Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Nov. 02, 2018 | Dec. 03, 2018 | |
Document Information [Line Items] | ||
Entity Registrant Name | Lands' End, Inc. | |
Entity Central Index Key | 799,288 | |
Current Fiscal Year End Date | --02-01 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Period End Date | Nov. 2, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 32,211,641 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2018 | Oct. 27, 2017 | Nov. 02, 2018 | Oct. 27, 2017 | |
Net revenue | $ 341,570 | $ 325,489 | $ 949,340 | $ 896,044 |
Cost of sales (excluding depreciation and amortization) | 190,608 | 183,515 | 528,587 | 497,262 |
Gross profit | 150,962 | 141,974 | 420,753 | 398,782 |
Selling and administrative | 135,274 | 129,122 | 388,315 | 377,804 |
Depreciation and amortization | 7,361 | 6,347 | 20,420 | 19,031 |
Other operating (income) expense, net | (158) | 564 | 132 | 2,552 |
Operating income (loss) | 8,485 | 5,941 | 11,886 | (605) |
Interest expense | 7,303 | 6,350 | 21,216 | 18,642 |
Other (income) expense, net | 1,866 | (576) | 5,317 | (1,812) |
Income (loss) before income taxes | (684) | 167 | (14,647) | (17,435) |
Income tax benefit | (3,978) | 5 | (10,026) | (5,878) |
NET INCOME (LOSS) | $ 3,294 | $ 162 | $ (4,621) | $ (11,557) |
NET INCOME (LOSS) PER COMMON SHARE | ||||
Basic (in USD per share) | $ 0.10 | $ 0.01 | $ (0.14) | $ (0.36) |
Diluted (in USD per share) | $ 0.10 | $ 0.01 | ||
Basic weighted average common shares outstanding (shares) | 32,211 | 32,095 | 32,182 | 32,068 |
Diluted weighted average common shares outstanding (shares) | 32,314 | 32,117 | 32,182 | 32,068 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Operations Statement - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2018 | Oct. 27, 2017 | Nov. 02, 2018 | Oct. 27, 2017 | |
NET LOSS | $ 3,294 | $ 162 | $ (4,621) | $ (11,557) |
Other comprehensive (loss) income, net of tax, foreign currency translation adjustments | (39) | (79) | (3,215) | 1,060 |
COMPREHENSIVE LOSS | $ 3,255 | $ 83 | $ (7,836) | $ (10,497) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Nov. 02, 2018 | Feb. 02, 2018 | Oct. 27, 2017 |
Current assets | |||
Cash and cash equivalents | $ 105,933 | $ 195,581 | $ 92,913 |
Restricted cash | 2,069 | 2,356 | 1,640 |
Accounts receivable, net | 41,496 | 49,860 | 39,044 |
Inventories, net | 431,950 | 332,297 | 423,540 |
Prepaid expenses and other current assets | 49,001 | 26,659 | 48,934 |
Total current assets | 630,449 | 606,753 | 606,071 |
Property and equipment, net | 145,808 | 136,501 | 129,955 |
Goodwill | 110,000 | 110,000 | 110,000 |
Intangible asset, net | 257,000 | 257,000 | 257,000 |
Other assets | 5,461 | 13,881 | 17,454 |
TOTAL ASSETS | 1,148,718 | 1,124,135 | 1,120,480 |
Current liabilities | |||
Accounts payable | 179,036 | 155,874 | 160,340 |
Other current liabilities | 116,367 | 100,257 | 103,886 |
Total current liabilities | 295,403 | 256,131 | 264,226 |
Long-term liabilities | |||
Long-term debt, net | 483,401 | 486,248 | 487,197 |
Long-term deferred tax liabilities | 58,462 | 59,137 | 91,392 |
Other liabilities | 7,246 | 15,526 | 14,568 |
TOTAL LIABILITIES | 844,512 | 817,042 | 857,383 |
Commitments and contingencies | |||
Stockholders’ equity | |||
Common stock, par value $0.01 authorized: 480,000,000 shares; issued and outstanding: 32,211,641, 32,097,483 and 32,101,793, respectively | 320 | 320 | 320 |
Additional paid-in capital | 351,064 | 347,175 | 346,153 |
Accumulated deficit | (33,371) | (29,810) | (72,010) |
Accumulated other comprehensive loss | (13,807) | (10,592) | (11,366) |
Total stockholders’ equity | 304,206 | 307,093 | 263,097 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,148,718 | $ 1,124,135 | $ 1,120,480 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Nov. 02, 2018 | Feb. 02, 2018 | Oct. 27, 2017 |
Statement of Financial Position [Abstract] | |||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 480,000,000 | 480,000,000 | 480,000,000 |
Common stock, shares issued | 32,211,641 | 32,101,793 | 32,095,021 |
Common stock, shares outstanding | 32,211,641 | 32,101,793 | 32,095,021 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 02, 2018 | Oct. 27, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (4,621) | $ (11,557) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 20,420 | 19,031 |
Gain (Loss) on Disposition of Assets | 121 | 151 |
Amortization of debt issuance costs | 1,394 | 1,284 |
Share-based compensation | 4,432 | 2,855 |
Deferred income taxes | 180 | 355 |
Change in operating assets and liabilities: | ||
Inventories | (103,177) | (96,522) |
Accounts payable | 26,742 | 944 |
Other operating assets | (2,864) | (21,890) |
Other operating liabilities | 5,125 | 17,542 |
Net cash provided by (used in) operating activities | (52,248) | (87,807) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (33,160) | (29,143) |
Proceeds from Sale of Property, Plant, and Equipment | 127 | 0 |
Net cash used in investing activities | (33,033) | (29,143) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments on term loan facility | (3,865) | (3,863) |
Payments of employee withholding taxes on share-based compensation | (543) | (674) |
Net cash used in financing activities | (4,408) | (4,537) |
Effect of exchange rate on cash, cash equivalents, restricted cash | (246) | (368) |
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (89,935) | (121,855) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 197,937 | 216,408 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | 108,002 | 94,553 |
SUPPLEMENTAL CASH FLOW DATA | ||
Unpaid liability to acquire property and equipment | 4,707 | 4,796 |
Income taxes paid, net of refunds | 1,420 | 3,220 |
Interest paid | $ 19,792 | $ 17,106 |
Background and Basis of Present
Background and Basis of Presentation | 9 Months Ended |
Nov. 02, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | BACKGROUND AND BASIS OF PRESENTATION Description of Business Lands' End, Inc. ("Lands' End" or the "Company") is a leading multi-channel retailer of casual clothing, accessories, footwear and home products. We offer products through catalogs, online at www.landsend.com and affiliated specialty and international websites, and through retail locations. We are a classic American lifestyle brand with a passion for quality, legendary service and real value, and seek to deliver timeless style for women, men, kids and the home. Terms that are commonly used in the Company's notes to Condensed Consolidated Financial Statements are defined as follows: • ABL Facilities - Collectively, the Prior ABL Facility and the Current ABL Facility • Adjusted EBITDA - Net income (loss) net of Income tax benefit, Other income, net, Interest expense, Depreciation and amortization and certain significant items • ASC - FASB Accounting Standards Codification • ASU - FASB Accounting Standards Update • CAM - Common area maintenance for leased properties • Company Operated stores - Lands' End retail stores • Current ABL Facility - Asset-based senior secured credit agreements, dated as of November 16, 2017, with Wells Fargo Bank, N.A. and certain other lenders • Debt Facilities - Collectively, the Current ABL Facility and the Term Loan Facility • Deferred Awards - Time vesting stock awards • EPS - Earnings (loss) per share • ESL - ESL Investments, Inc. and its investment affiliates, including Edward S. Lampert • FASB - Financial Accounting Standards Board • First Quarter 2018 - The thirteen weeks ended May 4, 2018 • Fiscal 2017 - The fifty-three weeks ended February 2, 2018 • Fiscal 2018 - The fifty-two weeks ending February 1, 2019 • Fiscal 2020 - The fifty-two weeks ending January 29, 2021 • Fourth Quarter 2017 - The fourteen weeks ended February 2, 2018 • GAAP - Accounting principles generally accepted in the United States • Lands' End Shops at Sears - Lands' End shops operated within Sears stores • LIBOR - London inter-bank offered rate • Option Awards - Stock option awards • Performance Awards - Performance-based stock awards • Prior ABL Facility - Asset-based senior secured credit agreements, dated as of April 4, 2014, with Bank of America, N.A. and certain other lenders, terminated November 16, 2017 • Sears Holdings or Sears Holdings Corporation - Sears Holdings Corporation, a Delaware corporation, and its consolidated subsidiaries (other than, for all periods following the Separation, Lands' End) • SEC - United States Securities and Exchange Commission • Separation - On April 4, 2014 Sears Holdings distributed 100% of the outstanding common stock of Lands' End to its shareholders • SHMC - Sears Holdings Management Corporation, a subsidiary of Sears Holdings Corporation • Target Shares - Shares to be delivered to participants based on achievement of target performance metrics • Tax Act - The Tax Cuts and Jobs Act passed by the United States government on December 22, 2017 • Tax Sharing Agreement - A tax sharing agreement entered into by Sears Holdings Corporation and Lands' End in connection with the Separation • Term Loan Facility - Term loan credit agreements, dated as of April 4, 2014, with Bank of America, N.A. and certain other lenders • Third Quarter 2018 - The thirteen weeks ended November 2, 2018 • Third Quarter 2017 - The thirteen weeks ended October 27, 2017 • UTBs - Gross unrecognized tax benefits • Year-to-Date 2018 - The thirty-nine weeks ended November 2, 2018 • Year-to-Date 2017 - The thirty-nine weeks ended October 27, 2017 Basis of Presentation The Condensed Consolidated Financial Statements include the accounts of Lands' End, Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to 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. In the opinion of management, all material adjustments which are of a normal and recurring nature necessary for a fair presentation of the results for the periods presented have been reflected. Dollar amounts are reported in thousands, except per share data, unless otherwise noted. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Lands' End Annual Report on Form 10-K filed with the SEC on March 29, 2018. Reclassifications In the First Quarter 2018, the Company adopted ASU 2016-18, Restricted Cash , which changed the required presentation of Restricted cash on the Condensed Consolidated Statements of Cash Flows to include those amounts generally described as Restricted cash or restricted cash equivalents with Cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown. As a result of the adoption, the Company reclassified the amount of beginning-of-period cash, cash equivalents, and restricted cash presented in the Condensed Consolidated Statement of Cash Flows to include Restricted cash. