Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 29, 2017 | Aug. 26, 2017 | |
Entity Registrant Name | DILLARD'S, INC. | |
Entity Central Index Key | 28,917 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 29, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-03 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Common Stock Class A | ||
Entity Common Stock, Shares Outstanding | 25,011,159 | |
Common Stock Class B | ||
Entity Common Stock, Shares Outstanding | 4,010,401 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 29, 2017 | Jan. 28, 2017 | Jul. 30, 2016 |
Current assets: | |||
Cash and cash equivalents | $ 135,089 | $ 346,985 | $ 128,250 |
Accounts receivable | 39,191 | 48,230 | 41,210 |
Merchandise inventories | 1,527,385 | 1,406,403 | 1,499,265 |
Income Taxes Receivable, Current | 20,302 | 0 | 21,961 |
Other current assets | 37,906 | 36,303 | 45,948 |
Total current assets | 1,759,873 | 1,837,921 | 1,736,634 |
Property and equipment (net of accumulated depreciation and amortization of $2,580,082, $2,478,490 and $2,494,914, respectively) | 1,733,559 | 1,790,267 | 1,851,831 |
Other assets | 255,903 | 259,948 | 254,543 |
Total assets | 3,749,335 | 3,888,136 | 3,843,008 |
Current liabilities: | |||
Trade accounts payable and accrued expenses | 873,553 | 839,305 | 760,624 |
Long-term Debt, Current Maturities | 248,071 | 87,201 | 0 |
Current portion of capital lease obligations | 1,058 | 3,281 | 3,236 |
Other Short-term Borrowings | 0 | ||
Accrued Income Taxes, Current | 0 | 46,730 | 0 |
Total current liabilities | 1,122,682 | 976,517 | 763,860 |
Long-term debt | 365,359 | 526,106 | 613,184 |
Capital lease obligations | 3,447 | 3,988 | 4,505 |
Other liabilities | 238,907 | 238,424 | 242,100 |
Deferred Tax Liabilities, Net, Noncurrent | 216,219 | 225,684 | 250,663 |
Subordinated debentures | 200,000 | 200,000 | 200,000 |
Commitments and contingencies | |||
Stockholders’ equity: | |||
Common stock | 1,238 | 1,238 | 1,238 |
Additional paid-in capital | 944,401 | 943,467 | 941,709 |
Accumulated other comprehensive loss | (11,137) | (11,137) | (16,746) |
Retained earnings | 4,198,855 | 4,153,844 | 4,078,824 |
Less treasury stock, at cost | (3,530,636) | (3,369,995) | (3,236,329) |
Total stockholders’ equity | 1,602,721 | 1,717,417 | 1,768,696 |
Total liabilities and stockholders’ equity | $ 3,749,335 | $ 3,888,136 | $ 3,843,008 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jul. 29, 2017 | Jan. 28, 2017 | Jul. 30, 2016 |
Statement of Financial Position [Abstract] | |||
Property and equipment, accumulated depreciation and amortization | $ 2,580,082 | $ 2,478,490 | $ 2,494,914 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2017 | Jul. 30, 2016 | Jul. 29, 2017 | Jul. 30, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,427,210 | $ 1,452,445 | $ 2,845,321 | $ 2,955,687 |
Service charges and other income | 36,600 | 36,305 | 71,363 | 71,860 |
Total net sales, service charges and other income | 1,463,810 | 1,488,750 | 2,916,684 | 3,027,547 |
Cost of sales | 1,007,054 | 993,359 | 1,877,139 | 1,931,938 |
Selling, General and Administrative Expense | 401,698 | 395,144 | 800,150 | 793,488 |
Depreciation and amortization | 59,868 | 60,607 | 119,879 | 121,252 |
Rentals | 6,456 | 5,880 | 12,658 | 11,870 |
Interest Expense | 15,798 | 15,979 | 31,480 | 31,693 |
Gain on disposal of assets | (23) | (781) | (42) | (876) |
(Loss) income before income taxes and income on and equity in earnings of joint ventures | (27,041) | 18,562 | 75,420 | 138,182 |
Income taxes (benefit) | (9,950) | 6,490 | 26,220 | 48,690 |
Income on and equity in earnings of joint ventures | 11 | 11 | 22 | 22 |
Net Income | (17,080) | 12,083 | 49,222 | 89,514 |
Retained Earnings [Roll Forward] | ||||
Retained earnings at beginning of period | 4,217,972 | 4,069,151 | 4,153,844 | 3,994,211 |
Cash dividends declared | (2,037) | (2,410) | (4,211) | (4,901) |
Retained earnings at end of period | $ 4,198,855 | $ 4,078,824 | $ 4,198,855 | $ 4,078,824 |
(Loss) earnings per share: | ||||
Earnings Per Share, Basic and Diluted | $ (0.58) | $ 0.35 | $ 1.62 | $ 2.55 |
Cash dividends declared per common share (in dollars per share) | $ 0.07 | $ 0.07 | $ 0.14 | $ 0.14 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2017 | Jul. 30, 2016 | Jul. 29, 2017 | Jul. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ (17,080) | $ 12,083 | $ 49,222 | $ 89,514 |
Other comprehensive income: | ||||
Amortization of retirement plan and other retiree benefit adjustments (net of tax of $0, $115, $0 and $230, respectively) | 0 | 186 | 0 | 372 |
Comprehensive (loss) income | $ (17,080) | $ 12,269 | $ 49,222 | $ 89,886 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2017 | Jul. 30, 2016 | Jul. 29, 2017 | Jul. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Amortization of retirement plan and other retiree benefit adjustments, tax | $ 0 | $ 115 | $ 0 | $ 230 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Operating activities: | ||
