Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 29, 2022 | Mar. 28, 2022 | Jul. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jan. 29, 2022 | ||
Current Fiscal Year End Date | --01-29 | ||
Document Transition Report | false | ||
Entity File Number | 001-40571 | ||
Entity Registrant Name | TORRID HOLDINGS INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 84-3517567 | ||
Entity Address, Address Line One | 18501 East San Jose Avenue | ||
Entity Address, City or Town | City of Industry | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 91748 | ||
City Area Code | 626 | ||
Local Phone Number | 667-1002 | ||
Title of 12(b) Security | Common stock, par value $0.01 per share | ||
Trading Symbol | CURV | ||
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 | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 105,856,729 | ||
Entity Public Float | $ 411 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Information required in response to Part III of Form 10-K (Items 10, 11, 12, 13 and 14) is hereby incorporated by reference to portions of the registrant’s definitive proxy statement for the 2022 Annual Meeting of Stockholders (the "2021 Proxy Statement"), to be filed with the Securities and Exchange Commission no later than 120 days after the end of the Registrant’s fiscal year ended January 29, 2022. | ||
Entity Central Index Key | 0001792781 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Jan. 29, 2022 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Los Angeles, California |
Auditor Firm ID | 238 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 29,025 | $ 122,953 |
Restricted cash | 262 | 262 |
Inventory | 170,608 | 105,843 |
Prepaid expenses and other current assets | 14,686 | 12,668 |
Prepaid income taxes | 6,345 | 417 |
Total current assets | 220,926 | 242,143 |
Property and equipment, net | 127,565 | 143,256 |
Operating lease right-of-use assets | 209,637 | 244,711 |
Deposits and other noncurrent assets | 7,100 | 3,560 |
Deferred tax assets | 4,873 | 6,139 |
Intangible asset | 8,400 | 8,400 |
Total assets | 578,501 | 648,209 |
Current liabilities: | ||
Accounts payable | 77,448 | 70,853 |
Accrued and other current liabilities | 138,708 | 110,361 |
Operating lease liabilities | 45,716 | 50,998 |
Current portion of term loan | 20,519 | 11,506 |
Due to related parties | 14,622 | 8,060 |
Income taxes payable | 0 | 9,336 |
Total current liabilities | 297,013 | 261,114 |
Noncurrent operating lease liabilities | 207,049 | 246,458 |
Term loan | 320,841 | 193,406 |
Deferred compensation | 6,873 | 6,531 |
Lease incentives and other noncurrent liabilities | 5,044 | 3,873 |
Total liabilities | 836,820 | 711,382 |
Commitments and contingencies (Note 16) | ||
Stockholders' deficit: | ||
Common shares: $0.01 par value; 1,000,000,000 shares authorized; 110,000,000 shares issued and outstanding at January 30, 2021; 107,857,625 shares issued and outstanding at January 29, 2022 | 1,078 | 1,100 |
Additional paid-in capital | 118,286 | 10,326 |
Accumulated deficit | (377,759) | (74,591) |
Accumulated other comprehensive (loss) income | 76 | (8) |
Total stockholders' deficit | (258,319) | (63,173) |
Total liabilities and stockholders' deficit | $ 578,501 | $ 648,209 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jan. 29, 2022 | Jan. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Common shares, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common shares, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common shares, issued (in shares) | 107,857,625 | 110,000,000 |
Common shares, outstanding (in shares) | 107,857,625 | 110,000,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Income Statement [Abstract] | |||
Net sales | $ 1,278,794 | $ 973,514 | $ 1,036,984 |
Cost of goods sold | 759,826 | 643,215 | 640,909 |
Gross profit | 518,968 | 330,299 | 396,075 |
Selling, general and administrative expenses | 420,932 | 222,098 | 253,378 |
Marketing expenses | 52,654 | 51,382 | 65,704 |
Income from operations | 45,382 | 56,819 | 76,993 |
Interest expense | 29,497 | 21,338 | 16,493 |
Interest income, net of other (income) expense | 56 | (42) | (202) |
Income before provision for income taxes | 15,829 | 35,523 | 60,702 |
Provision for income taxes | 45,773 | 10,991 | 18,833 |
Net income (loss) | (29,944) | 24,532 | 41,869 |
Comprehensive income (loss): | |||
Net income (loss) | (29,944) | 24,532 | 41,869 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustment | 84 | 2 | (29) |
Total other comprehensive (loss) income | 84 | 2 | (29) |
Comprehensive income (loss) | $ (29,860) | $ 24,534 | $ 41,840 |
Net earnings (loss) per share: | |||
Basic (in USD per share) | $ (0.27) | $ 0.22 | $ 0.38 |
Diluted (in USD per share) | $ (0.27) | $ 0.22 | $ 0.38 |
Weighted average number of shares: | |||
Basic (in shares) | 109,886 | 110,000 | 110,000 |
Diluted (in shares) | 109,886 | 110,000 | 110,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Shares | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Feb. 02, 2019 | 110,000,000 | ||||
Beginning balance at Feb. 02, 2019 | $ 126,422 | $ 1,100 | $ 266,295 | $ (140,992) | $ 19 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 41,869 | 41,869 | |||
Related party IT asset purchase, net of tax | (19,336) | (19,336) | |||
Capital contribution from Torrid Holding LLC for incentive units | 11,993 | 11,993 | |||
Capital distribution to Torrid Holding LLC | (256,417) | (256,417) | |||
Other comprehensive income (loss) | (29) | (29) | |||
Ending balance (in shares) at Feb. 01, 2020 | 110,000,000 | ||||
Ending balance at Feb. 01, 2020 | (95,498) | $ 1,100 | 2,535 | (99,123) | (10) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 24,532 | 24,532 | |||
Capital contribution from Torrid Holding LLC for incentive units | 7,791 | 7,791 | |||
Other comprehensive income (loss) | $ 2 | 2 | |||
Ending balance (in shares) at Jan. 30, 2021 | 110,000,000 | 110,000,000 | |||
Ending balance at Jan. 30, 2021 | $ (63,173) | $ 1,100 | 10,326 | (74,591) | (8) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (29,944) | (29,944) | |||
Capital contribution from Torrid Holding LLC for incentive units | 151,166 | 151,166 | |||
Capital distribution to Torrid Holding LLC | (300,000) | (50,105) | (249,895) | ||
Issuance of common shares and withholding tax payments related to vesting of restricted stock awards and restricted stock units (in shares) | 127,000 | ||||
Issuance of common shares and withholding tax payments related to vesting of restricted stock awards and restricted stock units | (2,073) | $ 1 | (2,074) | ||
Issuance of common stock related to employee stock purchase plan (in shares) | 46,000 | ||||
Issuance of common stock related to employee stock purchase plan | 385 | 385 | |||
Share-based compensation | 8,588 | 8,588 | |||
Repurchases and retirement of common stock (in shares) | (2,315,000) | ||||
Repurchases and retirement of common stock | (23,352) | $ (23) | (23,329) | ||
Other comprehensive income (loss) | $ 84 | 84 | |||
Ending balance (in shares) at Jan. 29, 2022 | 107,857,625 | 107,858,000 | |||
Ending balance at Jan. 29, 2022 | $ (258,319) | $ 1,078 | $ 118,286 | $ (377,759) | $ 76 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
OPERATING ACTIVITIES | |||
Net income (loss) | $ (29,944) | $ 24,532 | $ 41,869 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Write down of inventory | 696 | 6,099 | 3,828 |
Operating right-of-use assets amortization | 41,648 | 40,316 | 40,427 |
Depreciation and other amortization | 36,748 | 34,579 | 31,173 |
Write off of unamortized original issue discount and deferred financing costs for Amended Term Loan Credit Agreement | 5,231 | 0 | 0 |
Share-based compensation | 159,754 | 7,791 | 11,993 |
Deferred taxes | 1,266 | (2,325) | (4,661) |
Other | (457) | (1,226) | (1,031) |
Changes in operating assets and liabilities: | |||
Inventory | (65,709) | 7,880 | (17,405) |
Prepaid expenses and other current assets | (1,949) | 1,394 | 4,604 |
Prepaid income taxes | (5,928) | 1,200 | 596 |
Deposits and other noncurrent assets | (3,058) | (749) | (522) |
Accounts payable | 5,639 | 37,849 | 5,314 |
Accrued and other current liabilities | 28,090 | 19,748 | 28,009 |
Operating lease liabilities | (49,597) | (33,895) | (41,651) |
Lease incentives and other noncurrent liabilities | 1,222 | 544 | (45) |
Deferred compensation | 342 | 1,316 | 1,064 |
Due to related parties | 6,562 | (626) | (4,435) |
Income taxes payable | (9,336) | 7,394 | (37) |
Net cash provided by operating activities | 121,220 | 151,821 | 99,090 |
INVESTING ACTIVITIES | |||
Purchases of property and equipment | (17,552) | (11,570) | (26,333) |
Purchase of Hot Topic IT assets | 0 | 0 | (29,548) |
Deficit of insurance proceeds received for damage to property and equipment | 0 | 0 | (239) |
Net cash used in investing activities | (17,552) | (11,570) | (56,120) |
FINANCING ACTIVITIES | |||
Capital distribution to Torrid Holding LLC, net of contribution | (300,000) | 0 | (256,417) |
Proceeds from revolving credit facility | 5,700 | 50,700 | 103,120 |
Payments on revolving credit facility | (5,700) | (50,700) | (118,600) |
Principal payments on and repayment of Amended Term Loan Credit Agreement and related costs | (212,775) | (45,400) | (3,900) |
Proceeds from issuances under share-based compensation plans | 569 | 0 | 0 |
Withholding tax payments related to vesting of restricted stock units and awards | (2,072) | 0 | 0 |
Repurchases and retirement of common stock | (23,352) | 0 | 0 |
Net cash used in financing activities | (197,809) | (45,925) | (23,335) |
Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash | 213 | (110) | (11) |
Increase in cash, cash equivalents and restricted cash | (93,928) | 94,216 | 19,624 |
Cash, cash equivalents and restricted cash at beginning of period | 123,215 | 28,999 | 9,375 |
Cash, cash equivalents and restricted cash at end of period | 29,287 | 123,215 | 28,999 |
SUPPLEMENTAL INFORMATION | |||
Cash paid during the period for interest related to the revolving credit facility and term loan | 24,120 | 21,258 | 10,607 |
Cash paid during the period for income taxes | 58,134 | 3,921 | 22,413 |
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES | |||
Property and equipment purchases included in accounts payable and accrued liabilities | 3,338 | 1,238 | 5,580 |
Related party promissory note receivable in exchange for HT Intermediate Holdings Corp. preferred stock | 0 | 0 | 214,628 |
Amended Term Loan Credit Agreement | |||
FINANCING ACTIVITIES | |||
Deferred financing costs | 0 | (525) | |
Proceeds from New Term Loan Credit Agreement, net of original issue discount and deferred financing costs | 252,462 | ||
New Term Loan Credit Agreement | |||
FINANCING ACTIVITIES | |||
Proceeds from New Term Loan Credit Agreement, net of original issue discount and deferred financing costs | 340,509 | 0 | 0 |
Revolving Credit Facility | |||
FINANCING ACTIVITIES | |||
Deferred financing costs | $ (688) | $ 0 | $ 0 |
Basis of Presentation and Descr
Basis of Presentation and Description of the Business | 12 Months Ended |
Jan. 29, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Description of the Business | Basis of Presentation and Description of the Business Corporate Structure Torrid Holdings Inc. is a Delaware corporation formed on October 29, 2019 and capitalized on February 20, 2020. Sycamore Partners Management, L.P. (“Sycamore”) owns a majority of the voting power of Torrid Holdings Inc.’s outstanding common stock. Prior to the IPO (as defined below), Torrid Holdings Inc. was a wholly owned subsidiary of Torrid Holding LLC, which is majority-owned by investment funds managed by Sycamore. Torrid Parent Inc. is a Delaware corporation formed on June 4, 2019 and is a wholly owned subsidiary of Torrid Holdings Inc. Torrid Intermediate LLC, formerly known as Torrid Inc., is a Delaware limited liability company formed on June 18, 2019 and a wholly owned subsidiary of Torrid Parent Inc. Torrid LLC is a wholly owned subsidiary of Torrid Intermediate LLC. Substantially all of Torrid Holdings Inc.'s financial position, operations and cash flows are generated through its wholly owned indirect subsidiary, Torrid LLC. Throughout these financial statements, the terms “Torrid,” “we,” “us,” “our,” the “Company” and similar references refer to Torrid Holdings Inc. and its consolidated subsidiaries. Reorganization On July 1, 2021, Torrid Holding LLC, our then parent, completed a reorganization pursuant to which (i) Torrid Holding LLC contributed, assigned, transferred and delivered its issued and outstanding equity interest in Torrid Parent Inc. to Torrid, and (ii) Torrid assumed the obligations of Torrid Holding LLC under the related party promissory notes due to Torrid Parent Inc. (together, the “Reorganization”). The Reorganization was accounted for as a combination of entities under common control in accordance with subsections of Accounting Standards Codification (“ASC”) 805-50, Business Combinations (“ASC 805-50”). Consequently, the equity interests of Torrid Parent Inc. contributed by Torrid Holding LLC to Torrid were recorded at historical carrying amounts and our financial position, results of operations and cash flows prior to the Reorganization have been adjusted to reflect the retrospective combination of the entities for all periods presented as if the combination had been in effect since the inception of common control. Stock Split On June 22, 2021, Torrid's stockholder approved an amendment to Torrid's certificate of incorporation to (i) effect a 110,000-for-1 stock split of all shares of the issued and outstanding common stock, which was effected on June 22, 2021 and (ii) authorize 5.0 million shares of preferred stock. All share and per-share data in the consolidated financial statements and notes to the consolidated financial statements has been retroactively adjusted to reflect the stock split for all periods presented. The par value of the common stock was not adjusted as a result of the stock split. Initial Public Offering Our registration statement on Form S-1 related to our initial public offering (“IPO”) was declared effective on June 30, 2021, and our common stock began trading on the New York Stock Exchange on July 1, 2021. On July 6, 2021, subsequent to the Reorganization, we completed the IPO and certain of our shareholders sold 12,650,000 shares of common stock at a public offering price of $21.00 per share, including 1,650,000 shares of common stock after full exercise of the underwriters' option, for net proceeds of $248.4 million, after deducting underwriting discounts of $17.3 million. The offering costs of approximately $6.0 million were borne by us. We did not receive any proceeds from the sale of our shares of common stock by the selling stockholders. Fiscal Year Our fiscal year ends on the Saturday nearest to January 31 and each fiscal year is generally comprised of four 13-week quarters (although in years with 53 weeks, the fourth quarter is comprised of 14 weeks). Fiscal years 2019, 2020 and 2021 are 52-week years. Fiscal years are identified according to the calendar year in which they begin. For example, references to “fiscal year 2021” or similar references refer to the fiscal year ended January 29, 2022. Description of Business We are a direct-to-consumer brand of apparel, intimates and accessories targeting the 25- to 40-year old woman who is curvy and wears sizes 10 to 30. We generate revenues primarily through our e-Commerce platform www.torrid.com and our stores in the United States of America, Puerto Rico and Canada. COVID-19 In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic, which continues to spread throughout the United States and globally. The COVID-19 health crisis poses significant and widespread risks to our business as well as to the business environment and the markets in which we operate. In response to the public health crisis posed by COVID-19, individual states across the United States, including California where our headquarters are located, imposed a variety of regulatory restrictions including stay-at-home requirements. Consequently, we temporarily closed our headquarters and all retail store locations on March 17, 2020. In response to the impact of COVID-19, in March 2020, we implemented a number of precautionary measures to minimize cash outlays. These precautionary measures included managing workforce costs, delaying planned capital expenditures, including store openings, minimizing discretionary expenses and deferring lease payments while we negotiate concessions for certain of our retail locations. Please refer to “Note 9—Leases” for further discussion regarding these lease concessions. On May 15, 2020, we began to reopen our retail store locations in phases. Our decision to reopen retail store locations is affected by a number of factors including applicable regulatory restrictions. As of August 1, 2020, all of our retail store locations impacted by COVID-19 had reopened subject to local and state restrictions including limited hours and curbside order pick-up for certain locations. While our retail store locations were closed, we continued to serve customers virtually through our Torrid app and online at www.torrid.com. In addition to our planned closures and reopenings, we have had to unexpectedly close some of our physical locations for brief periods of time in response to COVID-19 exposures. We may face new closure requirements with respect to some or all of our physical locations for prolonged periods of time due to, among other factors, evolving federal, state and local restrictions and shelter-in-place orders. Even though we have reopened our physical locations, changes in consumer behavior and health concerns may continue to impact customer traffic at our retail locations and may make it more difficult for us to staff these locations. Our business operations, including net sales, were substantially affected by COVID-19 in the prior year and the extent of future impacts of COVID-19 on our business, including the duration and impact on overall customer demand, is uncertain as current circumstances are dynamic and depend on future developments, including, but not limited to, the duration and spread of COVID-19, the emergence of new variants of the coronavirus and the availability and acceptance of effective vaccines or medical treatments. During fiscal year 2021, global supply chain disruption caused significant product delays resulting in limited product availability to our customers. Increased port congestion and COVID-19-related factory closures, most notably in the Asia-Pacific region where we source a significant amount of product, impacted our results of operations for fiscal year 2021. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law, and has resulted in significant changes to the U.S. federal corporate tax law. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, and the creation of certain refundable employee retention credits. Additionally, several state and foreign jurisdictions have enacted additional legislation to comply with federal changes. On December 27, 2020, the Consolidated Appropriations Act (“CAA”) was enacted in further response to the COVID-19 pandemic. The CAA, among other things, revised certain tax measures enacted under the CARES Act, such as the deductibility of payroll tax credits, charitable contributions for corporate taxpayers, certain meals and entertainment expenses paid or incurred in calendar years 2020 and 2021, and employment retention credit claims. On March 11, 2021, the American Rescue Plan Act (“ARPA”) was signed into law with additional funding for COVID-19 pandemic relief. The ARPA includes the expansion of employment retention credit claims and other pandemic funding provisions. We have considered the applicable CARES Act, CAA and ARPA tax law changes in our tax provision for fiscal year 2021 and continue to evaluate the impact of these tax law changes on future periods. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 29, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The accompanying audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include our accounts and those of our wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Segment Reporting We have determined that we have one reportable segment, which includes the operation of our e-Commerce platform and stores. The single segment was identified based on how the Chief Operating Decision Maker, who we have determined to be our Chief Executive Officer, manages and evaluates performance and allocates resources. Net sales and long-lived assets related to our operations in Canada and Puerto Rico during fiscal years 2019, 2020 and 2021 and as of the end of the same periods were not material, and therefore, are not reported separately from domestic net sales and long-lived assets. Use of Estimates We are required to make certain estimates and assumptions in order to prepare consolidated financial statements in conformity with GAAP. Such estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities in the consolidated financial statements and accompanying notes. Our most significant estimates include, but are not limited to, the valuation of inventory balances, the determination of sales returns, the assessments related to the valuation of long-lived assets for impairment, the determination of incremental borrowing rates used to value our operating lease liabilities, estimates related to our loyalty program, the recoverability of deferred taxes, the determination of uncertain tax positions and the determination of gift card breakage. The estimation process required to prepare our consolidated financial statements requires assumptions to be made about future events and conditions, and as such, is inherently subjective and uncertain. Our actual results could differ materially from those estimates. Concentration Risks We consider all highly liquid investments with maturities of less than three months when purchased to be cash equivalents. All credit and debit card receivable balances are also classified as cash and cash equivalents. As of the end of fiscal years 2020 and 2021, the amounts due from third party financial institutions for these transactions classified as cash and cash equivalents totaled $7.1 million and $14.1 million, respectively. Cash and cash equivalents used primarily for working capital purposes are maintained with various major third party financial institutions in amounts which are in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. We are potentially exposed to a concentration of credit risk when cash and cash equivalent deposits in these financial institutions are in excess of FDIC limits. We consider the credit risk associated with these financial instruments to be minimal as cash and cash equivalents are held by financial institutions with high credit ratings and we have not historically sustained any credit losses associated with our cash and cash equivalents balances. In addition, no one supplier accounted for more than 10% of total net purchases in fiscal year 2019, and one supplier accounted for approximately 14% and two suppliers accounted for approximately 11% of total net purchases in fiscal years 2020 and 2021, respectively. Fair Value of Financial Instruments We carry certain of our assets and liabilities at fair value in accordance with GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We consider carrying amounts of cash equivalents, accounts payable and accrued and other current liabilities to approximate fair value because of the short maturity of these financial instruments. We consider the carrying amounts of the Existing ABL Facility, as amended, (as defined in “Note 12—Debt Financing Arrangements”) and the New Term Loan Credit Agreement (as defined in “Note 12—Debt Financing Arrangements”) to approximate fair value because they are carried at market observable interest rates that reset periodically and are categorized as Level 2 in the fair value hierarchy. See “Note 19—Fair Value Measurements” for more details about how we determine the fair value of our financial instruments. Inventory Inventory is valued at the lower of moving average cost or net realizable value. We make certain assumptions regarding net realizable value in order to assess whether our inventory is recorded properly at the lower of cost or net realizable value. These assumptions are based on historical average selling price experience, current selling price information and estimated future selling price information. Physical inventory counts are conducted at least once during the year to determine actual inventory on hand and shrinkage. We accrue our estimated inventory shrinkage for the period between the last physical count and current balance sheet date. Property and Equipment Property and equipment are recorded at cost less accumulated depreciation. Major repairs and improvements are capitalized, while routine maintenance and repairs are expensed as incurred. The gross carrying amounts of property and equipment sold or retired and the related accumulated depreciation are eliminated in the year of disposal, and any resulting gains or losses are included in the consolidated statements of operations and comprehensive income (loss). Application and development costs associated with internally developed software such as salaries of employees and payments made to third parties and consultants working on the software development are capitalized. