Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Mar. 23, 2023 | Jul. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jan. 28, 2023 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Petco Health and Wellness Company, Inc | ||
Entity Central Index Key | 0001826470 | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Current Fiscal Year End Date | --01-28 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Shell Company | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 1,130 | ||
Title of 12(b) Security | Class A Common Stock, par value $0.001 per share | ||
Trading Symbol | WOOF | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-39878 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 81-1005932 | ||
Entity Address, Address Line One | 10850 Via Frontera | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92127 | ||
City Area Code | 858 | ||
Local Phone Number | 453-7845 | ||
ICFR Auditor Attestation Flag | true | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Location | San Diego, California | ||
Auditor Firm ID | 42 | ||
Documents Incorporated by Reference | The information required by Part III of this Annual Report on Form 10-K, to the extent not set forth herein, is incorporated herein by reference from the registrant’s definitive proxy statement to be filed pursuant to Regulation 14A in connection with the registrant’s 2023 annual meeting of stockholders within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates. | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 228,963,580 | ||
Class B-1 Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 37,790,781 | ||
Class B-2 Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 37,790,781 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 28, 2023 | Jan. 29, 2022 |
ASSETS | $ 6,612,829 | $ 6,497,941 |
Current assets: | ||
Cash and cash equivalents | 201,901 | 211,602 |
Receivables, less allowance for credit losses ($952 and $931, respectively) | 49,580 | 55,618 |
Merchandise inventories, net | 652,430 | 675,111 |
Prepaid expenses | 51,274 | 42,355 |
Other current assets | 60,809 | 86,091 |
Total current assets | 1,015,994 | 1,070,777 |
Fixed assets, net | 803,327 | 726,922 |
Operating lease right-of-use assets | 1,397,761 | 1,338,465 |
Goodwill | 2,193,941 | 2,183,991 |
Trade name | 1,025,000 | 1,025,000 |
Other long-term assets | 176,806 | 152,786 |
Total assets | 6,612,829 | 6,497,941 |
Current liabilities: | ||
Accounts payable and book overdrafts | 381,213 | 403,976 |
Accrued salaries and employee benefits | 89,929 | 150,630 |
Accrued expenses and other liabilities | 217,556 | 210,872 |
Current portion of operating lease liabilities | 309,766 | 265,897 |
Current portion of long-term debt and other lease liabilities | 22,794 | 21,764 |
Total current liabilities | 1,021,258 | 1,053,139 |
Senior secured credit facilities, net, excluding current portion | 1,628,331 | 1,640,390 |
Operating lease liabilities, excluding current portion | 1,148,155 | 1,096,133 |
Deferred taxes, net | 303,121 | 318,355 |
Other long-term liabilities | 130,487 | 134,105 |
Total liabilities | 4,231,352 | 4,242,122 |
Commitments and contingencies (Notes 7 and 15) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value: Authorized - 25.0 million shares; Issued and outstanding - none | ||
Additional paid-in-capital | 2,152,342 | 2,133,821 |
Retained earnings | 232,967 | 142,166 |
Accumulated other comprehensive loss | (4,098) | (2,238) |
Total stockholders’ equity | 2,381,477 | 2,274,014 |
Noncontrolling interest | (18,195) | |
Total equity | 2,381,477 | 2,255,819 |
Total liabilities and equity | 6,612,829 | 6,497,941 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common stock value | 228 | 227 |
Class B-1 Common Stock | ||
Stockholders' equity: | ||
Common stock value | 38 | 38 |
Class B-2 Common Stock | ||
Stockholders' equity: | ||
Common stock value |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jan. 28, 2023 | Jan. 29, 2022 |
Allowance for credit loss, current | $ 952 | $ 931 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A Common Stock | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares, issued | 228,300,000 | 227,200,000 |
Common stock, shares, outstanding | 228,300,000 | 227,200,000 |
Class B-1 Common Stock | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares, issued | 37,800,000 | 37,800,000 |
Common stock, shares, outstanding | 37,800,000 | 37,800,000 |
Class B-2 Common Stock | ||
Common stock, par value per share | $ 0.000001 | $ 0.000001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares, issued | 37,800,000 | 37,800,000 |
Common stock, shares, outstanding | 37,800,000 | 37,800,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | ||
Income Statement [Abstract] | ||||
Net sales | $ 6,035,967 | $ 5,807,149 | $ 4,920,202 | |
Cost of sales | 3,608,860 | 3,380,539 | 2,813,464 | |
Gross profit | 2,427,107 | 2,426,610 | 2,106,738 | |
Selling, general and administrative expenses | 2,201,548 | 2,160,539 | 1,912,314 | |
Operating income | 225,559 | 266,071 | 194,424 | |
Interest income | (1,032) | (62) | (653) | |
Interest expense | 101,643 | 77,397 | 219,083 | |
Loss on extinguishment and modification of debt | 20,838 | 17,549 | ||
Other non-operating loss (income) | 12,667 | (34,497) | ||
Income (loss) before income taxes and income from equity method investees | 112,281 | 202,395 | (41,555) | |
Income tax expense (benefit) | 35,347 | 53,473 | (3,337) | |
Income from equity method investees | (12,976) | (10,883) | (6,482) | |
Net income (loss) | 89,910 | 159,805 | (31,736) | |
Net loss attributable to noncontrolling interest | (891) | (4,612) | (5,253) | |
Net income (loss) attributable to Class A and B-1 common stockholders | $ 90,801 | $ 164,417 | $ (26,483) | |
Net income (loss) per Class A and B-1 common share (1): | ||||
Basic | [1] | $ 0.34 | $ 0.62 | $ (0.13) |
Diluted | [1] | $ 0.34 | $ 0.62 | $ (0.13) |
Weighted average shares used in computing net income (loss) per Class A and B-1 common share (1): | ||||
Basic | [1] | 265,522 | 264,261 | 210,683 |
Diluted | [1] | 265,951 | 265,338 | 210,683 |
[1] Amounts for periods prior to the Company’s conversion to a Delaware corporation have been retrospectively adjusted to give effect to the organizational transactions described in Note 1. See Note 12 for further discussion. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 89,910 | $ 159,805 | $ (31,736) |
Net loss attributable to noncontrolling interest | (891) | (4,612) | (5,253) |
Net income (loss) attributable to Class A and B-1 common stockholders | 90,801 | 164,417 | (26,483) |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustment | 194 | (963) | (905) |
Unrealized loss on derivatives | (2,180) | 0 | (86) |
Losses on derivatives reclassified to income | 127 | 0 | 7,989 |
Total other comprehensive (loss) income, net of tax | (1,859) | (963) | 6,998 |
Comprehensive income (loss) | 88,051 | 158,842 | (24,738) |
Comprehensive loss attributable to noncontrolling interest | (891) | (4,612) | (5,253) |
Comprehensive income (loss) attributable to Class A and B-1 common stockholders | $ 88,942 | $ 163,454 | $ (19,485) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Members' Interest | [1] | Common Stock | Common Stock Class A Common Stock | Common Stock Class B-1 Common Stock | Common Stock Class B-2 Common Stock | Additional Paid-in Capital | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders'/Members' Equity | Noncontrolling Interest |
Beginning Balance at Feb. 01, 2020 | $ 561,061 | $ 1,358,130 | $ (780,466) | $ (8,273) | $ 569,391 | $ (8,330) | ||||||
Equity-based compensation expense (Note 12) | 12,915 | 9,757 | $ 3,158 | 12,915 | ||||||||
Repurchase of equity | (104) | (104) | (104) | |||||||||
Net income (loss) | (31,736) | (26,483) | (26,483) | (5,253) | ||||||||
Foreign currency translation adjustment, net of tax | (905) | (905) | (905) | |||||||||
Unrealized loss on derivatives, net of tax (Note 9) | (86) | (86) | (86) | |||||||||
Losses on derivatives reclassified to income, net of tax (Note 9) | 7,989 | 7,989 | 7,989 | |||||||||
Contributions of Senior Notes (Note 8) | 573,934 | 573,934 | 573,934 | |||||||||
Conversion to Delaware corporation(Note 1) | $ (1,367,783) | $ 209 | 582,876 | 784,698 | ||||||||
Conversion to Delaware corporation (Note1) (in shares) | 171,224 | 37,791 | 37,791 | |||||||||
Issuance of common stock | 932,197 | 55 | 932,142 | 932,197 | ||||||||
Issuance of common stock (in shares) | 55,200 | |||||||||||
Ending Balance at Jan. 30, 2021 | 2,055,265 | 264 | 2,092,110 | (22,251) | (1,275) | 2,068,848 | (13,583) | |||||
Ending Balance (in shares) at Jan. 30, 2021 | 226,424 | 37,791 | 37,791 | |||||||||
Equity-based compensation expense (Note 12) | 45,603 | 45,603 | 45,603 | |||||||||
Net income (loss) | 159,805 | 164,417 | 164,417 | (4,612) | ||||||||
Foreign currency translation adjustment, net of tax | (963) | (963) | (963) | |||||||||
Unrealized loss on derivatives, net of tax (Note 9) | 0 | |||||||||||
Losses on derivatives reclassified to income, net of tax (Note 9) | 0 | |||||||||||
Issuance of restricted stock awards (in shares) | 55 | |||||||||||
Issuance of common stock | (3,891) | 1 | (3,892) | (3,891) | ||||||||
Issuance of common stock (in shares) | 708 | |||||||||||
Ending Balance at Jan. 29, 2022 | 2,255,819 | 265 | 2,133,821 | 142,166 | (2,238) | 2,274,014 | (18,195) | |||||
Ending Balance (in shares) at Jan. 29, 2022 | 227,187 | 37,791 | 37,791 | |||||||||
Equity-based compensation expense (Note 12) | 61,355 | 61,355 | 61,355 | |||||||||
Net income (loss) | 89,910 | 90,801 | 90,801 | (891) | ||||||||
Foreign currency translation adjustment, net of tax | 194 | 194 | 194 | |||||||||
Unrealized loss on derivatives, net of tax (Note 9) | (2,180) | (2,180) | (2,180) | |||||||||
Losses on derivatives reclassified to income, net of tax (Note 9) | 127 | 127 | 127 | |||||||||
Investment in veterinary joint venture (Note 1) | (21,226) | (40,312) | (40,312) | $ 19,086 | ||||||||
Issuance of common stock | (2,521) | 1 | (2,522) | (2,521) | ||||||||
Issuance of common stock (in shares) | 1,151 | |||||||||||
Ending Balance at Jan. 28, 2023 | $ 2,381,477 | $ 266 | $ 2,152,342 | $ 232,967 | $ (4,098) | $ 2,381,477 | ||||||
Ending Balance (in shares) at Jan. 28, 2023 | 228,338 | 37,791 | 37,791 | |||||||||
[1] Balances prior to the Company's conversion to a Delaware corporation were reclassified to additional paid-in capital to give effect to the organizational transactions described in Note 1. |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||
Foreign currency translation adjustment, net of tax | $ 71 | $ (337) | $ (318) |
Unrealized loss on derivatives, net of tax | (714) | (30) | |
Losses on derivatives reclassified to income, net of tax | 42 | $ 2,804 | |
Investment in veterinary joint venture, net of tax | $ (13,774) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 89,910 | $ 159,805 | $ (31,736) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 193,828 | 172,431 | 174,836 |
Amortization of debt discounts and issuance costs | 4,940 | 5,796 | 24,237 |
Provision for deferred taxes | (893) | 37,741 | 25,548 |
Equity-based compensation | 60,784 | 49,265 | 12,915 |
Impairments, write-offs and losses on sale of fixed and other assets | 1,992 | 10,918 | 15,606 |
Loss on extinguishment and modification of debt | 20,838 | 17,549 | |
Income from equity method investees | (12,976) | (10,883) | (6,482) |
Amounts reclassified out of accumulated other comprehensive income (Note 9) | 168 | 10,793 | |
Change in contingent consideration obligation | (398) | ||
Non-cash operating lease costs | 422,792 | 422,465 | 430,359 |
Other non-operating loss (income) | 12,667 | (34,497) | |
Changes in assets and liabilities: | |||
Receivables | 6,038 | (13,791) | (10,311) |
Merchandise inventories | 22,681 | (136,404) | (60,635) |
Prepaid expenses and other assets | (5,933) | (17,664) | (13,842) |
Accounts payable and book overdrafts | (22,763) | 71,775 | 46,303 |
Accrued salaries and employee benefits | (51,427) | 10,679 | 34,295 |
Accrued expenses and other liabilities | 13,616 | 42,899 | (28,289) |
Operating lease liabilities | (386,259) | (418,210) | (399,557) |
Other long-term liabilities | (3,162) | (14,948) | 27,424 |
Net cash provided by operating activities | 346,003 | 358,215 | 268,615 |
Cash flows from investing activities: | |||
Cash paid for fixed assets | (278,020) | (239,110) | (159,560) |
Cash paid for acquisitions, net of cash acquired (Note 3) | (9,640) | (4,334) | |
Cash paid for interest in veterinary joint venture (Note 1) | (35,000) | ||
Cash paid for investments | (1,000) | ||
Proceeds from investments | 6,135 | 73 | |
Proceeds from sale of assets | 2,336 | 226 | 3,302 |
Net cash used in investing activities | (320,324) | (237,083) | (157,185) |
Cash flows from financing activities: | |||
Borrowings under long-term debt agreements | 123,000 | 1,700,000 | 476,000 |
Repayments of long-term debt | (140,000) | (1,690,861) | (1,554,890) |
Debt refinancing costs | (24,665) | ||
Payments for finance lease liabilities | (5,083) | (3,564) | (3,404) |
Proceeds from employee stock purchase plan and stock option exercises | 3,796 | 4,185 | |
Tax withholdings on stock-based awards | (15,555) | (33) | |
Proceeds from initial public offering, net of issuance costs | 936,041 | ||
Repurchase of equity | (105) | ||
Payment of contingent consideration | (250) | ||
Payment of offering costs | (3,844) | ||
Net cash used in financing activities | (33,842) | (18,782) | (146,608) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (8,163) | 102,350 | (35,178) |
Cash, cash equivalents and restricted cash at beginning of year | 221,890 | 119,540 | 154,718 |
Cash, cash equivalents and restricted cash at end of year | 213,727 | 221,890 | 119,540 |
Supplemental cash flow disclosures: | |||
Interest paid, net | 89,285 | 64,545 | 178,960 |
Capitalized interest | 1,480 | 1,003 | 499 |
Income taxes paid | 14,443 | 16,092 | 2,388 |
Supplemental non-cash investing and financing activities disclosures: | |||
Accounts payable and accrued expenses for capital expenditures | $ 29,051 | 36,935 | 19,723 |
Accrued expenses for offering costs in initial public offering | 3,844 | ||
Accrued tax withholdings on stock-based awards | $ 6,552 | ||
Contributions of Senior Notes (Note 8) | $ 573,934 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 28, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Description of Business and Basis of Presentation Petco Health and Wellness Company, Inc. (together with its consolidated subsidiaries, the “Company”) is a category-defining health and wellness company focused on improving the lives of pets, pet parents, and its own partners with 1,430 pet care centers in 50 states, the District of Columbia and Puerto Rico as of January 28, 2023. The Company also offers an expanded range of consumables, supplies and services through its www.petco.com, www.petcoach.co, www.petinsurancequotes.com, and www.pupbox.com websites. The Company was formed as a Delaware limited liability company under the name PET Acquisition LLC on November 19, 2015 as an acquisition entity controlled by Scooby LP, which was indirectly owned by funds affiliated with CVC Capital Partners, Canada Pension Plan Investment Board, a Canadian company (together with CVC Capital Partners, the “Sponsors”), and certain co-investors. On January 26, 2016, the Company completed a merger (the “Acquisition”) whereby Petco Holdings, Inc. converted from a Delaware corporation to a Delaware limited liability company and became a wholly owned subsidiary of the Company. Under this ownership structure, the Company had four classes of membership units: (i) Common Series A Units; (ii) Common Series B Units; (iii) Common Series C Units; and (iv) Voting Common Units. Corporate Conversion and Public Offerings In January 2021, all of the Company’s Common Series A Units, Common Series B Units, and Common Series C Units were contributed from Scooby LP to a newly formed and wholly owned subsidiary, Scooby Aggregator, LP. The Company then converted to a Delaware corporation pursuant to a statutory conversion and changed its name to Petco Health and Wellness Company, Inc. In connection with the conversion and immediately prior to the Company’s initial public offering, all outstanding membership units were converted into 171.2 million shares of newly-issued Class A common stock, 37.8 million shares of newly-issued Class B-1 common stock, and 37.8 million shares of newly-issued Class B-2 common stock. The existing balances of members’ interest and accumulated deficit prior to the conversion were reclassified to additional paid-in capital in the consolidated balance sheets. This reclassification had no effect on the Company’s results of operations. The rights of the holders of Class A common stock and Class B-1 common stock are identical in all respects, except that Class B-1 common stock does not vote on the election or removal of the Company’s directors. The rights of the holders of Class B-2 common stock differ from the rights of the holders of Class A common stock and Class B-1 common stock in that holders of Class B-2 common stock only possess the right to vote on the election or removal of the Company’s directors. On January 19, 2021, the Company completed its initial public offering of 55.2 million newly-issued shares of its Class A common stock. The price was $ 18.00 per share. The Company received net cash proceeds of approximately $ 936.0 million from the initial public offering after deducting underwriting discounts, commissions, and offering expenses through January 30, 2021, with $ 3.8 million of accrued offering expenses reflected in accrued expenses and other liabilities in the consolidated balance sheets. The net proceeds from the initial public offering were used to pay a portion of the principal amount and accrued interest on the Company’s debt obligations. Refer to Note 7 and Note 8 for further discussion on the Company’s use of proceeds from the initial public offering. In June 2021, Scooby Aggregator, LP, the Company’s principal stockholder, completed the sale of 25.3 million existing shares of Class A common stock in connection with a secondary offering. The offering price was $ 24.00 per share. The Company received no proceeds from the secondary offering. Expenses incurred by the Company related to the secondary offering were not material. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Petco Health and Wellness Company, Inc., its wholly owned subsidiaries, and a variable interest entity for which it was the primary beneficiary prior to the transaction described below. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates are based on information that is currently available and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could vary from those estimates under different assumptions or conditions. Fiscal Year The Company’s fiscal year ends on the Saturday closest to January 31, resulting in years of either 52 or 53 weeks. All references to a fiscal year refer to the fiscal year ending on the Saturday closest to January 31 of the following year. For example, references to fiscal 2022 refer to the fiscal year that began on January 30, 2022 and ended on January 28, 2023. Fiscal 2022, 2021 and 2020 included 52 weeks. Segment Reporting Operating segments are components of an enterprise about which separate financial information is available and is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CEO serves as the Company’s CODM. The Company manages its business as one reportable operating segment which is designed to sell pet food, supplies and companion animals, and services to pet parents across pet care center and online channels. Cash and Cash Equivalents Cash equivalents represent all liquid investments with original maturities of three months or less and include money market mutual funds. The Company maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. The Company has not experienced any losses related to these balances. Included in the Company’s cash and cash equivalents are credit and debit card receivables from banks, which typically settle within five business days, of $ 40.0 million and $ 35.9 million at January 28, 2023 and January 29, 2022 , respectively. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets to the total amounts reported in the consolidated statements of cash flows. Restricted cash is held in a trust used for certain employee benefit costs. January 28, January 29, Cash and cash equivalents $ 201,901 $ 211,602 Restricted cash included in other current assets 11,826 10,288 Total cash, cash equivalents and restricted cash in $ 213,727 $ 221,890 Outstanding checks in excess of funds on deposit (book overdrafts) totaled $ 27.4 million and $ 61.5 million at January 28, 2023 and January 29, 2022 , respectively, and are reflected in accounts payable and book overdrafts in the consolidated balance sheets. Vendor Rebates and Allowances Most of the Company’s receivables are due from vendors. Receivables are stated net of an allowance for estimated credit losses, which is determined by continually evaluating individual receivables, the vendor’s financial condition and current and expected economic conditions. The additions and deductions to the allowance for estimated credit losses were not material for all periods presented. The Company receives vendor allowances, primarily in the form of cooperative advertising reimbursements, rebate incentives, prompt purchase discounts, and vendor compliance charges pursuant to agreements with certain vendors. Substantially all vendor allowances are initially deferred as a reduction of the cost of inventory purchased and recorded as a reduction to cost of sales in the consolidated statements of operations as the inventory is sold. Vendor rebates and allowances that are identified as specific, incremental and identifiable costs incurred by the Company in selling the vendors’ products are classified as a reduction of selling, general and administrative expenses in the consolidated statements of operations as the costs are incurred, as the related costs are also classified as selling, general and administrative expenses. Merchandise Inventories Merchandise inventories represent finished goods and are stated at the lower of cost or net realizable value. Cost is determined by the average-cost method and includes inbound freight charges. Physical inventories are performed on a regular basis at pet care center locations and cycle counts are performed for inventory at distribution centers. During the period between counts at pet care center locations, the Company accrues for estimated losses related to inventory shrinkage based on historical inventory shrinkage results and current trends in the business. Inventory shrinkage may occur due to theft, loss, or the deterioration of goods, among other reasons. The Company assesses its inventory for estimated obsolescence or unmarketable inventory and writes down the difference between the cost of inventory and the estimated market value based upon historical mark-downs, supply on-hand and assumptions about future sales. Fixed Assets Fixed assets are stated at cost or fair value as of the date of the Acquisition less accumulated depreciation and amortization. Pet care center facilities and equipment under finance leases are recorded at the present value of lease payments at the inception of the lease. Maintenance and minor repairs are expensed as incurred. Buildings, equipment, furniture and fixtures are depreciated using the straight-line method over the estimated useful life of the asset. Leasehold and building improvements are amortized using the straight-line method over the term of the lease or the estimated useful life of the improvement, whichever is shorter. Land is not depreciated. Amortization of fixed assets financed through finance leases is included in depreciation and amortization expense. The Company’s fixed assets are generally depreciated or amortized using the following estimated useful lives: Buildings 30 years Equipment 3 to 7 years Furniture and fixtures 4 to 7 years Leasehold and building improvements 5 to 10 years Costs incurred to develop internal-use software during the application development stage, which include costs to design the software configuration and interfaces, coding, installation and testing, are capitalized and reported at cost, less accumulated amortization. Costs of significant upgrades and enhancements that result in additional functionality are also capitalized, whereas costs incurred for maintenance and minor upgrades and enhancements are expensed as incurred. Software and capitalized development costs are included in the Company’s equipment fixed asset category and are amortized using the straight-line method over the estimated useful life of the asset. The Company assesses its fixed assets, including internal-use software, for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The review of recoverability is based on estimates of the undiscounted future cash flows expected to be generated by an asset (or group of assets) at a pet care center level. If impairment exists due to the inability to recover the asset’s carrying value, impairment losses are measured as the amount by which the asset’s carrying value exceeds its fair value using the income approach and are recorded as a reduction of the related asset and charged to the consolidated statements of operations. Goodwill Goodwill represents the excess of the cost of acquired businesses over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed. Goodwill is not amortized. The Company performs its annual impairment test during the fourth quarter of each fiscal year, or more frequently when warranted by events or changes in circumstances. The Company has the option to first perform a qualitative assessment of its goodwill to determine whether it is necessary to perform a quantitative impairment test. If the Company concludes it is more likely than not that its goodwill is impaired, management evaluates the recoverability of goodwill by comparing the carrying value of the Company’s reporting unit to the fair value. An impairment charge is recorded for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the loss recognized not exceeding the total amount of goodwill allocated to that reporting unit. The Company has one reporting unit. In cases where the quantitative test is performed, the fair value of the Company’s reporting unit is estimated by a third party valuation firm. Trade Name The Company’s trade name has an indefinite life. The Company performs its annual impairment test during the fourth quarter of each fiscal year, or more frequently when warranted by events or changes in circumstances. The Company also has the option to first perform a qualitative assessment of its trade name to determine whether it is necessary to perform a quantitative impairment test. In cases where the quantitative test is performed, the fair value of the Company’s trade name is estimated by a third party valuation firm. Significant assumptions inherent in the valuation methodologies employed by the third party valuation firm could include, but are not limited to, prospective financial information, growth rates, discount rates and comparable multiples from publicly traded companies in similar industries. An impairment charge is recorded for the amount by which the carrying amount of the trade name exceeds its fair value. Joint Ventures, Equity Method Investments, and Variable Interest Entities Investments for which the Company exercises significant influence but does not have control are accounted for under the equity method. Equity method investment activity is primarily related to a 50 % joint venture with Grupo Gigante, S.A.B. de C.V. (the “Mexico joint venture”) to establish Petco locations in Mexico. The Company’s share of the investee’s results is presented as either income or loss from equity method investees in the accompanying consolidated statements of operations. The equity method of accounting is applicable for the Mexico joint venture as the Company does not own more than 50% of voting power, but has significant influence over the operation and financial policies of the investee. The joint venture is not material to the Company’s consolidated financial statements. The Mexico joint venture purchases certain inventory items and pet care center assets from the Company. The Company also receives royalties from the Mexico joint venture for the use of its trademarks. Revenues generated from these transactions were not material in fiscal 2022, 2021, and 2020. The cumulative unrealized foreign currency adjustment on the translation of the Company’s investment in the joint venture and the foreign currency translation impact of the royalty receivable are recorded in accumulated other comprehensive income (“AOCI”), net of tax. The Company consolidates variable interest entities (“VIEs”) where it has been determined that the Company is the primary beneficiary of those entities’ operations. The Company held a 50 % investment in a joint venture with a domestic partner to build and operate veterinary clinics in Petco locations, which were previously accounted for under the equity method. In March 2019, the Company entered into an amended agreement governing the joint venture’s operations and determined that the Company had the power to direct the activities most important to the VIE. As a result, the joint venture was a VIE for which the Company was the primary beneficiary. Under the amended agreement, the domestic partner provided certain management and support services to the joint venture. These services included administrative, financial reporting, compliance, and technology support services in connection with the operation and growth of the joint venture. As compensation for these services, the joint venture paid the domestic partner a quarterly joint venture management fee equal to a portion of clinic revenues, subject to a minimum fixed fee. The Company incurred and recorded $ 0.7 million, $ 2.5 million, and $ 2.0 million of joint venture management fees under this agreement in fiscal 2022, 2021, and 2020, respectively, which were included in selling, general and administrative expenses in the consolidated statements of operations. In May 2022, the Company completed the purchase of the remaining 50 % of the issued and outstanding membership interests of the joint venture, which is now a wholly owned subsidiary of the Company, for cash consideration of $ 35.0 million. Direct transaction costs related to this purchase were not material. Fair Value Measurements Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would conduct a transaction, in addition to the assumptions that market participants would use when pricing the related assets or liabilities, including non-performance risk. A three-level hierarchy prioritizes the inputs to valuation techniques used to measure fair value. 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 measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 — Unobservable inputs for the asset or liability. The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, trade accounts payable, and accrued expenses and other current liabilities approximate fair value based on the short-term maturities of these instruments. Refer to Notes 7, 9 and 10 for fair value disclosures for the senior secured term credit facilities, derivatives, and other types of assets and liabilities measured at fair value, respectively. Self-Insurance Reserves The Company is self-insured for workers’ compensation, general, auto liability and employee-related health care benefits, a portion of which is paid by the Company’s employees. Additionally, the Company has insurance coverage to limit its exposure above a per occurrence retention limit. These insurance policies have stated maximum coverage limits after which the Company bears the risk of loss. The Company determines the related liabilities using a number of factors including historical experience and trends related to claims and payments, information provided by the Company’s insurance brokers and actuaries, an estimate of incurred but not reported claims and industry experience and trends. Estimates of future claim costs for workers’ compensation, general, auto liability and employee-related health care benefits are recorded on an undiscounted basis. All estimates of ultimate loss and loss adjustment expense and resulting reserves are subject to inherent variability caused by the nature of the insurance process. The potentially long period of time between the reporting of an occurrence of an incident and the final resolution of a claim and the possible effects of changes in the legal, social and economic environments contribute to this variability. The Company reports self-insurance liabilities gross of insurance recoveries. As of January 28, 2023, insurance recoveries of $ 7.0 million and $ 16.4 million were recorded in other current assets and other long-term assets, respectively. As of January 29, 2022, insurance recoveries of $ 5.7 million and $ 15.9 million were recorded in other current assets and other long-term assets, respectively. Self-insurance reserves are reflected in the consolidated balance sheets as follows (in thousands): January 28, January 29, Current: Workers’ compensation and employee-related $ 27,175 $ 23,699 General and auto liability reserves 5,678 4,733 $ 32,853 $ 28,432 Non-current: Workers’ compensation reserve $ 40,336 $ 44,706 General and auto liability reserves 12,444 11,780 $ 52,780 $ 56,486 The current portion and non-current portion of self-insurance reserves for workers’ compensation and employee-related health care benefits are included in accrued salaries and employee benefits and other long-term liabilities, respectively, in the consolidated balance sheets. The current portion and non-current portion of self-insurance reserves for general and auto liability costs are included in accrued expenses and other liabilities and other long-term liabilities, respectively, in the consolidated balance sheets. Revenue Recognition The Company recognizes revenue when control of promised goods or services is transferred to customers, in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. See Note 2 for further discussion on revenue recognition. Cost of Sales Cost of sales includes the following types of expenses: • Direct costs (net of vendor rebates, allowances and discounts for products sold) including inbound freight charges; • Shipping and handling costs associated with sales to customers; • Freight costs associated with moving merchandise inventories; • Inventory shrinkage costs and write-downs; • Payroll costs of pet groomers, trainers, veterinarians and other direct costs of services; and • Costs associated with operating the Company’s distribution centers including payroll, occupancy costs and depreciation Selling, General and Administrative Expenses Selling, general and administrative expenses include the following types of expenses: • Payroll and benefit costs of pet care center and corporate employees; • Occupancy and operating costs of pet care center and corporate facilities; • Depreciation and amortization related to pet care center and corporate assets; • Credit card fees; • Store pre-opening and remodeling costs; • Advertising costs; and • Other selling and administrative costs Advertising Expenses The Company records advertising expense as incurred and classifies advertising costs within selling, general and administrative expenses in the consolidated statements of operations. The Company’s advertising expenses, net of cooperative advertising reimbursements, were $ 203.7 million, $ 227.9 million, and $ 168.4 million for fiscal 2022, 2021, and 2020, respectively. Vendor cooperative advertising reimbursements reduced total advertising expense by $ 10.0 million, $ 32.5 million, and $ 25.7 million for fiscal 2022, 2021, and 2020, respectively. Leases The majority of the Company’s lease liabilities are real estate operating leases from which pet care center, corporate support, and distribution operations are conducted. The Company also leases equipment, vehicles, and certain pet care center locations under finance leases. Lease terms generally do not include options to terminate the lease and only include options to extend the lease, if it is reasonably certain that the option will be exercised. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the consolidated balance sheet as an operating or finance lease at the commencement of the lease agreement. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term. Operating lease assets represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. The Company uses a collateralized incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Operating leases typically require payment of certain non-lease costs, such as real estate taxes, common area maintenance and insurance. These components comprise the majority of the Company’s variable lease costs and are excluded from the present value of lease liabilities unless an event occurs that results in the payments becoming fixed for the remaining term. The remaining lease and non-lease components are accounted for together as a single lease component for all underlying classes of assets. Operating lease assets are adjusted for lease incentives, initial direct costs, impairments, and exit or disposal costs. Operating lease costs are recognized on a straight-line basis from the commencement date to the end of the lease term. Operating lease costs relating to distribution centers are included in cost of sales, and operating lease costs relating to pet care center and corporate support locations are included in selling, general and administrative expenses in the consolidated statements of operations. Amortization on finance lease right-of-use assets relating to distribution centers are included in cost of sales, and amortization on finance lease right-of-use assets relating to pet care center and corporate support locations are included in selling, general and administrative expenses in the consolidated statements of operations. Interest on finance lease right-of-use assets is included in interest expense in the consolidated statements of operations. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company’s sublease portfolio consists mainly of operating leases with a domestic partner to operate dog boarding and daycare facilities, which are not material. The Company records contractual obligations associated with the retirement of long-lived assets at their fair value at the time the obligations are incurred. These obligations arise from certain leases and primarily relate to the cost of removing leasehold improvements and certain fixtures from such lease sites and restoring the sites to their original condition. Upon initial recognition of the liability, that cost is capitalized as part of the related long-lived asset and depreciated on a straight-line basis over the estimated useful life of the asset. Activity related to these obligations in fiscal 2022, 2021, and 2020 was not material. The Company’s asset retirement obligation was $ 6.2 million and $ 6.9 million at January 28, 2023 and January 29, 2022 , respectively, and is included in other long-term liabilities in the consolidated balance sheets. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date. Valuation allowances, if any, are recorded against net deferred tax assets when it is considered more likely than not that some portion or all of a deferred tax asset may not be recoverable. Deferred tax assets and liabilities are recorded as either net non-current assets or net non-current liabilities on the consolidated balance sheets. Refer to Note 13 for further disclosures of the Company’s income taxes. Management regularly evaluates the likelihood of recognizing the benefit for income tax positions it has taken in various federal and state filings by considering relevant facts, circumstances and information available. The authoritative guidance clarifies the accounting for income taxes by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold for recognizing benefit of a tax position is that such position is more likely than not to be sustained upon examination by the taxing authority, including resolution of any related appeals or litigation processes, and is based on the technical merits of the position. Equity-Based Compensation Equity-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the vesting period of the award, which is also the requisite service period, based upon the corresponding vesting method and probability of vesting (Note 12). The Company recognizes the effect of pre-vesting forfeitures as they occur. Equity Valuation The per unit fair value of equity underlying the partnership unit awards prior to the Company’s initial public offering was determined by the Company’s board of directors based on enterprise valuations performed by management with the assistance of a third-party valuation firm, taking into consideration any recent market transactions involving the Company’s equity. The valuation of the equity of any private company involves various estimates and assumptions that may differ from actual values. For a portion of fiscal 2020, the Company’s equity value was determined using a combination of two valuation approaches: Income Approach – estimates the fair value based on the present value of the Company’s future estimated cash flows and the residual value of the Company beyond the forecast period. These future cash flows, including the cash flows beyond the forecast period for the residual value, are discounted to their present values using an appropriate discount rate, to reflect the risks inherent in the Company achieving these estimated cash flows. Market Approach (specifically, the guideline public company method) – estimates fair value based upon the observed valuation multiples of comparable public companies, the equity of which is freely-traded by investors in the public securities markets. Beginning in the third quarter of fiscal 2020 and prior to its initial public offering, the Company determined its equity value using the probability weighted expected return method (“PWERM”), or the hybrid method. Under the hybrid method, multiple valuation approaches are used and then combined into a single probability weighted valuation using a PWERM, which considers the probability of an initial public offering scenario. The results of the valuation approaches were weighted based on a variety of factors including: current macroeconomic environment, current industry conditions and length of time since arms-length market transaction events. Additionally, a discount for lack of marketability was applied to account for the lack of access to an active public market. The resulting value was then allocated to outstanding equity using an option-pricing model. Derivative Instruments In March 2016, the Company entered into a series of five interest rate cap agreements with four counterparties totaling $ 1,950.0 million to limit the maximum interest rate on a portion of the Company’s variable-rate debt and limit its exposure to interest rate variability when three-month LIBOR exceeds 2.25 %. The interest rate caps are accounted for as cash flow hedges, and changes in the fair value of the interest rate caps are reported as a component of AOCI. The interest rate caps were settled in accordance with their contractual terms on January 29, 2021 . In November 2022, the Company entered into a series of interest rate cap agreements to limit the maximum interest on a portion of |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Jan. 28, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 2. Revenue Recognition The Company generates revenue primarily from the sale of products and services. Revenue is recognized when the control of promised goods or services is transferred to customers, in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. Control refers to the ability of the customer to direct the use of, and obtain substantially all of, the remaining benefits from the goods or services. Net sales by product type and services were as follows (in thousands): Fiscal years ended January 28, January 29, January 30, (52 weeks) (52 weeks) (52 weeks) Consumables $ 2,859,602 $ 2,533,755 $ 2,123,499 Supplies and companion animals 2,370,913 2,603,104 2,328,663 Services and other 805,452 670,290 468,040 Net sales $ 6,035,967 $ 5,807,149 $ 4,920,202 For all contracts with customers, the Company evaluates whether it is the principal (i.e. to report revenue on a gross basis) or agent (i.e. to report revenue on a net basis). Generally, the Company is the principal in its contracts with customers as it controls the related goods or services before they are transferred to the customer. Revenue from product sales and services is reported net of sales refunds, which includes an estimate of future returns based on historical refund rates, with a corresponding reduction to cost of sales. The Company records a refund liability for sales returns, which is included in accrued expenses and other liabilities, and a corresponding asset for anticipated cost recoveries, which is included in other current assets. The Company’s refund liability and expected cost recoveries were not material as of January 28, 2023 and January 29, 2022. There is inherent judgment in estimating future refunds as they are susceptible to factors outside of the Company’s influence. The Company has significant experience in estimating the amount of refunds based primarily on historical data. Revenue is recognized net of applicable sales tax in the consolidated statements of operations. Sales tax liability is included in accrued expenses and other liabilities in the consolidated balance sheets. The Company’s contract liabilities primarily relate to product merchandise not yet delivered to customers, unredeemed gift cards, services not yet completed, and options that provide a material right to customers, such as its customer loyalty program. Substantially all of the Company’s remaining performance obligations have an original expected duration of one year or less. The Company did no t have any material contract assets as of January 28, 2023 and January 29, 2022. Product Revenue Product revenue is recognized when control passes, which generally occurs at a point in time when the customer completes a transaction in a pet care center and receives the merchandise. The Company’s payment terms are typically at the point of sale. For transactions initiated online, customers choose whether to have it delivered to them (using third-party parcel delivery companies) or to