Net Income | $ 49,222 | $ 89,514 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of property and other deferred costs | 121,033 | 122,354 |
Gain on disposal of assets | (42) | (876) |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable | 9,039 | 5,928 |
Increase in merchandise inventories | (120,982) | (124,760) |
Increase in other current assets | (669) | (664) |
Decrease in other assets | 2,366 | 1,013 |
Increase in trade accounts payable and accrued expenses and other liabilities | 35,841 | 77,046 |
Decrease in income taxes | (73,652) | (82,811) |
Net cash provided by operating activities | 22,156 | 86,744 |
Investing activities: | ||
Purchases of property and equipment | (65,979) | (41,990) |
Proceeds from disposal of assets | 3,090 | 957 |
Proceeds from Insurance Settlement, Investing Activities | 1,875 | 0 |
Proceeds from Equity Method Investment, Dividends or Distributions, Return of Capital | 855 | 0 |
Net cash used in investing activities | (60,159) | (41,033) |
Financing activities: | ||
Principal payments on long-term debt and capital lease obligations | (2,764) | (2,812) |
Cash dividends paid | (4,486) | (5,011) |
Purchase of treasury stock | (166,643) | (112,507) |
Net cash used in financing activities | (173,893) | (120,330) |
Decrease in cash and cash equivalents | (211,896) | (74,619) |
Cash and cash equivalents, beginning of period | 346,985 | 202,869 |
Cash and cash equivalents, end of period | 135,089 | 128,250 |
Non-cash transactions: | ||
Accrued capital expenditures | 3,900 | 3,600 |
Stock Issued | $ 934 | $ 913 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jul. 29, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements of Dillard’s, Inc. (the “Company”) have been prepared in accordance with the rules of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended July 29, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending February 3, 2018 due to, among other factors, the seasonal nature of the business. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2017 filed with the SEC on March 24, 2017. |
Business Segments
Business Segments | 6 Months Ended |
Jul. 29, 2017 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments The Company operates in two reportable segments: the operation of retail department stores (“retail operations”) and a general contracting construction company (“construction”). For the Company’s retail operations, the Company determined its operating segments on a store by store basis. Each store’s operating performance has been aggregated into one reportable segment. The Company’s operating segments are aggregated for financial reporting purposes because they are similar in each of the following areas: economic characteristics, class of consumer, nature of products and distribution methods. Revenues from external customers are derived from merchandise sales, and the Company does not rely on any major customers as a source of revenue. Across all stores, the Company operates one store format under the Dillard’s name where each store offers the same general mix of merchandise with similar categories and similar customers. The Company believes that disaggregating its operating segments would not provide meaningful additional information. The following tables summarize certain segment information, including the reconciliation of those items to the Company’s consolidated operations: (in thousands of dollars) Retail Operations Construction Consolidated Three Months Ended July 29, 2017: Net sales from external customers $ 1,384,553 $ 42,657 $ 1,427,210 Gross profit 418,491 1,665 420,156 Depreciation and amortization 59,701 167 59,868 Interest and debt expense (income), net 15,817 (19 ) 15,798 (Loss) income before income taxes and income on and equity in earnings of joint ventures (27,683 ) 642 (27,041 ) Income on and equity in earnings of joint ventures 11 — 11 Total assets 3,707,899 41,436 3,749,335 Three Months Ended July 30, 2016: Net sales from external customers $ 1,403,410 $ 49,035 $ 1,452,445 Gross profit 457,275 1,811 459,086 Depreciation and amortization 60,433 174 60,607 Interest and debt expense (income), net 15,994 (15 ) 15,979 Income before income taxes and income on and equity in earnings of joint ventures 17,918 644 18,562 Income on and equity in earnings of joint ventures 11 — 11 Total assets 3,789,486 53,522 3,843,008 Six Months Ended July 29, 2017: Net sales from external customers $ 2,770,073 $ 75,248 $ 2,845,321 Gross profit 964,991 3,191 968,182 Depreciation and amortization 119,544 335 119,879 Interest and debt expense (income), net 31,520 (40 ) 31,480 Income before income taxes and income on and equity in earnings of joint ventures 74,677 743 75,420 Income on and equity in earnings of joint ventures 22 — 