DICK'S Sporting Goods (DKS) 10-Q 3 Jun 20 2020 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	May 02, 2020	May 29, 2020
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	May 2, 2020
Document Transition Report	false
Entity File Number	001-31463
Entity Registrant Name	DICK’S SPORTING GOODS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	16-1241537
Entity Address, Address Line One	345 Court Street
Entity Address, City or Town	Coraopolis
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	15108
City Area Code	724
Local Phone Number	273-3400
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	DKS
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001089063
Current Fiscal Year End Date	--01-30
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false
Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		65,156,173
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		24,291,123

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	May 02, 2020	May 04, 2019
Income Statement [Abstract]
Net sales	$ 1,333,228	$ 1,920,677
Cost of goods sold, including occupancy and distribution costs	1,113,900	1,356,868
GROSS PROFIT	219,328	563,809
Selling, general and administrative expenses	403,221	487,158
Pre-opening expenses	2,280	578
(LOSS) INCOME FROM OPERATIONS	(186,173)	76,073
Interest expense	8,045	3,081
Other expense (income)	13,522	(6,738)
(LOSS) INCOME BEFORE INCOME TAXES	(207,740)	79,730
(Benefit from) provision for income taxes	(64,318)	22,205
NET (LOSS) INCOME	$ (143,422)	$ 57,525
Earnings Per Share [Abstract]
Basic (in dollars per share)	$ (1.71)	$ 0.62
Diluted (in dollars per share)	$ (1.71)	$ 0.61
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic (in shares)	83,734	92,887
Diluted (in shares)	83,734	94,388

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - UNAUDITED - USD ($) $ in Thousands	3 Months Ended
	May 02, 2020	May 04, 2019
Statement of Comprehensive Income [Abstract]
NET (LOSS) INCOME	$ (143,422)	$ 57,525
OTHER COMPREHENSIVE LOSS:
Foreign currency translation adjustment, net of tax	(63)	(19)
TOTAL OTHER COMPREHENSIVE LOSS	(63)	(19)
COMPREHENSIVE (LOSS) INCOME	$ (143,485)	$ 57,506

CONSOLIDATED BALANCE SHEETS - U

CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) $ in Thousands	May 02, 2020	Feb. 01, 2020	May 04, 2019
CURRENT ASSETS:
Cash and cash equivalents	$ 1,484,004	$ 69,334	$ 92,423
Accounts receivable, net	100,895	53,173	52,382
Income taxes receivable	56,291	5,762	4,435
Inventories, net	2,096,964	2,202,275	2,142,022
Prepaid expenses and other current assets	102,249	79,472	148,442
Total current assets	3,840,403	2,410,016	2,439,704
Property and equipment, net	1,369,873	1,415,728	1,478,910
Operating lease assets	2,260,189	2,313,846	2,484,660
Intangible assets, net	93,676	94,768	128,563
Goodwill	245,857	245,857	250,476
Deferred income taxes	14,263	14,412	12,858
Other	128,289	133,933	116,823
TOTAL ASSETS	7,952,550	6,628,560	6,911,994
CURRENT LIABILITIES:
Accounts payable	844,991	1,001,589	932,055
Accrued expenses	317,026	415,501	320,603
Operating lease liabilities	505,678	422,970	367,768
Income taxes payable	2,062	10,455	38,772
Deferred revenue and other liabilities	217,223	225,959	196,190
Total current liabilities	1,886,980	2,076,474	1,855,388
LONG-TERM LIABILITIES:
Revolving credit borrowings	1,429,000	224,100	369,500
Convertible senior notes	398,121	0	0
Long-term operating lease liabilities	2,428,133	2,453,346	2,683,561
Deferred income taxes	4,362	9,187	8,073
Other long-term liabilities	133,929	133,855	169,437
Total long-term liabilities	4,393,545	2,820,488	3,230,571
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Additional paid-in capital	1,364,568	1,253,867	1,220,543
Retained earnings	2,475,065	2,645,281	2,478,129
Accumulated other comprehensive loss	(183)	(120)	(139)
Treasury stock, at cost	(2,168,266)	(2,168,266)	(1,873,411)
Total stockholders' equity	1,672,025	1,731,598	1,826,035
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	7,952,550	6,628,560	6,911,994
Common Stock
STOCKHOLDERS' EQUITY:
Common stock	598	593	668
Class B Common Stock
STOCKHOLDERS' EQUITY:
Common stock	$ 243	$ 243	$ 245