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Nov. 02, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides guidance for revenue recognition. In First Quarter 2018, the Company adopted the guidance using the modified retrospective method resulting in only those contracts that were open as of the date of adoption requiring assessment. The comparative information presented in the Condensed Consolidated Financial Statements was not restated and is reported under the accounting standards in effect for the periods presented. The adoption of this guidance did not have, and is not expected to have, a significant impact on our reported revenue, gross margin or income from operations. Revenue includes sales of merchandise and delivery revenue related to merchandise sold. Substantially all of the Company's revenue is recognized when control of product passes to customers, which for the Direct segment is when the merchandise is expected to be received by the customer and for the Retail segment, is at the time of sale in the store. Revenue is adjusted for estimated returns and volume rebates with a corresponding liability recorded. Effective in the First Quarter 2018, the Company changed its balance sheet presentation for estimated product returns by reporting a product return asset for the right to receive returned products and a returns liability for amounts expected to be refunded to customers as a result of product returns. The product return asset is reported within Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheet. Prior to adoption, product return assets were netted against the returns liability and reported within Other current liabilities. The impact of the adoption was recorded as a non-cash transaction in Other operating assets and Other operating liabilities in the Condensed Consolidated Statement of Cash Flows. The returns liability and payments received from customers for future delivery of products are reported within Other current liabilities in the Condensed Consolidated Balance Sheet. The adoption of this guidance did not have an impact on the recording of these liabilities. Recognition of Breakage for Certain Prepaid Stored-Value Products The Company sells gift certificates, gift cards and e-certificates (collectively, "gift cards") to customers through both the Direct and Retail segments. The gift cards do not have expiration dates. Revenue from gift cards is recognized when (i) the gift card is redeemed by the customer for merchandise, or (ii) as gift card breakage, an estimate of gift cards which will not be redeemed where the Company does not have a legal obligation to remit the value of the unredeemed gift cards to the relevant jurisdictions. In March 2016, the FASB issued ASU 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products . This update clarifies when it is acceptable to recognize the unredeemed portion of prepaid gift cards into income. The Company has evaluated the impacts of this ASU and has identified a change in the timing of recognition of revenue from gift cards. The Company will recognize breakage income over the breakage period for the estimated portion of unredeemed gift cards that is unlikely to be redeemed where the Company does not have an obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Previously the Company recognized gift card breakage after three years of no activity, or when the likelihood of redemption was considered remote. This guidance was adopted by the Company during First Quarter 2018 and resulted in a cumulative impact to be recognized as a reduction in Accumulated deficit and Other current liabilities of $1.1 million for estimated gift card breakage occurring prior to Fiscal 2018, under the modified retrospective approach described under the preceding Revenue from Contracts with Customers section. The impact of adoption on the Condensed Consolidated Balance Sheet as of February 3, 2018 was: (in thousands) February 2, 2018 (As reported) Impact of Adoption February 3, 2018 Assets: Prepaid expenses and other current assets $ 26,659 $ 10,425 $ 37,084 Liabilities: Other current liabilities 100,257 9,365 109,622 Stockholders' Equity: Accumulated deficit (29,810 ) 1,060 (28,750 ) The impact of the new revenue recognition guidance on our Condensed Consolidated Balance Sheet as of November 2, 2018 was: November 2, 2018 (in thousands) Balances Without Adoption Impact of Adoption As Reported Assets: Prepaid expenses and other current assets $ 38,246 $ 10,755 $ 49,001 Liabilities: Other current liabilities 106,736 9,631 116,367 Stockholders' Equity: Accumulated deficit (34,494 ) 1,123 (33,371 ) See Note 12 , Revenue for additional disclosures. Restricted Cash In November 2016, the FASB issued ASU 2016-18, Restricted Cash . This ASU requires the inclusion of Restricted cash with Cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Condensed Consolidated Statement of Cash Flows. This guidance was adopted by the Company during First Quarter 2018. As a result of the adoption, the Company changed the presentation in its Condensed Consolidated Statements of Cash Flows for all periods presented. Leases In February 2016, the FASB issued ASU 2016-02, Leases, which will replace the existing guidance in ASC 840, Leases . This ASU requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize a straight-line total lease expense. This guidance will be effective for the Company in the first quarter of its fiscal year ending January 31, 2020. The Company is still evaluating the overall impact on the Company's Condensed Consolidated Financial Statements, however, it is expected that the standard will result in a material increase in the assets and liabilities recorded on the Company's Consolidated Balance Sheet. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Nov. 02, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Earnings Per Share | PER SHARE The numerator for both basic and diluted EPS is net income (loss). The denominator for basic EPS is based upon the number of weighted average shares of Lands’ End common stock outstanding during the reporting periods. The denominator for diluted EPS is based upon the number of weighted average shares of Lands' End common stock and common stock equivalents outstanding during the reporting periods using the treasury stock method in accordance with US GAAP. Potentially dilutive securities for the diluted EPS calculations consist of nonvested equity shares of common stock and in-the-money outstanding stock options, if any, to purchase the Company’s common stock. The following table summarizes the components of basic and diluted EPS: 13 Weeks Ended 39 Weeks Ended (in thousands, except per share amounts) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Net income (loss) $ 3,294 $ 162 $ (4,621 ) $ (11,557 ) Basic weighted average common shares outstanding 32,211 32,095 32,182 32,068 Dilutive effect of stock awards 103 22 — — Diluted weighted average common shares outstanding 32,314 32,117 32,182 32,068 Basic Earnings (Loss) per share $ 0.10 $ 0.01 $ (0.14 ) $ (0.36 ) Diluted Earnings (Loss) per share $ 0.10 $ 0.01 $ (0.14 ) $ (0.36 ) Stock awards are considered anti-dilutive based on the application of the treasury stock method or in the event of a net loss. There were 484,743 , 827,057 , 408,092 , and 692,175 anti-dilutive shares excluded from the diluted weighted average shares outstanding for Third Quarter 2018 , Third Quarter 2017 , Year-to-Date 2018 , and Year-to-Date 2017 , respectively. |
Other Comprehensive (Loss) Inco
Other Comprehensive (Loss) Income | 9 Months Ended |
Nov. 02, 2018 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | OTHER COMPREHENSIVE INCOME (LOSS) Other comprehensive income (loss) encompasses all changes in equity other than those arising from transactions with stockholders, and is comprised solely of foreign currency translation adjustments. 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Beginning balance: Accumulated other comprehensive loss (net of tax of $3,660, $6,054, $2,816 and $6,691, respectively) $ (13,768 ) $ (11,287 ) $ (10,592 ) $ (12,426 ) Other comprehensive income (loss): Foreign currency translation adjustments (net of tax (benefit) expense of $10, $66, $854, and $(571), respectively) (39 ) (79 ) (3,215 ) 1,060 Ending balance: Accumulated other comprehensive loss (net of tax of $3,670, $6,120, $3,670, and $6,120, respectively) $ (13,807 ) $ (11,366 ) $ (13,807 ) $ (11,366 ) No amounts were reclassified out of Accumulated other comprehensive income (loss) during any of the periods presented. |
Debt
Debt | 9 Months Ended |
Nov. 02, 2018 | |
Debt Disclosure [Abstract] | |
