Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2017 | Mar. 17, 2017 | Jul. 29, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | DOLLAR GENERAL CORP | ||
Entity Central Index Key | 29,534 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 3, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-03 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 26,700 | ||
Entity Common Stock, Shares Outstanding | 275,095,294 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Feb. 03, 2017 | Jan. 29, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 187,915 | $ 157,947 |
Merchandise inventories | 3,258,785 | 3,074,153 |
Income tax receivable | 11,050 | 6,843 |
Prepaid expenses and other current assets | 220,021 | 193,467 |
Total current assets | 3,677,771 | 3,432,410 |
Net property and equipment | 2,434,456 | 2,264,062 |
Goodwill | 4,338,589 | 4,338,589 |
Other intangible assets, net | 1,200,659 | 1,200,994 |
Other assets, net | 20,823 | 21,830 |
Total assets | 11,672,298 | 11,257,885 |
Current liabilities: | ||
Current portion of long-term obligations | 500,950 | 1,379 |
Accounts payable | 1,557,596 | 1,494,225 |
Accrued expenses and other | 500,866 | 467,122 |
Income taxes payable | 63,393 | 32,870 |
Total current liabilities | 2,622,805 | 1,995,596 |
Long-term obligations | 2,710,576 | 2,969,175 |
Deferred income taxes | 652,841 | 639,955 |
Other liabilities | 279,782 | 275,283 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock, 1,000 shares authorized | ||
Common stock; $0.875 par value, 1,000,000 shares authorized, 275,212 and 286,694 shares issued and outstanding at February 3, 2017 and January 29, 2016, respectively | 240,811 | 250,855 |
Additional paid-in capital | 3,154,606 | 3,107,283 |
Retained earnings | 2,015,867 | 2,025,545 |
Accumulated other comprehensive loss | (4,990) | (5,807) |
Total shareholders' equity | 5,406,294 | 5,377,876 |
Total liabilities and shareholders' equity | $ 11,672,298 | $ 11,257,885 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Feb. 03, 2017 | Jan. 29, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, shares authorized | 1,000 | 1,000 |
Common stock, par value (in dollars per share) | $ 0.875 | $ 0.875 |
Common stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, shares issued | 275,212 | 286,694 |
Common stock, shares outstanding | 275,212 | 286,694 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Net sales | $ 21,986,598 | $ 20,368,562 | $ 18,909,588 |
Cost of goods sold | 15,203,960 | 14,062,471 | 13,107,081 |
Gross profit | 6,782,638 | 6,306,091 | 5,802,507 |
Selling, general and administrative expenses | 4,719,189 | 4,365,797 | 4,033,414 |
Operating profit | 2,063,449 | 1,940,294 | 1,769,093 |
Interest expense | 97,821 | 86,944 | 88,232 |
Other (income) expense | 326 | ||
Income before income taxes | 1,965,628 | 1,853,024 | 1,680,861 |
Income tax expense | 714,495 | 687,944 | 615,516 |
Net income | $ 1,251,133 | $ 1,165,080 | $ 1,065,345 |
Earnings per share: | |||
Basic (in dollars per share) | $ 4.45 | $ 3.96 | $ 3.50 |
Diluted (in dollars per share) | $ 4.43 | $ 3.95 | $ 3.49 |
Weighted average shares outstanding: | |||
Basic (in shares) | 281,317 | 294,330 | 304,633 |
Diluted (in shares) | 282,261 | 295,211 | 305,681 |
Dividends per share (in dollars per share) | $ 1 | $ 0.88 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 1,251,133 | $ 1,165,080 | $ 1,065,345 |
Unrealized net gain (loss) on hedged transactions, net of related income tax expense (benefit) of $527, $971 and $1,671, respectively | 817 | 1,520 | 2,583 |
Comprehensive income | $ 1,251,950 | $ 1,166,600 | $ 1,067,928 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Unrealized net gain (loss) on hedged transactions, income tax expense | $ 527 | $ 971 | $ 1,671 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total |
Balances at Jan. 31, 2014 | $ 277,424 | $ 3,009,226 | $ 2,125,453 | $ (9,910) | $ 5,402,193 |
Balances (in shares) at Jan. 31, 2014 | 317,058 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 1,065,345 | 1,065,345 | |||
Unrealized net gain (loss) on hedged transactions | 2,583 | 2,583 | |||
Share-based compensation expense | 37,338 | 37,338 | |||
Repurchases of common stock | $ (12,342) | (787,753) | (800,095) | ||
Repurchases of common stock (in shares) | (14,106) | ||||
Tax benefit from stock option exercises | 5,047 | 5,047 | |||
Other equity and related transactions | $ 432 | (2,805) | (2,373) | ||
Other equity and related transactions (in shares) | 495 | ||||
Balances at Jan. 30, 2015 | $ 265,514 | 3,048,806 | 2,403,045 | (7,327) | 5,710,038 |
Balances (in shares) at Jan. 30, 2015 | 303,447 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 1,165,080 | 1,165,080 | |||
Dividends per common share | (258,328) | (258,328) | |||
Unrealized net gain (loss) on hedged transactions | 1,520 | 1,520 | |||
Share-based compensation expense | 38,547 | 38,547 | |||
Repurchases of common stock | $ (15,361) | (1,284,252) | (1,299,613) | ||
Repurchases of common stock (in shares) | (17,556) | ||||
Tax benefit from stock option exercises | 13,698 | 13,698 | |||
Other equity and related transactions | $ 702 | 6,232 | 6,934 | ||
Other equity and related transactions (in shares) | 803 | ||||
Balances at Jan. 29, 2016 | $ 250,855 | 3,107,283 | 2,025,545 | (5,807) | $ 5,377,876 |
Balances (in shares) at Jan. 29, 2016 | 286,694 | 286,694 | |||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 1,251,133 | $ 1,251,133 | |||
Dividends per common share | (281,147) | (281,147) | |||
Unrealized net gain (loss) on hedged transactions | 817 | 817 | |||
Share-based compensation expense | 36,967 | 36,967 | |||
Repurchases of common stock | $ (10,810) | (979,664) | (990,474) | ||
Repurchases of common stock (in shares) | (12,354) | ||||
Other equity and related transactions | $ 766 | 10,356 | 11,122 | ||
Other equity and related transactions (in shares) | 872 | ||||
Balances at Feb. 03, 2017 | $ 240,811 | $ 3,154,606 | $ 2,015,867 | $ (4,990) | $ 5,406,294 |
Balances (in shares) at Feb. 03, 2017 | 275,212 | 275,212 |
CONSOLIDATED STATEMENTS OF SHA8
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | ||||
Feb. 03, 2017 | Oct. 28, 2016 | Jul. 29, 2016 | Apr. 29, 2016 | Feb. 03, 2017 | Jan. 29, 2016 | |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY | ||||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 1 | $ 0.88 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 1,251,133 | $ 1,165,080 | $ 1,065,345 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Depreciation and amortization | 379,931 | 352,431 | 342,353 |
Deferred income taxes | 12,359 | 12,126 | (17,734) |
Loss on debt retirement, net | 326 | ||
Noncash share-based compensation | 36,967 | 38,547 | 37,338 |
Other noncash (gains) and losses | (3,625) | 7,797 | 8,551 |
Change in operating assets and liabilities: | |||
Merchandise inventories | (171,908) | (290,001) | (233,559) |
Prepaid expenses and other current assets | (25,046) | (24,626) | (25,048) |
Accounts payable | 56,477 | 105,637 | 97,166 |
Accrued expenses and other liabilities | 42,937 | 44,949 | 41,635 |
Income taxes | 26,316 | (19,675) | 12,399 |
Other | (500) | (905) | (1,555) |
Net cash provided by (used in) operating activities | 1,605,041 | 1,391,686 | 1,326,891 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (560,296) | (504,806) | (373,967) |
Proceeds from sales of property and equipment | 9,360 | 1,423 | 2,268 |
Net cash provided by (used in) investing activities | (550,936) | (503,383) | (371,699) |
Cash flows from financing activities: | |||
Issuance of long-term obligations | 499,220 | ||
Repayments of long-term obligations | (3,138) | (502,401) | (78,467) |
Net increase in commercial paper outstanding | 490,500 | ||
Borrowings under revolving credit facilities | 1,584,000 | 2,034,100 | 1,023,000 |
Repayments of borrowings under revolving credit facilities | (1,835,000) | (1,783,100) | (1,023,000) |
Debt issuance costs | (6,991) | ||
Repurchases of common stock | (990,474) | (1,299,613) | (800,095) |
Payments of cash dividends | (281,135) | (258,328) | |
Other equity and related transactions | 11,110 | 6,934 | (2,373) |
Net cash provided by (used in) financing activities | (1,024,137) | (1,310,179) | (880,935) |
Net increase (decrease) in cash and cash equivalents | 29,968 | (421,876) | 74,257 |
Cash and cash equivalents, beginning of period | 157,947 | 579,823 | 505,566 |
Cash and cash equivalents, end of period | 187,915 | 157,947 | 579,823 |
Cash paid for: | |||
Interest | 92,952 | 76,354 | 82,447 |
Income taxes | 679,633 | 697,357 | 631,483 |
Supplemental schedule of noncash investing and financing activities: | |||
Purchases of property and equipment awaiting processing for payment, included in Accounts payable | $ 38,914 | $ 32,020 | $ 31,586 |
Basis of presentation and accou
Basis of presentation and accounting policies | 12 Months Ended |
Feb. 03, 2017 | |
Basis of presentation | |
Basis of presentation and accounting policies | 1. Basis of presentation and accounting policies Basis of presentation These notes contain references to the years 2016, 2015, and 2014, which represent fiscal years ended February 3, 2017, January 29, 2016, and January 30, 2015, respectively. The Company had a 53-week accounting period in 2016, while 2015 and 2014 were each 52-week accounting periods. The Company’s fiscal year ends on the Friday closest to January 31. The consolidated financial statements include all subsidiaries of the Company, except for its not-for-profit subsidiary which the Company does not control. Intercompany transactions have been eliminated. The Company sells general merchandise on a retail basis through 13,320 stores (as of February 3, 2017) in 43 states with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States. The Company has owned distribution centers (“DCs”) in Scottsville, Kentucky; South Boston, Virginia; Alachua, Florida; Zanesville, Ohio; Jonesville, South Carolina; Marion, Indiana; Bessemer, Alabama; Bethel, Pennsylvania; San Antonio, Texas; and Janesville, Wisconsin, and leased DCs in Ardmore, Oklahoma; Fulton, Missouri; Indianola, Mississippi; and Lebec, California. Cash and cash equivalents Cash and cash equivalents include highly liquid investments with insignificant interest rate risk and original maturities of three months or less when purchased. Such investments primarily consist of money market funds, bank deposits, certificates of deposit, and commercial paper. The carrying amounts of these items are a reasonable estimate of their fair value due to the short maturity of these investments. Payments due from processors for electronic tender transactions classified as cash and cash equivalents totaled approximately $73.9 million and $59.5 million at February 3, 2017 and January 29, 2016, respectively. At February 3, 2017, the Company maintained cash balances to meet a $20 million minimum threshold set by insurance regulators, as further described below under “Insurance liabilities.” Investments in debt and equity securities The Company accounts for investments in debt and marketable equity securities as held‑to‑maturity, available‑for‑sale, or trading, depending on their classification. Debt securities categorized as held‑to‑maturity are stated at amortized cost. Debt and equity securities categorized as available‑for‑sale are stated at fair value, with any unrealized gains and losses, net of deferred income taxes, reported as a component of Accumulated other comprehensive loss. Trading securities are stated at fair value, with changes in fair value recorded as a component of Selling, general and administrative (“SG&A”) expense. The cost of securities sold is based upon the specific identification method. Merchandise inventories Inventories are stated at the lower of cost or market with cost determined using the retail last‑in, first‑out (“LIFO”) method as this method results in a better matching of costs and revenues. Under the Company’s retail inventory method (“RIM”), the calculation of gross profit and the resulting valuation of inventories at cost are computed by applying a calculated cost‑to‑retail inventory ratio to the retail value of sales at a department level. The use of the RIM will result in valuing inventories at the lower of cost or market (“LCM”) if markdowns are currently taken as a reduction of the retail value of inventories. Costs directly associated with warehousing and distribution are capitalized into inventory. The excess of current cost over LIFO cost was approximately $80.7 million and $92.9 million at February 3, 2017 and January 29, 2016, respectively. Current cost is determined using the RIM on a first‑in, first‑out basis. Under the LIFO inventory method, the impacts of rising or falling market price changes increase or decrease cost of sales (the LIFO provision or benefit). The Company recorded a LIFO provision (benefit) of $(12.2) million in 2016, $(2.3) million in 2015, and $4.2 million in 2014, which is included in cost of goods sold in the consolidated statements of income. The Company purchases its merchandise from a wide variety of suppliers. The Company’s largest and second largest suppliers each accounted for approximately 8% of the Company’s purchases in 2016. Vendor rebates The Company accounts for all cash consideration received from vendors in accordance with applicable accounting standards pertaining to such arrangements. Cash consideration received from a vendor is generally presumed to be a rebate or an allowance and is accounted for as a reduction of merchandise purchase costs as earned. However, certain specific, incremental and otherwise qualifying SG&A expenses related to the promotion or sale of vendor products may be offset by cash consideration received from vendors, in accordance with arrangements such as cooperative advertising, when earned for dollar amounts up to but not exceeding actual incremental costs. Prepaid expenses and other current assets Prepaid expenses and other current assets include prepaid amounts for rent, maintenance, business licenses, advertising, and insurance, and amounts receivable for certain vendor rebates (primarily those expected to be collected in cash) and coupons. Property and equipment In 2007, the Company’s property and equipment was recorded at estimated fair values as the result of a merger transaction. Property and equipment acquired subsequent to the merger has been recorded at cost. The Company records depreciation and amortization on a straight-line basis over the assets’ estimated useful lives. The Company’s property and equipment balances and depreciable lives are summarized as follows: Depreciable February 3, January 29, (In thousands) Life 2017 2016 Land Indefinite $ $ Land improvements Buildings - Leasehold improvements (a) Furniture, fixtures and equipment - Construction in progress Less accumulated depreciation and amortization Net property and equipment $ $ (a) Amortized over the lesser of the life of the applicable lease term or the estimated useful life of the asset. Depreciation expense related to property and equipment was approximately $378.3 million, $350.6 million and $335.9 million for 2016, 2015 and 2014, respectively. Amortization of capital lease assets is included in depreciation expense. Interest on borrowed funds during the construction of property and equipment is capitalized where applicable. Interest costs of $1.4 million, $1.4 million and $0.2 million were capitalized in 2016, 2015 and 2014, respectively. Impairment of long‑lived assets When indicators of impairment are present, the Company evaluates the carrying value of long‑lived assets, excluding goodwill and other indefinite-lived intangible assets, in relation to the operating performance and future cash flows or the appraised values of the underlying assets. Generally, the Company’s policy is to review for impairment stores open more than three years for which current cash flows from operations are negative. Impairment results when the carrying value of the assets exceeds the undiscounted future cash flows expected to be generated by the assets. The Company’s estimate of undiscounted future cash flows is based upon historical operations of the stores and estimates of future store profitability which encompasses many factors that are subject to variability and difficult to predict. If a long‑lived asset is found to be impaired, the amount recognized for impairment is equal to the difference between the carrying value and the asset’s estimated fair value. The fair value is estimated based primarily upon estimated future cash flows over the asset’s remaining useful life (discounted at the Company’s credit adjusted risk‑free rate) or other reasonable estimates of fair market value. Assets to be disposed of are adjusted to the fair value less the cost to sell if less than the book value. The Company recorded impairment charges included in SG&A expense of approximately $6.3 million in 2016, $5.9 million in 2015 and $1.9 million in 2014, to reduce the carrying value of certain of its stores’ assets. Such action was deemed necessary based on the Company’s evaluation that such amounts would not be recoverable primarily due to insufficient sales or excessive costs resulting in the carrying value of the assets exceeding the estimated undiscounted future cash flows generated by the assets at these locations. Goodwill and other intangible assets The Company amortizes intangible assets over their estimated useful lives unless such lives are deemed