Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Feb. 02, 2020 | Mar. 26, 2020 | Aug. 02, 2019 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Period End Date | Feb. 2, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-38936 | ||
Entity Registrant Name | CHEWY, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 90-1020167 | ||
Entity Address, Address Line One | 1855 Griffin Road, Suite B-428 | ||
Entity Address, City or Town | Dania Beach | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33004 | ||
City Area Code | 786 | ||
Local Phone Number | 320-7111 | ||
Title of 12(b) Security | Class A Common Stock, par value $0.01 per share | ||
Trading Symbol | CHWY | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1.7 | ||
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement relating to the Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The registrant's Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended February 2, 2020. | ||
Entity Central Index Key | 0001766502 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --02-02 | ||
Document Fiscal Year Focus | 2019 | ||
Class A Common Stock, $0.01 par value per share | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 66,478,642 | ||
Class B Common Stock, $0.01 par value per share | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 334,922,454 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Feb. 02, 2020 | Feb. 03, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 212,088 | $ 88,331 |
Accounts receivable | 80,478 | 48,738 |
Inventories | 317,808 | 220,855 |
Due from Parent, net | 626 | 78,712 |
Prepaid expenses and other current assets | 18,789 | 11,949 |
Total current assets | 629,789 | 448,585 |
Property and equipment, net | 118,731 | 91,691 |
Operating lease right-of-use assets | 179,052 | |
Other non-current assets | 4,749 | 1,346 |
Total assets | 932,321 | 541,622 |
Current liabilities: | ||
Trade accounts payable | 683,049 | 502,880 |
Accrued expenses and other current liabilities | 417,489 | 311,150 |
Total current liabilities | 1,100,538 | 814,030 |
Operating lease liabilities | 200,439 | |
Other long-term liabilities | 35,318 | 63,534 |
Total liabilities | 1,336,295 | 877,564 |
Commitments and contingencies | ||
Stockholders’ deficit: | ||
Preferred stock, $0.01 par value per share, 5,000,000 shares authorized, no shares issued and outstanding as of February 2, 2020; no shares authorized, issued or outstanding as of February 3, 2019 | 0 | 0 |
Additional paid-in capital | 1,436,484 | 1,256,160 |
Accumulated deficit | (1,844,472) | (1,592,102) |
Total stockholders’ deficit | (403,974) | (335,942) |
Total liabilities and stockholders’ deficit | 932,321 | 541,622 |
Class A common stock, $0.01 par value per share, 1,500,000,000 shares authorized, 66,445,422 shares issued and outstanding as of February 2, 2020; no shares authorized, issued or outstanding as of February 3, 2019 | ||
Stockholders’ deficit: | ||
Common stock | 665 | 0 |
Class B common stock, $0.01 par value per share, 395,000,000 shares authorized, 334,922,454 shares issued and outstanding as of February 2, 2020; no shares authorized, issued or outstanding as of February 3, 2019 | ||
Stockholders’ deficit: | ||
Common stock | 3,349 | 0 |
Voting common stock, $0.01 par value per share, no shares authorized, issued or outstanding as of February 2, 2020; 1,000 shares authorized, 100 shares issued and outstanding as of February 3, 2019 | ||
Stockholders’ deficit: | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Feb. 02, 2020 | Feb. 03, 2019 |
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 5,000,000 | 0 |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Class A common stock | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 1,500,000,000 | 0 |
Common stock issued (in shares) | 66,445,422 | 0 |
Common stock outstanding (in shares) | 66,445,422 | 0 |
Class B common stock | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 395,000,000 | 0 |
Common stock issued (in shares) | 334,922,454 | 0 |
Common stock outstanding (in shares) | 334,922,454 | 0 |
Voting common stock | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 0 | 1,000 |
Common stock issued (in shares) | 0 | 100 |
Common stock outstanding (in shares) | 0 | 100 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Feb. 02, 2020 | Feb. 03, 2019 | Jan. 28, 2018 | |
Income Statement [Abstract] | |||
Net sales | $ 4,846,743 | $ 3,532,837 | $ 2,104,287 |
Cost of goods sold | 3,702,683 | 2,818,032 | 1,736,737 |
Gross profit | 1,144,060 | 714,805 | 367,550 |
Operating expenses: | |||
Selling, general and administrative | 969,890 | 589,507 | 451,673 |
Advertising and marketing | 426,896 | 393,064 | 253,728 |
Total operating expenses | 1,396,786 | 982,571 | 705,401 |
Loss from operations | (252,726) | (267,766) | (337,851) |
Interest income (expense), net | 356 | (124) | (206) |
Loss before income tax provision | (252,370) | (267,890) | (338,057) |
Income tax provision | 0 | 0 | 0 |
Net loss | $ (252,370) | $ (267,890) | $ (338,057) |
Net loss per share attributable to common Class A and Class B stockholders, basic and diluted (in dollars per share) | $ (0.63) | $ (0.68) | $ (2.67) |
Weighted average common shares used in computing net loss per share attributable to common Class A and Class B stockholders, basic and diluted (in shares) | 398,256 | 393,000 | 262,200 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Series 1 Preferred Stock | Additional Paid-in Capital | Accumulated Deficit | Convertible Redeemable Preferred Stock |
Beginning balance (in shares) at Jan. 31, 2017 | 628 | |||||
Beginning balance at Jan. 31, 2017 | $ 689,329 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Accretion of convertible redeemable preferred units and preferred stock | $ 361,520 | $ 361,520 | ||||
Issuance of Series F convertible redeemable preferred stock, net of issuance costs (in shares) | 67 | |||||
Issuance of Series F convertible redeemable preferred stock, net of issuance costs | $ 124,981 | |||||
Effect of equity reorganization (in shares) | (695) | |||||
Effect of equity reorganization | $ (1,175,830) | |||||
Ending balance (in shares) at Jan. 28, 2018 | 0 | |||||
Ending balance at Jan. 28, 2018 | $ 0 | |||||
Beginning balance (in shares) at Jan. 31, 2017 | 600 | 60 | ||||
Beginning balance at Jan. 31, 2017 | (634,024) | $ 6 | $ 1 | $ 0 | $ (634,031) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Accretion of convertible redeemable preferred stock | (361,520) | (9,396) | (352,124) | |||
Share-based compensation expense | 11,209 | 11,209 | ||||
Effect of equity reorganization (in shares) | (600) | (60) | ||||
Effect of equity reorganization | 1,175,830 | $ (6) | $ (1) | 1,175,837 | ||
Contribution from Parent | 62,859 | 62,859 | ||||
Net loss | (338,057) | (338,057) | ||||
Ending balance (in shares) at Jan. 28, 2018 | 0 | 0 | ||||
Ending balance at Jan. 28, 2018 | (83,703) | $ 0 | $ 0 | 1,240,509 | (1,324,212) | |
Ending balance (in shares) at Feb. 03, 2019 | 0 | |||||
Ending balance at Feb. 03, 2019 | $ 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 14,351 | 14,351 | ||||
Contribution from Parent | 1,300 | 1,300 | ||||
Net loss | (267,890) | (267,890) | ||||
Ending balance (in shares) at Feb. 03, 2019 | 0 | 0 | ||||
Ending balance at Feb. 03, 2019 | (335,942) | $ 0 | $ 0 | 1,256,160 | (1,592,102) | |
Ending balance (in shares) at Feb. 02, 2020 | 0 | |||||
Ending balance at Feb. 02, 2020 | $ 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of Class A common stock upon initial public offering, net of underwriting discounts, commissions and offering costs (in shares) | 5,600 | |||||
Issuance of Class A common stock upon initial public offering, net of underwriting discounts, commissions and offering costs | 110,349 | $ 56 | 110,293 | |||
Change in capital structure (in shares) | 393,000 | |||||
Change in capital structure | 0 | $ 3,930 | (3,930) | |||
Distribution to Parent (in shares) | 83 | |||||
Distribution to Parent | 0 | $ 1 | (1) | |||
Share-based compensation expense | 134,926 | 134,926 | ||||
Vesting of share-based compensation awards (in shares) | 2,685 | |||||
Vesting of share-based compensation awards | (224) | $ 27 | (251) | |||
Contribution from Parent | 1,300 | 1,300 | ||||
Tax sharing agreement with Parent | 17,497 | 17,497 | ||||
Termination of loan from Parent | (79,510) | (79,510) | ||||
Net loss | (252,370) | (252,370) | ||||
Ending balance (in shares) at Feb. 02, 2020 | 401,368 | 0 | ||||
Ending balance at Feb. 02, 2020 | $ (403,974) | $ 4,014 | $ 0 | $ 1,436,484 | $ (1,844,472) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 02, 2020 | Feb. 03, 2019 | Jan. 28, 2018 | |
Cash flows from operating activities | |||
Net loss | $ (252,370) | $ (267,890) | $ (338,057) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 30,645 | 23,210 | 12,536 |
Share-based compensation expense | 134,926 | 14,351 | 11,209 |
Non-cash lease expense | 18,208 | ||
Amortization of deferred rent | 9,872 | 6,377 | |
Other | 2,511 | 670 | 1,446 |
Net change in operating assets and liabilities: | |||
Accounts receivable | (31,740) | (12,208) | (19,759) |
Inventories | (96,953) | (54,851) | (68,876) |
Prepaid expenses and other current assets | (10,134) | (5,530) | (522) |
Other non-current assets | (2,125) | 797 | (308) |
Trade accounts payable | 180,169 | 167,453 | 164,173 |
Accrued expenses and other current liabilities | 80,824 | 102,041 | 125,428 |
Operating lease liabilities | (10,304) | ||
Other long-term liabilities | 2,924 | 8,670 | 26,606 |
Net cash provided by (used in) operating activities | 46,581 | (13,415) | (79,747) |
Cash flows from investing activities | |||
Capital expenditures | (48,636) | (44,160) | (40,282) |
Cash advances provided to Parent, net of reimbursements | (1,225) | 75,998 | (155,522) |
Net cash (used in) provided by investing activities | (49,861) | 31,838 | (195,804) |
Cash flows from financing activities | |||
Proceeds from initial public offering, net of underwriting discounts, commissions and offering costs | 110,349 | 0 | 0 |
Proceeds from tax sharing agreement with Parent | 17,300 | 0 | 0 |
Proceeds from issuance of Series F convertible redeemable preferred stock | 0 | 0 | 125,000 |
Contribution from Parent | 1,300 | 1,300 | 62,859 |
Payment of debt issuance costs | (1,459) | 0 | (10) |
Principal repayments of finance lease obligations | (229) | ||
Principal repayments of finance lease obligations | (159) | 0 | |
Other | (224) | 0 | 0 |
Net cash provided by (used in) financing activities | 127,037 | 1,141 | 187,849 |
Net increase (decrease) in cash and cash equivalents | 123,757 | 19,564 | (87,702) |
Cash and cash equivalents, as of end of period | 212,088 | 88,331 | 68,767 |
Cash and cash equivalents, as of beginning of period | 88,331 | 68,767 | 156,469 |
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for interest | $ 375 | $ 34 | $ 55 |
Description of Business
Description of Business | 12 Months Ended |
Feb. 02, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Chewy, Inc. and its wholly-owned subsidiaries (collectively, “Chewy” or the “Company”) is a pure-play e-commerce business geared toward pet products for dogs, cats, fish, birds, small pets, horses, and reptiles. Chewy serves its customers through its retail website, www.chewy.com, and its mobile applications and focuses on delivering exceptional customer service, a large selection of high-quality pet food, treats and supplies, and pet healthcare products; price, convenience (including Chewy’s Autoship subscription program), fast shipping, and hassle-free returns. PetSmart Acquisition On May 31, 2017, the Company was acquired by PetSmart, Inc. (“PetSmart” or the “Parent”), a leading specialty provider of products, services and solutions for the lifetime needs of pets. This change-in-control event is referred to as the “PetSmart Acquisition”. PetSmart is wholly-owned by a consortium including private investment funds advised by BC Partners, La Caisse de dépôt et placement du Québec, affiliates of GIC Special Investments Pte Ltd, affiliates of StepStone Group LP and funds advised by Longview Asset Management, LLC (collectively, the “Sponsors”), and controlled by affiliates of BC Partners. Initial Public Offering On June 18, 2019, the Company closed its initial public offering (“IPO”), in which it issued and sold 5.6 million shares of its Class A common stock. The price at IPO was $22.00 per share. The Company received net proceeds of approximately $110.3 million from the IPO after deducting underwriting discounts and commissions of $6.2 million and offering costs. Prior to the completion of the IPO, the Company amended and restated its certificate of incorporation to authorize Class A and Class B common stock and reclassify the 100 outstanding shares of common stock into 393,000,000 shares of Class B common stock. In connection with the IPO, 47,875,000 shares of the Company’s Class B common stock were reclassified into shares of Class A common stock on a one-to-one basis. Upon completion of the IPO, 53,475,000 shares of the Company’s Class A common stock and 345,125,000 shares of Class B common stock were outstanding. The Class A common stock outstanding includes the shares issued in the IPO. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Feb. 02, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation The Company’s accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) accounting standards codification. The Company’s consolidated financial statements for the periods subsequent to the PetSmart Acquisition presented herein have been derived from the separate records maintained by the Company. Pushdown accounting was not applied in connection with the PetSmart Acquisition and consequently no change in basis was reflected in the Company’s consolidated financial statements. Fiscal Year The Company’s 2019 fiscal year ended February 2, 2020 and included 52 weeks (“Fiscal Year 2019”). The Company’s 2018 fiscal year ended February 3, 2019 and included 53 weeks (“Fiscal Year 2018”). The Company’s 2017 fiscal year ended January 28, 2018 and included 52 weeks (“Fiscal Year 2017”). Principles of Consolidation The consolidated financial statements and related notes include the accounts of Chewy, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates GAAP requires management to make certain estimates, judgments, and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates these estimates and judgments. Actual results could differ from those estimates. Key estimates relate primarily to determining the net realizable value and demand for inventory, useful lives associated with property and equipment, valuation allowances with respect to deferred tax assets, contingencies, evaluation of sales tax positions, and the valuation and assumptions underlying share-based compensation. On an ongoing basis, management evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. Cash equivalents primarily consist of institutional money market funds and are carried at cost, which approximates fair value. Concentration of Credit Risk The Company maintains the majority of its cash and cash equivalents in accounts with large financial institutions. At times, balances in these accounts may exceed federally insured limits; however, to date, the Company has not incurred any losses on its deposits of cash and cash equivalents. Accounts Receivable The Company’s accounts receivable are comprised of customer and vendor receivables. The Company’s net customer receivables were $58.3 million and $41.5 million as of February 2, 2020 and February 3, 2019, respectively, and consist of credit and debit card receivables from banks, which typically settle within five business days. The Company’s vendor receivables were $22.2 million and $7.2 million as of February 2, 2020 and February 3, 2019, respectively. The Company does not maintain an allowance for doubtful accounts as historical losses on customer and vendor receivables have not been significant. Inventories The Company’s inventories represent finished goods, consist of products available for sale and are accounted for using the first-in, first-out (FIFO) method and valued at the lower of cost or net realizable value. Inventory costs consist of product and inbound shipping and handling costs. Inventory valuation requires the Company to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers or returns to product vendors. Inventory valuation losses are recorded as cost of goods sold and historical losses have not been significant. Due from Parent, net Transactions between the Company and the Parent relate to funding operations and capital contributions. Balances that are due from and due to Parent are regularly cash settled and have been included in the consolidated balance sheets on a net basis. Cash advances provided to and reimbursed by the Parent to fund Parent operations has been classified on a net basis in the consolidated statements of cash flows as investing activities. Cash received from the Parent in connection with the tax sharing agreement and cash received as capital contributions have been classified in the consolidated statements of cash flows as financing activities. For more information, see Note 11 – “Certain Relationships and Related Party Transactions”. Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated over the estimated useful lives of the related assets using the straight-line method. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term (including renewals that are reasonably assured) or the estimated useful lives of the improvements. External costs and certain internal costs, including payroll and payroll-related costs of employees, directly associated with developing significant computer software applications for internal use are capitalized subsequent to the preliminary stage of development. Internal-use software costs are amortized using the straight-line method over the estimated useful life of the software when the project is substantially complete and ready for its intended use. The estimated useful lives of property and equipment are principally as follows: Furniture, fixtures and equipment 5 to 10 years Computer equipment and software 3 to 5 years Leasehold improvements and finance lease assets Shorter of the lease term or estimated useful life Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gains or losses are included in the Company’s results of operations for the respective period. Impairment of Long-Lived Assets The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. For asset groups held and used, the carrying value of the asset group is considered recoverable when the estimated undiscounted future cash flows expected to be generated from the use and eventual disposition of the asset group exceed the respective carrying value. In the event that the carrying value is not considered recoverable, an impairment charge would be recognized for the asset group to be held and used equal to the excess of the carrying value above the estimated fair value of the asset group. Impairment charges are recognized within selling, general and administrative expenses in the consolidated statements of operations. The Company did not have any impairment charges for Fiscal Year 2019, Fiscal Year 2018, and Fiscal Year 2017. Accrued Expenses and Other Current Liabilities The following table presents the components of accrued expenses and other current liabilities (in thousands): As of February 2, 2020 February 3, 2019 Outbound fulfillment $ 182,589 $ 147,610 Advertising and marketing 96,836 85,421 Accrued expenses and other 138,064 78,119 Total accrued expenses and other current liabilities $ 417,489 $ 311,150 Self-Insurance Accruals The Company uses a combination of self-insurance programs and large-deductible purchased insurance to provide for the costs of medical and workers’ compensation claims. The Company periodically evaluates its level of insurance coverage and adjusts its insurance levels based on risk tolerance and premium expense. Liabilities for the risks the Company retains, including estimates of claims incurred but not reported, are not discounted and are estimated, in part, by considering historical cost experience, demographic and severity factors, and judgments about current and expected levels of cost per claim and retention levels. Additionally, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous actuarial projections. The Company believes the actuarial methods are appropriate for measuring these self-insurance accruals. However, based on the number of claims and the length of time from incurrence of the claims to ultimate settlement, the use of any estimation method is sensitive to the assumptions and factors described above. Accordingly, changes in these assumptions and factors can affect the estimated liability and those amounts may be different than the actual costs paid to settle the claims. Defined Contribution Plans The Company maintains a 401(k) defined contribution plan which covers all employees who meet minimum requirements and elect to participate. The Company is currently matching employee contributions, up to specified percentages of those contributions. Revenue Recognition Chewy recognizes revenues from product sales when the customer orders an item through Chewy’s website or mobile applications via the electronic shopping cart, funds are collected from the customer and the item is shipped from one of the Company’s fulfillment centers and delivered to the carrier. Revenue is recognized on a gross basis as the Company is (i) the primary entity responsible for fulfilling the promise to provide the specified products in the arrangement with the customer and provides the primary customer service for all products sold on Chewy’s website or mobile applications, (ii) has inventory risk before the products have been transferred to a customer and maintains inventory risk upon accepting returns , and (iii) has discretion in establishing the price for the specified products sold on Chewy’s website or mobile applications. Chewy generates net sales from sales of pet food, pet products, pet medications and other pet health products, and related shipping fees. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. To encourage customers to purchase its products, the Company periodically provides incentive offers. Generally, these promotions include current discount offers, such as percentage discounts off current purchases and other similar offers. These offers, when accepted by customers, are treated as a reduction to the transaction price. Revenue typically consists of the consideration received from the customer when the order is executed less a refund allowance, which is estimated using historical experience. Taxes collected from customers for remittance to governmental authorities are excluded from net sales. Cost of Goods Sold Cost of goods sold includes the purchase price of inventory sold, freight costs associated with inventory, shipping supply costs, inventory shrinkage costs and valuation adjustments and reductions for promotions and discounts offered by the Company’s vendors. Vendor Agreements The Company has agreements with vendors to receive either percentage or volume rebates. Additionally, certain vendors provide funding for discounts relating to the Autoship subscription program which are passed on to the Company’s customers. The Company primarily receives agreed upon percentage rebates from vendors, however, certain of its vendor rebates are dependent upon reaching minimum purchase thresholds. In these instances, the Company evaluates the likelihood of reaching purchase thresholds using past experience and current year forecasts. When volume rebates can be reasonably estimated and it is probable that minimum purchase thresholds will be met, the Company records a portion of the rebate as it makes progress towards the purchase threshold. The Company also receives vendor funding in the form of advertising agreements related to general marketing activities. Amounts received from vendors are considered a reduction of the carrying value of the Company’s inventory and, therefore, such amounts are ultimately recorded as a reduction of cost of goods sold in the consolidated statements of operations. Vendor Concentration Risk The Company purchases inventory from several hundred vendors worldwide. Sales of products from the Company’s three largest vendors represented approximately 32.5%, 30.1%, and 28.5% of the Company’s net sales for Fiscal Year 2019, Fiscal Year 2018, and Fiscal Year 2017, respectively. Selling, General and Administrative Selling, general and administrative expenses consist of payroll and related expenses for employees involved in general corporate functions, including accounting, finance, tax, legal, and human resources; costs associated with use by these functions of facilities and equipment, such as depreciation expense and rent; share-based compensation expense, professional fees and other general corporate costs. Fulfillment Fulfillment costs represent those costs incurred in operating and staffing fulfillment and customer service centers, including costs attributable to buying, receiving, inspecting and warehousing inventories, picking, packaging and preparing customer orders for shipment, payment processing and related transaction costs, and responding to inquiries from customers. For Fiscal Year 2019, Fiscal Year 2018, and Fiscal Year 2017 the Company recorded fulfillment costs of $546.2 million, $403.9 million, and $258.9 million, respectively, which are included within selling, general and administrative expenses in the consolidated statements of operations. Included within fulfillment costs are merchant processing fees charged by third parties that provide merchant processing services for credit cards. For Fiscal Year 2019, Fiscal Year 2018, and Fiscal Year 2017, the Company recorded merchant processing fees of $101.0 million, $74.1 million, and $45.2 million, respectively, which are included within selling, general and administrative expenses in the consolidated statements of operations. Share-Based Compensation The Company recognizes share-based compensation expense based on the equity award’s grant date fair value. For grants of restricted stock units (“RSUs”) subject to service-based vesting conditions, the fair value is established based on the market price on the date of the grant. For grants of RSUs subject to market-based vesting conditions, the fair value is established using the Monte Carlo simulation lattice model. The determination of the fair value of share-based awards is affected by the Company’s stock price and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. The Company accounts for forfeitures as they occur. The grant date fair value of each RSU is amortized over the requisite service period. Advertising and Marketing Advertising and marketing expenses primarily consist of advertising and payroll and related expenses for personnel engaged in marketing, business development and selling activities. Advertising and marketing costs are expensed in the period that the advertising first takes place. Leases The Company has operating and finance lease agreements for its fulfillment and customer service centers, corporate offices, and certain equipment. The Company determines if an arrangement contains a lease at inception based on the ability to control a physically distinct asset. Operating and finance lease right-of-use assets are recorded in the consolidated balance sheets based on the initial measurement of the lease liability as adjusted to include prepaid rent and initial direct costs less any lease incentives received. Lease liabilities are measured at the commencement date based on the present value of the lease payments over the lease term. Lease payments are generally fixed but may include provisions for future rent increases based on a market index. The Company separately accounts for lease and non-lease components within lease agreements; the non-lease components primarily relate to common area maintenance for real estate leases. The Company uses its incremental borrowing rate to present value the lease liability as key inputs to determine the interest rate implicit in the lease are not shared by lessors. Operating lease expense is recorded on a straight-line basis over the lease term. Right-of-use assets and lease liabilities for short-term leases are not recognized in the consolidated balance sheets. Payments for short-term leases are recognized in the consolidated statements of operations on a straight-line basis over the lease term. Income and Other Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We evaluate both the positive and negative evidence that is relevant in assessing whether we will realize the deferred tax assets. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. This projected realization is directly related to our future projections of the performance of our business and management’s planning initiatives at any point in time. As a result, valuation allowances are subject to change as proven business trends and planning initiatives develop. In accordance with the accounting standard for uncertainty in income taxes, liabilities for uncertain tax positions are recognized based on the two-step process prescribed by the accounting standards. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company collects and remits sales tax in jurisdictions in which it has a physical presence or it believes nexus exists. The Company has recorded an estimated liability for potential exposure in states where there is uncertainty about the point in time at which the Company established a sufficient in-state business presence to create nexus and the Company did not collect sales tax. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Loss Contingencies Certain conditions may exist which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability is estimable, the liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed. Unasserted claims that are not considered probable of being asserted and those for which an unfavorable outcome is not reasonably possible have not been disclosed. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1-Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2-Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3-Valuations based on unobservable inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The Company’s cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, trade accounts payable, and accrued expenses and other current liabilities approximate fair value based on the short-term maturities of these instruments. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements ASU 2016-02, Leases. In February 2016, the FASB issued this Accounting Standards Update (“ASU”) to provide a comprehensive lease accounting model that requires lessees to recognize lease liabilities and corresponding right-of-use assets for most leases. The new guidance also changes the definition of a lease and requires enhanced disclosures of pertinent quantitative and qualitative information about an entity’s leasing activities. The FASB subsequently issued ASU 2018-10 allowing entities to initially apply ASU 2016-02 at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. These ASUs became effective at the beginning of the Company’s 2019 fiscal year. The Company adopted this ASU by applying the new guidance to new and existing leases effective February 4, 2019, with no restatement of comparative periods. The Company elected the package of practical expedients, which permitted the Company to not reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company also made an accounting policy election to not recognize right-of-use assets and lease liabilities arising from short-term leases on its consolidated balance sheets. The adoption of this ASU did not result in a cumulative effect adjustment to accumulated deficit. Upon adoption, the Company recognized operating lease right-of-use assets of $162.8 million and operating lease liabilities of $193.6 million. The adoption of this new guidance did not have a material net impact on the Company’s consolidated statements of operations or consolidated statements of cash flows. ASU 2018-07, Stock Compensation; Improvements to Nonemployee Share-Based Payment Accounting . In June 2018, the FASB issued this ASU to expand the scope of Topic 718, Compensation-Stock Compensation to include share-based payment awards to be issued to non-employees in exchange for acquiring goods and services. The ASU aligned the accounting for awards issued to non-employees to be similar to employee awards. This update became effective at the beginning of the Company’s 2019 fiscal year. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements and disclosures. Recently Issued Accounting Pronouncements ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued this ASU to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. This ASU also clarifies and simplifies other aspects of the accounting for income taxes. This update is effective at the beginning of the Company’s 2021 fiscal year, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement. In August 2018, the FASB issued this ASU to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This update is effective at the beginning of the Company’s 2020 fiscal year. The Company does not believe the adoption of this ASU will have a material impact on its consolidated financial statements and disclosures. ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued this ASU to amend the current accounting guidance which requires the measurement of all expected losses to be based on historical experience, current conditions and reasonable and supportable forecasts. For trade receivables, loans, and other financial instruments, the Company will be required to use a forward-looking expected loss model that reflects probable losses rather than the incurred loss model for recognizing credit losses. This update is effective at the beginning of the Company’s 2020 fiscal year. The Company does not believe the adoption of this ASU will have a material impact on its consolidated financial statements and disclosures. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Feb. 02, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net The following is a summary of property and equipment, net (in thousands): As of February 2, 2020 February 3, 2019 Furniture, fixtures and equipment $ 65,329 $ 60,535 Computer equipment 32,259 25,027 Internal-use software 30,222 19,308 Leasehold improvements 39,447 22,342 Finance lease assets 2,565 705 Construction in progress 18,927 6,227 188,749 134,144 Less: accumulated depreciation and amortization 70,018 42,453 Property and equipment, net $ 118,731 $ 91,691 Internal-use software includes labor and license costs associated with software development for internal use. As of February 2, 2020 and February 3, 2019, the Company had accumulated amortization related to internal-use software of $15.9 million and $9.7 million, respectively. Construction in progress is stated at cost, which includes the cost of construction and other directly attributable costs. No provision for depreciation is made on construction in progress until the relevant assets are completed and put into use. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Feb. 02, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters Various legal claims arise from time to time in the normal course of business which, in the opinion of management, will not have a material effect on the Company's consolidated financial statements or disclosures. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. |
Debt
Debt | 12 Months Ended |
Feb. 02, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt ABL Credit Facility On June 18, 2019, the Company entered into a five Borrowings under the ABL Credit Facility bear interest at a rate per annum equal to an applicable margin, plus, at the Company’s option, either a base rate or a LIBOR rate. The applicable margin is generally determined based on the average excess liquidity during the immediately preceding fiscal quarter as a percentage of the maximum borrowing amount under the ABL Credit Facility, and is between 0.25% and 0.75% for base rate loans and between 1.25% and 1.75% for LIBOR loans. The Company is also required to a pay commitment fee of between 0.25% and 0.375% with respect to the undrawn portion of the commitments, which is generally based on average daily usage of the facility. All obligations under the ABL Credit Facility are guaranteed on a senior secured first-lien basis by the Company’s wholly-owned domestic subsidiaries, subject to certain exceptions, and secured, subject to permitted liens and other exceptions, by a perfected first-priority security interest in substantially all of the Company’s and its wholly-owned domestic subsidiaries’ assets. The ABL Credit Facility contains a number of covenants that, among other things, restrict the Company’s and its restricted subsidiaries’ ability to: • incur or guarantee additional debt and issue certain equity securities; • make certain investments and acquisitions; • make certain restricted payments and payments of certain indebtedness; • incur certain liens or permit them to exist; • enter into certain types of transactions with affiliates; • merge or consolidate with another company; and • transfer, sell or otherwise dispose of assets. Each of these restrictions is subject to various exceptions. |
Leases
Leases | 12 Months Ended |
Feb. 02, 2020 | |
Leases [Abstract] | |
Leases | LeasesThe Company leases all of its fulfillment and customer service centers and corporate offices under non-cancelable operating lease agreements. The terms of the Company’s real estate leases generally range from 5 to 15 years and typically allow for the leases to be renewed for up to three additional five The Company’s finance leases as of February 2, 2020 were not material. The table below presents the operating lease-related assets and liabilities recorded on the consolidated balance sheets (in thousands): Leases Balance Sheet Classification As of February 2, 2020 Assets Operating Operating lease right-of-use assets $ 179,052 Total operating lease assets $ 179,052 Liabilities Current Operating Accrued expenses and other current liabilities $ 15,491 Non-current Operating Operating lease liabilities 200,439 Total operating lease liabilities $ 215,930 For Fiscal Year 2019, assets acquired in exchange for new operating lease liabilities were $30.7 million. Lease expense primarily related to operating lease costs. Lease expense for Fiscal Year 2019 was $47.9 million, of which short-term and variable lease payments were $9.3 million, and were included within selling, general and administrative expenses in the consolidated statements of operations. As of February 2, 2020, the weighted-average remaining lease term and weighted-average discount rate for operating leases was 10.4 years and 11.3%, respectively. Operating cash flows related to cash paid for operating leases were approximately $37.9 million for Fiscal Year 2019. The table below presents the maturity of lease liabilities as of February 2, 2020 (in thousands): Operating Leases 2020 $ 36,518 2021 37,663 2022 35,536 2023 30,821 2024 29,471 Thereafter 231,191 Total lease payments 401,200 Less: interest 185,270 Present value of lease liabilities $ 215,930 |
Stockholders' Deficit and Conve
Stockholders' Deficit and Convertible Redeemable Preferred Stock | 12 Months Ended |
Feb. 02, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit and Convertible Redeemable Preferred Stock | Stockholders’ Deficit and Convertible Redeemable Preferred Stock Common Stock Prior to the completion of the IPO, the Company amended and restated its certificate of incorporation to authorize Class A and Class B common stock and reclassify the 100 outstanding shares of common stock into 393,000,000 shares of Class B common stock. In connection with the IPO, 47,875,000 shares of the Company’s Class B common stock were reclassified into shares of Class A common stock on a one-to-one basis. Upon completion of the IPO, 53,475,000 shares of the Company’s Class A common stock and 345,125,000 shares of Class B common stock were outstanding. Voting Rights Holders of the Company’s Class A and Class B common stock are entitled to vote together as a single class on all matters submitted to a vote or for the consent of the stockholders of the Company, unless otherwise required by law or the Company’s amended and restated certificate of incorporation. Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to ten votes per share. Dividends Subject to the preferences applicable to any series of preferred stock, if any, outstanding, holders of Class A and Class B common stock are entitled to share equally, on a per share basis, in dividends and other distributions of cash, property or securities of the Company. Liquidation Subject to the preferences applicable to any series of preferred stock, if any, outstanding, in the event of the voluntary or involuntary liquidation, dissolution, distribution of assets or winding up of the Company, all assets of the Company available for distribution to common stockholders would be divided among and paid ratably to holders of Class A and Class B common stock. Conversion of Class B Common Stock Voluntary Conversion Each share of Class B common stock is convertible into one fully paid and nonassessable share of Class A common stock at the option of the holder thereof with the prior written consent of the Company. On December 20, 2019, a wholly-owned subsidiary of PetSmart, converted 6,352,546 shares of the Company’s Class B common stock into Class A common stock and sold such Class A common stock. Subsequently, on January 6, 2020, a wholly-owned subsidiary of PetSmart, converted 3,850,000 shares of the Company’s Class B common stock into Class A common stock and sold such Class A common stock. Automatic Conversion All shares of Class B common stock shall automatically, without further action by any holder, be converted into an identical number of shares of fully paid and nonassessable Class A common stock (i) on the first trading day on or after the date on which the outstanding shares of Class B common stock constitute less than 7.5% of the aggregate number of shares of common stock then outstanding, or (ii) upon the occurrence of an event, specified by the affirmative vote (or written consent) of the holders of a majority of the then-outstanding shares Class B common stock, voting as a separate class. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock (i) upon the sale or transfer of such share of Class B common stock, except for certain transfers described in the Company’s amended and restated certificate of incorporation, including transfers to affiliates of the holder and another holder of Class B common stock, or (ii) if the holder is not an affiliate of any of the Sponsors. Preferred Stock Preferred stock may be issued from time to time by the Company for such consideration as may be fixed by the board of directors. Except as otherwise required by law, holders of any series of preferred stock shall be entitled to only such voting rights, if any, as shall expressly be granted by the Company’s amended and restated certificate of incorporation. Convertible Redeemable Preferred Stock In October 2013, the Company issued Series A convertible redeemable preferred units and a warrant to purchase its Series A-1 convertible redeemable preferred units to an investor in exchange for $15.0 million in total proceeds and incurred transaction costs of $1.3 million. The warrant was recorded as a liability at its fair value and the remaining net proceeds were allocated to the Series A convertible redeemable preferred units. In October 2015, the warrant was exercised (net-unit settled) into 2,727,260 Series A-1 convertible redeemable preferred units (27,273 shares of Series A-1 convertible redeemable preferred stock subsequent to the 100:1 reverse share split). In April 2014, in connection with the issuance of the Series B convertible redeemable preferred units, the Company raised $30.0 million in total proceeds and incurred transaction costs of $0.1 million. In August 2014, in connection with the issuance of the Series C convertible redeemable preferred units, the Company raised $41.0 million in total proceeds and incurred transaction costs of $0.1 million. In October 2015, in connection with the issuance of the Series D convertible redeemable preferred units, the Company raised $75.0 million in total proceeds and incurred transaction costs of $1.7 million. As a result of the Company’s corporate conversion and related 100:1 reverse share split in March 2016, its convertible redeemable preferred Series A, A-1, B, C and D units were replaced with ten series of convertible redeemable preferred stock, par value $0.01 per share. In April and May 2016, in connection with the issuance of the Series E convertible redeemable preferred stock, the Company raised $75.0 million in total proceeds and incurred transaction costs of $0.1 million. In April 2017, in connection with the issuance of the Series F convertible redeemable preferred stock, the Company raised $125.0 million in total proceeds. The following table provides information about the Company's convertible redeemable preferred stock for Fiscal Year 2017 (in thousands): Fiscal Year 2017 Series Accretion Series A voting preferred stock $ 108,880 Series A-1 voting preferred stock 15,848 Series B voting preferred stock 67,595 Series C voting preferred stock 66,513 Series D voting preferred stock 60,163 Series E voting preferred stock 42,521 Total $ 361,520 The Company classified the convertible redeemable preferred stock outside of stockholders’ deficit as the stock contained contingent redemption features that were not solely within the Company’s control. The Company recognized changes in the redemption value of the convertible redeemable preferred stock immediately as they occurred by adjusting the carrying amounts of these shares to what the redemption amounts would be assuming the shares were redeemable as of each balance sheet date. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Feb. 02, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation 2019 Omnibus Incentive Plan In June 2019, the Company’s board of directors adopted and approved the 2019 Omnibus Incentive Plan (the “2019 Plan”). The 2019 Plan became effective on June 13, 2019 and allows for the issuance of up to 31,864,865 shares of Class A common stock. No awards may be granted under the 2019 Plan after June 2029. The 2019 Plan provides for the grant of stock options, including incentive stock options, non-qualified stock options, restricted stock, dividend equivalents, stock payments, RSUs, performance shares, other incentive awards, stock appreciation rights, and cash awards (collectively “awards”). The awards may be granted to the Company’s employees, consultants, and directors, and the employees and consultants of the Company’s affiliates and subsidiaries. RSUs In connection with the consummation of the IPO, the Company granted RSUs under the 2019 Plan. Certain of these RSUs vest upon satisfaction of both a service-based vesting condition (the “Service Condition”) and a performance-based vesting condition (the “Share Price Condition”) as described below. The Service Condition will be satisfied with respect to 25% of an employee’s RSUs on the first anniversary of the 2019 Plan’s registration date and then with respect to 12.5% of an employee’s RSUs at the end of each six month period thereafter, subject to the employee’s continued employment with the Company through the applicable vesting date. The Share Price Condition shall be satisfied with respect to a percentage of an employee’s RSUs, as and when the price per share of Class A common stock specified (each, a “Share Price Hurdle”) is achieved, on a volume adjusted weighted-average basis, on every trading day during a consecutive 45-trading day period completed prior to the fifth anniversary of the 2019 Plan’s effective date subject to the employee’s continued employment with the Company through the applicable vesting date. RSU Activity The following table summarizes the activity related to the Company’s RSUs for Fiscal Year 2019 (in thousands, except for weighted average grant date fair value): Number of RSUs Weighted Average Grant Date Fair Value Outstanding as of February 3, 2019 — $ — Granted 26,677 $ 36.31 Vested (2,778) $ 36.86 Forfeited (2,615) $ 36.62 Unvested and outstanding as of February 2, 2020 21,284 $ 36.20 The total fair value of RSUs that vested during Fiscal Year 2019 was $103.3 million. As of February 2, 2020, total unrecognized compensation expense related to unvested RSUs was $192.3 million and is expected to be recognized over a weighted-average expected performance period of 1.9 years. During Fiscal Year 2019, the Company issued 82,941 RSUs to a director of the Company that vested. For accounting purposes, this is treated as a distribution to the Parent because such director is an employee of the Parent. The fair value of the RSUs with share price hurdles was determined on the date of grant using a Monte Carlo model to simulate total stockholder return for the Company and peer companies with the following assumptions: Performance period 5 years Weighted-average risk-free interest rate 1.8% Weighted-average volatility 49.6% Weighted-average dividend yield —% The risk-free interest rate utilized is based on a 5-year term-matched zero-coupon U.S. Treasury security yield at the time of grant. Expected volatility is based on historical volatility of the stock of the Company’s peer firms. As of February 2, 2020, there were 7.8 million additional shares of Class A common stock reserved for future issuance under the 2019 Plan. Citrus Profits Interest Plan Subsequent to the PetSmart Acquisition, the Company’s share-based compensation included profits interests units (“PIUs”) granted by Citrus Intermediate Holdings L.P. (the “Citrus Partnership”), a Delaware limited partnership (the “Citrus Profits Interest Plan”). The Citrus Partnership is a parent company of PetSmart and a wholly-owned subsidiary of the Sponsors. The Company recognized share-based compensation as equity contributions from the Citrus Partnership in its consolidated financial statements for awards granted under the Citrus Profits Interest Plan as it relates to grantees’ services as employees of the Company. As of June 13, 2019, an aggregate of 768,785 profits interests units under the Citrus Profits Interest Plan were held by employees of Chewy, Inc. and were canceled. Share-Based Compensation Expense Share-based compensation expense is included within selling, general and administrative expenses in the consolidated statements of operations. The Company recognized share-based compensation expense as follows (in thousands): Fiscal Year 2019 2018 2017 RSUs $ 124,761 $ — $ — PIUs 10,165 14,351 11,209 Total share-based compensation expense $ 134,926 $ 14,351 $ 11,209 |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 02, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Chewy is subject to U.S. federal, state, and local corporate income taxes. The Company is included with PetSmart’s consolidated U.S. federal and state income tax returns. Income taxes as presented in the Company’s consolidated financial statements have been prepared on the separate return method as if the Company were a taxpayer separate from PetSmart. The Company did not have a current or deferred provision for income taxes for any taxing jurisdiction during Fiscal Year 2019, Fiscal Year 2018, and Fiscal Year 2017. The Company’s effective income tax rate reconciliation is composed of the following for the periods presented: Fiscal Year 2019 2018 2017 Federal statutory rate 21.0 % 21.0 % 33.9 % State income taxes, net of federal tax benefit 4.4 % 1.5 % 1.1 % Change in tax rate 0.6 % — % (21.3) % Share-based compensation 4.0 % — % 7.4 % Other (2.1) % (1.1) % (1.3) % Change in valuation allowance (27.9) % (21.4) % (19.8) % Effective rate — % — % — % The temporary differences which comprise the Company’s deferred taxes are as follows for the periods presented (in thousands): As of February 2, 2020 February 3, 2019 Deferred tax assets: Operating lease liabilities $ 53,578 $ — Inventories 7,485 11,474 Deferred rent — 7,415 Share-based compensation 29,639 — Accrued expenses and reserves 10,814 10,271 Other 12,882 1,668 Net operating loss carryforwards 190,307 156,360 Total deferred tax assets 304,705 187,188 Less: valuation allowance 242,974 172,481 Deferred tax assets, net of valuation allowance 61,731 14,707 Deferred tax liabilities: Operating lease right-of-use assets 44,428 — Depreciation 15,681 14,707 Prepaids 1,622 — Total deferred tax liabilities 61,731 14,707 Net deferred tax assets $ — $ — Net Operating Loss and Tax Credit Carryforwards As of February 2, 2020, the Company had federal and state net operating loss (“NOL”) carryforwards of $836.9 million and $281.6 million, respectively, of which $402.4 million expire beginning in 2030 and $716.1 million have no expiration but can only be used to offset 80% of the Company’s future taxable income. The state NOLs are presented as an apportioned amount. Although these carryforwards are available to offset future taxable income of the Company under the separate return method presented in these consolidated financial statements, they have already been used on federal consolidated income tax returns that the Company files with PetSmart. As of February 2, 2020, the Company recorded a deferred tax asset of $190.3 million, before valuation allowance, with respect to NOL carryforwards. These deferred tax assets expire as follows (in thousands): 2030 $ 45 2032 401 2034 163 2035 18,258 2036 34,752 Thereafter 136,688 Total loss carryforwards $ 190,307 The Company participates in various federal credit programs which provide credits against current and future tax liabilities. Credits not used in the current year are carried forward to future years. As of February 2, 2020, the Company had the following tax credit carryforwards (in thousands): Year of Expiration Research and Development Work Opportunity Hurricane Retention Total 2036 $ 227 $ — $ — $ 227 2037 1,609 94 848 2,551 2038 1,622 761 — 2,383 2039 1,622 775 — 2,397 $ 5,080 $ 1,630 $ 848 $ 7,558 The research and development credit is available to taxpayers that design, develop, or improve products, processes, techniques, formulas, or software. The work opportunity tax credit program is a federal government initiative designed to increase employment opportunities for people who typically experience certain barriers to employment. The hurricane retention credit is provided to certain employers to help them retain their employees during periods in which their place of business is inoperable due to the effects of hurricanes. Valuation Allowance The realization of deferred tax assets is based on historical tax positions and estimates of future taxable income. We evaluate both the positive and negative evidence that we believe is relevant in assessing whether we will realize the deferred tax assets. A valuation allowance is recorded when it is more likely than not that some portion of the deferred tax assets will not be realized. To the extent that a valuation allowance has been established and it is subsequently determined that it is more likely than not that the deferred tax assets will be recovered, the valuation allowance will be released. Our valuation allowance was $243.0 million as of February 2, 2020, which represents an increase of $70.5 million from February 3, 2019. The increase in the valuation allowance primarily relates to the following: (i) an increase of $74.3 million relating to current year activity, (ii) an increase of $1.5 million relating to changes to our state blended rate, and (iii) other changes totaling a decrease of $5.3 million for miscellaneous adjustments to our deferred tax assets and liabilities. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. We consider the scheduled reversal of deferred tax liabilities (including the effect of available carryback and carryforward periods), as well as projected pre-tax book income in making this assessment. To fully utilize the NOL and tax credits carryforwards we will need to generate sufficient future taxable income in each respective jurisdiction. The following summarizes the activity related to valuation allowances on deferred tax assets (in thousands): Fiscal Year 2019 2018 2017 Valuation allowance, as of beginning of period $ 172,481 $ 115,143 $ 43,015 Valuation allowances established 69,009 57,232 88,768 Changes to existing valuation allowances 1,484 106 (16,640) Release of valuation allowances — — — Valuation allowance, as of end of period $ 242,974 $ 172,481 $ 115,143 Accounting for Uncertain Tax Positions The benefits of uncertain tax positions (“UTP”) are recorded in the Company’s consolidated financial statements only after establishing a more likely than not probability that the UTP will withstand challenge, if any, from tax authorities. As of February 2, 2020 and February 3, 2019, the Company did not have any uncertain tax positions. The Company’s federal income tax return for the period from March 17, 2016 through December 31, 2016, which represents the stub period after the Company’s conversion to a corporation, is currently being audited by the Internal Revenue Service (“IRS”). The Company is not currently subject to any other examinations. The Company may be subject to examination by the IRS and various states for the 2016 calendar year and thereafter. Concurrent with the IPO, the Company and PetSmart entered into a tax sharing agreement which governs the respective rights, responsibilities, and obligations of the Company and PetSmart with respect to tax matters, including taxes attributable to PetSmart, entitlement to refunds, allocation of tax attributes, preparation of tax returns, certain tax elections, control of tax contests and other tax matters regarding U.S. federal, state, local, and foreign income taxes. During Fiscal Year 2019, the Company received $17.3 million from PetSmart in connection with the tax sharing agreement. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Feb. 02, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share Basic and diluted net loss per share attributable to common stockholders is presented using the two class method required for participating securities. Under the two class method, net loss attributable to common stockholders is determined by allocating undistributed earnings between common stock and participating securities. Undistributed earnings for the periods presented are calculated as net loss less distributed earnings. Basic and diluted net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average shares outstanding during the period. The weighted-average shares outstanding during the periods presented reflects the reclassification of the 100 outstanding shares of common stock into 393,000,000 shares of Class B common stock. For Fiscal Year 2019, Fiscal Year 2018, and Fiscal Year 2017, the Company’s basic and diluted net loss per share attributable to common Class A and Class B stockholders are the same because the Company has generated a net loss to common stockholders and common stock equivalents are excluded from diluted net loss per share as they have an antidilutive impact. The following table sets forth basic and diluted net loss per share attributable to common stockholders for the periods presented (in thousands, except per share data): Fiscal Year 2019 2018 2017 (1) Total common stockholders Numerator: Net loss $ (252,370) $ (267,890) $ (338,057) Accretion of convertible redeemable preferred stock — — (361,520) Net loss attributable to common stockholders $ (252,370) $ (267,890) $ (699,577) Denominator: Weighted average common shares used in computing net loss per share attributable to common Class A and Class B stockholders, basic and diluted 398,256 393,000 262,200 Net loss per share attributable to common Class A and Class B stockholders, basic and diluted $ (0.63) $ (0.68) $ (2.67) (1) The computation of diluted loss per share attributable to common stockholders does not include 187,370 shares of Series A convertible redeemable preferred stock, 27,273 shares of Series A-1 convertible redeemable preferred stock, 116,324 shares of Series B convertible redeemable preferred stock, 114,461 shares of Series C convertible redeemable preferred stock, 103,534 shares of Series D convertible redeemable preferred stock, 79,290 shares of Series E convertible redeemable preferred stock, 67,397 shares of Series F convertible redeemable preferred stock, 60,000 shares of Series 1 preferred stock, 18,038 shares of unvested restricted stock, and 77,885 stock options for Fiscal Year 2017, as the effect of their inclusion would have been anti-dilutive. |
Certain Relationships and Relat
Certain Relationships and Related Party Transactions | 12 Months Ended |
Feb. 02, 2020 | |
Related Party Transactions [Abstract] | |
Certain Relationships and Related Party Transactions | Certain Relationships and Related Party Transactions The Company’s consolidated financial statements include management fee expenses of $1.3 million, $1.3 million and $0.9 million, allocated to the Company by the Parent for organizational oversight and certain limited corporate functions provided by its sponsors for Fiscal Year 2019, Fiscal Year 2018, and Fiscal Year 2017, respectively. The Company's consolidated financial statements also include expenses for certain costs historically paid on the Company's behalf by PetSmart, including $28.1 million for acquisition-related costs incurred for the Company's benefit as part of the PetSmart Acquisition and $33.9 million for compensation expenses paid by PetSmart to the Company's employees for employment services in the period subsequent to the PetSmart Acquisition for Fiscal Year 2017. Allocated costs are included within selling, general and administrative expenses in the consolidated statements of operations. From time to time, prior to the completion of the IPO, the Company used funding from or provided funding to the Parent, as needed, in the normal course of business. The Company and PetSmart were parties to an intercompany loan agreement pursuant to which each party made loans from time to time to the other. In connection with the signing of an underwriting agreement pursuant to which the Company received substantially all of the net proceeds from the Company’s sale of shares of Class A common stock as part of the IPO, the loan agreement was terminated without cash repayment of the outstanding loan. The termination of the intercompany loan resulted in a $79.5 million reduction of the Company’s due from Parent balance during Fiscal Year 2019. Certain of the Company’s pharmacy operations are currently, and have been since launch on July 2, 2018, conducted through a wholly-owned subsidiary of PetSmart. The Company has entered into a services agreement with PetSmart that provides for the payment of a management fee due from PetSmart with respect to this arrangement. The Company recognized $41.1 million and $12.9 million within net sales in the consolidated statement of operations for the services provided during Fiscal Year 2019 and Fiscal Year 2018, respectively. In connection with the IPO, the Company was released from its obligations under the Parent’s asset-backed revolving credit facility in accordance with its terms. PetSmart Guarantees PetSmart currently provides a guarantee of payment with respect to certain equipment and other leases that the Company has entered into and serves as a guarantor in respect of the Company’s obligations under a credit insurance policy in favor of certain of the Company’s current or future suppliers. |
Summary of Significant Accounti
Summary of Significant Accounting Policies - (Policies) | 12 Months Ended |
Feb. 02, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) accounting standards codification. The Company’s consolidated financial statements for the periods subsequent to the PetSmart Acquisition presented herein have been derived from the separate records maintained by the Company. Pushdown accounting was not applied in connection with the PetSmart Acquisition and consequently no change in basis was reflected in the Company’s consolidated financial statements. Fiscal Year The Company’s 2019 fiscal year ended February 2, 2020 and included 52 weeks (“Fiscal Year 2019”). The Company’s 2018 fiscal year ended February 3, 2019 and included 53 weeks (“Fiscal Year 2018”). The Company’s 2017 fiscal year ended January 28, 2018 and included 52 weeks (“Fiscal Year 2017”). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements and related notes include the accounts of Chewy, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates GAAP requires management to make certain estimates, judgments, and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates these estimates and judgments. Actual results could differ from those estimates. Key estimates relate primarily to determining the net realizable value and demand for inventory, useful lives associated with property and equipment, valuation allowances with respect to deferred tax assets, contingencies, evaluation of sales tax positions, and the valuation and assumptions underlying share-based compensation. On an ongoing basis, management evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. Cash equivalents primarily consist of institutional money market funds and are carried at cost, which approximates fair value. |
Concentration of Credit Risk | Concentration of Credit Risk The Company maintains the majority of its cash and cash equivalents in accounts with large financial institutions. At times, balances in these accounts may exceed federally insured limits; however, to date, the Company has not incurred any losses on its deposits of cash and cash equivalents. |
Accounts Receivable | Accounts Receivable The Company’s accounts receivable are comprised of customer and vendor receivables. The Company’s net customer receivables were $58.3 million and $41.5 million as of February 2, 2020 and February 3, 2019, respectively, and consist of credit and debit card receivables from banks, which typically settle within five business days. The Company’s vendor receivables were $22.2 million and $7.2 million as of February 2, 2020 and February 3, 2019, respectively. The Company does not maintain an allowance for doubtful accounts as historical losses on customer and vendor receivables have not been significant. |
Inventories | Inventories The Company’s inventories represent finished goods, consist of products available for sale and are accounted for using the first-in, first-out (FIFO) method and valued at the lower of cost or net realizable value. |
Due from Parent, net | Due from Parent, net Transactions between the Company and the Parent relate to funding operations and capital contributions. Balances that are due from and due to Parent are regularly cash settled and have been included in the consolidated balance sheets on a net basis. Cash advances provided to and reimbursed by the Parent to fund Parent operations has been classified on a net basis in the consolidated statements of cash flows as investing activities. Cash received from the Parent in connection with the tax sharing agreement and cash received as capital contributions have been classified in the consolidated statements of cash flows as financing activities. For more information, see Note 11 – “Certain Relationships and Related Party Transactions”. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated over the estimated useful lives of the related assets using the straight-line method. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term (including renewals that are reasonably assured) or the estimated useful lives of the improvements. External costs and certain internal costs, including payroll and payroll-related costs of employees, directly associated with developing significant computer software applications for internal use are capitalized subsequent to the preliminary stage of development. Internal-use software costs are amortized using the straight-line method over the estimated useful life of the software when the project is substantially complete and ready for its intended use. The estimated useful lives of property and equipment are principally as follows: Furniture, fixtures and equipment 5 to 10 years Computer equipment and software 3 to 5 years Leasehold improvements and finance lease assets Shorter of the lease term or estimated useful life |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. For asset groups held and used, the carrying value of the asset group is considered recoverable when the estimated undiscounted future cash flows expected to be generated from the use and eventual disposition of the asset group exceed the respective carrying value. In the event that the carrying value is not considered recoverable, an impairment charge would be recognized for the asset group to be held and used equal to the excess of the carrying value above the estimated fair value of the asset group. Impairment charges are recognized within selling, general and administrative expenses in the consolidated statements of operations. |
Self-Insurance Accruals | Self-Insurance Accruals The Company uses a combination of self-insurance programs and large-deductible purchased insurance to provide for the costs of medical and workers’ compensation claims. The Company periodically evaluates its level of insurance coverage and adjusts its insurance levels based on risk tolerance and premium expense. Liabilities for the risks the Company retains, including estimates of claims incurred but not reported, are not discounted and are estimated, in part, by considering historical cost experience, demographic and severity factors, and judgments about current and expected levels of cost per claim and retention levels. Additionally, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous actuarial projections. The Company believes the actuarial methods are appropriate for measuring these self-insurance accruals. However, based on the number of claims and the length of time from incurrence of the claims to ultimate settlement, the use of any estimation method is sensitive to the assumptions and factors described above. Accordingly, changes in these assumptions and factors can affect the estimated liability and those amounts may be different than the actual costs paid to settle the claims. |
