Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 03, 2021 | Jul. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 3, 2021 | |
Entity Transition Report | false | |
Entity File Number | 001-38854 | |
Entity Registrant Name | KONTOOR BRANDS, INC. | |
Entity Incorporation, State or Country Code | NC | |
Entity Tax Identification Number | 83-2680248 | |
Entity Address, Address Line One | 400 N. Elm Street | |
Entity Address, City or Town | Greensboro | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 27401 | |
City Area Code | 336 | |
Local Phone Number | 332-3400 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | KTB | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 57,663,976 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001760965 | |
Current Fiscal Year End Date | --01-01 |
Combined Balance Sheets (Unaudi
Combined Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 |
Current assets | |||
Cash and equivalents | $ 175,628 | $ 248,138 | $ 256,276 |
Accounts receivable, net | 215,297 | 231,397 | 153,302 |
Inventories | 403,249 | 340,732 | 432,925 |
Prepaid expenses and other current assets | 82,127 | 81,413 | 77,374 |
Total current assets | 876,301 | 901,680 | 919,877 |
Property, plant and equipment, net | 109,487 | 118,897 | 124,939 |
Operating lease assets | 63,036 | 60,443 | 76,780 |
Intangible assets, net | 15,325 | 15,991 | 16,629 |
Goodwill | 212,654 | 213,392 | 211,781 |
Other assets | 241,042 | 235,413 | 222,762 |
TOTAL ASSETS | 1,517,845 | 1,545,816 | 1,572,768 |
Current liabilities | |||
Short-term borrowings | 918 | 1,114 | 310 |
Current portion of long-term debt | 8,750 | 25,000 | 6,250 |
Accounts payable | 198,697 | 167,240 | 108,745 |
Accrued liabilities | 187,240 | 192,952 | 180,324 |
Operating lease liabilities, current | 26,034 | 27,329 | 35,144 |
Total current liabilities | 421,639 | 413,635 | 330,773 |
Operating lease liabilities, noncurrent | 41,325 | 39,806 | 46,526 |
Other liabilities | 118,733 | 119,777 | 109,895 |
Long-term debt | 782,262 | 887,957 | 1,130,463 |
Commitments and contingencies | |||
Total liabilities | 1,363,959 | 1,461,175 | 1,617,657 |
Equity | |||
Preferred Stock, no par value; shares authorized, 90,000,000; no shares outstanding at June 2021, December 2020 and June 2020 | 0 | 0 | 0 |
Common Stock, no par value; shares authorized, 600,000,000; shares outstanding of 57,631,974 at June 2021; 57,254,611 at December 2020 and 56,930,737 at June 2020 | 0 | 0 | 0 |
Additional paid-in capital | 198,776 | 172,297 | 158,660 |
Retained earnings (accumulated deficit) | 44,079 | 7,151 | (72,251) |
Accumulated other comprehensive loss | (88,969) | (94,807) | (131,298) |
Total equity (deficit) | 153,886 | 84,641 | (44,889) |
TOTAL LIABILITIES AND EQUITY | $ 1,517,845 | $ 1,545,816 | $ 1,572,768 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jul. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 |
Statement of Financial Position [Abstract] | |||
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 90,000,000 | 90,000,000 | 90,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 | 600,000,000 |
Common stock, shares outstanding (in shares) | 57,631,974 | 57,254,611 | 56,930,737 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Income Statement [Abstract] | ||||
Net revenues | $ 490,765 | $ 349,254 | $ 1,142,527 | $ 853,752 |
Costs and operating expenses | ||||
Cost of goods sold | 264,641 | 214,888 | 615,823 | 528,622 |
Selling, general and administrative expenses | 190,947 | 156,161 | 398,351 | 347,089 |
Total costs and operating expenses | 455,588 | 371,049 | 1,014,174 | 875,711 |
Operating income (loss) | 35,177 | (21,795) | 128,353 | (21,959) |
Interest expense | (7,641) | (13,120) | (19,432) | (24,059) |
Interest income | 421 | 556 | 679 | 972 |
Other income (expense), net | 45 | (509) | (397) | (959) |
Income (loss) before income taxes | 28,002 | (34,868) | 109,203 | (46,005) |
Income taxes | 4,365 | (1,606) | 21,103 | (10,031) |
Net income (loss) | $ 23,637 | $ (33,262) | $ 88,100 | $ (35,974) |
Earnings (loss) per common share | ||||
Basic (in USD per share) | $ 0.41 | $ (0.58) | $ 1.53 | $ (0.63) |
Diluted (in USD per share) | $ 0.40 | $ (0.58) | $ 1.49 | $ (0.63) |
Weighted average shares outstanding | ||||
Basic (in shares) | 57,612 | 56,931 | 57,478 | 56,903 |
Diluted (in shares) | 59,356 | 56,931 | 59,129 | 56,903 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 23,637 | $ (33,262) | $ 88,100 | $ (35,974) |
Other comprehensive income (loss) | ||||
Net change in foreign currency translation | 4,068 | 3,199 | (3,014) | (24,011) |
Net change in defined benefit pension plans | (11) | (17) | 63 | 12 |
Net change in derivative financial instruments | 3,671 | (1,018) | 8,789 | (27,601) |
Total other comprehensive income (loss), net of related taxes | 7,728 | 2,164 | 5,838 | (51,600) |
Comprehensive income (loss) | $ 31,365 | $ (31,098) | $ 93,938 | $ (87,574) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 03, 2021 | Jun. 27, 2020 | |
OPERATING ACTIVITIES | ||
Net income (loss) | $ 88,100 | $ (35,974) |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
Depreciation and amortization | 17,749 | 15,219 |
Stock-based compensation | 20,660 | 7,160 |
Provision for doubtful accounts | 783 | 18,012 |
Other | 5,788 | (18,346) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 14,315 | 50,319 |
Inventories | (63,006) | 20,510 |
Accounts payable | 31,822 | (37,988) |
Income taxes | 3,075 | (1,810) |
Accrued liabilities | 4,791 | (9,760) |
Other assets and liabilities | (3,912) | (2,915) |
Cash provided by operating activities | 120,165 | 4,427 |
INVESTING ACTIVITIES | ||
Property, plant and equipment expenditures | (3,320) | (11,895) |
Capitalized computer software | (16,993) | (25,605) |
Other | (902) | (1,673) |
Cash used by investing activities | (21,215) | (39,173) |
FINANCING ACTIVITIES | ||
Borrowings under revolving credit facility | 0 | 512,500 |
Repayments under revolving credit facility | 0 | (287,500) |
Payment of deferred financing costs | 0 | (4,346) |
Repayments of term loans | (125,000) | 0 |
Dividends paid | (46,016) | (31,877) |
Proceeds from issuance of Common Stock, net of shares withheld for taxes | 663 | (1,854) |
Other | (176) | (718) |
Cash (used) provided by financing activities | (170,529) | 186,205 |
Effect of foreign currency rate changes on cash and cash equivalents | (931) | (1,991) |
Net change in cash and cash equivalents | (72,510) | 149,468 |
Cash and cash equivalents – beginning of period | 248,138 | 106,808 |
Cash and cash equivalents – end of period | $ 175,628 | $ 256,276 |
Consolidated Statements of Equi
Consolidated Statements of Equity (Deficit) (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss |
Balance, beginning (in shares) at Dec. 28, 2019 | 56,812,000 | ||||
Balance, beginning at Dec. 28, 2019 | $ 69,257 | $ 0 | $ 150,673 | $ (1,718) | $ (79,698) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (2,712) | (2,712) | |||
Stock-based compensation, net (in shares) | 119,000 | ||||
Stock-based compensation, net | 611 | 3,293 | (2,682) | ||
Other comprehensive income (loss) | (53,764) | (53,764) | |||
Dividends on Common Stock | (31,877) | (31,877) | |||
Balance, ending (in shares) at Mar. 28, 2020 | 56,931,000 | ||||
Balance, ending at Mar. 28, 2020 | (18,485) | $ 0 | 153,966 | (38,989) | (133,462) |
Balance, beginning (in shares) at Dec. 28, 2019 | 56,812,000 | ||||
Balance, beginning at Dec. 28, 2019 | 69,257 | $ 0 | 150,673 | (1,718) | (79,698) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (35,974) | ||||
Other comprehensive income (loss) | $ (51,600) | ||||
Balance, ending (in shares) at Jun. 27, 2020 | 56,930,737 | 56,931,000 | |||
Balance, ending at Jun. 27, 2020 | $ (44,889) | $ 0 | 158,660 | (72,251) | (131,298) |
Balance, beginning (in shares) at Mar. 28, 2020 | 56,931,000 | ||||
Balance, beginning at Mar. 28, 2020 | (18,485) | $ 0 | 153,966 | (38,989) | (133,462) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (33,262) | (33,262) | |||
Stock-based compensation, net | 4,694 | 4,694 | |||
Other comprehensive income (loss) | $ 2,164 | 2,164 | |||
Balance, ending (in shares) at Jun. 27, 2020 | 56,930,737 | 56,931,000 | |||
Balance, ending at Jun. 27, 2020 | $ (44,889) | $ 0 | 158,660 | (72,251) | (131,298) |
Balance, beginning (in shares) at Jan. 02, 2021 | 57,254,611 | 57,255,000 | |||
Balance, beginning at Jan. 02, 2021 | $ 84,641 | $ 0 | 172,297 | 7,151 | (94,807) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 64,463 | 64,463 | |||
Stock-based compensation, net (in shares) | 259,000 | ||||
Stock-based compensation, net | 10,014 | 14,472 | (4,458) | ||
Other comprehensive income (loss) | (1,890) | (1,890) | |||
Dividends on Common Stock | (22,964) | (22,964) | |||
Balance, ending (in shares) at Apr. 03, 2021 | 57,514,000 | ||||
Balance, ending at Apr. 03, 2021 | $ 134,264 | $ 0 | 186,769 | 44,192 | (96,697) |
Balance, beginning (in shares) at Jan. 02, 2021 | 57,254,611 | 57,255,000 | |||
Balance, beginning at Jan. 02, 2021 | $ 84,641 | $ 0 | 172,297 | 7,151 | (94,807) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 88,100 | ||||
Other comprehensive income (loss) | $ 5,838 | ||||
Balance, ending (in shares) at Jul. 03, 2021 | 57,631,974 | 57,632,000 | |||
Balance, ending at Jul. 03, 2021 | $ 153,886 | $ 0 | 198,776 | 44,079 | (88,969) |
Balance, beginning (in shares) at Apr. 03, 2021 | 57,514,000 | ||||
Balance, beginning at Apr. 03, 2021 | 134,264 | $ 0 | 186,769 | 44,192 | (96,697) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 23,637 | 23,637 | |||
Stock-based compensation, net (in shares) | 118,000 | ||||
Stock-based compensation, net | 11,309 | 12,007 | (698) | ||
Other comprehensive income (loss) | 7,728 | 7,728 | |||
Dividends on Common Stock | $ (23,052) | (23,052) | |||
Balance, ending (in shares) at Jul. 03, 2021 | 57,631,974 | 57,632,000 | |||
Balance, ending at Jul. 03, 2021 | $ 153,886 | $ 0 | $ 198,776 | $ 44,079 | $ (88,969) |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Deficit) (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | ||
Jul. 03, 2021 | Apr. 03, 2021 | Mar. 28, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends on Common Stock (in USD per share) | $ 0.40 | $ 0.40 | $ 0.56 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jul. 03, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Description of Business Kontoor Brands, Inc. ("Kontoor," the "Company," "we," "us" or "our") is a global lifestyle apparel company headquartered in the United States ("U.S."). We completed a spin-off transaction from VF Corporation ("VF" or "former parent") on May 22, 2019 (the "Separation") and began to trade as a standalone public company (NYSE: KTB) on May 23, 2019. The Company designs, produces, procures, markets and distributes apparel and footwear, primarily under the brand names Wrangler ® and Lee ® . The Company's products are sold in the U.S. through mass merchants, specialty stores, mid-tier and traditional department stores, company-operated stores and online. The Company's products are also sold internationally, primarily in Europe and Asia, through department, specialty, company-operated, concession retail and independently-operated partnership stores and online. Fiscal Year The Company operates and reports using a 52/53 week fiscal year ending on the Saturday closest to December 31 of each year. Accordingly, this Form 10-Q presents the second quarter of the Company's fiscal year ending January 1, 2022 ("fiscal 2021"), which is a 52-week fiscal year. For presentation purposes herein, all references to periods ended June 2021, December 2020 and June 2020 correspond to the fiscal periods ended July 3, 2021, January 2, 2021 and June 27, 2020, respectively. Impact of COVID-19 The novel coronavirus (“COVID-19”) pandemic continues to impact global economic conditions, as well as the Company's operations. The Company considered the impact of COVID-19 on the assumptions and estimates used when preparing these quarterly financial statements including, but not limited to, our allowance for doubtful accounts, inventory valuations, liabilities for variable consideration, deferred tax valuation allowances, fair value measurements including asset impairment evaluations, the effectiveness of the Company’s hedging instruments, and expected compliance with all applicable financial covenants in our Credit Agreement (as defined in Note 6 to the Company's financial statements). These assumptions and estimates may change as new events occur and