Cover
Cover - USD ($) | 12 Months Ended | ||
Jan. 28, 2023 | Mar. 10, 2023 | Jul. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --01-28 | ||
Document Period End Date | Jan. 28, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-40515 | ||
Entity Registrant Name | VICTORIA'S SECRET & CO. | ||
Entity Central Index Key | 0001856437 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 86-3167653 | ||
Entity Address, Address Line One | 4 Limited Parkway East, | ||
Entity Address, City or Town | Reynoldsburg, | ||
Entity Address, State or Province | OH | ||
Entity Address, Postal Zip Code | 43068 | ||
City Area Code | 614 | ||
Local Phone Number | 577-7000 | ||
Title of 12(b) Security | Common Stock, $0.01 Par Value | ||
Trading Symbol | VSCO | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3,013,232,812 | ||
Entity Common Stock, Shares Outstanding | 77,746,058 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant’s Proxy Statement for the Registrant’s 2023 Annual Meeting of Stockholders are incorporated by reference into Part III. |
Audit Information
Audit Information | 12 Months Ended |
Jan. 28, 2023 | |
Auditor Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Grandview Heights, Ohio |
Auditor Firm ID | 42 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Income Statement [Abstract] | |||
Net Sales | $ 6,344 | $ 6,785 | $ 5,413 |
Costs of Goods Sold, Buying and Occupancy | (4,086) | (4,025) | (3,842) |
Gross Profit | 2,258 | 2,760 | 1,571 |
General, Administrative and Store Operating Expenses | (1,780) | (1,890) | (1,672) |
Operating Income (Loss) | 478 | 870 | (101) |
Interest Expense | (60) | (27) | (6) |
Other Income (Loss) | (1) | 0 | 1 |
Income (Loss) Before Income Taxes | 417 | 843 | (106) |
Provision (Benefit) for Income Taxes | 79 | 197 | (34) |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 338 | 646 | (72) |
Less: Net Loss Attributable to Noncontrolling Interest | (10) | 0 | 0 |
Net Income (Loss) Attributable to Victoria's Secret & Co. | $ 348 | $ 646 | $ (72) |
Net Income (Loss) Per Basic Share (in dollars per share) | $ 4.24 | $ 7.34 | $ (0.82) |
Net Income (Loss) Per Diluted Share (in dollars per share) | $ 4.14 | $ 7.18 | $ (0.82) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Consolidated Statements of Income [Abstract] | |||
Net Income (Loss) | $ 338 | $ 646 | $ (72) |
Other Comprehensive Income (Loss), Net of Tax | |||
Foreign Currency Translation | (7) | 1 | (3) |
Amounts Reclassified from Accumulated Other Comprehensive Income to Paid-in Capital | 3 | 0 | 0 |
Reclassification of Foreign Currency Translation to Earnings | 0 | 0 | 36 |
Total Other Comprehensive Income (Loss), Net of Tax | (4) | 1 | 33 |
Total Comprehensive Income (Loss) | 334 | 647 | (39) |
Less: Net Loss Attributable to Noncontrolling Interest | (10) | 0 | 0 |
Less: Foreign Currency Translation Attributable to Noncontrolling Interest | 0 | 0 | 0 |
Comprehensive Income (Loss) Attributable to Victoria's Secret & Co. | $ 344 | $ 647 | $ (39) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jan. 28, 2023 | Jan. 29, 2022 |
Current Assets: | ||
Cash and Cash Equivalents | $ 427 | $ 490 |
Accounts Receivable, Net | 141 | 162 |
Inventories | 1,052 | 949 |
Other | 117 | 90 |
Total Current Assets | 1,737 | 1,691 |
Property and Equipment, Net | 846 | 957 |
Operating Lease Assets | 1,232 | 1,369 |
Goodwill | 365 | 0 |
Trade Names | 289 | 246 |
Other Intangible Assets | 137 | 0 |
Deferred Income Taxes | 18 | 17 |
Other Assets | 87 | 64 |
Total Assets | 4,711 | 4,344 |
Current Liabilities: | ||
Accounts Payable | 481 | 538 |
Accrued Expenses and Other | 737 | 714 |
Current Debt | 4 | 4 |
Current Operating Lease Liabilities | 310 | 340 |
Income Taxes | 47 | 102 |
Total Current Liabilities | 1,579 | 1,698 |
Deferred Income Taxes | 53 | 58 |
Long-term Debt | 1,271 | 978 |
Long-term Operating Lease Liabilities | 1,201 | 1,314 |
Other Long-term Liabilities | 206 | 39 |
Total Liabilities | 4,310 | 4,087 |
Shareholders’ Equity: | ||
Preferred Stock—$0.01 par value; 10 shares authorized; none issued | 0 | 0 |
Common Stock—$0.01 par value; 1,000 shares authorized; 80 and 85 shares issued; 80 and 85 shares outstanding, respectively | 1 | 1 |
Paid-in Capital | 195 | 125 |
Accumulated Other Comprehensive Income | 1 | 5 |
Retained Earnings | 186 | 126 |
Total Victoria's Secret & Co. Shareholders' Equity | 383 | 257 |
Noncontrolling Interest | 18 | 0 |
Total Equity | 401 | 257 |
Total Liabilities and Equity | $ 4,711 | $ 4,344 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Jan. 28, 2023 | Jan. 29, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized (in shares) | 10 | 10 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 1,000 | 1,000 |
Common Stock, shares issued (in shares) | 80 | 85 |
Common Stock, shares outstanding (in shares) | 80 | 85 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Paid-in Capital | Net Investment by Former Parent | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Noncontrolling Interest | Parent |
Beginning Balance at Feb. 01, 2020 | $ 1,314 | $ 1,341 | $ (29) | $ 2 | $ 1,312 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Other Comprehensive Income | 33 | 33 | 33 | ||||||
Total Comprehensive Income (Loss) | (39) | (72) | 33 | (39) | |||||
Net Transfers to Former Parent | (382) | (382) | (382) | ||||||
Stockholders' Equity, Other | (2) | (2) | |||||||
Ending Balance at Jan. 30, 2021 | 891 | 887 | 4 | 0 | 891 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net Income (Loss) | (72) | (72) | (72) | ||||||
Other Comprehensive Income | 1 | 1 | 1 | ||||||
Total Comprehensive Income (Loss) | 647 | 328 | 1 | $ 318 | 647 | ||||
Net Transfers to Former Parent | (1,053) | (1,053) | (1,053) | ||||||
Transfer of Former Parent to Additional Paid-in Capital | 0 | $ 162 | (162) | ||||||
Issuance of Common Stock (in shares) | 88 | ||||||||
Issuance of Common Stock | 1 | $ 1 | 1 | ||||||
Repurchase of Common Stock (in shares) | (4) | ||||||||
Repurchase of Common Stock | (250) | (50) | $ (200) | (250) | |||||
Treasury Share Retirement | 0 | (8) | (192) | 200 | |||||
Stockholders' Equity, Other Shares | 1 | ||||||||
Stockholders' Equity, Other | $ (21) | (21) | (21) | ||||||
Ending Balance (in shares) at Jan. 29, 2022 | 85 | 85 | |||||||
Ending Balance at Jan. 29, 2022 | $ 257 | $ 1 | 125 | 0 | 5 | 126 | 0 | 0 | 257 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net Income (Loss) | 646 | 328 | 318 | 646 | |||||
Other Comprehensive Income | (4) | (4) | 0 | (4) | |||||
Total Comprehensive Income (Loss) | 334 | 0 | (4) | 348 | (10) | 344 | |||
Repurchase of Common Stock (in shares) | (6) | ||||||||
Repurchase of Common Stock | (250) | 50 | (300) | (250) | |||||
Treasury Share Retirement | 0 | (12) | (288) | 300 | |||||
Share-based Compensation and Other (in shares) | 0 | ||||||||
Share-based Compensation Expense | 48 | 48 | 48 | ||||||
Stockholders' Equity, Other Shares | (2) | ||||||||
Stockholders' Equity, Other | $ 9 | 9 | 9 | ||||||
Ending Balance (in shares) at Jan. 28, 2023 | 80 | 80 | |||||||
Ending Balance at Jan. 28, 2023 | $ 401 | $ 1 | 195 | $ 0 | $ 1 | 186 | $ 0 | 18 | 383 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | (1) | ||||||||
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation | (42) | (42) | (42) | ||||||
Net Income (Loss) | 338 | $ 348 | (10) | 348 | |||||
Noncontrolling Interest, Increase from Sale of Parent Equity Interest | $ 45 | $ 17 | $ 28 | $ 17 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities: | |||
Depreciation of Long-lived Assets | $ 274 | $ 303 | $ 326 |
Share-based Compensation Expense | 48 | 33 | 25 |
Deferred Income Taxes | (28) | 1 | (64) |
Asset Impairment Charges | 0 | 0 | 254 |
Gain related to Formation of U.K. Joint Venture | 0 | 0 | (54) |
Gain from Hong Kong Store Closure and Lease Termination | 0 | 0 | (39) |
Changes in Assets and Liabilities, Net of Assets and Liabilities related to the Acquisition: | |||
Accounts Receivable | 22 | (21) | 36 |
Inventories | 0 | (247) | 141 |
Accounts Payable, Accrued Expenses and Other | (163) | 173 | 49 |
Income Taxes | (67) | 119 | (25) |
Other Assets and Liabilities | 13 | (156) | 97 |
Net Cash Provided by Operating Activities | 437 | 851 | 674 |
Investing Activities: | |||
Payments to Acquire Businesses, Net of Cash Acquired | (369) | 0 | 0 |
Capital Expenditures | (164) | (169) | (127) |
Investment in Frankies Bikinis, LLC | (18) | 0 | 0 |
Other Investing Activities | (4) | 0 | 4 |
Net Cash Used for Investing Activities | (555) | (169) | (123) |
Financing Activities: | |||
Borrowings from Asset-based Revolving Credit Facility | 295 | 0 | 0 |
Repurchases of Common Stock | (250) | (250) | 0 |
Cash Received from Noncontrolling Interest Holder | 55 | 0 | 0 |
Tax Payments related to Share-based Awards | (42) | (4) | 0 |
Proceeds from Stock Option Exercises | 5 | 5 | 0 |
Payments of Long-term Debt | (4) | (1) | 0 |
Proceeds from Issuance of Long-term Debt, Net of Issuance Costs and Discounts | 0 | 982 | 0 |
Net Transfers to Former Parent | 0 | (1,253) | (407) |
Borrowing from Former Parent | 0 | 0 | 97 |
Other Financing Activities | (1) | (6) | 0 |
Net Cash Provided by (Used for) Financing Activities | 58 | (527) | (465) |
Effects of Exchange Rate Changes on Cash and Cash Equivalents | (3) | 0 | 4 |
Net Increase (Decrease) in Cash and Cash Equivalents | (63) | 155 | 90 |
Cash and Cash Equivalents, Beginning of Period | 490 | 335 | 245 |
Cash and Cash Equivalents, End of Period | 427 | 490 | 335 |
Net Income (Loss) | 338 | 646 | (72) |
Foreign Facilities | |||
Financing Activities: | |||
Borrowings from Foreign Facilities | 0 | 0 | 34 |
Repayments of Foreign Facilities | $ 0 | $ 0 | $ (189) |
Description of Business, Basis
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 28, 2023 | |
Accounting Policies [Abstract] | |
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies | Description of Business, Basis of Presentation and Summary of Significant Accounting Policies Description of Business Victoria's Secret & Co. is a specialty retailer of women's intimate and other apparel and beauty products marketed under the Victoria's Secret, PINK and Adore Me brand names. The Company has more than 910 stores in the U.S., Canada and China as well as its own websites, www.VictoriasSecret.com, www.PINK.com and www.AdoreMe.com and other online channels worldwide. Additionally, the Company has approximately 450 stores in approximately 70 countries operating under franchise, license and wholesale arrangements. The Company also includes the merchandise sourcing and production function serving the Company and its international partners. The Company operates as a single segment designed to serve customers worldwide seamlessly through stores and online channels. On November 1, 2022, the Company announced that it had signed a Merger Agreement to acquire 100% of Adore Me. On December 30, 2022, the acquisition was completed pursuant to the terms and conditions of the Merger Agreement. For additional information, see Note 2, “Acquisition.” In July 2022, the Company announced a new, simplified corporate leadership structure designed to unite the Company's brands, better align its teams with a shifting consumer landscape and enable better execution of its strategy. The restructuring eliminated approximately 160 management roles, or approximately 5% of the Company's home office headcount. In the fourth quarter of 2022, the Company executed additional restructuring actions to continue to reorganize and improve its organizational structure. For additional information, see Note 6, “Restructuring Activities.” Victoria's Secret & Co. Spin-Off On July 9, 2021, L Brands announced that its Board of Directors approved the previously announced separation of the Victoria's Secret business, including PINK, into an independent, publicly traded company. Prior to the Separation, L Brands operated the Bath & Body Works, Victoria’s Secret and PINK retail brands. On August 2, 2021, after the New York Stock Exchange market closing, the Separation of the Victoria's Secret business was completed. On August 3, 2021, Victoria's Secret & Co. became an independent, publicly-traded company trading on the NYSE under the stock symbol “VSCO.” The Separation was achieved through the Former Parent’s distribution of 100% of the shares of the Company's common stock to holders of the Former Parent's common stock as of the close of business on the record date of July 22, 2021. The Former Parent's stockholders of record received one share of the Company's common stock for every three shares of the Former Parent's common stock. In connection with the Separation, the Company made a cash payment of approximately $976 million to the Former Parent on August 2, 2021 from the issuances of certain debt (discussed in Note 13, “Long-term Debt and Borrowing Facilities”). The Former Parent retained no ownership interest in the Company following the Separation. The Company entered into several agreements with the Former Parent that, among other things, effect the Separation and govern the relationship of the parties following the Separation, including a Separation and Distribution Agreement, a Tax Matters Agreement, an L Brands to VS Transition Services Agreement, a VS to L Brands Transition Services Agreement, an Employee Matters Agreement and a Domestic Transportation Services Agreement. For additional information, see Note 3, “Transactions with Former Parent.” Fiscal Year The Company's fiscal year ends on the Saturday nearest to January 31. As used herein, “2022,” “2021” and “2020” refer to the 52-week periods ended January 28, 2023, January 29, 2022 and January 30, 2021, respectively. Basis of Presentation - Consolidated and Combined Financial Statements The Company’s financial statements for periods through the Separation date of August 2, 2021 are combined financial statements prepared on a “carve-out” basis as discussed below. The Company’s financial statements for the period from August 3, 2021 through January 28, 2023 are consolidated financial statements based on the reported results of Victoria's Secret & Co. as a standalone company. The Consolidated and Combined Financial Statements have been prepared in conformity with GAAP. The Consolidated and Combined Financial Statements may not be indicative of the Company’s future performance and do not necessarily reflect what the financial position, results of operations, and cash flows would have been had it operated as an independent company during all of the periods presented. Basis of Presentation - Prior to Separation Through the Separation date, the Company's combined financial statements are prepared on a “carve-out” basis. The Combined Financial Statements have been derived from the consolidated financial statements and accounting records of the Former Parent in conformity with GAAP. Intracompany transactions have been eliminated. Transactions between the Company and the Former Parent have been included in these financial statements. For the periods prior to the Separation, certain of the Former Parent's assets and liabilities that were specifically identifiable or otherwise attributable to the Company were included in the Company's balance sheets. For the periods prior to the Separation, the Former Parent's third-party long-term notes payable and the related interest expense were not allocated to the Company as the Company was not the legal obligor of such debt. For the periods prior to the Separation, the Former Parent utilized a centralized approach to cash management and financing its operations. The cash and cash equivalents held by the Former Parent at the corporate level were not specifically identifiable to the Company and, therefore, were not reflected in the Company’s balance sheets. Cash transfers between the Former Parent and the Company were accounted for through Net Investment by Former Parent. Cash and cash equivalents that are included in the Company's balance sheets for the periods prior to the Separation represent cash and cash equivalents held by the Company prior to any potential transfer to the centralized cash management pool of the Former Parent. For the periods prior to the Separation, the Consolidated and Combined Statements of Income (Loss) include costs for certain functions, including information technology, human resources and store design and construction, that historically were provided and administered on a centralized basis by the Former Parent. Starting in the third quarter of 2020, as part of the steps to prepare the Company to operate as a separate, standalone company, these functions were transitioned to the business and began to be operated and administered as part of Victoria’s Secret & Co. For additional information, see Note 6, “Restructuring Activities.” Costs applicable to the Company related to these functions are included in the Consolidated and Combined Statements of Income (Loss) for all periods presented. Prior to the transition of these functions, these costs were directly charged to the Company by the Former Parent. In addition, for purposes of preparing the combined financial statements on a “carve-out” basis prior to the Separation, a portion of the Former Parent's corporate expenses were allocated to the Company. These expense allocations include the cost of corporate functions and resources provided by, or administered by, the Former Parent including, but not limited to, executive management and other corporate and governance functions, such as corporate finance, internal audit, tax and treasury. The related employee payroll and benefit costs associated with such functions, such as share-based compensation, were included in the expense allocations. Corporate expenses of $49 million and $77 million in 2021 and 2020, respectively, were allocated and included within General, Administrative and Store Operating Expenses in the Consolidated and Combined Statements of Income (Loss). Costs were allocated to the Company based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional net sales. Management considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to, or the benefit received by, the Company during the periods presented. However, the allocations may not reflect the expenses the Company would have incurred if the Company had been a standalone company for the periods presented. Actual costs that may have been incurred if the Company had been a standalone company would depend on a number of factors, including the organizational structure, whether functions were outsourced or performed by employees, and strategic or capital decisions. Going forward, the Company may perform these functions using its own resources or outsourced services. For a period following the Separation, however, some of these functions will continue to be provided by the Former Parent under a transition services agreement, and the Company will provide some services to the Former Parent under a transition services agreement. The Company has also entered into certain commercial arrangements with the Former Parent in connection with the Separation. For more information, see Note 3, “Transactions with Former Parent.” During the periods prior to the Separation that are presented in these Consolidated and Combined Financial Statements, the Company's income tax expense (benefit) and deferred tax balances were included in the Former Parent's income tax returns. Income tax expense (benefit) and deferred tax balances contained in these Consolidated and Combined Financial Statements for periods prior to the Separation are presented on a separate return basis, as if the Company had filed its own income tax returns. As a result, actual tax transactions included in the consolidated financial statements of the Former Parent may or may not be included in the Consolidated and Combined Financial Statements of the Company. Similarly, the tax treatment of certain items reflected in the Consolidated and Combined Financial Statements of the Company may or may not be reflected in the consolidated financial statements and income tax returns of the Former Parent. The taxes recorded in the Consolidated and Combined Statements of Income (Loss) for periods prior to the Separation are not necessarily representative of the taxes that may arise in the future when the Company files its income tax returns independent from the Former Parent's returns. Impacts of Macroeconomic Environment The Company's operations and financial performance have been adversely impacted by deterioration in economic conditions in the United States and globally, which were caused in part by the COVID-19 pandemic. The current macroeconomic environment is characterized by record-high inflation, supply chain challenges, labor shortages, high interest rates, volatility in global capital markets and growing recession risk. Such macroeconomic conditions have and could continue to adversely affect the Company's business, for example, by reducing consumer demand for our products and leading to decreased sales. Cash and Cash Equivalents Cash and Cash Equivalents include cash on hand, demand deposits with financial institutions, credit and debit card receivables and highly liquid investments with original maturities of 90 days or less. The Company's Cash and Cash Equivalents are considered Level 1 fair value measurements as they are valued using unadjusted quoted prices in active markets for identical assets. Concentration of Credit Risk The Company maintains cash and cash equivalents with various major financial institutions. The Company monitors the relative credit standing of financial institutions with whom the Company transacts and limits the amount of credit exposure with any one entity. The Company’s investment portfolio is primarily comprised of bank deposits. The Company also periodically reviews the relative credit standing of franchise, license and wholesale partners and other entities to which the Company grants credit terms in the normal course of business. The Company determines the required allowance for expected credit losses using information such as customer credit history and financial condition. Amounts are charged against the allowance when it is determined that expected credit losses may occur. Inventories Inventories are principally valued at the lower of cost or net realizable value, on an average cost basis. The Company records valuation adjustments to its inventories if the cost of inventory on hand exceeds the amount it expects to realize from the ultimate sale or disposal of the inventory. These estimates are based on management’s judgment regarding future demand and market conditions and analysis of historical experience. The Company also records inventory loss adjustments for estimated physical inventory losses that have occurred since the date of the last physical inventory. These estimates are based on management’s analysis of historical results, operating trends and consumer behavior. Advertising Costs Advertising and marketing costs are expensed at the time the promotion first appears in media, or in the store or when the advertising is mailed. Advertising and marketing costs totaled $344 million for 2022, $334 million for 2021 and $239 million for 2020. Property and Equipment The Company’s property and equipment are recorded at cost and depreciation is computed on a straight-line basis using the following depreciable life ranges: Category of Property and Equipment Depreciable Life Range Software, including software developed for internal use 3 - 5 years Furniture, fixtures and equipment 3 - 10 years Leasehold improvements Shorter of lease term or 10 years Non-store related building and site improvements 10 - 15 years Other property and equipment 20 years Buildings 30 years When a decision has been made to dispose of property and equipment prior to the end of the previously estimated useful life, depreciation estimates are revised to reflect the use of the asset over the shortened estimated useful life. The Company’s cost of assets sold or retired and the related accumulated depreciation are removed from the accounts with any resulting gain or loss included in net income (loss). Maintenance and repairs are charged to expense as incurred. Major renewals and betterments that extend useful lives are capitalized. Long-lived store assets, which include leasehold improvements, store related assets and operating lease assets (subsequent to the adoption of ASC 842, Leases ), are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Store assets are grouped at the lowest level for which they are largely independent of other assets or asset groups. If the estimated undiscounted future cash flows related to the asset group are less than the carrying value, the Company recognizes a loss equal to the difference between the carrying value and the estimated fair value, determined by the estimated discounted future cash flows of the asset group. For operating lease assets, the Company determines the fair value of the assets by comparing the contractual rent payments to estimated market rental rates. An individual asset within an asset group is not impaired below its estimated fair value. The fair value of long-lived store assets is determined using Level 3 inputs within the fair value hierarchy. Leases and Leasehold Improvements The Company leases retail space, office space, warehouse facilities, storage space, equipment and certain other items under operating leases. A substantial portion of the Company’s leases are operating leases for its stores, which generally have an initial term of 10 years. Annual store rent consists of a fixed minimum amount and/or variable rent based on a percentage of sales exceeding a stipulated amount. Store lease terms generally also require additional payments covering certain operating costs such as common area maintenance, utilities, insurance and taxes. Certain leases contain predetermined fixed escalations of minimum rentals or require periodic adjustments of minimum rentals, depending on an index or rate. Additionally, certain leases contain incentives, such as construction allowances from landlords and/or rent abatements subsequent to taking possession of the leased property. At the date of control of the leased asset, the Company recognizes an asset for the right to use the leased asset and a liability based on the present value of the unpaid fixed lease payments. Operating lease costs are recognized on a straight-line basis as lease expense over the lease term. Variable lease payments associated with the Company's leases are recognized upon occurrence of the event or circumstance on which the payments are assessed. