Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May 05, 2018 | May 31, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | OXFORD INDUSTRIES INC | |
Entity Central Index Key | 75,288 | |
Current Fiscal Year End Date | --02-02 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | May 5, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 16,936,543 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 | Apr. 29, 2017 |
Current Assets | |||
Cash and cash equivalents | $ 4,662 | $ 6,343 | $ 6,554 |
Receivables, net | 81,274 | 67,542 | 79,042 |
Inventories, net | 132,342 | 126,812 | 127,061 |
Prepaid expenses and other current assets | 31,994 | 35,421 | 24,325 |
Total Current Assets | 250,272 | 236,118 | 236,982 |
Property and equipment, net | 196,734 | 193,533 | 192,734 |
Intangible assets, net | 178,111 | 178,858 | 174,603 |
Goodwill | 66,577 | 66,703 | 60,002 |
Other non-current assets, net | 25,037 | 24,729 | 24,258 |
Total Assets | 716,731 | 699,941 | 688,579 |
Current Liabilities | |||
Accounts payable | 51,615 | 66,175 | 63,982 |
Accrued compensation | 19,153 | 29,941 | 16,593 |
Other accrued expenses and liabilities | 40,421 | 36,802 | 35,591 |
Liabilities related to discontinued operations | 0 | 2,092 | 3,143 |
Total Current Liabilities | 111,189 | 135,010 | 119,309 |
Long-term debt | 72,244 | 45,809 | 93,289 |
Other non-current liabilities | 73,588 | 74,029 | 69,370 |
Deferred taxes | 16,045 | 15,269 | 16,183 |
Liabilities related to discontinued operations | 0 | 0 | 2,022 |
Commitments and contingencies | |||
Shareholders’ Equity | |||
Common stock, $1.00 par value per share | 16,937 | 16,839 | 16,821 |
Additional paid-in capital | 136,297 | 136,664 | 131,011 |
Retained earnings | 295,086 | 280,395 | 246,136 |
Accumulated other comprehensive loss | (4,655) | (4,074) | (5,562) |
Total Shareholders’ Equity | 443,665 | 429,824 | 388,406 |
Total Liabilities and Shareholders’ Equity | $ 716,731 | $ 699,941 | $ 688,579 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | May 05, 2018 | Feb. 03, 2018 | Apr. 29, 2017 |
Statement of Financial Position [Abstract] | |||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 272,628 | $ 272,363 |
Cost of goods sold | 108,482 | 112,953 |
Gross profit | 164,146 | 159,410 |
SG&A | 139,720 | 133,191 |
Royalties and other operating income | 3,947 | 3,740 |
Operating income | 28,373 | 29,959 |
Interest expense, net | 781 | 930 |
Earnings before income taxes | 27,592 | 29,029 |
Income taxes | 7,025 | 11,832 |
Net earnings | $ 20,567 | $ 17,197 |
Net earnings per share: | ||
Basic (in dollars per share) | $ 1.24 | $ 1.04 |
Diluted (in dollars per share) | $ 1.23 | $ 1.03 |
Weighted average shares outstanding: | ||
Basic (in shares) | 16,639 | 16,549 |
Diluted (in shares) | 16,769 | 16,695 |
Dividends declared per share (in dollars per share) | $ 0.34 | $ 0.27 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 20,567 | $ 17,197 |
Other comprehensive income (loss), net of taxes: | ||
Net foreign currency translation adjustment | (581) | (286) |
Total other comprehensive loss, net of taxes | (581) | (286) |
Comprehensive income | $ 19,986 | $ 16,911 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Cash Flows From Operating Activities: | ||
Net earnings | $ 20,567 | $ 17,197 |
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: | ||
Depreciation | 9,435 | 9,651 |
Amortization of intangible assets | 691 | 539 |
Equity compensation expense | 1,718 | 1,739 |
Amortization of deferred financing costs | 106 | 105 |
Deferred income taxes | 660 | 2,605 |
Changes in working capital, net of acquisitions and dispositions: | ||
Receivables, net | (13,795) | (20,474) |
Inventories, net | (5,763) | 15,000 |
Prepaid expenses | 3,402 | 508 |
Current liabilities | (23,429) | (12,171) |
Other non-current assets, net | (395) | 7 |
Other non-current liabilities | (341) | (1,095) |
Cash (used in) provided by operating activities | (7,144) | 13,611 |
Cash Flows From Investing Activities: | ||
Acquisitions, net of cash acquired | (302) | (225) |
Purchases of property and equipment | (12,838) | (8,545) |
Cash used in investing activities | (13,140) | (8,770) |
Cash Flows From Financing Activities: | ||
Repayment of revolving credit arrangements | (64,265) | (67,373) |
Proceeds from revolving credit arrangements | 90,700 | 69,153 |
Proceeds from issuance of common stock | 384 | 386 |
Repurchase of equity awards for employee tax withholding liabilities | (2,372) | (2,206) |
Cash dividends declared and paid | (5,758) | (4,552) |
Cash provided by (used in) financing activities | 18,689 | (4,592) |
Net change in cash and cash equivalents | (1,595) | 249 |
Effect of foreign currency translation on cash and cash equivalents | (86) | (27) |
Cash and cash equivalents at the beginning of year | 6,343 | 6,332 |
Cash and cash equivalents at the end of the period | 4,662 | 6,554 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest, net | 635 | 876 |
Cash paid for income taxes | $ 334 | $ 833 |
Basis of Presentation_
Basis of Presentation: | 3 Months Ended |
May 05, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation: | Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. We believe the accompanying unaudited condensed consolidated financial statements reflect all normal, recurring adjustments that are necessary for a fair presentation of our financial position and results of operations as of the dates and for the periods presented. Results of operations for the interim periods presented are not necessarily indicative of results to be expected for our full fiscal year. The significant accounting policies applied during the interim periods presented are consistent with the significant accounting policies described in our Annual Report on Form 10-K for Fiscal 2017 . Recently Issued Accounting Standards Applicable to Future Periods In February 2016, the FASB issued revised lease accounting guidance. The guidance will require companies to record substantially all leases as assets and liabilities on the balance sheet. For these leases, we will be required to recognize (1) a right to use asset which will represent our right to use, or control the use of, a specified asset for a lease term and (2) a lease liability equal to our obligation to make lease payments arising from a lease measured on a discounted basis. Also, the revised guidance will require additional qualitative and quantitative footnote disclosures in our consolidated financial statements. This guidance will be effective in the First Quarter of