additional information is obtained regarding the impact of COVID-19. Such future changes may have an adverse impact on the Company's results of operations, financial position and liquidity. Basis of Presentation - Interim Financial Statements The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by generally accepted accounting principles in the U.S. ("GAAP") for complete financial statements. In the opinion of management, the accompanying financial statements contain all normal and recurring adjustments necessary to fairly state the financial position, results of operations and cash flows of the Company for the interim periods presented. Operating results for the three and six months ended June 2021 are not necessarily indicative of results that may be expected for any other interim period or for fiscal 2021. The unaudited financial statements should be read in conjunction with the audited consolidated and combined financial statements included in the Company's 2020 Annual Report on Form 10-K for the fiscal year ended January 2, 2021, as filed with the Securities and Exchange Commission ("SEC") on March 3, 2021 ("2020 Annual Report on Form 10-K"). Recently Adopted Accounting Standard In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, " Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ," which amends and simplifies the accounting for income taxes by removing certain exceptions and providing new guidance to reduce complexity in certain aspects of the current guidance. This guidance was adopted by the Company during the first quarter of 2021 and did not impact the Company’s financial statements or related disclosures. Recently Issued Accounting Standard In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting ,” which is intended to provide temporary optional expedients and exceptions for applying GAAP to contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance was effective upon issuance and the Company may adopt the guidance and apply it prospectively to contract modifications made or relationships entered into or evaluated any time from the issuance date through December 31, 2022. The Company will continue to evaluate the impact that adoption of this guidance would have on its financial statements and related disclosures, which is not expected to be significant. |
REVENUES
REVENUES | 6 Months Ended |
Jul. 03, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Performance Obligations As of June 2021, there were no arrangements with any transaction price allocated to remaining performance obligations other than (i) contracts for which the Company has applied the practical expedients and (ii) fixed consideration related to future minimum guarantees. For the three and six months ended June 2021, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not significant. Contract Balances The following table presents information about contract balances recorded in the Company's balance sheets: (In thousands) June 2021 December 2020 June 2020 Accounts receivable, net $ 215,297 $ 231,397 $ 153,302 Contract assets (a) 4,694 5,769 3,113 Contract liabilities (b) 674 787 1,688 (a) Included within "prepaid expenses and other current assets" in the Company's balance sheets. (b) Included within "accrued liabilities" in the Company's balance sheets. For the three and six months ended June 2021, revenue recognized that was included in contract liabilities as of December 2020 was not significant. For the three and six months ended June 2020, revenue of $0.1 million and $1.2 million, respectively, was recognized that was included in contract liabilities as of December 2019. As of June 2021, the Company has contractual rights under its licensing agreements to receive $27.0 million of fixed consideration related to the future minimum guarantees through December 2025. The variable consideration is not disclosed as a remaining performance obligation as the licensing arrangements qualify for the sales-based royalty exemption. Disaggregation of Revenue The following tables present revenues disaggregated by channel and geography. Revenues from licensing arrangements have been included within the U.S. or Non-U.S. Wholesale channels, based on the respective region where the licensee sells the product. Direct-to-Consumer revenues include the distribution of our products via Wrangler ® and Lee ® branded full-price stores and Company-operated outlet stores globally, digital sales at www.wrangler.com and www.lee.com globally and concession retail locations internationally. The Other channel primarily included sales of third-party branded merchandise at VF Outlet stores through the first quarter of 2021. During 2020, the Company decided to discontinue the sale of third-party branded merchandise in all VF Outlet stores, exit certain VF Outlet stores and convert all remaining locations to Lee Wrangler Outlet TM and Lee Wrangler Clearance Center TM retail stores. Sales of Wrangler ® and Lee ® branded products in our retail stores are not included in Other and are reported in the Direct-to-Consumer channel discussed above. Three Months Ended June 2021 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 245,200 $ 79,312 $ 2,434 $ 326,946 Non-U.S. Wholesale 41,071 55,690 805 97,566 Direct-to-Consumer 25,030 41,012 8 66,050 Other — — 203 203 Total $ 311,301 $ 176,014 $ 3,450 $ 490,765 Geographic revenues U.S. $ 266,146 $ 96,179 $ 2,645 $ 364,970 International 45,155 79,835 805 125,795 Total $ 311,301 $ 176,014 $ 3,450 $ 490,765 Three Months Ended June 2020 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 217,183 $ 33,194 $ 2,503 $ 252,880 Non-U.S. Wholesale 17,251 27,005 — 44,256 Direct-to-Consumer 17,221 25,767 1 42,989 Other — — 9,129 9,129 Total $ 251,655 $ 85,966 $ 11,633 $ 349,254 Geographic revenues U.S. $ 232,566 $ 44,119 $ 11,633 $ 288,318 International 19,089 41,847 — 60,936 Total $ 251,655 $ 85,966 $ 11,633 $ 349,254 Six Months Ended June 2021 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 574,899 $ 203,894 $ 4,160 $ 782,953 Non-U.S. Wholesale 88,648 146,490 1,442 236,580 Direct-to-Consumer 46,576 75,778 13 122,367 Other — — 627 627 Total $ 710,123 $ 426,162 $ 6,242 $ 1,142,527 Geographic revenues U.S. $ 614,025 $ 234,411 $ 4,800 $ 853,236 International 96,098 191,751 1,442 289,291 Total $ 710,123 $ 426,162 $ 6,242 $ 1,142,527 Six Months Ended June 2020 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 453,465 $ 125,772 $ 6,564 $ 585,801 Non-U.S. Wholesale 64,188 86,858 304 151,350 Direct-to-Consumer 37,388 56,092 3 93,483 Other — — 23,118 23,118 Total $ 555,041 $ 268,722 $ 29,989 $ 853,752 Geographic revenues U.S. $ 485,150 $ 152,087 $ 29,685 $ 666,922 International 69,891 116,635 304 186,830 Total $ 555,041 $ 268,722 $ 29,989 $ 853,752 |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 6 Months Ended |
Jul. 03, 2021 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION The Company has two reportable segments: • Wrangler — Wrangler ® branded denim, apparel and accessories. • Lee — Lee ® branded denim, apparel and accessories. The chief operating decision maker allocates resources and assesses performance based on a global brand view which determines the Company's operating segments. Operating segments are the basis for the Company's reportable segments. In addition, we report an "Other" category in order to reconcile segment revenues and segment profit to the Company's operating results, but the Other category is not considered a reportable segment based on evaluation of aggregation criteria. Other primarily includes other revenue sources, including sales and licensing of Rock & Republic ® apparel. Other also included sales of third-party branded merchandise at VF Outlet stores through the first quarter of 2021. During 2020, the Company decided to discontinue the sale of third-party branded merchandise in all VF Outlet stores, exit certain VF Outlet stores and convert all remaining locations to Lee Wrangler Outlet TM and Lee Wrangler Clearance Center TM retail stores. Sales of Wrangler ® and Lee ® branded products in our retail stores are not included in Other and are reported in the respective segments discussed above. Accounting policies utilized for internal management reporting at the individual segments are consistent with those in Note 1 to the Company's financial statements included in the Company's 2020 Annual Report on Form 10-K, except as noted below. The Company has allocated costs for certain centralized functions and programs to the Wrangler and Lee segments based on appropriate metrics such as usage or production of net revenues. These centralized functions and programs include, but are not limited to, information technology, human resources, supply chain, insurance and related benefit costs associated with those functions. Corporate and other expenses and interest income and expense are not controlled by segment management and therefore are excluded from the measurement of segment profit. The following table presents financial information for the Company's reportable segments and income (loss) before income taxes: Three Months Ended June Six Months Ended June (In thousands) 2021 2020 2021 2020 Segment revenues: Wrangler $ 311,301 $ 251,655 $ 710,123 $ 555,041 Lee 176,014 85,966 426,162 268,722 Total reportable segment revenues 487,315 337,621 1,136,285 823,763 Other revenues 3,450 11,633 6,242 29,989 Total net revenues $ 490,765 $ 349,254 $ 1,142,527 $ 853,752 Segment profit: Wrangler $ 52,834 $ 28,938 $ 136,817 $ 62,801 Lee 18,491 (18,417) 69,614 (17,444) Total reportable segment profit $ 71,325 $ 10,521 $ 206,431 $ 45,357 Corporate and other expenses (36,983) (26,348) (78,534) (59,570) Interest expense (7,641) (13,120) (19,432) (24,059) Interest income 421 556 679 972 Profit (loss) related to other revenues 880 (6,477) 59 (8,705) Income (loss) before income taxes $ 28,002 $ (34,868) $ 109,203 $ (46,005) |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 6 Months Ended |
Jul. 03, 2021 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Allowance for Doubtful Accounts The Company reviews the estimates used to calculate the allowance for doubtful accounts on a quarterly basis. The following table presents a rollforward of the allowance for doubtful accounts: Six Months Ended June (In thousands) 2021 2020 Balance, December $ 19,143 $ 11,852 Provision for expected credit losses 783 18,012 Accounts receivable balances written off (1) (4,119) (7,502) Other (2) (325) (713) Balance, June $ 15,482 $ 21,649 (1) Accounts receivable balances written off against the allowance were primarily due to the bankruptcy of a major U.S. retail customer during the second quarter of 2020, write-offs related to our India business during 2021 as well as the impact of COVID-19 during the 2021 and 2020 periods. (2) Other primarily includes the impact of foreign currency translation and recoveries of amounts previously written off, none of which were individually significant. Sale of Trade Accounts Receivable On April 1, 2019, the Company entered into an agreement with a financial institution to sell selected trade accounts receivable on a nonrecourse basis. Under this agreement, up to $377.5 million of the Company’s trade accounts receivable may be sold to the financial institution and remain outstanding at any point in time. The Company removes the sold balances from "accounts receivable, net" in its balance sheet at the time of sale. The Company does not retain any interests in the sold trade accounts receivable but continues to service and collect outstanding trade accounts receivable on behalf of the financial institution. During the six months ended June 2021 and June 2020, the Company sold total trade accounts receivable of $586.8 million and $405.8 million, respectively. As of June 2021, December 2020 and June 2020, $183.0 million, $127.1 million and $144.5 million, respectively, of the sold trade accounts receivable had been removed from the Company's balance sheets but remained outstanding with the financial institution. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jul. 03, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The following table presents components of inventories recorded in the Company's balance sheets: (In thousands) June 2021 December 2020 June 2020 Finished products $ 342,276 $ 277,164 $ 367,361 Work-in-process 29,551 29,921 21,416 Raw materials 31,422 33,647 44,148 Total inventories $ 403,249 $ 340,732 $ 432,925 |
SHORT-TERM BORROWINGS AND LONG-
SHORT-TERM BORROWINGS AND LONG-TERM DEBT | 6 Months Ended |
