Cover Page
Cover Page - shares | 6 Months Ended | |
Aug. 03, 2019 | Sep. 04, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Aug. 3, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-11893 | |
Entity Registrant Name | GUESS INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-3679695 | |
Entity Address, Address Line One | 1444 South Alameda Street | |
Entity Address, City or Town | Los Angeles, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90021 | |
City Area Code | 213 | |
Local Phone Number | 765-3100 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | GES | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 65,612,359 | |
Entity Central Index Key | 0000912463 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-01 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Aug. 03, 2019 | Feb. 02, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 131,060 | $ 210,460 |
Accounts receivable, net | 292,985 | 321,995 |
Inventories | 484,236 | 468,897 |
Other current assets | 59,226 | 87,343 |
Total current assets | 967,507 | 1,088,695 |
Property and equipment, net | 302,906 | 315,558 |
Goodwill | 36,279 | 37,072 |
Other intangible assets, net | 5,750 | 6,934 |
Deferred tax assets | 57,374 | 57,224 |
Restricted cash | 519 | 535 |
Operating lease right-of-use assets | 900,062 | 0 |
Other assets | 131,807 | 143,187 |
Total assets | 2,402,204 | 1,649,205 |
Current liabilities: | ||
Current portion of borrowings and finance lease obligations | 32,554 | 4,315 |
Accounts payable | 246,492 | 286,657 |
Accrued expenses and other current liabilities | 180,394 | 252,392 |
Current portion of operating lease liabilities | 213,912 | 0 |
Total current liabilities | 673,352 | 543,364 |
Convertible senior notes, net | 242,055 | 0 |
Deferred rent and lease incentives | 0 | 84,893 |
Long-term operating lease liabilities | 747,791 | 0 |
Other long-term liabilities | 125,915 | 127,438 |
Total liabilities | 1,824,625 | 790,707 |
Redeemable noncontrolling interests | 4,784 | 4,853 |
Commitments and contingencies (Note 13) | ||
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 143,000,001 and 142,707,300 shares, outstanding 71,007,232 and 81,379,660 shares, as of August 3, 2019 and February 2, 2019, respectively | 710 | 814 |
Paid-in capital | 484,986 | 523,331 |
Retained earnings | 1,053,604 | 1,077,747 |
Accumulated other comprehensive loss | (137,202) | (126,179) |
Treasury stock, 71,992,769 and 61,327,640 shares as of August 3, 2019 and February 2, 2019, respectively | (847,226) | (638,486) |
Guess, Inc. stockholders’ equity | 554,872 | 837,227 |
Nonredeemable noncontrolling interests | 17,923 | 16,418 |
Total stockholders’ equity | 572,795 | 853,645 |
Total liabilities and stockholders' equity | 2,402,204 | 1,649,205 |
Long-term debt and finance lease liabilities, excluding convertible senior notes | ||
Current liabilities: | ||
Current portion of borrowings and finance lease obligations | 32,554 | 4,315 |
Long-term debt and finance lease obligations, net | $ 35,512 | $ 35,012 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Aug. 03, 2019 | Feb. 02, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 143,000,001 | 142,707,300 |
Common stock, outstanding (in shares) | 71,007,232 | 81,379,660 |
Treasury stock (in shares) | 71,992,769 | 61,327,640 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Net revenue | $ 683,220 | $ 645,871 | $ 1,219,911 | $ 1,167,160 |
Cost of product sales | 417,554 | 406,440 | 772,296 | 753,791 |
Gross profit | 265,666 | 239,431 | 447,615 | 413,369 |
Selling, general and administrative expenses | 218,175 | 204,569 | 422,820 | 402,788 |
Asset impairment charges | 1,504 | 2,981 | 3,279 | 3,740 |
Net gains on lease terminations | 0 | 0 | 0 | (152) |
Earnings from operations | 45,987 | 31,881 | 21,516 | 6,993 |
Other income (expense): | ||||
Interest expense | (4,951) | (863) | (6,210) | (1,602) |
Interest income | 313 | 1,132 | 674 | 2,109 |
Other income (expense), net | (6,355) | 1,360 | (4,284) | (1,254) |
Total other income (expense) | (10,993) | 1,629 | (9,820) | (747) |
Earnings before income tax expense | 34,994 | 33,510 | 11,696 | 6,246 |
Income tax expense | 8,818 | 7,776 | 6,101 | 1,499 |
Net earnings | 26,176 | 25,734 | 5,595 | 4,747 |
Net earnings attributable to noncontrolling interests | 854 | 204 | 1,647 | 438 |
Net earnings attributable to Guess, Inc. | $ 25,322 | $ 25,530 | $ 3,948 | $ 4,309 |
Net earnings per common share attributable to common stockholders (Note 3): | ||||
Basic (in dollars per share) | $ 0.36 | $ 0.32 | $ 0.05 | $ 0.05 |
Diluted (in dollars per share) | $ 0.35 | $ 0.31 | $ 0.05 | $ 0.05 |
Weighted average common shares outstanding attributable to common stockholders (Note 3): | ||||
Basic (in shares) | 70,508 | 80,110 | 75,216 | 80,006 |
Diluted (in shares) | 71,356 | 81,550 | 76,155 | 81,248 |
Product sales | ||||
Net revenue | $ 664,678 | $ 626,162 | $ 1,182,551 | $ 1,127,667 |
Net royalties | ||||
Net revenue | $ 18,542 | $ 19,709 | $ 37,360 | $ 39,493 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 26,176 | $ 25,734 | $ 5,595 | $ 4,747 |
Foreign currency translation adjustment | ||||
Losses arising during the period | (5,293) | (22,953) | (17,360) | (47,525) |
Derivative financial instruments designated as cash flow hedges | ||||
Gains arising during the period | 2,286 | 6,722 | ||
Gains arising during the period | 4,675 | 12,167 | ||
Less income tax effect | (308) | (880) | ||
Less income tax effect | (564) | (1,588) | ||
Reclassification to net earnings for (gains) losses realized | (1,801) | (2,077) | ||
Reclassification to net earnings for (gains) losses realized | 2,311 | 4,190 | ||
Less income tax effect | 229 | 324 | ||
Less income tax effect | (279) | (542) | ||
Defined benefit plans | ||||
Foreign currency and other adjustments | (167) | (40) | (60) | 303 |
Less income tax effect | 16 | 6 | 5 | (26) |
Net actuarial loss amortization | 111 | 151 | 222 | 303 |
Prior service credit amortization | (9) | (7) | (19) | (14) |
Less income tax effect | (12) | (19) | (23) | (39) |
Total comprehensive income (loss) | 21,228 | 9,015 | (7,551) | (28,024) |
Less comprehensive income (loss) attributable to noncontrolling interests: | ||||
Net earnings | 854 | 204 | 1,647 | 438 |
Foreign currency translation adjustment | (452) | 511 | (142) | 187 |
Amounts attributable to noncontrolling interests | 402 | 715 | 1,505 | 625 |
Comprehensive income (loss) attributable to Guess, Inc. | $ 20,826 | $ 8,300 | $ (9,056) | $ (28,649) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Aug. 03, 2019 | May 04, 2019 | Aug. 04, 2018 | May 05, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | Feb. 02, 2019 | |
Cash flows from operating activities: | |||||||
Net earnings | $ 26,176 | $ (20,581) | $ 25,734 | $ (20,987) | $ 5,595 | $ 4,747 | |
Adjustments to reconcile net earnings to net cash used in operating activities: | |||||||
Depreciation and amortization of property and equipment | 35,665 | 31,195 | |||||
Amortization of other long-term and intangible assets | 1,560 | 1,850 | |||||
Amortization of debt discount | 2,662 | 0 | |||||
Amortization of debt issuance costs | 276 | 0 | |||||
Share-based compensation expense | 9,454 | 7,989 | |||||
Unrealized forward contract gains | (34) | (2,365) | |||||
Net loss on disposition of property and equipment and long-term assets | 3,753 | 4,125 | |||||
Other items, net | 5,606 | 10,467 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 24,492 | (967) | |||||
Inventories | (22,926) | (71,044) | |||||
Prepaid expenses and other assets | (1,596) | (20,971) | |||||
Operating lease assets and liabilities, net | 1,340 | 0 | |||||
Accounts payable and accrued expenses | (87,423) | 6,210 | |||||
Other long-term liabilities | (1,381) | 7,112 | |||||
Net cash used in operating activities | (22,957) | (21,652) | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (34,551) | (46,006) | |||||
Changes in other assets | 521 | 0 | |||||
Acquisition of businesses, net of cash acquired | 0 | (6,321) | |||||
Net cash settlement of forward contracts | 162 | 685 | |||||
Purchases of investments | 0 | (1,581) | |||||
Net cash used in investing activities | (33,868) | (53,223) | |||||
Cash flows from financing activities: | |||||||
Proceeds from short-term borrowings | 90,136 | 0 | |||||
Repayments of short-term borrowings | (61,724) | 0 | |||||
Proceeds from issuance of convertible senior notes | 300,000 | 0 | |||||
Proceeds from issuance of warrants | 28,080 | 0 | |||||
Purchase of convertible note hedges | (60,990) | 0 | |||||
Convertible debt issuance costs | (5,068) | 0 | |||||
Purchase of equity forward contracts | (68,000) | 0 | |||||
Repayment of finance lease obligations and borrowings | (1,561) | (1,181) | |||||
Dividends paid | (26,901) | (36,625) | |||||
Issuance of common stock, net of tax withholdings on vesting of stock awards | 43 | 4,634 | |||||
Purchase of treasury stock | (212,564) | (23,620) | |||||
Net cash used in financing activities | (18,549) | (56,792) | |||||
Effect of exchange rates on cash, cash equivalents and restricted cash | (4,042) | (16,581) | |||||
Net change in cash, cash equivalents and restricted cash | (79,416) | (148,248) | |||||
Cash, cash equivalents and restricted cash at the beginning of the year | $ 210,995 | $ 367,682 | 210,995 | 367,682 | $ 367,682 | ||
Cash, cash equivalents and restricted cash at the end of the period | $ 131,579 | 219,434 | 131,579 | 219,434 | $ 210,995 | ||
Supplemental cash flow data: | |||||||
Interest paid | 1,535 | 683 | |||||
Income taxes paid, net of refunds | 4,201 | 21,436 | |||||
Non-cash investing and financing activity: | |||||||
Assets acquired under finance lease obligations | 3,055 | 1,164 | |||||
Noncontrolling interest capital distributions | $ 3,069 | 0 | 3,069 | ||||
Sale of retail locations | $ 5,088 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Statement - USD ($) $ in Thousands | Total | Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Nonredeemable Noncontrolling Interests |
Beginning balance (in shares) at Feb. 03, 2018 | 81,371,118 | 60,252,569 | |||||
Beginning balance at Feb. 03, 2018 | $ 933,475 | $ 813 | $ 498,249 | $ 1,132,173 | $ (93,062) | $ (621,354) | $ 16,656 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | (20,987) | (21,221) | 234 | ||||
Other comprehensive income, net of income tax | (16,052) | (15,728) | (324) | ||||
Issuance of common stock under stock compensation plans including tax effect (in shares) | 689,341 | ||||||
Issuance of common stock under stock compensation plans including tax effect | 3,890 | $ 8 | 3,882 | ||||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 15,313 | (15,313) | |||||
Issuance of stock under Employee Stock Purchase Plan | 230 | 71 | $ 159 | ||||
Share-based compensation | 3,958 | 3,949 | 9 | ||||
Dividends | (18,499) | (18,499) | |||||
Share repurchases (in shares) | (1,118,808) | 1,118,808 | |||||
Share repurchases | (17,587) | $ (11) | 11 | $ (17,587) | |||
Ending balance (in shares) at May. 05, 2018 | 80,956,964 | 61,356,064 | |||||
Ending balance at May. 05, 2018 | 874,257 | $ 810 | 506,162 | 1,098,291 | (108,790) | $ (638,782) | 16,566 |
Beginning balance (in shares) at Feb. 03, 2018 | 81,371,118 | 60,252,569 | |||||
Beginning balance at Feb. 03, 2018 | 933,475 | $ 813 | 498,249 | 1,132,173 | (93,062) | $ (621,354) | 16,656 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | 4,747 | ||||||
Noncontrolling interest capital distribution | (3,069) | ||||||
Ending balance (in shares) at Aug. 04, 2018 | 81,030,202 | 61,342,834 | |||||
Ending balance at Aug. 04, 2018 | 866,081 | $ 810 | 510,550 | 1,105,173 | (126,020) | $ (638,644) | 14,212 |
Beginning balance (in shares) at May. 05, 2018 | 80,956,964 | 61,356,064 | |||||
Beginning balance at May. 05, 2018 | 874,257 | $ 810 | 506,162 | 1,098,291 | (108,790) | $ (638,782) | 16,566 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | 25,734 | 25,530 | 204 | ||||
Other comprehensive income, net of income tax | (16,719) | (17,230) | 511 | ||||
Issuance of common stock under stock compensation plans including tax effect (in shares) | 60,008 | ||||||
Issuance of common stock under stock compensation plans including tax effect | 279 | 279 | |||||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 13,230 | (13,230) | |||||
Issuance of stock under Employee Stock Purchase Plan | 235 | 97 | $ 138 | ||||
Share-based compensation | 4,031 | 4,012 | 19 | ||||
Dividends | (18,667) | (18,667) | |||||