collect their merchandise from one of the Company’s pet care centers (“buy online, pick up in store,” or “BOPUS”). For items delivered directly to the customer, control passes and revenue is recognized when delivery has been completed to the customer, as title has passed and possession has transferred to the customer. For BOPUS sales, control passes and revenue is recognized once the customer has taken possession of the merchandise. Any fees charged to customers for delivery (such as shipping and handling) are a component of the transaction price and are recognized when delivery has been completed. The Company uses delivery information to determine when to recognize revenue for products and any related delivery fee revenue. Service Revenue The Company recognizes service revenue from pet grooming, veterinary care, and certain other in-store services once the service is completed, as this is when the customer has the ability to direct the use of and obtain the benefits of the service. Payment terms are typically at the point of sale, but may also occur upon completion of the service. The Company’s service contracts are primarily with retail and veterinary customers. The Company recognizes service revenue from dog training ratably over the life of the contract, as this pattern best depicts when customers use the services provided and, accordingly, when delivery of the performance obligation occurs. Gift Cards The Company sells its own gift cards to customers in its pet care centers, online, and through select third parties. The Company recognizes revenue from gift cards when gift cards are redeemed by the customer. The Company also recognizes revenue for the portion of gift card values that is not expected to be redeemed (“breakage”). Breakage is estimated based upon historical redemption patterns and other factors, such as laws and regulations applicable to each jurisdiction. There is judgment in assessing redemption patterns and the ultimate value of gift cards that is not expected to be redeemed. Sales Incentives and Customer Loyalty Program The Company has a customer loyalty program that allows members to earn points for each qualifying purchase. Points earned enable members to receive a certificate that may be redeemed on future purchases generally within 45 days of the issuance date. The loyalty program points represent customer options that provide a material right and, accordingly, are performance obligations for each applicable contract. The relative standalone selling price of points earned by loyalty program members is deferred and included as part of accrued expenses and other liabilities in the consolidated balance sheets based on the amount of points that are projected to be redeemed, subject to breakage. The Company’s contract liabilities for its customer loyalty program were no t material as of January 28, 2023 and January 29, 2022. Revenue is recognized for these performance obligations as actual redemptions occur and the Company updates its estimate of the amount of points that are projected to be redeemed. There is judgment in assessing redemption patterns and the ultimate value of points that is not expected to be redeemed. The Company issues coupons that are not earned in conjunction with a purchase of a product or service, typically as part of targeted marketing activities. Additionally, the Company issues coupons in conjunction with the purchase of products or services. However, these coupons typically do not materially exceed the range of discounts given to similar customers and do not confer a material right. In both of these cases, these are not performance obligations and are instead recognized as a reduction of the transaction price when redeemed by the customer. The Company sells annual membership plans that include access to benefits such as vet exams, percentage discounts on certain products and services and additional loyalty program points. The Company allocates the transaction price to all performance obligations identified in the contract based on their relative fair values. Performance obligations provided over the term of the contract are recognized as revenue on a usage basis. This involves the estimation of expected usage patterns, primarily derived from historical information. When insufficient history is available to estimate usage, the Company recognizes revenue ratably over the life of the contract. |
Other Acquisitions
Other Acquisitions | 12 Months Ended |
Jan. 28, 2023 | |
Business Combinations [Abstract] | |
Other Acquisitions | 3. Other Acquisitions During fiscal 2022 and 2021, the Company completed acquisitions of small, regional veterinary businesses for total consideration of approximately $ 9.9 million and $ 5.5 million, respectively. Noncash consideration was not material. Net tangible and identifiable intangible assets acquired and liabilities assumed were not material. The acquisitions resulted in the recognition of $ 9.9 million and $ 4.7 million of goodwill, respectively. The tax-deductible portion of goodwill in these acquisitions was $ 9.9 million and $ 2.4 million, respectively. Pro forma results of operations for the acquisitions have not been presented because they are not material to the consolidated results of operations. |
Composition of Balance Sheet Ac
Composition of Balance Sheet Accounts | 12 Months Ended |
Jan. 28, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Composition of Balance Sheet Accounts | . Composition of Balance Sheet Accounts Fixed Assets, Net Fixed assets, net, consisted of the following (in thousands): January 28, January 29, Equipment $ 885,370 $ 772,454 Leasehold improvements 686,888 623,201 Furniture and fixtures 398,187 329,823 Buildings and related improvements 16,696 16,959 Land 418 3,254 1,987,559 1,745,691 Less accumulated depreciation ( 1,184,232 ) ( 1,018,769 ) $ 803,327 $ 726,922 The Company’s depreciation and amortization expense for fixed assets, net was $ 193.9 million, $ 171.1 million, and $ 174.0 million for fiscal 2022, 2021 and 2020, respectively. Accrued Salaries and Employee Benefits Accrued salaries and employee benefits consisted of the following (in thousands): January 28, January 29, Accrued compensation and related taxes $ 44,724 $ 110,347 Self-insurance reserves 27,175 23,699 Accrued paid time-off 18,030 16,584 $ 89,929 $ 150,630 Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following (in thousands): January 28, January 29, Accrued capital expenditures $ 29,051 $ 36,935 Accrued real estate taxes 26,485 26,662 Accrued advertising 24,020 15,192 Deferred revenue 23,045 18,003 Sales taxes payable 22,950 19,950 Other accrued expenses and liabilities 92,005 94,130 $ 217,556 $ 210,872 Other Long-Term Liabilities Other long-term liabilities consisted of the following (in thousands): January 28, January 29, Self-insurance reserves $ 52,780 $ 56,486 Finance leases 23,642 25,052 Other liabilities 54,065 52,567 $ 130,487 $ 134,105 |
Leases
Leases | 12 Months Ended |
Jan. 28, 2023 | |
Leases [Abstract] | |
Leases | . Leases Lease assets and liabilities are reflected in the Company’s consolidated balance sheets as follows (in thousands): Leases Balance sheet January 28, January 29, Assets Operating leases Operating lease right-of-use assets $ 1,397,761 $ 1,338,465 Finance leases Fixed assets, net(1) 24,624 24,500 Total lease assets $ 1,422,385 $ 1,362,965 Liabilities Current Operating leases Current portion of operating lease liabilities $ 309,766 $ 265,897 Finance leases Current portion of long-term debt and other 5,794 4,764 Non-current Operating leases Operating lease liabilities, excluding 1,148,155 1,096,133 Finance leases Other long-term liabilities 23,642 25,052 Total lease liabilities $ 1,487,357 $ 1,391,846 (1) Finance lease right-of-use assets are recorded net of accumulated amortization of $ 24.6 million and $ 19.7 million as of January 28, 2023 and January 29, 2022 , respectively. The components of total lease cost are as follows (in thousands): Fiscal years ended January 28, January 29, January 30, Operating lease cost $ 422,792 $ 422,465 $ 430,359 Finance lease cost: Amortization of right-of-use lease assets 5,660 3,933 3,292 Interest on lease liabilities 1,329 876 908 Variable lease cost 110,335 109,723 105,859 Sublease income ( 2,810 ) ( 5,091 ) ( 5,327 ) Total lease cost $ 537,306 $ 531,906 $ 535,091 Other information for the Company’s leases is as follows (in thousands): Fiscal years ended January 28, January 29, January 30, Cash paid for amounts included in the measurement Operating cash flows from operating leases $ 386,259 $ 418,210 $ 399,557 Operating cash flows from finance leases $ 1,349 $ 850 $ 941 Financing cash flows from finance leases $ 5,083 $ 3,564 $ 3,404 Lease assets obtained in exchange for lease liabilities: Operating leases $ 363,311 $ 308,166 $ 132,829 Finance leases $ 4,784 $ 19,841 $ 613 January 28, January 29, Weighted average remaining lease term: Operating leases 6.0 years 6.0 years Finance leases 3.2 years 3.6 years Weighted average discount rate: Operating leases 8.4 % 9.2 % Finance leases 4.7 % 4.6 % At January 28, 2023, the maturities of the Company’s operating and finance lease liabilities were as follows (in thousands): Fiscal years Operating Finance 2023 414,773 7,029 2024 355,630 16,726 2025 292,014 3,734 2026 234,248 2,161 2027 164,643 1,182 Thereafter 380,655 1,569 Total lease payments $ 1,841,963 $ 32,401 Less imputed interest ( 384,042 ) ( 2,965 ) Present value of lease payments 1,457,921 29,436 Less current portion ( 309,766 ) ( 5,794 ) Lease liabilities, excluding current portion $ 1,148,155 $ 23,642 |
Goodwill
Goodwill | 12 Months Ended |
Jan. 28, 2023 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |
Goodwill | . Goodwill The changes in the carrying amount of the Company’s goodwill were as follows (in thousands): January 28, January 29, Beginning balance: Goodwill $ 2,991,954 $ 2,987,273 Accumulated impairment ( 807,963 ) ( 807,963 ) Goodwill, net $ 2,183,991 $ 2,179,310 Additions from acquisitions $ 9,950 $ 4,681 Ending balance: Goodwill $ 3,001,904 $ 2,991,954 Accumulated impairment ( 807,963 ) ( 807,963 ) Goodwill, net $ 2,193,941 $ 2,183,991 Refer to Note 10 for further discussion of the results of impairment testing performed on the Company’s goodwill. |
Senior Secured Credit Facilitie
Senior Secured Credit Facilities | 12 Months Ended |
Jan. 28, 2023 | |
Debt Disclosure [Abstract] | |
Senior Secured Credit Facilities | 7. Senior Secured Credit Facilities The Company previously had a senior secured term loan facility (the “Amended Term Loan Facility”), which was fully repaid on March 4, 2021 , and a senior secured asset-based revolving credit facility (the “Amended Revolving Credit Facility”), which was terminated on March 4, 2021 . On March 4, 2021 , the Company entered into a $ 1,700.0 million secured term loan facility maturing on March 4, 2028 (the “First Lien Term Loan”) and a secured asset-based revolving credit facility with availability of up to $ 500.0 million, subject to a borrowing base, maturing on March 4, 2026 (the “ABL Revolving Credit Facility”). The Company’s obligations under the First Lien Term Loan and ABL Revolving Credit Facility are secured by substantially all of the personal property assets of the Company with differing priority rights to the various personal property assets ascribed to each facility. The credit facility agreements, while not identical, contain certain affirmative and negative covenants related to indebtedness, liens, fundamental changes in the business, investments, restricted payments and agreements and a fixed charge coverage ratio, among other things. As of January 28, 2023 , the Company was in compliance with its covenants on the agreements. The credit agreements governing the First Lien Term Loan and ABL Revolving Credit Facility contain customary default provisions including, among others, the failure to make payments when due, defaults under other material indebtedness, non-compliance with covenants, change of control and bankruptcy, the occurrence of any of which would limit the Company’s ability to draw on the ABL Revolving Credit Facility and could result in the applicable lenders under the First Lien Term Loan and ABL Revolving Credit Facility accelerating the maturity of such indebtedness and foreclosing upon the collateral pledged thereunder. Term Loan Facilities On January 19, 2021, the Company repaid $ 727.0 million of the Amended Term Loan Facility using a portion of the proceeds from its initial public offering, in addition to existing cash on hand. The Company accounted for the repayment as a partial extinguishment and recognized a loss on debt extinguishment of $ 12.6 million, which represents a portion of previously unamortized debt discount and debt issuance costs and is included in the accompanying consolidated statement of operations. On March 4, 2021 , the Company entered into the $ 1,700.0 million First Lien Term Loan and repaid all outstanding principal and interest on the Amended Term Loan Facility. The Company recognized a loss on debt extinguishment and modification of $ 19.6 million on the term loan facilities, which consisted of a $ 6.5 million write-off of unamortized debt discount and issuance costs on the Amended Term Loan Facility and $ 13.1 million of third-party expenses. Fees relating to the Company’s entry into the First Lien Term Loan consisted of arranger fees and other third-party expenses. Of those fees, $ 3.2 million was capitalized as debt issuance costs, along with $ 4.3 million of original issue discount. The remaining portion of original issue discount and debt issuance costs of the Amended Term Loan Facility previously capitalized is being amortized over the contractual term of the First Lien Term Loan to interest expense using the effective interest rate in effect on the date of issuance, as these amounts represent the portion that was not substantially modified. On December 12, 2022, the Company amended the First Lien Term Loan to replace the LIBOR-based rate with a SOFR-based rate as the interest rate benchmark. Interest on the First Lien Term Loan is based on, at the Company’s option, either a base rate or Adjusted Term SOFR, subject to a 0.75 % floor, payable upon maturity of the SOFR contract, in either case plus the applicable rate. The base rate is the greater of the bank prime rate, federal funds effective rate plus 0.5 % or Adjusted Term SOFR plus 1.0 %. The applicable rate is 2.25 % per annum for a base rate loan or 3.25 % per annum for an Adjusted Term SOFR loan. P rincipal and interest payments commen ced on June 30, 2021. Principal payments are $ 4.25 million quarterly. In March 2023, the Company repaid $ 35.0 million on the First Lien Term Loan using existing cash on hand. The repayment was applied to remaining principal payments in order of scheduled payment date. As of January 28, 2023, the outstanding principal balance of the First Lien Term Loan was $ 1,670.3 million ($ 1,648.9 million, net of the unamortized discount and debt issuance costs). As of January 29, 2022, the outstanding principal balance of the First Lien Term Loan was $ 1,687.3 million ($ 1,662.1 million, net of the unamortized discount and debt issuance costs). The weighted average interest rate on the borrowings outstanding was 8.2 % and 4.1 % as of January 28, 2023 and January 29, 2022, respectively. Debt issuance costs are being amortized over the contractual term to interest expense using the effective interest rate in effect at issuance. As of January 28, 2023 and January 29, 2022, the estimated fair value of the First Lien Term Loan was approximately $ 1,649.4 million and $ 1,687.3 , respectively, based upon Level 2 fair value hierarchy inputs (Note 1). Revolving Credit Facilities On March 4, 2021, the Company entered into an agreement establishing the ABL Revolving Credit Facility and terminated the Amended Revolving Credit Facility. The ABL Revolving Credit Facility has availability up to $ 500.0 million, subject to a borrowing base. Fees relating to the Company’s entry into the ABL Revolving Credit Facility consisted of arranger fees and other third-party expenses. Of those fees, $ 4.1 million was capitalized as debt issuance costs. Unamortized debt issuance costs of $ 1.2 million were written off and recognized as a loss on debt extinguishment and modification in connection with this transaction. The remaining portion of debt issuance costs of the Amended Revolving Credit Facility previously capitalized is being amortized over the contractual term of the ABL Revolving Credit Facility as these amounts represent the portion that was not substantially modified. As of January 28, 2023 and January 29, 2022, no amounts were outstanding under the ABL Revolving Credit Facility. At January 28, 2023, $ 443.9 million was available under the ABL Revolving Credit Facility, which is net of $ 56.1 million of outstanding letters of credit issued in the normal course of business and no borrowing base reduction for a shortfall in qualifying assets. Unamortized debt issuance costs of $ 3.6 million and $ 4.7 million relating to the ABL Revolving Credit Facility were outstanding and were being amortized using the straight-line method over the remaining term of the agreement as of January 28, 2023 and January 29, 2022, respectively. The ABL Revolving Credit Facility has availability up to $ 500.0 million and a $ 150.0 million letter of credit sub-facility. The availability is limited to a borrowing base, which allows borrowings of up to 90 % of eligible accounts receivable plus 90 % of the net orderly liquidation value of eligible inventory plus up to $ 50.0 million of qualified cash of the Company to which the Company and guarantors have no access, less reserves as determined by the administrative agent. Letters of credit reduce the amount available to borrow under the ABL Revolving Credit Facility by their face value. On December 12, 2022, the Company amended the ABL Revolving Credit Facility to replace the LIBOR-based rate with a SOFR-based rate as the interest rate benchmark. Interest on the ABL Revolving Credit Facility is based on, at the Company’s option, either the base rate or Adjusted Term SOFR subject to a floor of 0 %, in either case, plus an applicable margin. The applicable margin is currently equal to 25 basis points in the case of base rate loans and 125 basis points in the case of Adjusted Term SOFR loans. The applicable margin is adjusted quarterly based on the average historical excess availability as a percentage of the Line Cap, which represents the lesser of the aggregate ABL Revolving Credit Facility and the borrowing base, as follows: Average Historical Excess Availability Applicable Applicable Less than 33.3 % of the Line Cap 1.75 % 0.75 % Less than 66.7 % but greater than or equal to 33.3 % of 1.50 % 0.50 % Greater than or equal to 66.7 % of the Line Cap 1.25 % 0.25 % The ABL Revolving Credit Facility is subject to an unused commitment fee. If the actual daily utilized portion exceeds 50%, the unused commitment fee is 0.25 %. Otherwise, the unused commitment fee is 0.375 % and is not dependent upon excess availability. |
Senior Notes
Senior Notes | 12 Months Ended |
Jan. 28, 2023 | |
Debt Disclosure [Abstract] | |
Senior Notes | . Senior Notes Floating Rate Senior Notes On January 26, 2016, the Company issued $ 750.0 million of unsecured senior notes in a private offering (the “Floating Rate Senior Notes”). In January 2021, the holders of the outstanding Floating Rate Senior Notes exchanged $ 450.0 million of the aggregate principal amount of the Floating Rate Senior Notes for a new series of notes with a principal amount of $ 450.0 million issued by Scooby Aggregator, LP. Scooby Aggregator, LP, as the new holder of $ 450.0 million of Floating Rate Senior Notes, contributed the principal balance to the Company. This contribution, offset by approximately $ 7.4 million of unamortized deferred financing costs associated with the principal balance contributed, was recorded as an adjustment to additional paid-in capital. On January 19, 2021, the Company repaid the remaining $ 300.0 million principal balance of the Floating Rate Senior Notes using a portion of the proceeds from its initial public offering, in addition to existing cash on hand. The Company accounted for the repayment as an extinguishment of debt and recognized a loss on debt extinguishment of $ 4.9 million, which represents a write-off of the remaining unamortized debt issuance costs and is included in the accompanying consolidated statement of operations. 3.00% Senior Notes On January 26, 2016, the Company issued senior unsecured notes in a private offering to its members, which were last amended on September 28, 2020 to extend their maturity to January 25, 2023 (the “3.00% Senior Notes”). On January 19, 2021, the Company repaid $ 4.0 million of the principal balance of the 3.00% Senior Notes. The remaining $ 127.7 million of principal and $ 3.6 million of accrued interest was then contributed to the Company in connection with its initial public offering. This contribution was recorded as an adjustment to additional paid-in-capital. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Jan. 28, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 9. Derivative Instruments In March 2016, the Company entered into a series of five interest rate cap agreements with four counterparties with a total notional value of $ 1,950.0 million to limit the maximum interest rate on a portion of the Company’s variable-rate debt and limit its exposure to interest rate variability when three-month LIBOR exceeds 2.25 %. The interest rate caps expired and were settled in accordance with their contractual terms on January 29, 2021 . The interest rate caps were accounted for as cash flow hedges because the interest rate caps were expected to be highly effective in hedging variable rate interest payments. Changes in the fair value of the interest rate caps were reported as a component of AOCI. There were no amounts remaining in AOCI relating to the interest rate caps as of January 29, 2022. Approximately $ 10.8 million of pre-tax losses deferred in AOCI were reclassified to interest expense during fiscal 2020. In November 2022, the Company entered into a series of interest rate cap agreements to limit the maximum interest on a portion of the Company’s variable-rate debt and decrease its exposure to interest rate variability when three-month SOFR as published by CME Group exceeds 4.5 %. The interest rate caps became effective December 30, 2022 and expire on December 31, 2024 . Interest rate caps are reflected in the Company’s consolidated balance sheets as follows (in thousands): Liabilities Balance sheet location January 28, Current liability portion of interest rate caps Accrued expenses and other liabilities $ 1,176 Non-current liability portion of interest rate caps Other long-term liabilities 1,717 Total interest rate caps $ 2,893 Although the Company is exposed to credit loss in the event of nonperformance by its counterparties, credit risk is considered limited due to the credit ratings of the counterparties and the use of a master netting agreement, which permits the netting of derivative payables and receivables. The Company has not historically incurred, and does not expect to incur in the future any losses as a result of counterparty default. The notional amount of the Company’s outstanding derivatives is not an indicator of the magnitude of potential exposure. The interest rate cap agreements contain provisions that would be triggered in the event the Company defaults on its debt agreements (Note 7), which in turn could impact the assessment of hedge effectiveness or cause termination of the underlying cap agreements. As of January 28, 2023, no events of default have occurred. There is no collateral posting requirement outside the provisions in the debt agreements. The interest rate caps are accounted for as cash flow hedges because the interest rate caps are expected to be highly effective in hedging variable rate interest payments. Changes in the fair value of the interest rate caps are reported as a component of AOCI. As of January 28, 2023 , AOCI included unrealized losses of $ 2.7 millio n ($ 2.1 million, net of tax). Approximately $ 0.2 million of pre-tax losses deferred in AOCI were reclassified to interest expense during fiscal 2022. The Company currently estim ates that $ 2.5 million of losse s related to trade date costs on its interest rate caps that are currently deferred in AOCI will be reclassified to interest expense in the consolidated statement of operations within the next twelve months. This estimate could vary based on actual amounts as a result of changes in market conditions. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jan. 28, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 10. Fair Value Measurements Assets and Liabilities Measured on a Recurring Basis The following table presents information about assets and liabilities that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): January 28, 2023 Level 1 Level 2 Level 3 Assets (liabilities): Money market mutual funds $ 156,626 $ — $ — Investments of officers' life insurance $ — $ 13,112 $ — Non-qualified deferred compensation plan $ — $ ( 18,464 ) $ — Investment in Rover Group, Inc. $ 20,152 $ — $ — January 29, 2022 Level 1 Level 2 Level 3 Assets (liabilities): Money market mutual funds $ 167,277 $ — $ — Investments of officers' life insurance $ — $ 14,575 $ — Non-qualified deferred compensation plan $ — $ ( 17,453 ) $ — Investment in Rover Group, Inc. $ 32,819 $ — $ — The fair value of money market mutual funds is based on quoted market prices, such as quoted net asset values published by the fund as supported in an active market. Money market mutual funds included in the Company’s cash and cash equivalents were $ 145.5 million and $ 158.0 million as of January 28, 2023 and January 29, 2022, respectively. Also included in the Company’s money market mutual funds balances were $ 11.1 million and $ 9.3 million as of January 28, 2023 and January 29, 2022, respectively, which relate to the Company’s restricted cash, and are included in other current assets in the consolidated balance sheets. The Company maintains a deferred compensation plan for key executives and other members of management, which is funded by investments in officers’ life insurance. The fair value of this obligation is based on participants’ elected investments, which reflect the closing market prices of similar assets. The Company previously held an equity investment, in the form of multiple series of preferred stock, in A Place for Rover, Inc., an online marketplace for pet care, which was historically accounted for as an equity security without a readily determinable fair value. In July 2021, A Place for Rover, Inc. completed a business combination with Nebula Caravel Acquisition Corp., a publicly-traded special purpose acquisition company. The combined entity was renamed to Rover Group, Inc. (“Rover”), and the Company’s equity investment was converted into shares of Rover Class A common stock. In September 2021, the Company received additional shares of Rover Class A common stock in accordance with certain earnout provisions from the July 2021 business combination. The Company now remeasures the fair value of its investment on a quarterly basis, and the resulting gains or losses are included in other non-operating income in the consolidated statements of operations. On November 23, 2021, the Company completed the sale of approximately 11 % of its Rover Class A common stock for net proceeds of $ 6.1 million in cash as part of its participation in an underwritten secondary offering by certain Rover shareholders. In February 2022, the Company amended a collaboration agreement with a vendor, and as part of the amendment the Company was granted a right to receive equity and warrants for common shares of the vendor that is subject to certain performance conditions and other contingencies. The Company evaluated the agreement under FASB ASC 705-20, Consideration Received from a Vendor, and no material consideration was recognized during the fiscal year ended January 28, 2023. Assets Measured on a Non-Recurring Basis The Company’s non-financial assets, which primarily consist of goodwill, other intangible assets, fixed assets and equity and other investments, are reported at carrying value, or at fair value as of the date of the Company’s acquisition of Petco Holdings, Inc. LLC on January 26, 2016, and are not required to be measured at fair value on a recurring basis. However, on a periodic basis (at least annually for goodwill and indefinite-lived intangibles or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable), non-financial assets are assessed for impairment. If impaired, the carrying values of the assets are written down to fair value using Level 3 inputs. In fiscal 2022, 2021, and 2020, the Company determined that the fair value of its reporting unit was greater than its carrying amount, and therefore no goodwill impairment charge was recorded (Note 6). In fiscal 2022, 2021, and 2020, the Company determined that the fair value of its trade name was greater than its carrying amount, and therefore no tradename impairment charge was recorded. There were no indications of impairment of the Company’s other intangible assets or equity and other investments in fiscal 2022, 2021, and 2020. The Company recorded fixed asset and right-of-use asset impairment charges of $ 2.2 million, $ 10.4 million $ 14.5 million in fiscal years 2022, 2021, and 2020, respectively. Impairment charges are primarily related to pet care center locations and are recorded in selling, general and administrative expense in the accompanying consolidated statements of operations. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Jan. 28, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 11. Employee Benefit Plans The Company has employee savings plans that permits eligible participants to make contributions by salary reduction pursuant to either section 401(k) of the Internal Revenue Code or under the Company’s non-qualified deferred compensation plan. The Company generally matches 100 % of the first 1 % plus 50 % of the next 5 % of compensation contributed by each participating employee to the 401(k) plan. For eligible participants that hold positions as director and above, the Company matches, at its discretion, 100 % of the first 1 % plus 50 % of the next 2 % of compensation that is contributed by each participating employee to the plan. The Company match is subject to a 3 -year vesting schedule. Employees are required to complete six months of service with the Company to participate in the plan. Under the Company’s non-qualified deferred compensation plan, the Company matches 50 % of the first 6 % of compensation contributed by each participating employee to the plan from the date of eligibility until the point of time that the participating employee is eligible to participate in the Company’s 401(k) plan. Once a participating employee is eligible to participate in the 401(k) plan, the Company match is 50 % of the first 3 % of compensation contributed by the employee to the plan. In connection with the required matches, Company contributions to the plans were $ 10.7 million, $ 9.2 million, and $ 6.6 million for fiscal years 2022, 2021, and 2020, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 28, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 12. Stockholders’ Equity Equity-based compensation awards under the Company’s current equity incentive plan (the “2021 Equity Incentive Plan”) include restricted stock units (“RSUs,” which include performance-based stock units), restricted stock awards (“RSAs”), non-qualified stock options, and other equity compensation awards. The Company also has an employee stock purchase plan (“ESPP”). The Company issues new shares of Class A common stock upon exercise of stock options and the vesting of restricted stock units. As of January 28, 2023, there were 26.8 million shares of Class A common stock available for issuance pursuant to future equity-based compensation awards under the 2021 Equity Incentive Plan. The Company’s controlling parent, Scooby LP, also maintains an incentive plan (the “2016 Incentive Plan”) under which it has awarded partnership unit awards to certain current and former employees, consultants, and non-employee directors of the Company that are restricted profit interests in Scooby LP subject to a distribution threshold (“Series C Units”). The following table summarizes the Company’s equity-based compensation expense by award type (in thousands): Fiscal years ended January 28, January 29, January 30, (52 weeks) (52 weeks) (52 weeks) RSUs and RSAs $ 38,146 $ 25,459 $ 1,991 Options 9,418 8,002 391 ESPP 1,274 1,034 — Other awards 11,946 14,770 10,533 Total equity-based compensation expense $ 60,784 $ 49,265 $ 12,915 Total related tax benefit $ 8,160 $ 5,033 $ 329 RSUs and RSAs The Company has both time-vested RSUs and performance-based RSUs. Time-vested RSUs are awarded to eligible employees and non-employee directors and entitle the grantee to receive shares of Class A common stock at the end of a vesting period, subject solely to the individual’s continued employment or service as a director. In most cases, 34 % of the units becomes vested on the anniversary of the grant date, followed by 16.5 % of the units in four equal semi-annual installments thereafter. Performance-based RSUs are awarded to eligible employees and entitle the grantee to receive shares of Class A common stock if the Company achieves specified performance goals during the performance period and the grantee remains employed through the vesting period. RSU activity under the 2021 Equity Incentive Plan was as follows (in thousands, except per share and contractual life amounts): Shares Weighted Weighted Aggregate Nonvested, January 29, 2022 2,587 $ 18.63 1.0 $ 47,342 Granted 7,536 15.23 Vested and delivered ( 1,402 ) 18.63 Forfeited/expired ( 919 ) 18.52 Nonvested, January 28, 2023 7,802 $ 15.36 1.2 $ 91,596 As of January 28, 2023, unrecognized compensation expense related to unvested RSUs was $ 93.3 million, which is expected to be recognized over a weighted average period of approximately 2.0 years. RSA activity has not been material and relates to an RSA of Class A common stock granted to an executive in March 2021. For this grant, 50 % of the RSA becomes vested on each of the first two anniversaries of the grant date. Options The Company provides stock option grants, which are time-vested, as a form of employee compensation. In most cases, 34 % of the options generally becomes vested on the anniversary of the grant date, followed by 16.5 % of the options in four equal semi-annual installments thereafter. Stock options generally expire 10 years from the grant date. Stock option activity under the 2021 Equity Incentive Plan was as follows (in thousands, except per share and contractual life amounts): Shares Weighted Weighted Aggregate Outstanding, January 29, 2022 3,327 $ 18.00 9.0 $ 998 Granted 5,125 11.97 Exercised ( 45 ) 18.00 Forfeited/expired ( 593 ) 18.36 Outstanding, January 28, 2023 7,814 $ 14.02 9.1 $ 3,512 Exercisable, January 28, 2023 1,853 $ 18.00 7.9 $ — No stock option awards were granted in fiscal 2021. The fair value of stock option awards granted in fiscal 2022 and 2020 was estimated at the grant dates using the Black-Scholes option pricing model with the following assumptions: Fiscal years ended January 28, January 30, (52 weeks) (52 weeks) Dividend yield 0.0 % 0.0 % Expected volatility (1) 38.0 % - 48.4 % 40.4 % Risk-free interest rate (2) 2.8 % - 3.6 % 0.7 % Expected term (3) 5.8 to 5.9 years 5.9 years Grant date fair value per share $ 10.98 - $ 21.06 $ 18.00 Estimated fair value per option granted $ 5.46 - $ 8.64 $ 7.00 (1) The expected volatility was estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term consistent with the expected term of the stock options. (2) The risk-free interest rates were based on the U.S. Treasury constant maturity interest rate for a term 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 was calculated using the simplified method. As of January 28, 2023, unrecognized compensation expense related to unvested options was $ 32.1 million, which is expected to be recognized over a weighted average period of approximately 1.8 years. ESPP The ESPP allows eligible employees to contribute up to 15 % of their base earnings towards purchases of Class A common stock, subject to an annual maximum. The purchase price will be 85 % of the lower of (i) the fair market value of the stock on the associated lookback date and (ii) the fair market value of the stock on the last day of the related purchase period. As of January 28, 2023, 7.3 million shares of Class A common stock were available for issuance under the ESPP. Other Awards Other awards primarily consist of partnership unit awards (“Series C Units”) issued by Scooby LP to eligible employees, consultants, and non-employee directors of the Company under the 2016 Incentive Plan, which was established in connection with the Acquisition. Series C Unit awards are restricted profit interests in Scooby LP subject to a distribution threshold and have generally been issued in the form of time-based units that vest in three to five equal annual installments following the grant date. In addition to acceleration upon a change in control, a portion of grantees’ Series C Units may vest upon certain levels of direct or indirect sales by Scooby LP of the Company’s Class A common stock, and all unvested Series C Units will fully accelerate in the event Scooby LP sells 90 % of its direct or indirect holdings of the Company’s Class A common stock. No additional Series C Units have been or will be awarded following the Company’s initial public offering. For the Series C Units granted during fiscal 2020, the weighted average fair value per unit was estimated to be $ 0.44 . The weighted average fair value per Series C Unit was estimated at the grant date using the Black-Scholes option pricing model with the following assumptions: Fiscal year ended January 30, (52 weeks) Dividend yield 0.0 % Expected volatility (1) 60.0 - 81.9 % Weighted average volatility (1) 81.1 % Risk-free interest rate (2) 0.1 % - 1.3 % Expected term (3) 2.0 to 4.0 years (1) The expected volatility was estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term consistent with the expected term of the Series C Units. (2) The risk-free interest rates were based on the U.S. Treasury constant maturity interest rate for a term consistent with the expected term of the Series C Units. (3) The expected term of the Series C Units was based on estimated liquidity event timing. Series C Unit activity under the 2016 Incentive Plan was as follows (in thousands): Units Outstanding, January 29, 2022 207,178 Granted — Forfeited ( 5,819 ) Outstanding, January 28, 2023 201,359 Vested, January 28, 2023 151,597 Charges with respect to awards issued pursuant to the 2016 Incentive Plan are reflected in the Company’s consolidated financial statements. Compensation expense related to Series C Units is generally not tax deductible. As of January 28, 2023, unrecognized compensation expense related to the unvested portion of Scooby LP’s Series C Units was $ 9.3 million, which is expected to be recognized over a weighted average period of 1.3 years. Earnings (Loss) Per Share Shares of Class A common stock and Class B-1 common stock participate equally in the earnings and losses of the Company and have identical rights in distribution. Basic net income (loss) per Class A and B-1 common share is based on the weighted-average Class A and B-1 common shares outstanding during the relevant period. Diluted net income (loss) per Class A and B-1 common share is based on the weighted-average Class A and B-1 common shares outstanding during the relevant period adjusted for the effect of potentially dilutive securities. Potentially dilutive securities include potential Class A common shares related to outstanding stock options and unvested RSUs, calculated using the treasury stock method. The calculation of diluted shares outstanding excludes options and RSUs where the combination of the exercise price (in the case of options) and the associated unrecognized compensation expense is greater than the average market price of Class A common shares because the inclusion of these securities would be antidilutive. In fiscal 2022 and 2021, there were approximately 6.7 million and 3.3 million potential shares, respectively, that were anti-dilutive and excluded from the computation of diluted shares outstanding. In fiscal 2020, all outstanding stock options and unvested RSUs were excluded from the calculation of diluted loss per Class A and B-1 common share, as their effect would be antidilutive in a net loss period. Shares of Class B-2 common stock are not included in the calculation of net income (loss) per share as they only possess voting rights. Unvested RSUs contain forfeitable rights to dividend equivalent units if dividends are paid to holders of Class A and B-1 common stock. Because the dividend equivalent units are forfeitable, unvested RSUs are not considered participating securities. For periods prior to the Company’s conversion to a Delaware corporation, including fiscal 2020 for which a portion of the period preceded the conversion, the Company has retrospectively presented net loss per share as if the conversion had occurred at the beginning of the earliest period presented. The weighted average shares used in computing net loss per Class A and B-1 common share in these periods are based on the number of Common Series A and Common Series B Units held by members. Prior to the conversion, the Company’s Series C Units met the definition of participating securities, as they would have participated in distributions after certain applicable thresholds had been met. However, such thresholds had not been met in the periods presented, and holders of Series C Units were not contractually obligated to participate in losses of the Company. Accordingly, losses were not allocated to participating securities under the two-class method in these periods. Following the conversion, the Company had no Series C Units outstanding. Scooby LP’s own Series C Units (such as those granted under the 2016 Incentive Plan) do not participate in the earnings and losses of the Company and are therefore not participating securities. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 28, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes Income tax expense (benefit) consisted of the following (in thousands): Fiscal years ended January 28, January 29, January 30, (52 weeks) (52 weeks) (52 weeks) Current: Federal $ 23,141 $ 4,550 $ ( 29,869 ) State 13,099 11,182 984 $ 36,240 $ 15,732 $ ( 28,885 ) Deferred: Federal $ 4,649 $ 39,087 $ 19,604 State ( 5,542 ) ( 1,346 ) 5,944 $ ( 893 ) $ 37,741 $ 25,548 Income tax expense (benefit) $ 35,347 $ 53,473 $ ( 3,337 ) A reconciliation of income tax expense (benefit) at the federal statutory rate with the provision for income taxes is as follows (in thousands): Fiscal years ended January 28, 2023 January 29, 2022 January 30, 2021 (52 weeks) (52 weeks) (52 weeks) Income tax expense (benefit) at federal statutory rate $ 26,490 21.0 % $ 45,751 21.0 % $ ( 6,251 ) 21.0 % Non-deductible expenses 2,035 1.9 1,425 0.7 986 ( 3.3 ) Equity compensation 6,754 5.4 5,988 2.7 2,212 ( 7.4 ) State taxes, net of federal tax benefit 4,289 3.1 7,636 3.5 5,473 ( 18.4 ) Tax credits ( 3,800 ) ( 3.0 ) ( 2,500 ) ( 1.1 ) ( 1,907 ) 6.4 Uncertain tax positions 1,142 0.9 925 0.4 4,593 ( 15.4 ) CARES Act – carryback rate differential — — — — ( 8,752 ) 29.3 IPO transaction costs — — ( 5,201 ) ( 2.4 ) — — Other, net ( 1,563 ) ( 1.3 ) ( 551 ) ( 0.3 ) 309 ( 1.0 ) $ 35,347 28.0 % $ 53,473 24.5 % $ ( 3,337 ) 11.2 % The effective tax rate is based on expected taxable income, statutory tax rates and tax planning opportunities available to the Company. Reserves are established when positions are “more likely than not” to not be sustained if challenged. Reserves are adjusted at each reporting period to reflect the impact of audit settlements, expiration of statutes of limitation, developments in the tax law and ongoing discussions with the tax authorities. Accrued interest and penalties associated with uncertain tax positions are recognized as part of the income tax provision. On March 27, 2020, in response to the COVID-19 pandemic, the “Coronavirus Aid, Relief and Economic Security Act” (“CARES Act”) was signed into law by the President of the United States. The CARES Act includes, among other things, U.S. corporate income tax provisions related to net operating loss carryback periods, alternative minimum tax credits, modifications to interest deduction limitations and technical corrections on tax depreciation methods for qualified improvement property. The Company re-measured deferred tax assets related to $ 67.4 million net operating losses available under the CARES Act that were expected to be carried back to the fiscal years before the Tax Act was enacted, which resulted in a benefit of $ 8.8 million that increased the effective tax rate in the fiscal year ended January 30, 2021. During the fiscal year ended January 29, 2022, the Company completed its analysis of third party legal, consulting, accounting, and other transaction costs incurred by the Company in connection with its initial public offering on January 13, 2021, which resulted in a benefit of $ 5.2 million that decreased the effective tax rate in the fiscal year ended January 29, 2022. Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): January 28, January 29, Deferred tax assets: Inventory $ 25,758 $ 21,203 Accrued employee benefits 30,847 38,670 Net operating losses, state tax credit carryforwards 5,918 5,856 Interest expense limitation carry-forward under 25,761 14,696 Lease-related items 377,270 359,677 Other 1,927 11,646 Total deferred tax assets 467,481 451,748 Valuation allowance ( 2,520 ) ( 5,863 ) Net deferred tax assets 464,961 445,885 Deferred tax liabilities: Fixed assets ( 112,868 ) ( 115,621 ) Intangible assets ( 261,333 ) ( 267,597 ) Debt restructuring ( 1,975 ) ( 2,248 ) Lease-related items ( 361,833 ) ( 347,501 ) Investments in joint ventures ( 30,073 ) ( 31,273 ) Total deferred tax liabilities ( 768,082 ) ( 764,240 ) $ ( 303,121 ) $ ( 318,355 ) In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. With the exception to certain state net operating losses discussed below, management believes that it is more likely than not that the Company will realize the benefits of these deductible differences. This is based upon future reversals of existing taxable temporary differences over the periods in which the deferred tax assets are deductible. As of January 28, 2023 , the Company has recorded a deferred tax asset of $ 2.5 million reflecting the benefit of $ 48.0 million in state income tax net operating loss carryforwards, which will begin to expire in fiscal 2023. The Company believes that it is more likely than not that the state net operating loss carryforward will not be realized and recorded a valuation allowance of $ 2.5 million on the deferred tax asset related to these state net operating loss carryforwards as of January 28, 2023. If or when recognized, the tax benefits related to any reversal of the valuation allowance on deferred tax assets will be accounted for as a reduction of income tax expense. The Company has approximatel y $ 16.4 million of unrecognized tax benefits as of January 28, 2023, of which $ 4.2 million, if recognized, would impact the effective tax rate and $ 12.2 million wo uld result in an adjustment to the net deferred tax liability. Changes in unrecognized tax benefits, excluding interest and penalties, were as follows (in thousands): January 28, January 29, Beginning balance $ 16,421 $ 16,421 Additions for tax positions taken in prior years — — Decreases related to lapse of statute limitation — — Ending balance $ 16,421 $ 16,421 The Company has approximately $ 2.9 million accrued for interest and penalties as of January 28, 2023 in the consolidated balance sheets and recorded $ 1.3 million in interest during fiscal 2022 in the consolidated statements of operations. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company does not anticipate that unrecognized tax benefits will significantly increase or decrease over the next 12 months. The Company is no longer subject to examination for U.S. federal income tax for periods prior to fiscal 2018. The Company is no longer subject to examination by state tax authorities for tax periods prior to fiscal 2017 . The Company is currently under audit by various state jurisdictions for various years. Though the estimated completion dates of these audits are not known, it is possible that these audits will be completed within the next 12 months. In addition, the Company does not foresee other material changes to the federal or state uncertain tax positions affecting income tax expense within the next 12 months. The Company has no material foreign operations. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Jan. 28, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 14. Accumulated Other Comprehensive Income (Loss) Changes in the balances of each component included in AOCI are presented below (net of tax, in thousands): Derivatives Foreign Total Balance at February 1, 2020 $ ( 7,903 ) $ ( 370 ) $ ( 8,273 ) Other comprehensive loss before reclassifications ( 86 ) ( 905 ) ( 991 ) Amounts reclassified from AOCI 7,989 — 7,989 Other comprehensive income (loss) 7,903 ( 905 ) 6,998 Balance at January 30, 2021 $ — $ ( 1,275 ) $ ( 1,275 ) Other comprehensive loss — ( 963 ) ( 963 ) Balance at January 29, 2022 $ — $ ( 2,238 ) $ ( 2,238 ) Other comprehensive (loss) income ( 2,180 ) 194 ( 1,986 ) Amounts reclassified from AOCI 127 — 127 Other comprehensive (loss) income ( 2,053 ) 194 ( 1,859 ) Balance at January 28, 2023 $ ( 2,053 ) $ ( 2,044 ) $ ( 4,098 ) |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 28, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies Baseball Stadium Naming Rights Commitment In March 2003, the Company entered into an agreement with San Diego Ballpark Funding LLC and Padres L.P. to name the San Diego Padres’ new stadium Petco Park. The naming rights include signage, advertising and other promotional benefits. Pursuant to the agreement, the Company pays an annual contract fee. Fees for fiscal 2022, 2021, and 2020 were $ 4.4 million, $ 4.1 million, and $ 4.1 million, respectively. These fees are included in selling, general and administrative expenses in the consolidated statements of operations, and will be adjusted by the maximum annual change related to the San Diego consumer price index per year through the 2027 Major League Baseball season. Litigation The Company is involved in legal proceedings and is subject to other claims and litigation arising in the ordinary course of its business. The Company has made accruals with respect to certain of these matters, where appropriate, which are reflected in the Company’s consolidated financial statements but are not, individually or in the aggregate, considered material. For other matters, the Company has not made accruals because management has not yet determined that a loss is probable or because the amount of loss cannot be reasonably estimated. While the ultimate outcome of the matters cannot be determined, the Company currently does not expect that these matters will have a material adverse effect on its consolidated financial statements. The outcome of any litigation is inherently uncertain, however, and if decided adversely to the Company, or if the Company determines that settlement of particular litigation is appropriate, the Company may be subject to liability that could have a material adverse effect on its consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 28, 2023 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Petco Health and Wellness Company, Inc. (together with its consolidated subsidiaries, the “Company”) is a category-defining health and wellness company focused on improving the lives of pets, pet parents, and its own partners with 1,430 pet care centers in 50 states, the District of Columbia and Puerto Rico as of January 28, 2023. The Company also offers an expanded range of consumables, supplies and services through its www.petco.com, www.petcoach.co, www.petinsurancequotes.com, and www.pupbox.com websites. The Company was formed as a Delaware limited liability company under the name PET Acquisition LLC on November 19, 2015 as an acquisition entity controlled by Scooby LP, which was indirectly owned by funds affiliated with CVC Capital Partners, Canada Pension Plan Investment Board, a Canadian company (together with CVC Capital Partners, the “Sponsors”), and certain co-investors. On January 26, 2016, the Company completed a merger (the “Acquisition”) whereby Petco Holdings, Inc. converted from a Delaware corporation to a Delaware limited liability company and became a wholly owned subsidiary of the Company. Under this ownership structure, the Company had four classes of membership units: (i) Common Series A Units; (ii) Common Series B Units; (iii) Common Series C Units; and (iv) Voting Common Units. |
Corporate Conversion and Public Offering | Corporate Conversion and Public Offerings In January 2021, all of the Company’s Common Series A Units, Common Series B Units, and Common Series C Units were contributed from Scooby LP to a newly formed and wholly owned subsidiary, Scooby Aggregator, LP. The Company then converted to a Delaware corporation pursuant to a statutory conversion and changed its name to Petco Health and Wellness Company, Inc. In connection with the conversion and immediately prior to the Company’s initial public offering, all outstanding membership units were converted into 171.2 million shares of newly-issued Class A common stock, 37.8 million shares of newly-issued Class B-1 common stock, and 37.8 million shares of newly-issued Class B-2 common stock. The existing balances of members’ interest and accumulated deficit prior to the conversion were reclassified to additional paid-in capital in the consolidated balance sheets. This reclassification had no effect on the Company’s results of operations. The rights of the holders of Class A common stock and Class B-1 common stock are identical in all respects, except that Class B-1 common stock does not vote on the election or removal of the Company’s directors. The rights of the holders of Class B-2 common stock differ from the rights of the holders of Class A common stock and Class B-1 common stock in that holders of Class B-2 common stock only possess the right to vote on the election or removal of the Company’s directors. On January 19, 2021, the Company completed its initial public offering of 55.2 million newly-issued shares of its Class A common stock. The price was $ 18.00 per share. The Company received net cash proceeds of approximately $ 936.0 million from the initial public offering after deducting underwriting discounts, commissions, and offering expenses through January 30, 2021, with $ 3.8 million of accrued offering expenses reflected in accrued expenses and other liabilities in the consolidated balance sheets. The net proceeds from the initial public offering were used to pay a portion of the principal amount and accrued interest on the Company’s debt obligations. Refer to Note 7 and Note 8 for further discussion on the Company’s use of proceeds from the initial public offering. In June 2021, Scooby Aggregator, LP, the Company’s principal stockholder, completed the sale of 25.3 million existing shares of Class A common stock in connection with a secondary offering. The offering price was $ 24.00 per share. The Company received no proceeds from the secondary offering. Expenses incurred by the Company related to the secondary offering were not material. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Petco Health and Wellness Company, Inc., its wholly owned subsidiaries, and a variable interest entity for which it was the primary beneficiary prior to the transaction described below. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates are based on information that is currently available and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could vary from those estimates under different assumptions or conditions. |
Fiscal Year | Fiscal Year The Company’s fiscal year ends on the Saturday closest to January 31, resulting in years of either 52 or 53 weeks. All references to a fiscal year refer to the fiscal year ending on the Saturday closest to January 31 of the following year. For example, references to fiscal 2022 refer to the fiscal year that began on January 30, 2022 and ended on January 28, 2023. Fiscal 2022, 2021 and 2020 included 52 weeks. |
Segment Reporting | Segment Reporting Operating segments are components of an enterprise about which separate financial information is available and is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CEO serves as the Company’s CODM. The Company manages its business as one reportable operating segment which is designed to sell pet food, supplies and companion animals, and services to pet parents across pet care center and online channels. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents represent all liquid investments with original maturities of three months or less and include money market mutual funds. The Company maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. The Company has not experienced any losses related to these balances. Included in the Company’s cash and cash equivalents are credit and debit card receivables from banks, which typically settle within five business days, of $ 40.0 million and $ 35.9 million at January 28, 2023 and January 29, 2022 , respectively. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets to the total amounts reported in the consolidated statements of cash flows. Restricted cash is held in a trust used for certain employee benefit costs. January 28, January 29, Cash and cash equivalents $ 201,901 $ 211,602 Restricted cash included in other current assets 11,826 10,288 Total cash, cash equivalents and restricted cash in $ 213,727 $ 221,890 Outstanding checks in excess of funds on deposit (book overdrafts) totaled $ 27.4 million and $ 61.5 million at January 28, 2023 and January 29, 2022 , respectively, and are reflected in accounts payable and book overdrafts in the consolidated balance sheets. |
Vendor Rebates and Allowances | Vendor Rebates and Allowances Most of the Company’s receivables are due from vendors. Receivables are stated net of an allowance for estimated credit losses, which is determined by continually evaluating individual receivables, the vendor’s financial condition and current and expected economic conditions. The additions and deductions to the allowance for estimated credit losses were not material for all periods presented. The Company receives vendor allowances, primarily in the form of cooperative advertising reimbursements, rebate incentives, prompt purchase discounts, and vendor compliance charges pursuant to agreements with certain vendors. Substantially all vendor allowances are initially deferred as a reduction of the cost of inventory purchased and recorded as a reduction to cost of sales in the consolidated statements of operations as the inventory is sold. Vendor rebates and allowances that are identified as specific, incremental and identifiable costs incurred by the Company in selling the vendors’ products are classified as a reduction of selling, general and administrative expenses in the consolidated statements of operations as the costs are incurred, as the related costs are also classified as selling, general and administrative expenses. |
Merchandise Inventories | Merchandise Inventories Merchandise inventories represent finished goods and are stated at the lower of cost or net realizable value. Cost is determined by the average-cost method and includes inbound freight charges. Physical inventories are performed on a regular basis at pet care center locations and cycle counts are performed for inventory at distribution centers. During the period between counts at pet care center locations, the Company accrues for estimated losses related to inventory shrinkage based on historical inventory shrinkage results and current trends in the business. Inventory shrinkage may occur due to theft, loss, or the deterioration of goods, among other reasons. The Company assesses its inventory for estimated obsolescence or unmarketable inventory and writes down the difference between the cost of inventory and the estimated market value based upon historical mark-downs, supply on-hand and assumptions about future sales. |
Fixed Assets | Fixed Assets Fixed assets are stated at cost or fair value as of the date of the Acquisition less accumulated depreciation and amortization. Pet care center facilities and equipment under finance leases are recorded at the present value of lease payments at the inception of the lease. Maintenance and minor repairs are expensed as incurred. Buildings, equipment, furniture and fixtures are depreciated using the straight-line method over the estimated useful life of the asset. Leasehold and building improvements are amortized using the straight-line method over the term of the lease or the estimated useful life of the improvement, whichever is shorter. Land is not depreciated. Amortization of fixed assets financed through finance leases is included in depreciation and amortization expense. The Company’s fixed assets are generally depreciated or amortized using the following estimated useful lives: Buildings 30 years Equipment 3 to 7 years Furniture and fixtures 4 to 7 years Leasehold and building improvements 5 to 10 years Costs incurred to develop internal-use software during the application development stage, which include costs to design the software configuration and interfaces, coding, installation and testing, are capitalized and reported at cost, less accumulated amortization. Costs of significant upgrades and enhancements that result in additional functionality are also capitalized, whereas costs incurred for maintenance and minor upgrades and enhancements are expensed as incurred. Software and capitalized development costs are included in the Company’s equipment fixed asset category and are amortized using the straight-line method over the estimated useful life of the asset. The Company assesses its fixed assets, including internal-use software, for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The review of recoverability is based on estimates of the undiscounted future cash flows expected to be generated by an asset (or group of assets) at a pet care center level. If impairment exists due to the inability to recover the asset’s carrying value, impairment losses are measured as the amount by which the asset’s carrying value exceeds its fair value using the income approach and are recorded as a reduction of the related asset and charged to the consolidated statements of operations. |
Goodwill | Goodwill Goodwill represents the excess of the cost of acquired businesses over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed. Goodwill is not amortized. The Company performs its annual impairment test during the fourth quarter of each fiscal year, or more frequently when warranted by events or changes in circumstances. The Company has the option to first perform a qualitative assessment of its goodwill to determine whether it is necessary to perform a quantitative impairment test. If the Company concludes it is more likely than not that its goodwill is impaired, management evaluates the recoverability of goodwill by comparing the carrying value of the Company’s reporting unit to the fair value. An impairment charge is recorded for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the loss recognized not exceeding the total amount of goodwill allocated to that reporting unit. The Company has one reporting unit. In cases where the quantitative test is performed, the fair value of the Company’s reporting unit is estimated by a third party valuation firm. |
Trade Name | Trade Name The Company’s trade name has an indefinite life. The Company performs its annual impairment test during the fourth quarter of each fiscal year, or more frequently when warranted by events or changes in circumstances. The Company also has the option to first perform a qualitative assessment of its trade name to determine whether it is necessary to perform a quantitative impairment test. In cases where the quantitative test is performed, the fair value of the Company’s trade name is estimated by a third party valuation firm. Significant assumptions inherent in the valuation methodologies employed by the third party valuation firm could include, but are not limited to, prospective financial information, growth rates, discount rates and comparable multiples from publicly traded companies in similar industries. An impairment charge is recorded for the amount by which the carrying amount of the trade name exceeds its fair value. |
Joint Ventures, Equity Method Investments, and Variable Interest Entities | Joint Ventures, Equity Method Investments, and Variable Interest Entities Investments for which the Company exercises significant influence but does not have control are accounted for under the equity method. Equity method investment activity is primarily related to a 50 % joint venture with Grupo Gigante, S.A.B. de C.V. (the “Mexico joint venture”) to establish Petco locations in Mexico. The Company’s share of the investee’s results is presented as either income or loss from equity method investees in the accompanying consolidated statements of operations. The equity method of accounting is applicable for the Mexico joint venture as the Company does not own more than 50% of voting power, but has significant influence over the operation and financial policies of the investee. The joint venture is not material to the Company’s consolidated financial statements. The Mexico joint venture purchases certain inventory items and pet care center assets from the Company. The Company also receives royalties from the Mexico joint venture for the use of its trademarks. Revenues generated from these transactions were not material in fiscal 2022, 2021, and 2020. The cumulative unrealized foreign currency adjustment on the translation of the Company’s investment in the joint venture and the foreign currency translation impact of the royalty receivable are recorded in accumulated other comprehensive income (“AOCI”), net of tax. The Company consolidates variable interest entities (“VIEs”) where it has been determined that the Company is the primary beneficiary of those entities’ operations. The Company held a 50 % investment in a joint venture with a domestic partner to build and operate veterinary clinics in Petco locations, which were previously accounted for under the equity method. In March 2019, the Company entered into an amended agreement governing the joint venture’s operations and determined that the Company had the power to direct the activities most important to the VIE. As a result, the joint venture was a VIE for which the Company was the primary beneficiary. Under the amended agreement, the domestic partner provided certain management and support services to the joint venture. These services included administrative, financial reporting, compliance, and technology support services in connection with the operation and growth of the joint venture. As compensation for these services, the joint venture paid the domestic partner a quarterly joint venture management fee equal to a portion of clinic revenues, subject to a minimum fixed fee. The Company incurred and recorded $ 0.7 million, $ 2.5 million, and $ 2.0 million of joint venture management fees under this agreement in fiscal 2022, 2021, and 2020, respectively, which were included in selling, general and administrative expenses in the consolidated statements of operations. In May 2022, the Company completed the purchase of the remaining 50 % of the issued and outstanding membership interests of the joint venture, which is now a wholly owned subsidiary of the Company, for cash consideration of $ 35.0 million. Direct transaction costs related to this purchase were not material. |
Fair Value Measurements | Fair Value Measurements Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would conduct a transaction, in addition to the assumptions that market participants would use when pricing the related assets or liabilities, including non-performance risk. A three-level hierarchy prioritizes the inputs to valuation techniques used to measure fair value. 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 measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 — Unobservable inputs for the asset or liability. The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, trade accounts payable, and accrued expenses and other current liabilities approximate fair value based on the short-term maturities of these instruments. Refer to Notes 7, 9 and 10 for fair value disclosures for the senior secured term credit facilities, derivatives, and other types of assets and liabilities measured at fair value, respectively. |
