Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
May 04, 2024 | Jun. 07, 2024 | |
Document Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | May 04, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-08897 | |
Entity Registrant Name | BIG LOTS, INC. | |
Entity Incorporation, State or Country Code | OH | |
Entity Tax Identification Number | 06-1119097 | |
Entity Address, Address Line One | 4900 E. Dublin-Granville Road | |
Entity Address, City or Town | Columbus | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 43081 | |
City Area Code | 614 | |
Local Phone Number | 278-6800 | |
Entity Central Index Key | 0000768835 | |
Title of 12(b) Security | Common shares | |
Trading Symbol | BIG | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 29,681,973 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --02-01 | |
Amendment Flag | false | |
Entity Small Business | false |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Net sales | $ 1,009,112 | $ 1,123,577 |
Cost of sales (exclusive of depreciation expense shown separately below) | 637,413 | 731,108 |
Gross margin | 371,699 | 392,469 |
Selling and administrative expenses | 533,004 | 620,865 |
Depreciation expense | 31,551 | 36,582 |
Gain on sale of real estate and related expenses | 0 | (3,799) |
Operating income (loss) | (192,856) | (261,179) |
Interest expense | (11,989) | (9,149) |
Other income (expense) | 1 | 5 |
Income (loss) before income taxes | (204,844) | (270,323) |
Income tax expense (benefit) | 191 | (64,250) |
Net income (loss) and comprehensive income (loss) | $ (205,035) | $ (206,073) |
Earnings (loss) per common share | ||
Earnings (loss) per common share - basic (in dollars per share) | $ (6.99) | $ (7.10) |
Earnings (loss) per common share - diluted (in dollars per share) | $ (6.99) | $ (7.10) |
Weighted-average common shares outstanding: | ||
Basic | 29,350 | 29,018 |
Dilutive effect of share-based awards | 0 | 0 |
Diluted | 29,350 | 29,018 |
Cash dividends declared per common share | $ 0 | $ 0.30 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | May 04, 2024 | Feb. 03, 2024 |
Current assets: | ||
Cash and cash equivalents | $ 43,985 | $ 46,411 |
Inventories | 949,899 | 953,302 |
Other current assets | 82,236 | 86,310 |
Total current assets | 1,076,120 | 1,086,023 |
Operating lease right-of-use assets | 1,543,378 | 1,637,845 |
Property and equipment - net | 516,418 | 563,185 |
Deferred income taxes | 0 | 0 |
Other assets | 42,426 | 38,256 |
Total assets | 3,178,342 | 3,325,309 |
Current liabilities: | ||
Accounts payable | 298,743 | 320,682 |
Current operating lease liabilities | 236,841 | 242,384 |
Property, payroll, and other taxes | 69,648 | 72,517 |
Accrued operating expenses | 111,003 | 116,900 |
Insurance reserves | 31,564 | 33,458 |
Accrued salaries and wages | 22,234 | 43,182 |
Income taxes payable | 2,385 | 1,896 |
Total current liabilities | 772,418 | 831,019 |
Long-term debt | 573,843 | 406,271 |
Noncurrent operating lease liabilities | 1,565,354 | 1,616,634 |
Deferred income taxes | 459 | 459 |
Insurance reserves | 57,384 | 57,384 |
Unrecognized tax benefits | 5,369 | 5,223 |
Other liabilities | 122,074 | 123,824 |
Shareholders' equity: | ||
Preferred shares - authorized 2,000 shares; $0.01 par value; none issued | 0 | 0 |
Common shares - authorized 298,000 shares; $0.01 par value; issued 117,495 shares; outstanding 29,215 shares and 28,959 shares, respectively | 1,175 | 1,175 |
Treasury shares - 88,280 shares and 88,536 shares, respectively, at cost | (3,075,788) | (3,092,046) |
Additional paid-in capital | 610,330 | 624,618 |
Retained earnings | 2,545,724 | 2,750,748 |
Total shareholders' equity | 81,441 | 284,495 |
Total liabilities and shareholders' equity | $ 3,178,342 | $ 3,325,309 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | May 04, 2024 | Feb. 03, 2024 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Shares Authorized | 2,000 | 2,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Issued | 0 | 0 |
Common Stock, Shares Authorized | 298,000 | 298,000 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares, Issued | 117,495 | 117,495 |
Common Stock, Shares, Outstanding | 29,515 | 29,224 |
Treasury Stock, Common, Shares | 87,980 | 88,271 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Performance Shares [Member] | Common Stock [Member] | Common Stock [Member] Performance Shares [Member] | Treasury Stock [Member] | Treasury Stock [Member] Performance Shares [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] Performance Shares [Member] | Retained Earnings [Member] | Retained Earnings [Member] Performance Shares [Member] |
Balance at Jan. 28, 2023 | $ 763,907 | $ 1,175 | $ (3,105,175) | $ 627,714 | $ 3,240,193 | |||||
Balance (in shares) at Jan. 28, 2023 | 28,959 | |||||||||
Treasury stock (in shares) at Jan. 28, 2023 | 88,536 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Comprehensive loss | (206,073) | $ 0 | $ 0 | 0 | (206,073) | |||||
Dividends declared, including the impact of forfeitures | (9,116) | 0 | 0 | 0 | (9,116) | |||||
Purchases of common shares | (1,417) | $ 0 | $ (1,417) | 0 | 0 | |||||
Purchases of common shares, (in shares) | (128) | 128 | ||||||||
Restricted shares vested | 0 | $ 0 | $ 10,801 | (10,801) | 0 | |||||
Restricted shares vested, (in shares) | 308 | (308) | ||||||||
Performance shares vested | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||||
Performance shares vested (in shares) | 0 | 0 | ||||||||
Share-based compensation expense | 4,058 | $ 0 | $ 0 | 4,058 | 0 | |||||
Balance at Apr. 29, 2023 | 551,359 | $ 1,175 | $ (3,095,791) | 620,971 | 3,025,004 | |||||
Balance (in shares) at Apr. 29, 2023 | 29,139 | |||||||||
Treasury stock (in shares) at Apr. 29, 2023 | 88,356 | |||||||||
Balance at Feb. 03, 2024 | $ 284,495 | $ 1,175 | $ (3,092,046) | 624,618 | 2,750,748 | |||||
Balance (in shares) at Feb. 03, 2024 | 29,224 | 29,224 | ||||||||
Treasury stock (in shares) at Feb. 03, 2024 | 88,271 | 88,271 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Comprehensive loss | $ (205,035) | $ 0 | $ 0 | 0 | (205,035) | |||||
Dividends declared, including the impact of forfeitures | 11 | 0 | 0 | 0 | 11 | |||||
Purchases of common shares | (747) | $ 0 | $ (747) | 0 | 0 | |||||
Purchases of common shares, (in shares) | (195) | 195 | ||||||||
Restricted shares vested | 0 | $ 0 | $ 17,005 | (17,005) | 0 | |||||
Restricted shares vested, (in shares) | 486 | (486) | ||||||||
Share-based compensation expense | 2,717 | $ 0 | $ 0 | 2,717 | 0 | |||||
Balance at May. 04, 2024 | $ 81,441 | $ 1,175 | $ (3,075,788) | $ 610,330 | $ 2,545,724 | |||||
Balance (in shares) at May. 04, 2024 | 29,515 | 29,515 | ||||||||
Treasury stock (in shares) at May. 04, 2024 | 87,980 | 87,980 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared per common share | $ 0 | $ 0.30 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Operating activities: | ||
Net income (loss) | $ (205,035) | $ (206,073) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 32,424 | 37,196 |
Non-cash lease expense | 56,481 | 118,921 |
Deferred income taxes | 0 | (65,624) |
Non-cash impairment charge | 68,154 | 84,449 |
Gain on disposition of property and equipment | 65 | (3,419) |
Non-cash share-based compensation expense | 2,717 | 4,058 |
Change in assets and liabilities | ||
Inventories | 3,403 | 60,294 |
Accounts payable | (21,939) | (104,780) |
Operating lease liabilities | (63,026) | (117,874) |
Current income taxes | 4,800 | 7,050 |
Other current assets | (4,678) | (3,985) |
Other current liabilities | (19,873) | 23,262 |
Other assets | (151) | (1,583) |
Other liabilities | (281) | (830) |
Net cash used in operating activities | (146,939) | (168,938) |
Investing activities: | ||
Capital expenditures | (15,148) | (16,861) |
Cash proceeds from sale of property and equipment | 1,660 | 4,386 |
Other | (2,255) | (6) |
Net cash provided by (used in) investing activities | (15,743) | (12,481) |
Financing activities: | ||
Net proceeds from long-term debt | 172,100 | 200,200 |
Net repayments of sale and leaseback financing | (826) | (743) |
Payment of finance lease obligations | (605) | (444) |
Dividends paid | (159) | (9,587) |
Payments for other financing liabilities | (2,690) | 0 |
Payment for treasury shares acquired | (747) | (1,417) |
Payments for debt issuance cost | (6,817) | 0 |
Net cash provided by financing activities | 160,256 | 188,009 |
Increase in cash and cash equivalents | (2,426) | 6,590 |
Cash and cash equivalents: | ||
Beginning of Period | 46,411 | 44,730 |
