Cover Page
Cover Page - shares | 6 Months Ended | |
Aug. 01, 2020 | Aug. 21, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Aug. 1, 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, $0.01 par value | |
Trading Symbol | DKS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001089063 | |
Current Fiscal Year End Date | --01-30 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 65,146,591 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 23,965,633 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 2,713,372 | $ 2,259,212 | $ 4,046,600 | $ 4,179,889 |
Cost of goods sold, including occupancy and distribution costs | 1,776,497 | 1,582,141 | 2,890,397 | 2,939,009 |
GROSS PROFIT | 936,875 | 677,071 | 1,156,203 | 1,240,880 |
Selling, general and administrative expenses | 543,033 | 521,072 | 946,254 | 1,008,230 |
Pre-opening expenses | 2,485 | 996 | 4,765 | 1,574 |
INCOME FROM OPERATIONS | 391,357 | 155,003 | 205,184 | 231,076 |
Interest expense | 14,682 | 5,550 | 22,727 | 8,631 |
Other income | (14,508) | (1,582) | (986) | (8,320) |
INCOME BEFORE INCOME TAXES | 391,183 | 151,035 | 183,443 | 230,765 |
Provision for income taxes | 114,340 | 38,501 | 50,022 | 60,706 |
NET INCOME | $ 276,843 | $ 112,534 | $ 133,421 | $ 170,059 |
Earnings Per Share [Abstract] | ||||
Basic (in dollars per share) | $ 3.29 | $ 1.28 | $ 1.59 | $ 1.88 |
Diluted (in dollars per share) | $ 3.12 | $ 1.26 | $ 1.53 | $ 1.85 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic (in shares) | 84,130 | 88,080 | 83,932 | 90,483 |
Diluted (in shares) | 88,826 | 89,400 | 87,360 | 91,894 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - UNAUDITED - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME | $ 276,843 | $ 112,534 | $ 133,421 | $ 170,059 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||||
Foreign currency translation adjustment, net of taxes | 53 | 17 | (10) | (2) |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | 53 | 17 | (10) | (2) |
COMPREHENSIVE INCOME | $ 276,896 | $ 112,551 | $ 133,411 | $ 170,057 |
CONSOLIDATED BALANCE SHEETS - U
CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 1,061,141,000 | $ 69,334,000 | $ 116,733,000 |
Accounts receivable, net | 74,790,000 | 53,173,000 | 64,096,000 |
Income taxes receivable | 7,223,000 | 5,762,000 | 4,389,000 |
Inventories, net | 1,875,152,000 | 2,202,275,000 | 2,136,797,000 |
Prepaid expenses and other current assets | 74,946,000 | 79,472,000 | 144,002,000 |
Total current assets | 3,093,252,000 | 2,410,016,000 | 2,466,017,000 |
Property and equipment, net | 1,348,059,000 | 1,415,728,000 | 1,479,855,000 |
Operating lease assets | 2,213,158,000 | 2,313,846,000 | 2,454,929,000 |
Intangible assets, net | 92,584,000 | 94,768,000 | 127,079,000 |
Goodwill | 245,857,000 | 245,857,000 | 250,476,000 |
Deferred income taxes | 21,538,000 | 14,412,000 | 14,600,000 |
Other | 138,121,000 | 133,933,000 | 122,259,000 |
TOTAL ASSETS | 7,152,569,000 | 6,628,560,000 | 6,915,215,000 |
CURRENT LIABILITIES: | |||
Accounts payable | 1,094,258,000 | 1,001,589,000 | 906,721,000 |
Accrued expenses | 462,284,000 | 415,501,000 | 391,555,000 |
Operating lease liabilities | 474,769,000 | 422,970,000 | 410,477,000 |
Income taxes payable | 55,901,000 | 10,455,000 | 21,490,000 |
Deferred revenue and other liabilities | 196,165,000 | 225,959,000 | 195,148,000 |
Total current liabilities | 2,283,377,000 | 2,076,474,000 | 1,925,391,000 |
LONG-TERM LIABILITIES: | |||
Revolving credit borrowings | 0 | 224,100,000 | 441,500,000 |
Convertible senior notes | 404,573,000 | 0 | 0 |
Long-term operating lease liabilities | 2,373,173,000 | 2,453,346,000 | 2,604,897,000 |
Deferred income taxes | 0 | 9,187,000 | 5,926,000 |
Other long-term liabilities | 161,150,000 | 133,855,000 | 172,415,000 |
Total long-term liabilities | 2,938,896,000 | 2,820,488,000 | 3,224,738,000 |
COMMITMENTS AND CONTINGENCIES | |||
STOCKHOLDERS' EQUITY: | |||
Additional paid-in capital | 1,373,426,000 | 1,253,867,000 | 1,231,325,000 |
Retained earnings | 2,724,424,000 | 2,645,281,000 | 2,565,700,000 |
Accumulated other comprehensive loss | (130,000) | (120,000) | (122,000) |
Treasury stock, at cost | (2,168,266,000) | (2,168,266,000) | (2,032,685,000) |
Total stockholders' equity | 1,930,296,000 | 1,731,598,000 | 1,765,086,000 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 7,152,569,000 | 6,628,560,000 | 6,915,215,000 |
Common Stock | |||
STOCKHOLDERS' EQUITY: | |||
Common stock | 601,000 | 593,000 | 623,000 |
Class B Common Stock | |||