Defined Contribution Plans | Defined Contribution Plans The Company maintains a 401(k) defined contribution plan which covers all employees who meet minimum requirements and elect to participate. The Company is currently matching employee contributions, up to specified percentages of those contributions. |
Revenue Recognition | Revenue Recognition Chewy recognizes revenues from product sales when the customer orders an item through Chewy’s website or mobile applications via the electronic shopping cart, funds are collected from the customer and the item is shipped from one of the Company’s fulfillment centers and delivered to the carrier. Revenue is recognized on a gross basis as the Company is (i) the primary entity responsible for fulfilling the promise to provide the specified products in the arrangement with the customer and provides the primary customer service for all products sold on Chewy’s website or mobile applications, (ii) has inventory risk before the products have been transferred to a customer and maintains inventory risk upon accepting returns , and (iii) has discretion in establishing the price for the specified products sold on Chewy’s website or mobile applications. Chewy generates net sales from sales of pet food, pet products, pet medications and other pet health products, and related shipping fees. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. To encourage customers to purchase its products, the Company periodically provides incentive offers. Generally, these promotions include current discount offers, such as percentage discounts off current purchases and other similar offers. These offers, when accepted by customers, are treated as a reduction to the transaction price. Revenue typically consists of the consideration received from the customer when the order is executed less a refund allowance, which is estimated using historical experience. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes the purchase price of inventory sold, freight costs associated with inventory, shipping supply costs, inventory shrinkage costs and valuation adjustments and reductions for promotions and discounts offered by the Company’s vendors. Vendor Agreements |
Selling, General and Administrative | Selling, General and Administrative Selling, general and administrative expenses consist of payroll and related expenses for employees involved in general corporate functions, including accounting, finance, tax, legal, and human resources; costs associated with use by these functions of facilities and equipment, such as depreciation expense and rent; share-based compensation expense, professional fees and other general corporate costs. Fulfillment |
Share-Based Compensation | Share-Based Compensation The Company recognizes share-based compensation expense based on the equity award’s grant date fair value. For grants of restricted stock units (“RSUs”) subject to service-based vesting conditions, the fair value is established based on the market price on the date of the grant. For grants of RSUs subject to market-based vesting conditions, the fair value is established using the Monte Carlo simulation lattice model. The determination of the fair value of share-based awards is affected by the Company’s stock price and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. The Company accounts for forfeitures as they occur. The grant date fair value of each RSU is amortized over the requisite service period. |
Advertising and Marketing | Advertising and Marketing Advertising and marketing expenses primarily consist of advertising and payroll and related expenses for personnel engaged in marketing, business development and selling activities. Advertising and marketing costs are expensed in the period that the advertising first takes place. |
Leases | Leases The Company has operating and finance lease agreements for its fulfillment and customer service centers, corporate offices, and certain equipment. The Company determines if an arrangement contains a lease at inception based on the ability to control a physically distinct asset. Operating and finance lease right-of-use assets are recorded in the consolidated balance sheets based on the initial measurement of the lease liability as adjusted to include prepaid rent and initial direct costs less any lease incentives received. Lease liabilities are measured at the commencement date based on the present value of the lease payments over the lease term. Lease payments are generally fixed but may include provisions for future rent increases based on a market index. The Company separately accounts for lease and non-lease components within lease agreements; the non-lease components primarily relate to common area maintenance for real estate leases. The Company uses its incremental borrowing rate to present value the lease liability as key inputs to determine the interest rate implicit in the lease are not shared by lessors. Operating lease expense is recorded on a straight-line basis over the lease term. Right-of-use assets and lease liabilities for short-term leases are not recognized in the consolidated balance sheets. Payments for short-term leases are recognized in the consolidated statements of operations on a straight-line basis over the lease term. |
Income and Other Taxes | Income and Other Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We evaluate both the positive and negative evidence that is relevant in assessing whether we will realize the deferred tax assets. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. This projected realization is directly related to our future projections of the performance of our business and management’s planning initiatives at any point in time. As a result, valuation allowances are subject to change as proven business trends and planning initiatives develop. In accordance with the accounting standard for uncertainty in income taxes, liabilities for uncertain tax positions are recognized based on the two-step process prescribed by the accounting standards. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company collects and remits sales tax in jurisdictions in which it has a physical presence or it believes nexus exists. The Company has recorded an estimated liability for potential exposure in states where there is uncertainty about the point in time at which the Company established a sufficient in-state business presence to create nexus and the Company did not collect sales tax. |
Segments | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. |
Loss Contingencies | Loss Contingencies Certain conditions may exist which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability is estimable, the liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed. Unasserted claims that are not considered probable of being asserted and those for which an unfavorable outcome is not reasonably possible have not been disclosed. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1-Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2-Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3-Valuations based on unobservable inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements ASU 2016-02, Leases. In February 2016, the FASB issued this Accounting Standards Update (“ASU”) to provide a comprehensive lease accounting model that requires lessees to recognize lease liabilities and corresponding right-of-use assets for most leases. The new guidance also changes the definition of a lease and requires enhanced disclosures of pertinent quantitative and qualitative information about an entity’s leasing activities. The FASB subsequently issued ASU 2018-10 allowing entities to initially apply ASU 2016-02 at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. These ASUs became effective at the beginning of the Company’s 2019 fiscal year. The Company adopted this ASU by applying the new guidance to new and existing leases effective February 4, 2019, with no restatement of comparative periods. The Company elected the package of practical expedients, which permitted the Company to not reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company also made an accounting policy election to not recognize right-of-use assets and lease liabilities arising from short-term leases on its consolidated balance sheets. The adoption of this ASU did not result in a cumulative effect adjustment to accumulated deficit. Upon adoption, the Company recognized operating lease right-of-use assets of $162.8 million and operating lease liabilities of $193.6 million. The adoption of this new guidance did not have a material net impact on the Company’s consolidated statements of operations or consolidated statements of cash flows. ASU 2018-07, Stock Compensation; Improvements to Nonemployee Share-Based Payment Accounting . In June 2018, the FASB issued this ASU to expand the scope of Topic 718, Compensation-Stock Compensation to include share-based payment awards to be issued to non-employees in exchange for acquiring goods and services. The ASU aligned the accounting for awards issued to non-employees to be similar to employee awards. This update became effective at the beginning of the Company’s 2019 fiscal year. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements and disclosures. Recently Issued Accounting Pronouncements ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued this ASU to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. This ASU also clarifies and simplifies other aspects of the accounting for income taxes. This update is effective at the beginning of the Company’s 2021 fiscal year, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement. In August 2018, the FASB issued this ASU to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This update is effective at the beginning of the Company’s 2020 fiscal year. The Company does not believe the adoption of this ASU will have a material impact on its consolidated financial statements and disclosures. ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued this ASU to amend the current accounting guidance which requires the measurement of all expected losses to be based on historical experience, current conditions and reasonable and supportable forecasts. For trade receivables, loans, and other financial instruments, the Company will be required to use a forward-looking expected loss model that reflects probable losses rather than the incurred loss model for recognizing credit losses. This update is effective at the beginning of the Company’s 2020 fiscal year. The Company does not believe the adoption of this ASU will have a material impact on its consolidated financial statements and disclosures. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies - (Tables) | 12 Months Ended |
Feb. 02, 2020 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Property and Equipment | The estimated useful lives of property and equipment are principally as follows: Furniture, fixtures and equipment 5 to 10 years Computer equipment and software 3 to 5 years Leasehold improvements and finance lease assets Shorter of the lease term or estimated useful life The following is a summary of property and equipment, net (in thousands): As of February 2, 2020 February 3, 2019 Furniture, fixtures and equipment $ 65,329 $ 60,535 Computer equipment 32,259 25,027 Internal-use software 30,222 19,308 Leasehold improvements 39,447 22,342 Finance lease assets 2,565 705 Construction in progress 18,927 6,227 188,749 134,144 Less: accumulated depreciation and amortization 70,018 42,453 Property and equipment, net $ 118,731 $ 91,691 |
Schedule of Accrued Liabilities | The following table presents the components of accrued expenses and other current liabilities (in thousands): As of February 2, 2020 February 3, 2019 Outbound fulfillment $ 182,589 $ 147,610 Advertising and marketing 96,836 85,421 Accrued expenses and other 138,064 78,119 Total accrued expenses and other current liabilities $ 417,489 $ 311,150 |
Property and Equipment, net - (
Property and Equipment, net - (Tables) | 12 Months Ended |
Feb. 02, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | The estimated useful lives of property and equipment are principally as follows: Furniture, fixtures and equipment 5 to 10 years Computer equipment and software 3 to 5 years Leasehold improvements and finance lease assets Shorter of the lease term or estimated useful life The following is a summary of property and equipment, net (in thousands): As of February 2, 2020 February 3, 2019 Furniture, fixtures and equipment $ 65,329 $ 60,535 Computer equipment 32,259 25,027 Internal-use software 30,222 19,308 Leasehold improvements 39,447 22,342 Finance lease assets 2,565 705 Construction in progress 18,927 6,227 188,749 134,144 Less: accumulated depreciation and amortization 70,018 42,453 Property and equipment, net $ 118,731 $ 91,691 |
Leases - (Tables)
Leases - (Tables) | 12 Months Ended |
Feb. 02, 2020 | |
Leases [Abstract] | |
Assets and Liabilities, Lessee | The table below presents the operating lease-related assets and liabilities recorded on the consolidated balance sheets (in thousands): Leases Balance Sheet Classification As of February 2, 2020 Assets Operating Operating lease right-of-use assets $ 179,052 Total operating lease assets $ 179,052 Liabilities Current Operating Accrued expenses and other current liabilities $ 15,491 Non-current Operating Operating lease liabilities 200,439 Total operating lease liabilities $ 215,930 |
Lessee, Operating Lease, Liability, Maturity | The table below presents the maturity of lease liabilities as of February 2, 2020 (in thousands): Operating Leases 2020 $ 36,518 2021 37,663 2022 35,536 2023 30,821 2024 29,471 Thereafter 231,191 Total lease payments 401,200 Less: interest 185,270 Present value of lease liabilities $ 215,930 |
Convertible Redeemable Preferre
Convertible Redeemable Preferred Stock - (Tables) | 12 Months Ended |
Feb. 02, 2020 | |
Equity [Abstract] | |
Temporary Equity | The following table provides information about the Company's convertible redeemable preferred stock for Fiscal Year 2017 (in thousands): Fiscal Year 2017 Series Accretion Series A voting preferred stock $ 108,880 Series A-1 voting preferred stock 15,848 Series B voting preferred stock 67,595 Series C voting preferred stock 66,513 Series D voting preferred stock 60,163 Series E voting preferred stock 42,521 Total $ 361,520 |
