Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 30, 2022 | May 27, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 30, 2022 | |
Entity Registrant Name | Shoe Carnival, Inc. | |
Entity Central Index Key | 0000895447 | |
Trading Symbol | SCVL | |
Current Fiscal Year End Date | --01-28 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 27,587,354 | |
Entity File Number | 0-21360 | |
Entity Incorporation, State or Country Code | IN | |
Entity Tax Identification Number | 35-1736614 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Security Exchange Name | NASDAQ | |
Entity Address, Address Line One | 7500 East Columbia Street | |
Entity Address, City or Town | Evansville | |
Entity Address, State or Province | IN | |
Entity Address, Postal Zip Code | 47715 | |
City Area Code | 812 | |
Local Phone Number | 867-4034 | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Apr. 30, 2022 | Jan. 29, 2022 | May 01, 2021 |
Current Assets: | |||
Cash and cash equivalents | $ 86,179 | $ 117,443 | $ 174,643 |
Marketable securities | 10,965 | 14,961 | 0 |
Accounts receivable | 14,442 | 14,159 | 7,477 |
Merchandise inventories | 345,021 | 285,205 | 268,629 |
Other | 14,592 | 10,264 | 11,896 |
Total Current Assets | 471,199 | 442,032 | 462,645 |
Property and equipment – net | 110,033 | 88,533 | 62,038 |
Operating lease right-of-use assets | 222,259 | 220,952 | 207,571 |
Intangible Assets | 32,600 | 32,600 | 0 |
Goodwill | 11,698 | 11,384 | 0 |
Deferred income taxes | 0 | 2,699 | 4,965 |
Other noncurrent assets | 13,945 | 14,064 | 12,870 |
Total Assets | 861,734 | 812,264 | 750,089 |
Current Liabilities: | |||
Accounts payable | 116,837 | 69,092 | 102,405 |
Accrued and other liabilities | 31,243 | 33,053 | 55,011 |
Current portion of operating lease liabilities | 51,287 | 51,563 | 42,895 |
Total Current Liabilities | 199,367 | 153,708 | 200,311 |
Long-term portion of operating lease liabilities | 195,426 | 194,788 | 185,205 |
Deferred income taxes | 409 | 0 | 0 |
Deferred compensation | 10,482 | 10,901 | 11,614 |
Other | 336 | 334 | 2,684 |
Total Liabilities | 406,020 | 359,731 | 399,814 |
Shareholders’ Equity: | |||
Common stock, $0.01 par value, 50,000,000 shares authorized and 41,049,190 shares issued in each period, respectively | 410 | 410 | 410 |
Additional paid-in capital | 79,595 | 80,681 | 77,041 |
Retained earnings | 577,823 | 553,487 | 447,875 |
Treasury stock, at cost, 13,461,836 shares, 12,882,789 shares and 12,702,788 shares, respectively | (202,114) | (182,045) | (175,051) |
Total Shareholders’ Equity | 455,714 | 452,533 | 350,275 |
Total Liabilities and Shareholders’ Equity | $ 861,734 | $ 812,264 | $ 750,089 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Apr. 30, 2022 | Jan. 29, 2022 | May 01, 2021 |
Statement Of Financial Position [Abstract] | |||
Common stock, par value per share | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Common stock, shares issued | 41,049,190 | 41,049,190 | 41,049,190 |
Treasury shares, shares | 13,461,836 | 12,882,789 | 12,702,788 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 317,527 | $ 328,457 |
Cost of sales (including buying, distribution and occupancy costs) | 204,664 | 198,299 |
Gross profit | 112,863 | 130,158 |
Selling, general and administrative expenses | 77,479 | 72,555 |
Operating income | 35,384 | 57,603 |
Interest income | (32) | (4) |
Interest expense | 95 | 119 |
Income before income taxes | 35,321 | 57,488 |
Income tax expense | 8,424 | 14,246 |
Net income | $ 26,897 | $ 43,242 |
Net income per share: | ||
Basic | $ 0.96 | $ 1.53 |
Diluted | $ 0.95 | $ 1.51 |
Weighted average shares: | ||
Basic | 27,996 | 28,258 |
Diluted | 28,331 | 28,647 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings |
Balance at Jan. 30, 2021 | $ 310,176 | $ 410 | $ (175,626) | $ 78,737 | $ 406,655 |
Balance, shares at Jan. 30, 2021 | 41,049 | (12,839) | |||
Dividends declared | (2,022) | (2,022) | |||
Employee stock purchase plan purchases | 64 | $ 33 | 31 | ||
Employee stock purchase plan purchases, shares | 2 | ||||
Stock-based compensation awards | 0 | $ 2,878 | (2,878) | ||
Stock-based compensation awards, Shares | 210 | ||||
Shares surrendered by employees to pay taxes on stock-based compensation awards | (2,336) | $ (2,336) | |||
Shares surrendered by employees to pay taxes on stock-based compensation awards, Shares | (76) | ||||
Stock-based compensation expense | 1,151 | 1,151 | |||
Net income | 43,242 | 43,242 | |||
Balance at May. 01, 2021 | 350,275 | $ 410 | $ (175,051) | 77,041 | 447,875 |
Balance, shares at May. 01, 2021 | 41,049 | (12,703) | |||
Balance at Jan. 29, 2022 | 452,533 | $ 410 | $ (182,045) | 80,681 | 553,487 |
Balance, shares at Jan. 29, 2022 | 41,049 | (12,883) | |||
Dividends declared | (2,561) | (2,561) | |||
Employee stock purchase plan purchases | 45 | $ 27 | 18 | ||
Employee stock purchase plan purchases, shares | 2 | ||||
Stock-based compensation awards | 0 | $ 2,467 | (2,467) | ||
Stock-based compensation awards, Shares | 170 | ||||
Shares surrendered by employees to pay taxes on stock-based compensation awards | (2,048) | $ (2,048) | |||