STOCKHOLDERS' EQUITY: | |||
Common stock | $ 241,000 | $ 243,000 | $ 245,000 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-In Capital | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Treasury Stock | Common StockCommon Stock | Common StockClass B Common Stock |
BALANCE at Feb. 02, 2019 | $ 1,904,161 | $ (7,953) | $ 1,214,287 | $ 2,455,192 | $ (7,953) | $ (120) | $ (1,766,136) | $ 693 | $ 245 |
BALANCE (in shares) at Feb. 02, 2019 | 69,305,000 | 24,541,000 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
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 income | 57,525 | 57,525 | |||||||
Stock-based compensation | 11,907 | 11,907 | |||||||
Foreign currency translation adjustment, net of taxes | (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. 02, 2019 | 1,904,161 | $ (7,953) | 1,214,287 | 2,455,192 | $ (7,953) | (120) | (1,766,136) | $ 693 | $ 245 |
BALANCE (in shares) at Feb. 02, 2019 | 69,305,000 | 24,541,000 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 170,059 | ||||||||
Foreign currency translation adjustment, net of taxes | (2) | ||||||||
BALANCE at Aug. 03, 2019 | 1,765,086 | 1,231,325 | 2,565,700 | (122) | (2,032,685) | $ 623 | $ 245 | ||
BALANCE (in shares) at Aug. 03, 2019 | 62,285,000 | 24,491,000 | |||||||
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 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Exercise of stock options | 60 | 60 | $ 0 | ||||||
Exercise of stock options (in shares) | 2,000 | ||||||||
Restricted stock vested | 0 | 0 | $ 0 | ||||||
Restricted stock vested (in shares) | 21,000 | ||||||||
Minimum tax withholding requirements | (453) | (453) | $ 0 | ||||||
Minimum tax withholding requirements (in shares) | (7,000) | ||||||||
Net income | 112,534 | 112,534 | |||||||
Stock-based compensation | 11,175 | 11,175 | |||||||
Foreign currency translation adjustment, net of taxes | 17 | 17 | |||||||
Purchase of shares for treasury | (159,319) | (159,274) | $ (45) | ||||||
Purchase of shares for treasury (in shares) | (4,486,000) | ||||||||
Cash dividend declared | (24,963) | (24,963) | |||||||
BALANCE at Aug. 03, 2019 | 1,765,086 | 1,231,325 | 2,565,700 | (122) | (2,032,685) | $ 623 | $ 245 | ||
BALANCE (in shares) at Aug. 03, 2019 | 62,285,000 | 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 income | (143,422) | (143,422) | |||||||
Stock-based compensation | 9,235 | 9,235 | |||||||
Foreign currency translation adjustment, net of taxes | (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 | |||||||
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 | |||||||||
Net income | 133,421 | ||||||||
Foreign currency translation adjustment, net of taxes | (10) | ||||||||
BALANCE at Aug. 01, 2020 | 1,930,296 | 1,373,426 | 2,724,424 | (130) | (2,168,266) | $ 601 | $ 241 | ||
BALANCE (in shares) at Aug. 01, 2020 | 60,062,000 | 24,091,000 | |||||||
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 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Exchange of Class B common stock for common stock | 0 | $ 2 | $ (2) | ||||||
Exchange of Class B common stock for common stock (in shares) | 200,000 | (200,000) | |||||||
Exercise of stock options | 939 | 939 | $ 0 | ||||||
Exercise of stock options (in shares) | 28,000 | ||||||||
Restricted stock vested | 0 | (1) | $ 1 | ||||||
Restricted stock vested (in shares) | 26,000 | ||||||||
Minimum tax withholding requirements | (294) | (294) | $ 0 | ||||||
Minimum tax withholding requirements (in shares) | (8,000) | ||||||||
Net income | 276,843 | 276,843 | |||||||
Stock-based compensation | 8,214 | 8,214 | |||||||
Foreign currency translation adjustment, net of taxes | 53 | 53 | |||||||
Cash dividend declared | (27,484) | (27,484) | |||||||
BALANCE at Aug. 01, 2020 | $ 1,930,296 | $ 1,373,426 | $ 2,724,424 | $ (130) | $ (2,168,266) | $ 601 | $ 241 | ||
BALANCE (in shares) at Aug. 01, 2020 | 60,062,000 | 24,091,000 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||
Aug. 01, 2020 | May 02, 2020 | Aug. 03, 2019 | May 04, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Foreign currency translation adjustment, taxes | $ (17) | $ 20 | $ (5) | $ 6 |
Cash dividend declared per share (in dollars per share) | $ 0.3125 | $ 0.3125 | $ 0.275 | $ 0.275 |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 133,421 | $ 170,059 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation, amortization, and other | 162,755 | 157,410 |
Amortization of convertible notes discount and issuance costs | 7,662 | 0 |
Non-cash lease costs | 28,395 | (28,699) |