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they constitute major enhancements. Capitalized internal-use software costs are amortized using the straight-line method over their estimated useful lives, which are generally three years. Depreciation expense is calculated using the straight-line method over the following estimated useful lives: Leasehold improvements shorter of the 3- to 10-year estimated useful life or the respective lease term Furniture, fixtures and equipment 2 to 10 years Software and licenses 3 to 7 years The carrying value of property and equipment is subject to assessment for potential impairment whenever events or changes in circumstances indicate that an asset’s carrying value may not be recoverable, as further described below. Definite-Lived Assets We assess the carrying value of long-lived assets for potential impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We group and evaluate long-lived assets for impairment at the individual store level, which is the lowest level at which individual cash flows can be identified. Factors we consider important that could trigger an impairment review of our stores or e-Commerce operations include significant underperformance relative to historical or projected future operating results, a significant change in the manner of the use of the asset or a significant negative industry or economic trend. If we determine the carrying value of long-lived assets may not be recoverable based upon the existence of one or more of the aforementioned factors, we test for the recoverability of the carrying value of our long-lived assets by comparing the carrying value of the asset groups to our estimated undiscounted future net cash flows attributable to the asset groups. If the carrying value of the long-lived assets is greater than the related undiscounted future net cash flows, the long-lived assets are measured for impairment. We measure the impairment by comparing the difference between the long-lived asset’s carrying value and the discounted future net cash flows attributable to the long-lived asset, which represent its fair value. We calculate the discounted future net cash flows of a store by netting future estimated sales of each store against estimated cost of goods sold, store occupancy costs and other store operating expenses such as payroll, supplies, repairs and maintenance and credit/debit card fees. Changes in these assumptions may cause the fair value to be significantly impacted. In the event future performance is lower than forecasted results, future cash flows may be lower than expected, which could result in future impairment charges. While we believe that recently opened stores will provide sufficient cash flow, material changes in financial performance could result in future store impairment charges. Indefinite-Lived Intangible Assets Indefinite-lived intangible assets are not amortized, but are reviewed for impairment at least annually, or more frequently when events or changes in circumstances indicate the carrying value may not be recoverable. Judgments regarding indicators of potential impairment are based on market conditions and operational performance of the business. At the end of the third quarter of each fiscal year, we perform an impairment analysis of indefinite-lived intangible assets. We assess our indefinite-lived intangible asset for impairment using a qualitative analysis to determine whether it is more likely than not that the fair value of the asset is less than its carrying value. If it is determined that it is more likely than not that the fair value of the asset is less than its carrying amount or if a quantitative assessment is not performed, then we would perform the quantitative analysis to determine the fair value of the asset. If we conclude, based on our assessment, that the asset’s fair value is less than its carrying value, then an impairment charge is recorded in the amount of the excess. Implementation Costs Incurred in Cloud Computing Arrangements that are Service Contracts Our cloud computing arrangements that are service contracts primarily consist of arrangements with third party vendors for our internal use of their software applications that they host. We defer implementation costs incurred in relation to such arrangements, including costs for software application coding, configuration, integration and customization, while associated process reengineering, training, maintenance and data conversion costs are expensed. Subsequent implementation costs are deferred only to the extent that they constitute major enhancements. The short-term portion of deferred costs are included in prepaid expenses and other current assets in the consolidated balance sheets, while the long-term portion of deferred costs are included in deposits and other noncurrent assets. Amortized implementation costs incurred in cloud computing arrangements that are service contracts are recognized in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss) using the straight-line method over three Loyalty Program On July 22, 2019, we relaunched our loyalty program, Torrid Rewards, in all our stores and on www.torrid.com. Under this program, customers accumulate points based on purchase activity and qualifying non-purchase activity and upon reaching a certain point level, customers can earn awards that may only be redeemed for merchandise. Unredeemed points typically expire after 13 months without additional purchase and qualifying non-purchase activity and unredeemed awards typically expire 45 days after issuance. We use historical redemption rates to estimate the value of future award redemptions and we recognize the estimated value of these future awards as a reduction of revenue in the consolidated statements of operations and comprehensive income (loss) in the period the points are earned by the customer. Prior to the relaunch of the Torrid Rewards loyalty program, we operated our Torrid Insider loyalty program under which customers accumulated points based on purchase activity only. As of the end of fiscal years 2020 and 2021, we had $12.3 million and $13.5 million, respectively, in accrued loyalty program included in accrued and other current liabilities in the consolidated balance sheets. We recorded $3.1 million, $0.3 million and $1.1 million as a reduction of net sales in fiscal years 2019, 2020 and 2021, respectively. Future revisions to the estimated liability may result in changes to net sales. Self-Insurance We are self-insured for certain losses related to medical and workers’ compensation claims although we maintain stop loss coverage with third party insurers to limit our total liability exposure. In general, our self-insurance reserves are recorded on an undiscounted basis. The estimate of our self-insurance liability involves uncertainty since we must use judgment to estimate the ultimate cost that will be incurred to settle reported claims and unreported claims for incidents incurred but not reported as of the balance sheet date. When estimating our self-insurance liability, we consider a number of factors, which include historical claim experience and valuations provided by independent third party actuaries. While the ultimate amount of claims incurred is dependent on future developments, we believe recorded reserves are adequate to cover the future payment of claims. However, it is possible that recorded reserves may not be adequate to cover the future payment of claims. Adjustments, if any, to estimates recorded resulting from ultimate claim payments will be reflected in our consolidated statements of operations and comprehensive income (loss) in the periods in which such adjustments are known. Comprehensive Income (Loss) Comprehensive income includes all changes in equity during a period except those that resulted from investments by, or distributions to, stockholders. Other comprehensive income (loss) refers to revenues, expenses, gains and losses that, under GAAP, are included in comprehensive income, but excluded from net income (loss) as these amounts are recorded directly as an adjustment to stockholders' equity (deficit). Components of our comprehensive income (loss) include net income (loss) and foreign currency translation adjustments. Foreign currency translation adjustments in fiscal years 2019, 2020 and 2021 were not material. Foreign Currency Translation The functional currency for our wholly owned foreign subsidiaries included in these consolidated financial statements that are domiciled outside of the United States is the applicable local currency. Assets and liabilities of our foreign subsidiaries are translated into United States dollars at the exchange rate in effect on the balance sheet date. Revenues and expenses are translated at the average rate in effect during the period. Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the consolidated statements of stockholders' equity (deficit) as a component of accumulated other comprehensive income (loss). Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss) as incurred. Share Repurchases We have elected to retire shares repurchased to date. Shares retired become part of the pool of authorized but unissued shares. We have elected to record the purchase price of the retired shares in excess of par value, including transaction costs, directly as an increase in accumulated deficit. Revenue Recognition We recognize revenue when our performance obligations under the terms of a contract or an implied arrangement with a customer are satisfied, which is when the merchandise is transferred to the customer and the customer obtains control of it. The amount of revenue we recognize reflects the total consideration we expect to receive for the merchandise, which is the transaction price. For arrangements that contain multiple performance obligations, we allocate the transaction price to each performance obligation on a relative standalone selling price basis. At our retail store locations, we satisfy our performance obligation and recognize revenue at the point in time when a customer takes possession of the merchandise and tenders payment at the point-of-sale register. For e-Commerce sales shipped to a customer from our distribution center, or from a retail store location (ship from store), we satisfy our performance obligation and recognize revenue upon shipment, which is the point in time we believe the customer obtains control of the merchandise after payment has been tendered. Income we receive from customers for shipping and handling is recognized as a component of revenue upon shipment of merchandise to the customer. We satisfy our performance obligation and recognize revenue from e-Commerce sales shipped to a retail store location from our distribution center, or fulfilled from merchandise already located at a retail store location (buy-online-pickup-in-store), at the point in time when the customer retrieves the merchandise from within the retail store location or at a retail store curbside. If a customer earns loyalty program points in connection with the retail store or e-Commerce sales transactions described above, then we have a remaining performance obligation and cannot recognize all the revenue. A portion of the revenue is allocated to the loyalty program points earned during the transaction. We satisfy our performance obligation and recognize revenue allocated to these loyalty program points and the resulting awards at the point in time when the awards are redeemed for merchandise, when we determine that they will not be redeemed, or when the awards and points expire. We satisfy our performance obligation and recognize revenue from gift cards and store merchandise credits at the point in time when the customer presents the gift cards and store merchandise credits for redemption. Gift card breakage is income recognized due to the non-redemption of a portion of gift cards sold by us for which a liability was recorded in prior periods. We recognize estimated gift card breakage over time as a component of net sales in proportion to the pattern of rights exercised by the customer as reflected in actual gift card redemption patterns over the period. Our estimated gift card breakage rate is approximately 4%. While customer redemption patterns result in estimated gift card breakage, changes in our customers’ behavior could impact the amount that ultimately is unused and could affect the amount recognized as a component of net sales. During fiscal years 2019, 2020 and 2021, we recognized $1.1 million, $0.9 million and $1.1 million, respectively, of estimated gift card breakage as a component of net sales. We are required to estimate certain amounts included in a contract or an implied arrangement with a customer which add variability to the transaction price. Under certain conditions, we are obligated to accept customer returns for most of our merchandise. Sales returns reduce the revenue we expect to receive for merchandise and therefore add variability to the transaction price. Based on historical return pattern experience, we reasonably estimate the amount of merchandise expected to be returned and exclude it from revenue. Similarly, losses we bear arising from uncollectible customer credit card payments are recorded as a reduction of revenue as they reduce the revenue we expect to receive for the merchandise. We recognize a contract liability when we receive consideration from a customer before our performance obligations under the terms of a contract or an implied arrangement with the customer are satisfied. Consequently, we consider our remaining performance obligations to be representative of our contract liability, most of which is not expected to last for more than one year and has therefore been classified as current. Our contract liability balances increase as gift cards and store merchandise credits are purchased and received by the customer; and as loyalty points are earned based on purchase activity. Contract liability balances decrease as gift cards and store merchandise credits are redeemed for merchandise or when we determine that they will not be redeemed; as loyalty points expire or when we determine that they will not be converted into a loyalty award; and as loyalty awards are redeemed for merchandise or expire. Sales taxes collected from customers and remitted directly to governmental authorities are not considered revenue and are excluded from the transaction price. Cost of Goods Sold Cost of goods sold includes: merchandise costs; freight; inventory shrinkage; payroll expenses associated with the merchandising and distribution departments; distribution center expenses, including rent, common area maintenance (“CAM”) charges, real estate taxes, depreciation, utilities, supplies and maintenance; and store occupancy expenses, including rents, CAM charges, heating, ventilation and air conditioning (“HVAC”) charges, real estate taxes and depreciation. Vendor Allowances We receive certain allowances from our vendors primarily related to damaged merchandise, markdowns and pricing. Allowances received from vendors related to damaged merchandise and pricing are reflected as a reduction of inventory in the period they are received and allocated to cost of goods sold during the period in which the items are sold. Markdown allowances received from vendors are reflected as reductions to cost of goods sold in the period they are received if the goods have been sold or marked down, or as a reduction of inventory if the goods have not yet been sold. During fiscal years 2019, 2020 and 2021, we received vendor allowances of $3.2 million, $2.8 million and $3.5 million, respectively, substantially all of which were accounted for as a reduction of cost of goods sold. Selling, General and Administrative Expenses Selling, general and administrative expenses include: payroll expenses associated with stores and e-Commerce; store and e-Commerce operating expenses other than store occupancy; store pre-opening costs; credit card processing fees; share-based compensation; and payroll and other expenses associated with headquarters and administrative functions. Marketing Expenses Marketing expenses include direct mail marketing costs, photographic production and targeted online performance marketing costs such as retargeting, paid search/product listing advertising, and social media advertisements. Store Pre-Opening Costs Costs incurred in connection with the opening of new stores, store remodels or relocations are expensed as incurred. We incurred $1.0 million, $0.1 million and $0.9 million of pre-opening costs in fiscal years 2019, 2020 and 2021, respectively, which are recorded in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). Shipping and Handling Costs We classify shipping and handling costs in costs of goods sold in the consolidated statements of operations and comprehensive income (loss). We account for shipping and handling activities that occur after the customer has obtained control of merchandise as a fulfillment cost rather than an additional promised service. Leases We consider an agreement to be or contain a lease if it conveys us as the lessee with the right to control the use of an identified property, plant and equipment asset for a period of time in exchange for consideration. Based on these criteria, we as the lessee have operating lease agreements with lessors for our retail stores, distribution center and headquarter office space; and vehicles and equipment; under primarily non-cancelable leases with terms ranging from approximately two Certain of our operating lease agreements contain one or more options to extend the leases at our sole discretion. However, the periods covered by the options to extend the leases of our retail stores, vehicles and equipment are not recognized as part of the associated right of use ("ROU") assets and lease liabilities, as we are not reasonably certain to exercise the options. The periods covered by the options to extend the leases of our distribution center and headquarter office space are recognized as part of the associated ROU assets and lease liabilities, as we are reasonably certain to exercise the options due to the significant effort and investment it would take to move out of these locations. Some of our operating lease agreements contain options to terminate the lease under certain conditions. The retail space leases provide for rents based upon the greater of the minimum annual rental amounts or a percentage of annual store sales volume. Certain leases provide for increasing minimum annual rental amounts. We consider rents based upon a percentage of annual store sales volume, and other rent-related payments that generally vary because of changes in facts and circumstances (other than due to the passage of time), to be variable lease payments. Variable lease payments associated with retail space leases are recognized as occupancy costs within cost of goods sold in the consolidated statements of operations and comprehensive income (loss) in the period in which the obligation for those payments is incurred. We generally consider all other lease payments to be fixed in nature and the sum of all the discounted remaining fixed payments in the lease terms make up the lease liabilities in our consolidated balance sheet (if the lease terms are longer than 12 months). Our operating lease agreements do not contain any residual value guarantees or restrictive covenants, and we have not entered into any sublease agreements, lease agreements with related parties, or build-to-suit arrangements that may create significant rights and obligations for us. We discount the fixed lease payments that make up the lease liabilities using an incremental borrowing rate (“IBR”), as the rates implicit in our leases are not readily determinable. The IBR is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The determination of the incremental borrowing rate incorporates various assumptions including the financial scale, leverage and coverage measures that indicate our financial flexibility and long-term viability. These measures utilize credit ratings that are assigned scores which, when weighted based on certain quantitative factors, indicate overall credit rating. An IBR for each lease term is determined based on the credit rating. All scores, credit ratings and corresponding IBRs are highly subjective. We choose not to separate nonlease components (such as common area maintenance charges and heating, ventilation and air conditioning charges), from lease components (such as fixed minimum rent payments), and instead account for each separate lease component and the nonlease components associated with that lease component as a single lease component. We do not apply Accounting Standards Update (“ASU”) 2016-02, Leases , and all related guidance (ASC 842) requirements to leases that have lease terms of 12 months or less upon commencement, and instead recognize short-term lease payments, if applicable, in the consolidated statements of operations and comprehensive income (loss) on a straight-line basis over the lease term. In response to the COVID-19 pandemic, the Financial Accounting Standards Board ("FASB") issued interpretive guidance in April 2020, which provides entities the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease terms. We elected this option; accordingly, we do not remeasure the lease liabilities or record a change to the ROU assets for any concessions we receive for our retail store leases. Rather, deferred lease payments are recorded to operating lease liabilities until paid and lease concessions are recorded in the period they are negotiated or when the lower lease expense is paid. Income Taxes We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting bases and tax bases of assets and liabilities and are measured using the enacted tax rates expected to apply to taxable income in the periods in which the deferred tax asset or liability is expected to be realized or settled. Deferred tax assets are reduced by valuation allowances if we believe it is more likely than not that some portion or the entire deferred tax asset will not be realized. Deferred tax assets and liabilities are measured using the enacted tax rates in effect in the years when those temporary differences are expected to reverse. The effect on deferred taxes from a change in tax rate is recognized through continuing operations in the period that includes the enactment date of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. We prescribe a recognition threshold and a measurement attribute for the consolidated financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We include interest and penalties related to uncertain tax positions in income tax expense in the consolidated statements of operations and comprehensive income (loss). The amount of income taxes we pay may be subject to periodic audits by the Internal Revenue Service (“IRS”) and other taxing authorities. These audits may challenge certain of our tax positions, such as the timing and amount of deductions and allocation of taxable income to various jurisdictions. We recognize tax liabilities for our estimate of the potential outcome of any uncertain tax issue, which is subject to our assessment of the relevant risks, facts and circumstances existing at the time, and we adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense and the effective tax rate in the period in which the new information becomes available. As of the end of fiscal year 2021, we had accumulated undistributed earnings and profits of our foreign subsidiary of approximately $4.5 million. We continue to treat undistributed earnings of our foreign subsidiary as indefinitely reinvested according to our current operating plans and no deferred tax liability has been recorded for potential future taxes related to such earnings. According to current tax law, any future dividends paid from our foreign subsidiary will not be subject to income tax in the United States, except for withholding taxes and state taxes, which are not material. We have made a determination on our accounting policy choice to treat taxes related to Global Intangible Low Taxed Income (“GILTI”) as a period cost starting in calendar year 2018. Share-Based Compensation Prior to the IPO, Torrid Holding LLC issued 13,660,000 Class A, Class B, Class C, Class D, Class E, Class F, Class G, Class H and Class J Torrid incentive units, in the aggregate, net of forfeitures, to certain members of our management. These incentive units were intended to constitute profits interests. We recognized the impact of share-based compensation associated with incentive units issued by Torrid Holding LLC in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). The share-based compensation expense and related capital contribution are reflected in our consolidated financial statements as these awards were deemed to be for ou |
Accounting Standards
Accounting Standards | 12 Months Ended |
Jan. 29, 2022 | |
Accounting Policies [Abstract] | |
Accounting Standards | Accounting Standards Recently Adopted Accounting Standards in Fiscal Year 2020 In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This ASU provides optional guidance for a limited period of time to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The amendments in this update are effective as of March 12, 2020 through December 31, 2022. Our adoption of this guidance in the first quarter of fiscal year 2020 did not have a material impact on our consolidated financial statements. Recently Adopted Accounting Standards in Fiscal Year 2021 In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes. The ASU is intended to enhance and simplify aspects of the income tax accounting guidance in ASC 740 as part of the FASB’s simplification initiative. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2020 with early adoption permitted. Our adoption of this guidance on January 31, 2021 did not have a material impact on our consolidated financial statements. Accounting Standards Not Yet Adopted We have considered all recent accounting pronouncements and have concluded that there are no recent accounting pronouncements not yet adopted that are applicable to us, based on current information. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Jan. 29, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): January 30, 2021 January 29, 2022 Prepaid and other information technology expenses 3,202 5,692 Prepaid casualty insurance 1,336 3,050 Other 8,130 5,944 Prepaid expenses and other current assets $ 12,668 $ 14,686 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jan. 29, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment are summarized as follows (in thousands): January 30, 2021 January 29, 2022 Property and equipment, at cost Leasehold improvements $ 161,817 $ 168,084 Furniture, fixtures and equipment 98,753 108,261 Software and licenses 15,121 15,356 Construction-in-progress 3,266 4,743 278,957 296,444 Less: Accumulated depreciation and amortization (135,701) (168,879) Property and equipment, net $ 143,256 $ 127,565 We recorded depreciation and amortization expense related to our property and equipment in the amounts of $30.2 million, $33.1 million and $35.2 million during fiscal years 2019, 2020 and 2021, respectively. |
Implementation Costs Incurred i
Implementation Costs Incurred in Cloud Computing Arrangements that are Service Contracts | 12 Months Ended |
Jan. 29, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Implementation Costs Incurred in Cloud Computing Arrangements that are Service Contracts | Implementation Costs Incurred in Cloud Computing Arrangements that are Service Contracts We defer implementation costs incurred in cloud computing arrangements that are service contracts. The short-term portion of deferred implementation costs incurred in cloud computing arrangements that are service contracts are included in prepaid expenses and other current assets in the consolidated balance sheets, while the long-term portion of these deferred costs are included in deposits and other noncurrent assets. Deferred implementation costs incurred in cloud computing arrangements that are service contracts are summarized as follows (in thousands): January 30, 2021 January 29, 2022 Internal use of third party hosted software, gross $ 6,095 $ 11,877 Less: Accumulated amortization (2,245) (3,892) Internal use of third party hosted software, net $ 3,850 $ 7,985 During fiscal years 2019, 2020 and 2021, we amortized approximately $0.8 million, $1.1 million and $1.7 million, respectively, of implementation costs incurred in cloud computing arrangements that are service contracts. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jan. 29, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Definite-lived intangible assets and indefinite-lived intangible assets are summarized as follows (in thousands): January 30, 2021 January 29, 2022 Gross Accumulated Net Book Gross Accumulated Net Book Indefinite-lived intangible assets: Trade name $ 8,400 $ — $ 8,400 $ 8,400 $ — $ 8,400 Total $ 8,400 $ — $ 8,400 $ 8,400 $ — $ 8,400 Indefinite-Lived Intangible Assets We performed our annual impairment assessment of our trade name at the end of the third quarter of fiscal year 2021. We performed a qualitative assessment and determined that it is not more likely than not that the fair value of our trade name is less than its carrying value, which indicated there was no impairment. |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 12 Months Ended |
Jan. 29, 2022 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | Accrued and Other Current Liabilities Accrued and other current liabilities consist of the following (in thousands): January 30, 2021 January 29, 2022 Accrued payroll and related expenses $ 25,638 $ 31,194 Accrued inventory-in-transit 21,749 37,156 Accrued loyalty program 12,344 13,481 Accrued sales return allowance 3,863 4,347 Gift cards 9,361 11,695 Deferred revenue 1,512 2,879 Accrued sales and use tax 5,615 4,136 Accrued freight 4,937 6,048 Term loan interest payable 3,311 1,762 Accrued marketing 4,696 5,419 Accrued self-insurance liabilities 2,868 2,891 Other 14,467 17,700 Accrued and other current liabilities $ 110,361 $ 138,708 |
Leases
Leases | 12 Months Ended |
Jan. 29, 2022 | |
Leases [Abstract] | |