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet, and lease expense is recognized on a straight-line basis over the lease term. For leases entered into or reassessed after the adoption of ASC 842, Leases , the Company has elected the practical expedient allowed by the standard to account for all fixed consideration in a lease as a single lease component. Therefore, the lease payments used to measure the lease liability for these leases include fixed minimum rentals along with fixed operating costs such as common area maintenance and utilities. The Company uses its incremental borrowing rate, adjusted for collateral, to determine the present value of its unpaid lease payments. The Company’s store leases often include options to extend the initial term or to terminate the lease prior to the end of the initial term. The exercise of these options is typically at the sole discretion of the Company. These options are included in determining the initial lease term at lease commencement if the Company is reasonably certain to exercise the option. Additionally, the Company may operate stores for a period of time on a month-to-month basis after the expiration of the lease term. The Company also has leasehold improvements which are amortized over the shorter of their estimated useful lives or the period from the date the assets are placed in service to the end of the initial lease term. Leasehold improvements made after the inception of the initial lease term are depreciated over the shorter of their estimated useful lives or the remaining lease term, including renewal periods, if reasonably assured. Intangible Assets The Company has certain intangible assets resulting from business combinations and acquisitions that are recorded at cost. The Company has goodwill resulting from the Adore Me acquisition on December 30, 2022. Goodwill is reviewed for impairment at the reporting unit level each year in the fourth quarter and may be reviewed more frequently if certain events occur or circumstances change. The Company has the option to either first perform a qualitative assessment to determine whether it is more likely than not that each reporting unit's fair value is less than its carrying value (including goodwill), or to proceed directly to the quantitative assessment which requires a comparison of the reporting unit's fair value to its carrying value (including goodwill). If the Company determines that the fair value of a reporting unit is less than its carrying value, the Company recognizes an impairment charge equal to the difference, not to exceed the total amount of goodwill allocated to the reporting unit. The Company's reporting units are determined in accordance with the provisions of ASC 350, Intangibles - Goodwill and Other. The Victoria’s Secret trade name is an intangible asset with an indefinite life. Intangible assets with indefinite lives are reviewed for impairment each year in the fourth quarter and may be reviewed more frequently if certain events occur or circumstances change. The Company has the option to either first perform a qualitative assessment to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired, or to proceed directly to the quantitative assessment which requires a comparison of the fair value of the intangible asset to its carrying value. To determine if the fair value of the asset is less than its carrying amount, the Company will estimate the fair value, usually determined by the relief from royalty method under the income approach, and compare that value with its carrying amount. If the carrying value of the trade name exceeds its fair value, the Company recognizes an impairment charge equal to the difference. The Company also has definite-lived intangible assets, which includes customer relationships, developed technology and the Adore Me trade name. Definite-lived intangible assets are amortized over their useful lives and are evaluated for impairment whenever events or circumstances indicate that a certain asset or asset group may be impaired. Foreign Currency Translation The functional currency of the Company’s foreign operations is generally the applicable local currency. Assets and liabilities are translated into U.S. dollars using the current exchange rates in effect as of the balance sheet date, while revenues and expenses are translated at the average exchange rates for the period. The Company’s resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in shareholders’ equity. Accumulated foreign currency translation adjustments are reclassified to net income (loss) when realized upon sale or upon complete, or substantially complete, liquidation of the investment in the foreign entity. Fair Value The authoritative guidance included in ASC 820, Fair Value Measurement , defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. This authoritative guidance further establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1—Quoted market prices in active markets for identical assets or liabilities. • Level 2—Observable inputs other than quoted market prices included in Level 1, such as quoted prices of similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The Company estimates the fair value of financial instruments, property and equipment, goodwill, trade names, other intangible assets and contingent consideration in accordance with the provisions of ASC 820 . The recorded amounts for cash and cash equivalents, accounts receivable, prepaid expenses, other current assets and current liabilities approximate fair value due to the short-term nature of these assets and liabilities. Derivative Financial Instruments The Company from time to time uses derivative financial instruments to manage exposure to foreign currency exchange rates. The Company does not use derivative instruments for trading purposes. All derivative instruments are recorded on the Consolidated Balance Sheets at fair value. The earnings of the Company's foreign operations are subject to exchange rate risk as substantially all the merchandise is sourced through U.S. dollar transactions. The Company from time to time utilizes foreign currency forward contracts designated as cash flow hedges to mitigate this foreign currency exposure. Amounts for these designated cash flow hedges are reclassified from Accumulated Other Comprehensive Income (Loss) upon sale of the hedged merchandise to the customer. These gains and losses are recognized in Costs of Goods Sold, Buying and Occupancy in the Consolidated and Combined Statements of Income (Loss). During the second quarter of 2021, the Company terminated its foreign currency forward contracts designated as cash flow hedges that were used to mitigate foreign currency exposure for its Canadian operations. The fair value of designated cash flow hedges is not significant for any period presented. Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, taxes currently payable or refundable are accrued, and deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are also recognized for realizable operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted income tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the Company’s Consolidated and Combined Statement of Income (Loss) in the period that includes the enactment date. The Company treats the global intangible low-taxed income provision enacted as part of the U.S. Tax Cuts and Jobs Act as a current period expense. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is more likely than not that such assets will not be realized. In determining the Company’s provision for income taxes, the Company considers permanent differences between book and tax income and statutory income tax rates. The Company’s effective income tax rate is affected by items including changes in tax law, the tax jurisdiction of new stores or business ventures and the level of earnings. The Company follows a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and for which actual outcomes may differ from forecasted outcomes. The Company's policy is to include interest and penalties related to uncertain tax positions in income tax expense. The Company’s income tax returns, like those of most companies, are periodically audited by domestic and foreign tax authorities. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. At any one time, multiple tax years are subject to audit by the various tax authorities. A number of years may elapse before a particular matter for which the Company has established an accrual is audited and fully resolved or clarified. The Company adjusts its tax contingencies accrual and income tax provision in the period in which matters are effectively settled with tax authorities at amounts different from its established accrual, when the statute of limitations expires for the relevant taxing authority to examine the tax position or when more information becomes available. The Company includes its tax contingencies accrual, including accrued penalties and interest, in Other Long-term Liabilities on the Consolidated Balance Sheets unless the liability is expected to be paid within one year. Changes to the tax contingencies accrual, including accrued penalties and interest, are included in Provision (Benefit) for Income Taxes on the Consolidated and Combined Statements of Income (Loss). Self-Insurance The Company is self-insured for medical, workers’ compensation, property, general liability and automobile liability up to certain stop-loss limits. Such costs are accrued based on known claims and an estimate of incurred but not reported (“IBNR”) claims. IBNR claims are estimated using historical claim information and actuarial estimates. Equity Method Investments The Company accounts for investments in unconsolidated entities where it exercises significant influence, but does not have control, using the equity method. Under the equity method of accounting, the Company recognizes its share of the investee's net income or loss. Losses are only recognized to the extent the Company has positive carrying value related to the investee. Carrying values are only reduced below zero if the Company has an obligation to provide funding to the investee. The Company’s share of net income or loss of unconsolidated entities from which the Company purchases merchandise or merchandise components is included in Costs of Goods Sold, Buying and Occupancy in the Consolidated and Combined Statements of Income (Loss), and the Company’s share of net income or loss from all other unconsolidated entities is included in General, Administrative and Store Operating Expenses in the Consolidated and Combined Statements of Income (Loss). The Company’s equity method investments are required to be reviewed for impairment when it is determined there may be an other-than-temporary loss in value. In March 2022, the Company acquired a minority interest in swimwear brand Frankies Bikinis, LLC (“Frankies Bikinis”) in exchange for $18 million. The investment in Frankies Bikinis is accounted for using the equity method of accounting. The total carrying value of equity method investments was $56 million and $35 million as of January 28, 2023 and January 29, 2022. These investments are recorded in Other Assets on the Consolidated Balance Sheets. Net Investment by Former Parent Net Investment by Former Parent represents the Former Parent's historical investment in the Company, the accumulated net earnings after taxes and the net effect of the transactions with and allocations from the Former Parent. All transactions reflected in Net Investment by Former Parent have been considered as financing activities for purposes of the Consolidated and Combined Statements of Cash Flows. For additional information, see Basis of Presentation above and Note 3, “Transactions with Former Parent.” Noncontrolling Interest The Company accounts for investments in entities where it has control over the entity by consolidating the entities' assets, liabilities and results of operations and including them in the Company's Consolidated and Combined Financial Statements. The share of the investment not owned by the Company is reflected in Noncontrolling Interest in the Consolidated Balance Sheets. The Company recognizes the share of net income or loss not attributable to the Company in Net Loss Attributable to Noncontrolling Interest in the Consolidated and Combined Statements of Income. Noncontrolling interest in fiscal year 2022 represents the portion of equity interests in a joint venture that operates the business in China that is not owned by the Company. Noncontrolling interest in fiscal year 2020 represents the portion of equity interests in a technology joint venture in India that was not owned at that time by the Company. Share-based Compensation Prior to the Separation, certain Company employees participated in the share-based compensation plans sponsored by the Former Parent. The Former Parent's share-based compensation awards granted to the employees of the Company consisted of the Former Parent's stock options and restricted stock. As such, prior to the Separation, the awards granted to Company employees are reflected in Net Investment by Former Parent within the Consolidated and Combined Statements of Equity at the time they were expensed. Prior to the Separation, the Consolidated and Combined Statements of Income (Loss) also include an allocation of the Former Parent's corporate and shared |
Adore Me Acquisition
Adore Me Acquisition | 12 Months Ended |
Jan. 28, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Adore Me Acquisition | Acquisition On November 1, 2022, the Company announced that it had signed a Merger Agreement to acquire 100% of Adore Me. The acquisition closed on December 30, 2022 pursuant to the terms and conditions of the Merger Agreement. Adore Me is a direct-to-consumer lingerie and apparel brand with technology driven commerce service and a series of innovation-driven products. The acquisition creates the opportunity for the Company to leverage Adore Me's expertise and technology to continue to improve the Victoria's Secret and PINK customer shopping experience and accelerate the modernization of the Company's digital platform. Under the terms of the Merger Agreement, the Company made an upfront cash payment of $391 million at closing and will pay further cash consideration in an aggregate amount of at least $80 million, consisting of a fixed payment to be made on or prior to January 15, 2025, and up to $300 million based on the performance of Adore Me and achievement of specified strategic objectives and certain EBITDA and net revenue goals within the two The total consideration when applying the acquisition method of accounting was $537 million, net of $22 million of cash acquired. The gross consideration as of the acquisition date of $559 million consists of $391 million in cash paid at closing, $98 million which represents the fair value of the contingent cash consideration and $70 million which represents the fair value of the future fixed payment. The Company incurred approximately $15 million of acquisition-related costs related to the Adore Me transaction. Those costs, primarily related to professional advisory services and other transaction-related costs, are included within General, Administrative and Store Operating Expenses in the 2022 Consolidated Statement of Income. The Company accounted for the acquisition of Adore Me using the acquisition method of accounting. Assets acquired and liabilities assumed have been recorded based on their preliminary fair values, and as a result, the estimates and assumptions are subject to change. The Company is still in the process of finalizing the valuation estimates and final purchase price allocation which includes potential adjustments related to the final working capital settlement and amounts allocated to intangible assets. The Company expects to complete this process no later than twelve months after the closing of the acquisition. The following is a preliminary purchase price allocation of assets acquired and liabilities assumed related to the Adore Me acquisition: (in millions) Accounts Receivable $ 1 Inventories 105 Other Current Assets 7 Property and Equipment, Net 12 Operating Lease Assets 5 Goodwill 365 Trade Name 43 Other Intangible Assets 137 Other Assets 1 Accounts Payable 17 Accrued Expenses and Other 88 Current Operating Lease Liabilities 2 Deferred Income Tax Liabilities 21 Long-term Operating Lease Liabilities 3 Other Long-term Liabilities 8 Net Assets Acquired and Liabilities Assumed $ 537 The following table represents the definite-lived intangible assets acquired, the preliminary fair values and respective useful lives: Useful Life Preliminary Fair Value (in millions) Customer Relationships 7 years $ 81 Developed Technology 6 years 56 Trade Name 10 years 43 Total Definite-Lived Intangible Assets $ 180 The Company used the multi-period excess earnings method to value the customer relationships intangible assets and the relief from royalty method to value the developed technology and trade name intangible assets. The significant assumptions used to estimate the fair value of customer relationships included forecasted revenues, customer attrition rates and a discount rate. The significant assumptions used to estimate the fair value of developed technology and the trade name included forecasted revenues, royalty rates and a discount rate. These significant assumptions are forward-looking and could be affected by future economic and market conditions. The estimated weighted-average useful life was 7.4 years for definite-lived intangible assets. Goodwill was calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of net assets recognized for Adore Me, and represents the future economic benefits, including synergies, and assembled workforce, that are expected to be achieved as a result of the consummation of the acquisition of Adore Me. The goodwill arising from the acquisition is not expected to be deductible for tax purposes. For additional information about goodwill and other intangible assets, see Note 10, “Intangible Assets.” The Company consolidates Adore Me's financial information on an approximate one Pro Forma Financial Information In accordance with ASC 805, Business Combinations , the following unaudited pro forma results of operations for 2022 and 2021, respectively, assumes the Adore Me acquisition was completed on the first day of fiscal year 2021, or January 31, 2021. The following pro forma results include adjustments to reflect acquisition-related costs, amortization of intangibles associated with the acquisition and the effects of adjustments made to the carrying value of inventories. 2022 2021 (in millions) Net Sales $ 6,595 $ 6,996 Net Income Attributable to Victoria's Secret & Co. 330 544 The unaudited pro forma financial information may not be indicative of the results that would have been obtained had the acquisition occurred at the beginning of the periods presented, nor is it intended to be a projection of future results. Additionally, the pro forma financial information does not reflect the costs which the Company has incurred or may incur to integrate the acquired business. |
Transactions with Former Parent
Transactions with Former Parent | 12 Months Ended |
Jan. 28, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Transactions with Former Parent | Transactions with Former Parent Prior to the Separation, the Company's financial statements were prepared on a “carve-out” basis and were derived from the consolidated financial statements and accounting records of the Former Parent. The following discussion summarizes activity between the Company and the Former Parent. Allocation of General Corporate Expenses Prior to the Separation, for purposes of preparing the financial statements on a “carve-out” basis, the Company was allocated a portion of the Former Parent's total corporate expenses. See Note 1 for a discussion of the methodology used to allocate corporate-related costs for purposes of preparing the financial statements on a "carve-out” basis. Long-term Debt due to Former Parent Prior to the Separation, during 2020, the Company borrowed $97 million from the Former Parent to pay down outstanding debt with external parties. This borrowing was due in September 2025 and had a variable interest rate based on the China Loan Prime Rate. As a result of the Separation, the Company no longer has this Long-term Debt due to Former Parent. Prior to the Separation, the Company recognized $2 million of interest expense during 2021 related to this borrowing. Net Transfers from (to) Former Parent The following table presents the components of Net Transfers from (to) Former Parent prior to the Separation in the 2021 and 2020 Consolidated and Combined Statements of Equity: 2021 2020 (in millions) Cash Pooling and General Financing Activities, Net $ (172) $ (543) Long-lived Assets (a) 16 — Corporate Expense Allocations 49 77 Share-based Compensation Expense 15 25 Assumed Income Tax Payments 15 59 Cash Payment to Former Parent (976) — Total Net Transfers to Former Parent $ (1,053) $ (382) _______________ (a) Represents long-lived assets transferred between the Company and the Former Parent as a result of asset allocation decisions made during the period. Agreements with Former Parent The Company entered into several agreements with the Former Parent that, among other things, effect the Separation and govern the relationship of the parties following the Separation, including a Separation and Distribution Agreement, a Tax Matters Agreement, an L Brands to VS Transition Services Agreement, a VS to L Brands Transition Services Agreement, an Employee Matters Agreement and a Domestic Transportation Services Agreement. Under the terms of the transition services agreements, as amended, the Company provides its Former Parent, on a transitional basis, certain services or functions, including information technology, certain logistics functions and customer marketing services. Additionally, the Former Parent provides to the Company various services or functions, many of which currently use a shared technology platform, including human resources, payroll and certain logistics functions. Generally, these services will be provided for a period of up to two years following the Separation, except for information technology services, which will be provided for a period of up to three years following the Separation and may be extended for a maximum of two additional one The following table summarizes the recognized consideration and costs pursuant to the transition services agreements for 2022 and 2021: 2022 2021 (in millions) Consideration Received $ 72 $ 55 Costs Recognized 74 42 Under the terms of the Domestic Transportation Services Agreement, the Former Parent provides transportation services to the Company for certain beauty and apparel merchandise in the U.S. and Canada for an initial term of three years following the Separation, which term will thereafter continuously renew unless and until either party elects to terminate the arrangement upon written prior notice. Costs for the transportation services will be determined using customary billing and fixed billing methodologies, which are described in the agreement, and are subject to an administrative charge. Costs for transition services are recorded within Costs of Goods Sold, Buying and Occupancy in the Consolidated and Combined Statements of Income (Loss). The following table summarizes the recognized costs pursuant to the Domestic Transportation Services Agreement for 2022 and 2021: 2022 2021 (in millions) Costs Recognized $ 91 $ 46 Prior to the Separation, certain Company employees participated in the stock option and performance incentive plan of the Former Parent. Under the terms of the Employee Matters Agreement, in connection with the Separation, restricted stock and stock option equity awards held by Company employees were converted to awards representing approximately 6.0 million shares of the Company's common stock under the Company's 2021 Stock Option and Performance Incentive Plan. