Lululemon Athletica (LULU) 10-Q 8 Jun 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	May. 01, 2016	Jun. 03, 2016
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 1, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Trading Symbol	LULU
Entity Registrant Name	lululemon athletica inc.
Entity Central Index Key	1,397,187
Current Fiscal Year End Date	--01-29
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		127,174,155

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	May. 01, 2016	Jan. 31, 2016
Current assets
Cash and cash equivalents	$ 550,046	$ 501,482
Accounts receivable	9,502	13,108
Inventories	286,230	284,009
Prepaid and receivable income taxes	92,095	91,453
Other prepaid expenses and other current assets	33,320	26,987
Total current assets	971,193	917,039
Property and equipment, net	377,813	349,605
Goodwill and intangible assets, net	25,320	24,777
Deferred income tax assets	13,044	11,802
Other non-current assets	14,285	10,854
Total assets	1,401,655	1,314,077
Current liabilities
Accounts payable	6,443	10,381
Accrued inventory liabilities	21,901	25,451
Accrued compensation and related expenses	35,083	43,524
Income taxes payable	36,892	37,736
Unredeemed gift card liability	50,387	57,736
Other accrued liabilities	51,722	50,676
Total current liabilities	202,428	225,504
Deferred income tax liabilities	11,382	10,759
Other non-current liabilities	51,620	50,332
Total liabilities	265,430	286,595
Stockholders' equity
Undesignated preferred stock, $0.01 par value: 5,000 shares authorized; none issued and outstanding	0	0
Exchangeable stock, no par value: 60,000 shares authorized; 9,804 and 9,804 issued and outstanding	0	0
Special voting stock, $0.000005 par value: 60,000 shares authorized; 9,804 and 9,804 issued and outstanding	0	0
Common stock, $0.005 par value: 400,000 shares authorized; 127,359 and 127,482 issued and outstanding	637	637
Additional paid-in capital	250,799	245,533
Retained earnings	1,049,430	1,019,515
Accumulated other comprehensive loss	(164,641)	(238,203)
Total stockholders' equity	1,136,225	1,027,482
Total liabilities and stockholders' equity	$ 1,401,655	$ 1,314,077

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	May. 01, 2016	Jan. 31, 2016
Statement of Financial Position [Abstract]
Undesignated preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Undesignated preferred stock, shares authorized	5,000,000	5,000,000
Undesignated preferred stock, shares issued	0	0
Undesignated preferred stock, shares outstanding	0	0
Exchangeable stock, shares authorized	60,000,000	60,000,000
Exchangeable stock, shares issued	9,804,000	9,804,000
Exchangeable stock, shares outstanding	9,804,000	9,804,000
Special voting stock, par value (in dollars per share)	$ 0.000005	$ 0.000005
Special voting stock, shares authorized	60,000,000	60,000,000
Special voting stock, shares issued	9,804,000	9,804,000
Special voting stock, shares outstanding	9,804,000	9,804,000
Common stock, par value (in dollars per share)	$ 0.005	$ 0.005
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	127,359,000	127,482,000
Common stock, shares outstanding	127,359,000	127,482,000

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	May. 01, 2016	May. 03, 2015
Income Statement [Abstract]
Net revenue	$ 495,516	$ 423,544
Cost of goods sold	256,385	217,667
Gross profit	239,131	205,877
Selling, general and administrative expenses	181,542	137,841
Income from operations	57,589	68,036
Other (expense) income, net	(486)	529
Income before income tax expense	57,103	68,565
Income tax expense	11,767	20,755
Net income	45,336	47,810
Other comprehensive income:
Foreign currency translation adjustment	73,562	22,606
Comprehensive income	$ 118,898	$ 70,416
Basic earnings per share (in dollars per share)	$ 0.33	$ 0.34
Diluted earnings per share (in dollars per share)	$ 0.33	$ 0.34
Basic weighted-average number of shares outstanding	137,263	141,967
Diluted weighted-average number of shares outstanding	137,496	142,337

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 3 months ended May. 01, 2016 - USD ($) shares in Thousands, $ in Thousands	Total	Exchangeable Stock [Member]	Special Voting Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]
Beginning balance at Jan. 31, 2016	$ 1,027,482		$ 0	$ 637	$ 245,533	$ 1,019,515	$ (238,203)
Beginning balance, shares at Jan. 31, 2016		9,804	9,804	127,482
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	45,336					45,336
Foreign currency translation adjustment	73,562						73,562
Stock-based compensation expense	3,174				3,174
Tax benefits from stock-based compensation	293				293
Common stock issued upon settlement of stock-based compensation	3,579			$ 1	3,578
Common stock issued upon settlement of stock-based compensation, shares				140
Shares withheld related to net share settlement of stock-based compensation	(1,436)			$ 0	(1,436)
Shares withheld related to net share settlement of stock-based compensation, shares				(21)
Repurchase of common stock	$ (15,765)			$ (1)	(343)	(15,421)
Repurchase of common stock, shares	(200)			(242)
Ending balance at May. 01, 2016	$ 1,136,225		$ 0	$ 637	$ 250,799	$ 1,049,430	$ (164,641)
Ending balance, shares at May. 01, 2016		9,804	9,804	127,359