Leases | Leases Our lease costs reflected in the tables below include minimum base rents, CAM charges and HVAC charges. We recognize such lease costs in the applicable expense category in either cost of goods sold, or selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). Our lease costs consisted of the following (in thousands): Fiscal Year Ended February 1, 2020 January 30, 2021 January 29, 2022 Operating (fixed) lease cost $ 58,700 $ 40,192 $ 50,446 Short-term lease cost 170 124 82 Variable lease cost 18,237 17,550 20,655 Total lease cost $ 77,107 $ 57,866 $ 71,183 In response to the COVID-19 pandemic, the FASB issued interpretive guidance in April 2020, which provides entities the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease terms. We elected this option; accordingly, we do not remeasure the lease liabilities or record a change to the ROU assets for any concessions we receive for our retail store leases. Rather, deferred lease payments are recorded to operating lease liabilities until paid and lease concessions are recorded in the period they are negotiated or when the lower lease expense is paid. As of January 30, 2021, we recorded deferred fixed lease payments of $5.8 million in current operating lease liabilities in the consolidated balance sheet and as of January 29, 2022, the amount recorded was not material. During fiscal years 2020 and 2021, we recorded reductions to lease costs of $18.6 million and $1.3 million, respectively, as a result of negotiated lease concessions. A maturity analysis of our operating lease liabilities, for lease terms that include periods covered by options to extend some of our leases that we are reasonably certain of being executed, for each of the next five years and thereafter, reconciled to our operating lease liabilities recognized in the consolidated balance sheet as of January 29, 2022, is as follows (in thousands): Fiscal Year 2022 $ 58,749 2023 59,476 2024 52,812 2025 43,095 2026 31,065 Thereafter 55,792 Total operating lease liabilities $ 300,989 Less: Imputed interest (48,224) Total operating lease liabilities $ 252,765 Less: Current portion of operating lease liabilities (45,716) Noncurrent operating lease liabilities $ 207,049 Other supplementary information related to our leases is reflected in the table below (in thousands except lease term and discount rate data): Fiscal Year Ended February 1, 2020 January 30, 2021 January 29, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 59,894 $ 40,025 $ 59,066 Right-of-use assets obtained in exchange for new operating lease liabilities $ 18,202 $ 3,814 $ 11,912 Decrease in right-of-use assets resulting from operating lease modifications or remeasurements $ 8,111 $ 6,493 $ 5,190 Weighted average remaining lease term - operating leases 7 years 7 years 6 years Weighted average discount rate - operating leases 5 % 6 % 6 % |
Leases | Leases Our lease costs reflected in the tables below include minimum base rents, CAM charges and HVAC charges. We recognize such lease costs in the applicable expense category in either cost of goods sold, or selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). Our lease costs consisted of the following (in thousands): Fiscal Year Ended February 1, 2020 January 30, 2021 January 29, 2022 Operating (fixed) lease cost $ 58,700 $ 40,192 $ 50,446 Short-term lease cost 170 124 82 Variable lease cost 18,237 17,550 20,655 Total lease cost $ 77,107 $ 57,866 $ 71,183 In response to the COVID-19 pandemic, the FASB issued interpretive guidance in April 2020, which provides entities the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease terms. We elected this option; accordingly, we do not remeasure the lease liabilities or record a change to the ROU assets for any concessions we receive for our retail store leases. Rather, deferred lease payments are recorded to operating lease liabilities until paid and lease concessions are recorded in the period they are negotiated or when the lower lease expense is paid. As of January 30, 2021, we recorded deferred fixed lease payments of $5.8 million in current operating lease liabilities in the consolidated balance sheet and as of January 29, 2022, the amount recorded was not material. During fiscal years 2020 and 2021, we recorded reductions to lease costs of $18.6 million and $1.3 million, respectively, as a result of negotiated lease concessions. A maturity analysis of our operating lease liabilities, for lease terms that include periods covered by options to extend some of our leases that we are reasonably certain of being executed, for each of the next five years and thereafter, reconciled to our operating lease liabilities recognized in the consolidated balance sheet as of January 29, 2022, is as follows (in thousands): Fiscal Year 2022 $ 58,749 2023 59,476 2024 52,812 2025 43,095 2026 31,065 Thereafter 55,792 Total operating lease liabilities $ 300,989 Less: Imputed interest (48,224) Total operating lease liabilities $ 252,765 Less: Current portion of operating lease liabilities (45,716) Noncurrent operating lease liabilities $ 207,049 Other supplementary information related to our leases is reflected in the table below (in thousands except lease term and discount rate data): Fiscal Year Ended February 1, 2020 January 30, 2021 January 29, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 59,894 $ 40,025 $ 59,066 Right-of-use assets obtained in exchange for new operating lease liabilities $ 18,202 $ 3,814 $ 11,912 Decrease in right-of-use assets resulting from operating lease modifications or remeasurements $ 8,111 $ 6,493 $ 5,190 Weighted average remaining lease term - operating leases 7 years 7 years 6 years Weighted average discount rate - operating leases 5 % 6 % 6 % |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Jan. 29, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition We recognize revenue when our performance obligations under the terms of a contract or an implied arrangement with a customer are satisfied, which is when the merchandise is transferred to the customer and the customer obtains control of it. The amount of revenue we recognize reflects the total consideration we expect to receive for the merchandise, which is the transaction price. Our revenue, disaggregated by product category, consists of the following (in thousands): Fiscal Year Ended February 1, January 30, January 29, Apparel $ 951,286 $ 890,511 $ 1,169,668 Non-apparel 85,698 83,003 109,126 Total net sales $ 1,036,984 $ 973,514 $ 1,278,794 Amounts within Apparel include revenues earned from the sale of tops, bottoms, dresses, intimates, sleep wear, swim wear and outerwear. Amounts within Non-apparel include revenues earned from the sale of accessories, footwear and beauty. During fiscal years 2019, 2020 and 2021, e-Commerce penetration of total net sales was 48%, 70% and 63%, respectively. Contract Liabilities During fiscal year 2020, we recognized revenue of $9.0 million and $4.8 million related to our accrued loyalty program and gift cards, respectively, that existed at the beginning of fiscal year 2020. During fiscal year 2021, we recognized revenue of $10.9 million and $5.2 million related to our accrued loyalty program and gift cards, respectively, that existed at the beginning of fiscal year 2021. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jan. 29, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Services Agreements with Hot Topic From June 2, 2017 until its termination on March 21, 2019, we had a services agreement (“Third Party Services Agreement”) with Hot Topic Inc. ("Hot Topic"), pursuant to which Hot Topic provided us (or caused applicable third parties to provide) certain services, including information technology, distribution and logistics management, real estate leasing and construction management and other services as may have been specified. On March 21, 2019, we entered into an amended and restated services agreement (“Amended and Restated Services Agreement”) with Hot Topic under which Hot Topic provides us (or causes applicable third parties to provide) substantially similar services to those provided under the Third Party Services Agreement. The term of the Amended and Restated Services Agreement is three years, unless we or Hot Topic extend the agreement, or we terminate the agreement (or certain services under the agreement). We may terminate the various services upon written notice. Rates and costs related to the services provided under the Amended and Restated Services Agreement may change with approval from both parties. Each month, we are committed to pay Hot Topic for these services and reimburse Hot Topic for certain costs it incurs in the course of providing these services. We record payments made to Hot Topic under these service agreements in the applicable expense category in either cost of goods sold, or selling, general and administrative expenses. On August 1, 2019, in connection with the IT Asset Purchase Agreement (as defined below), we entered into a services agreement (“Reverse Services Agreement”) with Hot Topic, under which Torrid provides Hot Topic with certain information technology services. The term of the Reverse Services Agreement is three years, unless we or Hot Topic extend the agreement, or Hot Topic terminates the agreement. Torrid provides Hot Topic with the specified information technology services at no cost for the first three years of the Reverse Services Agreement, however Hot Topic bears certain capital and operating expenses that it incurs. Costs incurred in connection with providing the specified information technology services to Hot Topic are expensed as incurred in our consolidated statements of operations and comprehensive income (loss). During fiscal years 2019, 2020 and 2021, we incurred costs of $2.3 million, $3.0 million and $3.4 million, respectively, in connection with providing these information technology services to Hot Topic. In connection with the Reverse Services Agreement, we entered into an amendment to the Amended and Restated Services Agreement (“Amendment to Amended and Restated Services Agreement”) with Hot Topic on August 1, 2019, pursuant to which sections pertaining to Hot Topic’s provision of information technology services to Torrid were removed. During fiscal years 2019, 2020 and 2021, Hot Topic charged us $35.3 million, $12.3 million and $7.5 million, respectively, for various services under the applicable service agreements, of which $14.5 million, $9.6 million and $4.9 million, respectively, were recorded as components of cost of goods sold, and the remaining $20.8 million, $2.7 million and $2.6 million, respectively, were charged to selling, general and administrative expenses. As of January 30, 2021, we did not owe any amount to Hot Topic for these services and as of January 29, 2022, we owed $0.7 million to Hot Topic for these services. Hot Topic incurs certain direct expenses on our behalf, such as payments to our non-merchandise vendors and each month, we pay Hot Topic for these pass-through expenses. As of January 30, 2021, we had prepaid Hot Topic $0.4 million for these expenses, which are included in prepaid expenses and other current assets in our consolidated balance sheets. As of January 29, 2022, the net amount we owed Hot Topic for these expenses was $1.7 million, which is included in due to related parties in our consolidated balance sheets. IT Asset Purchase Agreement with Hot Topic On June 14, 2019, we entered into an asset purchase agreement (“IT Asset Purchase Agreement”) with Hot Topic pursuant to which we purchased certain information technology assets from Hot Topic for $29.5 million on August 1, 2019. Funds obtained from the Term Loan Credit Agreement (as defined in “Note 12 – Debt Financing Arrangements”) were used to make the purchase. We accounted for the purchase in accordance with subsections of ASC 805-50, related to transactions between entities under common control. Consequently, we recorded the information technology assets we purchased from Hot Topic at their historical carrying amounts totaling $3.5 million and recognized the difference between the historical carrying amounts and the purchase price in equity. In addition, certain information technology-related obligations and personnel, along with associated assets of $1.4 million and liabilities of $0.1 million, were transferred from Hot Topic to Torrid. In connection with the IT Asset Purchase Agreement, we and Hot Topic agreed to enter into the Reverse Services Agreement and Amendment to Amended and Restated Services Agreement upon the closing date of the IT Asset Purchase Agreement, which was August 1, 2019. Promissory Notes Receivable from Parent From time to time prior to the Reorganization, our former parent, Torrid Holding LLC, issued promissory notes receivable to Torrid Parent Inc., our current subsidiary. Due to the nature of these promissory notes receivable, we considered them to be in-substance distributions to Torrid Holding LLC and accounted for them as contra-equity in accordance with ASC 310, Receivables . Consequently, these promissory notes receivable were reflected within equity in our consolidated balance sheets as reductions in additional paid-in capital, within capital distribution to Torrid Holding LLC, net of contribution, in our consolidated statements of stockholders' equity (deficit), and within capital distribution to Torrid Holding LLC, net of contribution, in our consolidated statements of cash flows as financing cash outflows. Pursuant to the Reorganization during fiscal year 2021, we assumed the obligations of Torrid Holding LLC under the related party promissory notes due to Torrid Parent Inc. These obligations represent intercompany transactions and have been eliminated in consolidation. No principal or interest payments had been made to Torrid Parent Inc. by our former parent prior to the Reorganization. On December 20, 2018, Torrid Holding LLC issued a $61.4 million promissory note to us in exchange for cash, due on or before December 20, 2024 (“$61.4M Related Party Promissory Note Receivable”). The funds realized from the $61.4M Related Party Promissory Note Receivable were invested by our parent in HTI (as defined below) and used by HTI (as defined below) and Hot Topic for the partial redemption of Hot Topic’s 9.25% senior secured notes (“Notes”). The $61.4M Related Party Promissory Note Receivable accrued interest at an annual compounding rate of 3.06% due upon its maturity. As of the end of fiscal year 2020, there was a $61.4 million lump sum principal payment due to us upon the December 20, 2024 maturity date. The total amount of interest Torrid Holding LLC owed us as of the end of fiscal year 2020 was $4.0 million. On June 6, 2019, Torrid Holding LLC issued a $20.0 million promissory note to us in exchange for cash, due on or before June 6, 2025 (“$20M Related Party Promissory Note Receivable”). The $20M Related Party Promissory Note Receivable accrued interest at an annual compounding rate of 2.78% due upon its maturity. As of the end of fiscal year 2020, there was a $20.0 million lump sum principal payment due to us upon the June 6, 2025 maturity date. The total amount of interest Torrid Holding LLC owed us as of the end of fiscal year 2020 was $0.9 million. On June 14, 2019, Torrid Holding LLC issued a $10.0 million promissory note to us in exchange for cash, due on or before June 14, 2025 (“$10M Related Party Promissory Note Receivable”). The $10M Related Party Promissory Note Receivable accrued interest at an annual compounding rate of 2.78% due upon its maturity. As of the end of fiscal year 2020, there was a $10.0 million lump sum principal payment due to us upon the June 14, 2025 maturity date. The total amount of interest Torrid Holding LLC owed us as of the end of fiscal year 2020 was $0.5 million. On July 31, 2019, Torrid Holding LLC issued a $214.6 million promissory note to us, due on or before July 31, 2025 (“$214.6M Related Party Promissory Note Receivable”). The $214.6M Related Party Promissory Note Receivable was issued to us in exchange for the $213.2 million investment we made in HTI (as defined below) on June 14, 2019 plus the associated $1.4 million interest due to us through July 31, 2019. The $214.6M Related Party Note Receivable accrued interest at an annual compounding rate of 1.87% due upon its maturity. As of the end of fiscal year 2020, there was a $214.6 million lump sum principal payment due to us upon the July 31, 2025 maturity date. The total amount of interest Torrid Holding LLC owed us as of the end of fiscal year 2020 was $6.1 million. On August 1, 2019, Torrid Holding LLC issued a $1.2 million promissory note to us in exchange for cash, due on or before August 1, 2025 (“$1.2M Related Party Promissory Note Receivable”). The $1.2M Related Party Promissory Note Receivable was issued to us in exchange for purchasing $1.2 million of senior participating preferred stock from HTI (as defined below) on behalf of our parent. The $1.2M Related Party Promissory Note Receivable accrued interest at an annual compounding rate of 1.87% due upon its maturity. As of the end of fiscal year 2020, there was a $1.2 million lump sum principal payment due to us upon the August 1, 2025 maturity date. The total amount of interest Torrid Holding LLC owed us as of the end of fiscal year 2020 was not material. On November 26, 2019, Torrid Holding LLC issued a $12.0 million promissory note to us in exchange for cash, due on or before November 26, 2025 (“$12M Related Party Promissory Note Receivable”). The $12M Related Party Promissory Note Receivable accrued interest at an annual compounding rate of 1.59% due upon its maturity. As of the end of fiscal year 2020, there was a $12.0 million lump sum principal payment due to us upon the November 26, 2025 maturity date. The total amount of interest Torrid Holding LLC owed us as of the end of fiscal year 2020 was $0.2 million. On June 14, 2021, Torrid Holding LLC issued a $300.0 million promissory note to us in exchange for cash, due on or before June 14, 2027 (“$300M Related Party Promissory Note Receivable”). The $300M Related Party Promissory Note Receivable accrued interest at an annual compounding rate of 1.02% upon its maturity. Sponsor Advisory Services Agreement On May 1, 2015, we entered into an advisory services agreement with Sycamore, pursuant to which Sycamore agreed to provide strategic planning and other related services to us. We are obligated to reimburse Sycamore for its expenses incurred in connection with providing such advisory services to us. As of the end of fiscal years 2020 and 2021, there were no amounts due and during fiscal years 2019, 2020 and 2021, no amounts were paid under this agreement. From time to time, we reimburse Sycamore for certain management expenses it pays on our behalf. As of the end of fiscal year 2020, there was no amount due, and as of the end of fiscal year 2021, the amount due was not material. During fiscal years 2019, 2020 and 2021, the reimbursements we made to Sycamore for such expenses were $0.1 million, $0.1 million and $0.7 million, respectively. Other Related Party Transactions On June 14, 2019, we used funds obtained from the Term Loan Credit Agreement (as defined in “Note 12—Debt Financing Arrangements”) to purchase $213.2 million of senior participating preferred stock from Hot Topic’s parent, HT Intermediate Holdings Corp. (“HTI”). HTI used the funds it received from us to redeem its Notes. We accounted for the purchase under the cost method in accordance with ASC 325, Investments—Other . On July 31, 2019, Torrid Holding LLC issued the $214.6M Related Party Promissory Note Receivable to us in exchange for our $213.2 million investment in HTI’s senior participating preferred stock, including $1.4 million of accrued interest. Due to the nature of this $214.6M Related Party Promissory Note Receivable, we considered it to be an in-substance distribution to Torrid Holding LLC and accounted for it as contra-equity. Pursuant to the Reorganization, we assumed the obligations of Torrid Holding LLC under the $214.6M Related Party Promissory Note Receivable. MGF Sourcing US, LLC, an entity indirectly controlled by affiliates of Sycamore, is one of our suppliers. During fiscal years 2019, 2020 and 2021, cost of goods sold includes $37.4 million, $45.4 million and $55.4 million, respectively, related to the sale of merchandise purchased from this supplier. Purchases from this supplier accounted for less than 10% of total purchases in fiscal years 2019 and 2020 and less than 12% of total purchases in fiscal year 2021. As of the end of fiscal years 2020 and 2021, the net amounts we owed MGF Sourcing US, LLC for these purchases were $8.0 million and $12.1 million, respectively. This liability is included in due to related parties in our consolidated balance sheets. HU Merchandising, LLC, a subsidiary of Hot Topic, is one of our suppliers. During fiscal years 2019, 2020 and 2021, cost of goods sold includes $0.7 million, $0.4 million and $0.7 million, respectively, related to the sale of merchandise purchased from this supplier. As of the end of fiscal years 2020 and 2021, the amounts we owed HU Merchandising, LLC for these purchases were $0.1 million. Staples, Inc., an entity indirectly controlled by affiliates of Sycamore, is one of our suppliers. During fiscal years 2019, 2020 and 2021, purchases from this supplier were not material. As of the end of fiscal years 2020 and 2021, amounts due to this supplier were not material. Prior to fiscal year 2020, Hot Topic provided us with licensing services for certain of our goods, such as license procurement and design services. During fiscal year 2019, Hot Topic charged us $0.1 million for these services, which were recorded as components of cost of goods sold. In April 2020, we received a letter of support from Sycamore for up to $20.0 million of additional equity funding which, if necessary and sufficient, would be provided to further prevent noncompliance with the financial covenants in the Amended Term Loan Credit Agreement (as defined in “Note 12—Debt Financing Arrangements”) through May 2021. In September 2020, we received an updated letter of support from Sycamore extending the equity funding commitment of up to $20.0 million, if necessary and sufficient, through January 2022. The letter of support was terminated as of May 6, 2021. In March 2021, Hot Topic entered into a consulting services agreement with our Chief Financial Officer, George Wehlitz, Jr. (“CFO”), pursuant to which Hot Topic agreed to pay our CFO a consulting fee of $10,000 per month. The agreement was effective from January 3, 2021 and terminated on May 31, 2021. |
Debt Financing Arrangements
Debt Financing Arrangements | 12 Months Ended |
Jan. 29, 2022 | |
Debt Disclosure [Abstract] | |
Debt Financing Arrangements | Debt Financing Arrangements Our debt financing arrangements consist of the following (in thousands): January 30, 2021 January 29, 2022 Existing ABL Facility, as amended $ — $ — Term loan Amended Term Loan Credit Agreement 210,700 — New Term Loan Credit Agreement — 350,000 Less: current portion of unamortized original issue discount and debt financing costs (1,494) (1,356) Less: noncurrent portion of unamortized original issue discount and debt financing costs (4,294) (7,284) Total term loan outstanding, net of unamortized original issue discount and debt financing costs 204,912 341,360 Less: current portion of term loan, net of unamortized original issue discount and debt financing costs (11,506) (20,519) Total term loan, net of current portion and unamortized original issue discount and debt financing costs $ 193,406 $ 320,841 Fixed mandatory principal repayments due on the outstanding term loan are as follows as of January 29, 2022 (in thousands): Fiscal Year 2022 21,875 2023 17,500 2024 17,500 2025 17,500 2026 17,500 2027 17,500 2028 240,625 $ 350,000 New Term Loan Credit Agreement On June 14, 2021, we entered into a term loan credit agreement (“New Term Loan Credit Agreement”) among Bank of America, N.A., as agent, and the lenders party thereto. The New Term Loan Credit Agreement provides for term loans in an initial aggregate amount of $350.0 million (“Principal”), which is recorded net of an original issue discount (“OID”) of $3.5 million and has a maturity date of June 14, 2028. In connection with the New Term Loan Credit Agreement, we paid financing costs of approximately $6.0 million. The $346.5 million proceeds of the New Term Loan Credit Agreement, net of OID, were used to (i) repay and terminate the Amended Term Loan Credit Agreement (as defined below); (ii) make a $131.7 million distribution to the direct and indirect holders of our equity interests; and (iii) pay for financing costs associated with the New Term Loan Credit Agreement. Loans made pursuant to the New Term Loan Credit Agreement bear interest at an annual rate equal to, at our option, either (a) a base rate determined by reference to the highest of (1) the prime rate quoted by The Wall Street Journal, (2) the federal funds effective rate plus 0.50% and (3) a LIBOR rate for an interest period of one month, plus 1.00% (in each case, subject to a floor of 1.75%); or (b) at a LIBOR rate for the interest period relevant to such borrowing (subject to a floor of 0.75%), in each case plus an applicable margin of 5.50% for LIBOR borrowings and 4.50% for base rate borrowings. If we elect the LIBOR rate, interest is due and payable on the last day of each interest period, unless an interest period exceeds three months, then the respective dates that fall every three months after the beginning of the interest period shall also be interest payment dates. If we elect the Base rate loan, interest is due and payable the last day of each calendar quarter. The elected interest rate at the end of fiscal year 2021 was approximately 6% . In addition to paying interest on the outstanding Principal under the New Term Loan Credit Agreement, we are required to make fixed mandatory repayments of the Principal on the last business day of each fiscal quarter until maturity commencing with the second full fiscal quarter following the closing date (“Repayment”). For each of the fiscal quarters until the maturity date and starting with the fourth fiscal quarter of 2021, Repayments represent 1.25% of the Principal, reduced as a result of the application of prior Prepayments, as defined below. Under the New Term Loan Credit Agreement, we are also required to make variable mandatory prepayments of the Principal, under certain conditions as described below, approximately 102 days after the end of each fiscal year (each, a “Prepayment”). Prepayments, if applicable, commence at the end of fiscal year 2022 and represent between —% and 50% (depending on our first lien net leverage ratio) of Excess Cash Flow (as defined in the New Term Loan Credit Agreement) in excess of $10.0 million, minus prepayments of Principal, the Existing ABL Facility, as amended (to the extent accompanied by a permanent reduction in the commitments thereunder) and certain other specified indebtedness and amounts in connection with certain other enumerated items. In addition to mandatory Repayment and Prepayment obligations, we may at our option, prepay a portion of the outstanding Principal (“Optional Prepayment”). If we make Optional Prepayments before June 14, 2023, we will be subject to penalties ranging from 1.00% to 2.00% of the aggregate principal amount. All of Torrid LLC’s existing domestic subsidiaries and Torrid Intermediate LLC unconditionally guarantee all obligations under the New Term Loan Credit Agreement. Substantially all of the assets of Torrid LLC, Torrid LLC’s existing subsidiaries and Torrid Intermediate LLC will secure all such obligations and the guarantees of those obligations, subject to certain exceptions. The New Term Loan Credit Agreement also contains a number of covenants that, among other things and subject to certain exceptions, will