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED - USD ($) $ in Thousands	Total	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Common StockCommon Stock	Common StockClass B Common Stock
BALANCE at Feb. 02, 2019	$ 1,904,161	$ 1,214,287	$ 2,455,192	$ (120)	$ (1,766,136)	$ 693	$ 245
BALANCE (in shares) at Feb. 02, 2019						69,305,000	24,541,000
Increase (Decrease) in Stockholders' Equity
Adjustment for cumulative effect from change in accounting principle | ASU 2016-02	(7,953)		(7,953)
Exchange of Class B common stock for common stock	0					$ 0	$ 0
Exchange of Class B common stock for common stock (in shares)						50,000	(50,000)
Exercise of stock options	213	213				$ 0
Exercise of stock options (in shares)						6,000
Restricted stock vested	0	(6)				$ 6
Restricted stock vested (in shares)						520,000
Minimum tax withholding requirements	(5,859)	(5,858)				$ (1)
Minimum tax withholding requirements (in shares)						(158,000)
Net (loss) income	57,525		57,525
Stock-based compensation	11,907	11,907
Foreign currency translation adjustment, net of tax	(19)			(19)
Purchase of shares for treasury	(107,305)				(107,275)	$ (30)
Purchase of shares for treasury (in shares)						(2,968,000)
Cash dividend declared	(26,635)		(26,635)
BALANCE at May. 04, 2019	1,826,035	1,220,543	2,478,129	(139)	(1,873,411)	$ 668	$ 245
BALANCE (in shares) at May. 04, 2019						66,755,000	24,491,000
BALANCE at Feb. 01, 2020	1,731,598	1,253,867	2,645,281	(120)	(2,168,266)	$ 593	$ 243
BALANCE (in shares) at Feb. 01, 2020						59,256,000	24,291,000
Increase (Decrease) in Stockholders' Equity
Equity component value of convertible note issuance	160,693	160,693
Purchase of convertible note hedge	(161,057)	(161,057)
Sale of common stock warrants	105,225	105,225
Restricted stock vested	0	(7)				$ 7
Restricted stock vested (in shares)						745,000
Minimum tax withholding requirements	(3,390)	(3,388)				$ (2)
Minimum tax withholding requirements (in shares)						(185,000)
Net (loss) income	(143,422)		(143,422)
Stock-based compensation	9,235	9,235
Foreign currency translation adjustment, net of tax	(63)			(63)
Cash dividend declared	(26,794)		(26,794)
BALANCE at May. 02, 2020	$ 1,672,025	$ 1,364,568	$ 2,475,065	$ (183)	$ (2,168,266)	$ 598	$ 243
BALANCE (in shares) at May. 02, 2020						59,816,000	24,291,000

CONSOLIDATED STATEMENTS OF CH_2

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	May 02, 2020	May 04, 2019
Statement of Stockholders' Equity [Abstract]
Foreign currency translation adjustment, taxes	$ 20	$ 6
Cash dividend declared per share (in dollars per share)	$ 0.3125	$ 0.275

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Thousands	3 Months Ended
	May 02, 2020	May 04, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (143,422)	$ 57,525
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation, amortization, and other	86,081	82,604
Amortization of discount on convertible notes	1,094	0
Non-cash lease costs	69,560	(16,580)
Deferred income taxes	(4,676)	(720)
Stock-based compensation	9,235	11,907
Changes in assets and liabilities:
Accounts receivable	(14,745)	(15,433)
Inventories	105,311	(317,326)
Prepaid expenses and other assets	(13,190)	(7,983)
Accounts payable	(167,707)	22,531
Accrued expenses	(90,047)	(43,100)
Income taxes payable / receivable	(58,922)	20,330
Deferred construction allowances	8,638	16,387
Deferred revenue and other liabilities	(2,063)	(32,294)
Net cash used in operating activities	(214,853)	(222,152)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(59,591)	(46,882)
Net cash used in investing activities	(59,591)	(46,882)
CASH FLOWS FROM FINANCING ACTIVITIES:
Revolving credit borrowings	1,291,700	635,300
Revolving credit repayments	(86,800)	(265,800)
Proceeds from issuance of convertible notes	575,000	0
Payments for purchase of bond hedges	(161,057)	0
Proceeds from issuance of warrants	105,225	0
Transaction costs paid in connection with convertible notes issuance	(14,341)	0
Payments on other long-term debt and finance lease obligations	(199)	(1,330)
Proceeds from exercise of stock options	0	213
Minimum tax withholding requirements	(3,390)	(5,859)
Cash paid for treasury stock	0	(107,305)
Cash dividend paid to stockholders	(28,070)	(27,012)
Increase in bank overdraft	11,109	19,616
Net cash provided by financing activities	1,689,177	247,823
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(63)	(19)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	1,414,670	(21,230)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	69,334	113,653
CASH AND CASH EQUIVALENTS, END OF PERIOD	1,484,004	92,423
Supplemental disclosure of cash flow information:
Accrued property and equipment	21,033	17,520
Accrued transaction costs	2,939	0
Cash paid for interest	5,138	2,456
Cash paid for income taxes	$ 182	$ 3,219

