Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Feb. 25, 2022 | Jul. 03, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jan. 1, 2022 | ||
Current Fiscal Year End Date | --01-01 | ||
Document 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 | ||
Entity Trading Symbol | KTB | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3,377 | ||
Entity Common Stock, Shares Outstanding | 56,200,446 | ||
Documents Incorporated by Reference | Portions of the definitive Proxy Statement for the Annual Meeting of Shareholders to be held on April 19, 2022 are incorporated by reference into Part III of this Annual Report on Form 10-K, which definitive Proxy Statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates. | ||
Entity Central Index Key | 0001760965 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Jan. 01, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 238 |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Greensboro, North Carolina |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Current assets | ||
Cash and cash equivalents | $ 185,322 | $ 248,138 |
Accounts receivable, net | 289,800 | 231,397 |
Inventories | 362,957 | 340,732 |
Prepaid expenses and other current assets | 72,579 | 81,413 |
Total current assets | 910,658 | 901,680 |
Property, plant and equipment, net | 105,155 | 118,897 |
Operating lease assets | 54,950 | 60,443 |
Intangible assets, net | 14,638 | 15,991 |
Goodwill | 212,213 | 213,392 |
Deferred income tax assets | 74,876 | 85,221 |
Other assets | 160,534 | 150,192 |
TOTAL ASSETS | 1,533,024 | 1,545,816 |
Current liabilities | ||
Short-term borrowings | 249 | 1,114 |
Current portion of long-term debt | 0 | 25,000 |
Accounts payable | 214,204 | 167,240 |
Accrued liabilities | 217,164 | 192,952 |
Operating lease liabilities, current | 24,195 | 27,329 |
Total current liabilities | 455,812 | 413,635 |
Operating lease liabilities, noncurrent | 32,993 | 39,806 |
Deferred income tax liabilities | 5,572 | 4,436 |
Other liabilities | 99,192 | 115,341 |
Long-term debt | 791,317 | 887,957 |
Commitments and contingencies | ||
Total liabilities | 1,384,886 | 1,461,175 |
Equity | ||
Preferred Stock, no par value; shares authorized, 90,000,000; no shares outstanding at December 2021 and 2020 | 0 | 0 |
Common Stock, no par value; shares authorized, 600,000,000; outstanding shares of 56,381,466 at December 2021 and 57,254,611 at December 2020 | 0 | 0 |
Additional paid-in capital | 218,259 | 172,297 |
Retained earnings | 22,635 | 7,151 |
Accumulated other comprehensive loss | (92,756) | (94,807) |
Total equity | 148,138 | 84,641 |
TOTAL LIABILITIES AND EQUITY | $ 1,533,024 | $ 1,545,816 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jan. 01, 2022 | Jan. 02, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock authorized (in shares) | 90,000,000 | 90,000,000 |
Preferred stock outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0 | $ 0 |
Common stock authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock outstanding (in shares) | 56,381,466 | 57,254,611 |
Consolidated and Combined State
Consolidated and Combined Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Income Statement [Abstract] | |||
Net revenues | $ 2,475,916 | $ 2,097,839 | $ 2,548,839 |
Costs and operating expenses | |||
Cost of goods sold | 1,368,190 | 1,234,150 | 1,544,465 |
Selling, general and administrative expenses | 824,747 | 739,855 | 803,448 |
Non-cash impairment of intangible asset | 0 | 0 | 32,636 |
Total costs and operating expenses | 2,192,937 | 1,974,005 | 2,380,549 |
Operating income | 282,979 | 123,834 | 168,290 |
Interest income from former parent, net | 0 | 0 | 3,762 |
Interest expense | (38,900) | (49,992) | (35,787) |
Interest income | 1,480 | 1,608 | 3,931 |
Other expense, net | (959) | (2,514) | (5,002) |
Income before income taxes | 244,600 | 72,936 | 135,194 |
Income taxes | 49,177 | 5,013 | 38,540 |
Net income | $ 195,423 | $ 67,923 | $ 96,654 |
Earnings per common share | |||
Basic (in USD per share) | $ 3.40 | $ 1.19 | $ 1.71 |
Diluted (in USD per share) | $ 3.31 | $ 1.17 | $ 1.69 |
Weighted average shares outstanding | |||
Basic (in shares) | 57,394 | 56,994 | 56,688 |
Diluted (in shares) | 59,086 | 57,858 | 57,209 |
Consolidated and Combined Sta_2
Consolidated and Combined Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 195,423 | $ 67,923 | $ 96,654 |
Other comprehensive income (loss) | |||
Net change in foreign currency translation | (12,947) | 3,940 | 3,167 |
Net change in defined benefit pension plans | (288) | 412 | (1,243) |
Net change in derivative financial instruments | 15,286 | (19,461) | (4,924) |
Total other comprehensive income (loss), net of related taxes | 2,051 | (15,109) | (3,000) |
Comprehensive income | $ 197,474 | $ 52,814 | $ 93,654 |
Consolidated and Combined Sta_3
Consolidated and Combined Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
OPERATING ACTIVITIES | |||
Net income | $ 195,423 | $ 67,923 | $ 96,654 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation and amortization | 36,599 | 34,491 | 30,760 |
Stock-based compensation | 38,516 | 15,948 | 23,844 |
Provision for doubtful accounts | 330 | 18,338 | 5,988 |
Deferred income taxes | 3,637 | 2,706 | (4,174) |
Non-cash impairment of intangible asset | 0 | 0 | 32,636 |
Other | 9,087 | (1,131) | 2,442 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (60,957) | (17,647) | 24,971 |
Inventories | (24,928) | 119,276 | 9,682 |
Due from former parent | 0 | 0 | 548,301 |
Accounts payable | 47,662 | 17,375 | 31,923 |
Income taxes | 15,987 | (3,390) | 4,033 |
Accrued liabilities | 18,859 | (4,178) | 23,273 |
Due to former parent | 0 | 0 | (16,065) |
Other assets and liabilities | 3,647 | (7,741) | (36,480) |
Cash provided by operating activities | 283,862 | 241,970 | 777,788 |
INVESTING ACTIVITIES | |||
Property, plant and equipment expenditures | (10,551) | (18,182) | (22,679) |
Capitalized computer software | (26,322) | (44,207) | (14,807) |
Collection of notes receivable from former parent | 0 | 0 | 517,940 |
Proceeds from sales of assets | 669 | 18,155 | 4,955 |
Other | (3,167) | (4,833) | (1,462) |
Cash (used) provided by investing activities | (39,371) | (49,067) | 483,947 |
FINANCING ACTIVITIES | |||
Borrowings under revolving credit facility | 0 | 512,500 | 65,000 |
Repayments under revolving credit facility | 0 | (512,500) | (65,000) |
Proceeds from issuance of senior notes | 400,000 | 0 | 0 |
Proceeds from issuance of term loans | 0 | 0 | 1,050,000 |
Payment of deferred financing costs | (8,010) | (4,346) | (12,993) |
Repayments of term loans | (523,000) | 0 | (127,000) |
Repayment of notes payable to former parent | 0 | 0 | (269,112) |
Net transfers to former parent | 0 | 0 | (1,814,682) |
Repurchases of Common Stock | 75,462 | 0 | 0 |
Dividends paid | (95,081) | (54,768) | (63,555) |
Proceeds from issuance of Common Stock, net of shares withheld for taxes | (1,951) | 1,389 | 1,035 |
Other | (562) | 38 | (15,787) |
Cash used by financing activities | (304,066) | (57,687) | (1,252,094) |
Effect of foreign currency rate changes on cash and cash equivalents | (3,241) | 6,114 | 391 |
Net change in cash and cash equivalents | (62,816) | 141,330 | 10,032 |
Cash and cash equivalents - beginning of period | 248,138 | 106,808 | 96,776 |
Cash and cash equivalents - end of period | 185,322 | 248,138 | 106,808 |
Supplemental cash flow information: | |||
Interest paid, net of amounts capitalized | 27,074 | 47,069 | 29,407 |
Income taxes paid | 32,607 | 15,626 | 28,886 |
Change in accrual for property, plant and equipment | (336) | (4,623) | 4,854 |
Change in accrual for capitalized computer software | $ (2,669) | $ (889) | $ 5,352 |
Consolidated and Combined Sta_4
Consolidated and Combined Statements of Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Former Parent Investment | Former Parent InvestmentCumulative Effect, Period of Adoption, Adjustment | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 29, 2018 | 0 | |||||||
Beginning balance at Dec. 29, 2018 | $ 1,723,452 | $ (2,713) | $ 0 | $ 0 | $ 1,868,634 | $ (2,713) | $ 0 | $ (145,182) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 96,654 | 32,164 | 64,490 | |||||
Stock-based compensation, net (in shares) | 164,000 | |||||||
Stock-based compensation, net | 15,278 | 17,931 | (2,653) | |||||
Other comprehensive income (loss) | (3,000) | (3,000) | ||||||
Net transfers to former parent | (1,696,859) | (1,765,343) | 68,484 | |||||
Transfer of former parent investment to additional paid-in capital | 0 | 132,742 | (132,742) | |||||
Issuance of Common Stock (in shares) | 56,648,000 | |||||||
Dividends on Common Stock | (63,555) | (63,555) | ||||||
Ending balance (in shares) at Dec. 28, 2019 | 56,812,000 | |||||||
Ending balance at Dec. 28, 2019 | 69,257 | $ 0 | 150,673 | 0 | (1,718) | (79,698) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 67,923 | 67,923 | ||||||
Stock-based compensation, net (in shares) | 443,000 | |||||||
Stock-based compensation, net | 17,338 | 21,624 | (4,286) | |||||
Other comprehensive income (loss) | (15,109) | (15,109) | ||||||
Dividends on Common Stock | $ (54,768) | (54,768) | ||||||
Ending balance (in shares) at Jan. 02, 2021 | 57,254,611 | 57,255,000 | ||||||
Ending balance at Jan. 02, 2021 | $ 84,641 | $ 0 | 172,297 | 0 | 7,151 | (94,807) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 195,423 | 195,423 | ||||||
Stock-based compensation, net (in shares) | 504,000 | |||||||
Stock-based compensation, net | 36,566 | 45,962 | (9,396) | |||||
Other comprehensive income (loss) | 2,051 | 2,051 | ||||||
Dividends on Common Stock | (95,081) | (95,081) | ||||||
Repurchase of Common Stock (in shares) | (1,378,000) | |||||||
Repurchases of Common Stock | $ (75,462) | $ (75,500) | (75,462) | |||||
Ending balance (in shares) at Jan. 01, 2022 | 56,381,466 | 56,381,000 | ||||||
Ending balance at Jan. 01, 2022 | $ 148,138 | $ 0 | $ 218,259 | $ 0 | $ 22,635 | $ (92,756) |
Consolidated and Combined Sta_5
Consolidated and Combined Statements of Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends (in USD per Share) | $ 1.66 | $ 0.96 | $ 1.12 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jan. 01, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 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 the Europe, Middle East and Africa ("EMEA") and Asia-Pacific ("APAC") regions, 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. For presentation purposes herein, all references to periods ended December 2021, December 2020 and December 2019 correspond to the 52-week fiscal year ended January 1, 2022, the 53-week fiscal year ended January 2, 2021 and the 52-week fiscal year ended December 28, 2019, respectively. Impact of COVID-19 and Other Recent Developments 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 annual 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 10 Basis of Presentation - Consolidated and Combined Financial Statements The Company’s financial statements from May 23, 2019 were consolidated financial statements based on the reported results of Kontoor Brands, Inc. as a standalone company. The Company’s financial statements through the Separation date of May 22, 2019 were combined financial statements prepared on a "carve-out" basis as discussed below. The consolidated and combined financial statements and related disclosures are presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"). The Company’s consolidated and combined financial statements for all periods presented are referred to throughout this Annual Report on Form 10-K as “financial statements.” Basis of Presentation - Carve Out Accounting Through the Separation date in 2019, the Company's combined financial statements were prepared on a carve-out basis under GAAP, which reflected the historical financial position, results of operations and cash flows of the Company for the period presented, through the Separation date, as historically managed within VF. The combined financial statements were derived from the consolidated financial statements and accounting records of VF. The combined statement of operations included costs for certain centralized functions and programs provided and administered by VF that were charged directly to the Company. These centralized functions and programs included, but were not limited to, information technology, human resources, accounting shared services, supply chain, insurance and related benefits associated with those functions. These historical allocations were included in the measurement of segment profit for the period through the Separation date as presented in Note 3 In addition, for purposes of preparing these combined financial statements on a carve-out basis, a portion of VF's total corporate expenses were allocated to the Company. These expense allocations included the cost of corporate functions and resources provided by or administered by VF including, but not limited to, executive management, finance, accounting, legal, human resources and related benefit costs associated with such functions, such as stock-based compensation and pension. Allocations also included the cost of operating VF's corporate headquarters located in Greensboro, North Carolina. These additional allocations were reported as "corporate and other expenses" for the period through the Separation date as presented in Note 3 Costs were allocated to the Company based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional revenues, cost of goods sold or square footage, as applicable. Management considered the basis on which the expenses were allocated to reasonably reflect the utilization of services provided to, or benefit received by, the Company during the period presented. However, the allocations may not reflect the expenses that would have been incurred if the Company had been a standalone company for the period presented. All intracompany transactions were eliminated. All transactions between the Company and VF were included in the combined financial statements. For those transactions between the Company and VF that were historically settled in cash, the Company reflected such balances in the balance sheet within "due from former parent" or "due to former parent." All amounts due to and from former parent were settled in connection with the Separation. The accumulated net earnings after taxes and the net effect of transactions with and allocations from VF that were not historically settled in cash represented VF's historical investment in the Company and were reflected in the balance sheet within "former parent investment" and in the statement of cash flows within "net transfers to former parent." Subsequent to the Separation, the Company continued to service commercial arrangements with VF, which included sales of VF-branded products at VF Outlet stores, as well as sales to VF for products manufactured in our plants, use of our transportation fleet and fulfillment of a transition services agreement related to VF’s sale of its Nautica ® brand business in mid-2018. None of these arrangements with VF continued after 2019. Income Taxes — Prior to the Separation, the Company's operations were included in VF’s U.S. federal consolidated and certain state income tax returns and certain foreign tax returns. For the period prior to the Separation, the income tax expense and deferred tax balances presented in the financial statements were calculated on a carve-out basis, which applied accounting guidance as if the Company filed its own tax returns in each jurisdiction and included tax losses and tax credits that may not reflect tax positions taken by VF. Certain tax attributes reported by the Company on a carve-out basis were not transferred to the Company as part of the Separation. These attributes primarily related to losses in certain Central America and South America jurisdictions. Use of Estimates In preparing the financial statements in accordance with GAAP, management makes estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Foreign Currency Translation and Transactions The financial statements of most foreign subsidiaries are measured using the foreign currency as the functional currency. Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using exchange rates in effect at the balance sheet dates, and revenues and expenses are translated at average exchange rates during the period. Resulting translation gains and losses are reported in other comprehensive income (loss) (“OCL”). The Company accounted for Argentina as highly inflationary from July 1, 2018 through the Separation as the projected three-year cumulative inflation rate exceeded 100%. At the Separation, the Company transitioned the Argentina market to a licensed model, which transacts in U.S. dollars. Certain transactions are denominated in a currency other than the functional currency of a particular subsidiary, and typically result in receivables or payables that are denominated in the foreign currency. Transaction gains or losses arise when exchange rate fluctuations either increase or decrease the functional currency cash flows from the originally recorded transactions. As discussed in Note 14 Cash and Cash Equivalents Cash and cash equivalents are demand deposits, receivables from third-party credit card processors and highly liquid investments that mature within three months of their purchase dates. Cash equivalents totaling $113.7 million and $170.7 million at December 2021 and 2020, respectively, consist of money market funds and short-term time deposits. Accounts Receivable, Net of Allowance for Doubtful Accounts Trade accounts receivable are recorded at invoiced amounts, less contractual allowances for trade terms, sales incentive programs and discounts. Royalty receivables are recorded at amounts earned based on the licensees’ sales of licensed products, subject in some cases to contractual minimum royalties due from individual licensees. The Company is exposed to credit losses primarily through trade accounts receivable from customers and licensees which are generally short-term in nature. The Company maintains an allowance for doubtful accounts that will result from the inability of customers to make required payments of outstanding balances. In estimating this allowance, accounts receivable are evaluated on a pooled basis at each reporting date and aggregated on the basis of similar risk characteristics, including current and forecasted industry trends and economic conditions, aging status of accounts, and the financial strength and credit standing of customers, including payment and default history. Additionally, specific allowance amounts are established for customers that have a higher probability of default. Receivables are written off against the allowance when all collection efforts have been exhausted and the likelihood of collection is remote. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on the first-in, first-out method. Existence of physical inventory is verified through periodic physical inventory counts and ongoing cycle counts at most locations throughout the year. Property, Plant and Equipment and Capitalized Computer Software Property, plant and equipment is initially recorded at cost. The Company capitalizes improvements to property, plant and equipment that substantially extend the useful life of an asset, and interest cost incurred during construction of major assets. Depreciation is computed using the straight-line method over each asset's estimated useful life, ranging from three Repair and maintenance costs are expensed as incurred. Expenditures for major software purchases and software developed for internal use are capitalized and amortized on a straight-line basis over periods ranging from five During 2021, the Company capitalized $23.5 million related to the Company's global enterprise resource planning (“ERP”) system implementation and information technology infrastructure build-out, of which $23.2 million is reflected in "other assets" and $0.3 million is reflected in "property, plant and equipment, net" at December 2021. During 2020, the Company capitalized $43.5 million related to the Company's global ERP implementation and information technology infrastructure build-out, of which $42.9 million is reflected in "other assets" and $0.6 million is reflected in "property, plant and equipment, net" at December 2020. Intangible Assets Intangible assets include acquired trademarks and trade names, some of which are registered in multiple countries. Amortization of finite-lived trademarks is computed on a straight-line basis over a 16 year estimated useful life. Trademarks and trade names determined to have indefinite lives are not amortized. Additionally, the Company had acquired customer relationship assets that were amortized using accelerated methods over a 15 year estimated useful life, all of which were fully amortized by the end of 2020. Depreciation and Amortization Expense Depreciation and amortization expense related to producing or otherwise obtaining finished goods inventories is reflected in the Company's statements of operations within "cost of goods sold" and all other depreciation and amortization expense is reflected within "selling, general and administrative expenses." Impairment of Long-lived Assets Property, Plant and Equipment, Operating Lease Assets and Finite-lived Intangible Assets — The Company’s policy is to review property, plant and equipment, right-of-use operating lease assets and amortizable intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. If the forecasted undiscounted cash flows to be generated by an asset are not expected to recover the asset’s carrying value, the estimated fair value is calculated, and an impairment charge is recorded to the extent that an asset’s carrying value exceeds its estimated fair value. Goodwill and Indefinite-lived Intangible Assets — The Company’s policy is to evaluate goodwill and indefinite-lived intangible assets for possible impairment as of the beginning of the fourth quarter of each year, or whenever events or changes in circumstances indicate that the fair value of such assets may be below their carrying value. The Company may first assess qualitative factors as a basis for determining whether it is necessary to perform quantitative impairment testing. If the Company determines that it is not more likely than not that the fair value of an asset or reporting unit is less than its carrying value, then no further testing is required. Otherwise, the assets must be quantitatively tested for possible impairment. Goodwill is quantitatively tested for possible impairment by comparing the estimated fair value of a reporting unit with its carrying value, including the goodwill assigned to that reporting unit. An impairment charge is recorded to the extent that the carrying value of the reporting unit exceeds its estimated fair value. An indefinite-lived intangible asset is quantitatively tested for possible impairment by comparing the estimated fair value of the asset with its carrying value. An impairment charge is recorded to the extent that the carrying value of the asset exceeds its estimated fair value. For all reporting units, we elected to perform a qualitative impairment assessment to determine whether it is more likely than not that the goodwill and indefinite-lived trademark intangible assets in those reporting units were impaired. We considered relevant events and circumstances for each reporting unit, including (i) current year results, (ii) financial performance versus management’s annual and five-year strategic plans, (iii) changes in the reporting unit carrying value since prior year, (iv) industry and market conditions in which the reporting unit and indefinite-lived trademark operates, (v) macroeconomic conditions, including discount rate changes and (vi) changes in products or services offered by the reporting unit. If applicable, performance in recent years was compared to forecasts included in prior valuations. We did not record any impairment charges in 2021, 2020 or 2019 based on the results of our annual impairment testing. Leases and Rent Expense The Company enters into operating leases for retail stores, operational facilities, vehicles and certain equipment, with terms expiring at various dates through 2031. Leases for real estate typically have initial terms ranging from one one The Company determines whether an arrangement is a lease at inception. Upon adoption of Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)," in 2019, the Company elected to combine lease and non-lease components as a single component for all asset classes. For leases with a term of 12 months or less, the Company elected not to recognize a right-of-use asset and related lease liability. Most leases have fixed rentals, with many of the real estate leases requiring additional payments for real estate taxes and occupancy-related costs. Certain of the Company’s leases contain fixed, indexed, or market-based escalation clauses which impact future payments. Certain of the Company's leases contain variable payment provisions, such as contingent rent based on percent of sales or excess mileage over specified levels. Variable rent is recognized when the liability is probable. The Company's leases typically contain customary covenants and restrictions. Rent expense for leases having landlord incentives or scheduled rent fluctuations is recorded on a straight-line basis over the lease term beginning on the lease commencement date, which is the date the underlying asset is made available to the Company. Lease agreements may include optional renewals, terminations or purchases, which are considered in the Company’s assessments of lease terms when such options are reasonably certain to be exercised. For retail real estate leases, the Company does not typically include renewal options in the underlying lease term. For non-retail real estate leases, the Company includes the renewal options in the underlying lease term if renewal options are reasonably certain to be exercised, up to a maximum of ten years. Renewals for all other leases are determined on a lease-by-lease basis. The Company measures right-of-use operating lease assets and related operating lease liabilities based on the present value of remaining lease payments, including in-substance fixed payments, the current payment amount when payments depend on an index or rate (e.g., inflation adjustments, market renewals) and the amount the Company believes is probable to be paid to the lessor under residual value guarantees, when applicable. As applicable borrowing rates are not typically implied within our lease arrangements, the Company discounts lease payments based on its estimated incremental borrowing rate at lease commencement, or modification, which is based on the Company’s estimated credit rating, the lease term at commencement or modification and the contract currency of the lease arrangement. Revenue Recognition The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied based on the transfer of control of promised goods or services. The transfer of control typically occurs at a point in time based on consideration of when the customer has i) an obligation to pay for, ii) physical possession of, iii) legal title to, iv) risks and rewards of ownership of and v) accepted the goods or services. Revenue recognition within the wholesale channels occurs either upon shipment or delivery of goods based on contractual terms with the customer. Revenue recognition in the direct-to-consumer channels typically occurs at the point of sale for Company-operated or concession retail stores and either upon shipment or delivery of goods for e-commerce transactions based on contractual terms with the customer. For finished products shipped directly to customers from our suppliers, the Company’s promise to the customer is a performance obligation to provide the specified goods and the Company has discretion in establishing pricing. For each of these arrangements, the Company is the principal and revenue is recognized on a gross basis at the transaction price. Contractual arrangements with customers in our wholesale channels are typically on a purchase order basis with terms of less than one year. Payment terms with customers are typically between 30 and 60 days. The Company does not adjust the promised amount of consideration for the effects of a significant financing component as it is expected, at contract inception, that the period between the transfer of the promised good or service to the customer and the customer