Noncontrolling interest capital distribution | (3,069) | (3,069) | |||||
Ending balance (in shares) at Aug. 04, 2018 | 81,030,202 | 61,342,834 | |||||
Ending balance at Aug. 04, 2018 | $ 866,081 | $ 810 | 510,550 | 1,105,173 | (126,020) | $ (638,644) | 14,212 |
Beginning balance (in shares) at Feb. 02, 2019 | 81,379,660 | 81,379,660 | 61,327,640 | ||||
Beginning balance at Feb. 02, 2019 | $ 853,645 | $ 814 | 523,331 | 1,077,747 | (126,179) | $ (638,486) | 16,418 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | (20,581) | (21,374) | 793 | ||||
Other comprehensive income, net of income tax | (8,198) | (8,508) | 310 | ||||
Issuance of common stock under stock compensation plans including tax effect (in shares) | 545,881 | (211,221) | |||||
Issuance of common stock under stock compensation plans including tax effect | (812) | $ 5 | (3,042) | $ 2,225 | |||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 11,377 | (11,377) | |||||
Issuance of stock under Employee Stock Purchase Plan | 190 | $ 1 | 69 | $ 120 | |||
Share-based compensation | 4,468 | 4,440 | 28 | ||||
Dividends | (18,331) | (18,331) | |||||
Share repurchases (in shares) | (10,264,052) | 10,264,052 | |||||
Share repurchases | (201,564) | $ (103) | 103 | $ (201,564) | |||
Equity component value of convertible note issuance, net | 42,324 | 42,324 | |||||
Sale of common stock warrant | 28,080 | 28,080 | |||||
Purchase of convertible note hedge | (46,440) | (46,440) | |||||
Equity forward contract issuance | (68,000) | (68,000) | |||||
Ending balance (in shares) at May. 04, 2019 | 71,672,866 | 71,369,094 | |||||
Ending balance at May. 04, 2019 | $ 565,078 | $ 717 | 480,865 | 1,036,386 | (132,706) | $ (837,705) | 17,521 |
Beginning balance (in shares) at Feb. 02, 2019 | 81,379,660 | 81,379,660 | 61,327,640 | ||||
Beginning balance at Feb. 02, 2019 | $ 853,645 | $ 814 | 523,331 | 1,077,747 | (126,179) | $ (638,486) | 16,418 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | 5,595 | ||||||
Noncontrolling interest capital distribution | $ 0 | ||||||
Ending balance (in shares) at Aug. 03, 2019 | 71,007,232 | 71,007,232 | 71,992,769 | ||||
Ending balance at Aug. 03, 2019 | $ 572,795 | $ 710 | 484,986 | 1,053,604 | (137,202) | $ (847,226) | 17,923 |
Beginning balance (in shares) at May. 04, 2019 | 71,672,866 | 71,369,094 | |||||
Beginning balance at May. 04, 2019 | 565,078 | $ 717 | 480,865 | 1,036,386 | (132,706) | $ (837,705) | 17,521 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | 26,176 | 25,322 | 854 | ||||
Other comprehensive income, net of income tax | (4,948) | (4,496) | (452) | ||||
Issuance of common stock under stock compensation plans including tax effect (in shares) | 64,080 | (106,039) | |||||
Issuance of common stock under stock compensation plans including tax effect | 397 | (852) | $ 1,249 | ||||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 19,538 | (19,538) | |||||
Issuance of stock under Employee Stock Purchase Plan | 268 | 38 | $ 230 | ||||
Share-based compensation | 4,986 | 4,928 | 58 | ||||
Dividends | (8,162) | (8,162) | |||||
Share repurchases (in shares) | (749,252) | 749,252 | |||||
Share repurchases | $ (11,000) | $ (7) | 7 | $ (11,000) | |||
Ending balance (in shares) at Aug. 03, 2019 | 71,007,232 | 71,007,232 | 71,992,769 | ||||
Ending balance at Aug. 03, 2019 | $ 572,795 | $ 710 | $ 484,986 | $ 1,053,604 | $ (137,202) | $ (847,226) | $ 17,923 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||
Aug. 03, 2019 | May 04, 2019 | Aug. 04, 2018 | May 05, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Other comprehensive income, tax | $ (75) | $ (499) | $ (856) | $ (1,339) |
Basis of Presentation and New A
Basis of Presentation and New Accounting Guidance | 6 Months Ended |
Aug. 03, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and New Accounting Guidance | Basis of Presentation and New Accounting Guidance 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. Basis of Presentation In the opinion of management, the accompanying unaudited condensed consolidated financial statements of the Company contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the condensed consolidated balance sheets as of August 3, 2019 and February 2, 2019 , the condensed consolidated statements of income , comprehensive income (loss) and stockholders’ equity for the three and six months ended August 3, 2019 and August 4, 2018 and the condensed consolidated statements of cash flows for the six months ended August 3, 2019 and August 4, 2018 . The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, they have been condensed and do not include all of the information and footnotes required by GAAP for complete financial statements. The results of operations for the three and six months ended August 3, 2019 are not necessarily indicative of the results of operations to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended February 2, 2019 . The three and six months ended August 3, 2019 had the same number of days as the three and six months ended August 4, 2018 . All references herein to “fiscal 2020 ,” “fiscal 2019 ” and “fiscal 2018 ” represent the results of the 52 -week fiscal year ending February 1, 2020 , the 52 -week fiscal year ended February 2, 2019 and the 53 -week fiscal year ended February 3, 2018 , respectively. Reclassifications The Company has made certain reclassifications to prior period amounts to conform to the current period presentation within the accompanying notes to the condensed consolidated financial statements. Revenue Recognition The Company recognizes the majority of its revenue from its direct-to-consumer (brick-and-mortar retail stores and concessions as well as e-commerce) and wholesale distribution channels at a point in time when it satisfies a performance obligation and transfers control of the product to the respective customer. The Company also recognizes royalty revenue from its trademark license agreements. The Company’s trademark license agreements represent symbolic licenses that are dependent on the Company’s continued support over the term of the license agreement. The amount of revenue that is recognized from the licensing arrangements is based on sales-based royalty and advertising fund contributions as well as specific fixed payments, where applicable. The Company’s trademark license agreements customarily provide for a multi-year initial term ranging from three to ten years , and may contain options to renew prior to expiration for an additional multi-year period. 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 August 3, 2019 , the Company had $6.7 million and $12.6 million of deferred royalties related to these upfront payments included in accrued expenses and other long-term liabilities, respectively. This compares to $6.4 million and $15.5 million of deferred royalties related to these upfront payments included in accrued expenses and other long-term liabilities, respectively, at February 2, 2019 . During the three and six months ended August 3, 2019 , the Company recognized $3.1 million and $6.1 million in net royalties related to the amortization of the deferred royalties, respectively. During the three and six months ended August 4, 2018 , the Company recognized $3.6 million and $6.9 million in net royalties related to the amortization of the deferred royalties, respectively. Refer to Note 8 for further information on disaggregation of revenue by segment and country. Other Assets During fiscal 2019, the Company invested $8.3 million in a privately-held apparel company and holds a 30% minority interest. The Company’s ownership in this company is accounted for under the equity method of accounting. The Company recognized its proportionate share of net losses of $2.9 million in other income (expense) in its condensed consolidated statements of income during the three and six months ended August 3, 2019 . Sale of Australian Stores During the second quarter of fiscal 2020, the Company entered into a definitive agreement to sell its Australian retail locations to the Company’s wholesale distributor in the region for approximately AUD $7.3 million (US $5.1 million ), subject to certain adjustments, and recognized a loss on the sale of approximately AUD $1.1 million (US $0.8 million ). As per the terms of the agreement, the wholesale distributor entered into a promissory note with the Company to make periodic payments on the sale through August 2021. As of August 3, 2019 , the Company included AUD $2.0 million (US $1.4 million ) and AUD $5.3 million (US $3.7 million ) in accounts receivable, net and other assets, respectively, in its condensed consolidated balance sheet based on the timing of the payments. New Accounting Guidance Changes in Accounting Policies In February 2016, the FASB issued a comprehensive new lease standard which superseded previous lease guidance. The standard requires a lessee to recognize an asset related to the right to use the underlying asset and a liability that approximates the present value of the lease payments over the term of contracts that qualify as leases under the new guidance. The standard also requires expanded disclosures surrounding leases . The Company adopted this guidance as of February 3, 2019 using the modified retrospective approach and recorded a cumulative adjustment to increase retained earnings by approximately $0.3 million , net taxes, with no restatement of prior periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carry forward historical lease classification. As of the adoption date, the Company recorded operating lease right-of-use (“ROU”) assets and operating lease liabilities of approximately $1.0 billion . The standard did not materially impact the Company’s condensed consolidated statements of income or cash flows. Refer to Note 2 for the Company’s expanded disclosures on leases. 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 eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) . The guidance also reduced the overall complexity of the hedge accounting model, including broadening the scope of risks eligible to qualify for hedge accounting, easing documentation and effectiveness assessment requirements, modifying the treatment of components excluded from the assessment of hedge effectiveness and updating disclosure requirements. In October 2018, the FASB clarified the new hedge accounting guidance by allowing the Secured Overnight Financing Rate to be eligible as a U.S. benchmark interest rate for purposes of applying hedge accounting. The Company adopted this guidance as of February 3, 2019. The adoption of this guidance resulted in a decrease in retained earnings and a decrease in accumulated other comprehensive loss of approximately $2.0 million . Approximately $1.4 million of this gain will be recognized in cost of product sales during fiscal 2020, on a pre-tax basis. Recently Issued Accounting Guidance 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 was the Company’s first quarter of fiscal 2020. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements and 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 condensed consolidated financial statements or related disclosures. In August 2018, the FASB issued authoritative guidance to modify the disclosure requirements on fair value measurements. 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. The Company is currently evaluating the impact of the adoption of this standard on its related disclosures. In August 2018, the FASB issued authoritative guidance to modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This guidance is effective for fiscal years beginning after December 15, 2020, which will be the Company’s first quarter of fiscal 2022, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its related disclosures. In August 2018, the FASB issued authoritative guidance to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance provides criteria for determining which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The capitalized implementation costs are required to be expensed over the term of the hosting arrangement. The guidance also clarifies the presentation requirements for reporting such costs in the entity’s financial statements. 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. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements and related disclosures. |
Lease Accounting
Lease Accounting | 6 Months Ended |
Aug. 03, 2019 | |
Leases [Abstract] | |
