Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 31, 2020 | Mar. 18, 2020 | Aug. 02, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | Lands' End, Inc. | ||
Document Type | 10-K | ||
Trading Symbol | LE | ||
Current Fiscal Year End Date | --01-31 | ||
Entity Common Stock, Shares Outstanding | 32,381,612 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0000799288 | ||
Entity Filer Category | Accelerated Filer | ||
Document Period End Date | Jan. 31, 2020 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Shell Company | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 112.4 | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-09769 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 36-2512786 | ||
Entity Address, Address Line One | 1 Lands’ End Lane | ||
Entity Address, City or Town | Dodgeville | ||
Entity Address, State or Province | WI | ||
Entity Address, Postal Zip Code | 53595 | ||
City Area Code | 608 | ||
Local Phone Number | 935-9341 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Income Statement [Abstract] | |||
Net revenue | $ 1,450,201 | $ 1,451,592 | $ 1,406,677 |
Cost of sales (excluding depreciation and amortization) | 828,309 | 835,536 | 809,474 |
Gross profit | 621,892 | 616,056 | 597,203 |
Selling and administrative | 543,962 | 545,590 | 538,939 |
Depreciation and amortization | 31,136 | 27,558 | 24,910 |
Other operating expense, net | 1,357 | 309 | 4,269 |
Total costs and expenses | 576,455 | 573,457 | 568,118 |
Operating income | 45,437 | 42,599 | 29,085 |
Interest expense | 25,987 | 28,909 | 25,929 |
Other (income) expense, net | (1,912) | 4,059 | 2,708 |
Income before income taxes | 21,362 | 9,631 | 448 |
Income tax expense (benefit) | 2,072 | (1,959) | (27,747) |
NET INCOME | $ 19,290 | $ 11,590 | $ 28,195 |
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO STOCKHOLDERS | |||
Basic: | $ 0.60 | $ 0.36 | $ 0.88 |
Diluted: | $ 0.60 | $ 0.36 | $ 0.88 |
Basic weighted average common shares outstanding | 32,343 | 32,190 | 32,076 |
Diluted weighted average common shares outstanding | 32,345 | 32,526 | 32,110 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
NET INCOME | $ 19,290 | $ 11,590 | $ 28,195 |
Other comprehensive (loss) income, net of tax, foreign currency translation adjustments | 195 | (2,591) | 4,282 |
COMPREHENSIVE INCOME | $ 19,485 | $ 8,999 | $ 32,477 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 31, 2020 | Feb. 01, 2019 |
Current assets | ||
Cash and cash equivalents | $ 77,148 | $ 193,405 |
Restricted cash | 2,149 | 1,948 |
Accounts receivable, net | 50,953 | 34,549 |
Inventories, net | 375,670 | 321,905 |
Prepaid expenses and other current assets | 39,458 | 36,574 |
Total current assets | 545,378 | 588,381 |
Property and equipment, net | 157,665 | 149,894 |
Operating lease right-of-use asset | 38,665 | |
Goodwill | 110,000 | 110,000 |
Intangible asset, net | 257,000 | 257,000 |
Other assets | 4,921 | 5,636 |
TOTAL ASSETS | 1,113,629 | 1,110,911 |
Current liabilities | ||
Current borrowings and short-term debt | 5,150 | 5,150 |
Accounts payable | 158,436 | 123,827 |
Lease liability - current | 5,864 | |
Other current liabilities | 114,116 | 112,274 |
Total current liabilities | 283,566 | 241,251 |
Long-term debt, net | 378,657 | 482,453 |
Lease liability - long-term | 39,841 | |
Deferred tax liabilities | 57,651 | 58,670 |
Other liabilities | 5,532 | 5,826 |
TOTAL LIABILITIES | 765,247 | 788,200 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Common stock, par value $0.01- authorized: 480,000 shares; issued and outstanding: 32,382 and 32,220, respectively | 324 | 320 |
Additional paid-in capital | 360,656 | 352,733 |
Retained earnings (Accumulated deficit) | 390 | (17,159) |
Accumulated other comprehensive loss | (12,988) | (13,183) |
TOTAL STOCKHOLDERS' EQUITY | 348,382 | 322,711 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,113,629 | $ 1,110,911 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jan. 31, 2020 | Feb. 01, 2019 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 480,000,000 | 480,000,000 |
Common stock, shares issued | 32,382,000 | 32,220,000 |
Common stock, shares outstanding | 32,382,000 | 32,220,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 19,290 | $ 11,590 | $ 28,195 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 31,136 | 27,558 | 24,910 |
Amortization of debt issuance costs | 1,722 | 1,755 | 1,904 |
(Gain) loss on disposal of property and equipment | (266) | 278 | 348 |
Stock-based compensation | 8,690 | 6,161 | 3,951 |
Deferred income taxes | (456) | 223 | (32,757) |
Other | 1,635 | ||
Change in operating assets and liabilities: | |||
Inventories | (53,819) | 7,773 | (2,709) |
Accounts payable | 32,716 | (29,433) | (6,950) |
Other operating assets | (16,908) | 17,824 | (3,234) |
Other operating liabilities | 3,549 | 4,471 | 14,779 |
Net cash provided by operating activities | 27,289 | 48,200 | 28,437 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Sales of property and equipment | 906 | 456 | 68 |
Purchases of property and equipment | (38,878) | (44,852) | (38,145) |
Net cash used in investing activities | (37,972) | (44,396) | (38,077) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from borrowing under ABL Facility | 99,550 | ||
Payments of borrowing under ABL Facility | (99,550) | ||
Payments of term-loan | (105,150) | (5,150) | (5,150) |
Payments of employee withholding taxes on share-based compensation | (763) | (603) | (747) |
Debt issuance costs | (1,515) | ||
Net cash used in financing activities | (105,913) | (5,753) | (7,412) |
Effects of exchange rate changes on cash, cash equivalents and restricted cash | 540 | (635) | (1,419) |
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (116,056) | (2,584) | (18,471) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR | 195,353 | 197,937 | 216,408 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR | 79,297 | 195,353 | 197,937 |
SUPPLEMENTAL CASH FLOW DATA | |||
Unpaid liability to acquire property and equipment | 7,364 | 5,521 | 7,756 |
Income taxes paid, net of refunds | 3,069 | 1,221 | 3,379 |
Interest paid | $ 23,728 | $ 27,243 | $ 23,458 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock Issued | Additional Paid-In Capital | (Accumulated Deficit) / Retained Earnings | Accumulated Other Comprehensive Loss |
Balance at Jan. 27, 2017 | $ 271,412 | $ 320 | $ 343,971 | $ (60,453) | $ (12,426) |
Balance, shares at Jan. 27, 2017 | 32,029 | ||||
Net income | 28,195 | 28,195 | |||
Cumulative translation adjustment, net of tax | 4,282 | 4,282 | |||
Impact of Tax Act | 2,448 | 2,448 | (2,448) | ||
Stock-based compensation expense | 3,951 | 3,951 | |||
Vesting of restricted shares, shares | 110 | ||||
Restricted stock shares surrendered for taxes | (747) | (747) | |||
Restricted stock shares surrendered for taxes, shares | (38) | ||||
Balance at Feb. 02, 2018 | 307,093 | $ 320 | 347,175 | (29,810) | (10,592) |
Balance, shares at Feb. 02, 2018 | 32,102 | ||||
Net income | 11,590 | 11,590 | |||
Cumulative translation adjustment, net of tax | (2,591) | (2,591) | |||
Change in accounting principle | Accounting Standards Update 2014-09 | 1,061 | 1,061 | |||
Stock-based compensation expense | 6,161 | 6,161 | |||
Vesting of restricted shares, shares | 151 | ||||
Restricted stock shares surrendered for taxes | (603) | (603) | |||
Restricted stock shares surrendered for taxes, shares | (33) | ||||
Balance at Feb. 01, 2019 | 322,711 | $ 320 | 352,733 | (17,159) | (13,183) |
Balance, shares at Feb. 01, 2019 | 32,220 | ||||
Net income | 19,290 | 19,290 | |||
Cumulative translation adjustment, net of tax | 195 | 195 | |||
Change in accounting principle | Accounting Standards Update 2016-02 | (1,741) | (1,741) | |||
Stock-based compensation expense | 8,690 | 8,690 | |||
Vesting of restricted shares | $ 4 | (4) | |||
Vesting of restricted shares, shares | 210 | ||||
Restricted stock shares surrendered for taxes | (763) | (763) | |||
Restricted stock shares surrendered for taxes, shares | (48) | ||||
Balance at Jan. 31, 2020 | $ 348,382 | $ 324 | $ 360,656 | $ 390 | $ (12,988) |
Balance, shares at Jan. 31, 2020 | 32,382 |
Background and Basis of Present
Background and Basis of Presentation | 12 Months Ended |
Jan. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements Abstract | |
Background and Basis of Presentation | NOTE 1. BACKGROUND AND BASIS OF PRESENTATION Description of Business Lands' End, Inc. ("Lands' End" or the "Company") is a leading uni-channel retailer of casual clothing, accessories, footwear and home products. Lands' End offers products online at www.landsend.com Terms that are commonly used in the Company's notes to consolidated financial statements are defined as follows: • ABL Facility - Asset-based senior secured credit agreements, dated as of November 16, 2017, with Wells Fargo, N.A. and certain other lenders • ASC - Financial Accounting Standards Board Accounting Standards Codification, which serves as the source for authoritative GAAP, as supplemented by rules and interpretive releases by the SEC which are also sources of authoritative GAAP for SEC registrants • ASU - Financial Accounting Standards Board Accounting Standards Update • CAM - Common area maintenance for leased properties • Debt Facilities - Collectively, the ABL Facility and the Term Loan Facility • Deferred Awards - Time vesting stock awards • EPS - Earnings per share • ERP - Enterprise resource planning software solutions • ESL - ESL Investments, Inc. and its investment affiliates, including Edward S. Lampert • FASB - Financial Accounting Standards Board • First Quarter 2019 - The 13 weeks ended May 3, 2019 • Fiscal 2020 – The Company’s next fiscal year representing the 52 weeks ending January 29, 2021 • Fourth Quarter 2019 – The 13 weeks ended January 31, 2020 • GAAP - Accounting principles generally accepted in the United States • LIBOR - London inter-bank offered rate • Performance Awards - Performance-based stock awards • Option Awards - Stock option awards • Sears Holdings or Sears Holdings Corporation - Sears Holdings Corporation, a Delaware corporation, and its consolidated subsidiaries • Sears Roebuck - Sears, Roebuck and Co., a subsidiary of Sears Holdings Corporation • 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 • 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 • Transform Holdco - Transform Holdco LLC, an affiliate of ESL, which on February 11, 2019 acquired from Sears Holdings substantially all of the go-forward retail footprint and other assets and component businesses of Sears Holdings as a going concern • UTBs - Gross unrecognized tax benefits Basis of Presentation The Consolidated Financial Statements include the accounts of Lands' End, Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated. The accompanying Consolidated Financial Statements have been prepared in accordance with GAAP. In the opinion of management, all material adjustments 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. Reclassifications Certain reclassifications have been made to prior year amounts within the Consolidated Balance Sheets to conform to the current year presentation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fiscal Year The Company's fiscal year end is on the Friday preceding the Saturday closest to January 31 each year. The fiscal periods in this report are presented as follows, unless the context otherwise requires: Fiscal Year Ended Weeks 2019 January 31, 2020 52 2018 February 1, 2019 52 2017 February 2, 2018 53 Seasonality The Company's operations have historically been seasonal, with a disproportionate amount of net revenue occurring in the fourth fiscal quarter, reflecting increased demand during the year-end holiday selling season. The impact of seasonality on results of operations is more pronounced since the level of certain fixed costs, such as occupancy and overhead expenses, do not vary with sales. The Company's results of operations also may fluctuate based upon such factors as the timing of certain holiday seasons and promotions, the amount of net revenue contributed by new and existing stores, the timing and level of markdowns, competitive factors, weather and general economic conditions. Working capital requirements typically increase during the second and third quarters of the fiscal year as inventory builds to support peak shipping/selling periods and, accordingly, typically decrease during the fourth quarter of the fiscal year as inventory is shipped/sold. Cash provided by operating activities is typically higher in the fourth quarter of the fiscal year due to reduced working capital requirements during that period. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reportable amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and cash equivalents Cash and cash equivalents consist of highly liquid temporary instruments purchased with original maturities of three months or less. It also includes deposits in-transit from banks for payments related to third-party credit card and debit card transactions. Restricted cash The Company classifies cash balances pledged as collateral as Restricted cash on the Consolidated Balance Sheets. Allowance for Doubtful Accounts The Company provides an allowance for doubtful accounts based on both historical experience and specific identification. The Accounts receivable balance on the Consolidated Balance Sheets is presented net of the Company's allowance for doubtful accounts and is comprised of various customer-related accounts receivable. Changes in the balance of the allowance for doubtful accounts are as follows: (in thousands) Fiscal 2019 Fiscal 2018 Beginning balance $ 542 $ 637 Provision 151 192 Write-offs (182 ) (287 ) Ending balance $ 511 $ 542 Inventory Inventories primarily consist of merchandise purchased for resale. For financial reporting and tax purposes, the Company's United States inventory, primarily merchandise held for sale, is stated at last-in, first-out ("LIFO") cost, which is lower than net realizable value. The Company accounts for its non-United States inventory on the first-in, first-out ("FIFO") method. The United States inventory accounted for using the LIFO method was 90% of total inventory as of January 31, 2020 and 88% as of February 1, 2019. If the FIFO method of accounting for inventory had been used, the effect on inventory would have been an increase of $0.9 million and $1.1 million as of January 31, 2020 and February 1, 2019, respectively. The Company maintains a reserve for excess and obsolete inventory. The reserve is calculated based on historical experience related to liquidation/disposal of identified inventory. The excess and obsolescence reserve balances were $11.0 million and $12.5 million as of January 31, 2020 and February 1, 2019, respectively. Deferred Catalog Costs and Marketing Costs incurred for direct response marketing consist primarily of catalog production and mailing costs that are generally amortized within two months from the date catalogs are mailed. Unamortized marketing costs reported as prepaid assets were $14.7 million and $13.5 million as of January 31, 2020 and February 1, 2019, respectively. The Company expenses the costs of marketing for website, magazine, newspaper, radio and other general media when the marketing takes place. Marketing expenses, including catalog costs amortization, website-related costs and other print media were $194.9 million, $186.9 million and $186.4 million for Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively. These costs are included within Selling and administrative expenses in the accompanying Consolidated Statements of Operations. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Additions and substantial improvements are capitalized and include expenditures that materially extend the useful lives of existing facilities and equipment. Maintenance and repairs that do not materially improve or extend the lives of the respective assets are expensed as incurred. As of the balance sheet dates, Property and equipment, net consisted of the following: (in thousands) Asset Lives January 31, 2020 February 1, 2019 Land - $ 3,459 $ 3,459 Buildings and improvements 15-30 100,269 99,400 Furniture, fixtures and equipment 3-10 59,731 62,823 Computer hardware and software 3-10 181,160 146,400 Leasehold improvements 3-7 8,423 6,569 Construction in progress 22,796 27,296 Gross property and equipment 375,838 345,947 Accumulated depreciation (218,173 ) (196,053 ) Total property and equipment, net $ 157,665 $ 149,894 As of January 31, 2020 and February 1, 2019, assets in development relate primarily to technological investments. Depreciation expense is recorded over the estimated useful lives of the respective assets using the straight-line method. Leasehold improvements are depreciated over the shorter of the associated lease term or the estimated useful life of the asset. Depreciation expense was $31.1 million, $27.6 million and $24.9 million for Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively. Impairment of Property and Equipment Property and equipment are subject to a review for impairment if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Retail store long-lived assets, including right-of-use assets, are regularly reviewed for impairment indicators. Impairment is assessed at the individual store level which is the lowest level of identifiable cash flows and considers the estimated undiscounted cash flows over the asset’s remaining life. If estimated undiscounted cash flows are insufficient to recover the investment, an impairment loss is recognized equal to the difference between the estimated fair value of the asset and its carrying value, net of salvage, and any costs of disposition. The fair value estimate is generally the discounted amount of estimated store-specific cash flows. During Fiscal 2019 an impairment of $1.4 million was recognized for property and equipment in one Retail location. During Fiscal 2018 an impairment of $254 thousand was recognized for property and equipment in two Retail locations. There were no impairments of property and equipment recognized in Fiscal 2017. G oodwill and Indefinite-lived Intangible Asset Impairment Assessments Goodwill and the indefinite-lived trade name intangible asset are tested separately for impairment on an annual basis or are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The goodwill and trade name intangible asset relate to Kmart Holding Corporation's acquisition of Sears Roebuck in March 2005. Frequently our impairment assessments contain multiple uncertainties because the calculation requires management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting cash flows under different scenarios. We perform goodwill and indefinite-lived intangible asset impairment tests on an annual basis and update these annual impairment tests mid-year if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit or indefinite-lived intangible asset below its carrying amount. If actual results fall short of our estimates and assumptions used