indefinite. Goodwill and intangible assets with indefinite lives are tested for impairment annually or more frequently if indicators of impairment are present. Definite lived intangible assets are tested for impairment if indicators of impairment are present. Impaired assets are written down to fair value as required. No impairment of intangible assets has been identified during any of the periods presented. In accordance with accounting standards for goodwill and indefinite‑lived intangible assets, an entity has the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill or an indefinite‑lived intangible asset is impaired. If after such assessment an entity concludes that the asset is not impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the asset using a quantitative impairment test, and if impaired, the associated assets must be written down to fair value as described in further detail below. The quantitative goodwill impairment test is a two-step process that would require management to make judgments in determining what assumptions to use in the calculation. The first step of the process consists of estimating the fair value of an entity’s reporting units based on valuation techniques (including a discounted cash flow model using revenue and profit forecasts) and comparing that estimated fair value with the recorded carrying value, which includes goodwill. If the estimated fair value is less than the carrying value, a second step is performed to compute the amount of the impairment by determining an “implied fair value” of goodwill. The determination of the implied fair value of goodwill would require the entity to allocate the estimated fair value of its reporting unit to its assets and liabilities. Any unallocated fair value would represent the implied fair value of goodwill, which would be compared to its corresponding carrying value. The quantitative impairment test for intangible assets compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Other assets Noncurrent Other assets consist primarily of qualifying prepaid expenses for maintenance, beer and wine licenses, and utility, security and other deposits. Accrued expenses and other liabilities Accrued expenses and other consist of the following: February 3, January 29, (In thousands) 2017 2016 Compensation and benefits $ $ Insurance Taxes (other than taxes on income) Other $ $ Included in other accrued expenses are liabilities for maintenance, utilities, interest, credit card processing fees and freight expense. Certain increases in accrued expenses and other reflect the 53 rd week in 2016. Insurance liabilities The Company retains a significant portion of risk for its workers’ compensation, employee health, general liability, property and automobile claim exposures. Accordingly, provisions are made for the Company’s estimates of such risks. The undiscounted future claim costs for the workers’ compensation, general liability, and health claim risks are derived using actuarial methods and are recorded as self‑insurance reserves pursuant to Company policy. To the extent that subsequent claim costs vary from those estimates, future results of operations will be affected as the reserves are adjusted. Ashley River Insurance Company (“ARIC”), a South Carolina-based wholly owned captive insurance subsidiary of the Company, charges the operating subsidiary companies premiums to insure the retained workers’ compensation and non-property general liability exposures. Pursuant to South Carolina insurance regulations, ARIC maintains certain levels of cash and cash equivalents related to its self-insured exposures. Operating leases and related liabilities Rent expense is recognized over the term of the lease. The Company records minimum rental expense on a straight‑line basis over the base, non‑cancelable lease term commencing on the date that the Company takes physical possession of the property from the landlord, which normally includes a period prior to the store opening to make necessary leasehold improvements and install store fixtures. When a lease contains a predetermined fixed escalation of the minimum rent, the Company recognizes the related rent expense on a straight‑line basis and records the difference between the recognized rental expense and the amounts payable under the lease as deferred rent. Tenant allowances, to the extent received, are recorded as deferred incentive rent and are amortized as a reduction to rent expense over the term of the lease. The difference between the calculated expense and the amounts paid result in a liability, with the current portion in Accrued expenses and other and the long‑term portion in Other liabilities in the consolidated balance sheets, and totaled approximately $61.1 million and $57.9 million at February 3, 2017 and January 29, 2016, respectively. The Company recognizes contingent rental expense when the achievement of specified sales targets is considered probable. The amount expensed but not paid as of February 3, 2017 and January 29, 2016 was approximately $3.5 million and $4.0 million, respectively, and is included in Accrued expenses and other in the consolidated balance sheets. Other liabilities Noncurrent Other liabilities consist of the following: February 3, January 29, (In thousands) 2017 2016 Insurance $ $ Deferred rent Deferred gain on sale leaseback Other $ $ Fair value accounting The Company utilizes accounting standards for fair value, which include the definition of fair value, the framework for measuring fair value, and disclosures about fair value measurements. Fair value is a market‑based measurement, not an entity‑specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, fair value accounting standards establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are directly or indirectly observable for the asset or liability. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are based on an entity’s own assumptions, as there is little, if any, observable market activity. In instances where the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The valuation of derivative financial instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis takes into account the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The variable cash receipts (or payments) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. The Company considers the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees, to adjust the fair value of outstanding derivative contracts for the effect of nonperformance risk. In connection with accounting standards for fair value measurement, the Company has made an accounting policy election to measure the credit risk of outstanding derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. Derivative financial instruments The Company accounts for derivative financial instruments in accordance with applicable accounting standards for such instruments and hedging activities, which require that all derivatives are recorded on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge a certain portion of its risk, even though hedge accounting does not apply or the Company elects not to apply the hedge accounting standards. The Company previously recorded a loss on the settlement of treasury locks associated with the issuance of long-term debt which was deferred to other comprehensive income and is being amortized as an increase to interest expense over the period of the debt’s maturity in 2023. Revenue and gain recognition The Company recognizes retail sales in its stores at the time the customer takes possession of merchandise. All sales are net of discounts and estimated returns and are presented net of taxes assessed by governmental authorities that are imposed concurrent with those sales. The liability for retail merchandise returns is based on the Company’s prior experience. The Company records gain contingencies when realized. The Company recognizes gift card sales revenue at the time of redemption. The liability for the gift cards is established for the cash value at the time of purchase of the gift card. The liability for outstanding gift cards was approximately $3.4 million and $2.8 million at February 3, 2017 and January 29, 2016, respectively, and is recorded in Accrued expenses and other liabilities. Estimated breakage revenue, a percentage of gift cards that will never be redeemed based on historical redemption rates, is recognized over time in proportion to actual gift card redemptions. The Company recorded breakage revenue of $0.5 million and $0.6 million in 2016 and 2015, respectively. Advertising costs Advertising costs are expensed upon performance, “first showing” or distribution, and are reflected in SG&A expenses net of earned cooperative advertising amounts provided by vendors which are specific, incremental and otherwise qualifying expenses related to the promotion or sale of vendor products for dollar amounts up to but not exceeding actual incremental costs. Advertising costs were $82.7 million, $89.3 million and $77.3 million in 2016, 2015 and 2014, respectively. These costs primarily include promotional circulars, targeted circulars supporting new stores, television and radio advertising, in‑store signage, and costs associated with the sponsorships of certain automobile racing activities in 2016. Vendor funding for cooperative advertising offset reported expenses by $35.9 million, $36.7 million and $35.0 million in 2016, 2015 and 2014, respectively. Share‑based payments The Company recognizes compensation expense for share‑based compensation based on the fair value of the awards on the grant date. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. This estimate may be adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the prior estimate. The forfeiture rate is the estimated percentage of share-based awards granted that are expected to be forfeited or canceled before becoming fully vested. The Company bases this estimate on historical experience or estimates of future trends, as applicable. An increase in the forfeiture rate will decrease compensation expense. The fair value of each option grant is separately estimated and amortized into compensation expense on a straight‑line basis between the applicable grant date and each vesting date. The Company has estimated the fair value of all stock option awards as of the grant date by applying the Black‑Scholes‑Merton option pricing valuation model. The application of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense. The Company calculates compensation expense for restricted stock, share units and similar awards as the difference between the market price of the underlying stock or similar award on the grant date and the purchase price, if any. Such expense is recognized on a straight‑line basis for time-based awards or an accelerated basis for performance awards over the period in which the recipient earns the awards. Store pre‑opening costs Pre‑opening costs related to new store openings and the related construction periods are expensed as incurred. Income taxes Under the accounting standards for income taxes, the asset and liability method is used for computing the future income tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns. Deferred income tax expense or benefit is the net change during the year in the Company’s deferred income tax assets and liabilities. The Company includes income tax related interest and penalties as a component of the provision for income tax expense. Income tax reserves are determined using a methodology which requires companies to assess each income tax position taken using a two‑step process. A determination is first made as to whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position. Uncertain tax positions require determinations and estimated liabilities to be made based on provisions of the tax law which may be subject to change or varying interpretation. If the Company’s determinations and estimates prove to be inaccurate, the resulting adjustments could be material to the Company’s future financial results. Management estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Accounting standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued comprehensive new accounting standards related to the recognition of revenue, which specified an effective date for annual reporting periods beginning after December 15, 2016, with early adoption not permitted. In August 2015, the FASB deferred the effective date to annual reporting periods beginning after December 15, 2017, with earlier adoption permitted only for annual reporting periods beginning after December 15, 2016. The new guidance allows companies to use either a full retrospective or a modified retrospective approach in the adoption of this guidance. The Company formed a project team to assess and implement the standard by compiling a list of the applicable revenue streams, evaluating relevant contracts and comparing the Company’s current accounting policies to the new standard. As a result of the efforts of this project team, the Company has identified customer incentives and gross versus net considerations as the areas in which it would most likely be affected by the new guidance. The Company is continuing to assess all the impacts of the new standard and the design of internal control over financial reporting, but based upon the terms of the Company’s agreements and the materiality of these transactions related to customer incentives and gross versus net considerations, the Company does not expect the effect of adoption to have a material effect on the Company’s consolidated results of operations, financial position or cash flows. The Company expects to complete this work in 2017 and to adopt this guidance on February 3, 2018. In February 2016, the FASB issued new guidance related to lease accounting, which when effective will require a dual approach for lessee accounting under which a lessee will account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability on its balance sheet, with differing methodology for income statement recognition. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. A modified retrospective approach is required for all leases existing or entered into after the beginning of the earliest comparative period in the consolidated financial statements. The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and is anticipating a material impact because the Company is party to a significant number of lease contracts. In March 2016, the FASB issued amendments to existing guidance related to accounting for employee share-based payment affecting the income tax consequences of awards, classification of awards as equity or liabilities, and classification on the statement of cash flows. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. The Company early adopted this guidance in the first quarter of 2016. The Company has elected to continue estimating forfeitures of share-based awards. The amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement were applied prospectively resulting in a benefit for the year ended February 3, 2017 of approximately $11.0 million, or $0.04 per diluted share. The Company has elected to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using a retrospective transition method, and as a result, $13.7 million and $12.1 million of excess tax benefits related to share-based awards which were previously classified as cash flows from financing activities for the years ended January 29, 2016 and January 30, 2015, respectively, have been reclassified as cash flows from operating activities. In October 2016, the FASB issued amendments to existing guidance related to accounting for intra-entity transfers of assets other than inventory. These amendments require an entity to recognize the income tax consequences of such transfers when the transfer occurs and affects the Company’s historical accounting for intra-entity transfers of certain intangible assets. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted subject to certain guidelines. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements, but expects such adoption will result in an increase in deferred income tax liabilities and a decrease in retained earnings. Reclassifications Certain financial disclosures relating to prior periods have been reclassified to conform to the current year presentation where applicable. |
Goodwill and other intangible a
Goodwill and other intangible assets | 12 Months Ended |
Feb. 03, 2017 | |
Goodwill and other intangible assets | |
Goodwill and other intangible assets | 2. Goodwill and other intangible assets As of February 3, 2017 and January 29, 2016, the balances of the Company’s intangible assets were as follows: As of February 3, 2017 Remaining Accumulated (In thousands) Life Amount Amortization Net Goodwill Indefinite $ $ — $ Other intangible assets: Leasehold interests 1-6 years $ $ $ Trade names and trademarks Indefinite — $ $ $ As of January 29, 2016 Remaining Accumulated (In thousands) Life Amount Amortization Net Goodwill Indefinite $ $ — $ Other intangible assets: Leasehold interests 1-7 years $ $ $ Trade names and trademarks Indefinite — $ $ $ The Company recorded amortization expense related to amortizable intangible assets for 2016, 2015 and 2014 of $0.3 million, $0.9 million and $5.8 million, respectively, all of which is included in rent expense. Expected future cash flows associated with the Company’s intangible assets are not expected to be materially affected by the Company’s intent or ability to renew or extend the arrangements. The Company’s goodwill balance is not expected to be deductible for tax purposes. |