Fiscal 2019 with early adoption permitted. The guidance requires the use of the modified retrospective transition approach, which includes a number of optional practical expedients that companies may elect to apply. In March 2018, the FASB approved a new, optional transition method that will provide companies the option to use the effective date as the date of initial application on transition. We are in the process of evaluating the potential impact of the revised lease accounting guidance on our consolidated balance sheet, statement of operations and statement of cash flows, as well as our systems, processes and controls. This plan includes assessing lease arrangements, evaluating practical expedient and policy elections, implementing software to meet the accounting and reporting requirements of the guidance and identifying changes to our business processes and controls to support the adoption of the revised guidance. Considering the magnitude of our existing operating leases to our business operations, we anticipate that the new lease guidance will have a significant impact on our consolidated balance sheet by requiring the recognition of a significant amount of lease-related right of use assets and liabilities. While we are still evaluating the potential impact of the revised guidance, we do not anticipate the adoption of the guidance will have a material impact on our consolidated statement of operations and statement of cash flows. In June 2016, the FASB issued guidance on the measurement of credit losses on financial instruments. This guidance amends the impairment model by requiring companies to use a forward-looking approach based on expected losses to estimate credit losses on certain financial instruments, including trade receivables. This guidance will be effective in Fiscal 2020 with early adoption permitted. We are currently assessing the impact that adopting this guidance will have on our consolidated financial statements. |
Operating Group Information_
Operating Group Information: | 3 Months Ended |
May 05, 2018 | |
Segment Reporting [Abstract] | |
Operating Group Information: | Operating Group Information: Our business is primarily operated through our Tommy Bahama, Lilly Pulitzer, Lanier Apparel and Southern Tide operating groups. We identify our operating groups based on the way our management organizes the components of our business for purposes of allocating resources and assessing performance. Our operating group structure reflects a brand-focused management approach, emphasizing operational coordination and resource allocation across each brand's direct to consumer, wholesale and licensing operations, as applicable. Tommy Bahama, Lilly Pulitzer and Southern Tide each design, source, market and distribute apparel and related products bearing their respective trademarks and license their trademarks for other product categories, while Lanier Apparel designs, sources and distributes branded and private label men's tailored clothing, sportswear and other products. Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities, elimination of inter-segment sales, LIFO accounting adjustments for inventory, other costs that are not allocated to the operating groups and operations of our other businesses which are not included in our operating groups. Corporate and Other includes the operations of our Lyons, Georgia distribution center and The Beaufort Bonnet Company, which we refer to as TBBC, which we acquired in December 2017. Our LIFO inventory pool does not correspond to our operating group definitions; therefore, LIFO inventory accounting adjustments are not allocated to our operating groups. For a more extensive description of our operating groups, see Part I, Item 1. Business included in our Annual Report on Form 10-K for Fiscal 2017. The table below presents certain financial information (in thousands) about our operating groups, as well as Corporate and Other. First Quarter Fiscal 2018 First Quarter Fiscal 2017 Net sales Tommy Bahama $ 167,132 $ 172,496 Lilly Pulitzer 68,627 63,343 Lanier Apparel 19,909 23,356 Southern Tide 13,472 12,642 Corporate and Other 3,488 526 Total net sales $ 272,628 $ 272,363 Depreciation and amortization Tommy Bahama $ 7,066 $ 7,574 Lilly Pulitzer 2,479 1,995 Lanier Apparel 141 148 Southern Tide 125 106 Corporate and Other 315 367 Total depreciation and amortization $ 10,126 $ 10,190 Operating income (loss) Tommy Bahama $ 14,303 $ 16,038 Lilly Pulitzer 15,826 17,687 Lanier Apparel 362 858 Southern Tide 2,487 2,104 Corporate and Other (4,605 ) (6,728 ) Total operating income $ 28,373 $ 29,959 Interest expense, net 781 930 Earnings before income taxes $ 27,592 $ 29,029 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss: | 3 Months Ended |
May 05, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss: | Accumulated Other Comprehensive Loss: Substantially all amounts included in accumulated other comprehensive loss in our consolidated balance sheets, as well as any related changes, for each period presented, reflect the net foreign currency translation adjustment related to our Tommy Bahama operations in Canada, Japan and Australia. No amounts of accumulated other comprehensive loss were reclassified to our consolidated statements of operations during any period presented. |
Income Taxes_
Income Taxes: | 3 Months Ended |
May 05, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes: | Income Taxes: U.S. Tax Reform, as enacted on December 22, 2017, made significant changes in the taxation of our domestic and foreign earnings. The federal corporate tax rate was lowered from 35% to 21% effective January 1, 2018, resulting in a blended federal rate applicable to our fiscal year ended February 3, 2018 to reflect the weighted average of the rate applicable to the period prior to the effective date and the period on and after the effective date. The change in the federal corporate tax rate also required revaluation of our deferred tax assets and liabilities to reflect the enacted rate at which we expect those differences to reverse. U.S. Tax Reform moved the U.S. to a territorial taxation system under which the earnings of foreign subsidiaries will generally not be subject to U.S. federal income tax upon distribution and imposed a one-time transition tax on the amount of previously untaxed earnings of those foreign subsidiaries measured as of November 2, 2017 or December 31, 2017, whichever resulted in the greater taxable amount. Additional changes included the increase in bonus depreciation