payment for the good or service will be one year or less. The amount of revenue recognized reflects the expected consideration to be received for providing the goods or services to the customer, net of estimates for variable consideration which includes allowances for trade terms, sales incentive programs, discounts, markdowns, chargebacks and product returns. Estimates of variable consideration are determined at contract inception and reassessed at each reporting date, at a minimum, to reflect any changes in facts and circumstances. The Company utilizes the expected value method in determining its estimates of variable consideration, based on evaluations of specific product and customer circumstances, historical and anticipated trends and current economic conditions. Estimates for variable consideration are recorded as "accrued liabilities" in the Company's balance sheets. Revenue from the sale of gift cards is deferred and recorded as a contract liability until the gift card is redeemed by the customer, factoring in breakage as appropriate, which considers whether the Company has a legal obligation to remit the value of the unredeemed gift card to any jurisdiction under unclaimed property regulations. Prior to 2021, our company-operated outlet stores in the U.S. maintained customer loyalty programs where customers earned rewards from qualifying purchases, which were redeemable for discounts on future purchases or other rewards. Under the program, the Company estimated the standalone selling price of the loyalty rewards and allocated a portion of the consideration for the sale of products to the loyalty points earned. The deferred amount was recorded as a contract liability, and recognized as revenue when the points were redeemed or when the likelihood of redemption was remote. As of December 2020, this program was discontinued with no remaining contract liability. The Company has elected to treat all shipping and handling activities as fulfillment costs and recognize the costs as selling, general and administrative expenses at the time the related revenue is recognized. Shipping and handling costs billed to customers are included in net revenues. Sales taxes and value added taxes collected from customers and remitted directly to governmental authorities are excluded from the transaction price. The Company has licensing agreements for its symbolic intellectual property, most of which include minimum guarantees for sales-based royalties. Royalty income is recognized as earned over the respective license term based on the greater of minimum guarantees or the licensees’ sales of licensed products at rates specified in the licensing contracts. Royalty income related to the minimum guarantees is recognized using a measure of progress with variable amounts recognized only when the cumulative earned royalty exceeds the minimum guarantees and collection is probable. As of December 2021, the Company has contractual rights under its licensing agreements to receive $24.0 million of fixed consideration related to the future minimum guarantees through December 2027. The variable consideration is not disclosed as a remaining performance obligation as the licensing arrangements qualify for the sales-based royalty exemption. Royalty income was included within "net revenues" in the Company's statements of operations and was $26.6 million, $18.7 million and $32.1 million in 2021, 2020 and 2019, respectively. The Company has applied the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less. Cost of Goods Sold Cost of goods sold for company-manufactured goods includes all materials, labor and overhead costs incurred in the production process. Cost of goods sold for purchased finished goods includes the purchase costs and related overhead. In both cases, overhead includes all costs related to manufacturing or purchasing finished goods, including costs of planning, purchasing, quality control, depreciation, restructuring, freight, duties, royalties paid to third parties and shrinkage. Selling, General and Administrative Expenses Selling, general and administrative expenses include costs of product development, selling, marketing and advertising, company-operated retail stores, concession retail stores, warehousing, distribution, shipping and handling, licensing, restructuring and administration. Advertising costs are expensed as incurred and totaled $142.0 million in 2021, $98.8 million in 2020 and $119.3 million in 2019. Advertising costs include cooperative advertising payments made to the Company's customers as reimbursement for their costs of advertising the Company’s products, and totaled $3.3 million in 2021, $4.6 million in 2020 and $5.9 million in 2019. Shipping and handling costs for delivery of products to customers totaled $84.4 million in 2021, $56.2 million in 2020 and $66.1 million in 2019. Expenses related to royalty income were $0.2 million in 2021, $0.3 million in 2020 and $1.8 million in 2019. Derivative Financial Instruments Derivative financial instruments are measured at fair value in the Company's balance sheets. Unrealized gains and losses are recognized as assets and liabilities, respectively, and classified as current or noncurrent based on the derivatives’ maturity dates. The accounting for changes in the fair value of derivative instruments (i.e., gains and losses) depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. To qualify for hedge accounting treatment, all hedging relationships must be formally documented at the inception of the hedges and must be highly effective in offsetting changes in future cash flows of hedged transactions. Further, at the inception of a contract and on an ongoing basis, the Company assesses whether the hedging instruments are effective in offsetting the risk of the hedged transactions. Occasionally, a portion of a derivative instrument will be considered ineffective in hedging the originally identified exposure due to a decline in amount or a change in timing of the hedged exposure. In such cases, hedge accounting treatment is discontinued for the ineffective portion of that hedging instrument, and any change in fair value for the ineffective portion is recognized in net income. The Company does not use derivative instruments for trading or speculative purposes. Hedging cash flows are classified in the Company's statements of cash flows in the same category as the items being hedged. Hedging contracts are further described in Note 14 Cash Flow Hedges — The Company uses foreign currency exchange contracts primarily to hedge a portion of the exchange risk for its forecasted sales, purchases, intercompany service fees and royalties. The Company uses interest rate swap agreements to partially hedge the interest rate risk associated with the volatility of monthly London Interbank Offered Rate ("LIBOR") movements. Derivative Contracts Not Designated as Hedges — The Company uses contracts that are not designated as hedges and are recorded at fair value in the Company's balance sheets 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 counterparties to our derivative contracts are financial institutions with investment grade credit ratings, but this does not eliminate the Company's exposure to credit risk with these institutions. To manage its credit risk, the Company monitors the credit risks of its counterparties, limits its exposure in the aggregate and to any single counterparty, and adjusts its hedging positions as appropriate. The impact of the Company's credit risk and the credit risk of its counterparties, as well as the ability of each party to fulfill its obligations under the contracts, is considered in determining the fair value of the derivative contracts. Credit risk has not had a significant effect on the fair value of our derivative contracts. The counterparties to our derivative contracts are also lenders under our credit facility. These derivative contracts are secured by the same collateral that secures our credit facility. Self-insurance The Company is self-insured for a significant portion of its employee medical, workers’ compensation, property and general liability exposures. Liabilities for self-insured exposures are accrued at the present value of amounts expected to be paid based on historical claims experience and actuarial data for forecasted settlements of claims filed and for incurred but not yet reported claims. Accruals for self-insured exposures are included in current and noncurrent liabilities based on the expected periods of payment. Excess liability insurance has been purchased to limit the amount of self-insured risk on claims. Income Taxes Income taxes are provided on pre-tax income for financial reporting purposes. "Deferred income tax assets" and "deferred income tax liabilities", as presented in the Company's balance sheets, reflect the net future tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Net temporary differences and net operating losses are recorded utilizing tax rates currently enacted for the years in which the differences are expected to be settled or realized. We periodically assess the realizability of deferred tax assets and the adequacy of deferred tax liabilities, including the results of local, state, federal or foreign statutory tax audits and changes in estimates and judgments used. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not (likelihood of more than 50%) that some portion, or all, of a deferred tax asset will not be realized. Accrued income taxes as presented in the Company's balance sheets include unrecognized income tax benefits along with related interest and penalties, appropriately classified as current or noncurrent. All deferred tax assets and liabilities are classified as noncurrent in the Company's balance sheets. The provision for income taxes as presented in the Company's statements of income also includes estimated interest and penalties related to uncertain tax position s . Concentration of Risks The Company markets products to a broad customer base throughout the world. Products are sold at a range of price points through our wholesale and direct-to-consumer channels. The Company’s largest customer, a U.S.-based retailer, accounted for 34% of 2021 net revenues, and the top ten customers accounted for 61% of 2021 net revenues. Sales are typically made on an unsecured basis under customary terms that vary by product, channel of distribution or geographic region. The Company continuously monitors the creditworthiness of its customers and has established internal policies regarding customer credit limits. The Company is not aware of any issues with respect to relationships with any of its top customers. Legal and Other Contingencies Management periodically assesses liabilities and contingencies in connection with legal proceedings and other claims that may arise from time to time. When it is probable that a loss has been or will be incurred, an estimate of the loss is recorded in the financial statements. Estimates of losses are adjusted when additional information becomes available or circumstances change. A contingent liability is disclosed when there is at least a reasonable possibility that a material loss may have been incurred. Management believes that the outcome of any outstanding or pending matters, individually and in the aggregate, will not have a material adverse effect on the financial statements. Earnings Per Share B |
REVENUES
REVENUES | 12 Months Ended |
Jan. 01, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES The Company recognizes revenue when performance obligations under the terms of the contract with the customer are satisfied based on the transfer of control or promised goods or services. Performance Obligations Disclosure is required for the aggregate transaction price allocated to performance obligations that are unsatisfied at the end of a reporting period, unless the optional practical expedients are applicable. The Company elected the practical expedients that do not require disclosure of the transaction price allocated to remaining performance obligations for (i) variable consideration related to sales-based royalty arrangements and (ii) contracts with an original expected duration of one year or less. As of December 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 year ended December 2021, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not significant. Contract Balances Accounts receivable represent the Company's unconditional right to receive consideration from a customer and are recorded at net invoiced amounts, less estimated allowances. Contract assets are rights to consideration in exchange for goods or services that have been transferred to a customer when that right is conditional on something other than the passage of time. Once the Company has an unconditional right to consideration under a contract, amounts are invoiced and contract assets are reclassified to "accounts receivable" within the Company's balance sheets. The Company's primary contract assets relate to sales-based royalty arrangements. Contract liabilities are recorded when a customer pays consideration, or the Company has a right to an amount of consideration that is unconditional, before the transfer of a good or service to the customer, and thus represent the Company's obligation to transfer the good or service to the customer. The following table presents information about contract balances recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Accounts receivable, net $ 289,800 $ 231,397 Contract assets (a) $ 3,093 $ 5,769 Contract liabilities (b) $ 2,258 $ 787 (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 year ended December 2021, revenue recognized that was included in contract liabilities as of December 2020 was not significant. For the year ended December 2020, revenue of $1.5 million was recognized that was included in contract liabilities as of December 2019. 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, digital sales at www.wrangler.com and www.lee.com and international concession retail locations. 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 converted 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. Prior to 2020, the Other category also included transactions with VF for pre-Separation activities. These transactions included sales of VF-branded products at VF Outlet stores, as well as sales to VF for products manufactured in our plants, use of our transportation fleet and fulfillment of a transition services agreement related to VF’s sale of its Nautica ® brand business in mid-2018. Year Ended December 2021 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,269,718 $ 420,720 $ 9,979 $ 1,700,417 Non-U.S. Wholesale 186,355 301,332 2,854 490,541 Direct-to-Consumer 119,158 165,000 21 284,179 Other — — 779 779 Total $ 1,575,231 $ 887,052 $ 13,633 $ 2,475,916 Geographic revenues U.S. $ 1,370,916 $ 487,214 $ 10,779 $ 1,868,909 International 204,315 399,838 2,854 607,007 Total $ 1,575,231 $ 887,052 $ 13,633 $ 2,475,916 Year Ended December 2020 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,101,148 $ 319,347 $ 10,244 $ 1,430,739 Non-U.S. Wholesale 147,738 214,493 2,024 364,255 Direct-to-Consumer 100,528 153,780 22 254,330 Other — — 48,515 48,515 Total $ 1,349,414 $ 687,620 $ 60,805 $ 2,097,839 Geographic revenues U.S. $ 1,189,060 $ 394,311 $ 58,781 $ 1,642,152 International 160,354 293,309 2,024 455,687 Total $ 1,349,414 $ 687,620 $ 60,805 $ 2,097,839 Year Ended December 2019 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,198,303 $ 391,887 $ 22,137 $ 1,612,327 Non-U.S. Wholesale 213,905 314,882 1,585 530,372 Direct-to-Consumer 105,904 175,507 27 281,438 Other — — 124,702 124,702 Total $ 1,518,112 $ 882,276 $ 148,451 $ 2,548,839 Geographic revenues U.S. $ 1,282,428 $ 481,050 $ 146,469 $ 1,909,947 International 235,684 401,226 1,982 638,892 Total $ 1,518,112 $ 882,276 $ 148,451 $ 2,548,839 |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended |
Jan. 01, 2022 | |
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 discontinued the sale of third-party branded merchandise in all VF Outlet stores, exited certain VF Outlet stores and converted all remaining locations to Lee Wrangler Outlet TM and Lee Wrangler Clearance Center TM retail stores. Prior to 2020, the Other category also included transactions with VF for pre-Separation activities, which included sales of VF-branded products at VF Outlet stores, as well as sales to VF for products manufactured in our plants, use of our transportation fleet and fulfillment of a transition services agreement related to VF’s sale of its Nautica ® brand business in mid-2018. Accounting policies utilized for internal management reporting at the individual segments are consistent with those included in Note 1 After the Separation, as a standalone public company, 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. Refer to Note 1 Corporate and other expenses, intangible asset impairment charges, 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 before income taxes: Year Ended December (In thousands) 2021 2020 2019 Segment revenues: Wrangler $ 1,575,231 $ 1,349,414 $ 1,518,112 Lee 887,052 687,620 882,276 Total reportable segment revenues 2,462,283 2,037,034 2,400,388 Other revenues 13,633 60,805 148,451 Total net revenues $ 2,475,916 $ 2,097,839 $ 2,548,839 Segment profit: Wrangler $ 294,153 $ 244,892 $ 215,008 Lee 128,305 37,912 68,214 Total reportable segment profit $ 422,458 $ 282,804 $ 283,222 Non-cash impairment of intangible asset (1) — — (32,636) Corporate and other expenses (140,960) (143,065) (90,117) Interest income from former parent, net — — 3,762 Interest expense (38,900) (49,992) (35,787) Interest income 1,480 1,608 3,931 Profit (loss) related to other revenues 522 (18,419) 2,819 Income before income taxes $ 244,600 $ 72,936 $ 135,194 (1) Represents an impairment charge recorded during the third quarter of 2019 related to the Rock & Republic ® trademark. See Note 7 For internal management purposes, segment assets are those used directly in or resulting from the operations of each business, which are accounts receivable and inventories. Segment assets included in the "Other" category represent balances related to other brands and corporate activities, as well as the VF Outlet business in 2020 and 2019, and are provided for purposes of reconciliation as the "Other" category is not considered a reportable segment. Total expenditures for long-lived assets are not disclosed as this information is not regularly provided to the chief operating decision maker at the segment level. The following table presents assets for the Company's reportable segments and a reconciliation to total asset balances: (In thousands) December 2021 December 2020 Segment assets: Wrangler $ 394,709 $ 320,087 Lee 247,573 221,217 Total reportable segment assets 642,282 541,304 Other accounts receivable and inventories 10,475 30,825 Total accounts receivable and inventories $ 652,757 $ 572,129 Cash and cash equivalents 185,322 248,138 Prepaid expenses and other current assets 72,579 81,413 Property, plant and equipment, net 105,155 118,897 Operating lease assets 54,950 60,443 Goodwill and intangible assets 226,851 229,383 Deferred income tax assets 74,876 85,221 Other assets 160,534 150,192 Total assets $ 1,533,024 $ 1,545,816 The following table presents supplemental information of net revenues by geographic area based on the location of the customer: Year Ended December (In thousands) 2021 2020 2019 Revenues: U.S. $ 1,868,909 $ 1,642,152 $ 1,909,947 International 607,007 455,687 638,892 Total $ 2,475,916 $ 2,097,839 $ 2,548,839 One customer accounted for 34%, 38% and 34% of the Company's total net revenues in 2021 , 2020 and 2019, respectively. Sales to this customer are included in both the Wrangler ® and Lee ® reportable segments. The following table presents "property, plant and equipment, net" recorded in the Company's balance sheets by geographic area based on physical location: (In thousands) December 2021 December 2020 Property, plant and equipment, net: U.S. $ 63,951 $ 69,481 International 41,204 49,416 Total $ 105,155 $ 118,897 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Jan. 01, 2022 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE The following table presents components of "accounts receivable, net" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Trade $ 290,830 $ 242,451 Royalty and other 10,675 8,089 Total accounts receivable 301,505 250,540 Less: allowance for doubtful accounts (11,705) (19,143) Accounts receivable, net $ 289,800 $ 231,397 Allowance for Doubtful Accounts The Company reviews the estimates used to calculate the allowance for doubtful accounts on a quarterly basis. At December 2021 and 2020, the Company updated its evaluation of expected losses and related assumptions used in the allowance for doubtful accounts, including the impact of COVID-19. The following table presents a rollforward of the allowance for doubtful accounts: (In thousands) Year Ended December Balance, December 2019 $ 11,852 Provision for expected credit losses 18,338 Accounts receivable balances written off (1) (11,877) Other (2) 830 Balance, December 2020 $ 19,143 Provision for expected credit losses 330 Accounts receivable balances written off (1) (6,309) Other (2) (1,459) Balance, December 2021 $ 11,705 (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, the exit of 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 The Company is party to 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 2021, 2020 and 2019, the Company sold total trade accounts receivable of $1,249.3 million, $981.9 million and $1,035.4 million, respectively. As of December 2021 and December 2020, $170.6 million and $127.1 million, respectively, of the sold trade accounts receivable had been removed from the Company's balance sheets but remained outstanding with the financial institution. The funding fees charged by the financial institution for this program are reflected in the Company's statements of operations within "other expense, net" and were $1.8 million, $2.0 million and $5.3 million in 2021 , 2020 and 2019, respectively. Net proceeds of this program are reflected as operating activities in the Company's statements of cash flows. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jan. 01, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The following table presents components of "inventories" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Finished products $ 293,427 $ 277,164 Work-in-process 32,346 29,921 Raw materials 37,184 33,647 Total inventories $ 362,957 $ 340,732 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Jan. 01, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT The following table presents components of "property, plant and equipment, net" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Land and improvements $ 10,557 $ 9,732 Buildings and improvements 175,181 154,839 Machinery and equipment 337,134 327,562 Property, plant and equipment, at cost 522,872 492,133 Less: accumulated depreciation and amortization (417,717) (373,236) Property, plant and equipment, net $ 105,155 $ 118,897 Depreciation expense was $22.4 million, $23.7 million and $22.3 million in 2021, 2020 and 2019, respectively. During 2021 and 2020, the Company assessed retail store assets, including property, plant and equipment, for impairment due to the decision to exit certain VF Outlet locations as well as retail store closures resulting from COVID-19. Refer to Note 13 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Jan. 01, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS The following tables present components of "intangible assets, net" recorded in the Company's balance sheets: (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount December 2021 Finite-lived intangible assets: Trademarks 16 years Straight-line $ 58,132 $ 48,071 $ 10,061 Indefinite-lived intangible assets: Trademarks and trade names 4,577 Intangible assets, net $ 14,638 (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount December 2020 Finite-lived intangible assets: Trademarks 16 years Straight-line $ 58,132 $ 47,066 $ 11,066 Indefinite-lived intangible assets: Trademarks and trade names 4,925 Intangible assets, net $ 15,991 During the third quarter of 2019, the Company recorded a $32.6 million non-cash impairment charge, which was reflected within "non-cash impairment of intangible asset" in the Company's statement of operations and is included in the accumulated amortization balance. The Company did not incur any impairment charges related to intangible assets during 2021 or 2020. Refer to Note 13 Amortization expense (excluding impairment charges) was $1.0 million, $1.7 million and $3.0 million for 2021, 2020 and 2019, respectively. Estimated amortization expense for the next five years beginning in 2022 is $1.0 million each year. |
GOODWILL
GOODWILL | 12 Months Ended |
Jan. 01, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL The following table presents changes in "goodwill" recorded in the Company's balance sheets, summarized by reportable segment: (In thousands) Wrangler Lee Total Balance, December 2019 $ 131,307 $ 81,529 $ 212,836 Currency translation 343 213 556 Balance, December 2020 131,650 81,742 213,392 Currency translation (727) (452) (1,179) Balance, December 2021 $ 130,923 $ 81,290 $ 212,213 The Company did not record any impairment charges related to goodwill in 2021, 2020 or 2019 based on the results of its annual impairment testing. Refer to Note 13 |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Jan. 01, 2022 | |
Other Assets [Abstract] | |
OTHER ASSETS | OTHER ASSETS The following table presents components of "other assets" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Investments held for deferred compensation plans (Note 12) $ 50,983 $ 50,394 Capitalized computer software, net of accumulated amortization of $18,224 in 2021 and $7,991 in 2020 81,555 68,223 Deposits 5,568 7,448 Partnership stores and shop-in-shop costs, net of accumulated amortization of $20,732 in 2021 and $26,811 in 2020 4,192 4,260 Other 18,236 19,867 Total other assets $ 160,534 $ 150,192 |
SHORT-TERM BORROWINGS AND LONG-
SHORT-TERM BORROWINGS AND LONG-TERM DEBT | 12 Months Ended |
