Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 03, 2018 | Mar. 26, 2018 | Jul. 29, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | GUESS INC | ||
Trading Symbol | GES | ||
Entity Central Index Key | 912,463 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 3, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-03 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 775,194,793 | ||
Entity Common Stock, Shares Outstanding | 80,374,301 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Feb. 03, 2018 | Jan. 28, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 367,441 | $ 396,129 |
Accounts receivable, net | 259,996 | 225,537 |
Inventories | 428,304 | 367,381 |
Other current assets | 52,964 | 54,965 |
Total current assets | 1,108,705 | 1,044,012 |
Property and equipment, net | 294,254 | 243,005 |
Goodwill | 38,481 | 34,100 |
Other intangible assets, net | 5,977 | 6,504 |
Deferred tax assets | 68,386 | 82,793 |
Restricted cash | 241 | 1,521 |
Other assets | 139,590 | 122,550 |
Total assets | 1,655,634 | 1,534,485 |
Current liabilities: | ||
Current portion of capital lease obligations and borrowings | 2,845 | 566 |
Accounts payable | 264,438 | 209,616 |
Accrued expenses | 200,562 | 135,271 |
Total current liabilities | 467,845 | 345,453 |
Long-term debt and capital lease obligations | 39,196 | 23,482 |
Deferred rent and lease incentives | 81,564 | 80,209 |
Other long-term liabilities | 127,964 | 99,895 |
Total liabilities | 716,569 | 549,039 |
Redeemable noncontrolling interests | 5,590 | 4,452 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity: | ||
Preferred stock, $.01 par value. Authorized 10,000,000 shares; no shares issued and outstanding | 0 | 0 |
Common stock, $.01 par value. Authorized 150,000,000 shares; issued 141,623,687 and 140,509,974 shares, outstanding 81,371,118 and 84,069,492 shares, as of February 3, 2018 and January 28, 2017, respectively | 813 | 841 |
Paid-in capital | 498,249 | 480,435 |
Retained earnings | 1,132,173 | 1,215,079 |
Accumulated other comprehensive loss | (93,062) | (161,389) |
Treasury stock, 60,252,569 and 56,440,482 shares as of February 3, 2018 and January 28, 2017, respectively | (621,354) | (565,744) |
Guess, Inc. stockholders’ equity | 916,819 | 969,222 |
Nonredeemable noncontrolling interests | 16,656 | 11,772 |
Total stockholders’ equity | 933,475 | 980,994 |
Total liabilities and stockholders' equity | $ 1,655,634 | $ 1,534,485 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Feb. 03, 2018 | Jan. 28, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 141,623,687 | 140,509,974 |
Common stock, shares outstanding | 81,371,118 | 84,069,492 |
Treasury stock, shares | 60,252,569 | 56,440,482 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) shares in Thousands | 12 Months Ended | |||||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||||
Income Statement [Abstract] | ||||||
Product sales | $ 2,290,999,000 | $ 2,118,534,000 | $ 2,100,454,000 | |||
Net royalties | 72,755,000 | 71,919,000 | 84,041,000 | |||
Net revenue | [1],[2] | 2,363,754,000 | 2,190,453,000 | [3] | 2,184,495,000 | [3] |
Cost of product sales | 1,534,906,000 | 1,445,413,000 | 1,397,065,000 | |||
Gross profit | 828,848,000 | 745,040,000 | 787,430,000 | |||
Selling, general and administrative expenses | 743,823,000 | 682,559,000 | 666,130,000 | |||
Net (gains) losses on lease terminations | 11,373,000 | (695,000) | (2,337,000) | |||
Asset impairment charges | 8,479,000 | 34,385,000 | 2,287,000 | |||
Restructuring charges | 0 | 6,083,000 | 0 | |||
Earnings from operations | [2] | 65,173,000 | 22,708,000 | 121,350,000 | ||
Other income (expense): | ||||||
Interest expense | (2,431,000) | (1,897,000) | (1,953,000) | |||
Interest income | 4,106,000 | 1,890,000 | 1,045,000 | |||
Other income, net | 3,423,000 | 30,909,000 | 6,837,000 | |||
Total other income | 5,098,000 | 30,902,000 | 5,929,000 | |||
Earnings before income tax expense | 70,271,000 | 53,610,000 | 127,279,000 | |||
Income tax expense | [4] | 74,172,000 | 28,212,000 | 42,464,000 | ||
Net earnings (loss) | (3,901,000) | 25,398,000 | 84,815,000 | |||
Net earnings attributable to noncontrolling interests | 3,993,000 | 2,637,000 | 2,964,000 | |||
Net earnings (loss) attributable to Guess, Inc. | $ (7,894,000) | $ 22,761,000 | $ 81,851,000 | |||
Net earnings (loss) per common share attributable to common stockholders (Note 18): | ||||||
Basic (in dollars per share) | $ (0.11) | $ 0.27 | $ 0.97 | |||
Diluted (in dollars per share) | $ (0.11) | $ 0.27 | $ 0.96 | |||
Weighted average common shares outstanding attributable to common stockholders (Note 18): | ||||||
Basic (in shares) | 82,189 | 83,666 | 84,264 | |||
Diluted (in shares) | 82,189 | 83,829 | 84,525 | |||
Dividends declared per common share (in dollars per share) | $ 0.9 | $ 0.9 | $ 0.90 | |||
[1] | During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales. Accordingly, net revenue has been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. This reclassification had no impact on previously reported earnings from operations. | |||||
[2] | The Company operates on a 52/53-week fiscal year calendar, which ends on the Saturday nearest to January 31 of each year. The results for fiscal 2018 included the impact of an additional week which occurred during the fourth quarter ended February 3, 2018. | |||||
[3] | During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales. Accordingly, net revenue by geographic area has been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. | |||||
[4] | During fiscal 2018, the Company adopted authoritative guidance which requires all income tax effects of stock awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. As a result, the Company recorded tax shortfalls of approximately $1.3 million in the Company’s income tax expense during fiscal 2018. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings (loss) | $ (3,901) | $ 25,398 | $ 84,815 |
Foreign currency translation adjustment | |||
Gains (losses) arising during the period | 93,416 | (2,632) | (37,744) |
Derivative financial instruments designated as cash flow hedges | |||
Gains (losses) arising during the period | (23,388) | 887 | 9,801 |
Less income tax effect | 2,980 | 172 | (1,857) |
Reclassification to net earnings (loss) for (gains) losses realized | 656 | (3,603) | (9,147) |
Less income tax effect | (242) | 692 | 1,298 |
Marketable securities | |||
Losses arising during the period | 0 | (4) | (19) |
Less income tax effect | 0 | 3 | 7 |
Reclassification to net earnings for losses realized | 0 | 25 | 0 |
Less income tax effect | 0 | (9) | 0 |
Defined benefit plans | |||
Net actuarial gains (losses) | (2,248) | (1,185) | 8,366 |
Plan amendment | 0 | 0 | 167 |
Foreign currency and other adjustments | (269) | (72) | 274 |
Less income tax effect | 518 | 95 | (3,339) |
Net actuarial loss amortization | 462 | 341 | 924 |
Prior service credit amortization | (27) | (28) | (97) |
Curtailment | 0 | 0 | (1,651) |
Less income tax effect | (83) | (74) | 367 |
Total comprehensive income | 67,874 | 20,006 | 52,165 |
Less comprehensive income attributable to noncontrolling interests: | |||
Net earnings | 3,993 | 2,637 | 2,964 |
Foreign currency translation adjustment | 2,238 | (2,057) | (1,661) |
Amounts attributable to noncontrolling interests | 6,231 | 580 | 1,303 |
Comprehensive income attributable to Guess, Inc. | $ 61,643 | $ 19,426 | $ 50,862 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Nonredeemable Noncontrolling Interests |
Balance at beginning of period at Jan. 31, 2015 | $ 1,089,446 | $ 853 | $ 453,546 | $ 1,265,524 | $ (127,065) | $ (519,002) | $ 15,590 |
Stock at beginning of period (in shares) at Jan. 31, 2015 | 85,323,154 | 54,235,846 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings (loss) | 84,815 | 81,851 | 2,964 | ||||
Foreign currency translation adjustment | (37,744) | (36,083) | (1,661) | ||||
Gain (loss) on derivative financial instruments designated as cash flow hedges | 95 | 95 | |||||
Other-than-temporary-impairment and unrealized loss on marketable securities | (12) | (12) | |||||
Actuarial valuation gain (loss) and related amortization, plan amendment, curtailment, prior service credit amortization and foreign currency and other adjustments on defined benefit plans | 5,011 | 5,011 | |||||
Issuance of common stock under stock compensation plans (in shares) | 469,937 | ||||||
Issuance of common stock under stock compensation plans including tax effect | (4,023) | $ 5 | (4,028) | ||||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 40,846 | (40,846) | |||||
Issuance of stock under Employee Stock Purchase Plan | 660 | 263 | $ 397 | ||||
Share-based compensation | 18,880 | 18,773 | 107 | ||||
Dividends | (77,287) | (77,287) | |||||
Share repurchases (in shares) | (2,000,000) | 2,000,000 | |||||
Share repurchases | (44,053) | $ (20) | 20 | $ (44,053) | |||
Noncontrolling interest capital distribution | (4,075) | (4,075) | |||||
Redeemable noncontrolling interest redemption value adjustment | (420) | (420) | |||||
Balance at end of period at Jan. 30, 2016 | 1,031,293 | $ 838 | 468,574 | 1,269,775 | (158,054) | $ (562,658) | 12,818 |
Stock at end of period (in shares) at Jan. 30, 2016 | 83,833,937 | 56,195,000 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings (loss) | 25,398 | 22,761 | 2,637 | ||||
Foreign currency translation adjustment | (2,632) | (575) | (2,057) | ||||
Gain (loss) on derivative financial instruments designated as cash flow hedges | (1,852) | (1,852) | |||||
Other-than-temporary-impairment and unrealized loss on marketable securities | 15 | 15 | |||||
Actuarial valuation gain (loss) and related amortization, plan amendment, curtailment, prior service credit amortization and foreign currency and other adjustments on defined benefit plans | (923) | (923) | |||||
Issuance of common stock under stock compensation plans (in shares) | 481,037 | ||||||
Issuance of common stock under stock compensation plans including tax effect | (3,813) | $ 6 | (3,819) | ||||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 44,486 | (44,486) | |||||
Issuance of stock under Employee Stock Purchase Plan | 558 | 112 | $ 446 | ||||
Share-based compensation | 16,908 | 16,698 | 210 | ||||
Dividends | (76,997) | (76,997) | |||||
Share repurchases (in shares) | (289,968) | 289,968 | |||||
Share repurchases | (3,532) | $ (3) | 3 | $ (3,532) | |||
Purchase of redeemable noncontrolling interest | 0 | (1,133) | 1,133 | ||||
Noncontrolling interest capital distribution | (2,759) | (2,759) | |||||
Redeemable noncontrolling interest redemption value adjustment | (670) | (670) | |||||
Balance at end of period at Jan. 28, 2017 | $ 980,994 | $ 841 | 480,435 | 1,215,079 | (161,389) | $ (565,744) | 11,772 |
Stock at end of period (in shares) at Jan. 28, 2017 | 84,069,492 | 84,069,492 | 56,440,482 | ||||
Increase (Decrease) in Stockholders' Equity | |||||||
Cumulative adjustment from adoption of new accounting guidance | $ 0 | 268 | 942 | (1,210) | |||
Net earnings (loss) | (3,901) | (7,894) | 3,993 | ||||
Foreign currency translation adjustment | 93,416 | 91,178 | 2,238 | ||||
Gain (loss) on derivative financial instruments designated as cash flow hedges | (19,994) | (19,994) | |||||
Actuarial valuation gain (loss) and related amortization, plan amendment, curtailment, prior service credit amortization and foreign currency and other adjustments on defined benefit plans | (1,647) | (1,647) | |||||
Issuance of common stock under stock compensation plans (in shares) | 1,113,713 | ||||||
Issuance of common stock under stock compensation plans including tax effect | (1,257) | $ 10 | (1,267) | ||||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 54,300 | (54,300) | |||||
Issuance of stock under Employee Stock Purchase Plan | 566 | 17 | $ 549 | ||||
Share-based compensation | 18,852 | 18,758 | 94 | ||||
Dividends | (76,048) | (76,048) | |||||
Share repurchases (in shares) | (3,866,387) | 3,866,387 | |||||
Share repurchases | (56,159) | $ (38) | 38 | $ (56,159) | |||
Noncontrolling interest capital contribution | 11 | 11 | |||||
Noncontrolling interest capital distribution | (1,358) | (1,358) | |||||
Balance at end of period at Feb. 03, 2018 | $ 933,475 | $ 813 | $ 498,249 | $ 1,132,173 | $ (93,062) | $ (621,354) | $ 16,656 |
Stock at end of period (in shares) at Feb. 03, 2018 | 81,371,118 | 81,371,118 | 60,252,569 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||
Cash flows from operating activities: | ||||
Net earnings (loss) | $ (3,901) | $ 25,398 | $ 84,815 | |
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization of property and equipment | 62,083 | 67,480 | 68,588 | |
Amortization of intangible assets | 1,505 | 1,839 | 2,096 | |
Share-based compensation expense | 18,852 | 16,908 | 18,880 | |
Unrealized forward contract (gains) losses | 3,087 | (3,157) | (1,937) | |
Deferred income taxes | 23,802 | 408 | 723 | |
Net (gain) loss on disposition of property and equipment and long-term assets | 6,891 | 11,809 | (4,255) | |
Other items, net | (7,832) | 3,495 | 3,442 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (11,656) | (10,805) | (5,970) | |
Inventories | (28,120) | (57,096) | (2,179) | |
Prepaid expenses and other assets | (429) | (1,839) | (67) | |
Accounts payable and accrued expenses | 69,299 | 19,054 | 33,510 | |
Deferred rent and lease incentives | 1,221 | 3,117 | (3,384) | |
Other long-term liabilities | 13,568 | (4,871) | (14,594) | |
Net cash provided by operating activities | 148,370 | 71,740 | 179,668 | |
Cash flows from investing activities: | ||||
Purchases of property and equipment | [1] | (84,655) | (90,581) | (83,844) |
Proceeds from sale of long-term assets | 1,052 | 43,399 | 0 | |
Changes in other assets | 753 | 0 | 2,614 | |
Acquisition of businesses, net of cash acquired | (4,850) | (2,068) | (1,330) | |
Net cash settlement of forward contracts | (2,150) | 266 | 9,014 | |
Purchases of investments | (497) | 0 | 0 | |
Net cash used in investing activities | (90,347) | (48,984) | (73,546) | |
Cash flows from financing activities: | ||||
Payment of debt issuance costs | 0 | (111) | (1,072) | |
Proceeds from borrowings | 166 | 21,500 | 948 | |
Repayment of borrowings and capital lease obligations | (1,633) | (4,747) | (1,518) | |
Dividends paid | (76,057) | (76,503) | (76,860) | |
Purchase of redeemable noncontrolling interest | 0 | (4,445) | 0 | |
Noncontrolling interest capital contribution | 962 | 2,157 | 871 | |
Noncontrolling interest capital distribution | (1,358) | (2,759) | (4,075) | |
Issuance of common stock, net of tax withholdings on vesting of stock awards | (690) | (594) | (2,220) | |
Purchase of treasury stock | (50,127) | (3,532) | (44,053) | |
Net cash used in financing activities | (128,737) | (69,034) | (127,979) | |
Effect of exchange rates on cash, cash equivalents and restricted cash | 40,746 | (2,071) | (15,964) | |
Net change in cash, cash equivalents and restricted cash | (29,968) | (48,349) | (37,821) | |
Cash, cash equivalents and restricted cash at the beginning of the year | 397,650 | 445,999 | 483,820 | |
Cash, cash equivalents and restricted cash at the beginning of the year | 367,682 | 397,650 | 445,999 | |
Supplemental cash flow data: | ||||
Interest paid | 2,078 | 1,225 | 868 | |
Income taxes paid | 26,907 | 24,869 | 31,188 | |
Non-cash investing and financing activity: | ||||
Assets acquired under capital lease obligations | $ 18,502 | $ 0 | $ 0 | |
[1] | The Company operates on a 52/53-week fiscal year calendar, which ends on the Saturday nearest to January 31 of each year. The results for fiscal 2018 included the impact of an additional week which occurred during the fourth quarter ended February 3, 2018. |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies and Practices | 12 Months Ended |
Feb. 03, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business and Summary of Significant Accounting Policies and Practices | Description of the Business and Summary of Significant Accounting Policies and Practices Description of the Business Guess?, Inc. (the “Company” or “GUESS?”) designs, markets, distributes and licenses a leading lifestyle collection of contemporary apparel and accessories for men, women and children that reflect the American lifestyle and European fashion sensibilities. The Company’s designs are sold in GUESS? owned stores, to a network of wholesale accounts that includes better department stores, selected specialty retailers and upscale boutiques and through the Internet. GUESS? branded products, some of which are produced under license, are also sold internationally through a series of retail store licensees and wholesale distributors. Correction of Immaterial Error During the year ended February 3, 2018 , the Company identified an immaterial error related to the classification of net royalties received on the Company’s purchases of licensed product. The Company’s typical license agreement requires the licensee to pay the Company a royalty based on the licensee’s net sales of licensed products, which in certain cases also includes licensed inventory that was purchased by the Company . Historically, the Company has included royalties received on the Company’s purchases of licensed product in net royalties generated from its Licensing segment. However, in connection with the Company’s review of the new revenue recognition standard, it was determined that such royalties received should be recorded as a reduction of the cost of the licensed product under existing revenue recognition guidance. As a result, during the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales . Accordingly, prior period amounts related to net royalties, net revenue and cost of product sales have been adjusted to conform to the current period presentation . This resulted in a decrease to net revenue and cost of product sales of $18.9 million and $19.8 million for fiscal 2017 and fiscal 2016 , respectively. This reclassification had no impact on previously reported earnings (loss) from operations, net earnings (loss) or net earnings (loss) per share. Reclassifications The Company has made certain reclassifications to prior period amounts to conform to the current period presentation within the accompanying notes to the consolidated financial statements. Fiscal Year The Company operates on a 52 / 53 -week fiscal year calendar, which ends on the Saturday nearest to January 31 of each year. All references herein to “fiscal 2018 ,” “fiscal 2017 ” and “fiscal 2016 ” represent the results of the 53 -week fiscal year ended February 3, 2018 and the 52 -week fiscal years ended January 28, 2017 and January 30, 2016 . The additional week in fiscal 2018 occurred during the fourth quarter ended February 3, 2018. References to “fiscal 2019 ” represent the 52 -week fiscal year ending February 2, 2019. Principles of Consolidation The consolidated financial statements include the accounts of Guess?, Inc., its wholly-owned direct and indirect subsidiaries and its non-wholly-owned subsidiaries and joint ventures in which the Company has a controlling financial interest and is determined to be the primary beneficiary. Accordingly, all references herein to “Guess?, Inc.” include the consolidated results of the Company, its wholly-owned subsidiaries and its joint ventures. All intercompany accounts and transactions are eliminated during the consolidation process. Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosed in the accompanying notes. Significant areas requiring the use of management estimates relate to the allowances for doubtful accounts, sales return and markdown allowances, gift card and loyalty accruals, valuation of inventories, share-based compensation, recoverability of deferred taxes, unrecognized tax benefits, the useful life of assets for depreciation and amortization, evaluation of asset impairment, pension obligations, workers’ compensation and medical self-insurance expense and accruals, litigation reserves and restructuring expense and accruals. Actual results could differ from those estimates. Business Segment Reporting Where applicable, the Company reports information about business segments and related disclosures about products and services, geographic areas and major customers. The Company’s businesses are grouped into five reportable segments for management and internal financial reporting purposes: Americas Retail , Americas Wholesale , Europe , Asia and Licensing . The Company’s Americas Retail, Americas Wholesale, Europe and Licensing reportable segments are the same as their respective operating segments. Certain components of the Company’s Asia reportable segment are separate operating segments based on region which have been aggregated into the Asia reportable segment for disclosure purposes. During fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. During fiscal 2018, segment results were also adjusted to exclude corporate performance-based compensation costs, net gains (losses) on lease terminations and asset impairment charges due to the fact that these items are no longer included in the segment results provided to the Company’s chief operating decision maker in order to allocate resources and assess performance. Accordingly, segment results have been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation . Management evaluates segment performance based primarily on revenues and earnings (loss) from operations before corporate performance-based compensation costs, net gains (losses) from lease terminations, asset impairment charges and restructuring charges, if any. The Company believes this segment reporting reflects how its business segments are managed and how each segment’s performance is evaluated by the Company’s chief operating decision maker to assess performance and make resource allocation decisions. The Americas Retail segment includes the Company’s retail and e-commerce operations in North and Central America and its retail operations in South America. The Americas Wholesale segment includes the Company’s wholesale operations in the Americas. The Europe segment includes the Company’s retail, e-commerce and wholesale operations in Europe and the Middle East. The Asia segment includes the Company’s retail, e-commerce and wholesale operations in Asia and the Pacific. The Licensing segment includes the worldwide licensing operations of the Company. The business segment operating results exclude corporate overhead costs, which consist of shared costs of the organization, net gains (losses) on lease terminations, asset impairment charges and restructuring charges. Corporate overhead costs are presented separately and generally include, among other things, the following unallocated corporate costs: accounting and finance, executive compensation, corporate performance-based compensation, facilities, global advertising and marketing, human resources, information technology and legal. Information regarding these segments is summarized in Note 17 . Revenue Recognition General The Company recognizes retail operations revenue at the point of sale and wholesale operations revenue from the sale of merchandise when products are shipped and the customer takes title and assumes risk of loss, collection of the relevant receivable is reasonably assured, pervasive evidence of an arrangement exists, and the sales price is fixed or determinable. Revenue from our e-commerce operations, including shipping fees, is recognized based on the estimated customer receipt date. The Company accrues for estimated sales returns and other allowances in the period in which the related revenue is recognized. To recognize the financial impact of sales returns, the Company estimates the amount of goods that will be returned based on historical experience and reduces sales and cost of sales accordingly . Sales taxes and value added taxes collected from customers and remitted directly to governmental authorities are excluded from net revenues. Net Royalty Revenue Royalty revenue is based upon a percentage, as defined in the underlying agreement, of the licensee’s actual net sales or minimum net sales, whichever is greater. The Company may also receive special payments in consideration of the grant of license rights. These payments are recognized ratably as revenue over the term of the license agreement. The unrecognized portion of upfront payments is included in deferred royalties in accrued expenses and other long-term liabilities depending on the short or long-term nature of the payments to be recognized. As of February 3, 2018 , the Company had $6.8 million and $ 12.8 million of deferred royalties included in accrued expenses and other long-term liabilities, respectively. This compares to $6.1 million and $ 16.4 million of deferred royalties included in accrued expenses and other long-term liabilities, respectively, at January 28, 2017 . Gift Cards Gift card breakage is income recognized due to the non-redemption of a portion of gift cards sold by the Company for which a liability was recorded in prior periods. Gifts cards are mainly used in the U.S. and Canada. The Company issues its gift cards in the U.S. and Canada through one of its subsidiaries and is not required by law to escheat the value of unredeemed gift cards to the state in which the subsidiary is domiciled. Estimated breakage amounts are accounted for under the redemption recognition method and are classified as additional net revenues as the gift cards are redeemed. The Company’s gift card breakage rate is approximately 6.1% and 5.1% for the U.S. retail business and Canadian retail business, respectively, based upon historical redemption patterns, which represents the cumulative estimated amount of gift card breakage from the inception of the electronic gift card program in late 2002. Based upon historical redemption trends, the Company recognizes estimated gift card breakage as a component of net revenue in proportion to actual gift card redemptions, over the period that remaining gift card values are redeemed. In fiscal 2018 , fiscal 2017 and fiscal 2016 , the Company recognized $0.7 million , $0.8 million and $0.5 million of gift card breakage to revenue, respectively. Any future revisions to the estimated breakage rate may result in changes in the amount of breakage income recognized in future periods. Loyalty Programs The Company has customer loyalty programs in North America, Europe and Asia which cover all of its brands. Under certain of the programs, primarily in the U.S. and Canada, customers accumulate points based on purchase activity. Once a loyalty program member achieves a certain point level, the member earns awards that may only be redeemed for merchandise. Unredeemed points generally expire after six months without additional purchase activity and unredeemed awards generally expire after two months. The Company uses historical redemption rates to estimate the value of future award redemptions which are accrued in current liabilities and recorded as a reduction of net revenue in the period which the related revenue is recognized. The aggregate dollar value of the loyalty program accruals included in accrued expenses was $3.8 million and $4.0 million as of February 3, 2018 and January 28, 2017 , respectively. Future revisions to the estimated liability may result in changes to net revenue . Classification of Certain Costs and Expenses The Company includes inbound freight charges, purchasing costs and related overhead, retail store occupancy costs, including rent and depreciation, and a portion of the Company’s distribution costs related to its direct-to-consumer business in cost of product sales. Distribution costs related primarily to the wholesale business are included in selling, general and administrative (“SG&A”) expenses and amounted to $34.2 million , $22.6 million and $23.2 million for fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. The Company also includes store selling, selling and merchandising, advertising, design and other corporate overhead costs as a component of SG&A expenses. The Company classifies amounts billed to customers for shipping fees as revenues and classifies costs related to shipping as cost of product sales in the accompanying consolidated statements of income (loss). Advertising and Marketing Costs The Company expenses the cost of advertising as incurred. Advertising and marketing expenses charged to operations for fiscal 2018 , fiscal 2017 and fiscal 2016 were $36.3 million , $37.1 million and $31.6 million , respectively. Share-Based Compensation The Company recognizes compensation expense for all share-based awards granted based on the grant date fair value. The fair value of each stock option is estimated on the grant date using the Black-Scholes option-pricing model and involves several assumptions, including the risk-free interest rate, expected volatility, dividend yield and expected life . The risk-free interest rate is based on the U.S. Treasury yield curve in effect for the expected term of the option at the time of grant. The expected stock price volatility is determined based on an average of both historical volatility and implied volatility. Implied volatility is derived from exchange traded options on the Company’s common stock. The expected dividend yield is based on the Company’s history and expectations of dividend payouts. The expected life is determined based on historical trends. Compensation expense for nonvested stock options and stock awards/units that are not subject to performance-based vesting conditions is recognized on a straight-line basis over the vesting period . During fiscal 2018, the Company adopted authoritative guidance which eliminates the requirement to estimate forfeitures, but rather provides for an election that would allow entities to account for forfeitures as they occur. In addition, the Company has granted certain nonvested units that require certain minimum performance targets to be achieved in order for these awards to vest . Vesting is also subject to continued service requirements through the vesting date . Compensation expense for performance-based awards that vest in increments is recognized based on an accelerated attribution method . If the minimum performance targets are not forecasted to be achieved, no expense is recognized during the period . The Company has also granted certain nonvested stock units which are subject to market-based performance targets in order for these units to vest. Vesting is also subject to continued service requirements through the vesting date. The grant date fair value for such nonvested stock units was estimated using a Monte Carlo simulation that incorporates option-pricing inputs covering the period from the grant date through the end of the performance period. Compensation expense for such nonvested stock units is recognized on a straight-line basis over the vesting period, regardless of whether the market condition is satisfied. During fiscal 2016, the Company granted certain restricted stock units which vested immediately but were considered contingently returnable as a result of certain service conditions. Compensation expense for these restricted stock units was recognized on a straight-line basis over the implied service period. Foreign Currency Foreign Currency Translation Adjustment The local selling currency is typically the functional currency for all of the Company’s significant international operations. In accordance with authoritative guidance, assets and liabilities of the Company’s foreign operations are translated from foreign currencies into U.S. dollars at period-end rates, while income and expenses are translated at the weighted average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive income (loss) within stockholders’ equity. In addition, the Company records foreign currency translation adjustments related to its noncontrolling interests within stockholders’ equity. Periodically, the Company may also use foreign exchange currency contracts to hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries (see below). Changes in the fair values of these foreign exchange currency contracts, designated as net investment hedges, are recorded in foreign currency translation adjustment as a component of accumulated other comprehensive income (loss) within stockholders’ equity. The total foreign currency translation adjustment in creased stockholders’ equity by $93.4 million , from an accumulated foreign currency translation loss of $164.7 million as of January 28, 2017 to an accumulated foreign currency translation loss of $71.3 million as of February 3, 2018 . Foreign Currency Transaction Gains and Losses Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency, including gains and losses on foreign exchange currency contracts (see below), are included in the consolidated statements of income (loss). Net foreign currency transaction gains (losses) included in the determination of net earnings (loss) were $(5.9) million , $3.6 million and $10.0 million for fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. Derivatives Foreign Exchange Currency Contracts The Company operates in foreign countries, which exposes it to market risk associated with foreign currency exchange rate fluctuations. Various transactions that occur primarily in Europe, Canada, South Korea, China and Mexico are denominated in U.S. dollars, British pounds and Russian roubles and thus are exposed to earnings risk as a result of exchange rate fluctuations when converted to their functional currencies. These types of transactions include U.S. dollar denominated purchases of merchandise and U.S. dollar and British pound denominated intercompany liabilities. In addition, certain operating expenses, tax liabilities and pension-related liabilities are denominated in Swiss francs and are exposed to earnings risk as a result of exchange rate fluctuations when converted to the functional currency . The Company has entered into certain forward contracts to hedge the risk of a portion of these anticipated foreign currency transactions against foreign currency rate fluctuations. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these hedges. The Company does not hedge all transactions denominated in foreign currency. The Company may also hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries. Changes in the fair value of the U.S. dollar/euro and U.S. dollar/Canadian dollar forward contracts for anticipated U.S. dollar merchandise purchases designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are recognized in cost of product sales in the period which approximates the time the hedged merchandise inventory is sold. Changes in the fair value of U.S. dollar/euro forward contracts for U.S. dollar intercompany royalties designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are recognized in other income and expense in the period in which the royalty expense is incurred. Changes in the fair value of any U.S. dollar/euro forward contracts designated as net investment hedges are recorded in foreign currency translation adjustment as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are not recognized in earnings (loss) until the sale or liquidation of the hedged net investment . The Company also has forward contracts that are not designated as hedging instruments for accounting purposes. Changes in fair value of forward contracts not designated as hedging instruments are reported in net earnings (loss) as part of other income and expense. Interest Rate Swap Agreements The Company is exposed to interest rate risk on its floating-rate debt. The Company has entered into interest rate swap agreements to effectively convert its floating-rate debt to a fixed-rate basis. The principal objective of these contracts is to eliminate or reduce the variability of the cash flows in interest payments associated with the Company’s floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these contracts. Changes in the fair value of interest rate swap agreements designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are amortized to interest expense over the term of the related debt. Periodically, the Company may also enter into interest rate swap agreements that are not designated as hedging instruments for accounting purposes. Changes in the fair value of interest rate swap agreements not designated as hedging instruments are reported in net earnings (loss) as part of other income and expense. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when management believes it is more likely than not that the results of operations will not generate sufficient taxable earnings to realize certain net deferred tax assets. The Company accounts for uncertainty in income taxes in accordance with authoritative guidance, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company also follows authoritative guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Earnings (Loss) Per Share Basic earnings (loss) per share represents net earnings (loss) attributable to common stockholders divided by the weighted average number of common shares outstanding during the period. The Company considers any restricted stock units with forfeitable dividend rights that are issued and outstanding, but considered contingently returnable if certain service conditions are not met, as common equivalent shares outstanding. These restricted stock units are excluded from the weighted average number of common shares outstanding and basic earnings (loss) per share calculation until the respective service conditions have been met. Diluted earnings per share represents net earnings attributable to common stockholders divided by the weighted average number of common shares outstanding, inclusive of the dilutive impact of common equivalent shares outstanding during the period. The potentially dilutive impact of common equivalent shares outstanding are not included in the computation of diluted net loss per share as the impact of the shares would be antidilutive due to the net loss incurred for the period. Nonvested restricted stock awards (referred to as participating securities) are excluded from the dilutive impact of common equivalent shares outstanding in accordance with authoritative guidance under the two-class method since the nonvested restricted stockholders are entitled to participate in dividends declared on common stock as if the shares were fully vested and hence are deemed to be participating securities. Under the two-class method, distributed and undistributed earnings attributable to nonvested restricted stockholders are excluded from net earnings (loss) attributable to common stockholders for purposes of calculating basic and diluted earnings (loss) per common share. However, net losses are not allocated to nonvested restricted stockholders because they are not contractually obligated to share in the losses of the Company. In addition, the Company has granted certain nonvested stock units that are subject to certain performance-based or market-based vesting conditions as well as continued service requirements through the respective vesting periods. These nonvested stock units are included in the computation of diluted net earnings per common share attributable to common stockholders only to the extent that the underlying performance-based or market-based vesting conditions are satisfied as of the end of the reporting period, or would be considered satisfied if the end of the reporting period were the end of the related contingency period, and the results would be dilutive under the treasury stock method. Comprehensive Income (Loss) Comprehensive income (loss) consists of net earnings (loss), foreign currency translation adjustments, the effective portion of the change in the fair value of cash flow hedges, unrealized and realized gains or losses and other-than-temporary-impairment on available-for-sale securities and defined benefit plan impact from actuarial valuation gains or losses and related amortization, plan amendment, prior service credit or cost amortization and curtailment. Comprehensive income (loss) is presented in the consolidated statements of comprehensive income. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and marketable securities with original maturities of three months or less. Investment Securities The Company accounts for its investment securities in accordance with authoritative guidance which requires investments to be classified into one of three categories based on management’s intent: held-to-maturity securities, available-for-sale securities and trading securities. Held-to-maturity securities are recorded at their amortized cost. Available-for-sale securities are recorded at fair value with unrealized gains and losses reported as a separate component of stockholders’ equity. Trading securities are recorded at market value with unrealized gains and losses reported in net earnings. The appropriate classification of investment securities is determined at the time of purchase and reevaluated at each balance sheet date. The Company has historically accounted for its investment securities, if any, as available-for-sale. The Company periodically evaluates investment securities for other-than-temporary-impairment using both qualitative and quantitative criteria such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and the Company’s ability and intent to hold the investment for a period of time which may be sufficient for anticipated recovery in market value. Other-than-temporary-impairment is recognized in net earnings (loss) as part of other income and expense in the period which the unrealized losses are deemed other than temporary. During fiscal 2017, the Company determined that its available-for-sale securities were fully impaired and recognized minimal other-than-temporary-impairment in other expense. Concentration of Credit and Liquidity Risk Cash used primarily for working capital purposes is maintained with various major financial institutions. The Company performs evaluations of the relative credit standing of these financial institutions in order to limit the amount of asset and liquidity exposure with any institution. Excess cash and cash equivalents, which represent the majority of the Company’s outstanding cash and cash equivalents balance, are held primarily in overnight deposit and short-term time deposit accounts . The Company is also exposed to concentrations of credit risk through its accounts receivable balances. The Company extends credit to corporate customers based upon an evaluation of the customer’s financial condition and credit history and generally requires no collateral but does obtain credit insurance when considered appropriate. As of February 3, 2018 , approximately 59% of the Company’s total net trade accounts receivable and 72% of its European net trade receivables were subject to credit insurance coverage, certain bank guarantees or letters of credit for collection purposes. The Company’s credit insurance coverage contains certain terms and conditions specifying deductibles and annual claim limits. The Company maintains allowances for doubtful accounts for estimated losses that result from the inability of its wholesale customers to make their required payments. The Company bases its allowances on analysis of the aging of accounts receivable at the date of the financial statements, assessments of historical collection trends, an evaluation of the impact of current economic conditions and whether the Company has obtained credit insurance or other guarantees. The Company’s corporate customers are principally located throughout Europe, Asia and the Americas. Management performs regular evaluations concerning the ability of its customers to satisfy their obligations and records a provision for doubtful accounts based on these evaluations. The Company’s credit losses for the periods presented were immaterial and did not significantly exceed management’s estimates. The Company’s two largest wholesale customers accounted for a total of approximately 2.2% , 2.7% and 3.4% of the Company’s consolidated net revenue in fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. Inventories Inventories are valued at the lower of cost (primarily weighted average method) or net realizable value. The Company continually evaluates its inventories by assessing slow moving product as well as prior seasons’ inventory. Net realizable value of aged inventory is estimated based on historical sales trends for each product line category, the impact of market trends, an evaluation of economic conditions, available liquidation channels and the value of current orders relating to the future sales of this type of inventory. Depreciation and Amortization Depreciation and amortization of property and equipment and purchased intangibles are provided using the straight-line method over the following useful lives: Building and building improvements 10 to 39 years Land improvements 5 years Furniture, fixtures and equipment 2 to 10 years Purchased intangibles 4 to 20 years Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the term of the lease, including reasonably assured renewal periods. Construction in progress is not depreciated until the related asset is completed and placed in service. Long-Lived Assets Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment quarterly or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The majority of the Company’s long-lived assets relate to its retail operations which consist primarily of regular retail and flagship locations. The Company considers each individual regular retail location as an asset group for impairment testing, which is the lowest level at which individual cash flows can be identified. The asset group includes leasehold improvements, furniture, fixtures and equipment, computer hardware and software and certain long-term security deposits and lease acquisition costs. The Company reviews regular retail locations in penetrated markets for impairment risk once the locations have been opened for at least one year in their curren |
New Accounting Guidance
New Accounting Guidance | 12 Months Ended |