Earnings per share
Earnings per share | 12 Months Ended |
Feb. 03, 2017 | |
Earnings per share | |
Earnings per share | 3. Earnings per share Earnings per share is computed as follows (in thousands except per share data): 2016 Weighted Net Average Per Share Income Shares Amount Basic earnings per share $ $ Effect of dilutive share-based awards Diluted earnings per share $ $ 2015 Weighted Net Average Per Share Income Shares Amount Basic earnings per share $ $ Effect of dilutive share-based awards Diluted earnings per share $ $ 2014 Weighted Net Average Per Share Income Shares Amount Basic earnings per share $ $ Effect of dilutive share-based awards Diluted earnings per share $ $ Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share is determined based on the dilutive effect of share‑based awards using the treasury stock method. Share-based awards that were outstanding at the end of the respective periods, but were not included in the computation of diluted earnings per share because the effect of exercising such options would be antidilutive, were 1.7 million, 1.3 million, and 1.2 million in 2016, 2015 and 2014, respectively. |
Income taxes
Income taxes | 12 Months Ended |
Feb. 03, 2017 | |
Income taxes | |
Income taxes | 4. Income taxes The provision (benefit) for income taxes consists of the following: (In thousands) 2016 2015 2014 Current: Federal $ $ $ Foreign State Deferred: Federal State $ $ $ A reconciliation between actual income taxes and amounts computed by applying the federal statutory rate to income before income taxes is summarized as follows: (Dollars in thousands) 2016 2015 2014 U.S. federal statutory rate on earnings before income taxes $ % $ % $ % State income taxes, net of federal income tax benefit Jobs credits, net of federal income taxes Increase (decrease) in valuation allowances Stock-based compensation programs — — — — Decrease in income tax reserves Other, net — $ % $ % $ % The 2016 effective tax rate was an expense of 36.3%. This expense was greater than the federal statutory tax rate of 35% due primarily to the inclusion of state income taxes in the total effective tax rate. The effective income tax rate was lower in 2016 due principally to the adoption of a change in accounting guidance related to employee share-based payments, as further discussed in Note 1, requiring the recognition of excess tax benefits in the statement of income rather than in the balance sheet, as reported in prior years. The 2015 effective tax rate was an expense of 37.1%. This expense was greater than the federal statutory tax rate of 35% due primarily to the inclusion of state income taxes in the total effective tax rate. The 2015 effective income tax rate increased from 2014 due principally to federal and state reserve releases in 2014 that did not reoccur, to the same extent, in 2015. The 2014 effective tax rate was an expense of 36.6%. This expense was greater than the federal statutory tax rate of 35% due primarily to the inclusion of state income taxes in the total effective tax rate. Deferred taxes reflect the effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: February 3, January 29, (In thousands) 2017 2016 Deferred tax assets: Deferred compensation expense $ $ Accrued expenses Accrued rent Accrued insurance Accrued incentive compensation Share based compensation Interest rate hedges Tax benefit of income tax and interest reserves related to uncertain tax positions Deferred gain on sale-leaseback Other State tax credit carry forwards, net of federal tax Less valuation allowances — Total deferred tax assets Deferred tax liabilities: Property and equipment Inventories Trademarks Other Total deferred tax liabilities Net deferred tax liabilities $ $ The Company has state tax credit carry forwards of approximately $13.5 million that will expire beginning in 2022 through 2026. The Company reversed the remaining valuation allowance for state tax credit carry forwards in the amount of $1.5 million, which was recorded as a reduction in income tax expense in 2016. Based upon expected future income, management believes that it is more likely than not that the results of operations will generate sufficient taxable income to realize the deferred tax assets. The 2015 decrease of $1.4 million and 2014 increase of $1.5 million were recorded as a reduction and an increase in income tax expense, respectively. The Company’s 2012 and earlier tax years are not open for further examination by the Internal Revenue Service (“IRS”). The IRS, at its discretion, may choose to examine the Company’s 2013 through 2015 fiscal year income tax filings. The Company has various state income tax examinations that are currently in progress. Generally, the Company’s 2012 and later tax years remain open for examination by the various state taxing authorities. As of February 3, 2017, accruals for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $3.1 million, $0.8 million and $0.9 million, respectively, for a total of $4.8 million. This total amount is reflected in noncurrent Other liabilities in the consolidated balance sheet. As of January 29, 2016, accruals for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $7.0 million, $0.9 million and $0.8 million, respectively, for a total of $8.7 million. This total amount is reflected in noncurrent Other liabilities in the consolidated balance sheet. The Company believes that it is reasonably possible that the reserve for uncertain tax positions may be reduced by approximately $2.2 million in the coming twelve months principally as a result of the expiration of applicable statutes of limitations. Also, as of February 3, 2017, approximately $3.1 million of the uncertain tax positions would impact the Company’s effective income tax rate if the Company were to recognize the tax benefit for these positions. The amounts associated with uncertain tax positions included in income tax expense consists of the following: (In thousands) 2016 2015 2014 Income tax expense (benefit) $ $ $ Income tax related interest expense (benefit) Income tax related penalty expense (benefit) A reconciliation of the uncertain income tax positions from January 31, 2014 through February 3, 2017 is as follows: (In thousands) 2016 2015 2014 Beginning balance $ $ $ Increases—tax positions taken in the current year Increases—tax positions taken in prior years Decreases—tax positions taken in prior years Statute expirations Settlements — Ending balance $ $ $ |
Current and long-term obligatio
Current and long-term obligations | 12 Months Ended |
Feb. 03, 2017 | |
Current and long-term obligations | |
Current and long-term obligations | 5. Current and long‑term obligations Current and long‑term obligations consist of the following: February 3, January 29, (In thousands) 2017 2016 Senior unsecured credit facilities Term Facility $ $ Revolving Facility — 4.125% Senior Notes due July 15, 2017 1.875% Senior Notes due April 15, 2018 (net of discount of $111 and $203) 3.250% Senior Notes due April 15, 2023 (net of discount of $1,552 and $1,775) 4.150% Senior Notes due November 1, 2025 (net of discount of $700 and $764) Unsecured commercial paper notes — Capital lease obligations Tax increment financing due February 1, 2035 Debt issuance costs, net Less: current portion Long-term portion $ $ At February 3, 2017, the Company’s senior unsecured credit facilities (the “2015 Facilities”) consisted of a $425.0 million senior unsecured term loan facility (the “2015 Term Facility”) and a $1.0 billion senior unsecured revolving credit facility (the “2015 Revolving Facility”) which provided for the issuance of letters of credit up to $175.0 million. The 2015 Facilities were scheduled to mature on October 20, 2020, but were replaced by an amended and restated credit facility on February 22, 2017 as described below. Borrowings under the 2015 Facilities bore interest at a rate equal to an applicable interest rate margin plus, at the Company’s option, either (a) LIBOR or (b) a base rate (which is usually equal to the prime rate). The applicable interest rate margin for borrowings as of February 3, 2017 was 1.10% for LIBOR borrowings and 0.10% for base-rate borrowings. The Company was also required to pay a facility fee, payable on any used and unused commitment amounts of the 2015 Facilities, and customary fees on letters of credit issued under the 2015 Revolving Facility. As of February 3, 2017, the commitment fee rate was 0.15%. The applicable interest rate margins for borrowings, the facility fees and the letter of credit fees under the 2015 Facilities were subject to adjustment from time to time based on the Company’s long‑term senior unsecured debt ratings. The weighted average all-in interest rate for borrowings under the 2015 Facilities was 1.9% as of February 3, 2017. The 2015 Facilities could be voluntarily prepaid in whole or in part at any time without penalty. There was no required principal amortization under the 2015 Facilities. The 2015 Facilities contained a number of customary affirmative and negative covenants that, among other things, restricted, subject to certain exceptions, the Company’s and its subsidiaries’ ability to: incur additional liens; sell all or substantially all of the Company’s assets; consummate certain fundamental changes or change in the Company’s lines of business; and incur additional subsidiary indebtedness. The 2015 Facilities also contained financial covenants which required the maintenance of a minimum fixed charge coverage ratio and a maximum leverage ratio. As of February 3, 2017, the Company was in compliance with all such covenants. The 2015 Facilities also contained customary events of default. As of February 3, 2017, under the 2015 Revolving Facility, the Company had borrowing availability of $986.2 million that, due to its intention to maintain borrowing availability under such facility related to the commercial paper program described below, could contribute incremental liquidity of $495.7 million. In addition, the Company had outstanding letters of credit of $13.8 million which were issued under the 2015 Revolving Facility and $29.4 million which were issued pursuant to separate agreements. On February 22, 2017, the Company entered into an unsecured amended and restated credit agreement for a $175.0 million senior unsecured term loan facility and a $1.25 billion senior unsecured revolving credit facility that provides for the issuance of letters of credit up to $175.0 million. The amended and restated credit facilities replaced the 2015 Facilities, and have terms similar to the 2015 Facilities, but the revolving credit facility maturity date was extended to February 22, 2022. On August 1, 2016, the Company established a commercial paper program under which the Company may issue unsecured commercial paper notes (the “CP Notes”). Under this program, the Company may issue the CP Notes from time to time in an aggregate amount not to exceed $1.0 billion outstanding at any time. The CP Notes have maturities of up to 364 days from the date of issue and rank equal in right of payment with all of the Company’s other unsecured and unsubordinated indebtedness. The Company intends to maintain available commitments under the amended and restated revolving credit facilities in an amount at least equal to the amount of CP Notes outstanding at any time. As of February 3, 2017, the Company had outstanding CP notes of $490.5 million classified as long-term obligations on the consolidated balance sheet due to its intent and ability to refinance these obligations as long-term debt. The weighted average interest rate for borrowings under the commercial paper program was 1.0% as of February 3, 2017. On October 20, 2015, the Company issued $500.0 million aggregate principal amount of 4.150% senior notes due 2025 (the “2025 Senior Notes”), net of discount of $0.8 million, which are scheduled to mature on November 1, 2025. Interest on the 2025 Senior Notes is payable in cash on May 1 and November 1 of each year, commencing on May 1, 2016. The Company incurred $4.4 million of debt issuance costs associated with the issuance of the 2025 Senior Notes. The net proceeds from the sale of the 2025 Senior Notes were used, together with borrowings under the 2015 Facilities, to repay all of the outstanding borrowings under a previous credit agreement and for general corporate purposes. Collectively, the 2025 Senior Notes and the Company’s other Senior Notes due 2017, 2018 and 2023 as reflected in the table above comprise the “Senior Notes”, each of which were issued pursuant to an indenture as supplemented and amended by supplemental indentures relating to each series of Senior Notes (as so supplemented and amended, the “Senior Indenture”). The Company may redeem some or all of its Senior Notes at any time at redemption prices set forth in the Senior Indenture. Upon the occurrence of a change of control triggering event, which is defined in the Senior Indenture, each holder of the Senior Notes has the right to require the Company to repurchase some or all of such holder’s Senior Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. The Senior Indenture contains covenants limiting, among other things, the ability of the Company and its subsidiaries to (subject to certain exceptions): consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets; and to incur or guarantee indebtedness secured by liens on any shares of voting stock of significant subsidiaries. The Senior Indenture also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the Senior Notes to become or to be declared due and payable, as applicable. Scheduled debt maturities at February 3, 2017, including capital lease obligations, for the Company’s fiscal years listed below are as follows (in thousands): 2017 - $991,450; 2018 - $400,892; 2019 - $1,020; 2020 - $425,980; 2021 - $883; thereafter - $1,407,758. |
Assets and liabilities measured
Assets and liabilities measured at fair value | 12 Months Ended |
Feb. 03, 2017 | |
Assets and liabilities measured at fair value | |
Assets and liabilities measured at fair value | 6. Assets and liabilities measured at fair value The following table presents the Company’s assets and liabilities required to be measured at fair value as of February 3, 2017, aggregated by the level in the fair value hierarchy within which those measurements are classified. Quoted Prices in Active Markets Significant for Identical Other Significant Total Fair Assets and Observable Unobservable Value at Liabilities Inputs Inputs February 3, (In thousands) (Level 1) (Level 2) (Level 3) 2017 Liabilities: Long-term obligations (a) $ $ $ — $ Deferred compensation (b) — — (a) Included in the consolidated balance sheet at book value as Current portion of long‑term obligations of $500,950 and Long‑term obligations of $2,710,576. (b) Reflected at fair value in the consolidated balance sheet as a component of Accrued expenses and other current liabilities of $905 and a component of noncurrent Other liabilities of $18,707. The carrying amounts reflected in the consolidated balance sheets for cash, cash equivalents, short‑term investments, receivables and payables approximate their respective fair values. The Company does not have any recurring fair value measurements using significant unobservable inputs (Level 3) as of February 3, 2017. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Feb. 03, 2017 | |
Commitments and contingencies | |