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Jan. 28, 2023 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue Recognition | Revenue Recognition Accounts receivable, net from revenue-generating activities were $101 million as of January 28, 2023 and $101 million as of January 29, 2022. Accounts receivable primarily relate to amounts due from the Company's franchise, license and wholesale partners. Under these arrangements, payment terms are typically 60 to 90 days. The Company records deferred revenue when cash payments are received in advance of transfer of control of goods or services. Deferred revenue primarily relates to gift cards, loyalty and credit card programs and direct channel shipments, which are all impacted by seasonal and holiday-related sales patterns. Deferred revenue was $309 million as of January 28, 2023 and $258 million as of January 29, 2022. The Company recognized $135 million as revenue in 2022 from amounts recorded as deferred revenue at the beginning of the period. As of January 28, 2023, the Company recorded deferred revenues of $291 million within Accrued Expenses and Other, and $18 million within Other Long-term Liabilities on the Consolidated Balance Sheet. The following table provides a disaggregation of Net Sales for 2022, 2021 and 2020: 2022 2021 2020 (in millions) Stores — North America $ 3,909 $ 4,194 $ 2,795 Direct 1,843 2,114 2,223 International (a) 592 477 395 Total Net Sales $ 6,344 $ 6,785 $ 5,413 _______________ (a) Results include consolidated joint venture sales in China, royalties associated with franchised stores, wholesale sales and company-operated stores in the U.K. (before our joint venture with Next). In April 2022, the Company launched a new co-branded credit card through which customers can earn points on purchases of Company product as well as on purchases outside of the Company. The co-branded credit card is in addition to the Company's existing U.S. private label credit card. A third-party financing company is the sole owner of the accounts and underwrites the credit issued under the credit card programs. Revenue earned in connection with the Company's credit card arrangements with the third-party is primarily recognized based on credit card sales and usage. The Company recognized Net Sales of $123 million, $132 million and $135 million for 2022, 2021 and 2020, respectively, related to revenue earned in connection with its credit card arrangements. The Company’s international net sales include sales from Company-operated stores, royalty revenue from franchise and license arrangements, wholesale revenues and direct sales shipped internationally. Certain of these sales are subject to the impact of fluctuations in foreign currency. The Company’s net sales outside of the U.S. totaled $830 million, $736 million and $643 million for 2022, 2021 and 2020, respectively. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Jan. 28, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Earnings (loss) per basic share is computed based on the weighted-average number of common shares outstanding. Earnings (loss) per diluted share include the weighted-average effect of dilutive restricted stock units, performance share units and options (collectively, “Dilutive Awards”) on the weighted-average shares outstanding. On August 2, 2021, the Separation was achieved through the Former Parent's distribution of 100% of the shares of the Company's common stock to holders of the Former Parent's common stock as of the close of business on the record date of July 22, 2021. The Former Parent's stockholders of record received one share of the Company's common stock for every three shares of the Former Parent's common stock. As a result, on August 3, 2021, the Company had 88 million shares of common stock outstanding. This share amount is being utilized for the calculation of basic and diluted earnings (loss) per share for all periods presented prior to the Separation. After the Separation, actual outstanding shares are used to calculate both basic and diluted weighted-average number of common shares outstanding. The following table provides the weighted-average shares utilized for the calculation of basic and diluted earnings (loss) per share for 2022, 2021 and 2020: 2022 2021 2020 (in millions) Common Shares 82 88 88 Treasury Shares — — — Basic Shares 82 88 88 Effect of Dilutive Awards 2 2 — Diluted Shares 84 90 88 Anti-dilutive Awards (a) 1 — — ________________ |
Restructuring Activities
Restructuring Activities | 12 Months Ended |
Jan. 28, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | Restructuring Activities Organizational Restructuring In July 2022, the Company announced a new, simplified corporate leadership structure designed to unite the Company's brands, better align its teams with a shifting consumer landscape and enable better execution of its strategy. As a result of the July 2022 restructuring, pre-tax severance and related costs of $29 million, of which $16 million are included in General, Administrative and Store Operating Expenses and $13 million are included in Costs of Goods Sold, Buying and Occupancy, are included in the 2022 Consolidated Statement of Income. In the fourth quarter of 2022, the Company executed additional restructuring actions to continue to reorganize and improve its organizational structure. As a result, pre-tax severance and related costs of $6 million, of which $5 million are included in General, Administrative and Store Operating Expenses and $1 million are included in Costs of Goods Sold, Buying and Occupancy, are included in the 2022 Consolidated Statement of Income. During 2022, the Company made payments of $18 million related to severance and related costs associated with these reductions. As of January 28, 2023, liabilities related to the restructuring of $17 million are included in the January 28, 2023 Consolidated Balance Sheet. Victoria's Secret China In April 2022, the Company announced the completion of the joint venture agreement with Regina Miracle, a company listed on the Hong Kong Stock Exchange, related to its existing Company-owned business in China. The Company and Regina Miracle formed a joint venture to operate Victoria's Secret stores and the related online business in China. Under the terms of the agreement, the Company owns 51% of the joint venture and Regina Miracle owns the remaining 49%. The Company received $45 million in cash from Regina Miracle during the first quarter of 2022 as consideration for its investment in the joint venture. In connection with the execution of the agreement, the Company and Regina Miracle each contributed $10 million in cash to the joint venture. The cash received from Regina Miracle is reflected within Cash Received from Noncontrolling Interest Partner in the 2022 Consolidated and Combined Statement of Cash Flows. Since the Company has retained control over the joint venture, the joint venture's assets, liabilities and results of operations will continue to be consolidated in the Company's consolidated financial statements. Regina Miracle's interest in the joint venture is now reflected in Noncontrolling Interest in the 2022 Consolidated Balance Sheet and in Net Loss Attributable to Noncontrolling Interest in the 2022 Consolidated Statement of Income. Victoria's Secret U.K. Due to challenging business results for our business in the U.K., the Company entered into administration in June 2020 to restructure store lease agreements and reduce operating losses in the U.K. business. In October 2020, the Company entered into a joint venture with Next for the business in the U.K. and Ireland. Under this agreement, the Company owns 49% of the joint venture, and Next owns 51% and is responsible for operations. The Company accounts for its investment in the joint venture under the equity method of accounting. The joint venture acquired the majority of the operating assets, primarily inventory, and the restructured leases were transferred to the joint venture. Effective October 19, 2020, the newly formed joint venture began operating all Victoria’s Secret stores in the U.K. and Ireland. The Company recognized non-cash pre-tax gains of $90 million related to the derecognition of operating lease liabilities in excess of operating lease assets for the 24 store leases that were restructured and transferred to the joint venture. In addition, the Company recognized a $25 million non-cash pre-tax impairment charge to fully write-off all remaining long-lived store assets in the U.K. Finally, as a result of the transition to a joint venture business model in the U.K. and the substantially complete liquidation of the Company’s investment in the U.K., the Company recognized a $36 million non-cash pre-tax loss related to accumulated foreign currency translation adjustments that were reclassified into earnings, which were previously recognized as a component of equity. The above items relating to Victoria's Secret U.K. are included in General, Administrative and Store Operating Expenses in the 2020 Consolidated and Combined Statement of Loss as they all relate to the Company's transition to a joint venture business model in the U.K. Pre-Separation Reorganization During the second quarter of 2020, management reduced home office headcount as a result of completing a comprehensive review of the home office organizations in order to achieve meaningful reductions in overhead expenses and to decentralize significant shared functions and services to support the creation of standalone companies. Pre-tax severance and related costs associated with these reductions, totaling $51 million, are included in General, Administrative and Store Operating Expenses in the 2020 Consolidated and Combined Statement of Loss. As of January 28, 2023, the liability for severance and related costs associated with these reductions was fully paid. |
Inventories
Inventories | 12 Months Ended |
Jan. 28, 2023 | |
Inventory, Net [Abstract] | |
Inventories | Inventories The following table provides details of Inventories as of January 28, 2023 and January 29, 2022: January 28, January 29, (in millions) Finished Goods Merchandise $ 997 $ 898 Raw Materials and Merchandise Components 55 51 Total Inventories $ 1,052 $ 949 The above amounts are net of valuation adjustments for inventory where the cost exceeds the amount the Company expects to realize from the ultimate sale or disposal of the inventory and net of loss adjustments for estimated physical inventory losses that have occurred since the date of the last physical inventory. |
Long-Lived Assets
Long-Lived Assets | 12 Months Ended |
Jan. 28, 2023 | |
Property, Plant and Equipment [Abstract] | |
Long-Lived Assets | Long-Lived Assets The following table provides details of Property and Equipment, Net as of January 28, 2023 and January 29, 2022: January 28, January 29, (in millions) Land and Improvements $ 28 $ 27 Buildings and Improvements 219 211 Furniture, Fixtures, Software and Equipment 2,394 2,409 Leasehold Improvements 1,018 1,070 Construction in Progress 57 78 Total 3,716 3,795 Accumulated Depreciation and Amortization (2,870) (2,838) Property and Equipment, Net $ 846 $ 957 Depreciation expense was $274 million in 2022, $303 million in 2021 and $326 million in 2020. Long-Lived Store Assets As a result of the Company's fleet rationalization executed during 2020 and the negative operating results of certain stores in 2020, the Company determined that the estimated undiscounted future cash flows were less than the carrying values for certain asset groups and, as a result, determined the estimated fair values of the store asset groups using estimated discounted future cash flows and estimated market rental rates. In 2020, the Company also recorded a $25 million non-cash pre-tax impairment charge to fully write-off all remaining long-lived store assets in the U.K. This charge is included in General, Administrative and Store Operating Expenses in the 2020 Consolidated and Combined Statement of Loss. There were no long-lived store asset impairment charges in 2022 or 2021. The following table provides pre-tax long-lived store asset impairment charges included in the 2020 Consolidated and Combined Statement of Loss: 2020 Store Asset Impairment $ 136 Operating Lease Asset Impairment 118 Total Impairment $ 254 |
Leases
Leases | 12 Months Ended |
Jan. 28, 2023 | |
Leases [Abstract] | |
Leases | Leases The following table provides the components of lease cost for operating leases for 2022, 2021 and 2020: 2022 2021 2020 (in millions) Operating Lease Costs $ 385 $ 399 $ 521 Variable Lease Costs 76 63 6 Short-term Lease Costs 13 6 5 Total Lease Cost $ 474 $ 468 $ 532 In 2020, for many stores and select office locations, beginning in April 2020, rent was not paid, or was only partially paid, due to the COVID-19 pandemic. The Financial Accounting Standards Board issued guidance in April 2020 which allows certain COVID-19-related concessions to be recognized as a reduction of lease costs in the period an amendment is executed. Negotiations were completed with nearly all landlords to determine potential rent credits or payment deferrals related to COVID-19. The Company fully accrued rent to the original contractual rent due unless an executed amendment was in place. As a result of the COVID-19-related concessions, the Company recognized a $31 million and $90 million reduction to occupancy expenses in 2021 and 2020, respectively, as a result of executed amendments with landlords. The amount recognized for COVID-19-related concessions in 2022 was not significant. The following table provides future maturities of operating lease liabilities as of January 28, 2023: Fiscal Year (in millions) 2023 $ 390 2024 327 2025 273 2026 213 2027 158 Thereafter 500 Total Lease Payments $ 1,861 Less: Interest (350) Present Value of Operating Lease Liabilities $ 1,511 As of January 28, 2023, the Company had additional operating lease commitments that have not yet commenced of approximately $87 million. The following table provides the weighted-average remaining lease term and discount rate for operating leases with lease liabilities as of January 28, 2023 and January 29, 2022: January 28, January 29, Weighted-Average Remaining Lease Term (years) 6.6 6.4 Weighted-Average Discount Rate 6.1% 6.0% The Company paid $423 million in 2022, $497 million in 2021 and $348 million in 2020 for operating lease liabilities recorded on the Consolidated Balance Sheets. These payments are included within the Operating Activities section of the Consolidated and Combined Statement of Cash Flows. In 2022 and 2021, the Company obtained $160 million and $120 million, respectively, of additional lease assets as a result of new operating lease obligations. During 2020, the Company reduced its lease assets by $32 million as a result of permanent store closures due to the fleet rationalization and lease term reductions that also reduced its operating lease obligations. Victoria's Secret Hong Kong During the second quarter of 2020, the Company closed its unprofitable Victoria's Secret flagship store in Hong Kong. As a result of the store closure, the Company recognized a non-cash pre-tax gain of $39 million, primarily due to terminating the store lease and the related write-off of the operating lease liability in excess of the operating lease asset, which was partially impaired in fiscal 2019. This gain is included in Costs of Goods Sold, Buying and Occupancy in the 2020 Consolidated and Combined Statement of Loss. The Company also recorded $3 million of severance and related costs, included in General, Administrative and Store Operating Expenses in the 2020 Consolidated and Combined Statement of Loss. Asset Retirement Obligations The Company has asset retirement obligations related to certain Company-operated international stores that contractually obligate the Company to remove leasehold improvements at the end of a lease. The Company's liabilities for asset retirement obligations totaled $12 million as of January 28, 2023 and $13 million as of January 29, 2022. These liabilities are included in Other Long-term Liabilities on the Consolidated Balance Sheets. |
Leases | Leases The following table provides the components of lease cost for operating leases for 2022, 2021 and 2020: 2022 2021 2020 (in millions) Operating Lease Costs $ 385 $ 399 $ 521 Variable Lease Costs 76 63 6 Short-term Lease Costs 13 6 5 Total Lease Cost $ 474 $ 468 $ 532 In 2020, for many stores and select office locations, beginning in April 2020, rent was not paid, or was only partially paid, due to the COVID-19 pandemic. The Financial Accounting Standards Board issued guidance in April 2020 which allows certain COVID-19-related concessions to be recognized as a reduction of lease costs in the period an amendment is executed. Negotiations were completed with nearly all landlords to determine potential rent credits or payment deferrals related to COVID-19. The Company fully accrued rent to the original contractual rent due unless an executed amendment was in place. As a result of the COVID-19-related concessions, the Company recognized a $31 million and $90 million reduction to occupancy expenses in 2021 and 2020, respectively, as a result of executed amendments with landlords. The amount recognized for COVID-19-related concessions in 2022 was not significant. The following table provides future maturities of operating lease liabilities as of January 28, 2023: Fiscal Year (in millions) 2023 $ 390 2024 327 2025 273 2026 213 2027 158 Thereafter 500 Total Lease Payments $ 1,861 Less: Interest (350) Present Value of Operating Lease Liabilities $ 1,511 As of January 28, 2023, the Company had additional operating lease commitments that have not yet commenced of approximately $87 million. The following table provides the weighted-average remaining lease term and discount rate for operating leases with lease liabilities as of January 28, 2023 and January 29, 2022: January 28, January 29, Weighted-Average Remaining Lease Term (years) 6.6 6.4 Weighted-Average Discount Rate 6.1% 6.0% The Company paid $423 million in 2022, $497 million in 2021 and $348 million in 2020 for operating lease liabilities recorded on the Consolidated Balance Sheets. These payments are included within the Operating Activities section of the Consolidated and Combined Statement of Cash Flows. In 2022 and 2021, the Company obtained $160 million and $120 million, respectively, of additional lease assets as a result of new operating lease obligations. During 2020, the Company reduced its lease assets by $32 million as a result of permanent store closures due to the fleet rationalization and lease term reductions that also reduced its operating lease obligations. Victoria's Secret Hong Kong During the second quarter of 2020, the Company closed its unprofitable Victoria's Secret flagship store in Hong Kong. As a result of the store closure, the Company recognized a non-cash pre-tax gain of $39 million, primarily due to terminating the store lease and the related write-off of the operating lease liability in excess of the operating lease asset, which was partially impaired in fiscal 2019. This gain is included in Costs of Goods Sold, Buying and Occupancy in the 2020 Consolidated and Combined Statement of Loss. The Company also recorded $3 million of severance and related costs, included in General, Administrative and Store Operating Expenses in the 2020 Consolidated and Combined Statement of Loss. Asset Retirement Obligations The Company has asset retirement obligations related to certain Company-operated international stores that contractually obligate the Company to remove leasehold improvements at the end of a lease. The Company's liabilities for asset retirement obligations totaled $12 million as of January 28, 2023 and $13 million as of January 29, 2022. These liabilities are included in Other Long-term Liabilities on the Consolidated Balance Sheets. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jan. 28, 2023 | |
Goodwill, Trade Names and Other Intangible Assets, Net [Abstract] | |
Intangible Assets | Intangible Assets Goodwill The Company's goodwill was $365 million as of January 28, 2023, which was established as a result of the acquisition of Adore Me on December 30, 2022. For additional information, see Note 2, “Acquisition.” The Company did not have any goodwill as of January 29, 2022 and January 30, 2021, respectively. Trade Name - Indefinite-Lived The Victoria's Secret trade name, an indefinite-lived intangible asset, was $246 million as of January 28, 2023 and January 29, 2022, respectively. As of the end of 2022 and 2021, the Company performed its annual impairment assessment of the Victoria's Secret trade name. To estimate the fair value of the trade name, the Company used the relief from royalty method under the income approach. The assessments concluded that the fair value of the trade name was in excess of its carrying value. Definite-Lived Intangible Assets The Company's definite-lived intangible assets were established as a result of the acquisition of Adore Me. Prior to the acquisition of Adore Me on December 30, 2022, the Company did not have any definite-lived intangible assets. The following table provides details of the gross carrying amounts of the Company's definite-lived intangible assets as of January 28, 2023: January 28, (in millions) Customer Relationships $ 81 Developed Technology 56 Adore Me Trade Name 43 Total Definite-Lived Intangible Assets $ 180 Due to the timing of the acquisition date and the Company consolidating Adore Me's financial information on an approximate one Definite-lived intangible assets are evaluated for impairment whenever events or circumstances indicate that a certain asset or asset group may be impaired. The estimated future annual amortization expense is $25 million for each of the next five fiscal years for definite-lived intangible assets recorded as of January 28, 2023. |
Accrued Expenses and Other
Accrued Expenses and Other | 12 Months Ended |