22 Total assets 3,707,899 41,436 3,749,335 Six Months Ended July 30, 2016: Net sales from external customers $ 2,852,798 $ 102,889 $ 2,955,687 Gross profit 1,019,454 4,295 1,023,749 Depreciation and amortization 120,908 344 121,252 Interest and debt expense (income), net 31,723 (30 ) 31,693 Income before income taxes and income on and equity in earnings of joint ventures 136,699 1,483 138,182 Income on and equity in earnings of joint ventures 22 — 22 Total assets 3,789,486 53,522 3,843,008 Intersegment construction revenues of $12.6 million and $23.3 million for the three months ended July 29, 2017 and July 30, 2016, respectively, and $21.6 million and $33.2 million for the six months ended July 29, 2017 and July 30, 2016, respectively, were eliminated during consolidation and have been excluded from net sales for the respective periods. |
Earnings Per Share Data
Earnings Per Share Data | 6 Months Ended |
Jul. 29, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share Data | Earnings Per Share Data The following table sets forth the computation of basic and diluted (loss) earnings per share for the periods indicated (in thousands, except per share data). Three Months Ended Six Months Ended July 29, July 30, July 29, July 30, Net (loss) income $ (17,080 ) $ 12,083 $ 49,222 $ 89,514 Weighted average shares of common stock outstanding 29,363 34,536 30,310 35,094 Basic and diluted (loss) earnings per share $ (0.58 ) $ 0.35 $ 1.62 $ 2.55 The Company maintains a capital structure in which common stock is the only equity security issued and outstanding, and there were no shares of preferred stock, stock options, other dilutive securities or potentially dilutive securities issued or outstanding during the three and six months ended July 29, 2017 and July 30, 2016 . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 29, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Various legal proceedings, in the form of lawsuits and claims, which occur in the normal course of business, are pending against the Company and its subsidiaries. In the opinion of management, disposition of these matters, individually or in the aggregate, is not expected to have a material adverse effect on the Company’s financial position, cash flows or results of operations. At July 29, 2017 , letters of credit totaling $25.6 million were issued under the Company’s revolving credit facility. |
Benefit Plans
Benefit Plans | 6 Months Ended |
Jul. 29, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Benefit Plans | Benefit Plans The Company has an unfunded, nonqualified defined benefit plan (“Pension Plan”) for its officers. The Pension Plan is noncontributory and provides benefits based on years of service and compensation during employment. The Company determines pension expense using an actuarial cost method to estimate the total benefits ultimately payable to officers and allocates this cost to service periods. The actuarial assumptions used to calculate pension costs are reviewed annually. The Company contributed $1.2 million and $2.8 million to the Pension Plan during the three and six months ended July 29, 2017 , respectively, and expects to make additional contributions to the Pension Plan of approximately $2.5 million during the remainder of fiscal 2017 . The components of net periodic benefit costs are as follows (in thousands): Three Months Ended Six Months Ended July 29, July 30, July 29, July 30, Components of net periodic benefit costs: Service cost $ 873 $ 984 $ 1,746 $ 1,967 Interest cost 1,808 1,919 3,615 3,839 Net actuarial loss — 301 — 602 Net periodic benefit costs $ 2,681 $ 3,204 $ 5,361 $ 6,408 Net periodic benefit costs are included in selling, general and administrative expenses. |
Revolving Credit Agreement
Revolving Credit Agreement | 6 Months Ended |
Jul. 29, 2017 | |
Line of Credit Facility [Abstract] | |
Revolving Credit Agreement | Revolving Credit Agreement At July 29, 2017 , the Company maintained a $1.0 billion unsecured revolving credit facility (“credit agreement”). The credit agreement was available to the Company for working capital needs and general corporate purposes. The Company paid a variable rate of interest on borrowings under the credit agreement and a commitment fee to the participating banks based on the Company's debt rating. The rate of interest on borrowings was LIBOR plus 1.375% , and the commitment fee for unused borrowings was 0.20% per annum. At July 29, 2017, no borrowings were outstanding, and letters of credit totaling $25.6 million were issued under the credit agreement leaving unutilized availability under the facility of approximately $974 million . To be in compliance with the financial covenants of the credit agreement, the Company's total leverage ratio could not exceed 4.0 to 1.0, and the coverage ratio could not be less than 2.5 to 1.0, as defined in the credit agreement. At July 29, 2017, the Company was in compliance with all financial covenants related to the credit agreement. See Note 13, Subsequent Event , for additional information regarding an amendment to the credit agreement. |