Jan. 01, 2022 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BORROWINGS AND LONG-TERM DEBT | SHORT-TERM BORROWINGS AND LONG-TERM DEBT Short-term Borrowings At December 2021 and December 2020, the Company had $10.1 million and $35.9 million, respectively, 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. There were no outstanding balances under these arrangements at December 2021, and $0.2 million at December 2020, which primarily consisted of letters of credit that are non-interest bearing to the Company. In addition, short-term borrowings at December 2021 and December 2020 included other debt of $0.2 million and $0.9 million, respectively. Long-term Debt The following table presents the components of "long-term debt" as recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Revolving Credit Facility — — Term Loan A 397,427 694,241 Term Loan B — 218,716 4.125% Notes, due 2029 393,890 — Total long-term debt 791,317 912,957 Less: current portion — (25,000) Long-term debt, due beyond one year $ 791,317 $ 887,957 Credit Facilities In May 2019, the Company entered into a $1.55 billion senior secured credit facility (the "Credit Agreement"). 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. On November 18, 2021, the Company completed a refinancing pursuant to which it issued $400.0 million of Notes (as defined below) and amended and restated its Credit Agreement (the “Amended Credit Agreement”). The net proceeds from the offering of the Notes, together with $7.6 million of cash on hand, were used to repay $265.0 million of the principal amount outstanding under Term Loan A, and all of the $133.0 million principal amount outstanding under Term Loan B. The Amended Credit Agreement provides for (i) a five-year $400.0 million term loan A facility (“Amended Term Loan A”) and (ii) a five-year $500.0 million revolving credit facility (the “Amended Revolving Credit Facility”) (collectively, the “Amended Credit Facilities”) with the lenders and agents party thereto. The Amended Term Loan A is scheduled to be repaid in quarterly installments beginning in March 2023. The Amended 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 December 2021, the Company had no outstanding borrowings under the Amended Revolving Credit Facility and $13.1 million of outstanding standby letters of credit issued on behalf of the Company, leaving $486.9 million available for borrowing against this facility. The interest rate per annum applicable to the Amended Credit Agreement is equal to the Applicable Margin (as defined therein) plus, at the Company’s option, either (i) a base rate determined by reference to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or (c) the Eurocurrency rate that would be calculated as of such day in respect of a proposed Eurocurrency rate loan with a one-month interest period plus 1.00%, or (ii) an interest rate benchmark elected by the Company based on the currency being borrowed and in accordance with the terms of the Amended Credit Agreement. The Amended Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit the ability of the Company and its subsidiaries to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to designate subsidiaries as unrestricted, to make certain investments, to prepay certain indebtedness and to pay dividends, or to make other distributions or redemptions/repurchases, in respect of the Company and its subsidiaries’ equity interests. In addition, the Amended Credit Agreement contains financial covenants which require compliance with (i) a total leverage ratio not to exceed 4.50 to 1.00 as of the last day of any test period, with an allowance for up to two elections to increase the limit to 5.00 to 1.00 in connection with certain material acquisitions, and (ii) a consolidated interest coverage ratio as of the last day of any test period to be no less than 3.00 to 1.00. The Amended Credit Agreement also contains events of default customary for financings of this type, including certain customary change of control events. As of December 2021, the Company was in compliance with all financial covenants and expects to maintain compliance with the applicable financial covenants for at least one year from the issuance of these financial statements. Senior Notes On November 18, 2021, the Company entered into an indenture (the “Indenture”), pursuant to which it issued $400.0 million of unsecured senior notes bearing interest at a fixed rate of 4.125% per annum (the “Notes”) through a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act. Interest on the Notes will be payable in cash in arrears on May 15 and November 15 of each year, commencing on May 15, 2022. The Notes are guaranteed on a senior unsecured basis by the Company’s existing and future domestic subsidiaries (other than certain excluded subsidiaries) that are borrowers under or guarantee the Amended Credit Facilities (as defined below) or certain other indebtedness. The Notes rank pari passu in right of payment with all existing and future senior indebtedness of the Company and the Guarantors and are effectively subordinated to all of the Company’s and the Guarantors’ existing and future secured indebtedness, to the extent of the value of the collateral securing such indebtedness. The Notes mature in November 2029. The Company may redeem all or a portion of the Notes beginning in November 2024 at the redemption prices set forth in the Indenture. Prior to November 2024, the Company may redeem all or a portion of the Notes at a redemption price equal to 100% of the principal amount of the Notes plus the “make-whole” premium as described in the Indenture together with accrued and unpaid interest, if any, to, but excluding, the redemption date. The Company may also redeem up to 40% of the aggregate principal amount of the Notes at any time prior to November 2024 using the net proceeds from certain equity offerings at a redemption price equal to 104.125% of the principal amount of the Notes together with accrued and unpaid interest, if any, to, but excluding, the redemption date. The Indenture governing the Notes contains customary negative covenants for financings of this type that, among other things, limit the ability of the Company and its restricted subsidiaries to incur additional indebtedness or issue certain preferred shares, pay dividends, redeem stock or make other distributions, make certain investments, sell or transfer certain assets, create liens, consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets, enter into certain transactions with affiliates and designate subsidiaries as unrestricted subsidiaries. The Indenture does not contain any financial covenants. As of December 2021, the Company was in compliance with the Indenture. The following table presents scheduled payments of long-term debt as of December 2021 for the next five years and thereafter: (In thousands) Future Principal Payments 2022 $ — 2023 10,000 2024 20,000 2025 20,000 2026 350,000 Thereafter 400,000 800,000 Less: unamortized deferred financing costs (8,683) Total long-term debt 791,317 Less: current portion — Long-term debt, due beyond one year $ 791,317 The Amended Term Loan A had an outstanding principal amount of $400.0 million at December 2021, and Term Loan A had an outstanding principal amount of $700.00 million at December 2020. These balances are reported net of unamortized deferred financing costs. As of December 2021, interest expense on the Amended Term Loan A was being recorded at an effective annual interest rate of 3.2%, including the amortization of deferred financing costs and the impact of the Company’s interest rate swap. The Notes had an outstanding principal amount of $400.0 million at December 2021, which is reported net of unamortized deferred financing costs. As of December 2021, interest expense on the Notes was being recorded at an effective annual interest rate of 4.3%, including the amortization of deferred financing costs. In connection with the Amended Credit Agreement and Notes issuance, the Company capitalized $2.1 million and $6.2 million of debt issuance costs, respectively, which are being amortized into net interest expense over their respective terms. During 2021, the Company recorded interest expense of $6.6 million due to accelerated amortization of the original issue discount and debt issuance costs associated with refinancing and early repayments on our Credit Facilities. |
ACCRUED LIABILITIES AND OTHER L
ACCRUED LIABILITIES AND OTHER LIABILITIES | 12 Months Ended |
Jan. 01, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES AND OTHER LIABILITIES | ACCRUED LIABILITIES AND OTHER LIABILITIES The following table presents components of "accrued liabilities" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Customer discounts, allowances and incentives $ 58,881 $ 58,873 Compensation 62,135 38,948 Other taxes 20,016 23,797 Advertising 11,976 11,266 Derivative liabilities (Note 14) 1,623 7,166 Deferred compensation (Note 12) 6,629 6,919 Restructuring (Note 21) 1,079 6,520 Professional services 13,529 6,410 Income taxes payable 17,722 6,328 Customer deposits 6,141 5,017 Insurance 2,796 3,368 Contract liabilities (Note 2) 2,258 787 Other 12,379 17,553 Accrued liabilities $ 217,164 $ 192,952 The following table presents components of "other liabilities" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Deferred compensation (Note 12) $ 52,162 $ 51,116 Derivative liabilities (Note 14) 6,401 17,937 Income taxes payable 16,570 16,735 Pension liabilities (Note 12) 13,685 14,056 Insurance 1,257 1,082 Restructuring (Note 21) — 221 Other 9,117 14,194 Other liabilities $ 99,192 $ 115,341 |
RETIREMENT AND SAVINGS BENEFIT
RETIREMENT AND SAVINGS BENEFIT PLANS | 12 Months Ended |
Jan. 01, 2022 | |
Retirement Benefits [Abstract] | |
RETIREMENT AND SAVINGS BENEFIT PLANS | RETIREMENT AND SAVINGS BENEFIT PLANS Pension Plans Shared Plans — Prior to the Separation, certain Company employees participated in U.S. and international defined benefit pension plans sponsored by VF (the "Shared Plans"), which included participants of other VF operations. The Company accounted for its participation in the Shared Plans as a multi-employer benefit plan. Accordingly, net pension costs specifically related to Company employees were reflected in the Company's statement of operations and the Company did not record an asset or liability in relation to the funded or unfunded status of the Shared Plans. The following table presents net pension costs recognized by the Company related to the Shared Plans through the Separation date: (In thousands) Year Ended December 2019 Service cost $ 726 Non-service components (3,166) Net pension benefit $ (2,440) All components of net pension benefit were recorded in the Company's statements of operations within "selling, general and administrative expenses" for 2019. International Plans — At the Separation, $11.0 million of net pension obligations related to international employees were transferred to the Company, which consisted of $17.4 million of projected benefit obligations and $6.4 million of plan assets, along with $1.1 million of related accumulated other comprehensive losses. The Company uses a December 31 measurement date for these plans. Net pension costs and obligations are developed from actuarial valuations. Inherent in these valuations are key assumptions, including discount rates, salary growth, long-term return on plan assets, retirement rates, mortality rates and other factors. The Company's selection of assumptions is based on historical trends and known economic and market conditions at the time of valuation, as well as independent studies of trends performed by actuaries. However, actual results may differ substantially from the estimates that were based on the critical assumptions. The following tables present key components of pension costs, amounts recorded in the balance sheets and related key assumptions specific to the international plans: Year Ended December (In thousands) 2021 2020 2019 Amounts included in the statements of operations: Net pension costs $ 866 $ 1,027 $ 680 Actuarial assumptions used to determine pension expense: Discount rate in effect for determining service cost 0.64 % 0.68 % 1.28 % Rate of inflation 1.70 % 1.80 % 1.80 % Expected long-term return on plan assets 3.00 % 3.00 % 3.00 % Rate of compensation increase 2.90 % 3.00 % 3.00 % (In thousands) December 2021 December 2020 Amounts included in the balance sheets: Projected benefit obligations $ 22,935 $ 22,764 Fair value of plan assets 9,250 8,708 Funded status - recorded in other liabilities (Note 11) $ 13,685 $ 14,056 Accumulated other comprehensive loss, pretax - net deferred amounts (2,904) (2,519) Actuarial assumptions used to determine pension obligations: Discount rate 0.64 % 0.64 % Rate of compensation increase 2.90 % 2.90 % Accumulated benefit obligations $ 13,514 $ 13,342 Net pension costs are reflected in the Company's statements of operations primarily within "selling, general and administrative expenses." Plan assets are invested in group insurance contracts, the fair values of which are provided by the insurance companies (Level 2). Refer to Note 13 Other Retirement and Savings Plans The Company sponsors a nonqualified retirement savings plan for employees whose contributions to a 401(k) plan would be limited by provisions of the Internal Revenue Code. This plan allows participants to defer a portion of their compensation and to receive matching contributions for a portion of the deferred amounts. Participants earn a return on their deferred compensation based on their selection of a hypothetical portfolio of publicly traded mutual funds. Changes in the fair value of the participants’ hypothetical investments are recorded as an adjustment to deferred compensation liabilities. Deferred compensation, including accumulated earnings, is distributable in cash at participant-specified dates upon retirement, death, disability or termination of employment. At December 2021, the liability to the Company’s participants was $57.6 million, of which $6.6 million was recorded in "accrued liabilities" ( Note 11 Note 11 Note 11 Note 11 Note 11 Note 11 Note 11 The Company has purchased publicly traded mutual funds in the same amounts as the participant-directed hypothetical investments underlying the employee deferred compensation liabilities. These investment securities and earnings thereon are intended to provide a source of funds to meet the deferred compensation obligations, and serve as an economic hedge of the financial impact of changes in deferred compensation liabilities. They are held in an irrevocable trust but are subject to claims of creditors in the event of the Company's insolvency. Accordingly, at December 2021, the fair value of these investments was $57.6 million, of which $6.6 million was recorded in "other current assets" and $51.0 million was recorded in "other assets" ( Note 9 Note 9 The Company sponsors 401(k) plans as well as other domestic and foreign retirement and savings plans. The Company’s expense under these plans was $8.6 million in 2021, $4.5 million in 2020 and $7.9 million in 2019. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jan. 01, 2022 | |
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 December 2021 Financial assets: Cash equivalents: Money market funds $ 110,050 $ 110,050 $ — $ — Time deposits 3,644 3,644 — — Foreign currency exchange contracts 7,321 — 7,321 — Investment securities 57,613 57,613 — — Financial liabilities: Foreign currency exchange contracts 1,972 — 1,972 — Interest rate swap agreements 6,052 — 6,052 — Deferred compensation 58,791 — 58,791 — 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 December 2021, the carrying value of the Company's long-term debt was $791.3 million compared to a fair value of $797.5 million. At December 2020, the carrying value of the Company's long-term debt, including the current portion, 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 December 2021 and December 2020, their carrying values approximated fair value due to the short-term nature of these instruments. Nonrecurring Fair Value Measurements Certain non-financial assets, primarily property, plant and equipment, capitalized computer software, operating lease assets and goodwill and intangible assets, are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, these assets are required to be assessed for impairment whenever events or circumstances indicate that the carrying value may not be recoverable, and at least annually for goodwill and indefinite-lived intangible assets. During the year ended December 2021, no triggering events were identified that required an impairment assessment. During 2020, the Company assessed retail store assets, including the related operating lease assets, for impairment due to retail store closures resulting from COVID-19 as well as the decision to exit certain VF Outlet locations. Based on these analyses, the Company recorded charges of $5.9 million and $0.9 million related to the impairment of store operating lease assets and store property, plant and equipment, respectively, during the year ended December 2020 which were reflected within "selling, general and administrative expenses" in the Company's statement of operations. Finite-lived Intangible Assets Impairment Analysis During the three months ended December 2021, the Company determined that recent operating results of the Rock & Republic ® brand were not in line with the projections used in our most recent impairment analysis of the Rock & Republic ® finite-lived trademark intangible asset during 2019. This was considered a triggering event that required management to perform a quantitative impairment analysis of the Rock & Republic ® finite-lived trademark intangible asset. Based on the analysis performed, management concluded that the trademark intangible asset did not require further testing as the undiscounted cash flows exceeded the carrying value. During the three months ended September 2019, the Company determined that the exclusive domestic wholesale distribution and licensing agreement of the Rock & Republic ® brand would not be extended. This was considered a triggering event that required management to perform a quantitative impairment analysis of the Rock & Republic ® finite-lived trademark intangible asset. Based on this analysis, the Company recorded a $32.6 million non-cash impairment charge during the three months ended September 2019 which was reflected within "non-cash impairment of intangible asset" in the Company's statement of operations. Annual Goodwill and Indefinite-lived Intangible Assets Impairment Analysis Management performed its annual impairment testing of goodwill and indefinite-lived intangible assets as of the beginning of the fourth quarter of 2021 for all reporting units and indefinite-lived intangible assets. Based on results of the qualitative impairment assessment, further testing was not necessary and no impairment charges of goodwill or indefinite-lived intangible assets were recorded in 2021. Refer to Part II, Item 7 - Critical Accounting Policies and Estimates for additional discussion regarding fair value measurements. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Jan. 01, 2022 | |
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 $297.4 million at December 2021 and $295.0 million at December 2020, consisting primarily of contracts hedging exposures to the euro, Mexican peso, Canadian dollar, British pound, Polish zloty and Swedish krona. 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 and $400.0 million at December 2021 and December 2020, respectively. 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 December 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 with Unrealized Gains Fair Value of Derivatives with Unrealized Losses (In thousands) December 2021 December 2020 December 2021 December 2020 Derivatives designated as hedging instruments: Foreign currency exchange contracts $ 7,321 $ 7,179 $ (1,972) $ (8,640) Interest rate swap agreements — — (6,052) (16,309) Derivatives not designated as hedging instruments: Foreign currency exchange contracts — 352 — (154) Total derivatives $ 7,321 $ 7,531 $ (8,024) $ (25,103) 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: December 2021 December 2020 (In thousands) Derivative Asset Derivative Liability Derivative Asset Derivative Liability Gross amounts presented in the balance sheet $ 7,321 $ (8,024) $ 7,531 $ (25,103) Gross amounts not offset in the balance sheet (1,636) 1,636 (1,818) 1,818 Net amounts $ 5,685 $ (6,388) $ 5,713 $ (23,285) 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) December 2021 December 2020 Prepaid expenses and other current assets $ 6,356 $ 5,773 Accrued liabilities (1,623) (7,166) Other assets 965 1,758 Other liabilities (6,401) (17,937) 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: (In thousands) Gain (Loss) on Derivatives Recognized in AOCL Cash Flow Hedging Relationships 2021 2020 2019 Foreign currency exchange contracts $ 6,900 $ (8,193) $ 3,683 Interest rate swap agreements 4,238 (18,224) (1,954) Total $ 11,138 $ (26,417) $ 1,729 (In thousands) Gain (Loss) Reclassified from AOCL into Income Location of Gain (Loss) 2021 2020 2019 Net revenues $ 204 $ (458) $ (844) Cost of goods sold (2,271) 3,171 6,745 Other expense, net (749) 149 343 Interest expense (6,019) (5,004) 1,136 Total $ (8,835) $ (2,142) $ 7,380 Derivative Contracts Not Designated as Hedge s 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 were 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) Gain (Loss) on Derivatives Recognized in Income Derivatives Not Designated as Hedges Location of Gain (Loss) on Derivatives Recognized in Income 2021 2020 2019 Foreign currency exchange contracts Net revenues $ (104) $ 90 $ — Cost of goods sold 7 (2,749) 829 Other expense, net 385 (1) — Total $ 288 $ (2,660) $ 829 Other Derivative Information During 2020, the Company determined that, due to a reduction in forecasted sales, it was probable that forecasted transactions of certain foreign currency cash flow hedges would no longer occur as originally expected. Accordingly, $0.3 million of gains related to the ineffective portion of these contracts were reclassified from AOCL into earnings during the year ended December 2020. There were no significant amounts recognized in earnings for the ineffective portion of any hedging relationships during 2021 or 2019. |
CAPITAL AND ACCUMULATED OTHER C
CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Jan. 01, 2022 | |
Equity [Abstract] | |
CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS | CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS Common Stock On August 5, 2021, the Company announced that its Board of Directors approved a share repurchase program (the "Repurchase Program"). The Repurchase Program authorizes the repurchase of up to $200.0 million of the Company's outstanding Common Stock through open market or privately negotiated transactions. The timing and amount of repurchases are determined by the Company's management based on its evaluation of market conditions, share price, legal requirements and other factors. The Repurchase Program does not have an expiration date but may be suspended, modified or terminated at any time without prior notice. All shares reacquired in connection with the Repurchase Program are treated as authorized and unissued shares upon repurchase. During the year ended December 2021, the Company repurchased 1.4 million shares of Common Stock for $75.5 million, including commissions, under the Repurchase Program. Accumulated Other Comprehensive Loss The Company's comprehensive income (loss) consists of net income and specified components of other comprehensive income (loss) ("OCL"), which relate to changes in assets and liabilities that are not included in net income 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. The following table presents deferred components of AOCL in equity, net of related taxes: (In thousands) December 2021 December 2020 December 2019 Foreign currency translation $ (93,125) $ (80,178) $ (84,118) Defined benefit pension plans (2,177) (1,889) (2,301) Derivative financial instruments 2,546 (12,740) 6,721 Accumulated other comprehensive loss $ (92,756) $ (94,807) $ (79,698) The following table presents changes in AOCL and related tax impact: (In thousands) Foreign Currency Translation Defined Derivative Total Balance, December 2018 $ (145,182) $ — $ — $ (145,182) Other comprehensive income (loss) due to gains (losses) arising before reclassifications 3,167 (2,010) 1,729 2,886 Reclassifications to net income of previously deferred (gains) losses — — (7,380) (7,380) Net other comprehensive income (loss) 3,167 (2,010) (5,651) (4,494) Amounts transferred from former parent 57,897 (1,058) 11,645 68,484 Income taxes — 767 727 1,494 Balance, December 2019 $ (84,118) $ (2,301) $ 6,721 $ (79,698) Other comprehensive income (loss) due to gains (losses) arising before reclassifications 3,940 490 (26,417) (21,987) Reclassifications to net income of previously deferred (gains) losses — 59 2,142 2,201 Net other comprehensive income (loss) 3,940 549 (24,275) (19,786) Income taxes — (137) 4,814 4,677 Balance, December 2020 $ (80,178) $ (1,889) $ (12,740) $ (94,807) Other comprehensive income (loss) due to gains (losses) arising before reclassifications (12,947) (399) 11,138 (2,208) Reclassifications to net income of previously deferred (gains) losses — 15 8,835 8,850 Net other comprehensive income (loss) (12,947) (384) 19,973 6,642 Income taxes — 96 (4,687) (4,591) Balance, December 2021 $ (93,125) $ (2,177) $ 2,546 $ (92,756) The following table presents reclassifications out of AOCL: (In thousands) Year Ended December Details About Accumulated Other Comprehensive Loss Reclassifications Affected Line Item in the Financial Statements 2021 2020 2019 Defined benefit pension plans: Net change in deferred losses during the period Selling, general and administrative expenses $ (15) $ (59) $ — Total before tax (15) (59) — Income taxes Income taxes 3 15 — Net of tax (12) (44) — Gains (losses) on derivative financial instruments: Foreign currency exchange contracts Net revenues $ 204 $ (458) $ (844) Foreign currency exchange contracts Cost of goods sold (2,271) 3,171 6,745 Foreign currency exchange contracts Other expense, net (749) 149 343 Interest rate swap agreements Interest expense (6,019) (5,004) 1,136 Total before tax (8,835) (2,142) 7,380 Income taxes Income taxes 2,724 600 (706) Net of tax (6,111) (1,542) 6,674 Total reclassifications for the period, net of tax $ (6,123) $ (1,586) $ 6,674 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Jan. 01, 2022 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Description of Plans Pursuant to the Kontoor Brands, Inc. 2019 Stock Compensation Plan (the "2019 Plan"), the Company is authorized to grant equity-based awards to officers, key employees and nonemployee members of the Board of Directors in the form of options, time-based restricted stock units (“RSUs”), performance-based restricted stock units ("PRSUs") and restricted stock awards ("RSAs"). The 2019 Plan also allowed for the issuance of replacement grants related to the conversion of VF awards for employees that transferred from VF to the Company (defined below as “Converted Awards”). A maximum of 7.5 million shares of Common Stock, plus shares subject to Converted Awards, may be issued under the 2019 Plan. As of December 2021, 4.4 million shares remained available for future grants. Shares distributed under the 2019 Plan are issued from Kontoor's authorized but unissued Common Stock. During 2021, the Company established the Repurchase Program to, among other initiatives, offset outstanding share dilution caused by awards under equity compensation plans. See Note 1 5 Substantially all of the Company’s outstanding awards are classified as equity awards, which are accounted for within "stockholders’ equity" in the Company's balance sheets. Compensation cost for all awards expected to vest is recognized over the shorter of the requisite service period or the vesting period, including accelerated recognition for retirement-eligible employees. During 2021, the Company amended the criteria for retirement eligibility for new awards beginning in 2022. Awards that do not vest are forfeited. Conversion at Separation Prior to the Separation, certain Company employees participated in the VF amended and restated 1996 Stock Compensation Plan (the "VF Plan"). In accordance with the terms of the Separation, share-based awards granted to Company employees under the VF Plan ("VF Awards") were converted at the time of Separation to options, RSUs, PRSUs and RSAs totaling approximately 2.4 million shares of Kontoor Common Stock (the "Converted Awards"). Certain stock option and PRSU awards were retained by VF and settled in accordance with their original terms under the VF Plan. Stock-based Compensation Expense For the years ended December 2021 and 2020 and for the period from the Separation date through December 2019, stock-based compensation includes expense related to grants under the 2019 Plan including the Converted Awards, as well as the expense related to grants remaining under the VF Plan. Prior to the Separation date, stock-based compensation expense was presented on a carve-out basis and included expense for VF grants related directly to employees that were historically dedicated to the Jeanswear business ("direct employees") as well as an allocation of VF’s corporate and shared employee stock-based compensation expenses. Of the total stock-based compensation expense recognized by the Company in 2019 through the Separation date, $7.3 million related to direct employees and $2.2 million related to allocations of VF’s corporate and shared employee stock-based compensation expenses. The following table presents total stock-based compensation expense and the associated income tax benefits recognized in the statements of operations for all awards: Year Ended December (In thousands) 2021 2020 2019 Stock-based compensation expense $ 38,516 $ 15,948 $ 23,844 Income tax benefits 5,201 2,769 5,011 There were no material amounts of stock-based compensation costs included in inventory at December 2021, December 2020 and December 2019. At December 2021, there was $15.2 million of total unrecognized compensation cost related to all stock-based compensation arrangements that will be recognized over a weighted average period of approximately 1.31 years. During 2021, there were 139,750 shares withheld to settle employee tax withholding related to vesting of awards. Time and Performance-based Restricted Stock Units Kontoor grants RSUs to certain key employees and nonemployee members of the Board of Directors. Each employee