End of Period | $ 43,985 | $ 51,320 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies - Supplemental Cash Flow Disclosures | 3 Months Ended |
May 04, 2024 | |
Other Significant Noncash Transactions [Line Items] | |
Schedule of Other Significant Noncash Transactions [Table Text Block] | The following table provides supplemental cash flow information for the first quarter of 2024 and the first quarter of 2023: Thirteen Weeks Ended (In thousands) May 4, 2024 April 29, 2023 Supplemental disclosure of cash flow information: Cash paid for interest $ 9,835 $ 7,945 Cash paid for income taxes, excluding impact of refunds 61 267 Gross proceeds from long-term debt under 2022 Credit Agreement 406,700 533,100 Gross proceeds from long-term debt under the Term Loan Facility, excluding debt issuance costs 50,000 — Gross payments of long-term debt under 2022 Credit Agreement 284,600 332,900 Cash paid for operating lease liabilities 97,176 149,007 Non-cash activity: Assets acquired under finance lease — 38 Accrued property and equipment 11,074 9,919 Deemed acquisition in “failed sale-leaseback transaction” — 100,000 Operating lease assets obtained in exchange for operating lease liabilities 6,203 85,933 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
May 04, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Substantial Doubt about Going Concern | Liquidity The Company has incurred net losses and used cash in operating activities in 2022, 2023, and the first quarter of 2024. The Company is currently in compliance with the covenants under the agreements governing its indebtedness (see Note 2 for additional information on these agreements and covenants) and its current aggregate available borrowings under the 2022 Credit Agreement and Term Loan Facility are $213.9 million, subject to certain borrowing base limitations discussed in Note 2 . Due to ongoing negative macroeconomic factors and their uncertain impacts on the Company’s business, results of operations, and cash flows, the Company expects to experience further operating losses and expects to experience difficulty remaining in compliance with such covenants. As further described below, management has implemented plans to reduce costs, improve sales, and enhance its financial flexibility and liquidity. However, based on our current cash and liquidity projections, and uncertainties with respect to the mitigating effect of management’s plans, the Company has concluded there is a significant likelihood that it will be unable to comply with the Excess Availability Covenant under the 2022 Credit Agreement and the Term Loan Facility within the next 12 months, which raises substantial doubt about the Company’s ability to continue as a going concern. Failure to comply with the Excess Availability Covenant would result in an event of default which could result in an acceleration of our obligations under the Term Loan Facility and the 2022 Credit Agreement. We can provide no assurance that the lender parties under the Term Loan Facility or the 2022 Credit Agreement would waive the Company’s failure to comply with the Excess Availability Covenant. Notwithstanding the above, the Company intends to vigorously pursue its plans to enhance its liquidity, improve the performance of the business, and avoid a covenant violation. The Company is evaluating various alternatives to improve its available liquidity, including but not limited to, lease concessions and deferrals, entering a letter of credit facility, managing its working capital and raising additional capital. The Company is also seeking to further monetize assets, such as its remaining owned real estate property, through outright sale or sale and leaseback opportunities. Further, the Company is seeking to monetize certain pending litigation claims to which the Company is a plaintiff, which we expect would improve the Company’s liquidity position, if actioned. The Company also plans to drive significant improvements in sales and profitability through our key strategic actions, which include, among others, our actions to increase penetration of extreme bargains and closeouts, improve merchandise presentations that highlight our best deals and encourage basket growth and visit frequency, and drive productivity and efficiency in our business by aggressively pursuing operating expense and capital outlay reductions, which includes continuing to achieve savings through our Project Springboard initiative. These plans have not been finalized, are subject to market conditions, and are not fully within the Company’s control, and therefore cannot be deemed probable; however, management believes that, in aggregate, these plans have the potential to maintain the Company’s compliance with the Excess Availability Covenant. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainty referenced above. |
Debt
Debt | 3 Months Ended |
May 04, 2024 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Bank Credit Facility On September 21, 2022, we entered into a five On April 18, 2024, concurrent with our entry into the Term Loan Facility (as defined below), the Company entered into the First Amendment to the 2022 Credit Agreement (the “ABL Amendment”). The ABL Amendment amended the 2022 Credit Agreement to, among other things, (1) permit the Term Loan Facility, (2) expand the scope of collateral to include non-working capital assets and a mortgage on the Company’s corporate headquarters located in Columbus, Ohio, (3) revise the borrowing base formula to include the Term Loan Pushdown Reserve (as defined below), (4) increase the interest rate spreads and replace CDOR with CORRA, (5) replace the fixed charge coverage ratio covenant with the Excess Availability Covenant (as defined below), and (6) make other changes to the 2022 Credit Agreement to conform with the Term Loan Facility. In connection with our entry into the ABL Amendment, we paid bank fees and other expenses in the aggregate amount of $2.2 million, which are being amortized over the term of the 2022 Credit Agreement. The bank fees and other expenses related to the ABL Amendment and the remaining unamortized fees from the 2022 Credit Agreement are recorded within other assets on the condensed consolidated balance sheets. Revolving loans under the 2022 Credit Agreement are available in an aggregate amount equal to the lesser of (1) the aggregate Commitments and (2) a borrowing base consisting of eligible credit card receivables and eligible inventory (including in-transit inventory), subject to customary exceptions and reserves, including the Term Loan Pushdown Reserve (the “ABL Borrowing Base”). Under the 2022 Credit Agreement, we may obtain additional Commitments on no more than five occasions in an aggregate amount of up to $300 million, subject to agreement by the lenders to increase their respective Commitments and certain other conditions. The 2022 Credit Agreement includes a swing loan sublimit of 10% of the then applicable aggregate Commitments and a $90 million letter of credit sublimit. Loans made under the 2022 Credit Agreement may be prepaid without penalty. Borrowings under the 2022 Credit Agreement are available for general corporate purposes, working capital and to repay certain of our indebtedness as of closing. Our obligations under the 2022 Credit Agreement are guaranteed by the Loan Parties (other than the Borrowers) and, after giving effect to the ABL Amendment, our obligations under the 2022 Credit Agreement are secured by (a) a first priority lien on substantially all of the Loan Parties’ working capital assets, including credit card receivables and inventory, and (b) a second priority lien on substantially all of the Loan Parties’ non-working capital personal property assets, including fixtures, machinery, equipment, and intellectual property, and a second priority mortgage on the Company’s corporate headquarters located in Columbus, Ohio, in each case subject to certain permitted liens. The pricing and certain fees under the 2022 Credit Agreement fluctuate based on our borrowing availability under the 2022 Credit Agreement. The 2022 Credit Agreement allows us to select our interest rate for each borrowing from multiple interest rate options. The interest rate options are generally derived from the prime rate, adjusted daily simple SOFR or one, three or six month adjusted Term SOFR. We will also pay an unused commitment fee of 0.20% per annum on the unused Commitments. The 2022 Credit Agreement contains an environmental, social and governance (“ESG”) provision, which may provide favorable pricing and fee adjustments if we meet ESG performance