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	May. 01, 2016	May. 03, 2015
Cash flows from operating activities
Net income	$ 45,336	$ 47,810
Items not affecting cash
Depreciation and amortization	19,185	16,096
Stock-based compensation expense	3,174	2,068
Tax benefits from stock-based compensation	(293)	(209)
Changes in operating assets and liabilities
Inventories	12,912	(25,797)
Prepaid and receivable income taxes	(348)	2,182
Other prepaid expenses and other current assets	(220)	(3,410)
Accounts payable	(4,532)	(4,092)
Accrued inventory liabilities	(7,057)	16,001
Accrued compensation and related expenses	(11,339)	(2,853)
Income taxes payable	(5,196)	(19,428)
Unredeemed gift card liability	(9,042)	(7,510)
Other accrued liabilities	(456)	(1,191)
Other non-current assets and liabilities	(2,390)	1,273
Net cash provided by operating activities	39,734	20,940
Cash flows from investing activities
Purchase of property and equipment	(26,644)	(27,936)
Net cash used in investing activities	(26,644)	(27,936)
Cash flows from financing activities
Proceeds from settlement of stock-based compensation	3,579	2,802
Tax benefits from stock-based compensation	293	209
Taxes paid related to net share settlement of stock-based compensation	(1,436)	(1,237)
Repurchase of common stock	(15,765)	(18,815)
Net cash used in financing activities	(13,329)	(17,041)
Effect of exchange rate changes on cash	48,803	15,439
Increase (decrease) in cash and cash equivalents	48,564	(8,598)
Cash and cash equivalents, beginning of period	501,482	664,479
Cash and cash equivalents, end of period	$ 550,046	$ 655,881