RSU entitles the holder to one share of Kontoor Common Stock and typically vests over a three-year period. Each RSU granted to a nonemployee member of the Board of Directors vests upon grant and will be settled in one share of Kontoor Common Stock one year from the date of grant. Kontoor also grants PRSUs that enable employees to receive shares of Kontoor Common Stock at the end of a three-year performance period. Each PRSU has a potential final payout ranging from zero to two shares of Kontoor Common Stock. The number of shares earned by participants, if any, is based on achievement of annually established performance goals set by the Talent and Compensation Committee of the Board of Directors. Shares earned will be issued to participants following the conclusion of the two For PRSUs, the actual number of shares earned may also be adjusted upward or downward by 25% of the target award based on how Kontoor’s total shareholder return (“TSR”) compares to the TSR for companies included in the Russell 3000 Index over a two-year period for the 2019 grants and a three-year period for the 2020 and 2021 grants. The grant date fair value of the TSR-based adjustment was determined using a Monte Carlo simulation technique that incorporates option-pricing model inputs, which was $5.73, $0.00 and $(0.67) per share for 2021, 2020 and 2019, respectively. Dividend equivalents on the RSUs and PRSUs accumulate during the vesting period, are payable in additional shares of Kontoor Common Stock when the RSUs and PRSUs vest and are subject to the same risk of forfeiture as the RSUs and PRSUs. The grant date fair value of RSUs and PRSUs is equal to the per share fair market value of the underlying Kontoor Common Stock on each grant date. The following table presents PRSU and RSU activity from December 2020 to December 2021: Performance-based Time-based Number Outstanding Weighted Average Number Outstanding Weighted Average Outstanding at December 2020 793,820 $ 31.59 633,265 $ 24.34 Granted 216,764 49.70 208,530 49.68 Dividend equivalents — — 14,377 25.03 Issued as Common Stock (72,447) 36.13 (255,774) 24.21 Forfeited/canceled (52,806) 41.06 (35,709) 30.04 Outstanding at December 2021 885,331 $ 42.44 564,689 $ 33.42 Vested at December 2021 373,579 $ 39.30 — $ — During the third quarter of 2020, management concluded that the Company was not probable of achieving the minimum thresholds of the 2020 performance period goals associated with its PRSU awards and recorded a $2.2 million adjustment to reverse all stock compensation expense previously recorded for these awards. On December 15, 2020, the Talent and Compensation Committee of the Board of Directors modified the 2020 performance goals, which affected approximately 270,000 shares held by approximately 200 employees. The modified awards had a fair value of $42.99 per share based on the fair market value of the underlying Kontoor Common Stock on the modification date, and the value of the modified awards is being recognized as compensation expense from the modification date through the shorter of the remaining requisite service period or the vesting period, including accelerated recognition for retirement eligible employees, for all awards expected to vest. The total value of the modified awards, as adjusted for the expected payout percentage under the modified performance goals, was $8.8 million, of which $4.1 million and $2.9 million was recorded as compensation expense during 2021 and 2020, respectively. The weighted average fair value of PRSUs granted under the 2019 Plan during the years ended December 2021 and December 2020 was $49.70 and $16.44 per share, respectively, which was equal to the fair market value of the underlying Kontoor Common Stock on each grant date. The weighted average fair value of RSUs granted under the 2019 Plan during the years ended December 2021 and December 2020 was $49.68 and $16.63 per share, respectively, which was equal to the fair market value of the underlying Kontoor Common Stock on each grant date. At December 2021, the fair value of PRSUs and RSUs outstanding was $45.4 million and $28.9 million, respectively. Restricted Stock Awards Prior to the Separation, VF granted RSAs of VF Common Stock to certain members of management with vesting periods of up to five years from the grant date. Dividends accumulate in the form of additional RSAs and are subject to the same risk of forfeiture as the RSAs. These awards were converted to Kontoor RSAs at the Separation. They generally have the same terms and conditions as the original awards and are being amortized ratably over the remaining vesting periods. No new RSAs have been granted by the Company subsequent to the Separation. The following table presents RSA activity from December 2020 to December 2021: Nonvested Shares Outstanding Weighted Average Grant Date Fair Value Outstanding at December 2020 129,367 $ 24.95 Dividend equivalents 561 27.50 Vested (119,906) 24.26 Forfeited (7,970) 33.96 Nonvested shares at December 2021 2,052 $ 30.84 The fair value of nonvested RSAs was $0.1 million at December 2021. The fair value of the shares that vested during the years ended December 2021 and December 2020 was $5.6 million and $1.7 million, respectively. Stock Options Prior to the Separation, VF granted stock options to employees that transferred from VF to the Company with the Separation. All employee stock options were included in the Converted Awards as discussed above except for retirement eligible employees, whose options remained with VF. The adjusted exercise price and outstanding quantities of the Converted Awards are included in the table below and no new stock options have been granted by the Company subsequent to the Separation. Employee stock options vest in equal annual installments over three years, and compensation cost is recognized ratably over the shorter of the requisite service period or the vesting period, including accelerated recognition for retirement-eligible employees. All options have ten-year terms. The following table presents stock option activity for the year ended December 2021: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 2020 1,474,098 $ 26.45 5.6 $ 20,806 Exercised (196,514) 25.86 Forfeited/cancelled (3,955) 30.89 Outstanding at December 2021 1,273,629 $ 26.52 4.7 $ 31,494 Exercisable at December 2021 1,272,501 $ 26.52 4.6 $ 31,475 The total fair value of stock options that vested during 2021 and 2020 was $3.5 million and $7.0 million, respectively. The total intrinsic value of stock options exercised during 2021 and 2020 was $5.5 million and $3.1 million, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jan. 01, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES As discussed in Note 1 The following table presents income before income taxes for which the provision for income taxes was computed: Year Ended December (In thousands) 2021 2020 2019 Domestic $ 118,142 $ 18,965 $ 61,691 Foreign 126,458 53,971 73,503 Income before income taxes $ 244,600 $ 72,936 $ 135,194 The following table presents components of the provision for income taxes: Year Ended December (In thousands) 2021 2020 2019 Current: Federal $ 24,514 $ (2,888) $ 14,831 Foreign 15,877 6,023 23,017 State 5,149 (828) 4,866 Total current income taxes 45,540 2,307 42,714 Deferred: Federal and state 2,951 10,140 (5,912) Foreign 686 (7,434) 1,738 Total deferred income taxes 3,637 2,706 (4,174) Total provision for income taxes $ 49,177 $ 5,013 $ 38,540 The following table presents a reconciliation of the differences between income taxes computed by applying the statutory federal income tax rate and "income taxes" recorded in the Company's statements of operations: Year Ended December (In thousands) 2021 2020 2019 Tax at federal statutory rate $ 51,366 $ 15,316 $ 28,391 State income tax, net of federal tax benefit 5,167 150 2,476 Foreign rate differences (13,698) (6,689) (8,983) Tax reform — (6,170) 258 Employee compensation 940 (272) (3,169) Adjustments to opening balances — (2,797) 1,928 Change in valuation allowance 2,010 3,900 17,025 Global intangible low-tax income ("GILTI") 2,852 2,345 2,437 Change in indefinite reinvestment assertions — — (3,914) Other 540 (770) 2,091 Income taxes $ 49,177 $ 5,013 $ 38,540 Foreign rate differences include tax benefits of $5.5 million, $3.0 million and $4.3 million in 2021, 2020 and 2019, respectively, from statutorily exempt foreign income. Income tax expense includes tax benefits of $0.2 million and $0.6 million in 2020 and 2019, respectively, from favorable audit outcomes on certain tax matters and from expiration of statutes of limitations. Income tax expense includes an immaterial amount of these benefits in 2021. On January 17, 2020, the Swiss canton of Ticino formally adopted The Federal Act on Tax and AVS Financing (“Swiss Tax Act”). Revaluation of deferred income tax asset and liability positions under the Swiss Tax Act had a one-time impact to tax expense of $6.2 million in 2020. The Company recognized net charges of $0.3 million in 2019 for the finalization of the tax impacts of the Tax Cuts and Jobs Act pursuant to Staff Accounting Bulletin (“SAB”) 118. The following table presents the components of "deferred income tax assets" and "deferred income tax liabilities" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Deferred income tax assets: Inventories $ 12,922 $ 11,093 Deferred compensation 10,907 10,977 Other employee benefits 13,596 10,297 Stock-based compensation 6,896 5,734 Other accrued expenses 21,616 31,961 Intangible assets 22,826 27,006 Leases 12,621 16,627 Operating loss carryforwards 27,835 23,372 Gross deferred income tax assets 129,219 137,067 Less: valuation allowance (21,789) (23,118) Net deferred income tax assets 107,430 113,949 Deferred income tax liabilities: Leases 11,877 14,747 Depreciation 22,846 15,657 Taxes on unremitted earnings 3,403 2,760 Deferred income tax liabilities 38,126 33,164 Total net deferred income tax assets $ 69,304 $ 80,785 Amounts included in the balance sheets: Deferred income tax assets $ 74,876 $ 85,221 Deferred income tax liabilities (5,572) (4,436) $ 69,304 $ 80,785 At the end of 2021, the Company is asserting indefinite reinvestment on foreign earnings totaling $78.3 million. The Company has determined the unrecorded deferred tax liability associated with the $78.3 million basis difference is approximately $0.6 million, primarily related to withholding taxes. The Company has $19.4 million of potential tax benefits for foreign operating loss carryforwards, $19.1 million of which will expire between 2025 and 2029. In addition, there are $8.5 million of potential tax benefits for state operating loss and credit carryforwards, $6.9 million of which expire between 2022 and 2041. A valuation allowance has been provided where it is more likely than not that deferred tax assets related to operating loss carryforwards will not be realized. Valuation allowances totaled $12.9 million for available foreign operating loss carryforwards, $7.2 million for available state operating loss and credit carryforwards, and $1.7 million for other foreign deferred income tax assets. During 2021, the Company recorded a tax benefit due to a $2.2 million decrease in valuation allowances related to state operating loss and credit carryforwards as well as other state deferred income tax assets, and a $0.9 million net increase in valuation allowances related to current year foreign operating losses and other deferred income tax assets, inclusive of foreign currency effects. The following table presents a reconciliation of the change in the accrual for unrecognized income tax benefits: (In thousands) Unrecognized Accrued Unrecognized Income Tax Benefits Balance, December 2018 $ 54,081 $ 4,939 $ 59,020 Additions for current year tax positions 1,260 — 1,260 Additions for prior year tax positions 4,881 2,632 7,513 Reductions for prior year tax positions (3,680) (318) (3,998) Reductions due to statute expirations (674) (127) (801) Payments in settlement (205) (183) (388) Amounts transferred to former parent (41,986) (2,728) (44,714) Balance, December 2019 13,677 4,215 17,892 Additions for current year tax positions 138 — 138 Additions for prior year tax positions 350 872 1,222 Reductions for prior year tax positions (1,881) (201) (2,082) Reductions due to statute expirations (192) (22) (214) Payments in settlement (199) — (199) Balance, December 2020 11,893 4,864 16,757 Additions for current year tax positions 154 — 154 Additions for prior year tax positions 18 525 543 Reductions for prior year tax positions (348) (340) (688) Balance, December 2021 $ 11,717 $ 5,049 $ 16,766 (In thousands) December 2021 December 2020 Amounts included in the balance sheets: Unrecognized income tax benefits, including interest and penalties $ 16,766 $ 16,757 Less: deferred tax benefits (3,308) (3,338) Total unrecognized tax benefits $ 13,458 $ 13,419 The unrecognized tax benefits of $13.5 million at the end of 2021, if recognized, would reduce the annual effective tax rate. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Jan. 01, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The calculations of basic and diluted earnings per share ("EPS") are based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares outstanding, respectively. On May 22, 2019, the Separation from VF was effected through a pro-rata distribution of one share of the Company's common stock for every seven shares of VF common stock held at the close of business on the record date of May 10, 2019. As a result, on May 23, 2019, the Company had 56,647,561 shares of common stock outstanding. This share amount was utilized for the calculations of basic and diluted earnings per share through the Separation date. After the Separation date, actual outstanding shares were used in the calculations of both basic and diluted weighted average number of common shares outstanding. The following table presents the calculations of basic and diluted EPS: Year Ended December (In thousands, except per share amounts) 2021 2020 2019 Net income $ 195,423 $ 67,923 $ 96,654 Basic weighted average shares outstanding 57,394 56,994 56,688 Dilutive effect of stock-based awards 1,692 864 521 Diluted weighted average shares outstanding 59,086 57,858 57,209 Earnings per share: Basic earnings per share $ 3.40 $ 1.19 $ 1.71 Diluted earnings per share $ 3.31 $ 1.17 $ 1.69 For the year ended December 2021, there were an immaterial number of anti-dilutive shares that were excluded from the dilutive earnings per share calculation. A total of 0.8 million and 0.1 million shares related to stock-based awards were excluded from the diluted earnings per share calculations for the years ended December 2020 and December 2019, respectively, because the effect of their inclusion would have been anti-dilutive. For the years ended December 2021, December 2020 and December 2019, a total of 0.2 million, 0.4 million and 0.3 million shares of PRSUs, respectively, were excluded from the calculations of diluted earnings per share as the units were not considered to be contingent outstanding shares. |
LEASES
LEASES | 12 Months Ended |
Jan. 01, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The following table presents lease-related assets and liabilities recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Assets Operating lease assets, noncurrent $ 54,950 $ 60,443 Total lease assets $ 54,950 $ 60,443 Liabilities Operating lease liabilities, current $ 24,195 $ 27,329 Operating lease liabilities, noncurrent 32,993 39,806 Total lease liabilities $ 57,188 $ 67,135 Weighted-average remaining lease term (in years) Operating leases 3.62 3.89 Weighted-average discount rate Operating leases 2.85 % 4.08 % Lease costs The following table presents certain information related to lease costs for operating leases: Year Ended December (In thousands) 2021 2020 2019 Operating lease costs $ 30,394 $ 40,906 $ 37,743 Short-term lease costs (excluding leases of one month or less) 272 1,114 3,043 Variable lease costs 3,505 3,960 5,300 Total lease costs $ 34,171 $ 45,980 $ 46,086 Other information The following table presents supplemental cash flow and non-cash information related to operating leases: Year Ended December (In thousands) 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities - operating cash flows $ 37,474 $ 45,225 $ 46,239 Right-of-use operating lease assets obtained in exchange for new operating leases - non-cash activity $ 4,323 $ 2,591 $ 39,874 The following table presents future maturities of operating lease liabilities as of December 2021: (In thousands) Lease Obligations 2022 $ 25,261 2023 13,635 2024 9,802 2025 5,556 2026 1,859 Thereafter 3,820 Total future minimum lease payments 59,933 Less: amounts related to imputed interest (2,745) Present value of future minimum lease payments 57,188 Less: operating lease liabilities, current 24,195 Operating lease liabilities, noncurrent $ 32,993 As of December 2021, the Company had not entered into any operating lease arrangements that had not yet commenced. The Company continuously monitors and may negotiate contract amendments that include extensions or modifications to existing leases. In April 2020, the FASB provided interpretive guidance that simplified accounting for rent concessions, including rent deferrals, that are a direct consequence of COVID-19. In response to temporary store closures related to COVID-19, the Company negotiated rent deferrals and other rent concessions with its landlords. The Company has elected to not evaluate whether a COVID-19 related rent concession constitutes a lease modification and has accounted for rent deferrals or other rent concessions as lease modifications in accordance with existing Accounting Standards Codification ("ASC") 842 guidance. During 2021 and 2020, the Company assessed retail store assets, including the related operating lease assets, for impairment due to the decision to exit certain VF Outlet locations as well as retail store closures resulting from COVID-19. Refer to Note 13 |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Jan. 01, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | COMMITMENTS The Company is obligated under noncancelable operating leases. Refer to Note 19 The Company has entered into licensing agreements that provide the Company rights to market products under trademarks owned by other parties. Royalties under these agreements are recognized within "cost of goods sold" in the statements of operations. Certain of these agreements contain minimum royalty and minimum advertising requirements. Future minimum royalty payments, including any required advertising payments, are $0.7 million, $0.1 million and $0.1 million for 2022 through 2024, respectively. There are currently no payments due beyond 2024. In the ordinary course of business, the Company has entered into purchase commitments for raw materials, contract production and finished products. These agreements typically range from one The Company has entered into commitments for (i) service and maintenance agreements related to management information systems, (ii) capital spending and (iii) advertising. Future payments under these agreements are $42.5 million, $18.0 million, $8.9 million, $0.1 million, and $0.1 million for 2022 through 2026, respectively. There are currently no payments due beyond 2026. Surety bonds, customs bonds, standby letters of credit and international bank guarantees, all of which represent contingent guarantees of performance under self-insurance and other programs, totaled $30.7 million as of December 2021. These commitments would only be drawn upon if the Company were to fail to meet related claims or other obligations. |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Jan. 01, 2022 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING The Company generally incurs restructuring charges related to cost optimization of business activities. In 2021 and 2020, costs primarily related to the decision to exit certain VF Outlet stores and the transition of our India business to a licensing model, as well as COVID-19 impacts. In 2019, costs primarily related to the transition of our CASA business to a licensing model and closures of certain manufacturing facilities. All of the $1.0 million of restructuring charges recognized during the year ended December 2021 were reflected within "selling, general and administrative expenses." Of the $25.4 million of restructuring charges recognized during the year ended December 2020, $20.8 million were reflected within "selling, general and administrative expenses" and $4.6 million within "cost of goods sold." Of the $24.6 million of restructuring charges recognized during the year ended December 2019, $13.8 million were reflected within "selling, general and administrative expenses" and $10.8 million within "cost of goods sold." All of the $1.1 million total restructuring accrual reported in the Company's balance sheet at December 2021 is expected to be paid out within the next 12 months and is classified within "accrued liabilities." Of the $6.7 million total restructuring accrual reported in the Company's balance sheet at December 2020, $6.5 million 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: Year Ended December (In thousands) 2021 2020 2019 Severance and employee-related benefits $ 992 $ 14,725 $ 14,903 Asset impairments — 4,587 1,596 Inventory write-downs — 3,645 4,403 Other — 2,486 3,660 Total restructuring charges $ 992 $ 25,443 $ 24,562 The following table presents the restructuring costs by business segment: Year Ended December (In thousands) 2021 2020 2019 Wrangler $ 305 $ 6,616 $ 17,613 Lee 331 5,702 6,685 Corporate and other 356 13,125 264 Total $ 992 $ 25,443 $ 24,562 The following table presents activity in the restructuring accrual for the years ended December 2021 and December 2020: (In thousands) Severance Accrual at December 2019 $ 2,172 Charges 14,725 Cash payments (8,390) Adjustments to accruals (1,847) Currency translation 81 Accrual at December 2020 $ 6,741 Charges 992 Cash payments (6,673) Adjustments to accruals 6 Currency translation 13 Accrual at December 2021 $ 1,079 |
TRANSACTIONS WITH FORMER PARENT
TRANSACTIONS WITH FORMER PARENT | 12 Months Ended |
Jan. 01, 2022 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH FORMER PARENT | TRANSACTIONS WITH FORMER PARENT In connection with the Separation, the Company entered into several agreements with VF that governed the relationship of the parties following the Separation, including the Separation and Distribution Agreement, the Tax Matters Agreement, the Transition Services Agreement, the Kontoor Intellectual Property License Agreement, the VF Intellectual Property License Agreement and the Employee Matters Agreement. Under the terms of the Transition Services Agreement, the Company and VF agreed to provide each other certain transitional services including information technology, information management, human resources, employee benefits administration, supply chain, facilities and other limited finance and accounting-related services, all of which were terminated by August 2021. The Company also entered into certain commercial arrangements with VF. Revenues, expenses and operating expense reimbursements under these agreements were recorded within the reportable segments or within the "corporate and other expenses" line item in the reconciliation of segment profit in Note 3 Prior to the Separation, the Company's financial statements were prepared on a carve-out basis and were derived from the consolidated financial statements and accounting records of VF. Refer to Note 1 Sales and Purchases To and From Former Parent T he Compa ny's sales to VF through the Separation date were $14.1 million in 2019, which were included within "net revenues" in the Company's statement of operations. The Company's cost of goods sold includes items purchased from VF totaling $0.5 million through the Separation date in 2019. At December 2019, the aggregate amount of inventories purchased from VF that remained on the Company's balance sheet was approximately $0.4 million, substantially all of which was sold during 2020. Notes To and From Former Parent All notes to and from former parent were settled in connection with the Separation and there were no remaining balances as of December 2019. The Company recorded net interest income related to these notes of $3.8 million through the Separation date in 2019 which was included within " interest income from former parent, net" in the Company's statement of operations. Due To and From Former Parent All amounts due to and from former parent were settled in connection with the Separation and there were no remaining balances as of December 2019. Net Transfers To and From VF Net transfers to and from VF are included within "former parent investment" in the statements of equity. The following table presents components of the transfers to and from VF: (In thousands) December 2019 (a) General financing activities $ (723,155) Corporate allocations 47,903 Stock-based compensation expense 9,582 Pension (benefit) costs (2,246) Purchases from parent 3,193 Sales to parent (13,988) Other income tax 10,863 Transition tax related to the Tax Act 3,937 Cash dividend to former parent (1,032,948) Total net transfers to former parent $ (1,696,859) (a) Activity reflected through the Separation date. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Jan. 01, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT Dividend On February 22, 2022, the Board of Directors declared a regular quarterly cash dividend of $0.46 per share of the Company's Common Stock. The cash dividend will be payable on March 18, 2022, to shareholders of record at the close of business on March 8, 2022. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Jan. 01, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Schedule II — Valuation and Qualifying Accounts ADDITIONS Description Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period (In thousands) Year ended December 2019 Allowance for doubtful accounts (a) $ 10,549 5,988 — 4,685 $ 11,852 Valuation allowance for deferred income tax assets (b) $ 24,175 17,025 — 24,501 $ 16,699 Year ended December 2020 Allowance for doubtful accounts (a) $ 11,852 18,338 — 11,047 $ 19,143 Valuation allowance for deferred income tax assets (b) $ 16,699 3,900 2,519 — $ 23,118 Year ended December 2021 Allowance for doubtful accounts (a) $ 19,143 330 — 7,768 $ 11,705 Valuation allowance for deferred income tax assets (b) $ 23,118 2,010 (3,339) — $ 21,789 (a) Deductions include accounts written off, net of recoveries, and the effects of foreign currency translation. (b) Amounts charged to costs and expenses relate to circumstances where it is more likely than not that deferred income tax assets will not be realized as well as the effects of foreign currency translation. As a result of the Separation in 2019, a $24.5 million decrease in valuation allowances was recorded within "former parent investment" in the financial statements, since the corresponding tax attributes reported by the Company on a carve-out basis were not transferred to the Company, as discussed in Note 1 |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jan. 01, 2022 | |
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. For presentation purposes herein, all references to periods ended December 2021, December 2020 and December 2019 correspond to the 52-week fiscal year ended January 1, 2022, the 53-week fiscal year ended January 2, 2021 and the 52-week fiscal year ended December 28, 2019, respectively. |
