Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jan. 31, 2015 | Mar. 27, 2015 | Aug. 02, 2014 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Jan-15 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | TLYS | ||
Entity Registrant Name | TILLY'S, INC. | ||
Entity Central Index Key | 1524025 | ||
Current Fiscal Year End Date | -30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 11,976,582 | ||
Entity Public Float | $79,579,483 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jan. 31, 2015 | Feb. 01, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $49,789 | $25,412 |
Marketable securities | 34,957 | 34,943 |
Receivables | 4,682 | 8,545 |
Merchandise inventories | 51,507 | 46,266 |
Prepaid expenses and other current assets | 12,349 | 11,772 |
Total current assets | 153,284 | 126,938 |
Property and equipment, net | 101,335 | 100,936 |
Other assets | 2,932 | 4,533 |
Total assets | 257,551 | 232,407 |
Current liabilities: | ||
Accounts payable | 23,109 | 19,645 |
Accrued expenses | 12,325 | 9,241 |
Current portion of deferred rent | 6,070 | 5,395 |
Deferred revenue | 7,075 | 6,214 |
Accrued compensation and benefits | 5,911 | 4,975 |
Current portion of capital lease obligation (Note 9) | 806 | 758 |
Total current liabilities | 55,296 | 46,228 |
Long-term portion of deferred rent | 41,875 | 42,756 |
Long-term portion of capital lease obligation (Note 9) | 1,694 | 2,500 |
Total long-term liabilities | 43,569 | 45,256 |
Total liabilities | 98,865 | 91,484 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; January 31, 2015 and February 1, 2014-10,000 shares authorized, no shares issued or outstanding | ||
Additional paid-in capital | 126,565 | 122,886 |
Retained earnings | 32,072 | 17,997 |
Accumulated other comprehensive income | 21 | 12 |
Total stockholders' equity | 158,686 | 140,923 |
Total liabilities and stockholders' equity | 257,551 | 232,407 |
Class A common stock | ||
Stockholders' equity: | ||
Common stock | 11 | 11 |
Class B common stock | ||
Stockholders' equity: | ||
Common stock | $17 | $17 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jan. 31, 2015 | Feb. 01, 2014 |
In Thousands, except Per Share data, unless otherwise specified | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A common stock | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 11,546 | 11,361 |
Common stock, shares outstanding | 11,546 | 11,361 |
Class B common stock | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 35,000 | 35,000 |
Common stock, shares issued | 16,544 | 16,642 |
Common stock, shares outstanding | 16,544 | 16,642 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 |
Net sales | $518,294 | $495,837 | $467,291 |
Cost of goods sold (includes buying, distribution, and occupancy costs) (Note 1) | 362,762 | 345,015 | 319,723 |
Gross profit | 155,532 | 150,822 | 147,568 |
Selling, general and administrative expenses (Note 1) | 132,343 | 121,085 | 116,178 |
Operating income | 23,189 | 29,737 | 31,390 |
Other expense, net | 14 | 9 | 91 |
Income before income taxes | 23,175 | 29,728 | 31,299 |
Income tax expense | 9,100 | 11,591 | 7,406 |
Net income | 14,075 | 18,137 | 23,893 |
Weighted average basic shares outstanding | 28,013 | 27,822 | 25,656 |
Weighted average diluted shares outstanding | 28,078 | 28,116 | 26,076 |
Class A and Class B common stock | |||
Basic earnings per share | $0.50 | $0.65 | $0.93 |
Diluted earnings per share | $0.50 | $0.65 | $0.92 |
Historical | |||
Income before income taxes | 31,299 | ||
Pro Forma | |||
Income tax expense | 12,520 | ||
Net income | $18,779 | ||
Pro Forma | Class A and Class B common stock | |||
Basic earnings per share | $0.73 | ||
Diluted earnings per share | $0.72 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 |
Net income | $14,075 | $18,137 | $23,893 |
Other comprehensive income, net of tax: | |||
Net change in unrealized gain/loss on available-for-sale securities | 9 | -5 | 17 |
Other comprehensive income (loss), net of tax | 9 | -5 | 17 |
Comprehensive income | $14,084 | $18,132 | $23,910 |
Consolidated_Statement_of_Stoc
Consolidated Statement of Stockholders' Equity (USD $) | Total | Class A common stock | Class B common stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
In Thousands, except Share data | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||
Beginning Balance at Jan. 28, 2012 | $60,424 | $20 | $150 | $60,254 | |||
Beginning Balance (in shares) at Jan. 28, 2012 | 20,000,000 | ||||||
Net income | 23,893 | 23,893 | |||||
Reorganization (Note 1) | 20,000,000 | -20,000,000 | |||||
Issuance of stock in IPO, net of costs (in shares) | 9,200,000 | -1,600,000 | |||||
Issuance of stock in IPO, net of costs | 106,789 | 7 | 106,782 | ||||
Distributions to "S" Corporation shareholders | -84,287 | -84,287 | |||||
Shares converted by founders | 1,480,000 | -1,480,000 | |||||
Stock-based compensation expense | 9,570 | 9,570 | |||||
Exercise of stock options (in shares) | 92,000 | ||||||
Exercise of stock options | 890 | 1 | 889 | ||||
Net change in unrealized gain (loss) on available-for-sale securities | 17 | 17 | |||||
Ending Balance at Feb. 02, 2013 | 117,296 | 28 | 117,391 | -140 | 17 | ||
Ending Balance (in shares) at Feb. 02, 2013 | 10,772,000 | 16,920,000 | |||||
Net income | 18,137 | 18,137 | |||||
Shares converted by founders | 278,000 | -278,000 | |||||
Stock-based compensation expense | 3,106 | 3,106 | |||||
Restricted stock | 31,000 | ||||||
Exercise of stock options (in shares) | 280,000 | ||||||
Exercise of stock options | 2,389 | 2,389 | |||||
Net change in unrealized gain (loss) on available-for-sale securities | -5 | -5 | |||||
Ending Balance at Feb. 01, 2014 | 140,923 | 28 | 122,886 | 17,997 | 12 | ||
Ending Balance (in shares) at Feb. 01, 2014 | 11,361,000 | 16,642,000 | |||||
Beginning Balance (in shares) at Feb. 01, 2014 | 11,361,000 | 16,642,000 | |||||
Net income | 14,075 | 14,075 | |||||
Shares converted by founders | 98,000 | -98,000 | |||||
Stock-based compensation expense | 3,499 | 3,499 | |||||
Excess tax deficiencies from stock-based compensation | -124 | -124 | |||||
Restricted stock | 49,000 | ||||||
Exercise of stock options (in shares) | 38,250 | 38,000 | |||||
Exercise of stock options | 304 | 304 | |||||
Net change in unrealized gain (loss) on available-for-sale securities | 9 | 9 | |||||
Ending Balance at Jan. 31, 2015 | $158,686 | $28 | $126,565 | $32,072 | $21 | ||
Ending Balance (in shares) at Jan. 31, 2015 | 11,546,000 | 16,544,000 |
Consolidated_Statement_of_Stoc1
Consolidated Statement of Stockholders' Equity (Parenthetical) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Feb. 01, 2014 | Feb. 02, 2013 |
Exercise of stock options, tax benefit | $42 | $74 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 |
Cash flows from operating activities | |||
Net income | $14,075 | $18,137 | $23,893 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 21,237 | 19,367 | 16,679 |
Loss on disposal of assets | 118 | 140 | 111 |
Impairment of assets | 1,007 | 1,840 | |
(Gain) loss on sales and maturities of marketable securities | -116 | -176 | 28 |
Deferred income taxes | -1,156 | 304 | 6,689 |
Stock-based compensation expense | 3,499 | 3,106 | 9,570 |
Excess tax benefit from stock-based compensation | -22 | -157 | -95 |
Changes in operating assets and liabilities: | |||
Receivables | 3,863 | -2,611 | 21 |
Merchandise inventories | -5,241 | 329 | -9,927 |
Prepaid expenses and other assets | 2,051 | -1,861 | -12,930 |
Accounts payable | 3,720 | 1,554 | 1,431 |
Accrued expenses | 3,662 | -1,796 | -1,470 |
Accrued compensation and benefits | 936 | -1,119 | -1,442 |
Deferred rent | -206 | 5,976 | 8,584 |
Deferred revenue | 861 | 761 | 588 |
Net cash provided by operating activities | 48,288 | 43,794 | 41,730 |
Cash flows from investing activities | |||
Purchase of property and equipment | -23,636 | -42,701 | -33,298 |
Proceeds from sale of property and equipment | 41 | 79 | 17 |
Insurance proceeds from casualty loss | 822 | ||
Purchases of marketable securities | -59,884 | -44,908 | -75,377 |
Maturities of marketable securities | 60,000 | 50,000 | 35,510 |
Net cash used in investing activities | -23,479 | -37,530 | -72,326 |
Cash flows from financing activities | |||
Payment of capital lease obligation | -758 | -712 | -668 |
Net proceeds from initial public offering | 106,789 | ||
Proceeds from exercise of stock options | 304 | 2,389 | 890 |
Excess tax benefit from stock-based compensation | 22 | 157 | 95 |
Distributions | -84,287 | ||
Net cash (used in) provided by financing activities | -432 | 1,834 | 22,819 |
Change in cash and cash equivalents | 24,377 | 8,098 | -7,777 |
Cash and cash equivalents, beginning of period | 25,412 | 17,314 | 25,091 |
Cash and cash equivalents, end of period | 49,789 | 25,412 | 17,314 |
Supplemental disclosures of cash flow information | |||
Interest paid | 182 | 253 | 299 |
Income taxes paid | 4,511 | 14,969 | 13,727 |
Supplemental disclosure of non-cash activities | |||
Unpaid purchases of property and equipment | $1,513 | $2,348 | $2,875 |
Description_of_the_Company_and
Description of the Company and Basis of Presentation | 12 Months Ended |
Jan. 31, 2015 | |
Description of the Company and Basis of Presentation | Note 1: Description of the Company and Basis of Presentation |
Tilly’s, Inc. was formed as a Delaware corporation on May 4, 2011 for the purpose of reorganizing the corporate structure of World of Jeans & Tops, a California corporation (“WOJT”). On May 2, 2012, the shareholders of WOJT contributed all of their shares of common stock to Tilly’s, Inc. in return for shares of Tilly’s, Inc. Class B common stock on a one-for-one basis. In addition, effective May 2, 2012, WOJT converted from an “S” Corporation to a “C” Corporation for income tax purposes. These events are collectively referred to as the “Reorganization”. As a result of the Reorganization, WOJT became a wholly owned subsidiary of Tilly’s, Inc. Except where context requires or where otherwise indicated, the terms the Company, Tilly’s, we, or us, refers to WOJT before the Reorganization and to Tilly’s, Inc. and its subsidiary, WOJT, after the Reorganization. | |
Tilly’s operates a chain of specialty retail stores featuring casual clothing, footwear and accessories for teens and young adults. The Company operated a total of 212 and 195 stores as of January 31, 2015 and February 1, 2014, respectively. The stores are located in malls, lifestyle centers, ‘power’ centers, community centers, outlet centers and street-front locations. Customers may also shop online, where the Company features a similar assortment of product as is carried in its brick-and-mortar stores. | |
Fiscal Year | |
The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years 2014, 2013 and 2012 ended on January 31, 2015, February 1, 2014 and February 2, 2013, respectively. Fiscal years 2014 and 2013 each included 52 weeks, and fiscal year 2012 included 53 weeks. | |
Segment Reporting | |
Accounting principles generally accepted in the United States (“GAAP”) has established guidance for reporting information about a company’s operating segments, including disclosures related to a company’s products and services, geographic areas and major customers. The Company has one reportable segment. All of the Company’s identifiable assets are in the United States. | |
Unaudited Pro Forma Income Information | |
The unaudited pro forma income information gives effect to the conversion of the Company to a “C” Corporation on May 2, 2012. Prior to such conversion, the Company was an “S” Corporation and generally not subject to income taxes. The pro forma net income and per share amounts, therefore, include an adjustment for income tax expense as if the Company had been a “C” Corporation during the periods presented at an assumed combined federal, state and local effective tax rate of 40%, which approximates the calculated statutory tax rate for each period. In addition, the unaudited pro forma diluted weighted average shares outstanding was computed using the assumed 40% effective tax rate. As a result, the pro forma adjustment to diluted weighted average shares outstanding was a decrease of approximately 20,000 shares in fiscal year 2012. | |
Initial Public Offering | |
On May 3, 2012, Tilly’s, Inc. completed its initial public offering (“IPO”) in which it issued and sold 7,600,000 shares of its Class A common stock and certain selling stockholders sold 400,000 shares of Class A common stock. In addition, on May 9, 2012, the underwriters exercised their option to purchase an additional 1,200,000 shares of Class A common stock from the selling stockholders to cover over-allotments. As a result, the total IPO size was 9,200,000 shares of Class A common stock, which consisted of 7,600,000 shares sold by Tilly’s, Inc. and 1,600,000 shares sold by the selling stockholders. The 9,200,000 shares of Class A common stock sold in the offering were sold at a price of $15.50 per share. Tilly’s, Inc. did not receive any proceeds from the sale of shares by the selling stockholders. | |
As a result of the IPO, the Company received net proceeds of approximately $106.6 million, after deducting the underwriting discount of $8.7 million and related fees and expenses of approximately $2.5 million. The Company used $84.0 million of the net proceeds from the IPO to pay in full notes previously issued to the shareholders of WOJT. These notes represented WOJT’s undistributed taxable income from the date of its formation through the date of termination of its “S” Corporation status. | |
Correction to the Consolidated Statements of Income | |
The Company identified a prior period error related to the classification of share-based compensation and benefits. The Company identified $1.5 million and $2.6 million of share-based compensation and benefits in fiscal years 2013 and 2012, respectively, previously included in selling, general and administrative expenses that should have been presented as a component of cost of goods sold. Accordingly, the Company has corrected the accompanying consolidated statements of income for fiscal years 2013 and 2012, resulting in an increase in cost of goods sold, a decrease in gross profit and a decrease in selling, general and administrative expenses of $1.5 million and $2.6 million for fiscal years 2013 and 2012, respectively, from amounts previously reported. The error had no impact on the amounts previously reported in the Company’s consolidated balance sheets and statements of comprehensive income, and cash flows and had no impact on net income. Management has evaluated the materiality of the error quantitatively and qualitatively and has concluded that the correction of this error is immaterial to the consolidated statements of income and the consolidated financial statements as a whole. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||
Jan. 31, 2015 | |||||||||||||
Summary of Significant Accounting Policies | Note 2: Summary of Significant Accounting Policies | ||||||||||||
Cash and Cash Equivalents | |||||||||||||
The Company considers all short-term investments with an initial maturity of 90 days or less when purchased to be cash equivalents. | |||||||||||||
Marketable Securities | |||||||||||||
Marketable securities are classified as available-for-sale and are carried at fair value, with the unrealized holding gains and losses, net of income taxes, reflected as a separate component of stockholders’ equity until realized. For the purposes of computing realized and unrealized gains and losses, cost is determined on a specific identification basis. The Company classifies all marketable securities within current assets on the consolidated balance sheet, including those with maturity dates beyond twelve months, as they are available to support the Company’s current operational liquidity needs. | |||||||||||||
Merchandise Inventories | |||||||||||||
Merchandise inventories are comprised of finished goods offered for sale at the Company’s retail stores and online. Inventories are stated at the lower of cost or market using the retail inventory method. An initial markup is applied to inventory at cost in order to establish a cost-to-retail ratio. The Company believes that the retail inventory method approximates cost. Shipping and handling costs for merchandise shipped to customers of $6.7 million, $6.6 million and $5.6 million in fiscal years 2014, 2013 and 2012, respectively, are included in cost of goods sold in the consolidated statements of operations. | |||||||||||||
The Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear this merchandise. At any given time, merchandise inventories include items that have been marked down to management’s best estimate of their fair market value at retail price, with a proportionate write-down to the cost of the inventory. Management bases the decision to mark down merchandise primarily upon its current sell-through rate and the age of the item, among other factors. These markdowns may have an adverse impact on earnings, depending on the extent and amount of inventory affected. Markdowns are recorded as an increase to cost of goods sold in the consolidated statements of income. Total markdowns, including permanent and promotional markdowns, on a cost basis were $37.0 million, $35.7 million and $32.2 million in fiscal years 2014, 2013 and 2012, respectively. In addition, the Company accrued $0.9 million for planned but unexecuted markdowns, including markdowns related to slow moving merchandise, as of January 31, 2015 and February 1, 2014. | |||||||||||||
Property and Equipment | |||||||||||||
Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Equipment is depreciated over five to seven years. Furniture and fixtures are depreciated over five years. Computer software is depreciated over three years. Leasehold improvements and the cost of acquiring leasehold rights are amortized over the lesser of the term of the lease or the estimated useful life of the improvement. The cost of assets sold or retired and the related accumulated depreciation is removed from the accounts with any resulting gain or loss included in net income. | |||||||||||||
Repairs and maintenance costs are charged directly to expense as incurred. Major renewals, replacements and improvements that substantially extend the useful life of an asset are capitalized and depreciated. | |||||||||||||
Impairment of Long-Lived Assets | |||||||||||||
Impairments are recorded on long-lived assets used in operations whenever events or changes in circumstances indicate that the net carrying amounts may not be recoverable. Factors considered important that could result in an impairment review include, but are not limited to, significant underperformance relative to historical or planned operating results, significant changes in the manner of use of the assets or significant changes in the Company’s business strategies. An evaluation is performed using estimated undiscounted future cash flows from operating activities compared to the carrying value of related assets for the individual stores. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized for the difference between the carrying value and the estimated fair value of the assets based on the discounted cash flows of the assets using a rate that approximates the Company’s weighted average cost of capital. With regard to retail store assets, which are comprised of leasehold improvements, fixtures and computer hardware and software, the Company considers the assets at each individual retail store to represent an asset group. In addition, the Company has considered the relevant valuation techniques that could be applied without undue cost and effort and has determined that the discounted estimated future cash flow approach provides the most relevant and reliable means by which to determine fair value in this circumstance. | |||||||||||||
At least quarterly, the Company assesses whether events or changes in circumstances have occurred that potentially indicate the carrying value of long-lived assets may not be recoverable. The Company’s evaluation during the fourth quarter of fiscal years 2014 and 2013 indicated that operating losses or insufficient operating income existed at two and four retail stores, respectively, with a projection that the operating losses or insufficient operating income for these locations would continue. As such, the Company recorded noncash charges of $1.0 million and $1.8 million in selling, general and administrative expenses in fiscal years 2014 and 2013, respectively, to write down the carrying value of these stores’ long-lived assets to their estimated fair values. The Company did not record any impairment charges in fiscal year 2012. | |||||||||||||
If the Company is not able to achieve its projected key financial metrics, the Company may incur additional impairment in the future for those retail stores tested and not deemed to be impaired in its analysis, as well as for additional retail stores not tested in its most recent analysis. | |||||||||||||
Operating Leases | |||||||||||||
The Company leases its retail stores under noncancellable operating leases. Most store leases include tenant allowances from landlords, rent escalation clauses and/or contingent rent provisions. The Company recognizes rent expense on a straight-line basis over the lease term, excluding contingent rent, and records the difference between the amount charged to expense and the rent paid as a deferred rent liability. Contingent rent, determined based on a percentage of sales in excess of specified levels, is recognized as rent expense when the achievement of the specified sales that triggers the contingent rent is probable. | |||||||||||||
Deferred Rent and Tenant Allowances | |||||||||||||
Deferred rent is recognized when a lease contains fixed rent escalations. The Company recognizes the related rent expense on a straight-line basis starting from the date of possession and records the difference between the recognized rental expense and cash rent payable as deferred rent. Deferred rent also includes tenant allowances received from landlords in accordance with negotiated lease terms. The tenant allowances are amortized as a reduction to rent expense on a straight-line basis over the term of the lease starting at the date of possession. | |||||||||||||
Revenue Recognition | |||||||||||||
Revenue is recognized for store sales when the customer receives and pays for the merchandise at the register. Taxes collected from the Company’s customers are recorded on a net basis. For e-commerce sales, the Company recognizes revenue, net of sales taxes and estimated sales returns, and the related cost of goods sold at the time the merchandise is received by the customer. The Company defers e-commerce revenue and the associated product and shipping costs for shipments that are in-transit to the customer. Customers typically receive goods within three days of shipment. Amounts related to shipping and handling that are billed to customers are reflected in net sales, and the related costs are reflected in cost of goods sold in the Consolidated Statements of Income. For fiscal years 2014, 2013 and 2012, shipping and handling fee revenue included in net sales was $2.6 million, $3.3 million and $3.7 million, respectively. | |||||||||||||
The Company accrues for estimated sales returns by customers based on historical sales return results. Sales return accrual activity for fiscal years 2014, 2013 and 2012 is as follows (in thousands): | |||||||||||||
Fiscal Year Ended | |||||||||||||
January 31, | February 1, | February 2, | |||||||||||
2015 | 2014 | 2013 | |||||||||||
Beginning balance | $ | 573 | $ | 703 | $ | 609 | |||||||
Provisions | 16,875 | 15,938 | 14,850 | ||||||||||
Usage | (16,800 | ) | (16,068 | ) | (14,756 | ) | |||||||
Ending balance | $ | 648 | $ | 573 | $ | 703 | |||||||
The Company recognizes revenue from gift cards as they are redeemed for merchandise. Prior to redemption, the Company maintains a current liability for unredeemed gift card balances. The customer liability balance was $7.1 million and $6.2 million as of January 31, 2015 and February 1, 2014, respectively, and is included in deferred revenue on the balance sheets. The Company’s s gift cards do not have expiration dates; however, over time, the redemption of some gift cards becomes remote and in most cases there is no legal obligation to remit the unredeemed gift cards to relevant jurisdictions (gift card “breakage”). An assessment of the ultimate non-redemption rate of gift cards is performed when enough time has passed since the activation of the cards to enable a determination of the ultimate breakage rate based upon historical redemption experience. This date of assessment has historically been two full fiscal years after the fiscal year the cards were activated. At the time of assessment a breakage estimate is calculated and recorded in net sales. Breakage revenue for gift cards was $0.8 million, $0.6 million and $0.4 million in fiscal years 2014, 2013 and 2012, respectively. | |||||||||||||
Cost of Goods Sold and Selling, General and Administrative Expenses | |||||||||||||
The following illustrates the primary costs classified in each major expense category: | |||||||||||||
Cost of Goods Sold | |||||||||||||
• | Total cost of products sold include: | ||||||||||||
• | freight expenses associated with moving merchandise inventories from our vendors to our distribution center; | ||||||||||||
• | vendor allowances; | ||||||||||||
• | cash discounts on payments to merchandise vendors; | ||||||||||||
• | physical inventory losses; and | ||||||||||||
• | markdowns of inventory. | ||||||||||||
• | Costs of buying and distribution of merchandise include: | ||||||||||||
• | payroll and benefit costs and incentive compensation for merchandise purchasing personnel; | ||||||||||||
• | customer shipping and handling expenses; | ||||||||||||
• | costs associated with operating our distribution and fulfillment center, including payroll and benefit costs for our distribution center, occupancy costs, and depreciation; and | ||||||||||||
• | freight expenses associated with moving merchandise inventories from our distribution center to our stores and e-commerce customers. | ||||||||||||
Store occupancy costs including rent, maintenance, utilities, property taxes, business licenses, security costs and depreciation. | |||||||||||||
Selling, General and Administrative Expenses | |||||||||||||
• | Payroll, benefit costs and incentive compensation for store, regional, e-commerce and corporate employees; | ||||||||||||
• | Occupancy and maintenance costs of corporate office facilities; | ||||||||||||
• | Depreciation related to corporate office assets; | ||||||||||||
• | Advertising and marketing costs, net of reimbursement from vendors; | ||||||||||||
• | Tender costs, including costs associated with credit and debit card interchange fees; | ||||||||||||
• | Long-lived asset impairment charges; | ||||||||||||
• | Other administrative costs such as supplies, consulting, audit and tax preparation fees, travel and lodging; and | ||||||||||||
• | Charitable contributions. | ||||||||||||
Store Opening Costs | |||||||||||||
Store opening costs consist primarily of occupancy costs, which are included in cost of goods sold, and payroll expenses, which are included in selling, general and administrative expenses, in the statements of operations. | |||||||||||||
Advertising | |||||||||||||
The Company expenses advertising costs as incurred, except for direct-mail advertising expenses which are recognized at the time of mailing. Advertising costs include such things as production and distribution of catalogs, print advertising costs, radio advertisements and grand openings and other events. Advertising expense, which is classified in selling, general and administrative expenses in the accompanying statements of operations, was $9.6 million, $9.1 million and $8.4 million in fiscal years 2014, 2013 and 2012, respectively. | |||||||||||||
Share-based Compensation | |||||||||||||
The Company applies the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation-Stock Compensation (“ASC 718”), for accounting for equity instruments exchanged for employee services. Under the provisions of this statement, share-based compensation expense is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight-line basis over the employee’s requisite service period (generally the vesting period of the equity grant). As required under this guidance, the Company estimates forfeitures for options granted which are not expected to vest. Changes in these inputs and assumptions can materially affect the measurement of the estimated fair value of the Company’s share-based compensation expense. Refer to “Note 12: Share-based Compensation” for further information. | |||||||||||||
Income Taxes | |||||||||||||
The Company accounts for income taxes and the related accounts using the asset and liability method in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Under this method, the Company accrues income taxes payable or refundable and recognizes deferred tax assets and liabilities based on differences between GAAP and tax bases of assets and liabilities. The Company measures deferred tax assets and liabilities using enacted tax rates in effect for the years in which the differences are expected to reverse, and recognizes the effect of a change in enacted rates in the period of enactment. | |||||||||||||
The Company establishes assets and liabilities for uncertain positions taken or expected to be taken in income tax returns, using a more-likely-than-not recognition threshold. The Company includes in income tax expense any interest and penalties related to uncertain tax positions. Refer to “Note 14: Income Taxes”, for further information. | |||||||||||||
Earnings per Share | |||||||||||||
Basic earnings per share is computed using the weighted average number of shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributed to outstanding options to purchase common stock. Incremental shares of 65 thousand, 294 thousand and 420 thousand in fiscal years 2014, 2013 and 2012, respectively, were used in the calculation of diluted earnings per share. Refer to “Note 15: Earnings Per Share”, for further information. | |||||||||||||
Concentration of Credit Risk | |||||||||||||
Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents. At January 31, 2015 and February 1, 2014, and at various times throughout these years, the Company had cash in financial institutions in excess of the $250,000 amount insured by the Federal Deposit Insurance Corporation. The Company typically invests its cash in highly rated, short-term commercial paper or in interest-bearing money market funds. | |||||||||||||
Use of Estimates | |||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. |
Marketable_Securities
Marketable Securities | 12 Months Ended | ||||||||||||||||
Jan. 31, 2015 | |||||||||||||||||
Marketable Securities | Note | 3: Marketable Securities | |||||||||||||||
Marketable securities are classified as available-for-sale and, as of January 31, 2015 and February 1, 2014, consisted entirely of commercial paper, all of which were less than one year from maturity. | |||||||||||||||||
The following table summarizes the Company’s investments in marketable securities at January 31, 2015 and February 1, 2014 (in thousands): | |||||||||||||||||
January 31, 2015 | |||||||||||||||||
Cost | Gross | Gross | Fair | ||||||||||||||
Unrealized | Unrealized | Value | |||||||||||||||
Holding | Holding | ||||||||||||||||
Gains | Losses | ||||||||||||||||
Commercial paper | $ | 34,922 | $ | 35 | $ | — | $ | 34,957 | |||||||||
. | |||||||||||||||||
1-Feb-14 | |||||||||||||||||
Cost | Gross | Gross | Fair | ||||||||||||||
Unrealized | Unrealized | Value | |||||||||||||||
Holding | Holding | ||||||||||||||||
Gains | Losses | ||||||||||||||||
Commercial paper | $ | 34,923 | $ | 23 | $ | (3 | ) | $ | 34,943 | ||||||||
For the fiscal years ended January 31, 2015 and February 1, 2014, the Company recognized gains on investments of $0.1 million and $0.2 million, respectively, for commercial paper which matured during the periods. Upon recognition of the gains, the Company reclassified these amounts out of accumulated other comprehensive income and into other expense, net, on the consolidated statements of income. |
Receivables
Receivables | 12 Months Ended | ||||||||
Jan. 31, 2015 | |||||||||
Receivables | Note 4: Receivables | ||||||||
At January 31, 2015 and February 1, 2014, receivables consisted of the following (in thousands): | |||||||||
January 31, | February 1, | ||||||||
2015 | 2014 | ||||||||
Credit and debit card receivables | $ | 2,685 | $ | 2,372 | |||||
Tenant allowances due from landlords | 1,789 | 2,849 | |||||||
Income tax receivable | — | 2,964 | |||||||
Other | 208 | 360 | |||||||
Total receivables | $ | 4,682 | $ | 8,545 | |||||
Prepaid_Expenses_and_Other_Cur
Prepaid Expenses and Other Current Assets | 12 Months Ended | ||||||||
Jan. 31, 2015 | |||||||||
Prepaid Expenses and Other Current Assets | Note 5: Prepaid Expenses and Other Current Assets | ||||||||
At January 31, 2015 and February 1, 2014, prepaid expenses and other current assets consisted of the following (in thousands): | |||||||||
January 31, | February 1, | ||||||||
2015 | 2014 | ||||||||
Prepaid rent | $ | 6,596 | $ | 6,204 | |||||
Deferred taxes | 3,594 | 3,379 | |||||||
Prepaid maintenance agreements | 753 | 892 | |||||||
Prepaid insurance | 704 | 532 | |||||||
Other | 702 | 765 | |||||||