Jul. 03, 2021 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BORROWINGS AND LONG-TERM DEBT | SHORT-TERM BORROWINGS AND LONG-TERM DEBT Credit Facilities On May 17, 2019, the Company entered into a $1.55 billion senior secured credit facility (the "Credit Agreement") under which it incurred $1.05 billion of indebtedness, the proceeds of which were used primarily to finance a cash transfer to VF in connection with the Separation. At inception, this facility consisted of a five-year $750.0 million term loan A facility (“Term Loan A”), a seven-year $300.0 million term loan B facility (“Term Loan B”) and a five-year $500.0 million revolving credit facility (the “Revolving Credit Facility”) (collectively, the “Credit Facilities”) with the lenders and agents party thereto. The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type, including maintenance of ratios as defined in the Credit Agreement for consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA") to consolidated debt (the "Total Leverage Ratio") and EBITDA to consolidated interest expense (the "Consolidated Interest Coverage Ratio"). As of June 2021, the applicable maximum Total Leverage Ratio was 4.00 to 1.00 and the applicable minimum Consolidated Interest Coverage Ratio was 3.00 to 1.00, both as measured over the most recent four consecutive fiscal quarters. In addition, beginning with the fiscal year ended December 2020, the Company is subject to additional mandatory repayments on Term Loan B if excess cash flow, as defined in the Credit Agreement, exceeds a specified threshold. As of June 2021, the Company was in compliance with all applicable financial covenants and expects to maintain compliance with the applicable financial covenants for at least one year from the issuance of these financial statements. Short-term Borrowings At June 2021, December 2020 and June 2020, the Company had $36.0 million, $35.9 million and $46.4 million, of borrowing availability under international lines of credit with various banks, which are uncommitted and may be terminated at any time by either the Company or the banks. Short-term borrowings outstanding under these arrangements were $0.2 million and $0.3 million at December 2020 and June 2020, respectively, and primarily consisted of letters of credit that are non-interest bearing to the Company. There were no outstanding balances under these arrangements at June 2021. In addition, short-term borrowings at June 2021 and December 2020 included other debt of $0.9 million. Long-term Debt The following table presents the components of long-term debt as recorded in the Company's balance sheets: (In thousands) June 2021 December 2020 June 2020 Revolving Credit Facility $ — $ — $ 225,000 Term Loan A 660,334 694,241 693,393 Term Loan B 130,678 218,716 218,320 Total long-term debt 791,012 912,957 1,136,713 Less: current portion (8,750) (25,000) (6,250) Long-term debt, due beyond one year $ 782,262 $ 887,957 $ 1,130,463 The Revolving Credit Facility may be used to borrow funds in both U.S. dollar and certain non-U.S. dollar currencies, and has a $75.0 million letter of credit sublimit. As of June 2021, the Company had no outstanding borrowings under the Revolving Credit Facility and $12.3 million of outstanding standby letters of credit issued on behalf of the Company, leaving $487.7 million available for borrowing against this facility. The interest rate per annum applicable to the Revolving Credit Facility and Term Loan A is either a base rate plus a margin or the applicable LIBOR rate plus a margin, at the Company's election. The applicable margin varies from 37.5 to 125 basis points for base rate loans and from 137.5 to 225 basis points for LIBOR loans. The Company is also required to pay a facility fee to the lenders, varying from 20 to 40 basis points of the undrawn amount of the facility. The applicable margins and facility fee are subject to adjustments based on the Company's credit ratings and Total Leverage Ratio. Additionally, the interest rate per annum applicable to Term Loan B is either a base rate plus a margin of 325 basis points or the applicable LIBOR rate plus a margin of 425 basis points, at the Company's election. The LIBOR rate for all loans under the Credit Facility is subject to a "floor" of 0%. Interest payments on all loans under the Credit Facility are due at least quarterly, and could be due more frequently based on the Company's interest rate elections. Term Loan A had an outstanding principal amount of $665.0 million at June 2021, and $700.0 million at both December 2020 and June 2020, which is recorded net of unamortized deferred financing costs. As of June 2021, interest expense on Term Loan A was being recorded at an effective annual interest rate of 2.8%, including the remaining amortization of deferred financing costs and the impact of the Company’s interest rate swap agreements. Term Loan B had an outstanding principal amount of $133.0 million at June 2021, and $223.0 million at both December 2020 and June 2020, which is recorded net of unamortized original issue discount and deferred financing costs. As of June 2021, interest expense on Term Loan B was being recorded at an effective annual interest rate of 5.5%, including the remaining amortization of original issue discount, deferred financing costs and the impact of the Company’s interest rate swap agreements. In addition, during the three and six months ended June 2021, the Company recorded interest expense of $0.2 million and $1.9 million due to accelerated amortization of original issue discount and debt issuance costs associated with early repayments on term loans under our Credit Facilities. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jul. 03, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Certain assets and liabilities measured and reported at fair value are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. Categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs, as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data. • Level 3 — Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be the Company's own data and judgments about assumptions that market participants would use in pricing the asset or liability. Recurring Fair Value Measurements The following tables present financial assets and financial liabilities that are measured and recorded in the Company's financial statements at fair value on a recurring basis: Fair Value Measurement Using (In thousands) Total Fair Value Level 1 Level 2 Level 3 June 2021 Financial assets: Cash equivalents: Money market funds $ 87,653 $ 87,653 $ — $ — Time deposits 3,631 3,631 — — Foreign currency exchange contracts 8,286 — 8,286 — Investment securities 58,568 58,568 — — Financial liabilities: Foreign currency exchange contracts 4,411 — 4,411 — Interest rate swap agreements 11,825 — 11,825 — Deferred compensation 59,877 — 59,877 — Fair Value Measurement Using (In thousands) Total Fair Value Level 1 Level 2 Level 3 December 2020 Financial assets: Cash equivalents: Money market funds $ 165,751 $ 165,751 $ — $ — Time deposits 4,978 4,978 — — Foreign currency exchange contracts 7,531 — 7,531 — Investment securities 57,166 57,166 — — Financial liabilities: Foreign currency exchange contracts 8,794 — 8,794 — Interest rate swap agreements 16,309 — 16,309 — Deferred compensation 58,035 — 58,035 — The Company's cash equivalents include money market funds and short-term time deposits that approximate fair value based on Level 1 measurements. The fair value of derivative financial instruments, which consist of foreign currency exchange contracts and interest rate swap agreements, is determined based on observable market inputs (Level 2), including spot and forward exchange rates for foreign currencies and observable interest rate yield curves for interest rate swap agreements. Investment securities are held in the Company's deferred compensation plans as an economic hedge of the related deferred compensation liabilities and are comprised of mutual funds that are valued based on quoted prices in active markets (Level 1). Liabilities related to the Company's deferred compensation plans are recorded at amounts due to participants, based on the fair value of the participants’ selection of hypothetical investments (Level 2). Additionally, at June 2021, the carrying value of the Company's long-term debt was $791.0 million compared to a fair value of $795.2 million. At December 2020, the carrying value of the Company's long-term debt was $913.0 million compared to a fair value of $916.0 million. The fair value of long-term debt is a Level 2 estimate based on quoted market prices or values of comparable borrowings. All other financial assets and financial liabilities are recorded in the Company's financial statements at cost. These other financial assets and financial liabilities include cash held as demand deposits, accounts receivable, short-term borrowings, accounts payable, and accrued liabilities. At June 2021 and December 2020, their carrying values approximated fair value due to the short-term nature of these instruments. Nonrecurring Fair Value Measurements |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 6 Months Ended |
Jul. 03, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Summary of Derivative Financial Instruments The Company enters into derivative contracts with external counterparties to hedge certain foreign currency transactions. The notional amount of all outstanding foreign currency exchange contracts was $310.3 million at June 2021, $295.0 million at December 2020 and $290.2 million at June 2020, consisting primarily of contracts hedging exposures to the euro, Mexican peso, Canadian dollar, British pound, Polish zloty, Swedish krona, and Indian rupee. Foreign currency exchange contracts have maturities up to 20 months. During 2019, the Company entered into "floating to fixed" interest rate swap agreements to mitigate exposure to volatility in LIBOR rates on the Company's future interest payments. The notional amount of the interest rate swap agreements was $350.0 million at June 2021 and $400.0 million at both December 2020 and June 2020. Because these interest rate swap agreements meet the criteria for hedge accounting, all related gains and losses are deferred within accumulated other comprehensive loss ("AOCL") and are being amortized through April 18, 2024. The Company's outstanding derivative financial instruments met the criteria for hedge accounting at the inception of the hedging relationship. At each reporting period, the Company assesses whether the hedging relationships continue to be highly effective in offsetting changes in cash flows of hedged items. If the Company determines that the hedging relationship has ceased to be highly effective, it would discontinue hedge accounting. All designated hedging relationships were determined to be highly effective as of June 2021. A limited number of foreign currency exchange contracts intended to hedge assets and liabilities are not designated as hedges for accounting purposes. The following table presents the fair value of outstanding derivatives on an individual contract basis: Fair Value of Derivatives Fair Value of Derivatives (In thousands) June 2021 December 2020 June 2020 June 2021 December 2020 June 2020 Derivatives designated as hedging instruments: Foreign currency exchange contracts $ 8,194 $ 7,179 $ 3,689 $ (4,381) $ (8,640) $ (9,597) Interest rate swap agreements — — — (11,825) (16,309) (18,832) Derivatives not designated as hedging instruments: Foreign currency exchange contracts 92 352 870 (30) (154) (422) Total derivatives $ 8,286 $ 7,531 $ 4,559 $ (16,236) $ (25,103) $ (28,851) The Company records and presents the fair value of all derivative assets and liabilities in the Company's balance sheets on a gross basis, even though certain of the derivative contracts are subject to master netting agreements. If the Company were to offset and record the asset and liability balances of its derivative contracts on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Company's balance sheets would be adjusted from the current gross presentation to the net amounts. The following table presents a reconciliation of gross to net amounts for derivative asset and liability balances: June 2021 December 2020 June 2020 (In thousands) Derivative Asset Derivative Liability Derivative Asset Derivative Liability Derivative Asset Derivative Gross amounts presented in the balance sheet $ 8,286 $ (16,236) $ 7,531 $ (25,103) $ 4,559 $ (28,851) Gross amounts not offset in the balance sheet (1,383) 1,383 (1,818) 1,818 (1,745) 1,745 Net amounts $ 6,903 $ (14,853) $ 5,713 $ (23,285) $ 2,814 $ (27,106) The following table presents the location of derivatives in the Company's balance sheets, with current or noncurrent classification based on maturity dates: (In thousands) June 2021 December 2020 June 2020 Prepaid expenses and other current assets $ 7,368 $ 5,773 $ 3,716 Accrued liabilities (4,113) (7,166) (8,625) Other assets 918 1,758 843 Other liabilities (12,123) (17,937) (20,226) Cash Flow Hedges The following tables present the pre-tax effects of cash flow hedges included in the Company's statements of operations and statements of comprehensive income (loss): Gain (Loss) on Derivatives Recognized in AOCL (In thousands) Three Months Ended Six Months Ended Cash Flow Hedging Relationships June 2021 June 2020 June 2021 June 2020 Foreign currency exchange contracts $ 1,357 $ 812 $ 2,903 $ (10,094) Interest rate swap agreements (609) (2,653) 1,477 (17,323) Total $ 748 $ (1,841) $ 4,380 $ (27,417) Gain (Loss) Reclassified from AOCL into Income (In thousands) Three Months Ended Six Months Ended Location of Gain (Loss) June 2021 June 2020 June 2021 June 2020 Net revenues $ 125 $ (194) $ 200 $ (552) Cost of goods sold (1,428) 1,615 (2,833) 5,356 Other expense, net (293) 141 (427) 137 Interest expense (1,494) (1,349) (3,007) (1,580) Total $ (3,090) $ 213 $ (6,067) $ 3,361 Derivative Contracts Not Designated as Hedges Contracts that are not designated as hedges and are recorded at fair value in the Company's balance sheets primarily relate to derivatives contracts used by the Company to manage foreign currency exchange risk on certain accounts receivable and accounts payable. Gains or losses on the balance sheet contracts largely offset the net transaction gains or losses on the related assets and liabilities. In addition, a limited number of cash flow hedges are deemed ineffective and de-designated. Changes in the fair values of derivative contracts not designated as hedges are recognized directly in earnings. The following table presents a summary of these derivatives included in the Company's statements of operations: (In thousands) Location of Gain (Loss) on Derivatives Recognized in Income Gain (Loss) on Derivatives Recognized in Income Three Months Ended Six Months Ended Derivatives Not Designated as Hedges June 2021 June 2020 June 2021 June 2020 Foreign currency exchange contracts Net revenues $ (23) $ 2 $ (104) $ 6 Cost of goods sold 109 550 (14) (3,122) Other expense, net (89) (13) 120 10 Total $ (3) $ 539 $ 2 $ (3,106) Other Derivative Information There were no significant amounts recognized in earnings for any hedging relationships deemed ineffective during the three and six months ended June 2021 and June 2020. At June 2021, AOCL included $3.1 million of pre-tax net deferred losses for foreign currency exchange contracts and interest rate swap agreements that are expected to be reclassified to earnings during the next 12 fiscal months. The amounts ultimately reclassified to earnings will depend on rates in effect when outstanding derivative contracts are settled. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 6 Months Ended |
Jul. 03, 2021 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The Company's comprehensive income (loss) consists of net income (loss) and specified components of other comprehensive income (loss) (“OCL”), which relate to changes in assets and liabilities that are not included in net income (loss) but are instead deferred and accumulated within a separate component of equity in the Company's balance sheets. The Company's comprehensive income (loss) is presented in the Company's statements of comprehensive income (loss). The following table presents deferred components of AOCL in equity, net of related taxes: (In thousands) June 2021 December 2020 June 2020 Foreign currency translation $ (83,192) $ (80,178) $ (108,129) Defined benefit pension plans (1,826) (1,889) (2,289) Derivative financial instruments (3,951) (12,740) (20,880) Accumulated other comprehensive loss $ (88,969) $ (94,807) $ (131,298) The following tables present changes in AOCL, net of related tax impact: Three Months Ended June 2021 Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments (In thousands) Total Balance, March 2021 $ (87,260) $ (1,815) $ (7,622) $ (96,697) Other comprehensive income (loss) due to gains (losses) arising before reclassifications 4,068 — 1,348 5,416 Reclassifications to net income (loss) of previously deferred (gains) losses — (11) 2,323 2,312 Net other comprehensive income (loss) 4,068 (11) 3,671 7,728 Balance, June 2021 $ (83,192) $ (1,826) $ (3,951) $ (88,969) Three Months Ended June 2020 Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments (In thousands) Total Balance, March 2020 $ (111,328) $ (2,272) $ (19,862) $ (133,462) Other comprehensive income (loss) due to gains (losses) arising before reclassifications 3,199 (27) (820) 2,352 Reclassifications to net income (loss) of previously deferred (gains) losses — 10 (198) (188) Net other comprehensive income (loss) 3,199 (17) (1,018) 2,164 Balance, June 2020 $ (108,129) $ (2,289) $ (20,880) $ (131,298) Six Months Ended June 2021 Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments (In thousands) Total Balance, December 2020 $ (80,178) $ (1,889) $ (12,740) $ (94,807) Other comprehensive income (loss) before reclassifications (3,014) — 4,197 1,183 Amounts reclassified from accumulated other comprehensive income (loss) — 63 4,592 4,655 Net other comprehensive income (loss) (3,014) 63 8,789 5,838 Balance, June 2021 $ (83,192) $ (1,826) $ (3,951) $ (88,969) Six Months Ended June 2020 Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments (In thousands) Total Balance, December 2019 $ (84,118) $ (2,301) $ 6,721 $ (79,698) Other comprehensive income (loss) before reclassifications (24,011) (8) (24,475) (48,494) Amounts reclassified from accumulated other comprehensive income (loss) — 20 (3,126) (3,106) Net other comprehensive income (loss) (24,011) 12 (27,601) (51,600) Balance, June 2020 $ (108,129) $ (2,289) $ (20,880) $ (131,298) The following table presents reclassifications out of AOCL: (In thousands) Three Months Ended June Six Months Ended June Details About Accumulated Other Comprehensive Loss Reclassifications Affected Line Item in the Financial Statements 2021 2020 2021 2020 Defined benefit pension plans: Net change in deferred losses during the period Selling, general and administrative expenses $ 14 $ (14) $ (85) $ (28) Total before tax 14 (14) (85) (28) Income taxes Income taxes (3) 4 22 8 Net of tax 11 (10) (63) (20) Gains (losses) on derivative financial instruments: Foreign currency exchange contracts Net revenues $ 125 $ (194) $ 200 $ (552) Foreign currency exchange contracts Cost of goods sold (1,428) 1,615 (2,833) 5,356 Foreign currency exchange contracts Other expense, net (293) 141 (427) 137 Interest rate swap agreements Interest expense (1,494) (1,349) (3,007) (1,580) Total before tax (3,090) 213 (6,067) 3,361 Income taxes Income taxes 767 (15) 1,475 (235) Net of tax (2,323) 198 (4,592) 3,126 Total reclassifications for the period, net of tax $ (2,312) $ 188 $ (4,655) $ 3,106 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jul. 03, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective income tax rate for the six months ended June 2021 was 19.3% compared to 21.8% in the 2020 period. The six months ended June 2021 included a net discrete tax benefit of $0.6 million, primarily comprised of $0.8 million of tax benefit related to stock compensation and $0.2 million of tax expense related to unrecognized tax benefits and interest. The $0.6 million net discrete tax benefit in the six months ended June 2021 decreased the effective income tax rate by 0.6%. The six months ended June 2020 included a net discrete tax benefit of $7.7 million, primarily comprised of $6.3 million of tax benefit recognized due to the enactment of Swiss tax reform in the canton of Ticino and $1.1 million of tax benefit related to the finalization of state tax return filings. The $7.7 million net discrete tax benefit in the six months ended June 2020 increased the effective income tax rate by 16.8%. The effective income tax rate without discrete items for the six months ended June 2021 was 19.9% compared to 5.0% on the 2020 period loss. The increase was primarily due to changes in our jurisdictional mix of earnings and the relative impact of losses incurred for which no related tax benefit was recognized. During the six months ended June 2021, the amount of net unrecognized tax benefits and associated interest increased by $0.4 million to $13.8 million. Management also believes that it is reasonably possible that the amount of unrecognized tax benefits may decrease by $0.6 million within the next 12 fiscal months due to settlements of audits and expiration of statutes of limitations, all of which would reduce income tax expense. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 6 Months Ended |
Jul. 03, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE The calculations of basic and diluted earnings (loss) per share ("EPS") is based on net income (loss) divided by the basic weighted average number of common shares and diluted weighted average number of common shares outstanding, respectively. The following table presents the calculations of basic and diluted EPS: Three Months Ended June Six Months Ended June (In thousands, except per share amounts) 2021 2020 2021 2020 Net income (loss) $ 23,637 $ (33,262) $ 88,100 $ (35,974) Basic weighted average shares outstanding 57,612 56,931 57,478 56,903 Dilutive effect of stock-based awards 1,744 — 1,651 — Diluted weighted average shares outstanding 59,356 56,931 59,129 56,903 Earnings (loss) per share: Basic earnings (loss) per common share $ 0.41 $ (0.58) $ 1.53 $ (0.63) Diluted earnings (loss) per common share $ 0.40 $ (0.58) $ 1.49 $ (0.63) For the three and six months ended June 2021, there were an immaterial number of anti-dilutive shares that were excluded from the dilutive loss per share calculation. A total of 2.1 million and 1.6 million of potentially dilutive shares were excluded from the diluted loss per share calculation for the three and six months ended June 2020, respectively, because the Company incurred a net loss for those periods. For both the three and six months ended June 2021, a total of 0.2 million shares of PRSUs were excluded from the calculations of diluted earnings per share as the units were not considered to be contingent outstanding shares. For both the three and six months ended June 2020, a total of 0.4 million shares of PRSUs were excluded from the calculations of diluted earnings per share as the units were not considered to be contingent outstanding shares. |
LEASES
LEASES | 6 Months Ended |
Jul. 03, 2021 | |
Leases [Abstract] | |
LEASES | LEASES The Company enters into operating leases for retail stores, operational facilities, vehicles and certain equipment, with terms expiring at various dates through 2031. Most leases have fixed rentals, with many of the real estate leases requiring additional payments for real estate taxes and occupancy-related costs. The following table presents supplemental cash flow and non-cash information related to leases: Six Months Ended June (In thousands) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities - operating cash flows $ 19,338 $ 18,925 Right-of-use operating assets obtained in exchange for new operating leases - non-cash activity $ 1,898 $ 702 |
RESTRUCTURING
RESTRUCTURING | 6 Months Ended |