Debt | DEBT The Company's debt consisted of the following: November 2, 2018 October 27, 2017 February 2, 2018 (in thousands) Amount Rate Amount Rate Amount Rate Term Loan Facility, maturing April 4, 2021 $ 491,825 5.49 % $ 496,975 4.49 % $ 495,688 4.82 % Current ABL Facility, maturing November 16, 2022 (1) — — % — — % — — % 491,825 496,975 495,688 Less: Current maturities in Other current liabilities 5,150 5,150 5,150 Less: Unamortized debt issuance costs 3,274 4,628 4,290 Long-term debt, net $ 483,401 $ 487,197 $ 486,248 (1) October 27, 2017 amounts pertain to Prior ABL Facility. The following table summarizes the Company's borrowing availability under the ABL Facilities: (in thousands) November 2, 2018 October 27, 2017 February 2, 2018 Current ABL Facility maximum borrowing (1) $ 175,000 $ 175,000 $ 175,000 Outstanding Letters of Credit (1) 22,621 17,788 22,328 Borrowing availability under ABL (1) $ 152,379 $ 157,212 $ 152,672 (1) October 27, 2017 amounts pertain to Prior ABL Facility. Interest; Fees The interest rates per annum applicable to the loans under the Debt Facilities are based on a fluctuating rate of interest measured by reference to, at the borrowers’ election, either (i) an adjusted LIBOR rate plus a borrowing margin, or (ii) an alternative base rate plus a borrowing margin. The borrowing margin is fixed for the Term Loan Facility at 3.25% in the case of LIBOR loans and 2.25% in the case of base rate loans. For the Term Loan Facility, LIBOR is subject to a 1% interest rate floor. The borrowing margin for the ABL Facilities is subject to adjustment based on the average excess availability under the ABL Facilities for the preceding fiscal quarter. LIBOR borrowings will range from 1.25% to 1.75% and 1.50% to 2.00% for the Current ABL Facility and Prior ABL Facility, respectively. Base rate borrowings will range from 0.50% to 1.00% for the ABL Facilities. Customary agency fees are payable pursuant to the terms of the Debt Facilities. The ABL Facilities fees also include (i) commitment fees in an amount equal to 0.25% and 0.25% to 0.375% of the daily unused portions of the Current ABL Facility and Prior ABL Facility, respectively, and (ii) customary letter of credit fees. Representations and Warranties; Covenants Subject to specified exceptions, the Debt Facilities contain various representations and warranties and restrictive covenants that, among other things, restrict the ability of Lands’ End and its subsidiaries to incur indebtedness (including guarantees), grant liens, make investments, make dividends or distributions with respect to capital stock, make prepayments on other indebtedness, engage in mergers or change the nature of their business. In addition, if excess availability under the Current ABL Facility falls below the greater of 10% of the loan cap amount or $15.0 million , Lands’ End will be required to comply with a minimum fixed charge coverage ratio of 1.0 to 1.0 . The Debt Facilities do not otherwise contain financial maintenance covenants. The Company was in compliance with all financial covenants related to the Debt Facilities as of November 2, 2018 . The Debt Facilities contain certain affirmative covenants, including reporting requirements such as delivery of financial statements, certificates and notices of certain events, maintaining insurance, and providing additional guarantees and collateral in certain circumstances. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Nov. 02, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | STOCK-BASED COMPENSATION The Company expenses the fair value of all stock awards over their respective vesting periods, ensuring that, the amount of cumulative compensation cost recognized at any date is at least equal to the portion of the grant-date value of the award that is vested at that date. The Company has elected to adjust compensation expense for an estimated forfeiture rate for those shares not expected to vest and to recognize compensation cost on a straight-line basis for awards that only have a service requirement with multiple vest dates. The Company has granted the following types of stock awards to employees at management levels and above: i. Time vesting stock awards ("Deferred Awards") are in the form of restricted stock units and only require each recipient to complete a service period for the awards to be earned. Deferred Awards generally vest over three years. The fair value of Deferred Awards is based on the closing price of the Company's common stock on the grant date and is reduced for estimated forfeitures of those awards not expected to vest due to employee turnover. ii. Stock option awards ("Option Awards") provide the recipient with the option to purchase a set number of shares at a stated exercise price over the term of the contract, which is ten years for all Option Awards currently outstanding. Options are granted with a strike price equal to the stock price on the date of grant and vest ratably over a four year period. iii. Performance-based stock awards ("Performance Awards") are in the form of restricted stock units and have, in addition to a service requirement, performance criteria that must be achieved for the awards to be earned. Performance Awards granted prior to Fiscal 2018 had annual vesting, but due to the performance criteria, were not eligible for straight-line expensing. All Performance Awards granted prior to Fiscal 2018 were forfeited during the First Quarter 2018. For Performance Awards granted in Fiscal 2018 , the Target Shares earned can range from 0% to 200% and depend on the achievement of Adjusted EBITDA and revenue performance measures for the cumulative three-fiscal year performance period from Fiscal 2018 to Fiscal 2020. The applicable percentage of the Target Shares, as determined by performance, vest after the completion of the applicable three year performance period, and unearned Target Shares are forfeited. The fair value of the Performance Awards granted in Fiscal 2018 is based on the closing price of the Company’s common stock on the grant date. Stock-based compensation expense is recognized ratably over the related service period reduced for estimated forfeitures of those awards not expected to vest due to employee turnover and adjusted based on the Company's estimate of the percentage of the aggregate Target Shares expected to be earned. The following table provides a summary of the Company's stock-based compensation expense, which is included in Selling and administrative expense in the Condensed Consolidated Statements of Operations: 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Deferred Awards $ 1,237 $ 879 $ 3,177 $ 2,315 Option Awards 187 176 561 452 Performance Awards 312 — 694 88 Total stock-based compensation expense $ 1,736 $ 1,055 $ 4,432 $ 2,855 The following table provides a summary of the activities for stock awards for Year-to-Date 2018 : Deferred Awards Option Awards Performance Awards (in thousands, except per share amounts) Number of Shares Weighted Average Grant Date Fair Value per Share Number of Shares Weighted Average Grant Date Fair Value per Share Number of Shares (1) Weighted Average Grant Date Fair Value per Share Unvested as of February 2, 2018 497 $ 22.07 343 $ 8.73 15 $ 21.94 Granted 292 21.97 — — 195 21.90 Vested (139 ) 22.68 (86 ) 8.73 — — Forfeited or expired (21 ) 22.41 — — (18 ) 21.93 Unvested as of November 2, 2018 629 21.86 257 8.73 192 21.90 (1) For those awards with respect to which the performance period is not yet complete, the number of granted and unvested shares in the table above is based on the participants earning their Target Shares at 100%; however, the cumulative expense recognized reflects changes in estimated achievement of the performance measures as they occur. Total unrecognized stock-based compensation expense related to unvested Deferred Awards was approximately $8.8 million as of November 2, 2018 , which is expected to be recognized ratably over a weighted average period of 2.1 years . Deferred Awards granted to various employees during Fiscal 2018 generally vest ratably over a period of three years. Total unrecognized stock-based compensation expense related to unvested Option Awards was approximately $1.8 million as of November 2, 2018 , which is expected to be recognized ratably over a weighted average period of 2.4 years . The Option Awards have a life of ten years and vest ratably over the first four years. The fair value of each Option Award was estimated on the grant date using the Black-Scholes option pricing model. As of November 2, 2018 , 85,784 shares related to Option Awards were exercisable. No options have been exercised as of November 2, 2018 . Total unrecognized stock-based compensation expense related to unvested Performance Awards was approximately $ 3.0 million as of November 2, 2018 , which is expected to be recognized ratably over a weighted average period of 2.4 years . Performance Awards granted to various employees during Fiscal 2018 vest, if earned, after completion of the applicable three-year performance period. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 9 Months Ended |
Nov. 02, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES Restricted cash is reflected on the Condensed Consolidated Balance Sheets at fair value. The fair value of restricted cash was $2.1 million , $1.6 million and $2.4 million as of November 2, 2018 , October 27, 2017 and February 2, 2018 , respectively based on Level 1 inputs. Restricted cash amounts are valued based upon statements received from financial institutions. The carrying amount of the Company's Cash and cash equivalents, Accounts receivable, Accounts payable and Other current liabilities approximate their fair value as recorded due to the short-term maturity of these instruments. Carrying values and fair values of long-term debt, including the short-term portion, in the Condensed Consolidated Balance Sheets are as follows: November 2, 2018 October 27, 2017 February 2, 2018 (in thousands) Carrying Amount Fair Value Carrying Fair Carrying Fair Long-term debt, including short-term portion $ 491,825 $ 475,226 $ 496,975 $ 414,353 $ 495,688 $ 443,641 Long-term debt, including short-term portion was valued utilizing Level 2 valuation techniques based on the closing inactive market bid price on November 2, 2018 , October 27, 2017 , and February 2, 2018 . There were no nonfinancial assets or nonfinancial liabilities recognized at fair value on a nonrecurring basis as of November 2, 2018 , October 27, 2017 , and February 2, 2018 . |
Income Taxes
Income Taxes | 9 Months Ended |