Shares surrendered by employees to pay taxes on stock-based compensation awards, Shares | (68) | ||||
Purchase of common stock for treasury | (20,515) | $ (20,515) | |||
Purchase of common stock for treasury, shares | (683) | ||||
Stock-based compensation expense | 1,363 | 1,363 | |||
Net income | 26,897 | 26,897 | |||
Balance at Apr. 30, 2022 | $ 455,714 | $ 410 | $ (202,114) | $ 79,595 | $ 577,823 |
Balance, shares at Apr. 30, 2022 | 41,049 | (13,462) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | Apr. 30, 2022 | May 01, 2021 |
Statement Of Stockholders Equity [Abstract] | ||
Dividends | $ 0.09 | $ 0.07 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Cash Flows From Operating Activities | ||
Net income | $ 26,897 | $ 43,242 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 4,677 | 4,315 |
Stock-based compensation | 1,240 | 1,227 |
Loss on retirement and impairment of assets, net | 22 | 757 |
Deferred income taxes | 3,108 | 670 |
Non-cash operating lease expense | 11,998 | 11,434 |
Other | 304 | 1,187 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (283) | (381) |
Merchandise inventories | (59,816) | (35,363) |
Operating leases | (12,942) | (16,682) |
Accounts payable and accrued liabilities | 41,697 | 61,519 |
Other | 801 | 4,595 |
Net cash provided by operating activities | 17,703 | 76,520 |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | (26,907) | (4,083) |
Investments in marketable securities and other | (6) | 0 |
Sales of marketable securities and other | 3,040 | 0 |
Net cash used in investing activities | (23,873) | (4,083) |
Cash Flows From Financing Activities | ||
Proceeds from issuance of stock | 45 | 64 |
Dividends paid | (2,576) | (2,054) |
Purchase of common stock for treasury | (20,515) | 0 |
Shares surrendered by employees to pay taxes on stock-based compensation awards | (2,048) | (2,336) |
Net cash used in financing activities | (25,094) | (4,326) |
Net (decrease) increase in cash and cash equivalents | (31,264) | 68,111 |
Cash and cash equivalents at beginning of period | 117,443 | 106,532 |
Cash and cash equivalents at end of period | 86,179 | 174,643 |
Supplemental disclosures of cash flow information: | ||
Cash paid during period for interest | 30 | 118 |
Cash paid during period for income taxes | 61 | 68 |
Capital expenditures incurred but not yet paid | 5,173 | 1,323 |
Dividends declared but not yet paid | $ 169 | $ 101 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Apr. 30, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation Shoe Carnival, Inc. is one of the nation’s largest family footwear retailers. We offer customers a broad assortment of dress, casual and athletic footwear and accessories for men, women and children with an emphasis on national name brands through our Shoe Carnival and Shoe Station store banners. We are an omnichannel retailer selling footwear and related products through our retail stores located in 35 states within the continental United States and in Puerto Rico, as well as through our e-commerce platform. We are an Indiana corporation that was initially formed in Delaware in 1993 and reincorporated in Indiana in 1996. References to “Shoe Carnival,” “we,” “us,” “our” and the “Company” in this Quarterly Report on Form 10-Q refer to Shoe Carnival, Inc. and its subsidiaries. In our opinion, the accompanying unaudited Condensed Consolidated Financial Statements and notes have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and contain all normal recurring adjustments necessary to fairly present our financial position and the results of our operations and our cash flows for the periods presented. Certain information and disclosures normally included in the notes to Condensed Consolidated Financial Statements have been condensed or omitted as permitted by the rules and regulations of the SEC although we believe that the disclosures are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended January 29, 2022. On June 21, 2021, our Board of Directors authorized a two-for-one stock split of the shares of our common stock. The stock split entitled each shareholder of record at the close of business on July 6, 2021 to receive one additional share of common stock for each share of common stock owned as of that date and was paid on July 19, 2021. Upon the completion of the stock split, our outstanding shares increased from approximately 14.1 million shares to approximately 28.2 million shares. In accordance with the provisions of our 2017 Equity Incentive Plan (the “2017 Plan”) and our Employee Stock Purchase Plan, and as determined by the Compensation Committee of our Board of Directors, the following, among other items, were adjusted to equitably reflect the effect of the two-for-one stock split: • The number of shares reserved and available for issuance; • The number of shares subject to outstanding equity awards under our stock-based compensation programs; • The exercise prices and maximum gain of our outstanding stock appreciation rights; and • The annual diluted net income per share targets associated with our outstanding performance stock units granted under the 2017 Plan. All share and per share amounts in this quarterly report on Form 10-Q give effect to the stock split and have been adjusted retroactively for all periods presented. |