criteria to be established by a future amendment to the 2022 Credit Agreement. The 2022 Credit Agreement contains customary affirmative and negative covenants (including, where applicable, restrictions on our ability to, among other things, incur additional indebtedness, pay dividends, redeem or repurchase stock, prepay certain indebtedness, make certain loans and investments, dispose of assets, enter into restrictive agreements, engage in transactions with affiliates, modify organizational documents, incur liens and consummate mergers and other fundamental changes) and events of default, including a cross default to other material indebtedness. In addition, after giving effect to the ABL Amendment, the 2022 Credit Agreement requires us to maintain minimum excess availability (“Excess Availability Covenant”) of at least the greater of (i) $80.0 million or (ii) 10% of the lesser of the aggregate Commitments under the 2022 Credit Agreement (currently $900.0 million) and the ABL Borrowing Base (the “Maximum Credit Amount”) (without giving effect to the Term Loan Pushdown Reserve). A violation of these covenants would result in a default under the 2022 Credit Agreement which would permit the lenders to restrict our ability to further access the 2022 Credit Agreement for loans and letters of credit and could require the immediate repayment of any outstanding loans under the 2022 Credit Agreement. The fair values of our long-term obligations under the 2022 Credit Agreement are estimated based on quoted market prices for the same or similar issues and the current interest rates offered for similar instruments. These fair value measurements are classified as Level 2 within the fair value hierarchy. We believe the carrying value of our debt is a reasonable approximation of fair value. Term Loan Facility On April 18, 2024, the Company entered into a Credit Agreement (the “Term Loan Facility”) among the Company and Big Lots Stores, LLC, as borrowers (the “Borrowers”), all other domestic subsidiaries of the Company, as guarantors (together with the Borrowers, the “Loan Parties”), 1903P Loan Agent, LLC (the “Term Loan Agent”), as administrative agent and collateral agent, and the other lenders named therein. The Term Loan Facility provides for a “first in, last out” delayed draw term loan facility in an aggregate committed amount of up to $200 million (the “Term Loan Facility Commitments”). At commencement of the Term Loan Facility, the Company drew down $50 million in total borrowings under the Term Loan Facility. Loans under the Term Loan Facility are available in an aggregate amount equal to the lesser of (1) the aggregate Term Loan Facility Commitments and (2) a borrowing base calculated based on specified percentages of eligible inventory, credit card receivables, real estate, fixtures, machinery and equipment, subject to customary exceptions and reserves (the “Term Loan Borrowing Base”). If at any time the amounts borrowed under the Term Loan Facility exceed the Term Loan Borrowing Base, the Company is required to maintain a reserve against the ABL Borrowing Base in an amount equal to such excess (the “Term Loan Pushdown Reserve”). Borrowings under the Term Loan Facility are available for general corporate purposes, working capital and to repay a portion of our indebtedness outstanding under the 2022 Credit Agreement. All amounts of the Term Loan Facility outstanding on the maturity date will be due and payable in full on September 21, 2027. The Term Loan Facility requires mandatory prepayments in connection with certain sales or dispositions of assets, the incurrence of certain additional debt, certain issuances of additional equity, the receipt of certain extraordinary receipts, subject to certain exceptions and, in the case of certain sales or other dispositions, reinvestment rights. Some mandatory prepayments are subject to a prepayment fee. Subject to compliance with applicable provisions and tests under the 2022 Credit Agreement, voluntary prepayments under the Term Loan Facility are permitted at any time upon proper notice and, in certain instances, a prepayment fee. Amounts borrowed under the Term Loan Facility bear interest at a variable rate indexed to SOFR plus a pricing margin ranging from 9.25% to 10.00% per annum based on our total borrowings under the Term Loan Facility. Interest payments under the Term Loan Facility are due on the first day of each calendar month. As of May 4, 2024, the interest rate on the outstanding Term Loan Facility borrowings was 14.6%. The Term Loan Facility requires the Borrowers to satisfy the Excess Availability Covenant. In addition, the Term Loan Facility contains customary covenants and restrictions on the Company’s and its subsidiaries’ activities, including, but not limited to, limitations on the incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions, prepayment of other debt, distributions, dividends, the repurchase of capital stock, transactions with affiliates, the ability to change the nature of its business or its fiscal year, and permitted activities of the Company. The Term Loan Facility also contains customary events of default that include, among other things, non-payment defaults, inaccuracy of representations and warranties defaults, covenant defaults, cross default to material indebtedness, bankruptcy and insolvency defaults, material judgment defaults, ERISA defaults, structural defaults under the loan documents and a change of control default. The occurrence of an event of default could result in the acceleration of our obligations under the Term Loan Facility. Under certain circumstances, a default interest rate will apply on any amount payable under the Term Loan Facility during the existence of an event of default at a per annum rate equal to 2.00% above the applicable interest rate for any principal and 2.00% above the rate applicable for base rate loans for any other interest. All obligations under the Term Loan Facility are guaranteed by the Loan Parties (other than the Borrowers) and secured by (a) a second priority lien on substantially all of the Loan Parties’ working capital assets, including credit card receivables and inventory, and (b) a first priority lien on substantially all of the Loan Parties’ non-working capital personal property assets, including fixtures, machinery, equipment, and intellectual property, and a first priority mortgage on the Company’s corporate headquarters located in Columbus, Ohio, in each case, subject to certain permitted liens. The Company recorded deferred financing costs associated with the issuance of the Term Loan Facility. As of May 4, 2024, the debt financing costs associated with the Term Loan Facility were $4.6 million and had unamortized costs of $4.5 million These costs will be amortized over the respective contractual term of the Term Loan Facility. The aggregate outstanding principal amount of the Term Loan Facility is presented on the condensed consolidated balance sheets, net of unamortized costs. The fair values of our long-term obligations under the Term Loan Facility are estimated based on quoted market prices for the same or similar issues and the current interest rates offered for similar instruments. These fair value measurements are classified as Level 2 within the fair value hierarchy. We believe the carrying value of our debt is a reasonable approximation of fair value. As of May 4, 2024, we had an aggregate borrowing base (as defined under the 2022 Credit Agreement and Term Loan Facility) of $956.7 million under the 2022 Credit Agreement and Term Loan Facility. At May 4, 2024, we had $578.2 million in aggregate borrowings outstanding under the 2022 Credit Agreement and Term Loan Facility and $53.6 million committed to outstanding letters of credit, leaving $324.9 million of aggregate availability under the 2022 Credit Agreement and Term Loan Facility, subject to certain borrowing base limitations as further discussed above. Secured Insurance Premium Financing Obligation In the second quarter of 2023, we entered into three individual financing agreements (“2023 Term Notes”) in an aggregate amount of $16.2 million, which are secured by unearned prepaid insurance premiums. The 2023 Term Notes were paid in full as of May 4, 2024. The 2023 Term Notes carried annual interest rates ranging from 7.1% to 8.5%. The Company did not receive any cash in connection with its entry into the 2023 Term Notes. In 2023, we entered into an immaterial financing arrangement for server and software equipment, which is included within the 2023 Term Notes balance noted within the table below. Debt was recorded in our condensed consolidated balance sheets as follows: Instrument (In thousands) May 4, 2024 February 3, 2024 2022 Credit Agreement $ 528,200 $ 406,100 Term Loan Facility 50,000 — 2023 Term Notes 361 3,021 Total debt 578,561 409,121 Less current portion of 2023 Term Notes (included in Accrued operating expenses) (190) (2,850) Total long-term debt 578,371 406,271 Less: Unamortized debt issuance costs related to Term Loan Facility (4,528) — Total Long-term debt - net 573,843 $ 406,271 |