Basis of Presentation | Basis of Presentation - Consolidated and Combined Financial Statements The Company’s financial statements from May 23, 2019 were consolidated financial statements based on the reported results of Kontoor Brands, Inc. as a standalone company. The Company’s financial statements through the Separation date of May 22, 2019 were combined financial statements prepared on a "carve-out" basis as discussed below. The consolidated and combined financial statements and related disclosures are presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"). The Company’s consolidated and combined financial statements for all periods presented are referred to throughout this Annual Report on Form 10-K as “financial statements.” Basis of Presentation - Carve Out Accounting Through the Separation date in 2019, the Company's combined financial statements were prepared on a carve-out basis under GAAP, which reflected the historical financial position, results of operations and cash flows of the Company for the period presented, through the Separation date, as historically managed within VF. The combined financial statements were derived from the consolidated financial statements and accounting records of VF. The combined statement of operations included costs for certain centralized functions and programs provided and administered by VF that were charged directly to the Company. These centralized functions and programs included, but were not limited to, information technology, human resources, accounting shared services, supply chain, insurance and related benefits associated with those functions. These historical allocations were included in the measurement of segment profit for the period through the Separation date as presented in Note 3 In addition, for purposes of preparing these combined financial statements on a carve-out basis, a portion of VF's total corporate expenses were allocated to the Company. These expense allocations included the cost of corporate functions and resources provided by or administered by VF including, but not limited to, executive management, finance, accounting, legal, human resources and related benefit costs associated with such functions, such as stock-based compensation and pension. Allocations also included the cost of operating VF's corporate headquarters located in Greensboro, North Carolina. These additional allocations were reported as "corporate and other expenses" for the period through the Separation date as presented in Note 3 Costs were allocated to the Company based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional revenues, cost of goods sold or square footage, as applicable. Management considered the basis on which the expenses were allocated to reasonably reflect the utilization of services provided to, or benefit received by, the Company during the period presented. However, the allocations may not reflect the expenses that would have been incurred if the Company had been a standalone company for the period presented. All intracompany transactions were eliminated. All transactions between the Company and VF were included in the combined financial statements. For those transactions between the Company and VF that were historically settled in cash, the Company reflected such balances in the balance sheet within "due from former parent" or "due to former parent." All amounts due to and from former parent were settled in connection with the Separation. The accumulated net earnings after taxes and the net effect of transactions with and allocations from VF that were not historically settled in cash represented VF's historical investment in the Company and were reflected in the balance sheet within "former parent investment" and in the statement of cash flows within "net transfers to former parent." Subsequent to the Separation, the Company continued to service commercial arrangements with VF, which included sales of VF-branded products at VF Outlet stores, as well as sales to VF for products manufactured in our plants, use of our transportation fleet and fulfillment of a transition services agreement related to VF’s sale of its Nautica ® brand business in mid-2018. None of these arrangements with VF continued after 2019. |
Use of Estimates | Use of Estimates In preparing the financial statements in accordance with GAAP, management makes estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The financial statements of most foreign subsidiaries are measured using the foreign currency as the functional currency. Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using exchange rates in effect at the balance sheet dates, and revenues and expenses are translated at average exchange rates during the period. Resulting translation gains and losses are reported in other comprehensive income (loss) (“OCL”). The Company accounted for Argentina as highly inflationary from July 1, 2018 through the Separation as the projected three-year cumulative inflation rate exceeded 100%. At the Separation, the Company transitioned the Argentina market to a licensed model, which transacts in U.S. dollars. Note 14 |
Cash and Cash Equivalents | Cash and Cash EquivalentsCash and cash equivalents are demand deposits, receivables from third-party credit card processors and highly liquid investments that mature within three months of their purchase dates. |
Accounts Receivable, Net of Allowance for Doubtful Accounts | Accounts Receivable, Net of Allowance for Doubtful Accounts Trade accounts receivable are recorded at invoiced amounts, less contractual allowances for trade terms, sales incentive programs and discounts. Royalty receivables are recorded at amounts earned based on the licensees’ sales of licensed products, subject in some cases to contractual minimum royalties due from individual licensees. The Company is exposed to credit losses primarily through trade accounts receivable from customers and licensees which are generally short-term in nature. The Company maintains an allowance for doubtful accounts that will result from the inability of customers to make required payments of outstanding balances. In estimating this allowance, accounts receivable are evaluated on a pooled basis at each reporting date and aggregated on the basis of similar risk characteristics, including current and forecasted industry trends and economic conditions, aging status of accounts, and the financial strength and credit standing of customers, including payment and default history. Additionally, specific allowance amounts are established for customers that have a higher probability of default. Receivables are written off against the allowance when all collection efforts have been exhausted and the likelihood of collection is remote. |
Inventories | InventoriesInventories are stated at the lower of cost or net realizable value. Cost is determined on the first-in, first-out method. Existence of physical inventory is verified through periodic physical inventory counts and ongoing cycle counts at most locations throughout the year. |
Property, Plant and Equipment and Capitalized Computer Software | Property, Plant and Equipment and Capitalized Computer Software Property, plant and equipment is initially recorded at cost. The Company capitalizes improvements to property, plant and equipment that substantially extend the useful life of an asset, and interest cost incurred during construction of major assets. Depreciation is computed using the straight-line method over each asset's estimated useful life, ranging from three Repair and maintenance costs are expensed as incurred. five |
Intangible Assets | Intangible Assets Intangible assets include acquired trademarks and trade names, some of which are registered in multiple countries. Amortization of finite-lived trademarks is computed on a straight-line basis over a 16 year estimated useful life. Trademarks and trade names determined to have indefinite lives are not amortized. Additionally, the Company had acquired customer relationship assets that were amortized using accelerated methods over a 15 year estimated useful life, all of which were fully amortized by the end of 2020. |
Depreciation and Amortization Expense | Depreciation and Amortization Expense Depreciation and amortization expense related to producing or otherwise obtaining finished goods inventories is reflected in the Company's statements of operations within "cost of goods sold" and all other depreciation and amortization expense is reflected within "selling, general and administrative expenses." |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Property, Plant and Equipment, Operating Lease Assets and Finite-lived Intangible Assets — The Company’s policy is to review property, plant and equipment, right-of-use operating lease assets and amortizable intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. If the forecasted undiscounted cash flows to be generated by an asset are not expected to recover the asset’s carrying value, the estimated fair value is calculated, and an impairment charge is recorded to the extent that an asset’s carrying value exceeds its estimated fair value. Goodwill and Indefinite-lived Intangible Assets — The Company’s policy is to evaluate goodwill and indefinite-lived intangible assets for possible impairment as of the beginning of the fourth quarter of each year, or whenever events or changes in circumstances indicate that the fair value of such assets may be below their carrying value. The Company may first assess qualitative factors as a basis for determining whether it is necessary to perform quantitative impairment testing. If the Company determines that it is not more likely than not that the fair value of an asset or reporting unit is less than its carrying value, then no further testing is required. Otherwise, the assets must be quantitatively tested for possible impairment. Goodwill is quantitatively tested for possible impairment by comparing the estimated fair value of a reporting unit with its carrying value, including the goodwill assigned to that reporting unit. An impairment charge is recorded to the extent that the carrying value of the reporting unit exceeds its estimated fair value. An indefinite-lived intangible asset is quantitatively tested for possible impairment by comparing the estimated fair value of the asset with its carrying value. An impairment charge is recorded to the extent that the carrying value of the asset exceeds its estimated fair value. For all reporting units, we elected to perform a qualitative impairment assessment to determine whether it is more likely than not that the goodwill and indefinite-lived trademark intangible assets in those reporting units were impaired. We considered relevant events and circumstances for each reporting unit, including (i) current year results, (ii) financial performance versus management’s annual and five-year strategic plans, (iii) changes in the reporting unit carrying value since prior year, (iv) industry and market conditions in |
Leases and Rent Expense | Leases and Rent Expense The Company enters into operating leases for retail stores, operational facilities, vehicles and certain equipment, with terms expiring at various dates through 2031. Leases for real estate typically have initial terms ranging from one one The Company determines whether an arrangement is a lease at inception. Upon adoption of Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)," in 2019, the Company elected to combine lease and non-lease components as a single component for all asset classes. For leases with a term of 12 months or less, the Company elected not to recognize a right-of-use asset and related lease liability. Most leases have fixed rentals, with many of the real estate leases requiring additional payments for real estate taxes and occupancy-related costs. Certain of the Company’s leases contain fixed, indexed, or market-based escalation clauses which impact future payments. Certain of the Company's leases contain variable payment provisions, such as contingent rent based on percent of sales or excess mileage over specified levels. Variable rent is recognized when the liability is probable. The Company's leases typically contain customary covenants and restrictions. Rent expense for leases having landlord incentives or scheduled rent fluctuations is recorded on a straight-line basis over the lease term beginning on the lease commencement date, which is the date the underlying asset is made available to the Company. Lease agreements may include optional renewals, terminations or purchases, which are considered in the Company’s assessments of lease terms when such options are reasonably certain to be exercised. For retail real estate leases, the Company does not typically include renewal options in the underlying lease term. For non-retail real estate leases, the Company includes the renewal options in the underlying lease term if renewal options are reasonably certain to be exercised, up to a maximum of ten years. Renewals for all other leases are determined on a lease-by-lease basis. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied based on the transfer of control of promised goods or services. The transfer of control typically occurs at a point in time based on consideration of when the customer has i) an obligation to pay for, ii) physical possession of, iii) legal title to, iv) risks and rewards of ownership of and v) accepted the goods or services. Revenue recognition within the wholesale channels occurs either upon shipment or delivery of goods based on contractual terms with the customer. Revenue recognition in the direct-to-consumer channels typically occurs at the point of sale for Company-operated or concession retail stores and either upon shipment or delivery of goods for e-commerce transactions based on contractual terms with the customer. For finished products shipped directly to customers from our suppliers, the Company’s promise to the customer is a performance obligation to provide the specified goods and the Company has discretion in establishing pricing. For each of these arrangements, the Company is the principal and revenue is recognized on a gross basis at the transaction price. Contractual arrangements with customers in our wholesale channels are typically on a purchase order basis with terms of less than one year. Payment terms with customers are typically between 30 and 60 days. The Company does not adjust the promised amount of consideration for the effects of a significant financing component as it is expected, at contract inception, that the period between the transfer of the promised good or service to the customer and the customer payment for the good or service will be one year or less. The amount of revenue recognized reflects the expected consideration to be received for providing the goods or services to the customer, net of estimates for variable consideration which includes allowances for trade terms, sales incentive programs, discounts, markdowns, chargebacks and product returns. Estimates of variable consideration are determined at contract inception and reassessed at each reporting date, at a minimum, to reflect any changes in facts and circumstances. The Company utilizes the expected value method in determining its estimates of variable consideration, based on evaluations of specific product and customer circumstances, historical and anticipated trends and current economic conditions. Estimates for variable consideration are recorded as "accrued liabilities" in the Company's balance sheets. Revenue from the sale of gift cards is deferred and recorded as a contract liability until the gift card is redeemed by the customer, factoring in breakage as appropriate, which considers whether the Company has a legal obligation to remit the value of the unredeemed gift card to any jurisdiction under unclaimed property regulations. Prior to 2021, our company-operated outlet stores in the U.S. maintained customer loyalty programs where customers earned rewards from qualifying purchases, which were redeemable for discounts on future purchases or other rewards. Under the program, the Company estimated the standalone selling price of the loyalty rewards and allocated a portion of the consideration for the sale of products to the loyalty points earned. The deferred amount was recorded as a contract liability, and recognized as revenue when the points were redeemed or when the likelihood of redemption was remote. As of December 2020, this program was discontinued with no remaining contract liability. The Company has elected to treat all shipping and handling activities as fulfillment costs and recognize the costs as selling, general and administrative expenses at the time the related revenue is recognized. Shipping and handling costs billed to customers are included in net revenues. Sales taxes and value added taxes collected from customers and remitted directly to governmental authorities are excluded from the transaction price. The Company has licensing agreements for its symbolic intellectual property, most of which include minimum guarantees for sales-based royalties. Royalty income is recognized as earned over the respective license term based on the greater of minimum guarantees or the licensees’ sales of licensed products at rates specified in the licensing contracts. Royalty income related to the minimum guarantees is recognized using a measure of progress with variable amounts recognized only when the cumulative earned royalty exceeds the minimum guarantees and collection is probable. As of December 2021, the Company has contractual rights under its licensing agreements to receive $24.0 million of fixed consideration related to the future minimum guarantees through December 2027. The variable consideration is not disclosed as a remaining performance obligation as the licensing arrangements qualify for the sales-based royalty exemption. Royalty income was included within "net revenues" in the Company's statements of operations and was $26.6 million, $18.7 million and $32.1 million in 2021, 2020 and 2019, respectively. The Company has applied the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less. |
Cost of Goods Sold | Cost of Goods SoldCost of goods sold for company-manufactured goods includes all materials, labor and overhead costs incurred in the production process. Cost of goods sold for purchased finished goods includes the purchase costs and related overhead. In both cases, overhead includes all costs related to manufacturing or purchasing finished goods, including costs of planning, purchasing, quality control, depreciation, restructuring, freight, duties, royalties paid to third parties and shrinkage. |
Selling, General and Administrative Expenses | Selling, General and Administrative ExpensesSelling, general and administrative expenses include costs of product development, selling, marketing and advertising, company-operated retail stores, concession retail stores, warehousing, distribution, shipping and handling, licensing, restructuring and administration. |
Derivative Financial Instruments | Derivative Financial Instruments Derivative financial instruments are measured at fair value in the Company's balance sheets. Unrealized gains and losses are recognized as assets and liabilities, respectively, and classified as current or noncurrent based on the derivatives’ maturity dates. The accounting for changes in the fair value of derivative instruments (i.e., gains and losses) depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. To qualify for hedge accounting treatment, all hedging relationships must be formally documented at the inception of the hedges and must be highly effective in offsetting changes in future cash flows of hedged transactions. Further, at the inception of a contract and on an ongoing basis, the Company assesses whether the hedging instruments are effective in offsetting the risk of the hedged transactions. Occasionally, a portion of a derivative instrument will be considered ineffective in hedging the originally identified exposure due to a decline in amount or a change in timing of the hedged exposure. In such cases, hedge accounting treatment is discontinued for the ineffective portion of that hedging instrument, and any change in fair value for the ineffective portion is recognized in net income. The Company does not use derivative instruments for trading or speculative purposes. Hedging cash flows are classified in the Company's statements of cash flows in the same category as the items being hedged. Hedging contracts are further described in Note 14 Cash Flow Hedges — The Company uses foreign currency exchange contracts primarily to hedge a portion of the exchange risk for its forecasted sales, purchases, intercompany service fees and royalties. The Company uses interest rate swap agreements to partially hedge the interest rate risk associated with the volatility of monthly London Interbank Offered Rate ("LIBOR") movements. Derivative Contracts Not Designated as Hedges — The Company uses contracts that are not designated as hedges and are recorded at fair value in the Company's balance sheets 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 counterparties to our derivative contracts are financial institutions with investment grade credit ratings, but this does not eliminate the Company's exposure to credit risk with these institutions. To manage its credit risk, the Company monitors the credit risks of its counterparties, limits its exposure in the aggregate and to any single counterparty, and adjusts its hedging positions as appropriate. The impact of the Company's credit risk and the credit risk of its counterparties, as well as the ability of each party to fulfill its obligations under the contracts, is considered in determining the fair value of the derivative contracts. Credit risk has not had a significant effect on the fair value of our derivative contracts. The counterparties to our derivative contracts are also lenders under our credit facility. These derivative contracts are secured by the same collateral that secures our credit facility. |
Self-insurance | Self-insurance The Company is self-insured for a significant portion of its employee medical, workers’ compensation, property and general liability exposures. Liabilities for self-insured exposures are accrued at the present value of amounts expected to be paid based on historical claims experience and actuarial data for forecasted settlements of claims filed and for incurred but not yet reported claims. Accruals for self-insured exposures are included in current and noncurrent liabilities based on the expected periods of payment. Excess liability insurance has been purchased to limit the amount of self-insured risk on claims. |
Income Taxes | Income Taxes Income taxes are provided on pre-tax income for financial reporting purposes. "Deferred income tax assets" and "deferred income tax liabilities", as presented in the Company's balance sheets, reflect the net future tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Net temporary differences and net operating losses are recorded utilizing tax rates currently enacted for the years in which the differences are expected to be settled or realized. We periodically assess the realizability of deferred tax assets and the adequacy of deferred tax liabilities, including the results of local, state, federal or foreign statutory tax audits and changes in estimates and judgments used. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not (likelihood of more than 50%) that some portion, or all, of a deferred tax asset will not be realized. Accrued income taxes as presented in the Company's balance sheets include unrecognized income tax benefits along with related interest and penalties, appropriately classified as current or noncurrent. All deferred tax assets and liabilities are classified as noncurrent in the Company's balance sheets. The provision for income taxes as presented in the Company's statements of income also includes estimated interest and penalties related to uncertain tax position s . |
Concentration of Risks | Concentration of Risks The Company markets products to a broad customer base throughout the world. Products are sold at a range of price points through our wholesale and direct-to-consumer channels. The Company’s largest customer, a U.S.-based retailer, accounted for 34% of 2021 net revenues, and the top ten customers accounted for 61% of 2021 net revenues. Sales are typically made on an unsecured basis under customary terms that vary by product, channel of distribution or geographic region. The Company continuously monitors the creditworthiness of its customers and has established internal policies regarding customer credit limits. The Company is not aware of any issues with respect to relationships with any of its top customers. |
Legal and Other Contingencies | Legal and Other Contingencies Management periodically assesses liabilities and contingencies in connection with legal proceedings and other claims that may arise from time to time. When it is probable that a loss has been or will be incurred, an estimate of the loss is recorded in the financial statements. Estimates of losses are adjusted when additional information becomes available or circumstances change. A contingent liability is disclosed when there is at least a reasonable possibility that a material loss may have been incurred. Management believes that the outcome of any outstanding or pending matters, individually and in the aggregate, will not have a material adverse effect on the financial statements. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share assumes conversion of potentially dilutive securities such as stock options, restricted stock and restricted stock units. |
Reclassifications | ReclassificationsCertain prior year amounts in the Company's financial statements and related disclosures have been reclassified to conform with the current year presentation. |
Recently Adopted Accounting Standards and Recently Issued Accounting Standards | Recently Adopted Accounting Standards In December 2019, the Financial Accounting Standards Board ("FASB") issued 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 LIBOR rate 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, most notably the Company's credit facilities and interest rate swap agreements, which is not expected to be significant. |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
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) December 2021 December 2020 Accounts receivable, net $ 289,800 $ 231,397 Contract assets (a) $ 3,093 $ 5,769 Contract liabilities (b) $ 2,258 $ 787 (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 | Year Ended December 2021 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,269,718 $ 420,720 $ 9,979 $ 1,700,417 Non-U.S. Wholesale 186,355 301,332 2,854 490,541 Direct-to-Consumer 119,158 165,000 21 284,179 Other — — 779 779 Total $ 1,575,231 $ 887,052 $ 13,633 $ 2,475,916 Geographic revenues U.S. $ 1,370,916 $ 487,214 $ 10,779 $ 1,868,909 International 204,315 399,838 2,854 607,007 Total $ 1,575,231 $ 887,052 $ 13,633 $ 2,475,916 Year Ended December 2020 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,101,148 $ 319,347 $ 10,244 $ 1,430,739 Non-U.S. Wholesale 147,738 214,493 2,024 364,255 Direct-to-Consumer 100,528 153,780 22 254,330 Other — — 48,515 48,515 Total $ 1,349,414 $ 687,620 $ 60,805 $ 2,097,839 Geographic revenues U.S. $ 1,189,060 $ 394,311 $ 58,781 $ 1,642,152 International 160,354 293,309 2,024 455,687 Total $ 1,349,414 $ 687,620 $ 60,805 $ 2,097,839 Year Ended December 2019 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,198,303 $ 391,887 $ 22,137 $ 1,612,327 Non-U.S. Wholesale 213,905 314,882 1,585 530,372 Direct-to-Consumer 105,904 175,507 27 281,438 Other — — 124,702 124,702 Total $ 1,518,112 $ 882,276 $ 148,451 $ 2,548,839 Geographic revenues U.S. $ 1,282,428 $ 481,050 $ 146,469 $ 1,909,947 International 235,684 401,226 1,982 638,892 Total $ 1,518,112 $ 882,276 $ 148,451 $ 2,548,839 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Segment Reporting [Abstract] | |
Financial Information for Reportable Segments | The following table presents financial information for the Company's reportable segments and income before income taxes: Year Ended December (In thousands) 2021 2020 2019 Segment revenues: Wrangler $ 1,575,231 $ 1,349,414 $ 1,518,112 Lee 887,052 687,620 882,276 Total reportable segment revenues 2,462,283 2,037,034 2,400,388 Other revenues 13,633 60,805 148,451 Total net revenues $ 2,475,916 $ 2,097,839 $ 2,548,839 Segment profit: Wrangler $ 294,153 $ 244,892 $ 215,008 Lee 128,305 37,912 68,214 Total reportable segment profit $ 422,458 $ 282,804 $ 283,222 Non-cash impairment of intangible asset (1) — — (32,636) Corporate and other expenses (140,960) (143,065) (90,117) Interest income from former parent, net — — 3,762 Interest expense (38,900) (49,992) (35,787) Interest income 1,480 1,608 3,931 Profit (loss) related to other revenues 522 (18,419) 2,819 Income before income taxes $ 244,600 $ 72,936 $ 135,194 (1) Represents an impairment charge recorded during the third quarter of 2019 related to the Rock & Republic ® Note 7 |