Feb. 03, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Guidance | New Accounting Guidance Changes in Accounting Policies In July 2015, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance to simplify the subsequent measurement of inventories by replacing the lower of cost or market test with a lower of cost or net realizable value test. The Company adopted this guidance effective January 29, 2017 on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements or related disclosures. In March 2016, the FASB issued authoritative guidance to simplify the accounting for certain aspects of share-based compensation. This guidance addresses the accounting for income tax effects at award settlement, the use of an expected forfeiture rate to estimate award cancellations prior to the vesting date and the presentation of excess tax benefits and shares surrendered for tax withholdings on the statement of cash flows. The Company adopted this guidance effective January 29, 2017. This guidance requires all income tax effects of awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. The Company adopted this provision prospectively and accordingly recorded tax shortfalls of approximately $1.3 million in its consolidated statement of income (loss) during fiscal 2018. This resulted in a negative impact on net loss attributable to Guess?, Inc. of approximately $1.3 million , or an unfavorable $0.02 per share impact during fiscal 2018. Under this guidance, excess tax benefits are also excluded from the assumed proceeds available to repurchase shares in the computation of diluted earnings (loss) per share. This was adopted prospectively and did not have an impact on the Company’s diluted loss per share for fiscal 2018. This guidance also eliminates the requirement to estimate forfeitures, but rather provides for an election that would allow entities to account for forfeitures as they occur. The Company adopted this election beginning in the first quarter of fiscal 2018 using the modified retrospective method and recorded a cumulative adjustment to reduce retained earnings by approximately $0.3 million . This guidance also changes the presentation of excess tax benefits from a financing activity to an operating activity in the statement of cash flows. This presentation was adopted on a retrospective basis and, as a result, net cash used in operating activities improved by $0.3 million and $0.2 million with a corresponding offset to net cash used in financing activities during fiscal 2017 and fiscal 2016, respectively. In August 2016, the FASB issued authoritative guidance related to the classification of certain cash receipts and cash payments in the statement of cash flows. The Company adopted this guidance effective January 29, 2017 on a retrospective basis. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements or related disclosures. In October 2016, the FASB issued authoritative guidance that requires an entity to include indirect interests held through related parties that are under common control on a proportionate basis when evaluating if a reporting entity is the primary beneficiary of a variable interest entity. The Company adopted this guidance effective January 29, 2017. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements or related disclosures. In November 2016, the FASB issued authoritative guidance related to the presentation of restricted cash in the statement of cash flows. This guidance requires that the statement of cash flows reconcile the change during the period in total cash, cash equivalents and restricted cash. The Company’s restricted cash is generally held as collateral for certain transactions. The Company adopted this guidance effective January 29, 2017 on a retrospective basis. As a result, the Company updated its consolidated statements of cash flows for fiscal 2018, fiscal 2017 and fiscal 2016 to include restricted cash with cash and cash equivalents when reconciling the beginning and end of period balances and to eliminate changes in restricted cash that have historically been included within operating and investing activities. In January 2017, the FASB issued authoritative guidance which clarifies the definition of a business to assist entities when evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The Company early adopted this guidance effective January 29, 2017 on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements or related disclosures. In February 2018, the FASB issued authoritative guidance to address certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the 2017 Tax Cuts and Jobs Act (the “Tax Reform”) enacted in December 2017 . This guidance provides the Company with an option to reclassify stranded tax effected within accumulated other comprehensive income (loss) to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate due to the Tax Reform is recorded. The Company early adopted this guidance during the fourth quarter of fiscal 2018 and recorded a cumulative adjustment to increase retained earnings by approximately $1.2 million . Recently Issued Accounting Guidance In May 2014, the FASB issued a comprehensive new revenue recognition standard which will supersede previous existing revenue recognition guidance. The standard is intended to clarify the principles of recognizing revenue and create common revenue recognition guidance between GAAP and International Financial Reporting Standards. The standard also requires expanded disclosures surrounding revenue recognition. During fiscal 2017, the FASB issued additional clarification guidance on the new revenue recognition standard which also included certain scope improvements and practical expedients. The standard (including clarification guidance issued) is effective for fiscal periods beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and allows for either full retrospective or modified retrospective adoption, with early adoption permitted. The Company has adopted this guidance using the modified retrospective method beginning in the first quarter of fiscal 2019. The Company’s assessment efforts have included reviewing current revenue processes, arrangements and accounting policies to identify potential differences that could arise from the application of this standard on its consolidated financial statements and related disclosures. While the Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements, the Company expects there to be differences related primarily to the classification and timing of when revenue and certain expenses are recognized from its licensing business. These differences relate primarily to changes in the presentation of advertising contributions received from the Company’s licensees and related advertising expenditures incurred by the Company. The Company currently records advertising contributions received from its licensees and the related advertising expenditures incurred by the Company on a net basis in its consolidated balance sheet. To the extent that the advertising contributions exceed the Company’s advertising expenditures for its licensees, the excess contribution is treated as a deferred liability and is included in accrued expenses in the Company’s consolidated balance sheet. Under the new standard, advertising contributions and related advertising expenditures related to the Company’s licensing business will be recorded on a gross basis which will increase net revenue as well as SG&A expenses. The Company also expects revenue related to its e-commerce operations to be recognized when merchandise is transferred to a common carrier rather than upon receipt by the customer, as well as adjustments to the accounting for the Company’s loyalty programs due to a slight change in the valuation of the amount that is deferred related to points earned. Additionally, allowances for wholesale sales returns and wholesale markdowns will be presented as accrued expenses rather than as reductions to accounts receivable and the estimated cost of inventory associated with the allowance for sales returns will be presented within other current assets in the Company’s consolidated balance sheet. In January 2016, the FASB issued authoritative guidance which requires equity investments not accounted for under the equity method of accounting or consolidation accounting to be measured at fair value, with subsequent changes in fair value recognized in net income. In February 2018, the FASB issued additional clarification guidance which made targeted improvements to address certain aspects of recognition, measurement, presentation and disclosure requirements for financial instruments. The original guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The clarification guidance is effective for fiscal years beginning after December 15, 2017 and interim periods beginning after June 15, 2015, which will be the Company’s third quarter of fiscal 2019. The clarification guidance may be early adopted, provided that the original guidance issued has been adopted. The adoption of this guidance (including the clarification guidance) is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures unless the Company acquires new equity investments. In February 2016, the FASB issued a comprehensive new lease standard which will supersede previous lease guidance. The standard requires a lessee to recognize assets and liabilities related to long-term leases that were classified as operating leases under previous guidance in its balance sheet. An asset would be recognized related to the right to use the underlying asset and a liability would be recognized related to the obligation to make lease payments over the term of the lease. The standard also requires expanded disclosures surrounding leases. The standard is effective for fiscal periods beginning after December 15, 2018, which will be the Company’s first quarter of fiscal 2020, and requires modified retrospective adoption, with early adoption permitted. The Company expects that this adoption will result in material increases in assets and liabilities in its consolidated balance sheet as well as enhanced disclosures. The Company is in the process of implementing controls and system changes to enable the preparation of the required financial information for this standard. In June 2016, the FASB issued authoritative guidance related to the measurement of credit losses on financial instruments. This guidance is effective for fiscal years beginning after December 15, 2019, which will be the Company’s first quarter of fiscal 2021. Early adoption is permitted for fiscal periods beginning after December 15, 2018, which will be the Company’s first quarter of fiscal 2020. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures. In October 2016, the FASB issued authoritative guidance which amends the accounting for income taxes on intra-entity transfers of assets other than inventory. This guidance requires that entities recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The income tax consequences on intra-entity transfers of inventory will continue to be deferred until the inventory has been sold to a third party. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Early adoption is permitted at the beginning of a fiscal year. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In January 2017, the FASB issued authoritative guidance to simplify the testing for goodwill impairment by removing step two from the goodwill testing. Under current guidance, if the fair value of a reporting unit is lower than its carrying amount (step one), an entity would calculate an impairment charge by comparing the implied fair value of goodwill with its carrying amount (step two). The implied fair value of goodwill was calculated by deducting the fair value of the assets and liabilities of the respective reporting unit from the reporting unit’s fair value as determined under step one. This guidance instead provides that an impairment charge should be recognized based on the difference between a reporting unit’s fair value and its carrying value. This guidance also does not require a qualitative test to be performed on reporting units with zero or negative carrying amounts. However, entities need to disclose any reporting units with zero or negative carrying amounts that have goodwill and the amount of goodwill allocated to each. This guidance is effective for fiscal years beginning after December 15, 2019, which will be the Company’s first quarter of fiscal 2021, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In March 2017, the FASB issued authoritative guidance related to the presentation of net periodic pension cost in the income statement. This guidance requires that the service cost component of net periodic pension cost is presented in the same line as other compensation costs arising from services rendered by the employees during the period. The other non-service components of net periodic pension cost are required to be presented in the income statement separately from the service cost component and outside of earnings from operations. This guidance also allows for the service cost component to be eligible for capitalization when applicable. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and requires retrospective adoption for the presentation of the service cost component and other non-service components of net periodic pension cost in the income statement and prospective adoption for capitalization of the service cost component. Other than the change in presentation of other non-service components of net periodic pension cost within the Company’s consolidated statements of income, the adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements and related disclosures. In May 2017, the FASB issued authoritative guidance that provides clarification on accounting for modifications in share-based payment awards. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, with early adoption permitted. The adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements or related disclosures unless there are modifications to the Company’s share-based payment awards. In August 2017, the FASB issued authoritative guidance to better align the results of hedge accounting with an entity’s risk management activities. This guidance updates the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. This guidance is effective for fiscal years beginning after December 15, 2018, which will be the Company’s first quarter of fiscal 2020, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with early adoption permitted. The updated presentation and disclosure guidance is required only on a prospective basis. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Feb. 03, 2018 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable is summarized as follows (in thousands): Feb 3, 2018 Jan 28, 2017 Trade $ 290,478 $ 234,690 Royalty 5,504 19,881 Other 13,233 5,888 309,215 260,459 Less allowances 49,219 34,922 $ 259,996 $ 225,537 Accounts receivable consists of trade receivables relating primarily to the Company’s wholesale business in Europe and, to a lesser extent, to its wholesale businesses in Asia and the Americas, royalty receivables relating to its licensing operations, credit card and retail concession receivables related to its retail businesses and certain other receivables . Other receivables generally relate to amounts due to the Company that result from activities that are not related to the direct sale of the Company’s products or collection of royalties. The accounts receivable allowance includes allowances for doubtful accounts, wholesale sales returns and wholesale markdowns. Retail sales returns allowances are included in accrued expenses. |
Inventories
Inventories | 12 Months Ended |
Feb. 03, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following (in thousands): Feb 3, 2018 Jan 28, 2017 Raw materials $ 604 $ 799 Work in progress 16 78 Finished goods 427,684 366,504 $ 428,304 $ 367,381 The above balances include an allowance to write down inventories to the lower of cost or net realizable value of $29.9 million and $19.4 million as of February 3, 2018 and January 28, 2017 , respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Feb. 03, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment is summarized as follows (in thousands): Feb 3, 2018 Jan 28, 2017 Land and land improvements $ 2,750 $ 2,750 Building and building improvements 51,285 47,673 Leasehold improvements 380,234 367,294 Furniture, fixtures and equipment 389,393 353,843 Construction in progress 16,555 13,163 Assets under capital leases 19,560 — 859,777 784,723 Less accumulated depreciation and amortization 565,523 541,718 $ 294,254 $ 243,005 During fiscal 2016, the Company purchased, for approximately $28.8 million , the facility that houses its U.S. distribution center. During fiscal 2018, the Company began the relocation of its European distribution center to the Netherlands and entered into a capital lease for equipment used in the new facility. During fiscal 2018, the Company also entered into a capital lease related primarily to computer hardware and software. The accumulated depreciation and amortization related to assets under capital leases was approximately $0.9 million as of February 3, 2018 and was included in depreciation expense when recognized. See Note 8 for more information regarding the related capital lease obligations. Construction in progress represents the costs associated with the construction in progress of leasehold improvements to be used in the Company’s operations, primarily for new and remodeled stores in retail operations. Impairment The Company recorded asset impairment charges of $8.5 million , $34.4 million and $2.3 million for fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. The asset impairment charges related primarily to the impairment of certain retail locations in North America resulting from under-performance and expected store closures during each of the respective periods. Impairments to long-lived assets are summarized as follows (in thousands): Feb 3, 2018 Jan 28, 2017 Aggregate carrying value of long-lived assets impaired $ 8,728 $ 36,103 Less asset impairment charges 8,479 34,385 Aggregate remaining fair value of long-lived assets impaired $ 249 $ 1,718 The Company’s impairment evaluations included testing of 233 retail locations and 255 retail locations during fiscal 2018 and fiscal 2017 , respectively, which were deemed to have impairment indicators. The Company concluded that 99 retail locations and 148 retail locations, respectively, were determined to be impaired, as the carrying amounts of the assets exceeded their estimated fair values (determined based on discounted cash flows) at each of the respective dates. Refer to Note 1 for a description of other assumptions that management considers in estimating the future discounted cash flows. If actual results are not consistent with the assumptions and judgments used in estimating future cash flows and asset fair values, there may be additional exposure to future impairment losses that could be material to the Company’s results of operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Feb. 03, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill activity is summarized by business segment as follows (in thousands): Americas Retail Americas Wholesale Europe Asia Total Goodwill balance at January 30, 2016 $ 1,693 $ 9,960 $ 21,759 $ — $ 33,412 Adjustments: Acquisition — — — 933 933 Translation adjustments 36 6 (287 ) — (245 ) Goodwill balance at January 28, 2017 1,729 9,966 21,472 933 34,100 Adjustments: Acquisition — — — 566 566 Translation adjustments 36 6 3,653 120 3,815 Goodwill balance at February 3, 2018 $ 1,765 $ 9,972 $ 25,125 $ 1,619 $ 38,481 The Company has no accumulated impairment related to goodwill. From time-to-time, the Company may acquire certain retail locations from its wholesale partners which may result in the recognition of goodwill or other intangible assets. During fiscal 2018, the Company recognized goodwill of approximately $0.6 million related to the acquisition of 14 retail locations from three of its Asian wholesale partners. During fiscal 2017, the Company recognized goodwill of approximately $0.9 million related to the acquisition of 12 retail locations from five of its Asian wholesale partners. Other intangible assets as of February 3, 2018 consisted primarily of lease and license acquisition costs related to European acquisitions. Gross intangible assets were $33.6 million and $29.7 million as of February 3, 2018 and January 28, 2017 , respectively. The accumulated amortization of intangible assets with finite useful lives was $27.6 million and $23.2 million for the years ended February 3, 2018 and January 28, 2017 , respectively. For these assets, amortization expense over the next five years is expected to be approximately $1.2 million in fiscal 2019 , $1.0 million in fiscal 2020 , $0.9 million in fiscal 2021 , $0.8 million in fiscal 2022 and $0.7 million in fiscal 2023 . |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Feb. 03, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses are summarized as follows (in thousands): Feb 3, 2018 Jan 28, 2017 Accrued compensation and benefits $ 73,815 $ 50,954 Sales and use taxes, property taxes and other indirect taxes 33,390 22,480 Derivative financial instruments 16,487 1,408 Professional and legal fees 14,281 7,982 Store credits, loyalty and gift cards 9,846 9,519 Advertising 9,677 7,746 Accrued rent 8,039 6,342 Deferred royalties and other revenue 7,273 7,891 Share repurchase 6,033 — Income taxes 5,186 653 Construction costs 3,428 4,210 Retail sales returns allowance 2,917 2,723 Restructuring charges — 180 Other 10,190 13,183 $ 200,562 $ 135,271 |
Borrowings and Capital Lease Ob
Borrowings and Capital Lease Obligations | 12 Months Ended |
Feb. 03, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings and Capital Lease Obligations | Borrowings and Capital Lease Obligations Borrowings and capital lease obligations are summarized as follows (in thousands): Feb 3, 2018 Jan 28, 2017 Mortgage debt, maturing monthly through January 2026 $ 20,323 $ 20,889 Capital lease obligations 18,589 — Other 3,129 3,159 42,041 24,048 Less current installments 2,845 566 Long-term debt and capital lease obligations $ 39,196 $ 23,482 Mortgage Debt On February 16, 2016 , the Company entered into a ten -year $ 21.5 million real estate secured loan (the “ Mortgage Debt ”) . The Mortgage Debt is secured by the Company’s U.S. distribution center based in Louisville, Kentucky and provides for monthly principal and interest payments based on a 25 -year amortization schedule, with the remaining principal balance and any accrued and unpaid interest due at maturity. Outstanding principal balances under the Mortgage Debt bear interest at the one-month LIBOR rate plus 1.5% . As of February 3, 2018 , outstanding borrowings under the Mortgage Debt , net of debt issuance costs of $ 0.1 million , were $ 20.3 million . At January 28, 2017 , outstanding borrowings under the Mortgage Debt, net of debt issuance costs of $ 0.1 million , were $ 20.9 million . The Mortgage Debt requires the Company to comply with a fixed charge coverage ratio on a trailing four-quarter basis if consolidated cash, cash equivalents and short term investment balances fall below certain levels. In addition, the Mortgage Debt contains customary covenants, including covenants that limit or restrict the Company’s ability to incur liens on the mortgaged property and enter into certain contractual obligations. Upon the occurrence of an event of default under the Mortgage Debt , the lender may terminate the Mortgage Debt and declare all amounts outstanding to be immediately due and payable. The Mortgage Debt specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults. On February 16, 2016 , the Company also entered into a separate interest rate swap agreement, designated as a cash flow hedge, that resulted in a swap fixed rate of approximately 3.06% . This interest rate swap agreement matures in January 2026 and converts the nature of the Mortgage Debt from LIBOR floating-rate debt to fixed-rate debt. The fair value of the interest rate swap asset was approximately $ 1.5 million and $0.9 million as of February 3, 2018 and January 28, 2017 , respectively. Capital Lease Obligations During fiscal 2018, the Company began the relocation of its European distribution center to the Netherlands . As a result, the Company entered into a capital lease of $ 17.0 million for equipment used in the new facility. The capital lease primarily provides for monthly minimum lease payments through May 2027 with an effective interest rate of approximately 6% . As of February 3, 2018 , the capital lease obligation was $ 17.3 million . During fiscal 2018, the Company also entered into a capital lease for $ 1.5 million related primarily to computer hardware and software. As of February 3, 2018 , this capital lease obligation was $ 1.3 million . The Company previously leased a building in Florence, Italy under a capital lease which provided for minimum lease payments through May 1, 2016 . Upon termination of the capital lease, the title of the building was transferred to the Company. The Company had a separate interest rate swap agreement designated as a non-hedging instrument that converted the nature of the capital lease obligation from Euribor floating-rate debt to fixed-rate debt and resulted in a swap fixed rate of 3.55% . This interest rate swap agreement matured on February 1, 2016 . Credit Facilities On June 23, 2015, the Company entered into a five -year senior secured asset-based revolving credit facility with Bank of America, N.A. and the other lenders party thereto (the “Credit Facility”). The Credit Facility provides for a borrowing capacity in an amount up to $150 million , including a Canadian sub-facility up to $50 million , subject to a borrowing base. Based on applicable accounts receivable, inventory, eligible cash balances and relevant covenant restrictions as of February 3, 2018 , the Company could have borrowed up to $87 million under the Credit Facility. The Credit Facility has an option to expand the borrowing capacity by up to $150 million subject to certain terms and conditions, including the willingness of existing or new lenders to assume such increased amount. The Credit Facility is available for direct borrowings and the issuance of letters of credit, subject to certain letters of credit sublimits, and may be used for working capital and other general corporate purposes. All obligations under the Credit Facility are unconditionally guaranteed by the Company and the Company’s existing and future domestic and Canadian subsidiaries, subject to certain exceptions, and are secured by a first priority lien on substantially all of the assets of the Company and such domestic and Canadian subsidiaries , as applicable. Direct borrowings under the Credit Facility made by the Company and its domestic subsidiaries shall bear interest at the U.S. base rate plus an applicable margin (varying from 0.25% to 0.75% ) or at LIBOR plus an applicable margin (varying from 1.25% to 1.75% ). The U.S. base rate is based on the greater of (i) the U.S. prime rate, (ii) the federal funds rate, plus 0.5% , and (iii) LIBOR for a 30 day interest period, plus 1.0% . Direct borrowings under the Credit Facility made by the Company’s Canadian subsidiaries shall bear interest at the Canadian prime rate plus an applicable margin (varying from 0.25% to 0.75% ) or at the Canadian BA rate plus an applicable margin (varying from 1.25% to 1.75% ). The Canadian prime rate is based on the greater of (i) the Canadian prime rate, (ii) the Bank of Canada overnight rate, plus 0.5% , and (iii) the Canadian BA rate for a one month interest period, plus 1.0% . The applicable margins are calculated quarterly and vary based on the average daily availability of the aggregate borrowing base. The Company is also obligated to pay certain commitment, letter of credit and other fees customary for a credit facility of this size and type. As of February 3, 2018 , the Company had $1.0 million in outstanding standby letters of credit, no outstanding documentary letters of credit and no outstanding borrowings under the Credit Facility. The Credit Facility requires the Company to comply with a fixed charge coverage ratio on a trailing four-quarter basis if a default or an event of default occurs under the Credit Facility or generally if borrowings exceed 80% of the borrowing base. In addition, the Credit Facility contains customary covenants, including covenants that limit or restrict the Company and certain of its subsidiaries’ ability to: incur liens, incur indebtedness, make investments, dispose of assets, make certain restricted payments, merge or consolidate and enter into certain transactions with affiliates. Upon the occurrence of an event of default under the Credit Facility, the lenders may cease making loans, terminate the Credit Facility and declare all amounts outstanding to be immediately due and payable. The Credit Facility specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults. The Credit Facility allows for both secured and unsecured borrowings outside of the Credit Facility up to specified amounts. The Company, through its European subsidiaries, maintains short-term uncommitted borrowing agreements, primarily for working capital purposes, with various banks in Europe. The majority of the borrowings under these agreements are secured by specific accounts receivable balances. Based on the applicable accounts receivable balances as of February 3, 2018 , the Company could have borrowed up to $87.5 million under these agreements. As of February 3, 2018 , the Company had no outstanding borrowings or outstanding documentary letters of credit under these agreements. The agreements are denominated primarily in euros and provide for annual interest rates ranging from 0.5% to 4.6% . The maturities of any short-term borrowings under these arrangements are generally linked to the credit terms of the underlying accounts receivable that secure the borrowings. With the exception of one facility for up to $43.6 million that has a minimum net equity requirement, there are no other financial ratio covenants. Other From time-to-time, the Company will obtain other financing in foreign countries for working capital to finance its local operations. Maturities of the Company’s debt and capital lease obligations as of February 3, 2018 are as follows (in thousands): Debt Capital Lease Total Fiscal 2019 $ 1,361 $ 1,594 $ 2,955 Fiscal 2020 1,893 1,767 3,660 Fiscal 2021 1,725 1,923 3,648 Fiscal 2022 659 1,944 2,603 Fiscal 2023 682 1,895 2,577 Thereafter 17,221 9,466 26,687 Total principal payments 23,541 18,589 42,130 Less unamortized debt issuance costs 89 — 89 Total debt and capital lease obligations $ 23,452 $ 18,589 $ 42,041 |
Restructuring Charges
Restructuring Charges | 12 Months Ended |
Feb. 03, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges During the first quarter of fiscal 2017, the Company implemented a global cost reduction and restructuring plan to better align its global cost and organizational structure with its current strategic initiatives. This plan included the consolidation and streamlining of the Company’s business processes and a reduction in its global workforce and other expenses. These actions resulted in restructuring charges related primarily to cash-based severance costs of $6.1 million during fiscal 2017. There were no restructuring charges incurred during fiscal 2018 . The Company does not expect significant future cash-based severance charges to be incurred under this plan as the actions were completed during fiscal 2017. As of February 3, 2018 , there were no amounts included in accrued expenses related to these restructuring activities as the Company completed payments for the remaining anticipated costs during fiscal 2018. At January 28, 2017, the Company had a balance of approximately $0.2 million in accrued expenses related to these restructuring activities. The following table summarizes restructuring activities related primarily to severance during fiscal 2017 and fiscal 2018 (in thousands): Total Balance at January 30, 2016 $ — Charges to operations 6,083 Cash payments (6,003 ) Foreign currency and other adjustments 100 Balance at January 28, 2017 $ 180 Cash payments (124 ) Foreign currency and other adjustments (56 ) Balance at February 3, 2018 $ — During fiscal 2017 , the Company also incurred an estimated exit tax charge of approximately $1.9 million related to its reorganization in Europe as a result of the global cost reduction and restructuring plan. The exit tax charge has not been finalized with the local authorities and actual amounts could differ significantly from these estimates as negotiations are completed. |
Comprehensive Income (Loss)
Comprehensive Income (Loss) | 12 Months Ended |
Feb. 03, 2018 | |
Stockholders' Equity Note [Abstract] | |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss), net of related income taxes, for fiscal 2018 , fiscal 2017 and fiscal 2016 are as follows (in thousands): Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Marketable Securities Defined Benefit Plans Total Balance at January 31, 2015 $ (121,569 ) $ 7,157 $ (3 ) $ (12,650 ) $ (127,065 ) Gains (losses) arising during the period (36,083 ) 7,944 (12 ) 5,468 (22,683 ) Reclassification to net earnings for gains realized — (7,849 ) — (457 ) (8,306 ) Net other comprehensive income (loss) (36,083 ) 95 (12 ) 5,011 (30,989 ) Balance at January 30, 2016 $ (157,652 ) $ 7,252 $ (15 ) $ (7,639 ) $ (158,054 ) Gains (losses) arising during the period (575 ) 1,059 (1 ) (1,162 ) (679 ) Reclassification to net earnings for (gains) losses realized — (2,911 ) 16 239 (2,656 ) Net other comprehensive income (loss) (575 ) (1,852 ) 15 (923 ) (3,335 ) Balance at January 28, 2017 $ (158,227 ) $ 5,400 $ — $ (8,562 ) $ (161,389 ) Gains (losses) arising during the period 91,178 (20,408 ) — (1,999 ) 68,771 Reclassification to net loss for (gains) losses realized — 414 — 352 766 Net other comprehensive income (loss) 91,178 (19,994 ) — (1,647 ) 69,537 Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance (1) — 225 — (1,435 ) (1,210 ) Balance at February 3, 2018 $ (67,049 ) $ (14,369 ) $ — $ (11,644 ) $ (93,062 ) ________________________________________________________________________ (1) During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017 . As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.2 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s Supplemental Executive Retirement Plan and its interest rate swap designated as a cash flow hedge based in the U.S. Details on reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) during fiscal 2018 , fiscal 2017 and fiscal 2016 are as follows (in thousands): Location of (Gain) Loss Reclassified from Accumulated OCI into Earnings (Loss) Year Ended Year Ended Year Ended Derivative financial instruments designated as cash flow hedges: Foreign exchange currency contracts $ (14 ) $ (3,518 ) $ (8,314 ) Cost of product sales Foreign exchange currency contracts 583 (301 ) (833 ) Other income/expense Interest rate swap 87 216 — Interest expense Less income tax effect (242 ) 692 1,298 Income tax expense 414 (2,911 ) (7,849 ) Marketable securities: Available-for-sale securities — 25 — Other income/expense Less income tax effect — (9 ) — Income tax expense — 16 — Defined benefit plans: Net actuarial loss amortization 462 341 924 (1) Prior service credit amortization (27 ) (28 ) (97 ) (1) Curtailment — — (1,651 ) (1) Less income tax effect (83 ) (74 ) 367 Income tax expense 352 239 (457 ) Total reclassifications to net earnings (loss) for (gains) losses realized during the period $ 766 $ (2,656 ) $ (8,306 ) ________________________________________________________________________ (1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic defined benefit pension cost. Refer to Note 12 for further information. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 03, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Changes in Tax Law In December 2017, the 2017 Tax Cuts and Jobs Act in the U.S. (referred to herein as the “Tax Reform”) , was enacted into law. The Tax Reform includes significant changes to the U.S. corporate income tax system, including a reduction in the U.S. federal corporate income tax rate from 35% to 21% and a one-time mandatory transition tax on accumulated foreign earnings. The Tax Reform also establishes new tax laws that will be effective for calendar 2018, including but not limited to (i) a new provision designed to tax global intangible low-taxed income (“GILTI”), (ii) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries, (iii) a limitation on deductible interest expense and (iv) limitations on the deductibility of certain executive compensation. The Securities and Exchange Commission (“SEC”) issued authoritative guidance which addresses accounting for the impact of the Tax Reform. This guidance provides a measurement period, which should not extend beyond one year from the enactment date, during which the Company may finalize the accounting for the impacts of the Tax Reform, and allows for the Company to record provisional estimates of such amounts. As a result, during fiscal 2018 , the Company recorded estimated additional income tax expense of $47.9 million . This is comprised of a provisional charge of $24.9 million for the re-measurement of U.S. deferred tax assets and a provisional charge of $23.0 million for the estimated effects of the transitional tax on the deemed repatriation of foreign earnings . The income tax payable related to the transition tax is due over an eight year period beginning in calendar 2018. The amount that is payable in the next 12 months is approximately $1.9 million and has been included in accrued expenses in the Company’s consolidated balance sheet. The Company has provided for any additional tax liabilities on amounts that are estimated to be repatriated from foreign operations as a result of the Tax Reform. We have not provided for other income taxes on undistributed foreign earnings expected to be reinvested outside the U.S. If in the future we decide to repatriate such earnings, we would incur other incremental taxes. Our current plans do not indicate a need to repatriate them to fund our U.S. cash requirements . Based on the Company’s current interpretation of the Tax Reform, reasonable estimates were made to record provisional adjustments during fiscal 2018. These estimates may change, and the Company will continue to refine such amounts within the measurement period allowed. These estimates may be impacted by a number of additional considerations, including, but not limited to, the state level income tax impacts of the Tax Reform, clarifications of or changes to the Tax Reform (including the issuance of final regulations and evolving technical interpretations), additional guidance issued by the SEC or FASB, and the Company’s ongoing analysis of historical earnings and profits as well as tax pools. The Company continues to analyze the provisions of the Tax Reform, including but not limited to, the creation of a new minimum tax called the base erosion anti-abuse tax; a new provision that taxes U.S. allocated expenses (e.g. interest and general administrative expenses) as well as certain GILTI from foreign operations; a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; a new limitation on deductible interest expense; and limitations on the deductibility of certain employee compensation. Under GAAP, companies are allowed to make an accounting policy election to either treat taxes resulting from GILTI as a current-period expense when they are incurred or factor such amounts into the measurement of deferred taxes. The Company has not completed its analysis of the effects of the GILTI provisions and will further consider the accounting policy election within the measurement period allowed. During the fourth quarter of fiscal 2018, the Company also early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform. As a result, the Company recorded a cumulative adjustment of $1.2 million to reclassify the stranded income tax effects from the Tax Reform that were included in accumulated other comprehensive income (loss) to retained earnings. Income Tax Expense Income tax expense (benefit) is summarized as follows (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Federal: Current $ 34,181 $ 8,212 $ 23,618 Deferred 21,595 (636 ) 4,038 State: Current 1,903 2,537 3,864 Deferred 217 (1,000 ) (296 ) Foreign: Current 7,333 17,055 14,259 Deferred 8,943 2,044 (3,019 ) Total $ 74,172 $ 28,212 $ 42,464 Actual income tax expense differs from expected income tax expense obtained by applying the statutory federal income tax rate to earnings before income taxes as follows (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Computed “expected” tax expense $ 23,693 $ 18,763 $ 44,547 State taxes, net of federal benefit 1,675 999 2,320 Non-U.S. tax expense less than federal statutory tax rate (1) (7,396 ) (1,539 ) (6,991 ) Tax Reform - repatriation tax adjustment (2) 23,034 — — Tax Reform - deferred tax adjustment (2) 24,856 — — Cumulative valuation reserve (3) — 6,830 — Valuation reserve (4) 9,057 5,841 3,024 Unrecognized tax benefit 537 556 1,123 Share-based compensation (5) 1,309 — — Net tax settlements — 1,894 — Sale of minority interest investment — (2,316 ) — Estimated exit tax charge — 1,911 — Prior year tax adjustments (88 ) (1,790 ) (2,944 ) Non-deductible permanent difference (3,224 ) (2,284 ) 1,295 Other 719 (653 ) 90 Total $ 74,172 $ 28,212 $ 42,464 ________________________________________________________________________ (1) The jurisdictional location of pre-tax income (loss) may represent a significant component of the Company’s effective tax rate as income tax rates outside the U.S. are generally lower than the U.S. statutory income tax rate. Furthermore, the impact of changes in the jurisdictional location of pre-tax income (loss) on the Company’s effective tax rate will be greater at lower levels of consolidated pre-tax income (loss). These amounts exclude the impact of net changes in valuation allowances, audit and other adjustments related to the Company’s non-U.S. operations, as they are reported separately in the appropriate corresponding line items in the table above. The impact on the Company’s effective tax rate was primarily related to the Company’s Swiss and Korean subsidiaries which have jurisdictional effective tax rates which range from 8% to 20% lower than the U.S. rates in effect for the periods presented. (2) During fiscal 2018, the Company recognized additional tax expense resulting from the enactment of the Tax Reform to account for the estimated effects of the transitional tax on the deemed repatriation of foreign earnings and reduced deferred tax assets due to lower future U.S. corporate tax rates. (3) Amounts represent valuation reserves resulting from jurisdictions where there have been cumulative net operating losses, limiting the Company’s ability to consider other subjective evidence to continue to recognize the existing deferred tax assets. (4) Amounts relate primarily to valuation reserves on non-cumulative net operating losses or other deferred tax assets arising during the respective period. (5) During fiscal 2018, the Company adopted authoritative guidance which requires all income tax effects of stock awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. Total income tax expense (benefit) is allocated as follows (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Operations (1) $ 74,172 $ 28,212 $ 42,464 Stockholders’ equity (1) (3,173 ) 1,782 4,668 Total income tax expense $ 70,999 $ 29,994 $ 47,132 ________________________________________________________________________ (1) During fiscal 2018, the Company adopted authoritative guidance which requires all income tax effects of stock awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. As a result, the Company recorded tax shortfalls of approximately $1.3 million in the Company’s income tax expense during fiscal 2018. The tax effects of the components of other comprehensive income (loss) are allocated as follows (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Derivative financial instruments designated as cash flow hedges $ (2,738 ) $ (864 ) $ 559 Marketable securities — 6 (7 ) Defined benefit plans (435 ) (21 ) 2,972 Total income tax expense (benefit) (1) $ (3,173 ) $ (879 ) $ 3,524 ________________________________________________________________________ (1) During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017 . As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.2 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s Supplemental Executive Retirement Plan and its interest rate swap designated as a cash flow hedge based in the U.S. The impact from this reclassification on accumulated other comprehensive income (loss) has been excluded from the amounts provided in this table. Total earnings before income tax expense and noncontrolling interests are comprised of the following (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Domestic operations $ 39,112 $ 32,944 $ 90,141 Foreign operations 31,159 20,666 37,138 Earnings before income tax expense and noncontrolling interests $ 70,271 $ 53,610 $ 127,279 Deferred Taxes The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities as of February 3, 2018 and January 28, 2017 are presented below (in thousands): Feb 3, 2018 Jan 28, 2017 Deferred tax assets: Net operating losses 19,859 13,524 Defined benefit plans 13,155 20,642 Deferred compensation 10,721 12,987 Excess of book over tax depreciation/amortization 10,704 9,018 Rent expense 7,651 13,672 Deferred income 7,141 6,213 Bad debt reserve 2,529 2,124 Lease incentives 1,814 5,545 Uniform capitalization 974 1,900 Other 30,703 28,265 Total deferred tax assets 105,251 113,890 Deferred tax liabilities: Goodwill amortization (2,303 ) (3,654 ) Excess of tax over book depreciation/amortization (135 ) (189 ) Other (4,517 ) (4,544 ) Valuation allowance (32,601 ) (23,255 ) Net deferred tax assets (1) $ 65,695 $ 82,248 __________________________________________________________________ (1) As of February 3, 2018 , amount includes net deferred tax liabilities of $2.7 million recorded in other long-term liabilities in the Company’s consolidated balance sheet. There were $0.5 million net deferred tax liabilities recorded in other long-term liabilities in the Company’s consolidated balance sheet at January 28, 2017 . Based on the historical earnings of the Company and projections of future taxable earnings in certain jurisdictions, management believes it is more likely than not that the results of operations will not generate sufficient taxable earnings to realize certain net deferred tax assets. Therefore, the Company has recorded a valuation allowance of $32.6 million , which is an in crease of $9.3 million from the prior year. As of February 3, 2018 , certain of the Company’s operations had net operating loss carryforwards of $74.7 million . These are comprised of $17.1 million of operating loss carryforwards that have an unlimited carryforward life, $57.0 million of foreign operating loss carryforwards that expire between fiscal 2019 and fiscal 2038 and $0.6 million of state operating loss carryforwards that expire between fiscal 2019 and fiscal 2036 . Based on the historical earnings of these operations, management believes that it is more likely than not that some of the operations will not generate sufficient earnings to utilize all of the net operating loss. As of February 3, 2018 and January 28, 2017 , the Company had a valuation allowance of $20.4 million and $13.9 million , respectively, related to its net operating loss carryforwards. Unrecognized Tax Benefit The Company and its subsidiaries are subject to U.S. federal and foreign income tax as well as income tax of multiple state and foreign local jurisdictions. From time-to-time, the Company is subject to routine income tax audits on various tax matters around the world in the ordinary course of business. Although the Company has substantially concluded all U.S. federal, foreign, state and foreign local income tax matters for years through fiscal 2012 , as of February 3, 2018 , several income tax audits were underway in multiple jurisdictions for various periods after fiscal 2012 . The Company does not believe that the resolution of open matters will have a material effect on the Company’s financial position or liquidity. The Company accrues an amount for its estimate of additional income tax liability which the Company, more likely than not, will incur as a result of the ultimate resolution of income tax audits (“uncertain tax positions”). The Company reviews and updates the estimates used in the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, upon completion of tax audits, upon expiration of statutes of limitation, or upon occurrence of other events. A reconciliation of the beginning and ending amount of gross unrecognized tax benefit (excluding interest and penalties) is as follows (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Beginning balance $ 12,983 $ 12,585 $ 13,640 Additions: Tax positions related to the prior year 4,436 672 496 Tax positions related to the current year 222 106 1,516 Reductions: Tax positions related to the prior year (356 ) (380 ) (1,650 ) Tax positions related to the current year (309 ) — (359 ) Settlements — — (505 ) Expiration of statutes of limitation (205 ) — (553 ) Ending balance $ 16,771 $ 12,983 $ 12,585 The amount of unrecognized tax benefit as of February 3, 2018 includes $17.4 million (net of federal benefit on state issues) which, if ultimately recognized, may reduce our future annual effective tax rate. As of February 3, 2018 and January 28, 2017 , the Company had $19.0 million and $14.6 million , respectively, of aggregate accruals for uncertain tax positions, including penalties and interest. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company included interest and penalties related to uncertain tax positions of $0.5 million , $0.2 million and $0.6 million in net income tax expense for fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. Total interest and penalties related to uncertain tax positions was $2.2 million and $1.6 million for the years ended February 3, 2018 and January 28, 2017 , respectively. |
Defined Benefit Plans
Defined Benefit Plans | 12 Months Ended |
Feb. 03, 2018 | |
Defined Benefit Plan [Abstract] | |