Acquisition of Shoe Station
Acquisition of Shoe Station | 3 Months Ended |
Apr. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition of Shoe Station | Note 2 - Acquisition of Shoe Station On December 3, 2021, we acquired the physical stores and substantially all of the other assets and liabilities of Shoe Station, Inc. ("Shoe Station") for total consideration of $ 70.7 million, net of $ 77,000 of cash acquired. The purchase price paid is subject to an adjustment for finalization of the value of the net assets acquired and was funded with available cash on hand. Shoe Station was one of the nation's largest independent shoe retailers, with currently 22 locations in Alabama, Florida, Georgia, Mississippi, and Louisiana. We believe the addition of a new brand and new retail locations to the Shoe Carnival portfolio creates a complementary retail platform to serve a broader family footwear customer base across both urban and suburban demographics. The results of Shoe Station are included in our condensed consolidated financial statements since the acquisition date. We recorded a preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on the estimated fair values as of December 3, 2021. There were no material adjustments to our preliminary purchase price allocation recognized during the first quarter of fiscal 2022. The final determination of the fair values and related impacts will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Apr. 30, 2022 | |
Earnings Per Share Basic [Abstract] | |
Net Income Per Share | Note 3 - Net Income Per Share The following tables set forth the computation of basic and diluted net income per share as shown on the face of the accompanying Condensed Consolidated Statements of Income: Thirteen Weeks Ended April 30, 2022 May 1, 2021 (In thousands, except per share data) Basic Net Income per Share: Net Shares Per Share Net Shares Per Share Net income available for basic common shares $ 26,897 27,996 $ 0.96 $ 43,242 28,258 $ 1.53 Diluted Net Income per Share: Net income $ 26,897 $ 43,242 Conversion of stock-based compensation 0 335 0 389 Net income available for diluted common $ 26,897 28,331 $ 0.95 $ 43,242 28,647 $ 1.51 The computation of basic net income per share of common stock is based on the weighted average number of common shares outstanding during the period. The computation of diluted net income per share is based on the weighted average number of shares outstanding plus the dilutive incremental shares that would be outstanding assuming the vesting of stock-based compensation arrangements involving restricted stock, restricted stock units and performance stock units. The computation of diluted net income per share for the thirteen weeks ended April 30, 2022 excluded approximately 24,000 unvested stock-based awards that will be settled in shares because the impact would have been anti-dilutive. During the thirteen weeks ended May 1, 2021, approximately 6,000 unvested stock-based awards that will be settled in shares were excluded from the computation of diluted net income per share because the impact would have been anti-dilutive. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 4 - Fair Value Measurements The following table presents financial instruments that are measured at fair value on a recurring basis at April 30, 2022, January 29, 2022 and May 1, 2021: Fair Value Measurements (In thousands) Level 1 Level 2 Level 3 Total As of April 30, 2022 Cash equivalents - money market mutual funds $ 90,598 $ 0 $ 0 $ 90,598 Marketable securities - mutual funds that fund 10,965 0 0 10,965 Total $ 101,563 $ 0 $ 0 $ 101,563 As of January 29, 2022 Cash equivalents - money market mutual funds $ 115,528 $ 0 $ 0 $ 115,528 Marketable securities - mutual funds that fund 14,961 14,961 Total $ 130,489 $ 0 $ 0 $ 130,489 As of May 1, 2021 Cash equivalents - money market mutual funds $ 175,612 $ 0 $ 0 $ 175,612 During fiscal 2021, we invested in publicly traded mutual funds with readily determinable fair values. These marketable securities are designed to mitigate volatility in our Condensed Consolidated Statements of Income associated with our non-qualified deferred compensation plan. As of April 30, 2022, these marketable securities were principally invested in equity-based mutual funds, consistent with the allocation in our deferred compensation plan. As of April 30, 2022, the balance in our deferred compensation plan was $ 10.5 million, of which $ 53,000 was in Accrued and other liabilities based on scheduled payments due within the next 12 months and the remaining balance was in Deferred compensation, a long-term liability. To the extent there are funds in excess of the total non-qualifi ed deferred compensation plan liability, such funds are invested in a stable value mutual fund. We