available for certain assets acquired after September 27, 2017 and limitations on the deduction for certain expenses, including executive compensation and interest incurred in taxable years beginning on or after January 1, 2018. New taxes were imposed related to foreign income including, for years beginning after December 31, 2017, a tax on global intangible low-taxed income (“GILTI”), disallowance of deductions for certain payments (the base erosion anti-abuse tax, or “BEAT”) and new deductions enacted for certain foreign-derived intangible income (“FDII”). The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides us with up to one year to finalize accounting for the impacts of U.S. Tax Reform. Since our initial accounting for U.S Tax Reform impact is incomplete, we may include provisional amounts when reasonable estimates can be made or continue to apply the prior tax law if a reasonable estimate cannot be made. In accordance with SAB 118, as of May 5, 2018 and February 3, 2018, we estimated provisional tax amounts related to our deferred income tax assets and liabilities, including the impacts of the change in the federal corporate tax rate, deductions for executive compensation, our indefinite reinvestment assertion, the transition tax, GILTI, BEAT and FDII. Also, as of May 5, 2018 and February 3, 2018, we have not yet elected an accounting policy related to how we will account for GILTI and therefore have not provided any deferred tax impacts of GILTI in our consolidated financial statements. Further, as of May 5, 2018 and February 3, 2018, we continue to assert that our investments in foreign subsidiaries and related earnings are permanently reinvested outside of the United States on a provisional basis, and thus we have not recorded any deferred tax liabilities related to these investments and earnings. As a result of the provisional revaluation impact on our deferred taxes and certain other items related to U.S. Tax Reform, we recognized a reduction in tax expense of $11.5 million in our Fiscal 2017 statement of operations. During the First Quarter of Fiscal 2018 , we did not recognize any measurement period adjustments to the provisional amounts recognized during Fiscal 2017. We are still finalizing our calculations related to the impact of U.S. Tax Reform. In accordance with SAB 118, we are required to finalize our accounting for the impacts of U.S. Tax Reform during Fiscal 2018. The effective tax rate for the First Quarter of Fiscal 2018 decreased from the First Quarter of Fiscal 2017 , primarily due to the lower federal corporate tax rate resulting from U.S. Tax Reform. Our effective tax rate for the full year of Fiscal 2018 is expected to be approximately 26% , which includes the U.S. federal statutory rate of 21% and state income taxes, net of the related federal income tax benefit; the rate differential related to foreign operations; valuation allowances against operating losses and other carryforwards; the excess tax benefit related to restricted stock vesting; and any other items impacting the effective tax rate. In addition to the typical items that may result in an effective tax rate that differs from our expectations, the effective rate for Fiscal 2018 may vary from 26% as a result of adjustments to the provisional amounts recognized for U.S. Tax Reform as discussed above. The final impact of U.S. Tax Reform may differ from our provisional amounts recognized in Fiscal 2017 due to, among other things, additional regulatory guidance that may be issued, us obtaining additional information to refine our estimated tax amounts and changes in current interpretations and assumptions. |
Accounting Standards Adopted in
Accounting Standards Adopted in Fiscal 2018: | 3 Months Ended |
May 05, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Accounting Standards Adopted in Fiscal 2018: | Accounting Standards Adopted in Fiscal 2018: Revenue Recognition for Contracts with Customers In May 2014, the FASB issued guidance which provided a single, comprehensive accounting model for revenue arising from contracts with customers. This guidance was revised and clarified through supplemental adoption guidance subsequent to May 2014. This new revenue recognition guidance superseded most of the prior revenue recognition guidance, which specified that revenue should be recognized when risks and rewards transfer to a customer. Under the new guidance, revenue is recognized at an amount that reflects the consideration expected to be received for those goods and services pursuant to a five-step approach: (1) identify the contracts with the customer; (2) identify the separate performance obligations in the contracts; (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenue when, or as, each performance obligation is satisfied. The new guidance also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flow arising from customer contracts, including significant judgments and changes in judgments. We adopted the revised revenue recognition guidance as of the first day of the First Quarter of Fiscal 2018 using the modified retrospective method, applying the guidance only to contracts that were not completed prior to Fiscal 2018. We have implemented this guidance for all contracts at the effective date. There was no adjustment for the cumulative effect of applying the guidance to retained earnings upon adoption. We have changed our accounting policies and practices and designed and implemented specific controls over our evaluation of the impact of the new guidance, including disclosure requirements and the collection of relevant data for the reporting process. Our revenue streams consist of direct to consumer sales, including retail store, e-commerce and restaurant operations, and wholesale sales, as well as royalty income, which is included in royalties and other income in our consolidated statements of operations. The table below quantifies the amount of net sales by distribution channel (in thousands) and as a percentage of net sales. First Quarter of Fiscal 2018 First Quarter of Fiscal 2017 Retail $ 107,735 40 % $ 102,663 38 % E-commerce 44,522 16 % 35,673 13 % Restaurant 25,293 9 % 23,409 9 % Wholesale 94,376 35 % 109,850 40 % Other 702 — % 768 — % Net sales $ 272,628 100 % $ 272,363 100 % The tables below provide net sales by operating group (in thousands) and the percentage of net sales by distribution channel for each operating group. First Quarter of Fiscal 2018 Net Sales Retail E-commerce Restaurant Wholesale Other Tommy