Jan. 28, 2023 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other | Accrued Expenses and Other The following table provides additional information about the composition of Accrued Expenses and Other as of January 28, 2023 and January 29, 2022: January 28, January 29, (in millions) Deferred Revenue on Gift Cards and Merchandise Credits $ 238 $ 198 Compensation, Payroll Taxes and Benefits 105 152 Rent 63 45 Deferred Revenue on Loyalty and Credit Card Programs 40 36 Taxes, Other than Income 40 24 Accrued Marketing 37 36 Contingent Consideration Related to Adore Me Acquisition 30 — Returns Reserve 22 23 Accrued Freight and Other Logistics 16 62 Deferred Revenue on Direct Shipments not yet Delivered 13 16 Accrued Claims on Self-insured Activities 8 4 Accrued Interest 7 5 Other 118 113 Total Accrued Expenses and Other $ 737 $ 714 |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 28, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Prior to the Separation, the Company's U.S. operations and certain of its non-U.S. operations were historically included in the income tax returns of the Former Parent or its subsidiaries that may not be part of the Company. For the periods prior to the Separation, the income tax expense (benefit) and all tax liabilities that are presented in these financial statements were calculated on a “carve-out” basis, which applied the accounting guidance as if we filed income tax returns for the Company on a standalone, separate return basis. The Company believes the assumptions supporting its allocation and presentation of income taxes on a separate return basis are reasonable. However, the Company's tax results, as presented in these financial statements for periods prior to the Separation, may not be reflective of the results that the Company expects to generate in the future. Post-Separation, the Company files a consolidated U.S. federal income tax return as well as separate and combined income tax returns in numerous state, local and international jurisdictions. Income tax expense (benefit) for the period prior to the Separation is based on the combined financial statements prepared on a “carve-out” basis. Income tax expense (benefit) for the period after the Separation is based on the consolidated results of the Company on a standalone basis. The following table provides the components of the Company’s Provision (Benefit) for Income Taxes for 2022, 2021 and 2020: 2022 2021 2020 (in millions) Current: U.S. Federal $ 67 $ 129 $ 7 U.S. State 22 44 16 Non-U.S. 18 23 7 Total 107 196 30 Deferred: U.S. Federal (20) 6 (68) U.S. State (4) (4) (14) Non-U.S. (4) (1) 18 Total (28) 1 (64) Provision (Benefit) for Income Taxes $ 79 $ 197 $ (34) The non-U.S. component of pre-tax income, arising principally from overseas operations, was income of $92 million, $92 million and $11 million for 2022, 2021 and 2020, respectively. The following table provides the reconciliation between the statutory federal income tax rate and the effective tax rate for 2022, 2021 and 2020: 2022 2021 2020 Federal Income Tax Rate 21.0 % 21.0 % 21.0 % State Income Taxes, Net of Federal Income Tax Effect 3.9 % 4.3 % (5.8 %) Impact of Non-U.S. Operations (1.6 %) (0.9 %) (16.6 %) Share-based Compensation (4.6 %) (1.2 %) (4.0 %) Uncertain Tax Positions 0.2 % (0.2 %) 19.3 % Change in Valuation Allowance (0.1 %) — % (2.6 %) Restructuring of Foreign Investments — % 0.2 % 23.3 % U.S. Permanent Items 0.3 % 0.1 % (2.8 %) Other Items, Net (0.1 %) — % 0.1 % Effective Tax Rate 19.0 % 23.3 % 31.9 % Deferred Taxes The following table provides the effect of temporary differences that cause deferred income taxes as of January 28, 2023 and January 29, 2022. Deferred tax assets and liabilities represent the future effects on income taxes resulting from temporary differences and carryforwards at the end of the respective year. January 28, 2023 January 29, 2022 Assets Liabilities Total Assets Liabilities Total (in millions) Loss Carryforwards $ 133 $ — $ 133 $ 118 $ — $ 118 Leases 354 (309) 45 371 (322) 49 Share-based Compensation 12 — 12 11 — 11 Deferred Revenue 43 — 43 42 — 42 Property and Equipment — (58) (58) — (79) (79) Trade Name and Other Intangibles — (100) (100) — (57) (57) Other 54 (11) 43 34 (11) 23 Valuation Allowance (153) — (153) (148) — (148) Total Deferred Income Taxes $ 443 $ (478) $ (35) $ 428 $ (469) $ (41) As of January 28, 2023, the Company had loss carryforwards of $133 million, of which $37 million has an indefinite carryforward. The remainder of the non-U.S. carryforwards, if unused, will expire at various dates from 2023 through 2039. For certain jurisdictions where the Company has determined that it is more likely than not that the loss carryforwards will not be realized, a valuation allowance has been provided on those loss carryforwards as well as other net deferred tax assets. Income tax payments were $161 million for 2022, $56 million for 2021 and $59 million for 2020. Uncertain Tax Positions The following table summarizes the activity related to the Company’s unrecognized tax benefits for U.S. federal, state & non-U.S. tax jurisdictions for 2022, 2021 and 2020, without interest and penalties: 2022 2021 2020 (in millions) Gross Unrecognized Tax Benefits, as of the Beginning of the Fiscal Year $ 10 $ 126 $ 41 Decreases to Unrecognized Tax Benefits Transferred to Former Parent — (126) — Increases to Unrecognized Tax Benefits as a Result of Current Year Activity 10 10 105 Increases to Unrecognized Tax Benefits for Prior Years, Including Acquisitions 11 — — Decreases to Unrecognized Tax Benefits for Prior Years — — (16) Decreases to Unrecognized Tax Benefits Relating to Settlements with Taxing Authorities — — — Decreases to Unrecognized Tax Benefits due to Lapse of Statute of Limitations — — (4) Gross Unrecognized Tax Benefits, as of the End of the Fiscal Year $ 31 $ 10 $ 126 Of the total gross unrecognized tax benefits, approximately $20 million, $9 million and $121 million, at January 28, 2023, January 29, 2022, and January 30, 2021, respectively, represent the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. These amounts are net of the offsetting tax effects from other tax jurisdictions. Of the total unrecognized tax benefits, it is reasonably possible that $9 million could change in the next 12 months due to audit settlement, expiration of statute of limitations or other resolution of uncertainties. Due to the uncertain and complex application of tax regulations, it is possible that the ultimate resolution of audits may result in amounts which could be different from this estimate. In such case, the Company will record additional tax expense or tax benefit in the period in which such matters are effectively settled. The Company recognizes interest and penalties related to unrecognized tax benefits as components of income tax expense. The Company recognized interest and penalties expense of $1 million in 2022, did not recognize expense in 2021, and recognized a benefit from interest and penalties of $2 million in 2020. The Company has accrued approximately $1 million for the payment of interest and penalties as of January 28, 2023. The Company did not have an accrual for the payment of interest and penalties as of January 29, 2022. Accrued interest and penalties are included within Other Long-term Liabilities on the Consolidated Balance Sheets. The Company files U.S. federal income tax returns as well as income tax returns in various states and in non-U.S. jurisdictions. The Company is currently under examination, or may be subject to examination, by various U.S. federal, state, local and non-U.S. tax jurisdictions for fiscal year 2016 through 2021. The Company is no longer subject to U.S. federal examination for years prior to fiscal year 2019, state and local examinations for years prior to fiscal year 2017, or examinations in any material non-U.S. jurisdictions for years prior to fiscal year 2016. In some situations, the Company determines that it does not have a filing requirement in a particular tax jurisdiction. Where no return has been filed, no statute of limitations applies. Accordingly, if a tax jurisdiction reaches a conclusion that a filing requirement does exist, additional years may be reviewed by the tax authority. The Company believes it has appropriately accounted for uncertainties related to this issue. On December 30, 2022, the Company acquired Adore Me. Pursuant to the Merger Agreement, the Company will be responsible for all U.S. federal, state, local and non-U.S. income taxes for any taxable period, or portion of such period, ending on or before the date of acquisition. Approximately $10 million in gross unrecognized tax benefits were established through acquisition accounting attributable to this acquisition. |
Long-term Debt and Borrowing Fa
Long-term Debt and Borrowing Facilities | 12 Months Ended |
Jan. 28, 2023 | |
Long-Term Debt, by Current and Noncurrent [Abstract] | |
Long-term Debt and Borrowing Facilities | Long-term Debt and Borrowing Facilities The following table provides the Company’s outstanding debt balance, net of unamortized debt issuance costs and discounts, as of January 28, 2023 and January 29, 2022: January 28, January 29, (in millions) Senior Secured Debt with Subsidiary Guarantee $395 million Term Loan due August 2028 (“Term Loan Facility”) $ 387 $ 390 Asset-based Revolving Credit Facility due August 2026 (“ABL Facility”) 295 — Total Senior Secured Debt with Subsidiary Guarantee 682 390 Senior Debt with Subsidiary Guarantee $600 million, 4.625% Fixed Interest Rate Notes due July 2029 (“2029 Notes”) 593 592 Total Senior Debt with Subsidiary Guarantee 593 592 Total 1,275 982 Current Debt (4) (4) Total Long-term Debt, Net of Current Portion $ 1,271 $ 978 The following table provides principal payments due on outstanding debt in the next five fiscal years and the remaining years thereafter: Fiscal Year (in millions) 2023 $ 4 2024 4 2025 4 2026 299 2027 4 Thereafter $ 975 Cash paid for interest was $52 million and $18 million in 2022 and 2021, respectively. There was no cash paid for interest in 2020. Issuance of Notes In July 2021, the Company issued $600 million of 4.625% notes due in July 2029 in a transaction exempt from registration under the Securities Act of 1933, as amended. The obligation to pay principal and interest on the 2029 Notes is jointly and severally guaranteed on a full and unconditional basis by certain of the Company's wholly-owned subsidiaries. On August 2, 2021, the Company used cash proceeds of $592 million, which were net of issuance costs of $8 million, from the 2029 Notes, to partially fund the approximately $976 million cash payment to the Former Parent in connection with the Separation. The issuance costs are being amortized through the maturity date and are included within Long-term Debt on the Consolidated Balance Sheets. Credit Facilities On August 2, 2021, the Company entered into a term loan B credit facility in an aggregate principal amount of $400 million, which will mature in August 2028. Commencing in December 2021, the Company is required to make quarterly principal payments on the Term Loan Facility in an amount equal to 0.25% of the original principal amount of $400 million. The Company made principal payments of $4 million and $1 million for the Term Loan Facility during 2022 and 2021, respectively. Interest under the Term Loan Facility is calculated by reference to LIBOR or an alternative base rate, plus an interest rate margin equal to (i) in the case of LIBOR loans, 3.25% and (ii) in the case of alternate base rate loans, 2.25%. The LIBOR rate applicable to the Term Loan Facility is subject to a floor of 0.50%. The obligation to pay principal and interest on the loans under the Term Loan Facility is jointly and severally guaranteed on a full and unconditional basis by certain of the Company's wholly-owned domestic subsidiaries. The loans under the Term Loan Facility are secured on a first-priority lien basis by certain assets of the Company and guarantors that do not constitute priority collateral of the ABL Facility and on a second-priority lien basis by priority collateral of the ABL Facility, subject to customary exceptions. As of January 28, 2023, the interest rate on loans under the Term Loan Facility was 7.98%. On August 2, 2021, the Company also entered into a senior secured asset-based revolving credit facility. The ABL Facility allows for borrowings and letters of credit in U.S. dollars or Canadian dollars and has aggregate commitments of $750 million and an expiration date of August 2026. The availability under the ABL Facility is the lesser of (i) the borrowing base, determined primarily based on the Company's eligible U.S. and Canadian credit card receivables, eligible accounts receivable, eligible inventory and eligible real property, and (ii) the aggregate commitment. Interest on the loans under the ABL Facility is calculated by reference to (i) LIBOR or an alternative base rate and (ii) in the case of loans denominated in Canadian dollars, CDOR or a Canadian base rate, plus an interest rate margin based on average daily excess availability ranging from (x) in the case of LIBOR and CDOR loans, 1.50% to 2.00% and (y) in the case of alternate base rate loans and Canadian base rate loans, 0.50% to 1.00%. Unused commitments under the ABL Facility accrue an unused commitment fee ranging from 0.25% to 0.30%. The obligation to pay principal and interest on the loans under the ABL Facility is jointly and severally guaranteed on a full and unconditional basis by certain of the Company's wholly-owned domestic and Canadian subsidiaries. The loans under the ABL Facility are secured on a first-priority lien basis by the Company's eligible U.S. and Canadian credit card receivables, eligible accounts receivable, eligible inventory and eligible real property and on a second-priority lien basis on substantially all other assets of the Company, subject to customary exceptions. During 2022, the Company borrowed $295 million from the ABL Facility, all of which remains outstanding as of January 28, 2023. As of January 28, 2023, the interest rate on the borrowings from the ABL Facility was 5.90%. The Company had $42 million of outstanding letters of credit as of January 28, 2023 that further reduced its availability under the ABL Facility. As of January 28, 2023, the Company's remaining availability under the ABL Facility was $259 million. On August 2, 2021, the Company used the net cash proceeds from the credit facilities of $384 million, which were net of issuance and financing costs of $10 million for the Term Loan Facility and $6 million for the ABL Facility, to partially fund the approximately $976 million cash payment to the Former Parent in connection with the Separation. The discounts and issuance costs from the Term Loan Facility are being amortized through the maturity date and are included within Long-term Debt on the Consolidated Balance Sheets. The Company's long-term debt and borrowing facilities contain certain financial and other covenants, including, but not limited to, the maintenance of financial ratios. The 2029 Notes and the Term Loan Facility include the maintenance of a consolidated coverage ratio and a consolidated total leverage ratio, and the ABL Facility includes the maintenance of a fixed charge coverage ratio and a debt to EBITDAR ratio. The financial covenants could, within specific predefined circumstances, limit the Company's ability to incur additional indebtedness, make certain investments, pay dividends or repurchase shares. As of January 28, 2023, the Company was in compliance with all covenants under its long-term debt and borrowing facilities. Foreign Facilities Certain of the Company's China subsidiaries previously utilized revolving and term loan bank facilities to support their operations. The Foreign Facilities allowed borrowings in U.S. dollars and Chinese Yuan, and interest rates on outstanding borrowings were based upon the applicable benchmark rate for the currency of each borrowing. Certain of these facilities were guaranteed by the Former Parent and certain of the Former Parent's wholly-owned subsidiaries. The Secured Foreign Facilities allowed for borrowings and letters of credit up to $30 million. The Company borrowed $21 million and made payments of $126 million under the Secured Foreign Facilities during 2020. The Company had no borrowings or payments under the Secured Foreign Facilities during 2021. During the second quarter of 2021, with no borrowings outstanding, the Company terminated the Secured Foreign Facilities. The Company borrowed $13 million and made payments of $63 million under the unsecured Foreign Facilities during 2020. During the second quarter of 2020, with no borrowings outstanding, the Company terminated the unsecured Foreign Facilities. Long-term Debt due to Former Parent During 2020, the Company borrowed $97 million from the Former Parent to pay down outstanding debt with external parties. This borrowing was due in September 2025 and had a variable interest rate based on the China Loan Prime Rate. As a result of the Separation, the Company no longer has this Long-term Debt due to Former Parent. Prior to the Separation, the Company recognized $2 million of interest expense during 2021 related to this borrowing. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jan. 28, 2023 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsCash and Cash Equivalents include cash on hand, deposits with financial institutions and highly liquid investments with original maturities of 90 days or less. The Company's Cash and Cash Equivalents are considered Level 1 fair value measurements as they are valued using unadjusted quoted prices in active markets for identical assets. The following table provides a summary of the principal value and estimated fair value of outstanding debt as of January 28, 2023 and January 29, 2022: January 28, January 29, (in millions) Principal Value $ 995 $ 999 Fair Value, Estimated (a) 894 975 ________________ (a) The estimated fair value of the Company’s publicly traded debt is based on reported transaction prices which are considered Level 2 inputs in accordance with ASC 820, Fair Value Measurement . The estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange. Management believes that the carrying values of accounts receivable, accounts payable and accrued expenses approximate fair value because of their short maturity. Management further believes the principal value of the outstanding debt under the ABL Facility approximates its fair value as of January 28, 2023 based on the terms of the borrowings under the ABL Facility. Recurring Fair Value Measurements The following table provides a summary of the Company's contingent consideration recognized at fair value related to the Adore Me acquisition as of January 28, 2023 (in millions): Balance Sheet Location January 28, Level 1 Level 2 Level 3 Accrued Expenses and Other $ 30 $ — $ — $ 30 Other Long-term Liabilities 70 — — 70 The estimated fair value of the contingent consideration is valued using a Scenario-Based method and a Monte Carlo simulation which utilize inputs including discount rates, estimated probability of achievement of certain milestones, forecasted revenues, forecasted EBITDA and volatility rates. These are considered Level 3 inputs in accordance with ASC 820, Fair Value Measurement . For additional information regarding the contingent consideration, see Note 2, “Acquisition.” |
Comprehensive Income (Loss)
Comprehensive Income (Loss) | 12 Months Ended |
Jan. 28, 2023 | |
Comprehensive Income Loss | |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive Income (Loss) includes gains and losses on foreign currency translation and derivative instruments. The cumulative gains and losses on these items are included in Accumulated Other Comprehensive Income on the Consolidated Balance Sheets and Consolidated and Combined Statements of Equity. The following table provides the rollforward of accumulated other comprehensive income (loss) for 2022: Foreign Currency Translation Accumulated Other Comprehensive Income (Loss) (in millions) Balance as of January 29, 2022 $ 5 $ 5 Other Comprehensive Income (Loss) Before Reclassifications (7) (7) Amounts Reclassified from Accumulated Other Comprehensive Income to Paid-in Capital 3 3 Tax Effect — — Current-period Other Comprehensive Loss (4) (4) Balance as of January 28, 2023 $ 1 $ 1 As a result of the China joint venture agreement completed in April 2022, the Company reclassified $3 million of accumulated foreign currency translation adjustments related to the joint venture out of Accumulated Other Comprehensive Income and into Paid-in Capital in the first quarter of 2022 in order to reflect the amount attributable to the noncontrolling interest partner. For additional information, see Note 6, “Restructuring Activities.” The following table provides the rollforward of accumulated other comprehensive income for 2021: Foreign Currency Translation Accumulated Other Comprehensive Income (in millions) Balance as of January 30, 2021 $ 4 $ 4 Other Comprehensive Income Before Reclassifications 1 1 Tax Effect — — Current-period Other Comprehensive Income 1 1 Balance as of January 29, 2022 $ 5 $ 5 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 28, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is subject to various claims and contingencies related to lawsuits, taxes, insurance and other matters arising out of the normal course of business. Actions filed against the Company from time to time include commercial, tort, intellectual property, customer, employment, data privacy and other claims, including purported class action lawsuits. Management believes that the ultimate liability arising from such claims and contingencies, if any, is not likely to have a material adverse effect on the Company’s results of operations, financial condition or cash flows. Settlement of Former Parent Derivative Lawsuits In May 2022, the U.S. District Court of the Southern District of Ohio approved a global settlement regarding certain shareholder actions against the Former Parent that were filed in 2020 and 2021. See Note 14, “Commitments and Contingencies” in the Company's Quarterly Report on Form 10-Q for the quarter ended July 30, 2022 for additional information. Following the Separation, the settlement terms apply to both the Former Parent and the Company. Pursuant to the settlement terms, the Company committed to, among other things, invest $45 million over at least five years to fund certain management and governance measures required under the settlement agreement. Occupancy-related Legal Matter The Company was a tenant of portions of a building known as Two Herald Square, New York, New York (the “Premises”) pursuant to an Agreement of Lease dated August 22, 2001 (the “Lease”) with Herald Square Owner LLC (the “Landlord”). On February 20, 2021, the Company surrendered the Premises to the Landlord. On February 16, 2021, the Landlord filed a Motion for Partial Summary Judgment seeking treble holdover damages against the Company for the period commencing June 9, 2020 through February 20, 2021, the date on which the Company vacated and surrendered the Premises. By an order dated July 21, 2021, the court granted the Landlord’s motion and awarded it damages in an amount equal to three times the aggregate of the rents and charges payable under the Lease during the last month of the term of the Lease. On August 6, 2021, judgment was entered against the Company in the amount of $23 million. On September 15, 2021, the Landlord filed a Motion for Partial Summary Judgment seeking treble holdover damages against the Company for the period commencing February 21, 2021 through September 30, 2021. By an order dated April 22, 2022, the court granted the Landlord’s motion and awarded it damages in an amount equal to three times the aggregate amount of the rents and charges payable under the Lease during the last month of the term of the Lease. On May 9, 2022, judgment was entered against the Company in the amount of $22 million. The Company appealed both judgments; on March 2, 2023, the appellate court issued a denial of the appeals. As of the end of fiscal year 2022, we were fully accrued for both judgments along with interest and attorney fees. Subsequent to the end of fiscal year 2022, the Company paid the Landlord for the judgment amount in full. |
Retirement Benefits
Retirement Benefits | 12 Months Ended |
Jan. 28, 2023 | |
Retirement Benefits [Abstract] | |