in estimating future cash flows and asset fair values, we may be exposed to future impairment losses that could be material. Goodwill impairment assessments The Company tests goodwill for impairment using a one-step quantitative test. The quantitative test compares the reporting unit's fair value to its carrying value. An impairment is recorded for any excess carrying value above the reporting unit's fair value, not to exceed the amount of goodwill. The Company estimates fair value using a discounted cash flow model, commonly referred to as the income approach. The income approach uses a reporting unit's projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions appropriate to the Company's reporting unit. The projection uses management's best estimates of economic and market conditions over the projected period using the best information available, including growth rates in revenues, costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. During Fiscal 2019 and Fiscal 2018, the fair value of the reporting units exceeded their carrying value and as such, the Company did not record a goodwill impairment charge. At the end of Fiscal 2019, the fair value of the U.S. eCommerce, Outfitters and Japan eCommerce reporting units exceeded the carrying value by 34.7%, 48.6% and 3.1% respectively. The goodwill allocated to Japan is approximately $3.3 million Goodwill impairment charges may be recognized in future periods to the extent changes in factors or circumstances occur, including deterioration in the macroeconomic environment, retail industry or in the equity markets, deterioration in our performance or our future projections, or changes in our plans for the reporting unit. Indefinite-lived intangible asset impairment assessments The Company's indefinite-lived intangible asset is the Lands' End trade name. Lands' End reviews the trade name for impairment, on an annual basis, by comparing the carrying amount to its fair value, using the income approach. Lands' End determined that the relief from royalty method of the income approach was most appropriate for analyzing the Company's indefinite-lived asset. This method is based on the assumption that, in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset class. The relief from royalty method involves two steps: (1) estimation of reasonable royalty rates for the assets and (2) the application of these royalty rates to a net revenue stream and discounting the resulting cash flows to determine a present value. The Company multiplied the selected royalty rate by the forecasted net revenue stream to calculate the cost savings (relief from royalty payment) associated with the asset. The cash flows are then discounted to present value using the selected discount rate and compared to the carrying value of the asset. In Fiscal 2019, Fiscal 2018 and Fiscal 2017, the Company tested the indefinite-lived intangible assets as required resulting in the fair value exceeding the carrying value by 19.1%, 45.1% and 9.7% respectively. As such, no trade name impairment charges were recorded in all periods presented . Financial Instruments with Off-Balance-Sheet Risk The Company entered into the ABL Facility on November 16, 2017, which provides for maximum borrowings of $175.0 million for the Company, subject to a borrowing base. Subsequent to Fiscal 2019 and before the filing of this Annual Report on Form 10-K for Fiscal 2019, the Company increased capacity under the ABL Facility by $25 million, so that maximum borrowings are $200 million. The ABL Facility has a letter of credit sub-limit of $70.0 million and will mature no later than November 16, 2022, subject to customary extension provisions provided for therein. The ABL Facility is available for working capital and other general corporate purposes, and was undrawn, at January 31, 2020, other than for letters of credit. See Note 3, Debt Fair Value of Financial Instruments The Company determines the fair value of financial instruments in accordance with accounting standards pertaining to fair value measurements. Such standards define fair value and establish a framework for measuring fair value in accordance with GAAP. Under fair value measurement accounting standards, fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The Company reports or discloses the fair value of financial assets and liabilities based on the fair value hierarchy prescribed by accounting standards for fair value measurements, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. Total accounts receivable were $51.0 million and $34.5 million as of January 31, 2020 and February 1, 2019, respectively. As of January 31, 2020 accounts receivable from two customers within the Outfitter’s business each represented more than 10% and a combined 54% of the accounts receivable balance. Cash and cash equivalents, Accounts receivable, Accounts payable and Other current liabilities are reflected in the Consolidated Balance Sheets at cost, which approximates fair value due to the short-term nature of these instruments. Long-term debt, net is reflected in the Consolidated Balance Sheets at amortized cost. The fair value of debt was determined utilizing level 2 valuation techniques based on the closing inactive market bid price on January 31, 2020 and February 1, 2019. See Note 7, Fair Value of Financial Assets and Liabilities Foreign Currency Translations and Transactions The Company translates the assets and liabilities of foreign subsidiaries from their respective functional currencies to United States dollars at the appropriate spot rates as of the balance sheet date. Revenue and expenses of operations are translated to United States dollars using weighted average exchange rates during the year. The foreign subsidiaries use the local currency as their functional currency. The effects of foreign currency translation adjustments are included as a component of Accumulated other comprehensive loss in the accompanying Consolidated Statements of Changes in Stockholders' Equity. The Company recognized a foreign exchange transaction gain of $3.4 million in Fiscal 2019, an insignificant gain in Fiscal 2018 and a loss of $4.8 million in Fiscal 2017, included within Cost of sales (excluding depreciation and amortization) in the accompanying Consolidated Statements of Operations. Revenue Recognition 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 eCommerce and Outfitters channels is when the merchandise is expected to be received by the customer and for the Retail channel 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. The Company's revenue is disaggregated by channel and geographic location. The Company excludes 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. 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 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 Consolidated Balance Sheets and amounts recognized through Net revenue for each period presented. The remainder of deferred revenue as of January 31, 2020 is expected to be recognized in Net revenue in the fiscal quarter ending May 1, 2020, as products are delivered to customers. (in thousands) Fiscal 2019 Fiscal 2018 Deferred revenue beginning of period $ 9,051 $ 12,993 Deferred revenue recognized in period (9,051 ) (12,993 ) Revenue deferred in period 8,096 9,051 Deferred revenue end of period $ 8,096 $ 9,051 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 Consolidated Statements of Operations. Prior to their redemption, gift cards are recorded as a liability, included within Other current liabilities in the Consolidated Balance Sheets. 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: (in thousands) Fiscal 2019 Fiscal 2018 Balance as of beginning of period $ 18,191 $ 19,272 Gift cards sold 65,662 57,465 Gift cards redeemed (60,043 ) (56,502 ) Gift card breakage (1,218 ) (984 ) Change in accounting principle — (1,060 ) Balance as of January 31, 2020 $ 22,592 $ 18,191 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 Fiscal 2019 and Fiscal 2018, $21.6 million and $22.2 million, respectively, of refund liabilities, primarily associated with product returns, were reported in Other current liabilities in the Consolidated Balance Sheets. Cost of Sales Cost of sales are comprised principally of the costs of merchandise, in-bound freight, duty, warehousing and distribution (including receiving, picking, packing, store delivery and value added costs), customer shipping and handling costs and physical inventory losses. Depreciation and amortization are not included in the Company's Cost of sales. Selling and Administrative Expenses Selling and administrative expenses are comprised principally of payroll and benefits costs, marketing, occupancy costs of retail stores and corporate facilities, buying, pre-opening costs and other administrative expenses. All stock-based compensation is recorded in Selling and administrative expenses. See Note 5, Stock-Based Compensation Selling and administrative expenses included $6.4 million, $30.2 million and $47.1 million in Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively, of costs allocated or charged to the Company by Sears Holdings. See Note 11, Related Party Agreements and Transactions Corporate Restructuring During Fiscal 2017, the Company implemented an initiative to right-size its New York Office in an effort to create efficiencies and refocus the Company back to its corporate headquarters in Dodgeville, Wisconsin. The restructuring included certain headcount reductions and the exit of a facility. The total restructuring charge as a result of this action was $3.9 million. As of January 31, 2020 and February 1, 2019 the Company had recorded a restructuring accrual of $0.7 million and $1.3 million, respectively, related to this initiative. In Fiscal 2019, the Company closed five school uniform showrooms. Income Taxes Deferred income tax assets and liabilities are based on the estimated future tax effects of differences between the financial and tax basis of assets and liabilities based on currently enacted tax laws. The tax balances and income tax expense recognized are based on management's interpretation of the tax laws of multiple jurisdictions. Income tax expense also reflects best estimates and assumptions regarding, among other things, the level of future taxable income and tax planning. Future changes in tax laws, changes in projected levels of taxable income, tax planning and adoption and implementation of new accounting standards could impact the effective tax rate and tax balances recorded. Tax positions are recognized when they are more likely than not to be sustained upon examination. The amount recognized is measured as the largest amount of benefit that is more likely than not to be realized upon settlement. The Company is subject to periodic audits by the United States Internal Revenue Service and other state and local taxing authorities. These audits may challenge certain of the Company's tax positions such as the timing and amount of income and deductions and the allocation of taxable income to various tax jurisdictions. The Company evaluates its tax positions and establishes liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. These tax uncertainties are reviewed as facts and circumstances change and are adjusted accordingly. This requires significant management judgment in estimating final outcomes. Interest and penalties are classified as Income tax expense in the Consolidated Statements of Operations. See Note 9, Income Taxes The Company performed an evaluation over its deferred tax assets and determined that a valuation allowance is considered necessary for certain jurisdictions. See Note 9, Income Taxes Lands' End and Sears Holdings Corporation entered into the Tax Sharing Agreement in connection with the Separation which governs Sears Holdings Corporation's and Lands' End's respective rights, responsibilities and obligations after the Separation with respect to liabilities for United States federal, state, local and foreign taxes attributable to the Lands' End business. Pursuant to this agreement, Sears Holdings Corporation is generally responsible for all United States federal, state and local UTBs, through the date of the Separation. 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. Sears Holdings rejected the Tax Sharing Agreement, per an order approved on April 4, 2019. 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. As of January 31, 2020 the indemnification asset was $0. Self-Insurance The Company has a self-insured plan for health and welfare benefits and provides an accrual to cover the obligation. The accrual for the self-insured liability is based on claims filed and an estimate of claims incurred but not yet reported. The Company considers a number of factors, including historical claims information, when determining the amount of the accrual. Costs related to the administration of the plan and related claims are expensed as incurred. Total expenses were $17.4 million, $17.1 million and $16.5 million for Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively. The Company also has a self-insured plan for certain costs related to workers' compensation. The Company obtains third-party insurance coverage to limit exposure to this self-insured risk. Postretirement Benefit Plan Effective January 1, 2006, the Company decided to indefinitely suspend eligibility to the postretirement medical plan for future company retirees. The Company has a 401(k) retirement plan, which covers most regular employees and allows them to make contributions. The Company also provides a matching contribution on a portion of the employee contributions. Total expense incurred under this plan was $3.6 million, $3.5 million and $3.2 million for Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively. 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, impact of the Tax Act on the translation adjustments and net income (loss). Fiscal 2019 Fiscal 2018 Fiscal 2017 Beginning balance: Accumulated other comprehensive loss (net of tax of $3,505, $2,816 and $6,691, respectively) $ (13,183 ) $ (10,592 ) $ (12,426 ) Other comprehensive income (loss) Foreign currency translation adjustments (net of tax of $(52), $689 and $(1,427), respectively) 195 (2,591 ) 4,282 Impact of Tax Act — — (2,448 ) Ending Balance: Accumulated other comprehensive loss (net of tax of $3,453, $3,505 and $2,816, respectively) $ (12,988 ) $ (13,183 ) $ (10,592 ) As a result of the Tax Act, in Fiscal 2017, $2.4 million was reclassified out of Accumulated other comprehensive loss into Accumulated deficit in accordance with the adoption of ASU 2018-02, Income Statement - Reporting Comprehensive Income Stock-Based Compensation Stock-based compensation expense for restricted stock units is determined based on the grant date fair value. The fair value is determined based on the Company's stock price on the date of the grant. The Company recognizes stock-based compensation cost net of estimated forfeitures and revises the estimates in subsequent periods if actual forfeitures differ from the estimates. The Company estimates the forfeiture rate based on historical data as well as expected future behavior. Stock-based compensation is recorded in Selling and administrative expense in the Consolidated Statements of Operations over the period in which the employee is required to provide service in exchange for the restricted stock units. 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. Earnings per Share The numerator for both basic and diluted EPS is net income attributable to Lands' End. 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 ASC 260, Earnings Per Share The following table summarizes the components of basic and diluted EPS: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 Net income $ 19,290 $ 11,590 $ 28,195 Basic weighted average shares outstanding 32,343 32,190 32,076 Dilutive impact of stock awards 2 336 34 Diluted weighted average shares outstanding 32,345 32,526 32,110 Basic earnings per share $ 0.60 $ 0.36 $ 0.88 Dilutive earnings per share $ 0.60 $ 0.36 $ 0.88 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 745,575, 438,583 and 397,669 anti-dilutive shares excluded from the diluted weighted average shares outstanding in Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively. Recently Adopted Accounting Pronouncements Leases In February 2016 the FASB issued ASU 2016-02, Leases (“ASC 842”), which changed how companies account for leases. On February 2, 2019, the Company adopted the guidance using the Comparatives under 840 option approach which waives the requirement to apply ASC 842 in the comparative periods presented within the financial statements in the year of adoption. Lands' End elected the practical expedient package, which among other practical expedients, includes the option to retain the historical classification of leases entered into prior to February 2, 2019. The Company also elected the practical expedient to combine lease and non-lease components. The Company is a lessee under various lease agreements for its equipment and retail operations. The determination of whether an arrangement contains a lease and the classification of a lease, if applicable, is made at lease commencement (date in which the Company takes possession of the asset). At lease commencement the Company also measures and recognizes a right-of-use asset, representing the Company’s right to use the underlying asset, and a lease liability, representing the Company’s obligation to make lease payments under the terms of the arrangement. The lease term is defined as the noncancelable portion of the lease term plus any periods covered by an option to extend the lease, if it is reasonably certain that the option will be exercised. For the purposes of recognizing right-of-use assets and lease liabilities associated with the Company’s leases, the Company has elected the practical expedient of not recognizing a right-of-use asset or lease liability for short-term leases, which are leases with a term of twelve months or less. The Company's leases are classified as operating leases, which are included in the Operating lease right-of-use asset, Lease liability - current and Lease liability - long-term on the Company's Consolidated Balance sheets. Right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments, over the lease term, as of the commencement date. Minimum lease payments include the fixed lease component of the agreement as well as any variable rate payments that depend on an index, initially measured using the index at the lease commencement date. Lease terms may include options to renew. If it is determined the lease will not be renewed, the right-of-use asset and lease liability for that lease will be adjusted to reflect the updated lease term. The Company does not have any leases with residual value guarantees or restrictions or covenants imposed by the lease. Due to the absence of an implicit rate in the Company’s lease contracts, the Company estimates its incremental borrowing rate for each lease based on the lease term, lease currency and the Company’s credit spread. The yield curve selected at the lease commencement date represents one notch above the Company’s unsecured credit rating, and therefore is considered a close proxy for the incremental borrowing rate the Company would incur for secured debt. Lease expense is recognized on a straight-line basis over the lease term and is included in Selling and administrative expense in the Consolidated Statements of Operations. Variable lease payments that do not depend on a rate or index and short-term rentals (leases with terms less than 12 months) are expensed as incurred. The impact of adoption of the new lease guidance on the Consolidated Balance Sheets as of February 2, 2019 was as follows. See Note 4, Leases (in thousands) February 1, 2019 (as reported) Impact of Adoption February 2, 2019 Assets: Operating lease right-of-use asset $ — $ 27,494 $ 27,494 Liabilities: Lease liability - current — 9,892 9,892 Lease liability - long-term — 21,700 21,700 Stockholders' Equity: — Accumulated deficit (17,159 ) (1,741 ) (1) (18,900 ) (1) At the time of implementation, the Company determined certain Operating lease right-of-use |