Reconciliation Assets | The following table presents assets for the Company's reportable segments and a reconciliation to total asset balances: (In thousands) December 2021 December 2020 Segment assets: Wrangler $ 394,709 $ 320,087 Lee 247,573 221,217 Total reportable segment assets 642,282 541,304 Other accounts receivable and inventories 10,475 30,825 Total accounts receivable and inventories $ 652,757 $ 572,129 Cash and cash equivalents 185,322 248,138 Prepaid expenses and other current assets 72,579 81,413 Property, plant and equipment, net 105,155 118,897 Operating lease assets 54,950 60,443 Goodwill and intangible assets 226,851 229,383 Deferred income tax assets 74,876 85,221 Other assets 160,534 150,192 Total assets $ 1,533,024 $ 1,545,816 |
Revenue from External Customers and Property, Plant, and Equipment by Geographic Area | The following table presents supplemental information of net revenues by geographic area based on the location of the customer: Year Ended December (In thousands) 2021 2020 2019 Revenues: U.S. $ 1,868,909 $ 1,642,152 $ 1,909,947 International 607,007 455,687 638,892 Total $ 2,475,916 $ 2,097,839 $ 2,548,839 The following table presents "property, plant and equipment, net" recorded in the Company's balance sheets by geographic area based on physical location: (In thousands) December 2021 December 2020 Property, plant and equipment, net: U.S. $ 63,951 $ 69,481 International 41,204 49,416 Total $ 105,155 $ 118,897 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Receivables [Abstract] | |
Components of Accounts Receivable | The following table presents components of "accounts receivable, net" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Trade $ 290,830 $ 242,451 Royalty and other 10,675 8,089 Total accounts receivable 301,505 250,540 Less: allowance for doubtful accounts (11,705) (19,143) Accounts receivable, net $ 289,800 $ 231,397 |
Roll-Forward of the Allowance for Doubtful Accounts | The following table presents a rollforward of the allowance for doubtful accounts: (In thousands) Year Ended December Balance, December 2019 $ 11,852 Provision for expected credit losses 18,338 Accounts receivable balances written off (1) (11,877) Other (2) 830 Balance, December 2020 $ 19,143 Provision for expected credit losses 330 Accounts receivable balances written off (1) (6,309) Other (2) (1,459) Balance, December 2021 $ 11,705 (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, the exit of 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. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The following table presents components of "inventories" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Finished products $ 293,427 $ 277,164 Work-in-process 32,346 29,921 Raw materials 37,184 33,647 Total inventories $ 362,957 $ 340,732 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Property, Plant and Equipment [Abstract] | |
Components of Property, Plant and Equipment | The following table presents components of "property, plant and equipment, net" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Land and improvements $ 10,557 $ 9,732 Buildings and improvements 175,181 154,839 Machinery and equipment 337,134 327,562 Property, plant and equipment, at cost 522,872 492,133 Less: accumulated depreciation and amortization (417,717) (373,236) Property, plant and equipment, net $ 105,155 $ 118,897 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangible Assets | The following tables present components of "intangible assets, net" recorded in the Company's balance sheets: (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount December 2021 Finite-lived intangible assets: Trademarks 16 years Straight-line $ 58,132 $ 48,071 $ 10,061 Indefinite-lived intangible assets: Trademarks and trade names 4,577 Intangible assets, net $ 14,638 (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount December 2020 Finite-lived intangible assets: Trademarks 16 years Straight-line $ 58,132 $ 47,066 $ 11,066 Indefinite-lived intangible assets: Trademarks and trade names 4,925 Intangible assets, net $ 15,991 |
Schedule of Finite-Lived Intangible Assets | The following tables present components of "intangible assets, net" recorded in the Company's balance sheets: (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount December 2021 Finite-lived intangible assets: Trademarks 16 years Straight-line $ 58,132 $ 48,071 $ 10,061 Indefinite-lived intangible assets: Trademarks and trade names 4,577 Intangible assets, net $ 14,638 (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount December 2020 Finite-lived intangible assets: Trademarks 16 years Straight-line $ 58,132 $ 47,066 $ 11,066 Indefinite-lived intangible assets: Trademarks and trade names 4,925 Intangible assets, net $ 15,991 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill | The following table presents changes in "goodwill" recorded in the Company's balance sheets, summarized by reportable segment: (In thousands) Wrangler Lee Total Balance, December 2019 $ 131,307 $ 81,529 $ 212,836 Currency translation 343 213 556 Balance, December 2020 131,650 81,742 213,392 Currency translation (727) (452) (1,179) Balance, December 2021 $ 130,923 $ 81,290 $ 212,213 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Other Assets [Abstract] | |
Components of Other Assets | The following table presents components of "other assets" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Investments held for deferred compensation plans (Note 12) $ 50,983 $ 50,394 Capitalized computer software, net of accumulated amortization of $18,224 in 2021 and $7,991 in 2020 81,555 68,223 Deposits 5,568 7,448 Partnership stores and shop-in-shop costs, net of accumulated amortization of $20,732 in 2021 and $26,811 in 2020 4,192 4,260 Other 18,236 19,867 Total other assets $ 160,534 $ 150,192 |
SHORT-TERM BORROWINGS AND LON_2
SHORT-TERM BORROWINGS AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Debt Disclosure [Abstract] | |
Components of Long-term Debt | The following table presents the components of "long-term debt" as recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Revolving Credit Facility — — Term Loan A 397,427 694,241 Term Loan B — 218,716 4.125% Notes, due 2029 393,890 — Total long-term debt 791,317 912,957 Less: current portion — (25,000) Long-term debt, due beyond one year $ 791,317 $ 887,957 |
Schedule of Payments of Long-Term Debt | The following table presents scheduled payments of long-term debt as of December 2021 for the next five years and thereafter: (In thousands) Future Principal Payments 2022 $ — 2023 10,000 2024 20,000 2025 20,000 2026 350,000 Thereafter 400,000 800,000 Less: unamortized deferred financing costs (8,683) Total long-term debt 791,317 Less: current portion — Long-term debt, due beyond one year $ 791,317 |
ACCRUED LIABILITIES AND OTHER_2
ACCRUED LIABILITIES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Payables and Accruals [Abstract] | |
Components of Accrued Liabilities and Other Liabilities | The following table presents components of "accrued liabilities" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Customer discounts, allowances and incentives $ 58,881 $ 58,873 Compensation 62,135 38,948 Other taxes 20,016 23,797 Advertising 11,976 11,266 Derivative liabilities (Note 14) 1,623 7,166 Deferred compensation (Note 12) 6,629 6,919 Restructuring (Note 21) 1,079 6,520 Professional services 13,529 6,410 Income taxes payable 17,722 6,328 Customer deposits 6,141 5,017 Insurance 2,796 3,368 Contract liabilities (Note 2) 2,258 787 Other 12,379 17,553 Accrued liabilities $ 217,164 $ 192,952 The following table presents components of "other liabilities" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Deferred compensation (Note 12) $ 52,162 $ 51,116 Derivative liabilities (Note 14) 6,401 17,937 Income taxes payable 16,570 16,735 Pension liabilities (Note 12) 13,685 14,056 Insurance 1,257 1,082 Restructuring (Note 21) — 221 Other 9,117 14,194 Other liabilities $ 99,192 $ 115,341 |
RETIREMENT AND SAVINGS BENEFI_2
RETIREMENT AND SAVINGS BENEFIT PLANS (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Retirement Benefits [Abstract] | |
Components of Pension Cost | The following table presents net pension costs recognized by the Company related to the Shared Plans through the Separation date: (In thousands) Year Ended December 2019 Service cost $ 726 Non-service components (3,166) Net pension benefit $ (2,440) The following tables present key components of pension costs, amounts recorded in the balance sheets and related key assumptions specific to the international plans: Year Ended December (In thousands) 2021 2020 2019 Amounts included in the statements of operations: Net pension costs $ 866 $ 1,027 $ 680 Actuarial assumptions used to determine pension expense: Discount rate in effect for determining service cost 0.64 % 0.68 % 1.28 % Rate of inflation 1.70 % 1.80 % 1.80 % Expected long-term return on plan assets 3.00 % 3.00 % 3.00 % Rate of compensation increase 2.90 % 3.00 % 3.00 % (In thousands) December 2021 December 2020 Amounts included in the balance sheets: Projected benefit obligations $ 22,935 $ 22,764 Fair value of plan assets 9,250 8,708 Funded status - recorded in other liabilities (Note 11) $ 13,685 $ 14,056 Accumulated other comprehensive loss, pretax - net deferred amounts (2,904) (2,519) Actuarial assumptions used to determine pension obligations: Discount rate 0.64 % 0.64 % Rate of compensation increase 2.90 % 2.90 % Accumulated benefit obligations $ 13,514 $ 13,342 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
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 December 2021 Financial assets: Cash equivalents: Money market funds $ 110,050 $ 110,050 $ — $ — Time deposits 3,644 3,644 — — Foreign currency exchange contracts 7,321 — 7,321 — Investment securities 57,613 57,613 — — Financial liabilities: Foreign currency exchange contracts 1,972 — 1,972 — Interest rate swap agreements 6,052 — 6,052 — Deferred compensation 58,791 — 58,791 — 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) | 12 Months Ended |
Jan. 01, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Outstanding Derivatives on Individual Contract Basis | The following table presents the fair value of outstanding derivatives on an individual contract basis: Fair Value of Derivatives with Unrealized Gains Fair Value of Derivatives with Unrealized Losses (In thousands) December 2021 December 2020 December 2021 December 2020 Derivatives designated as hedging instruments: Foreign currency exchange contracts $ 7,321 $ 7,179 $ (1,972) $ (8,640) Interest rate swap agreements — — (6,052) (16,309) Derivatives not designated as hedging instruments: Foreign currency exchange contracts — 352 — (154) Total derivatives $ 7,321 $ 7,531 $ (8,024) $ (25,103) |
Fair Value of Derivative Assets and Liabilities in Balance Sheet | The following table presents a reconciliation of gross to net amounts for derivative asset and liability balances: December 2021 December 2020 (In thousands) Derivative Asset Derivative Liability Derivative Asset Derivative Liability Gross amounts presented in the balance sheet $ 7,321 $ (8,024) $ 7,531 $ (25,103) Gross amounts not offset in the balance sheet (1,636) 1,636 (1,818) 1,818 Net amounts $ 5,685 $ (6,388) $ 5,713 $ (23,285) |
Derivatives Classified as Current or Noncurrent Based on Maturity Dates | 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) December 2021 December 2020 Prepaid expenses and other current assets $ 6,356 $ 5,773 Accrued liabilities (1,623) (7,166) Other assets 965 1,758 Other liabilities (6,401) (17,937) |
Effects of Cash Flow Hedging Included in Consolidated Statements of Income and Consolidated Statements of Comprehensive Income | 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: (In thousands) Gain (Loss) on Derivatives Recognized in AOCL Cash Flow Hedging Relationships 2021 2020 2019 Foreign currency exchange contracts $ 6,900 $ (8,193) $ 3,683 Interest rate swap agreements 4,238 (18,224) (1,954) Total $ 11,138 $ (26,417) $ 1,729 (In thousands) Gain (Loss) Reclassified from AOCL into Income Location of Gain (Loss) 2021 2020 2019 Net revenues $ 204 $ (458) $ (844) Cost of goods sold (2,271) 3,171 6,745 Other expense, net (749) 149 343 Interest expense (6,019) (5,004) 1,136 Total $ (8,835) $ (2,142) $ 7,380 |
Derivatives Included in Consolidated Statements of Income | The following table presents a summary of these derivatives included in the Company's statements of operations: (In thousands) Gain (Loss) on Derivatives Recognized in Income Derivatives Not Designated as Hedges Location of Gain (Loss) on Derivatives Recognized in Income 2021 2020 2019 Foreign currency exchange contracts Net revenues $ (104) $ 90 $ — Cost of goods sold 7 (2,749) 829 Other expense, net 385 (1) — Total $ 288 $ (2,660) $ 829 |
CAPITAL AND ACCUMULATED OTHER_2
CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Equity [Abstract] | |
Deferred Components of AOCL in Equity, Net of Related Taxes and Changes in AOCL and Related Tax Impact | The following table presents deferred components of AOCL in equity, net of related taxes: (In thousands) December 2021 December 2020 December 2019 Foreign currency translation $ (93,125) $ (80,178) $ (84,118) Defined benefit pension plans (2,177) (1,889) (2,301) Derivative financial instruments 2,546 (12,740) 6,721 Accumulated other comprehensive loss $ (92,756) $ (94,807) $ (79,698) The following table presents changes in AOCL and related tax impact: (In thousands) Foreign Currency Translation Defined Derivative Total Balance, December 2018 $ (145,182) $ — $ — $ (145,182) Other comprehensive income (loss) due to gains (losses) arising before reclassifications 3,167 (2,010) 1,729 2,886 Reclassifications to net income of previously deferred (gains) losses — — (7,380) (7,380) Net other comprehensive income (loss) 3,167 (2,010) (5,651) (4,494) Amounts transferred from former parent 57,897 (1,058) 11,645 68,484 Income taxes — 767 727 1,494 Balance, December 2019 $ (84,118) $ (2,301) $ 6,721 $ (79,698) Other comprehensive income (loss) due to gains (losses) arising before reclassifications 3,940 490 (26,417) (21,987) Reclassifications to net income of previously deferred (gains) losses — 59 2,142 2,201 Net other comprehensive income (loss) 3,940 549 (24,275) (19,786) Income taxes — (137) 4,814 4,677 Balance, December 2020 $ (80,178) $ (1,889) $ (12,740) $ (94,807) Other comprehensive income (loss) due to gains (losses) arising before reclassifications (12,947) (399) 11,138 (2,208) Reclassifications to net income of previously deferred (gains) losses — 15 8,835 8,850 Net other comprehensive income (loss) (12,947) (384) 19,973 6,642 Income taxes — 96 (4,687) (4,591) Balance, December 2021 $ (93,125) $ (2,177) $ 2,546 $ (92,756) |
Reclassifications Out of AOCL | The following table presents reclassifications out of AOCL: (In thousands) Year Ended December Details About Accumulated Other Comprehensive Loss Reclassifications Affected Line Item in the Financial Statements 2021 2020 2019 Defined benefit pension plans: Net change in deferred losses during the period Selling, general and administrative expenses $ (15) $ (59) $ — Total before tax (15) (59) — Income taxes Income taxes 3 15 — Net of tax (12) (44) — Gains (losses) on derivative financial instruments: Foreign currency exchange contracts Net revenues $ 204 $ (458) $ (844) Foreign currency exchange contracts Cost of goods sold (2,271) 3,171 6,745 Foreign currency exchange contracts Other expense, net (749) 149 343 Interest rate swap agreements Interest expense (6,019) (5,004) 1,136 Total before tax (8,835) (2,142) 7,380 Income taxes Income taxes 2,724 600 (706) Net of tax (6,111) (1,542) 6,674 Total reclassifications for the period, net of tax $ (6,123) $ (1,586) $ 6,674 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Total Stock-Based Compensation Cost and Associated Income Tax Benefits Recognized | The following table presents total stock-based compensation expense and the associated income tax benefits recognized in the statements of operations for all awards: Year Ended December (In thousands) 2021 2020 2019 Stock-based compensation expense $ 38,516 $ 15,948 $ 23,844 Income tax benefits 5,201 2,769 5,011 |
PRSU and RSU Activity | The following table presents PRSU and RSU activity from December 2020 to December 2021: Performance-based Time-based Number Outstanding Weighted Average Number Outstanding Weighted Average Outstanding at December 2020 793,820 $ 31.59 633,265 $ 24.34 Granted 216,764 49.70 208,530 49.68 Dividend equivalents — — 14,377 25.03 Issued as Common Stock (72,447) 36.13 (255,774) 24.21 Forfeited/canceled (52,806) 41.06 (35,709) 30.04 Outstanding at December 2021 885,331 $ 42.44 564,689 $ 33.42 Vested at December 2021 373,579 $ 39.30 — $ — |
RSA Activity | The following table presents RSA activity from December 2020 to December 2021: Nonvested Shares Outstanding Weighted Average Grant Date Fair Value Outstanding at December 2020 129,367 $ 24.95 Dividend equivalents 561 27.50 Vested (119,906) 24.26 Forfeited (7,970) 33.96 Nonvested shares at December 2021 2,052 $ 30.84 |
Stock Option Activity | The following table presents stock option activity for the year ended December 2021: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 2020 1,474,098 $ 26.45 5.6 $ 20,806 Exercised (196,514) 25.86 Forfeited/cancelled (3,955) 30.89 Outstanding at December 2021 1,273,629 $ 26.52 4.7 $ 31,494 Exercisable at December 2021 1,272,501 $ 26.52 4.6 $ 31,475 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Before Income Taxes for Which the Provision for Income Taxes was Computed | The following table presents income before income taxes for which the provision for income taxes was computed: Year Ended December (In thousands) 2021 2020 2019 Domestic $ 118,142 $ 18,965 $ 61,691 Foreign 126,458 53,971 73,503 Income before income taxes $ 244,600 $ 72,936 $ 135,194 |
Provision for Income Taxes | The following table presents components of the provision for income taxes: Year Ended December (In thousands) 2021 2020 2019 Current: Federal $ 24,514 $ (2,888) $ 14,831 Foreign 15,877 6,023 23,017 State 5,149 (828) 4,866 Total current income taxes 45,540 2,307 42,714 Deferred: Federal and state 2,951 10,140 (5,912) Foreign 686 (7,434) 1,738 Total deferred income taxes 3,637 2,706 (4,174) Total provision for income taxes $ 49,177 $ 5,013 $ 38,540 |
Differences Between Income Taxes Computed by Applying Statutory Federal Income Tax Rate and Income Tax Expense reported in Consolidated Financial Statements | The following table presents a reconciliation of the differences between income taxes computed by applying the statutory federal income tax rate and "income taxes" recorded in the Company's statements of operations: Year Ended December (In thousands) 2021 2020 2019 Tax at federal statutory rate $ 51,366 $ 15,316 $ 28,391 State income tax, net of federal tax benefit 5,167 150 2,476 Foreign rate differences (13,698) (6,689) (8,983) Tax reform — (6,170) 258 Employee compensation 940 (272) (3,169) Adjustments to opening balances — (2,797) 1,928 Change in valuation allowance 2,010 3,900 17,025 Global intangible low-tax income ("GILTI") 2,852 2,345 2,437 Change in indefinite reinvestment assertions — — (3,914) Other 540 (770) 2,091 Income taxes $ 49,177 $ 5,013 $ 38,540 |
Deferred Income Tax Assets and Liabilities | The following table presents the components of "deferred income tax assets" and "deferred income tax liabilities" recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Deferred income tax assets: Inventories $ 12,922 $ 11,093 Deferred compensation 10,907 10,977 Other employee benefits 13,596 10,297 Stock-based compensation 6,896 5,734 Other accrued expenses 21,616 31,961 Intangible assets 22,826 27,006 Leases 12,621 16,627 Operating loss carryforwards 27,835 23,372 Gross deferred income tax assets 129,219 137,067 Less: valuation allowance (21,789) (23,118) Net deferred income tax assets 107,430 113,949 Deferred income tax liabilities: Leases 11,877 14,747 Depreciation 22,846 15,657 Taxes on unremitted earnings 3,403 2,760 Deferred income tax liabilities 38,126 33,164 Total net deferred income tax assets $ 69,304 $ 80,785 Amounts included in the balance sheets: Deferred income tax assets $ 74,876 $ 85,221 Deferred income tax liabilities (5,572) (4,436) $ 69,304 $ 80,785 |
Reconciliation of Change in Accrual for Unrecognized Income Tax Benefits | The following table presents a reconciliation of the change in the accrual for unrecognized income tax benefits: (In thousands) Unrecognized Accrued Unrecognized Income Tax Benefits Balance, December 2018 $ 54,081 $ 4,939 $ 59,020 Additions for current year tax positions 1,260 — 1,260 Additions for prior year tax positions 4,881 2,632 7,513 Reductions for prior year tax positions (3,680) (318) (3,998) Reductions due to statute expirations (674) (127) (801) Payments in settlement (205) (183) (388) Amounts transferred to former parent (41,986) (2,728) (44,714) Balance, December 2019 13,677 4,215 17,892 Additions for current year tax positions 138 — 138 Additions for prior year tax positions 350 872 1,222 Reductions for prior year tax positions (1,881) (201) (2,082) Reductions due to statute expirations (192) (22) (214) Payments in settlement (199) — (199) Balance, December 2020 11,893 4,864 16,757 Additions for current year tax positions 154 — 154 Additions for prior year tax positions 18 525 543 Reductions for prior year tax positions (348) (340) (688) Balance, December 2021 $ 11,717 $ 5,049 $ 16,766 |
Amounts Included in Consolidated Balance Sheets | (In thousands) December 2021 December 2020 Amounts included in the balance sheets: Unrecognized income tax benefits, including interest and penalties $ 16,766 $ 16,757 Less: deferred tax benefits (3,308) (3,338) Total unrecognized tax benefits $ 13,458 $ 13,419 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Basic and Diluted | The following table presents the calculations of basic and diluted EPS: Year Ended December (In thousands, except per share amounts) 2021 2020 2019 Net income $ 195,423 $ 67,923 $ 96,654 Basic weighted average shares outstanding 57,394 56,994 56,688 Dilutive effect of stock-based awards 1,692 864 521 Diluted weighted average shares outstanding 59,086 57,858 57,209 Earnings per share: Basic earnings per share $ 3.40 $ 1.19 $ 1.71 Diluted earnings per share $ 3.31 $ 1.17 $ 1.69 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information | The following table presents lease-related assets and liabilities recorded in the Company's balance sheets: (In thousands) December 2021 December 2020 Assets Operating lease assets, noncurrent $ 54,950 $ 60,443 Total lease assets $ 54,950 $ 60,443 Liabilities Operating lease liabilities, current $ 24,195 $ 27,329 Operating lease liabilities, noncurrent 32,993 39,806 Total lease liabilities $ 57,188 $ 67,135 Weighted-average remaining lease term (in years) Operating leases 3.62 3.89 Weighted-average discount rate Operating leases 2.85 % 4.08 % |
Schedule of Lease Costs | The following table presents certain information related to lease costs for operating leases: Year Ended December (In thousands) 2021 2020 2019 Operating lease costs $ 30,394 $ 40,906 $ 37,743 Short-term lease costs (excluding leases of one month or less) 272 1,114 3,043 Variable lease costs 3,505 3,960 5,300 Total lease costs $ 34,171 $ 45,980 $ 46,086 The following table presents supplemental cash flow and non-cash information related to operating leases: Year Ended December (In thousands) 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities - operating cash flows $ 37,474 $ 45,225 $ 46,239 Right-of-use operating lease assets obtained in exchange for new operating leases - non-cash activity $ 4,323 $ 2,591 $ 39,874 |
Schedule of Maturities of Operating Leases | The following table presents future maturities of operating lease liabilities as of December 2021: (In thousands) Lease Obligations 2022 $ 25,261 2023 13,635 2024 9,802 2025 5,556 2026 1,859 Thereafter 3,820 Total future minimum lease payments 59,933 Less: amounts related to imputed interest (2,745) Present value of future minimum lease payments 57,188 Less: operating lease liabilities, current 24,195 Operating lease liabilities, noncurrent $ 32,993 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Restructuring and Related Activities [Abstract] | |
Components of Restructuring Charges | The following table presents the components of restructuring charges: Year Ended December (In thousands) 2021 2020 2019 Severance and employee-related benefits $ 992 $ 14,725 $ 14,903 Asset impairments — 4,587 1,596 Inventory write-downs — 3,645 4,403 Other — 2,486 3,660 Total restructuring charges $ 992 $ 25,443 $ 24,562 The following table presents the restructuring costs by business segment: Year Ended December (In thousands) 2021 2020 2019 Wrangler $ 305 $ 6,616 $ 17,613 Lee 331 5,702 6,685 Corporate and other 356 13,125 264 Total $ 992 $ 25,443 $ 24,562 |
Schedule of Activity in Restructuring Accrual | The following table presents activity in the restructuring accrual for the years ended December 2021 and December 2020: (In thousands) Severance Accrual at December 2019 $ 2,172 Charges 14,725 Cash payments (8,390) Adjustments to accruals (1,847) Currency translation 81 Accrual at December 2020 $ 6,741 Charges 992 Cash payments (6,673) Adjustments to accruals 6 Currency translation 13 Accrual at December 2021 $ 1,079 |
TRANSACTIONS WITH FORMER PARE_2
TRANSACTIONS WITH FORMER PARENT (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Related Party Transactions [Abstract] | |
Components of Transfers To and From VF | The following table presents components of the transfers to and from VF: (In thousands) December 2019 (a) General financing activities $ (723,155) Corporate allocations 47,903 Stock-based compensation expense 9,582 Pension (benefit) costs (2,246) Purchases from parent 3,193 Sales to parent (13,988) Other income tax 10,863 Transition tax related to the Tax Act 3,937 Cash dividend to former parent (1,032,948) Total net transfers to former parent $ (1,696,859) (a) Activity reflected through the Separation date. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 28, 2019 | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Property, Plant and Equipment [Line Items] | ||||
Foreign currency transaction gains (losses), net of related hedging impact | $ (3,100,000) | $ 6,000,000 | $ 5,600,000 | |
Cash equivalents | 113,700,000 | 170,700,000 | ||
Computer software, investment | 23,500,000 | 43,500,000 | ||
Capitalized computer software | 81,555,000 | 68,223,000 | ||
Property, plant and equipment, at cost | 522,872,000 | 492,133,000 | ||
Goodwill impairment charges | 0 | 0 | 0 | |
Impairment of indefinite lived intangible assets | $ 32,600,000 | 0 | 0 | 0 |
Net revenues | 2,475,916,000 | 2,097,839,000 | 2,548,839,000 | |
Advertising expense | 142,000,000 | 98,800,000 | 119,300,000 | |
Cooperate advertising expense | 3,300,000 | 4,600,000 | 5,900,000 | |
Shipping and handling expense | 84,400,000 | 56,200,000 | 66,100,000 | |
Royalty expenses | $ 200,000 | 300,000 | 1,800,000 | |
Net revenues | Customer Concentration Risk | Largest Customer | ||||
Property, Plant and Equipment [Line Items] | ||||
Concentration risk, percentage | 34.00% | |||
Net revenues | Customer Concentration Risk | Top Ten Customers | ||||
Property, Plant and Equipment [Line Items] | ||||
Concentration risk, percentage | 61.00% | |||
Royalty | ||||
Property, Plant and Equipment [Line Items] | ||||
Net revenues | $ 26,600,000 | $ 18,700,000 | $ 32,100,000 | |
Trademarks | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful lives of intangible assets | 16 years | 16 years | ||
Customer Relationships | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful lives of intangible assets | 15 years | |||
Other assets | ||||
Property, Plant and Equipment [Line Items] | ||||
Capitalized computer software | $ 23,200,000 | $ 42,900,000 | ||
Machinery and equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, at cost | $ 337,134,000 | 327,562,000 | ||
Machinery and equipment | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful lives of assets | 3 years | |||
Machinery and equipment | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful lives of assets | 10 years | |||
Building | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful lives of assets | 40 years | |||
Software Development | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, at cost | $ 300,000 | $ 600,000 | ||
Software Development | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful lives of assets | 5 years | |||
Software Development | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful lives of assets | 10 years | |||