Retirement Benefits | Retirement BenefitsThe Company sponsors a tax-qualified defined contribution retirement plan for employees who meet certain age and service requirements. The qualified plan permits participating associates to elect contributions up to the maximum limits allowable under the Internal Revenue Code. The Company matches associate contributions according to a predetermined formula and contributes additional amounts based on a percentage of the associates’ eligible annual compensation and years of service. Associate contributions and Company matching contributions vest immediately. Additional Company contributions and the related investment earnings are subject to vesting based on years of service. Total expense recognized related to the qualified plan was $43 million for 2022, $43 million for 2021 and $38 million for 2020.The Former Parent previously sponsored a non-qualified supplemental retirement plan. The non-qualified plan was an unfunded plan which provided benefits beyond the Internal Revenue Code limits for qualified defined contribution plans. On June 27, 2020 (the “Termination Date”), the Human Capital and Compensation Committee of the Former Parent's Board of Directors authorized the termination of the non-qualified plan. Subsequent to the Termination Date, no additional employee contributions could be made to the non-qualified plan. The Company had a liability of $66 million related to the non-qualified plan within Accrued Expenses and Other on the January 30, 2021 Consolidated Balance Sheet. All benefits and obligations due under the non-qualified plan were fully paid during the second quarter of 2021. Total expense recognized related to the non-qualified plan was not significant for any period presented. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Jan. 28, 2023 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Common Stock Share Repurchases & Treasury Stock Retirements January 2023 Share Repurchase Program In January 2023, the Company's Board of Directors approved the January 2023 Share Repurchase Program, authorizing the repurchase of up to $250 million of the Company's common stock. The $250 million authorization is expected to be utilized to repurchase shares in the open market, subject to market conditions and other factors. Shares acquired through the January 2023 Share Repurchase Program will be available to meet obligations under equity compensation plans and for general corporate purposes. The January 2023 Share Repurchase Program began upon completion of the March 2022 Share Repurchase Program and will continue until exhausted, but no later than the end of fiscal year 2023. The Company did not repurchase any shares of its common stock under the January 2023 Share Repurchase Program during fiscal year 2022. Subsequent to the end of fiscal year 2022, the Company entered into the ASR Agreement with Goldman Sachs to repurchase $125 million of the Company's common stock. In February 2023, the Company made an initial payment of $125 million to Goldman Sachs and received an initial delivery of 2.4 million shares of the Company's common stock. The final number of shares to be repurchased will be based on the volume-weighted average price of the Company’s common stock during the term of the ASR Agreement, less a discount and subject to adjustments pursuant to the terms of the ASR Agreement. The final settlement of the ASR Agreement is expected to be completed in the second quarter of 2023. The ASR Agreement is a component of the January 2023 Share Repurchase Program. March 2022 Share Repurchase Program In March 2022, the Company's Board of Directors approved the March 2022 Share Repurchase Program, providing for the repurchase of up to $250 million of the Company's common stock. The full $250 million authorization was utilized in fiscal year 2022 to repurchase shares in the open market, subject to market conditions and other factors. The Company repurchased the following shares of its common stock under the March 2022 Share Repurchase Program during 2022: Amount Authorized Shares Repurchased Amount Repurchased Average Stock Price (in millions) (in thousands) (in millions) March 2022 Share Repurchase Program $ 250 5,985 $ 250 $ 41.77 In accordance with the Board of Directors' resolution, shares of the Company's common stock repurchased under the March 2022 Share Repurchase Program were retired upon repurchase and were available to meet obligations under equity compensation plans and for general corporate purposes. As a result, the Company retired all the shares repurchased under the March 2022 Share Repurchase Program during 2022, which resulted in reductions of less than $1 million in the par value of Common Stock, $12 million in Paid-in Capital and $238 million in Retained Earnings. December 2021 ASR Agreement In December 2021, the Company entered into a December 2021 ASR Agreement with Goldman Sachs to repurchase $250 million of the Company's common stock. In December 2021, the Company made an initial payment of $250 million to Goldman Sachs and received an initial delivery of 4.1 million shares of the Company's common stock. The $250 million payment to Goldman Sachs was recognized as a reduction to shareholders’ equity, consisting of a $200 million increase in Treasury Stock, which reflects the value of the initial 4.1 million shares received upon initial settlement, and a $50 million decrease in Paid-in Capital, which reflects the value of the stock held back by Goldman Sachs pending final settlement of the December 2021 ASR Agreement. In accordance with the Board of Directors' resolution, the Company immediately retired the 4.1 million shares repurchased under the December 2021 ASR Agreement. The retirement resulted in a reduction of $200 million in Treasury Stock, less than $1 million in the par value of Common Stock, $8 million in Paid-in Capital and $192 million in Retained Earnings. |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Jan. 28, 2023 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Share-based Compensation | Share-based Compensation Plan Summary Prior to the Separation, certain Company employees participated in the stock option and performance incentive plan of the Former Parent (“Former Parent's Plan”). In connection with the Separation, the Company's Board of Directors approved the 2021 Stock Option and Performance Incentive Plan (“2021 Plan”). The 2021 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted shares, restricted share units, performance share units, unrestricted shares, converted awards, replacement awards and substitute awards. Under the Company’s 2021 Plan, 11 million options, restricted and unrestricted shares have been authorized to be granted to employees and directors, in addition to the converted awards from the Separation. There were 9 million options and shares available for grant as of January 28, 2023. Conversion at Separation Under the terms of the Employee Matters Agreement between the Company and the Former Parent, in connection with the Separation, restricted stock and stock option equity awards granted to Company employees under the Former Parent's Plan were converted to awards representing approximately 6.0 million shares of the Company's common stock (the “Converted Awards”) under the Company's 2021 Plan. Adjustments to the underlying shares and terms of outstanding restricted stock and stock options were made to preserve the intrinsic value of the awards immediately before the Separation. The adjustment of the underlying shares and exercise prices, as applicable, was determined using a conversion ratio of 1.665 based on the relative values of the Former Parent's pre-Separation stock price and the Company's post-Separation stock price. The outstanding awards continue to vest over their original vesting periods. The Company did not recognize any incremental compensation cost related to the adjustment of outstanding awards. Income Statement Impact For the period prior to the Separation, the following disclosures of share-based compensation expense recognized by the Company are based on grants related directly to Company employees, and exclude amounts related to the allocation of the Former Parent's corporate and shared employee share-based compensation expenses. The following table provides share-based compensation expense included in the Consolidated and Combined Statements of Income (Loss) for 2022, 2021 and 2020: 2022 2021 2020 (in millions) Costs of Goods Sold, Buying and Occupancy $ 18 $ 12 $ 9 General, Administrative and Store Operating Expenses 30 21 16 Total Share-based Compensation Expense $ 48 $ 33 $ 25 The tax benefit associated with recognized share-based compensation expense was $9 million for 2022, $6 million for 2021 and $6 million for 2020. Restricted Stock Restricted stock, including restricted stock units and performance share units, generally vests (the restrictions lapse) at the end of a three three During 2022, the Company granted performance share unit awards that include a specified market condition which can adjust the number of shares that vest under the award. The market condition compares total shareholder return to that of a designated peer group over the performance period. The performance share unit awards were valued using a Monte Carlo simulation model, which requires certain assumptions, including a risk-free interest rate of 2.1% and an expected volatility of 46.3%. The risk-free interest rate assumption is based on U.S. treasury constant maturity yields on the grant date with a term corresponding to the length of the remaining performance period. Due to the Company's limited trading history, the expected volatility assumption is based on the average historical volatility of the designated peer group. There was no dividend yield utilized in the Monte Carlo simulation model as the Company has not paid any cash dividends since the Separation. As discussed above, restricted stock awards granted to Company employees under the Former Parent's Plan prior to the Separation were converted to shares of the Company's common stock in connection with the Separation. The Converted Awards have the same terms and conditions as the original awards, including the original vesting periods. The following table provides the Company’s restricted stock activity for the fiscal year ended January 28, 2023: Number of Weighted-Average (in thousands) Unvested as of January 29, 2022 4,132 $ 23.04 Granted 1,872 47.63 Vested (2,312) 15.76 Cancelled (426) 40.71 Unvested as of January 28, 2023 3,266 $ 39.98 The weighted-average estimated fair value of restricted stock awards granted was $47.63 per share for 2022 and $56.63 per share for 2021 after the Separation. The Company’s total intrinsic value of restricted stock awards that vested was $118 million for 2022 and $11 million for 2021 after the Separation. The Company’s total fair value at grant date of restricted stock awards that vested was $36 million for 2022 and $3 million for 2021 after the Separation. The tax benefit realized from tax deductions associated with restricted stock awards that vested was $27 million for 2022 and $2 million for 2021 after the Separation. As of January 28, 2023, there was $50 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested restricted stock. That cost is expected to be recognized over a weighted-average period of 1.6 years. Stock Options In connection with the Separation, stock options granted to Company employees under the Former Parent's Plan were converted to awards representing approximately 1.7 million shares of the Company's common stock. No stock options have been granted by the Company subsequent to the Separation. Stock options granted under the Former Parent's Plan have a maximum term of 10 years and generally vest ratably over three five |
Description of Business, Basi_2
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 28, 2023 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Victoria's Secret & Co. is a specialty retailer of women's intimate and other apparel and beauty products marketed under the Victoria's Secret, PINK and Adore Me brand names. The Company has more than 910 stores in the U.S., Canada and China as well as its own websites, www.VictoriasSecret.com, www.PINK.com and www.AdoreMe.com and other online channels worldwide. Additionally, the Company has approximately 450 stores in approximately 70 countries operating under franchise, license and wholesale arrangements. The Company also includes the merchandise sourcing and production function serving the Company and its international partners. The Company operates as a single segment designed to serve customers worldwide seamlessly through stores and online channels. On November 1, 2022, the Company announced that it had signed a Merger Agreement to acquire 100% of Adore Me. On December 30, 2022, the acquisition was completed pursuant to the terms and conditions of the Merger Agreement. For additional information, see Note 2, “Acquisition.” In July 2022, the Company announced a new, simplified corporate leadership structure designed to unite the Company's brands, better align its teams with a shifting consumer landscape and enable better execution of its strategy. The restructuring eliminated approximately 160 management roles, or approximately 5% of the Company's home office headcount. In the fourth quarter of 2022, the Company executed additional restructuring actions to continue to reorganize and improve its organizational structure. For additional information, see Note 6, “Restructuring Activities.” |
Fiscal Year | Fiscal YearThe Company's fiscal year ends on the Saturday nearest to January 31. As used herein, “2022,” “2021” and “2020” refer to the 52-week periods ended January 28, 2023, January 29, 2022 and January 30, 2021, respectively. |
Basis of Presentation | Basis of Presentation - Consolidated and Combined Financial Statements The Company’s financial statements for periods through the Separation date of August 2, 2021 are combined financial statements prepared on a “carve-out” basis as discussed below. The Company’s financial statements for the period from August 3, 2021 through January 28, 2023 are consolidated financial statements based on the reported results of Victoria's Secret & Co. as a standalone company. The Consolidated and Combined Financial Statements have been prepared in conformity with GAAP. The Consolidated and Combined Financial Statements may not be indicative of the Company’s future performance and do not necessarily reflect what the financial position, results of operations, and cash flows would have been had it operated as an independent company during all of the periods presented. Basis of Presentation - Prior to Separation Through the Separation date, the Company's combined financial statements are prepared on a “carve-out” basis. The Combined Financial Statements have been derived from the consolidated financial statements and accounting records of the Former Parent in conformity with GAAP. Intracompany transactions have been eliminated. Transactions between the Company and the Former Parent have been included in these financial statements. For the periods prior to the Separation, certain of the Former Parent's assets and liabilities that were specifically identifiable or otherwise attributable to the Company were included in the Company's balance sheets. For the periods prior to the Separation, the Former Parent's third-party long-term notes payable and the related interest expense were not allocated to the Company as the Company was not the legal obligor of such debt. For the periods prior to the Separation, the Former Parent utilized a centralized approach to cash management and financing its operations. The cash and cash equivalents held by the Former Parent at the corporate level were not specifically identifiable to the Company and, therefore, were not reflected in the Company’s balance sheets. Cash transfers between the Former Parent and the Company were accounted for through Net Investment by Former Parent. Cash and cash equivalents that are included in the Company's balance sheets for the periods prior to the Separation represent cash and cash equivalents held by the Company prior to any potential transfer to the centralized cash management pool of the Former Parent. For the periods prior to the Separation, the Consolidated and Combined Statements of Income (Loss) include costs for certain functions, including information technology, human resources and store design and construction, that historically were provided and administered on a centralized basis by the Former Parent. Starting in the third quarter of 2020, as part of the steps to prepare the Company to operate as a separate, standalone company, these functions were transitioned to the business and began to be operated and administered as part of Victoria’s Secret & Co. For additional information, see Note 6, “Restructuring Activities.” Costs applicable to the Company related to these functions are included in the Consolidated and Combined Statements of Income (Loss) for all periods presented. Prior to the transition of these functions, these costs were directly charged to the Company by the Former Parent. In addition, for purposes of preparing the combined financial statements on a “carve-out” basis prior to the Separation, a portion of the Former Parent's corporate expenses were allocated to the Company. These expense allocations include the cost of corporate functions and resources provided by, or administered by, the Former Parent including, but not limited to, executive management and other corporate and governance functions, such as corporate finance, internal audit, tax and treasury. The related employee payroll and benefit costs associated with such functions, such as share-based compensation, were included in the expense allocations. Corporate expenses of $49 million and $77 million in 2021 and 2020, respectively, were allocated and included within General, Administrative and Store Operating Expenses in the Consolidated and Combined Statements of Income (Loss). Costs were allocated to the Company based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional net sales. Management considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to, or the benefit received by, the Company during the periods presented. However, the allocations may not reflect the expenses the Company would have incurred if the Company had been a standalone company for the periods presented. Actual costs that may have been incurred if the Company had been a standalone company would depend on a number of factors, including the organizational structure, whether functions were outsourced or performed by employees, and strategic or capital decisions. Going forward, the Company may perform these functions using its own resources or outsourced services. For a period following the Separation, however, some of these functions will continue to be provided by the Former Parent under a transition services agreement, and the Company will provide some services to the Former Parent under a transition services agreement. The Company has also entered into certain commercial arrangements with the Former Parent in connection with the Separation. For more information, see Note 3, “Transactions with Former Parent.” During the periods prior to the Separation that are presented in these Consolidated and Combined Financial Statements, the Company's income tax expense (benefit) and deferred tax balances were included in the Former Parent's income tax returns. Income tax expense (benefit) and deferred tax balances contained in these Consolidated and Combined Financial Statements for periods prior to the Separation are presented on a separate return basis, as if the Company had filed its own income tax returns. As a result, actual tax transactions included in the consolidated financial statements of the Former Parent may or may not be included in the Consolidated and Combined Financial Statements of the Company. Similarly, the tax treatment of certain items reflected in the Consolidated and Combined Financial Statements of the Company may or may not be reflected in the consolidated financial statements and income tax returns of the Former Parent. The taxes recorded in the Consolidated and Combined Statements of Income (Loss) for periods prior to the Separation are not necessarily representative of the taxes that may arise in the future when the Company files its income tax returns independent from the Former Parent's returns. |
Impacts of Macroeconomic Environment | Impacts of Macroeconomic Environment The Company's operations and financial performance have been adversely impacted by deterioration in economic conditions in the United States and globally, which were caused in part by the COVID-19 pandemic. The current macroeconomic environment is characterized by record-high inflation, supply chain challenges, labor shortages, high interest rates, volatility in global capital markets and growing recession risk. Such macroeconomic conditions have and could continue to adversely affect the Company's business, for example, by reducing consumer demand for our products and leading to decreased sales. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and Cash Equivalents include cash on hand, demand deposits with financial institutions, credit and debit card receivables and highly liquid investments with original maturities of 90 days or less. The Company's Cash and Cash Equivalents are considered Level 1 fair value measurements as they are valued using unadjusted quoted prices in active markets for identical assets. |
Concentration of Credit Risk | Concentration of Credit Risk The Company maintains cash and cash equivalents with various major financial institutions. The Company monitors the relative credit standing of financial institutions with whom the Company transacts and limits the amount of credit exposure with any one entity. The Company’s investment portfolio is primarily comprised of bank deposits. The Company also periodically reviews the relative credit standing of franchise, license and wholesale partners and other entities to which the Company grants credit terms in the normal course of business. The Company determines the required allowance for expected credit losses using information such as customer credit history and financial condition. Amounts are charged against the allowance when it is determined that expected credit losses may occur. |
Inventories | Inventories Inventories are principally valued at the lower of cost or net realizable value, on an average cost basis. The Company records valuation adjustments to its inventories if the cost of inventory on hand exceeds the amount it expects to realize from the ultimate sale or disposal of the inventory. These estimates are based on management’s judgment regarding future demand and market conditions and analysis of historical experience. The Company also records inventory loss adjustments for estimated physical inventory losses that have occurred since the date of the last physical inventory. These estimates are based on management’s analysis of historical results, operating trends and consumer behavior. |
Advertising Costs | Advertising Costs Advertising and marketing costs are expensed at the time the promotion first appears in media, or in the store or when the advertising is mailed. Advertising and marketing costs totaled $344 million for 2022, $334 million for 2021 and $239 million for 2020. |
Property and Equipment | Property and Equipment The Company’s property and equipment are recorded at cost and depreciation is computed on a straight-line basis using the following depreciable life ranges: Category of Property and Equipment Depreciable Life Range Software, including software developed for internal use 3 - 5 years Furniture, fixtures and equipment 3 - 10 years Leasehold improvements Shorter of lease term or 10 years Non-store related building and site improvements 10 - 15 years Other property and equipment 20 years Buildings 30 years When a decision has been made to dispose of property and equipment prior to the end of the previously estimated useful life, depreciation estimates are revised to reflect the use of the asset over the shortened estimated useful life. The Company’s cost of assets sold or retired and the related accumulated depreciation are removed from the accounts with any resulting gain or loss included in net income (loss). Maintenance and repairs are charged to expense as incurred. Major renewals and betterments that extend useful lives are capitalized. Long-lived store assets, which include leasehold improvements, store related assets and operating lease assets (subsequent to the adoption of ASC 842, Leases ), are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Store assets are grouped at the lowest level for which they are largely independent of other assets or asset groups. If the estimated undiscounted future cash flows related to the asset group are less than the carrying value, the Company recognizes a loss equal to the difference between the carrying value and the estimated fair value, determined by the estimated discounted future cash flows of the asset group. For operating lease assets, the Company determines the fair value of the assets by comparing the contractual rent payments to estimated market rental rates. An individual asset within an asset group is not impaired below its estimated fair value. The fair value of long-lived store assets is determined using Level 3 inputs within the fair value hierarchy. |