Self Insurance Reserves | Self-Insurance Reserves The Company is self-insured for workers’ compensation, general, auto liability and employee-related health care benefits, a portion of which is paid by the Company’s employees. Additionally, the Company has insurance coverage to limit its exposure above a per occurrence retention limit. These insurance policies have stated maximum coverage limits after which the Company bears the risk of loss. The Company determines the related liabilities using a number of factors including historical experience and trends related to claims and payments, information provided by the Company’s insurance brokers and actuaries, an estimate of incurred but not reported claims and industry experience and trends. Estimates of future claim costs for workers’ compensation, general, auto liability and employee-related health care benefits are recorded on an undiscounted basis. All estimates of ultimate loss and loss adjustment expense and resulting reserves are subject to inherent variability caused by the nature of the insurance process. The potentially long period of time between the reporting of an occurrence of an incident and the final resolution of a claim and the possible effects of changes in the legal, social and economic environments contribute to this variability. The Company reports self-insurance liabilities gross of insurance recoveries. As of January 28, 2023, insurance recoveries of $ 7.0 million and $ 16.4 million were recorded in other current assets and other long-term assets, respectively. As of January 29, 2022, insurance recoveries of $ 5.7 million and $ 15.9 million were recorded in other current assets and other long-term assets, respectively. Self-insurance reserves are reflected in the consolidated balance sheets as follows (in thousands): January 28, January 29, Current: Workers’ compensation and employee-related $ 27,175 $ 23,699 General and auto liability reserves 5,678 4,733 $ 32,853 $ 28,432 Non-current: Workers’ compensation reserve $ 40,336 $ 44,706 General and auto liability reserves 12,444 11,780 $ 52,780 $ 56,486 The current portion and non-current portion of self-insurance reserves for workers’ compensation and employee-related health care benefits are included in accrued salaries and employee benefits and other long-term liabilities, respectively, in the consolidated balance sheets. The current portion and non-current portion of self-insurance reserves for general and auto liability costs are included in accrued expenses and other liabilities and other long-term liabilities, respectively, in the consolidated balance sheets. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when control of promised goods or services is transferred to customers, in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. See Note 2 for further discussion on revenue recognition. |
Cost of Sales | Cost of Sales Cost of sales includes the following types of expenses: • Direct costs (net of vendor rebates, allowances and discounts for products sold) including inbound freight charges; • Shipping and handling costs associated with sales to customers; • Freight costs associated with moving merchandise inventories; • Inventory shrinkage costs and write-downs; • Payroll costs of pet groomers, trainers, veterinarians and other direct costs of services; and • Costs associated with operating the Company’s distribution centers including payroll, occupancy costs and depreciation |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses include the following types of expenses: • Payroll and benefit costs of pet care center and corporate employees; • Occupancy and operating costs of pet care center and corporate facilities; • Depreciation and amortization related to pet care center and corporate assets; • Credit card fees; • Store pre-opening and remodeling costs; • Advertising costs; and • Other selling and administrative costs |
Advertising Expenses | Advertising Expenses The Company records advertising expense as incurred and classifies advertising costs within selling, general and administrative expenses in the consolidated statements of operations. The Company’s advertising expenses, net of cooperative advertising reimbursements, were $ 203.7 million, $ 227.9 million, and $ 168.4 million for fiscal 2022, 2021, and 2020, respectively. Vendor cooperative advertising reimbursements reduced total advertising expense by $ 10.0 million, $ 32.5 million, and $ 25.7 million for fiscal 2022, 2021, and 2020, respectively. |
Leases | Leases The majority of the Company’s lease liabilities are real estate operating leases from which pet care center, corporate support, and distribution operations are conducted. The Company also leases equipment, vehicles, and certain pet care center locations under finance leases. Lease terms generally do not include options to terminate the lease and only include options to extend the lease, if it is reasonably certain that the option will be exercised. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the consolidated balance sheet as an operating or finance lease at the commencement of the lease agreement. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term. Operating lease assets represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. The Company uses a collateralized incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Operating leases typically require payment of certain non-lease costs, such as real estate taxes, common area maintenance and insurance. These components comprise the majority of the Company’s variable lease costs and are excluded from the present value of lease liabilities unless an event occurs that results in the payments becoming fixed for the remaining term. The remaining lease and non-lease components are accounted for together as a single lease component for all underlying classes of assets. Operating lease assets are adjusted for lease incentives, initial direct costs, impairments, and exit or disposal costs. Operating lease costs are recognized on a straight-line basis from the commencement date to the end of the lease term. Operating lease costs relating to distribution centers are included in cost of sales, and operating lease costs relating to pet care center and corporate support locations are included in selling, general and administrative expenses in the consolidated statements of operations. Amortization on finance lease right-of-use assets relating to distribution centers are included in cost of sales, and amortization on finance lease right-of-use assets relating to pet care center and corporate support locations are included in selling, general and administrative expenses in the consolidated statements of operations. Interest on finance lease right-of-use assets is included in interest expense in the consolidated statements of operations. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company’s sublease portfolio consists mainly of operating leases with a domestic partner to operate dog boarding and daycare facilities, which are not material. The Company records contractual obligations associated with the retirement of long-lived assets at their fair value at the time the obligations are incurred. These obligations arise from certain leases and primarily relate to the cost of removing leasehold improvements and certain fixtures from such lease sites and restoring the sites to their original condition. Upon initial recognition of the liability, that cost is capitalized as part of the related long-lived asset and depreciated on a straight-line basis over the estimated useful life of the asset. Activity related to these obligations in fiscal 2022, 2021, and 2020 was not material. The Company’s asset retirement obligation was $ 6.2 million and $ 6.9 million at January 28, 2023 and January 29, 2022 , respectively, and is included in other long-term liabilities in the consolidated balance sheets. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date. Valuation allowances, if any, are recorded against net deferred tax assets when it is considered more likely than not that some portion or all of a deferred tax asset may not be recoverable. Deferred tax assets and liabilities are recorded as either net non-current assets or net non-current liabilities on the consolidated balance sheets. Refer to Note 13 for further disclosures of the Company’s income taxes. Management regularly evaluates the likelihood of recognizing the benefit for income tax positions it has taken in various federal and state filings by considering relevant facts, circumstances and information available. The authoritative guidance clarifies the accounting for income taxes by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold for recognizing benefit of a tax position is that such position is more likely than not to be sustained upon examination by the taxing authority, including resolution of any related appeals or litigation processes, and is based on the technical merits of the position. |
Equity-Based Compensation | Equity-Based Compensation Equity-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the vesting period of the award, which is also the requisite service period, based upon the corresponding vesting method and probability of vesting (Note 12). The Company recognizes the effect of pre-vesting forfeitures as they occur. |
Equity Valuation | Equity Valuation The per unit fair value of equity underlying the partnership unit awards prior to the Company’s initial public offering was determined by the Company’s board of directors based on enterprise valuations performed by management with the assistance of a third-party valuation firm, taking into consideration any recent market transactions involving the Company’s equity. The valuation of the equity of any private company involves various estimates and assumptions that may differ from actual values. For a portion of fiscal 2020, the Company’s equity value was determined using a combination of two valuation approaches: Income Approach – estimates the fair value based on the present value of the Company’s future estimated cash flows and the residual value of the Company beyond the forecast period. These future cash flows, including the cash flows beyond the forecast period for the residual value, are discounted to their present values using an appropriate discount rate, to reflect the risks inherent in the Company achieving these estimated cash flows. Market Approach (specifically, the guideline public company method) – estimates fair value based upon the observed valuation multiples of comparable public companies, the equity of which is freely-traded by investors in the public securities markets. Beginning in the third quarter of fiscal 2020 and prior to its initial public offering, the Company determined its equity value using the probability weighted expected return method (“PWERM”), or the hybrid method. Under the hybrid method, multiple valuation approaches are used and then combined into a single probability weighted valuation using a PWERM, which considers the probability of an initial public offering scenario. The results of the valuation approaches were weighted based on a variety of factors including: current macroeconomic environment, current industry conditions and length of time since arms-length market transaction events. Additionally, a discount for lack of marketability was applied to account for the lack of access to an active public market. The resulting value was then allocated to outstanding equity using an option-pricing model. |
Derivative Instruments | Derivative Instruments In March 2016, the Company entered into a series of five interest rate cap agreements with four counterparties totaling $ 1,950.0 million to limit the maximum interest rate on a portion of the Company’s variable-rate debt and limit its exposure to interest rate variability when three-month LIBOR exceeds 2.25 %. The interest rate caps are accounted for as cash flow hedges, and changes in the fair value of the interest rate caps are reported as a component of AOCI. The interest rate caps were settled in accordance with their contractual terms on January 29, 2021 . In November 2022, the Company entered into a series of interest rate cap agreements to limit the maximum interest on a portion of the Company’s variable-rate debt and decrease its exposure to interest rate variability when the three-month Secured Overnight Financing Rate ("SOFR") as published by CME Group exceeds 4.5 %. The interest rate caps are accounted for as cash flow hedges, and changes in the fair value of the interest rate caps are reported as a component of AOCI. Refer to Note 9 for further disclosures of the Company’s derivative instruments and hedging activities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the FASB issued Accounting Standards Update No. 2020-04 – Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions affected by the anticipated transition from LIBOR. As a result of the reference rate reform initiative, certain widely used reference rates such as LIBOR are expected to be discontinued. The guidance is designed to simplify how entities account for contracts, such as receivables, debt, leases, derivative instruments and hedging, that are modified to replace LIBOR or other benchmark interest rates with new rates. The Company adopted this accounting policy in December 2022. The adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. R efer to Note 7 for additional information. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets to the total amounts reported in the consolidated statements of cash flows. Restricted cash is held in a trust used for certain employee benefit costs. January 28, January 29, Cash and cash equivalents $ 201,901 $ 211,602 Restricted cash included in other current assets 11,826 10,288 Total cash, cash equivalents and restricted cash in $ 213,727 $ 221,890 |
Summary of Estimated Useful Lives of Fixed Assets | The Company’s fixed assets are generally depreciated or amortized using the following estimated useful lives: Buildings 30 years Equipment 3 to 7 years Furniture and fixtures 4 to 7 years Leasehold and building improvements 5 to 10 years |
Summary of Self-insurance Reserves | Self-insurance reserves are reflected in the consolidated balance sheets as follows (in thousands): January 28, January 29, Current: Workers’ compensation and employee-related $ 27,175 $ 23,699 General and auto liability reserves 5,678 4,733 $ 32,853 $ 28,432 Non-current: Workers’ compensation reserve $ 40,336 $ 44,706 General and auto liability reserves 12,444 11,780 $ 52,780 $ 56,486 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Net Sales by Product Type and Services | Net sales by product type and services were as follows (in thousands): Fiscal years ended January 28, January 29, January 30, (52 weeks) (52 weeks) (52 weeks) Consumables $ 2,859,602 $ 2,533,755 $ 2,123,499 Supplies and companion animals 2,370,913 2,603,104 2,328,663 Services and other 805,452 670,290 468,040 Net sales $ 6,035,967 $ 5,807,149 $ 4,920,202 |
Composition of Balance Sheet _2
Composition of Balance Sheet Accounts (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Fixed Assets, Net | Fixed assets, net, consisted of the following (in thousands): January 28, January 29, Equipment $ 885,370 $ 772,454 Leasehold improvements 686,888 623,201 Furniture and fixtures 398,187 329,823 Buildings and related improvements 16,696 16,959 Land 418 3,254 1,987,559 1,745,691 Less accumulated depreciation ( 1,184,232 ) ( 1,018,769 ) $ 803,327 $ 726,922 |
Schedule of Accrued Salaries and Employee Benefits | Accrued salaries and employee benefits consisted of the following (in thousands): January 28, January 29, Accrued compensation and related taxes $ 44,724 $ 110,347 Self-insurance reserves 27,175 23,699 Accrued paid time-off 18,030 16,584 $ 89,929 $ 150,630 |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consisted of the following (in thousands): January 28, January 29, Accrued capital expenditures $ 29,051 $ 36,935 Accrued real estate taxes 26,485 26,662 Accrued advertising 24,020 15,192 Deferred revenue 23,045 18,003 Sales taxes payable 22,950 19,950 Other accrued expenses and liabilities 92,005 94,130 $ 217,556 $ 210,872 |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consisted of the following (in thousands): January 28, January 29, Self-insurance reserves $ 52,780 $ 56,486 Finance leases 23,642 25,052 Other liabilities 54,065 52,567 $ 130,487 $ 134,105 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Leases [Abstract] | |
Schedule of Lease Assets and Liabilities | Lease assets and liabilities are reflected in the Company’s consolidated balance sheets as follows (in thousands): Leases Balance sheet January 28, January 29, Assets Operating leases Operating lease right-of-use assets $ 1,397,761 $ 1,338,465 Finance leases Fixed assets, net(1) 24,624 24,500 Total lease assets $ 1,422,385 $ 1,362,965 Liabilities Current Operating leases Current portion of operating lease liabilities $ 309,766 $ 265,897 Finance leases Current portion of long-term debt and other 5,794 4,764 Non-current Operating leases Operating lease liabilities, excluding 1,148,155 1,096,133 Finance leases Other long-term liabilities 23,642 25,052 Total lease liabilities $ 1,487,357 $ 1,391,846 Finance lease right-of-use assets are recorded net of accumulated amortization of $ 24.6 million and $ 19.7 million as of January 28, 2023 and January 29, 2022 , respectively. |
Components of Total Lease Cost | The components of total lease cost are as follows (in thousands): Fiscal years ended January 28, January 29, January 30, Operating lease cost $ 422,792 $ 422,465 $ 430,359 Finance lease cost: Amortization of right-of-use lease assets 5,660 3,933 3,292 Interest on lease liabilities 1,329 876 908 Variable lease cost 110,335 109,723 105,859 Sublease income ( 2,810 ) ( 5,091 ) ( 5,327 ) Total lease cost $ 537,306 $ 531,906 $ 535,091 |
Schedule of Other Information of Leases | Other information for the Company’s leases is as follows (in thousands): Fiscal years ended January 28, January 29, January 30, Cash paid for amounts included in the measurement Operating cash flows from operating leases $ 386,259 $ 418,210 $ 399,557 Operating cash flows from finance leases $ 1,349 $ 850 $ 941 Financing cash flows from finance leases $ 5,083 $ 3,564 $ 3,404 Lease assets obtained in exchange for lease liabilities: Operating leases $ 363,311 $ 308,166 $ 132,829 Finance leases $ 4,784 $ 19,841 $ 613 January 28, January 29, Weighted average remaining lease term: Operating leases 6.0 years 6.0 years Finance leases 3.2 years 3.6 years Weighted average discount rate: Operating leases 8.4 % 9.2 % Finance leases 4.7 % 4.6 % |
Schedule of Maturities of Operating and Finance Lease Liabilities | At January 28, 2023, the maturities of the Company’s operating and finance lease liabilities were as follows (in thousands): Fiscal years Operating Finance 2023 414,773 7,029 2024 355,630 16,726 2025 292,014 3,734 2026 234,248 2,161 2027 164,643 1,182 Thereafter 380,655 1,569 Total lease payments $ 1,841,963 $ 32,401 Less imputed interest ( 384,042 ) ( 2,965 ) Present value of lease payments 1,457,921 29,436 Less current portion ( 309,766 ) ( 5,794 ) Lease liabilities, excluding current portion $ 1,148,155 $ 23,642 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of the Company’s goodwill were as follows (in thousands): January 28, January 29, Beginning balance: Goodwill $ 2,991,954 $ 2,987,273 Accumulated impairment ( 807,963 ) ( 807,963 ) Goodwill, net $ 2,183,991 $ 2,179,310 Additions from acquisitions $ 9,950 $ 4,681 Ending balance: Goodwill $ 3,001,904 $ 2,991,954 Accumulated impairment ( 807,963 ) ( 807,963 ) Goodwill, net $ 2,193,941 $ 2,183,991 |
Senior Secured Credit Facilit_2
Senior Secured Credit Facilities (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Debt Disclosure [Abstract] | |
Applicable Margin for Adjusted LIBOR Loans and Base Rate Loans based on Average Historical Excess Availability | The applicable margin is adjusted quarterly based on the average historical excess availability as a percentage of the Line Cap, which represents the lesser of the aggregate ABL Revolving Credit Facility and the borrowing base, as follows: Average Historical Excess Availability Applicable Applicable Less than 33.3 % of the Line Cap 1.75 % 0.75 % Less than 66.7 % but greater than or equal to 33.3 % of 1.50 % 0.50 % Greater than or equal to 66.7 % of the Line Cap 1.25 % 0.25 % |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Interest Rate Caps Reflected in Consolidated Balance Sheets | Interest rate caps are reflected in the Company’s consolidated balance sheets as follows (in thousands): Liabilities Balance sheet location January 28, Current liability portion of interest rate caps Accrued expenses and other liabilities $ 1,176 Non-current liability portion of interest rate caps Other long-term liabilities 1,717 Total interest rate caps $ 2,893 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Information About Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents information about assets and liabilities that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): January 28, 2023 Level 1 Level 2 Level 3 Assets (liabilities): Money market mutual funds $ 156,626 $ — $ — Investments of officers' life insurance $ — $ 13,112 $ — Non-qualified deferred compensation plan $ — $ ( 18,464 ) $ — Investment in Rover Group, Inc. $ 20,152 $ — $ — January 29, 2022 Level 1 Level 2 Level 3 Assets (liabilities): Money market mutual funds $ 167,277 $ — $ — Investments of officers' life insurance $ — $ 14,575 $ — Non-qualified deferred compensation plan $ — $ ( 17,453 ) $ — Investment in Rover Group, Inc. $ 32,819 $ — $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Summary of Equity-based Compensation Expense by Award Type | The following table summarizes the Company’s equity-based compensation expense by award type (in thousands): Fiscal years ended January 28, January 29, January 30, (52 weeks) (52 weeks) (52 weeks) RSUs and RSAs $ 38,146 $ 25,459 $ 1,991 Options 9,418 8,002 391 ESPP 1,274 1,034 — Other awards 11,946 14,770 10,533 Total equity-based compensation expense $ 60,784 $ 49,265 $ 12,915 Total related tax benefit $ 8,160 $ 5,033 $ 329 |
Schedule of RSU Activity | RSU activity under the 2021 Equity Incentive Plan was as follows (in thousands, except per share and contractual life amounts): Shares Weighted Weighted Aggregate Nonvested, January 29, 2022 2,587 $ 18.63 1.0 $ 47,342 Granted 7,536 15.23 Vested and delivered ( 1,402 ) 18.63 Forfeited/expired ( 919 ) 18.52 Nonvested, January 28, 2023 7,802 $ 15.36 1.2 $ 91,596 |
Schedule of Stock Option Activity | Stock option activity under the 2021 Equity Incentive Plan was as follows (in thousands, except per share and contractual life amounts): Shares Weighted Weighted Aggregate Outstanding, January 29, 2022 3,327 $ 18.00 9.0 $ 998 Granted 5,125 11.97 Exercised ( 45 ) 18.00 Forfeited/expired ( 593 ) 18.36 Outstanding, January 28, 2023 7,814 $ 14.02 9.1 $ 3,512 Exercisable, January 28, 2023 1,853 $ 18.00 7.9 $ — |
Black-Scholes Assumptions for Series C Units | The weighted average fair value per Series C Unit was estimated at the grant date using the Black-Scholes option pricing model with the following assumptions: Fiscal year ended January 30, (52 weeks) Dividend yield 0.0 % Expected volatility (1) 60.0 - 81.9 % Weighted average volatility (1) 81.1 % Risk-free interest rate (2) 0.1 % - 1.3 % Expected term (3) 2.0 to 4.0 years (1) The expected volatility was estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term consistent with the expected term of the Series C Units. (2) The risk-free interest rates were based on the U.S. Treasury constant maturity interest rate for a term consistent with the expected term of the Series C Units. (3) The expected term of the Series C Units was based on estimated liquidity event timing. |