Synthetic Lease
Synthetic Lease | 3 Months Ended |
May 04, 2024 | |
Leases [Abstract] | |
SYTHETIC LEASE [Text Block] | SYNTHETIC LEASE Synthetic Lease The 2023 Synthetic Lease (as defined below) related to our Apple Valley, CA distribution center was terminated and paid off on August 25, 2023 in connection with the closing of the sale and leaseback transactions described in more detail in Note 10 . On March 15, 2023, AVDC, LLC (“Lessee”), a wholly-owned indirect subsidiary of the Company, Bankers Commercial Corporation (“Lessor”), the rent assignees parties thereto (“Rent Assignees” and, together with Lessor, “Participants”), MUFG Bank, Ltd., as collateral agent for the Rent Assignees (in such capacity, “Collateral Agent”), and MUFG Bank, Ltd., as administrative agent for the Participants, entered into a Participation Agreement (the “Participation Agreement”), pursuant to which the Participants funded $100 million to Wachovia Service Corporation (“Prior Lessor”) to finance Lessor’s purchase of the land and building related to our Apple Valley, CA distribution center (“Leased Property”) from the Prior Lessor. Also on March 15, 2023, we entered into a Lease Agreement and supplement to the Lease Agreement (collectively, the “Lease” and together with the Participation Agreement and related agreements, the “2023 Synthetic Lease”) pursuant to which the Lessor agreed to lease the Leased Property to Lessee for an initial term of 60 months. The Lease could have been extended for up to an additional five years, in one-year or longer annual periods, with each renewal subject to approval by the Participants. The 2023 Synthetic Lease required Lessee to pay basic rent on the scheduled payment dates in arrears in an amount equal to (a) a per annum rate equal to Term SOFR for the applicable payment period plus a 10 basis point spread adjustment plus an applicable margin equal to 250 basis points multiplied by (b) the portion of the lease balance not constituting the investment by Lessor in the Leased Property. In addition to basic rent, Lessee was required to pay all costs and expenses associated with the use or occupancy of the Leased Property, including without limitation, maintenance, insurance and certain indemnity payments. GAAP treatment of the synthetic lease refinancing transaction required us to treat the assignment of the purchase option from Prior Lessor to Lessor as a deemed acquisition of the Leased Property due to the Company’s control of the Leased Property under GAAP at the time the assigned purchase option was exercised. Accordingly, the Company applied sale and leaseback accounting to the transfer of the property from the Prior Lessor to the Lessor. The transaction met the criteria of a “failed sale- leaseback” under GAAP, which required us to record an asset for the deemed acquisition and an equivalent financing liability that represents the cost to acquire the Leased Property. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
May 04, 2024 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY Earnings per Share No adjustments were required to be made to our weighted-average common shares outstanding for purposes of computing basic and diluted earnings per share for all periods presented. At May 4, 2024, performance share units that vest based on a relative total shareholder return (“TSR PSUs” see Note 5 for a more detailed description of these awards), shareholder value creation awards (“SVCA PSUs” - see Note 5 for a more detailed description of these awards), and certain restricted stock units (“RSUs”) with a minimum performance requirement (see Note 5 for a more detailed description of these awards) were excluded from our computation of earnings (loss) per share because the minimum applicable performance conditions had not been attained. Antidilutive RSUs, performance share units (“PSUs”), SVCA PSUs, and TSR PSUs are excluded from the calculation because they decrease the number of diluted shares outstanding under the treasury stock method. The aggregate number of RSUs, PSUs, SVCA PSUs, and TSR PSUs that were antidilutive, as determined under the treasury stock method, was 1.1 million and 0.9 million for the first quarter of 2024 and the first quarter of 2023, respectively. Due to the net loss recorded in the condensed consolidated statements of operations, any potentially dilutive shares were excluded from the denominator in computing diluted earnings (loss) per common share for the first quarter of 2024 and the first quarter of 2023. Share Repurchase Programs On December 1, 2021, our Board of Directors authorized the repurchase of up to $250 million of our common shares (“2021 Repurchase Authorization”). Pursuant to the 2021 Repurchase Authorization, we may repurchase shares in the open market and/or in privately negotiated transactions at our discretion, subject to market conditions, our compliance with the terms of the 2022 Credit Agreement and Term Loan Facility, and other factors. The 2021 Repurchase Authorization has no scheduled termination date. In the first quarter of 2024 and first quarter of 2023, no shares were repurchased under the 2021 Repurchase Authorization. As of May 4, 2024, we had $159.4 million available for future repurchases under the 2021 Repurchase Authorization. Common shares acquired through repurchase authorizations are held in treasury at cost and are available to meet obligations under equity compensation plans and for general corporate purposes. In addition to shares repurchased under the repurchase authorizations, purchases of common shares reported in the condensed consolidated statements of shareholders’ equity and the condensed consolidated statements of cash flows include shares repurchased to satisfy income tax withholdings associated with the vesting of share-based awards. In the first quarter of 2024 and first quarter of 2023, purchases of common shares reported in the condensed consolidated statements of shareholders’ equity and condensed consolidated statements of cash flows were solely comprised of shares repurchased to satisfy income tax withholdings associated with the vesting of share-based awards. Dividends The Company declared and paid cash dividends per common share during the quarterly periods presented as follows: Dividends Amount Declared Amount Paid 2024: (In thousands) (In thousands) First quarter $ — $ (11) $ 159 Total $ — $ (11) $ 159 The amount of dividends declared may vary from the amount of dividends paid in a period due to the vesting of share-based awards. Furthermore, dividends declared may fluctuate on a periodic basis due to the forfeiture of unpaid dividends associated with unvested share-based awards. Forfeitures of unpaid dividends result in a reversal of amounts previously declared which may produce a negative balance during the period. On May 23, 2023, our Board of Directors suspended the Company’s quarterly cash dividend. The payment of any future dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, compliance with applicable laws and agreements and any other factors deemed relevant by our Board of Directors. |
Share-Based Plans
Share-Based Plans | 3 Months Ended |