Leases and Leasehold Improvements | Leases and Leasehold Improvements The Company leases retail space, office space, warehouse facilities, storage space, equipment and certain other items under operating leases. A substantial portion of the Company’s leases are operating leases for its stores, which generally have an initial term of 10 years. Annual store rent consists of a fixed minimum amount and/or variable rent based on a percentage of sales exceeding a stipulated amount. Store lease terms generally also require additional payments covering certain operating costs such as common area maintenance, utilities, insurance and taxes. Certain leases contain predetermined fixed escalations of minimum rentals or require periodic adjustments of minimum rentals, depending on an index or rate. Additionally, certain leases contain incentives, such as construction allowances from landlords and/or rent abatements subsequent to taking possession of the leased property. At the date of control of the leased asset, the Company recognizes an asset for the right to use the leased asset and a liability based on the present value of the unpaid fixed lease payments. Operating lease costs are recognized on a straight-line basis as lease expense over the lease term. Variable lease payments associated with the Company's leases are recognized upon occurrence of the event or circumstance on which the payments are assessed. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet, and lease expense is recognized on a straight-line basis over the lease term. For leases entered into or reassessed after the adoption of ASC 842, Leases , the Company has elected the practical expedient allowed by the standard to account for all fixed consideration in a lease as a single lease component. Therefore, the lease payments used to measure the lease liability for these leases include fixed minimum rentals along with fixed operating costs such as common area maintenance and utilities. The Company uses its incremental borrowing rate, adjusted for collateral, to determine the present value of its unpaid lease payments. The Company’s store leases often include options to extend the initial term or to terminate the lease prior to the end of the initial term. The exercise of these options is typically at the sole discretion of the Company. These options are included in determining the initial lease term at lease commencement if the Company is reasonably certain to exercise the option. Additionally, the Company may operate stores for a period of time on a month-to-month basis after the expiration of the lease term. The Company also has leasehold improvements which are amortized over the shorter of their estimated useful lives or the period from the date the assets are placed in service to the end of the initial lease term. Leasehold improvements made after the inception of the initial lease term are depreciated over the shorter of their estimated useful lives or the remaining lease term, including renewal periods, if reasonably assured. |
Trade Name | Intangible Assets The Company has certain intangible assets resulting from business combinations and acquisitions that are recorded at cost. The Company has goodwill resulting from the Adore Me acquisition on December 30, 2022. Goodwill is reviewed for impairment at the reporting unit level each year in the fourth quarter and may be reviewed more frequently if certain events occur or circumstances change. The Company has the option to either first perform a qualitative assessment to determine whether it is more likely than not that each reporting unit's fair value is less than its carrying value (including goodwill), or to proceed directly to the quantitative assessment which requires a comparison of the reporting unit's fair value to its carrying value (including goodwill). If the Company determines that the fair value of a reporting unit is less than its carrying value, the Company recognizes an impairment charge equal to the difference, not to exceed the total amount of goodwill allocated to the reporting unit. The Company's reporting units are determined in accordance with the provisions of ASC 350, Intangibles - Goodwill and Other. The Victoria’s Secret trade name is an intangible asset with an indefinite life. Intangible assets with indefinite lives are reviewed for impairment each year in the fourth quarter and may be reviewed more frequently if certain events occur or circumstances change. The Company has the option to either first perform a qualitative assessment to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired, or to proceed directly to the quantitative assessment which requires a comparison of the fair value of the intangible asset to its carrying value. To determine if the fair value of the asset is less than its carrying amount, the Company will estimate the fair value, usually determined by the relief from royalty method under the income approach, and compare that value with its carrying amount. If the carrying value of the trade name exceeds its fair value, the Company recognizes an impairment charge equal to the difference. The Company also has definite-lived intangible assets, which includes customer relationships, developed technology and the Adore Me trade name. Definite-lived intangible assets are amortized over their useful lives and are evaluated for impairment whenever events or circumstances indicate that a certain asset or asset group may be impaired. |
Foreign Currency Translation | Foreign Currency Translation The functional currency of the Company’s foreign operations is generally the applicable local currency. Assets and liabilities are translated into U.S. dollars using the current exchange rates in effect as of the balance sheet date, while revenues and expenses are translated at the average exchange rates for the period. The Company’s resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in shareholders’ equity. Accumulated foreign currency translation adjustments are reclassified to net income (loss) when realized upon sale or upon complete, or substantially complete, liquidation of the investment in the foreign entity. |
Fair Value | Fair Value The authoritative guidance included in ASC 820, Fair Value Measurement , defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. This authoritative guidance further establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1—Quoted market prices in active markets for identical assets or liabilities. • Level 2—Observable inputs other than quoted market prices included in Level 1, such as quoted prices of similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The Company estimates the fair value of financial instruments, property and equipment, goodwill, trade names, other intangible assets and contingent consideration in accordance with the provisions of ASC 820 . The recorded amounts for cash and cash equivalents, accounts receivable, prepaid expenses, other current assets and current liabilities approximate fair value due to the short-term nature of these assets and liabilities. Derivative Financial Instruments The Company from time to time uses derivative financial instruments to manage exposure to foreign currency exchange rates. The Company does not use derivative instruments for trading purposes. All derivative instruments are recorded on the Consolidated Balance Sheets at fair value. The earnings of the Company's foreign operations are subject to exchange rate risk as substantially all the merchandise is sourced through U.S. dollar transactions. The Company from time to time utilizes foreign currency forward contracts designated as cash flow hedges to mitigate this foreign currency exposure. Amounts for these designated cash flow hedges are reclassified from Accumulated Other Comprehensive Income (Loss) upon sale of the hedged merchandise to the customer. These gains and losses are recognized in Costs of Goods Sold, Buying and Occupancy in the Consolidated and Combined Statements of Income (Loss). During the second quarter of 2021, the Company terminated its foreign currency forward contracts designated as cash flow hedges that were used to mitigate foreign currency exposure for its Canadian operations. The fair value of designated cash flow hedges is not significant for any period presented. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, taxes currently payable or refundable are accrued, and deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are also recognized for realizable operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted income tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the Company’s Consolidated and Combined Statement of Income (Loss) in the period that includes the enactment date. The Company treats the global intangible low-taxed income provision enacted as part of the U.S. Tax Cuts and Jobs Act as a current period expense. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is more likely than not that such assets will not be realized. In determining the Company’s provision for income taxes, the Company considers permanent differences between book and tax income and statutory income tax rates. The Company’s effective income tax rate is affected by items including changes in tax law, the tax jurisdiction of new stores or business ventures and the level of earnings. The Company follows a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and for which actual outcomes may differ from forecasted outcomes. The Company's policy is to include interest and penalties related to uncertain tax positions in income tax expense. The Company’s income tax returns, like those of most companies, are periodically audited by domestic and foreign tax authorities. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. At any one time, multiple tax years are subject to audit by the various tax authorities. A number of years may elapse before a particular matter for which the Company has established an accrual is audited and fully resolved or clarified. The Company adjusts its tax contingencies accrual and income tax provision in the period in which matters are effectively settled with tax authorities at amounts different from its established accrual, when the statute of limitations expires for the relevant taxing authority to examine the tax position or when more information becomes available. The Company includes its tax contingencies accrual, including accrued penalties and interest, in Other Long-term Liabilities on the Consolidated Balance Sheets unless the liability is expected to be paid within one year. Changes to the tax contingencies accrual, including accrued penalties and interest, are included in Provision (Benefit) for Income Taxes on the Consolidated and Combined Statements of Income (Loss). |
Self-Insurance | Self-Insurance The Company is self-insured for medical, workers’ compensation, property, general liability and automobile liability up to certain stop-loss limits. Such costs are accrued based on known claims and an estimate of incurred but not reported (“IBNR”) claims. IBNR claims are estimated using historical claim information and actuarial estimates. |
Equity Method Investments | Equity Method Investments The Company accounts for investments in unconsolidated entities where it exercises significant influence, but does not have control, using the equity method. Under the equity method of accounting, the Company recognizes its share of the investee's net income or loss. Losses are only recognized to the extent the Company has positive carrying value related to the investee. Carrying values are only reduced below zero if the Company has an obligation to provide funding to the investee. The Company’s share of net income or loss of unconsolidated entities from which the Company purchases merchandise or merchandise components is included in Costs of Goods Sold, Buying and Occupancy in the Consolidated and Combined Statements of Income (Loss), and the Company’s share of net income or loss from all other unconsolidated entities is included in General, Administrative and Store Operating Expenses in the Consolidated and Combined Statements of Income (Loss). The Company’s equity method investments are required to be reviewed for impairment when it is determined there may be an other-than-temporary loss in value. In March 2022, the Company acquired a minority interest in swimwear brand Frankies Bikinis, LLC (“Frankies Bikinis”) in exchange for $18 million. The investment in Frankies Bikinis is accounted for using the equity method of accounting. |
Net Investment By Former Parent | Net Investment by Former Parent Net Investment by Former Parent represents the Former Parent's historical investment in the Company, the accumulated net earnings after taxes and the net effect of the transactions with and allocations from the Former Parent. All transactions reflected in Net Investment by Former Parent have been considered as financing activities for purposes of the Consolidated and Combined Statements of Cash Flows. |
Noncontrolling Interest | Noncontrolling Interest The Company accounts for investments in entities where it has control over the entity by consolidating the entities' assets, liabilities and results of operations and including them in the Company's Consolidated and Combined Financial Statements. The share of the investment not owned by the Company is reflected in Noncontrolling Interest in the Consolidated Balance Sheets. The Company recognizes the share of net income or loss not attributable to the Company in Net Loss Attributable to Noncontrolling Interest in the Consolidated and Combined Statements of Income. Noncontrolling interest in fiscal year 2022 represents the portion of equity interests in a joint venture that operates the business in China that is not owned by the Company. Noncontrolling interest in fiscal year 2020 represents the portion of equity interests in a technology joint venture in India that was not owned at that time by the Company. |
Share-based Compensation | Share-based Compensation Prior to the Separation, certain Company employees participated in the share-based compensation plans sponsored by the Former Parent. The Former Parent's share-based compensation awards granted to the employees of the Company consisted of the Former Parent's stock options and restricted stock. As such, prior to the Separation, the awards granted to Company employees are reflected in Net Investment by Former Parent within the Consolidated and Combined Statements of Equity at the time they were expensed. Prior to the Separation, the Consolidated and Combined Statements of Income (Loss) also include an allocation of the Former Parent's corporate and shared employee share-based compensation expenses. The Company recognizes all share-based payments to employees and directors as compensation cost over the service period based on their estimated fair value on the date of grant. The Company estimates award forfeitures at the time awards are granted and adjusts, if necessary, in subsequent periods based on historical experience and expected future forfeitures. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue based on the amount it expects to receive when control of the goods or services is transferred to the customer. The Company recognizes sales upon customer receipt of merchandise, which, for direct channel revenues, reflect an estimate of shipments that have not yet been received by the customer based on shipping terms and historical delivery times. The Company’s shipping and handling revenues are included in Net Sales with the related costs included in Costs of Goods Sold, Buying and Occupancy in the Consolidated and Combined Statements of Income (Loss). The Company also provides a reserve for projected merchandise returns based on historical experience. Net Sales exclude sales and other similar taxes collected from customers. The Company offers certain loyalty programs that allow customers to earn points based on purchasing activity. As customers accumulate points and reach point thresholds, they can use the points to purchase merchandise in stores or online. The Company allocates revenue to points earned on qualifying purchases and defers recognition until the points are redeemed. The amount of revenue deferred is based on the relative stand-alone selling price method, which includes an estimate for points not expected to be redeemed based on historical experience. The Company sells gift cards with no expiration dates to customers. The Company does not charge administrative fees on unused gift cards. The Company recognizes revenue from gift cards when they are redeemed by the customer. In addition, the Company recognizes revenue on unredeemed gift cards where the likelihood of the gift card being redeemed is remote and there is no legal obligation to remit the unredeemed gift cards to relevant jurisdictions (gift card breakage). Gift card breakage revenue is recognized in proportion, and over the same period, as actual gift card redemptions. The Company determines the gift card breakage rate based on historical redemption patterns. Gift card breakage is included in Net Sales in the Consolidated and Combined Statements of Income (Loss). Revenue earned in connection with the Company's credit card arrangements is primarily recognized based on credit card sales and usage and is included in Net Sales in the Consolidated and Combined Statements of Income (Loss). |
Costs of Goods Sold, Buying and Occupancy | Costs of Goods Sold, Buying and Occupancy The Company’s costs of goods sold include merchandise costs, net of discounts and allowances, freight and inventory shrinkage. The Company’s buying and occupancy expenses primarily include payroll, benefit costs and operating expenses for its buying departments and distribution network, as well as rent, common area maintenance, real estate taxes, utilities, maintenance, fulfillment expenses and depreciation for the Company’s stores, warehouse facilities and equipment. |
General, Administrative and Store Operating Expenses | General, Administrative and Store Operating Expenses The Company’s general, administrative and store operating expenses primarily include payroll and benefit costs for its store-selling and administrative departments (including corporate functions), marketing, advertising and other operating expenses not specifically categorized elsewhere in the Consolidated and Combined Statements of Income (Loss). |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from those estimates, and the Company revises its estimates and assumptions as new information becomes available. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company did not adopt any new accounting standards during 2022 that had a material impact on the Company's results of operations, financial position or cash flows. In addition, there are no new accounting standards not yet adopted that are expected to have a material impact on the Company's results of operations, financial position or cash flows. |
Description of Business, Basi_3
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Accounting Policies [Abstract] | |
Depreciable Life Range of Property Plant and Equipment | The Company’s property and equipment are recorded at cost and depreciation is computed on a straight-line basis using the following depreciable life ranges: Category of Property and Equipment Depreciable Life Range Software, including software developed for internal use 3 - 5 years Furniture, fixtures and equipment 3 - 10 years Leasehold improvements Shorter of lease term or 10 years Non-store related building and site improvements 10 - 15 years Other property and equipment 20 years Buildings 30 years |
Adore Me Acquisition (Tables)
Adore Me Acquisition (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, Preliminary Purchase Price Allocation | The following is a preliminary purchase price allocation of assets acquired and liabilities assumed related to the Adore Me acquisition: (in millions) Accounts Receivable $ 1 Inventories 105 Other Current Assets 7 Property and Equipment, Net 12 Operating Lease Assets 5 Goodwill 365 Trade Name 43 Other Intangible Assets 137 Other Assets 1 Accounts Payable 17 Accrued Expenses and Other 88 Current Operating Lease Liabilities 2 Deferred Income Tax Liabilities 21 Long-term Operating Lease Liabilities 3 Other Long-term Liabilities 8 Net Assets Acquired and Liabilities Assumed $ 537 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table represents the definite-lived intangible assets acquired, the preliminary fair values and respective useful lives: Useful Life Preliminary Fair Value (in millions) Customer Relationships 7 years $ 81 Developed Technology 6 years 56 Trade Name 10 years 43 Total Definite-Lived Intangible Assets $ 180 |
Business Acquisition, Pro Forma Information | The following pro forma results include adjustments to reflect acquisition-related costs, amortization of intangibles associated with the acquisition and the effects of adjustments made to the carrying value of inventories. 2022 2021 (in millions) Net Sales $ 6,595 $ 6,996 Net Income Attributable to Victoria's Secret & Co. 330 544 |
Transactions with Former Pare_2
Transactions with Former Parent (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Net Transfers from (to) Former Parent | The following table presents the components of Net Transfers from (to) Former Parent prior to the Separation in the 2021 and 2020 Consolidated and Combined Statements of Equity: 2021 2020 (in millions) Cash Pooling and General Financing Activities, Net $ (172) $ (543) Long-lived Assets (a) 16 — Corporate Expense Allocations 49 77 Share-based Compensation Expense 15 25 Assumed Income Tax Payments 15 59 Cash Payment to Former Parent (976) — Total Net Transfers to Former Parent $ (1,053) $ (382) _______________ (a) Represents long-lived assets transferred between the Company and the Former Parent as a result of asset allocation decisions made during the period. |
Schedule Of Spinoff Transactions | The following table summarizes the recognized consideration and costs pursuant to the transition services agreements for 2022 and 2021: 2022 2021 (in millions) Consideration Received $ 72 $ 55 Costs Recognized 74 42 The following table summarizes the recognized costs pursuant to the Domestic Transportation Services Agreement for 2022 and 2021: 2022 2021 (in millions) Costs Recognized $ 91 $ 46 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Disaggregation of Revenue | The following table provides a disaggregation of Net Sales for 2022, 2021 and 2020: 2022 2021 2020 (in millions) Stores — North America $ 3,909 $ 4,194 $ 2,795 Direct 1,843 2,114 2,223 International (a) 592 477 395 Total Net Sales $ 6,344 $ 6,785 $ 5,413 _______________ |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share Computation | The following table provides the weighted-average shares utilized for the calculation of basic and diluted earnings (loss) per share for 2022, 2021 and 2020: 2022 2021 2020 (in millions) Common Shares 82 88 88 Treasury Shares — — — Basic Shares 82 88 88 Effect of Dilutive Awards 2 2 — Diluted Shares 84 90 88 Anti-dilutive Awards (a) 1 — — ________________ |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Inventory, Net [Abstract] | |
Summary of Inventories | The following table provides details of Inventories as of January 28, 2023 and January 29, 2022: January 28, January 29, (in millions) Finished Goods Merchandise $ 997 $ 898 Raw Materials and Merchandise Components 55 51 Total Inventories $ 1,052 $ 949 |
Long-Lived Assets (Tables)
Long-Lived Assets (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | The following table provides details of Property and Equipment, Net as of January 28, 2023 and January 29, 2022: January 28, January 29, (in millions) Land and Improvements $ 28 $ 27 Buildings and Improvements 219 211 Furniture, Fixtures, Software and Equipment 2,394 2,409 Leasehold Improvements 1,018 1,070 Construction in Progress 57 78 Total 3,716 3,795 Accumulated Depreciation and Amortization (2,870) (2,838) Property and Equipment, Net $ 846 $ 957 |
Details of Impairment of Long-Lived Assets | There were no long-lived store asset impairment charges in 2022 or 2021. The following table provides pre-tax long-lived store asset impairment charges included in the 2020 Consolidated and Combined Statement of Loss: 2020 Store Asset Impairment $ 136 Operating Lease Asset Impairment 118 Total Impairment $ 254 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Leases [Abstract] | |
Schedule of Lease Cost | The following table provides the components of lease cost for operating leases for 2022, 2021 and 2020: 2022 2021 2020 (in millions) Operating Lease Costs $ 385 $ 399 $ 521 Variable Lease Costs 76 63 6 Short-term Lease Costs 13 6 5 Total Lease Cost $ 474 $ 468 $ 532 |
Schedule of Future Maturities of Operating Lease Liabilities | The following table provides future maturities of operating lease liabilities as of January 28, 2023: Fiscal Year (in millions) 2023 $ 390 2024 327 2025 273 2026 213 2027 158 Thereafter 500 Total Lease Payments $ 1,861 Less: Interest (350) Present Value of Operating Lease Liabilities $ 1,511 |
Schedule of Supplemental Information Related to Leases | The following table provides the weighted-average remaining lease term and discount rate for operating leases with lease liabilities as of January 28, 2023 and January 29, 2022: January 28, January 29, Weighted-Average Remaining Lease Term (years) 6.6 6.4 Weighted-Average Discount Rate 6.1% 6.0% |
Intangible Assets, Goodwill and
Intangible Assets, Goodwill and Other (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following table provides details of the gross carrying amounts of the Company's definite-lived intangible assets as of January 28, 2023: January 28, (in millions) Customer Relationships $ 81 Developed Technology 56 Adore Me Trade Name 43 Total Definite-Lived Intangible Assets $ 180 |
Accrued Expenses and Other (Tab