Lease Accounting | Lease Accounting The Company primarily 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 January 2039 . The Company also leases some of its equipment as well as computer hardware and software under operating and finance lease agreements expiring on various dates through May 2027 . The Company determines whether an arrangement is a lease at inception of the agreement and reassesses that conclusion if the agreement is modified. The term of the Company’s leases represents the non-cancelable period of the lease, including any rent-free periods and any options to renew, extend or terminate the lease that the Company is reasonably certain to exercise. The Company determines the term of each lease at lease commencement and revisits that term in subsequent periods if a triggering event occurs which would require reassessment. Leases with an initial contractual term in excess of 12 months are accounted for as either an operating or finance lease based on certain criteria. Under this new guidance, leases the Company previously referred to as “capital leases” are now referred to as “finance leases.” In connection with the adoption of the new lease standard, the Company elected to apply the group of practical expedients which allows the Company to carry forward its identification of existing contracts that are or contain leases, its historical lease classification and its initial direct costs for existing leases. The Company has also elected to recognize leases with an initial term of 12 months or less on a straight-line basis without recognizing a ROU asset or operating lease liability. The Company’s lease agreements primarily provide for lease payments based on a minimum annual rental amount, a percentage of annual sales volume, periodic adjustments related to inflation or a combination of such lease payments. Certain retail store leases provide for rents based upon the minimum annual rental amount and a percentage of annual sales volume, generally ranging from 3% to 23% , when specific sales volumes are exceeded. The Company’s retail concession leases also provide for rents primarily based upon a percentage of annual sales volume which average approximately 35% of annual sales volume. Some of these leases require the Company to make periodic payments for insurance, property taxes, sales promotion and common area maintenance charges. The Company has elected the practical expedient to not separate non-lease components from lease components in the measurement of liabilities for its directly operated real estate leases. Lease liabilities are recognized at the present value of the fixed lease payments, reduced by landlord incentives using a discount rate based on similarly secured borrowings available to the Company. Lease ROU assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases. Variable lease payments are expensed as incurred and do not factor into the measurement of the applicable lease liability or lease ROU asset. Lease ROU assets are amortized over the life of the lease and tested for impairment in the same manner as long-lived assets used in operations. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. In addition to the amounts as disclosed below, the Company has estimated additional operating lease commitments of approximately $9.6 million for leases where the Company has not yet taken possession of the underlying asset as of August 3, 2019 . As such, the related operating lease ROU assets and operating lease liabilities have not been recognized in the Company’s condensed consolidated balance sheet as of August 3, 2019 . As of August 3, 2019 , the components of leases and lease costs are as follows (in thousands): Balance Sheet Location Aug 3, 2019 Assets Operating Operating lease right-of-use assets $ 900,062 Finance Property and equipment, net 17,402 Total lease assets $ 917,464 Liabilities Current: Operating Current portion of operating lease liabilities $ 213,912 Finance Current portion of borrowings and finance lease obligations 2,465 Noncurrent: Operating Long-term operating lease liabilities 747,791 Finance Long-term debt and finance lease obligations, net 15,618 Total lease liabilities $ 979,786 Income Statement Location Three Months Ended Six Months Operating lease costs 1 Cost of product sales $ 58,749 $ 117,565 Operating lease costs 1 Selling, general and administrative expenses 5,720 10,984 Finance lease costs Amortization of leased assets 2 Cost of product sales 44 87 Amortization of leased assets 2 Selling, general and administrative expenses 637 1,180 Interest on lease liabilities Interest expense 286 573 Variable lease costs 1 Cost of product sales 25,083 49,908 Variable lease costs 1 Selling, general and administrative expenses 628 1,455 Short-term lease costs 1 Selling, general and administrative expenses 183 395 Total lease costs $ 91,330 $ 182,147 ______________________________________________________________________ Notes: 1 Rental expense for all property and equipment operating leases during the three and six months ended August 4, 2018 aggregated $70.6 million and $142.8 million , respectively, including percentage rent of $15.5 million and $31.9 million , respectively. During the three and six months ended August 4, 2018 , the Company also recognized insurance, taxes, sales promotion and common area maintenance charges totaling $16.4 million and $31.3 million , respectively, related to its operating leases. 2 Amortization of leased assets related to finance leases are included in depreciation expense in the Company’s condensed consolidated statements of income. Maturities of the Company’s operating and finance lease liabilities as of August 3, 2019 are as follows (in thousands): Maturity of Lease Liabilities Operating Leases Finance Leases Total 2020 1 $ 131,202 $ 1,825 $ 133,027 2021 201,770 3,342 205,112 2022 189,492 3,646 193,138 2023 158,132 3,255 161,387 2024 132,342 3,092 135,434 After 2024 255,194 7,577 262,771 Total lease payments 1,068,132 22,737 1,090,869 Less: Interest 106,429 4,654 111,083 Present value of lease liabilities $ 961,703 $ 18,083 $ 979,786 ______________________________________________________________________ Notes: 1 Represents the maturity of lease liabilities for the remainder of fiscal 2020 and does not include payments made during the six months ended August 3, 2019 . Other supplemental information as of August 3, 2019 is as follows (dollars in thousands): Lease Term and Discount Rate Aug 3, 2019 Weighted-average remaining lease term (years) Operating leases 6.0 years Finance leases 6.8 years Weighted-average discount rate Operating leases 3.6% Finance leases 7.1% Supplemental Cash Flow Information Six Months Ended Aug 3, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 124,687 New operating ROU assets obtained in exchange for lease liabilities $ 99,951 |
Lease Accounting | Lease Accounting The Company primarily 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 January 2039 . The Company also leases some of its equipment as well as computer hardware and software under operating and finance lease agreements expiring on various dates through May 2027 . The Company determines whether an arrangement is a lease at inception of the agreement and reassesses that conclusion if the agreement is modified. The term of the Company’s leases represents the non-cancelable period of the lease, including any rent-free periods and any options to renew, extend or terminate the lease that the Company is reasonably certain to exercise. The Company determines the term of each lease at lease commencement and revisits that term in subsequent periods if a triggering event occurs which would require reassessment. Leases with an initial contractual term in excess of 12 months are accounted for as either an operating or finance lease based on certain criteria. Under this new guidance, leases the Company previously referred to as “capital leases” are now referred to as “finance leases.” In connection with the adoption of the new lease standard, the Company elected to apply the group of practical expedients which allows the Company to carry forward its identification of existing contracts that are or contain leases, its historical lease classification and its initial direct costs for existing leases. The Company has also elected to recognize leases with an initial term of 12 months or less on a straight-line basis without recognizing a ROU asset or operating lease liability. The Company’s lease agreements primarily provide for lease payments based on a minimum annual rental amount, a percentage of annual sales volume, periodic adjustments related to inflation or a combination of such lease payments. Certain retail store leases provide for rents based upon the minimum annual rental amount and a percentage of annual sales volume, generally ranging from 3% to 23% , when specific sales volumes are exceeded. The Company’s retail concession leases also provide for rents primarily based upon a percentage of annual sales volume which average approximately 35% of annual sales volume. Some of these leases require the Company to make periodic payments for insurance, property taxes, sales promotion and common area maintenance charges. The Company has elected the practical expedient to not separate non-lease components from lease components in the measurement of liabilities for its directly operated real estate leases. Lease liabilities are recognized at the present value of the fixed lease payments, reduced by landlord incentives using a discount rate based on similarly secured borrowings available to the Company. Lease ROU assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases. Variable lease payments are expensed as incurred and do not factor into the measurement of the applicable lease liability or lease ROU asset. Lease ROU assets are amortized over the life of the lease and tested for impairment in the same manner as long-lived assets used in operations. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. In addition to the amounts as disclosed below, the Company has estimated additional operating lease commitments of approximately $9.6 million for leases where the Company has not yet taken possession of the underlying asset as of August 3, 2019 . As such, the related operating lease ROU assets and operating lease liabilities have not been recognized in the Company’s condensed consolidated balance sheet as of August 3, 2019 . As of August 3, 2019 , the components of leases and lease costs are as follows (in thousands): Balance Sheet Location Aug 3, 2019 Assets Operating Operating lease right-of-use assets $ 900,062 Finance Property and equipment, net 17,402 Total lease assets $ 917,464 Liabilities Current: Operating Current portion of operating lease liabilities $ 213,912 Finance Current portion of borrowings and finance lease obligations 2,465 Noncurrent: Operating Long-term operating lease liabilities 747,791 Finance Long-term debt and finance lease obligations, net 15,618 Total lease liabilities $ 979,786 Income Statement Location Three Months Ended Six Months Operating lease costs 1 Cost of product sales $ 58,749 $ 117,565 Operating lease costs 1 Selling, general and administrative expenses 5,720 10,984 Finance lease costs Amortization of leased assets 2 Cost of product sales 44 87 Amortization of leased assets 2 Selling, general and administrative expenses 637 1,180 Interest on lease liabilities Interest expense 286 573 Variable lease costs 1 Cost of product sales 25,083 49,908 Variable lease costs 1 Selling, general and administrative expenses 628 1,455 Short-term lease costs 1 Selling, general and administrative expenses 183 395 Total lease costs $ 91,330 $ 182,147 ______________________________________________________________________ Notes: 1 Rental expense for all property and equipment operating leases during the three and six months ended August 4, 2018 aggregated $70.6 million and $142.8 million , respectively, including percentage rent of $15.5 million and $31.9 million , respectively. During the three and six months ended August 4, 2018 , the Company also recognized insurance, taxes, sales promotion and common area maintenance charges totaling $16.4 million and $31.3 million , respectively, related to its operating leases. 2 Amortization of leased assets related to finance leases are included in depreciation expense in the Company’s condensed consolidated statements of income. Maturities of the Company’s operating and finance lease liabilities as of August 3, 2019 are as follows (in thousands): Maturity of Lease Liabilities Operating Leases Finance Leases Total 2020 1 $ 131,202 $ 1,825 $ 133,027 2021 201,770 3,342 205,112 2022 189,492 3,646 193,138 2023 158,132 3,255 161,387 2024 132,342 3,092 135,434 After 2024 255,194 7,577 262,771 Total lease payments 1,068,132 22,737 1,090,869 Less: Interest 106,429 4,654 111,083 Present value of lease liabilities $ 961,703 $ 18,083 $ 979,786 ______________________________________________________________________ Notes: 1 Represents the maturity of lease liabilities for the remainder of fiscal 2020 and does not include payments made during the six months ended August 3, 2019 . Other supplemental information as of August 3, 2019 is as follows (dollars in thousands): Lease Term and Discount Rate Aug 3, 2019 Weighted-average remaining lease term (years) Operating leases 6.0 years Finance leases 6.8 years Weighted-average discount rate Operating leases 3.6% Finance leases 7.1% Supplemental Cash Flow Information Six Months Ended Aug 3, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 124,687 New operating ROU assets obtained in exchange for lease liabilities $ 99,951 |