Jul. 03, 2021 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING The Company generally incurs restructuring charges related to cost optimization of business activities, primarily related to severance and employee-related benefits. All of the $0.3 million and $1.0 million of restructuring charges recognized during the three and six months ended June 2021, respectively, were reflected within "selling, general and administrative expenses," and primarily related to previously approved initiatives. All of the $5.8 million of restructuring charges recognized during the three months ended June 2020 were reflected within "selling, general and administrative expenses." Of the $11.6 million of restructuring charges recognized during the six months ended June 2020, $11.1 million was reflected within "selling, general and administrative expenses" and $0.5 million was reflected within "cost of goods sold." Of the $2.6 million total restructuring accrual reported in the Company's balance sheet at June 2021, $2.5 million is expected to be paid out within the next 12 fiscal months and is classified within "accrued liabilities." The remaining $0.1 million is classified within "other liabilities." Of the $6.7 million total restructuring accrual reported in the Company's balance sheet at December 2020, $6.5 million was expected to be paid out within the next 12 fiscal months and was classified within "accrued liabilities," and the remaining $0.2 million was classified within "other liabilities." The following table presents the components of restructuring charges: Three Months Ended Six Months Ended (In thousands) June 2021 June 2020 June 2021 June 2020 Severance and employee-related benefits $ 273 $ 4,215 $ 992 $ 10,010 Asset impairments — 1,579 — 1,579 Total restructuring charges $ 273 $ 5,794 $ 992 $ 11,589 The following table presents the restructuring costs by business segment: Three Months Ended Six Months Ended (In thousands) June 2021 June 2020 June 2021 June 2020 Wrangler $ 123 $ 478 $ 306 $ 3,656 Lee 148 514 331 3,131 Corporate and other 2 4,802 355 4,802 Total $ 273 $ 5,794 $ 992 $ 11,589 The following table presents activity in the restructuring accrual for the six-month period ended June 2021: (In thousands) Total Accrual at December 2020 $ 6,741 Charges 992 Cash payments (5,196) Adjustments to accruals 55 Accrual at June 2021 $ 2,592 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jul. 03, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Dividend On July 20, 2021, the Board of Directors declared a regular quarterly cash dividend of $0.40 per share of the Company's Common Stock. The cash dividend will be payable on September 20, 2021, to shareholders of record at the close of business on September 10, 2021. Share Repurchase Program |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jul. 03, 2021 | |
Accounting Policies [Abstract] | |
Fiscal Year | Fiscal YearThe Company operates and reports using a 52/53 week fiscal year ending on the Saturday closest to December 31 of each year. Accordingly, this Form 10-Q presents the second quarter of the Company's fiscal year ending January 1, 2022 ("fiscal 2021"), which is a 52-week fiscal year. For presentation purposes herein, all references to periods ended June 2021, December 2020 and June 2020 correspond to the fiscal periods ended July 3, 2021, January 2, 2021 and June 27, 2020, respectively. |
Basis of Presentation - Interim Financial Statements | Basis of Presentation - Interim Financial Statements The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by generally accepted accounting principles in the U.S. ("GAAP") for complete financial statements. In the opinion of management, the accompanying financial statements contain all normal and recurring adjustments necessary to fairly state the financial position, results of operations and cash flows of the Company for the interim periods presented. Operating results for the three and six months ended June 2021 are not necessarily indicative of results that may be expected for any other interim period or for fiscal 2021. The unaudited financial statements should be read in conjunction with the audited consolidated and combined financial statements included in the Company's 2020 Annual Report on Form 10-K for the fiscal year ended January 2, 2021, as filed with the Securities and Exchange Commission ("SEC") on March 3, 2021 ("2020 Annual Report on Form 10-K"). |
Recently Adopted Accounting Standard and Recently Issued Accounting Standard | Recently Adopted Accounting Standard In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, " Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ," which amends and simplifies the accounting for income taxes by removing certain exceptions and providing new guidance to reduce complexity in certain aspects of the current guidance. This guidance was adopted by the Company during the first quarter of 2021 and did not impact the Company’s financial statements or related disclosures. Recently Issued Accounting Standard In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting ,” which is intended to provide temporary optional expedients and exceptions for applying GAAP to contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance was effective upon issuance and the Company may adopt the guidance and apply it prospectively to contract modifications made or relationships entered into or evaluated any time from the issuance date through December 31, 2022. The Company will continue to evaluate the impact that adoption of this guidance would have on its financial statements and related disclosures, which is not expected to be significant. |
Fair Value Measurements | Certain assets and liabilities measured and reported at fair value are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. Categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs, as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data. • Level 3 — Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be the Company's own data and judgments about assumptions that market participants would use in pricing the asset or liability. |
REVENUES (Tables)
REVENUES (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | The following table presents information about contract balances recorded in the Company's balance sheets: (In thousands) June 2021 December 2020 June 2020 Accounts receivable, net $ 215,297 $ 231,397 $ 153,302 Contract assets (a) 4,694 5,769 3,113 Contract liabilities (b) 674 787 1,688 (a) Included within "prepaid expenses and other current assets" in the Company's balance sheets. (b) Included within "accrued liabilities" in the Company's balance sheets. |
Disaggregation of Revenue | Three Months Ended June 2021 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 245,200 $ 79,312 $ 2,434 $ 326,946 Non-U.S. Wholesale 41,071 55,690 805 97,566 Direct-to-Consumer 25,030 41,012 8 66,050 Other — — 203 203 Total $ 311,301 $ 176,014 $ 3,450 $ 490,765 Geographic revenues U.S. $ 266,146 $ 96,179 $ 2,645 $ 364,970 International 45,155 79,835 805 125,795 Total $ 311,301 $ 176,014 $ 3,450 $ 490,765 Three Months Ended June 2020 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 217,183 $ 33,194 $ 2,503 $ 252,880 Non-U.S. Wholesale 17,251 27,005 — 44,256 Direct-to-Consumer 17,221 25,767 1 42,989 Other — — 9,129 9,129 Total $ 251,655 $ 85,966 $ 11,633 $ 349,254 Geographic revenues U.S. $ 232,566 $ 44,119 $ 11,633 $ 288,318 International 19,089 41,847 — 60,936 Total $ 251,655 $ 85,966 $ 11,633 $ 349,254 Six Months Ended June 2021 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 574,899 $ 203,894 $ 4,160 $ 782,953 Non-U.S. Wholesale 88,648 146,490 1,442 236,580 Direct-to-Consumer 46,576 75,778 13 122,367 Other — — 627 627 Total $ 710,123 $ 426,162 $ 6,242 $ 1,142,527 Geographic revenues U.S. $ 614,025 $ 234,411 $ 4,800 $ 853,236 International 96,098 191,751 1,442 289,291 Total $ 710,123 $ 426,162 $ 6,242 $ 1,142,527 Six Months Ended June 2020 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 453,465 $ 125,772 $ 6,564 $ 585,801 Non-U.S. Wholesale 64,188 86,858 304 151,350 Direct-to-Consumer 37,388 56,092 3 93,483 Other — — 23,118 23,118 Total $ 555,041 $ 268,722 $ 29,989 $ 853,752 Geographic revenues U.S. $ 485,150 $ 152,087 $ 29,685 $ 666,922 International 69,891 116,635 304 186,830 Total $ 555,041 $ 268,722 $ 29,989 $ 853,752 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Segment Reporting [Abstract] | |
Financial Information for Reportable Segments | The following table presents financial information for the Company's reportable segments and income (loss) before income taxes: Three Months Ended June Six Months Ended June (In thousands) 2021 2020 2021 2020 Segment revenues: Wrangler $ 311,301 $ 251,655 $ 710,123 $ 555,041 Lee 176,014 85,966 426,162 268,722 Total reportable segment revenues 487,315 337,621 1,136,285 823,763 Other revenues 3,450 11,633 6,242 29,989 Total net revenues $ 490,765 $ 349,254 $ 1,142,527 $ 853,752 Segment profit: Wrangler $ 52,834 $ 28,938 $ 136,817 $ 62,801 Lee 18,491 (18,417) 69,614 (17,444) Total reportable segment profit $ 71,325 $ 10,521 $ 206,431 $ 45,357 Corporate and other expenses (36,983) (26,348) (78,534) (59,570) Interest expense (7,641) (13,120) (19,432) (24,059) Interest income 421 556 679 972 Profit (loss) related to other revenues 880 (6,477) 59 (8,705) Income (loss) before income taxes $ 28,002 $ (34,868) $ 109,203 $ (46,005) |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Receivables [Abstract] | |
Rollforward of the Allowance for Doubtful Accounts | The following table presents a rollforward of the allowance for doubtful accounts: Six Months Ended June (In thousands) 2021 2020 Balance, December $ 19,143 $ 11,852 Provision for expected credit losses 783 18,012 Accounts receivable balances written off (1) (4,119) (7,502) Other (2) (325) (713) Balance, June $ 15,482 $ 21,649 (1) Accounts receivable balances written off against the allowance were primarily due to the bankruptcy of a major U.S. retail customer during the second quarter of 2020, write-offs related to our India business during 2021 as well as the impact of COVID-19 during the 2021 and 2020 periods. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | The following table presents components of inventories recorded in the Company's balance sheets: (In thousands) June 2021 December 2020 June 2020 Finished products $ 342,276 $ 277,164 $ 367,361 Work-in-process 29,551 29,921 21,416 Raw materials 31,422 33,647 44,148 Total inventories $ 403,249 $ 340,732 $ 432,925 |
SHORT-TERM BORROWINGS AND LON_2
SHORT-TERM BORROWINGS AND LONG-TERM DEBT (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term Debt The following table presents the components of long-term debt as recorded in the Company's balance sheets: (In thousands) June 2021 December 2020 June 2020 Revolving Credit Facility $ — $ — $ 225,000 Term Loan A 660,334 694,241 693,393 Term Loan B 130,678 218,716 218,320 Total long-term debt 791,012 912,957 1,136,713 Less: current portion (8,750) (25,000) (6,250) Long-term debt, due beyond one year $ 782,262 $ 887,957 $ 1,130,463 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Fair Value Disclosures [Abstract] | |
Classes of Financial Assets and Financial Liabilities Measured and Recorded at Fair Value on Recurring Basis | The following tables present financial assets and financial liabilities that are measured and recorded in the Company's financial statements at fair value on a recurring basis: Fair Value Measurement Using (In thousands) Total Fair Value Level 1 Level 2 Level 3 June 2021 Financial assets: Cash equivalents: Money market funds $ 87,653 $ 87,653 $ — $ — Time deposits 3,631 3,631 — — Foreign currency exchange contracts 8,286 — 8,286 — Investment securities 58,568 58,568 — — Financial liabilities: Foreign currency exchange contracts 4,411 — 4,411 — Interest rate swap agreements 11,825 — 11,825 — Deferred compensation 59,877 — 59,877 — Fair Value Measurement Using (In thousands) Total Fair Value Level 1 Level 2 Level 3 December 2020 Financial assets: Cash equivalents: Money market funds $ 165,751 $ 165,751 $ — $ — Time deposits 4,978 4,978 — — Foreign currency exchange contracts 7,531 — 7,531 — Investment securities 57,166 57,166 — — Financial liabilities: Foreign currency exchange contracts 8,794 — 8,794 — Interest rate swap agreements 16,309 — 16,309 — Deferred compensation 58,035 — 58,035 — |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table presents the fair value of outstanding derivatives on an individual contract basis: Fair Value of Derivatives Fair Value of Derivatives (In thousands) June 2021 December 2020 June 2020 June 2021 December 2020 June 2020 Derivatives designated as hedging instruments: Foreign currency exchange contracts $ 8,194 $ 7,179 $ 3,689 $ (4,381) $ (8,640) $ (9,597) Interest rate swap agreements — — — (11,825) (16,309) (18,832) Derivatives not designated as hedging instruments: Foreign currency exchange contracts 92 352 870 (30) (154) (422) Total derivatives $ 8,286 $ 7,531 $ 4,559 $ (16,236) $ (25,103) $ (28,851) The following table presents a reconciliation of gross to net amounts for derivative asset and liability balances: June 2021 December 2020 June 2020 (In thousands) Derivative Asset Derivative Liability Derivative Asset Derivative Liability Derivative Asset Derivative Gross amounts presented in the balance sheet $ 8,286 $ (16,236) $ 7,531 $ (25,103) $ 4,559 $ (28,851) Gross amounts not offset in the balance sheet (1,383) 1,383 (1,818) 1,818 (1,745) 1,745 Net amounts $ 6,903 $ (14,853) $ 5,713 $ (23,285) $ 2,814 $ (27,106) The following table presents the location of derivatives in the Company's balance sheets, with current or noncurrent classification based on maturity dates: (In thousands) June 2021 December 2020 June 2020 Prepaid expenses and other current assets $ 7,368 $ 5,773 $ 3,716 Accrued liabilities (4,113) (7,166) (8,625) Other assets 918 1,758 843 Other liabilities (12,123) (17,937) (20,226) |