Defined Benefit Plans | Defined Benefit Plans The Company maintains defined benefit plans for certain employees primarily in the U.S. and Switzerland. In accordance with authoritative guidance for defined benefit pension and other postretirement plans, an asset for a plan’s overfunded status or a liability for a plan’s underfunded status is recognized in the consolidated balance sheets; plan assets and obligations that determine the plan’s funded status are measured as of the end of the Company’s fiscal year; and changes in the funded status of defined benefit postretirement plans are recognized in the year in which they occur. Such changes are reported in other comprehensive income (loss) as a separate component of stockholders’ equity. The Company’s pension obligations and related costs are calculated using actuarial concepts, within the authoritative guidance framework , and are considered Level 3 inputs as defined in Note 20. The Company uses the corridor approach to amortize unrecognized actuarial gains or losses over the average remaining service life of active participants. The life expectancy, estimated retirement age, discount rate, estimated future compensation and expected return on plan assets are important elements of expense and/or liability measurement. These critical assumptions are evaluated annually which enables expected future payments for benefits to be stated at present value on the measurement date. If actual results are not consistent with actuarial assumptions, the amounts recognized for the defined benefit plans could change significantly. Supplemental Executive Retirement Plan On August 23, 2005, the Board of Directors of the Company adopted a Supplemental Executive Retirement Plan (“SERP”) which became effective January 1, 2006. The SERP provides select employees who satisfy certain eligibility requirements with certain benefits upon retirement, termination of employment, death, disability or a change in control of the Company, in certain prescribed circumstances. In fiscal 2016, the SERP was amended in connection with Paul Marciano’s transition from Chief Executive Officer to Executive Chairman of the Board and Chief Creative Officer. This amendment effectively eliminated any future salary progression by finalizing compensation levels for future benefits. Mr. Marciano will continue to be eligible to receive SERP benefits in the future in accordance with the amended terms of the SERP. Subsequent to this amendment, there are no employees considered actively participating under the terms of the SERP. As a result, the Company included an actuarial gain of $11.4 million before taxes in accumulated other comprehensive income (loss) during fiscal 2016. In addition, the Company also recognized a curtailment gain of $1.7 million before taxes related to the accelerated amortization of the remaining prior service credit during fiscal 2016. As a non-qualified pension plan, no dedicated funding of the SERP is required; however, the Company has made periodic payments into insurance policies held in a rabbi trust to fund the expected obligations arising under the non-qualified SERP. The amount of any future payments into the insurance policies, if any, may vary depending on investment performance of the trust. The cash surrender values of the insurance policies were $64.5 million and $58.6 million as of February 3, 2018 and January 28, 2017 , respectively, and were included in other assets in the Company’s consolidated balance sheets. As a result of changes in the value of the insurance policy investments, the Company recorded unrealized gains (losses) of $7.7 million , $6.9 million and ($1.8) million in other income and expense during fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. The Company also recorded realized gains of $ 0.7 million in other income resulting from payout on the insurance policies during fiscal 2016. The Company assumed a discount rate of approximately 3.5% for both of the years ended February 3, 2018 and January 28, 2017 , as part of the actuarial valuation performed to calculate the projected benefit obligation, based on the timing of cash flows expected to be made in the future to the participants, applied to high quality yield curves. In fiscal 2016, the Company amended the SERP to effectively eliminate any future salary progression by finalizing compensation levels for future benefits. Prior to the amendment, compensation levels utilized in calculating the projected benefit obligation were derived from expected future compensation as outlined in employment contracts in effect at the time. The Company also considers recent updates to the mortality tables and mortality improvement scale published by the Society of Actuaries in developing its best estimate of the expected mortality rates for its plan participants. As of February 3, 2018 , accumulated other comprehensive income (loss) included actuarial losses of $0.2 million that are expected to be amortized and recognized as a component of net periodic defined benefit pension cost in fiscal 2019 . Aggregate benefits projected to be paid in the next five fiscal years are approximately $ 1.7 million in fiscal 2019 , $ 3.7 million in fiscal 2020 , $3.9 million in fiscal 2021 , $3.9 million in fiscal 2022 and $3.9 million in fiscal 2023 . Aggregate benefits projected to be paid in the following five fiscal years amount to $18.5 million . Foreign Pension Plans In certain foreign jurisdictions, primarily in Switzerland, the Company is required to guarantee the returns on Company sponsored defined contribution plans in accordance with local regulations. These plans are typically government-mandated defined contribution plans that provide employees with a minimum investment return, and as such, are treated under pension accounting in accordance with authoritative guidance. The minimum investment return for our Swiss pension plan was 1.00% and 1.25% during calendar 2017 and calendar 2016, respectively. Under the Swiss pension plan, both the Company and certain of its employees with annual earnings in excess of government determined amounts are required to make contributions into a fund managed by an independent investment fiduciary. The Company’s contributions must be made in an amount at least equal to the employee’s contribution. Minimum employee contributions are based on the respective employee’s age, salary and gender. During fiscal 2016, the Swiss pension plan was amended to update the conversion rate for future periods. As a result, the projected benefit obligation and prior service cost were reduced by $0.2 million during fiscal 2016. As of February 3, 2018 and January 28, 2017 , actuarial assumptions used by the Company to calculate the projected benefit obligation and the fair value of the plans assets related to its Swiss pension plan included discount rates of 0.60% and 0.50% , respectively, and expected returns on plan assets of 1.40% for both periods. As of February 3, 2018 , accumulated other comprehensive income (loss) included actuarial losses of $0.4 million that are expected to be amortized and recognized as a component of net periodic defined benefit pension cost in fiscal 2019 . The components of net periodic defined benefit pension cost to accumulated comprehensive income (loss) for fiscal 2018 , fiscal 2017 and fiscal 2016 related to the Company’s defined benefit plans are as follows (in thousands): Year Ended February 3, 2018 SERP Foreign Pension Plans Total Service cost $ — $ 2,500 $ 2,500 Interest cost 1,844 147 1,991 Expected return on plan assets — (244 ) (244 ) Net amortization of unrecognized prior service credit — (27 ) (27 ) Net amortization of actuarial losses 151 311 462 Net periodic defined benefit pension cost $ 1,995 $ 2,687 $ 4,682 Unrecognized prior service credit charged to comprehensive income (loss) $ — $ (27 ) $ (27 ) Unrecognized net actuarial loss charged to comprehensive income (loss) 151 311 462 Net actuarial losses (1,092 ) (1,156 ) (2,248 ) Foreign currency and other adjustments — (269 ) (269 ) Related tax impact 360 75 435 Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) (581 ) (1,066 ) (1,647 ) Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance (1) (1,435 ) — (1,435 ) Total periodic defined benefit pension cost and other charges to accumulated other comprehensive income (loss) $ (2,016 ) $ (1,066 ) $ (3,082 ) ________________________________________________________________________ (1) During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017 . As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.4 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s SERP. Year Ended January 28, 2017 SERP Foreign Pension Total Service cost $ — $ 1,544 $ 1,544 Interest cost 1,839 87 1,926 Expected return on plan assets — (185 ) (185 ) Net amortization of unrecognized prior service credit — (28 ) (28 ) Net amortization of actuarial losses 155 186 341 Net periodic defined benefit pension cost $ 1,994 $ 1,604 $ 3,598 Unrecognized prior service credit charged to comprehensive income (loss) $ — $ (28 ) $ (28 ) Unrecognized net actuarial loss charged to comprehensive income (loss) 155 186 341 Net actuarial gains (losses) 63 (1,248 ) (1,185 ) Foreign currency and other adjustments — (72 ) (72 ) Related tax impact (84 ) 105 21 Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) and accumulated other comprehensive income (loss) $ 134 $ (1,057 ) $ (923 ) Year Ended January 30, 2016 SERP Foreign Pension Total Service cost $ — $ 1,622 $ 1,622 Interest cost 1,986 69 2,055 Expected return on plan assets — (142 ) (142 ) Net amortization of unrecognized prior service credit (97 ) — (97 ) Net amortization of actuarial losses 740 184 924 Curtailment gain (1,651 ) — (1,651 ) Net periodic defined benefit pension cost $ 978 $ 1,733 $ 2,711 Unrecognized prior service credit charged to comprehensive income (loss) $ (97 ) $ — $ (97 ) Unrecognized net actuarial loss charged to comprehensive income (loss) 740 184 924 Curtailment gain (1,651 ) — (1,651 ) Net actuarial gains (losses) 8,707 (341 ) 8,366 Plan amendment — 167 167 Foreign currency and other adjustments — 274 274 Related tax impact (2,945 ) (27 ) (2,972 ) Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) and accumulated other comprehensive income (loss) $ 4,754 $ 257 $ 5,011 Included in accumulated other comprehensive income (loss), before tax, as of February 3, 2018 and January 28, 2017 are the following amounts that have not yet been recognized in net periodic defined benefit pension cost (in thousands): Feb 3, 2018 Jan 28, 2017 SERP Foreign Pension Total SERP Foreign Pension Total Unrecognized prior service credit $ — $ (113 ) $ (113 ) $ — $ (140 ) $ (140 ) Unrecognized net actuarial loss 9,454 4,889 14,343 8,513 3,775 12,288 Total included in accumulated other comprehensive loss $ 9,454 $ 4,776 $ 14,230 $ 8,513 $ 3,635 $ 12,148 The following table summarizes the funded status of the Company’s defined benefit plans and the amounts recognized in the Company’s consolidated balance sheets (in thousands): February 3, 2018 Jan 28, 2017 SERP Foreign Pension Total SERP Foreign Pension Total Projected benefit obligation $ (54,760 ) $ (26,409 ) $ (81,169 ) $ (53,521 ) $ (19,986 ) $ (73,507 ) Plan assets at fair value (1) — 21,437 21,437 — 16,305 16,305 Net liability (2) $ (54,760 ) $ (4,972 ) $ (59,732 ) $ (53,521 ) $ (3,681 ) $ (57,202 ) ________________________________________________________________________ (1) The SERP is a non-qualified pension plan and hence the insurance policies are not considered to be plan assets. Accordingly, the table above does not include the insurance policies with cash surrender values of $64.5 million and $58.6 million as of February 3, 2018 and January 28, 2017 , respectively. (2) The net liability was included in accrued expenses and other long-term liabilities in the Company’s consolidated balance sheets depending on the expected timing of payments. A reconciliation of the changes in the projected benefit obligation for fiscal 2018 and fiscal 2017 is as follows (in thousands): Projected Benefit Obligation SERP Foreign Pension Total Balance at January 30, 2016 $ 53,443 $ 17,577 $ 71,020 Service cost — 1,544 1,544 Interest cost 1,839 87 1,926 Actuarial (gains) losses (63 ) 1,067 1,004 Contributions by plan participants — 1,805 1,805 Payments (1,698 ) (2,416 ) (4,114 ) Foreign currency and other adjustments — 322 322 Balance at January 28, 2017 $ 53,521 $ 19,986 $ 73,507 Service cost — 2,500 2,500 Interest cost 1,844 147 1,991 Actuarial (gains) losses 1,092 1,156 2,248 Contributions by plan participants — 2,315 2,315 Payments (1,697 ) (1,373 ) (3,070 ) Foreign currency and other adjustments — 1,678 1,678 Balance at February 3, 2018 $ 54,760 $ 26,409 $ 81,169 The SERP is a non-qualified pension plan and hence the insurance policies are not considered to be plan assets. Accordingly, the table below does not include the insurance policies with cash surrender values of $64.5 million and $58.6 million as of February 3, 2018 and January 28, 2017 , respectively. A reconciliation of the changes in plan assets for the Foreign Pension Plans for fiscal 2018 and fiscal 2017 is as follows (in thousands): Plan Assets Balance at January 30, 2016 $ 14,859 Actual return on plan assets 4 Contributions by employer 1,779 Contributions by plan participants 1,805 Payments (2,416 ) Foreign currency and other adjustments 274 Balance at January 28, 2017 $ 16,305 Actual return on plan assets 244 Contributions by employer 2,575 Contributions by plan participants 2,315 Payments (1,373 ) Foreign currency and other adjustments 1,371 Balance at February 3, 2018 $ 21,437 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Feb. 03, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company and its subsidiaries periodically enter into transactions with other entities or individuals that are considered related parties, including certain transactions with entities affiliated with trusts for the respective benefit of Paul Marciano, who is an executive and member of the Board of the Company, and Maurice Marciano, Chairman Emeritus and member of the Board, and certain of their children (the “Marciano Trusts”). Leases The Company leases warehouse and administrative facilities, including the Company’s corporate headquarters in Los Angeles, California, from partnerships affiliated with the Marciano Trusts and certain of their affiliates. There were four of these leases in effect as of February 3, 2018 with expiration dates ranging from calendar years 2018 to 2020 . The Company, through a wholly-owned Canadian subsidiary, leases warehouse and administrative facilities in Montreal, Quebec from a partnership affiliated with the Marciano Trusts. During fiscal 2018, the Company exercised an option to extend the lease term for an additional one -year period ending in December 2018 . All other terms of the existing lease remain in full force and effect . The Company, through a French subsidiary, leases a showroom and office space located in Paris, France from an entity that is owned in part by an affiliate of the Marciano Trusts. Due to excess capacity, the lease was amended to reduce the square footage by approximately 5,100 square feet to 16,000 square feet during fiscal 2018 . The amendment also provided for a corresponding reduction in aggregate rent, common area maintenance charges and property tax expense due to the lower square footage . All other terms of the existing lease remain in full force and effect . In January 2016, the Company sold an approximately 140,000 square foot parking lot located adjacent to the Company’s corporate headquarters to a partnership affiliated with the Marciano Trusts for a sales price of $7.5 million , which was subsequently collected during fiscal 2017. Concurrent with the sale, the Company entered into a lease agreement to lease back the parking lot from the purchaser. During fiscal 2016, the Company recognized a net gain of approximately $3.4 million in other income as a result of these transactions. Aggregate rent, common area maintenance charges and property tax expense recorded under these four related party leases for fiscal 2018 , fiscal 2017 and fiscal 2016 were $4.9 million , $5.0 million and $5.1 million , respectively. The Company believes that the terms of the related party leases and parking lot sale have not been significantly affected by the fact that the Company and the lessors are related. Refer to Note 14 for more information on lease commitments. Aircraft Arrangements The Company periodically charters aircraft owned by MPM Financial, LLC (“MPM Financial”), an entity affiliated with the Marciano Trusts, through informal arrangements with MPM Financial and independent third party management companies contracted by MPM Financial to manage its aircraft. The total fees paid under these arrangements for fiscal 2018 , fiscal 2017 and fiscal 2016 were approximately $1.1 million , $0.9 million and $0.6 million , respectively. Other Transactions During 2015, Georges Marciano, brother of Paul Marciano and Maurice Marciano, filed lawsuits against the Company in Canada and the U.S. related primarily to intellectual property rights in the Marciano name. Armand Marciano, also a brother of Paul Marciano and Maurice Marciano, was later added as a plaintiff to the U.S. lawsuit. In addition to the lawsuits, Georges Marciano opposed various of the Company’s applications for registration of its “Marciano” mark. In December 2015, the parties (including all the Marciano brothers) entered into a settlement agreement and a coexistence agreement whereby: (1) Georges Marciano and Armand Marciano agreed to drop all claims and actions against the Company; (2) the Company agreed to pay Georges Marciano and Armand Marciano a sum of $100,000 each (which amounts were substantially reimbursed by insurance); (3) the Company clarified the intellectual property rights of Georges Marciano and Armand Marciano in the use of their respective full names; and (4) the parties clarified the Company’s ownership and intellectual property rights in the name “Marciano.” |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Feb. 03, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases The Company leases its showrooms, advertising, licensing, sales and merchandising offices, remote distribution and warehousing facilities and retail and factory outlet store locations under operating lease agreements expiring on various dates through October 2037 . Some of these leases require the Company to make periodic payments for property taxes, utilities and common area operating expenses. Certain retail store leases provide for rents based upon the minimum annual rental amount and a percentage of annual sales volume, generally ranging from 4% to 20% , when specific sales volumes are exceeded. The Company’s concession leases also provide for rents primarily based upon a percentage of annual sales volume which average approximately 35% of annual sales volume. Some leases include lease incentives, rent abatements and fixed rent escalations, which are amortized and recorded over the initial lease term on a straight-line basis. The Company also leases some of its equipment under operating lease agreements expiring at various dates through November 2022 . As discussed in further detail in Note 8, the Company leases equipment as well as computer hardware and software under capital lease obligations. Future minimum property and equipment lease payments under capital leases and non-cancelable operating leases as of February 3, 2018 are as follows (in thousands): Operating Leases Capital Lease Non-Related Parties Related Parties Total Fiscal 2019 $ 2,940 $ 196,321 $ 4,757 $ 204,018 Fiscal 2020 2,945 174,521 4,420 181,886 Fiscal 2021 2,934 148,255 2,024 153,213 Fiscal 2022 2,716 124,562 — 127,278 Fiscal 2023 2,590 100,162 — 102,752 Thereafter 10,859 229,880 — 240,739 Total minimum lease payments $ 24,984 $ 973,701 $ 11,201 $ 1,009,886 Less interest (6,395 ) Capital lease obligations $ 18,589 Less current portion (1,594 ) Long-term capital lease obligations $ 16,995 Rental expense for all property and equipment operating leases during fiscal 2018 , fiscal 2017 and fiscal 2016 aggregated $272.3 million , $263.1 million and $259.1 million , respectively, including percentage rent of $61.2 million , $53.0 million and $53.7 million , respectively. Purchase Commitments Inventory purchase commitments as of February 3, 2018 were $208.1 million . These purchase commitments can be impacted by various factors, including the scheduling of market weeks, the timing of issuing orders, the timing of the shipment of orders and currency fluctuations. Incentive Bonuses Certain officers and key employees of the Company are eligible to receive annual cash incentive bonuses based on the achievement of certain performance criteria. These bonuses are based on performance measures such as earnings from operations of the Company or particular segments thereof, as well as other objective and subjective criteria as determined by the Compensation Committee of the Board of Directors. Investment Commitments As of February 3, 2018 , the Company had an unfunded commitment to invest € 4.5 million ($ 5.7 million ) in a private equity fund. Refer to Note 20 for further information. Legal Proceedings On May 6, 2009, Gucci America, Inc. filed a complaint in the U.S. District Court for the Southern District of New York against Guess?, Inc. and certain third party licensees for the Company asserting, among other things, trademark and trade dress law violations and unfair competition. The complaint sought injunctive relief, compensatory damages, including treble damages, and certain other relief. Complaints similar to those in the above action have also been filed by Gucci entities against the Company and certain of its subsidiaries in the Court of Milan, Italy, the Intermediate People’s Court of Nanjing, China and the Court of Paris, France. The three-week bench trial in the U.S. matter concluded on April 19, 2012, with the court issuing a preliminary ruling on May 21, 2012 and a final ruling on July 19, 2012. Although the plaintiff was seeking compensation in the U.S. matter in the form of damages of $26 million and an accounting of profits of $99 million , the final ruling provided for monetary damages of $2.3 million against the Company and $2.3 million against certain of its licensees. The court also granted narrow injunctions in favor of the plaintiff for certain of the claimed infringements. On August 20, 2012, the appeal period expired without any party having filed an appeal, rendering the judgment final. On May 2, 2013, the Court of Milan ruled in favor of the Company in the Milan, Italy matter. In the ruling, the Court rejected all of the plaintiff’s claims and ordered the cancellation of three of the plaintiff’s Italian and four of the plaintiff’s European Community trademark registrations. On June 10, 2013, the plaintiff appealed the Court’s ruling in the Milan matter. On September 15, 2014, the Court of Appeal of Milan affirmed the majority of the lower Court’s ruling in favor of the Company, but overturned the lower Court’s finding with respect to an unfair competition claim. That portion of the matter is now in a damages phase based on the ruling. On October 16, 2015, the plaintiff appealed the remainder of the Court of Appeal of Milan’s ruling in favor of the Company to the Italian Supreme Court of Cassation. In the China matter, the Intermediate People’s Court of Nanjing, China issued a ruling on November 8, 2013 granting an injunction in favor of the plaintiff for certain of the claimed infringements on handbags and small leather goods and awarding the plaintiff statutory damages in the amount of approximately $80,000 . The Company strongly disagreed with the Court’s decision and appealed the ruling. On August 31, 2016, the Court of Appeal for the China matter issued a decision in favor of the Company, rejecting all of the plaintiff’s claims. In March 2017, the plaintiff petitioned the China Supreme Court for a retrial of the matter. On January 30, 2015, the Court of Paris ruled in favor of the Company in the France matter, rejecting all of the plaintiff’s claims and partially canceling two of the plaintiff’s community trademark registrations and one of the plaintiff’s international trademark registrations. On February 17, 2015, the plaintiff appealed the Court of Paris’ ruling. Although the Company believes that it has a strong position with respect to each of the remaining matters, it is unable to predict with certainty whether or not these efforts will ultimately be successful or whether the outcomes will have a material impact on the Company’s financial position or results of operations. The parties are currently engaged in settlement discussions with respect to the remaining matters. The Company has received customs tax assessment notices from the Italian Customs Agency regarding its customs tax audit of one of the Company’s European subsidiaries for the period from July 2010 through December 2012 . Such assessments totaled €9.8 million ( $12.2 million ), including potential penalties and interest. The Company strongly disagrees with the positions that the Italian Customs Agency has taken and therefore filed appeals with the Milan First Degree Tax Court (“MFDTC”). In May 2015, the MFDTC issued a judgment in favor of the Company in relation to the first set of appeals (covering the period through September 2010 ) and canceled the related assessments totaling €1.7 million ( $2.1 million ). In November 2015, the Italian Customs Agency notified the Company of its intent to appeal this first MFDTC judgment. During fiscal 2017, the Appeals Court ruled in favor of the Company and rejected the appeal by the Italian Customs Agency on the first MFDTC judgment. During fiscal 2017, the MFDTC also issued judgments in favor of the Company in relation to the second through seventh set of appeals (covering the period from October 2010 through December 2012 ) and canceled the related assessments totaling €8.1 million ( $10.1 million ). Subsequently, the Italian Customs Agency has appealed the majority of these favorable MFDTC judgments, as well as certain of the Appeals Court judgments. While these MFDTC judgments have been favorable to the Company, there can be no assurances that the Italian Customs Agency will not be successful in its remaining appeals. It also continues to be possible that the Company will receive similar or even larger assessments for periods subsequent to December 2012 or other claims or charges related to the matter in the future. Although the Company believes that it has a strong position and will continue to vigorously defend this matter, it is unable to predict with certainty whether or not these efforts will ultimately be successful or whether the outcome will have a material impact on the Company’s financial position or results of operations. On June 6, 2017, the European Commission notified the Company that it has initiated proceedings to investigate whether certain of the Company’s practices and agreements concerning the distribution of apparel and accessories within the European Union breach European Union competition rules related to cross-border transactions, internet sales limitations and resale price restrictions. The initiation of the proceedings does not mean that the European Commission has made a definitive conclusion regarding whether the Company breached any rules. The Company has cooperated and plans to continue to cooperate with the European Commission, including through responses to requests for information and through changes to certain business practices and agreements, as appropriate. If a violation is ultimately found, a broad range of remedies is potentially available to the European Commission, including imposing a fine and/or injunctive relief prohibiting or restricting certain business practices. As of November 6, 2017, the Company and the European Commission agreed to begin a settlement discussion process to determine if the parties can mutually agree on an outcome of the proceedings. Those discussions are still ongoing. At this point, the Company is unable to predict the timing or outcome of these proceedings, including the magnitude of any potential fine. However, the Company does not currently believe that any changes to its business practices or agreements made in connection with this proceeding will have a material impact on its ongoing business operations within the European Union. The Company is also involved in various other claims and other matters incidental to the Company’s business, the resolutions of which are not expected to have a material adverse effect on the Company’s financial position or results of operations. Redeemable Noncontrolling Interests The Company is party to a put arrangement with respect to the common securities that represent the remaining noncontrolling interest for its majority-owned subsidiary, Guess Brasil Comércio e Distribuição S.A. (“Guess Brazil”), which was established through a majority-owned joint venture during fiscal 2014. The put arrangement for Guess Brazil, representing 40% of the total outstanding equity interest of that subsidiary, may be exercised at the discretion of the noncontrolling interest holder by providing written notice to the Company beginning in the sixth year of the agreement, or sooner in certain limited circumstances, and every third anniversary from the end of the sixth year thereafter subject to certain time restrictions. The redemption value of the Guess Brazil put arrangement is based on a multiple of Guess Brazil’s earnings before interest, taxes, depreciation and amortization subject to certain adjustments, and is classified as a redeemable noncontrolling interest outside of permanent equity in the Company’s consolidated balance sheet. During fiscal 2017, the Company and the noncontrolling interest holder increased their capital contributions by $ 1.7 million , of which $ 1.0 million was paid by the Company and the remaining amount was paid by the noncontrolling interest holder to retain the same pro-rata interest in Guess Brazil. The carrying value of the redeemable noncontrolling interest related to Guess Brazil was $1.6 million and $1.7 million as of February 3, 2018 and January 28, 2017 , respectively. The Company is party to a put arrangement with respect to the common securities that represent the remaining noncontrolling interest for its majority-owned subsidiary, Guess? CIS, LLC (“Guess CIS”), which was established through a majority-owned joint venture during fiscal 2016. The put arrangement for Guess CIS, representing 30% of the total outstanding equity interest of that subsidiary, may be exercised at the discretion of the noncontrolling interest holder by providing written notice to the Company during the period beginning after the fifth anniversary of the agreement through December 31, 2025 , or sooner in certain limited circumstances. The redemption value of the Guess CIS put arrangement is based on a multiple of Guess CIS’s earnings before interest, taxes, depreciation and amortization subject to certain adjustments and is classified as a redeemable noncontrolling interest outside of permanent equity in the Company’s consolidated balance sheet. During fiscal 2016, the Company made an initial contribution of $2.0 million . During fiscal 2017, the Company and the noncontrolling interest holder increased their capital contributions by $ 5.0 million , of which $ 3.5 million was paid by the Company and the remaining amount was paid by the noncontrolling interest holder to retain the same pro-rata interest in Guess CIS. During fiscal 2018, the Company and the noncontrolling interest holder made an additional capital contribution totaling $3.2 million , of which $2.2 million was paid by the Company and the remaining amount was paid by the noncontrolling interest holder to retain the same pro-rata interest in Guess CIS. The carrying value of the redeemable noncontrolling interest related to Guess CIS was $4.0 million and $2.8 million as of February 3, 2018 and January 28, 2017 , respectively. The Company was previously party to a put arrangement in connection with its now wholly-owned subsidiary, Guess Sud SAS (“Guess Sud”). Under the terms of this put arrangement, which represented 40% of the total outstanding interest of that subsidiary, the noncontrolling interest holder had the option to exercise the put arrangement at its discretion by providing written notice to the Company any time after January 30, 2012 . The redemption value of the put arrangement was determined based on a method which approximated fair value. During fiscal 2017, the Company acquired the remaining 40% interest in Guess Sud for $4.4 million . A reconciliation of the total carrying amount of redeemable noncontrolling interests for fiscal 2018 and fiscal 2017 is as follows (in thousands): Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Beginning balance $ 4,452 $ 5,252 Foreign currency translation adjustment 187 818 Purchase of redeemable noncontrolling interest — (4,445 ) Noncontrolling interest capital contribution 951 2,157 Redeemable noncontrolling interest redemption value adjustment — 670 Ending balance $ 5,590 $ 4,452 |
Savings Plans
Savings Plans | 12 Months Ended |
Feb. 03, 2018 | |
Retirement Benefits [Abstract] | |
Savings Plans | Savings Plans The Company established the Guess?, Inc. Savings Plan (the “Savings Plan”) under Section 401(k) of the Internal Revenue Code. Under the Savings Plan, employees (“associates”) may contribute up to 100% of their compensation per year subject to the elective limits as defined by IRS guidelines and the Company may make matching contributions in amounts not to exceed 3.0% of the associates’ annual compensation. Investment selections consist of mutual funds and do not include any Company common stock. The Company’s contributions to the Savings Plan amounted to $1.1 million , $1.2 million and $1.3 million for fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. Effective January 1, 2006, the Company adopted a Non-qualified Deferred Compensation Plan (the “DCP”). Under the DCP, select employees who satisfy certain eligibility requirements and members of the Board of Directors may make annual irrevocable elections to defer a portion of their base compensation and/or bonuses. The deferred amounts and earnings thereon are payable to participants at specified future distribution dates, upon termination of employment, retirement, disability, death or change in control of the Company, in a lump sum or installments, pursuant to elections under the rules of the DCP. The participants to the DCP have an unsecured contractual commitment by the Company to pay the amounts due under the DCP. The deferred compensation liability as of February 3, 2018 and January 28, 2017 was $13.5 million and $11.2 million , respectively, and was included in accrued expenses and other long-term liabilities in the Company’s consolidated balance sheets depending on the expected timing of payments. The Company has purchased corporate-owned life insurance, which is held in a rabbi trust, to offset this liability. The assets held in the rabbi trust are not available for general corporate purposes except in the event of bankruptcy of the Company. As of February 3, 2018 and January 28, 2017 , the long-term asset was $13.7 million and $12.0 million , respectively. All earnings and expenses of the rabbi trust are reported in the Company’s consolidated statements of income in other income and expense. For fiscal 2018 , fiscal 2017 and fiscal 2016 , the Company incurred unrealized gains (losses) of $1.7 million , $1.5 million and $(0.7) million , respectively, related to the change in the value of the insurance policy investments. During fiscal 2016, the Company also recorded realized gains of $0.3 million in other income resulting from payout on the insurance policies. During fiscal 2016, the Company made contributions of $1.5 million to the DCP. |
Quarterly Information (Unaudite
Quarterly Information (Unaudited) | 12 Months Ended |
Feb. 03, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Information (Unaudited) | Quarterly Information (Unaudited) The following is a summary of the unaudited quarterly financial information for fiscal 2018 and fiscal 2017 (in thousands, except per share data): Quarterly Periods Ended (1) Year Ended February 3, 2018 Apr 29, Jul 29, Oct 28, Feb 3, Net revenue (2) $ 454,345 $ 568,292 $ 548,953 $ 792,164 Gross profit 144,642 198,027 191,109 295,070 Net earnings (loss) (21,227 ) 15,881 (1,662 ) 3,107 Net earnings (loss) attributable to Guess?, Inc. (21,293 ) 15,219 (2,860 ) 1,040 Net earnings (loss) per common share attributable to common stockholders: (3) (4) (5) (6) Basic $ (0.26 ) $ 0.18 $ (0.04 ) $ 0.01 Diluted $ (0.26 ) $ 0.18 $ (0.04 ) $ 0.01 Quarterly Periods Ended (1) Year Ended January 28, 2017 Apr 30, Jul 30, Oct 29, Jan 28, Net revenue (2) $ 444,061 $ 540,412 $ 531,976 $ 674,004 Gross profit 142,759 185,632 180,242 236,407 Net earnings (25,154 ) 32,167 9,729 8,656 Net earnings attributable to Guess?, Inc. (25,178 ) 32,269 9,103 6,567 Net earnings per common share attributable to common stockholders: (3) (4) (5) (7) (8) (9) Basic $ (0.30 ) $ 0.38 $ 0.11 $ 0.08 Diluted $ (0.30 ) $ 0.38 $ 0.11 $ 0.08 _________________________________________________________________________ (1) All fiscal quarters presented consisted of 13 weeks with the exception of the quarter ended February 3, 2018 which consisted of 14 weeks. (2) During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales . Accordingly, prior period amounts related to net royalties, net revenue and cost of product sales have been adjusted to conform to the current period presentation . This resulted in a decrease to net revenue and cost of product sales of $4.2 million , $5.4 million and $5.2 million during the first, second and third quarters of fiscal 2018 , respectively. This also resulted in a decrease to net revenue and cost of product sales of $4.8 million , $4.5 million , $4.3 million and $5.3 million during the first, second, third and fourth quarters of fiscal 2017 , respectively. This reclassification had no impact on previously reported gross profit, net earnings (loss) or net earnings (loss) per share. Refer to Note 1 for further information regarding this reclassification. (3) Per common share amounts for the quarters and full years have been calculated separately. Accordingly, quarterly amounts may not add to the annual amount because of differences in the average common shares outstanding during each period. (4) The Company recorded net gains (losses) on lease terminations of $(11.5) million and $0.1 million during the third and fourth quarters of fiscal 2018 , respectively. There were no net gains (losses) on lease terminations recognized during the first or second quarters of fiscal 2018 . During the first and second quarters of fiscal 2017, the Company recorded net gains on lease terminations of $0.1 million and $0.6 million , respectively. There were no net gains (losses) on lease terminations recognized during the third or fourth quarters of fiscal 2017 . Refer to Note 1 for further information regarding net gains (losses) on lease terminations. (5) During each of the periods presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. The Company recorded asset impairment charges of $2.8 million , $1.2 million , $2.0 million and $2.5 million , respectively, during the first, second, third and fourth quarters of fiscal 2018 . The Company also recorded asset impairment charges of $0.2 million , $0.5 million , $0.8 million and $32.9 million , respectively, during the first, second, third and fourth quarters of fiscal 2017 . Refer to Note 5 for further detail regarding asset impairment charges. (6) During fiscal 2018, the Company recognized additional tax expense of $47.9 million related to the enactment of the Tax Reform . This is comprised of a $24.9 million charge for the provisional re-measurement of certain deferred taxes and related amounts and a provisional charge of $23.0 million to income tax expense for the estimated effects of the transitional tax on the deemed repatriation of foreign earnings . These charges were recorded during the fourth quarter of fiscal 2018. Refer to Note 11 for further detail. (7) During fiscal 2017, the Company recorded restructuring charges of $6.1 million and a related estimated exit tax charge of approximately $1.9 million . The restructuring charges and related estimated exit tax charge were recorded during the three months ended April 30, 2016. Refer to Note 9 for further detail regarding these charges. (8) During fiscal 2017, the Company sold its minority interest equity holding in a privately-held boutique apparel company for net proceeds of approximately $ 34.8 million , which resulted in a gain of approximately $ 22.3 million which was recorded in other income. The gain was recorded during the three months ended July 30, 2016. (9) During fiscal 2017, the Company recorded valuation reserves of $6.8 million resulting from jurisdictions where there have been cumulative net operating losses, limiting the Company’s ability to consider other subjective evidence to continue to recognize the existing deferred tax assets. The Company recorded the valuation reserve during the three months ended January 28, 2017. Refer to Note 11 for further detail. |
Segment Information
Segment Information | 12 Months Ended |
Feb. 03, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s reportable business segments and respective accounting policies of the segments are the same as those described in Note 1. Management evaluates segment performance based primarily on revenues and earnings (loss) from operations before corporate performance-based compensation costs, net gains (losses) from lease terminations, asset impairment charges and restructuring charges, if any. Corporate overhead, net gains (losses) from lease terminations, asset impairment charges, restructuring charges, interest income, interest expense and other income and expense are evaluated on a consolidated basis and not allocated to the Company’s business segments. Segment information is summarized as follows (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 (1) Jan 28, 2017 (1) Jan 30, 2016 (1) Net revenue: Americas Retail $ 833,077 $ 935,479 $ 981,942 Americas Wholesale (2) 150,366 146,260 155,594 Europe (2) 998,657 788,194 722,877 Asia (2) 308,899 248,601 240,041 Licensing (3) 72,755 71,919 84,041 Total net revenue (3) $ 2,363,754 $ 2,190,453 $ 2,184,495 Earnings (loss) from operations: Americas Retail (2) $ (17,301 ) $ (22,816 ) $ 18,414 Americas Wholesale (2) 25,161 24,190 29,579 Europe (2) 87,376 56,961 53,673 Asia (2) 14,116 (2,381 ) 10,309 Licensing (2) 78,102 80,386 92,189 Total segment earnings from operations 187,454 136,340 204,164 Corporate overhead (2) (102,429 ) (73,859 ) (82,864 ) Net gains (losses) on lease terminations (2) (4) (11,373 ) 695 2,337 Asset impairment charges (2) (5) (8,479 ) (34,385 ) (2,287 ) Restructuring charges (6) — (6,083 ) — Total earnings from operations $ 65,173 $ 22,708 $ 121,350 Capital expenditures: Americas Retail $ 16,899 $ 25,881 $ 26,384 Americas Wholesale 1,303 3,320 2,854 Europe 46,419 42,080 13,869 Asia 12,111 13,869 6,265 Licensing — 20 27 Corporate overhead 7,923 5,411 34,445 Total capital expenditures $ 84,655 $ 90,581 $ 83,844 Feb 3, 2018 Jan 28, 2017 Total assets: Americas Retail $ 192,917 $ 240,857 Americas Wholesale 181,548 175,136 Europe 850,886 723,251 Asia 242,232 182,405 Licensing 6,255 19,442 Corporate overhead 181,796 193,395 Total assets $ 1,655,634 $ 1,534,485 _________________________________________________________________________ (1) The Company operates on a 52 / 53 -week fiscal year calendar, which ends on the Saturday nearest to January 31 of each year. The results for fiscal 2018 included the impact of an additional week which occurred during the fourth quarter ended February 3, 2018 . (2) During fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. Segment results were also adjusted to exclude corporate performance-based compensation costs, net gains (losses) on lease terminations and asset impairment charges due to the fact that these items are no longer included in the segment results provided to the Company’s chief operating decision maker in order to allocate resources and assess performance . Accordingly, segment results have been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. (3) During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales . Accordingly, net revenue has been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. This reclassification had no impact on previously reported earnings from operations. (4) During fiscal 2018 , the Company incurred net losses on lease terminations related primarily to the modification of certain lease agreements held with a common landlord in North America . During fiscal 2017 and fiscal 2016 , the Company recorded net gains on lease terminations related primarily to the early termination of certain lease agreements in Europe . Refer to Note 1 for more information regarding the net gains (losses) on lease terminations. (5) During each of the years presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. Refer to Note 5 for more information regarding these asset impairment charges. (6) Restructuring charges incurred during fiscal 2017 related to plans to better align the Company’s global cost and organizational structure with its current strategic initiatives. Refer to Note 9 for more information regarding these restructuring charges. The table below presents information regarding geographic areas in which the Company operated. Net revenue is classified primarily based on the country where the Company’s customer is located (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 (1) Jan 30, 2016 (1) Net revenue: U.S. $ 742,620 $ 836,954 $ 892,056 Italy 289,299 257,542 245,451 Canada 203,965 220,720 222,470 South Korea 156,101 157,503 162,200 Other foreign countries 971,769 717,734 662,318 Total net revenue $ 2,363,754 $ 2,190,453 $ 2,184,495 Feb 3, 2018 Jan 28, 2017 Long-lived assets: U.S. $ 109,943 $ 115,728 Italy 34,884 31,013 Canada 18,845 13,690 South Korea 9,584 8,664 Other foreign countries 187,214 132,921 Total long-lived assets $ 360,470 $ 302,016 _________________________________________________________________________ (1) During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales . Accordingly, net revenue by geographic area has been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Feb. 03, 2018 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The computation of basic and diluted net earnings (loss) per common share attributable to common stockholders is as follows (in thousands, except per share data): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Net earnings (loss) attributable to Guess?, Inc. $ (7,894 ) $ 22,761 $ 81,851 Less net earnings attributable to nonvested restricted stockholders 764 527 532 Net earnings (loss) attributable to common stockholders $ (8,658 ) $ 22,234 $ 81,319 Weighted average common shares used in basic computations 82,189 83,666 84,264 Effect of dilutive securities: Stock options and restricted stock units (1) — 163 261 Weighted average common shares used in diluted computations 82,189 83,829 84,525 Net earnings (loss) per common share attributable to common stockholders: Basic $ (0.11 ) $ 0.27 $ 0.97 Diluted $ (0.11 ) $ 0.27 $ 0.96 _________________________________________________________________________ (1) For fiscal 2018, there were 652,494 potentially dilutive shares that were not included in the computation of diluted weighted average common shares and common equivalent shares outstanding because their effect would have been antidilutive given the Company’s net loss. For fiscal 2018 , fiscal 2017 and fiscal 2016 , equity awards granted for 2,925,549 , 3,254,259 and 2,737,573 , respectively, of the Company’s common shares were outstanding but were excluded from the computation of diluted weighted average common shares and common equivalent shares outstanding because the assumed proceeds, as calculated under the treasury stock method, resulted in these awards being antidilutive. For fiscal 2018 , the Company also excluded 899,345 nonvested stock units which were subject to the achievement of performance-based vesting conditions from the computation of diluted weighted average common shares and common equivalent shares outstanding because these conditions were not achieved as of February 3, 2018 . For fiscal 2017 , the Company excluded 473,878 nonvested stock units which were subject to the achievement of performance-based or market-based vesting conditions from the computation of diluted weighted average common shares and common equivalent shares outstanding because these conditions were not achieved as of January 28, 2017 . For fiscal 2016 , the Company did not exclude any nonvested stock units which were subject to the achievement of performance-based or market-based vesting conditions from the computation of diluted weighted average common shares and common equivalent shares outstanding since these conditions were achieved as of January 30, 2016 . |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Feb. 03, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Share-Based Compensation Plans The Company has four share-based compensation plans. The Guess?, Inc. 2004 Equity Incentive Plan (the “Plan”) provides that the Board of Directors may grant stock options and other equity awards to officers, key employees and certain consultants and advisors to the Company or any of its subsidiaries. Effective May 19, 2017, the Plan was amended to increase the authorized issuance of shares from 15,000,000 shares of common stock to 29,100,000 shares of common stock. In addition, the amendment provided that awards granted on or after May 1, 2017 (other than stock options or stock appreciation rights) would be counted against the number of shares available to be issued under the Plan as 3.54 shares for every one share actually issued. The amendment also extended the term through May 19, 2027 and extended the Company’s ability to grant certain performance-based awards under the Plan through the first annual meeting of the Company’s shareholders in calendar 2022. As of February 3, 2018 and January 28, 2017 , there were 15,350,428 and 4,092,241 shares available for grant under the Plan, respectively. Stock options granted under the Plan have ten -year terms and typically vest and become fully exercisable in increments of one-fourth of the shares granted on each anniversary from the date of grant. Stock awards/units granted under the Plan typically vest in increments of one-fourth of the shares granted on each anniversary from the date of grant. The three most recent annual grants for stock options and other equity awards had initial vesting periods of nine months followed by three annual vesting periods. The Guess?, Inc. Employee Stock Purchase Plan (“ESPP”) allows qualified employees to participate in the purchase of designated shares of the Company’s common stock at a price equal to 85% of the lower of the closing price at the beginning or end of each quarterly stock purchase period. The Guess?, Inc. 2006 Non-Employee Directors’ Stock Grant and Stock Option Plan (the “Director Plan”) provides for the grant of equity awards to non-employee directors. Effective May 20, 2016, the Director Plan was amended to extend the term through June 30, 2026 , reduce the authorized issuance of shares from 2,000,000 shares of common stock to 1,850,000 shares of common stock and allow more flexibility to structure compensation arrangements for the Company’s non-employee directors. All other remaining provisions under the Director Plan remained in full force and effect. As of February 3, 2018 and January 28, 2017 , there were 495,489 and 582,639 shares available for grant under this plan, respectively. In addition, the Guess?, Inc. 1996 Equity Incentive Plan, under which equity grants have not been permitted since the approval of the Plan in 2004, continues to govern outstanding awards previously made thereunder. Performance-Based Awards The Company has granted certain nonvested units that require certain minimum performance targets to be achieved in order for these awards to vest . Vesting is also subject to continued service requirements through the vesting date . If the minimum performance targets are not forecasted to be achieved, no expense is recognized during the period . The Company has granted certain nonvested stock units subject to performance-based vesting conditions to select executive officers. Each award of nonvested stock units generally has an initial vesting period from the date of the grant through either (i) the end of the first fiscal year or (ii) the first anniversary of the date of grant, followed by annual vesting periods which may range from two -to- three years. The nonvested stock units are subject to the achievement of certain performance-based vesting conditions. The Company has also granted a target number of nonvested stock units to select key management, including certain executive officers. The number of shares that may ultimately vest with respect to each award may range from 0% up to 200% of the target number of shares, subject to the achievement of certain performance-based vesting conditions. Any shares that are ultimately issued are scheduled to vest at the end of the third fiscal year following the grant date. Market-Based Awards The Company has granted certain nonvested stock units which are subject to market-based performance targets in order for these units to vest. Vesting is also subject to continued service requirements through the vesting date. The grant date fair value for such nonvested stock units was estimated using a Monte Carlo simulation that incorporates option-pricing inputs covering the period from the grant date through the end of the performance period. Compensation expense for such nonvested stock units is recognized on a straight-line basis over the vesting period, regardless of whether the market condition is satisfied. The Company has granted certain nonvested stock units subject to market-based vesting conditions to select executive