Real Estate | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Term of contract | 1 year | |||
Real Estate | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Term of contract | 10 years | |||
Equipment | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Term of contract | 1 year | |||
Equipment | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Term of contract | 7 years |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-02 $ in Millions | Jan. 01, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 24 |
Remaining performance obligation (in years) | 4 years |
REVENUES - Contract Assets and
REVENUES - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 289,800 | $ 231,397 |
Contract assets | 3,093 | 5,769 |
Contract liabilities | $ 2,258 | $ 787 |
REVENUES - Narrative (Details)
REVENUES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Contract with customer, liability, revenue recognized | $ 0 | $ 1.5 |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 2,475,916 | $ 2,097,839 | $ 2,548,839 |
U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,868,909 | 1,642,152 | 1,909,947 |
International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 607,007 | 455,687 | 638,892 |
Wholesale | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,700,417 | 1,430,739 | 1,612,327 |
Wholesale | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 490,541 | 364,255 | 530,372 |
Direct-to-Consumer | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 284,179 | 254,330 | 281,438 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 779 | 48,515 | 124,702 |
Operating Segments | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 2,462,283 | 2,037,034 | 2,400,388 |
Operating Segments | Wrangler | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,575,231 | 1,349,414 | 1,518,112 |
Operating Segments | Wrangler | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,370,916 | 1,189,060 | 1,282,428 |
Operating Segments | Wrangler | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 204,315 | 160,354 | 235,684 |
Operating Segments | Wrangler | Wholesale | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,269,718 | 1,101,148 | 1,198,303 |
Operating Segments | Wrangler | Wholesale | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 186,355 | 147,738 | 213,905 |
Operating Segments | Wrangler | Direct-to-Consumer | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 119,158 | 100,528 | 105,904 |
Operating Segments | Wrangler | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 0 | 0 | 0 |
Operating Segments | Lee | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 887,052 | 687,620 | 882,276 |
Operating Segments | Lee | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 487,214 | 394,311 | 481,050 |
Operating Segments | Lee | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 399,838 | 293,309 | 401,226 |
Operating Segments | Lee | Wholesale | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 420,720 | 319,347 | 391,887 |
Operating Segments | Lee | Wholesale | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 301,332 | 214,493 | 314,882 |
Operating Segments | Lee | Direct-to-Consumer | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 165,000 | 153,780 | 175,507 |
Operating Segments | Lee | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 0 | 0 | 0 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 13,633 | 60,805 | 148,451 |
Other | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 10,779 | 58,781 | 146,469 |
Other | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 2,854 | 2,024 | 1,982 |
Other | Wholesale | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 9,979 | 10,244 | 22,137 |
Other | Wholesale | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 2,854 | 2,024 | 1,585 |
Other | Direct-to-Consumer | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 21 | 22 | 27 |
Other | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 779 | $ 48,515 | $ 124,702 |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - Narrative (Details) - segment | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | 2 | ||
One Customer | Net revenues | Customer Concentration Risk | |||
Segment Reporting [Abstract] | |||
Concentration risk, percentage | 34.00% | 38.00% | 34.00% |
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 34.00% | 38.00% | 34.00% |
BUSINESS SEGMENT INFORMATION _2
BUSINESS SEGMENT INFORMATION - Financial Information for Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 12 Months Ended | ||
Sep. 28, 2019 | May 23, 2019 | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Segment Reporting Information [Line Items] | |||||
Total net revenues | $ 2,475,916 | $ 2,097,839 | $ 2,548,839 | ||
Operating income | 282,979 | 123,834 | 168,290 | ||
Non-cash impairment of intangible asset | $ (32,600) | 0 | 0 | (32,636) | |
Interest income from former parent, net | $ 3,800 | 0 | 0 | 3,762 | |
Interest expense | (38,900) | (49,992) | (35,787) | ||
Interest income | 1,480 | 1,608 | 3,931 | ||
Income before income taxes | 244,600 | 72,936 | 135,194 | ||
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total net revenues | 2,462,283 | 2,037,034 | 2,400,388 | ||
Operating income | 422,458 | 282,804 | 283,222 | ||
Operating Segments | Wrangler | |||||
Segment Reporting Information [Line Items] | |||||
Total net revenues | 1,575,231 | 1,349,414 | 1,518,112 | ||
Operating income | 294,153 | 244,892 | 215,008 | ||
Operating Segments | Lee | |||||
Segment Reporting Information [Line Items] | |||||
Total net revenues | 887,052 | 687,620 | 882,276 | ||
Operating income | 128,305 | 37,912 | 68,214 | ||
Corporate and other expenses | |||||
Segment Reporting Information [Line Items] | |||||
Corporate and other expenses | (140,960) | (143,065) | (90,117) | ||
Other | |||||
Segment Reporting Information [Line Items] | |||||
Total net revenues | 13,633 | 60,805 | 148,451 | ||
Operating income | $ 522 | $ (18,419) | $ 2,819 |
BUSINESS SEGMENT INFORMATION _3
BUSINESS SEGMENT INFORMATION - Reconciliation Assets (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 1,533,024 | $ 1,545,816 |
Total accounts receivable and inventories | 652,757 | 572,129 |
Cash and cash equivalents | 185,322 | 248,138 |
Prepaid expenses and other current assets | 72,579 | 81,413 |
Property, plant and equipment, net | 105,155 | 118,897 |
Operating lease assets | 54,950 | 60,443 |
Goodwill and intangible assets | 226,851 | 229,383 |
Deferred income tax assets | 74,876 | 85,221 |
Other assets | 160,534 | 150,192 |
Operating Segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 642,282 | 541,304 |
Operating Segments | Wrangler | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 394,709 | 320,087 |
Operating Segments | Lee | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 247,573 | 221,217 |
Other | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total accounts receivable and inventories | $ 10,475 | $ 30,825 |
BUSINESS SEGMENT INFORMATION _4
BUSINESS SEGMENT INFORMATION - Supplemental Information (with Revenues by Geographic Area Based on Location of Customer) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Segment Reporting Information [Line Items] | |||
Net revenues | $ 2,475,916 | $ 2,097,839 | $ 2,548,839 |
Property, plant and equipment, net | 105,155 | 118,897 | |
U.S. | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 1,868,909 | 1,642,152 | 1,909,947 |
Property, plant and equipment, net | 63,951 | 69,481 | |
International | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 607,007 | 455,687 | $ 638,892 |
Property, plant and equipment, net | $ 41,204 | $ 49,416 |
ACCOUNTS RECEIVABLE - Component
ACCOUNTS RECEIVABLE - Components of Accounts Receivable (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 301,505 | $ 250,540 |
Less: allowance for doubtful accounts | (11,705) | (19,143) |
Accounts receivable, net | 289,800 | 231,397 |
Trade | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 290,830 | 242,451 |
Royalty and other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 10,675 | $ 8,089 |
ACCOUNTS RECEIVABLE - Roll-Forw
ACCOUNTS RECEIVABLE - Roll-Forward of the Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 19,143 | $ 11,852 | |
Provision for expected credit losses | 330 | 18,338 | $ 5,988 |
Accounts receivable balances written off | (6,309) | (11,877) | |
Other | (1,459) | 830 | |
Ending balance | $ 11,705 | $ 19,143 | $ 11,852 |
ACCOUNTS RECEIVABLE - Narrative
ACCOUNTS RECEIVABLE - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Receivables [Abstract] | |||
Maximum amount of accounts receivable sold at any point in time | $ 377.5 | ||
Sale of accounts receivable | 1,249.3 | $ 981.9 | $ 1,035.4 |
Decrease in receivables related to balances sold | 170.6 | 127.1 | |
Funding fee | $ 1.8 | $ 2 | $ 5.3 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 293,427 | $ 277,164 |
Work-in-process | 32,346 | 29,921 |
Raw materials | 37,184 | 33,647 |
Total inventories | $ 362,957 | $ 340,732 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Components of Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 522,872 | $ 492,133 |
Less: accumulated depreciation and amortization | (417,717) | (373,236) |
Property, plant and equipment, net | 105,155 | 118,897 |
Land and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 10,557 | 9,732 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 175,181 | 154,839 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 337,134 | $ 327,562 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 22.4 | $ 23.7 | $ 22.3 |
INTANGIBLE ASSETS - Schedule of
INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 4,577 | $ 4,925 |
Intangible assets, net | $ 14,638 | $ 15,991 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 16 years | 16 years |
Cost | $ 58,132 | $ 58,132 |
Accumulated Amortization | 48,071 | 47,066 |
Amortizable intangible assets, net carrying amount | $ 10,061 | $ 11,066 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 28, 2019 | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment of indefinite lived intangible assets | $ 32,600,000 | $ 0 | $ 0 | $ 0 |
Amortization of intangible assets | 1,000,000 | $ 1,700,000 | $ 3,000,000 | |
Estimated amortization expense, 2022 | 1,000,000 | |||
Estimated amortization expense, 2023 | 1,000,000 | |||
Estimated amortization expense, 2024 | 1,000,000 | |||
Estimated amortization expense, 2025 | 1,000,000 | |||
Estimated amortization expense, 2026 | $ 1,000,000 |
GOODWILL - Changes in Goodwill
GOODWILL - Changes in Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 213,392 | $ 212,836 |
Currency translation | (1,179) | 556 |
Goodwill, ending balance | 212,213 | 213,392 |
Wrangler | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 131,650 | 131,307 |
Currency translation | (727) | 343 |
Goodwill, ending balance | 130,923 | 131,650 |
Lee | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 81,742 | 81,529 |
Currency translation | (452) | 213 |
Goodwill, ending balance | $ 81,290 | $ 81,742 |
GOODWILL - Narrative (Details)
GOODWILL - Narrative (Details) - USD ($) | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill impairment charges | $ 0 | $ 0 | $ 0 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Other Assets [Abstract] | ||
Investments held for deferred compensation plans (Note 12) | $ 50,983 | $ 50,394 |
Capitalized computer software, accumulated amortization | 18,224 | 7,991 |
Capitalized computer software, net of accumulated amortization of $18,224 in 2021 and $7,991 in 2020 | 81,555 | 68,223 |
Deposits | 5,568 | 7,448 |
Partnership stores and shop-in shop costs, accumulated amortization | 20,732 | 26,811 |
Partnership stores and shop-in-shop costs, net of accumulated amortization of $20,732 in 2021 and $26,811 in 2020 | 4,192 | 4,260 |
Other | 18,236 | 19,867 |
Total other assets | $ 160,534 | $ 150,192 |
SHORT-TERM BORROWINGS AND LON_3
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Short-term Borrowings (Details) - USD ($) | Jan. 01, 2022 | Jan. 02, 2021 |
Short-term Debt [Line Items] | ||
Short-term borrowings | $ 249,000 | $ 1,114,000 |
Other short-term borrowings | 200,000 | 900,000 |
International borrowing arrangements | ||
Short-term Debt [Line Items] | ||
Debt capacity | 10,100,000 | 35,900,000 |
Short-term borrowings | $ 0 | $ 200,000 |
SHORT-TERM BORROWINGS AND LON_4
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Components of Long-term Debt (Details) - USD ($) | Jan. 01, 2022 | Nov. 18, 2021 | Jan. 02, 2021 |
Debt Instrument [Line Items] | |||
Total long-term debt | $ 791,317,000 | $ 912,957,000 | |
Less: current portion | 0 | (25,000,000) | |
Long-term debt, due beyond one year | 791,317,000 | 887,957,000 | |
Term Loan | Term Loan A | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 397,427,000 | 694,241,000 | |
Term Loan | Term Loan B | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 0 | 218,716,000 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 0 | 0 | |
Senior Notes | 4.125% Notes, due 2029 | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 393,890,000 | $ 0 | |
Debt instrument, interest rate, stated percentage | 4.125% |
SHORT-TERM BORROWINGS AND LON_5
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Credit Facilities (Details) | Nov. 18, 2021USD ($) | May 17, 2019USD ($) | Jan. 01, 2022USD ($)election | Jan. 02, 2021USD ($) | Dec. 28, 2019USD ($) |
Debt Instrument [Line Items] | |||||
Line of credit facility, amount outstanding | $ 1,550,000,000 | ||||
Repayments of term loans | $ 523,000,000 | $ 0 | $ 127,000,000 | ||
Total long-term debt | $ 791,317,000 | 912,957,000 | |||
Debt instrument, leverage ratio, number of elections to increase the limit (up to) | election | 2 | ||||
Maximum | |||||
Debt Instrument [Line Items] | |||||
Leverage ratio | 4.50 | ||||
Debt instrument, leverage ratio, limit increase | 5 | ||||
Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest coverage ratio | 3 | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 5 years | 5 years | |||
Debt capacity | $ 500,000,000 | $ 500,000,000 | |||
Total long-term debt | $ 0 | 0 | |||
Remaining borrowing capacity | 486,900,000 | ||||
Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Debt capacity | 75,000,000 | ||||
Long-term line of credit | 13,100,000 | ||||
Term Loan | |||||
Debt Instrument [Line Items] | |||||
Cash | 7,600,000 | ||||
4.125% Notes, due 2029 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 400,000,000 | ||||
Total long-term debt | $ 393,890,000 | 0 | |||
Amended Credit Agreement | Federal Funds Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Amended Credit Agreement | Eurocurrency | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
Term Loan A | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 5 years | 5 years | |||
Debt capacity | $ 400,000,000 | $ 750,000,000 | |||
Repayments of term loans | 265,000,000 | ||||
Total long-term debt | $ 397,427,000 | 694,241,000 | |||
Term Loan B | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 7 years | ||||
Debt capacity | $ 300,000,000 | ||||
Repayments of term loans | $ 133,000,000 | ||||
Total long-term debt | $ 0 | $ 218,716,000 |
SHORT-TERM BORROWINGS AND LON_6
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Senior Notes (Details) - USD ($) $ in Thousands | Nov. 18, 2021 | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 800,000 | |||
Total long-term debt | 791,317 | $ 912,957 | ||
Interest expense | $ 38,900 | 49,992 | $ 35,787 | |
4.125% Notes, due 2029 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 400,000 | |||
Debt instrument, interest rate, stated percentage | 4.125% | |||
Effective annual interest rate | 4.30% | |||
Total long-term debt | $ 393,890 | 0 | ||
Debt issuance costs | 6,200 | |||
4.125% Notes, due 2029 | Senior Notes | Debt Instrument, Redemption, Period One | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, redemption price, percentage | 100.00% | |||
4.125% Notes, due 2029 | Senior Notes | Debt Instrument, Redemption, Period Two | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, redemption price, percentage | 104.125% | |||
Debt instrument, redemption price, percentage of principal amount redeemed | 40.00% | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Interest expense | 6,600 | |||
Term Loan | Term Loan A | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 400,000 | 700,000 | ||
Effective annual interest rate | 3.20% | |||
Total long-term debt | $ 397,427 | $ 694,241 | ||
Amended Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 2,100 |
SHORT-TERM BORROWINGS AND LON_7
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Schedule of Payments of Long-Term Debt (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Debt Disclosure [Abstract] | ||
2022 | $ 0 | |
2023 | 10,000 | |
2024 | 20,000 | |
2025 | 20,000 | |
2026 | 350,000 | |
Thereafter | 400,000 | |
Long-term debt | 800,000 | |
Less: unamortized deferred financing costs | (8,683) | |
Total long-term debt | 791,317 | $ 912,957 |
Less: current portion | 0 | (25,000) |
Long-term debt, due beyond one year | $ 791,317 | $ 887,957 |
ACCRUED LIABILITIES AND OTHER_3
ACCRUED LIABILITIES AND OTHER LIABILITIES - Components of Accrued Liabilities (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Payables and Accruals [Abstract] | ||
Customer discounts, allowances and incentives | $ 58,881 | $ 58,873 |
Compensation | 62,135 | 38,948 |
Other taxes | 20,016 | 23,797 |
Advertising | 11,976 | 11,266 |
Derivative liabilities (Note 14) | 1,623 | 7,166 |
Deferred compensation (Note 12) | 6,629 | 6,919 |
Restructuring (Note 21) | 1,079 | 6,520 |
Professional services | 13,529 | 6,410 |
Income taxes payable | 17,722 | 6,328 |
Customer deposits | 6,141 | 5,017 |
Insurance | 2,796 | 3,368 |
Contract liabilities (Note 2) | 2,258 | 787 |
Other | 12,379 | 17,553 |
Accrued liabilities | $ 217,164 | $ 192,952 |
ACCRUED LIABILITIES AND OTHER_4
ACCRUED LIABILITIES AND OTHER LIABILITIES - Components of Other Liabilities (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 | May 23, 2019 |
Payables and Accruals [Abstract] | |||
Deferred compensation (Note 12) | $ 52,162 | $ 51,116 | |
Derivative liabilities (Note 14) | 6,401 | 17,937 | |
Income taxes payable | 16,570 | 16,735 | |
Pension liabilities (Note 12) | 13,685 | 14,056 | $ 11,000 |
Insurance | 1,257 | 1,082 | |
Restructuring (Note 21) | 0 | 221 | |
Other | 9,117 | 14,194 | |
Other liabilities | $ 99,192 | $ 115,341 |
RETIREMENT AND SAVINGS BENEFI_3
RETIREMENT AND SAVINGS BENEFIT PLANS - Components of Pension Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 28, 2019USD ($) | |
Retirement Benefits [Abstract] | |
Service cost | $ 726 |
Non-service components | (3,166) |
Net pension benefit | $ (2,440) |
RETIREMENT AND SAVINGS BENEFI_4
RETIREMENT AND SAVINGS BENEFIT PLANS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | May 23, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension liabilities | $ 13,685 | $ 14,056 | $ 11,000 | |
Projected benefit obligations | 17,400 | |||
Plan assets | 6,400 | |||
Accumulated other comprehensive losses | $ 1,100 | |||
Current liability to participants of the deferred compensation plans | 6,629 | 6,919 | ||
Deferred compensation | 52,162 | 51,116 | ||
Other Postretirement Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Deferred compensation liability, current and noncurrent | 57,600 | 57,200 | ||
Current liability to participants of the deferred compensation plans | 6,600 | 6,800 | ||
Deferred compensation | 51,000 | 50,400 | ||
Fair value of investments | 57,600 | 57,200 | ||
Deferred compensation plans expense | 8,600 | 4,500 | $ 7,900 | |
Other Postretirement Benefit Plans | Other current assets | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of investments | 6,600 | 6,800 | ||
Other Postretirement Benefit Plans | Other assets | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of investments | 51,000 | 50,400 | ||
Other Postretirement Benefit Plans | Director | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Deferred compensation liability, current and noncurrent | $ 1,200 | 800 | ||
Current liability to participants of the deferred compensation plans | 100 | |||
Deferred compensation | $ 700 |
RETIREMENT AND SAVINGS BENEFI_5
RETIREMENT AND SAVINGS BENEFIT PLANS - Reconciliation of Changes in Fair Value of Defined Benefit Plan Assets and Projected Benefit Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Amounts included in the statements of operations: | |||
Net pension costs | $ 866 | $ 1,027 | $ 680 |
Actuarial assumptions used to determine pension expense: | |||
Discount rate in effect for determining service cost | 0.64% | 0.68% | 1.28% |
Rate of inflation | 1.70% | 1.80% | 1.80% |
Expected long-term return on plan assets | 3.00% | 3.00% | 3.00% |
Rate of compensation increase | 2.90% | 3.00% | 3.00% |
Amounts included in the balance sheets: | |||
Projected benefit obligations | $ 22,935 | $ 22,764 | |
Fair value of plan assets | 9,250 | 8,708 | |
Funded status - recorded in other liabilities (Note 11) | 13,685 | 14,056 | |
Accumulated other comprehensive loss, pretax - net deferred amounts | $ (2,904) | $ (2,519) | |
Actuarial assumptions used to determine pension obligations: | |||
Discount rate | 0.64% | 0.64% | |
Rate of compensation increase | 2.90% | 2.90% | |
Accumulated benefit obligations | $ 13,514 | $ 13,342 |
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 | Jan. 01, 2022 | Jan. 02, 2021 |
Cash equivalents: | ||
Money market funds | $ 110,050 | $ 165,751 |
Time deposits | 3,644 | 4,978 |
Foreign currency exchange contracts | 7,321 | 7,531 |
Investment securities | 57,613 | 57,166 |
Financial liabilities: | ||
Derivative liabilities (Note 14) | 8,024 | 25,103 |
Deferred compensation | 58,791 | 58,035 |
Level 1 | ||
Cash equivalents: | ||
Money market funds | 110,050 | 165,751 |
Time deposits | 3,644 | 4,978 |
Foreign currency exchange contracts | 0 | 0 |
Investment securities | 57,613 | 57,166 |
Financial liabilities: | ||
Deferred compensation | 0 | 0 |
Level 2 | ||
Cash equivalents: | ||
Money market funds | 0 | 0 |
Time deposits | 0 | 0 |
Foreign currency exchange contracts | 7,321 | 7,531 |
Investment securities | 0 | 0 |
Financial liabilities: | ||
Deferred compensation | 58,791 | 58,035 |
Level 3 | ||
Cash equivalents: | ||
Money market funds | 0 | 0 |
Time deposits | 0 | 0 |
Foreign currency exchange contracts | 0 | 0 |
Investment securities | 0 | 0 |
Financial liabilities: | ||
Deferred compensation | 0 | 0 |
Foreign currency exchange contracts | ||
Financial liabilities: | ||
Derivative liabilities (Note 14) | 1,972 | 8,794 |
Foreign currency exchange contracts | Level 1 | ||
Financial liabilities: | ||
Derivative liabilities (Note 14) | 0 | 0 |
Foreign currency exchange contracts | Level 2 | ||
Financial liabilities: | ||
Derivative liabilities (Note 14) | 1,972 | 8,794 |
Foreign currency exchange contracts | Level 3 | ||
Financial liabilities: | ||
Derivative liabilities (Note 14) | 0 | 0 |
Interest rate swap agreements | ||
Financial liabilities: | ||
Derivative liabilities (Note 14) | 6,052 | 16,309 |
Interest rate swap agreements | Level 1 | ||
Financial liabilities: | ||
Derivative liabilities (Note 14) | 0 | 0 |
Interest rate swap agreements | Level 2 | ||
Financial liabilities: | ||
Derivative liabilities (Note 14) | 6,052 | 16,309 |
Interest rate swap agreements | Level 3 | ||
Financial liabilities: | ||
Derivative liabilities (Note 14) | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 28, 2019 | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt, carrying value | $ 791,317,000 | $ 912,957,000 | ||
Impairment of operating lease assets | 5,900,000 | |||
Impairment of property, plant and equipment | 900,000 | |||
Non-cash impairment of intangible asset | $ 32,600,000 | 0 | 0 | $ 32,636,000 |
Goodwill impairment charges | 0 | 0 | 0 | |
Impairment of indefinite lived intangible assets | $ 32,600,000 | 0 | 0 | $ 0 |
Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt, fair value | $ 797,500,000 | $ 916,000,000 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Reclassified from AOCL into earnings | $ 0 | $ 300,000 | $ 0 |
Cash flow hedge gain to be reclassified during next 12 months | 2,400,000 | ||
Foreign currency exchange contracts | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional amount | $ 297,400,000 | 295,000,000 | |
Term of contract | 20 months | ||
Interest rate swap agreements | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional amount | $ 350,000,000 | $ 400,000,000 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Outstanding Derivatives on Individual Contract Basis (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Fair Value of Derivatives with Unrealized Gains | ||
Total derivatives | $ 7,321 | $ 7,531 |
Fair Value of Derivatives with Unrealized Losses | ||
Total derivatives | (8,024) | (25,103) |
Foreign currency exchange contracts | Derivatives designated as hedging instruments: | ||
Fair Value of Derivatives with Unrealized Gains | ||
Derivatives designated as hedging instruments: | 7,321 | 7,179 |
Fair Value of Derivatives with Unrealized Losses | ||
Derivatives designated as hedging instruments: | (1,972) | (8,640) |
Foreign currency exchange contracts | Derivatives not designated as hedging instruments: | ||
Fair Value of Derivatives with Unrealized Gains | ||
Derivatives not designated as hedging instruments: | 0 | 352 |
Fair Value of Derivatives with Unrealized Losses | ||
Derivatives not designated as hedging instruments: | 0 | (154) |
Interest rate swap agreements | Derivatives designated as hedging instruments: | ||
Fair Value of Derivatives with Unrealized Gains | ||
Derivatives designated as hedging instruments: | 0 | 0 |
Fair Value of Derivatives with Unrealized Losses | ||
Derivatives designated as hedging instruments: | $ (6,052) | $ (16,309) |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Fair Value of Derivative Assets and Liabilities in Balance Sheet (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Derivative Asset | ||
Gross amounts presented in the balance sheet | $ 7,321 | $ 7,531 |
Gross amounts not offset in the balance sheet | (1,636) | (1,818) |
Net amounts | 5,685 | 5,713 |
Derivative Liability | ||
Derivative liabilities (Note 14) | (8,024) | (25,103) |
Gross amounts not offset in the balance sheet | 1,636 | 1,818 |
Net amounts | $ (6,388) | $ (23,285) |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Derivatives Classified as Current or Noncurrent Based on Maturity Dates (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts | $ 7,321 | $ 7,531 |
Foreign currency exchange contracts, liabilities | (8,024) | (25,103) |
Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts | 6,356 | 5,773 |
Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, liabilities | (1,623) | (7,166) |
Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts | 965 | 1,758 |
Other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, liabilities | $ (6,401) | $ (17,937) |
DERIVATIVE FINANCIAL INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Cash Flow Hedging Relationships (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Derivative [Line Items] | |||
Gain (Loss) on Derivatives Recognized in AOCL Year Ended December | $ 11,138 | $ (26,417) | $ 1,729 |
Foreign currency exchange contracts | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivatives Recognized in AOCL Year Ended December | 6,900 | (8,193) | 3,683 |
Interest rate swap agreements | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivatives Recognized in AOCL Year Ended December | $ 4,238 | $ (18,224) | $ (1,954) |
DERIVATIVE FINANCIAL INSTRUME_8
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Location of Gain (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Derivative [Line Items] | |||
Gain (Loss) Reclassified from AOCL into Income Year Ended December | $ (8,835) | $ (2,142) | $ 7,380 |
Net revenues | |||
Derivative [Line Items] | |||
Gain (Loss) Reclassified from AOCL into Income Year Ended December | 204 | (458) | (844) |
Cost of goods sold | |||
Derivative [Line Items] | |||
Gain (Loss) Reclassified from AOCL into Income Year Ended December | (2,271) | 3,171 | 6,745 |
Other expense, net | |||
Derivative [Line Items] | |||
Gain (Loss) Reclassified from AOCL into Income Year Ended December | (749) | 149 | 343 |
Interest expense | |||
Derivative [Line Items] | |||
Gain (Loss) Reclassified from AOCL into Income Year Ended December | $ (6,019) | $ (5,004) | $ 1,136 |
DERIVATIVE FINANCIAL INSTRUME_9