Nature of Operations and Basis

Nature of Operations and Basis of Presentation	3 Months Ended
	May. 01, 2016
Accounting Policies [Abstract]
Nature of Operations and Basis of Presentation	NATURE OF OPERATIONS AND BASIS OF PRESENTATION Nature of operations lululemon athletica inc., a Delaware corporation ("lululemon" and, together with its subsidiaries unless the context otherwise requires, the "Company") is engaged in the design, distribution, and retail of healthy lifestyle inspired athletic apparel, which is sold through a chain of company-operated stores, direct to consumer through e-commerce, outlets, showrooms, sales to wholesale accounts, warehouse sales, temporary locations, and through a license and supply arrangement. The Company operates stores in the United States, Canada, Australia, New Zealand, the United Kingdom, Singapore, Hong Kong, Germany, and Puerto Rico. There were a total of 373 and 363 company-operated stores in operation as of May 1, 2016 and January 31, 2016 , respectively. Basis of presentation The unaudited interim consolidated financial statements as of May 1, 2016 and for the thirteen weeks ended May 1, 2016 and May 3, 2015 are presented in United States dollars and have been prepared by the Company under the rules and regulations of the Securities and Exchange Commission ("SEC"). The financial information is presented in accordance with United States generally accepted accounting principles ("GAAP") for interim financial information and, accordingly, does not include all of the information and footnotes required by GAAP for complete financial statements. The financial information as of January 31, 2016 is derived from the Company's audited consolidated financial statements and related notes for the fiscal year ended January 31, 2016 , included in Item 8 in the Company's fiscal 2015 Annual Report on Form 10-K filed with the SEC on March 30, 2016 . These unaudited interim consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These unaudited interim consolidated financial statements should be read in conjunction with the Company's consolidated financial statements and related notes included in Item 8 in the Company's fiscal 2015 Annual Report on Form 10-K. The Company's fiscal year ends on the Sunday closest to January 31 of the following year, typically resulting in a 52 week year, but occasionally giving rise to an additional week, resulting in a 53 week year. Fiscal 2016 will end on January 29, 2017 and will be a 52 week year. The Company's business is affected by the pattern of seasonality common to most retail apparel businesses. Historically, the Company has recognized a significant portion of its operating profit in the fourth fiscal quarter of each year as a result of increased net revenue during the holiday season. Certain comparative figures have been reclassified to conform to the financial presentation adopted for the current year.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	May. 01, 2016
Accounting Policies [Abstract]
Recent Accounting Pronouncements	RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board ("FASB") issued ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), which supersedes the revenue recognition requirements in ASC Topic 605 Revenue Recognition , including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. This guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and expands the related disclosure requirements. In 2015, the FASB deferred the effective date for this guidance, and in 2016, the FASB issued several updates that clarify the guidance in this topic. This guidance will be effective for the Company beginning in its first quarter of fiscal 2018, with early application permitted if adopted in its first quarter of fiscal 2017. The Company is currently evaluating the timing of adoption and the impact that this new guidance may have on its consolidated financial statements. In June 2014, the FASB amended ASC Topic 718, Compensation - Stock Compensation ("ASC 718") for share-based payments in which the terms of the award provide that a performance target can be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. This guidance became effective for the Company beginning in its first quarter of fiscal 2016 and it was adopted prospectively. The adoption did not have an impact on the Company’s consolidated financial statements. In April 2015, the FASB amended ASC Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software ("ASC 350-40") to provide guidance to customers about whether a cloud computing arrangement includes a software license. This guidance requires that if a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance became effective for the Company beginning in its first quarter of fiscal 2016 and it was adopted prospectively. The adoption did not have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB amended ASC Topic 330, Inventory ("ASC 330") to simplify the measurement of inventory. The amendments require that an entity measure inventory at the lower of cost and net realizable value instead of the lower of cost and market. This guidance will be effective for the Company beginning in its first quarter of fiscal 2017, with early application permitted. The Company is currently evaluating the impact that this new guidance may have on its consolidated financial statements. In February 2016 the FASB issued ASC Topic 842, Leases ("ASC 842") to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, lessees are required to recognize a lease liability, which represents the discounted obligation to make future minimum lease payments, and a corresponding right-of-use asset on the balance sheet for most leases. This guidance will be effective for the Company beginning in its first quarter of fiscal 2019, with early application permitted. The Company is currently evaluating the impact that this new guidance will have on its consolidated financial statements but it is expected that the adoption will result in a significant increase in assets and liabilities on the consolidated balance sheets. In March 2016, the FASB amended ASC Subtopic 405-20, Liabilities - Extinguishments of Liabilities ("ASC 405-20") to provide guidance on the derecognition of financial liabilities resulting from the sale of prepaid stored-value products which are redeemable for goods, services, or cash at third-party merchants. Under the new guidance, expected breakage amounts associated with these products must be recognized in a way that is consistent with how gift card breakage will be recognized under the new revenue guidance in ASC 606. This guidance will be effective for the Company beginning in its first quarter of fiscal 2018, with early application permitted. The Company is currently evaluating the applicability and the impact that this new guidance may have on its consolidated financial statements. In March 2016, the FASB amended ASC 718, simplifying the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance also allows an entity to account for forfeitures when they occur. This guidance will be effective for the Company beginning in its first quarter of fiscal 2017, with early application permitted. The Company is currently evaluating the impact that this new guidance may have on its consolidated financial statements.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	May. 01, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	STOCK-BASED COMPENSATION Stock-based compensation plans The Company's eligible employees participate in various stock-based compensation plans, which are provided by the Company directly. Stock-based compensation expense charged to income for the plans was $3.2 million and $2.1 million for the thirteen weeks ended May 1, 2016 and May 3, 2015 , respectively. Total unrecognized compensation cost for all stock-based compensation plans was $55.8 million at May 1, 2016 , which is expected to be recognized over a weighted-average period of 2.7 years. Company stock options, performance-based restricted stock units, restricted shares and restricted stock units A summary of the Company's stock option, performance-based restricted stock unit, restricted share and restricted stock unit activity as of May 1, 2016 and changes during the thirteen week period then ended is presented below: Stock Options Performance-Based Restricted Stock Units Restricted Shares Restricted Stock Units Number Weighted-Average Exercise Price Number Weighted-Average Grant Date Fair Value Number Weighted-Average Grant Date Fair Value Number Weighted-Average Grant Date Fair Value (In thousands, except per share amounts) Balance at January 31, 2016 867 $ 49.54 395 $ 58.58 31 $ 57.67 333 $ 55.91 Granted 401 68.68 154 68.68 1 59.09 184 68.47 Exercised/vested 91 39.40 2 75.35 — — 47 64.05 Forfeited 58 54.72 104 63.12 — — 27 49.35 Balance at May 1, 2016 1,119 $ 56.95 443 $ 60.94 32 $ 57.71 443 $ 60.66 Exercisable at May 1, 2016 224 $ 43.43 The fair value of each stock option granted is estimated on date of grant using the Black-Scholes model. The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and the Company's historical experience. The expected term of the options is based upon historical experience of similar awards, giving consideration to expectations of future employee behavior. Expected volatility is based upon the historical volatility of the Company's common stock for the period corresponding with the expected term of the options. The risk-free interest rate is based on the U.S. Treasury yield curve for the period corresponding with the expected term of the options. The following assumptions were used in calculating the fair value of stock options granted in fiscal 2016 : Stock Options Granted During Fiscal 2016 Expected term 4 years Expected volatility 40.07 % Risk-free interest rate 1.08 % Dividend yield — % The Company's performance-based restricted stock units are awarded to eligible employees and entitle the grantee to receive a maximum of two shares of common stock per performance-based restricted stock unit if the Company achieves specified performance goals and the grantee remains employed during the vesting period. The fair value of performance-based restricted stock units is based on the closing price of the Company's common stock on the award date. Expense for performance-based restricted stock units is recognized when it is probable that the performance goal will be achieved. The fair value of the restricted shares and restricted stock units is based on the closing price of the Company's common stock on the award date. Employee stock purchase plan The Company's board of directors and stockholders approved the Company's Employee Share Purchase Plan ("ESPP") in September 2007. Contributions are made by eligible employees, subject to certain limits as defined in the ESPP, and the Company matches one-third of the contribution. The maximum number of shares available under the ESPP is 6.0 million shares. During the thirteen weeks ended May 1, 2016 , there were 27.3 thousand shares purchased in the open market under the ESPP.