Bahama $ 167,132 46% 15% 15% 24% —% Lilly Pulitzer 68,627 44% 24% —% 32% —% Lanier Apparel 19,909 —% —% —% 100% —% Southern Tide 13,472 —% 12% —% 88% —% Corporate and Other 3,488 —% 60% —% 23% 17% First Quarter of Fiscal 2017 Net Sales Retail E-commerce Restaurant Wholesale Other Tommy Bahama $ 172,496 46% 12% 14% 28% —% Lilly Pulitzer 63,343 37% 20% —% 43% —% Lanier Apparel 23,356 —% —% —% 100% —% Southern Tide 12,642 —% 12% —% 88% —% Corporate and Other 526 —% —% —% —% 100% Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied. Our performance obligation generally consists of delivering our products to our direct to consumer and wholesale customers. Control of the products is generally transferred upon providing the products to consumers in our brick and mortar retail stores and restaurants, upon physical delivery of the products to consumers in our e-commerce operations and upon shipment from the distribution center to customers in our wholesale operations. Once control is transferred to the customer, we have completed our performance obligations related to the contract. After completion of our performance obligation, we have an unconditional right to consideration as outlined in the contract. Our receivables resulting from contracts with customers in our direct to consumer operations are generally collected within a few days, upon settlement of the credit card transaction. Our receivables resulting from contracts with our customers in our wholesale operations are generally collected within one quarter, in accordance with established credit terms. All of our performance obligations under the terms of our contracts with customers in our direct to consumer and wholesale operations have an expected original duration of one year or less. Our revenue, including any freight income, is recognized net of applicable taxes in our consolidated statements of operations. In our direct to consumer operations, consumers have certain rights to return products within a specified period and are eligible for certain point of sale discounts, thus retail store, e-commerce and restaurant revenues are recorded net of estimated returns and discounts, as applicable. The sales return allowance is recognized on a gross basis, with the recognition of a return liability for the estimated amount of sales that would be returned and a return asset for the right to recover the goods returned by the customer, measured at the previous carrying amounts of the goods. The value of inventory associated with right to recover the goods returned are included in prepaid expenses and other current assets in our consolidated balance sheet as of May 5, 2018 , whereas in all prior periods those amounts were included in inventories. The changes in the return liability are recognized in net sales in our consolidated statements of operations and the changes in the return asset are recognized in cost of goods sold in our consolidated statements of operations for all periods presented. In the ordinary course in certain of our wholesale operations, we offer discounts, allowances and cooperative advertising support to our wholesale customers. Certain of these arrangements are written agreements, while others may be implied by customary practices or expectations in the industry. Wholesale sales are recorded net of such discounts, allowances and cooperative advertising support for our customers, operational chargebacks and provisions for estimated wholesale returns. As certain allowances, other deductions and returns are not finalized until the end of a season, program or other event which may not have occurred yet, we estimate such discounts, allowances and returns on an ongoing basis to estimate the consideration from the customer that we expect to ultimately receive. In accordance with the new revenue recognition guidance, we only recognize revenue to the extent that it is probable that we will not recognize a significant reversal of revenue when the uncertainties related to the variability are ultimately resolved. Significant considerations in determining our estimates for discounts, allowances, operational chargebacks and returns for wholesale customers may include historical and current trends, agreements with customers, projected seasonal results, an evaluation of current economic conditions, specific program or product expectations and retailer performance. We record the discounts, returns and allowances as a reduction to net sales in our consolidated statements of operations and as a reduction to receivables, net in our consolidated balance sheets, with the estimated value of inventory expected to be returned in prepaid expenses and other current assets in our consolidated balance sheets as of May 5, 2018 . As of May 5, 2018 , February 3, 2018 and April 29, 2017 , reserve balances recorded as a reduction to receivables related to these items were $6 million , $7 million and $9 million , respectively. In addition to trade and other receivables, an income tax receivable of $5 million is included in receivables, net in our consolidated balance sheet as of both May 5, 2018 and February 3, 2018 , with no material income tax receivable as of April 29, 2017 . Substantially all other amounts recognized in receivables, net as of those dates represent receivables related to contracts with customers. As of May 5, 2018 , prepaid expenses and other current assets includes $3 million representing the estimate of the value of inventory for wholesale and direct to consumer sales returns, which would have been recognized in inventories pursuant to the previous guidance, while the estimated sales returns amount of $5 million for expected direct to consumer returns is classified in other accrued expenses and liabilities in our consolidated balance sheet as of May 5, 2018 . We do not have any significant contract assets related to contracts with customers, other than receivables and the value of inventory associated with reserves for expected sales returns, as of May 5, 2018 , February 3, 2018 or April 29, 2017 . In addition to our estimated return amounts, our contract liabilities related to contracts with customers include gift cards and merchandise credits issued by us, which do not have an expiration date, but are redeemable on demand by the holder of the card. Substantially all gift cards and merchandise credits are redeemed within one year of issuance. Gift cards and merchandise credits are recorded as a liability until our performance obligation is satisfied, which occurs when redeemed