Earnings per Share
Earnings per Share | 6 Months Ended |
Aug. 03, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings 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, and the dilutive impact of the Company’s convertible senior notes, related warrants and equity forward contract related to its accelerated share repurchase agreement, as applicable. The Company expects to settle the principal amount of its outstanding convertible senior notes in cash and any excess in shares. As a result, upon conversion of the convertible senior notes, only the amounts in excess of the principal amount are considered in diluted earnings per share under the treasury stock method, if applicable. In April 2019, the Company entered into an equity forward contract related to its accelerated share repurchase agreement. Based on the terms of the equity forward contract, the Company may be required to issue shares upon settlement if the Company’s stock price rises above a certain threshold during the agreement period. The Company has included the dilutive impact from any shares it may be obligated to issue in the computation of diluted earnings per share using the contingently issuable share guidance, as applicable. See Note 10 and Note 4 for more information regarding the Company’s convertible senior notes and its accelerated share repurchase agreement. In periods when there is a net loss, the potentially dilutive impact of common equivalent shares outstanding is not included in the computation of diluted net loss per share as the impact of the shares would be antidilutive. 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 was the end of the related contingency period, and the results would be dilutive under the treasury stock method. The computation of basic and diluted net earnings per common share attributable to common stockholders is as follows (in thousands, except per share data): Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Net earnings attribu table to Guess?, Inc. $ 25,322 $ 25,530 $ 3,948 $ 4,309 Less net earnings attributable to nonvested restricted stockholders 233 268 235 390 Net earnings attributable to common stockholders $ 25,089 $ 25,262 $ 3,713 $ 3,919 Weighted average common shares used in basic computations 70,508 80,110 75,216 80,006 Effect of dilutive securities: Stock options and restricted stock units 848 1,440 939 1,242 Weighted average common shares used in diluted computations 71,356 81,550 76,155 81,248 Net earnings per common share attributable to common stockholders: Basic $ 0.36 $ 0.32 $ 0.05 $ 0.05 Diluted $ 0.35 $ 0.31 $ 0.05 $ 0.05 For the three months ended August 3, 2019 and August 4, 2018 , equity awards granted for 3,258,910 and 1,385,422 , respectively, of the Company’s common shares and for the six months ended August 3, 2019 and August 4, 2018 , equity awards granted for 2,899,760 and 2,116,751 , 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 the three and six months ended August 3, 2019 , the Company also excluded 1,228,017 nonvested stock units which are 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 August 3, 2019 . For the three and six months ended August 4, 2018 , the Company excluded 1,361,550 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 August 4, 2018 . The conversion spread on the Company’s convertible senior notes will have a dilutive impact on diluted earnings per share when the average market price of the Company’s common stock for a given period exceeds the conversion price of $25.78 per share of common stock. For the three and six months ended August 3, 2019 , the convertible senior notes have been excluded from the computation of diluted earnings per share as the effect would be antidilutive since the conversion price of the convertible senior notes exceeded the average market price of the Company’s common stock. Warrants to purchase 11.6 million shares of the Company’s common shares at $46.88 per share were outstanding as of August 3, 2019 but were excluded from the computation of diluted earnings per share since the warrants’ strike price was greater than the average market price of the Company’s common stock during the period. There was no dilutive impact from the Company’s equity forward contact related to its accelerated share repurchase program as of August 3, 2019 . See Note 10 and Note 4 for more information regarding the Company’s convertible senior notes and its accelerated share repurchase agreement. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Aug. 03, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity 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 the six months ended August 3, 2019 , the Company repurchased 11,013,304 shares under the program at an aggregate cost of $212.5 million , which is inclusive of the shares repurchased under the accelerated share repurchase agreement (the “ASR Contract”) as described below . The Company repurchased 10,264,052 shares at an aggregate cost of $201.5 million during the three months ended May 4, 2019 and an additional 749,252 shares at an aggregate cost of $11.0 million during the three months ended August 3, 2019 . During the six months ended August 4, 2018 , the Company repurchased 1,118,808 shares under the program at an aggregate cost of $17.6 million . The shares were repurchased during the three months ended May 5, 2018. The Company also paid an additional $6.0 million for shares that were repurchased during the fourth quarter of fiscal 2018 but were settled during the first quarter of fiscal 2019. As of August 3, 2019 , the Company had remaining authority under the program to purchase $ 94.1 million of its common stock . On April 26, 2019, pursuant to existing stock repurchase authorizations, the Company entered into an ASR Contract with JPMorgan Chase Bank, National Association (in such capacity, the “ASR Counterparty”), to repurchase an aggregate of $170 million of the Company’s common stock. Under the ASR Contract, the Company made an initial payment of $170 million to the ASR Counterparty and received an initial delivery of approximately 5.2 million shares of common stock, which represented approximately $102 million (or 60% ) of the ASR Contract. The remaining balance of $68 million was classified as an equity forward contract and recorded in paid-in capital within shareholders’ equity as of August 3, 2019 . On September 4, 2019 (subsequent to the second quarter of fiscal 2020) , the Company received a final delivery of 5.4 million shares under its ASR Contract entered into in April 2019, which amount was determined based on the daily volume-weighted average price since the effective date of the ASR Contract, less the applicable contractual discount. When combined with the 5.2 million upfront shares received at the inception of the ASR in April 2019, the Company repurchased approximately 10.6 million of its shares under the ASR at an average repurchase price of $16.09 per share. All shares were repurchased in accordance with the Company’s publicly announced ASR program, which is now complete. The shares delivered under the ASR Contract reduced the Company’s outstanding shares, and going forward that will have the effect of reducing its weighted average number of common shares outstanding for purposes of calculating basic and diluted earnings per share. Dividends The following table sets forth the cash dividend declared per share for the three and six months ended August 3, 2019 and August 4, 2018 : Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Cash dividend declared per share $ 0.1125 $ 0.2250 $ 0.3375 $ 0.4500 During the first quarter of fiscal 2020, the Company announced that its Board of Directors reduced the future quarterly cash dividends that may be paid to holders of the Company’s common stock, when, as and if any such dividend is declared by the Company’s Board of Directors, from $0.225 per share to $0.1125 per share to redeploy capital and return incremental value to shareholders through share repurchases. Decisions on whether, when and in what amounts to continue making any future dividend distributions will remain at all times entirely at the discretion of the Company’s Board of Directors, which reserves the right to change or terminate the Company’s dividend practices at any time and for any reason without prior notice. The payment of cash dividends in the future will be based upon a number of business, legal and other considerations, including our cash flow from operations, capital expenditures, debt service and covenant requirements, cash paid for income taxes, earnings, share repurchases, economic conditions and U.S. and global liquidity. Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss), net of related income taxes, for the three and six months ended August 3, 2019 and August 4, 2018 are as follows (in thousands): Three Months Ended Aug 3, 2019 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Defined Benefit Plans Total Balance at May 4, 2019 $ (131,923 ) $ 8,663 $ (9,446 ) $ (132,706 ) Gains (losses) arising during the period (4,841 ) 1,978 (151 ) (3,014 ) Reclassification to net earnings for (gains) losses realized — (1,572 ) 90 (1,482 ) Net other comprehensive income (loss) (4,841 ) 406 (61 ) (4,496 ) Balance at August 3, 2019 $ (136,764 ) $ 9,069 $ (9,507 ) $ (137,202 ) Six Months Ended Aug 3, 2019 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Defined Benefit Plans Total Balance at February 2, 2019 $ (119,546 ) $ 2,999 $ (9,632 ) $ (126,179 ) Cumulative adjustment reclassified from retained earnings due to adoption of new accounting guidance 1 — 1,981 — 1,981 Gains (losses) arising during the period (17,218 ) 5,842 (55 ) (11,431 ) Reclassification to net earnings for (gains) losses realized — (1,753 ) 180 (1,573 ) Net other comprehensive income (loss) (17,218 ) 4,089 125 (13,004 ) Balance at August 3, 2019 $ (136,764 ) $ 9,069 $ (9,507 ) $ (137,202 ) ______________________________________________________________________ Notes: 1 During the first quarter of fiscal 2020, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) during the three and six months ended August 3, 2019 . Upon adoption of this guidance, the Company reclassified approximately $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting. Three Months Ended Aug 4, 2018 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Defined Benefit Plans Total Balance at May 5, 2018 $ (91,297 ) $ (6,285 ) $ (11,208 ) $ (108,790 ) Gains (losses) arising during the period (23,464 ) 4,111 (34 ) (19,387 ) Reclassification to net earnings for losses realized — 2,032 125 2,157 Net other comprehensive income (loss) (23,464 ) 6,143 91 (17,230 ) Balance at August 4, 2018 $ (114,761 ) $ (142 ) $ (11,117 ) $ (126,020 ) Six Months Ended Aug 4, 2018 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Defined Benefit Plans Total Balance at February 3, 2018 $ (67,049 ) $ (14,369 ) $ (11,644 ) $ (93,062 ) Gains (losses) arising during the period (47,712 ) 10,579 277 (36,856 ) Reclassification to net earnings for losses realized — 3,648 250 3,898 Net other comprehensive income (loss) (47,712 ) 14,227 527 (32,958 ) Balance at August 4, 2018 $ (114,761 ) $ (142 ) $ (11,117 ) $ (126,020 ) Details on reclassifications out of accumulated other comprehensive income (loss) to net earnings during the three and six months ended August 3, 2019 and August 4, 2018 are as follows (in thousands): Three Months Ended Six Months Ended Location of (Gain) Loss Reclassified from Accumulated OCI into Earnings Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Derivative financial instruments designated as cash flow hedges: Foreign exchange currency contracts $ (1,757 ) $ 2,342 $ (1,987 ) $ 4,028 Cost of product sales Foreign exchange currency contracts — — — 201 Other income (expense) Interest rate swap (44 ) (31 ) (90 ) (39 ) Interest expense Less income tax effect 229 (279 ) 324 (542 ) Income tax expense (1,572 ) 2,032 (1,753 ) 3,648 Defined benefit plans: Net actuarial loss amortization 111 151 222 303 Other income (expense) Prior service credit amortization (9 ) (7 ) (19 ) (14 ) Other income (expense) Less income tax effect (12 ) (19 ) (23 ) (39 ) Income tax expense 90 125 180 250 Total reclassifications during the period $ (1,482 ) $ 2,157 $ (1,573 ) $ 3,898 |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Aug. 03, 2019 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable is summarized as follows (in thousands): Aug 3, 2019 Feb 2, 2019 Trade $ 284,543 $ 314,651 Royalty 6,399 5,992 Other 10,968 9,892 301,910 330,535 Less allowances 8,925 8,540 $ 292,985 $ 321,995 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 the Americas and Asia, royalty receivables relating to its licensing operations, credit card and retail concession receivables related to its retail businesses and certain other receivables |