Debt
Debt | 12 Months Ended |
Jan. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 3. DEBT Debt Arrangements On November 16, 2017, the Company entered into the ABL Facility, which provides for maximum borrowings of $175.0 million for the Company, subject to a borrowing base. Subsequent to Fiscal 2019 and before the filing of this Annual Report on Form 10-K for Fiscal 2019, the Company increased capacity under the ABL Facility by $25 million, so that maximum borrowings are $200 million. The ABL Facility has a letter of credit sub-limit of $70.0 million and will mature no later than November 16, 2022, subject to customary extension provisions provided for therein. The ABL Facility is available for working capital and other general corporate purposes, and was undrawn, other than for letters of credit, as of January 31, 2020. Upon entering into the ABL Facility, the Company incurred $1.5 million in debt origination fees. The fees were capitalized as debt issuance costs and are being amortized as an adjustment to Interest expense over the remaining life of the Debt Facilities. On April 4, 2014, Lands' End entered into the Term Loan Facility of $515.0 million, the proceeds of which were used to pay a dividend of $500.0 million to a subsidiary of Sears Holdings Corporation immediately prior to the Separation and to pay fees and expenses associated with a prior debt arrangement and the Term Loan Facility of approximately $11.4 million. The remaining proceeds were used for general corporate purposes. The fees were capitalized as debt issuance costs and are being amortized as an adjustment to Interest expense over the remaining life of the Debt Facilities. In First Quarter 2019, Lands’ End made a $100 million voluntary prepayment on the Term Loan from excess cash on hand. The Company's debt consisted of the following: January 31, 2020 February 1, 2019 (in thousands) Amount Rate Amount Rate Term Loan Facility, maturing April 4, 2021 $ 385,388 5.05 % $ 490,538 5.77 % ABL Facility, maturing November 16, 2022 — — % — — % 385,388 490,538 Less: current maturities 5,150 5,150 Less: unamortized debt issuance costs 1,581 2,935 Long-term debt, net $ 378,657 $ 482,453 The following table summarizes the Company's borrowing availability under the ABL Facility: (in thousands) January 31, 2020 February 1, 2019 ABL Facility maximum borrowing $ 175,000 $ 175,000 Outstanding letters of credit 23,299 21,111 Borrowing availability under ABL $ 151,701 $ 153,889 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 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 Facility is subject to adjustment based on the average excess availability under the ABL Facility for the preceding fiscal quarter. LIBOR borrowings will range from 1.25% to 1.75% for the ABL Facility. Base rate borrowings will range from 0.50% to 1.00% for the ABL Facility. Customary agency fees are payable in respect of the Debt Facilities. The ABL Facility fees also include (i) commitment fees in an amount equal to 0.25% of the daily unused portions of the ABL Facility, and (ii) customary letter of credit fees. During Third Quarter Fiscal 2019 and Fourth Quarter Fiscal 2019 the Company had maximum borrowings of $83.3 million on the ABL Facility. These borrowings were paid in full during Fourth Quarter Fiscal 2019. Amortization and Prepayments The Term Loan Facility amortizes at a rate equal to 1% per annum, and is subject to mandatory prepayment in an amount equal to a percentage of the borrower's excess cash flows (as defined in the Term Loan Facility) in each fiscal year, ranging from 0% to 50% depending on Lands' End's secured leverage ratio, and the proceeds from certain asset sales and casualty events. Based on Fiscal 2019 results and in accordance with the Term Loan Facility, no prepayments were required. The Company's aggregate scheduled maturities of the Term Loan Facility as of January 31, 2020 are as follows: (in thousands) Less than 1 year $ 5,150 1 - 2 years 380,238 2 - 3 years — 3 - 4 years — 4 - 5 years — $ 385,388 Guarantees; Security All domestic obligations under the Debt Facilities are unconditionally guaranteed by Lands' End, Inc. and, subject to certain exceptions, each of its existing and future direct and indirect wholly-owned domestic subsidiaries. The ABL Facility is secured by a first priority security interest in certain working capital of the borrowers and guarantors consisting primarily of accounts receivable and inventory. The Term Loan Facility is secured by a second priority security interest in the same collateral, with certain exceptions. The Term Loan Facility also is secured by a first priority security interest in certain property and assets of the borrowers and guarantors, including certain fixed assets and stock of subsidiaries. The ABL Facility is secured by a second priority security interest in the same collateral. 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 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 January 31, 2020. 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. Events of Default The Debt Facilities include customary events of default including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross defaults related to certain other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of guarantees or security interests, and material judgments and change of control. |
Leases
Leases | 12 Months Ended |
Jan. 31, 2020 | |
Leases [Abstract] | |
Leases | NOTE 4. LEASES The Company is a lessee under various lease agreements for its retail operations and equipment. All leases are classified as operating leases. The Company’s leases have remaining terms of less than one year to ten years and contain various renewal options. The period which is subject to an option to extend the lease is included in the lease term if it is reasonably certain that the option will be exercised. Options to extend are reviewed within two years of option date. The components of lease expense are as follows: (in thousands) Fiscal 2019 Operating lease expense $ 9,210 Variable lease expense 1,682 Ending Balance $ 10,892 Short-term lease cost was not material for Fiscal 2019. Supplemental balance sheet information related to operating leases are as follows: (in thousands) Fiscal 2019 Operating lease right-of-use asset $ 38,665 Lease liability - current 5,864 Lease liability - long-term 39,841 Weighted average remaining lease term in years 8.03 Weighted average discount rate 6.39 % Supplemental cash flow information related to operating leases are as follows: (in thousands) Fiscal 2019 Operating cash outflows from operating leases $ 10,631 Operating lease right-of-use-assets obtained in exchange for lease liabilities 19,584 Maturities of operating lease liabilities as of January 31, 2020 are as follows (in thousands): (in thousands) Fiscal 2019 2020 $ 8,743 2021 7,834 2022 7,096 2023 6,512 2024 6,187 Thereafter 23,663 Total operating lease payments $ 60,035 Less imputed interest 14,330 Present value of lease liabilities $ 45,705 In Fourth Quarter 2019, the Company entered into several leases where possession of retail space will occur in Fiscal 2020. Total future commitments under the Company’s operating leases as of February 1, 2019 were as follows for the fiscal years ending (in thousands): (in thousands) Fiscal 2018 2020 $ 10,851 2021 6,338 2022 4,873 2023 3,828 2024 2,839 Thereafter 10,590 Total minimum payments required $ 39,319 The table above was updated from the version previously included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2019 within the Notes to Consolidated Financial Statements to adjust for certain inconsistencies that management identified in First Quarter 2019 during the implementation of ASC 842, Leases. Specifically, the Company corrected the schedule to include additional lease commitments for lease contracts signed in Fiscal 2018, with commencement dates in Fiscal 2019. |
Stock-Based Compensation
Stock-Based Compensation | Jan. 31, 2020 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | NOTE 5. 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. 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. For Performance Awards granted in Fiscal 2018 and after, the Target Shares earned can range from 50% to 200% once minimum thresholds have been reached, and depend on the achievement of Adjusted EBITDA and revenue performance measures for the cumulative three-fiscal year performance period beginning in the fiscal year of the grant date. 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 and after are 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. Based on performance to date, the Company is currently accruing for Performance Awards based on a 100% payout, which is reflected in the financial information below. iii. 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. The fair value of each Option Award is estimated on the grant date using the Black-Scholes option pricing model. The following table summarizes the Company's stock-based compensation expense, which is included in Selling and administrative expense in the Consolidated Statements of Operations: (in thousand) Fiscal 2019 Fiscal 2018 Fiscal 2017 Deferred Awards 5,591 4,407 3,212 Performance Awards 2,352 1,006 88 Option Awards 748 748 651 Total stock-based compensation expense 8,690 6,161 3,951 Deferred Awards The following table provides a summary of the Deferred Awards activity for Fiscal 2019 and Fiscal 2018: Fiscal Year Ended January 31, 2020 February 1, 2019 (in thousands, except per share amounts) Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Unvested deferred awards at beginning of year 594 $ 21.96 497 $ 22.07 Granted 428 15.62 294 21.93 Vested (210 ) 21.93 (151 ) 22.32 Forfeited (67 ) 20.65 (46 ) 21.62 Unvested deferred awards at end of year 745 18.49 594 21.96 Total unrecognized stock-based compensation expense related to unvested Deferred Awards was approximately $7.7 million as of January 31, 2020, which is expected to be recognized ratably over a weighted average period of 1.7 years. Deferred Awards granted to employees during Fiscal 2019 vest ratably over a period of three years. Performance Awards The following table provides a summary of the Performance Awards activity for Fiscal 2019 and Fiscal 2018: Fiscal Year Ended January 31, 2020 February 1, 2019 (in thousands, except per share amounts) Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Unvested performance awards at beginning of year 176 $ 21.93 15 $ 21.94 Granted 265 15.73 195 21.90 Vested — — — — Forfeited (29 ) 18.85 (34 ) 21.90 Unvested performance awards at end of year 412 18.15 176 21.93 Total unrecognized stock-based compensation expense related to unvested Performance Awards was approximately $4.2 million as of January 31, 2020 which is expected to be recognized ratably over a weighted average period of 1.8 years. Performance Awards granted to employees during Fiscal 2019 and Fiscal 2018 vest, if earned, after completion of the applicable three-year performance period. Options Awards The following table provides a summary of the Options Award activity for Fiscal 2019 and Fiscal 2018: Fiscal Year Ended January 31, 2020 February 1, 2019 (in thousands, except per share amounts) Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Unvested option awards at beginning of year 257 $ 8.73 343 $ 8.73 Granted — — — — Vested (86 ) 8.73 (86 ) 8.73 Forfeited — — — — Unvested option awards at end of year 171 8.73 257 8.73 Total unrecognized stock-based compensation expense related to unvested Option Awards was approximately $0.9 million as of January 31, 2020, which is expected to be recognized ratably over a weighted average period of 1.1 years. The Option Awards have a life of ten years and vest ratably over the first four years. As of January 31, 2020, 171,567 shares related to Option Awards were exercisable. No options have been exercised during the fiscal year ended January 31, 2020. |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Jan. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | NOTE 6. OTHER CURRENT LIABILITIES Other current liabilities consisted of the following: (in thousands) January 31, 2020 February 1, 2019 Accrued employee compensation and benefits $ 42,809 $ 42,439 Reserve for sales returns and allowances 21,641 22,222 Deferred gift card revenue 22,592 18,191 Accrued property, sales and other taxes 9,242 9,131 Other 9,736 11,240 Deferred revenue 8,096 9,051 Total other current liabilities $ 114,116 $ 112,274 |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 12 Months Ended |
Jan. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | NOTE 7. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES The Company determines fair value of financial assets and liabilities based on the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 inputs—unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. An active market for the asset or liability is one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide ongoing pricing information. Level 2 inputs—inputs other than quoted market prices included in Level 1 that are observable, either directly or indirectly, for the asset or liability. Level 2 inputs include, but are not limited to, quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted market prices that are observable for the asset or liability, such as interest rate curves and yield curves observable at commonly quoted intervals, volatilities, credit risk and default rates. Level 3 inputs—unobservable inputs for the asset or liability. Restricted cash is reflected on the Consolidated Balance Sheets at fair value. The fair value of Restricted cash as of January 31, 2020 and February 1, 2019 was $2.1 million and $1.9 million, respectively, based on Level 1 inputs. Restricted cash amounts are valued based upon statements received from financial institutions. Carrying values and fair values of other financial instruments in the Consolidated Balance Sheets are as follows: January 31, 2020 February 1, 2019 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including short-term portion $ 385,388 $ 378,643 $ 490,538 $ 460,493 Long-term debt, including short-term portion was valued utilizing level 2 valuation techniques based on the closing inactive market bid price on January 31, 2020. There were no nonfinancial assets or nonfinancial liabilities recognized at fair value on a nonrecurring basis as of January 31, 2020 and February 1, 2019. |
Goodwill and Indefinite Lived I
Goodwill and Indefinite Lived Intangible Assets | 12 Months Ended |
Jan. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Indefinite Lived Intangible Assets | NOTE 8. GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSET The Company's intangible assets, consisting of a trade name and goodwill, were originally valued in connection with a business combination accounted for under the purchase accounting method. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The following table summarizes the Company's indefinite-lived intangible asset and Goodwill: (in thousands) January 31, 2020 February 1, 2019 Goodwill balance $ 110,000 $ 110,000 Trade name balance $ 257,000 $ 257,000 ASC 350, Intangibles - Goodwill and Other, requires companies to test goodwill and indefinite-lived intangible assets for impairment annually, or more often if an event or circumstance indicates that the carrying amount may not be recoverable. During Fiscal 2019, Fiscal 2018 and Fiscal 2017 the Company conducted impairment testing of its goodwill and indefinite-lived intangible asset. There were no impairment charges recorded for the indefinite-lived asset in Fiscal 2019 or Fiscal 2018. There were no impairments of goodwill during any periods presented or since goodwill was first recognized. See also Note 2, Summary of Significant Accounting Policies-Goodwill and Intangible Asset Impairment Assessments |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9. INCOME TAXES The Company's income before income taxes in the United States and in foreign jurisdictions is as follows: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 Income before income taxes United States $ 21,406 $ 16,297 $ 9,011 Foreign (44 ) (6,666 ) (8,563 ) Total income before income taxes $ 21,362 $ 9,631 $ 448 The components of the provision for (benefit from) income taxes are as follows: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 United States $ 2,105 $ (1,959 ) $ (27,623 ) Foreign (33 ) — (124 ) Total provision (benefit) $ 2,072 $ (1,959 ) $ (27,747 ) (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 Current: Federal $ 979 $ (4,457 ) $ 4,804 State 1,549 2,275 330 Foreign — — (124 ) Total current 2,528 (2,182 ) 5,010 Deferred: Federal 340 1,650 (34,901 ) State (763 ) (1,427 ) 2,144 Foreign (33 ) — — Total deferred (456 ) 223 (32,757 ) Total provision (benefit) $ 2,072 $ (1,959 ) $ (27,747 ) A reconciliation of the statutory federal income tax rate to the effective income tax rate is as follows: Fiscal 2019 Fiscal 2018 Fiscal 2017 Tax at statutory federal tax rate 21.0 % 21.0 % 33.8 % * State income taxes, net of federal tax benefit 2.9 % 10.0 % 103.5 % Foreign differential (4.0 )% (4.6 )% 108.6 % Permanent differences 4.3 % 23.4 % 383.1 % Tax law changes — % — % (7,793.7 )% Repatriation of foreign earnings — % (38.4 )% 950.9 % Uncertain tax benefits (0.8 )% (38.6 )% (600.1 )% Change in foreign valuation allowance 4.2 % 19.2 % 509.8 % Foreign branches (15.9 )% — % — % Other, net (2.0 )% (12.3 )% 110.6 % Total 9.7 % (20.3 )% (6,193.5 )% *Under Internal Revenue Code Section 15(a), companies are required to calculate their federal tax rate using a blended rate based on the date of enactment of the Tax Act (“Federal Blended Rate”). The Federal Blended Rate for the Company is 33.8% for Fiscal 2017. Deferred tax assets and liabilities consisted of the following: (in thousands) January 31, 2020 February 1, 2019 February 2, 2018 Deferred tax assets Deferred revenue $ 3,797 $ 3,053 $ 3,292 Legal accruals 1,938 1,714 1,512 Deferred compensation 12,507 10,360 4,029 Reserve for returns 2,654 2,271 2,301 Inventory 3,413 3,690 3,099 CTA investment in foreign subsidiaries 3,453 3,505 2,816 Operating lease liabilities 10,319 — — Other 2,764 3,041 4,330 Net operating loss carryforward 6,018 5,117 2,284 Total deferred tax assets 46,863 32,751 23,663 Less valuation allowance (6,526 ) (5,079 ) (2,284 ) Net deferred tax assets $ 40,337 $ 27,672 $ 21,379 Deferred tax liabilities Intangible assets $ 62,397 $ 62,959 $ 62,754 LIFO reserve 17,503 16,382 16,659 Property and equipment 7,208 5,098 — Operating lease right-of-use assets 8,586 — — Catalog advertising 2,294 1,903 1,103 Total deferred tax liabilities 97,988 86,342 80,516 Net deferred tax liability $ 57,651 $ 58,670 $ 59,137 As of January 31, 2020, the Company had $13.9 million of state net operating loss (“NOL”) carryforwards (generating a $1.0 million deferred tax asset) available to offset future taxable income. The state NOL carryforwards generally expire between 2022 and 2038 with certain state NOLs generated after 2017 having indefinite carryforward. The Company’s foreign subsidiaries had $14.9 million of NOL carryforwards (generating a $5.0 million deferred tax asset) available to offset future taxable income. These foreign NOLs can be carried forward indefinitely, however, a valuation allowance was established since the future utilization of these NOLs is uncertain. A reconciliation of the beginning and ending amount of UTBs is as follows: Fiscal 2019 Fiscal 2018 Fiscal 2017 Gross UTB balance at beginning of period $ 1,458 $ 4,531 $ 6,901 Tax positions related to the current period - gross increase — — — Tax positions related to the prior periods - gross decreases (179 ) (2,588 ) (2,370 ) Settlements (77 ) (485 ) — Lapse of statutes of limitations — — Gross UTB balance at end of period $ 1,202 $ 1,458 $ 4,531 As of January 31, 2020, the Company had UTBs of $1.2 million. Of this amount, $1.0 million would, if recognized, impact its effective tax rate. The Company does not expect that UTBs will fluctuate significantly in the next 12 months for tax audit settlements and the expiration of the statute of limitations for certain jurisdictions. Pursuant to the Tax Sharing Agreement, Sears Holdings is generally responsible for all United States federal, state and local UTBs through the date of the Separation and, as such, the UTBs are recorded in Other liabilities in the Consolidated Balance Sheets. However, Sears Holdings rejected the Tax Sharing Agreement, per an order approved on April 3, 2019. The Company classifies interest expense and penalties related to UTBs and interest income on tax overpayments as components of income tax expense. As of January 31, 2020, the total amount of interest expense and penalties recognized on the balance sheet was $0.7 million ($0.6 million net of federal benefit). As of February 1, 2019, the total amount of interest and penalties recognized on the balance sheet was $0.8 million ($0.6 million net of federal benefit). The total amount of net interest expense recognized in the Consolidated Statements of Operations was insignificant for all periods presented. Sears Holdings and Lands' End files income tax returns in both the United States and various foreign jurisdictions. Impacts of Separation At Separation from Sears, the Company entered into a Tax Sharing Agreement with respect to Federal and State Income tax liabilities concerning pre-separation periods. Pursuant to the tax sharing agreement, a $13.7 million receivable was recorded by the Company to reflect the indemnification by Sears Holdings Corporation of the pre-Separation uncertain tax positions (including penalties and interest) for which Sears Holdings is responsible. This receivable is included in Other assets in the Consolidated Balance Sheets. For Fiscal 2018, the asset was written down $4.8 million related to favorable state tax audit settlements. In addition, due to filings by Sears in the US Bankruptcy Court in the third quarter of Fiscal 2018, the Company believes that the recovery of the remaining UTB’s provided by the Tax Sharing Agreement to be uncertain. Sears Holdings rejected the Tax Sharing Agreement, per an order approved on April 4, 2019. In the third quarter of Fiscal 2018, the Company recorded a charge of $2.6 million to establish a reserve on the remaining balance of the indemnification asset. Therefore, the indemnification asset was $0 at January 31, 2020 and February 1, 2019. Impacts of the Tax Act On December 22, 2017, the Tax Cuts and Jobs Act (H.R. 1) ("Tax Act") was signed into law. The Tax Act contains significant changes to corporate taxation, including (i) the reduction of the corporate income tax rate to 21%, (ii) the acceleration of expensing for certain business assets, (iii) the nonrecurring transition tax related to the transition of U.S. international tax from a worldwide tax system to a territorial tax system, (iv) the repeal of the domestic production deduction, (v) additional limitations on the deductibility of interest expense, and (vi) expanded limitations on the deductibility of executive compensation. In December 2017, the SEC issued Staff Accounting Bulletin (SAB) 118 to provide guidance for companies that had not completed their accounting for the income tax effects of the Tax Act. Due to the complexities involved in accounting for the enactment of the Tax Act, SAB 118 allowed for a provisional estimate of the impacts of the Tax Act in our earnings for the year ended February 2, 2018, as well as up to a one-year measurement period that ended on December 22, 2018, for any subsequent adjustments to such provisional estimate. Pursuant to SAB 118, in Fiscal 2017, the Company recorded a $30.6 million benefit which consisted of the provisional amounts for the re-measurement of deferred tax balances at the new expected tax rates under the Tax Act. This includes a net reduction of deferred liabilities of $29.7 million plus a $5.2 million reduction to deferred liabilities on unremitted foreign earnings previously recorded. Both amounts are offset by the provisional amount for a nonrecurring transition tax liability of $4.3 million related to foreign investments under the Tax Act. The Company has completed its analysis of the impacts of the Tax Act, including analyzing the effects of any Internal Revenue Service and U.S. Treasury guidance issued, and state tax law changes enacted, within the maximum one-year measurement period resulting in an additional $3.7 million benefit, in Fiscal 2018, to the $30.6 million provisional amount previously recorded. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10. 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. Lands' End is the defendant in four separate lawsuits, each of which seeks class certification and alleges similar injuries and claims: (1) DeCrescentis et al., v. Lands' End, Inc Gilbert et al. v. Lands' End, Inc. Andrews et al. v. Lands' End, Inc. Davis et al. v. Lands' End, Inc. and Lands' End Business Outfitters, Inc. DeCrescentis Gilbert, Andrews Davis Plaintiffs in DeCrescentis Gilbert Andrews Davis cts but do not allege personal property damage. The DeCrescentis matter is currently in discovery. Plaintiffs in DeCrescentis, Gilbert Davis On March 9, 2020, Plaintiffs in Gilbert Andrews Davis Gilbert a Lands' End is vigorously defending all four lawsuits and believes they are without merit. |
Related Party Agreements and Tr
Related Party Agreements and Transactions | 12 Months Ended |
Jan. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Agreements and Transactions | NOTE 11. RELATED PARTY AGREEMENTS AND 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’ outstanding shares of common stock. Therefore, Sears Holdings, the Company's former parent company, is considered a related party. On February 11, 2019, Transform Holdco acquired from Sears Holdings substantially all of the go-forward retail footprint and other assets and component businesses of Sears Holdings as a going concern. The Company believes that ESL holds a significant portion of the membership interests of Transform Holdco and therefore consider that entity to be a related party as well. In connection with and subsequent to the Separation, the Company entered into various agreements with Sears Holdings which, among other things, (i) governed specified aspects of the Company's relationship following the Separation, especially with regards to the Lands’ End Shops at Sears, and (ii) established terms pursuant to which subsidiaries of Sears Holdings provided services to the Company. Some of these agreements have been assumed by and assigned to Transform Holdco in connection with the proceedings related to the Sears Filing. All Lands’ End Shops at Sears closed by January 31, 2020 and accordingly there will be no further rent or retail operations transactions with Sears Holdings or Transform Holdco in Fiscal 2020. The components of the transactions between the Company and Sears Holdings or Transform Holdco in Fiscal 2019, Fiscal 2018 and Fiscal 2017, 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 or Transform Holdco to the Company related to Lands' End Shops at Sears were as follows: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 Rent, CAM and occupancy costs $ 3,768 $ 14,798 $ 22,084 Retail services, store labor 3,396 13,719 21,934 Financial services and payment processing 385 1,644 2,455 Supply chain costs 119 465 741 Total expenses $ 7,668 $ 30,626 $ 47,214 Number of Lands’ End Shops at Sears at period end (1) — 49 174 (1) During Fiscal 2019, Fiscal 2018 and Fiscal 2017, 49, 125 and 42 General Corporate Services Related party costs charged by Sears Holdings or Transform Holdco to the Company for general corporate services were as follows: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 Sourcing $ 7,456 $ 7,530 $ 10,243 Shop Your Way Loyalty Program 108 933 1,119 Shared services 176 190 176 Total expenses, net $ 7,740 $ 8,653 $ 11,538 Sourcing The Company contracts with a subsidiary of Sears Holdings to provide agreed upon buying agency services, on a non-exclusive basis, in foreign territories from where the Company purchases merchandise. These services, primarily based upon quantities purchased, include quality-control functions, regulatory compliance, product claims management and new vendor selection and setup assistance. The Company's contract under which it receives sourcing services from an affiliate of Sears Holdings runs through June 30, 2020. These amounts are capitalized into inventory and are expensed through cost of goods sold over the course of inventory turns and included in Cost of sales in the Consolidated Statements of Operations. Use of Intellectual Property or Services Related party revenue charged by the Company to Sears Holdings for the use of intellectual property or services is as follows: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 Call center services $ — $ — $ 1,160 Lands' End business outfitters revenue 4 845 1,045 Credit card revenue 375 709 980 Royalty income 142 189 213 Gift card revenue (14 ) (17 ) (32 ) Total income $ 507 $ 1,726 $ 3,366 Additional Related Party Balance Sheet Information Following the Sears Filing, the Company began netting payables due to Sears Holdings or Transform Holdco, as applicable, against receivables due from Sears Holdings or Transform Holdco 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 Consolidated Balance Sheets. These amounts were immaterial as of January 31, 2020 and February 1, 2019. In the third quarter Fiscal 2018, the Company recorded a non-cash charge of $2.6 million in Other expense, net, in the Consolidated Statement of Operations to reflect a reserve relating to pre-Separation UTBs (including penalties and interest) for which Sears Holdings Corporation indemnified the Company under a Tax Sharing Agreement entered into in connection with the Separation, the recovery of which had become uncertain as a result of the Sears Filing. Sears Holdings rejected the Tax Sharing Agreement, per an order approved on April 4, 2019. There was not an indemnification receivable as of January 31, 2020 and February 1, 2019. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Jan. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | NOTE 12. SEGMENT REPORTING The Company's operating segments consist of U.S. eCommerce, Outfitters, Europe eCommerce, Japan eCommerce and Retail. The Company determined that each of the operating segments share similar economic and other qualitative characteristics thus the results of the operating segments are aggregated into one reportable external segment, consistent with the Company's multi-channel business approach. Net revenue is presented by product channel in the following table: (in thousands) Fiscal 2019 % of Revenue Fiscal 2018 % of Revenue Fiscal 2017 % of Revenue eCommerce $ 1,104,829 76.2% $ 1,039,929 71.7% $ 975,446 69.3% Outfitters 285,807 19.7% 289,251 19.9% 258,669 18.4% Retail 59,565 4.1% 122,412 8.4% 172,562 12.3% Total Net revenue $ 1,450,201 $ 1,451,592 $ 1,406,677 The geographical allocation of Net revenue is based upon where the product is shipped. The following presents summarized geographical information: (in thousands) Fiscal 2019 % of Revenue Fiscal 2018 % of Revenue Fiscal 2017 % of Revenue United States $ 1,247,288 86.0% $ 1,245,157 85.8% $ 1,204,199 85.6% Europe 137,134 9.5% 138,761 9.6% 134,543 9.6% Asia 48,470 3.3% 50,203 3.5% 48,704 3.5% Other 17,309 1.2% 17,471 1.1% 19,231 1.3% Total Revenue $ 1,450,201 $ 1,451,592 $ 1,406,677 Property and equipment, net by geographical location are as follows: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 United States $ 148,340 $ 140,663 $ 126,015 Europe 8,716 8,773 9,862 Asia 609 458 625 Total Property and equipment, net $ 157,665 $ 149,894 $ 136,502 Other than the United States, no one country is greater than 10% of total Net revenue or of total Property and equipment, net. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Jan. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | NOTE 13. QUARTERLY FINANCIAL DATA (UNAUDITED) 2019 First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands except share data) $’s % Net Sales $’s % Net Sales $’s % Net Sales $’s % Net Sales Net revenue 262,433 100.0 % 298,267 100.0 % 340,023 100.0 % 549,478 100.0 % Gross profit 119,874 45.7 % 129,085 43.3 % 154,175 45.3 % 218,758 39.8 % Operating (loss) income (4,736 ) (1.8 )% (561 ) (0.2 )% 10,907 3.2 % 39,827 7.2 % Net (loss) income (6,818 ) (2.6 )% (3,014 ) (1.0 )% 3,606 1.1 % 25,516 4.6 % Basic earnings per common share (0.21 ) (0.09 ) 0.11 0.79 Diluted earnings per common share (1) (0.21 ) (0.09 ) 0.11 0.78 2018 First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands except share data) $’s % Net Sales $’s % Net Sales $’s % Net Sales $’s % Net Sales Net revenue 299,825 100.0 % 307,945 100.0 % 341,570 100.0 % 502,252 100.0 % Gross profit 133,025 44.4 % 136,766 44.4 % 150,962 44.2 % 195,303 38.9 % Operating income 2,527 0.8 % 875 0.3 % 8,485 2.5 % 30,712 6.1 % Net income (2,630 ) (0.9 )% (5,285 ) (1.7 )% 3,294 1.0 % 16,211 3.2 % Basic earnings per common share (0.08 ) (0.16 ) 0.10 0.50 Diluted earnings per common share (1) (0.08 ) (0.16 ) 0.10 0.50 (1) The sum of the quarterly earnings per share—basic and diluted amounts may not equal the fiscal year amount due to rounding. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jan. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | NOTE 14. SUBSEQUENT EVENT In March 2020, the World Health Organization declared the outbreak of a novel COVID-19 as a pandemic, which continues to spread throughout the United States. In terms of the Company’s business, the Company does not anticipate a significant near term inventory or supply chain impact from the virus, but the Company has decided to close its 26 U.S. stores for several weeks, as part of the societal response to the current situation. While retail sales are less than 5% of the Company’s total revenues and the disruption is expected to be temporary, the Company has also seen a negative impact on customer demand. The Company cannot reasonably estimate the length or severity of this pandemic. Therefore, while the Company expects this matter to negatively impact its business, results of operations, and financial position, the related financial impact cannot be reasonably estimated at this time. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Fiscal Year | Fiscal Year The Company's fiscal year end is on the Friday preceding the Saturday closest to January 31 each year. The fiscal periods in this report are presented as follows, unless the context otherwise requires: Fiscal Year Ended Weeks 2019 January 31, 2020 52 2018 February 1, 2019 52 2017 February 2, 2018 53 |
Seasonality | Seasonality The Company's operations have historically been seasonal, with a disproportionate amount of net revenue occurring in the fourth fiscal quarter, reflecting increased demand during the year-end holiday selling season. The impact of seasonality on results of operations is more pronounced since the level of certain fixed costs, such as occupancy and overhead expenses, do not vary with sales. The Company's results of operations also may fluctuate based upon such factors as the timing of certain holiday seasons and promotions, the amount of net revenue contributed by new and existing stores, the timing and level of markdowns, competitive factors, weather and general economic conditions. Working capital requirements typically increase during the second and third quarters of the fiscal year as inventory builds to support peak shipping/selling periods and, accordingly, typically decrease during the fourth quarter of the fiscal year as inventory is shipped/sold. Cash provided by operating activities is typically higher in the fourth quarter of the fiscal year due to reduced working capital requirements during that period. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reportable amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and cash equivalents Cash and cash equivalents consist of highly liquid temporary instruments purchased with original maturities of three months or less. It also includes deposits in-transit from banks for payments related to third-party credit card and debit card transactions. |
Restricted Cash | Restricted cash The Company classifies cash balances pledged as collateral as Restricted cash on the Consolidated Balance Sheets. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company provides an allowance for doubtful accounts based on both historical experience and specific identification. The Accounts receivable balance on the Consolidated Balance Sheets is presented net of the Company's allowance for doubtful accounts and is comprised of various customer-related accounts receivable. Changes in the balance of the allowance for doubtful accounts are as follows: (in thousands) Fiscal 2019 Fiscal 2018 Beginning balance $ 542 $ 637 Provision 151 192 Write-offs (182 ) (287 ) Ending balance $ 511 $ 542 |