Description of Business and Bas

Description of Business and Basis of Presentation	3 Months Ended
	May 02, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business and Basis of Presentation	Description of Business and Basis of Presentation DICK’S Sporting Goods, Inc. (together with its subsidiaries, referred to as “the Company”, “we”, “us” and “our” unless specified otherwise) is a leading omni-channel sporting goods retailer offering an extensive assortment of authentic, high-quality sports equipment, apparel, footwear and accessories through its dedicated teammates, in-store services and unique specialty shop-in-shops. The Company also owns and operates Golf Galaxy and Field & Stream stores, as well as GameChanger, a youth sports mobile app for scheduling, communications and live scorekeeping. The Company offers its products through a content-rich eCommerce platform that is integrated with its store network and provides customers with the convenience and expertise of a 24-hour storefront. When used in this Quarterly Report on Form 10-Q, unless the context otherwise requires or otherwise specifies, any reference to “year” is to the Company’s fiscal year. Basis of Presentation and Use of Estimates The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the requirements for Quarterly Reports on Form 10-Q and do not include all the disclosures normally required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The interim consolidated financial statements are unaudited and have been prepared on the same basis as the annual audited consolidated financial statements. In the opinion of management, such unaudited consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the interim financial information. The unaudited interim financial information should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 1, 2020 as filed with the Securities and Exchange Commission on March 20, 2020. Operating results for the 13 weeks ended May 2, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending January 30, 2021 or any other period. Reclassifications Certain reclassifications have been made to prior year amounts within the unaudited Consolidated Statements of Cash Flows to conform to the current year presentation. Impact of COVID-19 The novel coronavirus (“COVID-19”) pandemic has significantly impacted global economic conditions, including the Company's results and operations, which experienced a significant reduction in customer traffic and demand resulting from the spread of COVID-19. In response to the public health crisis posed by COVID-19, the Company prioritized the health and safety of its teammates and athletes and temporarily closed its stores to the public after the close of business on March 18, 2020. The Company also closed its corporate office to comply with mandatory shelter-in-place orders and meet the recommended social distancing guidance, using its business continuity plans to operate its corporate support functions under remote work arrangements. In response to the potential impacts and uncertainty about the duration of the COVID-19 pandemic, the Company took a number of precautionary measures, including, among other things: • Significantly reducing operating expenses and inventory receipts; • Modifying the Company’s capital allocation plan for fiscal 2020, including a reduction in planned capital expenditures and temporary suspension of its share repurchase and dividend programs; • Extending payment terms with vendors; • Negotiating rent deferrals with landlords, including abatements for certain store locations; • Temporarily deferring salaries for executives, senior leadership, and certain other teammates; • Temporarily suspending salaries for Ed Stack, Chairman and Chief Executive Officer, Lauren Hobart, President and Lee Belitsky, Chief Financial Officer other than to cover benefits; • Suspending payment of cash retainers for members of the Board of Directors; • Furloughing a significant number of teammates at the Company’s stores, distribution centers and corporate headquarters effective April 12, 2020; • Drawing $1.4 billion from its Credit Facility (as defined in Note 5), which was amended to increase our borrowing capacity by $255.0 million; and • Issuing $575.0 million of convertible senior notes due 2025 (“Convertible Senior Notes”), which added over $500.0 million of net proceeds to the Company’s cash position. See Note 6. On March 27, 2020, the United States government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which among other things, provides various income tax provisions, including but not limited to, modifications for net operating losses, accelerated time frame for refunds associated with prior minimum taxes and modifications of the limitation on business interest (see Note 7 for further discussion). The CARES Act also provides for refundable employee retention tax credits and the deferral of the employer-paid portion of social security taxes. During the first quarter of 2020, employee retention tax credits reduced the Company’s operating expenses by approximately $16.6 million. The Company intends to defer qualified payroll and other tax payments as permitted by the CARES Act. The Company considered the potential impact that the COVID-19 pandemic would have on the assumptions and estimates used to prepare these quarterly financial statements including, but not limited to, the Company’s inventory valuations, deferred tax valuation allowances, fair value measurements and potential asset impairment charges. These assumptions and estimates may change in the future as new events occur and additional information is obtained. If economic conditions caused by COVID-19 do not recover as currently estimated by management, such future changes may have a material adverse impact on the Company's results of operations, financial position and liquidity. As a result of actions taken to support its teammates as well as impacts from temporary store closures, the Company incurred approximately $34.0 million of incremental compensation and safety costs . In addition, the Company assessed certain related assets for impairment and write downs, which resulted in $28.0 million of inventory write-downs. There were not any other asset write downs or impairment charges recorded during the quarter ended May 2, 2020 related to the COVID-19 pandemic. Recently Adopted Accounting Pronouncements Financial Instruments In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduces new guidance for estimating credit losses on certain types of financial instruments based on expected losses and the timing of the recognition of such losses. The Company adopted ASU 2016-13 during the first quarter of fiscal 2020. The adoption did not have a significant impact on the Company’s financial condition, results of operations, cash flows and disclosures. Intangible Assets In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted Subtopic 350-40 during the first quarter of fiscal 2020 using a prospective approach; the adoption did not have a significant impact on the Company's financial statements. Recently Issued Accounting Pronouncements Income Taxes In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This update simplifies the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standard Codification (“ASC”) 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption of the amendments is permitted. Depending on the amendment, adoption may be applied on a retrospective, modified retrospective or prospective basis. The Company is currently evaluating the impact of adoption on the Company’s financial condition, results of operations, cash flows and disclosures, which is not expected to be significant. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The update provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as the London Interbank Offered Rate (“LIBOR”). The amendments in this ASU can be applied anytime between the first quarter of fiscal 2020 and the fourth quarter of fiscal 2022 and apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The impact of Topic 848 on the Company's financial statements and related disclosures is not expected to be significant.