Total prepaid expenses and other current assets | $ | 12,349 | $ | 11,772 | |||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Jan. 31, 2015 | |||||||||
Property and Equipment | Note 6: Property and Equipment | ||||||||
At January 31, 2015 and February 1, 2014, property and equipment consisted of the following (in thousands): | |||||||||
January 31, | February 1, | ||||||||
2015 | 2014 | ||||||||
Leasehold improvements | $ | 124,809 | $ | 99,719 | |||||
Furniture and fixtures | 37,796 | 35,043 | |||||||
Machinery and equipment | 28,819 | 26,990 | |||||||
Building under capital lease | 7,840 | 7,840 | |||||||
Computer hardware and software | 24,622 | 19,796 | |||||||
Construction in progress | 1,448 | 16,998 | |||||||
Vehicles | 1,470 | 1,381 | |||||||
226,804 | 207,767 | ||||||||
Accumulated depreciation | (125,469 | ) | (106,831 | ) | |||||
Property and equipment, net | $ | 101,335 | $ | 100,936 | |||||
Depreciation expense related to property and equipment was $21.2 million, $19.4 million and $16.7 million in fiscal years 2014, 2013 and 2012, respectively. | |||||||||
The Company incurred costs of $22.8 million, $42.2 million and $34.0 million for capital expenditures in fiscal years 2014, 2013 and 2012, respectively. |
Accrued_Expenses
Accrued Expenses | 12 Months Ended | ||||||||
Jan. 31, 2015 | |||||||||
Accrued Expenses | Note 7: Accrued Expenses | ||||||||
At January 31, 2015 and February 1, 2014, accrued expenses consisted of the following (in thousands): | |||||||||
January 31, | February 1, | ||||||||
2015 | 2014 | ||||||||
Sales and use taxes payable | $ | 1,611 | $ | 1,566 | |||||
Accrued construction | 1,202 | 1,780 | |||||||
Minimum rent and common area maintenance | 927 | 870 | |||||||
Accrued merchandise returns | 648 | 572 | |||||||
Income taxes payable | 600 | — | |||||||
Other | 7,337 | 4,453 | |||||||
Total accrued expenses | $ | 12,325 | $ | 9,241 | |||||
Line_of_Credit
Line of Credit | 12 Months Ended |
Jan. 31, 2015 | |
Line of Credit | Note 8: Line of Credit |
On May 3, 2012, the Company entered into an amended and restated credit agreement with Wells Fargo Bank, N.A., which the Company amended on March 17, 2014 to extend the maturity date, reduce the borrowing rate, eliminate a fee of 0.10% on the average daily unused amount on the line of credit, eliminate certain financial covenants related to current liabilities, funded debt and net profits, and add certain new covenants relating to total net losses and maximum balance sheet leverage. The amended credit facility, which was effective as of February 3, 2014, continues to provide for a $25.0 million revolving line of credit with a maturity date of May 31, 2017. The interest charged on borrowings is either at LIBOR plus 1.00%, or at the bank’s prime rate. The Company has the ability to select between the prime rate or LIBOR-based rate at the time of a cash advance. The revolving credit facility is secured by substantially all of the Company’s assets. As a sub-feature under the revolving credit facility the bank may issue stand-by and commercial letters of credit up to $15.0 million. | |
The Company is required to maintain certain financial and nonfinancial covenants in accordance with the revolving credit facility. The financial covenants require certain levels of leverage and profitability, such as (i) an aggregate maximum net loss after taxes not to exceed $5 million (measured at the end of each fiscal quarter), with no more than one annual net loss after taxes for any fiscal year (in either case, excluding all charges for impairment of goodwill, other intangibles and store assets impairment on the balance sheet of WOJT, in an aggregate amount of up to $2.0 million for the relevant period), and (ii) a maximum ratio of 2.00 to 1.00 for “balance sheet leverage”, defined as total liabilities divided by total tangible net worth. | |
At January 31, 2015, the Company was in compliance with all of its covenants and had no outstanding borrowings under the line of credit. |
Leases
Leases | 12 Months Ended | ||||||||||||
Jan. 31, 2015 | |||||||||||||
Leases | Note 9: Leases | ||||||||||||
The Company conducts all of its retail sales and corporate operations in leased facilities. Lease terms generally range up to ten years and provide for escalations in base rents. The Company is generally not obligated to renew leases. Certain leases provide for additional rent based on a percentage of sales and annual rent increases generally based upon the Consumer Price Index. In addition, many of the store leases contain certain co-tenancy provisions that permit the Company to pay rent based on a pre-determined percentage of sales when the occupancy of the retail center falls below minimums established in the lease. | |||||||||||||
Operating leases | |||||||||||||
The Company leases office and warehouse space (11 Whatney, Irvine, California) from a company that is owned by one of the co-founders of Tilly’s. The Company occupied the building on June 29, 2012 and incurred rent expense of $0.3 million in fiscal years 2014 and 2013 and $0.2 million in fiscal year 2012, related to the lease. Pursuant to the lease agreement, the lease payment adjusts annually based upon the Los Angeles/Anaheim/Riverside Urban Consumer Price Index, not to exceed 7%, but a minimum of 3%, in any one annual increase. The lease expires on June 30, 2022. | |||||||||||||
The Company leases a building (17 Pasteur, Irvine, California) from a company that is owned by one of the co-founders of Tilly’s. The Company uses this property as its e-commerce distribution center. Pursuant to the lease agreement, the Company requested during fiscal year 2012 that the landlord expand the building. Upon commencement of the building expansion, the Company returned the building to the landlord. As of February 2, 2013, the landlord returned the expanded building to the Company. The Company incurred rent expense of $1.0 million, $1.1 million and $0.6 million in fiscal years 2014, 2013 and 2012, respectively, related to this lease. Pursuant to the lease agreement, the lease payment adjusts annually based upon the Los Angeles/Anaheim/Riverside Urban Consumer Price Index, not to exceed 7%, but a minimum of 3%, in any one annual increase. The lease expires on October 31, 2021. | |||||||||||||
The Company previously leased warehouse space (15 Chrysler, Irvine, California) that is owned by one of the co-founders of Tilly’s. The lease provided for base monthly payments of $16,118 which increased every twelve months at $0.03 per square foot per month. The Company incurred rent expense of $0.1 million, $0.2 million and $0.2 million in fiscal years 2014, 2013 and 2012, respectively, related to this lease. The lease expired on October 31, 2014. The Company subleased part of the building to an unrelated third party. The sublease began on December 1, 2010 and terminated on May 31, 2014. Sublease income was $0.1 million in fiscal years 2014, 2013 and 2012. | |||||||||||||
Future minimum rental commitments, by year and in the aggregate, under noncancellable operating leases for the above buildings at 11 Whatney and 17 Pasteur and all of the Company’s store locations as of January 31, 2015 are as follows (in thousands): | |||||||||||||
Fiscal Year | Related | Other | Total | ||||||||||
Party | |||||||||||||
2015 | $ | 2,210 | $ | 47,507 | $ | 49,717 | |||||||
2016 | 2,247 | 45,949 | 48,196 | ||||||||||
2017 | 2,205 | 42,675 | 44,880 | ||||||||||
2018 | 1,503 | 42,200 | 43,703 | ||||||||||
2019 | 1,430 | 32,686 | 34,116 | ||||||||||
Thereafter | 2,756 | 87,882 | 90,638 | ||||||||||
Total | $ | 12,351 | $ | 298,899 | $ | 311,250 | |||||||
Rent expense under noncancellable operating leases for fiscal years 2014, 2013 and 2012 was as follows (in thousands): | |||||||||||||
January 31, | February 1, | February 2, | |||||||||||
2015 | 2014 | 2013 | |||||||||||
Minimum rentals | $ | 47,010 | $ | 43,353 | $ | 37,324 | |||||||
Contingent rentals | 166 | 38 | 19 | ||||||||||
Total rent expense | $ | 47,176 | $ | 43,391 | $ | 37,343 | |||||||
Capital lease | |||||||||||||
The Company leases its corporate headquarters and distribution center (10 and 12 Whatney, Irvine, California) from a company that is owned by the co-founders of Tilly’s. On June 29, 2012, the Company exercised the first of its three five-year renewal options on this lease, with the renewal commencing on January 1, 2013. The lease now expires on December 31, 2017. The land component of this lease is accounted for as an operating lease (included in the operating lease commitments schedule above) and the building component is accounted for as a capital lease. At January 31, 2015, the monthly payments under the operating portion of the lease were $80,046. The obligation under the capital lease was $2.5 million and $3.3 million as of January 31, 2015 and February 1, 2014, respectively. The gross amount of the building under capital lease was $7.8 million as of January 31, 2015 and February 1, 2014. The accumulated amortization of the building under capital lease was $6.3 million and $5.8 million as of January 31, 2015 and February 1, 2014, respectively. The Company incurred rent expense of $0.9 million in each of the fiscal years 2014, 2013 and 2012 related to the operating (land component) of this lease. | |||||||||||||
Future commitments under the Company’s related party capital lease obligation as of January 31, 2015 are as follows (in thousands): | |||||||||||||
Fiscal Year | |||||||||||||
2015 | $ | 940 | |||||||||||
2016 | 940 | ||||||||||||
2017 | 860 | ||||||||||||
Total minimum lease payments | 2,740 | ||||||||||||
Less amount representing interest | 240 | ||||||||||||
Present value of net minimum lease payments | 2,500 | ||||||||||||
Less current portion | 806 | ||||||||||||
Long-term portion | $ | 1,694 | |||||||||||
Prior to signing each of the related party leases above, the Company received an independent market analysis regarding the property and therefore believes that the terms of each lease are reasonable and not materially different from terms the Company would have obtained from an unaffiliated third party. See “Note 16: Related Party Transactions”, for further information. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 31, 2015 | |
Commitments and Contingencies | Note 10: Commitments and Contingencies |
Employment Agreements | |
On February 21, 2011, Daniel Griesemer joined the Company as its President and Chief Executive Officer. The Company is subject to an employment agreement with Mr. Griesemer which provides for compensation and certain other benefits. The employment agreement also provides for severance payments under certain circumstances. The Company did not have any other employment agreements as of January 31, 2015. | |
Indemnifications, Commitments, and Guarantees | |
During the normal course of business, the Company has made certain indemnifications, commitments, and guarantees under which it may be required to make payments for certain transactions. These indemnifications include those given to various lessors in connection with facility leases for certain claims arising from such facility or lease, and indemnifications to directors and officers of the Company to the maximum extent permitted under the laws of the state of California. The majority of these indemnifications, commitments, and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make, and their duration may be indefinite. The Company has not recorded any liability for these indemnifications, commitments, and guarantees in the accompanying balance sheets as the impact is expected to be immaterial. | |
Software Maintenance Commitments | |
At January 31, 2015, our future minimum payments under agreements to purchase services for software maintenance aggregated to $2.2 million, payable as follows: $1.1 million in fiscal 2015, $0.9 million in fiscal 2016 and $0.2 million in fiscal 2017. | |
Legal Proceedings | |
From time to time, the Company may become involved in lawsuits and other claims arising from its ordinary course of business. The Company is currently unable to predict the ultimate outcome of any litigation or claim, determine whether a liability has been incurred or make an estimate of the reasonably possible liability that could result from an unfavorable outcome because of the uncertainties related to the incurrence, amount and range of loss on any pending litigation or claim. Because of the unpredictable nature of these matters, the Company cannot provide any assurances regarding the outcome of any litigation or claim to which it is a party or that the ultimate outcome of any of the matters threatened or pending against it, including those disclosed below, will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. See Item 1A “Risk Factors—Litigation costs and the outcome of litigation could have a material adverse effect on our business” included in this report. | |
Kristin Christiansen, Shellie Smith and Paul Haug, on behalf of themselves and all others similarly situated vs. World of Jeans & Tops, Superior Court of California, County of Sacramento, Case No. 34-2013-00139010. On January 29, 2013, the plaintiffs in this matter filed a putative class action lawsuit against the Company alleging violations of California Civil Code Section 1747.08, which prohibits requesting or requiring personal identification information from a customer paying for goods with a credit card and recording such information, subject to exceptions. In June 2013, the Court granted the Company’s motion to strike portions of the plaintiffs’ complaint and granted plaintiffs leave to amend. Plaintiffs have amended the complaint and the parties are proceeding with discovery on class certification issues. Class certification briefing is currently expected to conclude in July 2015 with a hearing in August 2015. The complaint seeks certification of a class, unspecified damages, injunctive relief and attorneys’ fees. The Company intends to defend this case vigorously. | |
Maria Rebolledo, individually and on behalf of all others similarly situated and on behalf of the general public vs. Tilly’s, Inc.; World of Jeans & Tops, Superior Court of the State of California, County of Orange, Case No. 30-2012-00616290-CU-OE-CXC . On December 5, 2012, the plaintiff in this matter filed a putative class action lawsuit against the Company alleging violations of California’s wage and hour, meal break and rest break rules and regulations, and unfair competition law, among other things. An amended complaint was filed on February 28, 2013, to include enforcement of California’s private attorney general act. The complaint seeks an unspecified amount of damages and penalties. In April 2013, we filed a motion to compel arbitration, which was denied in May 2013 and affirmed on appeal. In October 2014, the Company filed an answer to the amended complaint. The Company intends to defend this case vigorously. | |
Karina Whitten, on behalf of herself and all others similarly situated, v. Tilly’s Inc., Superior Court of California, County of Los Angeles, Case No, BC 548252. On June 10, 2014, plaintiff filed a putative class action and representative Private Attorney General Act lawsuit against the Company alleging violations of California’s wage and hour, meal break and rest break rules and regulations, and unfair competition law, among other things. The complaint seeks class certification, penalties, restitution, injunctive relief and attorneys’ fees and costs. Plaintiff filed a first amended complaint on December 3, 2014, removing the expense reimbursement claim. The Company answered the complaint on January 8, 2015. The Company intends to defend this case vigorously. | |
Herbert Ortiz and Audra Haynes, individually, and on behalf of the generally public, v. Tilly’s Inc., United States District Court for the Eastern District of California, Case No, 1:15-CV-00108-MJS. On November 6, 2014, plaintiffs filed a putative class action and representative Private Attorney General Act lawsuit against the Company in the Superior Court of California, County of Fresno, alleging violations of California’s wage and hour, meal break and rest break rules and regulations, and unfair competition law, among other things. The complaint seeks class certification, penalties, restitution, injunctive relief and attorneys’ fees and costs. On January 21, 2015, the Company answered the complaint and removed the action to the United States District Court for the Eastern District of California. The Company intends to defend this case vigorously. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||||||||||
Jan. 31, 2015 | |||||||||||||||||||||||||
Fair Value Measurements | Note 11: Fair Value Measurements | ||||||||||||||||||||||||
ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date. ASC 820 established the following three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value: | |||||||||||||||||||||||||
• | Level 1 – Quoted prices in active markets for identical assets and liabilities. | ||||||||||||||||||||||||
• | Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||||||||||||
• | Level 3 – Unobservable inputs (i.e. projections, estimates, interpretations, etc.) that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||||||||||||
The Company measures certain financial assets at fair value on a recurring basis, including its marketable securities, which are classified as available-for-sale securities, and certain cash equivalents, specifically money market accounts. The money market accounts are valued based on quoted market prices in active markets. The marketable securities are valued based on other observable inputs for those securities (including market corroborated pricing or other models that utilize observable inputs such as interest rates and yield curves) based on information provided by independent third party entities. | |||||||||||||||||||||||||
The Company did not make any transfers between Level 1 and Level 2 financial assets during fiscal years 2014 and 2013. Furthermore, as of January 31, 2015 and February 1, 2014, the Company did not have any Level 3 financial assets. The Company conducts reviews on a quarterly basis to verify pricing, assess liquidity, and determine if significant inputs have changed that would impact the fair value hierarchy disclosure. | |||||||||||||||||||||||||
In accordance with the provisions of ASC 820, the Company categorized its financial assets based on the priority of the inputs to the valuation technique for the instruments as follows (in thousands): | |||||||||||||||||||||||||
January 31, 2015 | February 1, 2014 | ||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||||
Money market securities | $ | 34,433 | $ | — | $ | — | $ | 25,316 | $ | — | $ | — | |||||||||||||
Marketable securities: | |||||||||||||||||||||||||
Commercial paper | — | 34,957 | — | — | 34,943 | — | |||||||||||||||||||
During fiscal years 2014 and 2013, certain long-lived assets with carrying values totaling $1.0 million and $1.8 million at two and four of the Company’s retail stores, respectively, were determined to be unable to recover their carrying values and, therefore, were written down to their fair value, resulting in a loss on impairment of assets of $1.0 million and $1.8 million in fiscal years 2014 and 2013, respectively. The fair value of these assets was determined using Level 3 inputs and the valuation techniques are described in “Note 2: Summary of Significant Accounting Policies”. The Company has no other financial instruments that would be considered significant for fair value measurement purposes. |
ShareBased_Compensation
Share-Based Compensation | 12 Months Ended | ||||||||||||||||
Jan. 31, 2015 | |||||||||||||||||
Share-Based Compensation | Note 12: Share-Based Compensation | ||||||||||||||||
In June 2007, the Compensation Committee of the Company’s Board of Directors adopted the 2007 Stock Option Plan, (the “2007 Plan”), which authorized the issuance of options to acquire up to 1,600,000 shares of the Company’s Class A common stock for certain employees, consultants and directors. These share-based awards were granted at an exercise price equal to the fair market value of our common stock at the date of grant. These awards vest in equal installments over a four year period (service period) and generally expire at the earlier of 30 days after employment or services are terminated or ten years from the date of grant. The awards included a performance condition that prevented the awards from becoming exercisable until the consummation of the Company’s initial public offering. As the awards contained both a service requirement and a performance condition, compensation expense was not recognized in the financial statements until the consummation of our initial public offering on May 3, 2012. On that date, we recognized $7.6 million of share-based compensation expense relating to the stock options previously granted to employees and directors under the 2007 Plan. This amount represented the cumulative share-based compensation expense from the inception of the 2007 Plan through the date of the Company’s initial public offering, as the Company had not previously recognized any share-based compensation expense for these awards due to the performance condition wherein, if the stock options were vested, they would only become exercisable upon the consummation of the Company’s initial public offering. In connection with the recognition of share-based compensation, the Company recorded an increase in noncurrent deferred tax assets and income taxes payable of $3.0 million. No stock options were granted from the 2007 Plan during fiscal year 2012, and stock options may no longer be issued from the 2007 Plan subsequent to the initial public offering | |||||||||||||||||
In April 2012, the Compensation Committee adopted the Tilly’s 2012 Equity and Incentive Award Plan, (the “2012 Plan”), which authorized the issuance of options, shares or rights to acquire up to 2,913,900 shares of the Company’s Class A common stock. In June 2014, the Company’s stockholders approved the Amended and Restated Tilly’s 2012 Equity and Incentive Award Plan, which increased the aggregate number of shares reserved for issuance thereunder by 1,500,000 shares, from 2,913,900 shares to a total of 4,413,900 shares; and added operating income and comparable store sales growth as additional performance goals that may be used in connection with performance-based awards granted under the amended 2012 Plan. As of January 31, 2015, there were 2,831,159 shares still available for future issuance under the 2012 Plan. | |||||||||||||||||
Options | |||||||||||||||||
The Compensation Committee has granted stock options to certain existing and new employees to acquire the Company’s Class A common stock under its stock plans to certain of the Company’s employees and executives. The exercise price of options granted is equal to the closing price per share of the Company’s stock at the date of grant. The nonqualified options generally vest ratably over a four-year period beginning on the first anniversary of the date of grant, provided that the award recipient continues to be employed by the Company through each of those vesting dates, and expire ten years from the date of grant. | |||||||||||||||||
The following table summarizes the Company’s stock option activity for fiscal year 2014: | |||||||||||||||||
Stock | Grant Date | Weighted | Aggregate | ||||||||||||||
Options | Weighted | Average | Intrinsic | ||||||||||||||
Average | Remaining | Value(1) | |||||||||||||||
Exercise Price | Contractual | ||||||||||||||||
Life (in Years) | |||||||||||||||||
(in years) | (in thousands) | ||||||||||||||||
Outstanding at February 1, 2014 | 2,356,790 | $ | 13.31 | ||||||||||||||
Granted | 837,500 | $ | 12.19 | ||||||||||||||
Exercised | (38,250 | ) | $ | 7.94 | |||||||||||||
Forfeited | (173,500 | ) | $ | 13.69 | |||||||||||||
Expired | (102,500 | ) | $ | 13.41 | |||||||||||||
Outstanding at January 31, 2015 | 2,880,040 | $ | 13.03 | 7 | $ | 4,412 | |||||||||||
Vested and expected to vest at January 31, 2015 | 2,782,319 | $ | 13.04 | 7 | $ | 4,296 | |||||||||||
Exercisable at January 31, 2015 | 1,297,540 | $ | 12.65 | 5.4 | $ | 2,878 | |||||||||||
-1 | Intrinsic value for stock options is defined as the difference between the market price of the Company’s Class A common stock on the last business day of the fiscal quarter and the weighted average exercise price of in-the-money stock options outstanding at the end of each fiscal period. The market value per share was $13.74 at January 31, 2015. | ||||||||||||||||
The total intrinsic value of options exercised in fiscal years 2014, 2013 and 2012 was $0.1 million, $1.6 million and $0.7 million, respectively. | |||||||||||||||||
The total fair value of options vested in fiscal years 2014, 2013 and 2012 was $3.5 million, $3.0 million and $1.5 million, respectively. | |||||||||||||||||
The total proceeds received from the exercise of stock options in fiscal years 2014, 2013 and 2012 was $0.3 million, $2.3 million and $0.8 million, respectively. The tax benefit realized from stock options exercised in fiscal years 2014, 2013 and 2012 was $0.1 million, $0.7 million and $0.3 million, respectively. | |||||||||||||||||
The stock option awards were measured at fair value on the grant date using the Black-Scholes option valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, expected volatility of the Company’s stock over the option’s expected term, the risk-free interest rate over the option’s expected term and the Company’s expected annual dividend yield, if any. The Company’s estimate of pre-vesting forfeitures, or forfeiture rate, was based on its internal analysis, which included the award recipients’ positions within the Company and the vesting period of the awards. The Company will issue shares of Class A common stock when the options are exercised. | |||||||||||||||||
The fair values of stock options granted in fiscal years 2014, 2013 and 2012 were estimated on the grant dates using the following assumptions: | |||||||||||||||||
Fiscal Year Ended | |||||||||||||||||
January 31, | February 1, | February 2, | |||||||||||||||
2015 | 2014 | 2013 | |||||||||||||||
Average fair value per option granted | $5.19 | $6.31 | $9.01 | ||||||||||||||
Expected option term(1) | 5.0 years | 5.0 years | 5.0 years | ||||||||||||||
Expected volatility factor(2) | 44.4% - 46.9% | 55.0% - 56.2% | 57.6% - 62.9% | ||||||||||||||
Risk-free interest rate(3) | 1.6% - 1.8% | 0.8% - 1.7% | 0.6% - 0.8% | ||||||||||||||
Expected annual dividend yield | 0% | 0% | 0% | ||||||||||||||
-1 | The Company has limited historical information regarding expected option term. Accordingly, the Company determined the expected option term of the awards using the latest historical data available from comparable public companies and management’s expectation of exercise behavior. | ||||||||||||||||
-2 | Stock volatility for each grant is measured using the weighted average of historical daily price changes of the Company’s competitors’ common stock over the most recent period equal to the expected option term of the Company’s awards. | ||||||||||||||||
-3 | The risk-free interest rate is determined using the rate on treasury securities with the same term as the expected life of the stock option as of the grant date. | ||||||||||||||||
Restricted Stock | |||||||||||||||||
The Company has also granted restricted stock under the 2012 Plan to the Company’s independent directors. The value of the shares are measured on the date of grant based upon the closing price of the Company’s Class A common stock and vest ratably over two years beginning on the date of grant provided that the respective award recipient continues to serve on the Company’s board of directors through each of those vesting dates. | |||||||||||||||||
A summary of the status of non-vested restricted stock as of January 31, 2015 and changes during fiscal year 2014 are presented below: | |||||||||||||||||
Shares | Weighted- | ||||||||||||||||
Average | |||||||||||||||||
Grant-Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Nonvested at February 1, 2014 | 30,096 | $ | 15.95 | ||||||||||||||
Granted | 38,696 | $ | 8.27 | ||||||||||||||
Vested | (20,208 | ) | $ | 15.83 | |||||||||||||
Nonvested at January 31, 2015 | 48,584 | $ | 9.88 | ||||||||||||||
The weighted-average grant-date fair value of restricted stock granted during the years ended February 1, 2014 and February 2, 2013 was $16.18 and $15.50, respectively. | |||||||||||||||||
The total fair value of restricted stock vested was $0.2 million in fiscal years 2014 and 2013. There was no vested restricted stock during fiscal year 2012. | |||||||||||||||||
The Company recorded a total of $3.5 million, $3.1 million and $9.6 million of share-based compensation expense in fiscal years 2014, 2013 and 2012, respectively. Share-based compensation expense in fiscal year 2012 includes the one-time charge of $7.6 million as noted above. At January 31, 2015, there was $7.4 million of total unrecognized share-based compensation expense related to unvested stock options and restricted stock awards. This cost has a weighted average remaining recognition period of 2.3 years. | |||||||||||||||||
The following table summarizes share-based compensation recorded in the Consolidated Statements of Income: | |||||||||||||||||
Fiscal Year Ended | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Cost of goods sold | $ | 750 | $ | 694 | $ | 1,948 | |||||||||||
Selling, general and administrative expenses | 2,749 | 2,412 | 7,622 | ||||||||||||||
Stock-based compensation | $ | 3,499 | $ | 3,106 | $ | 9,570 | |||||||||||
Retirement_Savings_Plan
Retirement Savings Plan | 12 Months Ended |
Jan. 31, 2015 | |
Retirement Savings Plan | Note 13: Retirement Savings Plan |
The Tilly’s 401(k) Plan (the “401(k) Plan”) is a qualified plan under Section 401(k) of the Internal Revenue Code. The 401(k) Plan covers all employees that have attained age 21 and completed at least three months of employment tenure. Company matching contributions to the 401(k) Plan are at the discretion of the Board of Directors. Total employer contributions to the 401(k) Plan totaled $0.7 million, $0.6 million and $0.5 million in fiscal years 2014, 2013 and 2012, respectively. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Jan. 31, 2015 | |||||||||||||
Income Taxes | Note 14: Income Taxes | ||||||||||||
On May 2, 2012, as part of the Reorganization described in “Note 1: Description of the Company and Basis of Presentation”, the Company’s “S” Corporation status was terminated and the Company became subject to corporate-level federal and state income taxes at prevailing corporate rates. Prior to the Reorganization, income tax expense was mainly comprised of a 1.5% California franchise tax. | |||||||||||||
The components of income tax expense for fiscal years 2014, 2013 and 2012 were as follows (in thousands): | |||||||||||||
Fiscal Year Ended | |||||||||||||
January 31, | February 1, | February 2, | |||||||||||
2015 | 2014 | 2013 | |||||||||||
Current: | |||||||||||||
Federal | $ | 6,433 | $ | 9,591 | $ | 11,311 | |||||||
State | 1,517 | 2,304 | 2,796 | ||||||||||
7,950 | 11,895 | 14,107 | |||||||||||
Deferred: | |||||||||||||
Federal | 1,387 | (293 | ) | (4,257 | ) | ||||||||
State | (237 | ) | (11 | ) | (2,444 | ) | |||||||
1,150 | (304 | ) | (6,701 | ) | |||||||||
Total income tax expense | $ | 9,100 | $ | 11,591 | $ | 7,406 | |||||||
A reconciliation of income tax expense to the amount computed at the federal statutory rate for fiscal years 2014, 2013 and 2012 (in thousands) is as follows: | |||||||||||||
Fiscal Year Ended | |||||||||||||
January 31, | February 1, | February 2, | |||||||||||
2015 | 2014 | 2013 | |||||||||||
Federal taxes at statutory rate | $ | 8,111 | $ | 10,405 | $ | 10,955 | |||||||
State and local income taxes, net of federal benefit | 885 | 1,517 | 1,299 | ||||||||||
Return to provision adjustments | (15 | ) | (369 | ) | — | ||||||||
Impact of change in tax status | — | — | (2,962 | ) | |||||||||
Tax effect of earnings not subject to federal income tax due to “S” Corporation status | — | — | (2,094 | ) | |||||||||
Other | 119 | 38 | 208 | ||||||||||
Total income tax expense | $ | 9,100 | $ | 11,591 | $ | 7,406 | |||||||
Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and (b) operating loss and tax credit carry-forwards. The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Significant components of deferred tax assets and liabilities as of January 31, 2015 and February 1, 2014 were as follows (in thousands): | |||||||||||||
January 31, | February 1, | ||||||||||||
2015 | 2014 | ||||||||||||
Deferred tax assets: | |||||||||||||
Deferred rent | $ | 5,134 | $ | 4,970 | |||||||||
Stock-based compensation | 5,127 | 4,245 | |||||||||||
Accrued expenses | 1,262 | 1,334 | |||||||||||
Inventories | 2,206 | 1,816 | |||||||||||
Compensation and benefits | 630 | 575 | |||||||||||
Capital lease | 388 | 485 | |||||||||||
Deferred revenue | 227 | 425 | |||||||||||
Tax credits | 119 | — | |||||||||||
Total deferred tax assets | 15,093 | 13,850 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Property and equipment | (8,279 | ) | (5,840 | ) | |||||||||
Prepaid expenses | (717 | ) | (763 | ) | |||||||||
Marketable securities | (14 | ) | (8 | ) | |||||||||
Total deferred tax liabilities | (9,010 | ) | (6,611 | ) | |||||||||
Net deferred tax asset | $ | 6,083 | $ | 7,239 | |||||||||