officers. The number of shares that may ultimately vest will equal 0% to 150% of the target number of shares, subject to the performance of the Company’s total stockholder return (“TSR”) relative to the TSR of a select group of peer companies over a three-year period. Contingently Returnable Restricted Stock Awards On July 7, 2015, the Company granted Victor Herrero, the Company’s Chief Executive Officer, 150,000 restricted stock units in addition to certain other stock options and nonvested stock units in connection with an employment agreement entered into between the Company and Mr. Herrero (the “Herrero Employment Agreement”). These restricted stock units vested immediately but were considered contingently returnable as a result of a one-year implied service condition set forth in the Herrero Employment Agreement. This service condition was met during the year ended January 28, 2017. Compensation expense for these restricted stock units was recognized on a straight-line basis over the implied service period. Share-Based Compensation Expense Compensation expense for nonvested stock options and stock awards/units that are not subject to performance-based vesting conditions is recognized on a straight-line basis over the vesting period . Compensation expense for performance-based awards that vest in increments is recognized based on an accelerated attribution method . During fiscal 2018, the Company adopted authoritative guidance which eliminates the requirement to estimate forfeitures, but rather provides for an election that would allow entities to account for forfeitures as they occur. The Company adopted this election using the modified retrospective method and recorded a cumulative adjustment to reduce retained earnings by approximately $0.3 million as of the beginning of the period of adoption. The following table summarizes the share-based compensation expense recognized under all of the Company’s stock plans during fiscal 2018 , fiscal 2017 and fiscal 2016 (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Stock options $ 2,345 $ 2,219 $ 2,113 Stock awards/units 16,347 14,544 16,604 ESPP 160 145 163 Total share-based compensation expense $ 18,852 $ 16,908 $ 18,880 Stock options The following table summarizes the stock option activity under all of the Company’s stock plans during fiscal 2018 : Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Options outstanding at January 28, 2017 2,857,012 $ 24.30 Granted 1,283,175 11.22 Exercised (123,775 ) 11.22 Forfeited (88,625 ) 25.39 Expired (15,375 ) 41.14 Options outstanding at February 3, 2018 3,912,412 $ 20.33 4.79 $ 3,930 Exercisable at February 3, 2018 2,232,456 $ 24.56 6.52 $ 668 Options exercisable and expected to vest at February 3, 2018 3,912,412 $ 20.33 4.79 $ 3,930 The fair value of each stock option was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants during fiscal 2018 , fiscal 2017 and fiscal 2016 : Year Ended Year Ended Year Ended Valuation Assumptions Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Risk-free interest rate 1.5 % 1.0 % 1.0 % Expected stock price volatility 37.1 % 35.4 % 36.7 % Expected dividend yield 8.0 % 4.8 % 4.7 % Expected life of stock options (in years) 4.4 4.2 3.8 The risk-free interest rate is based on the U.S. Treasury yield curve in effect for the expected term of the option at the time of grant. The expected stock price volatility is determined based on an average of both historical volatility and implied volatility. Implied volatility is derived from exchange traded options on the Company’s common stock. The expected dividend yield is based on the Company’s history and expectations of dividend payouts. The expected life is determined based on historical trends. The weighted average grant date fair value of options granted was $1.57 , $3.53 and $3.75 during fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. The total intrinsic value of stock options exercised was $0.7 million during fiscal 2018 and minimal during fiscal 2017. During fiscal 2016 , the total intrinsic value of stock options exercised was $0.1 million . The intrinsic value of stock options is defined as the difference between the Company’s stock price on the exercise date and the grant date exercise price. The total cash received from option exercises was $1.4 million , $0.2 million and $0.3 million during fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. The compensation expense included in SG&A expense recognized was $2.3 million before the recognized income tax benefit of $0.8 million during fiscal 2018 . As of February 3, 2018 , there was approximately $3.7 million of unrecognized compensation cost related to nonvested stock options. This cost is expected to be recognized over a weighted average period of 1.5 years . The excess tax shortfall included in cash flows from operating activities related to stock option activity was minimal for fiscal 2018 . Stock awards/units The following table summarizes the nonvested stock awards/units activity under all of the Company’s stock plans during fiscal 2018 : Number of Awards/Units Weighted Average Grant Date Fair Value Nonvested at January 28, 2017 1,686,204 $ 18.80 Granted 1,969,619 11.41 Vested (1,052,796 ) 17.52 Forfeited (138,461 ) 14.94 Nonvested at February 3, 2018 2,464,566 $ 13.66 The following table summarizes the activity for nonvested performance-based units and nonvested market-based units included in the table above during fiscal 2018 : Performance-Based Units Market-Based Units Number of Units Weighted Average Grant Date Fair Value Number of Units Weighted Average Grant Date Fair Value Nonvested at January 28, 2017 787,849 $ 19.17 323,825 $ 16.63 Granted 818,416 11.17 309,118 12.03 Vested (290,645 ) 19.85 (244,466 ) 17.72 Forfeited (14,699 ) 16.60 — — Nonvested at February 3, 2018 1,300,921 $ 14.01 388,477 $ 12.28 The fair value of each market-based nonvested stock unit was estimated on the grant date using the Monte Carlo simulation with the following assumptions used for the grants during fiscal 2018 , fiscal 2017 and fiscal 2016 : Year Ended Year Ended Year Ended Valuation Assumptions Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Risk-free interest rate 1.4 % 0.9 % 0.9 % Expected stock price volatility 39.7 % 36.2 % 38.6 % Expected dividend yield — % — % — % Expected life of market-based awards (in years) 2.8 2.8 2.8 The weighted average grant date fair value for the total nonvested stock awards/units granted was $11.41 , $18.01 and $18.79 during fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. The total fair value at grant date of previously nonvested stock awards/units that were vested during fiscal 2018 , fiscal 2017 and fiscal 2016 was $18.4 million , $14.7 million and $14.0 million , respectively. During fiscal 2018 , fiscal 2017 and fiscal 2016 , the total intrinsic value of nonvested stock awards/units that vested was $12.6 million , $9.4 million and $11.0 million , respectively. The total intrinsic value of nonvested stock awards/units outstanding and unvested as of February 3, 2018 was $36.0 million . The compensation expense included in SG&A expense recognized during fiscal 2018 was $16.3 million before the recognized income tax benefit of $5.6 million . As of February 3, 2018 , there was approximately $26.9 million of total unrecognized compensation cost related to nonvested stock awards/units. This cost is expected to be recognized over a weighted average period of 1.6 years . The excess tax shortfall of $1.3 million related to stock award/unit activity was included in cash flows from operating activities for fiscal 2018 . ESPP The Company’s ESPP allows qualified employees (as defined) to participate in the purchase of designated shares of the Company’s common stock at a price equal to 85% of the lower of the closing price at the beginning or end of each quarterly stock purchase period. The ESPP requires participants to hold any shares purchased under the ESPP for a minimum period of six months after purchase. In addition, all Company employees are subject to the terms of the Company’s securities trading policy which generally prohibits the purchase or sale of any Company securities during the two weeks before the end of each fiscal quarter through two days after the public announcement by the Company of its earnings for that period. The Company has 4,000,000 shares of common stock registered under the ESPP. The Company’s ESPP will remain in effect through March 11, 2022 . During fiscal 2018 , fiscal 2017 and fiscal 2016 , 54,300 shares, 44,486 shares and 40,846 shares of the Company’s common stock were issued pursuant to the ESPP at an average price of $10.45 , $12.56 and $16.17 per share, respectively. The fair value of stock compensation expense associated with the Company’s ESPP was estimated on the date of grant using the Black-Scholes option-pricing valuation model with the following weighted average assumptions used for grants during fiscal 2018 , fiscal 2017 and fiscal 2016 . Year Ended Year Ended Year Ended Valuation Assumptions Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Risk-free interest rate 1.0 % 0.3 % 0.1 % Expected stock price volatility 45.8 % 41.1 % 34.9 % Expected dividend yield 7.6 % 6.2 % 4.7 % Expected life of ESPP options (in months) 3 3 3 The weighted average grant date fair value of ESPP options granted during fiscal 2018 , fiscal 2017 and fiscal 2016 was $2.85 , $3.32 and $4.06 , respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Feb. 03, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date. Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e. interest rates, yield curves, etc.) and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3—Unobservable inputs that reflect assumptions about what market participants would use in pricing the asset or liability. These inputs would be based on the best information available, including the Company’s own data. The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of February 3, 2018 and January 28, 2017 (in thousands): Fair Value Measurements at Feb 3, 2018 Fair Value Measurements at Jan 28, 2017 Recurring Fair Value Measures Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Foreign exchange currency contracts $ — $ 51 $ — $ 51 $ — $ 9,868 $ — $ 9,868 Interest rate swap — 1,460 — 1,460 — 876 — $ 876 Total $ — $ 1,511 $ — $ 1,511 $ — $ 10,744 $ — $ 10,744 Liabilities: Foreign exchange currency contracts $ — $ 18,089 $ — $ 18,089 $ — $ 1,424 $ — $ 1,424 Deferred compensation obligations — 13,476 — 13,476 — 11,184 — 11,184 Total $ — $ 31,565 $ — $ 31,565 $ — $ 12,608 $ — $ 12,608 There were no transfers of financial instruments between the three levels of fair value hierarchy during fiscal 2018 and fiscal 2017 . Foreign exchange currency contracts are entered into by the Company principally to hedge the future payment of inventory and intercompany transactions by non-U.S. subsidiaries. Periodically, the Company may also use foreign exchange currency contracts to hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries . The fair values of the Company’s foreign exchange currency contracts are based on quoted foreign exchange forward rates at the reporting date. The fair values of the interest rate swaps are based upon inputs corroborated by observable market data. Deferred compensation obligations to employees are adjusted based on changes in the fair value of the underlying employee-directed investments. Fair value of these obligations is based upon inputs corroborated by observable market data. During fiscal 2018, the Company invested € 0.5 million ( $0.5 million ) in a private equity fund, which was included in other assets in the Company’s consolidated balance sheet as of February 3, 2018 . As permitted in accordance with authoritative guidance, the Company uses net asset value per share as a practical expedient to measure the fair value of this investment and has not included this investment in the fair value hierarchy as disclosed above. As of February 3, 2018 , the Company had an unfunded commitment to invest an additional € 4.5 million ($ 5.7 million ) in the private equity fund. The carrying amount of the Company’s remaining financial instruments, which principally include cash and cash equivalents, trade receivables, accounts payable and accrued expenses, approximates fair value due to the relatively short maturity of such instruments. The fair values of the Company’s debt instruments (see Note 8) are based on the amount of future cash flows associated with each instrument discounted using the Company’s incremental borrowing rate. As of February 3, 2018 and January 28, 2017 , the carrying value of all financial instruments was not materially different from fair value , as the interest rates on the Company’s debt approximated rates currently available to the Company. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Feb. 03, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Hedging Strategy Foreign Exchange Currency Contracts The Company operates in foreign countries, which exposes it to market risk associated with foreign currency exchange rate fluctuations. The Company has entered into certain forward contracts to hedge the risk of foreign currency rate fluctuations. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these hedges. The Company’s primary objective is to hedge the variability in forecasted cash flows due to the foreign currency risk. Various transactions that occur primarily in Europe, Canada, South Korea, China and Mexico are denominated in U.S. dollars, British pounds and Russian roubles and thus are exposed to earnings risk as a result of exchange rate fluctuations when converted to their functional currencies. These types of transactions include U.S. dollar denominated purchases of merchandise and U.S. dollar and British pound denominated intercompany liabilities. In addition, certain operating expenses, tax liabilities and pension-related liabilities are denominated in Swiss francs and are exposed to earnings risk as a result of exchange rate fluctuations when converted to the functional currency . The Company enters into derivative financial instruments , including forward exchange currency contracts, to offset some but not all of the exchange risk on certain of these anticipated foreign currency transactions. Periodically, the Company may also use foreign exchange currency contracts to hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries . Interest Rate Swap Agreements The Company is exposed to interest rate risk on its floating-rate debt. The Company has entered into interest rate swap agreements to effectively convert its floating-rate debt to a fixed-rate basis. The principal objective of these contracts is to eliminate or reduce the variability of the cash flows in interest payments associated with the Company’s floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these contracts. Refer to Note 8 for further information. The impact of the credit risk of the counterparties to the derivative contracts is considered in determining the fair value of the foreign exchange currency contracts and interest rate swap agreements. As of February 3, 2018 , credit risk has not had a significant effect on the fair value of the Company’s foreign exchange currency contracts and interest rate swap agreements. Hedge Accounting Policy Foreign Exchange Currency Contracts U.S. dollar forward contracts are used to hedge forecasted merchandise purchases over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as cash flow hedges, are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are recognized in cost of product sales in the period which approximates the time the hedged merchandise inventory is sold. The Company also hedges forecasted intercompany royalties over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as cash flow hedges, are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are recognized in other income and expense in the period in which the royalty expense is incurred. The Company has also used U.S. dollar forward contracts to hedge the net investments of certain of the Company’s international subsidiaries over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as net investment hedges, are recorded in foreign currency translation adjustment as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are not recognized in earnings (loss) until the sale or liquidation of the hedged net investment . The Company also has foreign exchange currency contracts that are not designated as hedging instruments for accounting purposes. Changes in fair value of foreign exchange currency contracts not designated as hedging instruments are reported in net earnings (loss) as part of other income and expense. Interest Rate Swap Agreements Interest rate swap agreements are used to hedge the variability of the cash flows in interest payments associated with the Company’s floating-rate debt. Changes in the fair value of interest rate swap agreements designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are amortized to interest expense over the term of the related debt. Periodically, the Company may also enter into interest rate swap agreements that are not designated as hedging instruments for accounting purposes. Changes in the fair value of interest rate swap agreements not designated as hedging instruments are reported in net earnings (loss) as part of other income and expense. Summary of Derivative Instruments The fair value of derivative instruments in the consolidated balance sheets as of February 3, 2018 and January 28, 2017 is as follows (in thousands): Derivative Balance Sheet Location Fair Value at Feb 3, 2018 Fair Value at Jan 28, 2017 ASSETS: Derivatives designated as hedging instruments: Cash flow hedges: Foreign exchange currency contracts Other current assets/ Other assets $ 41 $ 6,072 Interest rate swap Other assets 1,460 876 Total derivatives designated as hedging instruments 1,501 6,948 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Other current assets/ Other assets 10 3,796 Total $ 1,511 $ 10,744 LIABILITIES: Derivatives designated as hedging instruments: Cash flow hedges: Foreign exchange currency contracts Accrued expenses/ Other long-term liabilities $ 13,789 $ 1,250 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Accrued expenses 4,300 174 Total $ 18,089 $ 1,424 Derivatives Designated as Hedging Instruments Foreign Exchange Currency Contracts Designated as Cash Flow Hedges During fiscal 2018 , the Company purchased U.S. dollar forward contracts in Europe and Canada totaling US $147.6 million and US $25.7 million , respectively, that were designated as cash flow hedges. As of February 3, 2018 , the Company had forward contracts outstanding for its European and Canadian operations of US $145.8 million and US $38.7 million , respectively, to hedge forecasted merchandise purchases and intercompany royalties, which are expected to mature over the next 17 months . At January 28, 2017 , the Company had forward contracts outstanding for its European and Canadian operations of US $104.2 million and US $66.9 million , respectively, that were designated as cash flow hedges. As of February 3, 2018 , accumulated other comprehensive income (loss) related to foreign exchange currency contracts included a net unrealized loss of approximately $15.5 million , net of tax, of which $10.0 million will be recognized in cost of product sales or other expense over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current year-end values . Interest Rate Swap Agreement Designated as Cash Flow Hedge During fiscal 2017, the Company entered into an interest rate swap agreement with a notional amount of $21.5 million , designated as a cash flow hedge, to hedge the variability of cash flows in interest payments associated with the Company’s floating-rate debt. This interest rate swap agreement matures in January 2026 and converts the nature of the Company’s real estate secured term loan from LIBOR floating-rate debt to fixed-rate debt, resulting in a swap fixed rate of approximately 3.06% . As of February 3, 2018 , accumulated other comprehensive income (loss) related to the interest rate swap agreement included a net unrealized gain of approximately $1.1 million , net of tax, which will be recognized in interest expense after the following 12 months, at the then current values on a pre-tax basis, which can be different than the current year-end values. The following table summarizes the gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in accumulated other comprehensive income (loss) and net earnings (loss) for fiscal 2018 , fiscal 2017 and fiscal 2016 (in thousands): Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from Accumulated OCI into Loss (1) Gain (Loss) Reclassified from Accumulated OCI into Loss Loss Reclassified from Accumulated OCI to Retained Earnings (2) Year Ended Feb 3, 2018 Year Ended Feb 3, 2018 Year Ended Feb 3, 2018 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ (22,497 ) Cost of product sales $ 14 $ — Foreign exchange currency contracts $ (1,163 ) Other income/expense $ (583 ) $ — Interest rate swap $ 272 Interest expense $ (87 ) $ (225 ) Gain Recognized in Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings (1) Gain (Loss) Reclassified from Year Ended Jan 28, 2017 Year Ended Jan 28, 2017 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ — Cost of product sales $ 3,518 Foreign exchange currency contracts $ 227 Other income/expense $ 301 Interest rate swap $ 660 Interest expense $ (216 ) Gain Recognized in Location of Gain Reclassified from Accumulated OCI into Earnings (1) Gain Reclassified from Year Ended Jan 30, 2016 Year Ended Jan 30, 2016 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ 9,301 Cost of product sales $ 8,314 Foreign exchange currency contracts $ 500 Other income/expense $ 833 ________________________________________________________________________ (1) The Company recognized gains of $ 2.7 million , $ 0.9 million and $ 0.1 million resulting from the ineffective portion related to foreign exchange currency contracts in interest income during fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. There was no ineffectiveness recognized related to the interest rate swap during fiscal 2018 and fiscal 2017 . (2) During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017 . As a result, the Company recorded a cumulative adjustment to reduce retained earnings by $0.2 million with a corresponding increase to accumulated other comprehensive income (loss) related to the Company’s interest rate swap designated as a cash flow hedge . The following table summarizes net after-tax derivative activity recorded in accumulated other comprehensive income (loss) (in thousands): Year Ended Feb 3, 2018 Year Ended Jan 28, 2017 Beginning balance gain $ 5,400 $ 7,252 Net gains (losses) from changes in cash flow hedges (20,408 ) 1,059 Net (gains) losses reclassified to earnings (loss) 414 (2,911 ) Net losses reclassified to retained earnings (1) 225 — Ending balance gain (loss) $ (14,369 ) $ 5,400 ________________________________________________________________________ (1) During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017 . As a result, the Company recorded a cumulative adjustment to reduce retained earnings by $0.2 million with a corresponding increase to accumulated other comprehensive income (loss) related to the Company’s interest rate swap designated as a cash flow hedge . Derivatives Not Designated as Hedging Instruments As of February 3, 2018 , the Company had euro foreign exchange currency contracts to purchase US $68.2 million expected to mature over the next 12 months and Canadian dollar foreign exchange currency contracts to purchase US $17.6 million expected to mature over the next 11 months . At January 28, 2017 , the Company had euro foreign exchange currency contracts to purchase US $81.4 million and Canadian dollar foreign exchange currency contracts to purchase US $13.9 million . The following table summarizes the gains (losses) before taxes recognized on the derivative instruments not designated as hedging instruments in other income and expense for fiscal 2018 , fiscal 2017 and fiscal 2016 (in thousands): Location of Gain (Loss) Recognized in Earnings (Loss) Gain (Loss) Recognized in Earnings (Loss) Year Ended Feb 3, 2018 Year Ended Jan 28, 2017 Year Ended Jan 30, 2016 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Other income/expense $ (10,511 ) $ 2,427 $ 4,346 Interest rate swap Other income/expense $ — $ 38 $ 179 |
Share Repurchase Program
Share Repurchase Program | 12 Months Ended |
Feb. 03, 2018 | |
Equity [Abstract] | |
Share Repurchase Program | Share Repurchase Program On June 26, 2012, the Company’s Board of Directors authorized a program to repurchase, from time-to-time and as market and business conditions warrant, up to $500 million of the Company’s common stock. Repurchases under the program may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. There is no minimum or maximum number of shares to be repurchased under the program, which may be discontinued at any time, without prior notice. During fiscal 2018 , the Company repurchased 3,866,387 shares under the program at an aggregate cost of $56.1 million , of which $6.0 million was settled subsequent to year end . During fiscal 2017 , the Company repurchased 289,968 shares under the program at an aggregate cost of $3.5 million . During fiscal 2016 , the Company repurchased 2,000,000 shares at an aggregate cost of $44.0 million . As of February 3, 2018 , the Company had remaining authority under the program to purchase $392.2 million of its common stock . |
Subsequent Events
Subsequent Events | 12 Months Ended |
Feb. 03, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Share Repurchases Subsequent to year end, the Company repurchased approximately 1.1 million shares under its share repurchase program at an aggregate cost of $17.6 million . Dividends On March 21, 2018 , the Company announced a regular quarterly cash dividend of $0.225 per share on the Company’s common stock. The cash dividend will be paid on April 20, 2018 to shareholders of record as of the close of business on April 4, 2018 . |
SCHEDULE II VALUATION AND QUALI
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Feb. 03, 2018 | |
Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II GUESS?, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS Years Ended February 3, 2018 , January 28, 2017 and January 30, 2016 (in thousands) Balance at Costs Deductions and Balance Description As of February 3, 2018 Allowance for doubtful accounts $ 13,313 $ 9,447 $ (9,420 ) $ 13,340 Allowance for markdowns 2,944 42,485 (34,652 ) 10,777 Allowance for royalties receivable 497 — (359 ) 138 Allowance for sales returns 20,891 83,593 (76,603 ) 27,881 Total $ 37,645 $ 135,525 $ (121,034 ) $ 52,136 As of January 28, 2017 Allowance for doubtful accounts $ 12,874 $ 7,284 $ (6,845 ) $ 13,313 Allowance for markdowns 2,196 32,679 (31,931 ) 2,944 Allowance for royalties receivable 411 86 — 497 Allowance for sales returns 20,513 74,278 (73,900 ) 20,891 Total $ 35,994 $ 114,327 $ (112,676 ) $ 37,645 As of January 30, 2016 Allowance for doubtful accounts $ 13,504 $ 5,767 $ (6,397 ) $ 12,874 Allowance for markdowns 2,549 21,988 (22,341 ) 2,196 Allowance for royalties receivable 253 240 (82 ) 411 Allowance for sales returns 17,727 68,477 (65,691 ) 20,513 Total $ 34,033 $ 96,472 $ (94,511 ) $ 35,994 |
Description of the Business a32
Description of the Business and Summary of Significant Accounting Policies and Practices (Policies) | 12 Months Ended |
Feb. 03, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Correction of Immaterial Error | Correction of Immaterial Error During the year ended February 3, 2018 , the Company identified an immaterial error related to the classification of net royalties received on the Company’s purchases of licensed product. The Company’s typical license agreement requires the licensee to pay the Company a royalty based on the licensee’s net sales of licensed products, which in certain cases also includes licensed inventory that was purchased by the Company . Historically, the Company has included royalties received on the Company’s purchases of licensed product in net royalties generated from its Licensing segment. However, in connection with the Company’s review of the new revenue recognition standard, it was determined that such royalties received should be recorded as a reduction of the cost of the licensed product under existing revenue recognition guidance. As a result, during the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales . Accordingly, prior period amounts related to net royalties, net revenue and cost of product sales have been adjusted to conform to the current period presentation . This resulted in a decrease to net revenue and cost of product sales of $18.9 million and $19.8 million for fiscal 2017 and fiscal 2016 , respectively. This reclassification had no impact on previously reported earnings (loss) from operations, net earnings (loss) or net earnings (loss) per share. |
Reclassifications | Reclassifications The Company has made certain reclassifications to prior period amounts to conform to the current period presentation within the accompanying notes to the consolidated financial statements. |
Fiscal Year | Fiscal Year The Company operates on a 52 / 53 -week fiscal year calendar, which ends on the Saturday nearest to January 31 of each year. All references herein to “fiscal 2018 ,” “fiscal 2017 ” and “fiscal 2016 ” represent the results of the 53 -week fiscal year ended February 3, 2018 and the 52 -week fiscal years ended January 28, 2017 and January 30, 2016 . The additional week in fiscal 2018 occurred during the fourth quarter ended February 3, 2018. References to “fiscal 2019 ” represent the 52 -week fiscal year ending February 2, 2019. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Guess?, Inc., its wholly-owned direct and indirect subsidiaries and its non-wholly-owned subsidiaries and joint ventures in which the Company has a controlling financial interest and is determined to be the primary beneficiary. Accordingly, all references herein to “Guess?, Inc.” include the consolidated results of the Company, its wholly-owned subsidiaries and its joint ventures. All intercompany accounts and transactions are eliminated during the consolidation process. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosed in the accompanying notes. Significant areas requiring the use of management estimates relate to the allowances for doubtful accounts, sales return and markdown allowances, gift card and loyalty accruals, valuation of inventories, share-based compensation, recoverability of deferred taxes, unrecognized tax benefits, the useful life of assets for depreciation and amortization, evaluation of asset impairment, pension obligations, workers’ compensation and medical self-insurance expense and accruals, litigation reserves and restructuring expense and accruals. Actual results could differ from those estimates. |
Business Segment Reporting | Business Segment Reporting Where applicable, the Company reports information about business segments and related disclosures about products and services, geographic areas and major customers. The Company’s businesses are grouped into five reportable segments for management and internal financial reporting purposes: Americas Retail , Americas Wholesale , Europe , Asia and Licensing . The Company’s Americas Retail, Americas Wholesale, Europe and Licensing reportable segments are the same as their respective operating segments. Certain components of the Company’s Asia reportable segment are separate operating segments based on region which have been aggregated into the Asia reportable segment for disclosure purposes. During fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. During fiscal 2018, segment results were also adjusted to exclude corporate performance-based compensation costs, net gains (losses) on lease terminations and asset impairment charges due to the fact that these items are no longer included in the segment results provided to the Company’s chief operating decision maker in order to allocate resources and assess performance. Accordingly, segment results have been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation . Management evaluates segment performance based primarily on revenues and earnings (loss) from operations before corporate performance-based compensation costs, net gains (losses) from lease terminations, asset impairment charges and restructuring charges, if any. The Company believes this segment reporting reflects how its business segments are managed and how each segment’s performance is evaluated by the Company’s chief operating decision maker to assess performance and make resource allocation decisions. The Americas Retail segment includes the Company’s retail and e-commerce operations in North and Central America and its retail operations in South America. The Americas Wholesale segment includes the Company’s wholesale operations in the Americas. The Europe segment includes the Company’s retail, e-commerce and wholesale operations in Europe and the Middle East. The Asia segment includes the Company’s retail, e-commerce and wholesale operations in Asia and the Pacific. The Licensing segment includes the worldwide licensing operations of the Company. The business segment operating results exclude corporate overhead costs, which consist of shared costs of the organization, net gains (losses) on lease terminations, asset impairment charges and restructuring charges. Corporate overhead costs are presented separately and generally include, among other things, the following unallocated corporate costs: accounting and finance, executive compensation, corporate performance-based compensation, facilities, global advertising and marketing, human resources, information technology and legal. Information regarding these segments is summarized in Note 17 . |
Revenue Recognition - General | Revenue Recognition General The Company recognizes retail operations revenue at the point of sale and wholesale operations revenue from the sale of merchandise when products are shipped and the customer takes title and assumes risk of loss, collection of the relevant receivable is reasonably assured, pervasive evidence of an arrangement exists, and the sales price is fixed or determinable. Revenue from our e-commerce operations, including shipping fees, is recognized based on the estimated customer receipt date. The Company accrues for estimated sales returns and other allowances in the period in which the related revenue is recognized. To recognize the financial impact of sales returns, the Company estimates the amount of goods that will be returned based on historical experience and reduces sales and cost of sales accordingly . Sales taxes and value added taxes collected from customers and remitted directly to governmental authorities are excluded from net revenues. |
Net Royalty Revenue | Net Royalty Revenue Royalty revenue is based upon a percentage, as defined in the underlying agreement, of the licensee’s actual net sales or minimum net sales, whichever is greater. The Company may also receive special payments in consideration of the grant of license rights. These payments are recognized ratably as revenue over the term of the license agreement. The unrecognized portion of upfront payments is included in deferred royalties in accrued expenses and other long-term liabilities depending on the short or long-term nature of the payments to be recognized. |
Gift Cards | Gift Cards Gift card breakage is income recognized due to the non-redemption of a portion of gift cards sold by the Company for which a liability was recorded in prior periods. Gifts cards are mainly used in the U.S. and Canada. The Company issues its gift cards in the U.S. and Canada through one of its subsidiaries and is not required by law to escheat the value of unredeemed gift cards to the state in which the subsidiary is domiciled. Estimated breakage amounts are accounted for under the redemption recognition method and are classified as additional net revenues as the gift cards are redeemed. The Company’s gift card breakage rate is approximately 6.1% and 5.1% for the U.S. retail business and Canadian retail business, respectively, based upon historical redemption patterns, which represents the cumulative estimated amount of gift card breakage from the inception of the electronic gift card program in late 2002. Based upon historical redemption trends, the Company recognizes estimated gift card breakage as a component of net revenue in proportion to actual gift card redemptions, over the period that remaining gift card values are redeemed. In fiscal 2018 , fiscal 2017 and fiscal 2016 , the Company recognized $0.7 million , $0.8 million and $0.5 million of gift card breakage to revenue, respectively. Any future revisions to the estimated breakage rate may result in changes in the amount of breakage income recognized in future periods. |
Loyalty Programs | Loyalty Programs The Company has customer loyalty programs in North America, Europe and Asia which cover all of its brands. Under certain of the programs, primarily in the U.S. and Canada, customers accumulate points based on purchase activity. Once a loyalty program member achieves a certain point level, the member earns awards that may only be redeemed for merchandise. Unredeemed points generally expire after six months without additional purchase activity and unredeemed awards generally expire after two months. The Company uses historical redemption rates to estimate the value of future award redemptions which are accrued in current liabilities and recorded as a reduction of net revenue in the period which the related revenue is recognized. The aggregate dollar value of the loyalty program accruals included in accrued expenses was $3.8 million and $4.0 million as of February 3, 2018 and January 28, 2017 , respectively. Future revisions to the estimated liability may result in changes to net revenue . |
Classification of Certain Costs and Expenses | Classification of Certain Costs and Expenses The Company includes inbound freight charges, purchasing costs and related overhead, retail store occupancy costs, including rent and depreciation, and a portion of the Company’s distribution costs related to its direct-to-consumer business in cost of product sales. Distribution costs related primarily to the wholesale business are included in selling, general and administrative (“SG&A”) expenses and amounted to $34.2 million , $22.6 million and $23.2 million for fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. The Company also includes store selling, selling and merchandising, advertising, design and other corporate overhead costs as a component of SG&A expenses. The Company classifies amounts billed to customers for shipping fees as revenues and classifies costs related to shipping as cost of product sales in the accompanying consolidated statements of income (loss). |
Advertising and Marketing Costs | Advertising and Marketing Costs The Company expenses the cost of advertising as incurred. |
Share-Based Compensation | Share-Based Compensation The Company recognizes compensation expense for all share-based awards granted based on the grant date fair value. The fair value of each stock option is estimated on the grant date using the Black-Scholes option-pricing model and involves several assumptions, including the risk-free interest rate, expected volatility, dividend yield and expected life . The risk-free interest rate is based on the U.S. Treasury yield curve in effect for the expected term of the option at the time of grant. The expected stock price volatility is determined based on an average of both historical volatility and implied volatility. Implied volatility is derived from exchange traded options on the Company’s common stock. The expected dividend yield is based on the Company’s history and expectations of dividend payouts. The expected life is determined based on historical trends. Compensation expense for nonvested stock options and stock awards/units that are not subject to performance-based vesting conditions is recognized on a straight-line basis over the vesting period . During fiscal 2018, the Company adopted authoritative guidance which eliminates the requirement to estimate forfeitures, but rather provides for an election that would allow entities to account for forfeitures as they occur. In addition, the Company has granted certain nonvested units that require certain minimum performance targets to be achieved in order for these awards to vest . Vesting is also subject to continued service requirements through the vesting date . Compensation expense for performance-based awards that vest in increments is recognized based on an accelerated attribution method . If the minimum performance targets are not forecasted to be achieved, no expense is recognized during the period . The Company has also granted certain nonvested stock units which are subject to market-based performance targets in order for these units to vest. Vesting is also subject to continued service requirements through the vesting date. The grant date fair value for such nonvested stock units was estimated using a Monte Carlo simulation that incorporates option-pricing inputs covering the period from the grant date through the end of the performance period. Compensation expense for such nonvested stock units is recognized on a straight-line basis over the vesting period, regardless of whether the market condition is satisfied. During fiscal 2016, the Company granted certain restricted stock units which vested immediately but were considered contingently returnable as a result of certain service conditions. Compensation expense for these restricted stock units was recognized on a straight-line basis over the implied service period. |
Foreign Currency - Translation and Transaction Gains and Losses | Foreign Currency Foreign Currency Translation Adjustment The local selling currency is typically the functional currency for all of the Company’s significant international operations. In accordance with authoritative guidance, assets and liabilities of the Company’s foreign operations are translated from foreign currencies into U.S. dollars at period-end rates, while income and expenses are translated at the weighted average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive income (loss) within stockholders’ equity. In addition, the Company records foreign currency translation adjustments related to its noncontrolling interests within stockholders’ equity. Periodically, the Company may also use foreign exchange currency contracts to hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries (see below). Changes in the fair values of these foreign exchange currency contracts, designated as net investment hedges, are recorded in foreign currency translation adjustment as a component of accumulated other comprehensive income (loss) within stockholders’ equity. The total foreign currency translation adjustment in creased stockholders’ equity by $93.4 million , from an accumulated foreign currency translation loss of $164.7 million as of January 28, 2017 to an accumulated foreign currency translation loss of $71.3 million as of February 3, 2018 . Foreign Currency Transaction Gains and Losses Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency, including gains and losses on foreign exchange currency contracts (see below), are included in the consolidated statements of income (loss). |
Derivatives | Derivatives Foreign Exchange Currency Contracts The Company operates in foreign countries, which exposes it to market risk associated with foreign currency exchange rate fluctuations. Various transactions that occur primarily in Europe, Canada, South Korea, China and Mexico are denominated in U.S. dollars, British pounds and Russian roubles and thus are exposed to earnings risk as a result of exchange rate fluctuations when converted to their functional currencies. These types of transactions include U.S. dollar denominated purchases of merchandise and U.S. dollar and British pound denominated intercompany liabilities. In addition, certain operating expenses, tax liabilities and pension-related liabilities are denominated in Swiss francs and are exposed to earnings risk as a result of exchange rate fluctuations when converted to the functional currency . The Company has entered into certain forward contracts to hedge the risk of a portion of these anticipated foreign currency transactions against foreign currency rate fluctuations. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these hedges. The Company does not hedge all transactions denominated in foreign currency. The Company may also hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries. Changes in the fair value of the U.S. dollar/euro and U.S. dollar/Canadian dollar forward contracts for anticipated U.S. dollar merchandise purchases designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are recognized in cost of product sales in the period which approximates the time the hedged merchandise inventory is sold. Changes in the fair value of U.S. dollar/euro forward contracts for U.S. dollar intercompany royalties designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are recognized in other income and expense in the period in which the royalty expense is incurred. Changes in the fair value of any U.S. dollar/euro forward contracts designated as net investment hedges are recorded in foreign currency translation adjustment as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are not recognized in earnings (loss) until the sale or liquidation of the hedged net investment . The Company also has forward contracts that are not designated as hedging instruments for accounting purposes. Changes in fair value of forward contracts not designated as hedging instruments are reported in net earnings (loss) as part of other income and expense. Interest Rate Swap Agreements The Company is exposed to interest rate risk on its floating-rate debt. The Company has entered into interest rate swap agreements to effectively convert its floating-rate debt to a fixed-rate basis. The principal objective of these contracts is to eliminate or reduce the variability of the cash flows in interest payments associated with the Company’s floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these contracts. Changes in the fair value of interest rate swap agreements designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are amortized to interest expense over the term of the related debt. Periodically, the Company may also enter into interest rate swap agreements that are not designated as hedging instruments for accounting purposes. Changes in the fair value of interest rate swap agreements not designated as hedging instruments are reported in net earnings (loss) as part of other income and expense. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when management believes it is more likely than not that the results of operations will not generate sufficient taxable earnings to realize certain net deferred tax assets. The Company accounts for uncertainty in income taxes in accordance with authoritative guidance, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company also follows authoritative guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share represents net earnings (loss) attributable to common stockholders divided by the weighted average number of common shares outstanding during the period. The Company considers any restricted stock units with forfeitable dividend rights that are issued and outstanding, but considered contingently returnable if certain service conditions are not met, as common equivalent shares outstanding. These restricted stock units are excluded from the weighted average number of common shares outstanding and basic earnings (loss) per share calculation until the respective service conditions have been met. Diluted earnings per share represents net earnings attributable to common stockholders divided by the weighted average number of common shares outstanding, inclusive of the dilutive impact of common equivalent shares outstanding during the period. The potentially dilutive impact of common equivalent shares outstanding are not included in the computation of diluted net loss per share as the impact of the shares would be antidilutive due to the net loss incurred for the period. Nonvested restricted stock awards (referred to as participating securities) are excluded from the dilutive impact of common equivalent shares outstanding in accordance with authoritative guidance under the two-class method since the nonvested restricted stockholders are entitled to participate in dividends declared on common stock as if the shares were fully vested and hence are deemed to be participating securities. Under the two-class method, distributed and undistributed earnings attributable to nonvested restricted stockholders are excluded from net earnings (loss) attributable to common stockholders for purposes of calculating basic and diluted earnings (loss) per common share. However, net losses are not allocated to nonvested restricted stockholders because they are not contractually obligated to share in the losses of the Company. In addition, the Company has granted certain nonvested stock units that are subject to certain performance-based or market-based vesting conditions as well as continued service requirements through the respective vesting periods. These nonvested stock units are included in the computation of diluted net earnings per common share attributable to common stockholders only to the extent that the underlying performance-based or market-based vesting conditions are satisfied as of the end of the reporting period, or would be considered satisfied if the end of the reporting period were the end of the related contingency period, and the results would be dilutive under the treasury stock method. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net earnings (loss), foreign currency translation adjustments, the effective portion of the change in the fair value of cash flow hedges, unrealized and realized gains or losses and other-than-temporary-impairment on available-for-sale securities and defined benefit plan impact from actuarial valuation gains or losses and related amortization, plan amendment, prior service credit or cost amortization and curtailment. Comprehensive income (loss) is presented in the consolidated statements of comprehensive income. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and marketable securities with original maturities of three months or less. |