Nov. 02, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Provision for Income Taxes The Company recorded a tax benefit for the Third Quarter 2018 and Year-to-Date 2018, with effective tax rates of 581.6% and 68.5% , respectively. This compares to effective tax rates of 3.0% and 33.7% for the Third Quarter 2017 and Year-to-Date 2017. The higher effective tax benefit for the Third Quarter 2018 was primarily due to revised estimates of the impact due to the Tax Act as more fully described below. The Year-to-Date 2018 rate reflects the revised estimates and the benefits of favorable state tax audit settlements for periods prior to the Separation which were recorded in the first quarter. Tax Act The Tax Act was enacted on December 22, 2017. In connection with the Tax Act, the Company re-measured its deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future under the Tax Act. Pursuant to Staff Accounting Bulletin No. 118, a provisional amount for the change in law was recorded in Fourth Quarter 2017. The Company has revised estimates related to the Tax Act and has recorded a benefit of $3.7 million in the Third Quarter 2018. The Company is still investigating potential planning opportunities as they present themselves. As such, the Company will continue its assessment of the impact of the Tax Act on the business and Consolidated Financial Statements throughout the one-year measurement period as provided by SAB 118. Impacts from Sears Pursuant to the Tax Sharing Agreement, Sears Holdings Corporation is generally responsible for all United States federal, state and local UTBs, through the date of the Separation. As of November 2, 2018, the Company had UTBs of $1.9 million . Of this amount, $1.5 million would, if recognized, impact its effective tax rate, with the remaining amount being comprised of UTBs related to gross temporary differences or other indirect benefits. Accordingly, an indemnification asset from Sears Holdings Corporation for the pre-Separation UTBs is recorded in Other assets in the Condensed Consolidated Balance Sheets. On October 15, 2018, Sears Holdings Corporation and certain of its subsidiaries filed voluntary petitions in the United States Bankruptcy Court for the Southern District of New York seeking relief under Chapter 11 of Title 11 of the United States Code (collectively the “Sears Filing"). As a result of the Sears Filing, the Company believes that the recovery of the UTBs provided by the Tax Sharing Agreement is uncertain. The Company recorded a non-cash charge of $2.6 million in the Third Quarter 2018 as the result of establishing a reserve against the indemnification asset. The indemnification asset was $0 , $12.0 million and $7.4 million as of November 2, 2018, October 27, 2017, and February 2, 2018, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Nov. 02, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company is party to various claims, legal proceedings and investigations arising in the ordinary course of business. Some of these actions involve complex factual and legal issues and are subject to uncertainties. At this time, the Company is not able to either predict the outcome of these legal proceedings or reasonably estimate a potential range of loss with respect to the proceedings. While it is not feasible to predict the outcome of such pending claims, proceedings and investigations with certainty, management is of the opinion that their ultimate resolution should not have a material adverse effect on results of operations, cash flows or financial position taken as a whole. |
Related Party
Related Party | 9 Months Ended |
Nov. 02, 2018 | |
Related Party Transactions [Abstract] | |
Related Party | RELATED PARTY TRANSACTIONS According to statements on Schedule 13D filed with the SEC by ESL, ESL beneficially owns significant portions of both the Company's and Sears Holdings Corporation's outstanding shares of common stock. Therefore, Sears Holdings Corporation, the Company's former parent company, is considered a related party. In connection with and subsequent to the Separation, the Company entered into various agreements with Sears Holdings which, among other things, (i) govern specified aspects of the Company's relationship following the Separation, especially with regards to the Lands’ End Shops at Sears, and (ii) establish terms pursuant to which subsidiaries of Sears Holdings Corporation are providing services to the Company. Descriptions of these transactions are included in the Company's Fiscal 2017 Form 10-K filed with the SEC on March 29, 2018 and proxy statement filed with the SEC on April 6, 2018. The components of the transactions between the Company and Sears Holdings, which exclude pass-through payments to or from third parties, are as follows: Lands’ End Shops at Sears Related party costs charged by Sears Holdings to the Company related to Lands’ End Shops at Sears are as follows: 13 Weeks Ended 39 Weeks Ended (in thousands, except for number of stores) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Rent, CAM and occupancy costs $ 3,483 $ 5,376 $ 12,004 $ 16,882 Retail services, store labor 3,231 5,268 11,084 16,410 Financial services and payment processing 350 479 1,191 1,627 Supply chain costs 126 167 362 558 Total expenses $ 7,190 $ 11,290 $ 24,641 $ 35,477 Number of Lands’ End Shops at Sears at period end 125 188 125 188 General Corporate Services Related party costs charged by Sears Holdings to the Company for general corporate services are as follows: 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Sourcing $ 2,830 $ 3,445 $ 6,144 $ 8,525 Shop Your Way 251 83 633 780 Shared services 48 48 143 143 Total expenses $ 3,129 $ 3,576 $ 6,920 $ 9,448 The Company's contract under which it receives sourcing services from an affiliate of Sears Holdings runs through June 30, 2020. The Company participates in Sears Holdings' Shop Your Way program in the Lands' End Shops at Sears. Use of Intellectual Property or Services Related party revenue and costs charged by the Company to and from Sears Holdings for the use of intellectual property or services is as follows: 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Call center services $ — $ — $ — $ 1,160 Lands' End business outfitters revenue 216 222 834 764 Credit card revenue 184 205 506 638 Royalty income 43 55 156 169 Gift card (expense) (4 ) (7 ) (12 ) (20 ) Total income $ 439 $ 475 $ 1,484 $ 2,711 Call Center Services The Company had entered into a contract with SHMC to provide call center services in support of Sears Holdings’ Shop Your Way member loyalty program. This income was net of agreed upon costs directly attributable to the Company providing these services. The income was included in Net revenue and costs are included in Selling and administrative expenses in the Condensed Consolidated Statements of Operations. The contract for call center services expired on April 30, 2017. Additional Balance Sheet Information At November 2, 2018 , October 27, 2017 and February 2, 2018 , the Company included $1.0 million , $3.1 million and $2.0 million in Accounts receivable, net, respectively, and $3.1 million and $2.9 million in Accounts payable on October 27, 2017 and February 2, 2018, respectively, in the Condensed Consolidated Balance Sheets to reflect amounts due from and owed to Sears Holdings. Following the Sears Filing, the Company began netting payables due to Sears against receivables due from Sears if and as allowed under its contracts. As a result, receivables and payables have been netted, and are presented as a net receivable balance in Accounts receivable, net. In the Third Quarter 2018 , the Company recorded a non-cash charge of $2.6 million in Other expense, net, in the Condensed Statement of Operations due to establishing a reserve against the indemnification asset related to the indemnification by Sears Holdings Corporation of the pre-Separation UTBs (including penalties and interest) for which Sears Holdings Corporation is responsible under the Tax Sharing Agreement. Due to the Sears Filing, there is substantial doubt regarding the collectability of this contingent asset. At October 27, 2017 and February 2, 2018, respectively, a $12.0 million and $7.4 million indemnification receivable was recorded in Other assets in the Condensed Consolidated Balance Sheets. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Nov. 02, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | SEGMENT REPORTING The Company is a leading multi-channel retailer of casual clothing, accessories, footwear, and home products, and has two reportable segments: Direct and Retail. Product revenue is divided by product categories: Apparel and Non-apparel. The Non-apparel revenue includes accessories, footwear, and home goods. Services and other revenue includes embroidery, monogramming, gift wrapping, shipping and other services. Net revenue is aggregated by product category in the following table: 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Net revenue: Apparel $ 279,620 $ 263,309 $ 794,788 $ 743,794 Non-apparel 40,238 37,303 97,286 91,148 Service and other 21,712 24,877 57,266 61,102 Total net revenue $ 341,570 $ 325,489 $ 949,340 $ 896,044 The Company identifies reportable segments according to how business activities are managed and evaluated. Each of the Company’s reportable segments are strategic business units that offer similar products and services but are either shipped directly from its warehouses (Direct) or sold through retail stores (Retail). Adjusted EBITDA is the primary measure used to make decisions on allocating resources and assessing performance of each operating segment. Adjusted EBITDA is computed as Net income (loss) appearing on the Condensed Consolidated Statements of Operations net of Income tax benefit, Other income, net, Interest expense, Depreciation and amortization and certain significant items that while periodically affecting the Company's results, may vary significantly from period to period and may have a disproportionate effect in a given period, which may affect comparability of results. Reportable segment assets are those directly used in or clearly allocable to an operating segment’s operations. Depreciation, amortization, and property and equipment expenditures are recognized in each respective segment. There were no material transactions between reporting segments for any periods presented. • The Direct segment sells products through the Company’s e-commerce websites and direct mail catalogs. Operating costs consist primarily of direct marketing costs (catalog and e-commerce marketing costs); order processing and shipping costs; direct labor and benefits costs and facility costs. Assets primarily include goodwill and trade name intangible assets, inventory, accounts receivable, prepaid expenses (deferred catalog costs), technology infrastructure, and property and equipment. • The Retail segment sells products and services through dedicated Lands’ End Shops at Sears across the United States and through Company Operated stores. Operating costs consist primarily of labor and benefits costs; rent, CAM and occupancy costs; distribution costs; and in-store marketing costs. Assets primarily include retail inventory, fixtures and leasehold improvements. • Corporate overhead and other expenses include unallocated shared-service costs, which primarily consist of employee services and financial services, legal and corporate expenses. These expenses include labor and benefits costs, corporate headquarters occupancy costs and other administrative expenses. Assets