classify these marketable securities as current assets because we have the ability to convert the securities into cash at our discretion and these marketable securities are not held in a rabbi trust. We have recognized unrealized losses of $ 2.6 million related to equity securities still held at April 30, 2022. The fair values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their carrying values because of their short-term nature. Long-Lived Asset Impairment Testing We periodically evaluate our long-lived assets for impairment if events or circumstances indicate that the carrying value may not be recoverable. The carrying value of long-lived assets is considered impaired when the carrying value of the assets exceeds the expected future cash flows to be derived from their use. Assets are grouped, and the evaluation is performed, at the lowest level for which there are identifiable cash flows, which is generally at a store level. Store level asset groupings typically include property and equipment and operating lease right-of-use assets. If the estimated, undiscounted future cash flows for a store are determined to be less than the carrying value of the store’s assets, an impairment loss is recorded for the difference between estimated fair value and carrying value. Assets subject to impairment are adjusted to estimated fair value and, if applicable, an impairment loss is recorded in selling, general and administrative expenses. If the operating lease right-of-use asset is impaired, we would amortize the remaining right-of-use asset on a straight-line basis over the remaining lease term. We estimate the fair value of our long-lived assets using store specific cash flow assumptions discounted by a rate commensurate with the risk involved with such assets while incorporating marketplace assumptions. Our estimates are derived from an income-based approach considering the cash flows expected over the remaining lease term for each location. These projections are primarily based on management’s estimates of store-level sales, exercise of future lease renewal options and the store’s contribution to cash flows and, by their nature, include judgments about how current initiatives will impact future performance. We estimate the fair value of operating lease right-of-use assets using the market value of rents applicable to the leased asset, discounted using the remaining lease term. External factors, such as the local environment in which the store is located, including store traffic and competition, are evaluated in terms of their effect on sales trends. Changes in sales and operating income assumptions or unfavorable changes in external factors can significantly impact the estimated future cash flows. An increase or decrease in the projected cash flow can significantly impact the fair value of these assets, which may have an effect on the impairment recorded. If actual operating results or market conditions differ from those anticipated, the carrying value of certain of our assets may prove unrecoverable and we may incur additional impairment charges in the future. During the thirteen weeks ended May 1, 2021, we recorded impairment charges of $ 724,000 associated with two stores. These charges were included in selling, general and administrative expenses. No impairment charges were recorded during the thirteen weeks ended April 30, 2022, and no impairments of operating right-of-use assets have been recorded in either period. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Apr. 30, 2022 | |
Share Based Compensation [Abstract] | |
Stock-Based Compensation | Note 5 - Stock-Based Compensation Stock-based compensation includes share-settled awards issued pursuant to our 2017 Plan in the form of restricted stock units, performance stock units, and restricted and other stock awards. Additionally, we recognize stock-based compensation expense for the discount on shares sold to employees through our Employee Stock Purchase Plan and for cash-settled stock appreciation rights. For the thirteen weeks ended April 30, 2022 and May 1, 2021, stock-based compensation expense was comprised of the following: (In thousands) Thirteen Thirteen Share-settled equity awards $ 1,355 $ 1,140 Stock appreciation rights ( 123 ) 76 Employee stock purchase plan 8 11 Total stock-based compensation expense $ 1,240 $ 1,227 Income tax effect at statutory rates $ ( 296 ) $ ( 304 ) Additional income tax benefit on vesting of share-settled awards $ ( 495 ) $ ( 880 ) As of April 30, 2022 , approximately $ 11.4 million of unrecognized compensation expense remained related to our share-settled equity awards. The cost is expected to be recognized over a weighted average period of approximately 1.9 years. Share-Settled Equity Awards The following table summarizes transactions for our restricted stock units and performance stock units: Number of Weighted- Outstanding at January 29, 2022 457,038 $ 16.54 Granted 336,164 30.52 Vested ( 170,425 ) 18.46 Forfeited ( 25,103 ) ( 18.07 ) Outstanding at April 30, 2022 597,674 $ 23.79 The total fair value at grant date of restricted stock units and performance stock units that vested during each of the thirteen weeks ended April 30, 2022 and May 1, 2021 was $ 3.1 million. The weighted-average grant date fair value of restricted stock units and performance stock units granted during the thirteen weeks ended April 30, 2022 and May 1, 2021 was $ 30.52 and $ 28.21 , respectively. |