Commitments and contingencies | 7. Commitments and contingencies Leases As of February 3, 2017, the Company was committed under operating lease agreements for most of its retail stores. Many of the Company’s stores are subject to build‑to‑suit arrangements with landlords which typically carry a primary lease term of up to 15 years with multiple renewal options. The Company also has stores subject to shorter‑term leases and many of these leases have renewal options. Certain of the Company’s leased stores have provisions for contingent rent based upon a specified percentage of defined sales volume. The land and buildings of the Company’s DCs in Missouri, Mississippi and California are subject to operating lease agreements and the leased Oklahoma DC is subject to a financing arrangement. Certain leases contain restrictive covenants, and as of February 3, 2017, the Company is not aware of any material violations of such covenants. The Company is accounting for the Oklahoma DC as a financing obligation as a result of, among other things, the lessor’s ability to put the property back to the Company under certain circumstances. The property and equipment, along with the related lease obligation associated with this transaction are recorded in the consolidated balance sheets. The Company is the owner of a secured promissory note (the “Ardmore Note”) which represents debt issued by the third party entity from which the Company leases the Oklahoma DC and therefore the Company holds the debt instrument pertaining to its lease financing obligation. Because a legal right of offset exists, the Company is accounting for the Ardmore Note as a reduction of its outstanding financing obligation in its consolidated balance sheets. Future minimum payments as of February 3, 2017 for operating leases are as follows: (In thousands) 2017 $ 2018 2019 2020 2021 Thereafter Total minimum payments $ Total future minimum payments for capital leases were $4.5 million, with a present value of $3.6 million, as of February 3, 2017. The gross amount of property and equipment recorded under capital leases and financing obligations at both February 3, 2017 and January 29, 2016, was $29.8 million. Accumulated depreciation on property and equipment under capital leases and financing obligations at February 3, 2017 and January 29, 2016, was $14.3 million and $12.4 million, respectively. Rent expense under all operating leases is as follows: (In thousands) 2016 2015 2014 Minimum rentals (a) $ $ $ Contingent rentals $ $ $ (a) Excludes amortization of leasehold interests of $0.3 million, $0.9 million and $5.8 million included in rent expense for the years ended February 3, 2017, January 29, 2016, and January 30, 2015, respectively. Legal proceedings From time to time, the Company is a party to various legal matters involving claims incidental to the conduct of its business, including actions by employees, consumers, suppliers, government agencies, or others. The Company has recorded accruals with respect to these matters, where appropriate, which are reflected in the Company’s consolidated financial statements. For some matters, a liability is not probable or the amount cannot be reasonably estimated and therefore an accrual has not been made. Except as described below, the Company believes, based upon information currently available, that such matters, both individually and in the aggregate, will be resolved without a material adverse effect on the Company’s consolidated financial statements as a whole. However, litigation and other legal matters involve an element of uncertainty. Future developments could cause these actions or claims to have a material adverse effect on the Company’s results of operations, cash flows, or financial position. In addition, certain of these matters, if decided adversely to the Company or settled by the Company, may result in liability material to the Company’s financial position or may negatively affect operating results if changes to the Company’s business operation are required. Employment Litigation The Company is defending a lawsuit filed by the Equal Employment Opportunity Commission (the “Commission”) in which the Commission alleges that the Company’s criminal background check policy has a disparate impact on “Black Applicants” in violation of Title VII and seeks to recover monetary damages and injunctive relief on behalf of a class of “Black Applicants.” The Company believes that its background check process is both lawful and necessary to a safe environment for its employees and customers and the protection of its assets. The Company is vigorously defending this matter, which has been tendered to, and accepted by, the Company’s Employment Practices Liability Insurance carrier. The Company has met its self-insured retention, and does not expect a material loss at this time. The Company also is defending litigation in California (the “California Wage/Hour Litigation”) in which the plaintiffs allege that they and a putative statewide class of other “key carriers” were not provided with meal and rest periods and were provided inaccurate wage statements and termination pay in violation of California law, including California’s Private Attorney General Act (the “PAGA”). The plaintiffs in the California Wage/Hour Litigation seek to recover alleged unpaid wages, injunctive relief, consequential damages, pre-judgment interest, statutory penalties and attorneys’ fees and costs. The Company is vigorously defending the California Wage/Hour Litigation and believes that its policies and practices comply with California law and that these actions are not appropriate for class or similar treatment. At this time, however, it is not possible to predict whether any of the actions comprising the California Wage/Hour Litigation ultimately will be permitted to proceed as a class, and no assurances can be given that the Company will be successful in its defense of these actions on the merits or otherwise. Similarly, at this time the Company cannot estimate either the size of any potential class or the value of the claims asserted in these actions and consequently is unable to estimate any potential loss or range of loss in these matters. If the Company is not successful in its defense efforts, the resolution of these actions could have a material adverse effect on the Company’s consolidated financial statements as a whole. The Company also is defending a lawsuit in which the plaintiff alleges that she and other similarly situated California Dollar General Market store managers were improperly classified as exempt employees and were not provided with meal and rest breaks and accurate and appropriate wage statements in violation of California law, including the PAGA. The plaintiff in this matter seeks to recover unpaid wages, including overtime pay, civil and statutory penalties, interest, injunctive relief, restitution, and attorneys’ fees and costs. The parties reached an agreement to settle this matter for an amount not material to the Company’s consolidated financial statements as a whole, and the settlement has received final approval by the Court. Consumer/Product Litigation In December 2015 and February, March, May and June 2016, the Company was notified of several lawsuits in which the plaintiffs allege violation of state consumer protection laws relating to the labeling, marketing and sale of Dollar General private-label motor oil. Each of the 22 lawsuits was filed in, or removed to, various federal district courts of the United States (collectively “the Motor Oil Lawsuits”). On June 2, 2016, the United States Judicial Panel on Multidistrict Litigation granted the Company’s motion to centralize the Motor Oil Lawsuits in a matter styled In re Dollar General Corp. Motor Oil Litigation , Case MDL No. 2709, before the United States District Court for the Western District of Missouri (“Motor Oil MDL”). Subsequently, the plaintiffs in the Motor Oil MDL filed a consolidated amended complaint, in which they seek to certify two nationwide classes and 16 statewide sub-classes and for each putative class member some or all of the following relief: compensatory damages, injunctive relief, statutory damages, punitive damages and attorneys’ fees. The Company’s motion to dismiss the allegations raised in the consolidated amended complaint remains pending. The Company believes that the labeling, marketing and sale of its private-label motor oil comply with applicable federal and state requirements and are not misleading. The Company further believes that this matter is not appropriate for class or similar treatment. The Company intends to vigorously defend this action; however, at this time, it is not possible to predict whether the Motor Oil MDL will be permitted to proceed as a class or the size of any putative class or classes. Likewise, at this time, it is not possible to estimate the value of the claims asserted, and no assurances can be given that the Company will be successful in its defense of this action on the merits or otherwise. For these reasons, the Company is unable to estimate the potential loss or range of loss in this matter; however if the Company is not successful in its defense efforts, the resolution of the Motor Oil MDL could have a material adverse effect on the Company’s consolidated financial statements as a whole. Shareholder Litigation The Company is defending litigation filed in January and February 2017 in which the plaintiffs, on behalf of themselves and a putative class of shareholders, allege that between March 10, 2016 and December 1, 2016, the Company violated federal securities laws by misrepresenting the impact to sales of changes to certain federal programs that provide supplemental nutritional assistance to individuals. ( Iron Workers Local Union No. 405 Annuity Fund v. Dollar General Corporation, et al. , M.D. Tenn. Case No. 3:17-cv-00063; Julia Askins v. Dollar General Corporation, et al ., M.D. Tenn., Case No. 3:17-cv-00276; Bruce Velan v. Dollar General Corporation, et al ., M.D. Tenn., Case No. 3:17-cv-00275)(collectively “the Shareholder Litigation”). Applications for lead plaintiff designation in the Shareholder Litigation must be filed on or before March 20, 2017, after which time the court is expected to designate a lead plaintiff and counsel for the putative class. Until such designation, neither the plaintiffs nor the Company is expected to make additional substantive filings in this matter. The Company believes that the statements at issue in the Shareholder Litigation complied with federal securities laws and intends to vigorously defend this matter. At this time, it is not possible to predict whether this matter will be permitted to proceed as a class or the size of any putative class. Likewise, at this time, it is not possible to estimate the value of the claims asserted, and no assurances can be given that the Company will be successful in its defense of this action on the merits or otherwise. For these reasons, the Company is unable to estimate the potential loss or range of loss in this matter; however if the Company is not successful in its defense efforts, the resolution of this matter could have a material adverse effect on the Company’s consolidated financial statements as a whole. Environmental Matter In February 2014, certain California District Attorneys’ Offices (“California DAs”), representing California’s county environmental authorities, informed the Company that they were investigating the Company’s hazardous waste handling and disposal practices in certain of its California stores and its California distribution center. On September 22, 2016, the California DAs provided a settlement demand to the Company that included a proposed civil penalty and certain injunctive relief. The Company continues to work with the California DAs towards a resolution of this matter and does not believe that any possible loss or the range of any possible loss that may be incurred in connection with this matter will be material to the Company’s financial condition or results of operations. Nonetheless, SEC regulations require disclosures of certain environmental matters when a governmental authority is a party to the proceeding unless the Company reasonably believes the proceeding will result in no monetary sanctions or in monetary sanctions, exclusive of interest and costs, of less than $100,000. As noted above, it now appears that this matter is likely to result in monetary sanctions, which the Company expects to exceed $100,000. |
Benefit plans
Benefit plans | 12 Months Ended |
Feb. 03, 2017 | |
Benefit plans | |
Benefit plans | 8. Benefit plans The Dollar General Corporation 401(k) Savings and Retirement Plan, which became effective on January 1, 1998, is a safe harbor defined contribution plan and is subject to the Employee Retirement and Income Security Act (“ERISA”). A participant’s right to claim a distribution of his or her account balance is dependent on the plan, ERISA guidelines and Internal Revenue Service regulations. All active participants are fully vested in all contributions to the 401(k) plan. During 2016, 2015 and 2014, the Company expensed approximately $16.0 million, $15.0 million and $13.7 million, respectively, for matching contributions. The Company also has a nonqualified supplemental retirement plan (“SERP”) and compensation deferral plan (“CDP”), known as the Dollar General Corporation CDP/SERP Plan, for a select group of management and other key employees. The Company incurred compensation expense for these plans of approximately $0.7 million, $1.1 million and $0.8 million in 2016, 2015 and 2014, respectively. The CDP/SERP Plan assets are invested in accounts selected by the Company’s Compensation Committee or its delegate, and the associated deferred compensation liability is reflected in the consolidated balance sheets as further disclosed in Note 6. |
Share-based payments
Share-based payments | 12 Months Ended |
Feb. 03, 2017 | |
Share-based payments | |
Share-based payments | 9. Share‑based payments The Company accounts for share‑based payments in accordance with applicable accounting standards, under which the fair value of each award is separately estimated and amortized into compensation expense over the service period. The fair value of the Company’s stock option grants are estimated on the grant date using the Black‑Scholes‑Merton valuation model. The application of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense. The fair value of the Company’s other share-based awards discussed below are estimated using the Company’s closing stock price on the grant date. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. On July 6, 2007, the Company’s Board of Directors adopted the 2007 Stock Incentive Plan, which plan was subsequently amended and restated on several occasions (as so amended and restated, the “Plan”). The Plan allows the granting of stock options, stock appreciation rights, and other stock‑based awards or dividend equivalent rights to key employees, directors, consultants or other persons having a service relationship with the Company, its subsidiaries and certain of its affiliates. The number of shares of Company common stock authorized for grant under the Plan is 31,142,858. As of February 3, 2017, 17,691,607 of such shares are available for future grants. Since May 2011, most of the share-based awards issued by the Company have been in the form of stock options, restricted stock, restricted stock units and performance share units. With limited exceptions, stock options and restricted stock units granted to employees generally vest ratably on an annual basis over four-year and three-year periods, respectively. Awards granted to board members generally vest over a one-year period. Performance share units generally vest ratably over a three-year period, provided that certain minimum performance criteria are met in the year of grant. With limited exceptions, the performance share unit and restricted stock unit awards are payable in shares of common stock on the vesting date. From July 2007 through May 2011, a significant majority of the Company’s share-based awards were a combination of stock options that vested solely upon the continued employment of the recipient (“MSA Time Options”) and options that vested upon the achievement of predetermined annual or cumulative financial-based targets (“MSA Performance Options”) (collectively, the “MSA Options”). MSA Options generally vested ratably on an annual basis over a period of approximately five years, with limited exceptions. The MSA Options have a contractual term of 10 years and an exercise price equal to the fair value of the underlying common stock on the date of grant. The weighted average for key assumptions used in determining the fair value of all stock options granted in the years ended February 3, 2017, January 29, 2016, and January 30, 2015, and a summary of the methodology applied to develop each assumption, are as follows: February 3, January 29, January 30, 2017 2016 2015 Expected dividend yield % % % Expected stock price volatility % % % Weighted average risk-free interest rate % % % Expected term of options (years) Expected dividend yield - This is an estimate of the expected dividend yield on the Company’s stock. An increase in the dividend yield will decrease compensation expense. Expected stock price volatility - This is a measure of the amount by which the price of the Company’s common stock has fluctuated or is expected to fluctuate. An increase in the expected volatility will increase compensation expense. Weighted average risk‑free interest rate - This is the U.S. Treasury rate for the week of the grant having a term approximating the expected life of the option. An increase in the risk‑free interest rate will increase compensation expense. Expected term of options - This is the period of time over which the options granted are expected to remain outstanding. The Company has estimated the expected term as the mid‑point between the vesting date and the contractual term of the option. An increase in the expected term will increase compensation expense. A summary of the Company’s stock option activity, exclusive of MSA Options, during the year ended February 3, 2017 is as follows: Average Remaining Options Exercise Contractual Intrinsic (Intrinsic value amounts reflected in thousands) Issued Price Term in Years Value Balance, January 29, 2016 $ Granted Exercised Canceled Balance, February 3, 2017 $ $ Exercisable at February 3, 2017 $ $ The weighted average grant date fair value per share of non-MSA options granted was $20.06, $18.48, and $17.26 during 2016, 2015 and 2014, respectively. The intrinsic value of non-MSA options exercised during 2016, 2015, and 2014 was $17.3 million, $20.8 million and $2.5 million, respectively. The number of performance share unit awards earned is based upon the Company’s annual financial performance in the year of grant as specified in the award agreement. A summary of performance share unit award activity during the year ended February 3, 2017 is as follows: Units Intrinsic (Intrinsic value amounts reflected in thousands) Issued Value Balance, January 29, 2016 Granted Converted to common stock Canceled Balance, February 3, 2017 $ The weighted average grant date fair value per share of performance share units granted was $84.67, $74.72 and $57.91 during 2016, 2015, and 2014, respectively. A summary of restricted stock unit award activity during the year ended February 3, 2017 is as follows: Units Intrinsic (Intrinsic value amounts reflected in thousands) Issued Value Balance, January 29, 2016 Granted Converted to common stock Canceled Balance, February 3, 2017 $ The weighted average grant date fair value per share of restricted stock units granted was $84.56, $74.67, and $57.87 during 2016, 2015 and 2014, respectively. At February 3, 2017, 90,467 MSA Time Options were outstanding, all of which were exercisable, with an average exercise price of $19.06, an average remaining contractual term of 2.7 years, and an aggregate intrinsic value of $4.9 million. The intrinsic value of MSA Time Options exercised during 2016, 2015, and 2014 was $5.3 million, $6.6 million and $6.8 million, respectively. At February 3, 2017, 66,290 MSA Performance Options were outstanding, all of which were exercisable, with an average exercise price of $19.15, an average remaining contractual term of 2.7 years, and an aggregate intrinsic value of $3.6 million. The intrinsic value of MSA Performance Options exercised during 2016, 2015 and 2014 was $5.5 million, $4.9 million and $4.9 million, respectively. At February 3, 2017, the total unrecognized compensation cost related to unvested stock‑based awards was $53.7 million with an expected weighted average expense recognition period of 1.6 years. The fair value method of accounting for share‑based awards resulted in share‑based compensation expense (a component of SG&A expenses) and a corresponding reduction in income before and net of income taxes as follows: Stock Performance Restricted Restricted (In thousands) Options Share Units Stock Units Stock Total Year ended February 3, 2017 Pre-tax $ $ $ $ — $ Net of tax $ $ $ $ — $ Year ended January 29, 2016 Pre-tax $ $ $ $ — $ Net of tax $ $ $ $ — $ Year ended January 30, 2015 Pre-tax $ $ $ $ $ Net of tax $ $ $ $ $ |