include corporate headquarters and facilities, corporate cash and cash equivalents and deferred income taxes. Financial information by segment is presented in the following tables: SUMMARY OF SEGMENT DATA 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Net revenue: Direct $ 313,778 $ 290,326 $ 863,753 $ 778,554 Retail 27,792 35,163 85,587 117,490 Total net revenue $ 341,570 $ 325,489 $ 949,340 $ 896,044 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Adjusted EBITDA: Direct $ 30,284 $ 29,100 $ 68,379 $ 54,018 Retail (3,595 ) (6,003 ) (7,763 ) (7,405 ) Corporate / other (11,001 ) (10,245 ) (28,179 ) (25,635 ) Total adjusted EBITDA $ 15,688 $ 12,852 $ 32,437 $ 20,978 (Gain) loss on property and equipment (162 ) 89 121 151 Transfer of corporate functions 4 475 10 2,401 Depreciation and amortization 7,361 6,347 20,420 19,031 Operating income (loss) $ 8,485 $ 5,941 $ 11,886 $ (605 ) Interest expense 7,303 6,350 21,216 18,642 Other expense (income), net 1,866 (576 ) 5,317 (1,812 ) Income tax (benefit) expense (3,978 ) 5 (10,026 ) (5,878 ) NET INCOME (LOSS) $ 3,294 $ 162 $ (4,621 ) $ (11,557 ) 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Depreciation and amortization: Direct $ 6,887 $ 5,747 $ 18,692 $ 17,015 Retail 177 285 752 992 Corporate / other 297 315 976 1,024 Total depreciation and amortization $ 7,361 $ 6,347 $ 20,420 $ 19,031 (in thousands) November 2, 2018 October 27, 2017 February 2, 2018 Total Assets: Direct $ 961,289 $ 934,508 $ 856,986 Retail 55,511 67,965 49,933 Corporate / other 131,918 118,007 217,216 Total assets $ 1,148,718 $ 1,120,480 $ 1,124,135 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Capital expenditures: Direct $ 9,129 $ 8,791 $ 29,591 $ 29,004 Retail 1,828 — 3,569 10 Corporate / other $ — $ 129 $ — $ 129 Total capital expenditures $ 10,957 $ 8,920 $ 33,160 $ 29,143 |
Revenue Revenue
Revenue Revenue | 9 Months Ended |
Nov. 02, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | NOTE 12 . REVENUE The Company adopted authoritative guidance related to the recognition of revenue from contracts with customers effective First Quarter 2018 using the modified retrospective method. The comparative information presented in the Condensed Consolidated Financial Statements was not restated and is reported under the accounting standards in effect for the periods presented. See Note 2 , Recent Accounting Pronouncements, for a discussion of the significant changes resulting from adoption of the guidance. The adoption of the guidance did not have a significant impact on revenue. Revenue includes sales of merchandise and delivery revenue related to merchandise sold. Substantially all of the Company's revenue is recognized when control of product passes to customers, which for the Direct segment is when the merchandise is expected to be received by the customer and for the Retail segment is at the time of sale in the store. The Company recognizes revenue, including shipping and handling fees billed to customers, in the amount expected to be received when control of the Company's products transfers to customers, and is presented net of various forms of promotions, which range from contractually-fixed percentage price reductions to sales returns, discounts, and other incentives that may vary in amount. Variable amounts are estimated based on an analysis of historical experience and adjusted as better estimates become available. There were no changes to estimates in Third Quarter 2018 . The Company's revenue is disaggregated by product categories and geographic location. Revenue by product category is presented in Note 11 , Segment Reporting . Revenue by geographic location was: 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Net revenue: North America $ 300,900 $ 283,771 $ 828,078 $ 780,926 Europe 30,783 31,848 87,888 84,053 Asia 9,887 9,870 33,374 31,065 Total Net revenue $ 341,570 $ 325,489 $ 949,340 $ 896,044 The Company elected to exclude from revenue, taxes assessed by governmental authorities, including value-added and other sales-related taxes, that are imposed on and concurrent with revenue-producing activities, and as a result there is no change in presentation from prior comparative periods. Contract Liabilities Contract liabilities consist of payments received in advance of the transfer of control to the customer. As products are delivered and control transfers, the Company recognizes the deferred revenue in Net revenue in the Condensed Consolidated Statements of Operations. The following table summarizes the deferred revenue associated with payments received in advance of the transfer of control to the customer reported in Other current liabilities in the Condensed Consolidated Balance Sheets and amounts recognized through Net revenue for each period presented. The remainder of deferred revenue as of November 2, 2018 is expected to be recognized in Net revenue in the fiscal quarter ending February 1, 2019 , as products are delivered to customers. November 2, 2018 (in thousands) 13 Weeks Ended 39 Weeks Ended Deferred Revenue Beginning of Period $ 8,461 $ 12,838 Deferred Revenue Recognized in Period (8,461 ) (12,838 ) Revenue Deferred in Period 21,960 21,960 Deferred Revenue End of Period $ 21,960 $ 21,960 Revenue from gift cards is recognized when (i) the gift card is redeemed by the customer for merchandise, or (ii) as gift card breakage, an estimate of gift cards which will not be redeemed where the Company does not have a legal obligation to remit the value of the unredeemed gift cards to the relevant jurisdictions. Gift card breakage is recorded within Net revenue in the Condensed Consolidated Statements of Operations. Prior to their redemption, gift cards are recorded as a liability, included within Other current liabilities in the Condensed Consolidated Balance Sheets. The total contract liability related to gift cards issued was $16.0 million , $17.7 million and $19.3 million as of November 2, 2018 , October 27, 2017 and February 2, 2018 , respectively. The liability is estimated based on expected breakage that considers historical patterns of redemption. The following table provides the reconciliation of the contract liability related to gift cards: November 2, 2018 (in thousands) 13 Weeks Ended 39 Weeks Ended Balance as of Beginning of Period $ 16,626 $ 19,272 Gift cards sold 14,790 40,143 Gift cards redeemed (15,258 ) (41,605 ) Gift card breakage (183 ) (1,835 ) Balance as of November 2, 2018 $ 15,975 $ 15,975 Refund Liabilities Refund liabilities, primarily associated with product sales returns and retrospective volume rebates represent variable consideration and are estimated and recorded as a reduction to Net revenue based on historical experience. As of November 2, 2018 , October 27, 2017 and February 2, 2018 , $23.7 million , $12.0 million and $11.1 million , respectively, of refund liabilities, primarily associated with product returns, were reported in Other current liabilities in the Condensed Consolidated Balance Sheets. Prior to adoption, product return assets and return liabilities were reported net within Other current liabilities. As of the adoption date, the product return assets were reclassified and reported as a component of Prepaid expenses and other current assets, and return liabilities continued to be reported in Other current liabilities in the Company's Condensed Consolidated Balance Sheet. See Note 2, Recent Accounting Pronouncements , for additional details on the impact of this change. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Nov. 02, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides guidance for revenue recognition. In First Quarter 2018, the Company adopted the guidance using the modified retrospective method resulting in only those contracts that were open as of the date of adoption requiring assessment. The comparative information presented in the Condensed Consolidated Financial Statements was not restated and is reported under the accounting standards in effect for the periods presented. The adoption of this guidance did not have, and is not expected to have, a significant impact on our reported revenue, gross margin or income from operations. Revenue includes sales of merchandise and delivery revenue related to merchandise sold. Substantially all of the Company's revenue is recognized when control of product passes to customers, which for the Direct segment is when the merchandise is expected to be received by the customer and for the Retail segment, is at the time of sale in the store. Revenue is adjusted for estimated returns and volume rebates with a corresponding liability recorded. Effective in the First Quarter 2018, the Company changed its balance sheet presentation for estimated product returns by reporting a product return asset for the right to receive returned products and a returns liability for amounts expected to be refunded to customers as a result of product returns. The product return asset is reported within Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheet. Prior to adoption, product return assets were netted against the returns liability and reported within Other current liabilities. The impact of the adoption was recorded as a non-cash transaction in Other operating assets and Other operating liabilities in the Condensed Consolidated Statement of Cash Flows. The returns liability and payments received from customers for future delivery of products are reported within Other current liabilities in the Condensed Consolidated Balance Sheet. The adoption of this guidance did not have an impact on the recording of these liabilities. Recognition of Breakage for Certain Prepaid Stored-Value Products The Company sells gift certificates, gift cards and e-certificates (collectively, "gift cards") to customers through both the Direct and Retail segments. The gift cards do not have expiration dates. Revenue from gift cards is recognized when (i) the gift card is redeemed by the customer for merchandise, or (ii) as gift card breakage, an estimate of gift cards which will not be redeemed where the Company does not have a legal obligation to remit the value of the unredeemed gift cards to the relevant jurisdictions. In March 2016, the FASB issued ASU 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products . This update clarifies when it is acceptable to recognize the unredeemed portion