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Derivatives Included in Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) on Derivatives Recognized in Income Year Ended December | $ 288 | $ (2,660) | $ 829 |
Net revenues | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) on Derivatives Recognized in Income Year Ended December | (104) | 90 | 0 |
Cost of goods sold | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) on Derivatives Recognized in Income Year Ended December | 7 | (2,749) | 829 |
Other expense, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) on Derivatives Recognized in Income Year Ended December | $ 385 | $ (1) | $ 0 |
CAPITAL AND ACCUMULATED OTHER_3
CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2022 | Aug. 05, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Share repurchase program, number of shares authorized to be repurchased (in shares) | 200,000,000 | |
Repurchase of common stock | $ 75,462 | |
Common Stock | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Repurchase of common stock (in shares) | 1,378,000 | |
Repurchase of common stock | $ 75,500 |
CAPITAL AND ACCUMULATED OTHER_4
CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS - Deferred Components of AOCL in Equity, Net of Related Taxes (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive loss | $ 148,138 | $ 84,641 | $ 69,257 | $ 1,723,452 |
Accumulated Other Comprehensive Loss | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive loss | (92,756) | (94,807) | (79,698) | (145,182) |
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive loss | (93,125) | (80,178) | (84,118) | (145,182) |
Defined Benefit Pension Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive loss | (2,177) | (1,889) | (2,301) | 0 |
Derivative Financial Instruments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive loss | $ 2,546 | $ (12,740) | $ 6,721 | $ 0 |
CAPITAL AND ACCUMULATED OTHER_5
CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS - Changes in AOCL and Related Tax Impact (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 84,641 | $ 69,257 | $ 1,723,452 |
Other comprehensive income (loss) due to gains (losses) arising before reclassifications | (2,208) | (21,987) | 2,886 |
Reclassifications to net income of previously deferred (gains) losses | 8,850 | 2,201 | (7,380) |
Net other comprehensive income (loss) | 6,642 | (19,786) | (4,494) |
Amounts transferred from former parent | (1,696,859) | ||
Income taxes | (4,591) | 4,677 | 1,494 |
Ending balance | 148,138 | 84,641 | 69,257 |
Accumulated other comprehensive loss | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (94,807) | (79,698) | (145,182) |
Amounts transferred from former parent | 68,484 | ||
Ending balance | (92,756) | (94,807) | (79,698) |
Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (80,178) | (84,118) | (145,182) |
Other comprehensive income (loss) due to gains (losses) arising before reclassifications | (12,947) | 3,940 | 3,167 |
Reclassifications to net income of previously deferred (gains) losses | 0 | 0 | 0 |
Net other comprehensive income (loss) | (12,947) | 3,940 | 3,167 |
Amounts transferred from former parent | 57,897 | ||
Income taxes | 0 | 0 | 0 |
Ending balance | (93,125) | (80,178) | (84,118) |
Defined Benefit Pension Plans | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (1,889) | (2,301) | 0 |
Other comprehensive income (loss) due to gains (losses) arising before reclassifications | (399) | 490 | (2,010) |
Reclassifications to net income of previously deferred (gains) losses | 15 | 59 | 0 |
Net other comprehensive income (loss) | (384) | 549 | (2,010) |
Amounts transferred from former parent | (1,058) | ||
Income taxes | 96 | (137) | 767 |
Ending balance | (2,177) | (1,889) | (2,301) |
Derivative Financial Instruments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (12,740) | 6,721 | 0 |
Other comprehensive income (loss) due to gains (losses) arising before reclassifications | 11,138 | (26,417) | 1,729 |
Reclassifications to net income of previously deferred (gains) losses | 8,835 | 2,142 | (7,380) |
Net other comprehensive income (loss) | 19,973 | (24,275) | (5,651) |
Amounts transferred from former parent | 11,645 | ||
Income taxes | (4,687) | 4,814 | 727 |
Ending balance | $ 2,546 | $ (12,740) | $ 6,721 |
CAPITAL AND ACCUMULATED OTHER_6
CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS - Reclassification Out of AOCL (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Selling, general and administrative expenses | $ 824,747 | $ 739,855 | $ 803,448 |
Net revenues | 2,475,916 | 2,097,839 | 2,548,839 |
Cost of goods sold | 1,368,190 | 1,234,150 | 1,544,465 |
Other expense, net | (959) | (2,514) | (5,002) |
Interest expense | (38,900) | (49,992) | (35,787) |
Total before tax | 244,600 | 72,936 | 135,194 |
Income taxes | (49,177) | (5,013) | (38,540) |
Net income | 195,423 | 67,923 | 96,654 |
Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Net income | (6,123) | (1,586) | 6,674 |
Defined Benefit Pension Plans | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Selling, general and administrative expenses | (15) | (59) | 0 |
Total before tax | (15) | (59) | 0 |
Income taxes | 3 | 15 | 0 |
Net income | (12) | (44) | 0 |
Derivative Financial Instruments | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | (8,835) | (2,142) | 7,380 |
Income taxes | 2,724 | 600 | (706) |
Net income | (6,111) | (1,542) | 6,674 |
Derivative Financial Instruments | Reclassification out of Accumulated Other Comprehensive Income | Foreign currency exchange contracts | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Net revenues | 204 | (458) | (844) |
Cost of goods sold | (2,271) | 3,171 | 6,745 |
Other expense, net | (749) | 149 | 343 |
Derivative Financial Instruments | Reclassification out of Accumulated Other Comprehensive Income | Interest rate swap agreements | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense | $ (6,019) | $ (5,004) | $ 1,136 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) | Dec. 15, 2020USD ($)employee$ / sharesshares | May 23, 2019shares | Sep. 26, 2020USD ($) | Dec. 28, 2019USD ($) | Jan. 01, 2022USD ($)$ / sharesshares | Jan. 02, 2021USD ($)$ / shares | Dec. 28, 2019USD ($)$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Maximum number of shares authorized (in shares) | shares | 7,500,000 | ||||||
Shares available for future grant (in shares) | shares | 4,400,000 | ||||||
Shares issued in period (in shares) | shares | 2,400,000 | ||||||
Stock-based compensation | $ 38,516,000 | $ 15,948,000 | $ 23,844,000 | ||||
Total unrecognized compensation cost related to nonvested stock-based compensation | $ 15,200,000 | ||||||
Period for recognition | 1 year 3 months 21 days | ||||||
Shares paid for tax withholding for share based compensation (in shares) | shares | 139,750 | ||||||
Share based compensation vesting period | 3 years | ||||||
Award expiration period from grant date | 10 years | ||||||
Total fair value of stock option vested | $ 3,500,000 | 7,000,000 | |||||
Total intrinsic value of stock options exercised | 5,500,000 | 3,100,000 | |||||
Inventories | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation | $ 0 | $ 0 | $ 0 | ||||
Former Parent | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation | $ 2,200,000 | ||||||
Stock-based compensation expense | Employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation | $ 7,300,000 | ||||||
Time-based | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Grant date fair value of each restricted units granted (in USD per share) | $ / shares | $ 49.68 | $ 16.63 | |||||
Total market value of awards outstanding | $ 28,900,000 | ||||||
Time-based | Employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares of common stock to be issued for each restricted stock unit granted (in shares) | shares | 1 | ||||||
Share based compensation vesting period | 3 years | ||||||
Time-based | Nonemployees | Director | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share based compensation vesting period | 1 year | ||||||
Share payout (in shares) | shares | 1 | ||||||
Performance-based | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation | $ (2,200,000) | ||||||
Performance period, years | 3 years | 3 years | 2 years | ||||
Percentage adjustment | 25.00% | ||||||
Total shareholder return adjustment | $ / shares | $ 5.73 | $ 0 | $ (0.67) | ||||
Share-based payment arrangement, plan modification, shares affected (in shares) | shares | 270,000 | ||||||
Share-based payment arrangement, plan modification, number of employees affected | employee | 200 | ||||||
Grant date fair value of each restricted units granted (in USD per share) | $ / shares | $ 49.70 | $ 16.44 | |||||
Total market value of awards outstanding | $ 45,400,000 | ||||||
Performance-based | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share payout (in shares) | shares | 0 | ||||||
Performance-based | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share payout (in shares) | shares | 2 | ||||||
Performance-based | Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance period, years | 2 years | ||||||
Performance-based | Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance period, years | 3 years | ||||||
Modified performance-based awards | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation | $ 4,100,000 | $ 2,900,000 | |||||
Modified awards, fair value (in USD per share) | $ / shares | $ 42.99 | ||||||
Plan modification, incremental cost | $ 8,800,000 | ||||||
Restricted stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Fair value of restricted stock | 100,000 | ||||||
Market value of shares vested | $ 5,600,000 | $ 1,700,000 | |||||
Restricted stock | Management | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share based compensation vesting period | 5 years |
STOCK-BASED COMPENSATION - Tota
STOCK-BASED COMPENSATION - Total Stock-Based Compensation Cost and Associated Income Tax Benefits Recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Share-based Payment Arrangement [Abstract] | |||
Stock-based compensation expense | $ 38,516 | $ 15,948 | $ 23,844 |
Income tax benefits | $ 5,201 | $ 2,769 | $ 5,011 |
STOCK-BASED COMPENSATION - PRSU
STOCK-BASED COMPENSATION - PRSU and RSU Activity (Details) - $ / shares | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Performance-based | ||
Number Outstanding | ||
Nonvested shares, Beginning balance (in shares) | 793,820 | |
Granted (in shares) | 216,764 | |
Dividend Equivalents (in shares) | 0 | |
Issued as Common Stock (in shares) | (72,447) | |
Forfeited/cancelled (in shares) | (52,806) | |
Nonvested shares, Ending balance (in shares) | 885,331 | 793,820 |
Vested (in shares) | 373,579 | |
Weighted Average Grant Date Fair Value | ||
Nonvested shares, Beginning balance (in USD per share) | $ 31.59 | |
Granted (in USD per share) | 49.70 | $ 16.44 |
Dividend Equivalents (in USD per share) | 0 | |
Issued as Common Stock (in USD per share) | 36.13 | |
Forfeited/cancelled (in USD per share) | 41.06 | |
Nonvested shares, Ending balance (in USD per share) | 42.44 | $ 31.59 |
Vested (in USD per share) | $ 39.30 | |
Time-based | ||
Number Outstanding | ||
Nonvested shares, Beginning balance (in shares) | 633,265 | |
Granted (in shares) | 208,530 | |
Dividend Equivalents (in shares) | 14,377 | |
Issued as Common Stock (in shares) | (255,774) | |
Forfeited/cancelled (in shares) | (35,709) | |
Nonvested shares, Ending balance (in shares) | 564,689 | 633,265 |
Vested (in shares) | 0 | |
Weighted Average Grant Date Fair Value | ||
Nonvested shares, Beginning balance (in USD per share) | $ 24.34 | |
Granted (in USD per share) | 49.68 | $ 16.63 |
Dividend Equivalents (in USD per share) | 25.03 | |
Issued as Common Stock (in USD per share) | 24.21 | |
Forfeited/cancelled (in USD per share) | 30.04 | |
Nonvested shares, Ending balance (in USD per share) | 33.42 | $ 24.34 |
Vested (in USD per share) | $ 0 |
STOCK-BASED COMPENSATION - RSA
STOCK-BASED COMPENSATION - RSA Activity (Details) - Restricted stock | 12 Months Ended |
Jan. 01, 2022$ / sharesshares | |
Number Outstanding | |
Nonvested shares, Beginning balance (in shares) | shares | 129,367 |
Dividend equivalents (in shares) | shares | 561 |
Vested (in shares) | shares | (119,906) |
Forfeited/cancelled (in shares) | shares | (7,970) |
Nonvested shares, Ending balance (in shares) | shares | 2,052 |
Weighted Average Grant Date Fair Value | |
Nonvested shares, Beginning balance (in USD per share) | $ / shares | $ 24.95 |
Dividend equivalents (in USD per share) | $ / shares | 27.50 |
Vested (in USD per share) | $ / shares | 24.26 |
Forfeited (in USD per share) | $ / shares | 33.96 |
Nonvested shares, Ending balance (in USD per share) | $ / shares | $ 30.84 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Number of Shares | ||
Outstanding, beginning balance (in shares) | 1,474,098 | |
Exercised (in shares) | (196,514) | |
Forfeited/cancelled (in shares) | (3,955) | |
Outstanding, ending balance (in shares) | 1,273,629 | 1,474,098 |
Weighted Average Exercise Price | ||
Outstanding, beginning balance (in USD per share) | $ 26.45 | |
Exercised (in USD per share) | 25.86 | |
Forfeited/cancelled (in USD per share) | 30.89 | |
Outstanding, ending balance (in USD per share) | $ 26.52 | $ 26.45 |
Stock-based Compensation Additional Disclosures | ||
Options outstanding, remaining contractual term | 4 years 8 months 12 days | 5 years 7 months 6 days |
Options outstanding, intrinsic value | $ 31,494 | $ 20,806 |
Exercisable (in shares) | 1,272,501 | |
Exercisable, ending balance (in USD per share) | $ 26.52 | |
Options exercisable, remaining contractual term | 4 years 7 months 6 days | |
Options exercisable, intrinsic value | $ 31,475 |
INCOME TAXES - Income Before In
INCOME TAXES - Income Before Income Taxes for Which the Provision for Income Taxes was Computed (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 118,142 | $ 18,965 | $ 61,691 |
Foreign | 126,458 | 53,971 | 73,503 |
Income before income taxes | $ 244,600 | $ 72,936 | $ 135,194 |
INCOME TAXES - Provision for In
INCOME TAXES - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Current: | |||
Federal | $ 24,514 | $ (2,888) | $ 14,831 |
Foreign | 15,877 | 6,023 | 23,017 |
State | 5,149 | (828) | 4,866 |
Total current income taxes | 45,540 | 2,307 | 42,714 |
Deferred: | |||
Federal and state | 2,951 | 10,140 | (5,912) |
Foreign | 686 | (7,434) | 1,738 |
Total deferred income taxes | 3,637 | 2,706 | (4,174) |
Total provision for income taxes | $ 49,177 | $ 5,013 | $ 38,540 |
INCOME TAXES - Differences Betw
INCOME TAXES - Differences Between Income Taxes Computed by Applying Statutory Federal Income Tax Rate and Income Tax Expense reported In Consolidated Financial Statements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Income Tax Disclosure [Abstract] | |||
Tax at federal statutory rate | $ 51,366 | $ 15,316 | $ 28,391 |
State income tax, net of federal tax benefit | 5,167 | 150 | 2,476 |
Foreign rate differences | (13,698) | (6,689) | (8,983) |
Tax reform | 0 | (6,170) | 258 |
Employee compensation | 940 | (272) | (3,169) |
Adjustments to opening balances | 0 | (2,797) | 1,928 |
Change in valuation allowance | 2,010 | 3,900 | 17,025 |
Global intangible low-tax income ("GILTI") | 2,852 | 2,345 | 2,437 |
Change in indefinite reinvestment assertions | 0 | 0 | (3,914) |
Other | 540 | (770) | 2,091 |
Total provision for income taxes | $ 49,177 | $ 5,013 | $ 38,540 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Operating Loss Carryforwards [Line Items] | |||
Tax benefit, statutory exempt foreign income | $ 5,500 | $ 3,000 | $ 4,300 |
Tax settlement | 0 | 200 | 600 |
Tax reform | 0 | (6,170) | $ 258 |
Undistributed earnings of foreign subsidiaries | 78,300 | ||
Change in indefinite reinvestment | 600 | ||
Potential tax benefits for federal capital loss carryforwards, foreign operations | 19,400 | ||
State operating loss carry forwards | 8,500 | ||
Deferred tax assets, valuation allowance | 21,789 | 23,118 | |
Net increase in valuation allowance related to state operating loss and carryforwards | 2,200 | ||
Net increase in valuation allowance related to foreign carryforwards and other deferred tax asset | 900 | ||
Net unrecognized tax benefits including interest and penalties if recognized, would reduce the annual effective tax rate | 13,458 | $ 13,419 | |
Decrease in unrecognized tax benefits is reasonably possible | 200 | ||
Foreign | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards, subject to expiration | 19,100 | ||
Operating loss carry forwards valuation allowance | 12,900 | ||
Deferred tax assets, valuation allowance | 1,700 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards, subject to expiration | 6,900 | ||
Operating loss carry forwards valuation allowance | $ 7,200 |
INCOME TAXES - Deferred Income
INCOME TAXES - Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Deferred income tax assets: | ||
Inventories | $ 12,922 | $ 11,093 |
Deferred compensation | 10,907 | 10,977 |
Other employee benefits | 13,596 | 10,297 |
Stock-based compensation | 6,896 | 5,734 |
Other accrued expenses | 21,616 | 31,961 |
Intangible assets | 22,826 | 27,006 |
Leases | 12,621 | 16,627 |
Operating loss carryforwards | 27,835 | 23,372 |
Gross deferred income tax assets | 129,219 | 137,067 |
Less: valuation allowance | (21,789) | (23,118) |
Net deferred income tax assets | 107,430 | 113,949 |
Deferred income tax liabilities: | ||
Leases | 11,877 | 14,747 |
Depreciation | 22,846 | 15,657 |
Taxes on unremitted earnings | 3,403 | 2,760 |
Deferred income tax liabilities | 38,126 | 33,164 |
Total net deferred income tax assets | 69,304 | 80,785 |
Amounts included in the balance sheets: | ||
Deferred income tax assets | 74,876 | 85,221 |
Deferred income tax liabilities | $ (5,572) | $ (4,436) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Change in Accrual for Unrecognized Income Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning Balance | $ 16,757 | $ 17,892 | $ 59,020 |
Additions for current year tax positions | 154 | 138 | 1,260 |
Additions for prior year tax positions | 543 | 1,222 | 7,513 |
Reductions for prior year tax positions | (688) | (2,082) | (3,998) |
Reductions due to statute expirations | (214) | (801) | |
Payments in settlement | (199) | (388) | |
Amounts transferred to former parent | (44,714) | ||
Ending Balance | 16,766 | 16,757 | 17,892 |
Unrecognized Income Tax Benefits | |||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning Balance | 11,893 | 13,677 | 54,081 |
Additions for current year tax positions | 154 | 138 | 1,260 |
Additions for prior year tax positions | 18 | 350 | 4,881 |
Reductions for prior year tax positions | (348) | (1,881) | (3,680) |
Reductions due to statute expirations | (192) | (674) | |
Payments in settlement | (199) | (205) | |
Amounts transferred to former parent | (41,986) | ||
Ending Balance | 11,717 | 11,893 | 13,677 |
Accrued Interest and Penalties | |||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning Balance | 4,864 | 4,215 | 4,939 |
Additions for current year tax positions | 0 | 0 | 0 |
Additions for prior year tax positions | 525 | 872 | 2,632 |
Reductions for prior year tax positions | (340) | (201) | (318) |
Reductions due to statute expirations | (22) | (127) | |
Payments in settlement | 0 | (183) | |
Amounts transferred to former parent | (2,728) | ||
Ending Balance | $ 5,049 | $ 4,864 | $ 4,215 |
INCOME TAXES - Amounts Included
INCOME TAXES - Amounts Included in Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 |
Income Tax Disclosure [Abstract] | ||||
Unrecognized income tax benefits, including interest and penalties | $ 16,766 | $ 16,757 | $ 17,892 | $ 59,020 |
Less: deferred tax benefits | (3,308) | (3,338) | ||
Total unrecognized tax benefits | $ 13,458 | $ 13,419 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) | May 23, 2019shares | May 22, 2019 | Jan. 01, 2022shares | Jan. 02, 2021shares | Dec. 28, 2019shares |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Spinoff transaction, conversion ratio | 0.1429 | ||||
Number of shares outstanding (in shares) | 56,647,561 | ||||
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 | 800,000 | 100,000 | ||
Performance-based | |||||
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 | 300,000 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Earnings Per Share Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Earnings Per Share [Abstract] | |||
Net income | $ 195,423 | $ 67,923 | $ 96,654 |
Basic weighted average shares outstanding (in shares) | 57,394 | 56,994 | 56,688 |
Dilutive effect of stock-based awards (in shares) | 1,692 | 864 | 521 |
Diluted weighted average shares outstanding (in shares) | 59,086 | 57,858 | 57,209 |
Earnings per share: | |||
Basic earnings per share (in USD per share) | $ 3.40 | $ 1.19 | $ 1.71 |
Diluted earnings per share (in USD per share) | $ 3.31 | $ 1.17 | $ 1.69 |
LEASES - Schedule of Supplement
LEASES - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Assets | ||
Operating lease assets | $ 54,950 | $ 60,443 |
Liabilities | ||
Operating lease liabilities, current | 24,195 | 27,329 |
Operating lease liabilities, noncurrent | 32,993 | 39,806 |
Present value of future minimum lease payments | $ 57,188 | $ 67,135 |
Weighted-average remaining lease term (in years) | ||
Operating leases | 3 years 7 months 13 days | 3 years 10 months 20 days |
Weighted-average discount rate | ||
Operating leases | 2.85% | 4.08% |
LEASES - Schedule of Lease Cost
LEASES - Schedule of Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Leases [Abstract] | |||
Operating lease costs | $ 30,394 | $ 40,906 | $ 37,743 |
Short-term lease costs (excluding leases of one month or less) | 272 | 1,114 | 3,043 |
Variable lease costs | 3,505 | 3,960 | 5,300 |
Total lease costs | 34,171 | 45,980 | 46,086 |
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows | 37,474 | 45,225 | 46,239 |
Right-of-use operating lease assets obtained in exchange for new operating leases - non-cash activity | $ 4,323 | $ 2,591 | $ 39,874 |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Operating Leases (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Leases [Abstract] | ||
2022 | $ 25,261 | |
2023 | 13,635 | |
2024 | 9,802 | |
2025 | 5,556 | |
2026 | 1,859 | |
Thereafter | 3,820 | |
Total future minimum lease payments | 59,933 | |
Less: amounts related to imputed interest | (2,745) | |
Present value of future minimum lease payments | 57,188 | $ 67,135 |
Less: operating lease liabilities, current | 24,195 | 27,329 |
Operating lease liabilities, noncurrent | $ 32,993 | $ 39,806 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Millions | Jan. 01, 2022USD ($) |
Leases [Abstract] | |
Lease not yet commenced | $ 0 |
COMMITMENTS - Narrative (Detail
COMMITMENTS - Narrative (Details) | 12 Months Ended |
Jan. 01, 2022USD ($) | |
Other Commitments [Line Items] | |
Future minimum royalty payments 2022 | $ 700,000 |
Future minimum royalty payments 2023 | 100,000 |
Future minimum royalty payments 2024 | 100,000 |
Future minimum royalty payments thereafter | 0 |
Total payments for purchase commitments 2022 | 782,400,000 |
Future payments under purchase commitments 2022 | 42,500,000 |
Future payments under purchase commitments 2023 | 18,000,000 |
Future payments under purchase commitments 2024 | 8,900,000 |
Future payments under purchase commitments 2025 | 100,000 |
Future payments under purchase commitments 2026 | 100,000 |
Future payments under purchase commitments thereafter | 0 |
Surety bonds, standby letters of credit and international bank guarantees | $ 30,700,000 |
Minimum | |
Other Commitments [Line Items] | |
Service period of purchase commitments | 1 month |
Maximum | |
Other Commitments [Line Items] | |
Service period of purchase commitments | 5 months |
RESTRUCTURING - Narrative (Deta
RESTRUCTURING - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 992 | $ 25,443 | $ 24,562 |
Restructuring reserve | $ 1,100 | 6,700 | |
Accrued Current Liabilities | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring reserve | 6,500 | ||
Other Noncurrent Liabilities | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring reserve | 200 | ||
Selling, general and administrative expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 20,800 | 13,800 | |
Cost of goods sold | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 4,600 | $ 10,800 |
RESTRUCTURING - Components of R
RESTRUCTURING - Components of Restructuring Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |||
Severance and employee-related benefits | $ 992 | $ 14,725 | $ 14,903 |
Asset impairments | 0 | 4,587 | 1,596 |
Inventory write-downs | 0 | 3,645 | 4,403 |
Other | 0 | 2,486 | 3,660 |
Total restructuring charges | $ 992 | $ 25,443 | $ 24,562 |
RESTRUCTURING - Restructuring b
RESTRUCTURING - Restructuring by Business Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 992 | $ 25,443 | $ 24,562 |
Operating Segments | Wrangler | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 305 | 6,616 | 17,613 |
Operating Segments | Lee | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 331 | 5,702 | 6,685 |
Corporate and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 356 | $ 13,125 | $ 264 |
RESTRUCTURING - Schedule of Act
RESTRUCTURING - Schedule of Activity in Restructuring Accrual (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Restructuring Reserve [Roll Forward] | ||
Accrual, Period Start | $ 6,700 | |
Accrual, Period End | 1,100 | $ 6,700 |
Severance | ||
Restructuring Reserve [Roll Forward] | ||
Accrual, Period Start | 6,741 | 2,172 |
Charges | 992 | 14,725 |
Cash payments | (6,673) | (8,390) |
Adjustments to accruals | 6 | (1,847) |
Currency translation | 13 | 81 |
Accrual, Period End | $ 1,079 | $ 6,741 |
TRANSACTIONS WITH FORMER PARE_3
TRANSACTIONS WITH FORMER PARENT - Narrative (Details) - USD ($) $ in Thousands | 5 Months Ended | 12 Months Ended | ||
May 23, 2019 | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Related Party Transactions [Abstract] | ||||
Sales to related party | $ 14,100 | |||
Related party transaction, cost of goods sold | 500 | |||
Related party transaction, remaining inventory purchased from related party | $ 400 | |||
Interest income from former parent, net | $ 3,800 | $ 0 | $ 0 | $ 3,762 |
TRANSACTIONS WITH FORMER PARE_4
TRANSACTIONS WITH FORMER PARENT - Components of Transfers To and From VF (Details) $ in Thousands | 12 Months Ended |
Dec. 29, 2018USD ($) | |
Related Party Transaction [Line Items] | |
Total net transfers to former parent | $ (1,696,859) |
General financing activities | |
Related Party Transaction [Line Items] | |
Total net transfers to former parent | (723,155) |
Corporate allocations | |
Related Party Transaction [Line Items] | |
Total net transfers to former parent | 47,903 |
Stock-based compensation expense | |
Related Party Transaction [Line Items] | |
Total net transfers to former parent | 9,582 |
Pension (benefit) costs | |
Related Party Transaction [Line Items] | |
Total net transfers to former parent | (2,246) |
Purchases from parent | |
Related Party Transaction [Line Items] | |
Total net transfers to former parent | 3,193 |
Sales to parent | |
Related Party Transaction [Line Items] | |
Total net transfers to former parent | (13,988) |
Other income tax | |
Related Party Transaction [Line Items] | |
Total net transfers to former parent | 10,863 |
Transition tax related to the Tax Act | |
Related Party Transaction [Line Items] | |
Total net transfers to former parent | 3,937 |
Cash dividend to former parent | |
Related Party Transaction [Line Items] | |
Total net transfers to former parent | $ (1,032,948) |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) | Feb. 22, 2022$ / shares |
Subsequent Event | Dividend Declared | |
Subsequent Event [Line Items] | |
Cash dividend (in USD per share) | $ 0.46 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowance, former parent investment | $ 24,500 | ||
Allowance for doubtful accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 19,143 | $ 11,852 | 10,549 |
Charged to Costs and Expenses | 330 | 18,338 | 5,988 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 7,768 | 11,047 | 4,685 |
Balance at End of Period | 11,705 | 19,143 | 11,852 |
Valuation allowance for deferred income tax assets | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 23,118 | 16,699 | 24,175 |
Charged to Costs and Expenses | 2,010 | 3,900 | 17,025 |
Charged to Other Accounts | (3,339) | 2,519 | 0 |
Deductions | 0 | 0 | 24,501 |
Balance at End of Period | $ 21,789 | $ 23,118 | $ 16,699 |
Uncategorized Items - ktb-20220
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-02 [Member] |