Investment Securities | Investment Securities The Company accounts for its investment securities in accordance with authoritative guidance which requires investments to be classified into one of three categories based on management’s intent: held-to-maturity securities, available-for-sale securities and trading securities. Held-to-maturity securities are recorded at their amortized cost. Available-for-sale securities are recorded at fair value with unrealized gains and losses reported as a separate component of stockholders’ equity. Trading securities are recorded at market value with unrealized gains and losses reported in net earnings. The appropriate classification of investment securities is determined at the time of purchase and reevaluated at each balance sheet date. The Company has historically accounted for its investment securities, if any, as available-for-sale. The Company periodically evaluates investment securities for other-than-temporary-impairment using both qualitative and quantitative criteria such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and the Company’s ability and intent to hold the investment for a period of time which may be sufficient for anticipated recovery in market value. Other-than-temporary-impairment is recognized in net earnings (loss) as part of other income and expense in the period which the unrealized losses are deemed other than temporary. |
Concentration of Credit and Liquidity Risk | Concentration of Credit and Liquidity Risk Cash used primarily for working capital purposes is maintained with various major financial institutions. The Company performs evaluations of the relative credit standing of these financial institutions in order to limit the amount of asset and liquidity exposure with any institution. Excess cash and cash equivalents, which represent the majority of the Company’s outstanding cash and cash equivalents balance, are held primarily in overnight deposit and short-term time deposit accounts . The Company is also exposed to concentrations of credit risk through its accounts receivable balances. The Company extends credit to corporate customers based upon an evaluation of the customer’s financial condition and credit history and generally requires no collateral but does obtain credit insurance when considered appropriate. As of February 3, 2018 , approximately 59% of the Company’s total net trade accounts receivable and 72% of its European net trade receivables were subject to credit insurance coverage, certain bank guarantees or letters of credit for collection purposes. The Company’s credit insurance coverage contains certain terms and conditions specifying deductibles and annual claim limits. The Company maintains allowances for doubtful accounts for estimated losses that result from the inability of its wholesale customers to make their required payments. The Company bases its allowances on analysis of the aging of accounts receivable at the date of the financial statements, assessments of historical collection trends, an evaluation of the impact of current economic conditions and whether the Company has obtained credit insurance or other guarantees. The Company’s corporate customers are principally located throughout Europe, Asia and the Americas. Management performs regular evaluations concerning the ability of its customers to satisfy their obligations and records a provision for doubtful accounts based on these evaluations. |
Inventories | Inventories Inventories are valued at the lower of cost (primarily weighted average method) or net realizable value. The Company continually evaluates its inventories by assessing slow moving product as well as prior seasons’ inventory. Net realizable value of aged inventory is estimated based on historical sales trends for each product line category, the impact of market trends, an evaluation of economic conditions, available liquidation channels and the value of current orders relating to the future sales of this type of inventory. |
Depreciation and Amortization | Depreciation and Amortization Depreciation and amortization of property and equipment and purchased intangibles are provided using the straight-line method over the following useful lives: Building and building improvements 10 to 39 years Land improvements 5 years Furniture, fixtures and equipment 2 to 10 years Purchased intangibles 4 to 20 years Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the term of the lease, including reasonably assured renewal periods. Construction in progress is not depreciated until the related asset is completed and placed in service. |
Long-Lived Assets | Long-Lived Assets Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment quarterly or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The majority of the Company’s long-lived assets relate to its retail operations which consist primarily of regular retail and flagship locations. The Company considers each individual regular retail location as an asset group for impairment testing, which is the lowest level at which individual cash flows can be identified. The asset group includes leasehold improvements, furniture, fixtures and equipment, computer hardware and software and certain long-term security deposits and lease acquisition costs. The Company reviews regular retail locations in penetrated markets for impairment risk once the locations have been opened for at least one year in their current condition, or sooner as changes in circumstances require. The Company believes that waiting at least one year allows a location to reach a maturity level where a more comprehensive analysis of financial performance can be performed. The Company evaluates impairment risk for regular retail locations in new markets, where the Company is in the early stages of establishing its presence, once brand awareness has been established. The Company also evaluates impairment risk for retail locations that are expected to be closed in the foreseeable future. The Company has flagship locations which are used as a regional marketing tool to build brand awareness and promote the Company’s current product. Impairment for these locations is tested at a reporting unit level similar to goodwill (see below) since they do not have separately identifiable cash flows. An asset is considered to be impaired if the Company determines that the carrying value may not be recoverable based upon its assessment of the asset’s ability to continue to generate earnings from operations and positive cash flow in future periods or if significant changes in the Company’s strategic business objectives and utilization of the assets occurred. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the estimated fair value, which is determined based on discounted future cash flows. The impairment loss calculations require management to apply judgment in estimating future cash flows and the discount rates that reflect the risk inherent in future cash flows. Future expected cash flows for assets in regular retail locations are based on management’s estimates of future cash flows over the remaining lease period or expected life, if shorter. For expected location closures, the Company will evaluate whether it is necessary to shorten the useful life for any of the assets within the respective asset group. The Company will use this revised useful life when estimating the asset group’s future cash flows. The Company considers historical trends, expected future business trends and other factors when estimating the future cash flow for each regular retail location. The Company also considers factors such as: the local environment for each regular retail location, including mall traffic and competition; the Company’s ability to successfully implement strategic initiatives; and the ability to control variable costs such as cost of sales and payroll and, in some cases, renegotiate lease costs. The estimated cash flows used for this nonrecurring fair value measurement are considered a Level 3 input as defined in Note 20 . If actual results are not consistent with the assumptions and judgments used in estimating future cash flows and asset fair values, there may be additional exposure to future impairment losses that could be material to the Company’s results of operations . |
Goodwill | Goodwill Goodwill is tested annually for impairment or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. This determination is made at the reporting unit level which may be either an operating segment or one level below an operating segment if discrete financial information is available. Two or more reporting units within an operating segment may be aggregated for impairment testing if they have similar economic characteristics. The Company has identified its Americas Retail segment, its Americas Wholesale segment, its European wholesale and European retail components of its Europe segment and its China retail component of its Asia segment as reporting units for goodwill impairment testing. In accordance with authoritative guidance, the Company may first assess qualitative factors relevant in determining whether it is more likely than not that the fair value of its reporting units are less than their carrying amounts. Based on this analysis, the Company may determine whether it is necessary to perform a quantitative impairment test. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the amount of any impairment loss to be recognized for that reporting unit is determined using two steps. First, the Company determines the fair value of the reporting unit using a discounted cash flow analysis, which requires unobservable inputs (Level 3) within the fair value hierarchy as defined in Note 20 . These inputs include selection of an appropriate discount rate and the amount and timing of expected future cash flows. Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill and other intangibles over the implied fair value. The implied fair value is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with authoritative guidance. |
Other Assets | Other Assets Other assets mainly relate to the Company’s investments in insurance policies held in rabbi trusts to fund expected obligations arising under its non-qualified supplemental executive retirement and deferred compensation plans. Refer to Notes 12 and 15 for further information regarding these investments. In addition, other assets also relate to security, key money and other deposits to secure prime retail store locations and receivables related to refundable value-added tax payments mainly from European taxing authorities. |
Defined Benefit Plans | Defined Benefit Plans In accordance with authoritative guidance for defined benefit pension and other postretirement plans, an asset for a plan’s overfunded status or a liability for a plan’s underfunded status is recognized in the consolidated balance sheets; plan assets and obligations that determine the plan’s funded status are measured as of the end of the Company’s fiscal year; and changes in the funded status of defined benefit postretirement plans are recognized in the year in which they occur. Such changes are reported in other comprehensive income (loss) as a separate component of stockholders’ equity. The Company’s pension obligations and related costs are calculated using actuarial concepts, within the authoritative guidance framework , and are considered Level 3 inputs as defined in Note 20. The Company uses the corridor approach to amortize unrecognized actuarial gains or losses over the average remaining service life of active participants. The life expectancy, estimated retirement age, discount rate, estimated future compensation and expected return on plan assets are important elements of expense and/or liability measurement. These critical assumptions are evaluated annually which enables expected future payments for benefits to be stated at present value on the measurement date. If actual results are not consistent with actuarial assumptions, the amounts recognized for the defined benefit plans could change significantly. |
Deferred Rent and Lease Incentives | Deferred Rent and Lease Incentives When a lease includes lease incentives (such as a rent holiday) or requires fixed escalations of the minimum lease payments or advances, rental expense is recognized on a straight-line basis over the term of the lease. The difference between the average rental amount charged to expense and the lease payments or advances under the lease is included either in deferred rent and lease incentives or other assets in the accompanying consolidated balance sheets depending on whether the difference is in a liability or asset position at the end of the period. For construction allowances, the Company records a deferred lease credit on the consolidated balance sheets and amortizes the deferred lease credit as a reduction of rent expense in the consolidated statements of income (loss) over the term of the leases |
Litigation Reserves | Litigation Reserves Estimated amounts for claims that are probable and can be reasonably estimated are recorded as liabilities in the consolidated balance sheets. As additional information becomes available, the Company assesses the potential liability related to new claims and existing claims and revises estimates as appropriate. As new claims arise or existing claims evolve, such revisions in estimates of the potential liability could materially impact the results of operations and financial position. |
New Accounting Guidance | Changes in Accounting Policies In July 2015, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance to simplify the subsequent measurement of inventories by replacing the lower of cost or market test with a lower of cost or net realizable value test. The Company adopted this guidance effective January 29, 2017 on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements or related disclosures. In March 2016, the FASB issued authoritative guidance to simplify the accounting for certain aspects of share-based compensation. This guidance addresses the accounting for income tax effects at award settlement, the use of an expected forfeiture rate to estimate award cancellations prior to the vesting date and the presentation of excess tax benefits and shares surrendered for tax withholdings on the statement of cash flows. The Company adopted this guidance effective January 29, 2017. This guidance requires all income tax effects of awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. The Company adopted this provision prospectively and accordingly recorded tax shortfalls of approximately $1.3 million in its consolidated statement of income (loss) during fiscal 2018. This resulted in a negative impact on net loss attributable to Guess?, Inc. of approximately $1.3 million , or an unfavorable $0.02 per share impact during fiscal 2018. Under this guidance, excess tax benefits are also excluded from the assumed proceeds available to repurchase shares in the computation of diluted earnings (loss) per share. This was adopted prospectively and did not have an impact on the Company’s diluted loss per share for fiscal 2018. This guidance also eliminates the requirement to estimate forfeitures, but rather provides for an election that would allow entities to account for forfeitures as they occur. The Company adopted this election beginning in the first quarter of fiscal 2018 using the modified retrospective method and recorded a cumulative adjustment to reduce retained earnings by approximately $0.3 million . This guidance also changes the presentation of excess tax benefits from a financing activity to an operating activity in the statement of cash flows. This presentation was adopted on a retrospective basis and, as a result, net cash used in operating activities improved by $0.3 million and $0.2 million with a corresponding offset to net cash used in financing activities during fiscal 2017 and fiscal 2016, respectively. In August 2016, the FASB issued authoritative guidance related to the classification of certain cash receipts and cash payments in the statement of cash flows. The Company adopted this guidance effective January 29, 2017 on a retrospective basis. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements or related disclosures. In October 2016, the FASB issued authoritative guidance that requires an entity to include indirect interests held through related parties that are under common control on a proportionate basis when evaluating if a reporting entity is the primary beneficiary of a variable interest entity. The Company adopted this guidance effective January 29, 2017. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements or related disclosures. In November 2016, the FASB issued authoritative guidance related to the presentation of restricted cash in the statement of cash flows. This guidance requires that the statement of cash flows reconcile the change during the period in total cash, cash equivalents and restricted cash. The Company’s restricted cash is generally held as collateral for certain transactions. The Company adopted this guidance effective January 29, 2017 on a retrospective basis. As a result, the Company updated its consolidated statements of cash flows for fiscal 2018, fiscal 2017 and fiscal 2016 to include restricted cash with cash and cash equivalents when reconciling the beginning and end of period balances and to eliminate changes in restricted cash that have historically been included within operating and investing activities. In January 2017, the FASB issued authoritative guidance which clarifies the definition of a business to assist entities when evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The Company early adopted this guidance effective January 29, 2017 on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements or related disclosures. In February 2018, the FASB issued authoritative guidance to address certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the 2017 Tax Cuts and Jobs Act (the “Tax Reform”) enacted in December 2017 . This guidance provides the Company with an option to reclassify stranded tax effected within accumulated other comprehensive income (loss) to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate due to the Tax Reform is recorded. The Company early adopted this guidance during the fourth quarter of fiscal 2018 and recorded a cumulative adjustment to increase retained earnings by approximately $1.2 million . Recently Issued Accounting Guidance In May 2014, the FASB issued a comprehensive new revenue recognition standard which will supersede previous existing revenue recognition guidance. The standard is intended to clarify the principles of recognizing revenue and create common revenue recognition guidance between GAAP and International Financial Reporting Standards. The standard also requires expanded disclosures surrounding revenue recognition. During fiscal 2017, the FASB issued additional clarification guidance on the new revenue recognition standard which also included certain scope improvements and practical expedients. The standard (including clarification guidance issued) is effective for fiscal periods beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and allows for either full retrospective or modified retrospective adoption, with early adoption permitted. The Company has adopted this guidance using the modified retrospective method beginning in the first quarter of fiscal 2019. The Company’s assessment efforts have included reviewing current revenue processes, arrangements and accounting policies to identify potential differences that could arise from the application of this standard on its consolidated financial statements and related disclosures. While the Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements, the Company expects there to be differences related primarily to the classification and timing of when revenue and certain expenses are recognized from its licensing business. These differences relate primarily to changes in the presentation of advertising contributions received from the Company’s licensees and related advertising expenditures incurred by the Company. The Company currently records advertising contributions received from its licensees and the related advertising expenditures incurred by the Company on a net basis in its consolidated balance sheet. To the extent that the advertising contributions exceed the Company’s advertising expenditures for its licensees, the excess contribution is treated as a deferred liability and is included in accrued expenses in the Company’s consolidated balance sheet. Under the new standard, advertising contributions and related advertising expenditures related to the Company’s licensing business will be recorded on a gross basis which will increase net revenue as well as SG&A expenses. The Company also expects revenue related to its e-commerce operations to be recognized when merchandise is transferred to a common carrier rather than upon receipt by the customer, as well as adjustments to the accounting for the Company’s loyalty programs due to a slight change in the valuation of the amount that is deferred related to points earned. Additionally, allowances for wholesale sales returns and wholesale markdowns will be presented as accrued expenses rather than as reductions to accounts receivable and the estimated cost of inventory associated with the allowance for sales returns will be presented within other current assets in the Company’s consolidated balance sheet. In January 2016, the FASB issued authoritative guidance which requires equity investments not accounted for under the equity method of accounting or consolidation accounting to be measured at fair value, with subsequent changes in fair value recognized in net income. In February 2018, the FASB issued additional clarification guidance which made targeted improvements to address certain aspects of recognition, measurement, presentation and disclosure requirements for financial instruments. The original guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The clarification guidance is effective for fiscal years beginning after December 15, 2017 and interim periods beginning after June 15, 2015, which will be the Company’s third quarter of fiscal 2019. The clarification guidance may be early adopted, provided that the original guidance issued has been adopted. The adoption of this guidance (including the clarification guidance) is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures unless the Company acquires new equity investments. In February 2016, the FASB issued a comprehensive new lease standard which will supersede previous lease guidance. The standard requires a lessee to recognize assets and liabilities related to long-term leases that were classified as operating leases under previous guidance in its balance sheet. An asset would be recognized related to the right to use the underlying asset and a liability would be recognized related to the obligation to make lease payments over the term of the lease. The standard also requires expanded disclosures surrounding leases. The standard is effective for fiscal periods beginning after December 15, 2018, which will be the Company’s first quarter of fiscal 2020, and requires modified retrospective adoption, with early adoption permitted. The Company expects that this adoption will result in material increases in assets and liabilities in its consolidated balance sheet as well as enhanced disclosures. The Company is in the process of implementing controls and system changes to enable the preparation of the required financial information for this standard. In June 2016, the FASB issued authoritative guidance related to the measurement of credit losses on financial instruments. This guidance is effective for fiscal years beginning after December 15, 2019, which will be the Company’s first quarter of fiscal 2021. Early adoption is permitted for fiscal periods beginning after December 15, 2018, which will be the Company’s first quarter of fiscal 2020. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures. In October 2016, the FASB issued authoritative guidance which amends the accounting for income taxes on intra-entity transfers of assets other than inventory. This guidance requires that entities recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The income tax consequences on intra-entity transfers of inventory will continue to be deferred until the inventory has been sold to a third party. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Early adoption is permitted at the beginning of a fiscal year. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In January 2017, the FASB issued authoritative guidance to simplify the testing for goodwill impairment by removing step two from the goodwill testing. Under current guidance, if the fair value of a reporting unit is lower than its carrying amount (step one), an entity would calculate an impairment charge by comparing the implied fair value of goodwill with its carrying amount (step two). The implied fair value of goodwill was calculated by deducting the fair value of the assets and liabilities of the respective reporting unit from the reporting unit’s fair value as determined under step one. This guidance instead provides that an impairment charge should be recognized based on the difference between a reporting unit’s fair value and its carrying value. This guidance also does not require a qualitative test to be performed on reporting units with zero or negative carrying amounts. However, entities need to disclose any reporting units with zero or negative carrying amounts that have goodwill and the amount of goodwill allocated to each. This guidance is effective for fiscal years beginning after December 15, 2019, which will be the Company’s first quarter of fiscal 2021, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In March 2017, the FASB issued authoritative guidance related to the presentation of net periodic pension cost in the income statement. This guidance requires that the service cost component of net periodic pension cost is presented in the same line as other compensation costs arising from services rendered by the employees during the period. The other non-service components of net periodic pension cost are required to be presented in the income statement separately from the service cost component and outside of earnings from operations. This guidance also allows for the service cost component to be eligible for capitalization when applicable. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and requires retrospective adoption for the presentation of the service cost component and other non-service components of net periodic pension cost in the income statement and prospective adoption for capitalization of the service cost component. Other than the change in presentation of other non-service components of net periodic pension cost within the Company’s consolidated statements of income, the adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements and related disclosures. In May 2017, the FASB issued authoritative guidance that provides clarification on accounting for modifications in share-based payment awards. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, with early adoption permitted. The adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements or related disclosures unless there are modifications to the Company’s share-based payment awards. In August 2017, the FASB issued authoritative guidance to better align the results of hedge accounting with an entity’s risk management activities. This guidance updates the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. This guidance is effective for fiscal years beginning after December 15, 2018, which will be the Company’s first quarter of fiscal 2020, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with early adoption permitted. The updated presentation and disclosure guidance is required only on a prospective basis. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures. |
Description of the Business a33
Description of the Business and Summary of Significant Accounting Policies and Practices (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of useful lives of property and equipment and purchased intangibles | Depreciation and amortization of property and equipment and purchased intangibles are provided using the straight-line method over the following useful lives: Building and building improvements 10 to 39 years Land improvements 5 years Furniture, fixtures and equipment 2 to 10 years Purchased intangibles 4 to 20 years |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable is summarized as follows (in thousands): Feb 3, 2018 Jan 28, 2017 Trade $ 290,478 $ 234,690 Royalty 5,504 19,881 Other 13,233 5,888 309,215 260,459 Less allowances 49,219 34,922 $ 259,996 $ 225,537 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consist of the following (in thousands): Feb 3, 2018 Jan 28, 2017 Raw materials $ 604 $ 799 Work in progress 16 78 Finished goods 427,684 366,504 $ 428,304 $ 367,381 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment is summarized as follows (in thousands): Feb 3, 2018 Jan 28, 2017 Land and land improvements $ 2,750 $ 2,750 Building and building improvements 51,285 47,673 Leasehold improvements 380,234 367,294 Furniture, fixtures and equipment 389,393 353,843 Construction in progress 16,555 13,163 Assets under capital leases 19,560 — 859,777 784,723 Less accumulated depreciation and amortization 565,523 541,718 $ 294,254 $ 243,005 |
Schedule of impairments to long-lived assets | Impairments to long-lived assets are summarized as follows (in thousands): Feb 3, 2018 Jan 28, 2017 Aggregate carrying value of long-lived assets impaired $ 8,728 $ 36,103 Less asset impairment charges 8,479 34,385 Aggregate remaining fair value of long-lived assets impaired $ 249 $ 1,718 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of goodwill activity by business segment | Goodwill activity is summarized by business segment as follows (in thousands): Americas Retail Americas Wholesale Europe Asia Total Goodwill balance at January 30, 2016 $ 1,693 $ 9,960 $ 21,759 $ — $ 33,412 Adjustments: Acquisition — — — 933 933 Translation adjustments 36 6 (287 ) — (245 ) Goodwill balance at January 28, 2017 1,729 9,966 21,472 933 34,100 Adjustments: Acquisition — — — 566 566 Translation adjustments 36 6 3,653 120 3,815 Goodwill balance at February 3, 2018 $ 1,765 $ 9,972 $ 25,125 $ 1,619 $ 38,481 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Payables and Accruals [Abstract] | |
Summary of accrued expenses | Accrued expenses are summarized as follows (in thousands): Feb 3, 2018 Jan 28, 2017 Accrued compensation and benefits $ 73,815 $ 50,954 Sales and use taxes, property taxes and other indirect taxes 33,390 22,480 Derivative financial instruments 16,487 1,408 Professional and legal fees 14,281 7,982 Store credits, loyalty and gift cards 9,846 9,519 Advertising 9,677 7,746 Accrued rent 8,039 6,342 Deferred royalties and other revenue 7,273 7,891 Share repurchase 6,033 — Income taxes 5,186 653 Construction costs 3,428 4,210 Retail sales returns allowance 2,917 2,723 Restructuring charges — 180 Other 10,190 13,183 $ 200,562 $ 135,271 |
Borrowings and Capital Lease 39
Borrowings and Capital Lease Obligations (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Debt Disclosure [Abstract] | |
Summary of borrowings and capital lease obligations | Borrowings and capital lease obligations are summarized as follows (in thousands): Feb 3, 2018 Jan 28, 2017 Mortgage debt, maturing monthly through January 2026 $ 20,323 $ 20,889 Capital lease obligations 18,589 — Other 3,129 3,159 42,041 24,048 Less current installments 2,845 566 Long-term debt and capital lease obligations $ 39,196 $ 23,482 |
Summary of maturities of debt and capital lease obligations | From time-to-time, the Company will obtain other financing in foreign countries for working capital to finance its local operations. Maturities of the Company’s debt and capital lease obligations as of February 3, 2018 are as follows (in thousands): Debt Capital Lease Total Fiscal 2019 $ 1,361 $ 1,594 $ 2,955 Fiscal 2020 1,893 1,767 3,660 Fiscal 2021 1,725 1,923 3,648 Fiscal 2022 659 1,944 2,603 Fiscal 2023 682 1,895 2,577 Thereafter 17,221 9,466 26,687 Total principal payments 23,541 18,589 42,130 Less unamortized debt issuance costs 89 — 89 Total debt and capital lease obligations $ 23,452 $ 18,589 $ 42,041 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Restructuring and Related Activities [Abstract] | |
Summary of restructuring activities related primarily to severance | The following table summarizes restructuring activities related primarily to severance during fiscal 2017 and fiscal 2018 (in thousands): Total Balance at January 30, 2016 $ — Charges to operations 6,083 Cash payments (6,003 ) Foreign currency and other adjustments 100 Balance at January 28, 2017 $ 180 Cash payments (124 ) Foreign currency and other adjustments (56 ) Balance at February 3, 2018 $ — |
Comprehensive Income (Loss) (Ta
Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of changes in accumulated other comprehensive income (loss), net of related income taxes | The changes in accumulated other comprehensive income (loss), net of related income taxes, for fiscal 2018 , fiscal 2017 and fiscal 2016 are as follows (in thousands): Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Marketable Securities Defined Benefit Plans Total Balance at January 31, 2015 $ (121,569 ) $ 7,157 $ (3 ) $ (12,650 ) $ (127,065 ) Gains (losses) arising during the period (36,083 ) 7,944 (12 ) 5,468 (22,683 ) Reclassification to net earnings for gains realized — (7,849 ) — (457 ) (8,306 ) Net other comprehensive income (loss) (36,083 ) 95 (12 ) 5,011 (30,989 ) Balance at January 30, 2016 $ (157,652 ) $ 7,252 $ (15 ) $ (7,639 ) $ (158,054 ) Gains (losses) arising during the period (575 ) 1,059 (1 ) (1,162 ) (679 ) Reclassification to net earnings for (gains) losses realized — (2,911 ) 16 239 (2,656 ) Net other comprehensive income (loss) (575 ) (1,852 ) 15 (923 ) (3,335 ) Balance at January 28, 2017 $ (158,227 ) $ 5,400 $ — $ (8,562 ) $ (161,389 ) Gains (losses) arising during the period 91,178 (20,408 ) — (1,999 ) 68,771 Reclassification to net loss for (gains) losses realized — 414 — 352 766 Net other comprehensive income (loss) 91,178 (19,994 ) — (1,647 ) 69,537 Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance (1) — 225 — (1,435 ) (1,210 ) Balance at February 3, 2018 $ (67,049 ) $ (14,369 ) $ — $ (11,644 ) $ (93,062 ) ________________________________________________________________________ (1) During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017 . As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.2 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s Supplemental Executive Retirement Plan and its interest rate swap designated as a cash flow hedge based in the U.S. |
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | Details on reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) during fiscal 2018 , fiscal 2017 and fiscal 2016 are as follows (in thousands): Location of (Gain) Loss Reclassified from Accumulated OCI into Earnings (Loss) Year Ended Year Ended Year Ended Derivative financial instruments designated as cash flow hedges: Foreign exchange currency contracts $ (14 ) $ (3,518 ) $ (8,314 ) Cost of product sales Foreign exchange currency contracts 583 (301 ) (833 ) Other income/expense Interest rate swap 87 216 — Interest expense Less income tax effect (242 ) 692 1,298 Income tax expense 414 (2,911 ) (7,849 ) Marketable securities: Available-for-sale securities — 25 — Other income/expense Less income tax effect — (9 ) — Income tax expense — 16 — Defined benefit plans: Net actuarial loss amortization 462 341 924 (1) Prior service credit amortization (27 ) (28 ) (97 ) (1) Curtailment — — (1,651 ) (1) Less income tax effect (83 ) (74 ) 367 Income tax expense 352 239 (457 ) Total reclassifications to net earnings (loss) for (gains) losses realized during the period $ 766 $ (2,656 ) $ (8,306 ) ________________________________________________________________________ (1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic defined benefit pension cost. Refer to Note 12 for further information. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense (benefit) | Income tax expense (benefit) is summarized as follows (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Federal: Current $ 34,181 $ 8,212 $ 23,618 Deferred 21,595 (636 ) 4,038 State: Current 1,903 2,537 3,864 Deferred 217 (1,000 ) (296 ) Foreign: Current 7,333 17,055 14,259 Deferred 8,943 2,044 (3,019 ) Total $ 74,172 $ 28,212 $ 42,464 |
Schedule of differences between actual income tax expense and expected income tax expense | Actual income tax expense differs from expected income tax expense obtained by applying the statutory federal income tax rate to earnings before income taxes as follows (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Computed “expected” tax expense $ 23,693 $ 18,763 $ 44,547 State taxes, net of federal benefit 1,675 999 2,320 Non-U.S. tax expense less than federal statutory tax rate (1) (7,396 ) (1,539 ) (6,991 ) Tax Reform - repatriation tax adjustment (2) 23,034 — — Tax Reform - deferred tax adjustment (2) 24,856 — — Cumulative valuation reserve (3) — 6,830 — Valuation reserve (4) 9,057 5,841 3,024 Unrecognized tax benefit 537 556 1,123 Share-based compensation (5) 1,309 — — Net tax settlements — 1,894 — Sale of minority interest investment — (2,316 ) — Estimated exit tax charge — 1,911 — Prior year tax adjustments (88 ) (1,790 ) (2,944 ) Non-deductible permanent difference (3,224 ) (2,284 ) 1,295 Other 719 (653 ) 90 Total $ 74,172 $ 28,212 $ 42,464 ________________________________________________________________________ (1) The jurisdictional location of pre-tax income (loss) may represent a significant component of the Company’s effective tax rate as income tax rates outside the U.S. are generally lower than the U.S. statutory income tax rate. Furthermore, the impact of changes in the jurisdictional location of pre-tax income (loss) on the Company’s effective tax rate will be greater at lower levels of consolidated pre-tax income (loss). These amounts exclude the impact of net changes in valuation allowances, audit and other adjustments related to the Company’s non-U.S. operations, as they are reported separately in the appropriate corresponding line items in the table above. The impact on the Company’s effective tax rate was primarily related to the Company’s Swiss and Korean subsidiaries which have jurisdictional effective tax rates which range from 8% to 20% lower than the U.S. rates in effect for the periods presented. (2) During fiscal 2018, the Company recognized additional tax expense resulting from the enactment of the Tax Reform to account for the estimated effects of the transitional tax on the deemed repatriation of foreign earnings and reduced deferred tax assets due to lower future U.S. corporate tax rates. (3) Amounts represent valuation reserves resulting from jurisdictions where there have been cumulative net operating losses, limiting the Company’s ability to consider other subjective evidence to continue to recognize the existing deferred tax assets. (4) Amounts relate primarily to valuation reserves on non-cumulative net operating losses or other deferred tax assets arising during the respective period. (5) During fiscal 2018, the Company adopted authoritative guidance which requires all income tax effects of stock awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. |
Schedule of allocation of total income tax expense (benefit) | Total income tax expense (benefit) is allocated as follows (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Operations (1) $ 74,172 $ 28,212 $ 42,464 Stockholders’ equity (1) (3,173 ) 1,782 4,668 Total income tax expense $ 70,999 $ 29,994 $ 47,132 ________________________________________________________________________ (1) During fiscal 2018, the Company adopted authoritative guidance which requires all income tax effects of stock awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. As a result, the Company recorded tax shortfalls of approximately $1.3 million in the Company’s income tax expense during fiscal 2018. |
Schedule of tax effects of the components of other comprehensive income (loss) | The tax effects of the components of other comprehensive income (loss) are allocated as follows (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Derivative financial instruments designated as cash flow hedges $ (2,738 ) $ (864 ) $ 559 Marketable securities — 6 (7 ) Defined benefit plans (435 ) (21 ) 2,972 Total income tax expense (benefit) (1) $ (3,173 ) $ (879 ) $ 3,524 ________________________________________________________________________ (1) During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017 . As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.2 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s Supplemental Executive Retirement Plan and its interest rate swap designated as a cash flow hedge based in the U.S. The impact from this reclassification on accumulated other comprehensive income (loss) has been excluded from the amounts provided in this table. |
Schedule of total earnings before income tax expense and noncontrolling interests | Total earnings before income tax expense and noncontrolling interests are comprised of the following (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Domestic operations $ 39,112 $ 32,944 $ 90,141 Foreign operations 31,159 20,666 37,138 Earnings before income tax expense and noncontrolling interests $ 70,271 $ 53,610 $ 127,279 |
Schedule of tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities | The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities as of February 3, 2018 and January 28, 2017 are presented below (in thousands): Feb 3, 2018 Jan 28, 2017 Deferred tax assets: Net operating losses 19,859 13,524 Defined benefit plans 13,155 20,642 Deferred compensation 10,721 12,987 Excess of book over tax depreciation/amortization 10,704 9,018 Rent expense 7,651 13,672 Deferred income 7,141 6,213 Bad debt reserve 2,529 2,124 Lease incentives 1,814 5,545 Uniform capitalization 974 1,900 Other 30,703 28,265 Total deferred tax assets 105,251 113,890 Deferred tax liabilities: Goodwill amortization (2,303 ) (3,654 ) Excess of tax over book depreciation/amortization (135 ) (189 ) Other (4,517 ) (4,544 ) Valuation allowance (32,601 ) (23,255 ) Net deferred tax assets (1) $ 65,695 $ 82,248 __________________________________________________________________ (1) As of February 3, 2018 , amount includes net deferred tax liabilities of $2.7 million recorded in other long-term liabilities in the Company’s consolidated balance sheet. There were $0.5 million net deferred tax liabilities recorded in other long-term liabilities in the Company’s consolidated balance sheet at January 28, 2017 . |
Schedule of changes that occurred in the amount of gross unrecognized tax benefit excluding interest and penalties | A reconciliation of the beginning and ending amount of gross unrecognized tax benefit (excluding interest and penalties) is as follows (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Beginning balance $ 12,983 $ 12,585 $ 13,640 Additions: Tax positions related to the prior year 4,436 672 496 Tax positions related to the current year 222 106 1,516 Reductions: Tax positions related to the prior year (356 ) (380 ) (1,650 ) Tax positions related to the current year (309 ) — (359 ) Settlements — — (505 ) Expiration of statutes of limitation (205 ) — (553 ) Ending balance $ 16,771 $ 12,983 $ 12,585 |
Defined Benefit Plans (Tables)
Defined Benefit Plans (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Defined Benefit Plan [Abstract] | |
Schedule of net periodic defined benefit pension cost and other charges to comprehensive income (loss) and accumulated other comprehensive income (loss) | The components of net periodic defined benefit pension cost to accumulated comprehensive income (loss) for fiscal 2018 , fiscal 2017 and fiscal 2016 related to the Company’s defined benefit plans are as follows (in thousands): Year Ended February 3, 2018 SERP Foreign Pension Plans Total Service cost $ — $ 2,500 $ 2,500 Interest cost 1,844 147 1,991 Expected return on plan assets — (244 ) (244 ) Net amortization of unrecognized prior service credit — (27 ) (27 ) Net amortization of actuarial losses 151 311 462 Net periodic defined benefit pension cost $ 1,995 $ 2,687 $ 4,682 Unrecognized prior service credit charged to comprehensive income (loss) $ — $ (27 ) $ (27 ) Unrecognized net actuarial loss charged to comprehensive income (loss) 151 311 462 Net actuarial losses (1,092 ) (1,156 ) (2,248 ) Foreign currency and other adjustments — (269 ) (269 ) Related tax impact 360 75 435 Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) (581 ) (1,066 ) (1,647 ) Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance (1) (1,435 ) — (1,435 ) Total periodic defined benefit pension cost and other charges to accumulated other comprehensive income (loss) $ (2,016 ) $ (1,066 ) $ (3,082 ) ________________________________________________________________________ (1) During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017 . As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.4 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s SERP. Year Ended January 28, 2017 SERP Foreign Pension Total Service cost $ — $ 1,544 $ 1,544 Interest cost 1,839 87 1,926 Expected return on plan assets — (185 ) (185 ) Net amortization of unrecognized prior service credit — (28 ) (28 ) Net amortization of actuarial losses 155 186 341 Net periodic defined benefit pension cost $ 1,994 $ 1,604 $ 3,598 Unrecognized prior service credit charged to comprehensive income (loss) $ — $ (28 ) $ (28 ) Unrecognized net actuarial loss charged to comprehensive income (loss) 155 186 341 Net actuarial gains (losses) 63 (1,248 ) (1,185 ) Foreign currency and other adjustments — (72 ) (72 ) Related tax impact (84 ) 105 21 Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) and accumulated other comprehensive income (loss) $ 134 $ (1,057 ) $ (923 ) Year Ended January 30, 2016 SERP Foreign Pension Total Service cost $ — $ 1,622 $ 1,622 Interest cost 1,986 69 2,055 Expected return on plan assets — (142 ) (142 ) Net amortization of unrecognized prior service credit (97 ) — (97 ) Net amortization of actuarial losses 740 184 924 Curtailment gain (1,651 ) — (1,651 ) Net periodic defined benefit pension cost $ 978 $ 1,733 $ 2,711 Unrecognized prior service credit charged to comprehensive income (loss) $ (97 ) $ — $ (97 ) Unrecognized net actuarial loss charged to comprehensive income (loss) 740 184 924 Curtailment gain (1,651 ) — (1,651 ) Net actuarial gains (losses) 8,707 (341 ) 8,366 Plan amendment — 167 167 Foreign currency and other adjustments — 274 274 Related tax impact (2,945 ) (27 ) (2,972 ) Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) and accumulated other comprehensive income (loss) $ 4,754 $ 257 $ 5,011 |
Schedule of accumulated other comprehensive income (loss), before tax, that have not yet been recognized in net periodic defined benefit pension cost | Included in accumulated other comprehensive income (loss), before tax, as of February 3, 2018 and January 28, 2017 are the following amounts that have not yet been recognized in net periodic defined benefit pension cost (in thousands): Feb 3, 2018 Jan 28, 2017 SERP Foreign Pension Total SERP Foreign Pension Total Unrecognized prior service credit $ — $ (113 ) $ (113 ) $ — $ (140 ) $ (140 ) Unrecognized net actuarial loss 9,454 4,889 14,343 8,513 3,775 12,288 Total included in accumulated other comprehensive loss $ 9,454 $ 4,776 $ 14,230 $ 8,513 $ 3,635 $ 12,148 |
Schedule of the funded status of the Company's defined benefit plans and the amounts recognized in the Company's consolidated balance sheets | The following table summarizes the funded status of the Company’s defined benefit plans and the amounts recognized in the Company’s consolidated balance sheets (in thousands): February 3, 2018 Jan 28, 2017 SERP Foreign Pension Total SERP Foreign Pension Total Projected benefit obligation $ (54,760 ) $ (26,409 ) $ (81,169 ) $ (53,521 ) $ (19,986 ) $ (73,507 ) Plan assets at fair value (1) — 21,437 21,437 — 16,305 16,305 Net liability (2) $ (54,760 ) $ (4,972 ) $ (59,732 ) $ (53,521 ) $ (3,681 ) $ (57,202 ) ________________________________________________________________________ (1) The SERP is a non-qualified pension plan and hence the insurance policies are not considered to be plan assets. Accordingly, the table above does not include the insurance policies with cash surrender values of $64.5 million and $58.6 million as of February 3, 2018 and January 28, 2017 , respectively. (2) The net liability was included in accrued expenses and other long-term liabilities in the Company’s consolidated balance sheets depending on the expected timing of payments. |
Schedule of reconciliation of the changes in the projected benefit obligation | A reconciliation of the changes in the projected benefit obligation for fiscal 2018 and fiscal 2017 is as follows (in thousands): Projected Benefit Obligation SERP Foreign Pension Total Balance at January 30, 2016 $ 53,443 $ 17,577 $ 71,020 Service cost — 1,544 1,544 Interest cost 1,839 87 1,926 Actuarial (gains) losses (63 ) 1,067 1,004 Contributions by plan participants — 1,805 1,805 Payments (1,698 ) (2,416 ) (4,114 ) Foreign currency and other adjustments — 322 322 Balance at January 28, 2017 $ 53,521 $ 19,986 $ 73,507 Service cost — 2,500 2,500 Interest cost 1,844 147 1,991 Actuarial (gains) losses 1,092 1,156 2,248 Contributions by plan participants — 2,315 2,315 Payments (1,697 ) (1,373 ) (3,070 ) Foreign currency and other adjustments — 1,678 1,678 Balance at February 3, 2018 $ 54,760 $ 26,409 $ 81,169 |