Deferred income taxes | (16,313) | (4,609) |
Stock-based compensation | 17,449 | 23,082 |
Changes in assets and liabilities: | ||
Accounts receivable | (8,402) | (26,859) |
Inventories | 327,123 | (312,101) |
Prepaid expenses and other assets | 7,026 | (5,169) |
Accounts payable | 103,379 | (10,550) |
Accrued expenses | 48,497 | 17,909 |
Income taxes payable / receivable | 43,985 | 3,094 |
Deferred construction allowances | 30,850 | 21,961 |
Deferred revenue and other liabilities | (9,120) | (32,752) |
Net cash provided by (used in) operating activities | 876,707 | (27,224) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (94,256) | (110,992) |
Deposits and purchases of other assets | 0 | (1,000) |
Net cash used in investing activities | (94,256) | (111,992) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Revolving credit borrowings | 1,291,700 | 1,185,850 |
Revolving credit repayments | (1,515,800) | (744,350) |
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 | (17,396) | 0 |
Payments on other long-term debt and finance lease obligations | (403) | (2,644) |
Proceeds from exercise of stock options | 939 | 273 |
Minimum tax withholding requirements | (3,684) | (6,312) |
Cash paid for treasury stock | 0 | (266,624) |
Cash dividends paid to stockholders | (54,448) | (51,258) |
(Decrease) increase in bank overdraft | (10,710) | 27,363 |
Net cash provided by financing activities | 209,366 | 142,298 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (10) | (2) |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 991,807 | 3,080 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 69,334 | 113,653 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 1,061,141 | 116,733 |
Supplemental disclosure of cash flow information: | ||
Accrued property and equipment | 30,924 | 28,255 |
Cash paid for interest | 9,156 | 7,865 |
Cash paid for income taxes | $ 24,260 | $ 62,780 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Aug. 01, 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 specialty stores, as well as GameChanger, a youth sports mobile app for scheduling, communications and live scorekeeping. The Company offers its products through an 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 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 and 26 weeks ended August 1, 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. COVID-19 Update In March 2020, the World Health Organization declared the disease caused by the novel strain of coronavirus (“COVID-19”) a pandemic, which continued to spread globally and throughout the United States. In response to the public health crisis posed by COVID-19, the Company prioritized the health and safety of our 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, using its business continuity plans to operate corporate support functions under remote work arrangements that currently remain in place. The temporary store closures had a negative impact on the Company’s first quarter results. In response to the potential impacts and uncertainty about the duration of the COVID-19 pandemic, the Company took precautionary measures to increase and maintain its liquidity, which included reductions in planned operating expenses, inventory receipts and planned capital expenditures, negotiating rent deferrals with landlords, increasing the borrowing capacity on its Credit Facility and issuing $575 million of convertible senior notes due 2025 (“Convertible Senior Notes”), which added over $500 million of net proceeds to the Company’s cash position, among other actions. Subsequent to the end of the first fiscal quarter, the Company reopened all of its stores by the end of June, which contributed to a sales increase of approximately 20.1% in the quarter ended August 1, 2020 compared to the quarter ended August 3, 2019. As a result of the Company’s second quarter results and the aforementioned precautionary measures taken to increase and maintain its liquidity, the Company ended the second quarter of fiscal 2020 with $1.1 billion of cash and cash equivalents, with no borrowings outstanding on its Credit Facility. In addition, on March 27, 2020, the United States Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which among other things, promulgated various income tax provisions, including but not limited to, modifications for net operating losses, an 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 year to date period in fiscal 2020, employee retention tax credits reduced the