Segment reporting
Segment reporting | 12 Months Ended |
Feb. 03, 2017 | |
Segment reporting | |
Segment reporting | 10. Segment reporting The Company manages its business on the basis of one reportable operating segment. See Note 1 for a brief description of the Company’s business. As of February 3, 2017, all of the Company’s operations were located within the United States with the exception of certain subsidiaries in Hong Kong and China and a liaison office in India, which collectively are not material with regard to assets, results of operations or otherwise, to the consolidated financial statements. The following net sales data is presented in accordance with accounting standards related to disclosures about segments of an enterprise. (in thousands) 2016 2015 2014 Classes of similar products: Consumables $ $ $ Seasonal Home products Apparel Net sales $ $ $ |
Common stock transactions
Common stock transactions | 12 Months Ended |
Feb. 03, 2017 | |
Common stock transactions | |
Common stock transactions | 11. Common stock transactions On August 29, 2012, the Company’s Board of Directors authorized a common stock repurchase program, which the Board has since increased on several occasions. Most recently, on August 24, 2016, the Company’s Board of Directors authorized a $1.0 billion increase to the existing common stock repurchase program. As of February 3, 2017, a cumulative total of $5.0 billion had been authorized under the program since its inception and approximately $933.3 million remained available for repurchase. The repurchase authorization has no expiration date and allows repurchases from time to time in the open market or in privately negotiated transactions. The timing and number of shares purchased depends on a variety of factors, such as price, market conditions, compliance with the covenants and restrictions under the Company’s debt agreements and other factors. Repurchases under the program may be funded from available cash or borrowings including under the Company’s amended and restated credit facilities and issuance of CP Notes discussed in further detail in Note 5. During the years ended February 3, 2017, January 29, 2016, and January 30, 2015, the Company repurchased approximately 12.4 million shares of its common stock at a total cost of $1.0 billion, approximately 17.6 million shares of its common stock at a total cost of $1.3 billion and approximately 14.1 million shares of its common stock at a total cost of $0.8 billion, respectively, pursuant to its common stock repurchase programs. The Company paid quarterly cash dividends of $0.25 per share during each of the four quarters of 2016. On March 15, 2017, the Company’s Board of Directors approved a quarterly cash dividend of $0.26 per share, which is payable on April 25, 2017 to shareholders of record as of April 11, 2017. The amount and declaration of future cash dividends is subject to the discretion of the Company’s Board of Directors and will depend upon, among other things, the Company’s results of operations, cash requirements, financial condition, contractual restrictions and other factors that the Board may deem relevant in its sole discretion. |
Quarterly financial data (unaud
Quarterly financial data (unaudited) | 12 Months Ended |
Feb. 03, 2017 | |
Quarterly financial data (unaudited) | |
Quarterly financial data (unaudited) | 12. Quarterly financial data (unaudited) The following is selected unaudited quarterly financial data for the fiscal years ended February 3, 2017 and January 29, 2016. Each quarterly period listed below was a 13-week accounting period, with the exception of the fourth quarter of 2016, which was a 14‑week accounting period. The sum of the four quarters for any given year may not equal annual totals due to rounding. First Second Third Fourth (In thousands) Quarter Quarter Quarter Quarter 2016: Net sales $ $ $ $ Gross profit Operating profit Net income Basic earnings per share Diluted earnings per share First Second Third Fourth (In thousands) Quarter Quarter Quarter Quarter 2015: Net sales $ $ $ $ Gross profit Operating profit Net income Basic earnings per share Diluted earnings per share In 2016, the Company acquired 42 former Walmart Express locations and closed 40 of its own locations as part of relocating stores to the purchased locations. As a result, the Company incurred expenses, primarily related to lease termination costs, of $11.0 million ($6.7 million net of tax, or $0.02 per diluted share), which was recognized in Selling, general, and administrative expense in the third quarter of 2016. In the fourth quarter of 2016, the Company sold or assigned the leases for 12 of its own locations which were closed as part of the relocation process to the Walmart Express locations. As a result, the Company incurred a reduction of expenses of $4.5 million ($2.8 million net of tax, or $0.01 per diluted share), which was recognized in Selling, general, and administrative expense. In the third quarter of 2015, the Company implemented a restructuring of its corporate support functions. As a result, the Company incurred expenses, primarily related to severance-related benefits, of $6.1 million ($3.7 million net of tax, or $0.01 per diluted share), which was recognized in Selling, general, and administrative expense. |
Basis of presentation and acc22
Basis of presentation and accounting policies (Policies) | 12 Months Ended |
Feb. 03, 2017 | |
Accounting policies | |
Basis of presentation | Basis of presentation These notes contain references to the years 2016, 2015, and 2014, which represent fiscal years ended February 3, 2017, January 29, 2016, and January 30, 2015, respectively. The Company had a 53-week accounting period in 2016, while 2015 and 2014 were each 52-week accounting periods. The Company’s fiscal year ends on the Friday closest to January 31. The consolidated financial statements include all subsidiaries of the Company, except for its not-for-profit subsidiary which the Company does not control. Intercompany transactions have been eliminated. The Company sells general merchandise on a retail basis through 13,320 stores (as of February 3, 2017) in 43 states with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States. The Company has owned distribution centers (“DCs”) in Scottsville, Kentucky; South Boston, Virginia; Alachua, Florida; Zanesville, Ohio; Jonesville, South Carolina; Marion, Indiana; Bessemer, Alabama; Bethel, Pennsylvania; San Antonio, Texas; and Janesville, Wisconsin, and leased DCs in Ardmore, Oklahoma; Fulton, Missouri; Indianola, Mississippi; and Lebec, California. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include highly liquid investments with insignificant interest rate risk and original maturities of three months or less when purchased. Such investments primarily consist of money market funds, bank deposits, certificates of deposit, and commercial paper. The carrying amounts of these items are a reasonable estimate of their fair value due to the short maturity of these investments. Payments due from processors for electronic tender transactions classified as cash and cash equivalents totaled approximately $73.9 million and $59.5 million at February 3, 2017 and January 29, 2016, respectively. At February 3, 2017, the Company maintained cash balances to meet a $20 million minimum threshold set by insurance regulators, as further described below under “Insurance liabilities.” |
Investments in debt and equity securities | Investments in debt and equity securities The Company accounts for investments in debt and marketable equity securities as held‑to‑maturity, available‑for‑sale, or trading, depending on their classification. Debt securities categorized as held‑to‑maturity are stated at amortized cost. Debt and equity securities categorized as available‑for‑sale are stated at fair value, with any unrealized gains and losses, net of deferred income taxes, reported as a component of Accumulated other comprehensive loss. Trading securities are stated at fair value, with changes in fair value recorded as a component of Selling, general and administrative (“SG&A”) expense. The cost of securities sold is based upon the specific identification method. |
Merchandise inventories | Merchandise inventories Inventories are stated at the lower of cost or market with cost determined using the retail last‑in, first‑out (“LIFO”) method as this method results in a better matching of costs and revenues. Under the Company’s retail inventory method (“RIM”), the calculation of gross profit and the resulting valuation of inventories at cost are computed by applying a calculated cost‑to‑retail inventory ratio to the retail value of sales at a department level. The use of the RIM will result in valuing inventories at the lower of cost or market (“LCM”) if markdowns are currently taken as a reduction of the retail value of inventories. Costs directly associated with warehousing and distribution are capitalized into inventory. The excess of current cost over LIFO cost was approximately $80.7 million and $92.9 million at February 3, 2017 and January 29, 2016, respectively. Current cost is determined using the RIM on a first‑in, first‑out basis. Under the LIFO inventory method, the impacts of rising or falling market price changes increase or decrease cost of sales (the LIFO provision or benefit). The Company recorded a LIFO provision (benefit) of $(12.2) million in 2016, $(2.3) million in 2015, and $4.2 million in 2014, which is included in cost of goods sold in the consolidated statements of income. The Company purchases its merchandise from a wide variety of suppliers. The Company’s largest and second largest suppliers each accounted for approximately 8% of the Company’s purchases in 2016. |
Vendor rebates | Vendor rebates The Company accounts for all cash consideration received from vendors in accordance with applicable accounting standards pertaining to such arrangements. Cash consideration received from a vendor is generally presumed to be a rebate or an allowance and is accounted for as a reduction of merchandise purchase costs as earned. However, certain specific, incremental and otherwise qualifying SG&A expenses related to the promotion or sale of vendor products may be offset by cash consideration received from vendors, in accordance with arrangements such as cooperative advertising, when earned for dollar amounts up to but not exceeding actual incremental costs. |
Property and equipment | Property and equipment In 2007, the Company’s property and equipment was recorded at estimated fair values as the result of a merger transaction. Property and equipment acquired subsequent to the merger has been recorded at cost. The Company records depreciation and amortization on a straight-line basis over the assets’ estimated useful lives. The Company’s property and equipment balances and depreciable lives are summarized as follows: Depreciable February 3, January 29, (In thousands) Life 2017 2016 Land Indefinite $ $ Land improvements Buildings - Leasehold improvements (a) Furniture, fixtures and equipment - Construction in progress Less accumulated depreciation and amortization Net property and equipment $ $ (a) Amortized over the lesser of the life of the applicable lease term or the estimated useful life of the asset. Depreciation expense related to property and equipment was approximately $378.3 million, $350.6 million and $335.9 million for 2016, 2015 and 2014, respectively. Amortization of capital lease assets is included in depreciation expense. Interest on borrowed funds during the construction of property and equipment is capitalized where applicable. Interest costs of $1.4 million, $1.4 million and $0.2 million were capitalized in 2016, 2015 and 2014, respectively. |
Impairment of long-lived assets | Impairment of long‑lived assets When indicators of impairment are present, the Company evaluates the carrying value of long‑lived assets, excluding goodwill and other indefinite-lived intangible assets, in relation to the operating performance and future cash flows or the appraised values of the underlying assets. Generally, the Company’s policy is to review for impairment stores open more than three years for which current cash flows from operations are negative. Impairment results when the carrying value of the assets exceeds the undiscounted future cash flows expected to be generated by the assets. The Company’s estimate of undiscounted future cash flows is based upon historical operations of the stores and estimates of future store profitability which encompasses many factors that are subject to variability and difficult to predict. If a long‑lived asset is found to be impaired, the amount recognized for impairment is equal to the difference between the carrying value and the asset’s estimated fair value. The fair value is estimated based primarily upon estimated future cash flows over the asset’s remaining useful life (discounted at the Company’s credit adjusted risk‑free rate) or other reasonable estimates of fair market value. Assets to be disposed of are adjusted to the fair value less the cost to sell if less than the book value. The Company recorded impairment charges included in SG&A expense of approximately $6.3 million in 2016, $5.9 million in 2015 and $1.9 million in 2014, to reduce the carrying value of certain of its stores’ assets. Such action was deemed necessary based on the Company’s evaluation that such amounts would not be recoverable primarily due to insufficient sales or excessive costs resulting in the carrying value of the assets exceeding the estimated undiscounted future cash flows generated by the assets at these locations. |
Goodwill and other intangible assets | Goodwill and other intangible assets The Company amortizes intangible assets over their estimated useful lives unless such lives are deemed indefinite. Goodwill and intangible assets with indefinite lives are tested for impairment annually or more frequently if indicators of impairment are present. Definite lived intangible assets are tested for impairment if indicators of impairment are present. Impaired assets are written down to fair value as required. No impairment of intangible assets has been identified during any of the periods presented. In accordance with accounting standards for goodwill and indefinite‑lived intangible assets, an entity has the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill or an indefinite‑lived intangible asset is impaired. If after such assessment an entity concludes that the asset is not impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the asset using a quantitative impairment test, and if impaired, the associated assets must be written down to fair value as described in further detail below. The quantitative goodwill impairment test is a two-step process that would require management to make judgments in determining what assumptions to use in the calculation. The first step of the process consists of estimating the fair value of an entity’s reporting units based on valuation techniques (including a discounted cash flow model using revenue and profit forecasts) and comparing that estimated fair value with the recorded carrying value, which includes goodwill. If the estimated fair value is less than the carrying value, a second step is performed to compute the amount of the impairment by determining an “implied fair value” of goodwill. The determination of the implied fair value of goodwill would require the entity to allocate the estimated fair value of its reporting unit to its assets and liabilities. Any unallocated fair value would represent the implied fair value of goodwill, which would be compared to its corresponding carrying value. The quantitative impairment test for intangible assets compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. |