Included in “Prepaid expenses and other current assets” in the Consolidated Balance Sheets are $3.6 million at January 31, 2015 and $3.4 million at February 1, 2014 of current deferred tax assets and included in “Other assets” in the Consolidated Balance Sheets are noncurrent deferred tax assets of $2.5 million at January 31, 2015 and $3.8 million at February 1, 2014. | |||||||||||||
Uncertain Tax Positions | |||||||||||||
As of January 31, 2015 and February 1, 2014, there were no material unrecognized tax benefits. The Company does not anticipate that there will be a material change in the balance of the unrecognized tax benefits in the next 12 months. Any interest and penalties related to uncertain tax positions are recorded in income tax expense. The Company did not recognize any interest or penalties related to unrecognized tax benefits during fiscal years 2014, 2013 and 2012. | |||||||||||||
In the third quarter of fiscal year 2014, the Internal Revenue Service (“IRS”) began an examination of our federal income tax return for the C-Corporation short period year ended February 2, 2013. The Company does not anticipate any material adjustments as a result of the examination. | |||||||||||||
The Company files income tax returns in the United States federal jurisdiction and in various state and local jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities. The fiscal tax years 2011 through 2013 remain subject to examination for federal purposes and the fiscal tax years 2010 through 2013 remain subject to examination in significant state jurisdictions. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||
Jan. 31, 2015 | |||||||||||||
Earnings Per Share | Note 15: Earnings Per Share | ||||||||||||
The Company’s common stock consists of two classes: Class A and Class B. The Class A and Class B common stock have identical rights, except with respect to voting and conversion. | |||||||||||||
Earnings per share is computed under the provisions of ASC Topic 260, Earnings Per Share. Basic earnings per share is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share for Class A common stock is calculated using the “if-converted” method, which assumes the conversion of all shares of Class B common stock to Class A common stock on a one-for-one basis, as this method is more dilutive than the two-class method. Diluted earnings per share for Class B common stock does not assume conversion of Class B common stock to shares of Class A common stock. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method, whereby proceeds from such exercise, unamortized compensation and hypothetical excess tax benefits, if any, on share-based awards are assumed to be used by the Company to purchase the common shares at the average market price during the period. Dilutive potential common shares represent outstanding stock options and restricted stock awards. The dilutive effect of stock options and restricted stock is applicable only in periods of net income. | |||||||||||||
The components of basic and diluted earnings per share of Class A and Class B common stock, in aggregate, for fiscal years 2014, 2013 and 2012 are as follows (in thousands, except per share amounts): | |||||||||||||
Fiscal Year Ended | |||||||||||||
January 31, | February 1, | February 2, | |||||||||||
2015 | 2014 | 2013 | |||||||||||
Net income | $ | 14,075 | $ | 18,137 | $ | 23,893 | |||||||
Weighted average basic shares outstanding | 28,013 | 27,822 | 25,656 | ||||||||||
Dilutive effect of stock options and restricted stock | 65 | 294 | 420 | ||||||||||
Weighted average shares for diluted earnings per share | 28,078 | 28,116 | 26,076 | ||||||||||
Basic earnings per share of Class A and Class B common stock | $ | 0.5 | $ | 0.65 | $ | 0.93 | |||||||
Diluted earnings per share of Class A and Class B common stock | $ | 0.5 | $ | 0.65 | $ | 0.92 | |||||||
The earnings per share amounts are the same for Class A and Class B common stock, in aggregate, and individually for Class A and Class B common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. Shares of Class A and Class B common stock vote together as a single class on all matters submitted to a vote of stockholders. Holders of Class A common stock are entitled to one vote per shares and holders of Class B common stock are entitled to 10 votes per share. | |||||||||||||
Total stock options of 2,364,000, 1,766,000 and 1,263,500 as of January 31, 2015, February 1, 2014 and February 2, 2013, respectively, have been excluded from the calculation of diluted earnings per share as the effect of including these stock options would have been anti-dilutive. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Jan. 31, 2015 | |
Related Party Transactions | Note 16: Related Party Transactions |
As discussed in “Note 9: Leases”, the Company leases its corporate headquarters, distribution center, warehouse space and e-commerce fulfillment center from companies that are owned by the co-founder of Tilly’s. | |
Tilly’s Life Center, (“TLC”), is a charitable organization which provides underprivileged youth a healthy and caring environment. The Company’s co-founder is also the founder and President of TLC. In June 2014, the Company’s Board of Directors approved support for TLC of up to $20,000. We incurred costs of approximately $10,000 related to printing of the program’s materials during the fiscal year ended January 31, 2015. The Company also provides support for marketing and website services to TLC. |
Quarterly_Financial_Informatio
Quarterly Financial Information | 12 Months Ended | ||||||||||||||||
Jan. 31, 2015 | |||||||||||||||||
Quarterly Financial Information | Note 17: Quarterly Financial Information (Unaudited) | ||||||||||||||||
The tables below set forth selected quarterly financial data for each of the last two fiscal years (in thousands, except per share data). Each of the quarters presented was thirteen weeks in duration. | |||||||||||||||||
Fiscal Year Ended January 31, 2015 | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Net sales | $ | 111,134 | $ | 123,060 | $ | 131,283 | $ | 152,817 | |||||||||
Gross profit | 31,327 | 34,655 | 40,548 | 49,002 | |||||||||||||
Operating income | 1,077 | 2,329 | 8,577 | 11,206 | |||||||||||||
Net income | 591 | 1,266 | 5,113 | 7,105 | |||||||||||||
Basic earnings per share | 0.02 | 0.05 | 0.18 | 0.25 | |||||||||||||
Diluted earnings per share | 0.02 | 0.05 | 0.18 | 0.25 | |||||||||||||
Fiscal Year Ended February 1, 2014 | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Net sales | $ | 109,119 | $ | 123,043 | $ | 123,779 | $ | 139,896 | |||||||||
Gross profit (1) | 31,806 | 37,888 | 37,843 | 43,285 | |||||||||||||
Operating income | 3,917 | 7,199 | 10,150 | 8,471 | |||||||||||||
Net income | 2,308 | 4,267 | 6,145 | 5,417 | |||||||||||||
Basic earnings per share | 0.08 | 0.15 | 0.22 | 0.19 | |||||||||||||
Diluted earnings per share | 0.08 | 0.15 | 0.22 | 0.19 | |||||||||||||
-1 | Includes share-based compensation and benefits of $0.4 million, $0.3 million, $0.3 million and $0.5 million in the first quarter, second quarter, third quarter and fourth quarter, respectively, previously reported in selling, general and administrative expenses that should have been presented as a component of cost of goods sold. Refer to “Note 1: Description of the Company and Basis of Presentation” for further information. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||
Jan. 31, 2015 | |||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||
The Company considers all short-term investments with an initial maturity of 90 days or less when purchased to be cash equivalents. | |||||||||||||
Marketable Securities | Marketable Securities | ||||||||||||
Marketable securities are classified as available-for-sale and are carried at fair value, with the unrealized holding gains and losses, net of income taxes, reflected as a separate component of stockholders’ equity until realized. For the purposes of computing realized and unrealized gains and losses, cost is determined on a specific identification basis. The Company classifies all marketable securities within current assets on the consolidated balance sheet, including those with maturity dates beyond twelve months, as they are available to support the Company’s current operational liquidity needs. | |||||||||||||
Merchandise Inventories | Merchandise Inventories | ||||||||||||
Merchandise inventories are comprised of finished goods offered for sale at the Company’s retail stores and online. Inventories are stated at the lower of cost or market using the retail inventory method. An initial markup is applied to inventory at cost in order to establish a cost-to-retail ratio. The Company believes that the retail inventory method approximates cost. Shipping and handling costs for merchandise shipped to customers of $6.7 million, $6.6 million and $5.6 million in fiscal years 2014, 2013 and 2012, respectively, are included in cost of goods sold in the consolidated statements of operations. | |||||||||||||
The Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear this merchandise. At any given time, merchandise inventories include items that have been marked down to management’s best estimate of their fair market value at retail price, with a proportionate write-down to the cost of the inventory. Management bases the decision to mark down merchandise primarily upon its current sell-through rate and the age of the item, among other factors. These markdowns may have an adverse impact on earnings, depending on the extent and amount of inventory affected. Markdowns are recorded as an increase to cost of goods sold in the consolidated statements of income. Total markdowns, including permanent and promotional markdowns, on a cost basis were $37.0 million, $35.7 million and $32.2 million in fiscal years 2014, 2013 and 2012, respectively. In addition, the Company accrued $0.9 million for planned but unexecuted markdowns, including markdowns related to slow moving merchandise, as of January 31, 2015 and February 1, 2014. | |||||||||||||
Property and Equipment | Property and Equipment | ||||||||||||
Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Equipment is depreciated over five to seven years. Furniture and fixtures are depreciated over five years. Computer software is depreciated over three years. Leasehold improvements and the cost of acquiring leasehold rights are amortized over the lesser of the term of the lease or the estimated useful life of the improvement. The cost of assets sold or retired and the related accumulated depreciation is removed from the accounts with any resulting gain or loss included in net income. | |||||||||||||
Repairs and maintenance costs are charged directly to expense as incurred. Major renewals, replacements and improvements that substantially extend the useful life of an asset are capitalized and depreciated. | |||||||||||||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | ||||||||||||
Impairments are recorded on long-lived assets used in operations whenever events or changes in circumstances indicate that the net carrying amounts may not be recoverable. Factors considered important that could result in an impairment review include, but are not limited to, significant underperformance relative to historical or planned operating results, significant changes in the manner of use of the assets or significant changes in the Company’s business strategies. An evaluation is performed using estimated undiscounted future cash flows from operating activities compared to the carrying value of related assets for the individual stores. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized for the difference between the carrying value and the estimated fair value of the assets based on the discounted cash flows of the assets using a rate that approximates the Company’s weighted average cost of capital. With regard to retail store assets, which are comprised of leasehold improvements, fixtures and computer hardware and software, the Company considers the assets at each individual retail store to represent an asset group. In addition, the Company has considered the relevant valuation techniques that could be applied without undue cost and effort and has determined that the discounted estimated future cash flow approach provides the most relevant and reliable means by which to determine fair value in this circumstance. | |||||||||||||
At least quarterly, the Company assesses whether events or changes in circumstances have occurred that potentially indicate the carrying value of long-lived assets may not be recoverable. The Company’s evaluation during the fourth quarter of fiscal years 2014 and 2013 indicated that operating losses or insufficient operating income existed at two and four retail stores, respectively, with a projection that the operating losses or insufficient operating income for these locations would continue. As such, the Company recorded noncash charges of $1.0 million and $1.8 million in selling, general and administrative expenses in fiscal years 2014 and 2013, respectively, to write down the carrying value of these stores’ long-lived assets to their estimated fair values. The Company did not record any impairment charges in fiscal year 2012. | |||||||||||||
If the Company is not able to achieve its projected key financial metrics, the Company may incur additional impairment in the future for those retail stores tested and not deemed to be impaired in its analysis, as well as for additional retail stores not tested in its most recent analysis. | |||||||||||||
Operating Leases | Operating Leases | ||||||||||||
The Company leases its retail stores under noncancellable operating leases. Most store leases include tenant allowances from landlords, rent escalation clauses and/or contingent rent provisions. The Company recognizes rent expense on a straight-line basis over the lease term, excluding contingent rent, and records the difference between the amount charged to expense and the rent paid as a deferred rent liability. Contingent rent, determined based on a percentage of sales in excess of specified levels, is recognized as rent expense when the achievement of the specified sales that triggers the contingent rent is probable. | |||||||||||||
Deferred Rent and Tenant Allowances | Deferred Rent and Tenant Allowances | ||||||||||||
Deferred rent is recognized when a lease contains fixed rent escalations. The Company recognizes the related rent expense on a straight-line basis starting from the date of possession and records the difference between the recognized rental expense and cash rent payable as deferred rent. Deferred rent also includes tenant allowances received from landlords in accordance with negotiated lease terms. The tenant allowances are amortized as a reduction to rent expense on a straight-line basis over the term of the lease starting at the date of possession. | |||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||
Revenue is recognized for store sales when the customer receives and pays for the merchandise at the register. Taxes collected from the Company’s customers are recorded on a net basis. For e-commerce sales, the Company recognizes revenue, net of sales taxes and estimated sales returns, and the related cost of goods sold at the time the merchandise is received by the customer. The Company defers e-commerce revenue and the associated product and shipping costs for shipments that are in-transit to the customer. Customers typically receive goods within three days of shipment. Amounts related to shipping and handling that are billed to customers are reflected in net sales, and the related costs are reflected in cost of goods sold in the Consolidated Statements of Income. For fiscal years 2014, 2013 and 2012, shipping and handling fee revenue included in net sales was $2.6 million, $3.3 million and $3.7 million, respectively. | |||||||||||||
The Company accrues for estimated sales returns by customers based on historical sales return results. Sales return accrual activity for fiscal years 2014, 2013 and 2012 is as follows (in thousands): | |||||||||||||
Fiscal Year Ended | |||||||||||||
January 31, | February 1, | February 2, | |||||||||||
2015 | 2014 | 2013 | |||||||||||
Beginning balance | $ | 573 | $ | 703 | $ | 609 | |||||||
Provisions | 16,875 | 15,938 | 14,850 | ||||||||||
Usage | (16,800 | ) | (16,068 | ) | (14,756 | ) | |||||||
Ending balance | $ | 648 | $ | 573 | $ | 703 | |||||||