Stock Repurchase Programs
Stock Repurchase Programs | 6 Months Ended |
Jul. 29, 2017 | |
Schedule of Share Repurchase Program Activity [Abstract] | |
Stock Repurchase Programs | Stock Repurchase Program On February 25, 2016, the Company’s Board of Directors authorized the Company to repurchase $500 million of the Company’s Class A Common Stock under an open-ended stock plan. The authorization permits the Company to repurchase its Class A Common Stock in the open market, pursuant to preset trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934 or through privately negotiated transactions. The authorization has no expiration date. The following is a summary of share repurchase activity for the periods indicated (in millions, except per share data): Three Months Ended Six Months Ended July 29, July 30, July 29, July 30, Cost of shares repurchased $ 69.5 $ 54.1 $ 160.6 $ 112.5 Number of shares repurchased 1.4 0.9 3.1 1.6 Average price per share $ 50.00 $ 61.18 $ 52.08 $ 70.08 All repurchases of the Company’s Class A Common Stock above were made at the market price at the trade date. Accordingly, all amounts paid to reacquire these shares were allocated to Treasury Stock. As of July 29, 2017 , $93.2 million of authorization remained under the Company's stock repurchase plan. |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 29, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the three months ended July 29, 2017, income tax benefit differed from what would be computed using the statutory federal tax rate primarily due to the effect of state and local income taxes and tax benefits recognized for federal tax credits. During the three months ended July 30, 2016, income tax expense differed from what would be computed using the statutory federal tax rate primarily due to the effect of state and local income taxes partially offset by tax benefits recognized for federal tax credits. During the six months ended July 29, 2017 and July 30, 2016, income tax expense differed from what would be computed using the statutory federal tax rate primarily due to the effect of state and local income taxes partially offset by tax benefits recognized for federal tax credits. |
Reclassifications from Accumula
Reclassifications from Accumulated Other Comprehensive Loss ("AOCL") | 6 Months Ended |
Jul. 29, 2017 | |
Reclassifications from Accumulated Other Comprehensive Loss ("AOCL") | |
Reclassifications from Accumulated Other Comprehensive Loss ("AOCL") | Reclassifications from Accumulated Other Comprehensive Loss (“AOCL”) Reclassifications from AOCL are summarized as follows (in thousands): Amount Reclassified from AOCL Three Months Ended Six Months Ended Affected Line Item in the Statement Where Net Income Is Presented Details about AOCL Components July 29, 2017 July 30, 2016 July 29, July 30, Defined benefit pension plan items Amortization of actuarial losses $ — $ 301 $ — $ 602 Total before tax (1) — 115 — 230 Income tax expense $ — $ 186 $ — $ 372 Total net of tax At January 28, 2017, the net actuarial loss was $18.0 million, and the projected benefit obligation was $183.6 million. For fiscal year 2017, there is no amortization of the net loss in accumulated other comprehensive income as the net loss does not exceed 10% of the projected benefit obligation. _______________________________ (1) These items are included in the computation of net periodic pension cost. See Note 5, Benefit Plans , for additional information. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss | 6 Months Ended |
Jul. 29, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | Changes in Accumulated Other Comprehensive Loss Changes in AOCL by component (net of tax) are summarized as follows (in thousands): Defined Benefit Pension Plan Items Three Months Ended Six Months Ended July 29, 2017 July 30, 2016 July 29, July 30, Beginning balance $ 11,137 $ 16,932 $ 11,137 $ 17,118 Other comprehensive income before reclassifications — — — — Amounts reclassified from AOCL — (186 ) — (372 ) Net other comprehensive income — (186 ) — (372 ) Ending balance $ 11,137 $ 16,746 $ 11,137 $ 16,746 |
Fair Value Disclosures
Fair Value Disclosures | 6 Months Ended |