Earnings Per Share

Earnings Per Share	3 Months Ended
	May. 01, 2016
Earnings Per Share [Abstract]
Earnings Per Share	EARNINGS PER SHARE The details of the computation of basic and diluted earnings per share are as follows: Thirteen Weeks Ended Thirteen Weeks Ended (In thousands, except per share amounts) Net income $ 45,336 $ 47,810 Basic weighted-average number of shares outstanding 137,263 141,967 Assumed conversion of dilutive stock options and awards 233 370 Diluted weighted-average number of shares outstanding 137,496 142,337 Basic earnings per share $ 0.33 $ 0.34 Diluted earnings per share $ 0.33 $ 0.34 The Company's calculation of weighted-average shares includes the common stock of the Company as well as the exchangeable shares. Exchangeable shares are the equivalent of common shares in all material respects. All classes of stock have, in effect, the same rights and share equally in undistributed net income. For the thirteen weeks ended May 1, 2016 and May 3, 2015 , 0.2 million and 0.1 million stock options and awards, respectively, were anti-dilutive to earnings per share and therefore have been excluded from the computation of diluted earnings per share. On June 11, 2014, the Company's board of directors approved a program to repurchase shares of the Company's common stock up to an aggregate value of $450.0 million . The common stock is repurchased in the open market at prevailing market prices, with the timing and actual number of shares repurchased depending upon market conditions and other factors. During the thirteen weeks ended May 1, 2016 and May 3, 2015 , 0.2 million and 0.3 million shares, respectively, were repurchased under the program at a total cost of $15.8 million and $18.8 million , respectively. Subsequent to May 1, 2016 , and up to May 19, 2016 , 0.2 million shares were repurchased at a total cost of $12.8 million .

Supplementary Financial Informa

Supplementary Financial Information	3 Months Ended
	May. 01, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Supplementary Financial Information	SUPPLEMENTARY FINANCIAL INFORMATION Included in selling, general and administrative expenses were net foreign exchange losses of $13.5 million and $4.5 million for the thirteen weeks ended May 1, 2016 and May 3, 2015 , respectively. A summary of certain consolidated balance sheet accounts is as follows: May 1, January 31, (In thousands) Inventories: Finished goods $ 293,620 $ 290,791 Provision to reduce inventory to market value (7,390 ) (6,782 ) $ 286,230 $ 284,009 Property and equipment: Land $ 61,248 $ 55,488 Buildings 33,143 30,885 Leasehold improvements 241,993 225,604 Furniture and fixtures 78,138 73,254 Computer hardware 49,117 44,085 Computer software 131,887 112,161 Equipment and vehicles 12,254 11,929 Accumulated depreciation (229,967 ) (203,801 ) $ 377,813 $ 349,605 Goodwill and intangible assets, net: Goodwill $ 25,496 $ 25,496 Changes in foreign currency exchange rates (1,003 ) (1,666 ) 24,493 23,830 Intangibles—reacquired franchise rights 10,150 10,150 Accumulated amortization (9,271 ) (9,074 ) Changes in foreign currency exchange rates (52 ) (129 ) 827 947 $ 25,320 $ 24,777 Other accrued liabilities: Accrued duty, freight, and other operating expenses $ 28,437 $ 26,017 Sales tax collected 11,025 10,506 Accrued rent 5,355 6,070 Other 6,905 8,083 $ 51,722 $ 50,676 Other non-current liabilities: Deferred lease liability $ 27,296 $ 25,723 Tenant inducements 24,324 24,609 $ 51,620 $ 50,332

Legal Proceedings

Legal Proceedings	3 Months Ended
	May. 01, 2016
Commitments and Contingencies Disclosure [Abstract]
Legal Proceedings	LEGAL PROCEEDINGS In addition to the legal matters described below, the Company is, from time to time, involved in routine legal matters incidental to the conduct of its business, including legal matters such as initiation and defense of proceedings to protect intellectual property rights, personal injury claims, product liability claims, and similar matters. The Company believes the ultimate resolution of any such current proceeding will not have a material adverse effect on its consolidated balance sheets, results of operations or cash flows. On July 15, 2015, plaintiffs Hallandale Beach Police Officers and Firefighters' Personnel Retirement Fund and Laborers' District Council Industry Pension Fund filed in the Delaware Court of Chancery a derivative lawsuit on behalf of lululemon against certain current and former directors of lululemon, captioned Laborers' District Council Industry Pension Fund v. Bensoussan, et al., C.A. No. 11293-CB. Plaintiffs claim that the individual defendants breached their fiduciary duties to lululemon by allegedly failing to investigate certain trades of lululemon stock owned by Dennis J. Wilson in 2013. Plaintiffs also claim that Mr. Wilson breached his fiduciary duties by making his broker aware of certain non-public, material events prior to executing sales of lululemon stock on Mr. Wilson's behalf. The defendants have filed motions to dismiss the action for failure to adequately plead that demand on the board was excused and the individual defendants have filed motions for failure to state a claim upon which relief may be granted. On October 9, 2015, certain current and former hourly employees of the Company filed a class action lawsuit in the Supreme Court of New York entitled Rebecca Gathmann-Landini et al v. lululemon USA inc. On December 2, 2015, the case was moved to the United States District Court for the Eastern District of New York. The lawsuit alleges that the Company violated various New York labor codes by failing to pay all earned wages, including overtime compensation. The plaintiffs are seeking an unspecified amount of damages. The Company intends to vigorously defend this matter.