restrict our ability and the ability of our subsidiaries to: create, incur or assume liens on our assets or property; incur additional indebtedness; issue preferred or disqualified stock; consolidate or merge; sell assets; pay dividends or make distributions, make investments, or engage in transactions with our affiliates. As of the end of fiscal year 2021, we were compliant with our financial covenants under the New Term Loan Credit Agreement. We consider the carrying amount of the term loan to approximate fair value at January 30, 2021 and January 29, 2022 because it is carried at a market observable interest rate that resets periodically and is categorized as Level 2 in the fair value hierarchy. As of the end of fiscal year 2021, total borrowings, net of OID and financing costs, of $341.4 million remain outstanding under the New Term Loan Credit Agreement. During fiscal year 2021, we recognized $14.0 million of interest expense and $0.9 million of OID and financing costs related to the New Term Loan Credit Agreement. The OID and financing costs are amortized over the New Term Loan Credit Agreement’s seven-year term and are reflected as a direct deduction of the face amount of the term loan in our consolidated balance sheets. We recognize interest payments, together with amortization of the OID and financing costs, in interest expense in our consolidated statements of operations and comprehensive income (loss). Term Loan Credit Agreement On June 14, 2019, we entered into a term loan credit agreement (“Term Loan Credit Agreement”) with Cortland Capital Market Services LLC, as agent, KKR Credit Advisors (US) LLC, as structuring advisor, and the lenders party thereto (the “Lenders”). On September 17, 2020, we entered into an amended term loan credit agreement (“Amended Term Loan Credit Agreement”) with the Lenders, pursuant to which the definition of total debt used in the calculation of Total Net Leverage Ratio (as defined below) was amended. All other material terms of the Term Loan Credit Agreement remained substantially the same. In September 2020, in conjunction with the Amended Term Loan Credit Agreement, we prepaid $35.0 million of the outstanding Amended Term Loan Credit Agreement Principal (as defined below), associated accrued interest of $0.2 million and an amendment fee of $0.5 million. On June 14, 2021, we utilized the proceeds from the New Term Loan Credit Agreement to pay the remaining outstanding Amended Term Loan Credit Agreement Principal (as defined below) of $207.5 million, associated accrued interest of $1.2 million and a prepayment penalty of $2.1 million. The Amended Term Loan Credit Agreement provided for term loans in an initial aggregate amount of $260.0 million (“Amended Term Loan Credit Agreement Principal”), which was recorded net of an original issue discount (“OID”) of $2.9 million and had a maturity date of December 14, 2024. In connection with the Term Loan Credit Agreement, we paid financing costs of approximately $4.6 million. The $257.1 million proceeds of the Term Loan Credit Agreement, net of OID, were used to i) purchase $213.2 million of senior participating preferred stock from Hot Topic’s parent, HT Intermediate Holdings Corp. for which we subsequently received a promissory note receivable in exchange from our parent; ii) purchase certain information technology assets from Hot Topic for $29.5 million; iii) make a $10.0 million distribution to Torrid Holding LLC; and iv) pay for financing costs associated with the Term Loan Credit Agreement. Loans made pursuant to the Amended Term Loan Credit Agreement bore interest at an annual rate equal to, at our option, either (a) a base rate determined by reference to the highest of (1) the prime rate quoted by The Wall Street Journal, (2) the federal funds effective rate plus 0.50% and (3) a LIBOR rate for an interest period of one month, plus 1.00% or (b) at a LIBOR rate for the interest period relevant to such borrowing, in each case plus an applicable margin of either 6.75% or 7.00% for LIBOR borrowings and either 5.75% or 6.00% for base rate borrowings, in each case, based upon our total net leverage ratio as of the relevant testing date. If we elected the LIBOR rate, interest was due and payable on the last day of each interest period, unless an interest period exceeded three months, then the respective dates that fell every three months after the beginning of the interest period would also be interest payment dates. If we elected the Base rate loan, interest was due and payable the last day of each fiscal quarter. In addition to paying interest on the outstanding Principal under the Amended Term Loan Credit Agreement, we were required to make fixed mandatory repayments of the Principal on the last business day of each fiscal quarter until maturity (“Amended Term Loan Credit Agreement Repayment”). Amended Term Loan Credit Agreement Repayments for the first four fiscal quarters, starting in the third quarter of fiscal year 2019, represented 0.75% of the Amended Term Loan Credit Agreement Principal, reduced as a result of the application of prior Amended Term Loan Credit Agreement Prepayments (as defined below). For each of the eight fiscal quarters thereafter, Amended Term Loan Credit Agreement Repayments represented 1.25% of the Amended Term Loan Credit Agreement Principal, reduced as a result of the application of prior Amended Term Loan Credit Agreement Prepayments (as defined below). For each of the 10 fiscal quarters thereafter until the maturity date, Amended Term Loan Credit Agreement Repayments represented 1.875% of the Amended Term Loan Credit Agreement Principal, reduced as a result of the application of prior Amended Term Loan Credit Agreement Prepayments (as defined below). Under the Amended Term Loan Credit Agreement, we were also required to make variable mandatory prepayments of the Amended Term Loan Credit Agreement Principal, under certain conditions as described below, approximately 102 days after the end of each fiscal year (each, an “Amended Term Loan Credit Agreement Prepayment”). Amended Term Loan Credit Agreement Prepayments, if applicable, commenced at the end of fiscal year 2018 and represented between 25% and 75% (depending on our first lien net leverage ratio) of Excess Cash Flow (as defined in the Amended Term Loan Credit Agreement) in excess of $2.0 million, minus prepayments of Amended Term Loan Credit Agreement Principal, the Existing ABL Facility, as amended (as defined below), (to the extent accompanied by a permanent reduction in the commitments thereunder) and certain other specified indebtedness and amounts in connection with certain other enumerated items. All of Torrid LLC’s existing domestic subsidiaries and Torrid Intermediate LLC unconditionally guaranteed all obligations under the Amended Term Loan Credit Agreement. Substantially all of the assets of Torrid LLC, Torrid LLC’s existing subsidiaries and Torrid Intermediate LLC secured all such obligations and the guarantees of those obligations, subject to certain exceptions. Our borrowings under the Amended Term Loan Credit Agreement were subject to a financial covenant that required us to maintain a maximum ratio of our total debt to EBITDA (as defined in the Amended Term Loan Credit Agreement) (“Total Net Leverage Ratio”). The maximum ratio was 3.60 for the quarter ended November 2, 2019, 3.35 for the quarters ended February 1, 2020, May 2, 2020, and August 1, 2020, 3.10 for the quarter ended October 31, 2020, 2.50 for the quarter ended January 30, 2021, 2.35 for the quarter ended May 1, 2021, 2.10 for the quarters ended July 31, 2021 and October 30, 2021, and 1.85 for all quarters thereafter. The Amended Term Loan Credit Agreement amended the definition of total debt used in the Total Net Leverage Ratio calculation for the quarters ended October 31, 2020, January 30, 2021, May 1, 2021 and July 31, 2021. The amended definition of total debt permitted us to exclude indebtedness associated with our Existing ABL Facility, as amended, through the quarter ended October 31, 2020, removed the $20.0 million cap from the amount of cash and cash equivalents on-hand that we were permitted to net against our total debt for purposes of the ratio calculation through the quarter ended January 30, 2021, and raised the $20.0 million cap to $40.0 million and $30.0 million for the quarters ended May 1, 2021 and July 31, 2021, respectively, before reverting to $20.0 million for all quarters thereafter. The Amended Term Loan Credit Agreement contained a limitation on our capital expenditures paid in cash in any fiscal year and such expenditures could not exceed 37.5% of prior year Adjusted EBITDA (as defined by the Amended Term Loan Credit Agreement). If the amount of our capital expenditures paid in cash in any fiscal year was less than the 37.5% threshold, 50% of the difference was to be automatically applied to increase the maximum threshold in the next fiscal year. The Amended Term Loan Credit Agreement also contained a number of other covenants that, among other things and subject to certain exceptions, would restrict our ability and the ability of our subsidiaries to: create, incur or assume liens on our assets or property; incur additional indebtedness; make capital expenditures; issue preferred or disqualified stock; incur hedging obligations; consolidate or merge; sell assets; pay dividends or make distributions, make investments or engage in transactions with our affiliates. During fiscal year 2019, we recognized $14.9 million of interest expense and recognized $0.9 million of OID and financing costs related to the Term Loan Credit Agreement. During fiscal year 2020, we recognized $19.2 million of interest expense and recognized $1.4 million of OID and financing costs related to the Amended Term Loan Credit Agreement. During fiscal year 2021, we recognized $8.2 million of interest expense and recognized $0.4 million of OID and financing costs related to the Amended Term Loan Credit Agreement. The OID and financing costs were amortized over the Amended Term Loan Credit Agreement’s five and a half-year term and were reflected as a direct deduction of the face amount of the term loan in our consolidated balance sheets. On June 14, 2021, upon repayment of the outstanding borrowings under the Amended Term Loan Credit Agreement, we wrote off $5.2 million of unamortized OID and financing costs and incurred a $2.1 million prepayment penalty. We recognized interest payments, together with amortization of the OID and financing costs, in interest expense in our consolidated statements of operations and comprehensive income (loss). Senior Secured Asset-Based Revolving Credit Facility In May 2015, we entered into a credit agreement for a senior secured asset-based revolving credit facility (“Original ABL Facility”) of $50.0 million (subject to a borrowing base), with Bank of America, N.A. On October 23, 2017, we entered into an amended and restated credit agreement (“Existing ABL Facility”), which amended our Original ABL Facility. The Existing ABL Facility increased the aggregate commitments available under the Original ABL Facility from $50.0 million to $100.0 million (subject to a borrowing base); and increased our right to request additional commitments from up to $30.0 million to up to $30.0 million plus the aggregate principal amount of any permanent principal reductions we may take (subject to customary conditions precedent). On June 14, 2019, in conjunction with the Term Loan Credit Agreement, we entered into an amendment to the Existing ABL Facility (the “1 st Amendment”). The 1 st Amendment decreased the aggregate commitments available under the Existing ABL Facility from $100.0 million to $70.0 million (subject to a borrowing base), permitted indebtedness incurred pursuant to the Term Loan Credit Agreement and made certain other modifications. On September 4, 2019, we entered into another amendment to the Existing ABL Facility (the “2 nd Amendment”). The 2 nd Amendment permitted parent company financial statements to be used to satisfy reporting requirements and made certain other modifications. On June 14, 2021, in conjunction with the New Term Loan Credit Agreement, we entered into a third amendment to the Existing ABL Facility (the “3rd Amendment”), which amended our Existing ABL Facility, as amended. The 3rd Amendment increased the aggregate commitments available under the Existing ABL facility, as amended, from $70.0 million to $150.0 million (subject to a borrowing base) and extended the date upon which the principal amount outstanding of the loans would be due and payable in full from October 23, 2022 to June 14, 2026. All other material terms of the Existing ABL Facility, as amended, remain substantially the same as the previous agreements it replaced. The borrowing base for the Existing ABL Facility, as amended, at any time equals the sum of 90% of eligible credit card receivables, plus 90% of the appraised net orderly liquidation value of eligible inventory and eligible in-transit inventory multiplied by the cost of such eligible inventory and eligible in-transit inventory (to be increased to 92.5% during the period beginning on September 1 of each year and ending on December 31 of each year). The Existing ABL Facility, as amended, includes borrowing capacity for letters of credit and for borrowings on same-day notice, referred to as Swing Line Loans, and is available in U.S. dollars. Under the Existing ABL Facility, as amended, we have the right to request up to $50.0 million of additional commitments plus the aggregate principal amount of any permanent principal reductions we may take plus the amount by which the borrowing base exceeds the aggregate commitments (subject to customary conditions precedent). The lenders under this facility are not under any obligation to provide any such additional commitments, and any increase in commitments is subject to customary conditions precedent. If we were to request any such additional commitments and the existing lenders or new lenders were to agree to provide such commitments, the size of the Existing ABL Facility, as amended, could increase to up to $200.0 million, but our ability to borrow under this facility would still be limited by the amount of the borrowing base. Borrowings under the Existing ABL Facility, as amended, bear interest at an annual rate equal to, at our option, either (a) a base rate determined by reference to the highest of (1) the prime rate of Bank of America, N.A., (2) the federal funds effective rate plus 0.50% and (3) a LIBOR rate for an interest period of one month adjusted for certain costs, plus 1.00% or (b) at a LIBOR rate for the interest period relevant to such borrowing adjusted for certain costs (“Adjusted LIBOR”), in each case plus an applicable margin that ranges from 1.25% to 1.75% for LIBOR borrowings and 0.25% to 0.75% for base rate borrowings, in each case, based on average daily availability. As of the end of fiscal year 2021, the applicable interest rate for borrowings under the Existing ABL Facility, as amended, was approximately 4% per annum. If we elect the LIBOR rate, interest is due and payable on the last day of each interest period, unless an interest period exceeds three months, then the respective dates that fall every three months after the beginning of the interest period shall also be interest payment dates. If we opt for the base rate (including a Swing Line Loan), interest is due and payable on the first business day of each month and on the maturity date. In addition to paying interest on outstanding principal under the Existing ABL Facility, as amended, we are required to pay a commitment fee in respect of unutilized commitments. The commitment fee ranges between 0.25% and 0.375% per annum of unutilized commitments and will be subject to adjustment each fiscal quarter based on the amount of unutilized commitments during the immediately preceding fiscal quarter. We must also pay customary letter of credit fees and agent fees. If at any time the aggregate amount of outstanding loans, unreimbursed letter of credit drawings and undrawn letters of credit under the Existing ABL Facility, as amended, exceeds the lesser of (a) the commitment amount and (b) the borrowing base, we will be required to repay outstanding loans and/or cash collateralize letters of credit in an aggregate amount equal to such excess, with no reduction of the commitment amount. We may voluntarily reduce the unused portion of the commitment amount and repay outstanding loans at any time. Prepayment of the loans may be made without premium or penalty other than customary “breakage” costs with respect to LIBOR loans. All obligations under the Existing ABL Facility, as amended, are unconditionally guaranteed by substantially all of Torrid Intermediate LLC’s existing majority-owned domestic subsidiaries and will be required to be guaranteed by certain of Torrid Intermediate LLC’s future domestic majority-owned subsidiaries. All obligations under the Existing ABL Facility, as amended, and the guarantees of those obligations, will be secured, subject to certain exceptions, by substantially all of Torrid Intermediate LLC’s assets. The Existing ABL Facility, as amended, requires us to maintain a fixed charge coverage ratio of at least 1.00 to 1.00 if we fail to maintain Specified Availability (as defined by the Existing ABL Facility, as amended) of at least the greater of 10% of the Loan Cap, as defined by the Existing ABL Facility, as amended, and $7.0 million. The Existing ABL Facility, as amended, contains a number of other covenants that, among other things and subject to certain exceptions, will restrict our ability and the ability of our subsidiaries to: incur additional indebtedness; pay dividends on our capital stock or redeem, repurchase or retire our capital stock or our other indebtedness; make investments, loans and acquisitions; engage in transactions with our affiliates; sell assets, including capital stock of our subsidiaries; alter the business we conduct; consolidate or merge; and incur liens. As of the end of fiscal years 2020 and 2021, we were compliant with our debt covenants under the Existing ABL Facility, as amended. The Existing ABL Facility, as amended, specifically restricts dividends and distributions, aside from amounts to cover ordinary operating expenses and taxes, between our subsidiaries and to us. However, dividends and distributions are permitted at any time that either (1) availability under the Existing ABL Facility, as amended, is equal to or greater than 15% of the maximum borrowing amount on a pro forma basis and we are pro forma compliant with a 1.00 to 1.00 fixed charge coverage ratio or (2) availability under the Existing ABL Facility, as amended, is equal to or greater than 20% of the maximum borrowing amount on a pro forma basis. As of the end of fiscal years 2020 and 2021, the maximum restricted payments utilizing the Existing ABL Facility, as amended, that our subsidiaries could make from its net assets were $55.0 million and $109.8 million, respectively. We consider the carrying amounts of the Existing ABL Facility, as amended, to approximate fair value because it is carried at a market observable interest rate that resets periodically and is categorized as Level 2 in the fair value hierarchy. Availability under the Existing ABL Facility, as amended, at the end of fiscal year 2020 was $65.5 million, which reflects no borrowings. In March 2020, we borrowed $50.0 million from our Existing ABL Facility, as amended, as a precautionary measure to increase our cash position and preserve financial flexibility in light of current uncertainty resulting from COVID-19. In the second quarter of fiscal year 2020, we repaid the $50.0 million outstanding under the Existing ABL Facility, as amended. Availability under the Existing ABL Facility, as amended, at the end of fiscal year 2021 was $123.9 million, which reflects no borrowings. Standby letters of credit issued and outstanding were $4.5 million and $5.3 million at the end of fiscal years 2020 and 2021, respectively. During the third quarter of fiscal year 2017, we incurred $0.5 million of financing costs for the Existing ABL Facility, which were reduced in fiscal year 2019 by $0.1 million written off to account for the impact of our entry into the |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 29, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income Before Provision for Income Taxes The domestic and foreign income before provision for income taxes during fiscal years 2019, 2020 and 2021 is as follows (in thousands): Fiscal Year Ended February 1, January 30, January 29, Domestic $ 57,348 $ 38,698 $ 15,010 Foreign 3,354 (3,175) 819 Income before provision $ 60,702 $ 35,523 $ 15,829 Provision for Income Taxes The composition of the provision for income taxes during fiscal years 2019, 2020 and 2021 is as follows (in thousands): Fiscal Year Ended February 1, January 30, January 29, Current: Federal $ 17,784 $ 9,528 $ 36,410 State 4,472 2,559 8,051 Foreign 1,263 (37) — $ 23,519 $ 12,050 $ 44,461 Deferred: Federal $ (4,008) $ (157) $ 785 State (623) (361) 305 Foreign (55) (541) 222 (4,686) (1,059) 1,312 Total income tax provision $ 18,833 $ 10,991 $ 45,773 Significant components of our deferred tax assets and liabilities are as follows (in thousands): January 30, January 29, Deferred tax assets (liabilities): Inventory $ 2,010 $ 2,197 Loyalty reserve 3,169 3,591 Accrued bonus 2,110 3,944 Deferred rent 812 639 Deferred compensation 1,612 1,694 Lease liability 72,837 61,112 Equity based compensation — 459 Other deferred tax assets 5,584 4,562 ROU assets (62,216) (52,611) Intangible assets (2,074) (2,071) Depreciation (16,096) (16,446) Other deferred tax liabilities (1,609) (2,197) Total net deferred tax assets $ 6,139 $ 4,873 A reconciliation of the provision for income taxes to the statutory tax rate is as follows: Fiscal Year Ended February 1, January 30, January 29, Statutory federal rate 21.0 % 21.0 % 21.0 % State and local taxes, net of federal benefit 4.6 5.5 35.5 Share-based compensation 4.2 4.6 202.9 Liability for uncertain tax positions 0.7 (1.2) 9.4 Information technology services charge — 1.8 4.5 Non-deductible IPO transaction costs — — 11.0 Limitation on Section 162(m) officers — — 5.8 Foreign derived intangible income (0.1) (0.3) (2.0) Other differences, net 0.6 (0.5) 1.1 Effective income tax rate 31.0 % 30.9 % 289.2 % The effective tax rates in fiscal years 2019, 2020 and 2021 reflect non-deductible and non-taxable fair market value adjustments to the share-based compensation expense, for which there is no associated income tax benefit or expense. The unconventional effective tax rate in fiscal year 2021 is primarily due to the increase in the amount of non-deductible items associated with share-based compensation, relative to income before provision for income taxes for fiscal year 2021. The increase in the amount of non-taxable items associated with share-based compensation during fiscal year 2021 was driven by the $111.4 million remeasurement adjustment related to the increase in the value of the incentive units as indicated by the Torrid Holding LLC equity value as of June 30, 2021, following the pricing of our IPO. Please refer to “Note 14—Share-Based Compensation” for further discussion regarding the $111.4 million remeasurement adjustment. Excess tax benefits or detriments associated with share-based payment awards are recognized as income tax benefits or expense in the consolidated statement of operations. The tax effects of exercised or vested awards are treated as discrete items in the reporting period in which they occur. The income tax detriment resulting from share-based awards was $0.3 million for 2021 and is reflected as an increase to the 2021 income tax provision. As of the end of fiscal year 2021, we had accumulated undistributed earnings and profits of our foreign subsidiary of approximately $4.5 million. We continue to treat undistributed earnings of our foreign subsidiary as indefinitely reinvested according to our current operating plans and no deferred tax liability has been recorded for potential future taxes related to such earnings. According to current tax law, any future dividends paid from our foreign subsidiary will not be subject to income tax in the United States, except for withholding taxes and state taxes, which are not material. We have made a determination on our accounting policy choice to treat taxes related to GILTI as a period cost starting in calendar year 2018. On March 27, 2020, December 27, 2020 and March 11, 2021, the CARES Act, CAA and ARPA, respectively, were signed into law and have resulted in significant changes to the U.S. federal corporate tax law as described in “Note 1—Basis of Presentation and Description of the Business.” We have considered the applicable CARES Act and CAA tax law changes in our tax provision for the year ended January 29, 2022, and continue to evaluate the impact of these and the ARPA tax law changes on future periods. Uncertain Tax Positions The amount of income taxes we pay is subject to ongoing audits by taxing authorities. Our estimate of the potential outcome of any uncertain tax issue is subject to our assessment of the relevant risks, facts and circumstances existing at the time. We believe that we have adequately provided for reasonably foreseeable outcomes related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, which may impact our effective tax rate. As of the end of fiscal year 2020, the total liability for income taxes associated with unrecognized tax benefits, including interest and penalties, was $2.4 million ($2.0 million, net of federal benefit). As of the end of fiscal year 2021, the total liability for income taxes associated with unrecognized tax benefits, including interest and penalties, was $4.0 million ($3.5 million, net of federal benefit). Our effective tax rate will be affected by any portion of this liability we may recognize. We believe that it is reasonably possible that $0.3 million ($0.3 million net of federal benefit) of our liability for unrecognized tax benefits, of which the associated interest and penalties are not material, may be recognized in the next 12 months due to the expiration of statutes of limitations. The following table reconciles the amount recorded for the liability for income taxes associated with unrecognized tax benefits as of the end of fiscal years 2019, 2020 and 2021 (in thousands): Fiscal Year Ended February 1, January 30, January 29, Unrecognized tax benefits at the beginning of the fiscal year $ 896 $ 1,308 $ 2,187 Additions: Tax positions related to the current period 424 1,455 1,535 Tax positions related to the prior period (12) (576) (429) Unrecognized tax benefits at the end of the fiscal year $ 1,308 $ 2,187 $ 3,293 Our continuing practice is to recognize interest and penalties related to unrecognized tax benefits as a tax expense. In fiscal years 2019, 2020 and 2021, tax expense related to interest and penalties was $0.3 million, $0.3 million and $0.5 million, respectively. We operate stores throughout the United States, Puerto Rico and Canada, and as a result, we file income tax returns in the United States federal jurisdiction and various state, local and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities. The federal statute of limitations period is three years and most states follow this limitations period with few exceptions. Consequently, tax years between 2018 and 2020 are open for examination. IT Asset Purchase Agreement with Hot Topic In connection with the IT Asset Purchase Agreement we entered into with Hot Topic on August 1, 2019, we generated a tax amortizable basis of the $29.5 million purchase price, amortizable over three years commencing in fiscal year 2019. We recorded the $26.0 million variance between the $3.5 million net book value and $29.5 million tax amortizable basis of the information technology assets in equity, net of $6.7 million deferred tax. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Jan. 29, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Our share-based compensation expense, by award type, consists of the following (in thousands): Fiscal Year Ended February 1, 2020 January 30, 2021 January 29, 2022 Restricted stock units $ — $ — $ 4,040 Restricted stock awards — — 3,864 Stock options — — 514 Employee stock purchase plan — — 170 Remeasurement adjustments for incentive units 11,993 7,791 151,166 Share-based compensation expense before income taxes 11,993 7,791 159,754 Income tax detriment — — 293 Net share-based compensation expense $ 11,993 $ 7,791 $ 160,047 On June 22, 2021, in connection with our IPO, the board of directors (“Board”) adopted the Torrid Holdings Inc. 2021 Long-Term Incentive Plan (the “2021 LTIP”), for employees, consultants and directors. The 2021 LTIP provides for the grant of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), stock awards, dividend equivalents, other stock-based awards, cash awards and substitute awards intended to align the interests of service providers, with those of our shareholders. As of the end of fiscal year 2021, 10,687,500 shares were authorized for issuance under the 2021 LTIP. On June 22, 2021, in connection with our IPO, the Board adopted the Torrid Holdings Inc. 2021 Employee Stock Purchase Plan (the “ESPP”), intended to qualify under Section 423 of the U.S. Internal Revenue Code of 1986, as amended, in order to provide all of our eligible employees with a further incentive towards ensuring our success and accomplishing our corporate goals. The ESPP allows eligible employees to contribute up to 15% of their base earnings towards purchases of common stock, subject to an annual maximum. The purchase price is 85% of the lower of (i) the fair market value of the stock on the date of enrollment and (ii) the fair market value of the stock on the last day of the related purchase period. As of the end of fiscal year 2021, 3,650,000 shares were authorized for issuance under the ESPP. Incentive Units Prior to the IPO, Torrid Holding LLC issued 13,660,000 Class A, Class B, Class C, Class D, Class E, Class F, Class G, Class H and Class J Torrid incentive units, in the aggregate, net of forfeitures, to certain members of our management. We recognized the impact of share-based compensation associated with incentive units issued by Torrid Holding LLC in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). The share-based compensation expense and related capital contribution are reflected in our consolidated financial statements as these awards were deemed to be for our benefit. The intent of the incentive units was to provide profit-sharing opportunities to management rather than equity ownership in our then parent, Torrid Holding LLC. The incentive units did not have any voting or distribution rights and contained a repurchase feature, whereby upon termination, Torrid Holding LLC had the right to purchase from former employees any or all of the vested incentive units at fair value. In addition, although the fair value of the incentive units was determined through an option pricing methodology that utilized the possible equity values of Torrid Holding LLC, the settlement amounts and method of settlement of the incentive units were at the discretion of the Board. Based on these aforementioned features and characteristics, we determined that the incentive units were in-substance liabilities accounted for as liability instruments in accordance with ASC 710, Compensation . The incentive units were remeasured based on the fair value of the awards at the end of each reporting period. We recorded the expense associated with changes in the fair value of these incentive units as a capital contribution from our former parent, Torrid Holding LLC, as our former parent is the legal obligor for the incentive units. The incentive units were valued utilizing a contingent claims analysis (“CCA”) methodology based on a Black-Scholes option pricing model (“OPM”). Under the OPM, each class of incentive units was modeled as a call option with a unique claim on the assets of Torrid Holding LLC. The characteristics of each class of incentive units determined the uniqueness of the claim on the assets of Torrid Holding LLC. The OPM used to value the incentive units incorporated various assumptions, including the time to liquidity event, equity volatility and risk-free interest rate of return. Equity volatility was based on the historical volatilities of comparable publicly traded companies for the time horizon equal to the time to the anticipated liquidity event; and the risk-free interest rate was for a term corresponding to the time to liquidity event. The assumptions underlying the valuation of the incentive units represented our best estimates, which involved inherent uncertainties and the application of our judgement. The most recent remeasurement of the fair value of the incentive units utilizing the CCA methodology was performed as of May 1, 2021. During the second quarter of fiscal year 2021, we recorded a share-based compensation expense remeasurement adjustment of $111.4 million related to the increase in the value of the incentive units as indicated by the Torrid Holding LLC equity value as of June 30, 2021, following the pricing of our IPO. The vested portion of the incentive units was exchanged for 13,353,122 shares of our common stock of an equivalent fair value as the vested incentive units and the unvested portion was cancelled. As such, the fair value of these incentive units is no longer recognized in our consolidated statement of operations. During fiscal years 2019, 2020 and 2021, we recognized share-based compensation expense of $12.0 million, $7.8 million and $159.8 million, respectively, primarily due to an increase in the Torrid Holding LLC equity value. IPO Awards Pursuant to the agreements we entered into with certain members of our management, upon completion of the IPO, such employees received one-time grants of RSUs (“IPO Awards”) in an aggregate amount equal to $5.7 million. 50% of the IPO Awards were fully vested on the date of grant, and the remaining 50% will vest in equal installments on the first, second and third anniversaries of the date of our IPO. These members of our management must remain employed by us through each vesting date in order to vest in the applicable portions of their IPO Awards. Consequently, we recognized $2.8 million of share-based compensation expense related to these IPO Awards upon the consummation of our IPO with the remainder recognized over the three-year vesting period. RSUs RSUs are awarded to certain employees, non-employee directors and consultants and entitle the grantee to receive shares of common stock at the end of a vesting period, subject to the employee's continued employment or service as a director or consultant. 50% of the RSUs granted as IPO Awards fully vested on the date of grant, and the remaining 50% will vest in equal installments on the first, second and third anniversaries of the date of grant. In general, the remaining RSUs vest in equal installments each year over 4 years. RSU activity under the 2021 LTIP consists of the following (in thousands except per share and contractual life amounts): Shares Weighted average grant date value per share Nonvested, January 30, 2021 — Granted 392 $ 26.82 Vested (105) $ 27.00 Forfeited (9) $ 27.00 Nonvested, January 29, 2022 278 $ 26.75 As of the end of fiscal year 2021, unrecognized compensation expense related to unvested RSUs was $6.2 million, which is expected to be recognized over a weighted average period of approximately 3.1 years. The total vesting date fair value of RSUs which vested during fiscal year 2021 was $2.6 million. Restricted Stock Awards Restricted stock awards are awarded to certain employees, non-employee directors and consultants, subject to the employee's continued employment or service as a director or consultant. Restricted stock awards vest over periods ranging from 2 to 4 years, subject to the employee's continued employment or service as an employee, non-employee director or consultant, as applicable, on each vesting date. Restricted stock award activity under the 2021 LTIP consists of the following (in thousands except per share and contractual life amounts): Shares Weighted average grant date fair value per share Outstanding, January 30, 2021 — Granted 866 $ 27.00 Vested (120) $ 27.00 Forfeited (214) $ 27.00 Nonvested, January 29, 2022 532 $ 27.00 As of the end of fiscal year 2021, unrecognized compensation expense related to unvested restricted stock awards was $13.7 million, which is expected to be recognized over a weighted average period of approximately 2.2 years. The total vesting date fair value of restricted stock awards which vested during fiscal year 2021 was $2.3 million. Stock Options Stock options generally vest in equal installments each year over 4 years and generally expire 10 years from the grant date. Stock option activity under the 2021 LTIP consists of the following (in thousands except per share and contractual life amounts): Shares Weighted average exercise price per share Weighted average remaining contractual life (years) Aggregate intrinsic value Outstanding, January 30, 2021 — Granted 342 $ 21.03 Exercised — Expired / forfeited (5) $ 21.00 Outstanding, January 29, 2022 337 $ 21.03 9.4 $ — Exercisable, January 29, 2022 — The weighted average grant date fair value of stock option awards granted during fiscal year 2021 was $11.24 per option and was estimated at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions: Dividend yield — % Expected volatility (1) 56.0 % Risk-free interest rate (2) 1.1 % Expected term (3) 6.31 years Grant date fair value per share $ 21.00 (1) The expected volatility is estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term that is consistent with the expected term of the stock options. (2) The risk-free interest rates are based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected term of the stock options. (3) The expected term of the stock options represents the estimated period of time until exercise and is calculated using the simplified method. As of the end of fiscal year 2021, unrecognized compensation expense related to unvested stock options was $3.3 million, which is expected to be recognized over a weighted average period of approximately 3.5 years. |
Lease Incentives and Other Nonc
Lease Incentives and Other Noncurrent Liabilities | 12 Months Ended |
Jan. 29, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Lease Incentives and Other Noncurrent Liabilities | Lease Incentives and Other Noncurrent Liabilities Lease incentives and other noncurrent liabilities consist of the following (in thousands): January 30, 2021 January 29, 2022 Noncurrent portion of lease incentives $ 1,426 $ 1,053 Noncurrent income taxes payable 2,447 3,991 Lease incentives and other noncurrent liabilities $ 3,873 $ 5,044 |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Jan. 29, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Lease Agreements We have entered into operating lease agreements for retail, distribution and office space; and vehicles and equipment, under primarily non-cancelable leases with terms ranging from approximately two Litigation On November 8, 2017, holders purporting to represent approximately 37% of Hot Topic’s Notes (“Plaintiffs”) filed a lawsuit in New York state court against Hot Topic, Torrid, and certain other persons (“Defendants”). The lawsuit alleged, among other matters, that the May 2015 sale by Hot Topic of Torrid LLC violated the Notes indenture. The Plaintiffs sought to void and unwind the separation of Torrid LLC or, in the alternative, monetary damages in an unspecified amount. On December 26, 2017, Torrid Holding LLC entered into a settlement agreement that we were a party to, with the Plaintiffs. In the settlement agreement, Torrid Holding LLC agreed to guarantee the timely payment of all obligations under the then $340 million outstanding balance of the Notes. In addition, Torrid Holding LLC agreed to use any net after-tax proceeds it may have received in connection with an IPO or other public or private sale of equity interests in us to redeem the Notes at the redemption prices specified in the indenture. Hot Topic redeemed all of its Notes during the second quarter of fiscal year 2019. From time to time, we are involved in other matters of litigation that arise in the ordinary course of business. Though significant litigation or awards against us could seriously harm our business and financial results, we do not at this time expect these other matters of litigation to have a material adverse effect on our consolidated financial statements. Indemnities, Commitments and Guarantees On November 20, 2018, Hot Topic issued a notice of conditional partial redemption to redeem $75 million in aggregate principal amount of its Notes (“Notes Redemption”). The date for the Notes Redemption was December 20, 2018 (“Redemption Date”) and was conditioned upon Hot Topic receiving net proceeds from an investment by our then parent, Torrid Holding LLC, in an amount no less than $75 million, on or prior to the Redemption Date. Torrid Holding LLC made a $77 million investment in Hot Topic on the Redemption Date and we funded $61.4 million of the investment through a capital distribution to Torrid Holding LLC. Hot Topic redeemed all of its Notes during the second quarter of fiscal year 2019. During the ordinary course of business, we have made certain other indemnities, commitments and guarantees under which we may be required to make payments in relation to certain transactions. These indemnities include those given to various lessors in connection with facility leases for certain claims arising from such facility or lease and indemnities to our board of directors and officers to the maximum extent permitted. Commitments include those given to various merchandise vendors and suppliers. From time to time, we have issued guarantees in the form of standby letters of credit as security for workers’ compensation claims. (Our letters of credit are discussed in more detail in “Note 12 – Debt Financing Arrangements”). The durations of these indemnities, commitments and guarantees vary. Some of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments we could be obligated to make. We have not recorded any liability for these indemnities, commitments and guarantees in the accompanying consolidated financial statements as no demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our consolidated financial statements. |
Stockholder_s Deficit
Stockholder’s Deficit | 12 Months Ended |
Jan. 29, 2022 | |
Equity [Abstract] | |
Stockholder’s Deficit | Stockholders' DeficitTorrid was formed on October 29, 2019 and capitalized on February 20, 2020. Torrid is authorized to issue 1.0 billion shares of common stock at $0.01 par value, and 5.0 million shares of preferred stock at $0.01 par value. Torrid had 107,857,625 shares of common stock and no shares of preferred stock issued and outstanding as of January 29, 2022. Historical periods prior to the formation of Torrid have been revised to reflect our current capital structure. On June 22, 2021, Torrid's stockholder approved an amendment to Torrid's certificate of incorporation to (i) effect a 110,000-for-1 stock split of all shares of the issued and outstanding common stock, which was effected on June 22, 2021 and (ii) authorize 5.0 million shares of preferred stock. All share and per-share data in the financial statements and notes to the financial statements has been retroactively adjusted to reflect the stock split for all periods presented. The par value of the common stock was not adjusted as a result of the stock split. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Jan. 29, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per ShareBasic earnings per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share is applicable only in periods of net income and is computed by dividing net income by the weighted average number of common shares outstanding for the period, inclusive of potentially dilutive common shares outstanding for the period. Periods of net loss require the diluted computation to be the same as the basic computation. There were no potentially dilutive common shares outstanding during fiscal years 2019 and 2020. There was an aggregate of 0.9 million potentially dilutive common share equivalents outstanding during fiscal year 2021, but were not included in the computation of diluted earnings per share because their effect would have been anti-dilutive. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jan. 29, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We carry certain of our assets and liabilities at fair value in accordance with GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value require us to maximize the use of observable inputs and minimize the use of unobservable inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs, other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for similar assets or liabilities in markets that are not active; or other inputs other than quoted prices that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities, including interest rates and yield curves, and market corroborated inputs. Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These are valued based on our estimates and assumptions that market participants would use in pricing the asset or liability. Financial assets and liabilities measured at fair value on a recurring basis as of the end of fiscal year 2020 consisted of the following (in thousands): January 30, Quoted Prices Significant Significant Assets: Money market funds (cash equivalent) $ 73,024 $ 73,024 $ — $ — Total assets $ 73,024 $ 73,024 $ — $ — Liabilities: Deferred compensation plan liability (noncurrent) $ 6,531 $ — $ 6,531 $ — Total liabilities $ 6,531 $ — $ 6,531 $ — Financial assets and liabilities measured at fair value on a recurring basis as of the end of fiscal year 2021 consisted of the following (in thousands): January 29, Quoted Prices Significant Significant Assets: Money market funds (cash equivalent) $ 11,411 $ 11,411 $ — $ — Total assets $ 11,411 $ 11,411 $ — $ — Liabilities: Deferred compensation plan liability (noncurrent) $ 6,873 $ — $ 6,873 $ — Total liabilities $ 6,873 $ — $ 6,873 $ — The fair value of our money market funds is based on quoted prices in active markets. The deferred compensation plan liability represents the amount that would be earned by participants if the funds were invested in securities traded in active markets. The fair value of the deferred compensation plan liability is determined based on quoted prices of similar assets that are traded in observable markets, or represents the cash withheld by participants prior to any investment activity. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jan. 29, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsSubsequent to January 29, 2022 and through March 29, 2022 we repurchased an additional 2.1 million shares of common stock for $17.5 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 29, 2022 | |
Accounting Policies [Abstract] | |
Fiscal Year | Fiscal YearOur fiscal year ends on the Saturday nearest to January 31 and each fiscal year is generally comprised of four 13-week quarters (although in years with 53 weeks, the fourth quarter is comprised of 14 weeks). |
Principles of Consolidation | Principles of Consolidation The accompanying audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include our accounts and those of our wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Segment Reporting | Segment ReportingWe have determined that we have one reportable segment, which includes the operation of our e-Commerce platform and stores. The single segment was identified based on how the Chief Operating Decision Maker, who we have determined to be our Chief Executive Officer, manages and evaluates performance and allocates resources. |
Use of Estimates | Use of Estimates We are required to make certain estimates and assumptions in order to prepare consolidated financial statements in conformity with GAAP. Such estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities in the consolidated financial statements and accompanying notes. Our most significant estimates include, but are not limited to, the valuation of inventory balances, the determination of sales returns, the assessments related to the valuation of long-lived assets for impairment, the determination of incremental borrowing rates used to value our operating lease liabilities, estimates related to our loyalty program, the recoverability of deferred taxes, the determination of uncertain tax positions and the determination of gift card breakage. The estimation process required to prepare our consolidated financial statements requires assumptions to be made about future events and conditions, and as such, is inherently subjective and uncertain. Our actual results could differ materially from those estimates. |
Concentration Risks | Concentration Risks We consider all highly liquid investments with maturities of less than three months when purchased to be cash equivalents. All credit and debit card receivable balances are also classified as cash and cash equivalents. As of the end of fiscal years 2020 and 2021, the amounts due from third party financial institutions for these transactions classified as cash and cash equivalents totaled $7.1 million and $14.1 million, respectively. Cash and cash equivalents used primarily for working capital purposes are maintained with various major third party financial institutions in amounts which are in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. We are potentially exposed to a concentration of credit risk when cash and cash equivalent deposits in these financial institutions are in excess of FDIC limits. We consider the credit risk associated with these financial instruments to be minimal as cash and cash equivalents are held by financial institutions with high credit ratings and we have not historically sustained any credit losses associated with our cash and cash equivalents balances. |
Inventory | Inventory Inventory is valued at the lower of moving average cost or net realizable value. We make certain assumptions regarding net realizable value in order to assess whether our inventory is recorded properly at the lower of cost or net realizable value. These assumptions are based on historical average selling price experience, current selling price information and estimated future selling price information. Physical inventory counts are conducted at least once during the year to determine actual inventory on hand and shrinkage. We accrue our estimated inventory shrinkage for the period between the last physical count and current balance sheet date. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost less accumulated depreciation. Major repairs and improvements are capitalized, while routine maintenance and repairs are expensed as incurred. The gross carrying amounts of property and equipment sold or retired and the related accumulated depreciation are eliminated in the year of disposal, and any resulting gains or losses are included in the consolidated statements of operations and comprehensive income (loss). Application and development costs associated with internally developed software such as salaries of employees and payments made to third parties and consultants working on the software development are capitalized. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they constitute major enhancements. Capitalized internal-use software costs are amortized using the straight-line method over their estimated useful lives, which are generally three years. Depreciation expense is calculated using the straight-line method over the following estimated useful lives: Leasehold improvements shorter of the 3- to 10-year estimated useful life or the respective lease term Furniture, fixtures and equipment 2 to 10 years Software and licenses 3 to 7 years The carrying value of property and equipment is subject to assessment for potential impairment whenever events or changes in circumstances indicate that an asset’s carrying value may not be recoverable, as further described below. |
Definite-Lived Assets | Definite-Lived Assets We assess the carrying value of long-lived assets for potential impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We group and evaluate long-lived assets for impairment at the individual store level, which is the lowest level at which individual cash flows can be identified. Factors we consider important that could trigger an impairment review of our stores or e-Commerce operations include significant underperformance relative to historical or projected future operating results, a significant change in the manner of the use of the asset or a significant negative industry or economic trend. If we determine the carrying value of long-lived assets may not be recoverable based upon the existence of one or more of the aforementioned factors, we test for the recoverability of the carrying value of our long-lived assets by comparing the carrying value of the asset groups to our estimated undiscounted future net cash flows attributable to the asset groups. If the carrying value of the long-lived assets is greater than the related undiscounted future net cash flows, the long-lived assets are measured for impairment. We measure the impairment by comparing the difference between the long-lived asset’s carrying value and the discounted future net cash flows attributable to the long-lived asset, which represent its fair value. We calculate the discounted future net cash flows of a store by netting future estimated sales of each store against estimated cost of goods sold, store occupancy costs and other store operating expenses such as payroll, supplies, repairs and maintenance and credit/debit card fees. Changes in these assumptions may cause the fair value to be significantly impacted. In the event future performance is lower than forecasted results, future cash flows may be lower than expected, which could result in future impairment charges. While we believe that recently opened stores will provide sufficient cash flow, material changes in financial performance could result in future store impairment charges. |
Indefinite-Lived Intangible Assets | Indefinite-Lived Intangible Assets Indefinite-lived intangible assets are not amortized, but are reviewed for impairment at least annually, or more frequently when events or changes in circumstances indicate the carrying value may not be recoverable. Judgments regarding indicators of potential impairment are based on market conditions and operational performance of the business. |
Implementation Costs Incurred in Cloud Computing Arrangements that are Service Contracts | Implementation Costs Incurred in Cloud Computing Arrangements that are Service Contracts Our cloud computing arrangements that are service contracts primarily consist of arrangements with third party vendors for our internal use of their software applications that they host. We defer implementation costs incurred in relation to such arrangements, including costs for software application coding, configuration, integration and customization, while associated process reengineering, training, maintenance and data conversion costs are expensed. Subsequent implementation costs are deferred only to the extent that they constitute major enhancements. The short-term portion of deferred costs are included in prepaid expenses and other current assets in the consolidated balance sheets, while the long-term portion of deferred costs are included in deposits and other noncurrent assets. Amortized implementation costs incurred in cloud computing arrangements that are service contracts are recognized in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss) using the straight-line method over three |