(Loss) Earnings Per Common Shar

(Loss) Earnings Per Common Share	3 Months Ended
	May 02, 2020
Earnings Per Share [Abstract]
(Loss) Earnings Per Common Share	(Loss) Earnings Per Common Share Basic (loss) earnings per common share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted (loss) earnings per common share is computed based on the weighted average number of shares of common stock outstanding, plus the effect of dilutive potential common shares outstanding during the period, using the treasury stock method. Dilutive potential common shares include shares the Company could be obligated to issue from its Convertible Senior Notes and warrants (as defined in Note 6) and stock-based awards, such as stock options and restricted stock. The computations for basic and diluted (loss) earnings per common share were as follows for the periods presented ( in thousands, except per share data ): 13 Weeks Ended May 2, May 4, Net (loss) income $ (143,422) $ 57,525 Weighted average common shares outstanding - basic 83,734 92,887 Dilutive effect of stock-based awards — 1,501 Dilutive effect of Convertible Senior Notes and warrants — — Weighted average common shares outstanding - diluted 83,734 94,388 (Loss) earnings per common share - basic $ (1.71) $ 0.62 (Loss) earnings per common share - diluted $ (1.71) $ 0.61 Potential dilutive common shares are excluded from the computation of diluted net (loss) income per share if their effect is anti-dilutive. Due to the net loss for the fiscal quarter ended May 2, 2020, approximately 7.8 million stock-based awards were excluded from the calculation of diluted loss per share, as these shares were anti-dilutive. Anti-dilutive shares totaled 3.2 million for the 13 weeks ended May 4, 2019. Additionally, the number of shares that the Company could be obligated to issue upon conversion of our Convertible Senior Notes and warrants were excluded from the current quarter calculation as they were anti-dilutive. See Note 6 for additional information.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	May 02, 2020
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements ASC 820, Fair Value Measurement and Disclosures , outlines a valuation framework and creates a fair value hierarchy for assets and liabilities as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Recurring The Company measures its deferred compensation plan assets held in trust at fair value on a recurring basis using Level 1 inputs. Such assets consist of investments in various mutual funds made by eligible individuals as part of the Company’s deferred compensation plans. As of May 2, 2020 and February 1, 2020, the fair value of the Company’s deferred compensation plans was $94.7 million and $99.7 million, respectively, as determined by quoted prices in active markets. The Company’s policy for recognition of transfers between levels of the fair value hierarchy is to recognize any transfer at the end of the fiscal quarter in which the determination to transfer was made. The Company bases the fair value of its par value $575.0 million Convertible Senior Notes on Level 2 inputs, specifically their quoted price in an inactive market on the last trading day in a reporting period. On May 2, 2020, the fair value of the Convertible Senior Notes was $584.0 million, compared to their carrying value of $398.1 million, which excluded amounts classified within additional paid-in capital and any unamortized discounts. See Note 6 for additional information. The fair value of cash and cash equivalents, accounts receivable, accounts payable, borrowings under the Credit Facility and certain other liabilities approximated their carrying values due to the short-term nature of these instruments at both May 2, 2020 and February 1, 2020. Nonrecurring Assets and liabilities recognized or disclosed at fair value on a nonrecurring basis may include property and equipment, goodwill and other intangible assets, equity and other assets. T hese assets are required to be assessed for impairment when events or circumstances indicate that the carrying value may not be recoverable, and at least annually for goodwill and indefinite-lived intangible assets. In the event that an impairment is required, the asset is adjusted to fair value, using Level 3 inputs. The Company did not record any impairment charges during the quarter ended May 2, 2020.

Leases

Leases	3 Months Ended
	May 02, 2020
Leases, Operating [Abstract]
Leases	Leases The Company leases all of its stores, three of its distribution centers and certain equipment under non-cancellable operating leases that expire at various dates through 2033. The Company’s stores generally have initial lease terms of 10 to 15 years and contain multiple five year renewal options and rent escalation provisions. The lease agreements provide primarily for the payment of minimum annual rentals, costs of utilities, property taxes, maintenance, common areas and insurance. In response to the COVID-19 pandemic, the FASB issued interpretive guidance in April 2020, which provides entities the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease. The Company did not elect this option; accordingly, any rent deferrals or concessions that were granted by landlords prior to the end of the quarter were treated as lease modifications and not as variable rent reductions. Since lease modification accounting generally requires recognition of changes in rent payments over the lease term, the Company’s earnings were not materially impacted in the quarter ended May 2, 2020. Supplemental cash flow information related to operating leases for the 13 weeks ended May 2, 2020 and May 4, 2019 were as follows ( in millions ): 13 Weeks Ended May 2, May 4, Cash paid for amounts included in the measurement of operating lease liabilities $ 78.5 $ 163.9 Non-cash operating lease assets and liabilities obtained in exchange for new or modified leases $ 91.9 $ 49.4