Income Taxes

Income Taxes	3 Months Ended
	May. 01, 2016
Income Tax Disclosure [Abstract]
Income Taxes	INCOME TAXES The Company is in the process of finalizing a bilateral Advance Pricing Arrangement ("APA") with the Internal Revenue Service ("IRS") and the Canada Revenue Agency ("CRA"), as detailed in Note 15 included in Item 8 of the Company's fiscal 2015 Annual Report on Form 10-K filed with the SEC on March 30, 2016 . The outcome of the APA will result in an income tax recovery in the United States and an income tax payment in Canada for fiscal 2011 through fiscal 2015. During the first quarter of fiscal 2016 , the Company received new communications from the IRS with respect to the APA. Based on this new information, the Company has determined that it is now more likely than not that the APA will result in an increased amount of income tax recoverable in the United States for fiscal 2011 through fiscal 2015. The Company also updated its income tax calculations with respect to the APA and the associated plan to repatriate $156.0 million of foreign earnings, for the exchange rates in effect as of May 1, 2016 . These income tax adjustments resulted in a net income tax recovery of $5.6 million in the first quarter of fiscal 2016 . During the first quarter of fiscal 2016 , the Company recorded a related net interest expense of $1.2 million in other expense (income), net. This primarily represents additional accrued interest on the Canadian income tax payable related to the APA. The Company anticipates that the APA will be finalized within the next nine months. The Company's expected filing position represents the largest benefit considered by management to be more likely than not. However, the Company's tax position will be updated as new information becomes available.

Segment Reporting

Segment Reporting	3 Months Ended
	May. 01, 2016
Segment Reporting [Abstract]
Segment Reporting	SEGMENT REPORTING The Company applies ASC Topic 280, Segment Reporting ("ASC 280"), in determining reportable segments for its financial statement disclosure. The Company reports segments based on the financial information it uses in managing its business. The Company's reportable segments are comprised of company-operated stores and direct to consumer. Direct to consumer represents sales from the Company's e-commerce websites. Outlets, showrooms, sales to wholesale accounts, warehouse sales, temporary locations, and a license and supply arrangement have been combined into other. Information for these segments is detailed in the table below: Thirteen Weeks Ended Thirteen Weeks Ended (In thousands) Net revenue: Company-operated stores $ 358,704 $ 314,094 Direct to consumer 97,566 83,636 Other 39,246 25,814 $ 495,516 $ 423,544 Income from operations before general corporate expense: Company-operated stores $ 73,259 $ 69,223 Direct to consumer 38,551 34,871 Other 2,069 981 113,879 105,075 General corporate expense 56,290 37,039 Income from operations 57,589 68,036 Other (expense) income, net (486 ) 529 Income before income tax expense $ 57,103 $ 68,565 Capital expenditures: Company-operated stores $ 16,750 $ 16,844 Direct to consumer 1,163 453 Corporate and other 8,731 10,639 $ 26,644 $ 27,936 Depreciation and amortization: Company-operated stores $ 13,784 $ 11,277 Direct to consumer 1,329 1,536 Corporate and other 4,072 3,283 $ 19,185 $ 16,096

Nature of Operations and Basi15

Nature of Operations and Basis of Presentation (Policies)	3 Months Ended
	May. 01, 2016
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation The unaudited interim consolidated financial statements as of May 1, 2016 and for the thirteen weeks ended May 1, 2016 and May 3, 2015 are presented in United States dollars and have been prepared by the Company under the rules and regulations of the Securities and Exchange Commission ("SEC"). The financial information is presented in accordance with United States generally accepted accounting principles ("GAAP") for interim financial information and, accordingly, does not include all of the information and footnotes required by GAAP for complete financial statements. The financial information as of January 31, 2016 is derived from the Company's audited consolidated financial statements and related notes for the fiscal year ended January 31, 2016 , included in Item 8 in the Company's fiscal 2015 Annual Report on Form 10-K filed with the SEC on March 30, 2016 . These unaudited interim consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These unaudited interim consolidated financial statements should be read in conjunction with the Company's consolidated financial statements and related notes included in Item 8 in the Company's fiscal 2015 Annual Report on Form 10-K.
Fiscal period	The Company's fiscal year ends on the Sunday closest to January 31 of the following year, typically resulting in a 52 week year, but occasionally giving rise to an additional week, resulting in a 53 week year. Fiscal 2016 will end on January 29, 2017 and will be a 52 week year.
Reclassification	Certain comparative figures have been reclassified to conform to the financial presentation adopted for the current year.
Recent accounting pronouncements	RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board ("FASB") issued ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), which supersedes the revenue recognition requirements in ASC Topic 605 Revenue Recognition , including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. This guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and expands the related disclosure requirements. In 2015, the FASB deferred the effective date for this guidance, and in 2016, the FASB issued several updates that clarify the guidance in this topic. This guidance will be effective for the Company beginning in its first quarter of fiscal 2018, with early application permitted if adopted in its first quarter of fiscal 2017. The Company is currently evaluating the timing of adoption and the impact that this new guidance may have on its consolidated financial statements. In June 2014, the FASB amended ASC Topic 718, Compensation - Stock Compensation ("ASC 718") for share-based payments in which the terms of the award provide that a performance target can be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. This guidance became effective for the Company beginning in its first quarter of fiscal 2016 and it was adopted prospectively. The adoption did not have an impact on the Company’s consolidated financial statements. In April 2015, the FASB amended ASC Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software ("ASC 350-40") to provide guidance to customers about whether a cloud computing arrangement includes a software license. This guidance requires that if a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance became effective for the Company beginning in its first quarter of fiscal 2016 and it was adopted prospectively. The adoption did not have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB amended ASC Topic 330, Inventory ("ASC 330") to simplify the measurement of inventory. The amendments require that an entity measure inventory at the lower of cost and net realizable value instead of the lower of cost and market. This guidance will be effective for the Company beginning in its first quarter of fiscal 2017, with early application permitted. The Company is currently evaluating the impact that this new guidance may have on its consolidated financial statements. In February 2016 the FASB issued ASC Topic 842, Leases ("ASC 842") to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, lessees are required to recognize a lease liability, which represents the discounted obligation to make future minimum lease payments, and a corresponding right-of-use asset on the balance sheet for most leases. This guidance will be effective for the Company beginning in its first quarter of fiscal 2019, with early application permitted. The Company is currently evaluating the impact that this new guidance will have on its consolidated financial statements but it is expected that the adoption will result in a significant increase in assets and liabilities on the consolidated balance sheets. In March 2016, the FASB amended ASC Subtopic 405-20, Liabilities - Extinguishments of Liabilities ("ASC 405-20") to provide guidance on the derecognition of financial liabilities resulting from the sale of prepaid stored-value products which are redeemable for goods, services, or cash at third-party merchants. Under the new guidance, expected breakage amounts associated with these products must be recognized in a way that is consistent with how gift card breakage will be recognized under the new revenue guidance in ASC 606. This guidance will be effective for the Company beginning in its first quarter of fiscal 2018, with early application permitted. The Company is currently evaluating the applicability and the impact that this new guidance may have on its consolidated financial statements. In March 2016, the FASB amended ASC 718, simplifying the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance also allows an entity to account for forfeitures when they occur. This guidance will be effective for the Company beginning in its first quarter of fiscal 2017, with early application permitted. The Company is currently evaluating the impact that this new guidance may have on its consolidated financial statements.