by the consumer, at which point revenue is recognized. However, we recognize breakage income for gift cards and merchandise credits using the redemption recognition method, subject to applicable laws in certain states. Contract liabilities for gift cards purchased by consumers and merchandise credits received by customers but not yet redeemed, less any breakage income recognized to date, is included in other accrued expenses and liabilities in our consolidated balance sheets and totaled $10 million , $10 million and $9 million as of May 5, 2018 , February 3, 2018, and April 29, 2017 , respectively. Gift card breakage, which was not material in any period presented, is included in net sales in our consolidated statements of operations. Royalties from the license of our owned brands, which are generally based on the greater of a percentage of the licensee's actual net sales or a contractually determined minimum royalty amount, are recognized over time based upon the guaranteed minimum levels and adjusted as sales data, or estimates thereof, is received from licensees. Royalty income represents substantially all of the amounts included in royalties and other operating income in our consolidated statements of operations. We have made the following accounting policy elections and practical expedients related to the new revenue recognition guidance: • We exclude any taxes collected from customers that are remitted to taxing authorities from net sales; • We deem charges incurred by us before and after the customer obtains control of goods, as applicable, as fulfillment costs; • As customer payment terms are less than one year from the transfer of goods, we do not adjust receivable amounts for the effects of time value of money; and • We utilize the portfolio approach when multiple contracts or performance obligations are involved in the determination of revenue recognition. We do not believe the use of any practical expedients utilized by us had a material impact on our financial statements upon our adoption of the revised guidance. Deferred income taxes for intra-entity asset transfers In October 2016, the FASB issued guidance on the recognition of current and deferred income taxes for intra-entity asset transfers. The revised guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset (other than inventory) when the transfer occurs. We adopted this guidance in the First Quarter of Fiscal 2018, resulting in a $0.1 million reduction to retained earnings as of February 4, 2018 and no impact on net earnings for any period presented. |
Basis of Presentation_ (Policie
Basis of Presentation: (Policies) | 3 Months Ended |
May 05, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Applicable to Future Periods In February 2016, the FASB issued revised lease accounting guidance. The guidance will require companies to record substantially all leases as assets and liabilities on the balance sheet. For these leases, we will be required to recognize (1) a right to use asset which will represent our right to use, or control the use of, a specified asset for a lease term and (2) a lease liability equal to our obligation to make lease payments arising from a lease measured on a discounted basis. Also, the revised guidance will require additional qualitative and quantitative footnote disclosures in our consolidated financial statements. This guidance will be effective in the First Quarter of Fiscal 2019 with early adoption permitted. The guidance requires the use of the modified retrospective transition approach, which includes a number of optional practical expedients that companies may elect to apply. In March 2018, the FASB approved a new, optional transition method that will provide companies the option to use the effective date as the date of initial application on transition. We are in the process of evaluating the potential impact of the revised lease accounting guidance on our consolidated balance sheet, statement of operations and statement of cash flows, as well as our systems, processes and controls. This plan includes assessing lease arrangements, evaluating practical expedient and policy elections, implementing software to meet the accounting and reporting requirements of the guidance and identifying changes to our business processes and controls to support the adoption of the revised guidance. Considering the magnitude of our existing operating leases to our business operations, we anticipate that the new lease guidance will have a significant impact on our consolidated balance sheet by requiring the recognition of a significant amount of lease-related right of use assets and liabilities. While we are still evaluating the potential impact of the revised guidance, we do not anticipate the adoption of the guidance will have a material impact on our consolidated statement of operations and statement of cash flows. In June 2016, the FASB issued guidance on the measurement of credit losses on financial instruments. This guidance amends the impairment model by requiring companies to use a forward-looking approach based on expected losses to estimate credit losses on certain financial instruments, including trade receivables. This guidance will be effective in Fiscal 2020 with early adoption permitted. We are currently assessing the impact that adopting this guidance will have on our consolidated financial statements. Revenue Recognition for Contracts with Customers In May 2014, the FASB issued guidance which provided a single, comprehensive accounting model for revenue arising from contracts with customers. This guidance was revised and clarified through supplemental adoption guidance subsequent to May 2014. This new revenue recognition guidance superseded most of the prior revenue recognition guidance, which specified that revenue should be recognized when risks and rewards transfer to a customer. Under the new guidance, revenue is recognized at an amount that reflects the consideration expected to be received for those goods and services pursuant to a five-step approach: (1) identify the contracts with the customer; (2) identify the separate performance obligations in the contracts; (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenue when, or as, each performance obligation is satisfied. The new guidance also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flow arising from customer contracts, including significant judgments and changes in judgments. We adopted the revised revenue recognition guidance as of the first day of the