Loyalty Program | Loyalty ProgramOn July 22, 2019, we relaunched our loyalty program, Torrid Rewards, in all our stores and on www.torrid.com. Under this program, customers accumulate points based on purchase activity and qualifying non-purchase activity and upon reaching a certain point level, customers can earn awards that may only be redeemed for merchandise. Unredeemed points typically expire after 13 months without additional purchase and qualifying non-purchase activity and unredeemed awards typically expire 45 days after issuance. We use historical redemption rates to estimate the value of future award redemptions and we recognize the estimated value of these future awards as a reduction of revenue in the consolidated statements of operations and comprehensive income (loss) in the period the points are earned by the customer. Prior to the relaunch of the Torrid Rewards loyalty program, we operated our Torrid Insider loyalty program under which customers accumulated points based on purchase activity only. |
Self-Insurance | Self-Insurance We are self-insured for certain losses related to medical and workers’ compensation claims although we maintain stop loss coverage with third party insurers to limit our total liability exposure. In general, our self-insurance reserves are recorded on an undiscounted basis. The estimate of our self-insurance liability involves uncertainty since we must use judgment to estimate the ultimate cost that will be incurred to settle reported claims and unreported claims for incidents incurred but not reported as of the balance sheet date. When estimating our self-insurance liability, we consider a number of factors, which include historical claim experience and valuations provided by independent third party actuaries. While the ultimate amount of claims incurred is dependent on future developments, we believe recorded reserves are adequate to cover the future payment of claims. However, it is possible that recorded reserves may not be adequate to cover the future payment of claims. Adjustments, if any, to estimates recorded resulting from ultimate claim payments will be reflected in our consolidated statements of operations and comprehensive income (loss) in the periods in which such adjustments are known. |
Comprehensive Income (Loss) | Comprehensive Income (Loss)Comprehensive income includes all changes in equity during a period except those that resulted from investments by, or distributions to, stockholders. Other comprehensive income (loss) refers to revenues, expenses, gains and losses that, under GAAP, are included in comprehensive income, but excluded from net income (loss) as these amounts are recorded directly as an adjustment to stockholders' equity (deficit). Components of our comprehensive income (loss) include net income (loss) and foreign currency translation adjustments. |
Foreign Currency Translation | Foreign Currency Translation The functional currency for our wholly owned foreign subsidiaries included in these consolidated financial statements that are domiciled outside of the United States is the applicable local currency. Assets and liabilities of our foreign subsidiaries are translated into United States dollars at the exchange rate in effect on the balance sheet date. Revenues and expenses are translated at the average rate in effect during the period. Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the consolidated statements of stockholders' equity (deficit) as a component of accumulated other comprehensive income (loss). Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss) as incurred. |
Share Repurchases | Share Repurchases We have elected to retire shares repurchased to date. Shares retired become part of the pool of authorized but unissued shares. We have elected to record the purchase price of the retired shares in excess of par value, including transaction costs, directly as an increase in accumulated deficit. |
Revenue Recognition | Revenue Recognition We recognize revenue when our performance obligations under the terms of a contract or an implied arrangement with a customer are satisfied, which is when the merchandise is transferred to the customer and the customer obtains control of it. The amount of revenue we recognize reflects the total consideration we expect to receive for the merchandise, which is the transaction price. For arrangements that contain multiple performance obligations, we allocate the transaction price to each performance obligation on a relative standalone selling price basis. At our retail store locations, we satisfy our performance obligation and recognize revenue at the point in time when a customer takes possession of the merchandise and tenders payment at the point-of-sale register. For e-Commerce sales shipped to a customer from our distribution center, or from a retail store location (ship from store), we satisfy our performance obligation and recognize revenue upon shipment, which is the point in time we believe the customer obtains control of the merchandise after payment has been tendered. Income we receive from customers for shipping and handling is recognized as a component of revenue upon shipment of merchandise to the customer. We satisfy our performance obligation and recognize revenue from e-Commerce sales shipped to a retail store location from our distribution center, or fulfilled from merchandise already located at a retail store location (buy-online-pickup-in-store), at the point in time when the customer retrieves the merchandise from within the retail store location or at a retail store curbside. If a customer earns loyalty program points in connection with the retail store or e-Commerce sales transactions described above, then we have a remaining performance obligation and cannot recognize all the revenue. A portion of the revenue is allocated to the loyalty program points earned during the transaction. We satisfy our performance obligation and recognize revenue allocated to these loyalty program points and the resulting awards at the point in time when the awards are redeemed for merchandise, when we determine that they will not be redeemed, or when the awards and points expire. We satisfy our performance obligation and recognize revenue from gift cards and store merchandise credits at the point in time when the customer presents the gift cards and store merchandise credits for redemption. Gift card breakage is income recognized due to the non-redemption of a portion of gift cards sold by us for which a liability was recorded in prior periods. We recognize estimated gift card breakage over time as a component of net sales in proportion to the pattern of rights exercised by the customer as reflected in actual gift card redemption patterns over the period. Our estimated gift card breakage rate is approximately 4%. While customer redemption patterns result in estimated gift card breakage, changes in our customers’ behavior could impact the amount that ultimately is unused and could affect the amount recognized as a component of net sales. During fiscal years 2019, 2020 and 2021, we recognized $1.1 million, $0.9 million and $1.1 million, respectively, of estimated gift card breakage as a component of net sales. We are required to estimate certain amounts included in a contract or an implied arrangement with a customer which add variability to the transaction price. Under certain conditions, we are obligated to accept customer returns for most of our merchandise. Sales returns reduce the revenue we expect to receive for merchandise and therefore add variability to the transaction price. Based on historical return pattern experience, we reasonably estimate the amount of merchandise expected to be returned and exclude it from revenue. Similarly, losses we bear arising from uncollectible customer credit card payments are recorded as a reduction of revenue as they reduce the revenue we expect to receive for the merchandise. We recognize a contract liability when we receive consideration from a customer before our performance obligations under the terms of a contract or an implied arrangement with the customer are satisfied. Consequently, we consider our remaining performance obligations to be representative of our contract liability, most of which is not expected to last for more than one year and has therefore been classified as current. Our contract liability balances increase as gift cards and store merchandise credits are purchased and received by the customer; and as loyalty points are earned based on purchase activity. Contract liability balances decrease as gift cards and store merchandise credits are redeemed for merchandise or when we determine that they will not be redeemed; as loyalty points expire or when we determine that they will not be converted into a loyalty award; and as loyalty awards are redeemed for merchandise or expire. Sales taxes collected from customers and remitted directly to governmental authorities are not considered revenue and are excluded from the transaction price. |
Cost of Goods Sold, Vendor Allowances and Shipping and Handling Costs | Cost of Goods Sold Cost of goods sold includes: merchandise costs; freight; inventory shrinkage; payroll expenses associated with the merchandising and distribution departments; distribution center expenses, including rent, common area maintenance (“CAM”) charges, real estate taxes, depreciation, utilities, supplies and maintenance; and store occupancy expenses, including rents, CAM charges, heating, ventilation and air conditioning (“HVAC”) charges, real estate taxes and depreciation. Vendor Allowances Shipping and Handling Costs We classify shipping and handling costs in costs of goods sold in the consolidated statements of operations and comprehensive income (loss). We account for shipping and handling activities that occur after the customer has obtained control of merchandise as a fulfillment cost rather than an additional promised service. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses include: payroll expenses associated with stores and e-Commerce; store and e-Commerce operating expenses other than store occupancy; store pre-opening costs; credit card processing fees; share-based compensation; and payroll and other expenses associated with headquarters and administrative functions. |
Marketing Expenses | Marketing Expenses Marketing expenses include direct mail marketing costs, photographic production and targeted online performance marketing costs such as retargeting, paid search/product listing advertising, and social media advertisements. |
Store Pre-Opening Costs | Store Pre-Opening CostsCosts incurred in connection with the opening of new stores, store remodels or relocations are expensed as incurred. |
Leases | Leases We consider an agreement to be or contain a lease if it conveys us as the lessee with the right to control the use of an identified property, plant and equipment asset for a period of time in exchange for consideration. Based on these criteria, we as the lessee have operating lease agreements with lessors for our retail stores, distribution center and headquarter office space; and vehicles and equipment; under primarily non-cancelable leases with terms ranging from approximately two Certain of our operating lease agreements contain one or more options to extend the leases at our sole discretion. However, the periods covered by the options to extend the leases of our retail stores, vehicles and equipment are not recognized as part of the associated right of use ("ROU") assets and lease liabilities, as we are not reasonably certain to exercise the options. The periods covered by the options to extend the leases of our distribution center and headquarter office space are recognized as part of the associated ROU assets and lease liabilities, as we are reasonably certain to exercise the options due to the significant effort and investment it would take to move out of these locations. Some of our operating lease agreements contain options to terminate the lease under certain conditions. The retail space leases provide for rents based upon the greater of the minimum annual rental amounts or a percentage of annual store sales volume. Certain leases provide for increasing minimum annual rental amounts. We consider rents based upon a percentage of annual store sales volume, and other rent-related payments that generally vary because of changes in facts and circumstances (other than due to the passage of time), to be variable lease payments. Variable lease payments associated with retail space leases are recognized as occupancy costs within cost of goods sold in the consolidated statements of operations and comprehensive income (loss) in the period in which the obligation for those payments is incurred. We generally consider all other lease payments to be fixed in nature and the sum of all the discounted remaining fixed payments in the lease terms make up the lease liabilities in our consolidated balance sheet (if the lease terms are longer than 12 months). Our operating lease agreements do not contain any residual value guarantees or restrictive covenants, and we have not entered into any sublease agreements, lease agreements with related parties, or build-to-suit arrangements that may create significant rights and obligations for us. We discount the fixed lease payments that make up the lease liabilities using an incremental borrowing rate (“IBR”), as the rates implicit in our leases are not readily determinable. The IBR is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The determination of the incremental borrowing rate incorporates various assumptions including the financial scale, leverage and coverage measures that indicate our financial flexibility and long-term viability. These measures utilize credit ratings that are assigned scores which, when weighted based on certain quantitative factors, indicate overall credit rating. An IBR for each lease term is determined based on the credit rating. All scores, credit ratings and corresponding IBRs are highly subjective. We choose not to separate nonlease components (such as common area maintenance charges and heating, ventilation and air conditioning charges), from lease components (such as fixed minimum rent payments), and instead account for each separate lease component and the nonlease components associated with that lease component as a single lease component. We do not apply Accounting Standards Update (“ASU”) 2016-02, Leases , and all related guidance (ASC 842) requirements to leases that have lease terms of 12 months or less upon commencement, and instead recognize short-term lease payments, if applicable, in the consolidated statements of operations and comprehensive income (loss) on a straight-line basis over the lease term. In response to the COVID-19 pandemic, the Financial Accounting Standards Board ("FASB") issued interpretive guidance in April 2020, which provides entities the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease terms. We elected this option; accordingly, we do not remeasure the lease liabilities or record a change to the ROU assets for any concessions we receive for our retail store leases. Rather, deferred lease payments are recorded to operating lease liabilities until paid and lease concessions are recorded in the period they are negotiated or when the lower lease expense is paid. |
Income Taxes | Income Taxes We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting bases and tax bases of assets and liabilities and are measured using the enacted tax rates expected to apply to taxable income in the periods in which the deferred tax asset or liability is expected to be realized or settled. Deferred tax assets are reduced by valuation allowances if we believe it is more likely than not that some portion or the entire deferred tax asset will not be realized. Deferred tax assets and liabilities are measured using the enacted tax rates in effect in the years when those temporary differences are expected to reverse. The effect on deferred taxes from a change in tax rate is recognized through continuing operations in the period that includes the enactment date of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. We prescribe a recognition threshold and a measurement attribute for the consolidated financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We include interest and penalties related to uncertain tax positions in income tax expense in the consolidated statements of operations and comprehensive income (loss). The amount of income taxes we pay may be subject to periodic audits by the Internal Revenue Service (“IRS”) and other taxing authorities. These audits may challenge certain of our tax positions, such as the timing and amount of deductions and allocation of taxable income to various jurisdictions. We recognize tax liabilities for our estimate of the potential outcome of any uncertain tax issue, which is subject to our assessment of the relevant risks, facts and circumstances existing at the time, and we adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense and the effective tax rate in the period in which the new information becomes available. As of the end of fiscal year 2021, we had accumulated undistributed earnings and profits of our foreign subsidiary of approximately $4.5 million. We continue to treat undistributed earnings of our foreign subsidiary as indefinitely reinvested according to our current operating plans and no deferred tax liability has been recorded for potential future taxes related to such earnings. According to current tax law, any future dividends paid from our foreign subsidiary will not be subject to income tax in the United States, except for withholding taxes and state taxes, which are not material. We have made a determination on our accounting policy choice to treat taxes related to Global Intangible Low Taxed Income (“GILTI”) as a period cost starting in calendar year 2018. |
Share-Based Compensation | Share-Based Compensation Prior to the IPO, Torrid Holding LLC issued 13,660,000 Class A, Class B, Class C, Class D, Class E, Class F, Class G, Class H and Class J Torrid incentive units, in the aggregate, net of forfeitures, to certain members of our management. These incentive units were intended to constitute profits interests. We recognized the impact of share-based compensation associated with incentive units issued by Torrid Holding LLC in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). The share-based compensation expense and related capital contribution are reflected in our consolidated financial statements as these awards were deemed to be for our benefit. The intent of the incentive units was to provide profit-sharing opportunities to management rather than equity ownership in our then parent, Torrid Holding LLC. The incentive units did not have any voting or distribution rights and contained a repurchase feature, whereby upon termination, Torrid Holding LLC had the right to purchase from former employees any or all of the vested incentive units at fair value. In addition, although the fair value of the incentive units was determined through an option pricing methodology that utilized the possible equity values of Torrid Holding LLC, the settlement amounts and method of settlement of the incentive units were at the discretion of the Board. Based on these aforementioned features and characteristics, we determined that the incentive units were in-substance liabilities accounted for as liability instruments in accordance with ASC 710, Compensation . The incentive units were remeasured based on the fair value of the awards at the end of each reporting period. We recorded the expense associated with changes in the fair value of these incentive units as a capital contribution from our former parent, Torrid Holding LLC, as our former parent is the legal obligor for the incentive units. The incentive units were valued utilizing a contingent claims analysis ("CCA") methodology based on a Black-Scholes option pricing model ("OPM"). Under the OPM, each class of incentive units was modeled as a call option with a unique claim on the assets of Torrid Holding LLC. The characteristics of each class of incentive units determined the uniqueness of the claim on the assets of Torrid Holding LLC. The OPM used to value the incentive units incorporated various assumptions, including the time to liquidity event, equity volatility and risk-free interest rate of return. Equity volatility was based on the historical volatilities of comparable publicly traded companies for the time horizon equal to the time to the anticipated liquidity event; and the risk-free interest rate was for a term corresponding to the time to liquidity event. The assumptions underlying the valuation of the incentive units represented our best estimates, which involved inherent uncertainties and the application of our judgement. The most recent remeasurement of the fair value of the incentive units utilizing the CCA methodology was performed as of May 1, 2021. Following the pricing of our IPO, the vested portion of the incentive units was exchanged for shares of our common stock of an equivalent fair value as the vested incentive units and the unvested portion was cancelled. As such, the fair value of these incentive units is no longer recognized in our consolidated statement of operations. On June 22, 2021, in connection with our IPO, we adopted the Torrid Holdings Inc. 2021 Long-Term Incentive Plan (the “2021 LTIP”), for employees, consultants and directors. The 2021 LTIP provides for the grant of stock options, restricted stock, restricted stock units (“RSUs”), among other types of awards, all of which are accounted for in accordance with ASC 718, Compensation-Stock Compensation . The Company measures share-based compensation cost at the grant date based on the fair value of the award and recognizes share-based compensation cost as expense over the vesting period. As share-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest, the amount of expense has been reduced for actual forfeitures as they occur. Stock options are valued utilizing a Black-Scholes OPM. The OPM used to value the stock options incorporates various assumptions, including dividend yield, expected volatility, risk-free interest rate and expected term of the stock options. The expected volatility is estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term that is consistent with the expected term of the stock options. The risk-free interest rates are based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected term of the stock options. The expected term of the stock options represents the estimated period of time until exercise and is calculated using the simplified method which deems the term to be the average of the time-to-vesting and the contractual life of the options. The grant date fair value of restricted stock and RSUs is based on the closing price per share of our common stock on the grant date. We recognize compensation expense for time-based awards on a straight-line basis and for performance-based awards on the graded-vesting method over the vesting period of the awards. |
Earnings Per Share | Earnings Per ShareBasic earnings per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share is applicable only in periods of net income and is computed by dividing net income by the weighted average number of common shares outstanding for the period and potentially dilutive common share equivalents outstanding for the period. Periods of net loss require the diluted computation to be the same as the basic computation, as all potentially dilutive securities would be anti-dilutive. |
Private Label Credit Card | Private Label Credit CardWe have an agreement with a third party to provide customers with private label credit cards (“Credit Card Agreement”). Each private label credit card bears the logo of the Torrid brand and can only be used at our store locations and on www.torrid.com. A third party financing company is the sole owner of the accounts issued under the private label credit card program and absorbs the losses associated with non-payment by the private label card holders and a portion of any fraudulent usage of the accounts. Pursuant to the Credit Card Agreement, we receive marketing and promotional funds from the third party financing company for certain expenses we incur based on usage of the private label credit cards. These marketing and promotional funds are recorded as a reduction in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). |
Employee Benefit Plan and Deferred Compensation Plan | Employee Benefit PlanOn August 1, 2015, we adopted the Torrid 401(k) Plan Deferred Compensation Plan On August 1, 2015, we established the Torrid Management Deferred Compensation Plan (“Deferred Compensation Plan”) for the purpose of providing highly compensated employees a program to meet their financial planning needs. The Deferred Compensation Plan provides participants with the opportunity to defer up to 80% of their base salary and up to 100% of their annual earned bonus, all of which, together with the associated investment returns, are 100% vested from the outset. The Deferred Compensation Plan is designed to be exempt from most provisions of the Employee Retirement Security Act of |
Accounting Standards | Recently Adopted Accounting Standards in Fiscal Year 2020 In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This ASU provides optional guidance for a limited period of time to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The amendments in this update are effective as of March 12, 2020 through December 31, 2022. Our adoption of this guidance in the first quarter of fiscal year 2020 did not have a material impact on our consolidated financial statements. Recently Adopted Accounting Standards in Fiscal Year 2021 In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes. The ASU is intended to enhance and simplify aspects of the income tax accounting guidance in ASC 740 as part of the FASB’s simplification initiative. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2020 with early adoption permitted. Our adoption of this guidance on January 31, 2021 did not have a material impact on our consolidated financial statements. Accounting Standards Not Yet Adopted We have considered all recent accounting pronouncements and have concluded that there are no recent accounting pronouncements not yet adopted that are applicable to us, based on current information. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Accounting Policies [Abstract] | |
Summary of Property and Equipment | Depreciation expense is calculated using the straight-line method over the following estimated useful lives: Leasehold improvements shorter of the 3- to 10-year estimated useful life or the respective lease term Furniture, fixtures and equipment 2 to 10 years Software and licenses 3 to 7 years Property and equipment are summarized as follows (in thousands): January 30, 2021 January 29, 2022 Property and equipment, at cost Leasehold improvements $ 161,817 $ 168,084 Furniture, fixtures and equipment 98,753 108,261 Software and licenses 15,121 15,356 Construction-in-progress 3,266 4,743 278,957 296,444 Less: Accumulated depreciation and amortization (135,701) (168,879) Property and equipment, net $ 143,256 $ 127,565 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in thousands): January 30, 2021 January 29, 2022 Prepaid and other information technology expenses 3,202 5,692 Prepaid casualty insurance 1,336 3,050 Other 8,130 5,944 Prepaid expenses and other current assets $ 12,668 $ 14,686 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Depreciation expense is calculated using the straight-line method over the following estimated useful lives: Leasehold improvements shorter of the 3- to 10-year estimated useful life or the respective lease term Furniture, fixtures and equipment 2 to 10 years Software and licenses 3 to 7 years Property and equipment are summarized as follows (in thousands): January 30, 2021 January 29, 2022 Property and equipment, at cost Leasehold improvements $ 161,817 $ 168,084 Furniture, fixtures and equipment 98,753 108,261 Software and licenses 15,121 15,356 Construction-in-progress 3,266 4,743 278,957 296,444 Less: Accumulated depreciation and amortization (135,701) (168,879) Property and equipment, net $ 143,256 $ 127,565 |