Jul. 29, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair Value Disclosures The estimated fair values of financial instruments presented herein have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of amounts the Company could realize in a current market exchange. The fair value of the Company’s long-term debt and subordinated debentures is based on market prices. The fair value of the Company’s cash and cash equivalents and accounts receivable approximates their carrying values at July 29, 2017 due to the short-term maturities of these instruments. The fair value of the Company’s long-term debt (including current portion) at July 29, 2017 was approximately $673 million . The carrying value of the Company’s long-term debt (including current portion) at July 29, 2017 was $613.4 million . The fair value of the Company’s subordinated debentures at July 29, 2017 was approximately $205 million . The carrying value of the Company’s subordinated debentures at July 29, 2017 was $200 million . |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 6 Months Ended |
Jul. 29, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. This update was amended by ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which deferred the effective date for the Company from the first quarter of fiscal 2017 to the first quarter of fiscal 2018. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This ASU clarifies the implementation guidance on principal versus agent considerations, as it assists in the determination of whether the entity controls the good or service before it is transferred to the customer. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This ASU clarifies two aspects of Topic 606, including identifying performance obligations and the licensing implementation guidance, while retaining the principles for those areas. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients . This ASU clarifies three aspects of Topic 606, including the objective of the collectibility criterion, the measurement date for noncash consideration and the requirements for a completed contract. The ASU also includes a practical expedient for contract modifications. Additionally, the amendments allow an entity to exclude amounts collected from customers for all sales taxes from the transaction price. The Company has substantially completed its initial evaluation of the impact of these updates on its consolidated financial statements, including an in-depth assessment of all revenue streams to determine which processes will be affected by these updates and the transition methods for applying the updates. Based on the results of the assessment, the Company is focusing on the construction segment revenue that is recorded using the percentage of completion method and working to quantify the impact to the financial statements. The Company expects that there will be certain adjustments to the retail operations that are not expected to be material to the consolidated financial statements. The Company will adopt the standard during the first quarter of fiscal 2018. Leases: Amendments to the FASB Accounting Standards Codification In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842): Amendments to the FASB Accounting Standards Codification, to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. Under these amendments, lessees are required to recognize lease assets and lease liabilities for leases historically classified as operating leases under Accounting Standards Codification, Leases (Topic 840) . ASU No. 2016-02 is effective for financial statements issued for fiscal years beginning after December 15, 2018, and early adoption is permitted. The Company's operating leases include building and equipment leases. The Company expects the majority of these current operating leases will be impacted by this ASU resulting in increases in assets and liabilities in the Company's consolidated financial statements. While early adoption is permitted for this ASU, the Company intends to adopt the standard during the first quarter of fiscal 2019. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to reduce the diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments within ASU No. 2016-15 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Although early adoption is permitted, the Company plans to adopt the standard during the first quarter of fiscal 2018. The Company is currently assessing the impact of this update on its consolidated financial statements. Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, as part of its initiative to reduce complexity in accounting standards. Under these amendments, an entity is required to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments within ASU No. 2016-16 are effective for financial statements issued for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently assessing the impact of this update on its consolidated financial statements. The Company intends to adopt the standard during the first quarter of fiscal 2018. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, to improve the presentation of net periodic pension cost in the income statement. The amendments within ASU No. 2017-07 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments in this update are to be applied retrospectively. The Company is currently assessing the impact of this update on its consolidated financial statements. The Company intends to adopt the standard during the first quarter of fiscal 2018. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jul. 29, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Event In August 2017, the Company amended and extended its senior unsecured revolving credit facility (the "new credit agreement") replacing the Company's previous credit agreement. The new credit agreement provides borrowing capacity of $800 million with a $200 million expansion option and matures on August 9, 2022. The variable rate of interest on borrowings and commitment fee for unused borrowings are unchanged under the new credit agreement. The new credit agreement is available to the Company for general corporate purposes including, among other uses, working capital financing, the issuance of letters of credit, capital expenditures and, subject to certain restrictions, the repayment of existing indebtedness and share repurchases. To be in compliance with the financial covenants of the new credit agreement, the Company's total leverage ratio cannot exceed 3.5 to 1.0, and the coverage ratio cannot be less than 2.5 to 1.0, as defined in the new credit agreement. |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jul. 29, 2017 | |
Segment Reporting [Abstract] | |
Schedule of segment information | The following tables summarize certain segment information, including the reconciliation of those items to the Company’s consolidated operations: (in thousands of dollars) Retail Operations Construction Consolidated Three Months Ended July 29, 2017: Net sales from external customers $ 1,384,553 $ 42,657 $ 1,427,210 Gross profit 418,491 1,665 420,156 Depreciation and amortization 59,701 167 59,868 Interest and debt expense (income), net 15,817 (19 ) 15,798 (Loss) income before income taxes and income on and equity in earnings of joint ventures (27,683 ) 642 (27,041 ) Income on and equity in earnings of joint ventures 11 — 11 Total assets 3,707,899 41,436 3,749,335 Three Months Ended July 30, 2016: Net sales from external customers $ 1,403,410 $ 49,035 $ 1,452,445 Gross profit 457,275 1,811 459,086 Depreciation and amortization 60,433 174 60,607 Interest and debt expense (income), net 15,994 (15 ) 15,979 Income before income taxes and income on and equity in earnings of joint ventures 17,918 644 18,562 Income on and equity in earnings of joint ventures 11 — 11 Total assets 3,789,486 53,522 3,843,008 Six Months Ended July 29, 2017: Net sales from external customers $ 2,770,073 $ 75,248 $ 2,845,321 Gross profit 964,991 3,191 968,182 Depreciation and amortization 119,544 335 119,879 Interest and debt expense (income), net 31,520 (40 ) 31,480 Income before income taxes and income on and equity in earnings of joint ventures 74,677 743 75,420 Income on and equity in earnings of joint ventures 22 — 22 Total assets 3,707,899 41,436 3,749,335 Six Months Ended July 30, 2016: Net sales from external customers $ 2,852,798 $ 102,889 $ 2,955,687 Gross profit 1,019,454 4,295 1,023,749 Depreciation and amortization 120,908 344 121,252 Interest and debt expense (income), net 31,723 (30 ) 31,693 Income before income taxes and income on and equity in earnings of joint ventures 136,699 1,483 138,182 Income on and equity in earnings of joint ventures 22 — 22 Total assets 3,789,486 53,522 3,843,008 |
Earnings Per Share Data (Tables
Earnings Per Share Data (Tables) | 6 Months Ended |
Jul. 29, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted (loss) earnings per share for the periods indicated (in thousands, except per share data). Three Months Ended Six Months Ended July 29, July 30, July 29, July 30, Net (loss) income $ (17,080 ) $ 12,083 $ 49,222 $ 89,514 Weighted average shares of common stock outstanding 29,363 34,536 30,310 35,094 Basic and diluted (loss) earnings per share $ (0.58 ) $ 0.35 $ 1.62 $ 2.55 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 6 Months Ended |
Jul. 29, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of components of net periodic benefit costs | The components of net periodic benefit costs are as follows (in thousands): Three Months Ended Six Months Ended July 29, July 30, July 29, July 30, Components of net periodic benefit costs: Service cost $ 873 $ 984 $ 1,746 $ 1,967 Interest cost 1,808 1,919 3,615 3,839 Net actuarial loss — 301 — 602 Net periodic benefit costs $ 2,681 $ 3,204 $ 5,361 $ 6,408 Net periodic benefit costs are included in selling, general and administrative expenses. |
Stock Repurchase Programs Sched
Stock Repurchase Programs Schedule of Repurchase Program Activity (Tables) | 6 Months Ended |
Jul. 29, 2017 | |
Schedule of Share Repurchase Program Activity [Abstract] | |