Revenue
Revenue | 3 Months Ended |
Apr. 30, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | Note 6 – Revenue Disaggregation of Revenue by Product Category Revenue is disaggregated by product category below. Net sales and percentage of Net sales for the thirteen weeks ended April 30, 2022 and May 1, 2021 were as follows: (In thousands) Thirteen Weeks Thirteen Weeks Non-Athletics: Women’s $ 88,554 28 % $ 75,531 23 % Men’s 49,152 15 44,282 13 Children’s 21,405 7 23,293 7 Total 159,111 50 143,106 43 Athletics: Women’s 51,034 16 58,595 18 Men’s 53,026 17 65,724 20 Children’s 36,731 11 42,578 13 Total 140,791 44 166,897 51 Accessories 15,752 5 16,627 5 Other 1,873 1 1,827 1 Total $ 317,527 100 % $ 328,457 100 % A ccounting Policy and Performance Obligations We operate as an omnichannel, family footwear retailer and provide the convenience of shopping at our physical stores or shopping online through our e-commerce platform. As part of our omnichannel strategy, we offer Shoes 2U, a program that enables us to ship product to a customer’s home or selected store if the product is not in stock at a particular store. We also offer “buy online, pick up in store” services for our customers. “Buy online, pick up in store” provides the convenience of local pickup for our customers. For our physical stores, we satisfy our performance obligation and control is transferred at the point of sale when the customer takes possession of the products. This also includes the “buy online, pick up in store” scenario described above and includes sales made via our Shoes 2U program when customers choose to pick up their goods at a physical store. For sales made through our e-commerce platform in which the customer chooses home delivery, we transfer control and recognize revenue when the product is shipped. This also includes sales made via our Shoes 2U program when the customer chooses home delivery. We offer our customers sales incentives including coupons, discounts, and free merchandise. Sales are recorded net of such incentives and returns and allowances. If an incentive involves free merchandise, that merchandise is recorded as a zero sale and the cost is included in Cost of sales. Gift card revenue is recognized at the time of redemption. When a customer makes a purchase as part of our rewards program, we allocate the transaction price between the goods purchased and the loyalty reward points and recognize the loyalty revenue based on estimated customer redemptions. Transaction Price and Payment Terms The transaction price is the amount of consideration we expect to receive from our customers and is reduced by any stated promotional discounts at the time of purchase. The transaction price may be variable due to terms that permit customers to exchange or return products for a refund. The implicit contract with the customer reflected in the transaction receipt states the final terms of the sale, including the description, quantity, and price of each product purchased. The customer agrees to a stated price in the contract that does not vary over the term of the contract and may include revenue to offset shipping costs. Taxes imposed by governmental authorities such as sales taxes are excluded from Net sales. We accept various forms of payment from customers at the point of sale typical for an omnichannel retailer. Payments made for products are generally collected when control passes to the customer, either at the point of sale or at the time the customer order is shipped. For Shoes 2U transactions, customers may order the product at the point of sale. For these transactions, customers pay in advance and unearned revenue is recorded as a contract liability. We recognize the related revenue when control has been transferred to the customer (i.e., when the product is picked up by the customer or shipped to the customer). Unearned revenue related to Shoes 2U was not material to our consolidated financial statements at April 30, 2022, January 29, 2022 or May 1, 2021. Returns and Refunds We have established an allowance based upon historical experience in order to estimate return and refund transactions. This allowance is recorded as a reduction in sales with a corresponding refund liability recorded in Accrued and other liabilities. The estimated cost of merchandise inventory is recorded as a reduction to Cost of sales and an increase in Merchandise inventories. Approximately $ 884,000 of refund liabilities and $ 516,000 o f right of return assets associated with estimated product returns were recorded in Accrued and other liabilities as of April 30, 2022 and January 29, 2022. Approximately $ 740,000 of refund liabilities and $ 