Implementation Costs Incurred_2
Implementation Costs Incurred in Cloud Computing Arrangements that are Service Contracts (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Deferred Implementation Costs | Deferred implementation costs incurred in cloud computing arrangements that are service contracts are summarized as follows (in thousands): January 30, 2021 January 29, 2022 Internal use of third party hosted software, gross $ 6,095 $ 11,877 Less: Accumulated amortization (2,245) (3,892) Internal use of third party hosted software, net $ 3,850 $ 7,985 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangible Assets | Definite-lived intangible assets and indefinite-lived intangible assets are summarized as follows (in thousands): January 30, 2021 January 29, 2022 Gross Accumulated Net Book Gross Accumulated Net Book Indefinite-lived intangible assets: Trade name $ 8,400 $ — $ 8,400 $ 8,400 $ — $ 8,400 Total $ 8,400 $ — $ 8,400 $ 8,400 $ — $ 8,400 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | Accrued and other current liabilities consist of the following (in thousands): January 30, 2021 January 29, 2022 Accrued payroll and related expenses $ 25,638 $ 31,194 Accrued inventory-in-transit 21,749 37,156 Accrued loyalty program 12,344 13,481 Accrued sales return allowance 3,863 4,347 Gift cards 9,361 11,695 Deferred revenue 1,512 2,879 Accrued sales and use tax 5,615 4,136 Accrued freight 4,937 6,048 Term loan interest payable 3,311 1,762 Accrued marketing 4,696 5,419 Accrued self-insurance liabilities 2,868 2,891 Other 14,467 17,700 Accrued and other current liabilities $ 110,361 $ 138,708 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Leases [Abstract] | |
Lease Costs and Other Supplementary Information Related to Leases | Our lease costs consisted of the following (in thousands): Fiscal Year Ended February 1, 2020 January 30, 2021 January 29, 2022 Operating (fixed) lease cost $ 58,700 $ 40,192 $ 50,446 Short-term lease cost 170 124 82 Variable lease cost 18,237 17,550 20,655 Total lease cost $ 77,107 $ 57,866 $ 71,183 Other supplementary information related to our leases is reflected in the table below (in thousands except lease term and discount rate data): Fiscal Year Ended February 1, 2020 January 30, 2021 January 29, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 59,894 $ 40,025 $ 59,066 Right-of-use assets obtained in exchange for new operating lease liabilities $ 18,202 $ 3,814 $ 11,912 Decrease in right-of-use assets resulting from operating lease modifications or remeasurements $ 8,111 $ 6,493 $ 5,190 Weighted average remaining lease term - operating leases 7 years 7 years 6 years Weighted average discount rate - operating leases 5 % 6 % 6 % |
Maturity Analysis of Operating Lease Liabilities | A maturity analysis of our operating lease liabilities, for lease terms that include periods covered by options to extend some of our leases that we are reasonably certain of being executed, for each of the next five years and thereafter, reconciled to our operating lease liabilities recognized in the consolidated balance sheet as of January 29, 2022, is as follows (in thousands): Fiscal Year 2022 $ 58,749 2023 59,476 2024 52,812 2025 43,095 2026 31,065 Thereafter 55,792 Total operating lease liabilities $ 300,989 Less: Imputed interest (48,224) Total operating lease liabilities $ 252,765 Less: Current portion of operating lease liabilities (45,716) Noncurrent operating lease liabilities $ 207,049 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Our revenue, disaggregated by product category, consists of the following (in thousands): Fiscal Year Ended February 1, January 30, January 29, Apparel $ 951,286 $ 890,511 $ 1,169,668 Non-apparel 85,698 83,003 109,126 Total net sales $ 1,036,984 $ 973,514 $ 1,278,794 |
Debt Financing Arrangements (Ta
Debt Financing Arrangements (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Financing Arrangements | Our debt financing arrangements consist of the following (in thousands): January 30, 2021 January 29, 2022 Existing ABL Facility, as amended $ — $ — Term loan Amended Term Loan Credit Agreement 210,700 — New Term Loan Credit Agreement — 350,000 Less: current portion of unamortized original issue discount and debt financing costs (1,494) (1,356) Less: noncurrent portion of unamortized original issue discount and debt financing costs (4,294) (7,284) Total term loan outstanding, net of unamortized original issue discount and debt financing costs 204,912 341,360 Less: current portion of term loan, net of unamortized original issue discount and debt financing costs (11,506) (20,519) Total term loan, net of current portion and unamortized original issue discount and debt financing costs $ 193,406 $ 320,841 |
Schedule of Principal Repayments of Debt | Fixed mandatory principal repayments due on the outstanding term loan are as follows as of January 29, 2022 (in thousands): Fiscal Year 2022 21,875 2023 17,500 2024 17,500 2025 17,500 2026 17,500 2027 17,500 2028 240,625 $ 350,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Provision for Income Taxes | The domestic and foreign income before provision for income taxes during fiscal years 2019, 2020 and 2021 is as follows (in thousands): Fiscal Year Ended February 1, January 30, January 29, Domestic $ 57,348 $ 38,698 $ 15,010 Foreign 3,354 (3,175) 819 Income before provision $ 60,702 $ 35,523 $ 15,829 |
Schedule of Components of Provision for Income Taxes | The composition of the provision for income taxes during fiscal years 2019, 2020 and 2021 is as follows (in thousands): Fiscal Year Ended February 1, January 30, January 29, Current: Federal $ 17,784 $ 9,528 $ 36,410 State 4,472 2,559 8,051 Foreign 1,263 (37) — $ 23,519 $ 12,050 $ 44,461 Deferred: Federal $ (4,008) $ (157) $ 785 State (623) (361) 305 Foreign (55) (541) 222 (4,686) (1,059) 1,312 Total income tax provision $ 18,833 $ 10,991 $ 45,773 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities are as follows (in thousands): January 30, January 29, Deferred tax assets (liabilities): Inventory $ 2,010 $ 2,197 Loyalty reserve 3,169 3,591 Accrued bonus 2,110 3,944 Deferred rent 812 639 Deferred compensation 1,612 1,694 Lease liability 72,837 61,112 Equity based compensation — 459 Other deferred tax assets 5,584 4,562 ROU assets (62,216) (52,611) Intangible assets (2,074) (2,071) Depreciation (16,096) (16,446) Other deferred tax liabilities (1,609) (2,197) Total net deferred tax assets $ 6,139 $ 4,873 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the provision for income taxes to the statutory tax rate is as follows: Fiscal Year Ended February 1, January 30, January 29, Statutory federal rate 21.0 % 21.0 % 21.0 % State and local taxes, net of federal benefit 4.6 5.5 35.5 Share-based compensation 4.2 4.6 202.9 Liability for uncertain tax positions 0.7 (1.2) 9.4 Information technology services charge — 1.8 4.5 Non-deductible IPO transaction costs — — 11.0 Limitation on Section 162(m) officers — — 5.8 Foreign derived intangible income (0.1) (0.3) (2.0) Other differences, net 0.6 (0.5) 1.1 Effective income tax rate 31.0 % 30.9 % 289.2 % |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table reconciles the amount recorded for the liability for income taxes associated with unrecognized tax benefits as of the end of fiscal years 2019, 2020 and 2021 (in thousands): Fiscal Year Ended February 1, January 30, January 29, Unrecognized tax benefits at the beginning of the fiscal year $ 896 $ 1,308 $ 2,187 Additions: Tax positions related to the current period 424 1,455 1,535 Tax positions related to the prior period (12) (576) (429) Unrecognized tax benefits at the end of the fiscal year $ 1,308 $ 2,187 $ 3,293 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Our share-based compensation expense, by award type, consists of the following (in thousands): Fiscal Year Ended February 1, 2020 January 30, 2021 January 29, 2022 Restricted stock units $ — $ — $ 4,040 Restricted stock awards — — 3,864 Stock options — — 514 Employee stock purchase plan — — 170 Remeasurement adjustments for incentive units 11,993 7,791 151,166 Share-based compensation expense before income taxes 11,993 7,791 159,754 Income tax detriment — — 293 Net share-based compensation expense $ 11,993 $ 7,791 $ 160,047 |
Restricted Stock Unit Activity | RSU activity under the 2021 LTIP consists of the following (in thousands except per share and contractual life amounts): Shares Weighted average grant date value per share Nonvested, January 30, 2021 — Granted 392 $ 26.82 Vested (105) $ 27.00 Forfeited (9) $ 27.00 Nonvested, January 29, 2022 278 $ 26.75 |
Restricted Stock Activity | Restricted stock award activity under the 2021 LTIP consists of the following (in thousands except per share and contractual life amounts): Shares Weighted average grant date fair value per share Outstanding, January 30, 2021 — Granted 866 $ 27.00 Vested (120) $ 27.00 Forfeited (214) $ 27.00 Nonvested, January 29, 2022 532 $ 27.00 |
Stock Option Activity | Stock option activity under the 2021 LTIP consists of the following (in thousands except per share and contractual life amounts): Shares Weighted average exercise price per share Weighted average remaining contractual life (years) Aggregate intrinsic value Outstanding, January 30, 2021 — Granted 342 $ 21.03 Exercised — Expired / forfeited (5) $ 21.00 Outstanding, January 29, 2022 337 $ 21.03 9.4 $ — Exercisable, January 29, 2022 — |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted average grant date fair value of stock option awards granted during fiscal year 2021 was $11.24 per option and was estimated at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions: Dividend yield — % Expected volatility (1) 56.0 % Risk-free interest rate (2) 1.1 % Expected term (3) 6.31 years Grant date fair value per share $ 21.00 (1) The expected volatility is estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term that is consistent with the expected term of the stock options. (2) The risk-free interest rates are based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected term of the stock options. (3) The expected term of the stock options represents the estimated period of time until exercise and is calculated using the simplified method. |
Lease Incentives and Other No_2
Lease Incentives and Other Noncurrent Liabilities (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Lease Incentives and Other Noncurrent Liabilities | Lease incentives and other noncurrent liabilities consist of the following (in thousands): January 30, 2021 January 29, 2022 Noncurrent portion of lease incentives $ 1,426 $ 1,053 Noncurrent income taxes payable 2,447 3,991 Lease incentives and other noncurrent liabilities $ 3,873 $ 5,044 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis as of the end of fiscal year 2020 consisted of the following (in thousands): January 30, Quoted Prices Significant Significant Assets: Money market funds (cash equivalent) $ 73,024 $ 73,024 $ — $ — Total assets $ 73,024 $ 73,024 $ — $ — Liabilities: Deferred compensation plan liability (noncurrent) $ 6,531 $ — $ 6,531 $ — Total liabilities $ 6,531 $ — $ 6,531 $ — Financial assets and liabilities measured at fair value on a recurring basis as of the end of fiscal year 2021 consisted of the following (in thousands): January 29, Quoted Prices Significant Significant Assets: Money market funds (cash equivalent) $ 11,411 $ 11,411 $ — $ — Total assets $ 11,411 $ 11,411 $ — $ — Liabilities: Deferred compensation plan liability (noncurrent) $ 6,873 $ — $ 6,873 $ — Total liabilities $ 6,873 $ — $ 6,873 $ — |
Basis of Presentation and Des_2
Basis of Presentation and Description of the Business (Details) $ / shares in Units, $ in Millions | Jul. 06, 2021USD ($)$ / sharesshares | Jun. 22, 2021shares | Jan. 29, 2022shares |
Subsidiary, Sale of Stock [Line Items] | |||
Stock split ratio, common stock | 110,000 | ||
Preferred stock, authorized (in shares) | shares | 5,000,000 | 5,000,000 | |
Underwriting discounts and offering costs | $ | $ 6 | ||
IPO | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares sold | shares | 12,650,000 | ||
Offering price (in USD per share) | $ / shares | $ 21 | ||
Net proceeds from sale of stock | $ | $ 248.4 | ||
Over-Allotment Option | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares sold | shares | 1,650,000 | ||
Underwriting discounts and offering costs | $ | $ 17.3 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Segment Reporting (Details) | 12 Months Ended |
Jan. 29, 2022segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Concentration Risks (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 29, 2022 | Jan. 30, 2021 | |
Concentration Risk [Line Items] | ||
Cash and cash equivalents | $ 29,025 | $ 122,953 |
Purchase Benchmark | Supplier Concentration Risk | Supplier One | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.00% | 14.00% |
Purchase Benchmark | Supplier Concentration Risk | Supplier Two | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.00% | |
Amounts Due from Third Party Financial Institutions | ||
Concentration Risk [Line Items] | ||
Cash and cash equivalents | $ 14,100 | $ 7,100 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Jan. 29, 2022 | |
Capitalized Internal-Use Software Costs | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Furniture, fixtures and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 2 years |
Furniture, fixtures and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Software and licenses | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Software and licenses | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Implementation Costs Incurred in Cloud Computing Arrangements that are Service Contracts (Details) | 12 Months Ended |
Jan. 29, 2022 | |
Minimum | |
Capitalized Contract Cost [Line Items] | |
Service contract term | 3 years |
Maximum | |
Capitalized Contract Cost [Line Items] | |
Service contract term | 5 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Loyalty Program (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Accounting Policies [Abstract] | |||
Unredeemed points, expiration period | 13 months | ||
Unredeemed awards, expiration period | 45 days | ||
Accrued loyalty program | $ 13,481 | $ 12,344 | |
Reduction of net sales | $ 1,100 | $ 300 | $ 3,100 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Gift card breakage rate | 4.00% | ||
Net sales | $ 1,278,794 | $ 973,514 | $ 1,036,984 |
Gift Cards | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 1,100 | $ 900 | $ 1,100 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Vendor Allowances (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Accounting Policies [Abstract] | |||
Vendor allowances | $ 3.5 | $ 2.8 | $ 3.2 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Store Pre-Opening Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Accounting Policies [Abstract] | |||
Pre-opening costs | $ 900 | $ 100 | $ 1,000 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Leases (Details) | Jan. 29, 2022 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease term | 2 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease term | 17 years |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Income Taxes (Details) $ in Millions | Jan. 29, 2022USD ($) |
Accounting Policies [Abstract] | |
Accumulated undistributed earnings of foreign subsidiary | $ 4.5 |
Deferred tax liability not recognized for undistributed foreign earnings | $ 0 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Share-Based Compensation (Details) | 5 Months Ended |
Jun. 21, 2021shares | |
Incentive Unit | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares issued, net of forfeitures (in shares) | 13,660,000 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Private Label Credit Card (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Accounting Policies [Abstract] | |||
Marketing and promotional funds | $ 18.5 | $ 10.7 | $ 10 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Employee Benefit Plan (Details) $ in Millions | 12 Months Ended | ||
Jan. 29, 2022USD ($)hour | Jan. 30, 2021USD ($) | Feb. 01, 2020USD ($) | |
Accounting Policies [Abstract] | |||
Defined Contribution Plan, Tax Status [Extensible Enumeration] | Qualified Plan [Member] | ||
Required number of hours | hour | 200 | ||
Age requirement | 21 years | ||
Percentage of maximum employee contribution | 80.00% | ||
Employer matching contribution, percent of match | 50.00% | 50.00% | 50.00% |
Employer matching contribution, percent of participants' eligible contribution | 4.00% | 4.00% | 4.00% |
Contributions | $ | $ 0.7 | $ 0.4 | $ 0.5 |
Summary of Significant Accou_17
Summary of Significant Accounting Policies - Deferred Compensation Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Accounting Policies [Abstract] | |||
Percentage of maximum annual deferral | 80.00% | ||
Percentage of annual earned bonus eligible for contribution | 100.00% | ||
Percentage of contributions vested from outset | 100.00% | ||
Employer matching contribution, percent of match | 50.00% | 50.00% | 50.00% |
Percentage of eligible contributions | 4.00% | 4.00% | 4.00% |
Deferred compensation plan assets | $ 0 | ||
Deferred compensation liabilities | 6.9 | $ 6.5 | |
Current deferred compensation liabilities | $ 0.4 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid and other information technology expenses | $ 5,692 | $ 3,202 |
Prepaid casualty insurance | 3,050 | 1,336 |
Other | 5,944 | 8,130 |
Prepaid expenses and other current assets | $ 14,686 | $ 12,668 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 296,444 | $ 278,957 |
Less: Accumulated depreciation and amortization | (168,879) | (135,701) |
Property and equipment, net | 127,565 | 143,256 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 168,084 | 161,817 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 108,261 | 98,753 |
Software and licenses | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 15,356 | 15,121 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 4,743 | $ 3,266 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and other amortization | $ 35.2 | $ 33.1 | $ 30.2 |
Implementation Costs Incurred_3
Implementation Costs Incurred in Cloud Computing Arrangements that are Service Contracts - Deferred Implementation Costs (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Internal use of third party hosted software, gross | $ 11,877 | $ 6,095 |
Less: Accumulated amortization | (3,892) | (2,245) |
Internal use of third party hosted software, net | $ 7,985 | $ 3,850 |
Implementation Costs Incurred_4
Implementation Costs Incurred in Cloud Computing Arrangements that are Service Contracts - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Amortization expense | $ 1.7 | $ 1.1 | $ 0.8 |
Intangible Assets - Summary (De
Intangible Assets - Summary (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 8,400 | $ 8,400 |
Trade name | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 8,400 | $ 8,400 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) $ in Thousands | 3 Months Ended |
Oct. 30, 2021USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment of indefinite-lived intangible assets | $ 0 |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Accrued Expenses And Liabilities [Line Items] | ||
Accrued payroll and related expenses | $ 31,194 | $ 25,638 |
Accrued inventory-in-transit | 37,156 | 21,749 |
Accrued loyalty program | 13,481 | 12,344 |
Accrued sales return allowance | 4,347 | 3,863 |
Accrued sales and use tax | 4,136 | 5,615 |
Accrued freight | 6,048 | 4,937 |
Term loan interest payable | 1,762 | 3,311 |
Accrued marketing | 5,419 | 4,696 |
Accrued self-insurance liabilities | 2,891 | 2,868 |
Other | 17,700 | 14,467 |
Accrued and other current liabilities | 138,708 | 110,361 |
Gift Cards | ||
Accrued Expenses And Liabilities [Line Items] | ||
Gift cards and deferred revenue | 11,695 | 9,361 |
Deferred revenue | ||
Accrued Expenses And Liabilities [Line Items] | ||
Gift cards and deferred revenue | $ 2,879 | $ 1,512 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Leases [Abstract] | |||
Operating (fixed) lease cost | $ 50,446 | $ 40,192 | $ 58,700 |
Short-term lease cost | 82 | 124 | 170 |
Variable lease cost | 20,655 | 17,550 | 18,237 |
Total lease cost | $ 71,183 | $ 57,866 | $ 77,107 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 29, 2022 | Jan. 30, 2021 | |
Leases [Abstract] | ||
Deferred fixed lease payment | $ 0 | $ 5.8 |
Reduction to lease cost | $ 1.3 | $ 18.6 |
Leases - Maturity Analysis (Det
Leases - Maturity Analysis (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Leases [Abstract] | ||
2022 | $ 58,749 | |
2023 | 59,476 | |
2024 | 52,812 | |
2025 | 43,095 | |
2026 | 31,065 | |
Thereafter | 55,792 | |
Total operating lease liabilities | 300,989 | |
Less: Imputed interest | (48,224) | |
Total operating lease liabilities | 252,765 | |
Less: Current portion of operating lease liabilities | (45,716) | $ (50,998) |
Noncurrent operating lease liabilities | $ 207,049 | $ 246,458 |
Leases - Other Supplementary In
Leases - Other Supplementary Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 59,066 | $ 40,025 | $ 59,894 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 11,912 | 3,814 | 18,202 |
Decrease in right-of-use assets resulting from operating lease modifications or remeasurements | $ 5,190 | $ 6,493 | $ 8,111 |
Weighted average remaining lease term - operating leases (in years) | 6 years | 7 years | 7 years |
Weighted average discount rate - operating leases (as a percent) | 6.00% | 6.00% | 5.00% |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 1,278,794 | $ 973,514 | $ 1,036,984 |
Apparel | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,169,668 | 890,511 | 951,286 |
Non-apparel | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 109,126 | $ 83,003 | $ 85,698 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Gift Cards | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | $ 5.2 | $ 4.8 | |
Loyalty Program | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | $ 10.9 | $ 9 | |
Revenue Benchmark | Customer Concentration Risk | Sales Channel, E-Commerce | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percentage | 63.00% | 70.00% | 48.00% |
Related Party Transactions - Se
Related Party Transactions - Services Agreements with Hot Topic (Details) - USD ($) $ in Thousands | Mar. 21, 2019 | Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 |
Related Party Transaction [Line Items] | ||||
Cost of goods sold | $ 759,826 | $ 643,215 | $ 640,909 | |
Selling, general and administrative expenses | 420,932 | 222,098 | 253,378 | |
Prepaid expenses and other current assets | 14,686 | 12,668 | ||
Affiliated Entity | Amended and Restated Services Agreement with Hot Topic | ||||
Related Party Transaction [Line Items] | ||||
Agreement term | 3 years | |||
Affiliated Entity | Information Technology Services with Hot Topic | ||||
Related Party Transaction [Line Items] | ||||
Total costs | 3,400 | 3,000 | 2,300 | |
Affiliated Entity | Various Services with Hot Topic | ||||
Related Party Transaction [Line Items] | ||||
Total costs | 7,500 | 12,300 | 35,300 | |
Cost of goods sold | 4,900 | 9,600 | 14,500 | |
Selling, general and administrative expenses | 2,600 | 2,700 | $ 20,800 | |
Due to related parties | 700 | 0 | ||
Affiliated Entity | Pass-Through Expenses With Hot Topic | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | $ 1,700 | |||
Prepaid expenses and other current assets | $ 400 |
Related Party Transactions - IT
Related Party Transactions - IT Asset Purchase Agreement with Hot Topic (Details) - Hot Topic - USD ($) $ in Millions | Aug. 01, 2019 | Jun. 14, 2019 |
Related Party Transaction [Line Items] | ||
Asset purchase agreement, purchase price | $ 29.5 | $ 29.5 |
Assets acquired | 3.5 | |
Information Technology-Related Obligations and Personnel | ||
Related Party Transaction [Line Items] | ||
Assets acquired | 1.4 | |
Liabilities transferred | $ 0.1 |
Related Party Transactions - Pr
Related Party Transactions - Promissory Notes Receivable from Parent (Details) - USD ($) $ in Millions | Jun. 14, 2021 | Nov. 26, 2019 | Aug. 01, 2019 | Jul. 31, 2019 | Jun. 14, 2019 | Jun. 06, 2019 | Dec. 20, 2018 | Jan. 30, 2021 |
Hot Topic | Senior Notes | ||||||||
Related Party Transaction [Line Items] | ||||||||
Stated interest rate | 9.25% | |||||||
$61.4M Promissory Note Receivable from Torrid Holding LLC | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Notes receivable from related parties | $ 61.4 | $ 61.4 | ||||||
Annual interest rate on related party note receivable | 3.06% | |||||||
Accrued interest | 4 | |||||||
$20M Promissory Note Receivable from Torrid Holding LLC | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Notes receivable from related parties | $ 20 | 20 | ||||||
Annual interest rate on related party note receivable | 2.78% | |||||||
Accrued interest | 0.9 | |||||||
$10M Promissory Note Receivable from Torrid Holding LLC | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Notes receivable from related parties | $ 10 | 10 | ||||||
Annual interest rate on related party note receivable | 2.78% | |||||||
Accrued interest | 0.5 | |||||||
$214.6M Promissory Note Receivable from Torrid Holding LLC | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Notes receivable from related parties | $ 214.6 | 214.6 | ||||||
Annual interest rate on related party note receivable | 1.87% | |||||||
Accrued interest | $ 1.4 | 6.1 | ||||||
Purchase of Senior Participating Preferred Stock from HTI | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Payments to acquire investments | $ 1.2 | $ 213.2 | ||||||
$1.2M Promissory Note Receivable from Torrid Holding LLC | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Notes receivable from related parties | $ 1.2 | 1.2 | ||||||
Annual interest rate on related party note receivable | 1.87% | |||||||
$12M Promissory Note Receivable from Torrid Holding LLC | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Notes receivable from related parties | $ 12 | 12 | ||||||
Annual interest rate on related party note receivable | 1.59% | |||||||
Accrued interest | $ 0.2 | |||||||
$300M Promissory Note Receivable from Torrid Holding LLC | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Notes receivable from related parties | $ 300 | |||||||
Annual interest rate on related party note receivable | 1.02% |
Related Party Transactions - Sp
Related Party Transactions - Sponsor Advisory Services Agreement (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Related Party Transaction [Line Items] | |||
Payments to related parties | $ 6,562 | $ (626) | $ (4,435) |
Affiliated Entity | Strategic Planning and Other Related Services with Sycamore | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 0 | 0 | |
Payments to related parties | 0 | 0 | 0 |
Affiliated Entity | Reimbursement for Management Expenses with Sycamore | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 0 | 0 | |
Reimbursements | $ 700 | $ 100 | $ 100 |
Related Party Transactions - Ot
Related Party Transactions - Other Related Party Transactions (Details) - USD ($) $ in Thousands | Aug. 01, 2019 | Jun. 14, 2019 | Sep. 30, 2020 | Apr. 30, 2020 | May 31, 2021 | Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | Jul. 31, 2019 |