Schedule of Repurchase Agreements [Table Text Block] | The following is a summary of share repurchase activity for the periods indicated (in millions, except per share data): Three Months Ended Six Months Ended July 29, July 30, July 29, July 30, Cost of shares repurchased $ 69.5 $ 54.1 $ 160.6 $ 112.5 Number of shares repurchased 1.4 0.9 3.1 1.6 Average price per share $ 50.00 $ 61.18 $ 52.08 $ 70.08 |
Reclassifications from Accumu25
Reclassifications from Accumulated Other Comprehensive Loss ("AOCL") (Tables) | 6 Months Ended |
Jul. 29, 2017 | |
Reclassifications from Accumulated Other Comprehensive Loss ("AOCL") | |
Summary of reclassifications from AOCL | Reclassifications from AOCL are summarized as follows (in thousands): Amount Reclassified from AOCL Three Months Ended Six Months Ended Affected Line Item in the Statement Where Net Income Is Presented Details about AOCL Components July 29, 2017 July 30, 2016 July 29, July 30, Defined benefit pension plan items Amortization of actuarial losses $ — $ 301 $ — $ 602 Total before tax (1) — 115 — 230 Income tax expense $ — $ 186 $ — $ 372 Total net of tax At January 28, 2017, the net actuarial loss was $18.0 million, and the projected benefit obligation was $183.6 million. For fiscal year 2017, there is no amortization of the net loss in accumulated other comprehensive income as the net loss does not exceed 10% of the projected benefit obligation. _______________________________ (1) These items are included in the computation of net periodic pension cost. See Note 5, Benefit Plans , for additional information. |
Changes in Accumulated Other 26
Changes in Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jul. 29, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of changes in AOCL by component (net of tax) | Changes in AOCL by component (net of tax) are summarized as follows (in thousands): Defined Benefit Pension Plan Items Three Months Ended Six Months Ended July 29, 2017 July 30, 2016 July 29, July 30, Beginning balance $ 11,137 $ 16,932 $ 11,137 $ 17,118 Other comprehensive income before reclassifications — — — — Amounts reclassified from AOCL — (186 ) — (372 ) Net other comprehensive income — (186 ) — (372 ) Ending balance $ 11,137 $ 16,746 $ 11,137 $ 16,746 |
Business Segments (Details)
Business Segments (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 29, 2017USD ($) | Jul. 30, 2016USD ($) | Jul. 29, 2017USD ($)segment | Jul. 30, 2016USD ($) | Jan. 28, 2017USD ($) | |
Business Segments | |||||
Number of reportable segments | segment | 2 | ||||
Net sales from external customers | $ 1,427,210 | $ 1,452,445 | $ 2,845,321 | $ 2,955,687 | |
Gross profit | 420,156 | 459,086 | 968,182 | 1,023,749 | |
Depreciation and amortization | 59,868 | 60,607 | 119,879 | 121,252 | |
Interest and debt expense (income), net | 15,798 | 15,979 | 31,480 | 31,693 | |
Income before income taxes and income on and equity in earnings of joint ventures | (27,041) | 18,562 | 75,420 | 138,182 | |
Income on and equity in earnings of joint ventures | 11 | 11 | 22 | 22 | |
Total assets | 3,749,335 | 3,843,008 | $ 3,749,335 | 3,843,008 | $ 3,888,136 |
Retail operations | |||||
Business Segments | |||||
Number of reportable segments | segment | 1 | ||||
Number of store formats | segment | 1 | ||||
Net sales from external customers | 1,384,553 | 1,403,410 | $ 2,770,073 | 2,852,798 | |
Gross profit | 418,491 | 457,275 | 964,991 | 1,019,454 | |
Depreciation and amortization | 59,701 | 60,433 | 119,544 | 120,908 | |
Interest and debt expense (income), net | 15,817 | 15,994 | 31,520 | 31,723 | |
Income before income taxes and income on and equity in earnings of joint ventures | (27,683) | 17,918 | 74,677 | 136,699 | |
Income on and equity in earnings of joint ventures | 11 | 11 | 22 | 22 | |
Total assets | 3,707,899 | 3,789,486 | 3,707,899 | 3,789,486 | |
Construction | |||||
Business Segments | |||||
Net sales from external customers | 42,657 | 49,035 | 75,248 | 102,889 | |
Gross profit | 1,665 | 1,811 | 3,191 | 4,295 | |
Depreciation and amortization | 167 | 174 | 335 | 344 | |
Interest and debt expense (income), net | (19) | (15) | (40) | (30) | |
Income before income taxes and income on and equity in earnings of joint ventures | 642 | 644 | 743 | 1,483 | |
Income on and equity in earnings of joint ventures | 0 | 0 | 0 | 0 | |
Total assets | 41,436 | 53,522 | 41,436 | 53,522 | |
Intersegment Eliminations [Member] | |||||
Business Segments | |||||
Net sales from external customers | $ 12,600 | $ 23,300 | $ 21,600 | $ 33,200 |
Earnings Per Share Data (Detail
Earnings Per Share Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2017 | Jul. 30, 2016 | Jul. 29, 2017 | Jul. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net Income | $ (17,080) | $ 12,083 | $ 49,222 | $ 89,514 |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 29,363,000 | 34,536,000 | 30,310,000 | 35,094,000 |
Earnings Per Share, Basic and Diluted | $ (0.58) | $ 0.35 | $ 1.62 | $ 2.55 |
Diluted: | ||||