Inventories
Inventories | 6 Months Ended |
Aug. 03, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following (in thousands): Aug 3, 2019 Feb 2, 2019 Raw materials $ 2,669 $ 881 Work in progress 69 162 Finished goods 481,498 467,854 $ 484,236 $ 468,897 The above balances include an allowance to write down inventories to the lower of cost or net realizable value of $27.1 million and $30.9 million as of August 3, 2019 and February 2, 2019 , respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Aug. 03, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense for the interim periods was computed using the tax rate estimated to be applicable for the full fiscal year, adjusted for discrete items. The Company’s effective income tax rate was 52.2% for the six months ended August 3, 2019 , compared to 24.0% for the six months ended August 4, 2018 . The deterioration in the effective income tax rate during the six months ended August 3, 2019 was due primarily to the impact of discrete non-deductible expenses as compared to the same prior-year period and a shift in the distribution of earnings among the Company’s tax jurisdictions within the quarters of the current fiscal year . In December 2017, the U.S. government enacted the 2017 Tax Cuts and Jobs Act (“Tax Reform”), which significantly changed the U.S. corporate income tax laws, including lowering the U.S. federal corporate income tax rate from 35% to 21% and requiring a one-time mandatory transition tax on accumulated foreign earnings. The Tax Reform also established new tax laws that were 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. Any income tax payable related to the transition tax is due over an eight-year period beginning in calendar 2018 . Based on the Company’s interpretation of the Tax Reform, reasonable estimates were made to record provisional adjustments during the fourth quarter of fiscal 2018. During the third quarter of fiscal 2019, the Company completed the preparation of its U.S. federal tax return for fiscal 2018 and concluded, based on the additional information that had become available, that no transition tax was due with respect to the Tax Reform. As a result, during the third quarter of fiscal 2019, the Company reversed a portion of provisional amounts initially recorded during the three months ended February 3, 2018 and recorded a benefit of $19.6 million . On November 28, 2018, the U.S. Internal Revenue Service (“IRS”) announced a proposed regulation to revise the section of the underlying IRS code which gave rise to the Company’s change in the provisional calculation. As a result, during the fourth quarter of fiscal 2019, the Company determined that in the event such proposed legislation is passed in the future, the Company could have tax liabilities of approximately $25.8 million . Therefore, the Company accrued such amount in the fourth quarter of fiscal 2019. During the second quarter of fiscal 2020, the Company revised its tax liability estimation and related accrual to $23.2 million . The balance related to this transition tax included in other long-term liabilities was $23.2 million and $25.8 million as of August 3, 2019 and February 2, 2019 , respectively. From time-to-time, the Company is subject to routine income and other tax audits on various tax matters around the world in the ordinary course of business. As of August 3, 2019 , several tax audits were ongoing for various periods in multiple jurisdictions. These audits could conclude with an assessment of additional tax liability for the Company. These assessments could arise as the result of timing or permanent differences and could be material to the Company’s net income or future cash flows. In the event the Company disagrees with an assessment from a taxing authority, the Company may elect to appeal, litigate, pursue settlement or take other actions. The Company accrues an amount for its estimate of additional tax liability which the Company, more likely than not, will incur as a result of the ultimate resolution of tax audits (“uncertain tax positions”). The Company reviews and updates the estimates used in the accrual for uncertain tax positions, as appropriate, as more definitive information or interpretations become available from taxing authorities, upon completion of tax audits, upon receipt of assessments, upon expiration of statutes of limitation, or upon occurrence of other events. The Company had aggregate accruals for uncertain tax positions, including penalties and interest, of $40.1 million and $41.4 million as of August 3, 2019 and February 2, 2019 |
Segment Information
Segment Information | 6 Months Ended |
Aug. 03, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information 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 operating segment are separate operating segments based on region, which have been aggregated into the Asia reportable segment for disclosure purposes. Management evaluates segment performance based primarily on revenues and earnings (loss) from operations before corporate performance-based compensation costs, net gains (losses) on lease terminations, asset impairment charges, restructuring charges, and certain non-recurring 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 the Americas. 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 and certain non-recurring charges, if any. 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. Net revenue and earnings (loss) from operations are summarized as follows for the three and six months ended August 3, 2019 and August 4, 2018 (in thousands): Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Net revenue: Americas Retail $ 198,966 $ 197,125 $ 375,389 $ 368,465 Americas Wholesale 41,902 34,253 88,107 74,932 Europe 340,509 311,998 550,564 517,433 Asia 83,301 82,786 168,491 166,837 Licensing 18,542 19,709 37,360 39,493 Total net revenue $ 683,220 $ 645,871 $ 1,219,911 $ 1,167,160 Earnings (loss) from operations: Americas Retail $ 5,957 $ 5,582 $ 4,145 $ (98 ) Americas Wholesale 8,422 5,325 16,236 11,351 Europe 51,594 30,531 35,267 10,198 Asia (4,800 ) 1,634 (8,003 ) 5,699 Licensing 15,547 17,437 32,191 34,923 Total segment earnings from operations 76,720 60,509 79,836 62,073 Corporate overhead (29,229 ) (25,647 ) (55,041 ) (51,492 ) Asset impairment charges 1 (1,504 ) (2,981 ) (3,279 ) (3,740 ) Net gains on lease terminations 2 — — — 152 Total earnings from operations $ 45,987 $ 31,881 $ 21,516 $ 6,993 ______________________________________________________________________ Notes: 1 During each of the periods presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. Refer to Note 15 for more information regarding these asset impairment charges. 2 During the six months ended August 4, 2018 , the Company recorded net gains on lease terminations related primarily to the early termination of certain lease agreements in North America. The net gains on lease terminations were recorded during the three months ended May 5, 2018. 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): Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Net revenue: U.S. $ 176,557 $ 171,802 $ 340,928 $ 325,112 Italy 86,497 84,663 136,932 142,334 Canada 44,001 45,059 82,582 84,579 Spain 39,900 39,954 67,897 66,351 South Korea 32,898 35,624 66,815 73,256 Other foreign countries 284,825 249,060 487,397 436,035 Total product sales 664,678 626,162 1,182,551 1,127,667 Net royalties 18,542 19,709 37,360 39,493 Net revenue $ 683,220 $ 645,871 $ 1,219,911 $ 1,167,160 |
Borrowings and Finance Lease Ob
Borrowings and Finance Lease Obligations | 6 Months Ended |
Aug. 03, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings and Finance Lease Obligations | Borrowings and Finance Lease Obligations Borrowings and finance lease obligations are summarized as follows (in thousands): Aug 3, 2019 Feb 2, 2019 Mortgage debt, maturing monthly through January 2026 $ 19,384 $ 19,738 Finance lease obligations 18,083 16,702 Borrowings under credit facilities 27,770 — Other 2,829 2,887 68,066 39,327 Less current installments 32,554 4,315 Long-term debt and finance lease obligations $ 35,512 $ 35,012 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 August 3, 2019 , outstanding borrowings under the Mortgage Debt, net of debt issuance costs of $0.1 million , were $19.4 million . At February 2, 2019 , outstanding borrowings under the Mortgage Debt, net of debt issuance costs of $0.1 million , were $19.7 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, short-term investment balances and availability under borrowing arrangements 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 (liability) was approximately $(0.1) million and $1.0 million as of August 3, 2019 and February 2, 2019 , respectively. Finance Lease Obligations During fiscal 2018 , the Company began the relocation of its primary European distribution center to the Netherlands. As a result, the Company entered into a finance lease of $17.0 million for equipment used in the new facility. The finance lease primarily provides for monthly minimum lease payments through May 2027 with an effective interest rate of approximately 6% . As of August 3, 2019 and February 2, 2019 , the finance lease obligation was $13.6 million and $ 14.7 million , respectively. The Company also has smaller finance leases related primarily to computer hardware and software. During the six months ended August 3, 2019 , the Company entered into additional finance leases of approximately $3.1 million related primarily to computer hardware and software. As of August 3, 2019 and February 2, 2019 , these finance lease obligations totaled $4.5 million and $2.0 million , respectively. 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, and on April 22, 2019, the credit facility was amended to permit, among other things, the offering and sale of convertible senior notes and certain transactions related thereto (as amended, the “Credit Facility”). See Note 10 for more information regarding the Company’s convertible senior notes. 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 and inventory as of August 3, 2019 , the Company could have borrowed up to $134 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 August 3, 2019 , the Company had $ 2.3 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 committed and uncommitted borrowing agreements, primarily for working capital purposes, with various banks in Europe. Some of these agreements include certain equity-based financial covenants. As of August 3, 2019 , the Company had $27.8 million in outstanding borrowings , no outstanding documentary letters of credit and $126.5 million available for future borrowings under these agreements. The agreements are denominated primarily in euros and provide for annual interest rates ranging from 0.5% to 4.6% . In March 2019, the Company, through its China subsidiary, entered into a short-term uncommitted bank borrowing agreement, primarily for working capital purposes. The multicurrency borrowing agreement provides for borrowing up to $20.0 million . As of August 3, 2019 , there were no outstanding borrowings or outstanding letters of credit under this borrowing agreement. Other |