Company’s operating expenses by approximately $16.6 million. In addition, the Company is deferring qualified payroll and other tax payments as permitted by the CARES Act, which totaled approximately $22.4 million as of August 1, 2020. The Company continues to consider and assess the potential impact that the COVID-19 pandemic could have on the Company’s operations, including the assumptions and estimates used to prepare its interim financial statements such as 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 the COVID-19 pandemic causes current economic conditions to further deteriorate and negatively impact consumer spending, 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 the impacts of temporary store closures, the Company incurred approximately $42 million and $76 million of incremental compensation and safety costs for the quarterly and year to date periods ended August 1, 2020, respectively. In addition, the quarter ended August 1, 2020 included the recovery of approximately $28 million of inventory write-downs that the Company recorded in the first quarter, due to better than anticipated second quarter sales. 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. Convertible Instruments In August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40).” The update simplifies the accounting for convertible debt instruments and convertible preferred stock by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. ASU 2020-06 also enhances transparency and improves disclosures for convertible instruments and earnings per share guidance. It is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. This update permits the use of either the modified retrospective or fully retrospective method of transition. The Company is currently evaluating the timing and impact of the adoption of ASU 2020-06 on the Company's financial statements but anticipates that it will result in a reduction in non-cash interest expense related to the Convertible Senior Notes. |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Aug. 01, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share Basic earnings per common share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted 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 (see Note 6 for further discussion) and stock-based awards, such as stock options and restricted stock. The computations for basic and diluted earnings per common share were as follows for the periods presented ( in thousands, except per share data ): 13 Weeks Ended 26 Weeks Ended August 1, August 3, August 1, August 3, Net income $ 276,843 $ 112,534 $ 133,421 $ 170,059 Weighted average common shares outstanding - basic 84,130 88,080 83,932 90,483 Dilutive effect of stock-based awards 3,577 1,320 2,868 1,411 Dilutive effect of Convertible Senior Notes and warrants 1,119 — 560 — Weighted average common shares outstanding - diluted 88,826 89,400 87,360 91,894 Earnings per common share - basic $ 3.29 $ 1.28 $ 1.59 $ 1.88 Earnings per common share - diluted $ 3.12 $ 1.26 $ 1.53 $ 1.85 Potentially dilutive shares are excluded from the computation of earnings per share if their effect is anti-dilutive. Anti-dilutive options and restricted stock awards excluded from the calculation of earnings per share for the 13 weeks ended August 1, 2020 and August 3, 2019 were 2.8 million and 3.2 million, respectively. Anti-dilutive options and restricted stock excluded from the calculation of earnings per share for the 26 weeks ended August 1, 2020 and August 3, 2019 were 3.1 million and 3.2 million, respectively. Shares to be provided to the Company from its bond hedge purchased concurrently with its issuance of Convertible Senior Notes are anti-dilutive and are not included in its diluted shares. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Aug. 01, 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 August 1, 2020 and February 1, 2020, the fair value of the Company’s deferred compensation plans was $107.2 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 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 August 1, 2020, the fair value of the Convertible Senior Notes was $866.0 million, compared to their carrying value of $404.6 million, which excluded amounts classified within additional paid-in capital and any unamortized discounts. See Note 6 for additional information. Due to the short-term nature of these instruments, 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 at both August 1, 2020 and February 1, 2020. Nonrecurring |