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following tables present the pre-tax effects of cash flow hedges included in the Company's statements of operations and statements of comprehensive income (loss): Gain (Loss) on Derivatives Recognized in AOCL (In thousands) Three Months Ended Six Months Ended Cash Flow Hedging Relationships June 2021 June 2020 June 2021 June 2020 Foreign currency exchange contracts $ 1,357 $ 812 $ 2,903 $ (10,094) Interest rate swap agreements (609) (2,653) 1,477 (17,323) Total $ 748 $ (1,841) $ 4,380 $ (27,417) Gain (Loss) Reclassified from AOCL into Income (In thousands) Three Months Ended Six Months Ended Location of Gain (Loss) June 2021 June 2020 June 2021 June 2020 Net revenues $ 125 $ (194) $ 200 $ (552) Cost of goods sold (1,428) 1,615 (2,833) 5,356 Other expense, net (293) 141 (427) 137 Interest expense (1,494) (1,349) (3,007) (1,580) Total $ (3,090) $ 213 $ (6,067) $ 3,361 |
Derivatives Not Designated as Hedging Instruments | The following table presents a summary of these derivatives included in the Company's statements of operations: (In thousands) Location of Gain (Loss) on Derivatives Recognized in Income Gain (Loss) on Derivatives Recognized in Income Three Months Ended Six Months Ended Derivatives Not Designated as Hedges June 2021 June 2020 June 2021 June 2020 Foreign currency exchange contracts Net revenues $ (23) $ 2 $ (104) $ 6 Cost of goods sold 109 550 (14) (3,122) Other expense, net (89) (13) 120 10 Total $ (3) $ 539 $ 2 $ (3,106) |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Equity [Abstract] | |
Deferred Components of AOCL in Equity, Net of Related Taxes, and Changes in AOCL | The following table presents deferred components of AOCL in equity, net of related taxes: (In thousands) June 2021 December 2020 June 2020 Foreign currency translation $ (83,192) $ (80,178) $ (108,129) Defined benefit pension plans (1,826) (1,889) (2,289) Derivative financial instruments (3,951) (12,740) (20,880) Accumulated other comprehensive loss $ (88,969) $ (94,807) $ (131,298) The following tables present changes in AOCL, net of related tax impact: Three Months Ended June 2021 Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments (In thousands) Total Balance, March 2021 $ (87,260) $ (1,815) $ (7,622) $ (96,697) Other comprehensive income (loss) due to gains (losses) arising before reclassifications 4,068 — 1,348 5,416 Reclassifications to net income (loss) of previously deferred (gains) losses — (11) 2,323 2,312 Net other comprehensive income (loss) 4,068 (11) 3,671 7,728 Balance, June 2021 $ (83,192) $ (1,826) $ (3,951) $ (88,969) Three Months Ended June 2020 Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments (In thousands) Total Balance, March 2020 $ (111,328) $ (2,272) $ (19,862) $ (133,462) Other comprehensive income (loss) due to gains (losses) arising before reclassifications 3,199 (27) (820) 2,352 Reclassifications to net income (loss) of previously deferred (gains) losses — 10 (198) (188) Net other comprehensive income (loss) 3,199 (17) (1,018) 2,164 Balance, June 2020 $ (108,129) $ (2,289) $ (20,880) $ (131,298) Six Months Ended June 2021 Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments (In thousands) Total Balance, December 2020 $ (80,178) $ (1,889) $ (12,740) $ (94,807) Other comprehensive income (loss) before reclassifications (3,014) — 4,197 1,183 Amounts reclassified from accumulated other comprehensive income (loss) — 63 4,592 4,655 Net other comprehensive income (loss) (3,014) 63 8,789 5,838 Balance, June 2021 $ (83,192) $ (1,826) $ (3,951) $ (88,969) Six Months Ended June 2020 Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments (In thousands) Total Balance, December 2019 $ (84,118) $ (2,301) $ 6,721 $ (79,698) Other comprehensive income (loss) before reclassifications (24,011) (8) (24,475) (48,494) Amounts reclassified from accumulated other comprehensive income (loss) — 20 (3,126) (3,106) Net other comprehensive income (loss) (24,011) 12 (27,601) (51,600) Balance, June 2020 $ (108,129) $ (2,289) $ (20,880) $ (131,298) |
Reclassification out of AOCL | The following table presents reclassifications out of AOCL: (In thousands) Three Months Ended June Six Months Ended June Details About Accumulated Other Comprehensive Loss Reclassifications Affected Line Item in the Financial Statements 2021 2020 2021 2020 Defined benefit pension plans: Net change in deferred losses during the period Selling, general and administrative expenses $ 14 $ (14) $ (85) $ (28) Total before tax 14 (14) (85) (28) Income taxes Income taxes (3) 4 22 8 Net of tax 11 (10) (63) (20) Gains (losses) on derivative financial instruments: Foreign currency exchange contracts Net revenues $ 125 $ (194) $ 200 $ (552) Foreign currency exchange contracts Cost of goods sold (1,428) 1,615 (2,833) 5,356 Foreign currency exchange contracts Other expense, net (293) 141 (427) 137 Interest rate swap agreements Interest expense (1,494) (1,349) (3,007) (1,580) Total before tax (3,090) 213 (6,067) 3,361 Income taxes Income taxes 767 (15) 1,475 (235) Net of tax (2,323) 198 (4,592) 3,126 Total reclassifications for the period, net of tax $ (2,312) $ 188 $ (4,655) $ 3,106 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table presents the calculations of basic and diluted EPS: Three Months Ended June Six Months Ended June (In thousands, except per share amounts) 2021 2020 2021 2020 Net income (loss) $ 23,637 $ (33,262) $ 88,100 $ (35,974) Basic weighted average shares outstanding 57,612 56,931 57,478 56,903 Dilutive effect of stock-based awards 1,744 — 1,651 — Diluted weighted average shares outstanding 59,356 56,931 59,129 56,903 Earnings (loss) per share: Basic earnings (loss) per common share $ 0.41 $ (0.58) $ 1.53 $ (0.63) Diluted earnings (loss) per common share $ 0.40 $ (0.58) $ 1.49 $ (0.63) |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Leases [Abstract] | |
Schedule of Lease Costs | The following table presents supplemental cash flow and non-cash information related to leases: Six Months Ended June (In thousands) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities - operating cash flows $ 19,338 $ 18,925 Right-of-use operating assets obtained in exchange for new operating leases - non-cash activity $ 1,898 $ 702 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Restructuring and Related Activities [Abstract] | |
Components of Restructuring Charges | The following table presents the components of restructuring charges: Three Months Ended Six Months Ended (In thousands) June 2021 June 2020 June 2021 June 2020 Severance and employee-related benefits $ 273 $ 4,215 $ 992 $ 10,010 Asset impairments — 1,579 — 1,579 Total restructuring charges $ 273 $ 5,794 $ 992 $ 11,589 The following table presents the restructuring costs by business segment: Three Months Ended Six Months Ended (In thousands) June 2021 June 2020 June 2021 June 2020 Wrangler $ 123 $ 478 $ 306 $ 3,656 Lee 148 514 331 3,131 Corporate and other 2 4,802 355 4,802 Total $ 273 $ 5,794 $ 992 $ 11,589 |
Activity in Restructuring | The following table presents activity in the restructuring accrual for the six-month period ended June 2021: (In thousands) Total Accrual at December 2020 $ 6,741 Charges 992 Cash payments (5,196) Adjustments to accruals 55 Accrual at June 2021 $ 2,592 |
REVENUES - Contract Assets and
REVENUES - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable, net | $ 215,297 | $ 231,397 | $ 153,302 |
Contract assets | 4,694 | 5,769 | 3,113 |
Contract liabilities | $ 674 | $ 787 | $ 1,688 |
REVENUES - Additional Informati
REVENUES - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Revenue from Contract with Customer [Abstract] | ||||
Contract with customer, liability, revenue recognized | $ 0 | $ 0.1 | $ 0 | $ 1.2 |
REVENUES - Remaining Performanc
REVENUES - Remaining Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-04 $ in Millions | Jul. 03, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 27 |
Remaining performance obligation, expected timing of satisfaction, period | 4 years 6 months |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 490,765 | $ 349,254 | $ 1,142,527 | $ 853,752 |
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 364,970 | 288,318 | 853,236 | 666,922 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 125,795 | 60,936 | 289,291 | 186,830 |
Wholesale | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 326,946 | 252,880 | 782,953 | 585,801 |
Wholesale | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 97,566 | 44,256 | 236,580 | 151,350 |
Direct-to-Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 66,050 | 42,989 | 122,367 | 93,483 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 203 | 9,129 | 627 | 23,118 |
Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 487,315 | 337,621 | 1,136,285 | 823,763 |
Operating Segments | Wrangler | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 311,301 | 251,655 | 710,123 | 555,041 |
Operating Segments | Wrangler | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 266,146 | 232,566 | 614,025 | 485,150 |
Operating Segments | Wrangler | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 45,155 | 19,089 | 96,098 | 69,891 |
Operating Segments | Wrangler | Wholesale | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 245,200 | 217,183 | 574,899 | 453,465 |
Operating Segments | Wrangler | Wholesale | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 41,071 | 17,251 | 88,648 | 64,188 |
Operating Segments | Wrangler | Direct-to-Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 25,030 | 17,221 | 46,576 | 37,388 |
Operating Segments | Wrangler | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Operating Segments | Lee | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 176,014 | 85,966 | 426,162 | 268,722 |
Operating Segments | Lee | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 96,179 | 44,119 | 234,411 | 152,087 |
Operating Segments | Lee | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 79,835 | 41,847 | 191,751 | 116,635 |
Operating Segments | Lee | Wholesale | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 79,312 | 33,194 | 203,894 | 125,772 |
Operating Segments | Lee | Wholesale | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 55,690 | 27,005 | 146,490 | 86,858 |
Operating Segments | Lee | Direct-to-Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 41,012 | 25,767 | 75,778 | 56,092 |
Operating Segments | Lee | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,450 | 11,633 | 6,242 | 29,989 |
Other | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,645 | 11,633 | 4,800 | 29,685 |
Other | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 805 | 0 | 1,442 | 304 |
Other | Wholesale | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,434 | 2,503 | 4,160 | 6,564 |
Other | Wholesale | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 805 | 0 | 1,442 | 304 |
Other | Direct-to-Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 8 | 1 | 13 | 3 |
Other | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 203 | $ 9,129 | $ 627 | $ 23,118 |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - Additional Information (Details) | 6 Months Ended |
Jul. 03, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
BUSINESS SEGMENT INFORMATION _2
BUSINESS SEGMENT INFORMATION - Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 490,765 | $ 349,254 | $ 1,142,527 | $ 853,752 |
Operating income (loss) | 35,177 | (21,795) | 128,353 | (21,959) |
Interest expense | (7,641) | (13,120) | (19,432) | (24,059) |
Interest income | 421 | 556 | 679 | 972 |
Income (loss) before income taxes | 28,002 | (34,868) | 109,203 | (46,005) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 487,315 | 337,621 | 1,136,285 | 823,763 |
Operating income (loss) | 71,325 | 10,521 | 206,431 | 45,357 |