First Quarter of Fiscal 2018 using the modified retrospective method, applying the guidance only to contracts that were not completed prior to Fiscal 2018. We have implemented this guidance for all contracts at the effective date. There was no adjustment for the cumulative effect of applying the guidance to retained earnings upon adoption. We have changed our accounting policies and practices and designed and implemented specific controls over our evaluation of the impact of the new guidance, including disclosure requirements and the collection of relevant data for the reporting process. Deferred income taxes for intra-entity asset transfers In October 2016, the FASB issued guidance on the recognition of current and deferred income taxes for intra-entity asset transfers. The revised guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset (other than inventory) when the transfer occurs. We adopted this guidance in the First Quarter of Fiscal 2018, resulting in a $0.1 million reduction to retained earnings as of February 4, 2018 and no impact on net earnings for any period presented. |
Revenue Recognition for Contracts with Customers | Our revenue streams consist of direct to consumer sales, including retail store, e-commerce and restaurant operations, and wholesale sales, as well as royalty income, which is included in royalties and other income in our consolidated statements of operations. The table below quantifies the amount of net sales by distribution channel (in thousands) and as a percentage of net sales. First Quarter of Fiscal 2018 First Quarter of Fiscal 2017 Retail $ 107,735 40 % $ 102,663 38 % E-commerce 44,522 16 % 35,673 13 % Restaurant 25,293 9 % 23,409 9 % Wholesale 94,376 35 % 109,850 40 % Other 702 — % 768 — % Net sales $ 272,628 100 % $ 272,363 100 % The tables below provide net sales by operating group (in thousands) and the percentage of net sales by distribution channel for each operating group. First Quarter of Fiscal 2018 Net Sales Retail E-commerce Restaurant Wholesale Other Tommy Bahama $ 167,132 46% 15% 15% 24% —% Lilly Pulitzer 68,627 44% 24% —% 32% —% Lanier Apparel 19,909 —% —% —% 100% —% Southern Tide 13,472 —% 12% —% 88% —% Corporate and Other 3,488 —% 60% —% 23% 17% First Quarter of Fiscal 2017 Net Sales Retail E-commerce Restaurant Wholesale Other Tommy Bahama $ 172,496 46% 12% 14% 28% —% Lilly Pulitzer 63,343 37% 20% —% 43% —% Lanier Apparel 23,356 —% —% —% 100% —% Southern Tide 12,642 —% 12% —% 88% —% Corporate and Other 526 —% —% —% —% 100% Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied. Our performance obligation generally consists of delivering our products to our direct to consumer and wholesale customers. Control of the products is generally transferred upon providing the products to consumers in our brick and mortar retail stores and restaurants, upon physical delivery of the products to consumers in our e-commerce operations and upon shipment from the distribution center to customers in our wholesale operations. Once control is transferred to the customer, we have completed our performance obligations related to the contract. After completion of our performance obligation, we have an unconditional right to consideration as outlined in the contract. Our receivables resulting from contracts with customers in our direct to consumer operations are generally collected within a few days, upon settlement of the credit card transaction. Our receivables resulting from contracts with our customers in our wholesale operations are generally collected within one quarter, in accordance with established credit terms. All of our performance obligations under the terms of our contracts with customers in our direct to consumer and wholesale operations have an expected original duration of one year or less. Our revenue, including any freight income, is recognized net of applicable taxes in our consolidated statements of operations. In our direct to consumer operations, consumers have certain rights to return products within a specified period and are eligible for certain point of sale discounts, thus retail store, e-commerce and restaurant revenues are recorded net of estimated returns and discounts, as applicable. The sales return allowance is recognized on a gross basis, with the recognition of a return liability for the estimated amount of sales that would be returned and a return asset for the right to recover the goods returned by the customer, measured at the previous carrying amounts of the goods. The value of inventory associated with right to recover the goods returned are included in prepaid expenses and other current assets in our consolidated balance sheet as of May 5, 2018 , whereas in all prior periods those amounts were included in inventories. The changes in the return liability are recognized in net sales in our consolidated statements of operations and the changes in the return asset are recognized in cost of goods sold in our consolidated statements of operations for all periods presented. In the ordinary course in certain of our wholesale operations, we offer discounts, allowances and cooperative advertising support to our wholesale customers. Certain of these arrangements are written agreements, while others may be implied by customary practices or expectations in the industry. Wholesale sales are recorded net of such discounts, allowances and cooperative advertising support for our customers, operational chargebacks and provisions for estimated wholesale returns. As certain allowances, other deductions and returns are not finalized until the end of a season, program or other event which may not have occurred yet, we estimate such discounts, allowances and returns on an ongoing basis to estimate the consideration from the customer that we expect to ultimately receive. In accordance with the new revenue recognition guidance, we only recognize revenue to the extent that it is probable that we will not recognize a significant reversal of revenue when the uncertainties related to the variability are ultimately resolved. Significant considerations in determining our estimates for discounts, allowances, operational chargebacks and returns for wholesale customers may include historical and current trends, agreements with customers, projected seasonal results, an evaluation of current economic conditions, specific program or product expectations and retailer performance. We record the discounts, returns and allowances as a reduction to net sales in our consolidated statements of