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	May. 01, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Company's Stock Option, Performance Share Unit and Restricted Share Activity	A summary of the Company's stock option, performance-based restricted stock unit, restricted share and restricted stock unit activity as of May 1, 2016 and changes during the thirteen week period then ended is presented below: Stock Options Performance-Based Restricted Stock Units Restricted Shares Restricted Stock Units Number Weighted-Average Exercise Price Number Weighted-Average Grant Date Fair Value Number Weighted-Average Grant Date Fair Value Number Weighted-Average Grant Date Fair Value (In thousands, except per share amounts) Balance at January 31, 2016 867 $ 49.54 395 $ 58.58 31 $ 57.67 333 $ 55.91 Granted 401 68.68 154 68.68 1 59.09 184 68.47 Exercised/vested 91 39.40 2 75.35 — — 47 64.05 Forfeited 58 54.72 104 63.12 — — 27 49.35 Balance at May 1, 2016 1,119 $ 56.95 443 $ 60.94 32 $ 57.71 443 $ 60.66 Exercisable at May 1, 2016 224 $ 43.43
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions	The following assumptions were used in calculating the fair value of stock options granted in fiscal 2016 : Stock Options Granted During Fiscal 2016 Expected term 4 years Expected volatility 40.07 % Risk-free interest rate 1.08 % Dividend yield — %

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	May. 01, 2016
Earnings Per Share [Abstract]
Computation of Basic and Diluted Earning Per Share	The details of the computation of basic and diluted earnings per share are as follows: Thirteen Weeks Ended Thirteen Weeks Ended (In thousands, except per share amounts) Net income $ 45,336 $ 47,810 Basic weighted-average number of shares outstanding 137,263 141,967 Assumed conversion of dilutive stock options and awards 233 370 Diluted weighted-average number of shares outstanding 137,496 142,337 Basic earnings per share $ 0.33 $ 0.34 Diluted earnings per share $ 0.33 $ 0.34

Supplementary Financial Infor18

Supplementary Financial Information (Tables)	3 Months Ended
	May. 01, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of Certain Balance Sheet Accounts	A summary of certain consolidated balance sheet accounts is as follows: May 1, January 31, (In thousands) Inventories: Finished goods $ 293,620 $ 290,791 Provision to reduce inventory to market value (7,390 ) (6,782 ) $ 286,230 $ 284,009 Property and equipment: Land $ 61,248 $ 55,488 Buildings 33,143 30,885 Leasehold improvements 241,993 225,604 Furniture and fixtures 78,138 73,254 Computer hardware 49,117 44,085 Computer software 131,887 112,161 Equipment and vehicles 12,254 11,929 Accumulated depreciation (229,967 ) (203,801 ) $ 377,813 $ 349,605 Goodwill and intangible assets, net: Goodwill $ 25,496 $ 25,496 Changes in foreign currency exchange rates (1,003 ) (1,666 ) 24,493 23,830 Intangibles—reacquired franchise rights 10,150 10,150 Accumulated amortization (9,271 ) (9,074 ) Changes in foreign currency exchange rates (52 ) (129 ) 827 947 $ 25,320 $ 24,777 Other accrued liabilities: Accrued duty, freight, and other operating expenses $ 28,437 $ 26,017 Sales tax collected 11,025 10,506 Accrued rent 5,355 6,070 Other 6,905 8,083 $ 51,722 $ 50,676 Other non-current liabilities: Deferred lease liability $ 27,296 $ 25,723 Tenant inducements 24,324 24,609 $ 51,620 $ 50,332

Segment Reporting (Tables)