Operating Segments | Wrangler | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 311,301 | 251,655 | 710,123 | 555,041 |
Operating income (loss) | 52,834 | 28,938 | 136,817 | 62,801 |
Operating Segments | Lee | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 176,014 | 85,966 | 426,162 | 268,722 |
Operating income (loss) | 18,491 | (18,417) | 69,614 | (17,444) |
Corporate and other expenses | ||||
Segment Reporting Information [Line Items] | ||||
Corporate and other expenses | (36,983) | (26,348) | (78,534) | (59,570) |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 3,450 | 11,633 | 6,242 | 29,989 |
Operating income (loss) | $ 880 | $ (6,477) | $ 59 | $ (8,705) |
ACCOUNTS RECEIVABLE - Rollforwa
ACCOUNTS RECEIVABLE - Rollforward of the allowance for doubtful accounts (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 03, 2021 | Jun. 27, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 19,143 | $ 11,852 |
Provision for expected credit losses | 783 | 18,012 |
Accounts receivable balances written off | (4,119) | (7,502) |
Other | (325) | (713) |
Ending balance | $ 15,482 | $ 21,649 |
ACCOUNTS RECEIVABLE - Additiona
ACCOUNTS RECEIVABLE - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | Jan. 02, 2021 | Apr. 01, 2019 | |
Receivables [Abstract] | ||||||
Maximum amount of accounts receivable sold at any point in time (up to) | $ 377.5 | |||||
Sale of accounts receivable | $ 586.8 | $ 405.8 | ||||
Accounts receivable removed related to sale of accounts receivable | $ 183 | $ 144.5 | 183 | 144.5 | $ 127.1 | |
Funding fee | $ 0.3 | $ 0.3 | $ 0.9 | $ 1.1 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 |
Inventory Disclosure [Abstract] | |||
Finished products | $ 342,276 | $ 277,164 | $ 367,361 |
Work-in-process | 29,551 | 29,921 | 21,416 |
Raw materials | 31,422 | 33,647 | 44,148 |
Total inventories | $ 403,249 | $ 340,732 | $ 432,925 |
SHORT-TERM BORROWINGS AND LON_3
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Additional Information (Details) | May 17, 2019USD ($) | Jul. 03, 2021USD ($) | Jun. 27, 2020USD ($) | Jul. 03, 2021USD ($) | Jun. 27, 2020USD ($) | Jan. 02, 2021USD ($) |
Short-term Debt [Line Items] | ||||||
Line of credit facility, amount outstanding | $ 1,550,000,000 | |||||
Proceeds from issuance of long-term debt | $ 1,050,000,000 | |||||
Short-term borrowings | $ 918,000 | $ 310,000 | $ 918,000 | $ 310,000 | $ 1,114,000 | |
Other short-term borrowings | 900,000 | 900,000 | 900,000 | |||
Long-term debt | 791,012,000 | 1,136,713,000 | 791,012,000 | 1,136,713,000 | 912,957,000 | |
Interest expense | 7,641,000 | 13,120,000 | 19,432,000 | 24,059,000 | ||
International borrowing arrangements | ||||||
Short-term Debt [Line Items] | ||||||
Maximum borrowing capacity | 36,000,000 | 46,400,000 | 36,000,000 | 46,400,000 | 35,900,000 | |
Short-term borrowings | 0 | 300,000 | $ 0 | 300,000 | 200,000 | |
Maximum | ||||||
Short-term Debt [Line Items] | ||||||
Leverage ratio | 4 | |||||
Unused capacity, commitment fee percentage | 0.40% | |||||
Maximum | Base Rate | ||||||
Short-term Debt [Line Items] | ||||||
Basis spread | 1.25% | |||||
Maximum | London Interbank Offered Rate (LIBOR) | ||||||
Short-term Debt [Line Items] | ||||||
Basis spread | 2.25% | |||||
Minimum | ||||||
Short-term Debt [Line Items] | ||||||
Debt instrument, interest coverage ratio | 3 | |||||
Unused capacity, commitment fee percentage | 0.20% | |||||
Minimum | Base Rate | ||||||
Short-term Debt [Line Items] | ||||||
Basis spread | 0.375% | |||||
Minimum | London Interbank Offered Rate (LIBOR) | ||||||
Short-term Debt [Line Items] | ||||||
Basis spread | 1.375% | |||||
Revolving Credit Facility | ||||||
Short-term Debt [Line Items] | ||||||
Debt instrument, term | 5 years | |||||
Maximum borrowing capacity | $ 500,000,000 | |||||
Long-term debt | 0 | 225,000,000 | $ 0 | 225,000,000 | 0 | |
Remaining borrowing capacity | 487,700,000 | $ 487,700,000 | ||||
Revolving Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | ||||||
Short-term Debt [Line Items] | ||||||
Basis spread | 0.00% | |||||
Letter of Credit | ||||||
Short-term Debt [Line Items] | ||||||
Maximum borrowing capacity | 75,000,000 | $ 75,000,000 | ||||
Long-term line of credit | 12,300,000 | 12,300,000 | ||||
Term Loan | ||||||
Short-term Debt [Line Items] | ||||||
Interest expense | 200,000 | 1,900,000 | ||||
Term Loan A | Term Loan | ||||||
Short-term Debt [Line Items] | ||||||
Debt instrument, term | 5 years | |||||
Maximum borrowing capacity | $ 750,000,000 | |||||
Long-term debt | 660,334,000 | 693,393,000 | 660,334,000 | 693,393,000 | 694,241,000 | |
Long-term debt | $ 665,000,000 | 700,000,000 | $ 665,000,000 | 700,000,000 | 700,000,000 | |
Effective annual interest rate | 2.80% | 2.80% | ||||
Term Loan B | Term Loan | ||||||
Short-term Debt [Line Items] | ||||||
Debt instrument, term | 7 years | |||||
Maximum borrowing capacity | $ 300,000,000 | |||||
Long-term debt | $ 130,678,000 | 218,320,000 | $ 130,678,000 | 218,320,000 | 218,716,000 | |
Long-term debt | $ 133,000,000 | $ 223,000,000 | $ 133,000,000 | $ 223,000,000 | $ 223,000,000 | |
Effective annual interest rate | 5.50% | 5.50% | ||||
Term Loan B | Term Loan | Base Rate | ||||||
Short-term Debt [Line Items] | ||||||
Basis spread | 3.25% | |||||
Term Loan B | Term Loan | London Interbank Offered Rate (LIBOR) | ||||||
Short-term Debt [Line Items] | ||||||
Basis spread | 4.25% |
SHORT-TERM BORROWINGS AND LON_4
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Schedule of Long-term Debt Instruments (Details) - USD ($) | Jul. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 |
Debt Instrument [Line Items] | |||
Total long-term debt | $ 791,012,000 | $ 912,957,000 | $ 1,136,713,000 |
Less: current portion | (8,750,000) | (25,000,000) | (6,250,000) |
Long-term debt, due beyond one year | 782,262,000 | 887,957,000 | 1,130,463,000 |
Term Loan A | Term Loan | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 660,334,000 | 694,241,000 | 693,393,000 |
Term Loan B | Term Loan | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 130,678,000 | 218,716,000 | 218,320,000 |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 0 | $ 0 | $ 225,000,000 |
FAIR VALUE MEASUREMENTS - Class
FAIR VALUE MEASUREMENTS - Classes of Financial Assets and Financial Liabilities Measured and Recorded at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 |
Cash equivalents: | |||
Money market funds | $ 87,653 | $ 165,751 | |
Time deposits | 3,631 | 4,978 | |
Foreign currency exchange contracts | 8,286 | 7,531 | $ 4,559 |
Investment securities | 58,568 | 57,166 | |
Financial liabilities: | |||
Derivative liability | 16,236 | 25,103 | $ 28,851 |
Deferred compensation | 59,877 | 58,035 | |
Level 1 | |||
Cash equivalents: | |||
Money market funds | 87,653 | 165,751 | |
Time deposits | 3,631 | 4,978 | |
Investment securities | 58,568 | 57,166 | |
Financial liabilities: | |||
Deferred compensation | 0 | 0 | |
Level 2 | |||
Cash equivalents: | |||
Money market funds | 0 | 0 | |
Time deposits | 0 | 0 | |
Investment securities | 0 | 0 | |
Financial liabilities: | |||
Deferred compensation | 59,877 | 58,035 | |
Level 3 | |||
Cash equivalents: | |||
Money market funds | 0 | 0 | |
Time deposits | 0 | 0 | |
Investment securities | 0 | 0 | |
Financial liabilities: | |||
Deferred compensation | 0 | 0 | |
Foreign currency exchange contracts | |||
Cash equivalents: | |||
Foreign currency exchange contracts | 8,286 | 7,531 | |
Financial liabilities: | |||
Derivative liability | 4,411 | 8,794 | |
Foreign currency exchange contracts | Level 1 | |||
Cash equivalents: | |||
Foreign currency exchange contracts | 0 | 0 | |
Financial liabilities: | |||
Derivative liability | 0 | 0 | |
Foreign currency exchange contracts | Level 2 | |||
Cash equivalents: | |||
Foreign currency exchange contracts | 8,286 | 7,531 | |
Financial liabilities: | |||
Derivative liability | 4,411 | 8,794 | |
Foreign currency exchange contracts | Level 3 | |||
Cash equivalents: | |||
Foreign currency exchange contracts | 0 | 0 | |
Financial liabilities: | |||
Derivative liability | 0 | 0 | |
Interest rate swap agreements | |||
Financial liabilities: | |||
Derivative liability | 11,825 | 16,309 | |
Interest rate swap agreements | Level 1 | |||
Financial liabilities: | |||
Derivative liability | 0 | 0 | |
Interest rate swap agreements | Level 2 | |||
Financial liabilities: | |||
Derivative liability | 11,825 | 16,309 | |
Interest rate swap agreements | Level 3 | |||
Financial liabilities: | |||
Derivative liability | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | Jan. 02, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Long-term debt | $ 791,012 | $ 1,136,713 | $ 791,012 | $ 1,136,713 | $ 912,957 |
Asset impairments | 0 | 1,579 | 0 | 1,579 | |
Fair Value, Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Asset impairments | $ 1,600 | $ 1,800 | |||
Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Debt, fair value | $ 795,200 | $ 795,200 | $ 916,000 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Additional information (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jul. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 | |
Derivative [Line Items] | |||
Cash flow hedge loss to be reclassified during the next 12 months | $ 3.1 | ||
Foreign currency exchange contracts | |||
Derivative [Line Items] | |||
Notional amount | $ 310.3 | $ 295 | $ 290.2 |
Term of contract (up to) | 20 months | ||
Interest rate swap agreements | |||
Derivative [Line Items] | |||
Notional amount | $ 350 | $ 400 | $ 400 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Outstanding derivatives on an individual contract basis (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 |
Fair Value of Derivatives with Unrealized Gains | |||
Total derivatives | $ 8,286 | $ 7,531 | $ 4,559 |
Fair Value of Derivatives with Unrealized Losses | |||
Total derivatives | (16,236) | (25,103) | (28,851) |
Designated as Hedging Instrument | Foreign currency exchange contracts | |||
Fair Value of Derivatives with Unrealized Gains | |||
Derivatives designated as hedging instruments: | 8,194 | 7,179 | 3,689 |
Fair Value of Derivatives with Unrealized Losses | |||
Derivatives designated as hedging instruments: | (4,381) | (8,640) | (9,597) |
Designated as Hedging Instrument | Interest rate swap agreements | |||
Fair Value of Derivatives with Unrealized Gains | |||
Derivatives designated as hedging instruments: | 0 | 0 | 0 |
Fair Value of Derivatives with Unrealized Losses | |||
Derivatives designated as hedging instruments: | (11,825) | (16,309) | (18,832) |
Not Designated as Hedging Instrument | Foreign currency exchange contracts | |||
Fair Value of Derivatives with Unrealized Gains | |||
Derivatives not designated as hedging instruments: | 92 | 352 | 870 |
Fair Value of Derivatives with Unrealized Losses | |||
Derivatives not designated as hedging instruments: | $ (30) | $ (154) | $ (422) |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Balance sheet (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 |
Derivative Asset | |||
Gross amounts presented in the balance sheet | $ 8,286 | $ 7,531 | $ 4,559 |
Gross amounts not offset in the balance sheet | (1,383) | (1,818) | (1,745) |
Derivative Asset | 6,903 | 5,713 | 2,814 |
Derivative Liability | |||
Gross amounts presented in the balance sheet | (16,236) | (25,103) | (28,851) |
Gross amounts not offset in the balance sheet | 1,383 | 1,818 | 1,745 |
Derivative Liability | $ (14,853) | $ (23,285) | $ (27,106) |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Derivatives are classified as current or noncurrent (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 |
Derivatives, Fair Value [Line Items] | |||
Foreign currency exchange contracts | $ 8,286 | $ 7,531 | $ 4,559 |
Foreign currency exchange contracts | (16,236) | (25,103) | (28,851) |
Prepaid expenses and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Foreign currency exchange contracts | 7,368 | 5,773 | 3,716 |
Accrued liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Foreign currency exchange contracts | (4,113) | (7,166) | (8,625) |
Other assets | |||
Derivatives, Fair Value [Line Items] | |||
Foreign currency exchange contracts | 918 | 1,758 | 843 |
Other liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Foreign currency exchange contracts | $ (12,123) | $ (17,937) | $ (20,226) |
DERIVATIVE FINANCIAL INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Cash flows hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Derivative [Line Items] | ||||