Revolving Credit Facility

Revolving Credit Facility	3 Months Ended
	May 02, 2020
Debt Disclosure [Abstract]
Revolving Credit Facility	Revolving Credit Facility On March 27, 2020, the Company amended its $1.6 billion senior secured revolving credit facility, which matures on June 28, 2024, to increase aggregate commitments to $1.855 billion (the “Credit Facility”). The amended Credit Facility includes the ability to issue letters of credit up to $150.0 million in the aggregate. After giving effect to the amendment, the Credit Facility allows the Company, upon the satisfaction of certain conditions, to request an increase of up to approximately $245.0 million in additional borrowing availability, subject to existing or new lenders agreeing to provide additional revolving commitments. The Credit Facility is secured by a first priority security interest in certain property and assets, including receivables, inventory, deposit accounts, securities accounts and other personal property of the Company and is guaranteed by the Company’s domestic subsidiaries. The annual interest rates applicable to loans under the Credit Facility are, at the Company’s option, equal to a base rate or an adjusted LIBOR rate plus, in each case, an applicable margin percentage. The March 27, 2020 amendment increased the applicable margins on base rate loans and LIBOR rate loans to the highest level under the existing pricing grid, or from 0.125% to 0.375% for base rate loans and from 1.125% to 1.375% for adjusted LIBOR rate loans. These margin percentages will be in effect until the Company elects to lower the aggregate commitments under the senior secured credit facility so that they no longer exceed $1.6 billion. Other modifications included introducing a LIBOR “floor” of 0.75% for purposes of calculating the interest rate on LIBOR based loans and modifying the borrowing base definition so that certain junior liens do not automatically disqualify eligible receivables and inventory from inclusion in the borrowing base. As of May 2, 2020 and February 1, 2020, total remaining borrowing capacity, after subtracting letters of credit, was $213.8 million and $1,359.8 million, respectively. The Credit Facility contains a covenant that requires the Company to maintain a minimum adjusted availability of 7.5% of its borrowing base. The Credit Facility also contains certain covenants that could, within specific predefined circumstances, limit the Company’s ability to, among other things: incur or guarantee additional indebtedness; pay distributions on, redeem or repurchase capital stock; redeem or repurchase subordinated debt; make certain investments; sell assets; or consolidate, merge or transfer all or substantially all of the Company’s assets. Other than in certain limited conditions, the Company is permitted under the Credit Facility to continue to pay dividends and repurchase shares pursuant to its stock repurchase program.