Segment Reporting (Tables)	3 Months Ended
	May. 01, 2016
Segment Reporting [Abstract]
Segment Reporting	Information for these segments is detailed in the table below: Thirteen Weeks Ended Thirteen Weeks Ended (In thousands) Net revenue: Company-operated stores $ 358,704 $ 314,094 Direct to consumer 97,566 83,636 Other 39,246 25,814 $ 495,516 $ 423,544 Income from operations before general corporate expense: Company-operated stores $ 73,259 $ 69,223 Direct to consumer 38,551 34,871 Other 2,069 981 113,879 105,075 General corporate expense 56,290 37,039 Income from operations 57,589 68,036 Other (expense) income, net (486 ) 529 Income before income tax expense $ 57,103 $ 68,565 Capital expenditures: Company-operated stores $ 16,750 $ 16,844 Direct to consumer 1,163 453 Corporate and other 8,731 10,639 $ 26,644 $ 27,936 Depreciation and amortization: Company-operated stores $ 13,784 $ 11,277 Direct to consumer 1,329 1,536 Corporate and other 4,072 3,283 $ 19,185 $ 16,096

Nature of Operations and Basi20

Nature of Operations and Basis of Presentation - Additional Information (Detail) - store	May. 01, 2016	Jan. 31, 2016
Accounting Policies [Abstract]
Number of company-operated stores	373	363

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Detail) $ in Millions	3 Months Ended
	May. 01, 2016USD ($)shares	May. 03, 2015USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense | $	$ 3.2	$ 2.1
Total unrecognized compensation cost | $	$ 55.8
Expected weighted-average period of compensation cost	2 years 8 months 12 days
Common stock per performance share unit	2
ESPP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company match contribution	33.33%
Maximum shares available under ESPP | shares	6,000,000
Shares purchased under ESPP | shares	27,300

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Company's Stock Option, Performance Share Unit and Restricted Share Activity (Detail) shares in Thousands	3 Months Ended
	May. 01, 2016$ / sharesshares
Stock Options [Member]
Number
Number of Stock Options, Beginning Balance (in shares) | shares	867
Number of Stock Options, Granted (in shares) | shares	401
Number of Stock Options, Exercised/vested (in shares) | shares	91
Number of Stock Options, Forfeited (in shares) | shares	58
Number of Stock Options, Ending Balance (in shares) | shares	1,119
Number of Stock Options, Exercisable | shares	224
Weighted-Average Exercise Price
Weighted-Average Exercise Price, Options, Beginning Balance (in dollars per share) | $ / shares	$ 49.54
Weighted-Average Exercise Price, Options, Granted (in dollars per share) | $ / shares	68.68
Weighted-Average Exercise Price, Options, Exercised/vested (in dollars per share) | $ / shares	39.40
Weighted-Average Exercise Price, Options, Forfeited (in dollars per share) | $ / shares	54.72
Weighted-Average Exercise Price, Options, Ending Balance (in dollars per share) | $ / shares	56.95
Weighted-Average Exercise Price, Options, Exercisable (in dollars per share) | $ / shares	$ 43.43
Performance-Based Restricted Stock Units [Member]
Number of Performance-Based Restricted Stock Units and Restricted Shares
Number of Units/Shares, Beginning Balance (in shares) | shares	395
Number of Units/Shares, Granted (in shares) | shares	154
Number of Units/Shares, Exercised/vested (in shares) | shares	2
Number of Units/Shares, Forfeited (in shares) | shares	104
Number of Units/Shares, Ending Balance (in shares) | shares	443
Weighted-Average Grant Date Fair Value
Weighted-Average Grant Date Fair Value, Beginning Balance (in dollars per share) | $ / shares	$ 58.58
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares	68.68
Weighted-Average Grant Date Fair Value, Exercised/vested (in dollars per share) | $ / shares	75.35
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares	63.12
Weighted-Average Grant Date Fair Value, Ending Balance (in dollars per share) | $ / shares	$ 60.94
Restricted Shares [Member]
Number of Performance-Based Restricted Stock Units and Restricted Shares
Number of Units/Shares, Beginning Balance (in shares) | shares	31
Number of Units/Shares, Granted (in shares) | shares	1
Number of Units/Shares, Exercised/vested (in shares) | shares	0
Number of Units/Shares, Forfeited (in shares) | shares	0
Number of Units/Shares, Ending Balance (in shares) | shares	32
Weighted-Average Grant Date Fair Value
Weighted-Average Grant Date Fair Value, Beginning Balance (in dollars per share) | $ / shares	$ 57.67
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares	59.09
Weighted-Average Grant Date Fair Value, Exercised/vested (in dollars per share) | $ / shares	0
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares	0
Weighted-Average Grant Date Fair Value, Ending Balance (in dollars per share) | $ / shares	$ 57.71
Restricted Stock Units [Member]
Number of Performance-Based Restricted Stock Units and Restricted Shares
Number of Units/Shares, Beginning Balance (in shares) | shares	333
Number of Units/Shares, Granted (in shares) | shares	184
Number of Units/Shares, Exercised/vested (in shares) | shares	47
Number of Units/Shares, Forfeited (in shares) | shares	27
Number of Units/Shares, Ending Balance (in shares) | shares	443
Weighted-Average Grant Date Fair Value
Weighted-Average Grant Date Fair Value, Beginning Balance (in dollars per share) | $ / shares	$ 55.91
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares	68.47
Weighted-Average Grant Date Fair Value, Exercised/vested (in dollars per share) | $ / shares	64.05
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares	49.35
Weighted-Average Grant Date Fair Value, Ending Balance (in dollars per share) | $ / shares	$ 60.66