Gain (Loss) on Derivatives Recognized in AOCL | $ 748 | $ (1,841) | $ 4,380 | $ (27,417) |
Foreign currency exchange contracts | ||||
Derivative [Line Items] | ||||
Gain (Loss) on Derivatives Recognized in AOCL | 1,357 | 812 | 2,903 | (10,094) |
Interest rate swap agreements | ||||
Derivative [Line Items] | ||||
Gain (Loss) on Derivatives Recognized in AOCL | $ (609) | $ (2,653) | $ 1,477 | $ (17,323) |
DERIVATIVE FINANCIAL INSTRUME_8
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Location of gain (loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Income | $ (3,090) | $ 213 | $ (6,067) | $ 3,361 |
Net revenues | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Income | 125 | (194) | 200 | (552) |
Cost of goods sold | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Income | (1,428) | 1,615 | (2,833) | 5,356 |
Other expense, net | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Income | (293) | 141 | (427) | 137 |
Interest expense | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Income | $ (1,494) | $ (1,349) | $ (3,007) | $ (1,580) |
DERIVATIVE FINANCIAL INSTRUME_9
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Derivative contracts not designated as hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Derivative [Line Items] | ||||
Gain (Loss) on Derivatives Recognized in Income | $ (3) | $ 539 | $ 2 | $ (3,106) |
Net revenues | ||||
Derivative [Line Items] | ||||
Gain (Loss) on Derivatives Recognized in Income | (23) | 2 | (104) | 6 |
Cost of goods sold | ||||
Derivative [Line Items] | ||||
Gain (Loss) on Derivatives Recognized in Income | 109 | 550 | (14) | (3,122) |
Other expense, net | ||||
Derivative [Line Items] | ||||
Gain (Loss) on Derivatives Recognized in Income | $ (89) | $ (13) | $ 120 | $ 10 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Deferred Components of AOCL in Equity, Net of Related Taxes (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Apr. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 | Mar. 28, 2020 | Dec. 28, 2019 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss | $ 153,886 | $ 134,264 | $ 84,641 | $ (44,889) | $ (18,485) | $ 69,257 |
Accumulated Other Comprehensive Loss | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss | (88,969) | (96,697) | (94,807) | (131,298) | (133,462) | (79,698) |
Foreign Currency Translation | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss | (83,192) | (87,260) | (80,178) | (108,129) | (111,328) | (84,118) |
Defined Benefit Pension Plans | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss | (1,826) | (1,815) | (1,889) | (2,289) | (2,272) | (2,301) |
Derivative Financial Instruments | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss | $ (3,951) | $ (7,622) | $ (12,740) | $ (20,880) | $ (19,862) | $ 6,721 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE LOSS - Changes in AOCL, Net of Related Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 03, 2021 | Apr. 03, 2021 | Jun. 27, 2020 | Mar. 28, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Balance, beginning | $ 134,264 | $ 84,641 | $ (18,485) | $ 69,257 | $ 84,641 | $ 69,257 |
Other comprehensive income (loss) due to gains (losses) arising before reclassifications | 5,416 | 2,352 | 1,183 | (48,494) | ||
Reclassifications to net income (loss) of previously deferred (gains) losses | 2,312 | (188) | 4,655 | (3,106) | ||
Total other comprehensive income (loss), net of related taxes | 7,728 | (1,890) | 2,164 | (53,764) | 5,838 | (51,600) |
Balance, ending | 153,886 | 134,264 | (44,889) | (18,485) | 153,886 | (44,889) |
Accumulated Other Comprehensive Loss | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Balance, beginning | (96,697) | (94,807) | (133,462) | (79,698) | (94,807) | (79,698) |
Total other comprehensive income (loss), net of related taxes | 7,728 | (1,890) | 2,164 | (53,764) | ||
Balance, ending | (88,969) | (96,697) | (131,298) | (133,462) | (88,969) | (131,298) |
Foreign Currency Translation | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Balance, beginning | (87,260) | (80,178) | (111,328) | (84,118) | (80,178) | (84,118) |
Other comprehensive income (loss) due to gains (losses) arising before reclassifications | 4,068 | 3,199 | (3,014) | (24,011) | ||
Reclassifications to net income (loss) of previously deferred (gains) losses | 0 | 0 | 0 | 0 | ||
Total other comprehensive income (loss), net of related taxes | 4,068 | 3,199 | (3,014) | (24,011) | ||
Balance, ending | (83,192) | (87,260) | (108,129) | (111,328) | (83,192) | (108,129) |
Defined Benefit Pension Plans | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Balance, beginning | (1,815) | (1,889) | (2,272) | (2,301) | (1,889) | (2,301) |
Other comprehensive income (loss) due to gains (losses) arising before reclassifications | 0 | (27) | 0 | (8) | ||
Reclassifications to net income (loss) of previously deferred (gains) losses | (11) | 10 | 63 | 20 | ||
Total other comprehensive income (loss), net of related taxes | (11) | (17) | 63 | 12 | ||
Balance, ending | (1,826) | (1,815) | (2,289) | (2,272) | (1,826) | (2,289) |
Derivative Financial Instruments | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Balance, beginning | (7,622) | (12,740) | (19,862) | 6,721 | (12,740) | 6,721 |
Other comprehensive income (loss) due to gains (losses) arising before reclassifications | 1,348 | (820) | 4,197 | (24,475) | ||
Reclassifications to net income (loss) of previously deferred (gains) losses | 2,323 | (198) | 4,592 | (3,126) | ||
Total other comprehensive income (loss), net of related taxes | 3,671 | (1,018) | 8,789 | (27,601) | ||
Balance, ending | $ (3,951) | $ (7,622) | $ (20,880) | $ (19,862) | $ (3,951) | $ (20,880) |
ACCUMULATED OTHER COMPREHENSI_5
ACCUMULATED OTHER COMPREHENSIVE LOSS - Reclassification Out of AOCL (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 03, 2021 | Apr. 03, 2021 | Jun. 27, 2020 | Mar. 28, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Selling, general and administrative expenses | $ 190,947 | $ 156,161 | $ 398,351 | $ 347,089 | ||
Net revenues | 490,765 | 349,254 | 1,142,527 | 853,752 | ||
Cost of goods sold | 264,641 | 214,888 | 615,823 | 528,622 | ||
Other expense, net | 45 | (509) | (397) | (959) | ||
Total before tax | 28,002 | (34,868) | 109,203 | (46,005) | ||
Income taxes | (4,365) | 1,606 | (21,103) | 10,031 | ||
Net income (loss) | 23,637 | $ 64,463 | (33,262) | $ (2,712) | 88,100 | (35,974) |
Reclassification out of AOCL | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Net income (loss) | (2,312) | 188 | (4,655) | 3,106 | ||
Reclassification out of AOCL | Defined Benefit Pension Plans | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Selling, general and administrative expenses | 14 | (14) | (85) | (28) | ||
Total before tax | 14 | (14) | (85) | (28) | ||
Income taxes | (3) | 4 | 22 | 8 | ||
Net income (loss) | 11 | (10) | (63) | (20) | ||
Reclassification out of AOCL | Derivative Financial Instruments | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Total before tax | (3,090) | 213 | (6,067) | 3,361 | ||
Income taxes | 767 | (15) | 1,475 | (235) | ||
Net income (loss) | (2,323) | 198 | (4,592) | 3,126 | ||
Reclassification out of AOCL | Derivative Financial Instruments | Foreign currency exchange contracts | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Net revenues | 125 | (194) | 200 | (552) | ||
Cost of goods sold | (1,428) | 1,615 | (2,833) | 5,356 | ||
Other expense, net | (293) | 141 | (427) | 137 | ||
Reclassification out of AOCL | Derivative Financial Instruments | Interest rate swap agreements | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Interest expense | $ (1,494) | $ (1,349) | $ (3,007) | $ (1,580) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 6 Months Ended | |
Jul. 03, 2021 | Jun. 27, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 19.30% | 21.80% |
Net discrete tax benefits (expense) | $ 600,000 | $ 7,700,000 |
Tax benefit related to stock compensation | 800,000 | |
Tax expense related to unrecognized tax benefits and interest | $ (200,000) | |
Tax increase (reduction) due to discrete items | (0.60%) | 16.80% |
Tax benefit recognized due to the enactment of Swiss tax reform | $ 6,300,000 | |
Tax benefit related to state tax return filings | $ 1,100,000 | |
Income tax rate, excluding discrete items | 19.90% | 5.00% |
Increase in unrecognized tax benefits and associated interest | $ 400,000 | |
Net unrecognized tax benefits and interest, if recognized, would reduce the annual effective tax rate | 13,800,000 | |
Possible decrease in unrecognized income tax benefits | $ 600,000 |
EARNINGS (LOSS) PER SHARE - Ear
EARNINGS (LOSS) PER SHARE - Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 03, 2021 | Apr. 03, 2021 | Jun. 27, 2020 | Mar. 28, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Earnings Per Share [Abstract] | ||||||
Net income (loss) | $ 23,637 | $ 64,463 | $ (33,262) | $ (2,712) | $ 88,100 | $ (35,974) |
Basic weighted average shares outstanding (in shares) | 57,612 | 56,931 | 57,478 | 56,903 | ||
Dilutive effect of stock-based awards (in shares) | 1,744 | 0 | 1,651 | 0 | ||
Diluted weighted average shares outstanding (in shares) | 59,356 | 56,931 | 59,129 | 56,903 | ||
Earnings (loss) per share: | ||||||
Basic earnings (loss) per common share (in USD per share) | $ 0.41 | $ (0.58) | $ 1.53 | $ (0.63) | ||
Diluted earnings (loss) per common share (in USD per share) | $ 0.40 | $ (0.58) | $ 1.49 | $ (0.63) |
EARNINGS (LOSS) PER SHARE - Add
EARNINGS (LOSS) PER SHARE - Additional Information (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Stock Option | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options excluded from computation of earnings per share (in shares) | 0 | 2,100,000 | 0 | 1,600,000 |
Performance-based restricted stock units (PRSUs) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options excluded from computation of earnings per share (in shares) | 200,000 | 400,000 | 200,000 | 400,000 |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 03, 2021 | Jun. 27, 2020 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows | $ 19,338 | $ 18,925 |
Right-of-use operating assets obtained in exchange for new operating leases - non-cash activity | $ 1,898 | $ 702 |
RESTRUCTURING - Additional Info
RESTRUCTURING - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | Jan. 02, 2021 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 273 | $ 5,794 | $ 992 | $ 11,589 | |
Restructuring reserve | 2,592 | 2,592 | $ 6,741 | ||
Accrued Current Liabilities | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring reserve | 2,500 | 2,500 | 6,500 | ||
Other Noncurrent Liabilities | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring reserve | $ 100 | $ 100 | $ 200 | ||
Selling, general and administrative expenses | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 11,100 | ||||
Cost of goods sold | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 500 |
RESTRUCTURING - Components of R
RESTRUCTURING - Components of Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Restructuring and Related Activities [Abstract] | ||||
Severance and employee-related benefits | $ 273 | $ 4,215 | $ 992 | $ 10,010 |
Asset impairments | 0 | 1,579 | 0 | 1,579 |
Total restructuring charges | $ 273 | $ 5,794 | $ 992 | $ 11,589 |
RESTRUCTURING - Restructuring c
RESTRUCTURING - Restructuring costs by business segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 273 | $ 5,794 | $ 992 | $ 11,589 |
Operating Segments | Wrangler | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 123 | 478 | 306 | 3,656 |
Operating Segments | Lee | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 148 | 514 | 331 | 3,131 |
Corporate and other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 2 | $ 4,802 | $ 355 | $ 4,802 |
RESTRUCTURING - Activity in res
RESTRUCTURING - Activity in restructuring accrual (Details) $ in Thousands | 6 Months Ended |
Jul. 03, 2021USD ($) | |
Restructuring Reserve [Roll Forward] | |
Amounts recorded in accrued liabilities, beginning | $ 6,741 |
Amounts recorded in accrued liabilities. ending | 2,592 |
Total | |
Restructuring Reserve [Roll Forward] | |
Charges | 992 |
Cash payments | (5,196) |
Adjustments to accruals | $ 55 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - USD ($) | Aug. 05, 2021 | Jul. 20, 2021 |
Subsequent Event [Line Items] | ||
Share repurchase program, authorized amount | $ 200,000,000 | |
Dividend Declared | ||
Subsequent Event [Line Items] | ||
Dividends payable (in USD per share) | $ 0.40 |