May 04, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED PLANS | SHARE-BASED PLANS We have issued RSUs, PSUs, SVCA PSUs, and TSR PSUs under our shareholder-approved equity compensation plans. We recognized share-based compensation expense of $2.7 million and $4.1 million in the first quarter of 2024 and the first quarter of 2023, respectively. Non-vested Restricted Stock Units The following table summarizes the non-vested RSU activity for the first quarter of 2024: Number of Shares Weighted Average Grant-Date Fair Value Per Share Outstanding non-vested RSUs at February 3, 2024 1,910,203 $ 12.54 Granted 987,147 3.90 Vested (485,611) 18.12 Forfeited (126,110) 11.83 Outstanding non-vested RSUs at May 4, 2024 2,285,629 $ 7.33 The non-vested RSUs granted in 2022, 2023, and the first quarter of 2024 generally vest, and are expensed, on a ratable basis over three years from the grant date of the award, if the grantee remains employed by us through the vesting dates. We estimated that the attainment of the financial performance objective associated with certain RSUs granted in 2022 will fall below the minimum required performance threshold. The RSUs granted in 2024 and 2023 have no required financial performance objectives. The RSUs granted in 2024 were only issued to certain executive members of management. Performance Share Units We awarded PSUs to certain members of management in 2021, which would vest if certain financial performance objectives were achieved over a three As a result of the process used to establish the financial performance objectives, we established the grant date for 2022 PSUs in the first quarter of 2024, when we communicated the financial performance objectives for the third fiscal year of the award to the award recipients, which also established the service inception date, the fair value of the awards, and the associated expense recognition period for the 2022 PSUs. If we meet the applicable threshold financial performance objectives over the three The number of shares distributed upon vesting of the 2022 PSUs depends on the average performance attained during the three In 2023, we issued PSUs to certain members of management, which will vest if minimum financial performance objectives are achieved over a three three As a result of the process used to establish the financial performance objectives, we met the requirements for establishing a grant date and subsequently the service inception date, fair value of the awards, and associated expense recognition period for the second tranche of 2023 PSUs after the Human Capital and Compensation Committee established the 2024 fiscal year financial performance objectives in the first quarter of 2024. If we meet the applicable threshold financial performance objectives for any of the three tranches and the grantee remains employed by us through the end of the performance period, the PSUs will vest on the first trading day after we file our Annual Report on Form 10-K for the last fiscal year in the three The number of shares distributed upon vesting of the 2023 PSUs depends on the average performance attained during the three In 2022 and 2023, in addition to PSUs, we also awarded TSR PSUs to certain members of management, which vest based on the achievement of TSR targets relative to a peer group over a three three three The number of shares distributed upon vesting of the TSR PSUs depends on the average performance attained during the three In 2023, we also awarded SVCA PSUs to certain members of management, which vest based on the achievement of multiple share price performance goals over a three three In the first quarter of 2024, we did not issue PSUs, SVCA PSUs, or TSR PSUs to any members of management. Instead, we granted performance-based cash awards and time-based cash awards to certain members of management. See the “Cash Awards” section of this note for additional details regarding these awards. We have begun or expect to begin recognizing expense related to PSUs, TSR PSUs, and SVCA PSUs as follows: Issue Year PSU Category Outstanding Units at May 4, 2024 Actual Grant Date Expected Valuation (Grant) Date Actual or Expected Expense Period 2022 TSR PSU 44,031 Fiscal 2022 Fiscal 2022 - 2024 2022 PSU 176,162 March 2024 Fiscal 2024 2023 PSU (“FY23 Tranche”) 141,485 August 2023 Fiscal 2023 - 2025 2023 PSU (“FY24 Tranche”) 141,485 March 2024 Fiscal 2024 - 2025 2023 PSU (“FY25 Tranche”) 141,485 March 2025 Fiscal 2025 2023 TSR PSU 106,109 March 2023 Fiscal 2023 - 2025 2023 SVCA PSU 433,985 March 2023 Fiscal 2023 - 2025 Total 1,184,742 We recognized $0.2 million and $0.4 million of share-based compensation expense related to PSUs, TSR PSUs and SVCA PSUs in the first quarter of 2024 and the first quarter of 2023, respectively. At May 4, 2024, we estimated that our financial performance will fall below the threshold performance objectives established for the 2022 PSUs and the FY24 Tranche of the 2023 PSUs. As of May 4, 2024, financial performance objectives have not been set for the FY25 Tranche of the 2023 PSUs. As a result, only the 2022 PSUs, the FY23 Tranche of the 2023 PSUs and the FY24 Tranche of the 2023 PSUs were deemed outstanding at May 4, 2024. In the first quarter 2024, we did not recognize share-based compensation expense related to the 2022 PSUs or the FY24 Tranche of the 2023 PSUs. The following table summarizes the activity related to PSUs, TSR PSUs, and SVCA PSUs for the first quarter of 2024: Number of Units Weighted Average Grant-Date Fair Value Per Share Outstanding PSUs, TSR PSUs, and SVCA PSUs at February 3, 2024 978,683 $ 7.34 Granted 332,049 3.90 Vested — — Forfeited (267,475) 6.70 Outstanding PSUs, TSR PSUs, and SVCA PSUs at May 4, 2024 1,043,257 $ 6.41 The following activity occurred under our share-based plans during the respective periods shown: First Quarter (In thousands) 2024 2023 Total fair value of restricted stock vested $ 1,858 $ 3,410 The total unearned compensation expense related to all share-based awards outstanding, excluding the FY25 Tranche of the 2023 PSUs, was approximately $12.0 million at May 4, 2024. We expect to recognize this compensation cost through February 2026 based on existing vesting terms with the weighted-average remaining expense recognition period being approximately 1.8 years from May 4, 2024. Cash Awards In the first quarter of 2024, in lieu of awarding RSUs, we issued time-based cash awards to certain members of management, which vest, and are expensed, on a ratable basis over the three In the first quarter of 2024, in lieu of awarding PSUs, we awarded performance-based cash awards to certain members of management, which will vest if minimum financial performance objectives are achieved over a three three We recognized compensation expense of $0.3 million during the first quarter of 2024 related to the cash awards described above. The time-based cash awards and performance-based cash awards have been recorded as a liability within accrued operating expenses in our condensed consolidated balance sheets. |
Income Taxes
Income Taxes | 3 Months Ended |
May 04, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The provision for income taxes was based on a current estimate of the annual effective tax rate, adjusted to reflect the effect of discrete items. We have estimated the reasonably possible expected net change in unrecognized tax benefits through May 4, 2024, based on (1) expected cash and noncash settlements or payments of uncertain tax positions, and (2) lapses of the applicable statutes of limitations for unrecognized tax benefits. The estimated net decrease in unrecognized tax benefits for the next 12 months is approximately $2.0 million. Actual results may differ materially from this estimate. We record income tax expense, income tax receivable, and deferred tax assets and related liabilities based on our best estimates. Additionally, we assess the likelihood of realizing the benefits of our deferred tax assets. Our ability to recover these deferred tax assets depends on several factors, including our ability to project future taxable income. In evaluating future taxable income, significant weight is given to positive and negative evidence that is objectively verifiable. As of May 4, 2024, the Company remains in a historical three-year cumulative loss position, which is significant objective negative evidence in considering whether deferred tax assets are realizable. Such objective evidence limits the ability to consider other subjective evidence, such as the projection of future taxable income. Accordingly, we have maintained a full valuation allowance on our deferred tax assets as of the first quarter of 2024. The change in valuation allowance increased by $33.7 million to $192.9 million at the end of first quarter of 2024 compared to $159.2 million at the end of fourth quarter of 2023. |
Contingencies
Contingencies | 3 Months Ended |
May 04, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Legal Proceedings We are involved in legal actions and claims arising in the ordinary course of business. We currently believe that each such action and claim will be resolved without a material effect on our financial condition, results of operations, or liquidity. However, litigation involves an element of uncertainty. Future developments could cause these actions or claims to have a material effect on our financial condition, results of operations, and liquidity. |