The Company recognizes revenue from gift cards as they are redeemed for merchandise. Prior to redemption, the Company maintains a current liability for unredeemed gift card balances. The customer liability balance was $7.1 million and $6.2 million as of January 31, 2015 and February 1, 2014, respectively, and is included in deferred revenue on the balance sheets. The Company’s s gift cards do not have expiration dates; however, over time, the redemption of some gift cards becomes remote and in most cases there is no legal obligation to remit the unredeemed gift cards to relevant jurisdictions (gift card “breakage”). An assessment of the ultimate non-redemption rate of gift cards is performed when enough time has passed since the activation of the cards to enable a determination of the ultimate breakage rate based upon historical redemption experience. This date of assessment has historically been two full fiscal years after the fiscal year the cards were activated. At the time of assessment a breakage estimate is calculated and recorded in net sales. Breakage revenue for gift cards was $0.8 million, $0.6 million and $0.4 million in fiscal years 2014, 2013 and 2012, respectively. | |||||||||||||
Cost of Goods Sold | Cost of Goods Sold | ||||||||||||
• | Total cost of products sold include: | ||||||||||||
• | freight expenses associated with moving merchandise inventories from our vendors to our distribution center; | ||||||||||||
• | vendor allowances; | ||||||||||||
• | cash discounts on payments to merchandise vendors; | ||||||||||||
• | physical inventory losses; and | ||||||||||||
• | markdowns of inventory. | ||||||||||||
• | Costs of buying and distribution of merchandise include: | ||||||||||||
• | payroll and benefit costs and incentive compensation for merchandise purchasing personnel; | ||||||||||||
• | customer shipping and handling expenses; | ||||||||||||
• | costs associated with operating our distribution and fulfillment center, including payroll and benefit costs for our distribution center, occupancy costs, and depreciation; and | ||||||||||||
• | freight expenses associated with moving merchandise inventories from our distribution center to our stores and e-commerce customers. | ||||||||||||
Store occupancy costs including rent, maintenance, utilities, property taxes, business licenses, security costs and depreciation. | |||||||||||||
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | ||||||||||||
• | Payroll, benefit costs and incentive compensation for store, regional, e-commerce and corporate employees; | ||||||||||||
• | Occupancy and maintenance costs of corporate office facilities; | ||||||||||||
• | Depreciation related to corporate office assets; | ||||||||||||
• | Advertising and marketing costs, net of reimbursement from vendors; | ||||||||||||
• | Tender costs, including costs associated with credit and debit card interchange fees; | ||||||||||||
• | Long-lived asset impairment charges; | ||||||||||||
• | Other administrative costs such as supplies, consulting, audit and tax preparation fees, travel and lodging; and | ||||||||||||
• | Charitable contributions. | ||||||||||||
Store Opening Costs | Store Opening Costs | ||||||||||||
Store opening costs consist primarily of occupancy costs, which are included in cost of goods sold, and payroll expenses, which are included in selling, general and administrative expenses, in the statements of operations. | |||||||||||||
Advertising | Advertising | ||||||||||||
The Company expenses advertising costs as incurred, except for direct-mail advertising expenses which are recognized at the time of mailing. Advertising costs include such things as production and distribution of catalogs, print advertising costs, radio advertisements and grand openings and other events. Advertising expense, which is classified in selling, general and administrative expenses in the accompanying statements of operations, was $9.6 million, $9.1 million and $8.4 million in fiscal years 2014, 2013 and 2012, respectively. | |||||||||||||
Share-based Compensation | Share-based Compensation | ||||||||||||
The Company applies the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation-Stock Compensation (“ASC 718”), for accounting for equity instruments exchanged for employee services. Under the provisions of this statement, share-based compensation expense is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight-line basis over the employee’s requisite service period (generally the vesting period of the equity grant). As required under this guidance, the Company estimates forfeitures for options granted which are not expected to vest. Changes in these inputs and assumptions can materially affect the measurement of the estimated fair value of the Company’s share-based compensation expense. Refer to “Note 12: Share-based Compensation” for further information. | |||||||||||||
Income Taxes | Income Taxes | ||||||||||||
The Company accounts for income taxes and the related accounts using the asset and liability method in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Under this method, the Company accrues income taxes payable or refundable and recognizes deferred tax assets and liabilities based on differences between GAAP and tax bases of assets and liabilities. The Company measures deferred tax assets and liabilities using enacted tax rates in effect for the years in which the differences are expected to reverse, and recognizes the effect of a change in enacted rates in the period of enactment. | |||||||||||||
The Company establishes assets and liabilities for uncertain positions taken or expected to be taken in income tax returns, using a more-likely-than-not recognition threshold. The Company includes in income tax expense any interest and penalties related to uncertain tax positions. Refer to “Note 14: Income Taxes”, for further information. | |||||||||||||
Earnings per Share | Earnings per Share | ||||||||||||
Basic earnings per share is computed using the weighted average number of shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributed to outstanding options to purchase common stock. Incremental shares of 65 thousand, 294 thousand and 420 thousand in fiscal years 2014, 2013 and 2012, respectively, were used in the calculation of diluted earnings per share. Refer to “Note 15: Earnings Per Share”, for further information. | |||||||||||||
Concentration of Credit Risk | Concentration of Credit Risk | ||||||||||||
Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents. At January 31, 2015 and February 1, 2014, and at various times throughout these years, the Company had cash in financial institutions in excess of the $250,000 amount insured by the Federal Deposit Insurance Corporation. The Company typically invests its cash in highly rated, short-term commercial paper or in interest-bearing money market funds. | |||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Jan. 31, 2015 | |||||||||||||
Sales Return Accrual Activity | The Company accrues for estimated sales returns by customers based on historical sales return results. Sales return accrual activity for fiscal years 2014, 2013 and 2012 is as follows (in thousands): | ||||||||||||
Fiscal Year Ended | |||||||||||||
January 31, | February 1, | February 2, | |||||||||||
2015 | 2014 | 2013 | |||||||||||
Beginning balance | $ | 573 | $ | 703 | $ | 609 | |||||||
Provisions | 16,875 | 15,938 | 14,850 | ||||||||||
Usage | (16,800 | ) | (16,068 | ) | (14,756 | ) | |||||||
Ending balance | $ | 648 | $ | 573 | $ | 703 | |||||||
Marketable_Securities_Tables
Marketable Securities (Tables) | 12 Months Ended | ||||||||||||||||
Jan. 31, 2015 | |||||||||||||||||
Investments in Marketable Securities | The following table summarizes the Company’s investments in marketable securities at January 31, 2015 and February 1, 2014 (in thousands): | ||||||||||||||||
January 31, 2015 | |||||||||||||||||
Cost | Gross | Gross | Fair | ||||||||||||||
Unrealized | Unrealized | Value | |||||||||||||||
Holding | Holding | ||||||||||||||||
Gains | Losses | ||||||||||||||||
Commercial paper | $ | 34,922 | $ | 35 | $ | — | $ | 34,957 | |||||||||
. | |||||||||||||||||
1-Feb-14 | |||||||||||||||||
Cost | Gross | Gross | Fair | ||||||||||||||
Unrealized | Unrealized | Value | |||||||||||||||
Holding | Holding | ||||||||||||||||
Gains | Losses | ||||||||||||||||
Commercial paper | $ | 34,923 | $ | 23 | $ | (3 | ) | $ | 34,943 |
Receivables_Tables
Receivables (Tables) | 12 Months Ended | ||||||||
Jan. 31, 2015 | |||||||||
Components of Receivables | At January 31, 2015 and February 1, 2014, receivables consisted of the following (in thousands): | ||||||||
January 31, | February 1, | ||||||||
2015 | 2014 | ||||||||
Credit and debit card receivables | $ | 2,685 | $ | 2,372 | |||||
Tenant allowances due from landlords | 1,789 | 2,849 | |||||||
Income tax receivable | — | 2,964 | |||||||
Other | 208 | 360 | |||||||
Total receivables | $ | 4,682 | $ | 8,545 | |||||
Prepaid_Expenses_and_Other_Cur1
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended | ||||||||
Jan. 31, 2015 | |||||||||
Components of Prepaid Expenses and Other Current Assets | At January 31, 2015 and February 1, 2014, prepaid expenses and other current assets consisted of the following (in thousands): | ||||||||
January 31, | February 1, | ||||||||
2015 | 2014 | ||||||||
Prepaid rent | $ | 6,596 | $ | 6,204 | |||||
Deferred taxes | 3,594 | 3,379 | |||||||
Prepaid maintenance agreements | 753 | 892 | |||||||
Prepaid insurance | 704 | 532 | |||||||
Other | 702 | 765 | |||||||
Total prepaid expenses and other current assets | $ | 12,349 | $ | 11,772 | |||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Jan. 31, 2015 | |||||||||
Schedule of Property and Equipment | At January 31, 2015 and February 1, 2014, property and equipment consisted of the following (in thousands): | ||||||||
January 31, | February 1, | ||||||||
2015 | 2014 | ||||||||
Leasehold improvements | $ | 124,809 | $ | 99,719 | |||||
Furniture and fixtures | 37,796 | 35,043 | |||||||
Machinery and equipment | 28,819 | 26,990 | |||||||
Building under capital lease | 7,840 | 7,840 | |||||||
Computer hardware and software | 24,622 | 19,796 | |||||||
Construction in progress | 1,448 | 16,998 | |||||||
Vehicles | 1,470 | 1,381 | |||||||
226,804 | 207,767 | ||||||||
Accumulated depreciation | (125,469 | ) | (106,831 | ) | |||||
Property and equipment, net | $ | 101,335 | $ | 100,936 | |||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Jan. 31, 2015 | |||||||||
Components of Accrued Expenses | At January 31, 2015 and February 1, 2014, accrued expenses consisted of the following (in thousands): | ||||||||
January 31, | February 1, | ||||||||
2015 | 2014 | ||||||||
Sales and use taxes payable | $ | 1,611 | $ | 1,566 | |||||
Accrued construction | 1,202 | 1,780 | |||||||
Minimum rent and common area maintenance | 927 | 870 | |||||||
Accrued merchandise returns | 648 | 572 | |||||||
Income taxes payable | 600 | — | |||||||
Other | 7,337 | 4,453 | |||||||
Total accrued expenses | $ | 12,325 | $ | 9,241 | |||||
Leases_Tables
Leases (Tables) | 12 Months Ended | ||||||||||||
Jan. 31, 2015 | |||||||||||||
Future Minimum Operating Rental Commitments | Future minimum rental commitments, by year and in the aggregate, under noncancellable operating leases for the above buildings at 11 Whatney and 17 Pasteur and all of the Company’s store locations as of January 31, 2015 are as follows (in thousands): | ||||||||||||
Fiscal Year | Related | Other | Total | ||||||||||
Party | |||||||||||||
2015 | $ | 2,210 | $ | 47,507 | $ | 49,717 | |||||||
2016 | 2,247 | 45,949 | 48,196 | ||||||||||
2017 | 2,205 | 42,675 | 44,880 | ||||||||||
2018 | 1,503 | 42,200 | 43,703 | ||||||||||
2019 | 1,430 | 32,686 | 34,116 | ||||||||||
Thereafter | 2,756 | 87,882 | 90,638 | ||||||||||
Total | $ | 12,351 | $ | 298,899 | $ | 311,250 | |||||||
Rent Expense Under Operating Leases | Rent expense under noncancellable operating leases for fiscal years 2014, 2013 and 2012 was as follows (in thousands): | ||||||||||||
January 31, | February 1, | February 2, | |||||||||||
2015 | 2014 | 2013 | |||||||||||
Minimum rentals | $ | 47,010 | $ | 43,353 | $ | 37,324 | |||||||
Contingent rentals | 166 | 38 | 19 | ||||||||||
Total rent expense | $ | 47,176 | $ | 43,391 | $ | 37,343 | |||||||
Future Commitments Under the Company's Related Party Capital Lease Obligation | Future commitments under the Company’s related party capital lease obligation as of January 31, 2015 are as follows (in thousands): | ||||||||||||
Fiscal Year | |||||||||||||
2015 | $ | 940 | |||||||||||
2016 | 940 | ||||||||||||
2017 | 860 | ||||||||||||
Total minimum lease payments | 2,740 | ||||||||||||
Less amount representing interest | 240 | ||||||||||||
Present value of net minimum lease payments | 2,500 | ||||||||||||
Less current portion | 806 | ||||||||||||
Long-term portion | $ | 1,694 | |||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Jan. 31, 2015 | |||||||||||||||||||||||||
Financial Assets Categorized Based on Priority of Inputs to Valuation Technique Instruments | In accordance with the provisions of ASC 820, the Company categorized its financial assets based on the priority of the inputs to the valuation technique for the instruments as follows (in thousands): | ||||||||||||||||||||||||
January 31, 2015 | February 1, 2014 | ||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||||
Money market securities | $ | 34,433 | $ | — | $ | — | $ | 25,316 | $ | — | $ | — | |||||||||||||
Marketable securities: | |||||||||||||||||||||||||
Commercial paper | — | 34,957 | — | — | 34,943 | — |
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Jan. 31, 2015 | |||||||||||||||||
Stock Option Activity Under Stock Option Plan | The following table summarizes the Company’s stock option activity for fiscal year 2014: | ||||||||||||||||
Stock | Grant Date | Weighted | Aggregate | ||||||||||||||
Options | Weighted | Average | Intrinsic | ||||||||||||||
Average | Remaining | Value(1) | |||||||||||||||
Exercise Price | Contractual | ||||||||||||||||
Life (in Years) | |||||||||||||||||
(in years) | (in thousands) | ||||||||||||||||
Outstanding at February 1, 2014 | 2,356,790 | $ | 13.31 | ||||||||||||||
Granted | 837,500 | $ | 12.19 | ||||||||||||||
Exercised | (38,250 | ) | $ | 7.94 | |||||||||||||
Forfeited | (173,500 | ) | $ | 13.69 | |||||||||||||
Expired | (102,500 | ) | $ | 13.41 | |||||||||||||
Outstanding at January 31, 2015 | 2,880,040 | $ | 13.03 | 7 | $ | 4,412 | |||||||||||
Vested and expected to vest at January 31, 2015 | 2,782,319 | $ | 13.04 | 7 | $ | 4,296 | |||||||||||
Exercisable at January 31, 2015 | 1,297,540 | $ | 12.65 | 5.4 | $ | 2,878 | |||||||||||
-1 | Intrinsic value for stock options is defined as the difference between the market price of the Company’s Class A common stock on the last business day of the fiscal quarter and the weighted average exercise price of in-the-money stock options outstanding at the end of each fiscal period. The market value per share was $13.74 at January 31, 2015. | ||||||||||||||||
Assumptions Used to Estimate Fair Value of Stock Options Granted | The fair values of stock options granted in fiscal years 2014, 2013 and 2012 were estimated on the grant dates using the following assumptions: | ||||||||||||||||
Fiscal Year Ended | |||||||||||||||||
January 31, | February 1, | February 2, | |||||||||||||||
2015 | 2014 | 2013 | |||||||||||||||
Average fair value per option granted | $5.19 | $6.31 | $9.01 | ||||||||||||||
Expected option term(1) | 5.0 years | 5.0 years | 5.0 years | ||||||||||||||
Expected volatility factor(2) | 44.4% - 46.9% | 55.0% - 56.2% | 57.6% - 62.9% | ||||||||||||||
Risk-free interest rate(3) | 1.6% - 1.8% | 0.8% - 1.7% | 0.6% - 0.8% | ||||||||||||||
Expected annual dividend yield | 0% | 0% | 0% | ||||||||||||||
-1 | The Company has limited historical information regarding expected option term. Accordingly, the Company determined the expected option term of the awards using the latest historical data available from comparable public companies and management’s expectation of exercise behavior. | ||||||||||||||||
-2 | Stock volatility for each grant is measured using the weighted average of historical daily price changes of the Company’s competitors’ common stock over the most recent period equal to the expected option term of the Company’s awards. | ||||||||||||||||
-3 | The risk-free interest rate is determined using the rate on treasury securities with the same term as the expected life of the stock option as of the grant date. | ||||||||||||||||
Summary of Status of Non-Vested Restricted Stock | A summary of the status of non-vested restricted stock as of January 31, 2015 and changes during fiscal year 2014 are presented below: | ||||||||||||||||
Shares | Weighted- | ||||||||||||||||
Average | |||||||||||||||||
Grant-Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Nonvested at February 1, 2014 | 30,096 | $ | 15.95 | ||||||||||||||
Granted | 38,696 | $ | 8.27 | ||||||||||||||
Vested | (20,208 | ) | $ | 15.83 | |||||||||||||
Nonvested at January 31, 2015 | 48,584 | $ | 9.88 | ||||||||||||||
Schedule of Stock Based Compensation | The following table summarizes share-based compensation recorded in the Consolidated Statements of Income: | ||||||||||||||||