Insurance liabilities | Insurance liabilities The Company retains a significant portion of risk for its workers’ compensation, employee health, general liability, property and automobile claim exposures. Accordingly, provisions are made for the Company’s estimates of such risks. The undiscounted future claim costs for the workers’ compensation, general liability, and health claim risks are derived using actuarial methods and are recorded as self‑insurance reserves pursuant to Company policy. To the extent that subsequent claim costs vary from those estimates, future results of operations will be affected as the reserves are adjusted. Ashley River Insurance Company (“ARIC”), a South Carolina-based wholly owned captive insurance subsidiary of the Company, charges the operating subsidiary companies premiums to insure the retained workers’ compensation and non-property general liability exposures. Pursuant to South Carolina insurance regulations, ARIC maintains certain levels of cash and cash equivalents related to its self-insured exposures. |
Operating leases and related liabilities | Operating leases and related liabilities Rent expense is recognized over the term of the lease. The Company records minimum rental expense on a straight‑line basis over the base, non‑cancelable lease term commencing on the date that the Company takes physical possession of the property from the landlord, which normally includes a period prior to the store opening to make necessary leasehold improvements and install store fixtures. When a lease contains a predetermined fixed escalation of the minimum rent, the Company recognizes the related rent expense on a straight‑line basis and records the difference between the recognized rental expense and the amounts payable under the lease as deferred rent. Tenant allowances, to the extent received, are recorded as deferred incentive rent and are amortized as a reduction to rent expense over the term of the lease. The difference between the calculated expense and the amounts paid result in a liability, with the current portion in Accrued expenses and other and the long‑term portion in Other liabilities in the consolidated balance sheets, and totaled approximately $61.1 million and $57.9 million at February 3, 2017 and January 29, 2016, respectively. The Company recognizes contingent rental expense when the achievement of specified sales targets is considered probable. The amount expensed but not paid as of February 3, 2017 and January 29, 2016 was approximately $3.5 million and $4.0 million, respectively, and is included in Accrued expenses and other in the consolidated balance sheets. |
Fair value accounting | Fair value accounting The Company utilizes accounting standards for fair value, which include the definition of fair value, the framework for measuring fair value, and disclosures about fair value measurements. Fair value is a market‑based measurement, not an entity‑specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, fair value accounting standards establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are directly or indirectly observable for the asset or liability. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are based on an entity’s own assumptions, as there is little, if any, observable market activity. In instances where the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The valuation of derivative financial instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis takes into account the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The variable cash receipts (or payments) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. The Company considers the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees, to adjust the fair value of outstanding derivative contracts for the effect of nonperformance risk. In connection with accounting standards for fair value measurement, the Company has made an accounting policy election to measure the credit risk of outstanding derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. |
Derivative financial instruments | Derivative financial instruments The Company accounts for derivative financial instruments in accordance with applicable accounting standards for such instruments and hedging activities, which require that all derivatives are recorded on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge a certain portion of its risk, even though hedge accounting does not apply or the Company elects not to apply the hedge accounting standards. The Company previously recorded a loss on the settlement of treasury locks associated with the issuance of long-term debt which was deferred to other comprehensive income and is being amortized as an increase to interest expense over the period of the debt’s maturity in 2023. |
Revenue and gain recognition retail sales | Revenue and gain recognition The Company recognizes retail sales in its stores at the time the customer takes possession of merchandise. All sales are net of discounts and estimated returns and are presented net of taxes assessed by governmental authorities that are imposed concurrent with those sales. The liability for retail merchandise returns is based on the Company’s prior experience. The Company records gain contingencies when realized. |
Revenue and gain recognition gift cards | The Company recognizes gift card sales revenue at the time of redemption. The liability for the gift cards is established for the cash value at the time of purchase of the gift card. The liability for outstanding gift cards was approximately $3.4 million and $2.8 million at February 3, 2017 and January 29, 2016, respectively, and is recorded in Accrued expenses and other liabilities. Estimated breakage revenue, a percentage of gift cards that will never be redeemed based on historical redemption rates, is recognized over time in proportion to actual gift card redemptions. The Company recorded breakage revenue of $0.5 million and $0.6 million in 2016 and 2015, respectively. |
Advertising costs | Advertising costs Advertising costs are expensed upon performance, “first showing” or distribution, and are reflected in SG&A expenses net of earned cooperative advertising amounts provided by vendors which are specific, incremental and otherwise qualifying expenses related to the promotion or sale of vendor products for dollar amounts up to but not exceeding actual incremental costs. Advertising costs were $82.7 million, $89.3 million and $77.3 million in 2016, 2015 and 2014, respectively. These costs primarily include promotional circulars, targeted circulars supporting new stores, television and radio advertising, in‑store signage, and costs associated with the sponsorships of certain automobile racing activities in 2016. Vendor funding for cooperative advertising offset reported expenses by $35.9 million, $36.7 million and $35.0 million in 2016, 2015 and 2014, respectively. |
Share-based payments | Share‑based payments The Company recognizes compensation expense for share‑based compensation based on the fair value of the awards on the grant date. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. This estimate may be adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the prior estimate. The forfeiture rate is the estimated percentage of share-based awards granted that are expected to be forfeited or canceled before becoming fully vested. The Company bases this estimate on historical experience or estimates of future trends, as applicable. An increase in the forfeiture rate will decrease compensation expense. The fair value of each option grant is separately estimated and amortized into compensation expense on a straight‑line basis between the applicable grant date and each vesting date. The Company has estimated the fair value of all stock option awards as of the grant date by applying the Black‑Scholes‑Merton option pricing valuation model. The application of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense. The Company calculates compensation expense for restricted stock, share units and similar awards as the difference between the market price of the underlying stock or similar award on the grant date and the purchase price, if any. Such expense is recognized on a straight‑line basis for time-based awards or an accelerated basis for performance awards over the period in which the recipient earns the awards. |
Store pre-opening costs | Store pre‑opening costs Pre‑opening costs related to new store openings and the related construction periods are expensed as incurred. |
Income taxes | Income taxes Under the accounting standards for income taxes, the asset and liability method is used for computing the future income tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns. Deferred income tax expense or benefit is the net change during the year in the Company’s deferred income tax assets and liabilities. The Company includes income tax related interest and penalties as a component of the provision for income tax expense. Income tax reserves are determined using a methodology which requires companies to assess each income tax position taken using a two‑step process. A determination is first made as to whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position. Uncertain tax positions require determinations and estimated liabilities to be made based on provisions of the tax law which may be subject to change or varying interpretation. If the Company’s determinations and estimates prove to be inaccurate, the resulting adjustments could be material to the Company’s future financial results. |
Management estimates | Management estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Accounting standards | Accounting standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued comprehensive new accounting standards related to the recognition of revenue, which specified an effective date for annual reporting periods beginning after December 15, 2016, with early adoption not permitted. In August 2015, the FASB deferred the effective date to annual reporting periods beginning after December 15, 2017, with earlier adoption permitted only for annual reporting periods beginning after December 15, 2016. The new guidance allows companies to use either a full retrospective or a modified retrospective approach in the adoption of this guidance. The Company formed a project team to assess and implement the standard by compiling a list of the applicable revenue streams, evaluating relevant contracts and comparing the Company’s current accounting policies to the new standard. As a result of the efforts of this project team, the Company has identified customer incentives and gross versus net considerations as the areas in which it would most likely be affected by the new guidance. The Company is continuing to assess all the impacts of the new standard and the design of internal control over financial reporting, but based upon the terms of the Company’s agreements and the materiality of these transactions related to customer incentives and gross versus net considerations, the Company does not expect the effect of adoption to have a material effect on the Company’s consolidated results of operations, financial position or cash flows. The Company expects to complete this work in 2017 and to adopt this guidance on February 3, 2018. In February 2016, the FASB issued new guidance related to lease accounting, which when effective will require a dual approach for lessee accounting under which a lessee will account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability on its balance sheet, with differing methodology for income statement recognition. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. A modified retrospective approach is required for all leases existing or entered into after the beginning of the earliest comparative period in the consolidated financial statements. The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and is anticipating a material impact because the Company is party to a significant number of lease contracts. In March 2016, the FASB issued amendments to existing guidance related to accounting for employee share-based payment affecting the income tax consequences of awards, classification of awards as equity or liabilities, and classification on the statement of cash flows. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. The Company early adopted this guidance in the first quarter of 2016. The Company has elected to continue estimating forfeitures of share-based awards. The amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement were applied prospectively resulting in a benefit for the year ended February 3, 2017 of approximately $11.0 million, or $0.04 per diluted share. The Company has elected to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using a retrospective transition method, and as a result, $13.7 million and $12.1 million of excess tax benefits related to share-based awards which were previously classified as cash flows from financing activities for the years ended January 29, 2016 and January 30, 2015, respectively, have been reclassified as cash flows from operating activities. In October 2016, the FASB issued amendments to existing guidance related to accounting for intra-entity transfers of assets other than inventory. These amendments require an entity to recognize the income tax consequences of such transfers when the transfer occurs and affects the Company’s historical accounting for intra-entity transfers of certain intangible assets. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted subject to certain guidelines. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements, but expects such adoption will result in an increase in deferred income tax liabilities and a decrease in retained earnings. |
Reclassifications | Reclassifications Certain financial disclosures relating to prior periods have been reclassified to conform to the current year presentation where applicable. |
Basis of presentation and acc23
Basis of presentation and accounting policies (Tables) | 12 Months Ended |
Feb. 03, 2017 | |
Basis of presentation | |
Schedule of property and equipment balances and depreciable lives | Depreciable February 3, January 29, (In thousands) Life 2017 2016 Land Indefinite $ $ Land improvements Buildings - Leasehold improvements (a) Furniture, fixtures and equipment - Construction in progress Less accumulated depreciation and amortization Net property and equipment $ $ (a) Amortized over the lesser of the life of the applicable lease term or the estimated useful life of the asset. |
Schedule of accrued expenses and other liabilities | February 3, January 29, (In thousands) 2017 2016 Compensation and benefits $ $ Insurance Taxes (other than taxes on income) Other $ $ |
Schedule of noncurrent other liabilities | February 3, January 29, (In thousands) 2017 2016 Insurance $ $ Deferred rent Deferred gain on sale leaseback Other $ $ |
Goodwill and other intangible24
Goodwill and other intangible assets (Tables) | 12 Months Ended |
Feb. 03, 2017 | |
Goodwill and other intangible assets | |
Schedule of the balances of the Company's intangible assets | As of February 3, 2017 Remaining Accumulated (In thousands) Life Amount Amortization Net Goodwill Indefinite $ $ — $ Other intangible assets: Leasehold interests 1-6 years $ $ $ Trade names and trademarks Indefinite — $ $ $ As of January 29, 2016 Remaining Accumulated (In thousands) Life Amount Amortization Net Goodwill Indefinite $ $ — $ Other intangible assets: Leasehold interests 1-7 years $ $ $ Trade names and trademarks Indefinite — $ $ $ |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Feb. 03, 2017 | |
Earnings per share | |
Schedule of computation of earnings per share | 2016 Weighted Net Average Per Share Income Shares Amount Basic earnings per share $ $ Effect of dilutive share-based awards Diluted earnings per share $ $ 2015 Weighted Net Average Per Share Income Shares Amount Basic earnings per share $ $ Effect of dilutive share-based awards Diluted earnings per share $ $ 2014 Weighted Net Average Per Share Income Shares Amount Basic earnings per share $ $ Effect of dilutive share-based awards Diluted earnings per share $ $ |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Feb. 03, 2017 | |
Income taxes | |
Schedule of provision (benefit) for income taxes | (In thousands) 2016 2015 2014 Current: Federal $ $ $ Foreign State Deferred: Federal State $ $ $ |
Schedule of reconciliation between actual income taxes and amounts computed by applying the federal statutory rate to income before income taxes | (Dollars in thousands) 2016 2015 2014 U.S. federal statutory rate on earnings before income taxes $ % $ % $ % State income taxes, net of federal income tax benefit Jobs credits, net of federal income taxes Increase (decrease) in valuation allowances Stock-based compensation programs — — — — Decrease in income tax reserves Other, net — $ % $ % $ % |