Convertible Senior Notes

Convertible Senior Notes	3 Months Ended
	May 02, 2020
Convertible Senior Notes [Abstract]
Convertible Senior Notes	Convertible Senior Notes Overview In April 2020, the Company issued in a private offering an aggregate $575.0 million 3.25% Convertible Senior Notes due 2025 in two closing transactions, including the exercise of a $75.0 million over-allotment option. The Company received proceeds from the issuance and sale of the Convertible Senior Notes of $557.7 million, net of $17.3 million of transaction fees and other third-party offering expenses. The Convertible Senior Notes accrue interest at a rate of 3.25% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2020 and will mature on April 15, 2025, unless earlier repurchased, redeemed or converted. The Convertible Senior Notes are the Company’s unsecured, unsubordinated obligations and are equal in right of payment with the Company’s existing and future unsecured, unsubordinated indebtedness; senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the Convertible Senior Notes; effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and preferred equity, if any, of the Company’s subsidiaries. Prior to the close of business on the business day immediately preceding December 2, 2024, noteholders may convert their Convertible Senior Notes into shares of the Company’s common stock at their option only in the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on September 30, 2020, if the last reported sale price per share of the Company’s common stock for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter, exceeds 130% of the conversion price then in effect on each applicable trading day; • during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive day trading day period, the “Measurement Period”) if the trading price per $1,000 principal amount of Convertible Senior Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; • upon the occurrence of certain corporate events or distributions on the Company’s common stock, including but not limited to a fundamental change; or • if the Company calls all or any Convertible Senior Notes for redemption. On or after December 2, 2024, until the close of business on the second scheduled trading day immediately before the maturity date of the Notes, noteholders may convert their Convertible Senior Notes at their option at any time, regardless of the foregoing conditions. The Company may redeem the Convertible Senior Notes at its option at any time on or after April 17, 2023 at a cash redemption price equal to the principal amount of the Convertible Senior Notes to be redeemed, plus accrued and unpaid interest, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling any Convertible Senior Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Convertible Senior Note, in which case the conversion rate applicable to the conversion of that Convertible Senior Note will be increased in certain circumstances if it is converted after it is called for redemption. Upon the occurrence of a fundamental change prior to the maturity date of the Convertible Senior Notes, holders of the Convertible Senior Notes may require the Company to repurchase all or a portion of the Convertible Senior Notes for cash at a price equal to 100% of the principal amount of the Convertible Senior Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The initial conversion rate for the Convertible Senior Notes is 28.2618 shares of the Company’s common stock per $1,000 principal amount of Convertible Senior Notes, which represents an initial conversion price of approximately $35.38 per share. The conversion rate will be subject to customary adjustments upon the occurrence of certain events. In addition, upon the occurrence of a fundamental change prior to the maturity of the Convertible Senior Notes, the Company will, in certain circumstances, increase the conversion rate by a specified number of additional shares for a holder that elects to convert the Convertible Senior Notes in connection with such fundamental change. Upon conversion, the Company may settle the Convertible Senior Notes for cash, shares of the Company’s stock, or a combination thereof, at the Company’s option. The Company intends to settle the principal amount of the Convertible Senior Notes in cash and any conversion premium in shares of its common stock. Convertible debt instruments that may be settled in cash are required to be separated into liability and equity components. The allocation to the liability component is based on the fair value of a similar instrument that does not contain an equity conversion option. Based on this debt to equity ratio, debt issuance costs are then allocated to the liability and equity components in a similar manner. Accordingly, at issuance the Company allocated $397.0 million to the debt liability and $160.7 million to additional paid in capital. The difference between the principal amount of the Convertible Senior Notes and the liability component, inclusive of issuance costs, represents the debt discount, which the Company will amortize to interest expense over the term of the Convertible Senior Notes using an effective interest rate of 11.6%. During the fiscal quarter ended May 2, 2020, the Company recognized interest expense of $1.9 million related to the Convertible Senior Notes. A summary of the gross carrying amount, unamortized debt discount including debt issuance costs, and net carrying value of the liability component of the Convertible Senior Notes are as follows: 13 Weeks Ended (in millions) May 2, 2020 May 4, 2019 Par value $ 575.0 $ — Debt discount $ (176.9) $ — Carrying amount $ 398.1 $ — Equity component (*) $ 160.7 $ — (*) Included in additional paid-in capital on the consolidated balance sheets. Convertible Note Hedge and Warrant Transactions In connection with the sale of the Convertible Senior Notes, the Company purchased a bond hedge that is designed to mitigate the potential dilution to shareholders from the conversion of the Convertible Senior Notes. Under the five-year term of the bond hedge, upon a conversion of the bonds the Company will receive shares of common stock based on the extent to which the then-market price exceeds $35.38 per share. The aggregate number of shares that the Company could be obligated to issue upon conversion of the Convertible Senior Notes, and that the Company would receive under the bond hedge, is equal to the number of shares underlying the Convertible Senior Notes at the initial conversion price of $35.38, or approximately 16.3 million shares. The cost of the bond hedge was partially offset by the Company’s sale of warrants to acquire approximately 16.3 million shares of the Company’s common stock. The warrants are exercisable at a price of at least $52.42 per share and may be settled at the Company’s option through a net share settlement or a net cash settlement. The bond hedge and warrant transactions effectively increase the conversion price associated with the Convertible Senior Notes during the term of these transactions from 35% to 100%, or from $35.38 to $52.42 per share, thereby reducing the dilutive economic effect to shareholders upon actual conversion. There would be dilution from the conversion of the Convertible Senior Notes to the extent that the then-market price per share of the common stock exceeds $52.42 at the time of conversion. The bond hedges and warrants are indexed to, and potentially settled in shares of, the Company’s common stock. The net cost of $55.8 million for the purchase of the bond hedges and sale of the warrants was recorded as a reduction to additional paid-in capital in the consolidated balance sheets. The Company recorded a deferred tax liability of $42.7 million in connection with the debt discount associated with the Convertible Senior Notes and recorded a deferred tax asset of $42.8 million in connection with the convertible note hedge transactions. The deferred tax liability and deferred tax asset are recorded in deferred income taxes on the consolidated balance sheets.

Income Taxes

Income Taxes	3 Months Ended
	May 02, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s effective tax rate increased to 31.0% for the current quarter from 27.9% for the quarter ended May 4, 2019. The increase is due primarily to the benefit resulting from the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which allows us to carry-back net operating losses to periods prior to the Tax Cuts and Jobs Act, when the federal statutory tax rate was 35%. This benefit was partially offset by the tax impact of certain share-based payments that vested during the quarter.