Leases
Leases | 6 Months Ended |
Aug. 01, 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 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 during fiscal 2020 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 or 26 weeks ended August 1, 2020 by rent deferrals or concessions. Supplemental cash flow information related to operating leases for the 26 weeks ended August 1, 2020 and August 3, 2019 were as follows ( in millions ): 26 weeks ended August 1, August 3, Cash paid for amounts included in the measurement of operating lease liabilities $ 265.8 $ 327.9 Non-cash operating lease assets and liabilities obtained in exchange for new or modified leases $ 143.5 $ 140.4 |
Revolving Credit Facility
Revolving Credit Facility | 6 Months Ended |
Aug. 01, 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 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 August 1, 2020, there were no borrowings outstanding under the Credit Facility. As of August 1, 2020 and February 1, 2020, total remaining borrowing capacity, after subtracting letters of credit, was $1,450.2 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 | 6 Months Ended |
Aug. 01, 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 $557.6 million, net of $17.4 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 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 Convertible Senior 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. Upon issuance of the Convertible Senior Notes in April 2020, the initial conversion rate was 28.2618 shares of the Company’s common stock per $1,000 principal amount of Convertible Senior Notes, which represented an initial conversion price of approximately $35.38 per share. The conversion rate is subject to customary adjustments upon the occurrence of certain events, such as the payment of dividends. 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. As of August 1, 2020, the conversion rate for the Convertible Senior Notes is 28.4788, which represents a conversion price of $35.11 per share. The difference between the initial conversion rate and the conversion rate as of August 1, 2020 is due to dividends that have been declared following the issuance of the Convertible Senior Notes. 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 also has the ability to irrevocably elect to settle the Convertible Senior Notes in cash without amending the indentures or the Notes themselves. As of August 1, 2020, 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 $396.9 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 13 and 26 weeks ended August 1, 2020, the Company recognized interest expense of $11.2 million and $13.1 million, respectively, related to the Convertible Senior Notes. A summary as of August 1, 2020 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 is as follows: (in millions) Par value $ 575.0 Debt discount $ (170.4) Carrying amount $ 404.6 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 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 equal to the shares issued under the conversion feature of the Convertible Senior Notes. 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 or approximately 16.4 million shares. The cost of the bond hedge was partially offset by the Company’s sale of warrants to acquire approximately 16.4 million shares of the Company’s common stock. The warrants were initially exercisable at a price of at least $52.42 per share and are subject to customary adjustments upon the occurrence of certain events, such as the payment of dividends. As of August 1, 2020, the warrants are exercisable at a price of at least $52.02 per share. The difference between the initial and current exercise price is due to dividends that have been declared following the issuance of the warrants. The bond hedge and warrant transactions effectively increased the conversion price associated with the Convertible Senior Notes during the term of these transactions from 35% to 100% at their issuance, 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 the exercise price of the warrants 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. |
Income Taxes
Income Taxes | 6 Months Ended |