Business Segment Data
Business Segment Data | 3 Months Ended |
May 04, 2024 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT DATA | BUSINESS SEGMENT DATA Our six merchandise categories are as follows: Food; Consumables; Soft Home; Hard Home and Other; Furniture; and Seasonal. The Food category includes our beverage & grocery; specialty foods; and candy & snacks departments. The Consumables category includes our health, beauty and cosmetics; plastics; paper; pet; infant; stationery; and chemical departments. The Soft Home category includes our apparel; hosiery; jewelry; frames; fashion bedding; utility bedding; bath; window; decorative textile; and area rugs departments. The Hard Home and Other category includes our small appliances; table top; food preparation; home maintenance; home organization; toys; and electronics departments; and other offerings. The Furniture category includes our upholstery; mattress; ready-to-assemble; home décor; and case goods departments. The Seasonal category includes our lawn & garden; summer; Christmas; and other holiday departments. We periodically assess, and make minor adjustments to, our product hierarchy, which can impact the roll-up of our merchandise categories. Our financial reporting process utilizes the most current product hierarchy in reporting net sales by merchandise category for all periods presented. Therefore, there may be minor reclassifications of net sales by merchandise category compared to previously reported amounts. The following table presents net sales data by merchandise category: First Quarter (In thousands) 2024 2023 Furniture $ 291,649 $ 312,144 Consumables 173,924 194,265 Seasonal 160,764 177,008 Soft Home 152,588 174,685 Food 136,907 157,036 Hard Home 93,280 108,439 Net sales $ 1,009,112 $ 1,123,577 |
Supplier Finance Program
Supplier Finance Program | 3 Months Ended |
May 04, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLIER FINANCE PROGRAM | SUPPLIER FINANCE PROGRAM In 2023 and through February 16, 2024, we facilitated a voluntary supply chain finance (“SCF”) program through a participating financial institution. This SCF program enabled our suppliers to sell their receivables due from the Company to a participating financial institution at their discretion. As of February 16, 2024, the participating financial institution suspended funding and we have chosen to suspend the program until such time that unsecured funding is available. As of May 4, 2024 and April 29, 2023, the SCF program had $0.0 million and $55.0 million of revolving capacity, respectively. Prior to February 16, 2024, we were not a party to the agreements between the participating financial institution and the suppliers in connection with the SCF program. The range of payment terms we negotiated with our suppliers was consistent, irrespective of whether a supplier participated in the SCF program. No guarantees were provided by the Company or any of our subsidiaries under the SCF program. The following table summarizes changes in the supplier finance program balance: First Quarter (In thousands) 2024 2023 Confirmed obligations outstanding at beginning of period $ 17.8 $ 35.4 Invoices confirmed during period 4.4 29.7 Confirmed invoices paid during period (22.2) (51.8) Confirmed obligations outstanding at period end $ — $ 13.3 |
Gain on Sale of Real Estate
Gain on Sale of Real Estate | 3 Months Ended |
May 04, 2024 | |
Gain (Loss) on Disposition of Property Plant Equipment [Abstract] | |
Real Estate Disclosure [Text Block] | GAIN ON SALE OF REAL ESTATEIn the third quarter of 2023, we simultaneously terminated the Synthetic Lease for our Apple Valley, CA distribution center (“AVDC”), took title to the AVDC property, and completed sale and leaseback transactions for the AVDC and 23 owned store locations (“Sale and leaseback Stores”). The aggregate sale price for the transactions was $305.7 million. The transactions, which were completed with the same buyer-lessor of our four other regional distribution centers, also included a five-year extension of the lease for our Columbus, OH distribution center (“CODC”). The Company allocated $9.4 million of the cash consideration received to the extension of the lease for CODC and recorded the consideration as a lease incentive. Due to sale-leaseback accounting requirements, the remaining cash received was compared, on an individual property basis, to the fair market value of the properties. As a result, the cash received in the transactions was allocated between proceeds on the sale of AVDC, the Sale and leaseback Stores, prepaid rent, and financing proceeds. The aggregate net proceeds, before taxes, on the sales of AVDC and the Sale and leaseback Stores were $332.1 million. The aggregate net proceeds include $36.5 million in net proceeds in excess of the aggregate sale price due to properties sold below market, which resulted in a corresponding increase in prepaid rent. The prepaid rent was recorded in the operating lease right-of-use assets in our condensed consolidated balance sheets. The aggregate net proceeds exclude $0.6 million received in the aggregate sale price due to properties sold above market value, which was recorded as a financing liability. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Pay vs Performance Disclosure | ||
Net income (loss) | $ (205,035) | $ (206,073) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
May 04, 2024 | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Insider Trading Arrangements During the three months ended May 4, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as such terms are defined in Item 408(a) of Regulation S-K. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
May 04, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Period, Policy [Policy Text Block] | Fiscal Periods |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets Our long-lived assets primarily consist of property and equipment - net and operating lease right-of-use assets. If the net book value of a store’s long-lived assets is not recoverable by the expected undiscounted future cash flows of the store, we estimate the fair value of the store’s assets and recognize an impairment charge for the excess net book value of the store’s long-lived assets over its fair value (categorized as Level 3 under the fair value hierarchy). Fair value at the store level is typically based on projected discounted cash flows over the remaining lease term, which may include market comparative information for similar properties. During the first quarter of 2024, the Company recorded aggregate asset impairment charges of $68.2 million related to 244 underperforming store locations, which were comprised of $44.2 million of operating lease right-of-use assets and $24.0 million of property and equipment - net. The asset impairment charges were recorded within selling and administrative expenses in our condensed consolidated statements of operations and comprehensive loss. A significant decline in our financial performance could negatively affect the results of our assessments of the recoverability of our property and equipment-net and operating lease right-of-use assets and estimated fair value at the store level, resulting in future impairment charges. In the first quarter of 2023, the Company recorded aggregate asset impairment charges of $83.8 million related to 237 underperforming store locations, which were comprised of $62.1 million of operating lease right-of-use assets, $22.4 million of property and equipment - net, partially offset by a gain on extinguishment of a lease liability resulting from a lease cancellation from a previous impaired store of $0.7 million. In the first quarter of 2023, the Company completed the sale of one owned store location that was held for sale at the end of fiscal 2022 with an aggregate net book value of $0.7 million. The net cash proceeds on the sale of real estate were $4.4 million and resulted in a gain after related expenses of $3.8 million. |