Accrued Expenses and Other (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Liabilities | The following table provides additional information about the composition of Accrued Expenses and Other as of January 28, 2023 and January 29, 2022: January 28, January 29, (in millions) Deferred Revenue on Gift Cards and Merchandise Credits $ 238 $ 198 Compensation, Payroll Taxes and Benefits 105 152 Rent 63 45 Deferred Revenue on Loyalty and Credit Card Programs 40 36 Taxes, Other than Income 40 24 Accrued Marketing 37 36 Contingent Consideration Related to Adore Me Acquisition 30 — Returns Reserve 22 23 Accrued Freight and Other Logistics 16 62 Deferred Revenue on Direct Shipments not yet Delivered 13 16 Accrued Claims on Self-insured Activities 8 4 Accrued Interest 7 5 Other 118 113 Total Accrued Expenses and Other $ 737 $ 714 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | The following table provides the components of the Company’s Provision (Benefit) for Income Taxes for 2022, 2021 and 2020: 2022 2021 2020 (in millions) Current: U.S. Federal $ 67 $ 129 $ 7 U.S. State 22 44 16 Non-U.S. 18 23 7 Total 107 196 30 Deferred: U.S. Federal (20) 6 (68) U.S. State (4) (4) (14) Non-U.S. (4) (1) 18 Total (28) 1 (64) Provision (Benefit) for Income Taxes $ 79 $ 197 $ (34) |
Reconciliation of the Statutory Federal Income Tax Rate and the Effective Tax Rate | The following table provides the reconciliation between the statutory federal income tax rate and the effective tax rate for 2022, 2021 and 2020: 2022 2021 2020 Federal Income Tax Rate 21.0 % 21.0 % 21.0 % State Income Taxes, Net of Federal Income Tax Effect 3.9 % 4.3 % (5.8 %) Impact of Non-U.S. Operations (1.6 %) (0.9 %) (16.6 %) Share-based Compensation (4.6 %) (1.2 %) (4.0 %) Uncertain Tax Positions 0.2 % (0.2 %) 19.3 % Change in Valuation Allowance (0.1 %) — % (2.6 %) Restructuring of Foreign Investments — % 0.2 % 23.3 % U.S. Permanent Items 0.3 % 0.1 % (2.8 %) Other Items, Net (0.1 %) — % 0.1 % Effective Tax Rate 19.0 % 23.3 % 31.9 % |
Effect of Temporary Differences that Cause Deferred Income Taxes | The following table provides the effect of temporary differences that cause deferred income taxes as of January 28, 2023 and January 29, 2022. Deferred tax assets and liabilities represent the future effects on income taxes resulting from temporary differences and carryforwards at the end of the respective year. January 28, 2023 January 29, 2022 Assets Liabilities Total Assets Liabilities Total (in millions) Loss Carryforwards $ 133 $ — $ 133 $ 118 $ — $ 118 Leases 354 (309) 45 371 (322) 49 Share-based Compensation 12 — 12 11 — 11 Deferred Revenue 43 — 43 42 — 42 Property and Equipment — (58) (58) — (79) (79) Trade Name and Other Intangibles — (100) (100) — (57) (57) Other 54 (11) 43 34 (11) 23 Valuation Allowance (153) — (153) (148) — (148) Total Deferred Income Taxes $ 443 $ (478) $ (35) $ 428 $ (469) $ (41) |
Activity Related to Unrecognized Tax Benefits | The following table summarizes the activity related to the Company’s unrecognized tax benefits for U.S. federal, state & non-U.S. tax jurisdictions for 2022, 2021 and 2020, without interest and penalties: 2022 2021 2020 (in millions) Gross Unrecognized Tax Benefits, as of the Beginning of the Fiscal Year $ 10 $ 126 $ 41 Decreases to Unrecognized Tax Benefits Transferred to Former Parent — (126) — Increases to Unrecognized Tax Benefits as a Result of Current Year Activity 10 10 105 Increases to Unrecognized Tax Benefits for Prior Years, Including Acquisitions 11 — — Decreases to Unrecognized Tax Benefits for Prior Years — — (16) Decreases to Unrecognized Tax Benefits Relating to Settlements with Taxing Authorities — — — Decreases to Unrecognized Tax Benefits due to Lapse of Statute of Limitations — — (4) Gross Unrecognized Tax Benefits, as of the End of the Fiscal Year $ 31 $ 10 $ 126 |
Long-term Debt and Borrowing _2
Long-term Debt and Borrowing Facilities (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Long-Term Debt, by Current and Noncurrent [Abstract] | |
Schedule of Long-term Debt Instruments | The following table provides the Company’s outstanding debt balance, net of unamortized debt issuance costs and discounts, as of January 28, 2023 and January 29, 2022: January 28, January 29, (in millions) Senior Secured Debt with Subsidiary Guarantee $395 million Term Loan due August 2028 (“Term Loan Facility”) $ 387 $ 390 Asset-based Revolving Credit Facility due August 2026 (“ABL Facility”) 295 — Total Senior Secured Debt with Subsidiary Guarantee 682 390 Senior Debt with Subsidiary Guarantee $600 million, 4.625% Fixed Interest Rate Notes due July 2029 (“2029 Notes”) 593 592 Total Senior Debt with Subsidiary Guarantee 593 592 Total 1,275 982 Current Debt (4) (4) Total Long-term Debt, Net of Current Portion $ 1,271 $ 978 |
Schedule of Principal Payments Due on Long-term Debt | The following table provides principal payments due on outstanding debt in the next five fiscal years and the remaining years thereafter: Fiscal Year (in millions) 2023 $ 4 2024 4 2025 4 2026 299 2027 4 Thereafter $ 975 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Fair Value Measurements [Abstract] | |
Carrying Value And Fair Value Of Long Term Debt, Disclosure | The following table provides a summary of the principal value and estimated fair value of outstanding debt as of January 28, 2023 and January 29, 2022: January 28, January 29, (in millions) Principal Value $ 995 $ 999 Fair Value, Estimated (a) 894 975 ________________ (a) The estimated fair value of the Company’s publicly traded debt is based on reported transaction prices which are considered Level 2 inputs in accordance with ASC 820, Fair Value Measurement . The estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange. |
Fair Value, Liabilities Measured on Recurring Basis | The following table provides a summary of the Company's contingent consideration recognized at fair value related to the Adore Me acquisition as of January 28, 2023 (in millions): Balance Sheet Location January 28, Level 1 Level 2 Level 3 Accrued Expenses and Other $ 30 $ — $ — $ 30 Other Long-term Liabilities 70 — — 70 The estimated fair value of the contingent consideration is valued using a Scenario-Based method and a Monte Carlo simulation which utilize inputs including discount rates, estimated probability of achievement of certain milestones, forecasted revenues, forecasted EBITDA and volatility rates. These are considered Level 3 inputs in accordance with ASC 820, Fair Value Measurement . For additional information regarding the contingent consideration, see Note 2, “Acquisition.” |
Comprehensive Income (Loss) (Ta
Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Comprehensive Income Loss | |
Components of Accumulated Other Comprehensive Income (Loss) | The following table provides the rollforward of accumulated other comprehensive income (loss) for 2022: Foreign Currency Translation Accumulated Other Comprehensive Income (Loss) (in millions) Balance as of January 29, 2022 $ 5 $ 5 Other Comprehensive Income (Loss) Before Reclassifications (7) (7) Amounts Reclassified from Accumulated Other Comprehensive Income to Paid-in Capital 3 3 Tax Effect — — Current-period Other Comprehensive Loss (4) (4) Balance as of January 28, 2023 $ 1 $ 1 The following table provides the rollforward of accumulated other comprehensive income for 2021: Foreign Currency Translation Accumulated Other Comprehensive Income (in millions) Balance as of January 30, 2021 $ 4 $ 4 Other Comprehensive Income Before Reclassifications 1 1 Tax Effect — — Current-period Other Comprehensive Income 1 1 Balance as of January 29, 2022 $ 5 $ 5 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule Of Repurchase Of Common Stock | The Company repurchased the following shares of its common stock under the March 2022 Share Repurchase Program during 2022: Amount Authorized Shares Repurchased Amount Repurchased Average Stock Price (in millions) (in thousands) (in millions) March 2022 Share Repurchase Program $ 250 5,985 $ 250 $ 41.77 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Jan. 28, 2023 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Share-Based Compensation Expense | The following table provides share-based compensation expense included in the Consolidated and Combined Statements of Income (Loss) for 2022, 2021 and 2020: 2022 2021 2020 (in millions) Costs of Goods Sold, Buying and Occupancy $ 18 $ 12 $ 9 General, Administrative and Store Operating Expenses 30 21 16 Total Share-based Compensation Expense $ 48 $ 33 $ 25 |
Restricted Stock Activity | The following table provides the Company’s restricted stock activity for the fiscal year ended January 28, 2023: Number of Weighted-Average (in thousands) Unvested as of January 29, 2022 4,132 $ 23.04 Granted 1,872 47.63 Vested (2,312) 15.76 Cancelled (426) 40.71 Unvested as of January 28, 2023 3,266 $ 39.98 |
Description of Business, Basi_4
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) $ in Millions | 12 Months Ended | ||||||
Mar. 25, 2022 USD ($) | Jan. 28, 2023 USD ($) store country | Jan. 29, 2022 USD ($) | Jan. 30, 2021 USD ($) | Jul. 30, 2022 associate | Aug. 03, 2021 | Aug. 02, 2021 USD ($) shares | |
Spinoff Transactions [Line Items] | |||||||
Number of countries in which entity operates (more than) | country | 70 | ||||||
Number of Home Office Management Roles Eliminated | associate | 160 | ||||||
Reduction of Home Office Headcount, Percentage | 5% | ||||||
Maturity of short term investments, maximum, in days | 90 days | ||||||
Advertising expense | $ 344 | $ 334 | $ 239 | ||||
Equity method investment carrying value | $ 56 | 35 | |||||
Lessee, operating lease, term of contract | 10 years | ||||||
Payments to Acquire Equity Method Investments | $ 18 | 0 | 0 | ||||
Adore Me | |||||||
Spinoff Transactions [Line Items] | |||||||
Reporting lag | 1 month | ||||||
Frankies Bikinis, LLC | |||||||
Spinoff Transactions [Line Items] | |||||||
Payments to Acquire Equity Method Investments | $ 18 | ||||||
Victoria's Secret Co. | Former Parent | |||||||
Spinoff Transactions [Line Items] | |||||||
Joint venture, percentage owned by parent | 0% | ||||||
Former Parent | |||||||
Spinoff Transactions [Line Items] | |||||||
Spinoff transaction, common stock distributed, percentage | 100% | ||||||
Spinoff transaction, shares of parent exchanged for each share of company | shares | 3 | ||||||
Spinoff transaction, cash payment to parent | $ 976 | ||||||
Allocation of selling, general and administrative expenses from former parent | $ 49 | $ 77 | |||||
Sales Channel, Directly | |||||||
Spinoff Transactions [Line Items] | |||||||
Number of stores (more than) | store | 910 | ||||||
Sales Channel, Through Intermediary | |||||||
Spinoff Transactions [Line Items] | |||||||
Number of stores (more than) | store | 450 |
Description of Business, Basi_5
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Depreciable Life Range of Property Plant and Equipment (Details) | 12 Months Ended |
Jan. 28, 2023 | |
Software, including software developed for internal use | Minimum | |
Property, Plant and Equipment [Line Items] | |
Depreciable life range | 3 years |
Software, including software developed for internal use | Maximum | |
Property, Plant and Equipment [Line Items] | |
Depreciable life range | 5 years |
Furniture, fixtures and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Depreciable life range | 3 years |
Furniture, fixtures and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Depreciable life range | 10 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Depreciable life range | 10 years |
Non-store related building and site improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Depreciable life range | 10 years |
Non-store related building and site improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Depreciable life range | 15 years |
Other property and equipment | |
Property, Plant and Equipment [Line Items] | |
Depreciable life range | 20 years |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Depreciable life range | 30 years |
Adore Me Acquisition - Narrativ
Adore Me Acquisition - Narrative (Details) - Adore Me - USD ($) $ in Millions | 12 Months Ended | |
Dec. 30, 2022 | Jan. 28, 2023 | |
Business Acquisition [Line Items] | ||
Business acquisition, percentage of voting interests acquired | 100% | |
Payments to acquire businesses, gross | $ 391 | |
Business combination, additional cash consideration, evaluation period | 2 years | |
Business combination, consideration transferred, net of cash acquired | $ 537 | |
Cash acquired from acquisition | 22 | |
Business combination, consideration transferred | 559 | |
Business combination, contingent consideration, fair value disclosure | 98 | |
Business combination, consideration transferred, fair value of future fixed payment | 70 | |
Acquisition related costs | $ 15 | |
Useful Life | 7 years 4 months 24 days | |
Reporting lag | 1 month | |
Minimum | ||
Business Acquisition [Line Items] | ||
Business combination, additional cash consideration | $ 80 | |
Maximum | ||
Business Acquisition [Line Items] | ||
Business combination, additional cash consideration | 300 | |
Business combination, contingent compensation payments | $ 60 |
Adore Me Acquisition - Schedule
Adore Me Acquisition - Schedule of Preliminary Purchase Price Allocation of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Jan. 28, 2023 | Dec. 30, 2022 | Jan. 29, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 365 | $ 0 | |
Adore Me | |||
Business Acquisition [Line Items] | |||
Accounts Receivable | $ 1 | ||
Inventories | 105 | ||
Other Current Assets | 7 | ||
Property and Equipment, Net | 12 | ||
Operating Lease Assets | 5 | ||
Goodwill | 365 | ||
Other Assets | 1 | ||
Accounts Payable | 17 | ||
Accrued Expenses and Other | 88 | ||
Current Operating Lease Liabilities | 2 | ||
Deferred Income Tax Liabilities | 21 | ||
Long-term Operating Lease Liabilities | 3 | ||
Other Long-term Liabilities | 8 | ||
Net Assets Acquired and Liabilities Assumed | 537 | ||
Adore Me | Trade Name | |||
Business Acquisition [Line Items] | |||
Intangible Assets | 43 | ||
Adore Me | Other Intangible Assets | |||
Business Acquisition [Line Items] | |||
Intangible Assets | $ 137 |
Adore Me Acquisition - Schedu_2
Adore Me Acquisition - Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination (Details) - Adore Me $ in Millions | Dec. 30, 2022 USD ($) |
Business Acquisition [Line Items] | |
Useful Life | 7 years 4 months 24 days |
Preliminary Fair Value | $ 180 |
Customer Relationships | |
Business Acquisition [Line Items] | |
Useful Life | 7 years |
Preliminary Fair Value | $ 81 |
Developed Technology | |
Business Acquisition [Line Items] | |
Useful Life | 6 years |
Preliminary Fair Value | $ 56 |
Trade Name | |
Business Acquisition [Line Items] | |
Useful Life | 10 years |
Preliminary Fair Value | $ 43 |
Adore Me Acquisition - Business
Adore Me Acquisition - Business Acquisition, Pro Forma Information (Details) - Adore Me - USD ($) $ in Millions | 12 Months Ended | |
Jan. 28, 2023 | Jan. 29, 2022 | |
Business Acquisition [Line Items] | ||
Net Sales | $ 6,595 | $ 6,996 |
Net Income Attributable to Victoria's Secret & Co. | $ 330 | $ 544 |
Transactions with Former Pare_3
Transactions with Former Parent - Narrative (Details) shares in Millions, $ in Millions | 12 Months Ended | |||
Aug. 02, 2021 period shares | Jan. 28, 2023 USD ($) | Jan. 29, 2022 USD ($) | Jan. 30, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||
Interest expense | $ 60 | $ 27 | $ 6 | |
Transition services agreements, number of extension periods | period | 2 | |||
Transition services agreements, extension period | 1 year | |||
Domestic transportation services, initial term | 3 years | |||
Share-based payment award, award converted from former parent (in shares) | shares | 6 | |||
Maximum | ||||
Debt Instrument [Line Items] | ||||
Transition services agreements, general services term (up to) | 2 years | |||
Transition services agreements, information technology service term (up to) | 3 years | |||
Former Parent | ||||
Debt Instrument [Line Items] | ||||
Long-term debt due to Former Parent | $ 97 | |||
Interest expense | $ 2 |
Transactions with Former Pare_4
Transactions with Former Parent - Schedule of Net Transfers from (to) Former Parent (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 29, 2022 | Jan. 30, 2021 | |
Transaction With Former Parent [Line Items] | ||
Total Net Transfers to Former Parent | $ (1,053) | $ (382) |
Former Parent | ||
Transaction With Former Parent [Line Items] | ||
Total Net Transfers to Former Parent | (1,053) | (382) |
Former Parent | Cash Pooling and General Financing Activities, Net | ||
Transaction With Former Parent [Line Items] | ||
Total Net Transfers to Former Parent | (172) | (543) |
Former Parent | Long-lived Assets | ||
Transaction With Former Parent [Line Items] | ||
Total Net Transfers to Former Parent | 16 | 0 |
Former Parent | Corporate Expense Allocations | ||
Transaction With Former Parent [Line Items] | ||
Total Net Transfers to Former Parent | 49 | 77 |
Former Parent | Share-based Compensation Expense | ||
Transaction With Former Parent [Line Items] | ||
Total Net Transfers to Former Parent | 15 | 25 |
Former Parent | Assumed Income Tax Payments | ||
Transaction With Former Parent [Line Items] | ||
Total Net Transfers to Former Parent | 15 | 59 |
Former Parent | Cash Payment to Former Parent | ||
Transaction With Former Parent [Line Items] | ||
Total Net Transfers to Former Parent | $ (976) | $ 0 |
Transactions with Former Pare_5
Transactions with Former Parent - Schedule of Spinoff Transactions (Details) - Former Parent - USD ($) $ in Millions | 12 Months Ended | |
Jan. 28, 2023 | Jan. 29, 2022 | |
Schedule Of Transaction With Former Parent [Line Items] | ||
Transition service consideration | $ 72 | $ 55 |
Transition service cost | 74 | 42 |
Domestic transportation services cost | $ 91 | $ 46 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Accounts receivable, net from revenue-generating activities | $ 101 | $ 101 | |
Contract with customer, liability | 309 | 258 | |
Contract with customer, liability, revenue recognized | 135 | ||
Net sale | $ 6,344 | 6,785 | $ 5,413 |
Minimum | |||
Account receivable, payment term | 60 days | ||
Maximum | |||
Account receivable, payment term | 90 days | ||
U.S. Private Label Credit Card Arrangement | |||
Net sale | $ 123 | 132 | 135 |
Sales Channel, Net Sale Outside Of The U.S. | |||
Net sale | 830 | $ 736 | $ 643 |
Accrued Liabilities | |||
Contract with customer, liability | 291 | ||
Other Long-term Liabilities | |||
Contract with customer, liability | $ 18 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Net Sales | $ 6,344 | $ 6,785 | $ 5,413 |
Stores — North America | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 3,909 | 4,194 | 2,795 |
Sales Channel, Directly | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 1,843 | 2,114 | 2,223 |
International | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | $ 592 | $ 477 | $ 395 |
Earnings (Loss) Per Share - Nar
Earnings (Loss) Per Share - Narrative (Details) - shares | Jan. 28, 2023 | Jan. 29, 2022 | Aug. 03, 2021 | Aug. 02, 2021 |
Spinoff Transactions [Line Items] | ||||
Common Stock, shares outstanding (in shares) | 80,000,000 | 85,000,000 | 88,000,000 | |
Former Parent | ||||
Spinoff Transactions [Line Items] | ||||
Spinoff transaction, common stock distributed, percentage | 100% | |||
Spinoff transaction, shares of parent exchanged for each share of company | 3 |
Earnings (Loss) Per Share - Sha
Earnings (Loss) Per Share - Shares Utilized for the Calculation of Basic and Diluted Earnings per Share (Details) - shares shares in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Weighted-average Common Shares: | |||
Common Shares (in shares) | 82 | 88 | 88 |
Treasury Shares (in shares) | 0 | 0 | 0 |
Basic Shares (in shares) | 82 | 88 | 88 |
Effect of Dilutive Options and Restricted Stock (in shares) | 2 | 2 | 0 |
Diluted Shares (in shares) | 84 | 90 | 88 |
Anti-dilutive Options and Awards (in shares) | 1 | 0 | 0 |
Restructuring (Details)
Restructuring (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 7 Months Ended | 12 Months Ended | |||||
Oct. 19, 2020 USD ($) store | Apr. 30, 2022 USD ($) | Jan. 28, 2023 USD ($) | Aug. 01, 2020 USD ($) | Jan. 28, 2023 USD ($) | Jan. 28, 2023 USD ($) | Jan. 29, 2022 USD ($) | Jan. 30, 2021 USD ($) | Oct. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring charges | $ 6 | $ 51 | $ 29 | ||||||
Payments for restructuring | $ 18 | ||||||||
Net gain on formation of UK joint venture | $ 90 | ||||||||
Number of stores restructured | store | 24 | ||||||||
Asset impairment charges | $ 25 | 0 | $ 0 | $ 254 | |||||
Foreign-currency translation adjustment | $ 36 | 0 | $ 0 | $ (36) | |||||
Proceeds from divestiture of interest in consolidated subsidiaries | $ 45 | ||||||||
Restructuring reserve | 17 | 17 | $ 17 | ||||||
Selling, General and Administrative Expenses [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring charges | 5 | 16 | |||||||
Cost of Goods Sold, Buying and Occupancy | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring charges | $ 1 | $ 13 | |||||||
Victoria's Secret China | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Joint venture, expected percentage owned by parent | 0.51 | ||||||||
Payments to Acquire Interest in Joint Venture | $ 10 | ||||||||
Victoria's Secret China | Regina Miracle | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Joint venture, expected percentage owned by noncontrolling owners | 0.49 | ||||||||
Regina Miracle | Victoria's Secret China | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Payments to Acquire Interest in Joint Venture | $ 10 | ||||||||
Victoria's Secret U.K. | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Equity method investment, ownership percentage | 49% | ||||||||
Victoria's Secret U.K. | Next PLC | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Equity method investment, ownership percentage | 51% |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Details) - USD ($) $ in Millions | Jan. 28, 2023 | Jan. 29, 2022 |
Inventory, Net [Abstract] | ||
Finished Goods Merchandise | $ 997 | $ 898 |
Raw Materials and Merchandise Components | 55 | 51 |
Total Inventories | $ 1,052 | $ 949 |
Long-Lived Assets - Details of
Long-Lived Assets - Details of Property and Equipment, Net (Details) - USD ($) $ in Millions | Jan. 28, 2023 | Jan. 29, 2022 |
Property, Plant and Equipment [Abstract] | ||
Land and Improvements | $ 28 | $ 27 |
Buildings and Improvements | 219 | 211 |
Furniture, Fixtures, Software and Equipment | 2,394 | 2,409 |
Leasehold Improvements | 1,018 | 1,070 |
Construction in Progress | 57 | 78 |
Total | 3,716 | 3,795 |
Accumulated Depreciation and Amortization | (2,870) | (2,838) |
Property and Equipment, Net | $ 846 | $ 957 |
Long-Lived Assets - Narrative (
Long-Lived Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 19, 2020 | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation of Long-lived Assets | $ 274 | $ 303 | $ 326 | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Asset impairment charges | $ 25 | $ 0 | $ 0 | 254 |
UNITED KINGDOM | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Asset impairment charges | $ 25 |
Long-Lived Assets (Long-Lived A
Long-Lived Assets (Long-Lived Assets Impairment) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 19, 2020 | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Total Impairment | $ 25 | $ 0 | $ 0 | $ 254 |
Store Assets | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Total Impairment | 136 | |||
Operating Lease Asset | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Total Impairment | $ 118 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 19, 2020 | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Leases [Abstract] | ||||
Operating Lease Costs | $ 385 | $ 399 | $ 521 | |
Variable Lease Costs | 76 | 63 | 6 | |
Short-term Lease Costs | 13 | 6 | 5 | |
Total Lease Cost | 474 | 468 | 532 | |
Asset Impairment Charges | $ 25 | $ 0 | $ 0 | $ 254 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Aug. 01, 2020 | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Decreased rent due to executed amendment | $ 31 | $ 90 | ||
Additional operating lease commitments not yet commenced | $ 87 | |||
Operating lease, payments | 423 | 497 | 348 | |
Right-of-use asset obtained in exchange for operating lease liability | 160 | 120 | ||
Lease assets, period increase (decrease) | (32) | |||
Gain (loss) on termination of lease | 0 | 0 | 39 | |
Asset retirement obligation | $ 12 | $ 13 | ||
Costs of Goods Sold, Buying and Occupancy | ||||
Lessee, Lease, Description [Line Items] | ||||
Gain (loss) on termination of lease | $ 39 | |||
General, Administrative and Store Operating Expenses | ||||
Lessee, Lease, Description [Line Items] | ||||
Severance costs | $ 3 |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) $ in Millions | Jan. 28, 2023 USD ($) |
Leases [Abstract] | |
2023 | $ 390 |
2024 | 327 |
2025 | 273 |
2026 | 213 |
2027 | 158 |
Thereafter | 500 |
Total Lease Payments | 1,861 |
Less: Interest | (350) |
Present Value of Operating Lease Liabilities | $ 1,511 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Jan. 28, 2023 | Jan. 29, 2022 |