Fiscal Year Ended | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Cost of goods sold | $ | 750 | $ | 694 | $ | 1,948 | |||||||||||
Selling, general and administrative expenses | 2,749 | 2,412 | 7,622 | ||||||||||||||
Stock-based compensation | $ | 3,499 | $ | 3,106 | $ | 9,570 | |||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Jan. 31, 2015 | |||||||||||||
Components of Income Tax Expense | The components of income tax expense for fiscal years 2014, 2013 and 2012 were as follows (in thousands): | ||||||||||||
Fiscal Year Ended | |||||||||||||
January 31, | February 1, | February 2, | |||||||||||
2015 | 2014 | 2013 | |||||||||||
Current: | |||||||||||||
Federal | $ | 6,433 | $ | 9,591 | $ | 11,311 | |||||||
State | 1,517 | 2,304 | 2,796 | ||||||||||
7,950 | 11,895 | 14,107 | |||||||||||
Deferred: | |||||||||||||
Federal | 1,387 | (293 | ) | (4,257 | ) | ||||||||
State | (237 | ) | (11 | ) | (2,444 | ) | |||||||
1,150 | (304 | ) | (6,701 | ) | |||||||||
Total income tax expense | $ | 9,100 | $ | 11,591 | $ | 7,406 | |||||||
Reconciliation of Income Tax Expense to Amount Computed At Federal Statutory Rate | A reconciliation of income tax expense to the amount computed at the federal statutory rate for fiscal years 2014, 2013 and 2012 (in thousands) is as follows: | ||||||||||||
Fiscal Year Ended | |||||||||||||
January 31, | February 1, | February 2, | |||||||||||
2015 | 2014 | 2013 | |||||||||||
Federal taxes at statutory rate | $ | 8,111 | $ | 10,405 | $ | 10,955 | |||||||
State and local income taxes, net of federal benefit | 885 | 1,517 | 1,299 | ||||||||||
Return to provision adjustments | (15 | ) | (369 | ) | — | ||||||||
Impact of change in tax status | — | — | (2,962 | ) | |||||||||
Tax effect of earnings not subject to federal income tax due to “S” Corporation status | — | — | (2,094 | ) | |||||||||
Other | 119 | 38 | 208 | ||||||||||
Total income tax expense | $ | 9,100 | $ | 11,591 | $ | 7,406 | |||||||
Significant Components of Deferred Tax Assets and Liabilities | operations. Significant components of deferred tax assets and liabilities as of January 31, 2015 and February 1, 2014 were as follows (in thousands): | ||||||||||||
January 31, | February 1, | ||||||||||||
2015 | 2014 | ||||||||||||
Deferred tax assets: | |||||||||||||
Deferred rent | $ | 5,134 | $ | 4,970 | |||||||||
Stock-based compensation | 5,127 | 4,245 | |||||||||||
Accrued expenses | 1,262 | 1,334 | |||||||||||
Inventories | 2,206 | 1,816 | |||||||||||
Compensation and benefits | 630 | 575 | |||||||||||
Capital lease | 388 | 485 | |||||||||||
Deferred revenue | 227 | 425 | |||||||||||
Tax credits | 119 | — | |||||||||||
Total deferred tax assets | 15,093 | 13,850 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Property and equipment | (8,279 | ) | (5,840 | ) | |||||||||
Prepaid expenses | (717 | ) | (763 | ) | |||||||||
Marketable securities | (14 | ) | (8 | ) | |||||||||
Total deferred tax liabilities | (9,010 | ) | (6,611 | ) | |||||||||
Net deferred tax asset | $ | 6,083 | $ | 7,239 | |||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
Jan. 31, 2015 | |||||||||||||
Components of Basic and Diluted Earnings Per Share | The components of basic and diluted earnings per share of Class A and Class B common stock, in aggregate, for fiscal years 2014, 2013 and 2012 are as follows (in thousands, except per share amounts): | ||||||||||||
Fiscal Year Ended | |||||||||||||
January 31, | February 1, | February 2, | |||||||||||
2015 | 2014 | 2013 | |||||||||||
Net income | $ | 14,075 | $ | 18,137 | $ | 23,893 | |||||||
Weighted average basic shares outstanding | 28,013 | 27,822 | 25,656 | ||||||||||
Dilutive effect of stock options and restricted stock | 65 | 294 | 420 | ||||||||||
Weighted average shares for diluted earnings per share | 28,078 | 28,116 | 26,076 | ||||||||||
Basic earnings per share of Class A and Class B common stock | $ | 0.5 | $ | 0.65 | $ | 0.93 | |||||||
Diluted earnings per share of Class A and Class B common stock | $ | 0.5 | $ | 0.65 | $ | 0.92 | |||||||
Quarterly_Financial_Informatio1
Quarterly Financial Information (Tables) | 12 Months Ended | ||||||||||||||||
Jan. 31, 2015 | |||||||||||||||||
Selected Quarterly Financial Data | The tables below set forth selected quarterly financial data for each of the last two fiscal years (in thousands, except per share data). Each of the quarters presented was thirteen weeks in duration. | ||||||||||||||||
Fiscal Year Ended January 31, 2015 | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Net sales | $ | 111,134 | $ | 123,060 | $ | 131,283 | $ | 152,817 | |||||||||
Gross profit | 31,327 | 34,655 | 40,548 | 49,002 | |||||||||||||
Operating income | 1,077 | 2,329 | 8,577 | 11,206 | |||||||||||||
Net income | 591 | 1,266 | 5,113 | 7,105 | |||||||||||||
Basic earnings per share | 0.02 | 0.05 | 0.18 | 0.25 | |||||||||||||
Diluted earnings per share | 0.02 | 0.05 | 0.18 | 0.25 | |||||||||||||
Fiscal Year Ended February 1, 2014 | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Net sales | $ | 109,119 | $ | 123,043 | $ | 123,779 | $ | 139,896 | |||||||||
Gross profit (1) | 31,806 | 37,888 | 37,843 | 43,285 | |||||||||||||
Operating income | 3,917 | 7,199 | 10,150 | 8,471 | |||||||||||||
Net income | 2,308 | 4,267 | 6,145 | 5,417 | |||||||||||||
Basic earnings per share | 0.08 | 0.15 | 0.22 | 0.19 | |||||||||||||
Diluted earnings per share | 0.08 | 0.15 | 0.22 | 0.19 | |||||||||||||
-1 | Includes share-based compensation and benefits of $0.4 million, $0.3 million, $0.3 million and $0.5 million in the first quarter, second quarter, third quarter and fourth quarter, respectively, previously reported in selling, general and administrative expenses that should have been presented as a component of cost of goods sold. Refer to “Note 1: Description of the Company and Basis of Presentation” for further information. |
Description_of_Company_and_Bas
Description of Company and Basis of Presentation - Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | 0 Months Ended | ||||||
Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 | Feb. 01, 2014 | Nov. 02, 2013 | Aug. 03, 2013 | 4-May-13 | 9-May-12 | 3-May-12 | |
Store | Store | ||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |||||||||
Number of Stores | 212 | 195 | 195 | ||||||
Adjustment to diluted weighted average shares outstanding | 65,000 | 294,000 | 420,000 | ||||||
Net proceed from issuance of initial public offering | $106,789,000 | ||||||||
Stock-based compensation expense and benefit | 3,499,000 | 3,106,000 | 9,570,000 | ||||||
Selling general and administrative expenses | 132,343,000 | 121,085,000 | 116,178,000 | ||||||
Pro Forma | |||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |||||||||
Effective Tax Rate | 40.00% | ||||||||
Adjustment to diluted weighted average shares outstanding | 20,000 | ||||||||
Restatement Adjustment | |||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |||||||||
Stock-based compensation expense and benefit | 1,500,000 | 2,600,000 | 500,000 | 300,000 | 300,000 | 400,000 | |||
Selling general and administrative expenses | 1,500,000 | 2,600,000 | |||||||
Class A common stock | |||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |||||||||
Stock issued | 9,200,000 | ||||||||
IPO | Class A common stock | |||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |||||||||
Stock issued | 9,200,000 | ||||||||
Stock issued, price per share | $15.50 | ||||||||
Net proceed from issuance of initial public offering | 106,600,000 | ||||||||
Underwriting discount | 8,700,000 | ||||||||
Fees and expenses | 2,500,000 | ||||||||
IPO | Class A common stock | Company | |||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |||||||||
Stock issued | 7,600,000 | ||||||||
IPO | Class A common stock | Stockholders | |||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |||||||||
Stock issued | 1,600,000 | 400,000 | |||||||
Repayment of note issued to shareholders | $84,000,000 | ||||||||
IPO | Class A common stock | Overallotment Option Exercised By Underwriters | |||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |||||||||
Stock issued | 1,200,000 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 | |
Accounting Policies [Line Items] | |||
Shipping and handling cost | $6,700,000 | $6,600,000 | $5,600,000 |
Inventory markdowns | 37,000,000 | 35,700,000 | 32,200,000 |
Reserve for unexecuted markdowns | 900,000 | 900,000 | |
Asset impairment | 1,007,000 | 1,840,000 | |
Shipping and handling fee revenue | 2,600,000 | 3,300,000 | 3,700,000 |
Liability for unredeemed gift cards | 7,100,000 | 6,200,000 | |
Breakage revenue for gift cards | 800,000 | 600,000 | 400,000 |
Advertising expense | 9,600,000 | 9,100,000 | 8,400,000 |
Incremental common shares used in calculating diluted EPS | 65,000 | 294,000 | 420,000 |
FDIC insured amount | 250,000 | 250,000 | |
Furniture and Fixtures | |||
Accounting Policies [Line Items] | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Computer Software | |||
Accounting Policies [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Selling, General and Administrative Expenses | |||
Accounting Policies [Line Items] | |||
Asset impairment | $1,000,000 | $1,800,000 | |
Maximum | Equipment | |||
Accounting Policies [Line Items] | |||
Property, Plant and Equipment, Useful Life | 7 years | ||
Maximum | Cash and Cash Equivalents | |||
Accounting Policies [Line Items] | |||
Short term investment maturity period | 90 days | ||
Minimum | Equipment | |||
Accounting Policies [Line Items] | |||
Property, Plant and Equipment, Useful Life | 5 years |
Sales_Return_Accrual_Activity_
Sales Return Accrual Activity (Detail) (Sales Returns Accrual, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 |
Sales Returns Accrual | |||
Revenue Recognition [Line Items] | |||
Beginning balance | $573 | $703 | $609 |
Provisions | 16,875 | 15,938 | 14,850 |
Usage | -16,800 | -16,068 | -14,756 |
Ending balance | $648 | $573 | $703 |
Investments_in_Marketable_Secu
Investments in Marketable Securities (Detail) (Commercial Paper, USD $) | Jan. 31, 2015 | Feb. 01, 2014 |
In Thousands, unless otherwise specified | ||
Commercial Paper | ||
Financial Instruments And Marketable Securities [Line Items] | ||
Cost | $34,922 | $34,923 |
Gross Unrealized Holding Gains | 35 | 23 |
Gross Unrealized Holding Losses | -3 | |
Estimated Fair Value | $34,957 | $34,943 |
Marketable_Securities_Addition
Marketable Securities - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 |
Schedule of Available-for-sale Securities [Line Items] | |||
Gains on sales and maturities of marketable securities | ($116) | ($176) | $28 |
Components_of_Receivables_Deta
Components of Receivables (Detail) (USD $) | Jan. 31, 2015 | Feb. 01, 2014 |
In Thousands, unless otherwise specified | ||
Receivables [Line Items] | ||
Credit and debit card receivables | $2,685 | $2,372 |
Tenant allowances due from landlords | 1,789 | 2,849 |
Income tax receivable | 2,964 | |
Other | 208 | 360 |
Total receivables | $4,682 | $8,545 |
Components_of_Prepaid_Expenses
Components of Prepaid Expenses and Other Current Assets (Detail) (USD $) | Jan. 31, 2015 | Feb. 01, 2014 |
In Thousands, unless otherwise specified | ||
Prepaid Expenses And Other Current Assets [Line Items] | ||
Prepaid rent | $6,596 | $6,204 |
Deferred taxes | 3,594 | 3,379 |
Prepaid maintenance agreements | 753 | 892 |
Prepaid insurance | 704 | 532 |
Other | 702 | 765 |
Total prepaid expenses and other current assets | $12,349 | $11,772 |
Schedule_of_Property_and_Equip
Schedule of Property and Equipment (Detail) (USD $) | Jan. 31, 2015 | Feb. 01, 2014 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Leasehold improvements | $124,809 | $99,719 |
Furniture and fixtures | 37,796 | 35,043 |
Machinery and equipment | 28,819 | 26,990 |
Building under capital lease | 7,840 | 7,840 |
Computer hardware and software | 24,622 | 19,796 |
Construction in progress | 1,448 | 16,998 |
Vehicles | 1,470 | 1,381 |
Property and equipment, gross | 226,804 | 207,767 |
Accumulated depreciation | -125,469 | -106,831 |
Property and equipment, net | $101,335 | $100,936 |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 |
Property, Plant, and Equipment Disclosure [Line Items] | |||
Depreciation expense | $21.20 | $19.40 | $16.70 |
capital expenditures | $22.80 | $42.20 | $34 |
Components_of_Accrued_Expenses
Components of Accrued Expenses (Detail) (USD $) | Jan. 31, 2015 | Feb. 01, 2014 |
In Thousands, unless otherwise specified | ||
Accrued Expenses [Line Items] | ||
Sales and use taxes payable | $1,611 | $1,566 |
Accrued construction | 1,202 | 1,780 |
Minimum rent and common area maintenance | 927 | 870 |
Accrued merchandise returns | 648 | 572 |
Income taxes payable | 600 | |
Other | 7,337 | 4,453 |
Total accrued expenses | $12,325 | $9,241 |
Line_of_Credit_Additional_Info
Line of Credit - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Mar. 17, 2014 | Jan. 31, 2015 | Nov. 01, 2014 | Aug. 02, 2014 | 3-May-14 | Feb. 01, 2014 | Nov. 02, 2013 | Aug. 03, 2013 | 4-May-13 | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 | Mar. 17, 2014 | |
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit amended date | 17-Mar-14 | ||||||||||||
Eliminated percentage of commitment fee on the unused amount of facility | 0.10% | ||||||||||||
Letters of credit facility maximum borrowing capacity | $25,000,000 | $25,000,000 | |||||||||||
Line of credit maturity date | 31-May-17 | ||||||||||||
Line of credit interest rate term | The interest charged on borrowings is either at LIBOR plus 1.00%, or at the bank's prime rate. The Company has the ability to select between the prime rate or LIBOR-based rate at the time of a cash advance | ||||||||||||
Covenant description | The Company is required to maintain certain financial and nonfinancial covenants in accordance with the revolving credit facility. The financial covenants require certain levels of leverage and profitability, such as (i) an aggregate maximum net loss after taxes not to exceed $5 million (measured at the end of each fiscal quarter), with no more than one annual net loss after taxes for any fiscal year (in either case, excluding all charges for impairment of goodwill, other intangibles and store assets impairment on the balance sheet of WOJT, in an aggregate amount of up to $2.0 million for the relevant period), and (ii) a maximum ratio of 2.00 to 1.00 for bbalance sheet leverageb, defined as total liabilities divided by total tangible net worth. | ||||||||||||
Net loss after taxes | 7,105,000 | 5,113,000 | 1,266,000 | 591,000 | 5,417,000 | 6,145,000 | 4,267,000 | 2,308,000 | 14,075,000 | 18,137,000 | 23,893,000 | ||
Covenant compliance | The Company was in compliance with all of its covenants and had no outstanding borrowings under the line of credit. | ||||||||||||
Outstanding borrowing | 0 | 0 | |||||||||||
London Interbank Offered Rate (LIBOR) | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit, percentage point added to reference rate | 1.00% | ||||||||||||
Maximum | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Net loss after taxes | -5,000,000 | ||||||||||||
Impairment of goodwill & other intangible assets | 2,000,000 | ||||||||||||
Balance sheet leverage | 200.00% | ||||||||||||
Stand-by and Commercial Letters of Credit | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Letters of credit facility maximum borrowing capacity | $15,000,000 | $15,000,000 |
Leases_Additional_Information_
Leases - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 | |
Operating Leased Assets [Line Items] | |||
Lease terms | 10 years | ||
Gross amount of building under capital lease | $7,840,000 | $7,840,000 | |
Warehouse space lease | |||
Operating Leased Assets [Line Items] | |||
Lease expiration date | 31-Oct-14 | ||
Rent expense | 100,000 | 200,000 | 200,000 |
Base monthly payments | 16,118 | ||
Increase in lease payment per square foot per month | 0.03 | ||
Warehouse space lease | Sublease | |||
Operating Leased Assets [Line Items] | |||
Lease expiration date | 31-May-14 | ||
Lease beginning date | 1-Dec-10 | ||
Sublease income | 0.1 | 0.1 | 0.1 |
Office and warehouse space | |||
Operating Leased Assets [Line Items] | |||
Lease expiration date | 30-Jun-22 | ||
Rent expense | 300,000 | 300,000 | 200,000 |
Office and warehouse space | Minimum | |||
Operating Leased Assets [Line Items] | |||
Annual lease adjustment rate | 3.00% | ||
Office and warehouse space | Maximum | |||
Operating Leased Assets [Line Items] | |||
Annual lease adjustment rate | 7.00% | ||
Building | |||
Operating Leased Assets [Line Items] | |||
Lease expiration date | 31-Oct-21 | ||
Rent expense | 1,000,000 | 1,100,000 | 600,000 |
Building | Minimum | |||
Operating Leased Assets [Line Items] | |||
Annual lease adjustment rate | 3.00% | ||