Share-Based Compensation - (Tab
Share-Based Compensation - (Tables) | 12 Months Ended |
Feb. 02, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes the activity related to the Company’s RSUs for Fiscal Year 2019 (in thousands, except for weighted average grant date fair value): Number of RSUs Weighted Average Grant Date Fair Value Outstanding as of February 3, 2019 — $ — Granted 26,677 $ 36.31 Vested (2,778) $ 36.86 Forfeited (2,615) $ 36.62 Unvested and outstanding as of February 2, 2020 21,284 $ 36.20 |
Fair Value Measurement Inputs and Valuation Techniques | The fair value of the RSUs with share price hurdles was determined on the date of grant using a Monte Carlo model to simulate total stockholder return for the Company and peer companies with the following assumptions: Performance period 5 years Weighted-average risk-free interest rate 1.8% Weighted-average volatility 49.6% Weighted-average dividend yield —% |
Share-based Compensation Expense | The Company recognized share-based compensation expense as follows (in thousands): Fiscal Year 2019 2018 2017 RSUs $ 124,761 $ — $ — PIUs 10,165 14,351 11,209 Total share-based compensation expense $ 134,926 $ 14,351 $ 11,209 |
Income Taxes - (Tables)
Income Taxes - (Tables) | 12 Months Ended |
Feb. 02, 2020 | |
Income Tax Disclosure [Abstract] | |
Effective Income Tax Rate Reconciliation | The Company’s effective income tax rate reconciliation is composed of the following for the periods presented: Fiscal Year 2019 2018 2017 Federal statutory rate 21.0 % 21.0 % 33.9 % State income taxes, net of federal tax benefit 4.4 % 1.5 % 1.1 % Change in tax rate 0.6 % — % (21.3) % Share-based compensation 4.0 % — % 7.4 % Other (2.1) % (1.1) % (1.3) % Change in valuation allowance (27.9) % (21.4) % (19.8) % Effective rate — % — % — % |
Schedule of Deferred Tax Assets and Liabilities | The temporary differences which comprise the Company’s deferred taxes are as follows for the periods presented (in thousands): As of February 2, 2020 February 3, 2019 Deferred tax assets: Operating lease liabilities $ 53,578 $ — Inventories 7,485 11,474 Deferred rent — 7,415 Share-based compensation 29,639 — Accrued expenses and reserves 10,814 10,271 Other 12,882 1,668 Net operating loss carryforwards 190,307 156,360 Total deferred tax assets 304,705 187,188 Less: valuation allowance 242,974 172,481 Deferred tax assets, net of valuation allowance 61,731 14,707 Deferred tax liabilities: Operating lease right-of-use assets 44,428 — Depreciation 15,681 14,707 Prepaids 1,622 — Total deferred tax liabilities 61,731 14,707 Net deferred tax assets $ — $ — |
Summary of Operating Loss Carryforwards | These deferred tax assets expire as follows (in thousands): 2030 $ 45 2032 401 2034 163 2035 18,258 2036 34,752 Thereafter 136,688 Total loss carryforwards $ 190,307 |
Summary of Tax Credit Carryforwards | As of February 2, 2020, the Company had the following tax credit carryforwards (in thousands): Year of Expiration Research and Development Work Opportunity Hurricane Retention Total 2036 $ 227 $ — $ — $ 227 2037 1,609 94 848 2,551 2038 1,622 761 — 2,383 2039 1,622 775 — 2,397 $ 5,080 $ 1,630 $ 848 $ 7,558 |
Summary of Valuation Allowance | The following summarizes the activity related to valuation allowances on deferred tax assets (in thousands): Fiscal Year 2019 2018 2017 Valuation allowance, as of beginning of period $ 172,481 $ 115,143 $ 43,015 Valuation allowances established 69,009 57,232 88,768 Changes to existing valuation allowances 1,484 106 (16,640) Release of valuation allowances — — — Valuation allowance, as of end of period $ 242,974 $ 172,481 $ 115,143 |
Net Loss per Share - (Tables)
Net Loss per Share - (Tables) | 12 Months Ended |
Feb. 02, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The following table sets forth basic and diluted net loss per share attributable to common stockholders for the periods presented (in thousands, except per share data): Fiscal Year 2019 2018 2017 (1) Total common stockholders Numerator: Net loss $ (252,370) $ (267,890) $ (338,057) Accretion of convertible redeemable preferred stock — — (361,520) Net loss attributable to common stockholders $ (252,370) $ (267,890) $ (699,577) Denominator: Weighted average common shares used in computing net loss per share attributable to common Class A and Class B stockholders, basic and diluted 398,256 393,000 262,200 Net loss per share attributable to common Class A and Class B stockholders, basic and diluted $ (0.63) $ (0.68) $ (2.67) (1) The computation of diluted loss per share attributable to common stockholders does not include 187,370 shares of Series A convertible redeemable preferred stock, 27,273 shares of Series A-1 convertible redeemable preferred stock, 116,324 shares of Series B convertible redeemable preferred stock, 114,461 shares of Series C convertible redeemable preferred stock, 103,534 shares of Series D convertible redeemable preferred stock, 79,290 shares of Series E convertible redeemable preferred stock, 67,397 shares of Series F convertible redeemable preferred stock, 60,000 shares of Series 1 preferred stock, 18,038 shares of unvested restricted stock, and 77,885 stock options for Fiscal Year 2017, as the effect of their inclusion would have been anti-dilutive. |
Description of Business and Bas
Description of Business and Basis of Presentation - Narrative (Details) $ / shares in Units, $ in Millions | Jan. 06, 2020shares | Dec. 20, 2019shares | Jun. 18, 2019USD ($)$ / sharesshares | Jun. 17, 2019shares | Feb. 02, 2020shares | Feb. 03, 2019shares |
Subsidiary, Sale of Stock [Line Items] | ||||||
Underwriting discounts and commissions | $ | $ 6.2 | |||||
Common stock outstanding (in shares) | 100 | |||||
Common stock conversion ratio | 1 | |||||
IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Sale of stock (in dollars per share) | $ / shares | $ 22 | |||||
Sale of stock | $ | $ 110.3 | |||||
Class A common stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock outstanding (in shares) | 53,475,000 | 66,445,422 | 0 | |||
Conversion of stock (in shares) | 3,850,000 | 6,352,546 | 47,875,000 | |||
Class A common stock | IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Sale of stock (in shares) | 5,600,000 | |||||
Class B common stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock outstanding (in shares) | 345,125,000 | 334,922,454 | 0 | |||
Conversion of stock (in shares) | (3,850,000) | (6,352,546) | (47,875,000) | 393,000,000 | ||
Common stock conversion ratio | 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Property and Equipment, net (Details) | 12 Months Ended |
Feb. 02, 2020 | |
Furniture, Fixtures And Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Furniture, Fixtures And Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Computer Equipment and Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Computer Equipment and Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 12 Months Ended | |||
Feb. 02, 2020USD ($)segment | Feb. 03, 2019USD ($) | Jan. 28, 2018USD ($) | Feb. 04, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Accounts receivable | $ 80,478,000 | $ 48,738,000 | ||
Impairment charges | 0 | 0 | $ 0 | |
Fulfillment costs | 546,200,000 | 403,900,000 | 258,900,000 | |
Merchant processing fees | $ 101,000,000 | $ 74,100,000 | $ 45,200,000 | |
Number of operating segments | segment | 1 | |||
Number of reportable segments | segment | 1 | |||
Operating lease right-of-use assets | $ 179,052,000 | |||
Operating lease liabilities | $ 215,930,000 | |||
Products from three largest vendors | Revenue Benchmark | Product Concentration Risk | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk percentage | 32.50% | 30.10% | 28.50% | |
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 162,800,000 | |||
Operating lease liabilities | $ 193,600,000 | |||
Customer Receivables | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Accounts receivable | $ 58,300,000 | $ 41,500,000 | ||
Vendor Receivables | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Accounts receivable | $ 22,200,000 | $ 7,200,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Feb. 02, 2020 | Feb. 03, 2019 |
Accounting Policies [Abstract] | ||
Outbound fulfillment | $ 182,589 | $ 147,610 |
Advertising and marketing | 96,836 | 85,421 |
Accrued expenses and other | 138,064 | 78,119 |
Total accrued expenses and other current liabilities | $ 417,489 | $ 311,150 |
Property and Equipment, net - S
Property and Equipment, net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Feb. 02, 2020 | Feb. 03, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 134,144 | |
Property, plant and equipment and finance lease right-of-use asset gross | $ 188,749 | |
Accumulated depreciation and amortization | 70,018 | |
Accumulated depreciation and amortization | 42,453 | |
Property and equipment, net | 118,731 | |
Property and equipment, net | 118,731 | 91,691 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 65,329 | 60,535 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 32,259 | 25,027 |
Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 30,222 | 19,308 |
Accumulated depreciation and amortization | 15,900 | 9,700 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 39,447 | 22,342 |
Finance lease assets | ||
Property, Plant and Equipment [Line Items] | ||
Finance lease assets | 2,565 | |
Finance lease assets | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 705 | |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 18,927 | $ 6,227 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 02, 2020 | Feb. 03, 2019 | Jan. 28, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Accumulated depreciation and amortization | $ 42,453 | ||
Depreciation expense | $ 22,000 | 17,900 | $ 9,500 |
Internal-use software | |||
Property, Plant and Equipment [Line Items] | |||
Accumulated depreciation and amortization | 15,900 | 9,700 | |
Amortization expense | $ 8,600 | $ 5,300 | $ 3,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - Line of Credit - Revolving Credit Facility | Jun. 18, 2019USD ($) | Feb. 02, 2020USD ($) |
Line of Credit Facility [Line Items] | ||
Debt instrument term | 5 years | |
Line of credit facility principal | $ 300,000,000 | |
Line of credit facility additional aggregate principal increase limit | $ 100,000,000 | |
Minimum fixed charge coverage ratio | 1 | |
Excess availability as percent of maximum borrowing amount | 10.00% | |
Excess availability maximum borrowing amount | $ 30,000,000 | |
Outstanding borrowings | $ 0 | |
Minimum | ||
Line of Credit Facility [Line Items] | ||
Commitment fee percentage | 0.25% | |
Maximum | ||
Line of Credit Facility [Line Items] | ||
Commitment fee percentage | 0.375% | |
Base Rate | Minimum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 0.25% | |
Base Rate | Maximum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 0.75% | |
London Interbank Offered Rate (LIBOR) | Minimum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.25% | |
London Interbank Offered Rate (LIBOR) | Maximum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.75% |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 12 Months Ended |
Feb. 02, 2020USD ($)renewal_option | |
Lessee, Lease, Description [Line Items] | |
Assets acquired in exchange for operating lease liability | $ 30,700 |
Lease expense | 47,900 |
Short-term and variable lease cost | $ 9,300 |
Weighted average remaining lease term | 10 years 4 months 24 days |
Weighted average discount rate | 11.30% |
Operating lease payments | $ 37,900 |
Lease not yet commenced minimum lease payments | $ 125,000 |
Lease not yet commenced term | 16 years |
Real Estate | |
Lessee, Lease, Description [Line Items] | |
Number of renewal options | renewal_option | 3 |
Renewal term | 5 years |
Minimum | Real Estate | |
Lessee, Lease, Description [Line Items] | |
Lease term | 5 years |
Minimum | Equipment | |
Lessee, Lease, Description [Line Items] | |
Lease term | 3 years |
Maximum | Real Estate | |
Lessee, Lease, Description [Line Items] | |
Lease term | 15 years |
Maximum | Equipment | |
Lessee, Lease, Description [Line Items] | |
Lease term | 5 years |
Leases - Schedule of Lease Asse
Leases - Schedule of Lease Assets and Liabilities (Details) $ in Thousands | Feb. 02, 2020USD ($) |
Assets | |
Operating | $ 179,052 |
Current | |
Operating | 15,491 |
Non-current | |
Operating | 200,439 |
Total operating lease liabilities | $ 215,930 |
Leases - Schedule of Lease Matu
Leases - Schedule of Lease Maturity (Details) $ in Thousands | Feb. 02, 2020USD ($) |
Operating Leases | |
2020 | $ 36,518 |
2021 | 37,663 |
2022 | 35,536 |
2023 | 30,821 |
2024 | 29,471 |
Thereafter | 231,191 |
Total lease payments | 401,200 |
Less: interest | 185,270 |
Present value of lease liabilities | $ 215,930 |
Stockholders' Deficit and Capit
Stockholders' Deficit and Capital Stock - Narrative (Details) $ / shares in Units, $ in Millions | Jan. 06, 2020shares | Dec. 20, 2019shares | Jun. 18, 2019USD ($)shares | Jun. 17, 2019shares | Apr. 30, 2017USD ($) | Mar. 31, 2016series$ / sharesRateshares | Oct. 31, 2015USD ($)shares | Aug. 31, 2014USD ($) | Apr. 30, 2014USD ($) | Oct. 31, 2013USD ($) | May 31, 2016USD ($) | Feb. 02, 2020voteshares | Feb. 03, 2019shares |
Class of Stock [Line Items] | |||||||||||||
Common stock outstanding (in shares) | shares | 100 | ||||||||||||
Common stock conversion ratio | 1 | ||||||||||||
Underwriting discounts and commissions | $ 6.2 | ||||||||||||
Number of series | series | 10 | ||||||||||||
Convertible redeemable preferred stock par value (in dollars per share) | $ / shares | $ 0.01 | ||||||||||||
Sale of Series A Convertible Redeemable Preferred Units | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock | $ 15 | ||||||||||||
Underwriting discounts and commissions | $ 1.3 | ||||||||||||
Sale of Series B Convertible Redeemable Preferred Units | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock | $ 30 | ||||||||||||
Underwriting discounts and commissions | $ 0.1 | ||||||||||||