495,000 of right of return assets associated with estimated product returns were recorded in Accrued and other liabilities at May 1, 2021. Contract Liabilities The issuance of a gift card is recorded as an increase to contract liabilities and a decrease to contract liabilities when a customer redeems a gift card. Estimated breakage is determined based on historical breakage percentages and recognized as revenue based on expected gift card usage. We do not record breakage revenue when escheat liability to relevant jurisdictions exists. At April 30, 2022, January 29, 2022 and May 1, 2021, approxima tely $ 2.0 million, $ 2.3 million and $ 1.4 million of contract liabilities associated with unredeemed gift cards were recorded in Accrued and other liabilities, respectively. We expect the revenue associated with these liabilities to be recognized in proportion to the pattern of customer redemptions within two years. Breakage revenue associated with our gift cards of $ 59,000 and $ 42,000 was recognized in Net sales during the thirteen weeks ended April 30, 2022 and May 1, 2021, respectively. Our Shoe Perks rewards program allows customers to accrue points and provides customers with the opportunity to earn rewards. Points under Shoe Perks are earned primarily by making purchases through any of our omnichannel points of sale. Once a certain threshold of accumulated points is reached, the customer earns a reward certificate, which is redeemable through any of our sales channels. When a Shoe Perks customer makes a purchase, we allocate the transaction price between the goods purchased and the loyalty reward points earned based on the relative standalone selling price. The portion allocated to the points program is recorded as a contract liability for rewards that are expected to be redeemed. We then recognize revenue based on an estimate of when customers redeem rewards, which incorporates an estimate of points expected to expire using historical rates. During each of the thirteen weeks ended April 30, 2022 and May 1, 2021, approximately $ 1.3 million of loyalty rewards were recognized in Net sales. At April 30, 2022, January 29, 2022 and May 1, 2021, approxi mately $ 849,000 , $ 852,000 and $ 1.1 million of contract liabilities associated with loyalty rewards were recorded in Accrued and other liabilities, respectively. We expect the revenue associated with these liabilities to be recognized in proportion to the pattern of customer redemptions in less than one year. |
Leases
Leases | 3 Months Ended |
Apr. 30, 2022 | |
Leases [Abstract] | |
Leases | Note 7 – Leases We lease all of our physical stores, our single distribution center, which has a current lease term expiring in 2034 , and certain other locations that support the recently acquired Shoe Station operations. We also enter into leases of equipment, copiers and billboards. All of our leases are operating leases. Leases with terms of twelve months or less are immaterial and are expensed as incurred, and we did not have any leases with related parties as of April 30, 2022. Lease costs, including related common area maintenance (“CAM”), property taxes, and insurance, reported in our Condensed Consolidated Statements of Income were as follows for the thirteen weeks ended April 30, 2022 and May 1, 2021: Thirteen Weeks Thirteen Weeks (In thousands) Ended April 30, 2022 Ended May 1, 2021 Operating lease cost $ 14,699 $ 13,263 Variable lease cost CAM, property taxes and insurance 4,761 4,768 Percentage rent and other variable lease costs 193 648 Total $ 19,653 $ 18,679 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of the Computation of Basic and Diluted Net Income Per Share | The following tables set forth the computation of basic and diluted net income per share as shown on the face of the accompanying Condensed Consolidated Statements of Income: Thirteen Weeks Ended April 30, 2022 May 1, 2021 (In thousands, except per share data) Basic Net Income per Share: Net Shares Per Share Net Shares Per Share Net income available for basic common shares $ 26,897 27,996 $ 0.96 $ 43,242 28,258 $ 1.53 Diluted Net Income per Share: Net income $ 26,897 $ 43,242 Conversion of stock-based compensation 0 335 0 389 Net income available for diluted common $ 26,897 28,331 $ 0.95 $ 43,242 28,647 $ 1.51 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis | The following table presents financial instruments that are measured at fair value on a recurring basis at April 30, 2022, January 29, 2022 and May 1, 2021: Fair Value Measurements (In thousands) Level 1 Level 2 Level 3 Total As of April 30, 2022 Cash equivalents - money market mutual funds $ 90,598 $ 0 $ 0 $ 90,598 Marketable securities - mutual funds that fund 10,965 0 0 10,965 Total $ 101,563 $ 0 $ 0 $ 101,563 As of January 29, 2022 Cash equivalents - money market mutual funds $ 115,528 $ 0 $ 0 $ 115,528 Marketable securities - mutual funds that fund 14,961 14,961 Total $ 130,489 $ 0 $ 0 $ 130,489 As of May 1, 2021 Cash equivalents - money market mutual funds $ 175,612 $ 0 $ 0 $ 175,612 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Schedule of Stock-based Compensation Expense | For the thirteen weeks ended April 30, 2022 and May 1, 2021, stock-based compensation expense was comprised of the following: (In thousands) Thirteen Thirteen Share-settled equity awards $ 1,355 $ 1,140 Stock appreciation rights ( 123 ) 76 Employee stock purchase plan 8 11 Total stock-based compensation expense $ 1,240 $ 1,227 Income tax effect at statutory rates $ ( 296 ) $ ( 304 ) Additional income tax benefit on vesting of share-settled awards $ ( 495 ) $ ( 880 ) |