Schedule of reconciliation of the changes in plan assets for the Foreign Pension Plans | A reconciliation of the changes in plan assets for the Foreign Pension Plans for fiscal 2018 and fiscal 2017 is as follows (in thousands): Plan Assets Balance at January 30, 2016 $ 14,859 Actual return on plan assets 4 Contributions by employer 1,779 Contributions by plan participants 1,805 Payments (2,416 ) Foreign currency and other adjustments 274 Balance at January 28, 2017 $ 16,305 Actual return on plan assets 244 Contributions by employer 2,575 Contributions by plan participants 2,315 Payments (1,373 ) Foreign currency and other adjustments 1,371 Balance at February 3, 2018 $ 21,437 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum property and equipment payments under capital leases and non-cancelable operating leases | Future minimum property and equipment lease payments under capital leases and non-cancelable operating leases as of February 3, 2018 are as follows (in thousands): Operating Leases Capital Lease Non-Related Parties Related Parties Total Fiscal 2019 $ 2,940 $ 196,321 $ 4,757 $ 204,018 Fiscal 2020 2,945 174,521 4,420 181,886 Fiscal 2021 2,934 148,255 2,024 153,213 Fiscal 2022 2,716 124,562 — 127,278 Fiscal 2023 2,590 100,162 — 102,752 Thereafter 10,859 229,880 — 240,739 Total minimum lease payments $ 24,984 $ 973,701 $ 11,201 $ 1,009,886 Less interest (6,395 ) Capital lease obligations $ 18,589 Less current portion (1,594 ) Long-term capital lease obligations $ 16,995 |
Schedule of reconciliation of the total carrying amount of redeemable noncontrolling interests | A reconciliation of the total carrying amount of redeemable noncontrolling interests for fiscal 2018 and fiscal 2017 is as follows (in thousands): Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Beginning balance $ 4,452 $ 5,252 Foreign currency translation adjustment 187 818 Purchase of redeemable noncontrolling interest — (4,445 ) Noncontrolling interest capital contribution 951 2,157 Redeemable noncontrolling interest redemption value adjustment — 670 Ending balance $ 5,590 $ 4,452 |
Quarterly Information (Unaudi45
Quarterly Information (Unaudited) (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of the unaudited quarterly financial information | The following is a summary of the unaudited quarterly financial information for fiscal 2018 and fiscal 2017 (in thousands, except per share data): Quarterly Periods Ended (1) Year Ended February 3, 2018 Apr 29, Jul 29, Oct 28, Feb 3, Net revenue (2) $ 454,345 $ 568,292 $ 548,953 $ 792,164 Gross profit 144,642 198,027 191,109 295,070 Net earnings (loss) (21,227 ) 15,881 (1,662 ) 3,107 Net earnings (loss) attributable to Guess?, Inc. (21,293 ) 15,219 (2,860 ) 1,040 Net earnings (loss) per common share attributable to common stockholders: (3) (4) (5) (6) Basic $ (0.26 ) $ 0.18 $ (0.04 ) $ 0.01 Diluted $ (0.26 ) $ 0.18 $ (0.04 ) $ 0.01 Quarterly Periods Ended (1) Year Ended January 28, 2017 Apr 30, Jul 30, Oct 29, Jan 28, Net revenue (2) $ 444,061 $ 540,412 $ 531,976 $ 674,004 Gross profit 142,759 185,632 180,242 236,407 Net earnings (25,154 ) 32,167 9,729 8,656 Net earnings attributable to Guess?, Inc. (25,178 ) 32,269 9,103 6,567 Net earnings per common share attributable to common stockholders: (3) (4) (5) (7) (8) (9) Basic $ (0.30 ) $ 0.38 $ 0.11 $ 0.08 Diluted $ (0.30 ) $ 0.38 $ 0.11 $ 0.08 _________________________________________________________________________ (1) All fiscal quarters presented consisted of 13 weeks with the exception of the quarter ended February 3, 2018 which consisted of 14 weeks. (2) During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales . Accordingly, prior period amounts related to net royalties, net revenue and cost of product sales have been adjusted to conform to the current period presentation . This resulted in a decrease to net revenue and cost of product sales of $4.2 million , $5.4 million and $5.2 million during the first, second and third quarters of fiscal 2018 , respectively. This also resulted in a decrease to net revenue and cost of product sales of $4.8 million , $4.5 million , $4.3 million and $5.3 million during the first, second, third and fourth quarters of fiscal 2017 , respectively. This reclassification had no impact on previously reported gross profit, net earnings (loss) or net earnings (loss) per share. Refer to Note 1 for further information regarding this reclassification. (3) Per common share amounts for the quarters and full years have been calculated separately. Accordingly, quarterly amounts may not add to the annual amount because of differences in the average common shares outstanding during each period. (4) The Company recorded net gains (losses) on lease terminations of $(11.5) million and $0.1 million during the third and fourth quarters of fiscal 2018 , respectively. There were no net gains (losses) on lease terminations recognized during the first or second quarters of fiscal 2018 . During the first and second quarters of fiscal 2017, the Company recorded net gains on lease terminations of $0.1 million and $0.6 million , respectively. There were no net gains (losses) on lease terminations recognized during the third or fourth quarters of fiscal 2017 . Refer to Note 1 for further information regarding net gains (losses) on lease terminations. (5) During each of the periods presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. The Company recorded asset impairment charges of $2.8 million , $1.2 million , $2.0 million and $2.5 million , respectively, during the first, second, third and fourth quarters of fiscal 2018 . The Company also recorded asset impairment charges of $0.2 million , $0.5 million , $0.8 million and $32.9 million , respectively, during the first, second, third and fourth quarters of fiscal 2017 . Refer to Note 5 for further detail regarding asset impairment charges. (6) During fiscal 2018, the Company recognized additional tax expense of $47.9 million related to the enactment of the Tax Reform . This is comprised of a $24.9 million charge for the provisional re-measurement of certain deferred taxes and related amounts and a provisional charge of $23.0 million to income tax expense for the estimated effects of the transitional tax on the deemed repatriation of foreign earnings . These charges were recorded during the fourth quarter of fiscal 2018. Refer to Note 11 for further detail. (7) During fiscal 2017, the Company recorded restructuring charges of $6.1 million and a related estimated exit tax charge of approximately $1.9 million . The restructuring charges and related estimated exit tax charge were recorded during the three months ended April 30, 2016. Refer to Note 9 for further detail regarding these charges. (8) During fiscal 2017, the Company sold its minority interest equity holding in a privately-held boutique apparel company for net proceeds of approximately $ 34.8 million , which resulted in a gain of approximately $ 22.3 million which was recorded in other income. The gain was recorded during the three months ended July 30, 2016. (9) During fiscal 2017, the Company recorded valuation reserves of $6.8 million resulting from jurisdictions where there have been cumulative net operating losses, limiting the Company’s ability to consider other subjective evidence to continue to recognize the existing deferred tax assets. The Company recorded the valuation reserve during the three months ended January 28, 2017. Refer to Note 11 for further detail. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Segment Reporting [Abstract] | |
Summary of net revenue, earnings (loss) from operations, capital expenditures and total assets by segment | Segment information is summarized as follows (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 (1) Jan 28, 2017 (1) Jan 30, 2016 (1) Net revenue: Americas Retail $ 833,077 $ 935,479 $ 981,942 Americas Wholesale (2) 150,366 146,260 155,594 Europe (2) 998,657 788,194 722,877 Asia (2) 308,899 248,601 240,041 Licensing (3) 72,755 71,919 84,041 Total net revenue (3) $ 2,363,754 $ 2,190,453 $ 2,184,495 Earnings (loss) from operations: Americas Retail (2) $ (17,301 ) $ (22,816 ) $ 18,414 Americas Wholesale (2) 25,161 24,190 29,579 Europe (2) 87,376 56,961 53,673 Asia (2) 14,116 (2,381 ) 10,309 Licensing (2) 78,102 80,386 92,189 Total segment earnings from operations 187,454 136,340 204,164 Corporate overhead (2) (102,429 ) (73,859 ) (82,864 ) Net gains (losses) on lease terminations (2) (4) (11,373 ) 695 2,337 Asset impairment charges (2) (5) (8,479 ) (34,385 ) (2,287 ) Restructuring charges (6) — (6,083 ) — Total earnings from operations $ 65,173 $ 22,708 $ 121,350 Capital expenditures: Americas Retail $ 16,899 $ 25,881 $ 26,384 Americas Wholesale 1,303 3,320 2,854 Europe 46,419 42,080 13,869 Asia 12,111 13,869 6,265 Licensing — 20 27 Corporate overhead 7,923 5,411 34,445 Total capital expenditures $ 84,655 $ 90,581 $ 83,844 Feb 3, 2018 Jan 28, 2017 Total assets: Americas Retail $ 192,917 $ 240,857 Americas Wholesale 181,548 175,136 Europe 850,886 723,251 Asia 242,232 182,405 Licensing 6,255 19,442 Corporate overhead 181,796 193,395 Total assets $ 1,655,634 $ 1,534,485 _________________________________________________________________________ (1) The Company operates on a 52 / 53 -week fiscal year calendar, which ends on the Saturday nearest to January 31 of each year. The results for fiscal 2018 included the impact of an additional week which occurred during the fourth quarter ended February 3, 2018 . (2) During fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. Segment results were also adjusted to exclude corporate performance-based compensation costs, net gains (losses) on lease terminations and asset impairment charges due to the fact that these items are no longer included in the segment results provided to the Company’s chief operating decision maker in order to allocate resources and assess performance . Accordingly, segment results have been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. (3) During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales . Accordingly, net revenue has been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. This reclassification had no impact on previously reported earnings from operations. (4) During fiscal 2018 , the Company incurred net losses on lease terminations related primarily to the modification of certain lease agreements held with a common landlord in North America . During fiscal 2017 and fiscal 2016 , the Company recorded net gains on lease terminations related primarily to the early termination of certain lease agreements in Europe . Refer to Note 1 for more information regarding the net gains (losses) on lease terminations. (5) During each of the years presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. Refer to Note 5 for more information regarding these asset impairment charges. (6) Restructuring charges incurred during fiscal 2017 related to plans to better align the Company’s global cost and organizational structure with its current strategic initiatives. Refer to Note 9 for more information regarding these restructuring charges. |
Summary of net revenue and long-lived assets by country | The table below presents information regarding geographic areas in which the Company operated. Net revenue is classified primarily based on the country where the Company’s customer is located (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 (1) Jan 30, 2016 (1) Net revenue: U.S. $ 742,620 $ 836,954 $ 892,056 Italy 289,299 257,542 245,451 Canada 203,965 220,720 222,470 South Korea 156,101 157,503 162,200 Other foreign countries 971,769 717,734 662,318 Total net revenue $ 2,363,754 $ 2,190,453 $ 2,184,495 Feb 3, 2018 Jan 28, 2017 Long-lived assets: U.S. $ 109,943 $ 115,728 Italy 34,884 31,013 Canada 18,845 13,690 South Korea 9,584 8,664 Other foreign countries 187,214 132,921 Total long-lived assets $ 360,470 $ 302,016 _________________________________________________________________________ (1) During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales . Accordingly, net revenue by geographic area has been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted net earnings (loss) per common share attributable to common stockholders | The computation of basic and diluted net earnings (loss) per common share attributable to common stockholders is as follows (in thousands, except per share data): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Net earnings (loss) attributable to Guess?, Inc. $ (7,894 ) $ 22,761 $ 81,851 Less net earnings attributable to nonvested restricted stockholders 764 527 532 Net earnings (loss) attributable to common stockholders $ (8,658 ) $ 22,234 $ 81,319 Weighted average common shares used in basic computations 82,189 83,666 84,264 Effect of dilutive securities: Stock options and restricted stock units (1) — 163 261 Weighted average common shares used in diluted computations 82,189 83,829 84,525 Net earnings (loss) per common share attributable to common stockholders: Basic $ (0.11 ) $ 0.27 $ 0.97 Diluted $ (0.11 ) $ 0.27 $ 0.96 _________________________________________________________________________ (1) For fiscal 2018, there were 652,494 potentially dilutive shares that were not included in the computation of diluted weighted average common shares and common equivalent shares outstanding because their effect would have been antidilutive given the Company’s net loss. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of share-based compensation expense recognized under all of the Company's stock plans | The following table summarizes the share-based compensation expense recognized under all of the Company’s stock plans during fiscal 2018 , fiscal 2017 and fiscal 2016 (in thousands): Year Ended Year Ended Year Ended Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Stock options $ 2,345 $ 2,219 $ 2,113 Stock awards/units 16,347 14,544 16,604 ESPP 160 145 163 Total share-based compensation expense $ 18,852 $ 16,908 $ 18,880 |
Schedule of stock option activity under all of the Company's stock plans | The following table summarizes the stock option activity under all of the Company’s stock plans during fiscal 2018 : Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Options outstanding at January 28, 2017 2,857,012 $ 24.30 Granted 1,283,175 11.22 Exercised (123,775 ) 11.22 Forfeited (88,625 ) 25.39 Expired (15,375 ) 41.14 Options outstanding at February 3, 2018 3,912,412 $ 20.33 4.79 $ 3,930 Exercisable at February 3, 2018 2,232,456 $ 24.56 6.52 $ 668 Options exercisable and expected to vest at February 3, 2018 3,912,412 $ 20.33 4.79 $ 3,930 |
Schedule of weighted average assumptions used for stock option grants | The fair value of each stock option was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants during fiscal 2018 , fiscal 2017 and fiscal 2016 : Year Ended Year Ended Year Ended Valuation Assumptions Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Risk-free interest rate 1.5 % 1.0 % 1.0 % Expected stock price volatility 37.1 % 35.4 % 36.7 % Expected dividend yield 8.0 % 4.8 % 4.7 % Expected life of stock options (in years) 4.4 4.2 3.8 |
Schedule of nonvested stock awards/units activity under all of the Company's stock plans | The following table summarizes the nonvested stock awards/units activity under all of the Company’s stock plans during fiscal 2018 : Number of Awards/Units Weighted Average Grant Date Fair Value Nonvested at January 28, 2017 1,686,204 $ 18.80 Granted 1,969,619 11.41 Vested (1,052,796 ) 17.52 Forfeited (138,461 ) 14.94 Nonvested at February 3, 2018 2,464,566 $ 13.66 |
Schedule of activity for nonvested performance-based units and nonvested market-based units | The following table summarizes the activity for nonvested performance-based units and nonvested market-based units included in the table above during fiscal 2018 : Performance-Based Units Market-Based Units Number of Units Weighted Average Grant Date Fair Value Number of Units Weighted Average Grant Date Fair Value Nonvested at January 28, 2017 787,849 $ 19.17 323,825 $ 16.63 Granted 818,416 11.17 309,118 12.03 Vested (290,645 ) 19.85 (244,466 ) 17.72 Forfeited (14,699 ) 16.60 — — Nonvested at February 3, 2018 1,300,921 $ 14.01 388,477 $ 12.28 |
Schedule of assumptions used for market-based nonvested stock units | The fair value of each market-based nonvested stock unit was estimated on the grant date using the Monte Carlo simulation with the following assumptions used for the grants during fiscal 2018 , fiscal 2017 and fiscal 2016 : Year Ended Year Ended Year Ended Valuation Assumptions Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Risk-free interest rate 1.4 % 0.9 % 0.9 % Expected stock price volatility 39.7 % 36.2 % 38.6 % Expected dividend yield — % — % — % Expected life of market-based awards (in years) 2.8 2.8 2.8 |
Schedule of weighted average assumptions used for ESPP | The fair value of stock compensation expense associated with the Company’s ESPP was estimated on the date of grant using the Black-Scholes option-pricing valuation model with the following weighted average assumptions used for grants during fiscal 2018 , fiscal 2017 and fiscal 2016 . Year Ended Year Ended Year Ended Valuation Assumptions Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Risk-free interest rate 1.0 % 0.3 % 0.1 % Expected stock price volatility 45.8 % 41.1 % 34.9 % Expected dividend yield 7.6 % 6.2 % 4.7 % Expected life of ESPP options (in months) 3 3 3 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of February 3, 2018 and January 28, 2017 (in thousands): Fair Value Measurements at Feb 3, 2018 Fair Value Measurements at Jan 28, 2017 Recurring Fair Value Measures Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Foreign exchange currency contracts $ — $ 51 $ — $ 51 $ — $ 9,868 $ — $ 9,868 Interest rate swap — 1,460 — 1,460 — 876 — $ 876 Total $ — $ 1,511 $ — $ 1,511 $ — $ 10,744 $ — $ 10,744 Liabilities: Foreign exchange currency contracts $ — $ 18,089 $ — $ 18,089 $ — $ 1,424 $ — $ 1,424 Deferred compensation obligations — 13,476 — 13,476 — 11,184 — 11,184 Total $ — $ 31,565 $ — $ 31,565 $ — $ 12,608 $ — $ 12,608 |
Derivative Financial Instrume50
Derivative Financial Instruments (Tables) | 12 Months Ended |
Feb. 03, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of fair value of derivative instruments in the consolidated balance sheets | The fair value of derivative instruments in the consolidated balance sheets as of February 3, 2018 and January 28, 2017 is as follows (in thousands): Derivative Balance Sheet Location Fair Value at Feb 3, 2018 Fair Value at Jan 28, 2017 ASSETS: Derivatives designated as hedging instruments: Cash flow hedges: Foreign exchange currency contracts Other current assets/ Other assets $ 41 $ 6,072 Interest rate swap Other assets 1,460 876 Total derivatives designated as hedging instruments 1,501 6,948 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Other current assets/ Other assets 10 3,796 Total $ 1,511 $ 10,744 LIABILITIES: Derivatives designated as hedging instruments: Cash flow hedges: Foreign exchange currency contracts Accrued expenses/ Other long-term liabilities $ 13,789 $ 1,250 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Accrued expenses 4,300 174 Total $ 18,089 $ 1,424 |
Summary of gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in accumulated other comprehensive income (loss) and net earnings (loss) | The following table summarizes the gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in accumulated other comprehensive income (loss) and net earnings (loss) for fiscal 2018 , fiscal 2017 and fiscal 2016 (in thousands): Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from Accumulated OCI into Loss (1) Gain (Loss) Reclassified from Accumulated OCI into Loss Loss Reclassified from Accumulated OCI to Retained Earnings (2) Year Ended Feb 3, 2018 Year Ended Feb 3, 2018 Year Ended Feb 3, 2018 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ (22,497 ) Cost of product sales $ 14 $ — Foreign exchange currency contracts $ (1,163 ) Other income/expense $ (583 ) $ — Interest rate swap $ 272 Interest expense $ (87 ) $ (225 ) Gain Recognized in Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings (1) Gain (Loss) Reclassified from Year Ended Jan 28, 2017 Year Ended Jan 28, 2017 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ — Cost of product sales $ 3,518 Foreign exchange currency contracts $ 227 Other income/expense $ 301 Interest rate swap $ 660 Interest expense $ (216 ) Gain Recognized in Location of Gain Reclassified from Accumulated OCI into Earnings (1) Gain Reclassified from Year Ended Jan 30, 2016 Year Ended Jan 30, 2016 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ 9,301 Cost of product sales $ 8,314 Foreign exchange currency contracts $ 500 Other income/expense $ 833 ________________________________________________________________________ (1) The Company recognized gains of $ 2.7 million , $ 0.9 million and $ 0.1 million resulting from the ineffective portion related to foreign exchange currency contracts in interest income during fiscal 2018 , fiscal 2017 and fiscal 2016 , respectively. There was no ineffectiveness recognized related to the interest rate swap during fiscal 2018 and fiscal 2017 . |
Summary of net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | The following table summarizes net after-tax derivative activity recorded in accumulated other comprehensive income (loss) (in thousands): Year Ended Feb 3, 2018 Year Ended Jan 28, 2017 Beginning balance gain $ 5,400 $ 7,252 Net gains (losses) from changes in cash flow hedges (20,408 ) 1,059 Net (gains) losses reclassified to earnings (loss) 414 (2,911 ) Net losses reclassified to retained earnings (1) 225 — Ending balance gain (loss) $ (14,369 ) $ 5,400 |
Summary of gains (loss) before taxes recognized on the derivative instruments not designated as hedging instruments in other income and expense | The following table summarizes the gains (losses) before taxes recognized on the derivative instruments not designated as hedging instruments in other income and expense for fiscal 2018 , fiscal 2017 and fiscal 2016 (in thousands): Location of Gain (Loss) Recognized in Earnings (Loss) Gain (Loss) Recognized in Earnings (Loss) Year Ended Feb 3, 2018 Year Ended Jan 28, 2017 Year Ended Jan 30, 2016 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Other income/expense $ (10,511 ) $ 2,427 $ 4,346 Interest rate swap Other income/expense $ — $ 38 $ 179 |
Description of the Business a51
Description of the Business and Summary of Significant Accounting Policies and Practices (Details 1) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Feb. 03, 2018 | Oct. 28, 2017USD ($) | Jul. 29, 2017USD ($) | Apr. 29, 2017USD ($) | Jan. 28, 2017USD ($) | Oct. 29, 2016USD ($) | Jul. 30, 2016USD ($) | Apr. 30, 2016USD ($) | Feb. 02, 2019 | Feb. 03, 2018USD ($)segment | Jan. 28, 2017USD ($) | Jan. 30, 2016USD ($) | |
Fiscal Year | ||||||||||||
Number of days in fiscal period | 98 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 371 days | 364 days | 364 days | |
Business Segment Reporting | ||||||||||||
Number of reportable segments | segment | 5 | |||||||||||
Advertising and Marketing Costs | ||||||||||||
Advertising and marketing expenses | $ 36.3 | $ 37.1 | $ 31.6 | |||||||||
Cash and Cash Equivalents | ||||||||||||
Marketable securities maximum original maturity period to be considered cash equivalent (in months) | 3 months | |||||||||||
Long-Lived Assets | ||||||||||||
Period of time new regular retail locations in penetrated markets would need to be opened to be considered for impairment | 1 year | |||||||||||
Forecast | ||||||||||||
Fiscal Year | ||||||||||||
Number of days in fiscal period | 364 days | |||||||||||
Minimum | ||||||||||||
Fiscal Year | ||||||||||||
Number of days in fiscal period | 364 days | |||||||||||
Maximum | ||||||||||||
Fiscal Year | ||||||||||||
Number of days in fiscal period | 371 days | |||||||||||
Net revenue | ||||||||||||
Correction of Immaterial Error | ||||||||||||
Prior period reclassification adjustment | $ (5.2) | $ (5.4) | $ (4.2) | $ (5.3) | $ (4.3) | $ (4.5) | $ (4.8) | (18.9) | (19.8) | |||
Cost of product sales | ||||||||||||
Correction of Immaterial Error | ||||||||||||
Prior period reclassification adjustment | $ 18.9 | $ 19.8 |
Description of the Business a52
Description of the Business and Summary of Significant Accounting Policies and Practices (Details 2) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2018USD ($)subsidiary | Jan. 28, 2017USD ($) | Jan. 30, 2016USD ($) | |
Net Royalty Revenue | |||
Deferred royalties, current | $ 7,273 | $ 7,891 | |
Gift Cards | |||
Number of subsidiaries that issue gift cards | subsidiary | 1 | ||
Revenue recognition of gift card breakage | $ 700 | 800 | $ 500 |
Loyalty Programs | |||
Expiration period of unredeemed points (in months) | 6 months | ||
Expiration period of unredeemed awards (in months) | 2 months | ||
U.S. retail business | |||
Gift Cards | |||
Gift card breakage rate (as a percent) | 6.10% | ||
Canadian retail business | |||
Gift Cards | |||
Gift card breakage rate (as a percent) | 5.10% | ||
Accrued expenses | |||
Loyalty Programs | |||
Aggregate dollar value of the loyalty program accruals included in accrued expenses | $ 3,800 | 4,000 | |
Deferred royalties | Accrued expenses | |||
Net Royalty Revenue | |||
Deferred royalties, current | 6,800 | 6,100 | |
Deferred royalties | Other long-term liabilities | |||
Net Royalty Revenue | |||
Deferred royalties, noncurrent | $ 12,800 | $ 16,400 |
Description of the Business a53
Description of the Business and Summary of Significant Accounting Policies and Practices (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Selling, general and administrative expenses | |||
Classification of Certain Costs and Expenses | |||
Distribution costs related primarily to the wholesale business | $ 34.2 | $ 22.6 | $ 23.2 |
Description of the Business a54
Description of the Business and Summary of Significant Accounting Policies and Practices (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | Jan. 31, 2015 | |
Foreign Currency | ||||
Foreign currency translation adjustment | $ 93,416 | $ (2,632) | $ (37,744) | |
Accumulated foreign currency translation loss | 933,475 | 980,994 | 1,031,293 | $ 1,089,446 |
Net foreign currency transaction gains (losses) | (5,900) | 3,600 | $ 10,000 | |
Accumulated foreign currency translation adjustment | ||||
Foreign Currency | ||||
Foreign currency translation adjustment | 93,400 | |||
Accumulated foreign currency translation loss | $ (71,300) | $ (164,700) |
Description of the Business a55
Description of the Business and Summary of Significant Accounting Policies and Practices (Details 5) - customer | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Concentration risk | |||
Percentage of total accounts receivable that are subject to credit insurance coverage, certain bank guarantees or letters of credit for collection purposes | 59.00% | ||
Net revenue | Customer Concentration Risk | |||
Concentration risk | |||
Number of wholesale customers that represent concentration of risk | 2 | 2 | 2 |
Net revenue | Customer Concentration Risk | Two largest wholesale customers | |||
Concentration risk | |||
Percentage of consolidated net revenue accounted for by wholesale customers that represent concentration of risk | 2.20% | 2.70% | 3.40% |
Europe | |||
Concentration risk | |||
Percentage of total accounts receivable that are subject to credit insurance coverage, certain bank guarantees or letters of credit for collection purposes | 72.00% |
Description of the Business a56
Description of the Business and Summary of Significant Accounting Policies and Practices (Details 6) | 12 Months Ended |
Feb. 03, 2018 | |
Purchased intangibles | Minimum | |
Summary of Significant Accounting Policies | |
Purchased intangibles, useful life | 4 years |
Purchased intangibles | Maximum | |
Summary of Significant Accounting Policies | |
Purchased intangibles, useful life | 20 years |
Building and building improvements | Minimum | |
Summary of Significant Accounting Policies | |
Property and equipment, useful life | 10 years |
Building and building improvements | Maximum | |
Summary of Significant Accounting Policies | |
Property and equipment, useful life | 39 years |
Land improvements | |
Summary of Significant Accounting Policies | |
Property and equipment, useful life | 5 years |
Furniture, fixtures and equipment | Minimum | |
Summary of Significant Accounting Policies | |
Property and equipment, useful life | 2 years |
Furniture, fixtures and equipment | Maximum | |
Summary of Significant Accounting Policies | |
Property and equipment, useful life | 10 years |
Description of the Business a57
Description of the Business and Summary of Significant Accounting Policies and Practices (Details 7) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jul. 30, 2016 | Jan. 28, 2017 | |
Sale of minority interest equity holding in privately-held boutique apparel company | ||
Net proceeds from sale of the Company's minority interest equity holding in a privately-held boutique apparel company | $ 34.8 | $ 34.8 |
Other income/expense | ||
Sale of minority interest equity holding in privately-held boutique apparel company | ||
Gain from sale of the Company's minority interest equity holding in a privately-held boutique apparel company | $ 22.3 | $ 22.3 |
Description of the Business a58
Description of the Business and Summary of Significant Accounting Policies and Practices (Details 8) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 03, 2018 | Oct. 28, 2017 | Jul. 29, 2017 | Apr. 29, 2017 | Jan. 28, 2017 | Oct. 29, 2016 | Jul. 30, 2016 | Apr. 30, 2016 | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Net (gains) losses on lease terminations | |||||||||||
Net (gains) losses on lease terminations | $ (100,000) | $ 11,500,000 | $ 0 | $ 0 | $ 0 | $ 0 | $ (600,000) | $ (100,000) | $ 11,373,000 | $ (695,000) | $ (2,337,000) |
Europe | |||||||||||
Net (gains) losses on lease terminations | |||||||||||
Net (gains) losses on lease terminations | (1,000,000) | $ (695,000) | $ (2,337,000) | ||||||||
Lease modification with a common landlord | North America | |||||||||||
Net (gains) losses on lease terminations | |||||||||||
Upfront payment related to lease modification | 22,000,000 | ||||||||||
Net (gains) losses on lease terminations | 12,000,000 | ||||||||||
Advanced rent payments | $ 10,000,000 | $ 10,000,000 |
New Accounting Guidance (Detail
New Accounting Guidance (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Feb. 03, 2018 | [2] | Oct. 28, 2017 | [2] | Jul. 29, 2017 | [2] | Apr. 29, 2017 | Jan. 28, 2017 | [2] | Oct. 29, 2016 | [2] | Jul. 30, 2016 | [2] | Apr. 30, 2016 | [2] | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||
Income tax expense | [1] | $ 74,172 | $ 28,212 | $ 42,464 | ||||||||||||||||
Negative impact on net loss attributable to Guess, Inc. from tax shortfalls | $ (1,040) | $ 2,860 | $ (15,219) | $ 21,293 | [2] | $ (6,567) | $ (9,103) | $ (32,269) | $ 25,178 | $ 7,894 | $ (22,761) | $ (81,851) | ||||||||
Unfavorable impact on basic loss per share | $ 0.01 | [3],[4],[5],[6] | $ (0.04) | [3],[4],[5],[6] | $ 0.18 | [3],[4],[5],[6] | $ (0.26) | [2],[3],[4],[5],[6] | $ 0.08 | [3],[5],[6],[7],[8],[9] | $ 0.11 | [3],[5],[6],[7],[8],[9] | $ 0.38 | [3],[5],[6],[7],[8],[9] | $ (0.30) | [3],[5],[6],[7],[8],[9] | $ (0.11) | $ 0.27 | $ 0.97 | |
Unfavorable impact on diluted loss per share from tax shortfalls | $ 0.01 | [3],[4],[5],[6] | $ (0.04) | [3],[4],[5],[6] | $ 0.18 | [3],[4],[5],[6] | $ (0.26) | [2],[3],[4],[5],[6] | $ 0.08 | [3],[5],[6],[7],[8],[9] | $ 0.11 | [3],[5],[6],[7],[8],[9] | $ 0.38 | [3],[5],[6],[7],[8],[9] | $ (0.30) | [3],[5],[6],[7],[8],[9] | $ (0.11) | $ 0.27 | $ 0.96 | |
Increase in operating cash flows from reclass of excess tax benefits | $ 148,370 | $ 71,740 | $ 179,668 | |||||||||||||||||
Decrease in financing cash flow from reclass of excess tax benefits | (128,737) | (69,034) | (127,979) | |||||||||||||||||
Cumulative adjustment reclassified to retained earnings from adoption of ASU 2018-02 | [10] | (1,210) | ||||||||||||||||||
Accounting Standards Update 2016-09 | ||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||
Income tax expense | 1,309 | |||||||||||||||||||
Negative impact on net loss attributable to Guess, Inc. from tax shortfalls | $ 1,309 | |||||||||||||||||||
Unfavorable impact on basic loss per share | $ (0.02) | |||||||||||||||||||
Unfavorable impact on diluted loss per share from tax shortfalls | $ (0.02) | |||||||||||||||||||
Increase in operating cash flows from reclass of excess tax benefits | 300 | 200 | ||||||||||||||||||
Decrease in financing cash flow from reclass of excess tax benefits | $ (300) | $ (200) | ||||||||||||||||||
Retained Earnings | Accounting Standards Update 2016-09 | ||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | $ (268) | $ (268) | ||||||||||||||||||
Retained Earnings | Accounting Standards Update 2018-02 | ||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||
Cumulative adjustment reclassified to retained earnings from adoption of ASU 2018-02 | $ 1,210 | |||||||||||||||||||
[1] | During fiscal 2018, the Company adopted authoritative guidance which requires all income tax effects of stock awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. As a result, the Company recorded tax shortfalls of approximately $1.3 million in the Company’s income tax expense during fiscal 2018. | |||||||||||||||||||
[2] | All fiscal quarters presented consisted of 13 weeks with the exception of the quarter ended February 3, 2018 which consisted of 14 weeks. | |||||||||||||||||||
[3] | During each of the periods presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. The Company recorded asset impairment charges of $2.8 million, $1.2 million, $2.0 million and $2.5 million, respectively, during the first, second, third and fourth quarters of fiscal 2018. The Company also recorded asset impairment charges of $0.2 million, $0.5 million, $0.8 million and $32.9 million, respectively, during the first, second, third and fourth quarters of fiscal 2017. Refer to Note 5 for further detail regarding asset impairment charges. | |||||||||||||||||||
[4] | During fiscal 2018, the Company recognized additional tax expense of $47.9 million related to the enactment of the Tax Reform. This is comprised of a $24.9 million charge for the provisional re-measurement of certain deferred taxes and related amounts and a provisional charge of $23.0 million to income tax expense for the estimated effects of the transitional tax on the deemed repatriation of foreign earnings. These charges were recorded during the fourth quarter of fiscal 2018. Refer to Note 11 for further detail. | |||||||||||||||||||
[5] | Per common share amounts for the quarters and full years have been calculated separately. Accordingly, quarterly amounts may not add to the annual amount because of differences in the average common shares outstanding during each period. | |||||||||||||||||||
[6] | The Company recorded net gains (losses) on lease terminations of $(11.5) million and $0.1 million during the third and fourth quarters of fiscal 2018, respectively. There were no net gains (losses) on lease terminations recognized during the first or second quarters of fiscal 2018. During the first and second quarters of fiscal 2017, the Company recorded net gains on lease terminations of $0.1 million and $0.6 million, respectively. There were no net gains (losses) on lease terminations recognized during the third or fourth quarters of fiscal 2017. Refer to Note 1 for further information regarding net gains (losses) on lease terminations. | |||||||||||||||||||
[7] | During fiscal 2017, the Company recorded restructuring charges of $6.1 million and a related estimated exit tax charge of approximately $1.9 million. The restructuring charges and related estimated exit tax charge were recorded during the three months ended April 30, 2016. Refer to Note 9 for further detail regarding these charges. | |||||||||||||||||||
[8] | During fiscal 2017, the Company recorded valuation reserves of $6.8 million resulting from jurisdictions where there have been cumulative net operating losses, limiting the Company’s ability to consider other subjective evidence to continue to recognize the existing deferred tax assets. The Company recorded the valuation reserve during the three months ended January 28, 2017. Refer to Note 11 for further detail. | |||||||||||||||||||
[9] | During fiscal 2017, the Company sold its minority interest equity holding in a privately-held boutique apparel company for net proceeds of approximately $34.8 million, which resulted in a gain of approximately $22.3 million which was recorded in other income. The gain was recorded during the three months ended July 30, 2016. | |||||||||||||||||||
[10] | During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017. As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.2 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s Supplemental Executive Retirement Plan and its interest rate swap designated as a cash flow hedge based in the U.S. |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Feb. 03, 2018 | Jan. 28, 2017 |
Accounts receivable | ||
Accounts receivable, gross | $ 309,215 | $ 260,459 |
Less allowances | 49,219 | 34,922 |
Accounts receivable, net | 259,996 | 225,537 |
Trade receivables | ||
Accounts receivable | ||
Accounts receivable, gross | 290,478 | 234,690 |
Royalty receivables | ||
Accounts receivable | ||
Accounts receivable, gross | 5,504 | 19,881 |
Other receivables | ||
Accounts receivable | ||
Accounts receivable, gross | $ 13,233 | $ 5,888 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Feb. 03, 2018 | Jan. 28, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 604 | $ 799 |
Work in progress | 16 | 78 |
Finished goods | 427,684 | 366,504 |
Inventories | 428,304 | 367,381 |
Allowance to write down inventories to the lower of cost or net realizable value | $ 29,900 | $ 19,400 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2016 | Feb. 03, 2018 | Jan. 28, 2017 | |
Property and equipment | |||
Property and equipment, gross | $ 859,777 | $ 784,723 | |
Less accumulated depreciation and amortization | 565,523 | 541,718 | |
Property and equipment, net | 294,254 | 243,005 | |
Land and land improvements | |||
Property and equipment | |||
Property and equipment, gross | 2,750 | 2,750 | |
Building and building improvements | |||
Property and equipment | |||
Property and equipment, gross | 51,285 | 47,673 | |
Leasehold improvements | |||
Property and equipment | |||
Property and equipment, gross | 380,234 | 367,294 | |
Furniture, fixtures and equipment | |||
Property and equipment | |||
Property and equipment, gross | 389,393 | 353,843 | |
Construction in progress | |||
Property and equipment | |||
Property and equipment, gross | 16,555 | 13,163 | |
Assets under capital leases | |||
Property and equipment | |||
Property and equipment, gross | 19,560 | $ 0 | |
Less accumulated depreciation and amortization | $ 900 | ||
U.S. | U.S. distribution center | |||
Property and equipment | |||
Payments to acquire the Company's U.S. distribution center | $ 28,800 |
Property and Equipment (Detai63
Property and Equipment (Details 2) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 03, 2018USD ($) | Oct. 28, 2017USD ($) | Jul. 29, 2017USD ($) | Apr. 29, 2017USD ($) | Jan. 28, 2017USD ($) | Oct. 29, 2016USD ($) | Jul. 30, 2016USD ($) | Apr. 30, 2016USD ($) | Feb. 03, 2018USD ($)retail_location | Jan. 28, 2017USD ($)retail_location | Jan. 30, 2016USD ($) | |
Impairment to long-lived assets | |||||||||||
Aggregate carrying value of long-lived assets impaired | $ 8,728 | $ 36,103 | $ 8,728 | $ 36,103 | |||||||
Less impairment charges | 2,500 | $ 2,000 | $ 1,200 | $ 2,800 | 32,900 | $ 800 | $ 500 | $ 200 | 8,479 | 34,385 | $ 2,287 |
Aggregate remaining fair value of long-lived assets impaired | $ 249 | $ 1,718 | $ 249 | $ 1,718 | |||||||
Number of retail locations tested for impairment | retail_location | 233 | 255 | |||||||||
Number of retail locations impaired | retail_location | 99 | 148 | |||||||||
Retail locations | North America | |||||||||||
Impairment to long-lived assets | |||||||||||
Less impairment charges | $ 8,479 | $ 34,385 | $ 2,287 |
Goodwill and Intangible Asset64
Goodwill and Intangible Assets (Details) | 12 Months Ended | |
Feb. 03, 2018USD ($)retail_locationlicensee | Jan. 28, 2017USD ($)retail_locationlicensee | |
Goodwill | ||
Goodwill at the beginning of the period | $ 34,100,000 | $ 33,412,000 |
Adjustments: | ||
Acquisition | 566,000 | 933,000 |
Translation adjustments | 3,815,000 | (245,000) |
Goodwill at the end of the period | 38,481,000 | 34,100,000 |
Accumulated impairment related to goodwill | 0 | |
Other intangible assets | ||
Gross intangible assets | 33,600,000 | 29,700,000 |
Accumulated amortization of intangible assets with finite useful lives | 27,600,000 | 23,200,000 |
Amortization expense over the next five years | ||
Fiscal 2,019 | 1,200,000 | |
Fiscal 2,020 | 1,000,000 | |
Fiscal 2,021 | 900,000 | |
Fiscal 2,022 | 800,000 | |
Fiscal 2,023 | 700,000 | |
Americas Retail | ||
Goodwill | ||
Goodwill at the beginning of the period | 1,729,000 | 1,693,000 |
Adjustments: | ||
Acquisition | 0 | 0 |
Translation adjustments | 36,000 | 36,000 |
Goodwill at the end of the period | 1,765,000 | 1,729,000 |
Americas Wholesale | ||
Goodwill | ||
Goodwill at the beginning of the period | 9,966,000 | 9,960,000 |
Adjustments: | ||
Acquisition | 0 | 0 |
Translation adjustments | 6,000 | 6,000 |
Goodwill at the end of the period | 9,972,000 | 9,966,000 |
Europe | ||
Goodwill | ||
Goodwill at the beginning of the period | 21,472,000 | 21,759,000 |
Adjustments: | ||
Acquisition | 0 | 0 |
Translation adjustments | 3,653,000 | (287,000) |
Goodwill at the end of the period | 25,125,000 | 21,472,000 |
Asia | ||
Goodwill | ||
Goodwill at the beginning of the period | 933,000 | 0 |
Adjustments: | ||
Acquisition | 566,000 | 933,000 |
Translation adjustments | 120,000 | 0 |
Goodwill at the end of the period | 1,619,000 | 933,000 |
Asia | Acquisition of retail location from the Company's licensees | ||
Adjustments: | ||
Acquisition | $ 566,000 | $ 933,000 |
Number of retail locations acquired | retail_location | 14 | 12 |
Number of licensees that sold retail locations to the Company | licensee | 3 | 5 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Feb. 03, 2018 | Jan. 28, 2017 |
Payables and Accruals [Abstract] | ||
Accrued compensation and benefits | $ 73,815 | $ 50,954 |
Sales and use taxes, property taxes and other indirect taxes | 33,390 | 22,480 |
Derivative financial instruments | 16,487 | 1,408 |
Professional and legal fees | 14,281 | 7,982 |
Store credits, loyalty and gift cards | 9,846 | 9,519 |
Advertising | 9,677 | 7,746 |
Accrued rent | 8,039 | 6,342 |
Deferred royalties and other revenue | 7,273 | 7,891 |
Share repurchase | 6,033 | 0 |
Income taxes | 5,186 | 653 |
Construction costs | 3,428 | 4,210 |
Retail sales returns allowance | 2,917 | 2,723 |
Restructuring charges | 0 | 180 |
Other | 10,190 | 13,183 |
Total accrued expenses | $ 200,562 | $ 135,271 |
Borrowings and Capital Lease 66
Borrowings and Capital Lease Obligations (Details) | Feb. 16, 2016USD ($) | Jun. 23, 2015USD ($) | Feb. 03, 2018USD ($)facility | Jan. 28, 2017USD ($) | Jan. 30, 2016USD ($) | Feb. 01, 2016 |
Borrowings and capital lease obligations | ||||||
Mortgage debt, maturing monthly through January 2026 | $ 20,323,000 | $ 20,889,000 | ||||
Capital lease obligations | 18,589,000 | 0 | ||||
Other | 3,129,000 | 3,159,000 | ||||
Total debt and capital lease obligations | 42,041,000 | 24,048,000 | ||||
Less current installments | 2,845,000 | 566,000 | ||||
Long-term debt and capital lease obligations | 39,196,000 | 23,482,000 | ||||
Mortgage Debt | ||||||
Debt issuance costs | 89,000 | |||||
Capital Lease Obligations | ||||||
Capital lease obligations incurred | 18,502,000 | 0 | $ 0 | |||
Europe | Foreign line of credit | ||||||
Line of Credit Facility [Abstract] | ||||||
Current borrowing capacity | 87,500,000 | |||||
Credit Facility, outstanding amount | $ 0 | |||||
Number of credit facilities subject to minimum net equity requirement | facility | 1 | |||||
Maximum borrowing capacity of the credit facility which is subject to a minimum net equity requirement | $ 43,600,000 | |||||
Europe | Foreign line of credit | Minimum | ||||||
Line of Credit Facility [Abstract] | ||||||
Interest rate (as a percent) | 0.50% | |||||
Europe | Foreign line of credit | Maximum | ||||||
Line of Credit Facility [Abstract] | ||||||
Interest rate (as a percent) | 4.60% | |||||
Europe | Documentary letters of credit | Foreign line of credit | ||||||
Line of Credit Facility [Abstract] | ||||||
Letters of credit outstanding | $ 0 | |||||
Cash flow hedges | Interest rate swap | Derivatives designated as hedging instruments | ||||||
Borrowings and capital lease obligations | ||||||
Fixed rate of interest rate swap derivative (as a percent) | 3.06% | |||||
Mortgage debt | Building | U.S. | ||||||
Borrowings and capital lease obligations | ||||||
Mortgage debt, maturing monthly through January 2026 | $ 21,500,000 | $ 20,323,000 | 20,889,000 | |||
Debt maturity period (in years) | 10 years | |||||
Mortgage Debt | ||||||
Debt amortization period (in years) | 25 years | |||||
Debt issuance costs | $ 89,000 | 100,000 | ||||
Mortgage debt | Building | U.S. | LIBOR | ||||||
Mortgage Debt | ||||||
Interest rate margin (as a percent) | 1.50% | |||||
Mortgage debt | Building | U.S. | Interest rate swap | ||||||
Mortgage Debt | ||||||
Fair value of cash flow hedge interest rate swap asset | $ 1,460,000 | $ 876,000 | ||||
Mortgage debt | Building | Cash flow hedges | U.S. | Interest rate swap | Derivatives designated as hedging instruments | ||||||
Borrowings and capital lease obligations | ||||||
Fixed rate of interest rate swap derivative (as a percent) | 3.06% | 3.06% | ||||
Capital lease obligation | Building | Italy | Interest rate swap | Derivatives not designated as hedging instruments | ||||||
Borrowings and capital lease obligations | ||||||
Fixed rate of interest rate swap derivative (as a percent) | 3.55% | |||||
Capital lease obligation | Equipment | Netherlands | ||||||
Borrowings and capital lease obligations | ||||||
Capital lease obligations | $ 17,300,000 | |||||
Capital Lease Obligations | ||||||
Capital lease obligations incurred | $ 17,000,000 | |||||
Effective interest rate on capital lease obligation | 6.00% | |||||
Capital lease obligation | Computer hardware and software | ||||||
Borrowings and capital lease obligations | ||||||
Capital lease obligations | $ 1,300,000 | |||||
Capital Lease Obligations | ||||||
Capital lease obligations incurred | 1,500,000 | |||||
Credit Facility | ||||||
Line of Credit Facility [Abstract] | ||||||
Credit Facility, outstanding amount | $ 0 | |||||
Percentage of borrowings exceeding borrowing base that require the Company to comply with a fixed charge coverage ratio on a trailing four-quarter basis | 80.00% | |||||
Credit Facility | Revolving Credit Facility | ||||||
Borrowings and capital lease obligations | ||||||
Debt maturity period (in years) | 5 years | |||||
Line of Credit Facility [Abstract] | ||||||
Maximum borrowing capacity | $ 150,000,000 | $ 150,000,000 | ||||
Current borrowing capacity | 87,000,000 | |||||
Credit Facility | Accordion feature | ||||||
Line of Credit Facility [Abstract] | ||||||
Maximum borrowing capacity | 150,000,000 | $ 150,000,000 | ||||
Credit Facility | U.S. line of credit | Base rate | Minimum | ||||||
Mortgage Debt | ||||||
Interest rate margin (as a percent) | 0.25% | |||||
Credit Facility | U.S. line of credit | Base rate | Maximum | ||||||
Mortgage Debt | ||||||
Interest rate margin (as a percent) | 0.75% | |||||
Credit Facility | U.S. line of credit | LIBOR | ||||||
Line of Credit Facility [Abstract] | ||||||
Interest rate margin added to respective base rate | 1.00% | |||||
Credit Facility | U.S. line of credit | LIBOR | Minimum | ||||||
Mortgage Debt | ||||||
Interest rate margin (as a percent) | 1.25% | |||||
Credit Facility | U.S. line of credit | LIBOR | Maximum | ||||||
Mortgage Debt | ||||||
Interest rate margin (as a percent) | 1.75% | |||||
Credit Facility | U.S. line of credit | Federal funds rate | ||||||
Line of Credit Facility [Abstract] | ||||||
Interest rate margin added to respective base rate | 0.50% | |||||
Credit Facility | Standby letters of credit | ||||||
Line of Credit Facility [Abstract] | ||||||
Letters of credit outstanding | $ 1,000,000 | |||||
Credit Facility | Documentary letters of credit | ||||||
Line of Credit Facility [Abstract] | ||||||
Letters of credit outstanding | 0 | |||||
Credit Facility | Canada | Foreign line of credit | ||||||
Line of Credit Facility [Abstract] | ||||||
Maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | ||||
Credit Facility | Canada | Foreign line of credit | Prime rate | Minimum | ||||||
Mortgage Debt | ||||||
Interest rate margin (as a percent) | 0.25% | |||||
Credit Facility | Canada | Foreign line of credit | Prime rate | Maximum | ||||||
Mortgage Debt | ||||||
Interest rate margin (as a percent) | 0.75% | |||||
Credit Facility | Canada | Foreign line of credit | Canadian BA rate | ||||||
Line of Credit Facility [Abstract] | ||||||
Interest rate margin added to respective base rate | 1.00% | |||||
Credit Facility | Canada | Foreign line of credit | Canadian BA rate | Minimum | ||||||
Mortgage Debt | ||||||
Interest rate margin (as a percent) | 1.25% | |||||
Credit Facility | Canada | Foreign line of credit | Canadian BA rate | Maximum | ||||||
Mortgage Debt | ||||||
Interest rate margin (as a percent) | 1.75% | |||||
Credit Facility | Canada | Foreign line of credit | Bank of Canada overnight rate | ||||||
Line of Credit Facility [Abstract] | ||||||
Interest rate margin added to respective base rate | 0.50% |
Borrowings and Capital Lease 67
Borrowings and Capital Lease Obligations (Details 2) - USD ($) $ in Thousands | Feb. 03, 2018 | Jan. 28, 2017 |
Debt | ||
Fiscal 2,019 | $ 1,361 | |
Fiscal 2,020 | 1,893 | |
Fiscal 2,021 | 1,725 | |
Fiscal 2,022 | 659 | |
Fiscal 2,023 | 682 | |
Thereafter | 17,221 | |
Total principal payments | 23,541 | |