Sale of Series C Convertible Redeemable Preferred Units | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock | $ 41 | ||||||||||||
Underwriting discounts and commissions | $ 0.1 | ||||||||||||
Sale of Series D Convertible Redeemable Preferred Units | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock | $ 75 | ||||||||||||
Underwriting discounts and commissions | $ 1.7 | ||||||||||||
Sale of Series E Convertible Redeemable Preferred Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock | $ 75 | ||||||||||||
Underwriting discounts and commissions | $ 0.1 | ||||||||||||
Sale of Series F Convertible Redeemable Preferred Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock | $ 125 | ||||||||||||
Class B common stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Common stock outstanding (in shares) | shares | 345,125,000 | 334,922,454 | 0 | ||||||||||
Conversion of stock (in shares) | shares | (3,850,000) | (6,352,546) | (47,875,000) | 393,000,000 | |||||||||
Common stock conversion ratio | 1 | ||||||||||||
Common stock number of votes per share | vote | 10 | ||||||||||||
Percentage of outstanding stock | 7.50% | ||||||||||||
Class A common stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Common stock outstanding (in shares) | shares | 53,475,000 | 66,445,422 | 0 | ||||||||||
Conversion of stock (in shares) | shares | 3,850,000 | 6,352,546 | 47,875,000 | ||||||||||
Common stock number of votes per share | vote | 1 | ||||||||||||
Series A-1 convertible redeemable preferred units | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Issued (in shares) | shares | 27,273 | 2,727,260 | |||||||||||
Convertible Redeemable Preferred Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Reverse share split ratio | Rate | 1.00% |
Stockholders' Deficit and Con_2
Stockholders' Deficit and Convertible Redeemable Preferred Stock - Schedule of Preferred Stock (Details) $ in Thousands | 12 Months Ended |
Jan. 28, 2018USD ($) | |
Temporary Equity [Line Items] | |
Accretion of convertible redeemable preferred stock | $ 361,520 |
Series A voting preferred stock | |
Temporary Equity [Line Items] | |
Accretion of convertible redeemable preferred stock | 108,880 |
Series A-1 voting preferred stock | |
Temporary Equity [Line Items] | |
Accretion of convertible redeemable preferred stock | 15,848 |
Series B voting preferred stock | |
Temporary Equity [Line Items] | |
Accretion of convertible redeemable preferred stock | 67,595 |
Series C voting preferred stock | |
Temporary Equity [Line Items] | |
Accretion of convertible redeemable preferred stock | 66,513 |
Series D voting preferred stock | |
Temporary Equity [Line Items] | |
Accretion of convertible redeemable preferred stock | 60,163 |
Series E voting preferred stock | |
Temporary Equity [Line Items] | |
Accretion of convertible redeemable preferred stock | $ 42,521 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ in Millions | Jun. 13, 2019shares | Feb. 02, 2020USD ($)dayshares |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share price hurdle period | day | 45 | |
Aggregate fair value of awards vested | $ | $ 103.3 | |
Unrecognized compensation cost | $ | $ 192.3 | |
Unrecognized compensation cost, recognition period | 1 year 10 months 24 days | |
Awards issued (in shares) | 26,677,000 | |
Awards forfeited/canceled (in shares) | 2,615,000 | |
RSUs | Parent | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards issued (in shares) | 82,941 | |
RSUs | Tranche One | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 25.00% | |
RSUs | Tranche Two | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 12.50% | |
RSUs | Tranche Three | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 12.50% | |
RSUs | Tranche Four | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 12.50% | |
RSUs | Tranche Five | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 12.50% | |
RSUs | Tranche Six | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 12.50% | |
RSUs | Tranche Seven | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 12.50% | |
PIUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards forfeited/canceled (in shares) | 768,785 | |
Class A common stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 7,800,000 | |
2019 Omnibus Incentive Plan | Class A common stock | Common Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares allowed for issuance (in shares) | 31,864,865 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Unvested Restricted Stock and Profit Interest Units Outstanding and Related Transactions (Details) - RSUs shares in Thousands | 12 Months Ended |
Feb. 02, 2020$ / sharesshares | |
Number of RSUs | |
Beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 26,677 |
Vested (in shares) | shares | (2,778) |
Forfeited (in shares) | shares | (2,615) |
Ending balance (in shares) | shares | 21,284 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 36.31 |
Vested (in dollars per share) | $ / shares | 36.86 |
Forfeited (in dollars per share) | $ / shares | 36.62 |
Ending balance (in dollars per share) | $ / shares | $ 36.20 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Fair Value Assumptions (Details) - RSUs | 12 Months Ended |
Feb. 02, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term/performance period | 5 years |
Weighted-average risk-free interest rate | 1.80% |
Weighted-average volatility | 49.60% |
Weighted-average dividend yield | 0.00% |
Share-Based Compensation - Sc_2
Share-Based Compensation - Schedule of Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 02, 2020 | Feb. 03, 2019 | Jan. 28, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 134,926 | $ 14,351 | $ 11,209 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 124,761 | 0 | 0 |
PIUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 10,165 | $ 14,351 | $ 11,209 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Feb. 02, 2020 | Feb. 03, 2019 | Jan. 28, 2018 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 21.00% | 21.00% | 33.90% |
State income taxes, net of federal tax benefit | 4.40% | 1.50% | 1.10% |
Change in tax rate | 0.60% | 0.00% | (21.30%) |
Share-based compensation | 4.00% | 0.00% | 7.40% |
Other | (2.10%) | (1.10%) | (1.30%) |
Change in valuation allowance | (27.90%) | (21.40%) | (19.80%) |
Effective rate | 0.00% | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Feb. 02, 2020 | Feb. 03, 2019 | Jan. 28, 2018 | Jan. 31, 2017 |
Deferred tax assets: | ||||
Operating lease liabilities | $ 53,578 | |||
Inventories | 7,485 | $ 11,474 | ||
Deferred rent | 0 | 7,415 | ||
Share-based compensation | 29,639 | 0 | ||
Accrued expenses and reserves | 10,814 | 10,271 | ||
Other | 12,882 | 1,668 | ||
Net operating loss carryforwards | 190,307 | 156,360 | ||
Total deferred tax assets | 304,705 | 187,188 | ||
Less: valuation allowance | 242,974 | 172,481 | $ 115,143 | $ 43,015 |
Deferred tax assets, net of valuation allowance | 61,731 | 14,707 | ||
Deferred tax liabilities: | ||||
Operating lease right-of-use assets | 44,428 | |||
Depreciation | 15,681 | 14,707 | ||
Prepaids | 1,622 | 0 | ||
Total deferred tax liabilities | 61,731 | 14,707 | ||
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |||
Feb. 02, 2020 | Feb. 03, 2019 | Jan. 28, 2018 | Jan. 31, 2017 | |
Tax Credit Carryforward [Line Items] | ||||
Current income tax provision | $ 0 | $ 0 | $ 0 | |
Deferred income tax provision | 0 | 0 | 0 | |
Net operating loss carryforwards subject to expiration | 402,400,000 | |||
Net operating loss carryforwards not subject to expiration | 716,100,000 | |||
Net operating loss carryforwards | 190,307,000 | 156,360,000 | ||
Deferred tax assets valuation allowance | 242,974,000 | 172,481,000 | 115,143,000 | $ 43,015,000 |
Change in valuation allowance | 70,500,000 | |||
Change in valuation allowance due to current year losses | 74,300,000 | |||
Change in valuation allowance due to state blended tax rate | 1,500,000 | |||
Change in valuation allowance, other | (5,300,000) | |||
Unrecognized tax benefits | 0 | 0 | ||
Proceeds from tax sharing agreement with Parent | 17,300,000 | $ 0 | $ 0 | |
Federal | ||||
Tax Credit Carryforward [Line Items] | ||||
Net operating loss carryforwards | 836,900,000 | |||
State Tax Authority | ||||
Tax Credit Carryforward [Line Items] | ||||
Net operating loss carryforwards | $ 281,600,000 |
Income Taxes - Operating Loss C
Income Taxes - Operating Loss Carryforwards (Details) - USD ($) $ in Thousands | Feb. 02, 2020 | Feb. 03, 2019 |
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards | $ 190,307 | $ 156,360 |
2030 | ||
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards | 45 | |
2032 | ||
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards | 401 | |
2034 | ||
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards | 163 | |
2035 | ||
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards | 18,258 | |
2036 | ||
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards | 34,752 | |
Thereafter | ||
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards | $ 136,688 |
Income Taxes - Tax Credit Carry
Income Taxes - Tax Credit Carryforwards (Details) $ in Thousands | Feb. 02, 2020USD ($) |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | $ 7,558 |
Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 5,080 |
Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 1,630 |
Hurricane Retention | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 848 |
2036 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 227 |
2036 | Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 227 |
2036 | Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2036 | Hurricane Retention | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2037 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 2,551 |
2037 | Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 1,609 |
2037 | Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 94 |
2037 | Hurricane Retention | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 848 |
2038 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 2,383 |
2038 | Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 1,622 |
2038 | Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 761 |
2038 | Hurricane Retention | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2039 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 2,397 |
2039 | Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 1,622 |
2039 | Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 775 |
2039 | Hurricane Retention | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | $ 0 |
Income Taxes - Valuation Allowa
Income Taxes - Valuation Allowance Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 02, 2020 | Feb. 03, 2019 | Jan. 28, 2018 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowance, as of beginning of period | $ 172,481 | $ 115,143 | $ 43,015 |
Valuation allowances established | 69,009 | 57,232 | 88,768 |
Changes to existing valuation allowances | 1,484 | 106 | (16,640) |
Release of valuation allowances | 0 | 0 | 0 |
Valuation allowance, as of end of period | $ 242,974 | $ 172,481 | $ 115,143 |
Net Loss per Share - Narrative
Net Loss per Share - Narrative (Details) - shares | Jan. 06, 2020 | Dec. 20, 2019 | Jun. 18, 2019 | Jun. 17, 2019 | Feb. 02, 2020 | Feb. 03, 2019 |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||
Common stock outstanding (in shares) | 100 | |||||
Class B common stock | ||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||
Common stock outstanding (in shares) | 345,125,000 | 334,922,454 | 0 | |||
Conversion of stock (in shares) | (3,850,000) | (6,352,546) | (47,875,000) | 393,000,000 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Feb. 02, 2020 | Feb. 03, 2019 | Jan. 28, 2018 | |
Numerator: | |||
Net loss | $ (252,370) | $ (267,890) | $ (338,057) |
Accretion of convertible redeemable preferred stock | 0 | 0 | (361,520) |
Net loss attributable to common stockholders | $ (252,370) | $ (267,890) | $ (699,577) |
Denominator: | |||
Weighted average common shares used in computing net loss per share attributable to common Class A and Class B stockholders, basic and diluted (in shares) | 398,256 | 393,000 | 262,200 |
Net loss per share attributable to common Class A and Class B stockholders, basic and diluted (in dollars per share) | $ (0.63) | $ (0.68) | $ (2.67) |
Series A voting preferred stock | |||
Denominator: | |||
Antidilutive securities (in shares) | 187,370 | ||
Series A-1 voting preferred stock | |||
Denominator: | |||
Antidilutive securities (in shares) | 27,273 | ||
Series B voting preferred stock | |||
Denominator: | |||
Antidilutive securities (in shares) | 116,324 | ||
Series C voting preferred stock | |||
Denominator: | |||
Antidilutive securities (in shares) | 114,461 | ||
Series D convertible redeemable preferred stock | |||
Denominator: | |||
Antidilutive securities (in shares) | 103,534 | ||
Series E convertible redeemable preferred stock | |||
Denominator: | |||
Antidilutive securities (in shares) | 79,290 | ||
Series F convertible redeemable preferred stock | |||
Denominator: | |||
Antidilutive securities (in shares) | 67,397 | ||
Series 1 Preferred Stock | |||
Denominator: | |||
Antidilutive securities (in shares) | 60,000 | ||
Restricted stock | |||
Denominator: | |||
Antidilutive securities (in shares) | 18,038 | ||
Stock options | |||
Denominator: | |||
Antidilutive securities (in shares) | 77,885 |
Certain Relationships and Rel_2
Certain Relationships and Related Party Transactions - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 02, 2020 | Feb. 03, 2019 | Jan. 28, 2018 | |
Intercompany Loan | |||
Related Party Transaction [Line Items] | |||
Termination of intercompany loan | $ 79.5 | ||
Sponsors and Parent | Management Fee | |||
Related Party Transaction [Line Items] | |||
Related party expense | 1.3 | $ 1.3 | $ 0.9 |
Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Net sales from management fee | $ 41.1 | $ 12.9 | |
Affiliated Entity | PetSmart Acquisition Costs | |||
Related Party Transaction [Line Items] | |||
Related party expense | 28.1 | ||
Affiliated Entity | Compensation Expense | |||
Related Party Transaction [Line Items] | |||
Related party expense | $ 33.9 |