Aug. 01, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rate increased to 29.2% for the current quarter from 25.5% for the quarter ended August 3, 2019. The Company’s effective tax rate for its first quarter of 2020 included an estimated benefit resulting from the 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%. Based upon its second quarter net income, the Company no longer anticipates a net operating loss for fiscal 2020, which is reflected in its effective tax rate for the 13 weeks ended August 1, 2020. The Company’s effective tax rate increased to 27.3% for the 26 weeks ended August 1, 2020 from 26.3% for the 26 weeks ended August 3, 2019. The increase was due primarily to the tax impact of certain share-based payments that vested in the current year. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Aug. 01, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent EventOn August 21, 2020, the Company's Board of Directors authorized and declared a quarterly cash dividend in the amount of $0.3125 per share on the Company's common stock and Class B common stock payable on September 25, 2020 to stockholders of record as of the close of business on September 11, 2020. |
Description of Business and B_2
Description of Business and Basis of Presentation (Policies) | 6 Months Ended |
Aug. 01, 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. Convertible Instruments In August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40).” The update simplifies the accounting for convertible debt instruments and convertible preferred stock by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. ASU 2020-06 also enhances transparency and improves disclosures for convertible instruments and earnings per share guidance. It is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. This update permits the use of either the modified retrospective or fully retrospective method of transition. The Company is currently evaluating the timing and impact of the adoption of ASU 2020-06 on the Company's financial statements but anticipates that it will result in a reduction in non-cash interest expense related to the Convertible Senior Notes. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Table) | 6 Months Ended |
Aug. 01, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of the computations for basic and diluted earnings per common share | The computations for basic and diluted earnings per common share were as follows for the periods presented ( in thousands, except per share data ): 13 Weeks Ended 26 Weeks Ended August 1, August 3, August 1, August 3, Net income $ 276,843 $ 112,534 $ 133,421 $ 170,059 Weighted average common shares outstanding - basic 84,130 88,080 83,932 90,483 Dilutive effect of stock-based awards 3,577 1,320 2,868 1,411 Dilutive effect of Convertible Senior Notes and warrants 1,119 — 560 — Weighted average common shares outstanding - diluted 88,826 89,400 87,360 91,894 Earnings per common share - basic $ 3.29 $ 1.28 $ 1.59 $ 1.88 Earnings per common share - diluted $ 3.12 $ 1.26 $ 1.53 $ 1.85 |
Leases (Table)
Leases (Table) | 6 Months Ended |
Aug. 01, 2020 | |
Leases, Operating [Abstract] | |
Schedule of supplemental cash flow information related to operating leases | Supplemental cash flow information related to operating leases for the 26 weeks ended August 1, 2020 and August 3, 2019 were as follows ( in millions ): 26 weeks ended August 1, August 3, Cash paid for amounts included in the measurement of operating lease liabilities $ 265.8 $ 327.9 Non-cash operating lease assets and liabilities obtained in exchange for new or modified leases $ 143.5 $ 140.4 |
Convertible Senior Notes (Table
Convertible Senior Notes (Table) | 6 Months Ended |
Aug. 01, 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 as of August 1, 2020 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 is as follows: (in millions) Par value $ 575.0 Debt discount $ (170.4) Carrying amount $ 404.6 Equity component (*) $ 160.7 |
Description of Business and B_3
Description of Business and Basis of Presentation (Details) - USD ($) | Apr. 17, 2020 | Aug. 01, 2020 | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Par value | $ 575,000,000 | $ 575,000,000 | $ 575,000,000 | ||
Proceeds from Convertible Senior Notes, net of purchase of bond hedge, proceeds from warrants, and cash paid for debt issuance costs | $ 500,000,000 | ||||
Percentage increase in sales | 20.10% | ||||
Cash and cash equivalents | $ 1,061,141,000 | 1,061,141,000 | $ 69,334,000 | $ 116,733,000 | |
Borrowings under Credit Facility | 0 | 0 | $ 224,100,000 | $ 441,500,000 | |
Employee retention tax credits | 16,600,000 | ||||
Deferred qualified payroll and other tax payments as permitted by the CARES Act | 22,400,000 | 22,400,000 | |||
Incremental compensation and safety costs | 42,000,000 | $ 76,000,000 | |||