Convertible Senior Notes and Re
Convertible Senior Notes and Related Transactions | 6 Months Ended |
Aug. 03, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes and Related Transactions | Convertible Senior Notes and Related Transactions 2.00% Convertible Senior Notes due 2024 In April 2019, the Company issued $300 million principal amount of 2.00% convertible senior notes due 2024 (the “Notes”) in a private offering . In connection with the issuance of the Notes, the Company entered into an indenture (the “Indenture”) with respect to the Notes with U.S. Bank N.A., as trustee (the “Trustee”). The Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 2.00% payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2019. The Notes will mature on April 15, 2024 , unless earlier repurchased or converted in accordance with their terms. The Notes are convertible in certain circumstances into cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, at an initial conversion rate of 38.7879 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $25.78 per share, subject to adjustment upon the occurrence of certain events. Prior to November 15, 2023 , the Notes are convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the Notes. Following certain corporate events described in the Indenture that occur prior to the maturity date, the conversion rate will be increased for a holder who elects to convert its Notes in connection with such corporate event in certain circumstances. The Notes are not redeemable prior to maturity, and no sinking fund is provided for the Notes. If the Company undergoes a “fundamental change,” as defined in the Indenture, subject to certain conditions, holders of the Notes may require the Company to purchase for cash all or any portion of their Notes. The fundamental change purchase price will be 100% of the principal amount of the Notes to be purchased plus any accrued and unpaid interest up to but excluding the fundamental change purchase date. The Indenture contains certain other customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% in principal amount of the outstanding Notes may declare 100% of the principal of, and accrued and unpaid interest on, all the Notes to be due and payable. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability and equity components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Accordingly, in accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, which is recognized as a debt discount, represents the difference between the proceeds from the issuance of the Notes and the fair value of the liability component of the Notes. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) will be amortized to interest expense using an effective interest rate of 6.8% over the term of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. During the three and six months ended August 3, 2019 , the Company recorded $2.4 million and $2.7 million of interest expense related to the amortization of the debt discount, respectively. Debt issuance costs related to the Notes were comprised of discounts and commissions payable to the initial purchasers of $3.8 million and third-party offering costs of approximately $1.5 million . As of August 3, 2019 , approximately $0.2 million of the total $5.3 million in debt issuance costs was included in accrued expenses in the Company’s condensed consolidated balance sheet. In accounting for the debt issuance costs related to the issuance of the Notes, the Company allocated the total amount incurred to the liability and equity components based on their relative values. Debt issuance costs attributable to the liability component were recorded as a contra-liability and are presented net against the convertible senior notes balance on the Company’s condensed consolidated balance sheets. These costs are amortized to interest expense using the effective interest method over the term of the Notes. During the three and six months ended August 3, 2019 , the Company recorded $0.2 million related to the amortization of debt issuance costs. Debt issuance costs attributable to the equity component are netted with the equity component in stockholders’ equity. The Notes consist of the following components as of August 3, 2019 (in thousands): Liability component: Principal $ 300,000 Unamortized debt discount (53,913 ) Unamortized issuance costs (4,032 ) Net carrying amount $ 242,055 Equity component, net 1 $ 42,324 ______________________________________________________________________ Notes: 1 Included in paid-in capital within stockholders’ equity on the condensed consolidated balance sheets and is net of debt issuance costs and deferred taxes. As of August 3, 2019 , the fair value of the Notes was approximately $226.6 million . The fair value of the Notes is determined based on inputs that are observable in the market and have been classified as Level 2 in the fair value hierarchy . Convertible Bond Hedge and Warrant Transactions In connection with the offering of the Notes, the Company entered into convertible note hedge transactions whereby the Company has the option to purchase a total of approximately 11.6 million shares of its common stock at a price of approximately $25.78 per share, in each case subject to adjustment in certain circumstances. The total cost of the convertible note hedge transactions was $61.0 million . In addition, the Company sold warrants whereby the holders of the warrants have the option to purchase a total of approximately 11.6 million shares of the Company’s common stock at a price of $46.88 per share. The Company received $28.1 million in cash proceeds from the sale of these warrants. Taken together, the purchase of the convertible note hedges and sale of the warrants are intended to offset dilution from the conversion of the Notes by effectively increasing the overall conversion price from $25.78 per share to $46.88 per share. The warrant transaction may have a dilutive effect with respect to the Company’s common stock to the extent the market price per share of the Company’s common stock exceeds the strike price of the warrants. As these transactions meet certain accounting criteria, the convertible note hedges and warrants are recorded in stockholders’ equity, are not accounted for as derivatives and are not remeasured each reporting period. The Company recorded a net deferred tax liability of $13.3 million in connection with the debt discount associated with the Notes and recorded a deferred tax asset of $14.5 million in connection with the convertible note hedge transactions. The total deferred tax impact is included in noncurrent deferred tax assets on the Company’s condensed consolidated balance sheets. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Aug. 03, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation The following table summarizes the share-based compensation expense recognized under all of the Company’s stock plans during the three and six months ended August 3, 2019 and August 4, 2018 (in thousands): Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Stock options $ 697 $ 672 $ 1,287 $ 1,367 Stock awards/units 4,205 3,292 8,020 6,462 Employee Stock Purchase Plan 84 67 147 160 Total share-based compensation expense $ 4,986 $ 4,031 $ 9,454 $ 7,989 Unrecognized compensation cost related to nonvested stock options and nonvested stock awards/units totaled approximately $10.4 million and $23.8 million , respectively, as of August 3, 2019 . This cost is expected to be recognized over a weighted average period of 1.8 years. The weighted average grant date fair value of stock options granted was $5.41 and $5.89 during the six months ended August 3, 2019 and August 4, 2018 , respectively. Grants In connection with a new employment agreement entered into between the Company and Carlos Alberini (the “Alberini Employment Agreement”), who became the Company’s Chief Executive Officer on February 20, 2019, the Company granted Mr. Alberini 600,000 stock options and 250,000 nonvested stock units which are subject to the achievement of certain performance-based vesting conditions. Mr. Alberini was also granted 150,000 restricted stock units which are considered contingently returnable as a result of certain service conditions set forth in the Alberini Employment Agreement. On June 10, 2019 , the Company made a special grant of 1,077,700 stock options to certain of its employees. On June 20, 2019 , the Company granted select key management 205,339 nonvested stock units which are subject to certain performance-based vesting conditions. On June 25, 2018 , the Company granted select key management 619,578 nonvested stock units which are subject to certain performance-based vesting or market-based vesting conditions. Annual Grants On March 29, 2019 , the Company made an annual grant of 5,100 stock options and 280,700 nonvested stock awards/units to its employees. On March 30, 2018 , the Company made an annual grant of 431,371 stock options and 490,528 nonvested stock awards/units to its employees. Performance-Based Awards 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 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. The following table summarizes the activity for nonvested performance-based units during the six months ended August 3, 2019 : Number of Units Weighted Average Grant Date Fair Value Nonvested at February 2, 2019 1,371,230 $ 16.44 Granted 455,339 18.33 Vested 103,369 20.70 Forfeited 334,526 18.01 Nonvested at August 3, 2019 1,388,674 $ 16.37 Market-Based Awards 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. Vesting is also subject to continued service requirements through the vesting date. The following table summarizes the activity for nonvested market-based units during the six months ended August 3, 2019 : Number of Units Weighted Average Grant Date Fair Value Nonvested at February 2, 2019 518,409 $ 14.28 Granted 1 17,557 15.20 Vested 1 158,014 15.20 Forfeited 89,750 15.58 Nonvested at August 3, 2019 288,202 $ 13.43 ______________________________________________________________________ Notes: 1 As a result of the achievement of certain market-based vesting conditions, there were 17,557 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Aug. 03, 2019 | |
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 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 August 3, 2019 with expiration or option exercise dates ranging from calendar years 2020 to 2021 . Aggregate rent, common area maintenance charges and property tax expense recorded under these four related party leases were approximately $ 2.6 million and $2.5 million for the six months ended August 3, 2019 and August 4, 2018 , respectively. The Company believes that the terms of the related party leases have not been significantly affected by the fact that the Company and the lessors are related. Aircraft Arrangements The Company periodically charters aircraft owned by entities affiliated with the Marciano Trusts (the “Aircraft Entities”), through informal arrangements with the Aircraft Entities and independent third-party management companies contracted by the Aircraft Entities to manage their aircraft. There were no fees paid under these arrangements for the six months ended August 3, 2019 . The total fees paid under these arrangements for the six months ended August 4, 2018 were approximately $ 0.8 million . These related party disclosures should be read in conjunction with the disclosure concerning related party transactions in the Company’s Annual Report on Form 10-K for the year ended February 2, 2019 . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 03, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Investment Commitments As of August 3, 2019 , the Company had an unfunded commitment to invest €3.6 million ( $4.0 million ) in a private equity fund. Refer to Note 15 for further information. Legal and Other Proceedings The Company is involved in legal proceedings, arising both in the ordinary course of business and otherwise, including the proceedings described below as well as various other claims and other matters incidental to the Company’s business. Unless otherwise stated, the resolution of any particular proceeding is not currently expected to have a material adverse impact on the Company’s financial position or results of operations. Even if such an impact could be material, we may not be able to estimate the reasonably possible loss or range of loss until developments in the proceedings have provided sufficient information to support an assessment . The Company has received customs tax assessment notices from the Italian Customs Agency (“ICA”) regarding its customs tax audit of one of the Company’s European subsidiaries for the period from July 2010 through December 2012 . Such assessments totaled € 9.8 million ($ 10.9 million ), including potential penalties and interest. The Company strongly disagreed with the ICA’s positions and therefore filed appeals with the Milan First Degree Tax Court (“MFDTC”). Those appeals were split into a number of different cases that were then heard by different sections of the MFDTC. The MFDTC ruled in favor of the Company on all of these appeals. The ICA subsequently appealed €9.7 million ( $10.8 million ) of these favorable MFDTC judgments with the Appeals Court. To date, €8.5 million ( $9.4 million ) have been decided in favor of the Company and €1.2 million ( $1.4 million ) have been decided in favor of the ICA. The Company believes that the unfavorable Appeals Court ruling is incorrect and inconsistent with the prior rulings on similar matters by both the MFDTC and other judges within the Appeals Court, and plans to appeal the decision to the Supreme Court. The ICA has appealed most of the favorable Appeals Court rulings to the Supreme Court. There can be no assurances the Company will be successful in the 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. 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 every third anniversary beginning in March 2019, 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 condensed consolidated balance sheet. The carrying value of the redeemable noncontrolling interest related to Guess Brazil was $1.3 million and $1.4 million as of August 3, 2019 and February 2, 2019 , respectively. The Company is also 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 condensed consolidated balance sheet. During fiscal 2018, the Company and the noncontrolling interest holder made additional capital contributions 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 $3.5 million as of August 3, 2019 and February 2, 2019 . A reconciliation of the total carrying amount of redeemable noncontrolling interests for the six months ended August 3, 2019 and August 4, 2018 is as follows (in thousands): Six Months Ended Aug 3, 2019 Aug 4, 2018 Beginning balance $ 4,853 $ 5,590 Foreign currency translation adjustment (69 ) (639 ) Ending balance $ 4,784 $ 4,951 |
Defined Benefit Plans
Defined Benefit Plans | 6 Months Ended |
Aug. 03, 2019 | |
Defined Benefit Plan [Abstract] | |
Defined Benefit Plans | Defined Benefit Plans 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. 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 $63.9 million and $61.7 million as of August 3, 2019 and February 2, 2019 , respectively, and were included in other assets in the Company’s condensed consolidated balance sheets. As a result of changes in the value of the insurance policy investments, the Company recorded unrealized gains (losses) of $(0.2) million and $3.0 million in other income (expense) during the three and six months ended August 3, 2019 , respectively, and unrealized gains of $1.7 million and $0.7 million in other income (expense) during the three and six months ended August 4, 2018 , respectively . The projected benefit obligation was $52.3 million and $52.2 million as of August 3, 2019 and February 2, 2019 , respectively, and was included in accrued expenses and other long-term liabilities in the Company’s condensed consolidated balance sheets depending on the expected timing of payments. SERP benefit payments of $0.4 million and $0.8 million were made during the three and six months ended August 3, 2019 , respectively. SERP benefit payments of $0.4 million and $0.8 million were made during the three and six months ended August 4, 2018 , respectively. 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. Under the Swiss 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. As of August 3, 2019 and February 2, 2019 , the foreign pension plans had a total projected benefit obligation of $33.6 million and $31.1 million , respectively, and plan assets held in independent investment fiduciaries of $27.4 million and $25.4 million , respectively. The net liability of $6.2 million and $5.7 million was included in other long-term liabilities in the Company’s condensed consolidated balance sheets as of August 3, 2019 and February 2, 2019 , respectively. The components of net periodic defined benefit pension cost for the three and six months ended August 3, 2019 and August 4, 2018 related to the Company’s defined benefit plans are as follows (in thousands): Three Months Ended Aug 3, 2019 SERP Foreign Pension Plans Total Service cost $ — $ 808 $ 808 Interest cost 481 67 548 Expected return on plan assets — (78 ) (78 ) Net amortization of unrecognized prior service credit — (9 ) (9 ) Net amortization of actuarial losses 15 96 111 Net periodic defined benefit pension cost $ 496 $ 884 $ 1,380 Six Months Ended Aug 3, 2019 SERP Foreign Pension Plans Total Service cost $ — $ 1,615 $ 1,615 Interest cost 962 135 1,097 Expected return on plan assets — (155 ) (155 ) Net amortization of unrecognized prior service credit — (19 ) (19 ) Net amortization of actuarial losses 31 191 222 Net periodic defined benefit pension cost $ 993 $ 1,767 $ 2,760 Three Months Ended Aug 4, 2018 SERP Foreign Pension Plans Total Service cost $ — $ 754 $ 754 Interest cost 472 55 527 Expected return on plan assets — (75 ) (75 ) Net amortization of unrecognized prior service credit — (7 ) (7 ) Net amortization of actuarial losses 46 105 151 Net periodic defined benefit pension cost $ 518 $ 832 $ 1,350 Six Months Ended Aug 4, 2018 SERP Foreign Pension Plans Total Service cost $ — $ 1,494 $ 1,494 Interest cost 944 110 1,054 Expected return on plan assets — (149 ) (149 ) Net amortization of unrecognized prior service credit — (14 ) (14 ) Net amortization of actuarial losses 93 210 303 Net periodic defined benefit pension cost $ 1,037 $ 1,651 $ 2,688 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Aug. 03, 2019 | |
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 August 3, 2019 and February 2, 2019 (in thousands): Fair Value Measurements Fair Value Measurements at Aug 3, 2019 at Feb 2, 2019 Recurring Fair Value Measures Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Foreign exchange currency contracts $ — $ 6,912 $ — $ 6,912 $ — $ 4,690 $ — $ 4,690 Interest rate swap — — — — — 1,033 — 1,033 Total $ — $ 6,912 $ — $ 6,912 $ — $ 5,723 $ — $ 5,723 Liabilities: Foreign exchange currency contracts $ — $ — $ — $ — $ — $ 77 $ — $ 77 Interest rate swaps — 53 — 53 — — — — Deferred compensation obligations — 15,554 — 15,554 — 14,405 — 14,405 Total $ — $ 15,607 $ — $ 15,607 $ — $ 14,482 $ — $ 14,482 There were no transfers of financial instruments between the three levels of fair value hierarchy during the six months ended August 3, 2019 or during the year ended February 2, 2019 . Foreign exchange currency contracts are entered into by the Company 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 Company ’ s 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. As of August 3, 2019 and February 2, 2019 , the Company included €1.2 million ($ 1.3 million ) and €1.2 million ( $1.4 million ), respectively, in other assets in the Company’s condensed consolidated balance sheet related to its investment in a private equity fund. 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 a result of changes in the value of the private equity investment, the Company recorded unrealized loss es of €0.1 million ( $0.1 million ) and €0.1 million ( $0.2 million ) in other expense during the six months ended August 3, 2019 and August 4, 2018 , respectively. During fiscal 2019 , the Company funded contributions of €0.9 million ( $1.1 million ) in this investment. As of August 3, 2019 , the Company had an unfunded commitment to invest an additional €3.6 million ( $4.0 million ) in the private equity fund. The fair values of the Company ’ s debt instruments (see Note 9) are based on the amount of future cash flows associated with each instrument discounted using the Company ’ s incremental borrowing rate. As of August 3, 2019 and February 2, 2019 , the carrying value was not materially different from fair value, as the interest rates on the Company’s debt approximated rates currently available to the Company. The fair value of the Company’s convertible senior notes (see Note 10) is determined based on inputs that are observable in the market and have been classified as Level 2 in the fair value hierarchy . 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. Long-Lived Assets Long-lived assets, such as property and equipment, operating lease ROU assets 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, operating lease ROU assets, certain long-term security deposits as well as lease acquisition costs, and excludes operating lease liabilities. 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 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 adjusted for lease payments, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the estimated fair value. The Company uses market participant rents to calculate fair value of ROU assets and discounted future cash flows of the asset group to quantify fair value for other long-lived assets. These nonrecurring fair value measurements are considered Level 3 inputs as defined above. 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. 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. The Company recorded asset impairment charges of $1.5 million and $3.3 million during the three and six months ended August 3, 2019 , respectively, and $3.0 million and $3.7 million during the three and six months ended August 4, 2018 , respectively. The asset impairment charges related primarily to the impairment of certain retail locations in Europe and North America resulting from under-performance and expected store closures . |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Aug. 03, 2019 | |
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, Hong Kong 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 9 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 August 3, 2019 , 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 that approximates the time the hedged merchandise inventory is sold . The Company may hedge 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 (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 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 (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 (expense). Summary of Derivative Instruments The fair value of derivative instruments in the condensed consolidated balance sheets as of August 3, 2019 and February 2, 2019 is as follows (in thousands): Derivative Balance Sheet Location Fair Value at Fair Value at ASSETS: Derivatives designated as hedging instruments: Cash flow hedges: Foreign exchange currency contracts Other current assets/ Other assets $ 5,894 $ 4,058 Interest rate swap Other assets — 1,033 Total derivatives designated as hedging instruments 5,894 5,091 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Other current assets 1,018 632 Total $ 6,912 $ 5,723 LIABILITIES: Derivatives designated as hedging instruments: Cash flow hedges: Foreign exchange currency contracts Accrued expenses and other current liabilities $ — $ 77 Interest rate swap Other long-term liabilities 53 — Total $ 53 $ 77 Derivatives Designated as Hedging Instruments Foreign Exchange Currency Contracts Designated as Cash Flow Hedges During the six months ended August 3, 2019 , the Company purchased U.S. dollar forward contracts in Europe totaling US $68.6 million that were designated as cash flow hedges. As of August 3, 2019 , the Company had forward contracts outstanding for its European operations of US $151.8 million to hedge forecasted merchandise purchases, which are expected to mature over the next 13 months . There were no outstanding foreign exchange currency contracts for the Company’s Canadian operations as of August 3, 2019 . As of August 3, 2019 , accumulated other comprehensive income (loss) related to foreign exchange currency contracts included a net unrealized gain of approximately $9.1 million , net of tax, which $7.5 million will be recognized in cost of product sales over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current quarter-end values. At February 2, 2019 , the Company had forward contracts outstanding for its European and Canadian operations of US $175.2 million and US $3.9 million , respectively, that were designated as cash flow hedges. 