Schedule of deferred tax assets and liabilities | February 3, January 29, (In thousands) 2017 2016 Deferred tax assets: Deferred compensation expense $ $ Accrued expenses Accrued rent Accrued insurance Accrued incentive compensation Share based compensation Interest rate hedges Tax benefit of income tax and interest reserves related to uncertain tax positions Deferred gain on sale-leaseback Other State tax credit carry forwards, net of federal tax Less valuation allowances — Total deferred tax assets Deferred tax liabilities: Property and equipment Inventories Trademarks Other Total deferred tax liabilities Net deferred tax liabilities $ $ |
Schedule of amounts associated with uncertain tax positions included in income tax expense | (In thousands) 2016 2015 2014 Income tax expense (benefit) $ $ $ Income tax related interest expense (benefit) Income tax related penalty expense (benefit) |
Schedule of reconciliation of uncertain income tax positions | (In thousands) 2016 2015 2014 Beginning balance $ $ $ Increases—tax positions taken in the current year Increases—tax positions taken in prior years Decreases—tax positions taken in prior years Statute expirations Settlements — Ending balance $ $ $ |
Current and long-term obligat27
Current and long-term obligations (Tables) | 12 Months Ended |
Feb. 03, 2017 | |
Current and long-term obligations | |
Schedule of current and long-term debt obligations | February 3, January 29, (In thousands) 2017 2016 Senior unsecured credit facilities Term Facility $ $ Revolving Facility — 4.125% Senior Notes due July 15, 2017 1.875% Senior Notes due April 15, 2018 (net of discount of $111 and $203) 3.250% Senior Notes due April 15, 2023 (net of discount of $1,552 and $1,775) 4.150% Senior Notes due November 1, 2025 (net of discount of $700 and $764) Unsecured commercial paper notes — Capital lease obligations Tax increment financing due February 1, 2035 Debt issuance costs, net Less: current portion Long-term portion $ $ At February 3, 2017, t |
Assets and liabilities measur28
Assets and liabilities measured at fair value (Tables) | 12 Months Ended |
Feb. 03, 2017 | |
Assets and liabilities measured at fair value | |
Schedule of assets and liabilities measured at fair value | Quoted Prices in Active Markets Significant for Identical Other Significant Total Fair Assets and Observable Unobservable Value at Liabilities Inputs Inputs February 3, (In thousands) (Level 1) (Level 2) (Level 3) 2017 Liabilities: Long-term obligations (a) $ $ $ — $ Deferred compensation (b) — — (a) Included in the consolidated balance sheet at book value as Current portion of long‑term obligations of $500,950 and Long‑term obligations of $2,710,576. (b) Reflected at fair value in the consolidated balance sheet as a component of Accrued expenses and other current liabilities of $905 and a component of noncurrent Other liabilities of $18,707. |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Feb. 03, 2017 | |
Commitments and contingencies | |
Schedule of future minimum payments for operating leases | (In thousands) 2017 $ 2018 2019 2020 2021 Thereafter Total minimum payments $ |
Schedule of rent expenses under operating leases | (In thousands) 2016 2015 2014 Minimum rentals (a) $ $ $ Contingent rentals $ $ $ (a) Excludes amortization of leasehold interests of $0.3 million, $0.9 million and $5.8 million included in rent expense for the years ended February 3, 2017, January 29, 2016, and January 30, 2015, respectively. |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Feb. 03, 2017 | |
Share-based payments | |
Schedule of weighted averages for key assumptions used in determining the fair value of all stock option grants | February 3, January 29, January 30, 2017 2016 2015 Expected dividend yield % % % Expected stock price volatility % % % Weighted average risk-free interest rate % % % Expected term of options (years) |
Schedule of performance share unit award activity | Units Intrinsic (Intrinsic value amounts reflected in thousands) Issued Value Balance, January 29, 2016 Granted Converted to common stock Canceled Balance, February 3, 2017 $ |
Schedule of restricted stock unit award activity | Units Intrinsic (Intrinsic value amounts reflected in thousands) Issued Value Balance, January 29, 2016 Granted Converted to common stock Canceled Balance, February 3, 2017 $ |
Schedule of share-based compensation expense | Stock Performance Restricted Restricted (In thousands) Options Share Units Stock Units Stock Total Year ended February 3, 2017 Pre-tax $ $ $ $ — $ Net of tax $ $ $ $ — $ Year ended January 29, 2016 Pre-tax $ $ $ $ — $ Net of tax $ $ $ $ — $ Year ended January 30, 2015 Pre-tax $ $ $ $ $ Net of tax $ $ $ $ $ |
Other Options | |
Share-based payments | |
Schedule of options activity | Average Remaining Options Exercise Contractual Intrinsic (Intrinsic value amounts reflected in thousands) Issued Price Term in Years Value Balance, January 29, 2016 $ Granted Exercised Canceled Balance, February 3, 2017 $ $ Exercisable at February 3, 2017 $ $ |
Segment reporting (Tables)
Segment reporting (Tables) | 12 Months Ended |
Feb. 03, 2017 | |
Segment reporting | |
Schedule of net sales grouped by classes of similar products | (in thousands) 2016 2015 2014 Classes of similar products: Consumables $ $ $ Seasonal Home products Apparel Net sales $ $ $ |
Quarterly financial data (una32
Quarterly financial data (unaudited) (Tables) | 12 Months Ended |
Feb. 03, 2017 | |
Quarterly financial data (unaudited) | |
Schedule of selected unaudited quarterly financial data | First Second Third Fourth (In thousands) Quarter Quarter Quarter Quarter 2016: Net sales $ $ $ $ Gross profit Operating profit Net income Basic earnings per share Diluted earnings per share First Second Third Fourth (In thousands) Quarter Quarter Quarter Quarter 2015: Net sales $ $ $ $ Gross profit Operating profit Net income Basic earnings per share Diluted earnings per share |
Basis of presentation and acc33
Basis of presentation and accounting policies - Fiscal year, Cash, Inventory (Details) $ in Millions | 12 Months Ended | ||
Feb. 03, 2017USD ($)storestateperiod | Jan. 29, 2016USD ($)period | Jan. 30, 2015USD ($)period | |
Basis of presentation | |||
Fiscal year, number of weeks | period | 53 | 52 | 52 |
Number of stores through which entity sells general merchandise on a retail basis | store | 13,320 | ||
Number of states which entity covers | state | 43 | ||
Cash and cash equivalents | |||
Maximum original maturity period at time of purchase of liquid investments classified as cash equivalents | 3 months | ||
Payments due from processors for electronic tender transactions classified as cash and cash equivalents | $ 73.9 | $ 59.5 | |
Minimum threshold of cash balances to be maintained as set by insurance regulators | 20 | ||
Merchandise inventories | |||
Excess of current cost over LIFO cost | 80.7 | 92.9 | |
LIFO provision (benefit) | $ (12.2) | $ (2.3) | $ 4.2 |
Basis of presentation and acc34
Basis of presentation and accounting policies - Supplier concentration (Detail) - Purchases - Supplier concentration | 12 Months Ended |
Feb. 03, 2017 | |
Largest supplier | |
Concentration of risk | |
Concentration risk, percentage | 8.00% |
Second largest supplier | |
Concentration of risk | |
Concentration risk, percentage | 8.00% |
Basis of presentation and acc35
Basis of presentation and accounting policies - Property and equipment (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
Property and equipment recorded at cost | |||
Property and equipment, gross | $ 4,595,002 | $ 4,170,486 | |
Less accumulated depreciation and amortization | 2,160,546 | 1,906,424 | |
Net property and equipment | 2,434,456 | 2,264,062 | |
Depreciation | |||
Depreciation expense | 378,300 | 350,600 | $ 335,900 |
Capitalized interest | |||
Interest costs capitalized | 1,400 | 1,400 | $ 200 |
Land | |||
Property and equipment recorded at cost | |||
Property and equipment, gross | 199,171 | 188,532 | |
Land improvements | |||
Property and equipment recorded at cost | |||
Property and equipment, gross | $ 74,209 | 66,955 | |
Depreciable Life | 20 years | ||
Buildings | |||
Property and equipment recorded at cost | |||
Property and equipment, gross | $ 1,013,227 | 834,884 | |
Buildings | Minimum | |||
Property and equipment recorded at cost | |||
Depreciable Life | 39 years | ||
Buildings | Maximum | |||
Property and equipment recorded at cost | |||
Depreciable Life | 40 years | ||
Leasehold improvements | |||
Property and equipment recorded at cost | |||
Property and equipment, gross | $ 438,711 | 402,997 | |
Furniture, fixtures and equipment | |||
Property and equipment recorded at cost | |||
Property and equipment, gross | $ 2,797,144 | 2,526,843 | |
Furniture, fixtures and equipment | Minimum | |||
Property and equipment recorded at cost | |||
Depreciable Life | 3 years | ||
Furniture, fixtures and equipment | Maximum | |||
Property and equipment recorded at cost | |||
Depreciable Life | 10 years | ||
Construction in progress | |||
Property and equipment recorded at cost | |||
Property and equipment, gross | $ 72,540 | $ 150,275 |
Basis of presentation and acc36
Basis of presentation and accounting policies - Impairment, Goodwill, Balance sheet detail (Detail) - USD ($) | 12 Months Ended | ||
Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
Impairment of long-lived assets | |||
Minimum period for which stores are open to be reviewed for impairment | 3 years | ||
Impairment charges included in SG&A expense | $ 6,300,000 | $ 5,900,000 | $ 1,900,000 |
Goodwill and other intangible assets | |||
Impairment of intangible assets | 0 | 0 | $ 0 |
Accrued expenses and other liabilities | |||
Compensation and benefits | 91,243,000 | 111,191,000 | |
Insurance | 85,240,000 | 82,182,000 | |
Taxes (other than taxes on income) | 175,099,000 | 136,762,000 | |
Other | 149,284,000 | 136,987,000 | |
Accrued expenses and other | 500,866,000 | 467,122,000 | |
Operating leases and related liabilities | |||
Deferred rent liability | 61,100,000 | 57,900,000 | |
Contingent rent liability | 3,500,000 | 4,000,000 | |
Noncurrent Other liabilities | |||
Insurance | 137,743,000 | 137,798,000 | |
Deferred rent | 61,082,000 | 57,017,000 | |
Deferred gain on sale leaseback | 49,259,000 | 53,737,000 | |
Other | 31,698,000 | 26,731,000 | |
Noncurrent other liabilities | $ 279,782,000 | $ 275,283,000 |
Basis of presentation and acc37
Basis of presentation and accounting policies - Revenue, Advertising (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 03, 2017 | Oct. 28, 2016 | Jul. 29, 2016 | Apr. 29, 2016 | Jan. 29, 2016 | Oct. 30, 2015 | Jul. 31, 2015 | May 01, 2015 | Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
Revenue and gain recognition | |||||||||||
Liability for outstanding gift cards | $ 3,400 | $ 2,800 | $ 3,400 | $ 2,800 | |||||||
Breakage income related to the gift card program | 500 | 600 | |||||||||
Advertising costs | |||||||||||
Advertising costs | 82,700 | 89,300 | $ 77,300 | ||||||||
Expenses related to vendor funding for cooperative advertising offset | 35,900 | 36,700 | 35,000 | ||||||||
Accounting standards | |||||||||||
Income tax benefit | $ (714,495) | $ (687,944) | $ (615,516) | ||||||||
Earnings Per Share, Diluted | $ 1.49 | $ 0.84 | $ 1.08 | $ 1.03 | $ 1.30 | $ 0.86 | $ 0.95 | $ 0.84 | $ 4.43 | $ 3.95 | $ 3.49 |
New accounting guidance effect | |||||||||||
Accounting standards | |||||||||||
Income tax benefit | $ 11,000 | ||||||||||
Earnings Per Share, Diluted | $ 0.04 | ||||||||||
Tax benefit of share-based awards | $ 13,700 | $ 12,100 |
Goodwill and other intangible38
Goodwill and other intangible assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
Goodwill and other intangible assets | |||
Goodwill | $ 4,338,589 | $ 4,338,589 | |
Other intangible assets: | |||
Leasehold interests, gross amount | 3,658 | 4,379 | |
Leasehold interests, accumulated amortization | 2,699 | 3,085 | |
Leasehold interests, net | 959 | 1,294 | |
Trade names and trademarks | 1,199,700 | 1,199,700 | |
Total other intangible assets, gross | 1,203,358 | 1,204,079 | |
Total other intangible assets, accumulated amortization | 2,699 | 3,085 | |
Total other intangible assets, net | 1,200,659 | 1,200,994 | |
Amortization expense | $ 300 | $ 900 | $ 5,800 |
Minimum | |||
Other intangible assets: | |||
Leasehold interests, remaining life | 1 year | 1 year | |
Maximum | |||
Other intangible assets: | |||
Leasehold interests, remaining life | 6 years | 7 years |
Earnings per share (Detail)
Earnings per share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 03, 2017 | Oct. 28, 2016 | Jul. 29, 2016 | Apr. 29, 2016 | Jan. 29, 2016 | Oct. 30, 2015 | Jul. 31, 2015 | May 01, 2015 | Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
Net Income | |||||||||||
Basic Earnings | $ 414,176 | $ 235,315 | $ 306,518 | $ 295,124 | $ 376,175 | $ 253,321 | $ 282,349 | $ 253,235 | $ 1,251,133 | $ 1,165,080 | $ 1,065,345 |
Diluted Earnings | $ 1,251,133 | $ 1,165,080 | $ 1,065,345 | ||||||||
Shares | |||||||||||
Shares outstanding, basic | 281,317 | 294,330 | 304,633 | ||||||||
Effect of dilutive share-based awards | 944 | 881 | 1,048 | ||||||||
Shares outstanding, diluted | 282,261 | 295,211 | 305,681 | ||||||||
Per Share Amount | |||||||||||
Basic earnings per share (in dollars per share) | $ 1.50 | $ 0.84 | $ 1.08 | $ 1.03 | $ 1.30 | $ 0.87 | $ 0.95 | $ 0.84 | $ 4.45 | $ 3.96 | $ 3.50 |
Diluted earnings per share (in dollars per share) | $ 1.49 | $ 0.84 | $ 1.08 | $ 1.03 | $ 1.30 | $ 0.86 | $ 0.95 | $ 0.84 | $ 4.43 | $ 3.95 | $ 3.49 |
Share-based awards outstanding excluded from computation of diluted earnings per share | 1,700 | 1,300 | 1,200 |
Income taxes (Detail)
Income taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
Current: | |||
Federal | $ 613,009 | $ 590,120 | $ 543,089 |
Foreign | 135 | 1,678 | 1,245 |
State | 88,990 | 84,021 | 81,816 |
Total current income taxes | 702,134 | 675,819 | 626,150 |
Deferred: | |||
Federal | 11,053 | 6,410 | (7,697) |
State | 1,308 | 5,715 | (2,937) |
Total deferred income taxes | 12,361 | 12,125 | (10,634) |
Total provision (benefit) for income taxes | 714,495 | 687,944 | 615,516 |
Reconciliation between actual income taxes and amounts computed by applying federal statutory rate | |||
U.S. federal statutory rate on earnings before income taxes | 687,969 | 648,558 | 588,303 |
State income taxes, net of federal income tax benefit | 60,168 | 59,700 | 49,819 |
Jobs credits, net of federal income taxes | (18,952) | (21,366) | (18,961) |
Increase (decrease) in valuation allowances | (1,474) | (1,371) | 1,453 |
Stock-based compensation programs | (9,915) | ||
Decrease in income tax reserves | (2,161) | (2,037) | (6,449) |
Other, net | (1,140) | 4,460 | 1,351 |
Total provision (benefit) for income taxes | $ 714,495 | $ 687,944 | $ 615,516 |
Reconciliation between actual income taxes rate and federal statutory rate | |||
U.S. federal statutory rate on earnings before income taxes (as a percent) | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal income tax benefit (as a percent) | 3.10% | 3.20% | 3.00% |
Jobs credits, net of federal income taxes (as a percent) | (1.00%) | (1.20%) | (1.10%) |
Increase (decrease) in valuation allowances (as a percent) | (0.10%) | (0.10%) | 0.10% |
Stock-based compensation programs (as a percent) | (0.50%) | ||
Decrease in income tax reserves (as a percent) | (0.10%) | (0.10%) | (0.40%) |
Other, net (as a percent) | (0.10%) | 0.30% | |
Total provision (benefit) for income taxes (as a percent) | 36.30% | 37.10% | 36.60% |
Deferred tax assets: | |||
Deferred compensation expense | $ 7,626 | $ 8,200 | |
Accrued expenses | 6,958 | 8,139 | |
Accrued rent | 24,077 | 20,793 | |
Accrued insurance | 72,990 | 72,676 | |
Accrued incentive compensation | 15,170 | 19,902 | |
Share based compensation | 18,908 | 17,988 | |
Interest rate hedges | 3,175 | 3,702 | |
Tax benefit of income tax and interest reserves related to uncertain tax positions | 746 | 1,371 | |
Deferred gain on sale- leaseback | 20,872 | 22,637 | |
Other | 12,591 | 9,440 | |
State tax credit carry forwards, net of federal tax | 8,765 | 10,711 | |
Total deferred tax assets, gross | 191,878 | 195,559 | |
Less valuation allowances | (1,474) | ||
Total deferred tax assets | 191,878 | 194,085 | |
Deferred tax liabilities: | |||
Property and equipment | (334,430) | (320,619) | |
Inventories | (65,844) | (72,456) | |
Trademarks | (434,045) | (433,548) | |
Other | (10,400) | (7,417) | |
Total deferred tax liabilities | (844,719) | (834,040) | |
Net deferred tax liabilities | (652,841) | (639,955) | |
State tax credit carryforwards that will expire beginning in 2022 through 2026 | 13,500 | ||
Increase (decrease) in valuation allowance for state tax credit carryforwards | (1,500) | (1,400) | $ 1,500 |
Reserve for uncertain tax positions that would impact effective tax rate if recognized | 3,100 | ||
Interest accrued related to uncertain tax benefits | 800 | 900 | |
Potential penalties accrued related to uncertain tax benefits | 900 | 800 | |
Reserves for uncertain tax benefits included in noncurrent Other liabilities | 4,800 | 8,700 | |
Reserve for uncertain tax positions for which a reduction is reasonably possible in the next twelve months | 2,200 | ||
Income tax amounts associated with uncertain tax positions | |||
Income tax expense (benefit) | (3,795) | (2,379) | (9,497) |
Income tax related interest expense (benefit) | (31) | (23) | (1,445) |
Income tax related penalty expense (benefit) | 50 | 373 | 51 |
Reconciliation of the uncertain income tax positions | |||
Beginning Balance | 6,964 | 9,343 | 19,583 |
Increases - tax positions taken in the current year | 41 | 214 | 198 |
Increases - tax positions taken in prior years | 52 | 17 | 62 |