Leases [Abstract] | ||
Weighted-Average Remaining Lease Term (years) | 6 years 7 months 6 days | 6 years 4 months 24 days |
Weighted-Average Discount Rate | 6.10% | 6% |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Goodwill, Trade Names and Other Intangible Assets, Net [Abstract] | |||
Goodwill | $ 365 | $ 0 | |
Amortization of Intangible Assets | 0 | 0 | $ 0 |
Finite-lived intangible asset, expected amortization, year one | 25 | ||
Finite-lived intangible asset, expected amortization, year two | 25 | ||
Finite-lived intangible asset, expected amortization, year three | 25 | ||
Finite-lived intangible asset, expected amortization, year four | 25 | ||
Finite-lived intangible asset, expected amortization, year five | 25 | ||
Finite-Lived Intangible Assets [Line Items] | |||
Trade Names | 289 | 246 | |
Victoria's Secret Trade Names, Excluding Adore Me | |||
Finite-Lived Intangible Assets [Line Items] | |||
Trade Names | $ 246 | $ 246 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) $ in Millions | Jan. 28, 2023 USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Total Definite-Lived Intangible Assets | $ 180 |
Customer Relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Total Definite-Lived Intangible Assets | 81 |
Developed Technology | |
Finite-Lived Intangible Assets [Line Items] | |
Total Definite-Lived Intangible Assets | 56 |
Trade Name | |
Finite-Lived Intangible Assets [Line Items] | |
Total Definite-Lived Intangible Assets | $ 43 |
Accrued Expenses and Other (Det
Accrued Expenses and Other (Details) - USD ($) $ in Millions | Jan. 28, 2023 | Dec. 30, 2022 | Jan. 29, 2022 |
Disaggregation of Revenue [Line Items] | |||
Compensation, Payroll Taxes and Benefits | $ 105 | $ 152 | |
Rent | 63 | 45 | |
Taxes, Other than Income | 40 | 24 | |
Accrued Marketing | 37 | 36 | |
Returns Reserve | 22 | 23 | |
Accrued Freight and Other Logistics | 16 | 62 | |
Accrued Claims on Self-insured Activities | 8 | 4 | |
Accrued Interest | 7 | 5 | |
Other | 118 | 113 | |
Total Accrued Expenses and Other | 737 | 714 | |
Adore Me | |||
Disaggregation of Revenue [Line Items] | |||
Business combination, contingent consideration, fair value disclosure | $ 98 | ||
Accrued Expenses and Other | Adore Me | |||
Disaggregation of Revenue [Line Items] | |||
Business combination, contingent consideration, fair value disclosure | 30 | 0 | |
Sales Channel, Gift Cards | |||
Disaggregation of Revenue [Line Items] | |||
Deferred Revenue | 238 | 198 | |
Sales Channel, Loyalty and Private Label Credit Card | |||
Disaggregation of Revenue [Line Items] | |||
Deferred Revenue | 40 | 36 | |
Sales Channel, Directly | |||
Disaggregation of Revenue [Line Items] | |||
Deferred Revenue | $ 13 | $ 16 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Current: | |||
U.S. Federal | $ 67 | $ 129 | $ 7 |
U.S. State | 22 | 44 | 16 |
Non-U.S. | 18 | 23 | 7 |
Total | 107 | 196 | 30 |
Deferred: | |||
U.S. Federal | (20) | 6 | (68) |
U.S. State | (4) | (4) | (14) |
Non-U.S. | (4) | (1) | 18 |
Total | (28) | 1 | (64) |
Provision (Benefit) for Income Taxes | $ 79 | $ 197 | $ (34) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 30, 2022 | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Operating Loss Carryforwards [Line Items] | ||||
Pre-tax income (loss), non-US, arising principally from overseas operations | $ 92 | $ 92 | $ 11 | |
Income tax payments | 161 | 56 | 59 | |
Unrecognized tax benefits resulting in reduction of effective income tax rate | 20 | 9 | 121 | |
Increase in unrecognized tax benefits is reasonably possible | 9 | |||
Decrease in unrecognized tax benefits is reasonably possible | 9 | |||
Interest and penalties related to unrecognized tax benefits of income tax expense | 1 | $ 0 | $ 2 | |
Unrecognized tax benefits, income tax penalties and interest accrued | 1 | |||
Unrecognized tax benefits, increase resulting from acquisition | $ 10 | |||
Operating Loss Carryforwards Expiration Year, Unlimited | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | $ 37 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Statutory Federal Income Tax Rate and the Effective Tax Rate (Details) | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal Income Tax Rate | 21% | 21% | 21% |
State Income Taxes, Net of Federal Income Tax Effect | 3.90% | 4.30% | (5.80%) |
Impact of Non-U.S. Operations | (1.60%) | (0.90%) | (16.60%) |
Share-based Compensation | (4.60%) | (1.20%) | (4.00%) |
Restructuring of Foreign Investments | 0% | 0.20% | 23.30% |
Uncertain Tax Positions | 0.20% | (0.20%) | 19.30% |
U.S. Permanent Items | 0.30% | 0.10% | (2.80%) |
Change in Valuation Allowance | (0.10%) | 0% | (2.60%) |
Other Items, Net | (0.10%) | 0% | 0.10% |
Effective Tax Rate | 19% | 23.30% | 31.90% |
Income Taxes - Effect of Tempor
Income Taxes - Effect of Temporary Differences that Cause Deferred Income Taxes (Details) - USD ($) $ in Millions | Jan. 28, 2023 | Jan. 29, 2022 |
Deferred Tax Asset and Liability [Line Items] | ||
Deferred tax liabilities, gross | $ (478) | $ (469) |
Deferred tax liability, net | (35) | (41) |
Deferred tax assets, net of valuation allowance | 443 | 428 |
Loss Carryforwards | ||
Deferred Tax Asset and Liability [Line Items] | ||
Deferred tax assets, gross | 133 | 118 |
Deferred tax liabilities, gross | 0 | 0 |
Deferred tax assets, net | 133 | 118 |
Leases | ||
Deferred Tax Asset and Liability [Line Items] | ||
Deferred tax assets, gross | 354 | 371 |
Deferred tax liabilities, gross | (309) | (322) |
Deferred tax assets, net | 45 | 49 |
Share-based Compensation | ||
Deferred Tax Asset and Liability [Line Items] | ||
Deferred tax assets, gross | 12 | 11 |
Deferred tax liabilities, gross | 0 | 0 |
Deferred tax assets, net | 12 | 11 |
Deferred Revenue | ||
Deferred Tax Asset and Liability [Line Items] | ||
Deferred tax assets, gross | 43 | 42 |
Deferred tax liabilities, gross | 0 | 0 |
Deferred tax assets, net | 43 | 42 |
Property and Equipment | ||
Deferred Tax Asset and Liability [Line Items] | ||
Deferred tax assets, gross | 0 | 0 |
Deferred tax liabilities, gross | (58) | (79) |
Deferred tax liability, net | (58) | (79) |
Trade Name and Other Intangibles | ||
Deferred Tax Asset and Liability [Line Items] | ||
Deferred tax assets, gross | 0 | 0 |
Deferred tax liabilities, gross | (100) | (57) |
Deferred tax liability, net | (100) | (57) |
Other | ||
Deferred Tax Asset and Liability [Line Items] | ||
Deferred tax assets, gross | 54 | 34 |
Deferred tax liabilities, gross | (11) | (11) |
Deferred tax assets, net | 43 | 23 |
Valuation Allowance | ||
Deferred Tax Asset and Liability [Line Items] | ||
Valuation Allowance | $ (153) | $ (148) |
Income Taxes - Activity Related
Income Taxes - Activity Related to its Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross Unrecognized Tax Benefits, as of the Beginning of the Fiscal Year | $ 10 | $ 126 | $ 41 |
Decreases to Unrecognized Tax Benefits Transferred to Former Parent | 0 | (126) | 0 |
Increases to Unrecognized Tax Benefits for Prior Years, Including Acquisitions | 11 | 0 | 0 |
Decreases to Unrecognized Tax Benefits for Prior Years | 0 | 0 | (16) |
Increases to Unrecognized Tax Benefits as a Result of Current Year Activity | 10 | 10 | 105 |
Decreases to Unrecognized Tax Benefits Relating to Settlements with Taxing Authorities | 0 | 0 | 0 |
Decreases to Unrecognized Tax Benefits due to Lapse of Statute of Limitations | 0 | 0 | (4) |
Gross Unrecognized Tax Benefits, as of the End of the Fiscal Year | $ 31 | $ 10 | $ 126 |
Long-term Debt and Borrowing _3
Long-term Debt and Borrowing Facilities - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Millions | Jan. 28, 2023 | Jan. 29, 2022 | Jul. 31, 2021 |
Debt, long-term and short-term, combined amount | $ 1,275 | $ 982 | |
Current Debt | (4) | (4) | |
Total long-term debt, net of current portion | 1,271 | 978 | |
With Subsidiary Guarantee | Senior Secured Debt with Subsidiary Guarantee | |||
Debt, long-term and short-term, combined amount | 682 | 390 | |
With Subsidiary Guarantee | Senior Debt with Subsidiary Guarantee | |||
Debt, long-term and short-term, combined amount | 593 | 592 | |
With Subsidiary Guarantee | $395 million Term Loan due August 2028 (“Term Loan Facility”) | |||
Debt instrument, face amount | 395 | ||
With Subsidiary Guarantee | $395 million Term Loan due August 2028 (“Term Loan Facility”) | Senior Secured Debt with Subsidiary Guarantee | |||
Debt, long-term and short-term, combined amount | 387 | 390 | |
With Subsidiary Guarantee | $600 million, 4.625% Fixed Interest Rate Notes due July 2029 (“2029 Notes”) | |||
Debt instrument, face amount | $ 600 | $ 600 | |
Interest rate | 4.625% | 4.625% | |
With Subsidiary Guarantee | $600 million, 4.625% Fixed Interest Rate Notes due July 2029 (“2029 Notes”) | Senior Debt with Subsidiary Guarantee | |||
Debt, long-term and short-term, combined amount | $ 593 | 592 | |
With Subsidiary Guarantee | Revolving Credit Expiring August 2026 | Senior Secured Debt with Subsidiary Guarantee | |||
Debt, long-term and short-term, combined amount | $ 295 | $ 0 |
Long-term Debt and Borrowing _4
Long-term Debt and Borrowing Facilities - Schedule of Principal Payments on Long-term Debt (Details) $ in Millions | Jan. 28, 2023 USD ($) |
Long-Term Debt, by Current and Noncurrent [Abstract] | |
2023 | $ 4 |
2024 | 4 |
2025 | 4 |
2026 | 299 |
2027 | 4 |
Thereafter | $ 975 |
Long-term Debt and Borrowing _5
Long-term Debt and Borrowing Facilities - Narrative (Details) $ in Millions | 12 Months Ended | |||||
Aug. 02, 2021 USD ($) | Jan. 28, 2023 USD ($) | Jan. 29, 2022 USD ($) | Jan. 30, 2021 USD ($) | Jul. 31, 2021 USD ($) | Aug. 01, 2020 USD ($) | |
Interest paid | $ 52 | $ 18 | $ 0 | |||
Interest expense | 60 | 27 | 6 | |||
Borrowings from Asset-based Revolving Credit Facility | $ 295 | 0 | 0 | |||
Former Parent | ||||||
Spinoff transaction, cash payment to parent | $ 976 | |||||
Long-term debt due to Former Parent | 97 | |||||
Interest expense | 2 | |||||
Credit Facility | ||||||
Proceeds from issuance of debt | 384 | |||||
$395 million Term Loan due August 2028 (“Term Loan Facility”) | Term Loan | ||||||
Interest rate | 7.98% | |||||
Debt issuance costs | 10 | |||||
Term loan B credit facility | $ 400 | |||||
Debt instrument, periodic principal payment, percent | 0.0025 | |||||
Debt instrument, periodic principal payment | $ 4 | 1 | ||||
$395 million Term Loan due August 2028 (“Term Loan Facility”) | London Interbank Offered Rate (LIBOR) | Term Loan | ||||||
Basis spread on variable rate | 3.25% | |||||
$395 million Term Loan due August 2028 (“Term Loan Facility”) | Base Rate | Term Loan | ||||||
Basis spread on variable rate | 2.25% | |||||
$395 million Term Loan due August 2028 (“Term Loan Facility”) | Interest Rate Floor | Term Loan | ||||||
Basis spread on variable rate | 0.50% | |||||
Revolving Credit Expiring August 2026 | Revolving Credit Facility | ||||||
Interest rate | 5.90% | |||||
Debt issuance costs | $ 6 | |||||
Line of credit facility, maximum borrowing capacity | $ 750 | |||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 259 | |||||
Borrowings from Asset-based Revolving Credit Facility | 295 | |||||
Revolving Credit Expiring August 2026 | Revolving Credit Expiring August 2026 | ||||||
Long-term line of credit | 295 | |||||
Revolving Credit Expiring August 2026 | Minimum | Revolving Credit Facility | ||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | |||||
Revolving Credit Expiring August 2026 | Maximum | Revolving Credit Facility | ||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.30% | |||||
Revolving Credit Expiring August 2026 | Average Daily Excess Availability | LIBOR and CDOR Loans | Minimum | Revolving Credit Facility | ||||||
Basis spread on variable rate | 1.50% | |||||
Revolving Credit Expiring August 2026 | Average Daily Excess Availability | LIBOR and CDOR Loans | Maximum | Revolving Credit Facility | ||||||
Basis spread on variable rate | 2% | |||||
Revolving Credit Expiring August 2026 | Average Daily Excess Availability | Alternate Base Rate Loans and Canadian Base Rate Loans | Minimum | Revolving Credit Facility | ||||||
Basis spread on variable rate | 0.50% | |||||
Revolving Credit Expiring August 2026 | Average Daily Excess Availability | Alternate Base Rate Loans and Canadian Base Rate Loans | Maximum | Revolving Credit Facility | ||||||
Basis spread on variable rate | 1% | |||||
Revolving Credit Expiring August 2026 | Letter of Credit | ||||||
Long-term line of credit | 42 | |||||
With Subsidiary Guarantee | $600 million, 4.625% Fixed Interest Rate Notes due July 2029 (“2029 Notes”) | ||||||
Principal Value | $ 600 | $ 600 | ||||
Interest rate | 4.625% | 4.625% | ||||
Proceeds from issuance of debt | $ 592 | |||||
Debt issuance costs | $ 8 | |||||
With Subsidiary Guarantee | $395 million Term Loan due August 2028 (“Term Loan Facility”) | ||||||
Principal Value | $ 395 | |||||
With Subsidiary Guarantee | Foreign Facilities with Parent Guarantee | ||||||
Line of credit facility, maximum borrowing capacity | 30 | |||||
Proceeds from line of credit | $ 0 | 21 | ||||
Repayments of lines of credit | $ 0 | 126 | ||||
Line of credit | $ 0 | |||||
Without Subsidiary Guarantee | Foreign Facilities with Parent Guarantee | ||||||
Proceeds from line of credit | 13 | |||||
Repayments of lines of credit | $ 63 | |||||
Line of credit | $ 0 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Fair Value of Long-Term Debt, Disclosure (Details) - USD ($) $ in Millions | Jan. 28, 2023 | Jan. 29, 2022 |
Reported Value Measurement | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt instrument, fair value | $ 995 | $ 999 |
Estimate of Fair Value Measurement | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt instrument, fair value | $ 894 | $ 975 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Contingent Consideration (Details) - Adore Me - USD ($) $ in Millions | Jan. 28, 2023 | Dec. 30, 2022 | Jan. 29, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business combination, contingent consideration, fair value disclosure | $ 98 | ||
Accrued Expenses and Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business combination, contingent consideration, fair value disclosure | $ 30 | $ 0 | |
Other Long-term Liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business combination, contingent consideration, fair value disclosure | 70 | ||
Level 1 | Accrued Expenses and Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business combination, contingent consideration, fair value disclosure | 0 | ||
Level 1 | Other Long-term Liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business combination, contingent consideration, fair value disclosure | 0 | ||
Level 2 | Accrued Expenses and Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business combination, contingent consideration, fair value disclosure | 0 | ||
Level 2 | Other Long-term Liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business combination, contingent consideration, fair value disclosure | 0 | ||
Level 3 | Accrued Expenses and Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business combination, contingent consideration, fair value disclosure | 30 | ||
Level 3 | Other Long-term Liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business combination, contingent consideration, fair value disclosure | $ 70 |
Comprehensive Income (Loss) - C
Comprehensive Income (Loss) - Components Of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2022 | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income (Loss), Beginning Balance | $ 5 | $ 4 | ||
Other Comprehensive Income (Loss) Before Reclassifications | (7) | 1 | ||
Amounts Reclassified from Accumulated Other Comprehensive Income to Paid-in Capital | 3 | |||
Tax Effect | 0 | 0 | ||
Total Other Comprehensive Income (Loss), Net of Tax | (4) | 1 | $ 33 | |
Accumulated Other Comprehensive Income (Loss), Ending Balance | 1 | 5 | 4 | |
Foreign Currency Translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income (Loss), Beginning Balance | 5 | 4 | ||
Other Comprehensive Income (Loss) Before Reclassifications | (7) | 1 | ||
Amounts Reclassified from Accumulated Other Comprehensive Income to Paid-in Capital | $ 3 | 3 | ||
Tax Effect | 0 | 0 | ||
Total Other Comprehensive Income (Loss), Net of Tax | (4) | 1 | ||
Accumulated Other Comprehensive Income (Loss), Ending Balance | $ 1 | $ 5 | $ 4 |
Comprehensive Income (Loss) - N
Comprehensive Income (Loss) - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Oct. 19, 2020 | Apr. 30, 2022 | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | |||||
Foreign-currency translation adjustment | $ (36) | $ 0 | $ 0 | $ 36 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Amounts Reclassified from Accumulated Other Comprehensive Income to Paid-in Capital | 3 | ||||
Foreign Currency Translation | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Amounts Reclassified from Accumulated Other Comprehensive Income to Paid-in Capital | $ 3 | $ 3 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 1 Months Ended | ||||
May 09, 2022 USD ($) | Aug. 06, 2021 USD ($) | Jul. 31, 2021 USD ($) | Apr. 22, 2022 | Jul. 21, 2021 | |
Occupancy-related Legal Matter | |||||
Other Commitments [Line Items] | |||||
Litigation Settlement, Calculation Of Settlement Amount | 3 | 3 | |||
Occupancy-related Legal Matter | Judicial Ruling | |||||
Other Commitments [Line Items] | |||||
Litigation Settlement, Amount Awarded to Other Party | $ 22 | $ 23 | |||
Management and Governance Investments | |||||
Other Commitments [Line Items] | |||||
Investment commitment, amount | $ 45 | ||||
Investment commitment, period | 5 years |
Retirement Benefits - Narrative
Retirement Benefits - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan, cost | $ 43 | $ 43 | $ 38 |
Non-qualified retirement plan, benefit obligation | $ 66 |
Shareholders' Equity (Narrative
Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 1 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Feb. 28, 2023 | Feb. 28, 2022 | Dec. 31, 2021 | Jan. 28, 2023 | Jan. 29, 2022 | Jan. 31, 2023 | Jan. 11, 2023 | Mar. 02, 2022 | Dec. 29, 2021 | |
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchased and retired during period | $ 0 | $ 0 | ||||||||
Amount Repurchased | 250 | 250 | ||||||||
Trade Names | 289 | 246 | ||||||||
Treasury Stock | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchased and retired during period | (300) | (200) | ||||||||
Amount Repurchased | $ 300 | $ 200 | ||||||||
Common Stock | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Repurchase of Common Stock (in shares) | 6,000 | 4,000 | ||||||||
Paid-in Capital | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchased and retired during period | $ 12 | $ 8 | ||||||||
Amount Repurchased | $ (50) | 50 | ||||||||
ASR Program | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchase program, authorized amount | $ 250 | |||||||||
Stock repurchased and retired during period (in shares) | 4,100 | 300 | 4,100 | |||||||
Stock repurchased and retired during period | $ 250 | |||||||||
ASR Program | Treasury Stock | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchased and retired during period | $ 200 | $ 50 | $ 200 | |||||||
ASR Program | Common Stock | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchased and retired during period | 1 | 1 | ||||||||
ASR Program | Paid-in Capital | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchased and retired during period | 1 | 8 | $ 50 | |||||||
ASR Program | Retained Earnings | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchased and retired during period | $ 50 | $ 192 | ||||||||
March 2022 Share Repurchase Program | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchase program, authorized amount | $ 250 | |||||||||
March 2022 Repurchase Program | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Repurchase of Common Stock (in shares) | 5,985 | |||||||||
Amount Repurchased | $ 250 | |||||||||
Average Stock Price | $ 41.77 | |||||||||
March 2022 Repurchase Program | Common Stock | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchased and retired during period | $ 1 | |||||||||
March 2022 Repurchase Program | Paid-in Capital | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchased and retired during period | 12 | |||||||||
March 2022 Repurchase Program | Retained Earnings | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchased and retired during period | $ 238 | |||||||||
January 2023 Share Repurchase Program | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchase program, authorized amount | $ 250 | |||||||||
January 2023 ASR Program | Subsequent Event | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Stock repurchase program, authorized amount | $ 125 | |||||||||
Stock repurchased and retired during period (in shares) | 2,400 | |||||||||
Stock repurchased and retired during period | $ 125 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Repurchase of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Mar. 02, 2022 | |
Equity, Class of Treasury Stock [Line Items] | |||
Amount Repurchased | $ 250 | $ 250 | |
March 2022 Share Repurchase Program | |||
Equity, Class of Treasury Stock [Line Items] | |||
Amount Authorized | $ 250 | ||
March 2022 Repurchase Program | |||
Equity, Class of Treasury Stock [Line Items] | |||
Repurchase of Common Stock (in shares) | 5,985 | ||
Amount Repurchased | $ 250 | ||
Average Stock Price | $ 41.77 |
Share-based Compensation (Narra
Share-based Compensation (Narrative) (Details) shares in Millions, $ in Millions | 6 Months Ended | 12 Months Ended | |||
Jan. 29, 2022 USD ($) | Jan. 28, 2023 USD ($) shares | Jan. 29, 2022 USD ($) | Jan. 30, 2021 USD ($) | Aug. 02, 2021 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options, restricted and unrestricted shares authorized (in shares) | shares | 11 | ||||
Options and shares available for grant (in shares) | shares | 9 | ||||
Share-based payment award, award converted from former parent (in shares) | shares | 6 | ||||
Share-based payment award, award converted from former parent, conversion ratio | 1.665 | ||||
Tax benefit associated with share based compensation | $ 9 | $ 6 | $ 6 | ||
Options outstanding (in shares) | shares | 1.3 | ||||
Options, aggregated intrinsic value | $ 11 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 46.30% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.10% | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment award, award converted from former parent (in shares) | shares | 1.7 | ||||
Total unrecognized compensation cost, weighted-average period of recognition, years | 1 year 1 month 6 days | ||||
Share-based compensation, award expiration period | 10 years | ||||
Share-based compensation, option, cost not yet recognized | $ 1 | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation, award vesting period | 3 years | ||||
Total intrinsic value of restricted stock vested | $ 11 | $ 118 | |||
Total fair value at grant date of awards vested | 3 | 36 | |||
Total unrecognized compensation cost, net of estimated forfeitures | $ 50 | ||||
Total unrecognized compensation cost, weighted-average period of recognition, years | 1 year 7 months 6 days | ||||
Tax benefits realized from tax deductions | $ 2 | $ 27 | |||
Minimum | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation, award vesting period | 3 years | ||||
Maximum | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation, award vesting period | 5 years |
Share-based Compensation - Shar
Share-based Compensation - Share-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Jan. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Expense | $ 48 | $ 33 | $ 25 |
Costs of Goods Sold, Buying and Occupancy | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Expense | 18 | 12 | 9 |
General, Administrative and Store Operating Expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Expense | $ 30 | $ 21 | $ 16 |
Share-based Compensation - Rest
Share-based Compensation - Restricted Stock Activity (Details) - Restricted Stock - $ / shares shares in Thousands | 6 Months Ended | 12 Months Ended |
Jan. 29, 2022 | Jan. 28, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | ||
Unvested as of August 2, 2021 (in shares) | 4,132 | |
Granted (in shares) | 1,872 | |
Vested (in shares) | (2,312) | |
Cancelled (in shares) | (426) | |
Unvested as of End of Period (in shares) | 4,132 | 3,266 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Unvested as of August 2, 2021, Weighted-Average Grant Date Fair Value (in dollars per share) | $ 23.04 | |
Granted, Weighted-Average Grant Date Fair Value (in dollars per share) | $ 56.63 | 47.63 |
Vested, Weighted-Average Grant Date Fair Value (in dollars per share) | 15.76 | |
Cancelled, Weighted-Average Grant Date Fair Value (in dollars per share) | 40.71 | |
Unvested as of End of Period, Weighted-Average Grant Date Fair Value (in dollars per share) | $ 23.04 | $ 39.98 |