Schedule of Series C Unit Activity Under 2016 Incentive Plan | Series C Unit activity under the 2016 Incentive Plan was as follows (in thousands): Units Outstanding, January 29, 2022 207,178 Granted — Forfeited ( 5,819 ) Outstanding, January 28, 2023 201,359 Vested, January 28, 2023 151,597 |
Share-based Payment Arrangement, Option | |
Black-Scholes Assumptions for Options | No stock option awards were granted in fiscal 2021. The fair value of stock option awards granted in fiscal 2022 and 2020 was estimated at the grant dates using the Black-Scholes option pricing model with the following assumptions: Fiscal years ended January 28, January 30, (52 weeks) (52 weeks) Dividend yield 0.0 % 0.0 % Expected volatility (1) 38.0 % - 48.4 % 40.4 % Risk-free interest rate (2) 2.8 % - 3.6 % 0.7 % Expected term (3) 5.8 to 5.9 years 5.9 years Grant date fair value per share $ 10.98 - $ 21.06 $ 18.00 Estimated fair value per option granted $ 5.46 - $ 8.64 $ 7.00 (1) The expected volatility was estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term consistent with the expected term of the stock options. (2) The risk-free interest rates were based on the U.S. Treasury constant maturity interest rate for a term 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 was calculated using the simplified method. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) | Income tax expense (benefit) consisted of the following (in thousands): Fiscal years ended January 28, January 29, January 30, (52 weeks) (52 weeks) (52 weeks) Current: Federal $ 23,141 $ 4,550 $ ( 29,869 ) State 13,099 11,182 984 $ 36,240 $ 15,732 $ ( 28,885 ) Deferred: Federal $ 4,649 $ 39,087 $ 19,604 State ( 5,542 ) ( 1,346 ) 5,944 $ ( 893 ) $ 37,741 $ 25,548 Income tax expense (benefit) $ 35,347 $ 53,473 $ ( 3,337 ) |
Reconciliation of Income Tax Expense (Benefit) at Federal Statutory Rate With Provision For Income Taxes | A reconciliation of income tax expense (benefit) at the federal statutory rate with the provision for income taxes is as follows (in thousands): Fiscal years ended January 28, 2023 January 29, 2022 January 30, 2021 (52 weeks) (52 weeks) (52 weeks) Income tax expense (benefit) at federal statutory rate $ 26,490 21.0 % $ 45,751 21.0 % $ ( 6,251 ) 21.0 % Non-deductible expenses 2,035 1.9 1,425 0.7 986 ( 3.3 ) Equity compensation 6,754 5.4 5,988 2.7 2,212 ( 7.4 ) State taxes, net of federal tax benefit 4,289 3.1 7,636 3.5 5,473 ( 18.4 ) Tax credits ( 3,800 ) ( 3.0 ) ( 2,500 ) ( 1.1 ) ( 1,907 ) 6.4 Uncertain tax positions 1,142 0.9 925 0.4 4,593 ( 15.4 ) CARES Act – carryback rate differential — — — — ( 8,752 ) 29.3 IPO transaction costs — — ( 5,201 ) ( 2.4 ) — — Other, net ( 1,563 ) ( 1.3 ) ( 551 ) ( 0.3 ) 309 ( 1.0 ) $ 35,347 28.0 % $ 53,473 24.5 % $ ( 3,337 ) 11.2 % |
Schedule of Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): January 28, January 29, Deferred tax assets: Inventory $ 25,758 $ 21,203 Accrued employee benefits 30,847 38,670 Net operating losses, state tax credit carryforwards 5,918 5,856 Interest expense limitation carry-forward under 25,761 14,696 Lease-related items 377,270 359,677 Other 1,927 11,646 Total deferred tax assets 467,481 451,748 Valuation allowance ( 2,520 ) ( 5,863 ) Net deferred tax assets 464,961 445,885 Deferred tax liabilities: Fixed assets ( 112,868 ) ( 115,621 ) Intangible assets ( 261,333 ) ( 267,597 ) Debt restructuring ( 1,975 ) ( 2,248 ) Lease-related items ( 361,833 ) ( 347,501 ) Investments in joint ventures ( 30,073 ) ( 31,273 ) Total deferred tax liabilities ( 768,082 ) ( 764,240 ) $ ( 303,121 ) $ ( 318,355 ) |
Schedule of Changes in Unrecognized Tax Benefits | Changes in unrecognized tax benefits, excluding interest and penalties, were as follows (in thousands): January 28, January 29, Beginning balance $ 16,421 $ 16,421 Additions for tax positions taken in prior years — — Decreases related to lapse of statute limitation — — Ending balance $ 16,421 $ 16,421 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Changes In Balances of Each Component in Accumulated Other Comprehensive Income (Loss) | Changes in the balances of each component included in AOCI are presented below (net of tax, in thousands): Derivatives Foreign Total Balance at February 1, 2020 $ ( 7,903 ) $ ( 370 ) $ ( 8,273 ) Other comprehensive loss before reclassifications ( 86 ) ( 905 ) ( 991 ) Amounts reclassified from AOCI 7,989 — 7,989 Other comprehensive income (loss) 7,903 ( 905 ) 6,998 Balance at January 30, 2021 $ — $ ( 1,275 ) $ ( 1,275 ) Other comprehensive loss — ( 963 ) ( 963 ) Balance at January 29, 2022 $ — $ ( 2,238 ) $ ( 2,238 ) Other comprehensive (loss) income ( 2,180 ) 194 ( 1,986 ) Amounts reclassified from AOCI 127 — 127 Other comprehensive (loss) income ( 2,053 ) 194 ( 1,859 ) Balance at January 28, 2023 $ ( 2,053 ) $ ( 2,044 ) $ ( 4,098 ) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||||||
Jan. 19, 2021 USD ($) $ / shares shares | May 31, 2022 USD ($) | Jun. 30, 2021 USD ($) $ / shares shares | Jan. 18, 2021 shares | Mar. 31, 2016 USD ($) Agreement | Jan. 29, 2022 USD ($) CareCenter Segment State | Jan. 30, 2021 USD ($) | Feb. 01, 2020 USD ($) | Jan. 28, 2023 USD ($) | Nov. 30, 2022 | |
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Number of care centers | CareCenter | 1,430 | |||||||||
Number of states in which the entity operates | State | 50 | |||||||||
Net proceeds from issuance of common stock | $ 936,000,000 | |||||||||
Credit and debit card receivables from banks included in cash and cash equivalents | $ 40,000,000 | $ 35,900,000 | ||||||||
Number of reporting units | Segment | 1 | |||||||||
Joint venture management fees | $ 700,000 | 2,500,000 | $ 2,000,000 | |||||||
Advertising expenses | 203,700,000 | 227,900,000 | 168,400,000 | |||||||
Advertising expense adjustments upon reimbursement of vendor cooperative advertising | $ 10,000,000 | 32,500,000 | $ 25,700,000 | |||||||
Number of interest rate cap agreements | Agreement | 5 | |||||||||
Derivative, notional value | $ 1,950,000,000 | |||||||||
Derivative, cap interest rate | 4.50% | |||||||||
Derivative, maturity date | Jan. 29, 2021 | |||||||||
London Interbank Offered Rate (LIBOR) | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Derivative, cap interest rate | 2.25% | |||||||||
Variable Interest Entities, Primary Beneficiary | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Cash consideration | $ 35 | |||||||||
VIEs' ownership percentage | 50% | |||||||||
VIEs' agreement to purchase remaining ownership percentage | 50% | |||||||||
Mexico Joint Venture | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Equity method investment, ownership percentage | 50% | |||||||||
Accrued Expenses And Other Liabilities | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Accrued offering expenses | $ 3,800,000 | |||||||||
Accounts Payable And Book Overdrafts | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Book overdrafts | $ 61,500,000 | $ 27,400,000 | ||||||||
Other Current Assets | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Self-insurance reserves | 5,700,000 | 7,000,000 | ||||||||
Other Long-term Assets | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Self-insurance reserves | 15,900,000 | $ 16,400,000 | ||||||||
Other Noncurrent Liabilities | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Asset retirement obligations | $ 6,200,000 | $ 6,900,000 | ||||||||
Class A Common Stock | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Conversion to Delaware corporation (Note1) (in shares) | shares | 171,200,000 | |||||||||
Issuance of common stock (in shares) | shares | 55,200,000 | |||||||||
Offering price per share | $ / shares | $ 18 | |||||||||
Class A Common Stock | Scooby Aggregator, LP | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Issuance of common stock (in shares) | shares | 25,300,000 | |||||||||
Offering price per share | $ / shares | $ 24 | |||||||||
Net proceeds from issuance of common stock | $ 0 | |||||||||
Common Class B-1 | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Conversion to Delaware corporation (Note1) (in shares) | shares | 37,800,000 | |||||||||
Common Class B-2 | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Conversion to Delaware corporation (Note1) (in shares) | shares | 37,800,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jan. 28, 2023 | Jan. 29, 2022 |
Accounting Policies [Abstract] | ||
Cash and cash equivalents | $ 201,901 | $ 211,602 |
Restricted cash included in other current assets | $ 11,826 | $ 10,288 |
Restricted Cash and Cash Equivalents, Current, Statement of Financial Position [Extensible Enumeration] | Other current assets | Other current assets |
Total cash, cash equivalents and restricted cash in the statement of cash flows | $ 213,727 | $ 221,890 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Fixed Assets (Details) | 12 Months Ended |
Jan. 28, 2023 | |
Buildings | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 30 years |
Equipment | Minimum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 3 years |
Equipment | Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 7 years |
Furniture and Fixtures | Minimum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 4 years |
Furniture and Fixtures | Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 7 years |
Leasehold and Building Improvements | Minimum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 5 years |
Leasehold and Building Improvements | Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 10 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Self-insurance Reserves (Details) - USD ($) | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 |
Summary Of Significant Accounting Policies [Line Items] | |||
Self-insurance reserves, current | $ 27,175,000 | $ 28,432,000 | $ 32,853,000 |
Self-insurance reserves, non-current | 52,780,000 | 56,486,000 | $ 52,780,000 |
Accrued Salaries and Employee Benefits | Workers’ Compensation and Employee-related Health Care Benefits | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Self-insurance reserves, current | 27,175 | 23,699,000 | |
Accrued Expenses And Other Liabilities | General and Auto Liability Reserves | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Self-insurance reserves, current | 5,678 | 4,733,000 | |
Other Long-term Liabilities | Workers’ Compensation and Employee-related Health Care Benefits | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Self-insurance reserves, non-current | 40,336 | 44,706,000 | |
Other Long-term Liabilities | General and Auto Liability Reserves | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Self-insurance reserves, non-current | $ 12,444 | $ 11,780,000 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Net Sales by Product Type and Services (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Disaggregation Of Revenue [Line Items] | |||
Net sales | $ 6,035,967 | $ 5,807,149 | $ 4,920,202 |
Consumables | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 2,859,602 | 2,533,755 | 2,123,499 |
Supplies and companion animals | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 2,370,913 | 2,603,104 | 2,328,663 |
Services and other | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | $ 805,452 | $ 670,290 | $ 468,040 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jan. 28, 2023 | Jan. 29, 2022 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Material contract asset | $ 0 | $ 0 |
Material contract liability | $ 0 | $ 0 |
Points earned on purchase redeemed period on future purchase | 45 days |
Other Acquisitions - Additional
Other Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 2,193,941 | $ 2,183,991 | $ 2,179,310 |
Series of Individually Immaterial Business Acquisitions | |||
Business Acquisition [Line Items] | |||
Business acquisition, consideration | 9,900 | 5,500 | |
Goodwill | 9,900 | 4,700 | |
Business acquisition, goodwill, tax deductible amount | $ 9,900 | $ 2,400 |
Composition of Balance Sheet _3
Composition of Balance Sheet Accounts - Schedule of Fixed Assets, Net (Details) - USD ($) $ in Thousands | Jan. 28, 2023 | Jan. 29, 2022 |
Property Plant And Equipment [Line Items] | ||
Fixed assets | $ 1,987,559 | $ 1,745,691 |
Less accumulated depreciation | (1,184,232) | (1,018,769) |
Fixed assets, net | 803,327 | 726,922 |
Equipment | ||
Property Plant And Equipment [Line Items] | ||
Fixed assets | 885,370 | 772,454 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Fixed assets | 686,888 | 623,201 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Fixed assets | 398,187 | 329,823 |
Buildings and related improvements | ||
Property Plant And Equipment [Line Items] | ||
Fixed assets | 16,696 | 16,959 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Fixed assets | $ 418 | $ 3,254 |
Composition of Balance Sheet _4
Composition of Balance Sheet Accounts - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |||
Depreciation and amortization expense | $ 193.9 | $ 171.1 | $ 174 |
Composition of Balance Sheet _5
Composition of Balance Sheet Accounts - Schedule of Accrued Salaries and Employee Benefits (Details) - USD ($) | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 |
Accrued Salaries And Employee Benefits [Line Items] | |||
Accrued compensation and related taxes | $ 44,724,000 | $ 110,347,000 | |
Self-insurance reserves | 27,175,000 | 28,432,000 | $ 32,853,000 |
Accrued paid time-off | 18,030,000 | 16,584,000 | |
Accrued salaries and employee benefits | 89,929,000 | 150,630,000 | |
Accrued Salaries and Employee Benefits | Workers’ Compensation and Employee-related Health Care Benefits | |||
Accrued Salaries And Employee Benefits [Line Items] | |||
Self-insurance reserves | $ 27,175 | $ 23,699,000 |
Composition of Balance Sheet _6
Composition of Balance Sheet Accounts - Schedule of Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Jan. 28, 2023 | Jan. 29, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued capital expenditures | $ 29,051 | $ 36,935 |
Accrued real estate taxes | 26,485 | 26,662 |
Accrued advertising | 24,020 | 15,192 |
Deferred revenue | 23,045 | 18,003 |
Sales taxes payable | 22,950 | 19,950 |
Other accrued expenses and liabilities | 92,005 | 94,130 |
Accrued expenses and other liabilities, current | $ 217,556 | $ 210,872 |
Composition of Balance Sheet _7
Composition of Balance Sheet Accounts - Schedule of Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 |
Balance Sheet Related Disclosures [Abstract] | |||
Self-insurance reserves, non-current | $ 52,780 | $ 56,486 | $ 52,780 |
Finance leases | 23,642 | 25,052 | |
Other liabilities | 54,065 | 52,567 | |
Other long-term liabilities | $ 130,487 | $ 134,105 |
Leases - Schedule of Lease Asse
Leases - Schedule of Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 28, 2023 | Jan. 29, 2022 | |
Assets | |||
Operating lease right-of-use assets | $ 1,397,761 | $ 1,338,465 | |
Finance leases | $ 24,624 | $ 24,500 | [1] |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other long-term assets | Other long-term assets | |
Total lease assets | $ 1,422,385 | $ 1,362,965 | |
Current liabilities: | |||
Current portion of operating lease liabilities | 309,766 | 265,897 | |
Finance leases | $ 5,794 | $ 4,764 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion of long-term debt and other lease liabilities | Current portion of long-term debt and other lease liabilities | |
Non-current | |||
Operating lease liabilities, excluding current portion | $ 1,148,155 | $ 1,096,133 | |
Finance leases | $ 23,642 | $ 25,052 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | Other long-term liabilities | |
Total lease liabilities | $ 1,487,357 | $ 1,391,846 | |
[1] Finance lease right-of-use assets are recorded net of accumulated amortization of $ 24.6 million and $ 19.7 million as of January 28, 2023 and January 29, 2022 , respectively. |
Leases - Schedule of Lease As_2
Leases - Schedule of Lease Assets and Liabilities (Parenthetical) (Details) - USD ($) $ in Millions | Jan. 28, 2023 | Jan. 29, 2022 |
Leases [Abstract] | ||
Accumulated amortization of finance lease right-of-use assets | $ 24.6 | $ 19.7 |
Leases - Schedule of Components
Leases - Schedule of Components of Total Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Leases [Abstract] | |||
Operating lease cost | $ 422,792 | $ 422,465 | $ 430,359 |
Finance lease cost: | |||
Amortization of right-of-use lease assets | 5,660 | 3,933 | 3,292 |
Interest on lease liabilities | 1,329 | 876 | 908 |
Variable lease cost | 110,335 | 109,723 | 105,859 |
Sublease income | (2,810) | (5,091) | (5,327) |
Total lease cost | $ 537,306 | $ 531,906 | $ 535,091 |
Leases - Schedule of Other Info
Leases - Schedule of Other Information of Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 386,259 | $ 418,210 | $ 399,557 |
Operating cash flows from finance leases | 1,349 | 850 | 941 |
Financing cash flows from finance leases | 5,083 | 3,564 | 3,404 |
Lease assets obtained in exchange for lease liabilities: | |||
Operating leases | 363,311 | 308,166 | 132,829 |
Finance leases | $ 4,784 | $ 19,841 | $ 613 |
Weighted average remaining lease term: | |||
Operating leases | 6 years | 6 years | |
Finance leases | 3 years 2 months 12 days | 3 years 7 months 6 days | |
Weighted average discount rate: | |||
Operating leases | 8.40% | 9.20% | |
Finance leases | 4.70% | 4.60% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Jan. 28, 2023 | Jan. 29, 2022 |
Operating leases | ||
2023 | $ 414,773 | |
2024 | 355,630 | |
2025 | 292,014 | |
2026 | 234,248 | |
2027 | 164,643 | |
Thereafter | 380,655 | |
Total lease payments | 1,841,963 | |
Less imputed interest | (384,042) | |
Present value of lease payments | 1,457,921 | |
Less current portion | (309,766) | $ (265,897) |
Lease liabilities, excluding current portion | 1,148,155 | 1,096,133 |
Total lease payments | 1,841,963 | |
Finance leases | ||
2023 | 7,029 | |
2024 | 16,726 | |
2025 | 3,734 | |
2026 | 2,161 | |
2027 | 1,182 | |
Thereafter | 1,569 | |
Total lease payments | 32,401 | |
Less imputed interest | (2,965) | |
Present value of lease payments | 29,436 | |
Less current portion | (5,794) | (4,764) |
Lease liabilities, excluding current portion | 23,642 | $ 25,052 |
Total lease payments | $ 32,401 |
Goodwill - Schedule of Changes
Goodwill - Schedule of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 28, 2023 | Jan. 29, 2022 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||
Goodwill | $ 2,991,954 | $ 2,987,273 |
Accumulated impairment | (807,963) | (807,963) |
Goodwill, net | 2,183,991 | 2,179,310 |
Additions from acquisitions | 9,950 | 4,681 |
Goodwill | 3,001,904 | 2,991,954 |
Accumulated impairment | (807,963) | (807,963) |
Goodwill, net | $ 2,193,941 | $ 2,183,991 |
Senior Secured Credit Facilit_3
Senior Secured Credit Facilities - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Dec. 12, 2022 | Mar. 04, 2021 | Jan. 19, 2021 | Mar. 31, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | Jan. 28, 2023 | |
Line Of Credit Facility [Line Items] | |||||||
Credit facility, covenant compliance | the Company was in compliance with its covenants on the agreements. | ||||||
Loss on debt extinguishment | $ (20,838,000) | $ (17,549,000) | |||||
Letter of credit sub facility | $ 150,000,000 | ||||||
Maximum borrowing capacity of eligible accounts receivable in percentage | 90% | ||||||
Borrowing capacity of net orderly liquidation value of eligible inventory in percentage | 90% | ||||||
Qualified cash | $ 50,000,000 | ||||||
Amended Term Loan Facility | |||||||
Line Of Credit Facility [Line Items] | |||||||
Credit facility, initiation date | Mar. 04, 2021 | ||||||
Credit facility, maturity date | Mar. 04, 2021 | ||||||
Credit facility principal repaid | $ 727,000,000 | ||||||
Loss on debt extinguishment | $ 19,600,000 | $ (12,600,000) | |||||
Write-off of unamortized debt discount and issuance costs | 6,500,000 | ||||||
Debt issuance cost related to third party expenses | $ 13,100,000 | ||||||
Outstanding principal balance, gross | 1,687,300,000 | ||||||
Outstanding principal balance, net of unamortized discount and debt issuance costs | $ 1,662,100,000 | ||||||
Weighted average interest rate | 4.10% | ||||||
Amended Term Loan Facility | Level 2 | |||||||
Line Of Credit Facility [Line Items] | |||||||
Estimated fair value of credit facility | 1,687.3 | ||||||
Amended Revolving Credit Facility | |||||||
Line Of Credit Facility [Line Items] | |||||||
Credit facility, maturity date | Mar. 04, 2021 | ||||||
First Lien Term Loan | |||||||
Line Of Credit Facility [Line Items] | |||||||
Borrowings under credit facility | $ 1,700,000,000 | ||||||
Credit facility, maturity date | Mar. 04, 2028 | ||||||
Debt instrument floor rate | 0.75% | ||||||
Quarterly principal payments | $ 4.25 | ||||||
Arranger fees and other third party expenses capitalized as debt issuance costs | $ 3,200,000 | ||||||
Debt original issue discount | $ 4,300,000 | ||||||
Outstanding principal balance, gross | 1,670,300,000 | ||||||
Outstanding principal balance, net of unamortized discount and debt issuance costs | $ 1,648,900,000 | ||||||
Weighted average interest rate | 8.20% | ||||||
First Lien Term Loan | Scenario Forecast | |||||||
Line Of Credit Facility [Line Items] | |||||||
Credit facility principal repaid | $ 35,000,000 | ||||||
First Lien Term Loan | Level 2 | |||||||
Line Of Credit Facility [Line Items] | |||||||
Estimated fair value of credit facility | $ 1,649,400,000 | ||||||
First Lien Term Loan | Base Rate | |||||||
Line Of Credit Facility [Line Items] | |||||||
Debt instrument basis spread on variable rate | 0.50% | ||||||
Applicable annual rate | 2.25% | ||||||
First Lien Term Loan | Adjusted LIBOR | |||||||
Line Of Credit Facility [Line Items] | |||||||
Debt instrument basis spread on variable rate | 1% | ||||||
Applicable annual rate | 3.25% | ||||||
ABL Revolving Credit Facility | |||||||
Line Of Credit Facility [Line Items] | |||||||
Credit facility, initiation date | Mar. 04, 2021 | ||||||
Borrowings under credit facility | $ 500,000,000 | ||||||
Credit facility, maturity date | Mar. 04, 2026 | ||||||
Arranger fees and other third party expenses capitalized as debt issuance costs | $ 4,100,000 | ||||||
Unamortized debt issuance costs | $ 1,200,000 | 4.7 | $ 3,600,000 | ||||
Borrowings available under credit facility | 443,900,000 | ||||||
Outstanding letters of credit | 56,100,000 | ||||||
Borrowings base reduction | 0 | ||||||
Maximum borrowing capacity | $ 500,000,000 | ||||||
Amended Revolving Credit Facility | |||||||
Line Of Credit Facility [Line Items] | |||||||
Debt instrument floor rate | 0% | ||||||
Line of credit facility, unused commitment fee percentage | 0.375% | ||||||
Amended Revolving Credit Facility | Actual Daily Utilized Portion Exceeds 50% | |||||||
Line Of Credit Facility [Line Items] | |||||||
Line of credit facility, unused commitment fee percentage | 0.25% | ||||||
Amended Revolving Credit Facility | Base Rate | |||||||
Line Of Credit Facility [Line Items] | |||||||
Debt instrument basis spread on variable rate | 0.25% | ||||||
Amended Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||
Line Of Credit Facility [Line Items] | |||||||
Debt instrument basis spread on variable rate | 1.25% |
Senior Secured Credit Facilit_4
Senior Secured Credit Facilities - Applicable Margin for Adjusted LIBOR Loans and Base Rate Loans based on Average Historical Excess Availability (Details) - Amended Revolving Credit Facility | 12 Months Ended |
Jan. 29, 2022 | |
Applicable Margin for Adjusted LIBOR Loans | |
Line Of Credit Facility [Line Items] | |