Share-settled Equity Awards | |
Summary of Restricted Stock Awards Transactions | The following table summarizes transactions for our restricted stock units and performance stock units: Number of Weighted- Outstanding at January 29, 2022 457,038 $ 16.54 Granted 336,164 30.52 Vested ( 170,425 ) 18.46 Forfeited ( 25,103 ) ( 18.07 ) Outstanding at April 30, 2022 597,674 $ 23.79 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Revenue Disaggregation by Product Category | Revenue is disaggregated by product category below. Net sales and percentage of Net sales for the thirteen weeks ended April 30, 2022 and May 1, 2021 were as follows: (In thousands) Thirteen Weeks Thirteen Weeks Non-Athletics: Women’s $ 88,554 28 % $ 75,531 23 % Men’s 49,152 15 44,282 13 Children’s 21,405 7 23,293 7 Total 159,111 50 143,106 43 Athletics: Women’s 51,034 16 58,595 18 Men’s 53,026 17 65,724 20 Children’s 36,731 11 42,578 13 Total 140,791 44 166,897 51 Accessories 15,752 5 16,627 5 Other 1,873 1 1,827 1 Total $ 317,527 100 % $ 328,457 100 % A |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Leases [Abstract] | |
Schedule of Lease Related Costs | Lease costs, including related common area maintenance (“CAM”), property taxes, and insurance, reported in our Condensed Consolidated Statements of Income were as follows for the thirteen weeks ended April 30, 2022 and May 1, 2021: Thirteen Weeks Thirteen Weeks (In thousands) Ended April 30, 2022 Ended May 1, 2021 Operating lease cost $ 14,699 $ 13,263 Variable lease cost CAM, property taxes and insurance 4,761 4,768 Percentage rent and other variable lease costs 193 648 Total $ 19,653 $ 18,679 |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) shares in Millions | Apr. 30, 2022State | Jul. 19, 2021shares | Jul. 18, 2021shares |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Number of States in which Entity Operates | State | 35 | ||
Stock split, shares outstanding | shares | 28.2 | 14.1 |
Acquisition of Shoe Station (Na
Acquisition of Shoe Station (Narrative) (Details) | Dec. 03, 2021USD ($)Location | Apr. 30, 2022 |
Maximum | ||
Business Acquisition [Line Items] | ||
Fair value and related impacts measurement period from acquisition date | 1 year | |
Shoe Station | ||
Business Acquisition [Line Items] | ||
Business combination consideration transferred | $ 70,700,000 | |
Cash consideration | $ 77,000 | |
Number of locations | Location | 22 |
Net Income Per Share (Schedule
Net Income Per Share (Schedule of Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Basic Net Income per Share: | ||
Net income available for basic common shares and basic net income per share | $ 26,897 | $ 43,242 |
Basic | 27,996 | 28,258 |
Basic | $ 0.96 | $ 1.53 |
Diluted Net Income per Share: | ||
Net income | $ 26,897 | $ 43,242 |
Conversion of stock-based compensation arrangements | 0 | 0 |
Net income available for diluted common shares and diluted net income per share | $ 26,897 | $ 43,242 |
Conversion of stock-based compensation arrangements | 335 | 389 |
Net income available for diluted common shares and diluted net income per share | 28,331 | 28,647 |
Net income available for diluted common shares and diluted net income per share | $ 0.95 | $ 1.51 |
Net Income Per Share (Narrative
Net Income Per Share (Narrative) (Details) - shares | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Earnings Per Share [Abstract] | ||
Diluted net income per share excluded dilutive unvested share-based awards | 24,000 | 6,000 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Financial Instruments Measure at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands | Apr. 30, 2022 | Jan. 29, 2022 | May 01, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents - money market mutual funds | $ 90,598 | $ 115,528 | $ 175,612 |
Marketable securities - mutual funds that fund deferred compensation | 10,965 | 14,961 | |
Total | 101,563 | 130,489 | |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents - money market mutual funds | 90,598 | 115,528 | 175,612 |
Marketable securities - mutual funds that fund deferred compensation | 10,965 | 14,961 | |
Total | 101,563 | 130,489 | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents - money market mutual funds | 0 | 0 | 0 |
Marketable securities - mutual funds that fund deferred compensation | 0 | ||
Total | 0 | 0 | |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents - money market mutual funds | 0 | 0 | $ 0 |
Marketable securities - mutual funds that fund deferred compensation | 0 | ||