of prepaid gift cards into income. The Company has evaluated the impacts of this ASU and has identified a change in the timing of recognition of revenue from gift cards. The Company will recognize breakage income over the breakage period for the estimated portion of unredeemed gift cards that is unlikely to be redeemed where the Company does not have an obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Previously the Company recognized gift card breakage after three years of no activity, or when the likelihood of redemption was considered remote. This guidance was adopted by the Company during First Quarter 2018 and resulted in a cumulative impact to be recognized as a reduction in Accumulated deficit and Other current liabilities of $1.1 million for estimated gift card breakage occurring prior to Fiscal 2018, under the modified retrospective approach described under the preceding Revenue from Contracts with Customers section. The impact of adoption on the Condensed Consolidated Balance Sheet as of February 3, 2018 was: (in thousands) February 2, 2018 (As reported) Impact of Adoption February 3, 2018 Assets: Prepaid expenses and other current assets $ 26,659 $ 10,425 $ 37,084 Liabilities: Other current liabilities 100,257 9,365 109,622 Stockholders' Equity: Accumulated deficit (29,810 ) 1,060 (28,750 ) The impact of the new revenue recognition guidance on our Condensed Consolidated Balance Sheet as of November 2, 2018 was: November 2, 2018 (in thousands) Balances Without Adoption Impact of Adoption As Reported Assets: Prepaid expenses and other current assets $ 38,246 $ 10,755 $ 49,001 Liabilities: Other current liabilities 106,736 9,631 116,367 Stockholders' Equity: Accumulated deficit (34,494 ) 1,123 (33,371 ) See Note 12 , Revenue for additional disclosures. Restricted Cash In November 2016, the FASB issued ASU 2016-18, Restricted Cash . This ASU requires the inclusion of Restricted cash with Cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Condensed Consolidated Statement of Cash Flows. This guidance was adopted by the Company during First Quarter 2018. As a result of the adoption, the Company changed the presentation in its Condensed Consolidated Statements of Cash Flows for all periods presented. Leases In February 2016, the FASB issued ASU 2016-02, Leases, which will replace the existing guidance in ASC 840, Leases . This ASU requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize a straight-line total lease expense. This guidance will be effective for the Company in the first quarter of its fiscal year ending January 31, 2020. The Company is still evaluating the overall impact on the Company's Condensed Consolidated Financial Statements, however, it is expected that the standard will result in a material increase in the assets and liabilities recorded on the Company's Consolidated Balance Sheet. |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements (Tables) | 9 Months Ended |
Nov. 02, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | (in thousands) February 2, 2018 (As reported) Impact of Adoption February 3, 2018 Assets: Prepaid expenses and other current assets $ 26,659 $ 10,425 $ 37,084 Liabilities: Other current liabilities 100,257 9,365 109,622 Stockholders' Equity: Accumulated deficit (29,810 ) 1,060 (28,750 ) November 2, 2018 (in thousands) Balances Without Adoption Impact of Adoption As Reported Assets: Prepaid expenses and other current assets $ 38,246 $ 10,755 $ 49,001 Liabilities: Other current liabilities 106,736 9,631 116,367 Stockholders' Equity: Accumulated deficit (34,494 ) 1,123 (33,371 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Nov. 02, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table summarizes the components of basic and diluted EPS: 13 Weeks Ended 39 Weeks Ended (in thousands, except per share amounts) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Net income (loss) $ 3,294 $ 162 $ (4,621 ) $ (11,557 ) Basic weighted average common shares outstanding 32,211 32,095 32,182 32,068 Dilutive effect of stock awards 103 22 — — Diluted weighted average common shares outstanding 32,314 32,117 32,182 32,068 Basic Earnings (Loss) per share $ 0.10 $ 0.01 $ (0.14 ) $ (0.36 ) Diluted Earnings (Loss) per share $ 0.10 $ 0.01 $ (0.14 ) $ (0.36 ) Stock awards are considered anti-dilutive based on the application of the treasury stock method or in the event of a net loss. There were 484,743 , 827,057 , 408,092 , and 692,175 anti-dilutive shares excluded from the diluted weighted average shares outstanding for Third Quarter 2018 , Third Quarter 2017 , Year-to-Date 2018 , and Year-to-Date 2017 , respectively. |
Other Comprehensive (Loss) In_2
Other Comprehensive (Loss) Income (Tables) | 9 Months Ended |
Nov. 02, 2018 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Beginning balance: Accumulated other comprehensive loss (net of tax of $3,660, $6,054, $2,816 and $6,691, respectively) $ (13,768 ) $ (11,287 ) $ (10,592 ) $ (12,426 ) Other comprehensive income (loss): Foreign currency translation adjustments (net of tax (benefit) expense of $10, $66, $854, and $(571), respectively) (39 ) (79 ) (3,215 ) 1,060 Ending balance: Accumulated other comprehensive loss (net of tax of $3,670, $6,120, $3,670, and $6,120, respectively) $ (13,807 ) $ (11,366 ) $ (13,807 ) $ (11,366 ) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Nov. 02, 2018 | |
Line of Credit Facility [Line Items] | |
Schedule of Line of Credit Facilities [Table Text Block] | The following table summarizes the Company's borrowing availability under the ABL Facilities: (in thousands) November 2, 2018 October 27, 2017 February 2, 2018 Current ABL Facility maximum borrowing (1) $ 175,000 $ 175,000 $ 175,000 Outstanding Letters of Credit (1) 22,621 17,788 22,328 Borrowing availability under ABL (1) $ 152,379 $ 157,212 $ 152,672 |
Schedule of aggregate scheduled maturities | The Company's debt consisted of the following: November 2, 2018 October 27, 2017 February 2, 2018 (in thousands) Amount Rate Amount Rate Amount Rate Term Loan Facility, maturing April 4, 2021 $ 491,825 5.49 % $ 496,975 4.49 % $ 495,688 4.82 % Current ABL Facility, maturing November 16, 2022 (1) — — % — — % — — % 491,825 496,975 495,688 Less: Current maturities in Other current liabilities 5,150 5,150 5,150 Less: Unamortized debt issuance costs 3,274 4,628 4,290 Long-term debt, net $ 483,401 $ 487,197 $ 486,248 (1) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Nov. 02, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangements by Share-based Payment Award, Restricted Stock Units, Vested and Expected to Vest [Table Text Block] | Deferred Awards Option Awards Performance Awards (in thousands, except per share amounts) Number of Shares Weighted Average Grant Date Fair Value per Share Number of Shares Weighted Average Grant Date Fair Value per Share Number of Shares (1) Weighted Average Grant Date Fair Value per Share Unvested as of February 2, 2018 497 $ 22.07 343 $ 8.73 15 $ 21.94 Granted 292 21.97 — — 195 21.90 Vested (139 ) 22.68 (86 ) 8.73 — — Forfeited or expired (21 ) 22.41 — — (18 ) 21.93 Unvested as of November 2, 2018 629 21.86 257 8.73 192 21.90 |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Deferred Awards $ 1,237 $ 879 $ 3,177 $ 2,315 Option Awards 187 176 561 452 Performance Awards 312 — 694 88 Total stock-based compensation expense $ 1,736 $ 1,055 $ 4,432 $ 2,855 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 9 Months Ended |
Nov. 02, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of other financial assets and liabilities measured at fair value | Carrying values and fair values of long-term debt, including the short-term portion, in the Condensed Consolidated Balance Sheets are as follows: November 2, 2018 October 27, 2017 February 2, 2018 (in thousands) Carrying Amount Fair Value Carrying Fair Carrying Fair Long-term debt, including short-term portion $ 491,825 $ 475,226 $ 496,975 $ 414,353 $ 495,688 $ 443,641 |
Related Party (Tables)
Related Party (Tables) | 9 Months Ended |
Nov. 02, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of related party revenue and costs | Related party revenue and costs charged by the Company to and from Sears Holdings for the use of intellectual property or services is as follows: 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Call center services $ — $ — $ — $ 1,160 Lands' End business outfitters revenue 216 222 834 764 Credit card revenue 184 205 506 638 Royalty income 43 55 156 169 Gift card (expense) (4 ) (7 ) (12 ) (20 ) Total income $ 439 $ 475 $ 1,484 $ 2,711 Related party costs charged by Sears Holdings to the Company related to Lands’ End Shops at Sears are as follows: 13 Weeks Ended 39 Weeks Ended (in thousands, except for number of stores) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Rent, CAM and occupancy costs $ 3,483 $ 5,376 $ 12,004 $ 16,882 Retail services, store labor 3,231 5,268 11,084 16,410 Financial services and payment processing 350 479 1,191 1,627 Supply chain costs 126 167 362 558 Total expenses $ 7,190 $ 11,290 $ 24,641 $ 35,477 Number of Lands’ End Shops at Sears at period end 125 188 125 188 Related party costs charged by Sears Holdings to the Company for general corporate services are as follows: 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Sourcing $ 2,830 $ 3,445 $ 6,144 $ 8,525 Shop Your Way 251 83 633 780 Shared services 48 48 143 143 Total expenses $ 3,129 $ 3,576 $ 6,920 $ 9,448 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Nov. 02, 2018 | |
Revenue, Major Customer [Line Items] | |
Revenue from External Customers by Products and Services [Table Text Block] | Net revenue is aggregated by product category in the following table: 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Net revenue: Apparel $ 279,620 $ 263,309 $ 794,788 $ 743,794 Non-apparel 40,238 37,303 97,286 91,148 Service and other 21,712 24,877 57,266 61,102 Total net revenue $ 341,570 $ 325,489 $ 949,340 $ 896,044 |