Inventory | Inventory Inventories primarily consist of merchandise purchased for resale. For financial reporting and tax purposes, the Company's United States inventory, primarily merchandise held for sale, is stated at last-in, first-out ("LIFO") cost, which is lower than net realizable value. The Company accounts for its non-United States inventory on the first-in, first-out ("FIFO") method. The United States inventory accounted for using the LIFO method was 90% of total inventory as of January 31, 2020 and 88% as of February 1, 2019. If the FIFO method of accounting for inventory had been used, the effect on inventory would have been an increase of $0.9 million and $1.1 million as of January 31, 2020 and February 1, 2019, respectively. The Company maintains a reserve for excess and obsolete inventory. The reserve is calculated based on historical experience related to liquidation/disposal of identified inventory. The excess and obsolescence reserve balances were $11.0 million and $12.5 million as of January 31, 2020 and February 1, 2019, respectively. |
Deferred Catalog Costs and Marketing | Deferred Catalog Costs and Marketing Costs incurred for direct response marketing consist primarily of catalog production and mailing costs that are generally amortized within two months from the date catalogs are mailed. Unamortized marketing costs reported as prepaid assets were $14.7 million and $13.5 million as of January 31, 2020 and February 1, 2019, respectively. The Company expenses the costs of marketing for website, magazine, newspaper, radio and other general media when the marketing takes place. Marketing expenses, including catalog costs amortization, website-related costs and other print media were $194.9 million, $186.9 million and $186.4 million for Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively. These costs are included within Selling and administrative expenses in the accompanying Consolidated Statements of Operations. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Additions and substantial improvements are capitalized and include expenditures that materially extend the useful lives of existing facilities and equipment. Maintenance and repairs that do not materially improve or extend the lives of the respective assets are expensed as incurred. As of the balance sheet dates, Property and equipment, net consisted of the following: (in thousands) Asset Lives January 31, 2020 February 1, 2019 Land - $ 3,459 $ 3,459 Buildings and improvements 15-30 100,269 99,400 Furniture, fixtures and equipment 3-10 59,731 62,823 Computer hardware and software 3-10 181,160 146,400 Leasehold improvements 3-7 8,423 6,569 Construction in progress 22,796 27,296 Gross property and equipment 375,838 345,947 Accumulated depreciation (218,173 ) (196,053 ) Total property and equipment, net $ 157,665 $ 149,894 As of January 31, 2020 and February 1, 2019, assets in development relate primarily to technological investments. Depreciation expense is recorded over the estimated useful lives of the respective assets using the straight-line method. Leasehold improvements are depreciated over the shorter of the associated lease term or the estimated useful life of the asset. Depreciation expense was $31.1 million, $27.6 million and $24.9 million for Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively. |
Impairment of Property and Equipment | Impairment of Property and Equipment Property and equipment are subject to a review for impairment if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Retail store long-lived assets, including right-of-use assets, are regularly reviewed for impairment indicators. Impairment is assessed at the individual store level which is the lowest level of identifiable cash flows and considers the estimated undiscounted cash flows over the asset’s remaining life. If estimated undiscounted cash flows are insufficient to recover the investment, an impairment loss is recognized equal to the difference between the estimated fair value of the asset and its carrying value, net of salvage, and any costs of disposition. The fair value estimate is generally the discounted amount of estimated store-specific cash flows. During Fiscal 2019 an impairment of $1.4 million was recognized for property and equipment in one Retail location. During Fiscal 2018 an impairment of $254 thousand was recognized for property and equipment in two Retail locations. There were no impairments of property and equipment recognized in Fiscal 2017. |
Goodwill and Indefinite-lived Intangible Asset Impairment Assessments | G oodwill and Indefinite-lived Intangible Asset Impairment Assessments Goodwill and the indefinite-lived trade name intangible asset are tested separately for impairment on an annual basis or are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The goodwill and trade name intangible asset relate to Kmart Holding Corporation's acquisition of Sears Roebuck in March 2005. Frequently our impairment assessments contain multiple uncertainties because the calculation requires management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting cash flows under different scenarios. We perform goodwill and indefinite-lived intangible asset impairment tests on an annual basis and update these annual impairment tests mid-year if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit or indefinite-lived intangible asset below its carrying amount. If actual results fall short of our estimates and assumptions used in estimating future cash flows and asset fair values, we may be exposed to future impairment losses that could be material. Goodwill impairment assessments The Company tests goodwill for impairment using a one-step quantitative test. The quantitative test compares the reporting unit's fair value to its carrying value. An impairment is recorded for any excess carrying value above the reporting unit's fair value, not to exceed the amount of goodwill. The Company estimates fair value using a discounted cash flow model, commonly referred to as the income approach. The income approach uses a reporting unit's projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions appropriate to the Company's reporting unit. The projection uses management's best estimates of economic and market conditions over the projected period using the best information available, including growth rates in revenues, costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. During Fiscal 2019 and Fiscal 2018, the fair value of the reporting units exceeded their carrying value and as such, the Company did not record a goodwill impairment charge. At the end of Fiscal 2019, the fair value of the U.S. eCommerce, Outfitters and Japan eCommerce reporting units exceeded the carrying value by 34.7%, 48.6% and 3.1% respectively. The goodwill allocated to Japan is approximately $3.3 million Goodwill impairment charges may be recognized in future periods to the extent changes in factors or circumstances occur, including deterioration in the macroeconomic environment, retail industry or in the equity markets, deterioration in our performance or our future projections, or changes in our plans for the reporting unit. Indefinite-lived intangible asset impairment assessments The Company's indefinite-lived intangible asset is the Lands' End trade name. Lands' End reviews the trade name for impairment, on an annual basis, by comparing the carrying amount to its fair value, using the income approach. Lands' End determined that the relief from royalty method of the income approach was most appropriate for analyzing the Company's indefinite-lived asset. This method is based on the assumption that, in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset class. The relief from royalty method involves two steps: (1) estimation of reasonable royalty rates for the assets and (2) the application of these royalty rates to a net revenue stream and discounting the resulting cash flows to determine a present value. The Company multiplied the selected royalty rate by the forecasted net revenue stream to calculate the cost savings (relief from royalty payment) associated with the asset. The cash flows are then discounted to present value using the selected discount rate and compared to the carrying value of the asset. In Fiscal 2019, Fiscal 2018 and Fiscal 2017, the Company tested the indefinite-lived intangible assets as required resulting in the fair value exceeding the carrying value by 19.1%, 45.1% and 9.7% respectively. As such, no trade name impairment charges were recorded in all periods presented . |
Financial Instruments with Off-Balance-Sheet Risk | Financial Instruments with Off-Balance-Sheet Risk The Company entered into the ABL Facility on November 16, 2017, which provides for maximum borrowings of $175.0 million for the Company, subject to a borrowing base. Subsequent to Fiscal 2019 and before the filing of this Annual Report on Form 10-K for Fiscal 2019, the Company increased capacity under the ABL Facility by $25 million, so that maximum borrowings are $200 million. The ABL Facility has a letter of credit sub-limit of $70.0 million and will mature no later than November 16, 2022, subject to customary extension provisions provided for therein. The ABL Facility is available for working capital and other general corporate purposes, and was undrawn, at January 31, 2020, other than for letters of credit. See Note 3, Debt |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company determines the fair value of financial instruments in accordance with accounting standards pertaining to fair value measurements. Such standards define fair value and establish a framework for measuring fair value in accordance with GAAP. Under fair value measurement accounting standards, fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The Company reports or discloses the fair value of financial assets and liabilities based on the fair value hierarchy prescribed by accounting standards for fair value measurements, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. Total accounts receivable were $51.0 million and $34.5 million as of January 31, 2020 and February 1, 2019, respectively. As of January 31, 2020 accounts receivable from two customers within the Outfitter’s business each represented more than 10% and a combined 54% of the accounts receivable balance. Cash and cash equivalents, Accounts receivable, Accounts payable and Other current liabilities are reflected in the Consolidated Balance Sheets at cost, which approximates fair value due to the short-term nature of these instruments. Long-term debt, net is reflected in the Consolidated Balance Sheets at amortized cost. The fair value of debt was determined utilizing level 2 valuation techniques based on the closing inactive market bid price on January 31, 2020 and February 1, 2019. See Note 7, Fair Value of Financial Assets and Liabilities |
Foreign Currency Transactions and Translations | Foreign Currency Translations and Transactions The Company translates the assets and liabilities of foreign subsidiaries from their respective functional currencies to United States dollars at the appropriate spot rates as of the balance sheet date. Revenue and expenses of operations are translated to United States dollars using weighted average exchange rates during the year. The foreign subsidiaries use the local currency as their functional currency. The effects of foreign currency translation adjustments are included as a component of Accumulated other comprehensive loss in the accompanying Consolidated Statements of Changes in Stockholders' Equity. The Company recognized a foreign exchange transaction gain of $3.4 million in Fiscal 2019, an insignificant gain in Fiscal 2018 and a loss of $4.8 million in Fiscal 2017, included within Cost of sales (excluding depreciation and amortization) in the accompanying Consolidated Statements of Operations. |
Revenue Recognition | Revenue Recognition 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 eCommerce and Outfitters channels is when the merchandise is expected to be received by the customer and for the Retail channel 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. The Company's revenue is disaggregated by channel and geographic location. The Company excludes 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. 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 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 Consolidated Balance Sheets and amounts recognized through Net revenue for each period presented. The remainder of deferred revenue as of January 31, 2020 is expected to be recognized in Net revenue in the fiscal quarter ending May 1, 2020, as products are delivered to customers. (in thousands) Fiscal 2019 Fiscal 2018 Deferred revenue beginning of period $ 9,051 $ 12,993 Deferred revenue recognized in period (9,051 ) (12,993 ) Revenue deferred in period 8,096 9,051 Deferred revenue end of period $ 8,096 $ 9,051 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 Consolidated Statements of Operations. Prior to their redemption, gift cards are recorded as a liability, included within Other current liabilities in the Consolidated Balance Sheets. 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: (in thousands) Fiscal 2019 Fiscal 2018 Balance as of beginning of period $ 18,191 $ 19,272 Gift cards sold 65,662 57,465 Gift cards redeemed (60,043 ) (56,502 ) Gift card breakage (1,218 ) (984 ) Change in accounting principle — (1,060 ) Balance as of January 31, 2020 $ 22,592 $ 18,191 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 Fiscal 2019 and Fiscal 2018, $21.6 million and $22.2 million, respectively, of refund liabilities, primarily associated with product returns, were reported in Other current liabilities in the Consolidated Balance Sheets. |
Cost of Sales | Cost of Sales Cost of sales are comprised principally of the costs of merchandise, in-bound freight, duty, warehousing and distribution (including receiving, picking, packing, store delivery and value added costs), customer shipping and handling costs and physical inventory losses. Depreciation and amortization are not included in the Company's Cost of sales. |
Selling and Administrative Expenses | Selling and Administrative Expenses Selling and administrative expenses are comprised principally of payroll and benefits costs, marketing, occupancy costs of retail stores and corporate facilities, buying, pre-opening costs and other administrative expenses. All stock-based compensation is recorded in Selling and administrative expenses. See Note 5, Stock-Based Compensation |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are based on the estimated future tax effects of differences between the financial and tax basis of assets and liabilities based on currently enacted tax laws. The tax balances and income tax expense recognized are based on management's interpretation of the tax laws of multiple jurisdictions. Income tax expense also reflects best estimates and assumptions regarding, among other things, the level of future taxable income and tax planning. Future changes in tax laws, changes in projected levels of taxable income, tax planning and adoption and implementation of new accounting standards could impact the effective tax rate and tax balances recorded. Tax positions are recognized when they are more likely than not to be sustained upon examination. The amount recognized is measured as the largest amount of benefit that is more likely than not to be realized upon settlement. The Company is subject to periodic audits by the United States Internal Revenue Service and other state and local taxing authorities. These audits may challenge certain of the Company's tax positions such as the timing and amount of income and deductions and the allocation of taxable income to various tax jurisdictions. The Company evaluates its tax positions and establishes liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. These tax uncertainties are reviewed as facts and circumstances change and are adjusted accordingly. This requires significant management judgment in estimating final outcomes. Interest and penalties are classified as Income tax expense in the Consolidated Statements of Operations. See Note 9, Income Taxes The Company performed an evaluation over its deferred tax assets and determined that a valuation allowance is considered necessary for certain jurisdictions. See Note 9, Income Taxes Lands' End and Sears Holdings Corporation entered into the Tax Sharing Agreement in connection with the Separation which governs Sears Holdings Corporation's and Lands' End's respective rights, responsibilities and obligations after the Separation with respect to liabilities for United States federal, state, local and foreign taxes attributable to the Lands' End business. Pursuant to this agreement, Sears Holdings Corporation is generally responsible for all United States federal, state and local UTBs, through the date of the Separation. 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. Sears Holdings rejected the Tax Sharing Agreement, per an order approved on April 4, 2019. 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. As of January 31, 2020 the indemnification asset was $0. |
Self Insurance | Self-Insurance The Company has a self-insured plan for health and welfare benefits and provides an accrual to cover the obligation. The accrual for the self-insured liability is based on claims filed and an estimate of claims incurred but not yet reported. The Company considers a number of factors, including historical claims information, when determining the amount of the accrual. Costs related to the administration of the plan and related claims are expensed as incurred. Total expenses were $17.4 million, $17.1 million and $16.5 million for Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively. |
Postretirement Benefit Plan | Postretirement Benefit Plan Effective January 1, 2006, the Company decided to indefinitely suspend eligibility to the postretirement medical plan for future company retirees. The Company has a 401(k) retirement plan, which covers most regular employees and allows them to make contributions. The Company also provides a matching contribution on a portion of the employee contributions. Total expense incurred under this plan was $3.6 million, $3.5 million and $3.2 million for Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively. |