Selling, General and Administrative Expenses, Policy [Policy Text Block] | Selling and Administrative Expenses Selling and administrative expenses include store expenses (such as payroll and occupancy costs) and costs related to warehousing, distribution, outbound transportation to our stores, advertising, purchasing, insurance, non-income taxes, accepting credit/debit cards, impairment charges, and overhead. Our selling and administrative expense rates may not be comparable to those of other retailers that include warehousing, distribution, and outbound transportation costs to stores in cost of sales. Distribution and outbound transportation costs included in selling and administrative expenses were $75.3 million and $140.2 million for the first quarter of 2024 and the first quarter of 2023, respectively. Distribution and outbound transportation costs in the first quarter of 2023 included $53.6 million of expenses associated with the exit of the former synthetic lease for our Apple Valley, California distribution center and $8.6 million to operate and wind down the Company’s four forward distribution centers, which were closed in the second quarter of 2023. |
Advertising Cost [Policy Text Block] | Advertising Expense Advertising costs, which are expensed as incurred, consist primarily of television and print advertising, digital, social media, internet and e-mail marketing and advertising, payment card-linked marketing and in-store point-of-purchase signage and presentations. Advertising expenses are included in selling and administrative expenses. Advertising expenses were $24.1 million and $24.8 million for the first quarter of 2024 and the first quarter of 2023, respectively. |
Comparability of Prior Year Financial Data, Policy [Policy Text Block] | Reclassifications We periodically assess, and make minor adjustments to, our product hierarchy, which can impact the roll-up of our merchandise categories. Our financial reporting process utilizes the most current product hierarchy in reporting net sales by merchandise category for all periods presented. Therefore, there may be minor reclassifications of net sales by merchandise category compared to previously reported amounts. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures , which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. Management is currently evaluating this ASU to determine its impact on the Company's disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which expands the requirements for income tax disclosures in order to provide greater transparency. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied prospectively. Management is currently evaluating this ASU to determine its impact on the Company's disclosures. There are currently no additional new accounting pronouncements with a future effective date that are of significance, or potential significance, to us. |
Fair Value Measurement, Policy | Fair Value of Financial Instruments The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. Level 1, defined as observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities. Level 2, defined as observable inputs other than Level 1 inputs. These include quoted prices for similar assets or liabilities in an active market, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying value of accounts receivable and accounts payable approximates fair value because of the relatively short maturity of these items. |
Debt Long-term Debt (Tables)
Debt Long-term Debt (Tables) | 3 Months Ended |
May 04, 2024 | |
Debt Instrument [Line Items] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Debt was recorded in our condensed consolidated balance sheets as follows: Instrument (In thousands) May 4, 2024 February 3, 2024 2022 Credit Agreement $ 528,200 $ 406,100 Term Loan Facility 50,000 — 2023 Term Notes 361 3,021 Total debt 578,561 409,121 Less current portion of 2023 Term Notes (included in Accrued operating expenses) (190) (2,850) Total long-term debt 578,371 406,271 Less: Unamortized debt issuance costs related to Term Loan Facility (4,528) — Total Long-term debt - net 573,843 $ 406,271 |
Shareholders' Equity Dividends
Shareholders' Equity Dividends Declared (Tables) | 3 Months Ended |
May 04, 2024 | |
Equity [Abstract] | |
Dividends Declared [Table Text Block] | The Company declared and paid cash dividends per common share during the quarterly periods presented as follows: Dividends Amount Declared Amount Paid 2024: (In thousands) (In thousands) First quarter $ — $ (11) $ 159 Total $ — $ (11) $ 159 |
Share-Based Plans (Tables)
Share-Based Plans (Tables) | 3 Months Ended |
May 04, 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity [Table Text Block] | The following table summarizes the non-vested RSU activity for the first quarter of 2024: Number of Shares Weighted Average Grant-Date Fair Value Per Share Outstanding non-vested RSUs at February 3, 2024 1,910,203 $ 12.54 Granted 987,147 3.90 Vested (485,611) 18.12 Forfeited (126,110) 11.83 Outstanding non-vested RSUs at May 4, 2024 2,285,629 $ 7.33 |
Schedule of Nonvested Performance-based Units Activity [Table Text Block] | The following table summarizes the activity related to PSUs, TSR PSUs, and SVCA PSUs for the first quarter of 2024: Number of Units Weighted Average Grant-Date Fair Value Per Share Outstanding PSUs, TSR PSUs, and SVCA PSUs at February 3, 2024 978,683 $ 7.34 Granted 332,049 3.90 Vested — — Forfeited (267,475) 6.70 Outstanding PSUs, TSR PSUs, and SVCA PSUs at May 4, 2024 1,043,257 $ 6.41 |
Schedule of Share Based Compensation, Additional Information [Table Text Block] | The following activity occurred under our share-based plans during the respective periods shown: First Quarter (In thousands) 2024 2023 Total fair value of restricted stock vested $ 1,858 $ 3,410 |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share Based Compensation, Additional Information [Table Text Block] | We have begun or expect to begin recognizing expense related to PSUs, TSR PSUs, and SVCA PSUs as follows: Issue Year PSU Category Outstanding Units at May 4, 2024 Actual Grant Date Expected Valuation (Grant) Date Actual or Expected Expense Period 2022 TSR PSU 44,031 Fiscal 2022 Fiscal 2022 - 2024 2022 PSU 176,162 March 2024 Fiscal 2024 2023 PSU (“FY23 Tranche”) 141,485 August 2023 Fiscal 2023 - 2025 2023 PSU (“FY24 Tranche”) 141,485 March 2024 Fiscal 2024 - 2025 2023 PSU (“FY25 Tranche”) 141,485 March 2025 Fiscal 2025 2023 TSR PSU 106,109 March 2023 Fiscal 2023 - 2025 2023 SVCA PSU 433,985 March 2023 Fiscal 2023 - 2025 Total 1,184,742 |
Business Segment Data (Tables)
Business Segment Data (Tables) | 3 Months Ended |
May 04, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales by Category [Table Text Block] | The following table presents net sales data by merchandise category: First Quarter (In thousands) 2024 2023 Furniture $ 291,649 $ 312,144 Consumables 173,924 194,265 Seasonal 160,764 177,008 Soft Home 152,588 174,685 Food 136,907 157,036 Hard Home 93,280 108,439 Net sales $ 1,009,112 $ 1,123,577 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 3 Months Ended | 6 Months Ended | ||
May 04, 2024 USD ($) store | Apr. 29, 2023 USD ($) store | Aug. 03, 2024 | Jul. 29, 2023 | |
Components of Operating Cost and Expense [Abstract] | ||||
Number of Stores | store | 1,392 | |||
Number of States in which Entity Operates | 48 | |||
Fiscal Period Duration | 91 days | 91 days | 371 days | 364 days |
Number of Stores Impaired [Member] | store | 244 | 237 | ||
Impairment [Member] | $ 68,200,000 | $ 83,800,000 | ||
Operating Lease, Impairment Loss | 44,200,000 | 62,100,000 | ||
Tangible Asset Impairment Charge | 24,000,000 | $ 22,400,000 | ||
Number of Stores, Sold | 1 | |||
Sold Assets, Previously Held for Sale | $ 700,000 | |||
Proceeds from Sale of Real Estate, Previously Held for Sale | 4,400,000 | |||
Gain on Extinguishment of Lease Liabilities | 3,800,000 | |||
Distribution and Outbound Transportation Costs | 75,300,000 | 140,200,000 | ||
Advertising Expense | $ 24,100,000 | $ 24,800,000 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | $ 9,835 | $ 7,945 |
Cash paid for income taxes, excluding impact of refunds | 61 | 267 |
Gross proceeds from long-term debt | 406,700 | 533,100 |
Proceeds from Long-Term Lines of Credit (FILO) | 50,000 | 0 |
Gross payments of long-term debt | 284,600 | 332,900 |
Cash paid for operating lease liabilities | 97,176 | 149,007 |
Non-cash activity: | ||
Assets acquired under finance lease | 0 | 38 |
Accrued property and equipment | 11,074 | 9,919 |
Deemed acquisition in "failed sale-leaseback transaction" | 0 | 100,000 |
Operating lease assets obtained in exchange for operating lease liabilities | $ 6,203 | 85,933 |
Valuation allowance on deferred tax assets | $ 159,200 |
Debt Line of Credit (Details)
Debt Line of Credit (Details) - 2022 Credit Agreement [Member] - USD ($) $ in Thousands | 1 Months Ended | |
Sep. 21, 2022 | May 04, 2024 | |
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 900,000 | |
Debt Instrument, Term | 5 years | |
Debt Issuance Costs, Gross | $ 3,400 | |
Line of Credit Facility, Optional Incremental Term Loans and/or Borrowing Capacity | $ 300,000 | |