Schedule of financial information by segment | Financial information by segment is presented in the following tables: SUMMARY OF SEGMENT DATA 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Net revenue: Direct $ 313,778 $ 290,326 $ 863,753 $ 778,554 Retail 27,792 35,163 85,587 117,490 Total net revenue $ 341,570 $ 325,489 $ 949,340 $ 896,044 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Adjusted EBITDA: Direct $ 30,284 $ 29,100 $ 68,379 $ 54,018 Retail (3,595 ) (6,003 ) (7,763 ) (7,405 ) Corporate / other (11,001 ) (10,245 ) (28,179 ) (25,635 ) Total adjusted EBITDA $ 15,688 $ 12,852 $ 32,437 $ 20,978 (Gain) loss on property and equipment (162 ) 89 121 151 Transfer of corporate functions 4 475 10 2,401 Depreciation and amortization 7,361 6,347 20,420 19,031 Operating income (loss) $ 8,485 $ 5,941 $ 11,886 $ (605 ) Interest expense 7,303 6,350 21,216 18,642 Other expense (income), net 1,866 (576 ) 5,317 (1,812 ) Income tax (benefit) expense (3,978 ) 5 (10,026 ) (5,878 ) NET INCOME (LOSS) $ 3,294 $ 162 $ (4,621 ) $ (11,557 ) 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Depreciation and amortization: Direct $ 6,887 $ 5,747 $ 18,692 $ 17,015 Retail 177 285 752 992 Corporate / other 297 315 976 1,024 Total depreciation and amortization $ 7,361 $ 6,347 $ 20,420 $ 19,031 (in thousands) November 2, 2018 October 27, 2017 February 2, 2018 Total Assets: Direct $ 961,289 $ 934,508 $ 856,986 Retail 55,511 67,965 49,933 Corporate / other 131,918 118,007 217,216 Total assets $ 1,148,718 $ 1,120,480 $ 1,124,135 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Capital expenditures: Direct $ 9,129 $ 8,791 $ 29,591 $ 29,004 Retail 1,828 — 3,569 10 Corporate / other $ — $ 129 $ — $ 129 Total capital expenditures $ 10,957 $ 8,920 $ 33,160 $ 29,143 |
Revenue Revenue (Tables)
Revenue Revenue (Tables) | 9 Months Ended |
Nov. 02, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | 13 Weeks Ended 39 Weeks Ended (in thousands) November 2, 2018 October 27, 2017 November 2, 2018 October 27, 2017 Net revenue: North America $ 300,900 $ 283,771 $ 828,078 $ 780,926 Europe 30,783 31,848 87,888 84,053 Asia 9,887 9,870 33,374 31,065 Total Net revenue $ 341,570 $ 325,489 $ 949,340 $ 896,044 |
Activity of Gift Card Liability Balance | November 2, 2018 (in thousands) 13 Weeks Ended 39 Weeks Ended Balance as of Beginning of Period $ 16,626 $ 19,272 Gift cards sold 14,790 40,143 Gift cards redeemed (15,258 ) (41,605 ) Gift card breakage (183 ) (1,835 ) Balance as of November 2, 2018 $ 15,975 $ 15,975 |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | November 2, 2018 (in thousands) 13 Weeks Ended 39 Weeks Ended Deferred Revenue Beginning of Period $ 8,461 $ 12,838 Deferred Revenue Recognized in Period (8,461 ) (12,838 ) Revenue Deferred in Period 21,960 21,960 Deferred Revenue End of Period $ 21,960 $ 21,960 |
Recent Accounting Pronounceme_4
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Nov. 02, 2018 | Feb. 03, 2018 | Feb. 02, 2018 | Oct. 27, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Prepaid expenses and other current assets | $ 49,001 | $ 26,659 | $ 48,934 | |
Other current liabilities | 116,367 | 100,257 | 103,886 | |
Accumulated deficit | (33,371) | (29,810) | $ (72,010) | |
Balances without adoption | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Prepaid expenses and other current assets | 38,246 | |||
Other current liabilities | 106,736 | |||
Accumulated deficit | (34,494) | |||
Impact of adoption | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Prepaid expenses and other current assets | 10,755 | $ 10,425 | ||
Other current liabilities | 9,631 | 9,365 | ||
Accumulated deficit | $ 1,123 | 1,060 | ||
Revenue recognition | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Prepaid expenses and other current assets | 37,084 | |||
Other current liabilities | 109,622 | |||
Accumulated deficit | $ (28,750) | |||
Revenue recognition | Accumulated deficit | Gift card breakage | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of accounting changes | ||||
Revenue recognition | Other Current Liabilities [Member] | Gift card breakage | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of accounting changes | $ (1,100) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2018 | Oct. 27, 2017 | Nov. 02, 2018 | Oct. 27, 2017 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Net loss | $ (3,294) | $ (162) | $ 4,621 | $ 11,557 |
Basic weighted average common shares outstanding (shares) | 32,211,000 | 32,095,000 | 32,182,000 | 32,068,000 |
Dilutive effect of stock awards | 103,000 | 22,000 | 0 | 0 |
Diluted weighted average common shares outstanding (shares) | 32,314,000 | 32,117,000 | 32,182,000 | 32,068,000 |
Basic (in USD per share) | $ 0.10 | $ 0.01 | $ (0.14) | $ (0.36) |
Diluted (in USD per share) | $ 0.10 | $ 0.01 | ||
Antidilutive securities excluded from computation of earnings per share, amount | 484,743 | 827,057 |
Other Comprehensive (Loss) In_3
Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Nov. 02, 2018 | Oct. 27, 2017 | Nov. 02, 2018 | Oct. 27, 2017 | Feb. 02, 2018 | Jan. 27, 2017 | |
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Roll Forward] | ||||||
Beginning balance: Accumulated other comprehensive loss (net of tax of $3,660, $6,054, $2,816 and $6,691, respectively) | $ (10,592) | $ (12,426) | ||||
Other comprehensive income (loss): | ||||||
Foreign currency translation adjustments (net of tax (benefit) expense of $10, $66, $854, and $(571), respectively) | $ (39) | $ (79) | (3,215) | 1,060 | ||
Ending balance: Accumulated other comprehensive loss (net of tax of $3,670, $6,120, $3,670, and $6,120, respectively) | (13,807) | (11,366) | (13,807) | (11,366) | ||
Accumulated other comprehensive loss, tax | 3,670 | 6,120 | $ 3,670 | $ 6,120 | $ 3,660 | $ 6,054 |
Foreign currency translations adjustment, tax | $ 10 | $ 66 |
Debt (Details)
Debt (Details) $ in Thousands | 9 Months Ended | |||
Nov. 02, 2018USD ($) | Feb. 02, 2018USD ($) | Oct. 27, 2017USD ($) | ||
Line of Credit Facility [Line Items] | ||||
Long-term debt | $ 491,825 | $ 495,688 | $ 496,975 | |
Debt Instrument, Interest Rate, Stated Percentage | 5.49% | 4.82% | 4.49% | |
Less: Current maturities in Other current liabilities | $ 5,150 | $ 5,150 | $ 5,150 | |
Less: Unamortized debt issuance costs | 3,274 | 4,290 | 4,628 | |
Long-term debt, net | 483,401 | 486,248 | 487,197 | |
Current ABL Facility | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility maximum borrowing capacity | [1] | 175,000 | 175,000 | |
Outstanding letters of credit | [1] | 22,621 | 22,328 | |
Available borrowing under line of credit facility | [1] | $ 152,379 | 152,672 | |
Current ABL Facility | Secured debt | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, unused commitment fee percentage | 0.25% | |||
Line of credit facility, covenant terms, minimum percentage of loan cap amount | 10.00% | |||
Line of credit facility, covenant terms, minimum excess credit availability | $ 15,000 | |||
Line of credit facility, covenant terms, minimum fixed charge coverage ratio | 1 | |||
Current ABL Facility | Domestic Letters of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility maximum borrowing capacity | [1] | $ 0 | $ 0 | |
Interest rate at the end of period | [1] | 0.00% | 0.00% | |
Prior ABL Facility | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility maximum borrowing capacity | [1] | 175,000 | ||
Outstanding letters of credit | [1] | 17,788 | ||
Available borrowing under line of credit facility | [1] | 157,212 | ||
Prior ABL Facility | Domestic Letters of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility maximum borrowing capacity | [1] | $ 0 | ||
Interest rate at the end of period | [1] | 0.00% | ||
Term Loan Facility | Secured debt | ||||
Line of Credit Facility [Line Items] | ||||
Secured Debt | $ 491,825 | $ 495,688 | $ 496,975 | |
Minimum | Prior ABL Facility | Secured debt | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, unused commitment fee percentage | 0.25% | |||
Minimum | Term Loan Facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate floor | .01 | |||
Maximum | Prior ABL Facility | Secured debt | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, unused commitment fee percentage | 0.375% | |||
LIBOR | Term Loan Facility | Secured debt | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 3.25% | |||
LIBOR | Minimum | Current ABL Facility | Secured debt | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 1.25% | |||
LIBOR | Minimum | Prior ABL Facility | Secured debt | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 1.50% | |||
LIBOR | Maximum | Current ABL Facility | Secured debt | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 1.75% | |||
LIBOR | Maximum | Prior ABL Facility | Secured debt | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 2.00% | |||
Base rate | Term Loan Facility | Secured debt | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 2.25% | |||
Base rate | Minimum | ABL Facilities | Secured debt | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 0.50% | |||
Base rate | Maximum | ABL Facilities | Secured debt | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 1.00% | |||
[1] | 1) October 27, 2017 amounts pertain to Prior ABL Facility. |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Nov. 02, 2018 | Oct. 27, 2017 | Nov. 02, 2018 | Oct. 27, 2017 | Feb. 02, 2018 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation | $ 1,736 | $ 1,055 | $ 4,432 | $ 2,855 | ||
Restricted Stock Units (RSUs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation | $ 1,237 | 879 | $ 3,177 | 2,315 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 629,000 | 629,000 | 497,000 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 8,800 | $ 8,800 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 1 month | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 21.86 | $ 21.86 | $ 22.07 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 292,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 21.97 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | (139,000) | (139,000) | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 22.68 | $ 22.68 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (21,000) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 22.41 | |||||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation | $ 187 | 176 | $ 561 | 452 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 1,800 | $ 1,800 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 5 months | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | 257,000 | 257,000 | 343,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Option, Nonvested, Weighted Average Exercise Price | $ 8.73 | $ 8.73 | $ 8.73 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | |||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | (86,000) | (86,000) | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 8.73 | $ 8.73 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares | 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | $ 0 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Exercisable Options | 85,784 | 85,784 | ||||