Building | Maximum | |||
Operating Leased Assets [Line Items] | |||
Annual lease adjustment rate | 7.00% | ||
Corporate headquarters and distribution center | |||
Operating Leased Assets [Line Items] | |||
Lease expiration date | 31-Dec-17 | ||
Capital lease obligation outstanding | 2,500,000 | 3,300,000 | |
Gross amount of building under capital lease | 7,800,000 | 7,800,000 | |
Accumulated amortization of the building under capital lease | 6,300,000 | 5,800,000 | |
Corporate headquarters and distribution center | Land | |||
Operating Leased Assets [Line Items] | |||
Rent expense | 900,000 | 900,000 | 900,000 |
Lease monthly payments | $80,046 | ||
Corporate headquarters and distribution center | Minimum | |||
Operating Leased Assets [Line Items] | |||
Term of renewal options | 3 years | ||
Corporate headquarters and distribution center | Maximum | |||
Operating Leased Assets [Line Items] | |||
Term of renewal options | 5 years |
Future_Minimum_Operating_Renta
Future Minimum Operating Rental Commitments (Detail) (USD $) | Jan. 31, 2015 |
In Thousands, unless otherwise specified | |
Operating Leased Assets [Line Items] | |
2015 | $49,717 |
2016 | 48,196 |
2017 | 44,880 |
2018 | 43,703 |
2019 | 34,116 |
Thereafter | 90,638 |
Total | 311,250 |
Related Parties | |
Operating Leased Assets [Line Items] | |
2015 | 2,210 |
2016 | 2,247 |
2017 | 2,205 |
2018 | 1,503 |
2019 | 1,430 |
Thereafter | 2,756 |
Total | 12,351 |
Other | |
Operating Leased Assets [Line Items] | |
2015 | 47,507 |
2016 | 45,949 |
2017 | 42,675 |
2018 | 42,200 |
2019 | 32,686 |
Thereafter | 87,882 |
Total | $298,899 |
Rent_Expense_Under_Operating_L
Rent Expense Under Operating Leases (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 |
Lease and Rental Expense [Line Items] | |||
Minimum rentals | $47,010 | $43,353 | $37,324 |
Contingent rentals | 166 | 38 | 19 |
Total rent expense | $47,176 | $43,391 | $37,343 |
Future_Commitments_under_Relat
Future Commitments under Related Party Capital Lease Obligation (Detail) (USD $) | Jan. 31, 2015 | Feb. 01, 2014 |
In Thousands, unless otherwise specified | ||
Capital Leased Assets [Line Items] | ||
Less current portion | $806 | $758 |
Related Party Lease | ||
Capital Leased Assets [Line Items] | ||
2015 | 940 | |
2016 | 940 | |
2017 | 860 | |
Total minimum lease payments | 2,740 | |
Less amount representing interest | 240 | |
Present value of net minimum lease payments | 2,500 | |
Less current portion | 806 | |
Long-term portion | $1,694 |
Commitment_And_Contingencies_A
Commitment And Contingencies - Additional Information (Detail) (USD $) | Jan. 31, 2015 |
In Millions, unless otherwise specified | |
Commitments and Contingencies [Line Items] | |
Future minimum payment due in fiscal 2015 | $1.10 |
Future minimum payment due in fiscal 2016 | 0.9 |
Future minimum payment due in fiscal 2017 | 0.2 |
Total future minimum payment due | $2.20 |
Financial_Assets_Categorized_B
Financial Assets Categorized Based on Priority of Inputs to Valuation Technique Instruments (Detail) (USD $) | Jan. 31, 2015 | Feb. 01, 2014 |
In Thousands, unless otherwise specified | ||
Fair Value, Inputs, Level 1 | Cash Equivalents | Money Market Instruments | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash equivalents | $34,433 | $25,316 |
Fair Value, Inputs, Level 2 | Marketable Securities | Commercial Paper | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Available-for-sale securities, fair value disclosure | $34,957 | $34,943 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | 12 Months Ended | |
Jan. 31, 2015 | Feb. 01, 2014 | |
Store | Store | |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Carrying value of long lived assets | $1,000,000 | $1,800,000 |
Number of Stores | 212 | 195 |
Asset impairment | $1,007,000 | $1,840,000 |
Number of stores | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Number of Stores | 2 | 4 |
Share_Based_Compensation_Addit
Share Based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||
Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 | 3-May-12 | Jun. 30, 2014 | Jan. 02, 2014 | Jan. 02, 2013 | Apr. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $3,499,000 | $3,106,000 | $9,570,000 | |||||
Options granted | 837,500 | |||||||
Total intrinsic value of options exercised | 100,000 | 1,600,000 | 700,000 | |||||
Total fair value of options vested | 3,500,000 | 3,000,000 | 1,500,000 | |||||
Proceeds from exercise of stock options | 304,000 | 2,389,000 | 890,000 | |||||
Tax benefit realized from stock options exercised | 100,000 | 700,000 | 300,000 | |||||
Total unrecognized stock-based compensation expense related to unvested stock options and restricted stock grants | 7,400,000 | |||||||
Weighted average recognition period | 2 years 3 months 18 days | |||||||
One-time charge | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | 7,600,000 | |||||||
Stock Option Plan 2007 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period (in years) | 4 years | |||||||
Options granted | 0 | |||||||
Stock Option Plan 2007 | IPO | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Increase in deferred tax assets and income tax payable | 3,000,000 | |||||||
Stock Option Plan 2007 | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Term of options | 10 years | |||||||
Stock Option Plan 2007 | Minimum | After Employee Terminated | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Term of options | 30 days | |||||||
Stock Option Plan 2007 | Employees, Consultants and Directors | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common shares authorized | 1,600,000 | |||||||
Stock Option Plan 2007 | One-time charge | IPO | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | 7,600,000 | |||||||
Stock Incentive Plan 2012 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares available for issuance | 2,831,159 | |||||||
Stock Incentive Plan 2012 | Class A common stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common shares authorized | 4,413,900 | 2,913,900 | ||||||
Common shares authorized, increase in number of shares reserved for issuance | 1,500,000 | |||||||
Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Grant date fair value | $16.18 | $15.50 | ||||||
Fair value of stock vested | $200,000 | $200,000 | $0 |
Stock_Option_Activity_Under_St
Stock Option Activity Under Stock Option Plan (Detail) (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Jan. 31, 2015 | |
Stock options | ||
Beginning balance | 2,356,790 | |
Granted | 837,500 | |
Exercised | -38,250 | |
Forfeited | -173,500 | |
Expired | -102,500 | |
Ending balance | 2,880,040 | |
Vested and expected to vest ending balance | 2,782,319 | |
Exercisable ending balance | 1,297,540 | |
Grant date weighted average exercise price | ||
Beginning balance | $13.31 | |
Granted | $12.19 | |
Exercised | $7.94 | |
Forfeited | $13.69 | |
Expired | $13.41 | |
Ending balance | $13.03 | |
Vested and expected to vest ending balance | $13.04 | |
Exercisable ending balance | $12.65 | |
Average remaining contractual life | ||
Outstanding at end of period | 7 years | |
Vested and expected to vest end of period | 7 years | |
Exercisable ending balance | 5 years 4 months 24 days | |
Aggregate intrinsic value | ||
Outstanding at end of period | $4,412 | [1] |
Vested and expected to vest ending balance | 4,296 | [1] |
Exercisable ending balance | $2,878 | [1] |
[1] | Intrinsic value for stock options is defined as the difference between the market price of the Company's Class A common stock on the last business day of the fiscal quarter and the weighted average exercise price of in-the-money stock options outstanding at the end of each fiscal period. The market value per share was $13.74 at January 31, 2015. |
Stock_Option_Activity_Under_St1
Stock Option Activity Under Stock Option Plan (Parenthetical) (Detail) (Class A common stock, USD $) | Jan. 31, 2015 |
Class A common stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Market value per share | $13.74 |
Assumptions_Used_to_Estimate_F
Assumptions Used to Estimate Fair Value of Stock Options Granted (Detail) (USD $) | 12 Months Ended | |||||
Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Average fair value per option granted | $5.19 | $6.31 | $9.01 | |||
Expected option term | 5 years | [1] | 5 years | [1] | 5 years | [1] |
Expected volatility factor, minimum | 44.40% | [2] | 55.00% | [2] | 57.60% | [2] |
Expected volatility factor, maximum | 46.90% | [2] | 56.20% | [2] | 62.90% | [2] |
Risk-free interest rate, minimum | 1.60% | [3] | 0.80% | [3] | 0.60% | [3] |
Risk-free interest rate, maximum | 1.80% | [3] | 1.70% | [3] | 0.80% | [3] |
Expected annual dividend yield | 0.00% | 0.00% | 0.00% | |||
[1] | The Company has limited historical information regarding expected option term. Accordingly, the Company determined the expected option term of the awards using the latest historical data available from comparable public companies and management's expectation of exercise behavior. | |||||
[2] | Stock volatility for each grant is measured using the weighted average of historical daily price changes of the Company's competitors' common stock over the most recent period equal to the expected option term of the Company's awards. | |||||
[3] | The risk-free interest rate is determined using the rate on treasury securities with the same term as the expected life of the stock option as of the grant date. |
Summary_of_Status_of_NonVested
Summary of Status of Non-Vested Restricted Stock (Detail) (USD $) | 12 Months Ended | |
Jan. 31, 2015 | Feb. 01, 2014 | |
Shares | ||
Beginning balance | 2,356,790 | |
Non Vested | ||
Shares | ||
Beginning balance | 30,096 | |
Granted, shares | 38,696 | |
Vested, shares | -20,208 | |
Ending Balance, shares | 48,584 | |
Weighted average grant date fair value | ||
Weighted average grant date fair value, Beginning Balance | $15.95 | |
Weighted average grant date fair value, Granted | $8.27 | |
Weighted average grant date fair value, Vested | $15.83 | |
Weighted average grant date fair value, Ending Balance | $9.88 |
Schedule_of_Stock_Based_Compen
Schedule of Stock Based Compensation (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $3,499 | $3,106 | $9,570 |
Cost of Goods Sold | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 750 | 694 | 1,948 |
Selling, General and Administrative Expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $2,749 | $2,412 | $7,622 |
Retirement_Savings_Plan_Additi
Retirement Savings Plan - Additional Information (Detail) (401 (k) Plan, USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 |
Age | |||
401 (k) Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Age of employees covered by plan | 21 | ||
Service period required | 3 months | ||
Total employer contribution | $0.70 | $0.60 | $0.50 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 0 Months Ended | ||
2-May-12 | Jan. 31, 2015 | Feb. 01, 2014 | |
Income Taxes [Line Items] | |||
Deferred tax assets, current | $3,594,000 | $3,379,000 | |
Deferred tax assets, noncurrent | $2,500,000 | $3,800,000 | |
California | Prior to Reorganization | |||
Income Taxes [Line Items] | |||
Percentage of franchise tax | 1.50% |
Components_of_Income_Tax_Expen
Components of Income Tax Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 |
Current: | |||
Federal | $6,433 | $9,591 | $11,311 |
State | 1,517 | 2,304 | 2,796 |
Total current tax expense | 7,950 | 11,895 | 14,107 |
Deferred: | |||
Federal | 1,387 | -293 | -4,257 |
State | -237 | -11 | -2,444 |
Total deferred tax expense | 1,150 | -304 | -6,701 |
Total income tax expense | $9,100 | $11,591 | $7,406 |
Reconciliation_of_Income_Tax_E
Reconciliation of Income Tax Expense to the Amount Computed at Federal Statutory Rate (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 |
Income tax reconciliation, income tax expense | |||
Federal taxes at statutory rate | $8,111 | $10,405 | $10,955 |
State and local income taxes, net of federal benefit | 885 | 1,517 | 1,299 |
Return to provision adjustments | -15 | -369 | |
Impact of change in tax status | -2,962 | ||
Tax effect of earnings not subject to federal income tax due to "S" Corporation status | -2,094 | ||
Other | 119 | 38 | 208 |
Total income tax expense | $9,100 | $11,591 | $7,406 |
Significant_Components_of_Defe
Significant Components of Deferred Tax Assets and Liabilities (Detail) (USD $) | Jan. 31, 2015 | Feb. 01, 2014 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Deferred rent | $5,134 | $4,970 |
Stock-based compensation | 5,127 | 4,245 |
Accrued expenses | 1,262 | 1,334 |
Inventories | 2,206 | 1,816 |
Compensation and benefits | 630 | 575 |
Capital lease | 388 | 485 |
Deferred revenue | 227 | 425 |
Tax credits | 119 | |
Total deferred tax assets | 15,093 | 13,850 |
Deferred tax liabilities: | ||
Property and equipment | -8,279 | -5,840 |
Prepaid expenses | -717 | -763 |
Marketable securities | -14 | -8 |
Total deferred tax liabilities | -9,010 | -6,611 |
Net deferred tax asset | $6,083 | $7,239 |
Components_of_Basic_and_Dilute
Components of Basic and Diluted Earnings Per Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Jan. 31, 2015 | Nov. 01, 2014 | Aug. 02, 2014 | 3-May-14 | Feb. 01, 2014 | Nov. 02, 2013 | Aug. 03, 2013 | 4-May-13 | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 |
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||||||||
Net income | $7,105 | $5,113 | $1,266 | $591 | $5,417 | $6,145 | $4,267 | $2,308 | $14,075 | $18,137 | $23,893 |
Weighted average basic shares outstanding | 28,013,000 | 27,822,000 | 25,656,000 | ||||||||
Dilutive effect of stock options and restricted stock | 65,000 | 294,000 | 420,000 | ||||||||
Weighted average common shares for diluted earnings per share | 28,078,000 | 28,116,000 | 26,076,000 | ||||||||
Basic earnings per share | $0.25 | $0.18 | $0.05 | $0.02 | $0.19 | $0.22 | $0.15 | $0.08 | |||
Diluted earnings per share | $0.25 | $0.18 | $0.05 | $0.02 | $0.19 | $0.22 | $0.15 | $0.08 | |||
Class A and Class B common stock | |||||||||||
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||||||||
Basic earnings per share | $0.50 | $0.65 | $0.93 | ||||||||
Diluted earnings per share | $0.50 | $0.65 | $0.92 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 12 Months Ended | ||
Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 | |
Earnings Per Share [Line Items] | |||
Stock options excluded from the calculation of diluted earning per share | 2,364,000 | 1,766,000 | 1,263,500 |
Class A common stock | |||
Earnings Per Share [Line Items] | |||
Number of votes | 1 | ||
Class B common stock | |||
Earnings Per Share [Line Items] | |||
Number of votes | 10 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (Presidents Charitable Organization, Tilly's Life Center, USD $) | 1 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Jan. 31, 2015 | |
Maximum | ||
Related Party Transaction [Line Items] | ||
Charitable pledge | $20,000 | |
Program Materials | ||
Related Party Transaction [Line Items] | ||
Costs incurred | $10,000 |
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Jan. 31, 2015 | Nov. 01, 2014 | Aug. 02, 2014 | 3-May-14 | Feb. 01, 2014 | Nov. 02, 2013 | Aug. 03, 2013 | 4-May-13 | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 | ||||
Quarterly Financial Data [Line Items] | |||||||||||||||
Net sales | $152,817 | $131,283 | $123,060 | $111,134 | $139,896 | $123,779 | $123,043 | $109,119 | $518,294 | $495,837 | $467,291 | ||||
Gross profit | 49,002 | 40,548 | 34,655 | 31,327 | 43,285 | [1] | 37,843 | [1] | 37,888 | [1] | 31,806 | [1] | 155,532 | 150,822 | 147,568 |
Operating income | 11,206 | 8,577 | 2,329 | 1,077 | 8,471 | 10,150 | 7,199 | 3,917 | 23,189 | 29,737 | 31,390 | ||||
Net income | $7,105 | $5,113 | $1,266 | $591 | $5,417 | $6,145 | $4,267 | $2,308 | $14,075 | $18,137 | $23,893 | ||||
Basic earnings per share | $0.25 | $0.18 | $0.05 | $0.02 | $0.19 | $0.22 | $0.15 | $0.08 | |||||||
Diluted earnings per share | $0.25 | $0.18 | $0.05 | $0.02 | $0.19 | $0.22 | $0.15 | $0.08 | |||||||
[1] | Reflects share-based compensation and benefits previously reported in selling, general and administrative expenses that should have been presented as a component of cost of goods sold. Refer to "Note 1: Description of the Company and Basis of Presentation" for further information. |
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (Parenthetical) (Detail) (USD $) | 12 Months Ended | 3 Months Ended | |||||
In Thousands, unless otherwise specified | Jan. 31, 2015 | Feb. 01, 2014 | Feb. 02, 2013 | Feb. 01, 2014 | Nov. 02, 2013 | Aug. 03, 2013 | 4-May-13 |
Quarterly Financial Data [Line Items] | |||||||
Share-based compensation and benefits | $3,499 | $3,106 | $9,570 | ||||
Restatement Adjustment | |||||||
Quarterly Financial Data [Line Items] | |||||||
Share-based compensation and benefits | $1,500 | $2,600 | $500 | $300 | $300 | $400 |