Less unamortized debt issuance costs | 89 | |
Total debt | 23,452 | |
Capital Lease | ||
Fiscal 2,019 | 1,594 | |
Fiscal 2,020 | 1,767 | |
Fiscal 2,021 | 1,923 | |
Fiscal 2,022 | 1,944 | |
Fiscal 2,023 | 1,895 | |
Thereafter | 9,466 | |
Capital lease obligations | 18,589 | $ 0 |
Fiscal 2,019 | 2,955 | |
Fiscal 2,020 | 3,660 | |
Fiscal 2,021 | 3,648 | |
Fiscal 2,022 | 2,603 | |
Fiscal 2,023 | 2,577 | |
Thereafter | 26,687 | |
Total principal payments | 42,130 | |
Total debt and capital lease obligations | $ 42,041 | $ 24,048 |
Restructuring Charges (Details)
Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Apr. 30, 2016 | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Restructuring activity | ||||
Estimated exit tax charge | $ 1,911 | $ 1,911 | ||
Restructuring reserve included in accrued expenses | $ 0 | 180 | ||
Restructuring reserve activity | ||||
Charges to operations | 6,083 | 0 | 6,083 | $ 0 |
Europe | ||||
Restructuring activity | ||||
Estimated exit tax charge | 1,911 | |||
Accrued expenses | ||||
Restructuring activity | ||||
Restructuring reserve included in accrued expenses | 0 | 180 | ||
Severance | ||||
Restructuring reserve activity | ||||
Beginning balance | $ 0 | 180 | 0 | |
Charges to operations | 0 | 6,083 | ||
Cash payments | (124) | (6,003) | ||
Foreign currency and other adjustments | (56) | 100 | ||
Ending balance | $ 0 | $ 180 | $ 0 |
Comprehensive Income (Loss) (De
Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | $ (161,389) | $ (158,054) | $ (127,065) | |
Gains (losses) arising during the period | 68,771 | (679) | (22,683) | |
Reclassification to net earnings (loss) for (gains) losses realized | 766 | (2,656) | (8,306) | |
Net other comprehensive income (loss) | 69,537 | (3,335) | (30,989) | |
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [1] | (1,210) | ||
Ending balance | (93,062) | (161,389) | (158,054) | |
Foreign Currency Translation Adjustment | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | (158,227) | (157,652) | (121,569) | |
Gains (losses) arising during the period | 91,178 | (575) | (36,083) | |
Reclassification to net earnings (loss) for (gains) losses realized | 0 | 0 | 0 | |
Net other comprehensive income (loss) | 91,178 | (575) | (36,083) | |
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [1] | 0 | ||
Ending balance | (67,049) | (158,227) | (157,652) | |
Derivative Financial Instruments Designated as Cash Flow Hedges | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | 5,400 | 7,252 | 7,157 | |
Gains (losses) arising during the period | (20,408) | 1,059 | 7,944 | |
Reclassification to net earnings (loss) for (gains) losses realized | 414 | (2,911) | (7,849) | |
Net other comprehensive income (loss) | (19,994) | (1,852) | 95 | |
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [1] | 225 | ||
Ending balance | (14,369) | 5,400 | 7,252 | |
Marketable Securities | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | 0 | (15) | (3) | |
Gains (losses) arising during the period | 0 | (1) | (12) | |
Reclassification to net earnings (loss) for (gains) losses realized | 0 | 16 | 0 | |
Net other comprehensive income (loss) | 0 | 15 | (12) | |
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [1] | 0 | ||
Ending balance | 0 | 0 | (15) | |
Defined Benefit Plans | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | (8,562) | (7,639) | (12,650) | |
Gains (losses) arising during the period | (1,999) | (1,162) | 5,468 | |
Reclassification to net earnings (loss) for (gains) losses realized | 352 | 239 | (457) | |
Net other comprehensive income (loss) | (1,647) | (923) | 5,011 | |
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [1] | (1,435) | ||
Ending balance | (11,644) | $ (8,562) | $ (7,639) | |
Accounting Standards Update 2018-02 | Retained Earnings | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | $ 1,210 | |||
[1] | During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017. As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.2 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s Supplemental Executive Retirement Plan and its interest rate swap designated as a cash flow hedge based in the U.S. |
Comprehensive Income (Loss) (70
Comprehensive Income (Loss) (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Feb. 03, 2018 | [2] | Oct. 28, 2017 | [2] | Jul. 29, 2017 | [2] | Apr. 29, 2017 | [2] | Jan. 28, 2017 | [2] | Oct. 29, 2016 | [2] | Jul. 30, 2016 | [2] | Apr. 30, 2016 | [2] | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||||||||||||||||||
Cost of product sales | $ 1,534,906 | $ 1,445,413 | $ 1,397,065 | |||||||||||||||||
Other income/expense | (3,423) | (30,909) | (6,837) | |||||||||||||||||
Interest expense | 2,431 | 1,897 | 1,953 | |||||||||||||||||
Income tax expense | [1] | 74,172 | 28,212 | 42,464 | ||||||||||||||||
Net earnings (loss) attributable to Guess, Inc. | $ (1,040) | $ 2,860 | $ (15,219) | $ 21,293 | $ (6,567) | $ (9,103) | $ (32,269) | $ 25,178 | 7,894 | (22,761) | (81,851) | |||||||||
Reclassification to net earnings (loss) for (gains) losses realized | 766 | (2,656) | (8,306) | |||||||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||||||||||||||||||
Net earnings (loss) attributable to Guess, Inc. | 766 | (2,656) | (8,306) | |||||||||||||||||
Derivative Financial Instruments Designated as Cash Flow Hedges | ||||||||||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||||||||||||||||||
Reclassification to net earnings (loss) for (gains) losses realized | 414 | (2,911) | (7,849) | |||||||||||||||||
Derivative Financial Instruments Designated as Cash Flow Hedges | Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||||||||||||||||||
Cost of product sales | (14) | (3,518) | (8,314) | |||||||||||||||||
Other income/expense | 583 | (301) | (833) | |||||||||||||||||
Interest expense | 87 | 216 | 0 | |||||||||||||||||
Income tax expense | (242) | 692 | 1,298 | |||||||||||||||||
Net earnings (loss) attributable to Guess, Inc. | 414 | (2,911) | (7,849) | |||||||||||||||||
Marketable Securities | ||||||||||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||||||||||||||||||
Reclassification to net earnings (loss) for (gains) losses realized | 0 | 16 | 0 | |||||||||||||||||
Marketable Securities | Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||||||||||||||||||
Other income/expense | 0 | 25 | 0 | |||||||||||||||||
Income tax expense | 0 | (9) | 0 | |||||||||||||||||
Net earnings (loss) attributable to Guess, Inc. | 0 | 16 | 0 | |||||||||||||||||
Net actuarial loss amortization | ||||||||||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||||||||||||||||||
Reclassifications out of AOCI related to defined benefit plans | [3] | 462 | 341 | 924 | ||||||||||||||||
Prior service credit amortization | ||||||||||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||||||||||||||||||
Reclassifications out of AOCI related to defined benefit plans | [3] | (27) | (28) | (97) | ||||||||||||||||
Curtailment | ||||||||||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||||||||||||||||||
Reclassifications out of AOCI related to defined benefit plans | [3] | 0 | 0 | (1,651) | ||||||||||||||||
Defined Benefit Plans | ||||||||||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||||||||||||||||||
Income tax expense | (83) | (74) | 367 | |||||||||||||||||
Reclassification to net earnings (loss) for (gains) losses realized | $ 352 | $ 239 | $ (457) | |||||||||||||||||
[1] | During fiscal 2018, the Company adopted authoritative guidance which requires all income tax effects of stock awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. As a result, the Company recorded tax shortfalls of approximately $1.3 million in the Company’s income tax expense during fiscal 2018. | |||||||||||||||||||
[2] | All fiscal quarters presented consisted of 13 weeks with the exception of the quarter ended February 3, 2018 which consisted of 14 weeks. | |||||||||||||||||||
[3] | These accumulated other comprehensive income (loss) components are included in the computation of net periodic defined benefit pension cost. Refer to Note 12 for further information. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Feb. 03, 2018 | Jan. 28, 2017 | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [1] | $ (1,210) | |||||||
Income tax expense | [2] | 74,172 | $ 28,212 | $ 42,464 | |||||
Additional income tax expense resulting from enactment of Tax Reform | $ 47,900 | 47,900 | |||||||
Provisional charge for remeasurement of U.S. deferred tax assets as a result of the enactment of the Tax Reform | 24,856 | 24,856 | |||||||
Provisional charge for the estimated effects of the transitional tax on the deemed repatriation of foreign earnings as a result of the enactment of the Tax Reform | 23,034 | 23,034 | |||||||
Federal: | |||||||||
Current | 34,181 | 8,212 | 23,618 | ||||||
Deferred | 21,595 | (636) | 4,038 | ||||||
State: | |||||||||
Current | 1,903 | 2,537 | 3,864 | ||||||
Deferred | 217 | (1,000) | (296) | ||||||
Foreign: | |||||||||
Current | 7,333 | 17,055 | 14,259 | ||||||
Deferred | 8,943 | 2,044 | (3,019) | ||||||
Total | [2] | 74,172 | 28,212 | 42,464 | |||||
Differences between actual income tax expense and expected income tax expense | |||||||||
Computed “expected” tax expense | 23,693 | 18,763 | 44,547 | ||||||
State taxes, net of federal benefit | 1,675 | 999 | 2,320 | ||||||
Non-U.S. tax expense less than federal statutory tax rate | [3] | (7,396) | (1,539) | (6,991) | |||||
Tax Reform - repatriation tax adjustment | [4] | 23,034 | 0 | 0 | |||||
Tax Reform - deferred tax adjustment | [4] | 24,856 | 0 | 0 | |||||
Cumulative valuation reserve | $ 6,830 | 0 | [5] | 6,830 | [5] | 0 | [5] | ||
Valuation reserve | [6] | 9,057 | 5,841 | 3,024 | |||||
Unrecognized tax benefit | 537 | 556 | 1,123 | ||||||
Share-based compensation | [7] | 1,309 | 0 | 0 | |||||
Net tax settlements | 0 | 1,894 | 0 | ||||||
Sale of minority interest investment | 0 | (2,316) | 0 | ||||||
Estimated exit tax charge | 0 | 1,911 | 0 | ||||||
Prior year tax adjustments | (88) | (1,790) | (2,944) | ||||||
Non-deductible permanent difference | (3,224) | (2,284) | 1,295 | ||||||
Other | 719 | (653) | 90 | ||||||
Total | [2] | 74,172 | 28,212 | 42,464 | |||||
Allocation of total income tax expense (benefit) | |||||||||
Operations | [2] | 74,172 | 28,212 | 42,464 | |||||
Stockholders’ equity | [2] | (3,173) | 1,782 | 4,668 | |||||
Total income tax expense | 70,999 | 29,994 | 47,132 | ||||||
Tax effects of the components of other comprehensive income (loss) | |||||||||
Derivative financial instruments designated as cash flow hedges | (2,738) | (864) | 559 | ||||||
Marketable securities | 0 | 6 | (7) | ||||||
Defined benefit plans | (435) | (21) | 2,972 | ||||||
Total income tax expense (benefit) | [8] | (3,173) | (879) | 3,524 | |||||
Total earnings before income tax expense and noncontrolling interests | |||||||||
Domestic operations | 39,112 | 32,944 | 90,141 | ||||||
Foreign operations | 31,159 | 20,666 | 37,138 | ||||||
Earnings before income tax expense | 70,271 | 53,610 | $ 127,279 | ||||||
Deferred tax assets: | |||||||||
Net operating losses | 19,859 | 13,524 | 19,859 | 13,524 | |||||
Defined benefit plans | 13,155 | 20,642 | 13,155 | 20,642 | |||||
Deferred compensation | 10,721 | 12,987 | 10,721 | 12,987 | |||||
Excess of book over tax depreciation/amortization | 10,704 | 9,018 | 10,704 | 9,018 | |||||
Rent expense | 7,651 | 13,672 | 7,651 | 13,672 | |||||
Deferred income | 7,141 | 6,213 | 7,141 | 6,213 | |||||
Bad debt reserve | 2,529 | 2,124 | 2,529 | 2,124 | |||||
Lease incentives | 1,814 | 5,545 | 1,814 | 5,545 | |||||
Uniform capitalization | 974 | 1,900 | 974 | 1,900 | |||||
Other | 30,703 | 28,265 | 30,703 | 28,265 | |||||
Total deferred tax assets | 105,251 | 113,890 | 105,251 | 113,890 | |||||
Deferred tax liabilities: | |||||||||
Goodwill amortization | (2,303) | (3,654) | (2,303) | (3,654) | |||||
Excess of tax over book depreciation/amortization | (135) | (189) | (135) | (189) | |||||
Other | (4,517) | (4,544) | (4,517) | (4,544) | |||||
Valuation allowance | (32,601) | (23,255) | (32,601) | (23,255) | |||||
Net deferred tax assets | [9] | 65,695 | 82,248 | 65,695 | 82,248 | ||||
Net deferred tax liabilities | 2,700 | $ 500 | 2,700 | $ 500 | |||||
Increase in valuation allowance | 9,300 | ||||||||
Accounting Standards Update 2016-09 | |||||||||
Income tax expense | 1,309 | ||||||||
Foreign: | |||||||||
Total | 1,309 | ||||||||
Differences between actual income tax expense and expected income tax expense | |||||||||
Total | 1,309 | ||||||||
Allocation of total income tax expense (benefit) | |||||||||
Operations | 1,309 | ||||||||
Retained Earnings | Accounting Standards Update 2018-02 | |||||||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | 1,210 | ||||||||
Accrued expenses | |||||||||
Current portion of transition tax | $ 1,900 | $ 1,900 | |||||||
Minimum | Switzerland and Korea | |||||||||
Range of jurisdictional effective tax rates that are lower than the U.S. rates | 8.00% | ||||||||
Maximum | Switzerland and Korea | |||||||||
Range of jurisdictional effective tax rates that are lower than the U.S. rates | 20.00% | ||||||||
[1] | During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017. As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.2 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s Supplemental Executive Retirement Plan and its interest rate swap designated as a cash flow hedge based in the U.S. | ||||||||
[2] | During fiscal 2018, the Company adopted authoritative guidance which requires all income tax effects of stock awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. As a result, the Company recorded tax shortfalls of approximately $1.3 million in the Company’s income tax expense during fiscal 2018. | ||||||||
[3] | The jurisdictional location of pre-tax income (loss) may represent a significant component of the Company’s effective tax rate as income tax rates outside the U.S. are generally lower than the U.S. statutory income tax rate. Furthermore, the impact of changes in the jurisdictional location of pre-tax income (loss) on the Company’s effective tax rate will be greater at lower levels of consolidated pre-tax income (loss). These amounts exclude the impact of net changes in valuation allowances, audit and other adjustments related to the Company’s non-U.S. operations, as they are reported separately in the appropriate corresponding line items in the table above. The impact on the Company’s effective tax rate was primarily related to the Company’s Swiss and Korean subsidiaries which have jurisdictional effective tax rates which range from 8% to 20% lower than the U.S. rates in effect for the periods presented. | ||||||||
[4] | During fiscal 2018, the Company recognized additional tax expense resulting from the enactment of the Tax Reform to account for the estimated effects of the transitional tax on the deemed repatriation of foreign earnings and reduced deferred tax assets due to lower future U.S. corporate tax rates. | ||||||||
[5] | Amounts represent valuation reserves resulting from jurisdictions where there have been cumulative net operating losses, limiting the Company’s ability to consider other subjective evidence to continue to recognize the existing deferred tax assets. | ||||||||
[6] | Amounts relate primarily to valuation reserves on non-cumulative net operating losses or other deferred tax assets arising during the respective period. | ||||||||
[7] | During fiscal 2018, the Company adopted authoritative guidance which requires all income tax effects of stock awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. | ||||||||
[8] | During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017. As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.2 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s Supplemental Executive Retirement Plan and its interest rate swap designated as a cash flow hedge based in the U.S. The impact from this reclassification on accumulated other comprehensive income (loss) has been excluded from the amounts provided in this table. | ||||||||
[9] | As of February 3, 2018, amount includes net deferred tax liabilities of $2.7 million recorded in other long-term liabilities in the Company’s consolidated balance sheet. There were $0.5 million net deferred tax liabilities recorded in other long-term liabilities in the Company’s consolidated balance sheet at January 28, 2017. |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Millions | Feb. 03, 2018 | Jan. 28, 2017 |
Operating loss carryforwards | ||
Net operating loss carryforwards | $ 74.7 | |
Operating loss carryforwards that have an unlimited carryforward life | 17.1 | |
Valuation allowance | 20.4 | $ 13.9 |
Foreign | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 57 | |
State | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | $ 0.6 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Changes that occurred in the amount of gross unrecognized tax benefit excluding interest and penalties | |||
Beginning balance | $ 12,983 | $ 12,585 | $ 13,640 |
Additions: | |||
Tax positions related to the prior year | 4,436 | 672 | 496 |
Tax positions related to the current year | 222 | 106 | 1,516 |
Reductions: | |||
Tax positions related to the prior year | (356) | (380) | (1,650) |
Tax positions related to the current year | (309) | 0 | (359) |
Settlements | 0 | 0 | (505) |
Expiration of statutes of limitation | (205) | 0 | (553) |
Ending balance | 16,771 | 12,983 | 12,585 |
Amount of unrecognized tax benefit (net of federal benefit on state issues) which, if ultimately recognized, may reduce our future annual effective tax rate | 17,400 | ||
Aggregate accruals for uncertain tax positions, including penalties and interest | 19,000 | 14,600 | |
Interest and penalties related to uncertain tax positions | 500 | 200 | $ 600 |
Accrued interest and penalties related to uncertain tax positions | $ 2,200 | $ 1,600 |
Defined Benefit Plans (Details)
Defined Benefit Plans (Details) $ in Thousands | 12 Months Ended | |||||||||||
Feb. 03, 2018USD ($) | Dec. 31, 2017 | Jan. 28, 2017USD ($) | Dec. 31, 2016 | Jan. 30, 2016USD ($) | Feb. 03, 2018USD ($)participant | Jan. 28, 2017USD ($) | ||||||
Components of net periodic defined benefit pension cost and other charges to comprehensive income (loss) and accumulated other comprehensive income (loss) | ||||||||||||
Unrecognized prior service credit charged to comprehensive income (loss) | $ (27) | $ (28) | $ (97) | |||||||||
Unrecognized net actuarial loss charged to comprehensive income (loss) | 462 | 341 | 924 | |||||||||
Curtailment gain | 0 | 0 | (1,651) | |||||||||
Net actuarial gains (losses) | (2,248) | (1,185) | 8,366 | |||||||||
Plan amendment | 0 | 0 | 167 | |||||||||
Foreign currency and other adjustments | (269) | (72) | 274 | |||||||||
Related tax impact | 435 | 21 | (2,972) | |||||||||
Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) | (1,647) | (923) | 5,011 | |||||||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [1] | (1,210) | ||||||||||
Accounting Standards Update 2018-02 | Retained Earnings | ||||||||||||
Components of net periodic defined benefit pension cost and other charges to comprehensive income (loss) and accumulated other comprehensive income (loss) | ||||||||||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | 1,210 | |||||||||||
SERP | ||||||||||||
Defined Benefit Plans | ||||||||||||
Number of employees considered actively participating under the terms of the SERP | participant | 0 | |||||||||||
Discount rate assumed as part of the actuarial valuation performed to calculate the projected benefit obligation and fair value of the plan assets (as a percent) | 3.50% | 3.50% | ||||||||||
Amount of actuarial losses, included in comprehensive income (loss), that are expected to be recognized as a component of net periodic defined benefit pension cost in the next fiscal year | $ 200 | |||||||||||
Total amount of benefits projected to be paid in fiscal 2019 | 1,700 | |||||||||||
Total amount of benefits projected to be paid in fiscal 2020 | 3,700 | |||||||||||
Total amount of benefits projected to be paid in fiscal 2021 | 3,900 | |||||||||||
Total amount of benefits projected to be paid in fiscal 2022 | 3,900 | |||||||||||
Total amount of benefits projected to be paid in fiscal 2023 | 3,900 | |||||||||||
Aggregate benefits projected to be paid in the following five fiscal years | 18,500 | |||||||||||
Components of net periodic defined benefit pension cost and other charges to comprehensive income (loss) and accumulated other comprehensive income (loss) | ||||||||||||
Service cost | 0 | 0 | 0 | |||||||||
Interest cost | 1,844 | 1,839 | 1,986 | |||||||||
Expected return on plan assets | 0 | 0 | 0 | |||||||||
Net amortization of unrecognized prior service credit | 0 | 0 | (97) | |||||||||
Net amortization of actuarial losses | 151 | 155 | 740 | |||||||||
Curtailment gain | (1,651) | |||||||||||
Net periodic defined benefit pension cost | 1,995 | 1,994 | 978 | |||||||||
Unrecognized prior service credit charged to comprehensive income (loss) | 0 | 0 | (97) | |||||||||
Unrecognized net actuarial loss charged to comprehensive income (loss) | 151 | 155 | 740 | |||||||||
Curtailment gain | (1,651) | |||||||||||
Net actuarial gains (losses) | (1,092) | 63 | 8,707 | |||||||||
Plan amendment | 0 | |||||||||||
Foreign currency and other adjustments | 0 | 0 | 0 | |||||||||
Related tax impact | 360 | (84) | (2,945) | |||||||||
Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) | (581) | 134 | 4,754 | |||||||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [2] | (1,435) | ||||||||||
Total periodic benefit pension cost and other charges to accumulated other omprehensive income (loss) | (2,016) | |||||||||||
Amounts not yet recognized in net periodic defined benefit pension cost, included in accumulated other comprehensive income (loss), before tax | ||||||||||||
Unrecognized prior service credit | 0 | $ 0 | ||||||||||
Unrecognized net actuarial loss | 9,454 | 8,513 | ||||||||||
Total included in accumulated other comprehensive loss | 9,454 | 8,513 | ||||||||||
Funded status and the amounts recognized in the Company's consolidated balance sheets | ||||||||||||
Projected benefit obligation | (53,521) | (53,443) | (53,443) | (54,760) | (53,521) | |||||||
Plan assets at fair value | [3] | 0 | 0 | 0 | 0 | |||||||
Net liability | [4] | (54,760) | (53,521) | |||||||||
Reconciliation of the changes in the projected benefit obligation | ||||||||||||
Balance at the beginning of the period | 53,521 | 53,443 | ||||||||||
Service cost | 0 | 0 | 0 | |||||||||
Interest cost | 1,844 | 1,839 | 1,986 | |||||||||
Actuarial (gains) losses | 1,092 | (63) | ||||||||||
Contributions by plan participant | 0 | 0 | ||||||||||
Payments | (1,697) | (1,698) | ||||||||||
Foreign currency and other adjustments | 0 | 0 | ||||||||||
Balance at the end of the period | 54,760 | 53,521 | 53,443 | |||||||||
Reconciliation of the changes in plan assets | ||||||||||||
Balance at beginning of period | [3] | 0 | ||||||||||
Balance at end of period | [3] | 0 | 0 | |||||||||
SERP | Accounting Standards Update 2018-02 | Retained Earnings | ||||||||||||
Components of net periodic defined benefit pension cost and other charges to comprehensive income (loss) and accumulated other comprehensive income (loss) | ||||||||||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | 1,435 | |||||||||||
SERP | Other income/expense | ||||||||||||
Defined Benefit Plans | ||||||||||||
Gains (losses) as a result of changes in value of the insurance policy investments, included in other income and expense | 7,700 | 6,900 | (1,800) | |||||||||
Realized gain resulting from payout on insurance policy investments | 700 | |||||||||||
SERP | Other assets | ||||||||||||
Defined Benefit Plans | ||||||||||||
Cash surrender values of the insurance policies held in a rabbi trust | 64,500 | 58,600 | ||||||||||
SERP | Executive Chairman of the Board of Chief Creative Officer | ||||||||||||
Components of net periodic defined benefit pension cost and other charges to comprehensive income (loss) and accumulated other comprehensive income (loss) | ||||||||||||
Curtailment gain | (1,651) | |||||||||||
Net actuarial gains (losses) | 11,400 | |||||||||||
Pension | ||||||||||||
Components of net periodic defined benefit pension cost and other charges to comprehensive income (loss) and accumulated other comprehensive income (loss) | ||||||||||||
Service cost | 2,500 | 1,544 | 1,622 | |||||||||
Interest cost | 1,991 | 1,926 | 2,055 | |||||||||
Expected return on plan assets | (244) | (185) | (142) | |||||||||
Net amortization of unrecognized prior service credit | (27) | (28) | (97) | |||||||||
Net amortization of actuarial losses | 462 | 341 | 924 | |||||||||
Curtailment gain | (1,651) | |||||||||||
Net periodic defined benefit pension cost | 4,682 | 3,598 | 2,711 | |||||||||
Unrecognized prior service credit charged to comprehensive income (loss) | (27) | (28) | (97) | |||||||||
Unrecognized net actuarial loss charged to comprehensive income (loss) | 462 | 341 | 924 | |||||||||
Curtailment gain | (1,651) | |||||||||||
Net actuarial gains (losses) | (2,248) | (1,185) | 8,366 | |||||||||
Plan amendment | 167 | |||||||||||
Foreign currency and other adjustments | (269) | (72) | 274 | |||||||||
Related tax impact | 435 | 21 | (2,972) | |||||||||
Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) | (1,647) | (923) | 5,011 | |||||||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [2] | (1,435) | ||||||||||
Total periodic benefit pension cost and other charges to accumulated other omprehensive income (loss) | (3,082) | |||||||||||
Amounts not yet recognized in net periodic defined benefit pension cost, included in accumulated other comprehensive income (loss), before tax | ||||||||||||
Unrecognized prior service credit | (113) | (140) | ||||||||||
Unrecognized net actuarial loss | 14,343 | 12,288 | ||||||||||
Total included in accumulated other comprehensive loss | 14,230 | 12,148 | ||||||||||
Funded status and the amounts recognized in the Company's consolidated balance sheets | ||||||||||||
Projected benefit obligation | (73,507) | (71,020) | (71,020) | (81,169) | (73,507) | |||||||
Plan assets at fair value | [3] | 16,305 | 16,305 | 21,437 | 16,305 | |||||||
Net liability | [4] | (59,732) | (57,202) | |||||||||
Reconciliation of the changes in the projected benefit obligation | ||||||||||||
Balance at the beginning of the period | 73,507 | 71,020 | ||||||||||
Service cost | 2,500 | 1,544 | 1,622 | |||||||||
Interest cost | 1,991 | 1,926 | 2,055 | |||||||||
Actuarial (gains) losses | 2,248 | 1,004 | ||||||||||
Contributions by plan participant | 2,315 | 1,805 | ||||||||||
Payments | (3,070) | (4,114) | ||||||||||
Foreign currency and other adjustments | 1,678 | 322 | ||||||||||
Balance at the end of the period | 81,169 | 73,507 | 71,020 | |||||||||
Reconciliation of the changes in plan assets | ||||||||||||
Balance at beginning of period | [3] | 16,305 | ||||||||||
Balance at end of period | [3] | 21,437 | 16,305 | |||||||||
Foreign Plan | Pension | ||||||||||||
Defined Benefit Plans | ||||||||||||
Amount of actuarial losses, included in comprehensive income (loss), that are expected to be recognized as a component of net periodic defined benefit pension cost in the next fiscal year | 400 | |||||||||||
Components of net periodic defined benefit pension cost and other charges to comprehensive income (loss) and accumulated other comprehensive income (loss) | ||||||||||||
Service cost | 2,500 | 1,544 | 1,622 | |||||||||
Interest cost | 147 | 87 | 69 | |||||||||
Expected return on plan assets | (244) | (185) | (142) | |||||||||
Net amortization of unrecognized prior service credit | (27) | (28) | 0 | |||||||||
Net amortization of actuarial losses | 311 | 186 | 184 | |||||||||
Curtailment gain | 0 | |||||||||||
Net periodic defined benefit pension cost | 2,687 | 1,604 | 1,733 | |||||||||
Unrecognized prior service credit charged to comprehensive income (loss) | (27) | (28) | 0 | |||||||||
Unrecognized net actuarial loss charged to comprehensive income (loss) | 311 | 186 | 184 | |||||||||
Curtailment gain | 0 | |||||||||||
Net actuarial gains (losses) | (1,156) | (1,248) | (341) | |||||||||
Plan amendment | 167 | |||||||||||
Foreign currency and other adjustments | (269) | (72) | 274 | |||||||||
Related tax impact | 75 | 105 | (27) | |||||||||
Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) | (1,066) | (1,057) | 257 | |||||||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [2] | 0 | ||||||||||
Total periodic benefit pension cost and other charges to accumulated other omprehensive income (loss) | (1,066) | |||||||||||
Amounts not yet recognized in net periodic defined benefit pension cost, included in accumulated other comprehensive income (loss), before tax | ||||||||||||
Unrecognized prior service credit | (113) | (140) | ||||||||||
Unrecognized net actuarial loss | 4,889 | 3,775 | ||||||||||
Total included in accumulated other comprehensive loss | 4,776 | 3,635 | ||||||||||
Funded status and the amounts recognized in the Company's consolidated balance sheets | ||||||||||||
Projected benefit obligation | (19,986) | (17,577) | (17,577) | (26,409) | (19,986) | |||||||
Plan assets at fair value | 16,305 | [3] | 14,859 | 14,859 | 21,437 | [3] | 16,305 | [3] | ||||
Net liability | [4] | $ (4,972) | $ (3,681) | |||||||||
Reconciliation of the changes in the projected benefit obligation | ||||||||||||
Balance at the beginning of the period | 19,986 | 17,577 | ||||||||||
Service cost | 2,500 | 1,544 | 1,622 | |||||||||
Interest cost | 147 | 87 | 69 | |||||||||
Actuarial (gains) losses | 1,156 | 1,067 | ||||||||||
Contributions by plan participant | 2,315 | 1,805 | ||||||||||
Payments | (1,373) | (2,416) | ||||||||||
Foreign currency and other adjustments | 1,678 | 322 | ||||||||||
Balance at the end of the period | 26,409 | 19,986 | 17,577 | |||||||||
Reconciliation of the changes in plan assets | ||||||||||||
Balance at beginning of period | 16,305 | [3] | 14,859 | |||||||||
Actual return on plan assets | 244 | 4 | ||||||||||
Contributions by employer | 2,575 | 1,779 | ||||||||||
Contributions by plan participant | 2,315 | 1,805 | ||||||||||
Payments | 1,373 | 2,416 | ||||||||||
Foreign currency and other adjustments | 1,371 | 274 | ||||||||||
Balance at end of period | $ 21,437 | [3] | $ 16,305 | [3] | 14,859 | |||||||
Foreign Plan | Pension | Switzerland | ||||||||||||
Defined Benefit Plans | ||||||||||||
Discount rate assumed as part of the actuarial valuation performed to calculate the projected benefit obligation and fair value of the plan assets (as a percent) | 0.60% | 0.50% | ||||||||||
Plan amendment | $ 167 | |||||||||||
Minimum investment return (as a percent) | 1.00% | 1.25% | ||||||||||
Expected return on plan assets assumed as a part of the actuarial valuation performed to calculate the projected benefit obligation and plan assets (as a percent) | 1.40% | 1.40% | ||||||||||
[1] | During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017. As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.2 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s Supplemental Executive Retirement Plan and its interest rate swap designated as a cash flow hedge based in the U.S. | |||||||||||
[2] | During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017. As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.4 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s SERP. | |||||||||||
[3] | The SERP is a non-qualified pension plan and hence the insurance policies are not considered to be plan assets. Accordingly, the table above does not include the insurance policies with cash surrender values of $64.5 million and $58.6 million as of February 3, 2018 and January 28, 2017, respectively. | |||||||||||
[4] | The net liability was included in accrued expenses and other long-term liabilities in the Company’s consolidated balance sheets depending on the expected timing of payments. |
Related Party Transactions (Det
Related Party Transactions (Details) | 1 Months Ended | 12 Months Ended | |||
Jan. 30, 2016USD ($)ft² | Dec. 31, 2015USD ($) | Feb. 03, 2018USD ($)ft²lease | Jan. 28, 2017USD ($) | Jan. 30, 2016USD ($)ft² | |
Georges Marciano settlement | Settled litigation | |||||
Related Party Transactions | |||||
Payments under related party agreement | $ 100,000 | ||||
Armand Marciano settlement | Settled litigation | |||||
Related Party Transactions | |||||
Payments under related party agreement | $ 100,000 | ||||
Marciano Trusts | |||||
Related Party Transactions | |||||
Number of leases under lease agreement | lease | 4 | ||||
Marciano Trusts | Related party leases | |||||
Related Party Transactions | |||||
Expenses under related party arrangement | $ 4,900,000 | $ 5,000,000 | $ 5,100,000 | ||
Marciano Trusts | Parking lot adjacent to corporate headquarters | |||||
Related Party Transactions | |||||
Area of leased property (in square feet) | ft² | 140,000 | 140,000 | |||
Sales price of sales-leaseback transaction | $ 7,500,000 | $ 7,500,000 | |||
Gross cash proceeds received from sales-leaseback transaction | 7,500,000 | ||||
Marciano Trusts | Parking lot adjacent to corporate headquarters | Other income/expense | |||||
Related Party Transactions | |||||
Net gains recognized in other income for sales-leaseback transaction | $ 3,400,000 | 3,400,000 | |||
MPM Financial LLC | Payments for aircraft charter | |||||
Related Party Transactions | |||||
Payments under related party agreement | $ 1,100,000 | $ 900,000 | $ 600,000 | ||
Canada | Marciano Trusts | |||||
Related Party Transactions | |||||
Renewal term | 1 year | ||||
France | Marciano Trusts | |||||
Related Party Transactions | |||||
Reduction in square footage | ft² | 5,100 | ||||
Area of leased property (in square feet) | ft² | 16,000 |
Commitments and Contingencies76
Commitments and Contingencies (Details) | 12 Months Ended |
Feb. 03, 2018 | |
Retail store leases | Minimum | |
Operating lease expiration | |
Percentage of annual sales volume used for incremental rent on certain retail location leases | 4.00% |
Retail store leases | Maximum | |
Operating lease expiration | |
Percentage of annual sales volume used for incremental rent on certain retail location leases | 20.00% |
Retail concession leases | Average | |
Operating lease expiration | |
Percentage of annual sales volume used for incremental rent on certain retail location leases | 35.00% |
Commitments and Contingencies77
Commitments and Contingencies (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Capital leases, future minimum lease payments | |||
Fiscal 2,019 | $ 2,940 | ||
Fiscal 2,020 | 2,945 | ||
Fiscal 2,021 | 2,934 | ||
Fiscal 2,022 | 2,716 | ||
Fiscal 2,023 | 2,590 | ||
Thereafter | 10,859 | ||
Total minimum lease payments | 24,984 | ||
Less interest | (6,395) | ||
Capital lease obligations | 18,589 | $ 0 | |
Less current portion | (1,594) | ||
Long-term capital lease obligations | 16,995 | ||
Capital and operating leases, future minimum lease payments | |||
Fiscal 2,019 | 204,018 | ||
Fiscal 2,020 | 181,886 | ||
Fiscal 2,021 | 153,213 | ||
Fiscal 2,022 | 127,278 | ||
Fiscal 2,023 | 102,752 | ||
Thereafter | 240,739 | ||
Total minimum lease payments | 1,009,886 | ||
Rental expense for all property and equipment under operating leases | 272,300 | 263,100 | $ 259,100 |
Rental expense based upon percentage of annual sales volume | 61,200 | $ 53,000 | $ 53,700 |
Non-Related Parties | |||
Operating leases, future minimum lease payments | |||
Fiscal 2,019 | 196,321 | ||
Fiscal 2,020 | 174,521 | ||
Fiscal 2,021 | 148,255 | ||
Fiscal 2,022 | 124,562 | ||
Fiscal 2,023 | 100,162 | ||
Thereafter | 229,880 | ||
Total minimum lease payments | 973,701 | ||
Related Parties | |||
Operating leases, future minimum lease payments | |||
Fiscal 2,019 | 4,757 | ||
Fiscal 2,020 | 4,420 | ||
Fiscal 2,021 | 2,024 | ||
Fiscal 2,022 | 0 | ||
Fiscal 2,023 | 0 | ||
Thereafter | 0 | ||
Total minimum lease payments | $ 11,201 |
Commitments and Contingencies78
Commitments and Contingencies (Details 3) - Feb. 03, 2018 € in Millions, $ in Millions | USD ($) | EUR (€) |
Commitments and Contingencies Disclosure [Abstract] | ||
Purchase commitments | $ 208.1 | |
Private equity fund | ||
Investment commitments | ||
Unfunded commitment to invest in private equity fund | $ 5.7 | € 4.5 |
Commitments and Contingencies79
Commitments and Contingencies (Details 4) $ in Thousands, € in Millions | Nov. 08, 2013USD ($) | Jul. 19, 2012USD ($) | May 31, 2015USD ($) | May 31, 2015EUR (€) | Feb. 03, 2018USD ($)subsidiary | Jan. 28, 2017USD ($) | Jan. 28, 2017EUR (€) | Feb. 03, 2018EUR (€) | Jan. 30, 2015trademark | May 02, 2013trademark |
Italy | Italian customs tax audit and appeals | Europe | ||||||||||
Litigation | ||||||||||
Number of subsidiaries under audit by the Italian Customs Agency | subsidiary | 1 | |||||||||
Customs tax assessments including potential penalties and interest | $ 12,200 | € 9.8 | ||||||||
Italy | First set of appeals | Italian customs tax audit and appeals | Europe | ||||||||||
Litigation | ||||||||||
Canceled customs tax assessments | $ 2,100 | € 1.7 | ||||||||
Italy | Second through seventh set of appeals | Italian customs tax audit and appeals | Europe | ||||||||||
Litigation | ||||||||||
Canceled customs tax assessments | $ 10,100 | € 8.1 | ||||||||
Judicial Ruling | U.S. | Gucci America, Inc. | ||||||||||
Litigation | ||||||||||
Damages sought in litigation case | $ 26,000 | |||||||||
Accounting profits sought by plaintiff as compensation | 99,000 | |||||||||
Monetary damages awarded by court | 2,300 | |||||||||
Monetary damages awarded by court to be paid by the Company's licensees | $ 2,300 | |||||||||
Pending Litigation | Italy | Gucci America, Inc. | ||||||||||
Litigation | ||||||||||
Number of Italian trademark registrations to be cancelled by plaintiff | trademark | 3 | |||||||||
Number of European Community trademark registrations to be cancelled by plaintiff | trademark | 4 | |||||||||
Pending Litigation | China | Gucci America, Inc. | ||||||||||
Litigation | ||||||||||
Damages sought in litigation case | $ 80 | |||||||||
Pending Litigation | France | Gucci America, Inc. | ||||||||||
Litigation | ||||||||||
Number of European Community trademark registrations to be cancelled by plaintiff | trademark | 2 | |||||||||
Number of international trademark registrations to be cancelled by plaintiff | trademark | 1 |
Commitments and Contingencies80
Commitments and Contingencies (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | Feb. 03, 2018 | Jan. 30, 2016 | |
Redeemable noncontrolling interests put arrangements | |||||
Redeemable noncontrolling interests | $ 4,452 | $ 5,252 | $ 5,252 | $ 5,590 | $ 5,252 |
Purchase of redeemable noncontrolling interest | 0 | 4,445 | 0 | ||
Redeemable noncontrolling interests reconciliation | |||||
Beginning balance | 4,452 | 5,252 | |||
Foreign currency translation adjustment | 187 | 818 | |||
Purchase of redeemable noncontrolling interest | 0 | (4,445) | |||
Noncontrolling interest capital contribution | 951 | 2,157 | |||
Redeemable noncontrolling interest redemption value adjustment | 0 | 670 | |||
Ending balance | 5,590 | 4,452 | 5,252 | ||
Guess Brazil | |||||
Redeemable noncontrolling interests put arrangements | |||||
Total outstanding equity interest in subsidiary covered by put arrangement (as a percent) | 40.00% | ||||
Total cash contributions in the joint venture made by the Company and the noncontrolling interest holder | 1,700 | ||||
Payments made by the Company related to its controlling interest in joint venture | 1,000 | ||||
Redeemable noncontrolling interests | $ 1,700 | 1,700 | $ 1,600 | ||
Initial period put option can be exercised by noncontrolling interest holder after commencement of agreement, subject to certain time restrictions (by year) | 6 years | ||||
Period put arrangement can be exercised by noncontrolling interest holder after initial and subsequent exercise periods, subject to certain time restrictions (by year) | 3 years | ||||
Redeemable noncontrolling interests reconciliation | |||||
Beginning balance | $ 1,700 | ||||
Ending balance | 1,600 | 1,700 | |||
Guess CIS | |||||
Noncontrolling Interest, Ownership Percentage by Parent | 30.00% | ||||
Redeemable noncontrolling interests put arrangements | |||||
Total cash contributions in the joint venture made by the Company and the noncontrolling interest holder | 3,200 | 5,000 | |||
Payments made by the Company related to its controlling interest in joint venture | 2,200 | 3,500 | $ 2,000 | ||
Redeemable noncontrolling interests | $ 2,800 | 2,800 | $ 4,000 | ||
Initial period put option can be exercised by noncontrolling interest holder after commencement of agreement, subject to certain time restrictions (by year) | 5 years | ||||
Redeemable noncontrolling interests reconciliation | |||||
Beginning balance | $ 2,800 | ||||
Ending balance | $ 4,000 | 2,800 | |||
Guess Sud | |||||
Redeemable noncontrolling interests put arrangements | |||||
Total outstanding equity interest in subsidiary covered by put arrangement (as a percent) | 40.00% | ||||
Purchase of redeemable noncontrolling interest | $ 4,445 | ||||
Remaining interest acquired by the Company from the noncontrolling interest holder (as a percent) | 40.00% |
Savings Plan (Details)
Savings Plan (Details) - Savings Plan - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Savings Plan | |||
Employee contribution limit per calendar year (as a percent of compensation) | 100.00% | ||
Employer contribution limit (as a percent of compensation) | 3.00% | ||
Company's contributions to the savings plan | $ 1.1 | $ 1.2 | $ 1.3 |
Savings Plans (Details 2)
Savings Plans (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Deferred Compensation Plan | |||
Company's contributions to deferred compensation plan | $ 1,500 | ||
DCP | Other income/expense | |||
Deferred Compensation Plan | |||
Deferred compensation plan, gains (losses) related to the change in the value of the insurance policy investments | $ 1,700 | $ 1,500 | (700) |
Realized gain resulting from payout on insurance policy investments | $ 300 | ||
Accrued expenses and other long-term liabilities | |||
Deferred Compensation Plan | |||
Deferred compensation liability | 13,476 | 11,184 | |
Other assets | |||
Deferred Compensation Plan | |||
Deferred compensation, long-term asset | $ 13,700 | $ 12,000 |
Quarterly Information (Unaudi83
Quarterly Information (Unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Feb. 03, 2018 | Oct. 28, 2017 | Jul. 29, 2017 | Apr. 29, 2017 | Jan. 28, 2017 | Oct. 29, 2016 | Jul. 30, 2016 | Apr. 30, 2016 | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||||||||||||
Summary of the unaudited quarterly financial information | ||||||||||||||||||||||
Net revenue | $ 792,164,000 | [1],[2] | $ 548,953,000 | [1],[2] | $ 568,292,000 | [1],[2] | $ 454,345,000 | [1],[2] | $ 674,004,000 | [1],[2] | $ 531,976,000 | [1],[2] | $ 540,412,000 | [1],[2] | $ 444,061,000 | [1],[2] | $ 2,363,754,000 | [3],[4] | $ 2,190,453,000 | [3],[4],[5] | $ 2,184,495,000 | [3],[4],[5] |
Gross profit | 295,070,000 | [1] | 191,109,000 | [1] | 198,027,000 | [1] | 144,642,000 | [1] | 236,407,000 | [1] | 180,242,000 | [1] | 185,632,000 | [1] | 142,759,000 | [1] | 828,848,000 | 745,040,000 | 787,430,000 | |||
Net earnings (loss) | 3,107,000 | [1] | (1,662,000) | [1] | 15,881,000 | [1] | (21,227,000) | [1] | 8,656,000 | [1] | 9,729,000 | [1] | 32,167,000 | [1] | (25,154,000) | [1] | (3,901,000) | 25,398,000 | 84,815,000 | |||
Net earnings (loss) attributable to Guess, Inc. | $ 1,040,000 | [1] | $ (2,860,000) | [1] | $ 15,219,000 | [1] | $ (21,293,000) | [1] | $ 6,567,000 | [1] | $ 9,103,000 | [1] | $ 32,269,000 | [1] | $ (25,178,000) | [1] | $ (7,894,000) | $ 22,761,000 | $ 81,851,000 | |||
Net earnings (loss) per common share attributable to common stockholders: | ||||||||||||||||||||||
Basic (in dollars per share) | $ 0.01 | [1],[6],[7],[8],[9] | $ (0.04) | [1],[6],[7],[8],[9] | $ 0.18 | [1],[6],[7],[8],[9] | $ (0.26) | [1],[6],[7],[8],[9] | $ 0.08 | [1],[6],[8],[9],[10],[11],[12] | $ 0.11 | [1],[6],[8],[9],[10],[11],[12] | $ 0.38 | [1],[6],[8],[9],[10],[11],[12] | $ (0.30) | [1],[6],[8],[9],[10],[11],[12] | $ (0.11) | $ 0.27 | $ 0.97 | |||
Diluted (in dollars per share) | $ 0.01 | [1],[6],[7],[8],[9] | $ (0.04) | [1],[6],[7],[8],[9] | $ 0.18 | [1],[6],[7],[8],[9] | $ (0.26) | [1],[6],[7],[8],[9] | $ 0.08 | [1],[6],[8],[9],[10],[11],[12] | $ 0.11 | [1],[6],[8],[9],[10],[11],[12] | $ 0.38 | [1],[6],[8],[9],[10],[11],[12] | $ (0.30) | [1],[6],[8],[9],[10],[11],[12] | $ (0.11) | $ 0.27 | $ 0.96 | |||
Selected quarterly financial information | ||||||||||||||||||||||
Number of days in fiscal period | 98 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 371 days | 364 days | 364 days | |||||||||||
Net gains (losses) on lease terminations | $ 100,000 | $ (11,500,000) | $ 0 | $ 0 | $ 0 | $ 0 | $ 600,000 | $ 100,000 | $ (11,373,000) | $ 695,000 | $ 2,337,000 | |||||||||||
Asset impairment charges | 2,500,000 | 2,000,000 | 1,200,000 | 2,800,000 | 32,900,000 | 800,000 | 500,000 | 200,000 | 8,479,000 | 34,385,000 | 2,287,000 | |||||||||||
Additional income tax expense resulting from enactment of Tax Reform | 47,900,000 | 47,900,000 | ||||||||||||||||||||
Provisional charge for remeasurement of U.S. deferred tax assets as a result of the enactment of the Tax Reform | 24,856,000 | 24,856,000 | ||||||||||||||||||||
Provisional charge for the estimated effects of the transitional tax on the deemed repatriation of foreign earnings as a result of the enactment of the Tax Reform | $ 23,034,000 | 23,034,000 | ||||||||||||||||||||
Restructuring charges | 6,083,000 | 0 | 6,083,000 | 0 | ||||||||||||||||||
Estimated exit tax charge | 1,911,000 | 1,911,000 | ||||||||||||||||||||
Net proceeds from sale of the Company's minority interest equity holding in a privately-held boutique apparel company | 34,800,000 | 34,800,000 | ||||||||||||||||||||
Cumulative valuation reserve | 6,830,000 | $ 0 | [13] | 6,830,000 | [13] | 0 | [13] | |||||||||||||||
Net revenue | ||||||||||||||||||||||
Selected quarterly financial information | ||||||||||||||||||||||
Prior period reclassification adjustment | (5,200,000) | (5,400,000) | (4,200,000) | (5,300,000) | (4,300,000) | (4,500,000) | (4,800,000) | (18,900,000) | $ (19,800,000) | |||||||||||||
Cost of product sales | ||||||||||||||||||||||
Selected quarterly financial information | ||||||||||||||||||||||
Prior period reclassification adjustment | $ 5,200,000 | $ 5,400,000 | $ 4,200,000 | $ 5,300,000 | $ 4,300,000 | 4,500,000 | $ 4,800,000 | |||||||||||||||
Other income/expense | ||||||||||||||||||||||
Selected quarterly financial information | ||||||||||||||||||||||
Gain from sale of the Company's minority interest equity holding in a privately-held boutique apparel company | $ 22,300,000 | $ 22,300,000 | ||||||||||||||||||||
[1] | All fiscal quarters presented consisted of 13 weeks with the exception of the quarter ended February 3, 2018 which consisted of 14 weeks. | |||||||||||||||||||||
[2] | During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales. Accordingly, prior period amounts related to net royalties, net revenue and cost of product sales have been adjusted to conform to the current period presentation. This resulted in a decrease to net revenue and cost of product sales of $4.2 million, $5.4 million and $5.2 million during the first, second and third quarters of fiscal 2018, respectively. This also resulted in a decrease to net revenue and cost of product sales of $4.8 million, $4.5 million, $4.3 million and $5.3 million during the first, second, third and fourth quarters of fiscal 2017, respectively. This reclassification had no impact on previously reported gross profit, net earnings (loss) or net earnings (loss) per share. Refer to Note 1 for further information regarding this reclassification. | |||||||||||||||||||||
[3] | During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales. Accordingly, net revenue has been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. This reclassification had no impact on previously reported earnings from operations. | |||||||||||||||||||||
[4] | The Company operates on a 52/53-week fiscal year calendar, which ends on the Saturday nearest to January 31 of each year. The results for fiscal 2018 included the impact of an additional week which occurred during the fourth quarter ended February 3, 2018. | |||||||||||||||||||||
[5] | During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales. Accordingly, net revenue by geographic area has been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. | |||||||||||||||||||||
[6] | During each of the periods presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. The Company recorded asset impairment charges of $2.8 million, $1.2 million, $2.0 million and $2.5 million, respectively, during the first, second, third and fourth quarters of fiscal 2018. The Company also recorded asset impairment charges of $0.2 million, $0.5 million, $0.8 million and $32.9 million, respectively, during the first, second, third and fourth quarters of fiscal 2017. Refer to Note 5 for further detail regarding asset impairment charges. | |||||||||||||||||||||
[7] | During fiscal 2018, the Company recognized additional tax expense of $47.9 million related to the enactment of the Tax Reform. This is comprised of a $24.9 million charge for the provisional re-measurement of certain deferred taxes and related amounts and a provisional charge of $23.0 million to income tax expense for the estimated effects of the transitional tax on the deemed repatriation of foreign earnings. These charges were recorded during the fourth quarter of fiscal 2018. Refer to Note 11 for further detail. | |||||||||||||||||||||
[8] | Per common share amounts for the quarters and full years have been calculated separately. Accordingly, quarterly amounts may not add to the annual amount because of differences in the average common shares outstanding during each period. | |||||||||||||||||||||
[9] | The Company recorded net gains (losses) on lease terminations of $(11.5) million and $0.1 million during the third and fourth quarters of fiscal 2018, respectively. There were no net gains (losses) on lease terminations recognized during the first or second quarters of fiscal 2018. During the first and second quarters of fiscal 2017, the Company recorded net gains on lease terminations of $0.1 million and $0.6 million, respectively. There were no net gains (losses) on lease terminations recognized during the third or fourth quarters of fiscal 2017. Refer to Note 1 for further information regarding net gains (losses) on lease terminations. | |||||||||||||||||||||