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, impact of the Tax Act on the translation adjustments and net income (loss). |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for restricted stock units is determined based on the grant date fair value. The fair value is determined based on the Company's stock price on the date of the grant. The Company recognizes stock-based compensation cost net of estimated forfeitures and revises the estimates in subsequent periods if actual forfeitures differ from the estimates. The Company estimates the forfeiture rate based on historical data as well as expected future behavior. Stock-based compensation is recorded in Selling and administrative expense in the Consolidated Statements of Operations over the period in which the employee is required to provide service in exchange for the restricted stock units. 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. |
Earnings Per Share | Earnings per Share The numerator for both basic and diluted EPS is net income attributable to Lands' End. 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 ASC 260, Earnings Per Share |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Leases In February 2016 the FASB issued ASU 2016-02, Leases (“ASC 842”), which changed how companies account for leases. On February 2, 2019, the Company adopted the guidance using the Comparatives under 840 option approach which waives the requirement to apply ASC 842 in the comparative periods presented within the financial statements in the year of adoption. Lands' End elected the practical expedient package, which among other practical expedients, includes the option to retain the historical classification of leases entered into prior to February 2, 2019. The Company also elected the practical expedient to combine lease and non-lease components. The Company is a lessee under various lease agreements for its equipment and retail operations. The determination of whether an arrangement contains a lease and the classification of a lease, if applicable, is made at lease commencement (date in which the Company takes possession of the asset). At lease commencement the Company also measures and recognizes a right-of-use asset, representing the Company’s right to use the underlying asset, and a lease liability, representing the Company’s obligation to make lease payments under the terms of the arrangement. The lease term is defined as the noncancelable portion of the lease term plus any periods covered by an option to extend the lease, if it is reasonably certain that the option will be exercised. For the purposes of recognizing right-of-use assets and lease liabilities associated with the Company’s leases, the Company has elected the practical expedient of not recognizing a right-of-use asset or lease liability for short-term leases, which are leases with a term of twelve months or less. The Company's leases are classified as operating leases, which are included in the Operating lease right-of-use asset, Lease liability - current and Lease liability - long-term on the Company's Consolidated Balance sheets. Right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments, over the lease term, as of the commencement date. Minimum lease payments include the fixed lease component of the agreement as well as any variable rate payments that depend on an index, initially measured using the index at the lease commencement date. Lease terms may include options to renew. If it is determined the lease will not be renewed, the right-of-use asset and lease liability for that lease will be adjusted to reflect the updated lease term. The Company does not have any leases with residual value guarantees or restrictions or covenants imposed by the lease. Due to the absence of an implicit rate in the Company’s lease contracts, the Company estimates its incremental borrowing rate for each lease based on the lease term, lease currency and the Company’s credit spread. The yield curve selected at the lease commencement date represents one notch above the Company’s unsecured credit rating, and therefore is considered a close proxy for the incremental borrowing rate the Company would incur for secured debt. Lease expense is recognized on a straight-line basis over the lease term and is included in Selling and administrative expense in the Consolidated Statements of Operations. Variable lease payments that do not depend on a rate or index and short-term rentals (leases with terms less than 12 months) are expensed as incurred. The impact of adoption of the new lease guidance on the Consolidated Balance Sheets as of February 2, 2019 was as follows. See Note 4, Leases (in thousands) February 1, 2019 (as reported) Impact of Adoption February 2, 2019 Assets: Operating lease right-of-use asset $ — $ 27,494 $ 27,494 Liabilities: Lease liability - current — 9,892 9,892 Lease liability - long-term — 21,700 21,700 Stockholders' Equity: — Accumulated deficit (17,159 ) (1,741 ) (1) (18,900 ) (1) At the time of implementation, the Company determined certain Operating lease right-of-use assets were impaired and recorded an adjustment to beginning retained earnings related to these impairments, net of tax. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Allowance for Doubtful Accounts | Changes in the balance of the allowance for doubtful accounts are as follows: (in thousands) Fiscal 2019 Fiscal 2018 Beginning balance $ 542 $ 637 Provision 151 192 Write-offs (182 ) (287 ) Ending balance $ 511 $ 542 |
Summary of Property and Equipment, Net | As of the balance sheet dates, Property and equipment, net consisted of the following: (in thousands) Asset Lives January 31, 2020 February 1, 2019 Land - $ 3,459 $ 3,459 Buildings and improvements 15-30 100,269 99,400 Furniture, fixtures and equipment 3-10 59,731 62,823 Computer hardware and software 3-10 181,160 146,400 Leasehold improvements 3-7 8,423 6,569 Construction in progress 22,796 27,296 Gross property and equipment 375,838 345,947 Accumulated depreciation (218,173 ) (196,053 ) Total property and equipment, net $ 157,665 $ 149,894 |
Deferred Revenue Disclosure | 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 Consolidated Balance Sheets and amounts recognized through Net revenue for each period presented. The remainder of deferred revenue as of January 31, 2020 is expected to be recognized in Net revenue in the fiscal quarter ending May 1, 2020, as products are delivered to customers. (in thousands) Fiscal 2019 Fiscal 2018 Deferred revenue beginning of period $ 9,051 $ 12,993 Deferred revenue recognized in period (9,051 ) (12,993 ) Revenue deferred in period 8,096 9,051 Deferred revenue end of period $ 8,096 $ 9,051 |
Gift Card Reconciliation | The following table provides the reconciliation of the contract liability related to gift cards: (in thousands) Fiscal 2019 Fiscal 2018 Balance as of beginning of period $ 18,191 $ 19,272 Gift cards sold 65,662 57,465 Gift cards redeemed (60,043 ) (56,502 ) Gift card breakage (1,218 ) (984 ) Change in accounting principle — (1,060 ) Balance as of January 31, 2020 $ 22,592 $ 18,191 |
Schedule of 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, impact of the Tax Act on the translation adjustments and net income (loss). Fiscal 2019 Fiscal 2018 Fiscal 2017 Beginning balance: Accumulated other comprehensive loss (net of tax of $3,505, $2,816 and $6,691, respectively) $ (13,183 ) $ (10,592 ) $ (12,426 ) Other comprehensive income (loss) Foreign currency translation adjustments (net of tax of $(52), $689 and $(1,427), respectively) 195 (2,591 ) 4,282 Impact of Tax Act — — (2,448 ) Ending Balance: Accumulated other comprehensive loss (net of tax of $3,453, $3,505 and $2,816, respectively) $ (12,988 ) $ (13,183 ) $ (10,592 ) |
Schedule of Components of Basic and Diluted EPS | The following table summarizes the components of basic and diluted EPS: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 Net income $ 19,290 $ 11,590 $ 28,195 Basic weighted average shares outstanding 32,343 32,190 32,076 Dilutive impact of stock awards 2 336 34 Diluted weighted average shares outstanding 32,345 32,526 32,110 Basic earnings per share $ 0.60 $ 0.36 $ 0.88 Dilutive earnings per share $ 0.60 $ 0.36 $ 0.88 |
Schedule of Impact of Adoption on Consolidated Balance Sheet | The impact of adoption of the new lease guidance on the Consolidated Balance Sheets as of February 2, 2019 was as follows. See Note 4, Leases (in thousands) February 1, 2019 (as reported) Impact of Adoption February 2, 2019 Assets: Operating lease right-of-use asset $ — $ 27,494 $ 27,494 Liabilities: Lease liability - current — 9,892 9,892 Lease liability - long-term — 21,700 21,700 Stockholders' Equity: — Accumulated deficit (17,159 ) (1,741 ) (1) (18,900 ) (1) At the time of implementation, the Company determined certain Operating lease right-of-use assets were impaired and recorded an adjustment to beginning retained earnings related to these impairments, net of tax. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Company's Debt | The Company's debt consisted of the following: January 31, 2020 February 1, 2019 (in thousands) Amount Rate Amount Rate Term Loan Facility, maturing April 4, 2021 $ 385,388 5.05 % $ 490,538 5.77 % ABL Facility, maturing November 16, 2022 — — % — — % 385,388 490,538 Less: current maturities 5,150 5,150 Less: unamortized debt issuance costs 1,581 2,935 Long-term debt, net $ 378,657 $ 482,453 |
Summary of Company's Borrowing Availability Under ABL Facility | The following table summarizes the Company's borrowing availability under the ABL Facility: (in thousands) January 31, 2020 February 1, 2019 ABL Facility maximum borrowing $ 175,000 $ 175,000 Outstanding letters of credit 23,299 21,111 Borrowing availability under ABL $ 151,701 $ 153,889 |
Schedule of Aggregate Scheduled Maturities | The Company's aggregate scheduled maturities of the Term Loan Facility as of January 31, 2020 are as follows: (in thousands) Less than 1 year $ 5,150 1 - 2 years 380,238 2 - 3 years — 3 - 4 years — 4 - 5 years — $ 385,388 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense are as follows: (in thousands) Fiscal 2019 Operating lease expense $ 9,210 Variable lease expense 1,682 Ending Balance $ 10,892 |
Supplemental Balance Sheet Information Related to Operating Leases | Supplemental balance sheet information related to operating leases are as follows: (in thousands) Fiscal 2019 Operating lease right-of-use asset $ 38,665 Lease liability - current 5,864 Lease liability - long-term 39,841 Weighted average remaining lease term in years 8.03 Weighted average discount rate 6.39 % |
Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to operating leases are as follows: (in thousands) Fiscal 2019 Operating cash outflows from operating leases $ 10,631 Operating lease right-of-use-assets obtained in exchange for lease liabilities 19,584 |
Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of January 31, 2020 are as follows (in thousands): (in thousands) Fiscal 2019 2020 $ 8,743 2021 7,834 2022 7,096 2023 6,512 2024 6,187 Thereafter 23,663 Total operating lease payments $ 60,035 Less imputed interest 14,330 Present value of lease liabilities $ 45,705 |
Summary of future operating lease commitments | Total future commitments under the Company’s operating leases as of February 1, 2019 were as follows for the fiscal years ending (in thousands): (in thousands) Fiscal 2018 2020 $ 10,851 2021 6,338 2022 4,873 2023 3,828 2024 2,839 Thereafter 10,590 Total minimum payments required $ 39,319 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | Jan. 31, 2020 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Stock-Based Compensation Expense | The following table summarizes the Company's stock-based compensation expense, which is included in Selling and administrative expense in the Consolidated Statements of Operations: (in thousand) Fiscal 2019 Fiscal 2018 Fiscal 2017 Deferred Awards 5,591 4,407 3,212 Performance Awards 2,352 1,006 88 Option Awards 748 748 651 Total stock-based compensation expense 8,690 6,161 3,951 |
Restricted Stock Units (RSUs) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Deferred, Performance and Options Awards | The following table provides a summary of the Deferred Awards activity for Fiscal 2019 and Fiscal 2018: Fiscal Year Ended January 31, 2020 February 1, 2019 (in thousands, except per share amounts) Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Unvested deferred awards at beginning of year 594 $ 21.96 497 $ 22.07 Granted 428 15.62 294 21.93 Vested (210 ) 21.93 (151 ) 22.32 Forfeited (67 ) 20.65 (46 ) 21.62 Unvested deferred awards at end of year 745 18.49 594 21.96 |
Performance Shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Deferred, Performance and Options Awards | The following table provides a summary of the Performance Awards activity for Fiscal 2019 and Fiscal 2018: Fiscal Year Ended January 31, 2020 February 1, 2019 (in thousands, except per share amounts) Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Unvested performance awards at beginning of year 176 $ 21.93 15 $ 21.94 Granted 265 15.73 195 21.90 Vested — — — — Forfeited (29 ) 18.85 (34 ) 21.90 Unvested performance awards at end of year 412 18.15 176 21.93 |
Share-based Payment Arrangement, Option | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Deferred, Performance and Options Awards | The following table provides a summary of the Options Award activity for Fiscal 2019 and Fiscal 2018: Fiscal Year Ended January 31, 2020 February 1, 2019 (in thousands, except per share amounts) Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Unvested option awards at beginning of year 257 $ 8.73 343 $ 8.73 Granted — — — — Vested (86 ) 8.73 (86 ) 8.73 Forfeited — — — — Unvested option awards at end of year 171 8.73 257 8.73 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Other Current Liabilities | Other current liabilities consisted of the following: (in thousands) January 31, 2020 February 1, 2019 Accrued employee compensation and benefits $ 42,809 $ 42,439 Reserve for sales returns and allowances 21,641 22,222 Deferred gift card revenue 22,592 18,191 Accrued property, sales and other taxes 9,242 9,131 Other 9,736 11,240 Deferred revenue 8,096 9,051 Total other current liabilities $ 114,116 $ 112,274 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Fair Values of Other Financial Instruments | Carrying values and fair values of other financial instruments in the Consolidated Balance Sheets are as follows: January 31, 2020 February 1, 2019 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including short-term portion $ 385,388 $ 378,643 $ 490,538 $ 460,493 |
Goodwill and Indefinite Lived_2
Goodwill and Indefinite Lived Intangible Assets (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Indefinite Lived Intangible Assets and Goodwill | The following table summarizes the Company's indefinite-lived intangible asset and Goodwill: (in thousands) January 31, 2020 February 1, 2019 Goodwill balance $ 110,000 $ 110,000 Trade name balance $ 257,000 $ 257,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Taxes | The Company's income before income taxes in the United States and in foreign jurisdictions is as follows: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 Income before income taxes United States $ 21,406 $ 16,297 $ 9,011 Foreign (44 ) (6,666 ) (8,563 ) Total income before income taxes $ 21,362 $ 9,631 $ 448 |
Schedule of Components of the Provision for Income Taxes | The components of the provision for (benefit from) income taxes are as follows: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 United States $ 2,105 $ (1,959 ) $ (27,623 ) Foreign (33 ) — (124 ) Total provision (benefit) $ 2,072 $ (1,959 ) $ (27,747 ) (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 Current: Federal $ 979 $ (4,457 ) $ 4,804 State 1,549 2,275 330 Foreign — — (124 ) Total current 2,528 (2,182 ) 5,010 Deferred: Federal 340 1,650 (34,901 ) State (763 ) (1,427 ) 2,144 Foreign (33 ) — — Total deferred (456 ) 223 (32,757 ) Total provision (benefit) $ 2,072 $ (1,959 ) $ (27,747 ) |
Reconciliation of the Effective Income Tax Rate | A reconciliation of the statutory federal income tax rate to the effective income tax rate is as follows: Fiscal 2019 Fiscal 2018 Fiscal 2017 Tax at statutory federal tax rate 21.0 % 21.0 % 33.8 % * State income taxes, net of federal tax benefit 2.9 % 10.0 % 103.5 % Foreign differential (4.0 )% (4.6 )% 108.6 % Permanent differences 4.3 % 23.4 % 383.1 % Tax law changes — % — % (7,793.7 )% Repatriation of foreign earnings — % (38.4 )% 950.9 % Uncertain tax benefits (0.8 )% (38.6 )% (600.1 )% Change in foreign valuation allowance 4.2 % 19.2 % 509.8 % Foreign branches (15.9 )% — % — % Other, net (2.0 )% (12.3 )% 110.6 % Total 9.7 % (20.3 )% (6,193.5 )% |
Summary of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consisted of the following: (in thousands) January 31, 2020 February 1, 2019 February 2, 2018 Deferred tax assets Deferred revenue $ 3,797 $ 3,053 $ 3,292 Legal accruals 1,938 1,714 1,512 Deferred compensation 12,507 10,360 4,029 Reserve for returns 2,654 2,271 2,301 Inventory 3,413 3,690 3,099 CTA investment in foreign subsidiaries 3,453 3,505 2,816 Operating lease liabilities 10,319 — — Other 2,764 3,041 4,330 Net operating loss carryforward 6,018 5,117 2,284 Total deferred tax assets 46,863 32,751 23,663 Less valuation allowance (6,526 ) (5,079 ) (2,284 ) Net deferred tax assets $ 40,337 $ 27,672 $ 21,379 Deferred tax liabilities Intangible assets $ 62,397 $ 62,959 $ 62,754 LIFO reserve 17,503 16,382 16,659 Property and equipment 7,208 5,098 — Operating lease right-of-use assets 8,586 — — Catalog advertising 2,294 1,903 1,103 Total deferred tax liabilities 97,988 86,342 80,516 Net deferred tax liability $ 57,651 $ 58,670 $ 59,137 |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of UTBs is as follows: Fiscal 2019 Fiscal 2018 Fiscal 2017 Gross UTB balance at beginning of period $ 1,458 $ 4,531 $ 6,901 Tax positions related to the current period - gross increase — — — Tax positions related to the prior periods - gross decreases (179 ) (2,588 ) (2,370 ) Settlements (77 ) (485 ) — Lapse of statutes of limitations — — Gross UTB balance at end of period $ 1,202 $ 1,458 $ 4,531 |
Related Party Agreements and _2
Related Party Agreements and Transactions (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Revenue and Costs | Related party costs charged by Sears Holdings or Transform Holdco to the Company related to Lands' End Shops at Sears were as follows: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 Rent, CAM and occupancy costs $ 3,768 $ 14,798 $ 22,084 Retail services, store labor 3,396 13,719 21,934 Financial services and payment processing 385 1,644 2,455 Supply chain costs 119 465 741 Total expenses $ 7,668 $ 30,626 $ 47,214 Number of Lands’ End Shops at Sears at period end (1) — 49 174 (1) During Fiscal 2019, Fiscal 2018 and Fiscal 2017, 49, 125 and 42 Related party costs charged by Sears Holdings or Transform Holdco to the Company for general corporate services were as follows: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 Sourcing $ 7,456 $ 7,530 $ 10,243 Shop Your Way Loyalty Program 108 933 1,119 Shared services 176 190 176 Total expenses, net $ 7,740 $ 8,653 $ 11,538 Related party revenue charged by the Company to Sears Holdings for the use of intellectual property or services is as follows: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 Call center services $ — $ — $ 1,160 Lands' End business outfitters revenue 4 845 1,045 Credit card revenue 375 709 980 Royalty income 142 189 213 Gift card revenue (14 ) (17 ) (32 ) Total income $ 507 $ 1,726 $ 3,366 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of Net Revenue by Product Channel | Net revenue is presented by product channel in the following table: (in thousands) Fiscal 2019 % of Revenue Fiscal 2018 % of Revenue Fiscal 2017 % of Revenue eCommerce $ 1,104,829 76.2% $ 1,039,929 71.7% $ 975,446 69.3% Outfitters 285,807 19.7% 289,251 19.9% 258,669 18.4% Retail 59,565 4.1% 122,412 8.4% 172,562 12.3% Total Net revenue $ 1,450,201 $ 1,451,592 $ 1,406,677 |