operations and as a reduction to receivables, net in our consolidated balance sheets, with the estimated value of inventory expected to be returned in prepaid expenses and other current assets in our consolidated balance sheets as of May 5, 2018 . As of May 5, 2018 , February 3, 2018 and April 29, 2017 , reserve balances recorded as a reduction to receivables related to these items were $6 million , $7 million and $9 million , respectively. In addition to trade and other receivables, an income tax receivable of $5 million is included in receivables, net in our consolidated balance sheet as of both May 5, 2018 and February 3, 2018 , with no material income tax receivable as of April 29, 2017 . Substantially all other amounts recognized in receivables, net as of those dates represent receivables related to contracts with customers. As of May 5, 2018 , prepaid expenses and other current assets includes $3 million representing the estimate of the value of inventory for wholesale and direct to consumer sales returns, which would have been recognized in inventories pursuant to the previous guidance, while the estimated sales returns amount of $5 million for expected direct to consumer returns is classified in other accrued expenses and liabilities in our consolidated balance sheet as of May 5, 2018 . We do not have any significant contract assets related to contracts with customers, other than receivables and the value of inventory associated with reserves for expected sales returns, as of May 5, 2018 , February 3, 2018 or April 29, 2017 . In addition to our estimated return amounts, our contract liabilities related to contracts with customers include gift cards and merchandise credits issued by us, which do not have an expiration date, but are redeemable on demand by the holder of the card. Substantially all gift cards and merchandise credits are redeemed within one year of issuance. Gift cards and merchandise credits are recorded as a liability until our performance obligation is satisfied, which occurs when redeemed by the consumer, at which point revenue is recognized. However, we recognize breakage income for gift cards and merchandise credits using the redemption recognition method, subject to applicable laws in certain states. Contract liabilities for gift cards purchased by consumers and merchandise credits received by customers but not yet redeemed, less any breakage income recognized to date, is included in other accrued expenses and liabilities in our consolidated balance sheets and totaled $10 million , $10 million and $9 million as of May 5, 2018 , February 3, 2018, and April 29, 2017 , respectively. Gift card breakage, which was not material in any period presented, is included in net sales in our consolidated statements of operations. Royalties from the license of our owned brands, which are generally based on the greater of a percentage of the licensee's actual net sales or a contractually determined minimum royalty amount, are recognized over time based upon the guaranteed minimum levels and adjusted as sales data, or estimates thereof, is received from licensees. Royalty income represents substantially all of the amounts included in royalties and other operating income in our consolidated statements of operations. We have made the following accounting policy elections and practical expedients related to the new revenue recognition guidance: • We exclude any taxes collected from customers that are remitted to taxing authorities from net sales; • We deem charges incurred by us before and after the customer obtains control of goods, as applicable, as fulfillment costs; • As customer payment terms are less than one year from the transfer of goods, we do not adjust receivable amounts for the effects of time value of money; and • We utilize the portfolio approach when multiple contracts or performance obligations are involved in the determination of revenue recognition. We do not believe the use of any practical expedients utilized by us had a material impact on our financial statements upon our adoption of the revised guidance. |
Operating Group Information_ (T
Operating Group Information: (Tables) | 3 Months Ended |
May 05, 2018 | |
Segment Reporting [Abstract] | |
Schedule of information pertaining to the operating groups | The table below presents certain financial information (in thousands) about our operating groups, as well as Corporate and Other. First Quarter Fiscal 2018 First Quarter Fiscal 2017 Net sales Tommy Bahama $ 167,132 $ 172,496 Lilly Pulitzer 68,627 63,343 Lanier Apparel 19,909 23,356 Southern Tide 13,472 12,642 Corporate and Other 3,488 526 Total net sales $ 272,628 $ 272,363 Depreciation and amortization Tommy Bahama $ 7,066 $ 7,574 Lilly Pulitzer 2,479 1,995 Lanier Apparel 141 148 Southern Tide 125 106 Corporate and Other 315 367 Total depreciation and amortization $ 10,126 $ 10,190 Operating income (loss) Tommy Bahama $ 14,303 $ 16,038 Lilly Pulitzer 15,826 17,687 Lanier Apparel 362 858 Southern Tide 2,487 2,104 Corporate and Other (4,605 ) (6,728 ) Total operating income $ 28,373 $ 29,959 Interest expense, net 781 930 Earnings before income taxes $ 27,592 $ 29,029 |
Accounting Standards Adopted 14
Accounting Standards Adopted in Fiscal 2018: (Tables) | 3 Months Ended |
May 05, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of information about sales by distribution channel | The table below quantifies the amount of net sales by distribution channel (in thousands) and as a percentage of net sales. First Quarter of Fiscal 2018 First Quarter of Fiscal 2017 Retail $ 107,735 40 % $ 102,663 38 % E-commerce 44,522 16 % 35,673 13 % Restaurant 25,293 9 % 23,409 9 % Wholesale 94,376 35 % 109,850 40 % Other 702 — % 768 — % Net sales $ 272,628 100 % $ 272,363 100 % The tables below provide net sales by operating group (in thousands) and the percentage of net sales by distribution channel for each operating group. First Quarter of Fiscal 2018 Net Sales Retail E-commerce Restaurant Wholesale Other Tommy Bahama $ 167,132 46% 15% 15% 24% —% Lilly Pulitzer 68,627 44% 24% —% 32% —% Lanier Apparel 19,909 —% —% —% 100% —% Southern Tide 13,472 —% 12% —% 88% —% Corporate and Other 3,488 —% 60% —% 23% 17% First Quarter of Fiscal 2017 Net Sales Retail E-commerce Restaurant Wholesale Other Tommy Bahama $ 172,496 46% 12% 14% 28% —% Lilly Pulitzer 63,343 37% 20% —% 43% —% Lanier Apparel 23,356 —% —% —% 100% —% Southern Tide 12,642 —% 12% —% 88% —% Corporate and Other 526 —% —% —% —% 100% |
Operating Group Information_ (D