Line of Credit Facility, Swing Loan Sublimit | 10% | |
Line of Credit Facility, Letter of Credit Sublimit | $ 90,000 | |
Line of Credit Facility, Unused Commitment Fee | 0.20% | |
Line of Credit Facility, Current Borrowing Capacity | $ 956,700 | |
Line of Credit Facility, Amount Outstanding | 578,200 | |
Line of Credit Facility, Letters of Credit Outstanding | 53,600 | |
Line of Credit Facility, Remaining Borrowing Capacity | $ 324,900 |
Debt Long-term Debt (Details)
Debt Long-term Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 04, 2024 | Feb. 03, 2024 | |
Debt, Long-term and Short-term, Combined Amount [Abstract] | ||
Total debt | $ 578,561 | $ 409,121 |
Less current portion of 2023 Term Notes (included in Accrued operating expenses) | (190) | (2,850) |
Long-Term Debt, Gross | 578,371 | 406,271 |
Less unamortized debt issuance | (4,528) | 0 |
Long-term debt | 573,843 | 406,271 |
2022 Credit Agreement [Member] | ||
Debt, Long-term and Short-term, Combined Amount [Abstract] | ||
Long-Term Line of Credit, Noncurrent | 528,200 | 406,100 |
2023 Term Notes Payable, Other Payables [Member] | ||
Debt Instrument [Line Items] | ||
2023 Term Notes | $ 16,200 | |
Term Note Payable, Minimum Interest Rate | 7.10% | |
Term Note Payable, Maximum Interest Rate | 8.50% | |
Debt, Long-term and Short-term, Combined Amount [Abstract] | ||
Short-Term Debt | $ 361 | 3,021 |
2024 Term Loan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Line Of Credit Facility Maximum Borrowing Capacity - Term Loan Facility | $ 200,000 | |
Term Loan Facility, Current Interest Rate | 14.60% | |
Proceeds From Issuance Of Secured Debt | $ 50,000 | |
Term Loan Note, Minimum Interest Rate | 9.25% | |
Term Loan Facility, Maximum Interest Rate | 10% | |
Debt Instrument Debt Default Additional InterestRate | 200% | |
Debt, Long-term and Short-term, Combined Amount [Abstract] | ||
Other Long-Term Debt | $ 50,000 | $ 0 |
Deferred FinanceCosts Gross - Term Loan Facility | 4,600 | |
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net, Total - Term Loan Facility | $ 4,500 |
Leases, Codification Topic 842
Leases, Codification Topic 842 (Details) $ in Millions | 3 Months Ended |
May 04, 2024 USD ($) | |
Leases [Abstract] | |
Synthetic Lease, Date | Mar. 15, 2023 |
Synthetic Lease, Lease Amount | $ 100 |
Synthetic Lease, Lease Term | 60 |
Termination Payment on Synthetic Lease | $ 53.4 |
Shareholders' Equity - Earnings
Shareholders' Equity - Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Class of Stock [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,100 | 900 |
Shareholders' Equity - Share Re
Shareholders' Equity - Share Repurchase Programs (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | ||
May 04, 2024 | Apr. 29, 2023 | Dec. 01, 2021 | |
Class of Stock [Line Items] | |||
Stock Repurchased During Period, Value | $ 747 | $ 1,417 | |
Common Stock [Member] | 2021 Repurchase Authorization [Member] | |||
Class of Stock [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ 159,400 | $ 250,000 | |
Stock Repurchased During Period, Shares | 0 |
Shareholders' Equity - Dividend
Shareholders' Equity - Dividends Declared (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Equity [Abstract] | ||
Common Stock, Dividends, Per Share, Cash Paid | $ 0 | |
Amount declared (Dividends), including the impact of forfeitures | $ (11) | $ 9,116 |
Amount paid (Dividends) | $ (159) | $ (9,587) |
Share-Based Plans - General and
Share-Based Plans - General and Other than Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
May 04, 2024 | Apr. 29, 2023 | Feb. 03, 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Expense | $ (2,700) | $ (4,100) | |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 12,000 | ||
Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 1 year 9 months 18 days | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Total fair value of other than options vested | $ 1,858 | 3,410 | |
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested, beginning balance | 1,910,203 | ||
Granted | 987,147 | ||
Vested | (485,611) | ||
Forfeited | (126,110) | ||
Nonvested, ending balance | 2,285,629 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Nonvested, Weighted Average Grant Date Fair Value | $ 7.33 | $ 12.54 | |
Grants in Period, Weighted Average Grant Date Fair Value | 3.90 | ||
Vested in Period, Weighted Average Grant Date Fair Value | 18.12 | ||
Forfeited in Period, Weighted Average Grant Date Fair Value | $ 11.83 | ||
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Expense | $ (200) | $ (400) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested, beginning balance | 978,683 | ||
Granted | 332,049 | ||
Vested | 0 | ||
Forfeited | (267,475) | ||
Nonvested, ending balance | 1,043,257 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Nonvested, Weighted Average Grant Date Fair Value | $ 6.41 | $ 7.34 | |
Grants in Period, Weighted Average Grant Date Fair Value | 3.90 | ||
Vested in Period, Weighted Average Grant Date Fair Value | 0 | ||
Forfeited in Period, Weighted Average Grant Date Fair Value | $ 6.70 | ||
PSU [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Performance Share Units Issued, Nonvested, Number | 1,184,742 | ||
2021 PSU Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Award Vesting Period | 3 years | ||
2022 TSR PSU Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Performance Share Units Issued, Nonvested, Number | 44,031 | ||
2022 PSU Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Award Vesting Period | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Performance Share Units Issued, Nonvested, Number | 176,162 | ||
2023 PSU Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Award Vesting Period | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Performance Share Units Issued, Nonvested, Number | 141,485 | ||
2023 TSR PSU Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Award Vesting Period | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Performance Share Units Issued, Nonvested, Number | 106,109 | ||
2023 SVCA PSU Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Award Vesting Period | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Performance Share Units Issued, Nonvested, Number | 433,985 | ||
2023 PSU Awards "FY24 Tranche" [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Performance Share Units Issued, Nonvested, Number | 141,485 | ||
2023 PSU Awards "FY25 Tranche" [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Performance Share Units Issued, Nonvested, Number | 141,485 | ||
2024 Cash-based Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Award Vesting Period | 3 years | ||
2024 Performance-cash Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Award Vesting Period | 3 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 29, 2023 | May 04, 2024 | |
Income Tax Contingency [Line Items] | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | $ (2) | |
Valuation Allowance [Abstract] | ||
Deferred Tax Assets, Valuation Allowance | $ 192.9 | |
Valuation allowance on deferred tax assets | $ (159.2) |
Business Segment Data (Details)
Business Segment Data (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 1,009,112 | $ 1,123,577 |
Furniture [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 291,649 | 312,144 |
Seasonal [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 160,764 | 177,008 |
Food [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 136,907 | 157,036 |
Soft Home [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 152,588 | 174,685 |
Consumables [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 173,924 | 194,265 |
Hard Home [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 93,280 | $ 108,439 |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements (Details) - USD ($) $ in Millions | May 04, 2024 | Feb. 03, 2024 | Apr. 29, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Supplier Finance Program, Revolving Capacity | $ 0 | $ 55 | |
Supplier Finance Program, Current Obligation | $ 0 | $ 17.8 | $ 13.3 |
Gain on Sale of Real Estate (De
Gain on Sale of Real Estate (Details) $ in Millions | 3 Months Ended |
May 04, 2024 USD ($) | |
Property, Plant and Equipment [Line Items] | |
Number of Stores included in the Sale and Leaseback | 23 |
Incentive to Lessee | $ 9.4 |
Land and Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Gross Proceeds from Sale of Real Estate | 332.1 |
Sales Price on Sale of Real Estate | 305.7 |
Gross financing proceeds from sale and leaseback | 0.6 |
Prepaid Rent Proceeds | $ 36.5 |