Summary of Segment and Geographic Region | The geographical allocation of Net revenue is based upon where the product is shipped. The following presents summarized geographical information: (in thousands) Fiscal 2019 % of Revenue Fiscal 2018 % of Revenue Fiscal 2017 % of Revenue United States $ 1,247,288 86.0% $ 1,245,157 85.8% $ 1,204,199 85.6% Europe 137,134 9.5% 138,761 9.6% 134,543 9.6% Asia 48,470 3.3% 50,203 3.5% 48,704 3.5% Other 17,309 1.2% 17,471 1.1% 19,231 1.3% Total Revenue $ 1,450,201 $ 1,451,592 $ 1,406,677 |
Summary of Property and Equipment Net by Geographical Location | Property and equipment, net by geographical location are as follows: (in thousands) Fiscal 2019 Fiscal 2018 Fiscal 2017 United States $ 148,340 $ 140,663 $ 126,015 Europe 8,716 8,773 9,862 Asia 609 458 625 Total Property and equipment, net $ 157,665 $ 149,894 $ 136,502 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data | 2019 First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands except share data) $’s % Net Sales $’s % Net Sales $’s % Net Sales $’s % Net Sales Net revenue 262,433 100.0 % 298,267 100.0 % 340,023 100.0 % 549,478 100.0 % Gross profit 119,874 45.7 % 129,085 43.3 % 154,175 45.3 % 218,758 39.8 % Operating (loss) income (4,736 ) (1.8 )% (561 ) (0.2 )% 10,907 3.2 % 39,827 7.2 % Net (loss) income (6,818 ) (2.6 )% (3,014 ) (1.0 )% 3,606 1.1 % 25,516 4.6 % Basic earnings per common share (0.21 ) (0.09 ) 0.11 0.79 Diluted earnings per common share (1) (0.21 ) (0.09 ) 0.11 0.78 2018 First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands except share data) $’s % Net Sales $’s % Net Sales $’s % Net Sales $’s % Net Sales Net revenue 299,825 100.0 % 307,945 100.0 % 341,570 100.0 % 502,252 100.0 % Gross profit 133,025 44.4 % 136,766 44.4 % 150,962 44.2 % 195,303 38.9 % Operating income 2,527 0.8 % 875 0.3 % 8,485 2.5 % 30,712 6.1 % Net income (2,630 ) (0.9 )% (5,285 ) (1.7 )% 3,294 1.0 % 16,211 3.2 % Basic earnings per common share (0.08 ) (0.16 ) 0.10 0.50 Diluted earnings per common share (1) (0.08 ) (0.16 ) 0.10 0.50 (1) The sum of the quarterly earnings per share—basic and diluted amounts may not equal the fiscal year amount due to rounding. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Feb. 01, 2019 | |
Accounting Policies [Abstract] | ||
Beginning balance | $ 542 | $ 637 |
Provision | 151 | 192 |
Write-offs | (182) | (287) |
Ending balance | $ 511 | $ 542 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) | 2 Months Ended | 12 Months Ended | |||||
Mar. 23, 2020USD ($) | Jan. 31, 2020USD ($)Storeshares | Feb. 01, 2019USD ($)shares | Feb. 02, 2018USD ($)shares | Nov. 02, 2018USD ($) | Nov. 16, 2017USD ($) | Apr. 04, 2014USD ($) | |
Significant Accounting Policies [Line Items] | |||||||
Increase in inventories | $ 53,819,000 | $ (7,773,000) | $ 2,709,000 | ||||
Reserve for excess and obsolete inventory | 11,000,000 | 12,500,000 | |||||
Unamortized marketing costs | 14,700,000 | 13,500,000 | |||||
Marketing expenses | 194,900,000 | 186,900,000 | 186,400,000 | ||||
Depreciation expense | 31,100,000 | 27,600,000 | 24,900,000 | ||||
Impairment of property and equipment | 1,400,000 | 254,000 | 0 | ||||
Goodwill | 110,000,000 | 110,000,000 | |||||
Impairment of intangible assets | 0 | 0 | 0 | ||||
Line of credit facility, maximum borrowing capacity | 175,000,000 | $ 175,000,000 | |||||
Letter of credit limit | $ 70,000,000 | ||||||
Accounts receivable, net | 50,953,000 | 34,549,000 | |||||
Restructuring charge | 3,900,000 | ||||||
Restructuring accrual | $ 700,000 | 1,300,000 | |||||
Number of school uniform showrooms closed | Store | 5 | ||||||
Non-cash charge for reserve against indemnification asset | 2,600,000 | $ 2,600,000 | |||||
Indemnification asset | $ 0 | 0 | $ 13,700,000 | ||||
Total self insurance expenses | 17,400,000 | 17,100,000 | 16,500,000 | ||||
401(k) plan expense | 3,600,000 | 3,500,000 | 3,200,000 | ||||
Amounts reclassified from accumulated other comprehensive loss | $ 0 | $ 0 | $ 2,400,000 | ||||
Options awards expiration period | 10 years | ||||||
Awards vesting period | 4 years | ||||||
Antidilutive shares excluded from diluted weighted average shares outstanding | shares | 745,575 | 438,583 | 397,669 | ||||
Sears Holdings Corporation | |||||||
Significant Accounting Policies [Line Items] | |||||||
Selling and administrative expenses allocated from former parent | $ 6,400,000 | $ 30,200,000 | $ 47,100,000 | ||||
Other Current Liabilities | |||||||
Significant Accounting Policies [Line Items] | |||||||
Refund liabilities | 21,600,000 | $ 22,200,000 | |||||
Cost Of Sales | |||||||
Significant Accounting Policies [Line Items] | |||||||
Foreign exchange transaction adjustments | $ 3,400,000 | $ (4,800,000) | |||||
Outfitters | Accounts Receivable | |||||||
Significant Accounting Policies [Line Items] | |||||||
Number of customers representing greater than ten percent of accounts receivable | two | ||||||
Outfitters | Accounts Receivable | Credit Concentration Risk | |||||||
Significant Accounting Policies [Line Items] | |||||||
Combined percentage of accounts receivable | 54.00% | ||||||
Subsequent Event | |||||||
Significant Accounting Policies [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | ||||||
Increase in borrowing capacity | $ 25,000,000 | ||||||
Trade Names | |||||||
Significant Accounting Policies [Line Items] | |||||||
Reporting units exceeded the carrying value percentage | 19.10% | 45.10% | 9.70% | ||||
US eCommerce | |||||||
Significant Accounting Policies [Line Items] | |||||||
Reporting units exceeded the carrying value percentage | 34.70% | ||||||
Outfitters | |||||||
Significant Accounting Policies [Line Items] | |||||||
Reporting units exceeded the carrying value percentage | 48.60% | ||||||
Japan | |||||||
Significant Accounting Policies [Line Items] | |||||||
Reporting units exceeded the carrying value percentage | 3.10% | ||||||
Goodwill | $ 3,300,000 | ||||||
United States | |||||||
Significant Accounting Policies [Line Items] | |||||||
Percentage of LIFO inventory | 90.00% | 88.00% | |||||
LIFO | |||||||
Significant Accounting Policies [Line Items] | |||||||
Increase in inventories | $ 900,000 | $ 1,100,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Property Plant And Equipment [Line Items] | |||
Gross property and equipment | $ 375,838 | $ 345,947 | |
Accumulated depreciation | (218,173) | (196,053) | |
Total property and equipment, net | 157,665 | 149,894 | $ 136,502 |
Land | |||
Property Plant And Equipment [Line Items] | |||
Gross property and equipment | 3,459 | 3,459 | |
Buildings and improvements | |||
Property Plant And Equipment [Line Items] | |||
Gross property and equipment | $ 100,269 | 99,400 | |
Buildings and improvements | Minimum | |||
Property Plant And Equipment [Line Items] | |||
Asset lives of property and equipment | 15 years | ||
Buildings and improvements | Maximum | |||
Property Plant And Equipment [Line Items] | |||
Asset lives of property and equipment | 30 years | ||
Furniture, fixtures and equipment | |||
Property Plant And Equipment [Line Items] | |||
Gross property and equipment | $ 59,731 | 62,823 | |
Furniture, fixtures and equipment | Minimum | |||
Property Plant And Equipment [Line Items] | |||
Asset lives of property and equipment | 3 years | ||
Furniture, fixtures and equipment | Maximum | |||
Property Plant And Equipment [Line Items] | |||
Asset lives of property and equipment | 10 years | ||
Computer hardware and software | |||
Property Plant And Equipment [Line Items] | |||
Gross property and equipment | $ 181,160 | 146,400 | |
Computer hardware and software | Minimum | |||
Property Plant And Equipment [Line Items] | |||
Asset lives of property and equipment | 3 years | ||
Computer hardware and software | Maximum | |||
Property Plant And Equipment [Line Items] | |||
Asset lives of property and equipment | 10 years | ||
Leasehold improvements | |||
Property Plant And Equipment [Line Items] | |||
Gross property and equipment | $ 8,423 | 6,569 | |
Leasehold improvements | Minimum | |||
Property Plant And Equipment [Line Items] | |||
Asset lives of property and equipment | 3 years | ||
Leasehold improvements | Maximum | |||
Property Plant And Equipment [Line Items] | |||
Asset lives of property and equipment | 7 years | ||
Construction in progress | |||
Property Plant And Equipment [Line Items] | |||
Gross property and equipment | $ 22,796 | $ 27,296 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Deferred Revenue Disclosure (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Feb. 01, 2019 | |
Revenue Recognition And Deferred Revenue [Abstract] | ||
Deferred revenue beginning of period | $ 9,051 | $ 12,993 |
Deferred revenue recognized in period | (9,051) | (12,993) |
Revenue deferred in period | 8,096 | 9,051 |
Deferred revenue end of period | $ 8,096 | $ 9,051 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Gift Card Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Feb. 01, 2019 | |
Gift Cards [Line Items] | ||
Gift card liability at beginning of period | $ 18,191 | $ 19,272 |
Gift cards sold | 65,662 | 57,465 |
Gift cards redeemed | (60,043) | (56,502) |
Gift card breakage | (1,218) | (984) |
Gift card liability at ending of period | $ 22,592 | 18,191 |
Adjustments for New Accounting Pronouncement | ||
Gift Cards [Line Items] | ||
Change in accounting principle | $ (1,060) |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Schedule of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Accounting Policies [Abstract] | |||
Beginning balance: Accumulated other comprehensive loss (net of tax of $3,505, $2,816 and $6,691, respectively) | $ (13,183) | $ (10,592) | $ (12,426) |
Other comprehensive income (loss) | |||
Foreign currency translation adjustments (net of tax of $(52), $689 and $(1,427), respectively) | 195 | (2,591) | 4,282 |
Impact of Tax Act | (2,448) | ||
Ending Balance: Accumulated other comprehensive loss (net of tax of $3,453, $3,505 and $2,816, respectively) | $ (12,988) | $ (13,183) | $ (10,592) |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Schedule of Other Comprehensive Income (Loss) (Parenthetical) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | Jan. 27, 2017 | |
Accounting Policies [Abstract] | ||||
Accumulated other comprehensive loss, tax | $ 3,453 | $ 3,505 | $ 2,816 | $ 6,691 |
Foreign currency translations adjustment, tax | $ (52) | $ 689 | $ (1,427) |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Schedule of Components of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2020 | Nov. 01, 2019 | Aug. 02, 2019 | May 03, 2019 | Feb. 01, 2019 | Nov. 02, 2018 | Aug. 03, 2018 | May 04, 2018 | Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Accounting Policies [Abstract] | |||||||||||
Net income | $ 25,516 | $ 3,606 | $ (3,014) | $ (6,818) | $ 16,211 | $ 3,294 | $ (5,285) | $ (2,630) | $ 19,290 | $ 11,590 | $ 28,195 |
Basic weighted average shares outstanding | 32,343 | 32,190 | 32,076 | ||||||||
Dilutive impact of stock awards | 2 | 336 | 34 | ||||||||
Diluted weighted average shares outstanding | 32,345 | 32,526 | 32,110 | ||||||||
Basic: | $ 0.79 | $ 0.11 | $ (0.09) | $ (0.21) | $ 0.50 | $ 0.10 | $ (0.16) | $ (0.08) | $ 0.60 | $ 0.36 | $ 0.88 |
Diluted: | $ 0.78 | $ 0.11 | $ (0.09) | $ (0.21) | $ 0.50 | $ 0.10 | $ (0.16) | $ (0.08) | $ 0.60 | $ 0.36 | $ 0.88 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Schedule of Impact of Adoption of New Lease Guidance on Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Feb. 02, 2019 | Feb. 01, 2019 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Operating lease right-of-use asset | $ 38,665 | ||
Lease liability - current | 5,864 | ||
Lease liability - long-term | 39,841 | ||
Accumulated deficit | $ 390 | $ (17,159) | |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Operating lease right-of-use asset | $ 27,494 | ||
Lease liability - current | 9,892 | ||
Lease liability - long-term | 21,700 | ||
Accumulated deficit | (18,900) | ||
Accounting Standards Update 2016-02 | Impact of Adoption | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Operating lease right-of-use asset | 27,494 | ||
Lease liability - current | 9,892 | ||
Lease liability - long-term | 21,700 | ||
Accumulated deficit | $ (1,741) |
Debt - Additional Information (
Debt - Additional Information (Details) | Nov. 16, 2017USD ($) | Apr. 04, 2014USD ($) | Mar. 23, 2020USD ($) | May 03, 2019USD ($) | Jan. 31, 2020USD ($) | Feb. 01, 2019USD ($) | Nov. 01, 2019USD ($) |
Line Of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 175,000,000 | $ 175,000,000 | |||||
Letter of credit limit | 70,000,000 | ||||||
Debt issuance costs, line of credit arrangements, gross | $ 1,500,000 | ||||||
Dividends | $ 500,000,000 | ||||||
Debt instrument, fee | 11,400,000 | ||||||
Term Loan Facility | |||||||
Line Of Credit Facility [Line Items] | |||||||
Secured debt | $ 515,000,000 | 385,388,000 | $ 490,538,000 | ||||
Voluntary prepayment of term loan | $ 100,000,000 | ||||||
Line of credit facility, amortization rate | 1.00% | ||||||
Term Loan Facility | Minimum | |||||||
Line Of Credit Facility [Line Items] | |||||||
Interest rate floor | .01 | ||||||
Term Loan Facility | Secured debt | Minimum | |||||||
Line Of Credit Facility [Line Items] | |||||||
Mandatory prepayment terms, amount equal to borrowers' excess cash flows, percentage | 0.00% | ||||||
Term Loan Facility | Secured debt | Maximum | |||||||
Line Of Credit Facility [Line Items] | |||||||
Mandatory prepayment terms, amount equal to borrowers' excess cash flows, percentage | 50.00% | ||||||
Term Loan Facility | LIBOR | Secured debt | |||||||
Line Of Credit Facility [Line Items] | |||||||
Spread on variable rate | 3.25% | ||||||
Term Loan Facility | Base rate | Secured debt | |||||||
Line Of Credit Facility [Line Items] | |||||||
Spread on variable rate | 2.25% | ||||||
Current ABL Facility | |||||||
Line Of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 175,000,000 | ||||||
Current ABL Facility | Secured debt | |||||||
Line Of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 83,300,000 | $ 83,300,000 | |||||
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 | $ 15,000,000 | ||||||
Line of credit facility, covenant terms, minimum fixed charge coverage ratio | 1 | ||||||
Current ABL Facility | LIBOR | Secured debt | Minimum | |||||||
Line Of Credit Facility [Line Items] | |||||||
Spread on variable rate | 1.25% | ||||||
Current ABL Facility | LIBOR | Secured debt | Maximum | |||||||
Line Of Credit Facility [Line Items] | |||||||
Spread on variable rate | 1.75% | ||||||
ABL Facilities | Base rate | Secured debt | Minimum | |||||||
Line Of Credit Facility [Line Items] | |||||||
Spread on variable rate | 0.50% | ||||||
ABL Facilities | Base rate | Secured debt | Maximum | |||||||
Line Of Credit Facility [Line Items] | |||||||
Spread on variable rate | 1.00% | ||||||
Subsequent Event | |||||||
Line Of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | ||||||
Increase in borrowing capacity | $ 25,000,000 |
Debt - Schedule of Company's De
Debt - Schedule of Company's Debt (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Feb. 01, 2019 | Apr. 04, 2014 |
Line Of Credit Facility [Line Items] | |||
Long-term debt | $ 385,388 | $ 490,538 | |
Less: current maturities | 5,150 | 5,150 | |
Less: unamortized debt issuance costs | 1,581 | 2,935 | |
Long-term debt, net | $ 378,657 | $ 482,453 | |
Debt instrument, interest rate, stated percentage | 5.05% | 5.77% | |
Term Loan Facility | |||
Line Of Credit Facility [Line Items] | |||
Secured debt | $ 385,388 | $ 490,538 | $ 515,000 |
Debt - Summary of Company's Bor
Debt - Summary of Company's Borrowing Availability Under ABL Facility (Details) - USD ($) | Jan. 31, 2020 | Feb. 01, 2019 | Nov. 16, 2017 |
Line Of Credit Facility [Line Items] | |||
ABL Facility maximum borrowing | $ 175,000,000 | $ 175,000,000 | |
Outstanding letters of credit | 23,299,000 | ||
Borrowing availability under ABL | $ 151,701,000 | ||
Current ABL Facility | |||
Line Of Credit Facility [Line Items] | |||
ABL Facility maximum borrowing | $ 175,000,000 | ||
Outstanding letters of credit | 21,111,000 | ||
Borrowing availability under ABL | $ 153,889,000 |
Debt - Schedule of Aggregate Ma
Debt - Schedule of Aggregate Maturities (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Feb. 01, 2019 |
Debt Disclosure [Abstract] | ||
Less than 1 year | $ 5,150 | |
1 - 2 years | 380,238 | |
Long-term debt | $ 385,388 | $ 490,538 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) $ in Thousands | 12 Months Ended |
Jan. 31, 2020USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 9,210 |
Variable lease expense | 1,682 |
Ending Balance | $ 10,892 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Operating Leases (Details) $ in Thousands | Jan. 31, 2020USD ($) |
Leases [Abstract] | |
Operating lease right-of-use asset | $ 38,665 |
Lease liability - current | 5,864 |
Lease liability - long-term | $ 39,841 |
Weighted average remaining lease term in years | 8 years 10 days |
Weighted average discount rate | 6.39% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Operating Leases (Details) $ in Thousands | 12 Months Ended |
Jan. 31, 2020USD ($) | |
Leases [Abstract] | |
Operating cash outflows from operating leases | $ 10,631 |
Operating lease right-of-use-assets obtained in exchange for lease liabilities | $ 19,584 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Jan. 31, 2020USD ($) |
Leases [Abstract] | |
2020 | $ 8,743 |
2021 | 7,834 |
2022 | 7,096 |
2023 | 6,512 |
2024 | 6,187 |
Thereafter | 23,663 |
Total operating lease payments | 60,035 |
Less imputed interest | 14,330 |
Present value of lease liabilities | $ 45,705 |
Leases - Summary of Lease Matur
Leases - Summary of Lease Maturities (Details) $ in Thousands | Feb. 01, 2019USD ($) |
Future minimum commitments operating lease payments | |
2020 | $ 10,851 |
2021 | 6,338 |
2022 | 4,873 |
2023 | 3,828 |
2024 | 2,839 |
Thereafter | 10,590 |
Total minimum payments required | $ 39,319 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 31, 2020 | Feb. 01, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Target shares earned | 100.00% | |
Vesting period | 4 years | |
Options awards expiration period | 10 years | |
Performance Shares | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Compensation expense not yet recognized | $ 4.2 | |