Stock-Based Compensation - Fair

Stock-Based Compensation - Fair Value Assumptions (Details)	3 Months Ended
	May. 01, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Expected term	4 years
Expected volatility	40.07%
Risk-free interest rate	1.08%
Dividend yield	0.00%

Earnings Per Share - Computatio

Earnings Per Share - Computation of Basic and Diluted Earning Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	May. 01, 2016	May. 03, 2015
Earnings Per Share [Abstract]
Net income	$ 45,336	$ 47,810
Basic weighted-average number of shares outstanding (in shares)	137,263	141,967
Assumed conversion of dilutive stock options and awards (in shares)	233	370
Diluted weighted-average number of shares outstanding (in shares)	137,496	142,337
Basic earnings per share (in dollars per share)	$ 0.33	$ 0.34
Diluted earnings per share (in dollars per share)	$ 0.33	$ 0.34

Earnings Per Share - Additional

Earnings Per Share - Additional Information (Detail) - USD ($) shares in Millions	1 Months Ended	3 Months Ended
	May. 19, 2016	May. 01, 2016	May. 03, 2015	Jun. 11, 2014
Earnings Per Share [Abstract]
Anti-dilutive stock options (in shares)		0.2	0.1
Aggregate amount authorized for stock repurchase				$ 450,000,000
Equity, Class of Treasury Stock [Line Items]
Repurchase of common stock (in shares)		0.2	0.3
Repurchase of common stock		$ 15,765,000	$ 18,800,000
Subsequent Event [Member]
Equity, Class of Treasury Stock [Line Items]
Repurchase of common stock (in shares)	0.2
Repurchase of common stock	$ 12,800,000

Supplementary Financial Infor26

Supplementary Financial Information - Summary of Certain Balance Sheet Accounts (Detail) - USD ($) $ in Thousands	3 Months Ended
	May. 01, 2016	May. 03, 2015	Jan. 31, 2016
Inventories:
Finished goods	$ 293,620		$ 290,791
Provision to reduce inventory to market value	(7,390)		(6,782)
Total inventories	286,230		284,009
Property and equipment:
Land	61,248		55,488
Buildings	33,143		30,885
Leasehold improvements	241,993		225,604
Furniture and fixtures	78,138		73,254
Computer hardware	49,117		44,085
Computer software	131,887		112,161
Equipment and vehicles	12,254		11,929
Accumulated depreciation	(229,967)		(203,801)
Total property and equipment	377,813		349,605
Goodwill and intangible assets, net:
Goodwill	25,496		25,496
Changes in foreign currency exchange rates	(1,003)		(1,666)
Goodwill, net	24,493		23,830
Intangibles—reacquired franchise rights	10,150		10,150
Accumulated amortization	(9,271)		(9,074)
Changes in foreign currency exchange rates	(52)		(129)
Total intangible assets	827		947
Goodwill and intangible assets, net	25,320		24,777
Other accrued liabilities:
Accrued duty, freight, and other operating expenses	28,437		26,017
Sales tax collected	11,025		10,506
Accrued rent	5,355		6,070
Other	6,905		8,083
Total accrued liabilities	51,722		50,676
Other non-current liabilities:
Deferred lease liability	27,296		25,723
Tenant inducements	24,324		24,609
Other non-current liabilities	51,620		$ 50,332
Selling, General and Administrative Expenses [Member]
Condensed Financial Statements, Captions [Line Items]
Net foreign exchange gains (losses)	$ (13,500)	$ (4,500)

Income Taxes Income Taxes - Add

Income Taxes Income Taxes - Additional Information (Details) $ in Millions	3 Months Ended
	May. 01, 2016USD ($)
Income Tax Disclosure [Abstract]
Amount of foreign earnings company plans to repatriate	$ 156
Net income tax expense (recovery)	(5.6)
Net interest expense	$ 1.2

Segment Reporting - Detailed Se

Segment Reporting - Detailed Segments Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	May. 01, 2016	May. 03, 2015
Net revenue:
Net revenue	$ 495,516	$ 423,544
Income from operations before general corporate expense:
Income from operations before general corporate expense	113,879	105,075
General corporate expense	56,290	37,039
Income from operations	57,589	68,036
Other (expense) income, net	(486)	529
Income before income tax expense	57,103	68,565
Capital expenditures:
Capital expenditures	26,644	27,936
Depreciation and amortization:
Depreciation and amortization	19,185	16,096
Operating Segments [Member] | Company-Operated Stores [Member]
Net revenue:
Net revenue	358,704	314,094
Income from operations before general corporate expense:
Income from operations before general corporate expense	73,259	69,223
Capital expenditures:
Capital expenditures	16,750	16,844
Depreciation and amortization:
Depreciation and amortization	13,784	11,277
Operating Segments [Member] | Direct To Consumer [Member]
Net revenue:
Net revenue	97,566	83,636
Income from operations before general corporate expense:
Income from operations before general corporate expense	38,551	34,871
Capital expenditures:
Capital expenditures	1,163	453
Depreciation and amortization:
Depreciation and amortization	1,329	1,536
Operating Segments [Member] | Other [Member]
Net revenue:
Net revenue	39,246	25,814
Income from operations before general corporate expense:
Income from operations before general corporate expense	2,069	981
Corporate and Other [Member]
Capital expenditures:
Capital expenditures	8,731	10,639
Depreciation and amortization:
Depreciation and amortization	$ 4,072	$ 3,283