Performance Shares [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation | $ 312 | $ 0 | $ 694 | $ 88 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | [1] | 192,000 | 192,000 | 15,000 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 3,000 | $ 3,000 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 5 months | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 21.90 | $ 21.90 | $ 21.94 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | [1] | 195,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 21.90 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | [1] | 0 | 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 0 | $ 0 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | [1] | (18,000) | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 21.93 | |||||
[1] | (1) For those awards with respect to which the performance period is not yet complete, the number of granted and unvested shares in the table above is based on the participants earning their Target Shares at 100%; however, the cumulative expense recognized reflects changes in estimated achievement of the performance measures as they occur. |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Nov. 02, 2018 | Feb. 02, 2018 | Oct. 27, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Restricted cash | $ 2,069 | $ 2,356 | $ 1,640 |
Long-term debt, including short-term portion | 491,825 | 495,688 | 496,975 |
Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt, including short-term portion | 491,825 | 495,688 | 496,975 |
Fair Value | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Restricted cash | 2,100 | 2,400 | 1,600 |
Fair Value | Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt, including short-term portion | $ 475,226 | $ 443,641 | $ 414,353 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | ||
Nov. 02, 2018 | Feb. 02, 2018 | Oct. 27, 2017 | |
Income Tax Examination [Line Items] | |||
Tax Act Impact | $ 3,700,000 | ||
Unrecognized tax benefits | 1,900,000 | ||
Unrecognized tax benefits, if recognized, would impact effective tax rate | 1,500,000 | ||
Sears Holdings Corporation | Other assets | |||
Income Tax Examination [Line Items] | |||
Indemnification receivable, uncertain tax positions | $ 0 | $ 7,400,000 | $ 12,000,000 |
Related Party - Narrative and R
Related Party - Narrative and Related Party Costs (Details) - Sears Holdings Corporation | 3 Months Ended | 9 Months Ended | |||
Nov. 02, 2018USD ($) | Oct. 27, 2017USD ($) | Nov. 02, 2018USD ($) | Oct. 27, 2017USD ($) | Feb. 02, 2018USD ($) | |
Related Party Transaction | |||||
Number of Lands’ End Shops at Sears at period end | 125 | 188 | 125 | 188 | |
Rent CAM, And occupancy costs | |||||
Related Party Transaction | |||||
Related party expenses | $ 3,483,000 | $ 5,376,000 | $ 12,004,000 | $ 16,882,000 | |
Retail services, store labor | |||||
Related Party Transaction | |||||
Related party expenses | 3,231,000 | 5,268,000 | 11,084,000 | 16,410,000 | |
Financial services and payment processing | |||||
Related Party Transaction | |||||
Related party expenses | 350,000 | 479,000 | 1,191,000 | 1,627,000 | |
Supply chain costs | |||||
Related Party Transaction | |||||
Related party expenses | 126,000 | 167,000 | 362,000 | 558,000 | |
Costs related to Lands' End Shops at Sears | |||||
Related Party Transaction | |||||
Related party expenses | 7,190,000 | 11,290,000 | 24,641,000 | 35,477,000 | |
Accounts receivable, net | |||||
Related Party Transaction | |||||
Accounts receivable, net, due from related party | 1,000,000 | 3,100,000 | 1,000,000 | 3,100,000 | $ 2,000,000 |
Accounts payable | |||||
Related Party Transaction | |||||
Accounts payable, due to related party | 3,100,000 | 3,100,000 | 2,900,000 | ||
Other assets | |||||
Related Party Transaction | |||||
Indemnification receivable, uncertain tax positions | $ 0 | $ 12,000,000 | $ 0 | $ 12,000,000 | $ 7,400,000 |
Related Party - Details of Gene
Related Party - Details of General Corporate Services (Details) - Sears Holdings Corporation - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2018 | Oct. 27, 2017 | Nov. 02, 2018 | Oct. 27, 2017 | |
Sourcing | ||||
Related Party Transaction | ||||
Related party expenses | $ 2,830 | $ 3,445 | $ 6,144 | $ 8,525 |
Shop Your Way | ||||
Related Party Transaction | ||||
Related party expenses | 251 | 83 | 633 | 780 |
Shared services | ||||
Related Party Transaction | ||||
Related party expenses | 48 | 48 | 143 | 143 |
Costs related general corporate services | ||||
Related Party Transaction | ||||
Related party expenses | $ 3,129 | $ 3,576 | $ 6,920 | $ 9,448 |
Related Party - Details of Use
Related Party - Details of Use of Intellectual Property or Services (Details) - Sears Holdings Corporation - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2018 | Oct. 27, 2017 | Nov. 02, 2018 | Oct. 27, 2017 | |
Related Party Transaction | ||||
Related party revenue, net | $ 1,484 | $ 2,711 | ||
Call center services | ||||
Related Party Transaction | ||||
Related party revenue, net | $ 0 | $ 0 | 0 | 1,160 |
Lands' End business outfitters revenue | ||||
Related Party Transaction | ||||
Related party revenue, net | 216 | 222 | 834 | 764 |
Credit card revenue | ||||
Related Party Transaction | ||||
Related party revenue, net | 184 | 205 | 506 | 638 |
Royalty income | ||||
Related Party Transaction | ||||
Related party revenue, net | 43 | 55 | 156 | 169 |
Gift card (expense) | ||||
Related Party Transaction | ||||
Related party transaction | (4) | (7) | $ (12) | $ (20) |
Revenue and costs for the use of intellectual property or services | ||||
Related Party Transaction | ||||
Related party revenue, net | $ 439 | $ 475 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 02, 2018USD ($) | Oct. 27, 2017USD ($) | Nov. 02, 2018USD ($)segment | Oct. 27, 2017USD ($) | Feb. 02, 2018USD ($) | |
Summary of Segment Data | |||||
Net revenue | $ 341,570 | $ 325,489 | $ 949,340 | $ 896,044 | |
Adjusted EBITDA | 15,688 | 12,852 | 32,437 | 20,978 | |
Gain (Loss) on Disposition of Property Plant Equipment | (162) | 89 | 121 | 151 | |
Transfer of corporate functions | 4 | 475 | 10 | 2,401 | |
Depreciation and amortization | 7,361 | 6,347 | 20,420 | 19,031 | |
Operating income (loss) | 8,485 | 5,941 | 11,886 | (605) | |
Interest Expense | 7,303 | 6,350 | 21,216 | 18,642 | |
Other (income) expense, net | 1,866 | (576) | 5,317 | (1,812) | |
Income tax benefit | (3,978) | 5 | (10,026) | (5,878) | |
NET LOSS | 3,294 | 162 | (4,621) | (11,557) | |
Assets | 1,148,718 | 1,120,480 | 1,148,718 | 1,120,480 | $ 1,124,135 |
Capital expenditures | 10,957 | 8,920 | $ 33,160 | 29,143 | |
Reportable segments | |||||
Segment Reporting Information [Line Items] | |||||
Number of reportable business segments | segment | 2 | ||||
Reportable segments | Direct | |||||
Summary of Segment Data | |||||
Net revenue | 313,778 | 290,326 | $ 863,753 | 778,554 | |
Adjusted EBITDA | 30,284 | 29,100 | 68,379 | 54,018 | |
Depreciation and amortization | 6,887 | 5,747 | 18,692 | 17,015 | |
Assets | 961,289 | 934,508 | 961,289 | 934,508 | 856,986 |
Capital expenditures | 9,129 | 8,791 | 29,591 | 29,004 | |
Reportable segments | Retail | |||||
Summary of Segment Data | |||||
Net revenue | 27,792 | 35,163 | 85,587 | 117,490 | |
Adjusted EBITDA | (3,595) | (6,003) | (7,763) | (7,405) | |
Depreciation and amortization | 177 | 285 | 752 | 992 | |
Assets | 55,511 | 67,965 | 55,511 | 67,965 | 49,933 |
Capital expenditures | 1,828 | 0 | 3,569 | 10 | |
Reportable segments | Corporate / other | |||||
Summary of Segment Data | |||||
Adjusted EBITDA | (11,001) | (10,245) | (28,179) | (25,635) | |
Depreciation and amortization | 297 | 315 | 976 | 1,024 | |
Assets | 131,918 | 118,007 | 131,918 | 118,007 | $ 217,216 |
Capital expenditures | 0 | 129 | 0 | 129 | |
Apparel | |||||
Summary of Segment Data | |||||
Net revenue | 279,620 | 263,309 | 794,788 | 743,794 | |
Non-apparel | |||||
Summary of Segment Data | |||||
Net revenue | 40,238 | 37,303 | 97,286 | 91,148 | |
Services and other | |||||
Summary of Segment Data | |||||
Net revenue | $ 21,712 | $ 24,877 | $ 57,266 | $ 61,102 |
Revenue Revenue (Details)
Revenue Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 02, 2018 | Nov. 02, 2018 | May 04, 2018 | Feb. 02, 2018 | Oct. 27, 2017 | |
Deferred Revenue Arrangement [Line Items] | |||||
Contract liabilities | $ 8,461 | ||||
Revenue recognized | $ (8,461) | $ (12,838) | |||
Increase (Decrease) in Contract with Customer, Liability | 21,960 | 21,960 | |||
Other Current Liabilities [Member] | |||||
Deferred Revenue Arrangement [Line Items] | |||||
Gift card liability | 15,975 | 15,975 | $ 16,626 | $ 19,272 | $ 17,700 |
Refund liability | $ 23,700 | $ 23,700 | $ 11,100 | $ 12,000 |
Revenue Revenue - Disaggregated
Revenue Revenue - Disaggregated Net revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2018 | Oct. 27, 2017 | Nov. 02, 2018 | Oct. 27, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 341,570 | $ 325,489 | $ 949,340 | $ 896,044 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 300,900 | 283,771 | 828,078 | 780,926 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 30,783 | 31,848 | 87,888 | 84,053 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 9,887 | $ 9,870 | $ 33,374 | $ 31,065 |
Revenue Revenue - Activity of G
Revenue Revenue - Activity of Gift Card Liability Balance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Nov. 02, 2018 | Nov. 02, 2018 | |
Deferred Revenue Arrangement [Line Items] | ||
Revenue recognized | $ (8,461) | $ (12,838) |
Gift cards sold | ||
Deferred Revenue Arrangement [Line Items] | ||
Gift cards sold | 14,790 | 40,143 |
Gift cards redeemed | ||
Deferred Revenue Arrangement [Line Items] | ||
Revenue recognized | (15,258) | (41,605) |
Gift card breakage | ||
Deferred Revenue Arrangement [Line Items] | ||
Revenue recognized | (183) | (1,835) |
Other Current Liabilities [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Gift card liability at beginning of period | 19,272 | |
Gift card liability at beginning of period | $ 15,975 | $ 15,975 |