Compensation expense not yet recognized, recognition period | 1 year 9 months 18 days | |
Performance awards period considered | 3 years | 3 years |
Share-based Payment Arrangement, Option | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Options awards expiration period | 10 years | |
Compensation expense not yet recognized | $ 0.9 | |
Compensation expense not yet recognized, recognition period | 1 year 1 month 6 days | |
Options awards exercisable | 171,567 | |
Options exercised | 0 | |
Restricted Stock Units (RSUs) | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Compensation expense not yet recognized | $ 7.7 | |
Compensation expense not yet recognized, recognition period | 1 year 8 months 12 days | |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Target shares earned | 50.00% | |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Target shares earned | 200.00% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation | $ 8,690 | $ 6,161 | $ 3,951 |
Restricted Stock Units (RSUs) | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation | 5,591 | 4,407 | 3,212 |
Share-based Payment Arrangement, Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation | 748 | 748 | 651 |
Performance Shares | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation | $ 2,352 | $ 1,006 | $ 88 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Deferred Awards Activity (Details) - Restricted Stock Units (RSUs) - $ / shares | 12 Months Ended | |
Jan. 31, 2020 | Feb. 01, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Shares, Unvested awards at beginning of year | 594,000 | 497,000 |
Number of Shares, Granted | 428,000 | 294,000 |
Number of Shares, Vested | (210,000) | (151,000) |
Number of Shares, Forfeited | (67,000) | (46,000) |
Number of Shares, Unvested awards at end of year | 745,000 | 594,000 |
Weighted Average Grant Date Fair Value, Unvested awards at beginning of year | $ 21.96 | $ 22.07 |
Weighted Average Grant Date Fair Value, Granted | 15.62 | 21.93 |
Weighted Average Grant Date Fair Value, Vested | 21.93 | 22.32 |
Weighted Average Grant Date Fair Value, Forfeited | 20.65 | 21.62 |
Weighted Average Grant Date Fair Value, Unvested awards at end of year | $ 18.49 | $ 21.96 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Performance Awards Activity (Details) - Performance Shares - $ / shares | 12 Months Ended | |
Jan. 31, 2020 | Feb. 01, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Shares, Unvested awards at beginning of year | 176,000 | 15,000 |
Number of Shares, Granted | 265,000 | 195,000 |
Number of Shares, Vested | 0 | 0 |
Number of Shares, Forfeited | (29,000) | (34,000) |
Number of Shares, Unvested awards at end of year | 412,000 | 176,000 |
Weighted Average Grant Date Fair Value, Unvested awards at beginning of year | $ 21.93 | $ 21.94 |
Weighted Average Grant Date Fair Value, Granted | 15.73 | 21.90 |
Weighted Average Grant Date Fair Value, Vested | 0 | 0 |
Weighted Average Grant Date Fair Value, Forfeited | 18.85 | 21.90 |
Weighted Average Grant Date Fair Value, Unvested awards at end of year | $ 18.15 | $ 21.93 |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Options Award Activity (Details) - Share-based Payment Arrangement, Option - $ / shares | 12 Months Ended | |
Jan. 31, 2020 | Feb. 01, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Shares, Unvested option awards at beginning of year | 257,000 | 343,000 |
Number of Shares, Granted | 0 | 0 |
Number of Shares, Vested | (86,000) | (86,000) |
Number of Shares, Forfeited | 0 | 0 |
Number of Shares, Unvested option awards at end of year | 171,000 | 257,000 |
Weighted Average Grant Date Fair Value, Unvested option awards at beginning of year | $ 8.73 | $ 8.73 |
Weighted Average Grant Date Fair Value, Granted | 0 | 0 |
Weighted Average Grant Date Fair Value, Vested | 8.73 | 8.73 |
Weighted Average Grant Date Fair Value, Forfeited | 0 | 0 |
Weighted Average Grant Date Fair Value, Unvested option awards at end of year | $ 8.73 | $ 8.73 |
Other Current Liabilities - Sum
Other Current Liabilities - Summary of Other Current Liabilities (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 |
Other Liabilities Current [Abstract] | |||
Accrued employee compensation and benefits | $ 42,809 | $ 42,439 | |
Reserve for sales returns and allowances | 21,641 | 22,222 | |
Deferred gift card revenue | 22,592 | 18,191 | $ 19,272 |
Accrued property, sales and other taxes | 9,242 | 9,131 | |
Other | 9,736 | 11,240 | |
Deferred revenue | 8,096 | 9,051 | |
Total other current liabilities | $ 114,116 | $ 112,274 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Additional Information (Details) - USD ($) | Jan. 31, 2020 | Feb. 01, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash | $ 2,149,000 | $ 1,948,000 |
Nonrecurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Nonfinancial assets fair value disclosure | 0 | 0 |
Nonfinancial liabilities fair value disclosure | 0 | 0 |
Fair Value | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash | $ 2,100,000 | $ 1,900,000 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Carrying Values and Fair Values of Other Financial Instruments (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Feb. 01, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, including short-term portion | $ 385,388 | $ 490,538 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, including short-term portion | 385,388 | 490,538 |
Fair Value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, including short-term portion | $ 378,643 | $ 460,493 |
Goodwill and Indefinite Lived_3
Goodwill and Indefinite Lived Intangible Assets - Summary of Indefinite Lived Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Feb. 01, 2019 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 110,000 | $ 110,000 |
Trade name balance | $ 257,000 | $ 257,000 |
Goodwill and Indefinite Lived_4
Goodwill and Indefinite Lived Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Impairment of indefinite-lived assets (excluding goodwill) | $ 0 | $ 0 | |
Goodwill, impairment loss | $ 0 | $ 0 | $ 0 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Income before income taxes | |||
United States | $ 21,406 | $ 16,297 | $ 9,011 |
Foreign | (44) | (6,666) | (8,563) |
Income before income taxes | $ 21,362 | $ 9,631 | $ 448 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of the Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Income Tax Expense (Benefit), Continuing Operations, by Jurisdiction [Abstract] | |||
United States | $ 2,105 | $ (1,959) | $ (27,623) |
Foreign | (33) | 0 | (124) |
Total provision (benefit) | 2,072 | (1,959) | (27,747) |
Current: | |||
Federal | 979 | (4,457) | 4,804 |
State | 1,549 | 2,275 | 330 |
Foreign | 0 | (124) | |
Total current | 2,528 | (2,182) | 5,010 |
Deferred: | |||
Federal | 340 | 1,650 | (34,901) |
State | (763) | (1,427) | 2,144 |
Foreign | (33) | 0 | 0 |
Total deferred | (456) | 223 | (32,757) |
Total provision (benefit) | $ 2,072 | $ (1,959) | $ (27,747) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Effective Income Tax Rate (Details) | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Income Tax Disclosure [Abstract] | |||
Tax at statutory federal tax rate | 21.00% | 21.00% | 33.80% |
State income taxes, net of federal tax benefit | 2.90% | 10.00% | 103.50% |
Foreign differential | (4.00%) | (4.60%) | 108.60% |
Permanent differences | 4.30% | 23.40% | 383.10% |
Tax law changes | 0.00% | (7793.70%) | |
Repatriation of foreign earnings | (38.40%) | 950.90% | |
Uncertain tax benefits | (0.80%) | (38.60%) | (600.10%) |
Change in foreign valuation allowance | 4.20% | 19.20% | 509.80% |
Foreign branches | (15.90%) | ||
Other, net | (2.00%) | (12.30%) | 110.60% |
Total | 9.70% | (20.30%) | (6193.50%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | Nov. 02, 2018 | Jan. 27, 2017 | Apr. 04, 2014 | |
Income Tax Examination [Line Items] | ||||||
Tax at statutory federal tax rate | 21.00% | 21.00% | 33.80% | |||
Unrecognized tax benefits | $ 1,202 | $ 1,458 | $ 4,531 | $ 6,901 | ||
Unrecognized tax benefits that would impact effective tax rate | 1,000 | |||||
Amount of interest and penalties recognized | 700 | 800 | ||||
Income tax examination, penalties and interest accrued, net of tax benefit | 600 | 600 | ||||
Indemnification receivable | 0 | 0 | $ 13,700 | |||
Indemnification write down | 4,800 | |||||
Indemnification reserve | $ 2,600 | $ 2,600 | ||||
Tax act benefit | 30,600 | |||||
Deferred tax liability tax act adjustment | 29,700 | |||||
Transition tax liability | 4,300 | |||||
State tax law changes | 3,700 | |||||
Reduction in Unremitted Foreign Earnings | ||||||
Income Tax Examination [Line Items] | ||||||
Deferred tax liability tax act adjustment | $ 5,200 | |||||
State and Local Jurisdiction | ||||||
Income Tax Examination [Line Items] | ||||||
Operating loss Carryforwards | 13,900 | |||||
Deferred tax assets, net | 1,000 | |||||
Foreign Tax Authority | ||||||
Income Tax Examination [Line Items] | ||||||
Operating loss Carryforwards | 14,900 | |||||
Deferred tax assets, net | $ 5,000 |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 |
Deferred tax assets | |||
Deferred revenue | $ 3,797 | $ 3,053 | $ 3,292 |
Legal accruals | 1,938 | 1,714 | 1,512 |
Deferred compensation | 12,507 | 10,360 | 4,029 |
Reserve for returns | 2,654 | 2,271 | 2,301 |
Inventory | 3,413 | 3,690 | 3,099 |
CTA investment in foreign subsidiaries | 3,453 | 3,505 | 2,816 |
Operating lease liabilities | 10,319 | ||
Other | 2,764 | 3,041 | 4,330 |
Net operating loss carryforward | 6,018 | 5,117 | 2,284 |
Total deferred tax assets | 46,863 | 32,751 | 23,663 |
Less valuation allowance | (6,526) | (5,079) | (2,284) |
Net deferred tax assets | 40,337 | 27,672 | 21,379 |
Deferred tax liabilities | |||
Intangible assets | 62,397 | 62,959 | 62,754 |
LIFO reserve | 17,503 | 16,382 | 16,659 |
Property and equipment | 7,208 | 5,098 | |
Operating lease right-of-use assets | 8,586 | ||
Catalog advertising | 2,294 | 1,903 | 1,103 |
Total deferred tax liabilities | 97,988 | 86,342 | 80,516 |
Net deferred tax liability | $ 57,651 | $ 58,670 | $ 59,137 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Income Tax Disclosure [Abstract] | |||
Gross UTB balance at beginning of period | $ 1,458 | $ 4,531 | $ 6,901 |
Tax positions related to the prior periods - gross decreases | (179) | (2,588) | (2,370) |
Settlements | (77) | (485) | |
Gross UTB balance at end of period | $ 1,202 | $ 1,458 | $ 4,531 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 12 Months Ended |
Jan. 31, 2020USD ($)Lawsuit | |
Loss Contingencies [Line Items] | |
Number of lawsuits | Lawsuit | 4 |
Minimum | |
Loss Contingencies [Line Items] | |
Damages sustained by proposed members | $ | $ 5,000,000 |
Related Party Agreements and _3
Related Party Agreements and Transactions - Schedule of Related Party Costs (Details) - Sears Holdings Corporation $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020USD ($) | Feb. 01, 2019USD ($)Store | Feb. 02, 2018USD ($)Store | |
Related Party Transaction [Line Items] | |||
Related party expenses | $ 7,740 | $ 8,653 | $ 11,538 |
Number of Lands’ End Shops at Sears at period end | Store | 49 | 174 | |
Rent, CAM and Occupancy Costs | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 3,768 | $ 14,798 | $ 22,084 |
Retail Services, Store Labor | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 3,396 | 13,719 | 21,934 |
Financial Services and Payment Processing | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 385 | 1,644 | 2,455 |
Supply Chain Costs | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 119 | 465 | 741 |
Costs Related to Lands' End Shops at Sears | |||
Related Party Transaction [Line Items] | |||
Related party expenses | $ 7,668 | $ 30,626 | $ 47,214 |
Related Party Agreements and _4
Related Party Agreements and Transactions - Schedule of Related Party Costs (Parenthetical) (Details) - Store | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Sears Holdings Corporation | |||
Related Party Transaction [Line Items] | |||
Number of Lands' End Shops at Sears closed in period | 49 | 125 | 42 |
Related Party Agreements and _5
Related Party Agreements and Transactions - Summary of General Corporate Services (Details) - Sears Holdings Corporation - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Related Party Transaction [Line Items] | |||
Related party expenses | $ 7,740 | $ 8,653 | $ 11,538 |
Sourcing | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 7,456 | 7,530 | 10,243 |
Shop Your Way Loyalty Program | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 108 | 933 | 1,119 |
Shared Services | |||
Related Party Transaction [Line Items] | |||
Related party expenses | $ 176 | $ 190 | $ 176 |
Related Party Agreements and _6
Related Party Agreements and Transactions - Summary of Use of Intellectual Property or Services (Details) - Sears Holdings Corporation - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Related Party Transaction [Line Items] | |||
Related party revenue, net | $ 507 | $ 1,726 | $ 3,366 |
Call Center Services | |||
Related Party Transaction [Line Items] | |||
Related party revenue, net | 1,160 | ||
Lands' End Business Outfitters Revenue | |||
Related Party Transaction [Line Items] | |||
Related party revenue, net | 4 | 845 | 1,045 |
Credit Card Revenue | |||
Related Party Transaction [Line Items] | |||
Related party revenue, net | 375 | 709 | 980 |
Royalty Income | |||
Related Party Transaction [Line Items] | |||
Related party revenue, net | 142 | 189 | 213 |
Gift Card Revenue | |||
Related Party Transaction [Line Items] | |||
Related party revenue, net | $ (14) | $ (17) | $ (32) |
Related Party Agreements and _7
Related Party Agreements and Transactions - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Nov. 02, 2018 | Jan. 31, 2020 | Feb. 01, 2019 | Apr. 04, 2014 | |
Related Party Transaction [Line Items] | ||||
Indemnification receivable | $ 0 | $ 0 | $ 13.7 | |
Sears Holdings Corporation | Other Expense, Net | ||||
Related Party Transaction [Line Items] | ||||
Indemnification Reserve Expense | $ 2.6 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 12 Months Ended |
Jan. 31, 2020SegmentCountry | |
Segment Reporting [Abstract] | |
Number of reportable segments | Segment | 1 |
Number of countries other than the U.S. representing greater than 10% of total net revenue | 0 |
Number of countries other than the U.S. representing greater than 10% of total property and equipment, net | 0 |
Segment Reporting - Summary of
Segment Reporting - Summary of Net Revenue by Product Channel (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2020 | Nov. 01, 2019 | Aug. 02, 2019 | May 03, 2019 | Feb. 01, 2019 | Nov. 02, 2018 | Aug. 03, 2018 | May 04, 2018 | Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 549,478 | $ 340,023 | $ 298,267 | $ 262,433 | $ 502,252 | $ 341,570 | $ 307,945 | $ 299,825 | $ 1,450,201 | $ 1,451,592 | $ 1,406,677 |
Percentage of revenue | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | |||
eCommerce | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 1,104,829 | $ 1,039,929 | $ 975,446 | ||||||||
Percentage of revenue | 76.20% | 71.70% | 69.30% | ||||||||
Outfitters | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 285,807 | $ 289,251 | $ 258,669 | ||||||||
Percentage of revenue | 19.70% | 19.90% | 18.40% | ||||||||
Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 59,565 | $ 122,412 | $ 172,562 | ||||||||
Percentage of revenue | 4.10% | 8.40% | 12.30% |
Segment Reporting - Summary o_2
Segment Reporting - Summary of Segment and Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2020 | Nov. 01, 2019 | Aug. 02, 2019 | May 03, 2019 | Feb. 01, 2019 | Nov. 02, 2018 | Aug. 03, 2018 | May 04, 2018 | Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 549,478 | $ 340,023 | $ 298,267 | $ 262,433 | $ 502,252 | $ 341,570 | $ 307,945 | $ 299,825 | $ 1,450,201 | $ 1,451,592 | $ 1,406,677 |
Percentage of revenue | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | |||
North America | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 1,247,288 | $ 1,245,157 | $ 1,204,199 | ||||||||
Percentage of revenue | 86.00% | 85.80% | 85.60% | ||||||||
Europe | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 137,134 | $ 138,761 | $ 134,543 | ||||||||
Percentage of revenue | 9.50% | 9.60% | 9.60% | ||||||||
Asia | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 48,470 | $ 50,203 | $ 48,704 | ||||||||
Percentage of revenue | 3.30% | 3.50% | 3.50% | ||||||||
Other Foreign | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 17,309 | $ 17,471 | $ 19,231 | ||||||||
Percentage of revenue | 1.20% | 1.10% | 1.30% |
Segment Reporting - Summary o_3
Segment Reporting - Summary of Property and Equipment Net by Geographical Location (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 |
Segment Reporting Information [Line Items] | |||
Property and equipment, net | $ 157,665 | $ 149,894 | $ 136,502 |
North America | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 148,340 | 140,663 | 126,015 |
Europe | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 8,716 | 8,773 | 9,862 |
Asia | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | $ 609 | $ 458 | $ 625 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2020 | Nov. 01, 2019 | Aug. 02, 2019 | May 03, 2019 | Feb. 01, 2019 | Nov. 02, 2018 | Aug. 03, 2018 | May 04, 2018 | Jan. 31, 2020 | Feb. 01, 2019 | Feb. 02, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net revenue | $ 549,478 | $ 340,023 | $ 298,267 | $ 262,433 | $ 502,252 | $ 341,570 | $ 307,945 | $ 299,825 | $ 1,450,201 | $ 1,451,592 | $ 1,406,677 |
Gross profit | 218,758 | 154,175 | 129,085 | 119,874 | 195,303 | 150,962 | 136,766 | 133,025 | 621,892 | 616,056 | 597,203 |
Operating (loss) income | 39,827 | 10,907 | (561) | (4,736) | 30,712 | 8,485 | 875 | 2,527 | 45,437 | 42,599 | 29,085 |
Net (loss) income | $ 25,516 | $ 3,606 | $ (3,014) | $ (6,818) | $ 16,211 | $ 3,294 | $ (5,285) | $ (2,630) | $ 19,290 | $ 11,590 | $ 28,195 |
Basic earnings per common share | $ 0.79 | $ 0.11 | $ (0.09) | $ (0.21) | $ 0.50 | $ 0.10 | $ (0.16) | $ (0.08) | $ 0.60 | $ 0.36 | $ 0.88 |
Diluted earnings per common share | $ 0.78 | $ 0.11 | $ (0.09) | $ (0.21) | $ 0.50 | $ 0.10 | $ (0.16) | $ (0.08) | $ 0.60 | $ 0.36 | $ 0.88 |
Merchandise sales and services, net to net sales, percentage | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | |||
Gross margin to net sales, percentage | 39.80% | 45.30% | 43.30% | 45.70% | 38.90% | 44.20% | 44.40% | 44.40% | |||
Operating income to net sales, percentage | 7.20% | 3.20% | (0.20%) | (1.80%) | 6.10% | 2.50% | 0.30% | 0.80% | |||
Net (loss) income to sales, percentage | 4.60% | 1.10% | (1.00%) | (2.60%) | 3.20% | 1.00% | (1.70%) | (0.90%) |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Details) - Subsequent Event - Novel Coronavirus - United States | 1 Months Ended |
Mar. 23, 2020Store | |
Subsequent Event [Line Items] | |
Number of stores closed | 26 |
Retail | Maximum | |
Subsequent Event [Line Items] | |
Percentage expected disruption in revenues | 5.00% |