Decreases - tax positions taken in prior years | (1,435) | (106) | (8,636) |
Statute expirations | (2,453) | (2,504) | (1,121) |
Settlements | (52) | (743) | |
Ending Balance | $ 3,117 | $ 6,964 | $ 9,343 |
Current and long-term obligat41
Current and long-term obligations (Details) - USD ($) $ in Thousands | Aug. 01, 2016 | Feb. 03, 2017 | Jan. 29, 2016 | Feb. 22, 2017 | Oct. 20, 2015 |
Current and long-term obligations | |||||
Debt issuance costs, net | $ (14,094) | $ (18,100) | |||
Current and long-term obligations | 3,211,526 | 2,970,554 | |||
Less: current portion | (500,950) | (1,379) | |||
Long-term obligations | 2,710,576 | 2,969,175 | |||
Loss on debt retirement, net | (326) | ||||
Borrowing availability except for amount reserved for commercial paper program | 495,700 | ||||
Scheduled debt maturities including capital lease obligations | |||||
2,017 | 991,450 | ||||
2,018 | 400,892 | ||||
2,019 | 1,020 | ||||
2,020 | 425,980 | ||||
2,021 | 883 | ||||
Thereafter | $ 1,407,758 | ||||
Senior unsecured credit facility | |||||
Current and long-term obligations | |||||
Commitment fee rate | 0.15% | ||||
Weighted average interest rate (as a percent) | 1.90% | ||||
Senior unsecured credit facility | LIBOR loans | |||||
Current and long-term obligations | |||||
Variable rate basis | LIBOR | ||||
Spread on variable rate (as a percent) | 1.10% | ||||
Senior unsecured credit facility | Base-rate loans | |||||
Current and long-term obligations | |||||
Variable rate basis | base-rate | ||||
Spread on variable rate (as a percent) | 0.10% | ||||
Senior unsecured credit facility, Term Facility | |||||
Current and long-term obligations | |||||
Current and long-term obligations | $ 425,000 | 425,000 | |||
Amount borrowed | 425,000 | $ 175,000 | |||
Senior unsecured credit facility, Revolving Facility | |||||
Current and long-term obligations | |||||
Current and long-term obligations | 251,000 | ||||
Maximum financing under credit agreements | 1,000,000 | 1,250,000 | |||
Borrowing availability under credit facility | 986,200 | ||||
Senior unsecured credit facility, Revolving Facility | Letters of credit | |||||
Current and long-term obligations | |||||
Maximum financing under credit agreements | 175,000 | $ 175,000 | |||
Letters of credit outstanding | $ 13,800 | ||||
Senior notes | |||||
Current and long-term obligations | |||||
Redemption price as a percentage of principal amount | 101.00% | ||||
4.125% Senior Notes due July 15, 2017 | |||||
Current and long-term obligations | |||||
Current and long-term obligations | $ 500,000 | $ 500,000 | |||
Stated interest rate (as a percent) | 4.125% | 4.125% | |||
1.875% Senior Notes due April 15, 2018 | |||||
Current and long-term obligations | |||||
Current and long-term obligations | $ 399,889 | $ 399,797 | |||
Discount on debt issuance | $ 111 | $ 203 | |||
Stated interest rate (as a percent) | 1.875% | 1.875% | |||
3.25% Senior Notes due April 15, 2023 | |||||
Current and long-term obligations | |||||
Current and long-term obligations | $ 898,448 | $ 898,225 | |||
Discount on debt issuance | $ 1,552 | $ 1,775 | |||
Stated interest rate (as a percent) | 3.25% | 3.25% | |||
4.150% Senior Notes due Nov 1, 2025 | |||||
Current and long-term obligations | |||||
Current and long-term obligations | $ 499,300 | $ 499,236 | |||
Discount on debt issuance | $ 700 | $ 764 | $ 800 | ||
Debt issue costs | 4,400 | ||||
Amount borrowed | $ 500,000 | ||||
Stated interest rate (as a percent) | 4.15% | 4.15% | 4.15% | ||
Unsecured commercial paper notes | |||||
Current and long-term obligations | |||||
Long-term obligations | $ 490,500 | ||||
Maximum maturity | 364 days | 364 days | |||
Maximum aggregate borrowing amount | $ 1,000,000 | $ 1,000,000 | |||
Weighted average interest rate (as a percent) | 1.00% | ||||
Capital lease obligations | |||||
Current and long-term obligations | |||||
Current and long-term obligations | $ 3,643 | $ 4,806 | |||
Tax increment financing due February 1, 2035 | |||||
Current and long-term obligations | |||||
Current and long-term obligations | 8,840 | $ 10,590 | |||
Letter Of Credit Outside Of Revolving Facility | |||||
Current and long-term obligations | |||||
Letters of credit outstanding | $ 29,400 |
Assets and liabilities measur42
Assets and liabilities measured at fair value (Detail) $ in Thousands | Feb. 03, 2017USD ($) |
Reported amount | Current portion of long-term debt obligations | |
Liabilities: | |
Long-term obligations | $ 500,950 |
Reported amount | Long-term obligations | |
Liabilities: | |
Long-term obligations | 2,710,576 |
Reported amount | Accrued expenses and other current liabilities | |
Liabilities: | |
Deferred Compensation Cash Based Arrangements Liability Current and Noncurrent Fair Value Disclosure | 905 |
Reported amount | Noncurrent Other liabilities | |
Liabilities: | |
Deferred Compensation Cash Based Arrangements Liability Current and Noncurrent Fair Value Disclosure | 18,707 |
Fair value measurements on recurring basis | Balance at the end of the period | |
Liabilities: | |
Long-term obligations | 3,245,049 |
Deferred Compensation Cash Based Arrangements Liability Current and Noncurrent Fair Value Disclosure | 19,612 |
Fair value measurements on recurring basis | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | |
Liabilities: | |
Long-term obligations | 2,315,204 |
Deferred Compensation Cash Based Arrangements Liability Current and Noncurrent Fair Value Disclosure | 19,612 |
Fair value measurements on recurring basis | Significant Other Observable Inputs (Level 2) | |
Liabilities: | |
Long-term obligations | $ 929,845 |
Commitments and contingencies -
Commitments and contingencies - (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
Future minimum payments for operating leases | |||
2,017 | $ 961,786 | ||
2,018 | 924,169 | ||
2,019 | 870,751 | ||
2,020 | 792,435 | ||
2,021 | 718,300 | ||
Thereafter | 3,856,187 | ||
Total minimum payments | 8,123,628 | ||
Total minimum payments for capital leases | 4,500 | ||
Present value of net minimum capital lease payments | 3,600 | ||
Gross property and equipment recorded under capital lease | 29,800 | $ 29,800 | |
Accumulated depreciation on property and equipment recorded under capital lease | 14,300 | 12,400 | |
Operating lease rent expenses | |||
Minimum rentals | 935,663 | 849,115 | $ 776,103 |
Contingent rentals | 6,748 | 7,793 | 9,099 |
Operating lease rent expenses | 942,411 | 856,908 | 785,202 |
Amortization of leasehold interests | $ 300 | $ 900 | $ 5,800 |
Maximum | |||
Operating Leased Assets [Line Items] | |||
Typical period of primary lease term for operating lease, build-to-suit, maximum | 15 years |
Commitments and contingencies44
Commitments and contingencies - Legal proceedings (Detail) | Feb. 03, 2017USD ($)item |
Motor Oil MDL | Pending litigation | |
Legal proceedings | |
Number of nationwide classes | 2 |
Number of statewide sub-classes | 16 |
Number of suits filed | 22 |
California County Environmental Authorities | Minimum | |
Legal proceedings | |
Expected possible loss | $ | $ 100,000 |
Benefit plans (Detail)
Benefit plans (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
Benefit plans | |||
Matching contribution expense related to the Company's 401(k) plan | $ 16 | $ 15 | $ 13.7 |
Compensation expense for the Dollar General Corporation CDP/SERP Plan | $ 0.7 | $ 1.1 | $ 0.8 |
Share-based payments (Detail)
Share-based payments (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 | |
Share-based payments | |||
Number of shares of common stock authorized for grant | 31,142,858 | ||
Shares available for future grants | 17,691,607 | ||
Share-based compensation expense | |||
Pre-tax | $ 36,967 | $ 38,547 | $ 37,338 |
Net of tax | 22,550 | 23,513 | 22,780 |
Total unrecognized compensation cost | $ 53,700 | ||
Expected weighted average expense recognition period (in years) | 1 year 7 months 6 days | ||
Board members | |||
Share-based payments | |||
Vesting period | 1 year | ||
Other stock option | Employee | |||
Share-based payments | |||
Vesting period | 4 years | ||
MSA Time Options | |||
Options Issued | |||
Balance, at the end of the period (in shares) | 90,467 | ||
Exercisable at the end of the period (in shares) | 90,467 | ||
Average Exercise Price | |||
Balance at the end of the period (in dollars per share) | $ 19.06 | ||
Remaining Contractual Term | |||
Balance, at the end of the period | 2 years 8 months 12 days | ||
Intrinsic Value | |||
Balance at the end of the period | $ 4,900 | ||
Intrinsic value of options exercised | $ 5,300 | 6,600 | 6,800 |
MSA Performance Options | |||
Options Issued | |||
Balance, at the end of the period (in shares) | 66,290 | ||
Exercisable at the end of the period (in shares) | 66,290 | ||
Average Exercise Price | |||
Balance at the end of the period (in dollars per share) | $ 19.15 | ||
Remaining Contractual Term | |||
Balance, at the end of the period | 2 years 8 months 12 days | ||
Intrinsic Value | |||
Balance at the end of the period | $ 3,600 | ||
Intrinsic value of options exercised | $ 5,500 | $ 4,900 | $ 4,900 |
Stock options | |||
Weighted average for key assumptions used in determining the fair value | |||
Expected dividend yield (as a percent) | 1.30% | 1.20% | 0.00% |
Expected stock price volatility (as a percent) | 25.40% | 25.30% | 25.60% |
Weighted average risk-free interest rate (as a percent) | 1.60% | 1.80% | 1.90% |
Expected term of options | 6 years 3 months 18 days | 6 years 4 months 24 days | 6 years 3 months 18 days |
Share-based compensation expense | |||
Pre-tax | $ 12,008 | $ 11,113 | $ 8,533 |
Net of tax | $ 7,325 | $ 6,779 | $ 5,206 |
Stock options | Other stock option | |||
Options Issued | |||
Balance at the beginning of the period (in shares) | 2,429,965 | ||
Granted (in shares) | 996,984 | ||
Exercise of share-based awards (in shares) | (524,129) | ||
Canceled (in shares) | (204,162) | ||
Balance, at the end of the period (in shares) | 2,698,658 | 2,429,965 | |
Exercisable at the end of the period (in shares) | 675,234 | ||
Average Exercise Price | |||
Balance at the beginning of the period (in dollars per share) | $ 61.19 | ||
Granted (in dollars per share) | 84.73 | ||
Exercised (in dollars per share) | 51.64 | ||
Canceled (in dollars per share) | 75.69 | ||
Balance at the end of the period (in dollars per share) | 70.64 | $ 61.19 | |
Exercisable at the end of the period (in dollars per share) | $ 54.40 | ||
Remaining Contractual Term | |||
Balance, at the end of the period | 7 years 10 months 24 days | ||
Exercisable at the end of the period | 6 years 4 months 24 days | ||
Intrinsic Value | |||
Balance at the end of the period | $ 18,842 | ||
Exercisable at the end of the period | $ 12,849 | ||
Weighted average grant date fair value (in dollars per share) | $ 20.06 | $ 18.48 | $ 17.26 |
Intrinsic value of options exercised | $ 17,300 | $ 20,800 | $ 2,500 |
Stock options | MSA Time Options and MSA Performance Options | |||
Share-based payments | |||
Vesting period | 5 years | ||
Contractual term | 10 years | ||
Performance Share Units | |||
Share-based payments | |||
Vesting period | 3 years | ||
Weighted average grant date fair value of awards issued (in dollars per share) | $ 84.67 | $ 74.72 | $ 57.91 |
Intrinsic Value | |||
Balance at the end of the period | $ 12,754 | ||
Units Issued | |||
Awards outstanding at the beginning of the period (in shares or rights) | 144,097 | ||
Granted (in shares or rights) | 121,246 | ||
Converted to common stock (in shares or rights) | (69,393) | ||
Canceled (in shares or rights) | (21,567) | ||
Awards outstanding at the end of the period (in shares or rights) | 174,383 | 144,097 | |
Share-based compensation expense | |||
Pre-tax | $ 7,258 | $ 4,856 | $ 5,461 |
Net of tax | $ 4,427 | $ 2,962 | $ 3,332 |
Restricted Stock Units | |||
Share-based payments | |||
Weighted average grant date fair value of awards issued (in dollars per share) | $ 84.56 | $ 74.67 | $ 57.87 |
Intrinsic Value | |||
Balance at the end of the period | $ 36,713 | ||
Units Issued | |||
Awards outstanding at the beginning of the period (in shares or rights) | 640,910 | ||
Granted (in shares or rights) | 282,828 | ||
Converted to common stock (in shares or rights) | (340,916) | ||
Canceled (in shares or rights) | (80,861) | ||
Awards outstanding at the end of the period (in shares or rights) | 501,961 | 640,910 | |
Share-based compensation expense | |||
Pre-tax | $ 17,701 | $ 22,578 | $ 15,968 |
Net of tax | $ 10,798 | $ 13,772 | 9,742 |
Restricted Stock Units | Employee | |||
Share-based payments | |||
Vesting period | 3 years | ||
Restricted Stock | Chairman and chief executive officer | |||
Share-based compensation expense | |||
Pre-tax | 7,376 | ||
Net of tax | $ 4,500 |
Segment reporting (Details)
Segment reporting (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 03, 2017USD ($) | Oct. 28, 2016USD ($) | Jul. 29, 2016USD ($) | Apr. 29, 2016USD ($) | Jan. 29, 2016USD ($) | Oct. 30, 2015USD ($) | Jul. 31, 2015USD ($) | May 01, 2015USD ($) | Feb. 03, 2017USD ($)segment | Jan. 29, 2016USD ($)segment | Jan. 30, 2015USD ($)segment | |
Net sales data for classes of similar products | |||||||||||
Net sales | $ 6,009,246 | $ 5,320,029 | $ 5,391,891 | $ 5,265,432 | $ 5,286,938 | $ 5,067,048 | $ 5,095,904 | $ 4,918,672 | $ 21,986,598 | $ 20,368,562 | $ 18,909,588 |
Number of reportable segments | |||||||||||
Number of reportable operating segments | segment | 1 | 1 | 1 | ||||||||
Consumables | |||||||||||
Net sales data for classes of similar products | |||||||||||
Net sales | $ 16,798,881 | $ 15,457,611 | $ 14,321,080 | ||||||||
Seasonal | |||||||||||
Net sales data for classes of similar products | |||||||||||
Net sales | 2,674,319 | 2,522,701 | 2,344,993 | ||||||||
Home products | |||||||||||
Net sales data for classes of similar products | |||||||||||
Net sales | 1,373,397 | 1,289,423 | 1,205,373 | ||||||||
Apparel | |||||||||||
Net sales data for classes of similar products | |||||||||||
Net sales | $ 1,140,001 | $ 1,098,827 | $ 1,038,142 |
Common stock transactions (Deta
Common stock transactions (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Mar. 15, 2017 | Aug. 24, 2016 | Feb. 03, 2017 | Oct. 28, 2016 | Jul. 29, 2016 | Apr. 29, 2016 | Feb. 03, 2017 | Jan. 29, 2016 | Jan. 30, 2015 |
Common stock transactions | |||||||||
Aggregate purchase price | $ 990,474 | $ 1,299,613 | $ 800,095 | ||||||
Cash dividend paid (in dollars per share) | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 1 | $ 0.88 | |||
Cash dividend declared (in dollars per share) | $ 0.26 | ||||||||
Common Stock | |||||||||
Common stock transactions | |||||||||
Shares acquired under share repurchase program | 12,354 | 17,556 | 14,106 | ||||||
Aggregate purchase price | $ 10,810 | $ 15,361 | $ 12,342 | ||||||
Common Stock | Pursuant to Authorized Repurchase Program | |||||||||
Common stock transactions | |||||||||
Common stock repurchase program, increase in the authorized amount | $ 1,000,000 | ||||||||
Common stock repurchase authorization | $ 5,000,000 | 5,000,000 | |||||||
Remaining authorization available under the common stock repurchase program | $ 933,300 | $ 933,300 | |||||||
Shares acquired under share repurchase program | 12,400 | 17,600 | 14,100 | ||||||
Aggregate purchase price | $ 1,000,000 | $ 1,300,000 | $ 800,000 |
Quarterly financial data (una49
Quarterly financial data (unaudited) (Detail) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 03, 2017USD ($)item$ / shares | Oct. 28, 2016USD ($)item$ / shares | Jul. 29, 2016USD ($)item$ / shares | Apr. 29, 2016USD ($)item$ / shares | Jan. 29, 2016USD ($)item$ / shares | Oct. 30, 2015USD ($)item$ / shares | Jul. 31, 2015USD ($)item$ / shares | May 01, 2015USD ($)item$ / shares | Feb. 03, 2017USD ($)item$ / shares | Jan. 29, 2016USD ($)$ / shares | Jan. 30, 2015USD ($)$ / shares | |
Selected unaudited quarterly financial data | |||||||||||
Number of weeks in a quarter | item | 14 | 13 | 13 | 13 | 13 | 13 | 13 | 13 | |||
Net sales | $ 6,009,246 | $ 5,320,029 | $ 5,391,891 | $ 5,265,432 | $ 5,286,938 | $ 5,067,048 | $ 5,095,904 | $ 4,918,672 | $ 21,986,598 | $ 20,368,562 | $ 18,909,588 |
Gross profit | 1,900,747 | 1,587,510 | 1,681,767 | 1,612,614 | 1,682,269 | 1,536,962 | 1,588,155 | 1,498,705 | 6,782,638 | 6,306,091 | 5,802,507 |
Operating profit | 680,618 | 392,991 | 509,097 | 480,743 | 612,429 | 423,859 | 475,812 | 428,194 | 2,063,449 | 1,940,294 | 1,769,093 |
Net income | $ 414,176 | $ 235,315 | $ 306,518 | $ 295,124 | $ 376,175 | $ 253,321 | $ 282,349 | $ 253,235 | $ 1,251,133 | $ 1,165,080 | $ 1,065,345 |
Basic earnings per share (in dollars per share) | $ / shares | $ 1.50 | $ 0.84 | $ 1.08 | $ 1.03 | $ 1.30 | $ 0.87 | $ 0.95 | $ 0.84 | $ 4.45 | $ 3.96 | $ 3.50 |
Diluted earnings per share (in dollars per share) | $ / shares | $ 1.49 | $ 0.84 | $ 1.08 | $ 1.03 | $ 1.30 | $ 0.86 | $ 0.95 | $ 0.84 | $ 4.43 | $ 3.95 | $ 3.49 |
Number of stores acquired | item | 42 | 42 | |||||||||
Number of stores closing | item | 40 | 40 | |||||||||
Selling, general and administrative expenses | $ (4,500) | $ 11,000 | |||||||||
Selling, general and administrative expenses, net of tax | $ (2,800) | $ 6,700 | |||||||||
Effect of pre-tax asset purchase on earnings per diluted share (in dollars per share) | $ / shares | $ 0.01 | $ (0.02) | |||||||||
Restructuring Charges | $ 6,100 | ||||||||||
Restructuring charges, net of tax | $ 3,700 | ||||||||||
Effect of pre-tax restructuring charges on earnings per diluted share (in dollars per share) | $ / shares | $ (0.01) |