Total dilutive and potentially dilutive securities outstanding (in shares) | 0 | 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jul. 29, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Outstanding letters of credit under the Company's revolving credit facility | $ 25.6 |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 29, 2017 | Jul. 30, 2016 | Jul. 29, 2017 | Jul. 30, 2016 | Jan. 28, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Net Gains (Losses), before Tax | $ 0 | ||||
Employer contributions to pension plan | $ 1,200 | $ 2,800 | |||
Expected employer contributions to pension plan for remainder of current fiscal year | 2,500 | ||||
Components of net periodic benefit costs: | |||||
Service cost | 873 | $ 984 | 1,746 | $ 1,967 | |
Interest cost | 1,808 | 1,919 | 3,615 | 3,839 | |
Net actuarial loss | 0 | 301 | 0 | 602 | |
Net periodic benefit costs | $ 2,681 | $ 3,204 | $ 5,361 | $ 6,408 | |
Defined Benefit Plan, Benefit Obligation | $ 0 |
Revolving Credit Agreement (Det
Revolving Credit Agreement (Details) | 6 Months Ended |
Jul. 29, 2017USD ($) | |
Credit agreement | |
Minimum Coverage Ratio Under Credit Facility | 2.5 |
Reference rate | LIBOR |
Percentage points added to reference rate | 1.375% |
Letters of credit issued | $ 25,600,000 |
Unutilized credit facility borrowing capacity | $ 974,000,000 |
Maximum Leverage Ratio Under Credit Facility | 4 |
Annual commitment fee (as a percent) | 0.20% |
Revolving Credit Facility [Member] | |
Credit agreement | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000,000 |
Stock Repurchase Programs (Deta
Stock Repurchase Programs (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2017 | Jul. 30, 2016 | Jul. 29, 2017 | Jul. 30, 2016 | |
Schedule of Share Repurchase Program Activity [Abstract] | ||||
Stock Repurchase Program, Authorized Amount | $ 500 | $ 500 | ||
Number of shares repurchased | 1.4 | 0.9 | 3.1 | 1.6 |
Amount of shares repurchased | $ 69.5 | $ 54.1 | $ 160.6 | $ 112.5 |
Average price of shares repurchased (in dollars per share) | $ 50 | $ 61.18 | $ 52.08 | $ 70.08 |
Repurchase of common stock remaining authorization | $ 93.2 | $ 93.2 |
Reclassifications from Accumu33
Reclassifications from Accumulated Other Comprehensive Loss ("AOCL") (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 29, 2017 | Jul. 30, 2016 | Jul. 29, 2017 | Jul. 30, 2016 | Jan. 28, 2017 | |
Reclassifications from accumulated other comprehensive loss | |||||
Amortization of actuarial losses | $ 0 | $ 301 | $ 0 | $ 602 | |
Income before income taxes and income on and equity in losses of joint ventures | 27,041 | (18,562) | (75,420) | (138,182) | |
Income tax expense | 9,950 | (6,490) | (26,220) | (48,690) | |
Net Income | 17,080 | (12,083) | (49,222) | (89,514) | |
Net Actuarial Loss less than 10 percent of PBO | 10.00% | ||||
Defined benefit pension plan | Amount Reclassified from AOCL | |||||
Reclassifications from accumulated other comprehensive loss | |||||
Income tax expense | 0 | 115 | 0 | 230 | |
Net Income | $ 0 | $ 186 | $ 0 | $ 372 |
Changes in Accumulated Other 34
Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2017 | Jul. 30, 2016 | Jul. 29, 2017 | Jul. 30, 2016 | |
Changes in accumulated other comprehensive loss | ||||
Beginning balance | $ 11,137 | |||
Ending balance | $ 11,137 | $ 16,746 | 11,137 | $ 16,746 |
Defined benefit pension plan | ||||
Changes in accumulated other comprehensive loss | ||||
Beginning balance | 11,137 | 16,932 | 11,137 | 17,118 |
Other comprehensive income before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from AOCL | 0 | (186) | 0 | (372) |
Net other comprehensive income | 0 | (186) | 0 | (372) |
Ending balance | $ 11,137 | $ 16,746 | $ 11,137 | $ 16,746 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - USD ($) $ in Thousands | Jul. 29, 2017 | Jan. 28, 2017 | Jul. 30, 2016 |
Fair value disclosures | |||
Subordinated debentures | $ 200,000 | $ 200,000 | $ 200,000 |
Fair Value of Assets | |||
Fair value disclosures | |||
Long-term debt, including current portion, fair value | 673,000 | ||
Subordinated debentures | 205,000 | ||
Carrying value | |||
Fair value disclosures | |||
Long-term debt, including current portion | 613,000 | ||
Subordinated debentures | $ 200,000 |
Subsequent Event (Details)
Subsequent Event (Details) | Aug. 10, 2017USD ($) | Jul. 29, 2017USD ($) |
Revolving Credit Facility [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000,000 | |
Subsequent Event [Member] | Maximum [Member] | ||
Subsequent Event [Line Items] | ||
Maximum Leverage Ratio Under Credit Facility | 3.5 | |
Subsequent Event [Member] | Minimum [Member] | ||
Subsequent Event [Line Items] | ||
Minimum Coverage Ratio Under Credit Facility | 2.5 | |
Subsequent Event [Member] | Revolving Credit Facility [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 800,000,000 | |
Line of Credit Facility, Expansion Option | $ 200,000,000 |