[10] | During fiscal 2017, the Company recorded restructuring charges of $6.1 million and a related estimated exit tax charge of approximately $1.9 million. The restructuring charges and related estimated exit tax charge were recorded during the three months ended April 30, 2016. Refer to Note 9 for further detail regarding these charges. | |||||||||||||||||||||
[11] | During fiscal 2017, the Company recorded valuation reserves of $6.8 million resulting from jurisdictions where there have been cumulative net operating losses, limiting the Company’s ability to consider other subjective evidence to continue to recognize the existing deferred tax assets. The Company recorded the valuation reserve during the three months ended January 28, 2017. Refer to Note 11 for further detail. | |||||||||||||||||||||
[12] | During fiscal 2017, the Company sold its minority interest equity holding in a privately-held boutique apparel company for net proceeds of approximately $34.8 million, which resulted in a gain of approximately $22.3 million which was recorded in other income. The gain was recorded during the three months ended July 30, 2016. | |||||||||||||||||||||
[13] | Amounts represent valuation reserves resulting from jurisdictions where there have been cumulative net operating losses, limiting the Company’s ability to consider other subjective evidence to continue to recognize the existing deferred tax assets. |
Segment Information (Details)
Segment Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Feb. 03, 2018 | Oct. 28, 2017 | Jul. 29, 2017 | Apr. 29, 2017 | Jan. 28, 2017 | Oct. 29, 2016 | Jul. 30, 2016 | Apr. 30, 2016 | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |||||||||||||
Segment information of net revenue, earnings (loss) from operations, capital expenditures and total assets | |||||||||||||||||||||||
Net revenue | $ 792,164,000 | [1],[2] | $ 548,953,000 | [1],[2] | $ 568,292,000 | [1],[2] | $ 454,345,000 | [1],[2] | $ 674,004,000 | [1],[2] | $ 531,976,000 | [1],[2] | $ 540,412,000 | [1],[2] | $ 444,061,000 | [1],[2] | $ 2,363,754,000 | [3],[4] | $ 2,190,453,000 | [3],[4],[5] | $ 2,184,495,000 | [3],[4],[5] | |
Licensing | 72,755,000 | 71,919,000 | 84,041,000 | ||||||||||||||||||||
Net gains (losses) on lease terminations | 100,000 | (11,500,000) | 0 | 0 | 0 | 0 | 600,000 | 100,000 | (11,373,000) | 695,000 | 2,337,000 | ||||||||||||
Asset impairment charges | (2,500,000) | $ (2,000,000) | $ (1,200,000) | $ (2,800,000) | (32,900,000) | $ (800,000) | $ (500,000) | (200,000) | (8,479,000) | (34,385,000) | (2,287,000) | ||||||||||||
Restructuring charges | $ (6,083,000) | 0 | (6,083,000) | 0 | |||||||||||||||||||
Earnings (loss) from operations | [4] | 65,173,000 | 22,708,000 | 121,350,000 | |||||||||||||||||||
Capital expenditures | [4] | 84,655,000 | 90,581,000 | $ 83,844,000 | |||||||||||||||||||
Total assets | $ 1,655,634,000 | $ 1,534,485,000 | $ 1,655,634,000 | $ 1,534,485,000 | |||||||||||||||||||
Number of days in fiscal period | 98 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 371 days | 364 days | 364 days | ||||||||||||
Operating segments | |||||||||||||||||||||||
Segment information of net revenue, earnings (loss) from operations, capital expenditures and total assets | |||||||||||||||||||||||
Earnings (loss) from operations | [4] | $ 187,454,000 | $ 136,340,000 | $ 204,164,000 | |||||||||||||||||||
Corporate overhead | |||||||||||||||||||||||
Segment information of net revenue, earnings (loss) from operations, capital expenditures and total assets | |||||||||||||||||||||||
Earnings (loss) from operations | [4],[6] | (102,429,000) | (73,859,000) | (82,864,000) | |||||||||||||||||||
Capital expenditures | [4] | 7,923,000 | 5,411,000 | 34,445,000 | |||||||||||||||||||
Total assets | $ 181,796,000 | $ 193,395,000 | 181,796,000 | 193,395,000 | |||||||||||||||||||
Reconciling items | |||||||||||||||||||||||
Segment information of net revenue, earnings (loss) from operations, capital expenditures and total assets | |||||||||||||||||||||||
Net gains (losses) on lease terminations | [4],[6],[7] | (11,373,000) | 695,000 | 2,337,000 | |||||||||||||||||||
Asset impairment charges | [4],[6],[8] | (8,479,000) | (34,385,000) | (2,287,000) | |||||||||||||||||||
Restructuring charges | [4],[9] | 0 | (6,083,000) | 0 | |||||||||||||||||||
Americas Retail | Operating segments | |||||||||||||||||||||||
Segment information of net revenue, earnings (loss) from operations, capital expenditures and total assets | |||||||||||||||||||||||
Net revenue | [4] | 833,077,000 | 935,479,000 | 981,942,000 | |||||||||||||||||||
Earnings (loss) from operations | [4],[6] | (17,301,000) | (22,816,000) | 18,414,000 | |||||||||||||||||||
Capital expenditures | [4] | 16,899,000 | 25,881,000 | 26,384,000 | |||||||||||||||||||
Total assets | 192,917,000 | 240,857,000 | 192,917,000 | 240,857,000 | |||||||||||||||||||
Americas Wholesale | Operating segments | |||||||||||||||||||||||
Segment information of net revenue, earnings (loss) from operations, capital expenditures and total assets | |||||||||||||||||||||||
Net revenue | [4],[6] | 150,366,000 | 146,260,000 | 155,594,000 | |||||||||||||||||||
Earnings (loss) from operations | [4],[6] | 25,161,000 | 24,190,000 | 29,579,000 | |||||||||||||||||||
Capital expenditures | [4] | 1,303,000 | 3,320,000 | 2,854,000 | |||||||||||||||||||
Total assets | 181,548,000 | 175,136,000 | 181,548,000 | 175,136,000 | |||||||||||||||||||
Europe | Operating segments | |||||||||||||||||||||||
Segment information of net revenue, earnings (loss) from operations, capital expenditures and total assets | |||||||||||||||||||||||
Net revenue | [4],[6] | 998,657,000 | 788,194,000 | 722,877,000 | |||||||||||||||||||
Earnings (loss) from operations | [4],[6] | 87,376,000 | 56,961,000 | 53,673,000 | |||||||||||||||||||
Capital expenditures | [4] | 46,419,000 | 42,080,000 | 13,869,000 | |||||||||||||||||||
Total assets | 850,886,000 | 723,251,000 | 850,886,000 | 723,251,000 | |||||||||||||||||||
Asia | Operating segments | |||||||||||||||||||||||
Segment information of net revenue, earnings (loss) from operations, capital expenditures and total assets | |||||||||||||||||||||||
Net revenue | [4],[6] | 308,899,000 | 248,601,000 | 240,041,000 | |||||||||||||||||||
Earnings (loss) from operations | [4],[6] | 14,116,000 | (2,381,000) | 10,309,000 | |||||||||||||||||||
Capital expenditures | [4] | 12,111,000 | 13,869,000 | 6,265,000 | |||||||||||||||||||
Total assets | 242,232,000 | 182,405,000 | 242,232,000 | 182,405,000 | |||||||||||||||||||
Licensing | Operating segments | |||||||||||||||||||||||
Segment information of net revenue, earnings (loss) from operations, capital expenditures and total assets | |||||||||||||||||||||||
Licensing | [3],[4] | 72,755,000 | 71,919,000 | 84,041,000 | |||||||||||||||||||
Earnings (loss) from operations | [4],[6] | 78,102,000 | 80,386,000 | 92,189,000 | |||||||||||||||||||
Capital expenditures | [4] | 0 | 20,000 | $ 27,000 | |||||||||||||||||||
Total assets | $ 6,255,000 | $ 19,442,000 | $ 6,255,000 | $ 19,442,000 | |||||||||||||||||||
[1] | All fiscal quarters presented consisted of 13 weeks with the exception of the quarter ended February 3, 2018 which consisted of 14 weeks. | ||||||||||||||||||||||
[2] | During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales. Accordingly, prior period amounts related to net royalties, net revenue and cost of product sales have been adjusted to conform to the current period presentation. This resulted in a decrease to net revenue and cost of product sales of $4.2 million, $5.4 million and $5.2 million during the first, second and third quarters of fiscal 2018, respectively. This also resulted in a decrease to net revenue and cost of product sales of $4.8 million, $4.5 million, $4.3 million and $5.3 million during the first, second, third and fourth quarters of fiscal 2017, respectively. This reclassification had no impact on previously reported gross profit, net earnings (loss) or net earnings (loss) per share. Refer to Note 1 for further information regarding this reclassification. | ||||||||||||||||||||||
[3] | During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales. Accordingly, net revenue has been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. This reclassification had no impact on previously reported earnings from operations. | ||||||||||||||||||||||
[4] | The Company operates on a 52/53-week fiscal year calendar, which ends on the Saturday nearest to January 31 of each year. The results for fiscal 2018 included the impact of an additional week which occurred during the fourth quarter ended February 3, 2018. | ||||||||||||||||||||||
[5] | During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales. Accordingly, net revenue by geographic area has been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. | ||||||||||||||||||||||
[6] | During fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. Segment results were also adjusted to exclude corporate performance-based compensation costs, net gains (losses) on lease terminations and asset impairment charges due to the fact that these items are no longer included in the segment results provided to the Company’s chief operating decision maker in order to allocate resources and assess performance. Accordingly, segment results have been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. | ||||||||||||||||||||||
[7] | During fiscal 2018, the Company incurred net losses on lease terminations related primarily to the modification of certain lease agreements held with a common landlord in North America. During fiscal 2017 and fiscal 2016, the Company recorded net gains on lease terminations related primarily to the early termination of certain lease agreements in Europe. Refer to Note 1 for more information regarding the net gains (losses) on lease terminations. | ||||||||||||||||||||||
[8] | During each of the years presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. Refer to Note 5 for more information regarding these asset impairment charges. | ||||||||||||||||||||||
[9] | Restructuring charges incurred during fiscal 2017 related to plans to better align the Company’s global cost and organizational structure with its current strategic initiatives. Refer to Note 9 for more information regarding these restructuring charges. |
Segment Information (Details 2)
Segment Information (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Feb. 03, 2018 | Oct. 28, 2017 | [1],[2] | Jul. 29, 2017 | [1],[2] | Apr. 29, 2017 | [1],[2] | Jan. 28, 2017 | Oct. 29, 2016 | [1],[2] | Jul. 30, 2016 | [1],[2] | Apr. 30, 2016 | [1],[2] | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | [5] | |||||
Information related to geographic areas in which the Company operated | ||||||||||||||||||||||
Net revenue | $ 792,164 | [1],[2] | $ 548,953 | $ 568,292 | $ 454,345 | $ 674,004 | [1],[2] | $ 531,976 | $ 540,412 | $ 444,061 | $ 2,363,754 | [3],[4] | $ 2,190,453 | [3],[4],[5] | $ 2,184,495 | [3],[4] | ||||||
Long-lived assets | 360,470 | 302,016 | 360,470 | 302,016 | ||||||||||||||||||
U.S. | ||||||||||||||||||||||
Information related to geographic areas in which the Company operated | ||||||||||||||||||||||
Net revenue | 742,620 | 836,954 | [5] | 892,056 | ||||||||||||||||||
Long-lived assets | 109,943 | 115,728 | 109,943 | 115,728 | ||||||||||||||||||
Italy | ||||||||||||||||||||||
Information related to geographic areas in which the Company operated | ||||||||||||||||||||||
Net revenue | 289,299 | 257,542 | [5] | 245,451 | ||||||||||||||||||
Long-lived assets | 34,884 | 31,013 | 34,884 | 31,013 | ||||||||||||||||||
Canada | ||||||||||||||||||||||
Information related to geographic areas in which the Company operated | ||||||||||||||||||||||
Net revenue | 203,965 | 220,720 | [5] | 222,470 | ||||||||||||||||||
Long-lived assets | 18,845 | 13,690 | 18,845 | 13,690 | ||||||||||||||||||
South Korea | ||||||||||||||||||||||
Information related to geographic areas in which the Company operated | ||||||||||||||||||||||
Net revenue | 156,101 | 157,503 | [5] | 162,200 | ||||||||||||||||||
Long-lived assets | 9,584 | 8,664 | 9,584 | 8,664 | ||||||||||||||||||
Other foreign countries | ||||||||||||||||||||||
Information related to geographic areas in which the Company operated | ||||||||||||||||||||||
Net revenue | 971,769 | 717,734 | [5] | $ 662,318 | ||||||||||||||||||
Long-lived assets | $ 187,214 | $ 132,921 | $ 187,214 | $ 132,921 | ||||||||||||||||||
[1] | All fiscal quarters presented consisted of 13 weeks with the exception of the quarter ended February 3, 2018 which consisted of 14 weeks. | |||||||||||||||||||||
[2] | During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales. Accordingly, prior period amounts related to net royalties, net revenue and cost of product sales have been adjusted to conform to the current period presentation. This resulted in a decrease to net revenue and cost of product sales of $4.2 million, $5.4 million and $5.2 million during the first, second and third quarters of fiscal 2018, respectively. This also resulted in a decrease to net revenue and cost of product sales of $4.8 million, $4.5 million, $4.3 million and $5.3 million during the first, second, third and fourth quarters of fiscal 2017, respectively. This reclassification had no impact on previously reported gross profit, net earnings (loss) or net earnings (loss) per share. Refer to Note 1 for further information regarding this reclassification. | |||||||||||||||||||||
[3] | During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales. Accordingly, net revenue has been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. This reclassification had no impact on previously reported earnings from operations. | |||||||||||||||||||||
[4] | The Company operates on a 52/53-week fiscal year calendar, which ends on the Saturday nearest to January 31 of each year. The results for fiscal 2018 included the impact of an additional week which occurred during the fourth quarter ended February 3, 2018. | |||||||||||||||||||||
[5] | During the fourth quarter of fiscal 2018, the Company reclassified net royalties received on the Company’s inventory purchases of licensed product from net revenue to cost of product sales. Accordingly, net revenue by geographic area has been adjusted for fiscal 2017 and fiscal 2016 to conform to the current period presentation. |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Feb. 03, 2018 | [1] | Oct. 28, 2017 | [1] | Jul. 29, 2017 | [1] | Apr. 29, 2017 | [1] | Jan. 28, 2017 | [1] | Oct. 29, 2016 | [1] | Jul. 30, 2016 | [1] | Apr. 30, 2016 | [1] | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||
Earnings Per Share [Abstract] | ||||||||||||||||||||
Net earnings (loss) attributable to Guess, Inc. | $ 1,040 | $ (2,860) | $ 15,219 | $ (21,293) | $ 6,567 | $ 9,103 | $ 32,269 | $ (25,178) | $ (7,894) | $ 22,761 | $ 81,851 | |||||||||
Less net earnings attributable to nonvested restricted stockholders | 764 | 527 | 532 | |||||||||||||||||
Net earnings (loss) attributable to common stockholders | $ (8,658) | $ 22,234 | $ 81,319 | |||||||||||||||||
Weighted average common shares used in basic computations | 82,189,000 | 83,666,000 | 84,264,000 | |||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||
Stock options and restricted stock units (in shares) | [2] | 0 | 163,000 | 261,000 | ||||||||||||||||
Weighted average common shares used in diluted computations | 82,189,000 | 83,829,000 | 84,525,000 | |||||||||||||||||
Net earnings (loss) per common share attributable to common stockholders: | ||||||||||||||||||||
Basic (in dollars per share) | $ 0.01 | [3],[4],[5],[6] | $ (0.04) | [3],[4],[5],[6] | $ 0.18 | [3],[4],[5],[6] | $ (0.26) | [3],[4],[5],[6] | $ 0.08 | [3],[5],[6],[7],[8],[9] | $ 0.11 | [3],[5],[6],[7],[8],[9] | $ 0.38 | [3],[5],[6],[7],[8],[9] | $ (0.30) | [3],[5],[6],[7],[8],[9] | $ (0.11) | $ 0.27 | $ 0.97 | |
Diluted (in dollars per share) | $ 0.01 | [3],[4],[5],[6] | $ (0.04) | [3],[4],[5],[6] | $ 0.18 | [3],[4],[5],[6] | $ (0.26) | [3],[4],[5],[6] | $ 0.08 | [3],[5],[6],[7],[8],[9] | $ 0.11 | [3],[5],[6],[7],[8],[9] | $ 0.38 | [3],[5],[6],[7],[8],[9] | $ (0.30) | [3],[5],[6],[7],[8],[9] | $ (0.11) | $ 0.27 | $ 0.96 | |
Antidilutive securities excluded from computation of earnings per share | ||||||||||||||||||||
Antidilutive equity awards excluded from computation of diluted weighted average common shares | 2,925,549 | 3,254,259 | 2,737,573 | |||||||||||||||||
Potentially dilutive shares | ||||||||||||||||||||
Antidilutive securities excluded from computation of earnings per share | ||||||||||||||||||||
Antidilutive equity awards excluded from computation of diluted weighted average common shares | 652,494 | |||||||||||||||||||
Performance-based units | ||||||||||||||||||||
Antidilutive securities excluded from computation of earnings per share | ||||||||||||||||||||
Awards subject to performance or market conditions that were excluded from the computation of diluted weighted average common shares | 899,345 | |||||||||||||||||||
Performance-based or market-based units | ||||||||||||||||||||
Antidilutive securities excluded from computation of earnings per share | ||||||||||||||||||||
Awards subject to performance or market conditions that were excluded from the computation of diluted weighted average common shares | 473,878 | |||||||||||||||||||
[1] | All fiscal quarters presented consisted of 13 weeks with the exception of the quarter ended February 3, 2018 which consisted of 14 weeks. | |||||||||||||||||||
[2] | For fiscal 2018, there were 652,494 potentially dilutive shares that were not included in the computation of diluted weighted average common shares and common equivalent shares outstanding because their effect would have been antidilutive given the Company’s net loss. | |||||||||||||||||||
[3] | During each of the periods presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. The Company recorded asset impairment charges of $2.8 million, $1.2 million, $2.0 million and $2.5 million, respectively, during the first, second, third and fourth quarters of fiscal 2018. The Company also recorded asset impairment charges of $0.2 million, $0.5 million, $0.8 million and $32.9 million, respectively, during the first, second, third and fourth quarters of fiscal 2017. Refer to Note 5 for further detail regarding asset impairment charges. | |||||||||||||||||||
[4] | During fiscal 2018, the Company recognized additional tax expense of $47.9 million related to the enactment of the Tax Reform. This is comprised of a $24.9 million charge for the provisional re-measurement of certain deferred taxes and related amounts and a provisional charge of $23.0 million to income tax expense for the estimated effects of the transitional tax on the deemed repatriation of foreign earnings. These charges were recorded during the fourth quarter of fiscal 2018. Refer to Note 11 for further detail. | |||||||||||||||||||
[5] | Per common share amounts for the quarters and full years have been calculated separately. Accordingly, quarterly amounts may not add to the annual amount because of differences in the average common shares outstanding during each period. | |||||||||||||||||||
[6] | The Company recorded net gains (losses) on lease terminations of $(11.5) million and $0.1 million during the third and fourth quarters of fiscal 2018, respectively. There were no net gains (losses) on lease terminations recognized during the first or second quarters of fiscal 2018. During the first and second quarters of fiscal 2017, the Company recorded net gains on lease terminations of $0.1 million and $0.6 million, respectively. There were no net gains (losses) on lease terminations recognized during the third or fourth quarters of fiscal 2017. Refer to Note 1 for further information regarding net gains (losses) on lease terminations. | |||||||||||||||||||
[7] | During fiscal 2017, the Company recorded restructuring charges of $6.1 million and a related estimated exit tax charge of approximately $1.9 million. The restructuring charges and related estimated exit tax charge were recorded during the three months ended April 30, 2016. Refer to Note 9 for further detail regarding these charges. | |||||||||||||||||||
[8] | During fiscal 2017, the Company recorded valuation reserves of $6.8 million resulting from jurisdictions where there have been cumulative net operating losses, limiting the Company’s ability to consider other subjective evidence to continue to recognize the existing deferred tax assets. The Company recorded the valuation reserve during the three months ended January 28, 2017. Refer to Note 11 for further detail. | |||||||||||||||||||
[9] | During fiscal 2017, the Company sold its minority interest equity holding in a privately-held boutique apparel company for net proceeds of approximately $34.8 million, which resulted in a gain of approximately $22.3 million which was recorded in other income. The gain was recorded during the three months ended July 30, 2016. |
Share-Based Compensation (Detai
Share-Based Compensation (Details) $ in Thousands | Jul. 07, 2015shares | Feb. 03, 2018USD ($)planshares | Jan. 28, 2017USD ($)shares | Jan. 30, 2016USD ($) | May 19, 2017shares | May 18, 2017shares | May 01, 2017shares | May 20, 2016shares | May 19, 2016shares |
Disclosure of share-based compensation information under stock plans | |||||||||
Number of share-based compensation plans | plan | 4 | ||||||||
Share-based compensation expense | $ | $ 18,852 | $ 16,908 | $ 18,880 | ||||||
Stock option | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Share-based compensation expense | $ | 2,345 | 2,219 | 2,113 | ||||||
Stock option | Selling, general and administrative expenses | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Share-based compensation expense | $ | $ 2,345 | ||||||||
Stock awards or units | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Stock awards or units granted (in shares) | 1,969,619 | ||||||||
Share-based compensation expense | $ | $ 16,347 | $ 14,544 | $ 16,604 | ||||||
Stock awards or units | Selling, general and administrative expenses | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Share-based compensation expense | $ | $ 16,347 | ||||||||
Performance-based awards/units | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Stock awards or units granted (in shares) | 818,416 | ||||||||
Performance units | Vesting, Tranche one | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting period | 1 year | ||||||||
Performance units | Minimum | Vesting, annual vesting periods after initial vesting period | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting period | 2 years | ||||||||
Performance units | Maximum | Vesting, annual vesting periods after initial vesting period | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting period | 3 years | ||||||||
Target performance units | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting period | 3 years | ||||||||
Target performance units | Minimum | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting rights based on the satisfaction of certain performance or market-based criteria (as a percentage) | 0.00% | ||||||||
Target performance units | Maximum | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting rights based on the satisfaction of certain performance or market-based criteria (as a percentage) | 200.00% | ||||||||
Market-based awards/units | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting period | 3 years | ||||||||
Stock awards or units granted (in shares) | 309,118 | ||||||||
Period which award is subject to a market condition (in years) | 3 years | ||||||||
Market-based awards/units | Minimum | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting rights based on the satisfaction of certain performance or market-based criteria (as a percentage) | 0.00% | ||||||||
Market-based awards/units | Maximum | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting rights based on the satisfaction of certain performance or market-based criteria (as a percentage) | 150.00% | ||||||||
Contingently returnable restricted stock units | CEO | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Stock awards or units granted (in shares) | 150,000 | ||||||||
Implied service period | 1 year | ||||||||
2004 Equity Incentive Plan | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Authorized number of shares (in shares) | 29,100,000 | 29,100,000 | 15,000,000 | ||||||
Shares available for grant under the plan (in shares) | 15,350,428 | 4,092,241 | |||||||
2004 Equity Incentive Plan | Stock option | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Term of award | 10 years | ||||||||
2004 Equity Incentive Plan | Stock option | Vesting, Tranche one | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting rights (as a percentage) | 25.00% | ||||||||
Vesting period | 9 months | 9 months | 9 months | ||||||
2004 Equity Incentive Plan | Stock option | Vesting, Tranche two | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting rights (as a percentage) | 25.00% | ||||||||
Vesting period | 1 year | 1 year | 1 year | ||||||
2004 Equity Incentive Plan | Stock option | Vesting, Tranche three | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting rights (as a percentage) | 25.00% | ||||||||
Vesting period | 1 year | 1 year | 1 year | ||||||
2004 Equity Incentive Plan | Stock option | Vesting, Tranche four | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting rights (as a percentage) | 25.00% | ||||||||
Vesting period | 1 year | 1 year | 1 year | ||||||
2004 Equity Incentive Plan | Stock awards or units | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Number that new grants on or after May 1, 2017 are counted against shares authorized (excluding stock options or stock appreciation rights) (in shares) | 3.54 | 3.54 | |||||||
2004 Equity Incentive Plan | Stock awards or units | Vesting, Tranche one | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting rights (as a percentage) | 25.00% | ||||||||
Vesting period | 9 months | 9 months | 9 months | ||||||
2004 Equity Incentive Plan | Stock awards or units | Vesting, Tranche two | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting rights (as a percentage) | 25.00% | ||||||||
Vesting period | 1 year | 1 year | 1 year | ||||||
2004 Equity Incentive Plan | Stock awards or units | Vesting, Tranche three | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting rights (as a percentage) | 25.00% | ||||||||
Vesting period | 1 year | 1 year | 1 year | ||||||
2004 Equity Incentive Plan | Stock awards or units | Vesting, Tranche four | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Vesting rights (as a percentage) | 25.00% | ||||||||
Vesting period | 1 year | 1 year | 1 year | ||||||
Employee Stock Purchase Plan | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Authorized number of shares (in shares) | 4,000,000 | ||||||||
Purchase price of the Company's common stock determined as the lower of the closing price at the beginning or end of the quarterly stock purchase period (expressed as a percentage) | 85.00% | ||||||||
Share-based compensation expense | $ | $ 160 | $ 145 | $ 163 | ||||||
Minimum holding period for shares purchased under the ESPP (in months) | 6 months | ||||||||
Period before the end of each fiscal quarter prohibited for trading, as per Company's securities trading policy (in days) | 14 days | ||||||||
Period after public announcement of earnings prohibited for trading, as per Company's securities trading policy (in days) | 2 days | ||||||||
2006 Non-Employee Directors Stock Grant and Stock Option Plan | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Authorized number of shares (in shares) | 1,850,000 | 1,850,000 | 2,000,000 | ||||||
Shares available for grant under the plan (in shares) | 495,489 | 582,639 | |||||||
Retained Earnings | Accounting Standards Update 2016-09 | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | $ | $ (268) |
Share-Based Compensation (Det88
Share-Based Compensation (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Number of Shares | |||
Options outstanding at the beginning of the period (in shares) | 2,857,012 | ||
Granted (in shares) | 1,283,175 | ||
Exercised (in shares) | (123,775) | ||
Forfeited (in shares) | (88,625) | ||
Expired (in shares) | (15,375) | ||
Options outstanding at the end of the period (in shares) | 3,912,412 | 2,857,012 | |
Exercisable at the end of the period (in shares) | 2,232,456 | ||
Options exercisable and expected to vest at the end of the period (in shares) | 3,912,412 | ||
Weighted Average Exercise Price | |||
Options outstanding at the beginning of the period (in dollars per share) | $ 24.30 | ||
Granted (in dollars per share) | 11.22 | ||
Exercised (in dollars per share) | 11.22 | ||
Forfeited (in dollars per share) | 25.39 | ||
Expired (in dollars per share) | 41.14 | ||
Options outstanding at the end of the period (in dollars per share) | 20.33 | $ 24.30 | |
Exercisable at the end of the period (in dollars per share) | 24.56 | ||
Options exercisable and expected to vest at the end of the period (in dollars per share) | $ 20.33 | ||
Weighted Average Remaining Contractual Term (Years) | |||
Options outstanding at the end of the period (in years/months/days) | 4 years 9 months 15 days | ||
Exercisable at the end of the period (in years/months/days) | 6 years 6 months 8 days | ||
Options exercisable and expected to vest at the end of the period (in years/months/days) | 4 years 9 months 15 days | ||
Aggregate Intrinsic Value | |||
Options outstanding at the end of the period (in dollars) | $ 3,930 | ||
Exercisable at the end of the period (in dollars) | 668 | ||
Options exercisable and expected to vest at the end of the period (in dollars) | $ 3,930 | ||
Additional disclosures | |||
Weighted average fair values of stock options granted during the period (in dollars per share) | $ 1.57 | $ 3.53 | $ 3.75 |
Total intrinsic value of options exercised (in dollars) | $ 700 | $ 100 | |
Cash received from option exercises | 1,400 | $ 200 | $ 300 |
Unrecognized compensation cost related to nonvested stock options | $ 3,700 | ||
Employee Stock Purchase Plan | |||
Valuation Assumptions | |||
Risk-free interest rate | 1.00% | 0.30% | 0.10% |
Expected stock price volatility | 45.80% | 41.10% | 34.90% |
Expected dividend yield | 7.60% | 6.20% | 4.70% |
Expected life (in years/months/days) | 3 months | 3 months | 3 months |
Additional disclosures | |||
Weighted average fair values of stock options granted during the period (in dollars per share) | $ 2.85 | $ 3.32 | $ 4.06 |
Common stock issued during the period (in shares) | 54,300 | 44,486 | 40,846 |
Average price per share (in dollars per share) | $ 10.45 | $ 12.56 | $ 16.17 |
Stock option | |||
Valuation Assumptions | |||
Risk-free interest rate | 1.50% | 1.00% | 1.00% |
Expected stock price volatility | 37.10% | 35.40% | 36.70% |
Expected dividend yield | 8.00% | 4.80% | 4.70% |
Expected life (in years/months/days) | 4 years 4 months 24 days | 4 years 2 months | 3 years 9 months 28 days |
Additional disclosures | |||
Income tax benefit on recognized compensation cost | $ 800 | ||
Weighted average period for recognition of unrecognized compensation cost (in years/months/days) | 1 year 6 months 1 day | ||
Market-based awards/units | |||
Valuation Assumptions | |||
Risk-free interest rate | 1.40% | 0.90% | 0.90% |
Expected stock price volatility | 39.70% | 36.20% | 38.60% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected life (in years/months/days) | 2 years 9 months 4 days | 2 years 9 months 4 days | 2 years 9 months 4 days |
Share-Based Compensation (Det89
Share-Based Compensation (Details 3) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Stock awards or units | |||
Number of Shares/Units | |||
Nonvested at the beginning of the period (in shares) | 1,686,204 | ||
Granted (in shares) | 1,969,619 | ||
Vested (in shares) | (1,052,796) | ||
Forfeited (in shares) | (138,461) | ||
Nonvested at the end of the period (in shares) | 2,464,566 | 1,686,204 | |
Weighted Average Grant Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 18.80 | ||
Granted (in dollars per share) | 11.41 | $ 18.01 | $ 18.79 |
Vested (in dollars per share) | 17.52 | ||
Forfeited (in dollars per share) | 14.94 | ||
Nonvested at the end of the period (in dollars per share) | $ 13.66 | $ 18.80 | |
Additional disclosures, awards other than options | |||
Total fair value at grant date of previously nonvested stock awards/units that were vested during the period | $ 18.4 | $ 14.7 | $ 14 |
Total intrinsic value of nonvested stock awards/units that vested during the period | 12.6 | $ 9.4 | $ 11 |
Total intrinsic value of nonvested stock awards/units outstanding | 36 | ||
Income tax benefit on recognized compensation cost | 5.6 | ||
Unrecognized compensation cost related to nonvested stock awards/units | $ 26.9 | ||
Weighted average period for recognition of unrecognized compensation cost (in years/months/days) | 1 year 7 months 1 day | ||
Excess tax shortfall included in cash flows from operating activities | $ 1.3 | ||
Performance-based units | |||
Number of Shares/Units | |||
Nonvested at the beginning of the period (in shares) | 787,849 | ||
Granted (in shares) | 818,416 | ||
Vested (in shares) | (290,645) | ||
Forfeited (in shares) | (14,699) | ||
Nonvested at the end of the period (in shares) | 1,300,921 | 787,849 | |
Weighted Average Grant Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 19.17 | ||
Granted (in dollars per share) | 11.17 | ||
Vested (in dollars per share) | 19.85 | ||
Forfeited (in dollars per share) | 16.60 | ||
Nonvested at the end of the period (in dollars per share) | $ 14.01 | $ 19.17 | |
Market-based awards/units | |||
Number of Shares/Units | |||
Nonvested at the beginning of the period (in shares) | 323,825 | ||
Granted (in shares) | 309,118 | ||
Vested (in shares) | (244,466) | ||
Forfeited (in shares) | 0 | ||
Nonvested at the end of the period (in shares) | 388,477 | 323,825 | |
Weighted Average Grant Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 16.63 | ||
Granted (in dollars per share) | 12.03 | ||
Vested (in dollars per share) | 17.72 | ||
Forfeited (in dollars per share) | 0 | ||
Nonvested at the end of the period (in dollars per share) | $ 12.28 | $ 16.63 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) € in Millions | 12 Months Ended | |||
Feb. 03, 2018USD ($) | Feb. 03, 2018EUR (€) | Jan. 28, 2017USD ($) | Feb. 03, 2018EUR (€) | |
Transfers of financial instruments between the three levels of fair value hierarchy | ||||
Value of transfers between levels | $ 0 | $ 0 | ||
Private equity fund | ||||
Investment in private equity fund | ||||
Payments to acquire investment in private equity fund | 500,000 | € 0.5 | ||
Unfunded commitment to invest in private equity fund | 5,700,000 | € 4.5 | ||
Private equity fund | Other assets | ||||
Investment in private equity fund | ||||
Investment in private equity fund | 500,000 | € 0.5 | ||
Assets and liabilities measured at fair value on a recurring basis | ||||
Assets: | ||||
Foreign exchange currency contracts, Assets | 51,000 | 9,868,000 | ||
Interest rate swap | 1,460,000 | 876,000 | ||
Total Assets | 1,511,000 | 10,744,000 | ||
Liabilities: | ||||
Foreign exchange currency contracts, Liabilities | 18,089,000 | 1,424,000 | ||
Deferred compensation obligations | 13,476,000 | 11,184,000 | ||
Total Liabilities | 31,565,000 | 12,608,000 | ||
Assets and liabilities measured at fair value on a recurring basis | Level 1 | ||||
Assets: | ||||
Foreign exchange currency contracts, Assets | 0 | 0 | ||
Interest rate swap | 0 | 0 | ||
Total Assets | 0 | 0 | ||
Liabilities: | ||||
Foreign exchange currency contracts, Liabilities | 0 | 0 | ||
Deferred compensation obligations | 0 | 0 | ||
Total Liabilities | 0 | 0 | ||
Assets and liabilities measured at fair value on a recurring basis | Level 2 | ||||
Assets: | ||||
Foreign exchange currency contracts, Assets | 51,000 | 9,868,000 | ||
Interest rate swap | 1,460,000 | 876,000 | ||
Total Assets | 1,511,000 | 10,744,000 | ||
Liabilities: | ||||
Foreign exchange currency contracts, Liabilities | 18,089,000 | 1,424,000 | ||
Deferred compensation obligations | 13,476,000 | 11,184,000 | ||
Total Liabilities | 31,565,000 | 12,608,000 | ||
Assets and liabilities measured at fair value on a recurring basis | Level 3 | ||||
Assets: | ||||
Foreign exchange currency contracts, Assets | 0 | 0 | ||
Interest rate swap | 0 | 0 | ||
Total Assets | 0 | 0 | ||
Liabilities: | ||||
Foreign exchange currency contracts, Liabilities | 0 | 0 | ||
Deferred compensation obligations | 0 | 0 | ||
Total Liabilities | $ 0 | $ 0 |
Derivative Financial Instrume91
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Feb. 03, 2018 | Jan. 28, 2017 |
ASSETS: | ||
Derivatives, assets | $ 1,511 | $ 10,744 |
LIABILITIES: | ||
Derivatives, liabilities | 18,089 | 1,424 |
Derivatives designated as hedging instruments | Cash flow hedges | ||
ASSETS: | ||
Derivatives, assets | 1,501 | 6,948 |
Derivatives designated as hedging instruments | Foreign exchange currency contracts | Other current assets/Other assets | Cash flow hedges | ||
ASSETS: | ||
Derivatives, assets | 41 | 6,072 |
Derivatives designated as hedging instruments | Foreign exchange currency contracts | Accrued expenses/Other long-term liabilities | Cash flow hedges | ||
LIABILITIES: | ||
Derivatives, liabilities | 13,789 | 1,250 |
Derivatives designated as hedging instruments | Interest rate swap | Other assets | Cash flow hedges | ||
ASSETS: | ||
Derivatives, assets | 1,460 | 876 |
Derivatives not designated as hedging instruments | Foreign exchange currency contracts | Other current assets/Other assets | ||
ASSETS: | ||
Derivatives, assets | 10 | 3,796 |
Derivatives not designated as hedging instruments | Foreign exchange currency contracts | Accrued expenses | ||
LIABILITIES: | ||
Derivatives, liabilities | $ 4,300 | $ 174 |
Derivative Financial Instrume92
Derivative Financial Instruments (Details 2) - USD ($) | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Foreign exchange currency contracts designated as cash flow hedges | |||
Net unrealized gain (loss) in accumulated other comprehensive income (loss) related to cash flow hedges | $ (14,369,000) | $ 5,400,000 | $ 7,252,000 |
Foreign exchange currency cash flow hedge unrealized loss to be recognized in cost of product sales or other income over the following 12 months | (10,000,000) | ||
Interest rate swap cash flow hedge unrealized gain to be recognized in interest expense after the following 12 months | 1,100,000 | ||
Foreign exchange currency contracts | |||
Foreign exchange currency contracts designated as cash flow hedges | |||
Net unrealized gain (loss) in accumulated other comprehensive income (loss) related to cash flow hedges | (15,500,000) | ||
Interest rate swap | |||
Foreign exchange currency contracts designated as cash flow hedges | |||
Net unrealized gain (loss) in accumulated other comprehensive income (loss) related to cash flow hedges | $ 1,100,000 | ||
Derivatives designated as hedging instruments | Europe | Cash flow hedges | |||
Foreign exchange currency contracts designated as cash flow hedges | |||
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 17 months | ||
Derivatives designated as hedging instruments | Canada | Cash flow hedges | |||
Foreign exchange currency contracts designated as cash flow hedges | |||
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 17 months | ||
Derivatives designated as hedging instruments | Foreign exchange currency contracts | Europe | Cash flow hedges | |||
Foreign exchange currency contracts designated as cash flow hedges | |||
U.S. dollar forward contracts purchased, total notional amount | $ 147,600,000 | ||
Notional amount of derivative outstanding | 145,800,000 | 104,200,000 | |
Derivatives designated as hedging instruments | Foreign exchange currency contracts | Canada | Cash flow hedges | |||
Foreign exchange currency contracts designated as cash flow hedges | |||
U.S. dollar forward contracts purchased, total notional amount | 25,700,000 | ||
Notional amount of derivative outstanding | $ 38,700,000 | 66,900,000 | |
Derivatives designated as hedging instruments | Interest rate swap | Cash flow hedges | |||
Foreign exchange currency contracts designated as cash flow hedges | |||
U.S. dollar forward contracts purchased, total notional amount | 21,500,000 | ||
Notional amount of derivative outstanding | $ 21,500,000 | ||
Fixed rate of interest rate swap designated as a cash flow hedge (as a percent) | 3.06% |
Derivative Financial Instrume93
Derivative Financial Instruments (Details 3) - USD ($) | 12 Months Ended | |||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | ||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings | ||||
Amount of ineffectiveness recognized in net earnings (loss) on interest rate swap | $ 0 | $ 0 | ||
Net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | ||||
Beginning balance gain | 5,400,000 | 7,252,000 | ||
Net gains (losses) from changes in cash flow hedges | (20,408,000) | 1,059,000 | ||
Net (gains) losses reclassified to earnings (loss) | 414,000 | (2,911,000) | ||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [1] | (1,210,000) | ||
Ending balance gain (loss) | (14,369,000) | 5,400,000 | $ 7,252,000 | |
Foreign exchange currency contracts | ||||
Net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | ||||
Ending balance gain (loss) | (15,500,000) | |||
Foreign exchange currency contracts | Cash flow hedges | Derivatives designated as hedging instruments | ||||
Net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | ||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [2] | 0 | ||
Interest rate swap | ||||
Net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | ||||
Ending balance gain (loss) | 1,100,000 | |||
Interest rate swap | Cash flow hedges | Derivatives designated as hedging instruments | ||||
Net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | ||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [2] | (225,000) | ||
Interest rate swap | Cash flow hedges | Derivatives designated as hedging instruments | Accounting Standards Update 2018-02 | ||||
Net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | ||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | (225,000) | |||
Cost of product sales | ||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings | ||||
Gain recognized in OCI on foreign exchange currency contracts | (22,497,000) | 0 | 9,301,000 | |
Gain (loss) reclassified from accumulated OCI into earnings on foreign exchange currency contracts | [3] | 14,000 | 3,518,000 | 8,314,000 |
Other income/expense | ||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings | ||||
Gain recognized in OCI on foreign exchange currency contracts | (1,163,000) | 227,000 | 500,000 | |
Gain (loss) reclassified from accumulated OCI into earnings on foreign exchange currency contracts | [3] | (583,000) | 301,000 | 833,000 |
Interest expense | ||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings | ||||
Gain recognized in OCI on interest rate swap | 272,000 | 660,000 | ||
Loss reclassified from accumulated OCI into earnings on interest rate swap | [3] | (87,000) | (216,000) | |
Interest income/expense | ||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings | ||||
Amount of ineffectiveness recognized in net earnings on foreign exchange currency contracts | 2,700,000 | 900,000 | $ 100,000 | |
Retained Earnings | Accounting Standards Update 2018-02 | ||||
Net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | ||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | 1,210,000 | |||
Accumulated Other Comprehensive Loss | Cash flow hedges | Derivatives designated as hedging instruments | ||||
Net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | ||||
Cumulative adjustment reclassified to retained earnings from adoption of new accounting guidance | [4] | $ 225,000 | $ 0 | |
[1] | During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017. As a result, the Company recorded a cumulative adjustment to increase retained earnings by $1.2 million with a corresponding reduction to accumulated other comprehensive income (loss) related to the Company’s Supplemental Executive Retirement Plan and its interest rate swap designated as a cash flow hedge based in the U.S. | |||
[2] | During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017. As a result, the Company recorded a cumulative adjustment to reduce retained earnings by $0.2 million with a corresponding increase to accumulated other comprehensive income (loss) related to the Company’s interest rate swap designated as a cash flow hedge. | |||
[3] | The Company recognized gains of $2.7 million, $0.9 million and $0.1 million resulting from the ineffective portion related to foreign exchange currency contracts in interest income during fiscal 2018, fiscal 2017 and fiscal 2016, respectively. There was no ineffectiveness recognized related to the interest rate swap during fiscal 2018 and fiscal 2017. | |||
[4] | During the fourth quarter of fiscal 2018, the Company early adopted authoritative guidance which addresses certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from the Tax Reform enacted in December 2017. As a result, the Company recorded a cumulative adjustment to reduce retained earnings by $0.2 million with a corresponding increase to accumulated other comprehensive income (loss) related to the Company’s interest rate swap designated as a cash flow hedge. |
Derivative Financial Instrume94
Derivative Financial Instruments (Details 4) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Derivatives not designated as hedging instruments | Euro | |||
Derivative instruments not designated as hedging instruments | |||
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 12 months | ||
Derivatives not designated as hedging instruments | Canadian dollar | |||
Derivative instruments not designated as hedging instruments | |||
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 11 months | ||
Foreign exchange currency contracts | Other income/expense | |||
Derivative instruments not designated as hedging instruments | |||
Gain (loss) on derivatives not designated as hedging instruments recognized in earnings (loss) before taxes | $ (10,511) | $ 2,427 | $ 4,346 |
Foreign exchange currency contracts | Derivatives not designated as hedging instruments | Euro | |||
Derivative instruments not designated as hedging instruments | |||
Notional amount of derivative outstanding | 68,200 | 81,400 | |
Foreign exchange currency contracts | Derivatives not designated as hedging instruments | Canadian dollar | |||
Derivative instruments not designated as hedging instruments | |||
Notional amount of derivative outstanding | 17,600 | 13,900 | |
Interest rate swap | Other income/expense | |||
Derivative instruments not designated as hedging instruments | |||
Gain (loss) on derivatives not designated as hedging instruments recognized in earnings (loss) before taxes | $ 0 | $ 38 | $ 179 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) | 12 Months Ended | |||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | Jun. 26, 2012 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Shares repurchased, aggregate cost | $ 56,159,000 | $ 3,532,000 | $ 44,053,000 | |
Share repurchases settled after year end | $ 6,033,000 | $ 0 | ||
Share Repurchase Program | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Value of common stock authorized to be repurchased | $ 500,000,000 | |||
Number of common stock repurchased (in shares) | 3,866,387 | 289,968 | 2,000,000 | |
Shares repurchased, aggregate cost | $ 56,100,000 | $ 3,500,000 | $ 44,000,000 | |
Share repurchases settled after year end | 6,033,000 | |||
Value of common stock remaining to be repurchased | $ 392,200,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Mar. 21, 2018 | Mar. 29, 2018 | Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 |
Share repurchases | |||||
Shares repurchased, aggregate cost | $ 56,159 | $ 3,532 | $ 44,053 | ||
Dividends | |||||
Cash dividend announced on common stock (in dollars per share) | $ 0.9 | $ 0.9 | $ 0.90 | ||
Subsequent events | |||||
Share repurchases | |||||
Number of common stock repurchased (in shares) | 1.1 | ||||
Shares repurchased, aggregate cost | $ 17,600 | ||||
Dividends | |||||
Cash dividend announced on common stock (in dollars per share) | $ 0.225 | ||||
Payment date of cash dividend | Apr. 20, 2018 | ||||
Record date of cash dividend | Apr. 4, 2018 |
SCHEDULE II VALUATION AND QUA97
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2018 | Jan. 28, 2017 | Jan. 30, 2016 | |
Reconciliation of valuation and qualifying accounts | |||
Balance at Beginning of Period | $ 37,645 | $ 35,994 | $ 34,033 |
Costs Charged to Expenses | 135,525 | 114,327 | 96,472 |
Deductions and Write-offs | (121,034) | (112,676) | (94,511) |
Balance at End of Period | 52,136 | 37,645 | 35,994 |
Allowance for doubtful accounts | |||
Reconciliation of valuation and qualifying accounts | |||
Balance at Beginning of Period | 13,313 | 12,874 | 13,504 |
Costs Charged to Expenses | 9,447 | 7,284 | 5,767 |
Deductions and Write-offs | (9,420) | (6,845) | (6,397) |
Balance at End of Period | 13,340 | 13,313 | 12,874 |
Allowance for markdowns | |||
Reconciliation of valuation and qualifying accounts | |||
Balance at Beginning of Period | 2,944 | 2,196 | 2,549 |
Costs Charged to Expenses | 42,485 | 32,679 | 21,988 |
Deductions and Write-offs | (34,652) | (31,931) | (22,341) |
Balance at End of Period | 10,777 | 2,944 | 2,196 |
Allowance for royalties receivable | |||
Reconciliation of valuation and qualifying accounts | |||
Balance at Beginning of Period | 497 | 411 | 253 |
Costs Charged to Expenses | 0 | 86 | 240 |
Deductions and Write-offs | (359) | 0 | (82) |
Balance at End of Period | 138 | 497 | 411 |
Allowance for sales returns | |||
Reconciliation of valuation and qualifying accounts | |||
Balance at Beginning of Period | 20,891 | 20,513 | 17,727 |
Costs Charged to Expenses | 83,593 | 74,278 | 68,477 |
Deductions and Write-offs | (76,603) | (73,900) | (65,691) |
Balance at End of Period | $ 27,881 | $ 20,891 | $ 20,513 |