Total | $ 0 | $ 0 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Fair Value Disclosures [Abstract] | ||
Investment Owned, at Fair Value | $ 10,500,000 | |
Accrued Liabilities and Other Liabilities | 53,000 | |
Unrealized losses related to equity securities | (2,600,000) | |
Long-lived assets, impairment charges | 0 | $ 724,000 |
Operating lease, impairment loss | $ 0 | $ 0 |
Stock-Based Compensation (Sched
Stock-Based Compensation (Schedule of Stock-based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 1,240 | $ 1,227 |
Income tax effect at statutory rate | (296) | (304) |
Additional income tax benefit on vesting of share-settled awards | (495) | (880) |
Share-settled Equity Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 1,355 | 1,140 |
Stock Appreciation Rights | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | (123) | 76 |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 8 | $ 11 |
Stock Based Compensation (Narra
Stock Based Compensation (Narrative) (Details) - Share-settled Equity Awards - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of stock awards vested during period | $ 3.1 | $ 3.1 |
Weighted average grant date fair value of awards | $ 30.52 | $ 28.21 |
Unrecognized share-based compensation expense | $ 11.4 | |
Unrecognized compensation cost, recognition period | 1 year 10 months 24 days |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary of Restricted Stock Awards Transactions) (Details) - Share-settled Equity Awards - $ / shares | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Number of Shares | ||
Outstanding at January 29, 2022 | 457,038 | |
Granted | 336,164 | |
Vested | (170,425) | |
Forfeited | (25,103) | |
Outstanding at April 30, 2022 | 597,674 | |
Weighted-Average Grant Date Fair Value | ||
Outstanding at January 29, 2022 | $ 16.54 | |
Granted | 30.52 | $ 28.21 |
Vested | 18.46 | |
Forfeited | (18.07) | |
Outstanding at April 30, 2022 | $ 23.79 |
Revenue (Schedule of Revenue Di
Revenue (Schedule of Revenue Disaggregation by Product Category) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Disaggregation Of Revenue [Line Items] | ||
Net sales | $ 317,527 | $ 328,457 |
Sales Revenue Net | Geographic Concentration Risk | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 100.00% | 100.00% |
Net sales | $ 317,527 | $ 328,457 |
Sales Revenue Net | Geographic Concentration Risk | Non-Athletics | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 50.00% | 43.00% |
Net sales | $ 159,111 | $ 143,106 |
Sales Revenue Net | Geographic Concentration Risk | Non-Athletics | Women's | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 28.00% | 23.00% |
Net sales | $ 88,554 | $ 75,531 |
Sales Revenue Net | Geographic Concentration Risk | Non-Athletics | Men's | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 15.00% | 13.00% |
Net sales | $ 49,152 | $ 44,282 |
Sales Revenue Net | Geographic Concentration Risk | Non-Athletics | Children's | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 7.00% | 7.00% |
Net sales | $ 21,405 | $ 23,293 |
Sales Revenue Net | Geographic Concentration Risk | Athletics | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 44.00% | 51.00% |
Net sales | $ 140,791 | $ 166,897 |
Sales Revenue Net | Geographic Concentration Risk | Athletics | Women's | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 16.00% | 18.00% |
Net sales | $ 51,034 | $ 58,595 |
Sales Revenue Net | Geographic Concentration Risk | Athletics | Men's | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 17.00% | 20.00% |
Net sales | $ 53,026 | $ 65,724 |
Sales Revenue Net | Geographic Concentration Risk | Athletics | Children's | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 11.00% | 13.00% |
Net sales | $ 36,731 | $ 42,578 |
Sales Revenue Net | Geographic Concentration Risk | Accessories | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 5.00% | 5.00% |
Net sales | $ 15,752 | $ 16,627 |
Sales Revenue Net | Geographic Concentration Risk | Other | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 1.00% | 1.00% |
Net sales | $ 1,873 | $ 1,827 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Apr. 30, 2022 | May 01, 2021 | Jan. 29, 2022 | |
Revenue From Contract With Customer [Abstract] | |||
Refund liabilities | $ 884,000 | $ 740,000 | $ 884,000 |
Return assets | 516,000 | 495,000 | 516,000 |
Contract liabilities associated with unredeemed gift cards | 2,000,000 | 1,400,000 | 2,300,000 |
Breakage revenue | 59,000 | 42,000 | |
Net sales associated with loyalty rewards | 1,300,000 | 1,300,000 | |
Contract liabilities associated with loyalty rewards | $ 849,000 | $ 1,100,000 | $ 852,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended |
Apr. 30, 2022 | |
Leases [Abstract] | |
Current lease expiration year | 2034 |
Leases - Schedule of Lease Rela
Leases - Schedule of Lease Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 14,699 | $ 13,263 |
Variable lease cost | ||
CAM, property taxes and insurance | 4,761 | 4,768 |
Percentage rent and other variable lease costs | 193 | 648 |
Total | $ 19,653 | $ 18,679 |