Description of Business and B_2

Description of Business and Basis of Presentation (Policies)	3 Months Ended
	May 02, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Recently Adopted Accounting Pronouncements / Recently Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements Financial Instruments In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduces new guidance for estimating credit losses on certain types of financial instruments based on expected losses and the timing of the recognition of such losses. The Company adopted ASU 2016-13 during the first quarter of fiscal 2020. The adoption did not have a significant impact on the Company’s financial condition, results of operations, cash flows and disclosures. Intangible Assets In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted Subtopic 350-40 during the first quarter of fiscal 2020 using a prospective approach; the adoption did not have a significant impact on the Company's financial statements. Recently Issued Accounting Pronouncements Income Taxes In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This update simplifies the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standard Codification (“ASC”) 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption of the amendments is permitted. Depending on the amendment, adoption may be applied on a retrospective, modified retrospective or prospective basis. The Company is currently evaluating the impact of adoption on the Company’s financial condition, results of operations, cash flows and disclosures, which is not expected to be significant. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The update provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as the London Interbank Offered Rate (“LIBOR”). The amendments in this ASU can be applied anytime between the first quarter of fiscal 2020 and the fourth quarter of fiscal 2022 and apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The impact of Topic 848 on the Company's financial statements and related disclosures is not expected to be significant.

(Loss) Earnings Per Common Sh_2

(Loss) Earnings Per Common Share (Table)	3 Months Ended
	May 02, 2020
Earnings Per Share [Abstract]
Schedule of the computations for basic and diluted (loss) earnings per common share	The computations for basic and diluted (loss) earnings per common share were as follows for the periods presented ( in thousands, except per share data ): 13 Weeks Ended May 2, May 4, Net (loss) income $ (143,422) $ 57,525 Weighted average common shares outstanding - basic 83,734 92,887 Dilutive effect of stock-based awards — 1,501 Dilutive effect of Convertible Senior Notes and warrants — — Weighted average common shares outstanding - diluted 83,734 94,388 (Loss) earnings per common share - basic $ (1.71) $ 0.62 (Loss) earnings per common share - diluted $ (1.71) $ 0.61

Leases (Table)

Leases (Table)	3 Months Ended
	May 02, 2020
Leases, Operating [Abstract]
Schedule of supplemental cash flow information related to operating leases	Supplemental cash flow information related to operating leases for the 13 weeks ended May 2, 2020 and May 4, 2019 were as follows ( in millions ): 13 Weeks Ended May 2, May 4, Cash paid for amounts included in the measurement of operating lease liabilities $ 78.5 $ 163.9 Non-cash operating lease assets and liabilities obtained in exchange for new or modified leases $ 91.9 $ 49.4

Convertible Senior Notes (Table

Convertible Senior Notes (Table)	3 Months Ended
	May 02, 2020
Convertible Senior Notes [Abstract]
Summary of the gross carrying amount, unamortized debt discount including debt issuance costs, and net carrying value of the liability component of the Convertible Senior Notes	A summary of the gross carrying amount, unamortized debt discount including debt issuance costs, and net carrying value of the liability component of the Convertible Senior Notes are as follows: 13 Weeks Ended (in millions) May 2, 2020 May 4, 2019 Par value $ 575.0 $ — Debt discount $ (176.9) $ — Carrying amount $ 398.1 $ — Equity component (*) $ 160.7 $ — (*) Included in additional paid-in capital on the consolidated balance sheets.

Description of Business and B_3

Description of Business and Basis of Presentation (Details) - USD ($) $ in Thousands	Apr. 17, 2020	May 02, 2020	Mar. 27, 2020	Feb. 01, 2020	May 04, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Borrowings under Credit Facility		$ 1,429,000		$ 224,100	$ 369,500
Increase in borrowing capacity of Credit Facility			$ 255,000
Par value	$ 575,000	575,000			$ 0
Proceeds from Convertible Senior Notes, net of purchase of bond hedge, proceeds from warrants, and cash paid for debt issuance costs	$ 500,000
Employee retention tax credits		16,600
Incremental compensation and safety costs		34,000
Inventory write-downs		$ 28,000

(Loss) Earnings Per Common Sh_3

(Loss) Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	May 02, 2020	May 04, 2019
Earnings Per Share [Abstract]
Net (loss) income	$ (143,422)	$ 57,525
Weighted average common shares outstanding - basic	83,734	92,887
Dilutive effect of stock-based awards (in shares)	0	1,501
Dilutive effect of Convertible Senior Notes and warrants	0	0
Diluted (in shares)	83,734	94,388
(Loss) earnings per common share - basic (in dollars per share)	$ (1.71)	$ 0.62
(Loss) earnings per common share - diluted (in dollars per share)	$ (1.71)	$ 0.61
Anti-dilutive stock-based awards excluded from diluted calculation (in shares)	7,800	3,200

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	May 02, 2020	Apr. 17, 2020	Feb. 01, 2020	May 04, 2019
Fair Value Measurements
Convertible Senior Notes, carrying value	$ 398,121		$ 0	$ 0
Par value	575,000	$ 575,000		$ 0
Level 1
Fair Value Measurements
Deferred compensation plan assets held in trust	94,700		$ 99,700
Level 2
Fair Value Measurements
Convertible Senior Notes, fair value	$ 584,000