Related Party Transaction [Line Items] | |||||||||
Cost of goods sold | $ 759,826 | $ 643,215 | $ 640,909 | ||||||
Purchase Benchmark | Supplier Concentration Risk | MGF Sourcing US, LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Concentration risk, percentage (less than) | 12.00% | 10.00% | 10.00% | ||||||
Affiliated Entity | Purchase of Senior Participating Preferred Stock from HTI | |||||||||
Related Party Transaction [Line Items] | |||||||||
Payments to acquire investments | $ 1,200 | $ 213,200 | |||||||
Affiliated Entity | $214.6M Promissory Note Receivable from Torrid Holding LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Notes receivable from related parties | $ 214,600 | $ 214,600 | |||||||
Accrued interest | 6,100 | $ 1,400 | |||||||
Affiliated Entity | Purchase of Supplies from MGF Sourcing US, LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Cost of goods sold | $ 55,400 | 45,400 | $ 37,400 | ||||||
Due to related parties | 12,100 | 8,000 | |||||||
Affiliated Entity | Purchase of Supplies from HU Merchandising, LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Cost of goods sold | 700 | 400 | 700 | ||||||
Due to related parties | $ 100 | $ 100 | |||||||
Affiliated Entity | Equity Funding from Sycamore | Maximum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Equity funding commitment | $ 20,000 | $ 20,000 | |||||||
Affiliated Entity | Licensing Services by Hot Topic | |||||||||
Related Party Transaction [Line Items] | |||||||||
Cost of goods sold | $ 100 | ||||||||
Management | Consulting Services Agreement with CFO | |||||||||
Related Party Transaction [Line Items] | |||||||||
Monthly consulting fee | $ 10 |
Debt Financing Arrangements - S
Debt Financing Arrangements - Schedule (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Debt Instrument [Line Items] | ||
Less: current portion of term loan, net of unamortized original issue discount and debt financing costs | $ (20,519) | $ (11,506) |
Total term loan, net of current portion and unamortized original issue discount and debt financing costs | 320,841 | 193,406 |
Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total | 0 | 0 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Term loan | 350,000 | |
Less: current portion of unamortized original issue discount and debt financing costs | (1,356) | (1,494) |
Less: noncurrent portion of unamortized original issue discount and debt financing costs | (7,284) | (4,294) |
Total | 341,360 | 204,912 |
Less: current portion of term loan, net of unamortized original issue discount and debt financing costs | (20,519) | (11,506) |
Total term loan, net of current portion and unamortized original issue discount and debt financing costs | 320,841 | 193,406 |
Term Loan | Amended Term Loan Credit Agreement | ||
Debt Instrument [Line Items] | ||
Term loan | 0 | 210,700 |
Term Loan | New Term Loan Credit Agreement | ||
Debt Instrument [Line Items] | ||
Term loan | $ 350,000 | $ 0 |
Debt Financing Arrangements - M
Debt Financing Arrangements - Maturity (Details) - Term Loan $ in Thousands | Jan. 29, 2022USD ($) |
Debt Instrument [Line Items] | |
2022 | $ 21,875 |
2023 | 17,500 |
2024 | 17,500 |
2025 | 17,500 |
2026 | 17,500 |
2027 | 17,500 |
2028 | 240,625 |
Total | $ 350,000 |
Debt Financing Arrangements - N
Debt Financing Arrangements - New Term Loan Credit Agreement (Details) - USD ($) | Jun. 14, 2021 | Jan. 29, 2022 | Jan. 30, 2021 |
Debt Instrument [Line Items] | |||
Cash distributions from borrowings | $ 131,700,000 | ||
Term Loan | |||
Debt Instrument [Line Items] | |||
Interest rate | 6.00% | ||
Outstanding borrowing | $ 341,360,000 | $ 204,912,000 | |
Term Loan | New Term Loan Credit Agreement | |||
Debt Instrument [Line Items] | |||
Aggregate amount of debt | 350,000,000 | ||
OID | 3,500,000 | ||
Financing costs paid | 6,000,000 | ||
Proceeds from issuance of long-term debt | $ 346,500,000 | ||
Repayment of principal, percentage | 1.25% | ||
Prepayment of principal, period | 102 days | ||
Cash flow threshold | $ 10,000,000 | ||
Interest expense | 14,000,000 | ||
OIF and financing costs | $ 900,000 | ||
Debt term | 7 years | ||
Term Loan | New Term Loan Credit Agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Prepayment of principal, percentage | 0.00% | ||
Penalty, percentage | 1.00% | ||
Term Loan | New Term Loan Credit Agreement | Maximum | |||
Debt Instrument [Line Items] | |||
Prepayment of principal, percentage | 50.00% | ||
Penalty, percentage | 2.00% | ||
Term Loan | New Term Loan Credit Agreement | Fed Funds Effective Rate | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as a percent) | 0.50% | ||
Term Loan | New Term Loan Credit Agreement | Fed Funds Effective Rate | Minimum | Base Rate | |||
Debt Instrument [Line Items] | |||
Interest rate floor | 1.75% | ||
Term Loan | New Term Loan Credit Agreement | Prime Rate | Minimum | Base Rate | |||
Debt Instrument [Line Items] | |||
Interest rate floor | 1.75% | ||
Term Loan | New Term Loan Credit Agreement | LIBOR | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as a percent) | 1.00% | ||
Term Loan | New Term Loan Credit Agreement | LIBOR | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as a percent) | 5.50% | ||
Term Loan | New Term Loan Credit Agreement | LIBOR | Minimum | Base Rate | |||
Debt Instrument [Line Items] | |||
Interest rate floor | 1.75% | ||
Term Loan | New Term Loan Credit Agreement | LIBOR | Minimum | LIBOR | |||
Debt Instrument [Line Items] | |||
Interest rate floor | 0.75% | ||
Term Loan | New Term Loan Credit Agreement | Base Rate | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as a percent) | 4.50% | ||
Term Loan | New Term Loan Credit Agreement | Base Rate | Minimum | LIBOR | |||
Debt Instrument [Line Items] | |||
Interest rate floor | 0.75% |
Debt Financing Arrangements - T
Debt Financing Arrangements - Term Loan Credit Agreement (Details) | Jun. 14, 2021USD ($) | Sep. 17, 2020USD ($) | Aug. 01, 2019USD ($) | Jun. 14, 2019USD ($) | Sep. 30, 2020USD ($) | Jan. 29, 2022USD ($) | Oct. 30, 2021 | Jul. 31, 2021USD ($) | May 01, 2021USD ($) | Jan. 30, 2021 | Oct. 31, 2020USD ($) | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Jan. 29, 2022USD ($) | Jan. 30, 2021USD ($) | Feb. 01, 2020USD ($) |
Debt Instrument [Line Items] | ||||||||||||||||||
Write off of unamortized original issue discount and deferred financing costs for Amended Term Loan Credit Agreement | $ 5,231,000 | $ 0 | $ 0 | |||||||||||||||
Purchase of Senior Participating Preferred Stock from HTI | Affiliated Entity | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Payments to acquire investments | $ 1,200,000 | $ 213,200,000 | ||||||||||||||||
Parent | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Cash distributions | 10,000,000 | |||||||||||||||||
Hot Topic | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Asset purchase agreement, purchase price | $ 29,500,000 | 29,500,000 | ||||||||||||||||
Amended Term Loan Credit Agreement | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Financing costs paid | 0 | 525,000 | ||||||||||||||||
Amended Term Loan Credit Agreement | Term Loan | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate amount of debt | $ 260,000,000 | |||||||||||||||||
OID | $ 2,900,000 | |||||||||||||||||
Percentage of principal amount repaid, first four fiscal quarters | 0.75% | |||||||||||||||||
Percentage of principal amount repaid, eight fiscal quarters thereafter | 1.25% | |||||||||||||||||
Percentage of principal amount repaid, ten fiscal quarters thereafter | 1.875% | |||||||||||||||||
Prepayment of principal, period | 102 days | |||||||||||||||||
Cash flow threshold | $ 2,000,000 | |||||||||||||||||
Percentage of difference in capital expenditure and prior year Adjusted EBITDA to be applied to increase the maximum threshold in next fiscal year | 50.00% | |||||||||||||||||
Interest expense | 8,200,000 | 19,200,000 | 14,900,000 | |||||||||||||||
OIF and financing costs | $ 400,000 | $ 1,400,000 | $ 900,000 | |||||||||||||||
Debt term | 5 years 6 months | |||||||||||||||||
Amended Term Loan Credit Agreement | Term Loan | Minimum | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Prepayment of principal, percentage | 25.00% | |||||||||||||||||
Amended Term Loan Credit Agreement | Term Loan | Maximum | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Prepayment of principal, percentage | 75.00% | |||||||||||||||||
Total debt to Adjusted EBITDA | 1.85 | 2.10 | 2.10 | 2.35 | 2.50 | 3.10 | 3.35 | 3.35 | 3.35 | 3.60 | ||||||||
Cash and cash equivalents on-hand excluded from total debt calculation | $ 20,000,000 | $ 30,000,000 | $ 40,000,000 | $ 20,000,000 | $ 20,000,000 | |||||||||||||
Capital expenditures limit | 37.50% | |||||||||||||||||
Amended Term Loan Credit Agreement | Term Loan | Fed Funds Effective Rate | Base Rate | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable rate (as a percent) | 50.00% | |||||||||||||||||
Amended Term Loan Credit Agreement | Term Loan | Base Rate | Minimum | LIBOR | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable rate (as a percent) | 5.75% | |||||||||||||||||
Amended Term Loan Credit Agreement | Term Loan | Base Rate | Maximum | LIBOR | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable rate (as a percent) | 6.00% | |||||||||||||||||
Amended Term Loan Credit Agreement | Term Loan | LIBOR | Base Rate | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable rate (as a percent) | 1.00% | |||||||||||||||||
Amended Term Loan Credit Agreement | Term Loan | LIBOR | Minimum | LIBOR | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable rate (as a percent) | 6.75% | |||||||||||||||||
Amended Term Loan Credit Agreement | Term Loan | LIBOR | Maximum | LIBOR | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable rate (as a percent) | 7.00% | |||||||||||||||||
Term Loan Credit Agreement | Term Loan | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Financing costs paid | 4,600,000 | |||||||||||||||||
Proceeds from issuance of long-term debt | $ 257,100,000 | |||||||||||||||||
Term Loan | Amended Term Loan Credit Agreement | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Payment of long-term debt | $ 207,500,000 | $ 35,000,000 | ||||||||||||||||
Interest payments | 1,200,000 | 200,000 | ||||||||||||||||
Amendment fee | $ 500,000 | |||||||||||||||||
Prepayment penalty | 2,100,000 | |||||||||||||||||
Write off of unamortized original issue discount and deferred financing costs for Amended Term Loan Credit Agreement | 5,200,000 | |||||||||||||||||
Prepayment penalty incurred | $ 2,100,000 |
Debt Financing Arrangements -_2
Debt Financing Arrangements - Senior Secured Asset-Based Revolving Credit Facility (Details) - USD ($) | Jun. 14, 2021 | Mar. 31, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | Nov. 04, 2017 | Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | Jun. 14, 2019 | Oct. 23, 2017 | May 31, 2015 |
Line of Credit Facility [Line Items] | |||||||||||
Maximum restricted payment | $ 109,800,000 | $ 55,000,000 | |||||||||
Standby letters of credit issued and outstanding | 5,300,000 | 4,500,000 | |||||||||
Write off of unamortized original issue discount and deferred financing costs for Amended Term Loan Credit Agreement | $ 5,231,000 | 0 | $ 0 | ||||||||
Revolving Credit Facility | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Maximum borrowing capacity | $ 150,000,000 | $ 70,000,000 | $ 100,000,000 | $ 50,000,000 | |||||||
Additional borrowing capacity | $ 50,000,000 | $ 30,000,000 | |||||||||
Percentage of eligible credit card receivables | 90.00% | ||||||||||
Percentage of appraised net orderly liquidation value of eligible inventory | 90.00% | ||||||||||
Maximum borrowing capacity including additional commitments | $ 200,000,000 | ||||||||||
Interest rate at end of period | 4.00% | ||||||||||
Fixed charge coverage ratio | 1 | ||||||||||
Percentage of the loan cap | 10.00% | ||||||||||
Availability | $ 123,900,000 | 65,500,000 | |||||||||
Borrowings | $ 50,000,000 | ||||||||||
Repayments | $ 50,000,000 | ||||||||||
Interest payments | 600,000 | 600,000 | 500,000 | ||||||||
Revolving Credit Facility | Line of Credit | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Financing costs incurred | $ 700,000 | $ 500,000 | |||||||||
Write off of unamortized original issue discount and deferred financing costs for Amended Term Loan Credit Agreement | 100,000 | ||||||||||
Unamortized financing costs | $ 100,000 | ||||||||||
Debt term | 5 years | ||||||||||
Amortization of financing costs | $ 100,000 | $ 100,000 | $ 100,000 | ||||||||
Revolving Credit Facility | Minimum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Unutilized commitment, commitment fee percentage | 0.25% | ||||||||||
Fixed charge coverage ratio | 1 | ||||||||||
Specified availability | $ 7,000,000 | ||||||||||
Percentage of availability to maximum borrowing amount on pro forma basis and pro forma compliant | 15.00% | ||||||||||
Percentage of availability to maximum borrowing amount on pro forma basis | 20.00% | ||||||||||
Revolving Credit Facility | Maximum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Percentage of appraised net orderly liquidation value of eligible inventory | 92.50% | ||||||||||
Unutilized commitment, commitment fee percentage | 0.375% | ||||||||||
Revolving Credit Facility | Fed Funds Effective Rate | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 0.50% | ||||||||||
Revolving Credit Facility | LIBOR | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 1.00% | ||||||||||
Revolving Credit Facility | Adjusted LIBOR | Minimum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 1.25% | ||||||||||
Revolving Credit Facility | Adjusted LIBOR | Maximum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 1.75% | ||||||||||
Revolving Credit Facility | Base Rate | Minimum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 0.25% | ||||||||||
Revolving Credit Facility | Base Rate | Maximum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 0.75% |
Income Taxes - Income Before Pr
Income Taxes - Income Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 15,010 | $ 38,698 | $ 57,348 |
Foreign | 819 | (3,175) | 3,354 |
Income before provision for income taxes | $ 15,829 | $ 35,523 | $ 60,702 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Current: | |||
Federal | $ 36,410 | $ 9,528 | $ 17,784 |
State | 8,051 | 2,559 | 4,472 |
Foreign | 0 | (37) | 1,263 |
Total current | 44,461 | 12,050 | 23,519 |
Deferred: | |||
Federal | 785 | (157) | (4,008) |
State | 305 | (361) | (623) |
Foreign | 222 | (541) | (55) |
Total deferred | 1,312 | (1,059) | (4,686) |
Total income tax provision | $ 45,773 | $ 10,991 | $ 18,833 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Income Tax Disclosure [Abstract] | ||
Inventory | $ 2,197 | $ 2,010 |
Loyalty reserve | 3,591 | 3,169 |
Accrued bonus | 3,944 | 2,110 |
Deferred rent | 639 | 812 |
Deferred compensation | 1,694 | 1,612 |
Lease liability | 61,112 | 72,837 |
Equity based compensation | 459 | 0 |
Other deferred tax assets | 4,562 | 5,584 |
ROU assets | (52,611) | (62,216) |
Intangible assets | (2,071) | (2,074) |
Depreciation | (16,446) | (16,096) |
Other deferred tax liabilities | (2,197) | (1,609) |
Total net deferred tax assets | $ 4,873 | $ 6,139 |
Income Taxes - Income Tax Rate
Income Taxes - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal rate | 21.00% | 21.00% | 21.00% |
State and local taxes, net of federal benefit | 35.50% | 5.50% | 4.60% |
Share-based compensation | 202.90% | 4.60% | 4.20% |
Liability for uncertain tax positions | 9.40% | (1.20%) | 0.70% |
Information technology services charge | 4.50% | 1.80% | 0.00% |
Non-deductible IPO transaction costs | 11.00% | 0.00% | 0.00% |
Limitation on Section 162(m) officers | 5.80% | 0.00% | 0.00% |
Foreign derived intangible income | (2.00%) | (0.30%) | (0.10%) |
Other differences, net | 1.10% | (0.50%) | 0.60% |
Effective income tax rate | 289.20% | 30.90% | 31.00% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Aug. 01, 2019 | Jun. 14, 2019 | Jul. 31, 2021 | Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 |
Income Tax Disclosure [Abstract] | |||||||
Income tax detriment resulting from share-based awards | $ 300 | ||||||
Accumulated undistributed earnings of foreign subsidiary | 4,500 | ||||||
Unrecognized tax benefits including interest and penalties | 4,000 | $ 2,400 | |||||
Unrecognized tax benefits, net | 3,500 | 2,000 | |||||
Decrease in unrecognized tax benefits is reasonably possible | 300 | ||||||
Decrease in unrecognized tax benefits is reasonably possible, net | 300 | ||||||
Tax expense related to interest and penalties | 500 | 300 | $ 300 | ||||
Asset Acquisition [Line Items] | |||||||
Share-based compensation expense | 159,754 | 7,791 | 11,993 | ||||
Deferred tax | 1,312 | (1,059) | (4,686) | ||||
Hot Topic | |||||||
Asset Acquisition [Line Items] | |||||||
Asset purchase agreement, purchase price | $ 29,500 | $ 29,500 | |||||
Amortizable basis, period | 3 years | ||||||
Difference in net book value and tax amortizable basis of assets acquired | $ 26,000 | ||||||
Net book value of assets acquired | 3,500 | ||||||
Tax amortizable basis | 29,500 | ||||||
Deferred tax | $ 6,700 | ||||||
Incentive Unit | |||||||
Asset Acquisition [Line Items] | |||||||
Share-based compensation expense | $ 111,400 | $ 111,400 | $ 151,166 | $ 7,791 | $ 11,993 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits at the beginning of the fiscal year | $ 2,187 | $ 1,308 | $ 896 |
Tax positions related to the current period | 1,535 | 1,455 | 424 |
Tax positions related to the prior period | (429) | (576) | (12) |
Unrecognized tax benefits at the end of the fiscal year | $ 3,293 | $ 2,187 | $ 1,308 |
Share-Based Compensation - Shar
Share-Based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jul. 31, 2021 | Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense before income taxes | $ 159,754 | $ 7,791 | $ 11,993 | ||
Income tax detriment | 293 | 0 | 0 | ||
Net share-based compensation expense | 160,047 | 7,791 | 11,993 | ||
Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense before income taxes | 4,040 | 0 | 0 | ||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense before income taxes | 3,864 | 0 | 0 | ||
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense before income taxes | 514 | 0 | 0 | ||
Employee stock purchase plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense before income taxes | 170 | 0 | 0 | ||
Incentive Unit | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense before income taxes | $ 111,400 | $ 111,400 | $ 151,166 | $ 7,791 | $ 11,993 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - Narrative - USD ($) $ in Thousands | Jul. 06, 2021 | Jun. 30, 2021 | Jan. 29, 2022 | Jul. 31, 2021 | Jun. 21, 2021 | Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense | $ 159,754 | $ 7,791 | $ 11,993 | |||||
2021 Long-Term Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares authorized (in shares) | 10,687,500 | 10,687,500 | ||||||
Employee stock purchase plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense | $ 170 | 0 | 0 | |||||
Employee stock purchase plan | 2021 Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares authorized (in shares) | 3,650,000 | 3,650,000 | ||||||
Contribution of base earnings towards common stock (as a percent) | 15.00% | 15.00% | ||||||
Purchase price (as a percent) | 85.00% | |||||||
Incentive Unit | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares issued, net of forfeitures (in shares) | 13,660,000 | |||||||
Share-based compensation expense | $ 111,400 | $ 111,400 | $ 151,166 | 7,791 | 11,993 | |||
Shares exchanged as an equivalent for vested incentive units (as shares) | 13,353,122 | |||||||
Restricted stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense | $ 4,040 | 0 | 0 | |||||
Award vesting period | 4 years | |||||||
Unrecognized share-based compensation expense | $ 6,200 | $ 6,200 | ||||||
Weighted average period for compensation expense related to unvested RSUs (in years) | 3 years 1 month 6 days | |||||||
Vesting fair value of RSUs | $ 2,600 | |||||||
Restricted stock units | Fully vested on grant date | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting percentage | 50.00% | |||||||
Restricted stock units | Vest in equal installments on first, second and third anniversaries of IPO date | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting percentage | 50.00% | |||||||
Restricted stock units | Management | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense | $ 2,800 | |||||||
Aggregate value of grants in period | $ 5,700 | |||||||
Award vesting period | 3 years | |||||||
Restricted stock units | Management | Fully vested on grant date | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting percentage | 50.00% | |||||||
Restricted stock units | Management | Vest in equal installments on first, second and third anniversaries of IPO date | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting percentage | 50.00% | |||||||
Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense | $ 3,864 | 0 | 0 | |||||
Unrecognized share-based compensation expense | $ 13,700 | 13,700 | ||||||
Weighted average period for compensation expense related to unvested RSUs (in years) | 2 years 2 months 12 days | |||||||
Vesting fair value of RSUs | $ 2,300 | |||||||
Restricted Stock | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 2 years | |||||||
Restricted Stock | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 4 years | |||||||
Stock options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense | $ 514 | $ 0 | $ 0 | |||||
Award vesting period | 4 years | |||||||
Unrecognized share-based compensation expense | $ 3,300 | $ 3,300 | ||||||
Weighted average period for compensation expense related to unvested RSUs (in years) | 3 years 6 months | |||||||
Vesting expiration period (in years) | 10 years |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Unit Activity (Details) - RSU shares in Thousands | 12 Months Ended |
Jan. 29, 2022$ / sharesshares | |
Shares | |
Nonvested, January 30, 2021 (in shares) | 0 |
Granted (in shares) | 392 |
Vested (in shares) | (105) |
Forfeited (in shares) | (9) |
Nonvested, January 29, 2022 (in shares) | 278 |
Weighted average grant date fair value per share | |
Granted (in USD per share) | $ / shares | $ 26.82 |
Vested (in USD per share) | $ / shares | 27 |
Forfeited (in USD per share) | $ / shares | 27 |
Nonvested, January 29, 2022 (in USD per share) | $ / shares | $ 26.75 |
Share-Based Compensation - Re_2
Share-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock shares in Thousands | 12 Months Ended |
Jan. 29, 2022$ / sharesshares | |
Shares | |
Nonvested, January 30, 2021 (in shares) | 0 |
Granted (in shares) | 866 |
Vested (in shares) | (120) |
Forfeited (in shares) | (214) |
Nonvested, January 29, 2022 (in shares) | 532 |
Weighted average grant date fair value per share | |
Granted (in USD per share) | $ / shares | $ 27 |
Vested (in USD per share) | $ / shares | 27 |
Forfeited (in USD per share) | $ / shares | 27 |
Nonvested, January 29, 2022 (in USD per share) | $ / shares | $ 27 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Jan. 29, 2022USD ($)$ / sharesshares | |
Shares | |
Outstanding, January 30, 2021 (in shares) | 0 |
Granted (in shares) | 342 |
Exercised (in shares) | 0 |
Expired / forfeited (in shares) | (5) |
Outstanding, January 29, 2022 (in shares) | 337 |
Exercisable, January 29, 2022 (in shares) | 0 |
Weighted average exercise price per share | |
Granted (in USD per share) | $ / shares | $ 21.03 |
Expired / forfeited (in USD per share) | $ / shares | 21 |
Outstanding, January 29, 2022 (in USD per share) | $ / shares | $ 21.03 |
Stock Options Additional Disclosures | |
Weighted average remaining contractual life (years) | 9 years 4 months 24 days |
Aggregate intrinsic value | $ | $ 0 |
Share-Based Compensation - St_2
Share-Based Compensation - Stock Option Activity, Valuation Assumptions (Details) | 12 Months Ended |
Jan. 29, 2022$ / shares | |
Share-based Payment Arrangement [Abstract] | |
Weighted average grant date fair value per share (in USD per share) | $ 11.24 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Expected volatility | 56.00% |
Risk-free interest rate | 1.10% |
Expected term | 6 years 3 months 21 days |
Grant date fair value per share (in USD per share) | $ 21 |
Lease Incentives and Other No_3
Lease Incentives and Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Other Liabilities Disclosure [Abstract] | ||
Noncurrent portion of lease incentives | $ 1,053 | $ 1,426 |
Noncurrent income taxes payable | 3,991 | 2,447 |
Lease incentives and other noncurrent liabilities | $ 5,044 | $ 3,873 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Millions | Dec. 20, 2018 | Nov. 20, 2018 | Dec. 26, 2017 | Jan. 29, 2022 | Nov. 08, 2017 |
Purported Note Holders v. Hot Topic, Torrid et al | |||||
Loss Contingencies [Line Items] | |||||
Settlement agreement amount | $ 340 | ||||
Hot Topic Note Holders | |||||
Loss Contingencies [Line Items] | |||||
Ownership percentage of plaintiffs | 37.00% | ||||
Affiliated Entity | |||||
Loss Contingencies [Line Items] | |||||
Redemption of notes | $ 75 | ||||
Conditional investment required for note redemption | $ 75 | ||||
Investment in affiliated entity | 77 | ||||
Capital distribution to parent | $ 61.4 | ||||
Minimum | |||||
Loss Contingencies [Line Items] | |||||
Lease term | 2 years | ||||
Maximum | |||||
Loss Contingencies [Line Items] | |||||
Lease term | 17 years |
Stockholder_s Deficit (Details)
Stockholder’s Deficit (Details) | Jun. 22, 2021shares | Jan. 29, 2022$ / sharesshares | Jan. 30, 2021$ / sharesshares |
Equity [Abstract] | |||
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |
Common stock, par value (in USD per share) | $ / shares | $ 0.01 | $ 0.01 | |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 | |
Preferred stock, par value (in USD per share) | $ / shares | $ 0.01 | ||
Common stock, issued (in shares) | 107,857,625 | 110,000,000 | |
Common stock, outstanding (in shares) | 107,857,625 | 110,000,000 | |
Preferred stock, issued (in shares) | 0 | ||
Preferred stock, outstanding (in shares) | 0 | ||
Stock split ratio, common stock | 110,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Millions | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Earnings Per Share [Abstract] | |||
Potentially dilutive common share equivalents outstanding (in shares) | 0.9 | 0 | 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Assets: | ||
Total assets | $ 11,411 | $ 73,024 |
Liabilities: | ||
Deferred compensation plan liability (noncurrent) | 6,873 | 6,531 |
Total liabilities | 6,873 | 6,531 |
Money Market Funds | ||
Assets: | ||
Money market funds (cash equivalent) | 11,411 | 73,024 |
Quoted Prices in Active Markets for Identical Items (Level 1) | ||
Assets: | ||
Total assets | 11,411 | 73,024 |
Liabilities: | ||
Deferred compensation plan liability (noncurrent) | 0 | 0 |
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Items (Level 1) | Money Market Funds | ||
Assets: | ||
Money market funds (cash equivalent) | 11,411 | 73,024 |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Deferred compensation plan liability (noncurrent) | 6,873 | 6,531 |
Total liabilities | 6,873 | 6,531 |
Significant Other Observable Inputs (Level 2) | Money Market Funds | ||
Assets: | ||
Money market funds (cash equivalent) | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Deferred compensation plan liability (noncurrent) | 0 | 0 |
Total liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Money Market Funds | ||
Assets: | ||
Money market funds (cash equivalent) | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event shares in Millions, $ in Millions | 2 Months Ended |
Mar. 29, 2022USD ($)shares | |
Subsequent Event [Line Items] | |
Number of shares repurchased | shares | 2.1 |
Value of stock repurchased | $ | $ 17.5 |