Operating Group Information: (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Operating group information | ||
Net sales | $ 272,628 | $ 272,363 |
Depreciation and amortization | 10,126 | 10,190 |
Operating income | 28,373 | 29,959 |
Interest expense, net | 781 | 930 |
Earnings before income taxes | 27,592 | 29,029 |
Corporate and Other | ||
Operating group information | ||
Depreciation and amortization | 315 | 367 |
Operating income | (4,605) | (6,728) |
Tommy Bahama | Operating Groups | ||
Operating group information | ||
Depreciation and amortization | 7,066 | 7,574 |
Operating income | 14,303 | 16,038 |
Lilly Pulitzer | Operating Groups | ||
Operating group information | ||
Depreciation and amortization | 2,479 | 1,995 |
Operating income | 15,826 | 17,687 |
Lanier Apparel | Operating Groups | ||
Operating group information | ||
Depreciation and amortization | 141 | 148 |
Operating income | 362 | 858 |
Southern Tide | Operating Groups | ||
Operating group information | ||
Depreciation and amortization | 125 | 106 |
Operating income | $ 2,487 | $ 2,104 |
Income Taxes_ (Details)
Income Taxes: (Details) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 02, 2019 | Feb. 03, 2018 | |
Income Tax Disclosure [Abstract] | ||
Reduction in tax expense | $ 11.5 | |
Scenario, Forecast | ||
Income Tax Contingency [Line Items] | ||
Expected effective tax rate | 26.00% |
Accounting Standards Adopted 17
Accounting Standards Adopted in Fiscal 2018: (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 272,628 | $ 272,363 |
Percentage of net sales | 100.00% | 100.00% |
Retail | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 107,735 | $ 102,663 |
Percentage of net sales | 40.00% | 38.00% |
E-commerce | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 44,522 | $ 35,673 |
Percentage of net sales | 16.00% | 13.00% |
Restaurant | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 25,293 | $ 23,409 |
Percentage of net sales | 9.00% | 9.00% |
Wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 94,376 | $ 109,850 |
Percentage of net sales | 35.00% | 40.00% |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 702 | $ 768 |
Percentage of net sales | 0.00% | 0.00% |
Operating Groups | Tommy Bahama | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 167,132 | $ 172,496 |
Operating Groups | Tommy Bahama | Retail | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 46.00% | 46.00% |
Operating Groups | Tommy Bahama | E-commerce | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 15.00% | 12.00% |
Operating Groups | Tommy Bahama | Restaurant | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 15.00% | 14.00% |
Operating Groups | Tommy Bahama | Wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 24.00% | 28.00% |
Operating Groups | Tommy Bahama | Other | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 0.00% | 0.00% |
Operating Groups | Lilly Pulitzer | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 68,627 | $ 63,343 |
Operating Groups | Lilly Pulitzer | Retail | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 44.00% | 37.00% |
Operating Groups | Lilly Pulitzer | E-commerce | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 24.00% | 20.00% |
Operating Groups | Lilly Pulitzer | Restaurant | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 0.00% | 0.00% |
Operating Groups | Lilly Pulitzer | Wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 32.00% | 43.00% |
Operating Groups | Lilly Pulitzer | Other | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 0.00% | 0.00% |
Operating Groups | Lanier Apparel | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 19,909 | $ 23,356 |
Operating Groups | Lanier Apparel | Retail | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 0.00% | 0.00% |
Operating Groups | Lanier Apparel | E-commerce | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 0.00% | 0.00% |
Operating Groups | Lanier Apparel | Restaurant | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 0.00% | 0.00% |
Operating Groups | Lanier Apparel | Wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 100.00% | 100.00% |
Operating Groups | Lanier Apparel | Other | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 0.00% | 0.00% |
Operating Groups | Southern Tide | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 13,472 | $ 12,642 |
Operating Groups | Southern Tide | Retail | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 0.00% | 0.00% |
Operating Groups | Southern Tide | E-commerce | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 12.00% | 12.00% |
Operating Groups | Southern Tide | Restaurant | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 0.00% | 0.00% |
Operating Groups | Southern Tide | Wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 88.00% | 88.00% |
Operating Groups | Southern Tide | Other | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 0.00% | 0.00% |
Corporate and Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 3,488 | $ 526 |
Corporate and Other | Retail | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 0.00% | 0.00% |
Corporate and Other | E-commerce | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 60.00% | 0.00% |
Corporate and Other | Restaurant | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 0.00% | 0.00% |
Corporate and Other | Wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 23.00% | 0.00% |
Corporate and Other | Other | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 17.00% | 100.00% |
Accounting Standards Adopted 18
Accounting Standards Adopted in Fiscal 2018: (Details 2) - USD ($) $ in Millions | 3 Months Ended | |||
May 05, 2018 | Feb. 04, 2018 | Feb. 03, 2018 | Apr. 29, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Expected original duration of performance obligations | 1 year | |||
Reserve balances recorded as a reduction to receivables | $ 6 | $ 7 | $ 9 | |
Income tax receivable | 5 | 5 | 0 | |
Value of inventory for wholesale and direct to consumer sales returns included in prepaid expenses and other current assets | 3 | |||
Contract liabilities for gift cards and merchandise credits, less any breakage income recognized to date, included in other accrued expenses and liabilities | 10 | $ 10 | $ 9 | |
Retained earnings | ASU 2016-16 | ||||
Disaggregation of Revenue [Line Items] | ||||
Reduction to retained earnings | $ 0.1 | |||
Direct to consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Estimated sales returns | $ 5 | |||
Gift cards and merchandise credits, redemption period | 1 year |