Applicable Margin Rate for Loans based on Average Historical Excess Availability | 1.25% |
Applicable Margin for Adjusted LIBOR Loans | Less than 33.3% of the Line Cap | |
Line Of Credit Facility [Line Items] | |
Applicable Margin Rate for Loans based on Average Historical Excess Availability | 1.75% |
Applicable Margin for Adjusted LIBOR Loans | Less than 66.7% but Greater than or Equal to 33.3% of the Line Cap | |
Line Of Credit Facility [Line Items] | |
Applicable Margin Rate for Loans based on Average Historical Excess Availability | 1.50% |
Applicable Margin for Adjusted LIBOR Loans | Greater than or Equal to 66.7% of the Line Cap | |
Line Of Credit Facility [Line Items] | |
Applicable Margin Rate for Loans based on Average Historical Excess Availability | 1.25% |
Applicable Margin for Base Rate Loans | |
Line Of Credit Facility [Line Items] | |
Applicable Margin Rate for Loans based on Average Historical Excess Availability | 0.25% |
Applicable Margin for Base Rate Loans | Less than 33.3% of the Line Cap | |
Line Of Credit Facility [Line Items] | |
Applicable Margin Rate for Loans based on Average Historical Excess Availability | 0.75% |
Applicable Margin for Base Rate Loans | Less than 66.7% but Greater than or Equal to 33.3% of the Line Cap | |
Line Of Credit Facility [Line Items] | |
Applicable Margin Rate for Loans based on Average Historical Excess Availability | 0.50% |
Applicable Margin for Base Rate Loans | Greater than or Equal to 66.7% of the Line Cap | |
Line Of Credit Facility [Line Items] | |
Applicable Margin Rate for Loans based on Average Historical Excess Availability | 0.25% |
Senior Secured Credit Facilit_5
Senior Secured Credit Facilities - Applicable Margin for Adjusted LIBOR Loans and Base Rate Loans based on Average Historical Excess Availability (Parenthetical) (Details) - Amended Revolving Credit Facility | 12 Months Ended |
Jan. 29, 2022 | |
Applicable Margin for Adjusted LIBOR Loans | Less than 33.3% of the Line Cap | Maximum | |
Line Of Credit Facility [Line Items] | |
Percentage of average historical excess availability of loans | 33.30% |
Applicable Margin for Adjusted LIBOR Loans | Less than 66.7% but Greater than or Equal to 33.3% of the Line Cap | Maximum | |
Line Of Credit Facility [Line Items] | |
Percentage of average historical excess availability of loans | 66.70% |
Applicable Margin for Adjusted LIBOR Loans | Less than 66.7% but Greater than or Equal to 33.3% of the Line Cap | Minimum | |
Line Of Credit Facility [Line Items] | |
Percentage of average historical excess availability of loans | 33.30% |
Applicable Margin for Adjusted LIBOR Loans | Greater than or Equal to 66.7% of the Line Cap | Minimum | |
Line Of Credit Facility [Line Items] | |
Percentage of average historical excess availability of loans | 66.70% |
Applicable Margin for Base Rate Loans | Less than 33.3% of the Line Cap | Maximum | |
Line Of Credit Facility [Line Items] | |
Percentage of average historical excess availability of loans | 33.30% |
Applicable Margin for Base Rate Loans | Less than 66.7% but Greater than or Equal to 33.3% of the Line Cap | Maximum | |
Line Of Credit Facility [Line Items] | |
Percentage of average historical excess availability of loans | 66.70% |
Applicable Margin for Base Rate Loans | Less than 66.7% but Greater than or Equal to 33.3% of the Line Cap | Minimum | |
Line Of Credit Facility [Line Items] | |
Percentage of average historical excess availability of loans | 33.30% |
Applicable Margin for Base Rate Loans | Greater than or Equal to 66.7% of the Line Cap | Minimum | |
Line Of Credit Facility [Line Items] | |
Percentage of average historical excess availability of loans | 66.70% |
Senior Notes - Additional Infor
Senior Notes - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jan. 19, 2021 | Sep. 28, 2020 | Jan. 30, 2021 | Jan. 29, 2022 | Jan. 30, 2021 | Jan. 26, 2016 | |
Debt Instrument [Line Items] | ||||||
Loss on debt extinguishment | $ (20,838) | $ (17,549) | ||||
Floating Rate Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding principal balance, gross | $ 750,000 | |||||
Debt instrument, principal amount exchanged for another Debt | $ 450,000 | |||||
Repayment of debt | $ 300,000 | |||||
Loss on debt extinguishment | (4,900) | |||||
Debt issued | $ 750,000 | |||||
Floating Rate Senior Notes | Scooby Aggregator, LP | ||||||
Debt Instrument [Line Items] | ||||||
Unsecured senior notes | 450,000 | $ 450,000 | ||||
Unamortized deferred financing costs | 7,400 | |||||
New Series Notes | Scooby Aggregator, LP | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, aggregate principal amount | $ 450,000 | |||||
3.00% Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, maturity date | Jan. 25, 2023 | |||||
Debt instrument, principal amount exchanged for another Debt | 127,700 | |||||
Repayment of debt | 4,000 | |||||
Accrued interest contributed in connection with Initial public offering | $ 3,600 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||
Nov. 30, 2022 | Mar. 31, 2016 USD ($) Agreement | Jan. 28, 2023 USD ($) | Jan. 29, 2022 USD ($) | Jan. 30, 2021 USD ($) | |
Derivative [Line Items] | |||||
Number of interest rate cap agreements | Agreement | 5 | ||||
Derivative, notional value | $ 1,950,000,000 | ||||
Derivative, cap interest rate | 4.50% | ||||
Expiration date | Jan. 29, 2021 | ||||
Unrealized loss on derivatives | $ (2,180,000) | $ 0 | $ (86,000) | ||
Interest Rate Caps | |||||
Derivative [Line Items] | |||||
Effective date | Dec. 30, 2022 | ||||
Expiration date | Dec. 31, 2024 | ||||
Pre-tax losses deferred in reclassified to interest expense | 200,000 | $ 10,800,000 | |||
Unrealized losses of other comprehensive income (loss), net of tax | $ 0 | ||||
Unrealized losses included in AOCI, before tax | 2,700,000 | ||||
Unrealized loss on derivatives | 2,100,000 | ||||
Estimated losses on interest rate caps deferred in AOCI reclassified to interest expense | $ 2,500,000 | ||||
London Interbank Offered Rate (LIBOR) | |||||
Derivative [Line Items] | |||||
Derivative, cap interest rate | 2.25% |
Derivative Instruments - Summar
Derivative Instruments - Summary of Interest Rate Caps Reflected in Consolidated Balance Sheets (Details) - Interest Rate Caps $ in Thousands | Jan. 28, 2023 USD ($) |
Derivative [Line Items] | |
Current liability portion of interest rate caps | $ 1,176 |
Derivative Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current |
Non-current liability portion of interest rate caps | $ 1,717 |
Derivative Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent |
Total interest rate caps | $ 2,893 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Information About Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Jan. 28, 2023 | Jan. 29, 2022 |
Level 1 | Money Market Mutual Funds | ||
Assets (liabilities): | ||
Asset fair value | $ 156,626 | $ 167,277 |
Level 1 | Investments of Officers' Life Insurance | ||
Assets (liabilities): | ||
Asset fair value | 0 | 0 |
Level 1 | Investment in Rover Group, Inc. | ||
Assets (liabilities): | ||
Asset fair value | 20,152 | 32,819 |
Level 2 | Money Market Mutual Funds | ||
Assets (liabilities): | ||
Asset fair value | 0 | 0 |
Level 2 | Investments of Officers' Life Insurance | ||
Assets (liabilities): | ||
Asset fair value | 13,112 | 14,575 |
Level 2 | Investment in Rover Group, Inc. | ||
Assets (liabilities): | ||
Asset fair value | 0 | 0 |
Level 3 | Money Market Mutual Funds | ||
Assets (liabilities): | ||
Asset fair value | 0 | 0 |
Level 3 | Investments of Officers' Life Insurance | ||
Assets (liabilities): | ||
Asset fair value | 0 | 0 |
Level 3 | Investment in Rover Group, Inc. | ||
Assets (liabilities): | ||
Asset fair value | 0 | 0 |
Non-qualified Deferred Compensation Plan | Level 1 | ||
Assets (liabilities): | ||
Liabilities fair value | 0 | 0 |
Non-qualified Deferred Compensation Plan | Level 2 | ||
Assets (liabilities): | ||
Liabilities fair value | (18,464) | (17,453) |
Non-qualified Deferred Compensation Plan | Level 3 | ||
Assets (liabilities): | ||
Liabilities fair value | $ 0 | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Nov. 23, 2021 | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Net proceeds from sale of common stock | $ 6,135 | $ 73 | ||
Impairment of fixed asset and right-of-use asset | $ 2,200 | 10,400 | $ 14,500 | |
Cash and Cash Equivalents | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Money market mutual funds | 145,500 | 158,000 | ||
Restricted Cash | Other Current Assets | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Money market mutual funds | $ 11,100 | $ 9,300 | ||
Investment in Rover Group, Inc. | Class A Common Stock | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Percentage of common stock sold | 11% | |||
Net proceeds from sale of common stock | $ 6,100 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Contributions to plans, amount | $ 10.7 | $ 9.2 | $ 6.6 |
Qualified Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, matching percentage | 100% | ||
Defined contribution plan, first percentage | 1% | ||
Defined contribution plan, additional percentage | 50% | ||
Defined contribution plan, next percentage of compensation | 5% | ||
Defined contribution plan, vesting schedule period | 3 years | ||
Defined contribution plan months of service | 6 months | ||
Qualified Plan | Director | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, matching percentage | 100% | ||
Defined contribution plan, first percentage | 1% | ||
Defined contribution plan, additional percentage | 50% | ||
Defined contribution plan, next percentage of compensation | 2% | ||
Nonqualified Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, matching percentage | 50% | ||
Defined contribution plan, first percentage | 6% | ||
Defined contribution plan, percentage contributed by each participant | 50% | ||
Participating employee compensation percentage | 3% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Jan. 19, 2021 | Mar. 31, 2021 | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Anti-dilutive shares excluded from computation of diluted shares outstanding | 6,700,000 | 3,300,000 | |||
RSUs | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized compensation expense | $ 93.3 | ||||
Unrecognized compensation expense, expected to be recognized over weighted average period | 2 years | ||||
Weighted average grant date fair value per Share, Granted | $ 15.23 | ||||
Share-based Payment Arrangement, Option | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized compensation expense | $ 32.1 | ||||
Unrecognized compensation expense, expected to be recognized over weighted average period | 1 year 9 months 18 days | ||||
Expire period | 10 years | ||||
Stock option awards were granted | 0 | ||||
Anniversaries of Grant Date | RSUs | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of restricted shares vested | 34% | ||||
Anniversaries of Grant Date | Share-based Payment Arrangement, Option | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of restricted shares vested | 34% | ||||
Four Equal Semi-Annual Installments | RSUs | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of restricted shares vested | 16.50% | ||||
Four Equal Semi-Annual Installments | Share-based Payment Arrangement, Option | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of restricted shares vested | 16.50% | ||||
2021 Equity Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock option awards were granted | 5,125,000 | ||||
2016 Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized compensation expense, expected to be recognized over weighted average period | 1 year 3 months 18 days | ||||
Number of additional shares awarded | 0 | ||||
Weighted average grant date fair value per Share, Granted | $ 0.44 | ||||
Unrecognized compensation expense related to the unvested portion | $ 9.3 | ||||
2016 Incentive Plan | Minimum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vest in equal annual installments | 3 years | ||||
2016 Incentive Plan | Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vest in equal annual installments | 5 years | ||||
Class A Common Stock | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Employee stock purchase plan maximum percentage of earnings to purchase shares by eligible participants | 15% | ||||
Purchase price as a percentage of the lesser of the market value of such shares at either the lookback date or last day of related purchase period | 85% | ||||
Issuance of common stock (in shares) | 55,200,000 | ||||
Class A Common Stock | Executive | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 2 years | ||||
Class A Common Stock | ESPP | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock, available for issuance future equity based compensation | 7,300,000 | ||||
Class A Common Stock | Anniversaries of Grant Date | Executive | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of restricted shares vested | 50% | ||||
Class A Common Stock | 2021 Equity Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock, available for issuance future equity based compensation | 26,800,000 | ||||
Class A Common Stock | 2016 Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Threshold percentage of direct and indirect holdings of common stock | 90% |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Equity-based Compensation Expense by Award Type (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total equity-based compensation expense | $ 60,784 | $ 49,265 | $ 12,915 |
Total related tax benefit | 8,160 | 5,033 | 329 |
RSUs and RSAs | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total equity-based compensation expense | 38,146 | 25,459 | 1,991 |
Share-based Payment Arrangement, Option | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total equity-based compensation expense | 9,418 | 8,002 | 391 |
ESPP | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total equity-based compensation expense | 1,274 | 1,034 | |
Other Awards | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total equity-based compensation expense | $ 11,946 | $ 14,770 | $ 10,533 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of RSUs (Details) - RSUs - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Jan. 28, 2023 | Jan. 29, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares Nonvested | 2,587 | |
Shares Granted | 7,536 | |
Shares Vested and delivered | (1,402) | |
Shares Forfeited/expired | (919) | |
Shares Nonvested | 7,802 | 2,587 |
Weighted average grant date fair value per share, Nonvested | $ 18.63 | |
Weighted average grant date fair value per Share, Granted | 15.23 | |
Weighted average grant date fair value per Share, Vested and delivered | 18.63 | |
Weighted average grant date fair value per Share, Forfeited/expired | 18.52 | |
Weighted average grant date fair value per share, Nonvested | $ 15.36 | $ 18.63 |
Weighted average remaining contractual life (years), Nonvested | 1 year 2 months 12 days | 1 year |
Aggregate intrinsic value, Nonvested | $ 91,596 | $ 47,342 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Stock Option Activity (Details) - 2021 Equity Incentive Plan - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Jan. 28, 2023 | Jan. 29, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares subject to options, Outstanding, January 29, 2022 | 3,327 | |
Shares subject to options, Granted | 5,125 | |
Shares subject to options, Exercised | (45) | |
Shares subject to options, Forfeited/expired | (593) | |
Shares subject to options, Outstanding, January 28, 2023 | 7,814 | 3,327 |
Shares subject to options, Exercisable, January 29, 2022 | 1,853 | |
Outstanding, January 29, 2022, weighted average exercise price per share | $ 18 | |
Granted, weighted average exercise price per share | 11.97 | |
Exercised, weighted average exercise price per share | 18 | |
Forfeited/expired, weighted average exercise price per share | 18.36 | |
Outstanding, January 28, 2023, weighted average exercise price per share | 14.02 | $ 18 |
Exercisable, January 28, 2023, weighted average exercise price per share | $ 18 | |
Weighted average remaining contractual life (years), Outstanding | 9 years 1 month 6 days | 9 years |
Weighted average remaining contractual life (years),, Exercisable, January 28, 2023 | 7 years 10 months 24 days | |
Aggregate intrinsic value, Outstanding | $ 3,512 | $ 998 |
Stockholders' Equity - Black-Sc
Stockholders' Equity - Black-Scholes Assumptions for Options (Details) - Share-based Payment Arrangement, Option - $ / shares | 12 Months Ended | |
Jan. 28, 2023 | Jan. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Dividend yield | 0% | 0% |
Expected volatility | 40.40% | |
Expected volatility, minimum | 38% | |
Expected volatility, maximum | 48.40% | |
Risk-free interest rate | 0.70% | |
Risk-free interest rate, minimum | 2.80% | |
Risk-free interest rate, maximum | 3.60% | |
Expected term | 5 years 10 months 24 days | |
Grant date fair value per share | $ 18 | |
Estimated fair value per option granted | $ 7 | |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term | 5 years 9 months 18 days | |
Grant date fair value per share | $ 10.98 | |
Estimated fair value per option granted | $ 5.46 | |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term | 5 years 10 months 24 days | |
Grant date fair value per share | $ 21.06 | |
Estimated fair value per option granted | $ 8.64 |
Stockholders' Equity - Black-_2
Stockholders' Equity - Black-Scholes Assumptions for Series C Units (Detail) - 2016 Incentive Plan | 12 Months Ended |
Jan. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Dividend yield | 0% |
Expected volatility, minimum | 60% |
Expected volatility, maximum | 81.90% |
Weighted average volatility | 81.10% |
Risk-free interest rate, minimum | 0.10% |
Risk-free interest rate, maximum | 1.30% |
Minimum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected term | 2 years |
Maximum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected term | 4 years |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Series C Unit Activity Under 2016 Incentive Plan (Details) - 2016 Incentive Plan | 12 Months Ended |
Jan. 28, 2023 shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Outstanding, January 29, 2022 | 207,178,000 |
Granted | 0 |
Forfeited | (5,819,000) |
Outstanding, January 28, 2023 | 201,359,000 |
Vested, January 28, 2023 | 151,597,000 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Current: | |||
Federal | $ 23,141 | $ 4,550 | $ (29,869) |
State | 13,099 | 11,182 | 984 |
Current, Total | 36,240 | 15,732 | (28,885) |
Deferred: | |||
Federal | 4,649 | 39,087 | 19,604 |
State | (5,542) | (1,346) | 5,944 |
Deferred, Total | (893) | 37,741 | 25,548 |
Income tax expense (benefit) | $ 35,347 | $ 53,473 | $ (3,337) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense (Benefit) at Federal Statutory Rate With Provision For Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Income tax expense (benefit) at federal statutory rate | $ 26,490 | $ 45,751 | $ (6,251) |
Non-deductible expenses | 2,035 | 1,425 | 986 |
Equity compensation | 6,754 | 5,988 | 2,212 |
State taxes, net of federal tax benefit | 4,289 | 7,636 | 5,473 |
Tax credits | (3,800) | (2,500) | (1,907) |
Uncertain tax positions | 1,142 | 925 | 4,593 |
CARES Act – carryback rate differential | 0 | 0 | (8,752) |
IPO transaction costs | 0 | (5,201) | 0 |
Other, net | (1,563) | (551) | 309 |
Income tax expense (benefit) | $ 35,347 | $ 53,473 | $ (3,337) |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Income tax expense (benefit) at federal statutory rate | 21% | 21% | 21% |
Non-deductible expenses | 1.90% | 0.70% | (3.30%) |
Equity compensation | 5.40% | 2.70% | (7.40%) |
State taxes, net of federal tax benefit | 3.10% | 3.50% | (18.40%) |
Tax credits | (3.00%) | (1.10%) | 6.40% |
Uncertain tax positions | 0.90% | 0.40% | (15.40%) |
CARES Act – carryback rate differential | 0% | 0% | 29.30% |
IPO transaction costs | 0% | (2.40%) | 0% |
Other, net | (1.30%) | (0.30%) | (1.00%) |
Effective income tax rate, percent | 28% | 24.50% | 11.20% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Income Tax Disclosure [Line Items] | |||
Income tax benefit resulted from re-measurement of deferred tax assets under CARES act | $ 8,800 | ||
Net operating losses expected to be carried back due to CARES act | 67,400 | ||
Income tax benefit on legal, consulting, accounting, and other transaction costs | $ 0 | $ 5,201 | 0 |
Operating loss carryforwards | 2,500 | ||
Unrecognized tax benefits | 16,421 | $ 16,421 | $ 16,421 |
Unrecognized tax benefits that would impact effective tax rate | 4,200 | ||
Unrecognized tax benefits to net deferred tax liability | 12,200 | ||
Unrecognized tax benefits, accrued for interest and penalties | 2,900 | ||
Unrecognized tax benefits, interest and penalties | 1,300 | ||
State | |||
Income Tax Disclosure [Line Items] | |||
Operating loss carryforwards | 2,500 | ||
Deferred tax asset, operating loss carryforwards | $ 48,000 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Jan. 28, 2023 | Jan. 29, 2022 |
Deferred tax assets: | ||
Inventory | $ 25,758 | $ 21,203 |
Accrued employee benefits | 30,847 | 38,670 |
Net operating losses, state tax credit carryforwards | 5,918 | 5,856 |
Interest expense limitation carry-forward under IRC §163(j) | 25,761 | 14,696 |
Lease-related items | 377,270 | 359,677 |
Other | 1,927 | 11,646 |
Total deferred tax assets | 467,481 | 451,748 |
Valuation allowance | (2,520) | (5,863) |
Net deferred tax assets | 464,961 | 445,885 |
Deferred tax liabilities: | ||
Fixed assets | (112,868) | (115,621) |
Intangible assets | (261,333) | (267,597) |
Debt restructuring | (1,975) | (2,248) |
Lease-related items | (361,833) | (347,501) |
Investments in joint ventures | (30,073) | (31,273) |
Total deferred tax liabilities | (768,082) | (764,240) |
Net deferred tax liability | $ (303,121) | $ (318,355) |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 28, 2023 | Jan. 29, 2022 | |
Income Tax Disclosure [Abstract] | ||
Beginning balance | $ 16,421 | $ 16,421 |
Additions for tax positions taken in prior years | 0 | 0 |
Decreases related to lapse of statute limitation | 0 | 0 |
Ending balance | $ 16,421 | $ 16,421 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Schedule of Changes In Balances of Each Component in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | $ 2,255,819 | $ 2,055,265 | $ 561,061 |
Other comprehensive (loss) income before reclassifications | (1,986) | (991) | |
Amounts reclassified from AOCI | 127 | 7,989 | |
Other comprehensive (loss) income | (1,859) | (963) | 6,998 |
Ending Balance | 2,381,477 | 2,255,819 | 2,055,265 |
Derivatives | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | (7,903) | ||
Other comprehensive (loss) income before reclassifications | (2,180) | (86) | |
Amounts reclassified from AOCI | 127 | 7,989 | |
Other comprehensive (loss) income | (2,053) | 7,903 | |
Ending Balance | (2,053) | ||
Foreign Currency Translation Adjustment | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | (2,238) | (1,275) | (370) |
Other comprehensive (loss) income before reclassifications | 194 | (905) | |
Other comprehensive (loss) income | 194 | (963) | (905) |
Ending Balance | (2,044) | (2,238) | (1,275) |
Accumulated Other Comprehensive Loss | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | (2,238) | (1,275) | (8,273) |
Ending Balance | $ (4,098) | $ (2,238) | $ (1,275) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Annual contract fees | $ 4.4 | $ 4.1 | $ 4.1 |