Leases (Details)

Leases (Details) $ in Thousands	3 Months Ended
	May 02, 2020USD ($)DistributionCenter	May 04, 2019USD ($)
Leases
Number of distribution centers leased | DistributionCenter	3
Additional renewal period	5 years
Cash paid for amounts included in the measurement of operating lease liabilities	$ 78,500	$ 163,900
Non-cash operating lease assets and liabilities obtained in exchange for new or modified leases	$ 91,900	$ 49,400
Minimum
Leases
Initial tenure of operating leases	10 years
Maximum
Leases
Initial tenure of operating leases	15 years

Revolving Credit Facility (Deta

Revolving Credit Facility (Details) - USD ($)	Mar. 27, 2020	Jun. 28, 2019	May 02, 2020	Feb. 01, 2020
Revolving Credit Facility
Credit Facility borrowing capacity extension	$ 245,000,000
Amount of aggregate commitments under Credit Facility when applicable margin rates may be reduced	$ 1,600,000,000
Remaining borrowing capacity			$ 213,800,000	$ 1,359,800,000
Base rate
Revolving Credit Facility
Interest rate margin (as a percent)	0.375%
Base rate | Minimum
Revolving Credit Facility
Interest rate margin (as a percent)		0.125%
Adjusted LIBOR rate
Revolving Credit Facility
Interest rate margin (as a percent)	1.375%
LIBOR floor rate (as a percent)	0.0075
Adjusted LIBOR rate | Minimum
Revolving Credit Facility
Interest rate margin (as a percent)		1.125%
Revolving Credit Facility
Revolving Credit Facility
Credit Facility previous borrowing capacity		$ 1,600,000,000
Credit Facility borrowing capacity	$ 1,855,000,000
Credit Facility borrowing capacity extension	$ 245,000,000
Adjusted availability of borrowing base (as a percent)	7.50%
Letters of credit
Revolving Credit Facility
Letters of credit maximum	$ 150,000,000

Convertible Senior Notes (Detai

Convertible Senior Notes (Details)	Apr. 17, 2020USD ($)item$ / sharesRate	May 02, 2020USD ($)	Feb. 01, 2020USD ($)	May 04, 2019USD ($)
Convertible Senior Notes
Par value	$ 575,000,000	$ 575,000,000		$ 0
Convertible senior notes		398,121,000	$ 0	0
Equity component		160,700,000		$ 0
Conversion Option, Convertible Senior Notes
Convertible Senior Notes
Par value	$ 575,000,000
Interest rate, stated percentage	3.25%
Over allotment option	$ 75,000,000
Proceeds from debt, net of issuance costs	557,700,000
Debt issuance costs	$ 17,300,000
Threshold trading days | item	20
Threshold consecutive trading days | item	30
Conversion percentage of stock price trigger	130.00%
Convertible principal amount	$ 1,000
Consecutive business days, following measurement period | item	5
Conversion percentage trigger based on measurement period	0.98
Conversion ratio | Rate	2826.18%
Conversion price | $ / shares	$ 35.38
Convertible senior notes	$ 397,000,000
Equity component	$ 160,700,000
Interest rate, effective percentage	11.60%
Amortization and interest expense, Convertible Senior Notes		$ 1,900,000

Convertible Senior Notes - Summ

Convertible Senior Notes - Summary of the Gross Carrying Amount, Unamortized Debt Discount Including Debt Issuance Costs, and Net Carrying Value of the Liability Component (Details) - USD ($) $ in Thousands	May 02, 2020	Apr. 17, 2020	Feb. 01, 2020	May 04, 2019
Convertible Senior Notes [Abstract]
Par value	$ 575,000	$ 575,000		$ 0
Debt discount	(176,900)			0
Carrying amount	398,121		$ 0	0
Equity component	$ 160,700			$ 0

Convertible Senior Notes - Conv

Convertible Senior Notes - Convertible Note Hedge and Warrant Transactions (Details) - Convertible Note Hedge and Warrant Transactions $ / shares in Units, shares in Millions, $ in Millions	Apr. 17, 2020USD ($)$ / sharesshares
Convertible Note Hedge and Warrant Transactions
Conversion price | $ / shares	$ 35.38
Number of securities called by warrants or rights | shares	16.3
Exercise price of warrants or rights | $ / shares	$ 52.42
Convertible, conversion price percentage - note hedge	35.00%
Convertible, conversion price percentage - warrants	100.00%
Debt instrument, term	5 years
Deferred tax liability in connection with debt discount	$ 42.7
Deferred tax assets in connection with convertible note hedge transactions	42.8
Additional Paid-In Capital
Convertible Note Hedge and Warrant Transactions
Bond hedges and sale of warrants, net	$ 55.8

Income Taxes (Details)

Income Taxes (Details)	3 Months Ended
	May 02, 2020	May 04, 2019
Income Tax Disclosure [Abstract]
Effective tax rate (as a percent)	31.00%	27.90%