Recovery on previously written down inventory | $ 28,000,000 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Aug. 01, 2020 | May 02, 2020 | Aug. 03, 2019 | May 04, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Earnings Per Share [Abstract] | ||||||
Net income | $ 276,843 | $ (143,422) | $ 112,534 | $ 57,525 | $ 133,421 | $ 170,059 |
Weighted average common shares outstanding - basic | 84,130 | 88,080 | 83,932 | 90,483 | ||
Dilutive effect of stock-based awards (in shares) | 3,577 | 1,320 | 2,868 | 1,411 | ||
Dilutive effect of Convertible Senior Notes and warrants | 1,119 | 0 | 560 | 0 | ||
Diluted (in shares) | 88,826 | 89,400 | 87,360 | 91,894 | ||
Earnings per common share - basic (in dollars per share) | $ 3.29 | $ 1.28 | $ 1.59 | $ 1.88 | ||
Earnings per common share - diluted (in dollars per share) | $ 3.12 | $ 1.26 | $ 1.53 | $ 1.85 | ||
Anti-dilutive stock-based awards excluded from diluted calculation (in shares) | 2,800 | 3,200 | 3,100 | 3,200 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Aug. 01, 2020 | Apr. 17, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
Fair Value Measurements | ||||
Convertible Senior Notes, carrying value | $ 404,573 | $ 0 | $ 0 | |
Par value | 575,000 | $ 575,000 | ||
Level 1 | ||||
Fair Value Measurements | ||||
Deferred compensation plan assets held in trust | 107,200 | $ 99,700 | ||
Level 2 | ||||
Fair Value Measurements | ||||
Convertible Senior Notes, fair value | $ 866,000 |
Leases (Details)
Leases (Details) $ in Thousands | 6 Months Ended | |
Aug. 01, 2020USD ($)DistributionCenter | Aug. 03, 2019USD ($) | |
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 | $ 265,800 | $ 327,900 |
Non-cash operating lease assets and liabilities obtained in exchange for new or modified leases | $ 143,500 | $ 140,400 |
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 | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
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 | ||||
Borrowings under Credit Facility | $ 0 | $ 224,100,000 | $ 441,500,000 | ||
Remaining borrowing capacity | $ 1,450,200,000 | $ 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) | Aug. 01, 2020USD ($)$ / sharesRate | Apr. 17, 2020USD ($)item$ / sharesRate | Aug. 01, 2020USD ($)$ / shares | Aug. 01, 2020USD ($)$ / shares | Feb. 01, 2020USD ($) | Aug. 03, 2019USD ($) |
Convertible Senior Notes | ||||||
Par value | $ 575,000,000 | $ 575,000,000 | $ 575,000,000 | $ 575,000,000 | ||
Convertible senior notes | 404,573,000 | 404,573,000 | 404,573,000 | $ 0 | $ 0 | |
Equity component | $ 160,700,000 | $ 160,700,000 | $ 160,700,000 | |||
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 | 557,600,000 | |||||
Debt issuance costs | $ 17,400,000 | |||||
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 | 2847.88% | 2826.18% | ||||
Conversion price | $ / shares | $ 35.11 | $ 35.38 | $ 35.11 | $ 35.11 | ||
Convertible senior notes | $ 396,900,000 | |||||
Equity component | $ 160,700,000 | |||||
Interest rate, effective percentage | 11.60% | |||||
Amortization and interest expense, Convertible Senior Notes | $ 11,200,000 | $ 13,100,000 |
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 | Aug. 01, 2020 | Apr. 17, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
Convertible Senior Notes [Abstract] | ||||
Par value | $ 575,000 | $ 575,000 | ||
Debt discount | (170,400) | |||
Convertible senior notes | 404,573 | $ 0 | $ 0 | |
Equity component | $ 160,700 |
Convertible Senior Notes - Conv
Convertible Senior Notes - Convertible Note Hedge and Warrant Transactions (Details) - Convertible Note Hedge and Warrant Transactions - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Apr. 17, 2020 | Aug. 01, 2020 |
Convertible Note Hedge and Warrant Transactions | ||
Debt instrument, term | 5 years | |
Number of securities called by warrants or rights | 16.4 | |
Exercise price of warrants or rights | $ 52.42 | $ 52.02 |
Convertible, conversion price percentage - note hedge | 35.00% | |
Convertible, conversion price percentage - warrants | 100.00% | |
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 | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate (as a percent) | 29.20% | 25.50% | 27.30% | 26.30% |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event | Aug. 21, 2020$ / shares |
Common Stock | |
Subsequent Event | |
Dividend amount (in dollars per share) | $ 0.3125 |
Class B Common Stock | |
Subsequent Event | |
Dividend amount (in dollars per share) | $ 0.3125 |