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 August 3, 2019 , accumulated other comprehensive income (loss) related to the interest rate swap agreement included a net unrealized loss of less than $0.1 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 quarter-end values. The following table summarizes the gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings for the three and six months ended August 3, 2019 and August 4, 2018 (in thousands): Gains (Losses) Recognized in OCI 1 Location of Gains (Losses) Reclassified from Accumulated OCI into Earnings 1 Gains (Losses) Reclassified from Accumulated OCI into Earnings Three Months Ended Three Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ 3,063 $ 4,638 Cost of product sales $ 1,757 $ (2,342 ) Interest rate swap (777 ) 37 Interest expense 44 31 Gains (Losses) Recognized in OCI 1 Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings 1 Gains (Losses) Reclassified from Accumulated OCI into Earnings Six Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ 7,718 $ 12,060 Cost of product sales $ 1,987 $ (4,028 ) Foreign exchange currency contracts — 2 Other income (expense) — (201 ) Interest rate swap (996 ) 105 Interest expense 90 39 ______________________________________________________________________ Notes: 1 During the first quarter of fiscal 2020, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) during the three and six months ended August 3, 2019 . Upon adoption of this guidance, the Company reclassified $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting. During the three and six months ended August 4, 2018 , the Company recognized gains of $0.8 million and $1.4 million , respectively, resulting from the ineffective portion related to foreign exchange currency contracts in interest income. There was no ineffectiveness recognized related to the interest rate swap during the three and six months ended August 4, 2018 . The following table summarizes net after-tax derivative activity recorded in accumulated other comprehensive income (loss) (in thousands): Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Beginning balance gain (loss) $ 8,663 $ (6,285 ) $ 2,999 $ (14,369 ) Cumulative adjustment from adoption of new accounting guidance 1 — — 1,981 — Net gains from changes in cash flow hedges 1,978 4,111 5,842 10,579 Net (gains) losses reclassified into earnings (1,572 ) 2,032 (1,753 ) 3,648 Ending balance gain (loss) $ 9,069 $ (142 ) $ 9,069 $ (142 ) ______________________________________________________________________ Notes: 1 During the first quarter of fiscal 2020, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) during the three and six months ended August 3, 2019 . Upon adoption of this guidance, the Company reclassified $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting. Foreign Exchange Currency Contracts Not Designated as Hedging Instruments As of August 3, 2019 , the Company had euro foreign exchange currency contracts to purchase US $14.1 million expected to mature over the next one month . There were no Canadian dollar foreign exchange currency contracts as of August 3, 2019 . The following table summarizes the gains before taxes recognized on the derivative instruments not designated as hedging instruments in other income (expense) for the three and six months ended August 3, 2019 and August 4, 2018 (in thousands): Location of Gain Recognized in Earnings Gain Recognized in Earnings Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Other income (expense) $ 233 $ 2,216 $ 808 $ 5,906 At February 2, 2019 , the Company had euro foreign exchange currency contracts to purchase US $8.2 million . There were no Canadian dollar foreign exchange currency contracts as of February 2, 2019 . |
Subsequent Events
Subsequent Events | 6 Months Ended |
Aug. 03, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Dividends On August 28, 2019 , the Company announced a regular quarterly cash dividend of $0.1125 per share on the Company’s common stock. The cash dividend will be paid on September 27, 2019 to shareholders of record as of the close of business on September 11, 2019 . Share Repurchases On September 4, 2019 , the Company received a final delivery of 5.4 million shares under its ASR Contract entered into in April 2019, which amount was determined based on the daily volume-weighted average price since the effective date of the ASR Contract, less the applicable contractual discount. When combined with the 5.2 million upfront shares received at the inception of the ASR in April 2019, the Company repurchased approximately 10.6 million of its shares under the ASR at an average repurchase price of $16.09 per share. All shares were repurchased in accordance with the Company’s publicly announced ASR program, which is now complete. The shares delivered under the ASR Contract reduced the Company’s outstanding shares, and going forward that will have the effect of reducing its weighted average number of common shares outstanding for purposes of calculating basic and diluted earnings per share. |
Basis of Presentation and New_2
Basis of Presentation and New Accounting Guidance (Policies) | 6 Months Ended |
Aug. 03, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 condensed consolidated financial statements. |
Revenue Recognition | Revenue Recognition The Company recognizes the majority of its revenue from its direct-to-consumer (brick-and-mortar retail stores and concessions as well as e-commerce) and wholesale distribution channels at a point in time when it satisfies a performance obligation and transfers control of the product to the respective customer. The Company also recognizes royalty revenue from its trademark license agreements. The Company’s trademark license agreements represent symbolic licenses that are dependent on the Company’s continued support over the term of the license agreement. The amount of revenue that is recognized from the licensing arrangements is based on sales-based royalty and advertising fund contributions as well as specific fixed payments, where applicable. The Company’s trademark license agreements customarily provide for a multi-year initial term ranging from three to ten years |
New Accounting Guidance | New Accounting Guidance Changes in Accounting Policies In February 2016, the FASB issued a comprehensive new lease standard which superseded previous lease guidance. The standard requires a lessee to recognize an asset related to the right to use the underlying asset and a liability that approximates the present value of the lease payments over the term of contracts that qualify as leases under the new guidance. The standard also requires expanded disclosures surrounding leases . The Company adopted this guidance as of February 3, 2019 using the modified retrospective approach and recorded a cumulative adjustment to increase retained earnings by approximately $0.3 million , net taxes, with no restatement of prior periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carry forward historical lease classification. As of the adoption date, the Company recorded operating lease right-of-use (“ROU”) assets and operating lease liabilities of approximately $1.0 billion . The standard did not materially impact the Company’s condensed consolidated statements of income or cash flows. Refer to Note 2 for the Company’s expanded disclosures on leases. 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 eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) . The guidance also reduced the overall complexity of the hedge accounting model, including broadening the scope of risks eligible to qualify for hedge accounting, easing documentation and effectiveness assessment requirements, modifying the treatment of components excluded from the assessment of hedge effectiveness and updating disclosure requirements. In October 2018, the FASB clarified the new hedge accounting guidance by allowing the Secured Overnight Financing Rate to be eligible as a U.S. benchmark interest rate for purposes of applying hedge accounting. The Company adopted this guidance as of February 3, 2019. The adoption of this guidance resulted in a decrease in retained earnings and a decrease in accumulated other comprehensive loss of approximately $2.0 million . Approximately $1.4 million of this gain will be recognized in cost of product sales during fiscal 2020, on a pre-tax basis. Recently Issued Accounting Guidance 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 was the Company’s first quarter of fiscal 2020. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements and 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 condensed consolidated financial statements or related disclosures. In August 2018, the FASB issued authoritative guidance to modify the disclosure requirements on fair value measurements. 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. The Company is currently evaluating the impact of the adoption of this standard on its related disclosures. In August 2018, the FASB issued authoritative guidance to modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This guidance is effective for fiscal years beginning after December 15, 2020, which will be the Company’s first quarter of fiscal 2022, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its related disclosures. In August 2018, the FASB issued authoritative guidance to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance provides criteria for determining which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The capitalized implementation costs are required to be expensed over the term of the hosting arrangement. The guidance also clarifies the presentation requirements for reporting such costs in the entity’s financial statements. 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. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements and related disclosures. |
Lease Accounting Lease Accounti
Lease Accounting Lease Accounting (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Leases [Abstract] | |
Assets and liabilities, lessee | As of August 3, 2019 , the components of leases and lease costs are as follows (in thousands): Balance Sheet Location Aug 3, 2019 Assets Operating Operating lease right-of-use assets $ 900,062 Finance Property and equipment, net 17,402 Total lease assets $ 917,464 Liabilities Current: Operating Current portion of operating lease liabilities $ 213,912 Finance Current portion of borrowings and finance lease obligations 2,465 Noncurrent: Operating Long-term operating lease liabilities 747,791 Finance Long-term debt and finance lease obligations, net 15,618 Total lease liabilities $ 979,786 |
Lease cost | Other supplemental information as of August 3, 2019 is as follows (dollars in thousands): Lease Term and Discount Rate Aug 3, 2019 Weighted-average remaining lease term (years) Operating leases 6.0 years Finance leases 6.8 years Weighted-average discount rate Operating leases 3.6% Finance leases 7.1% Supplemental Cash Flow Information Six Months Ended Aug 3, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 124,687 New operating ROU assets obtained in exchange for lease liabilities $ 99,951 Income Statement Location Three Months Ended Six Months Operating lease costs 1 Cost of product sales $ 58,749 $ 117,565 Operating lease costs 1 Selling, general and administrative expenses 5,720 10,984 Finance lease costs Amortization of leased assets 2 Cost of product sales 44 87 Amortization of leased assets 2 Selling, general and administrative expenses 637 1,180 Interest on lease liabilities Interest expense 286 573 Variable lease costs 1 Cost of product sales 25,083 49,908 Variable lease costs 1 Selling, general and administrative expenses 628 1,455 Short-term lease costs 1 Selling, general and administrative expenses 183 395 Total lease costs $ 91,330 $ 182,147 ______________________________________________________________________ Notes: 1 Rental expense for all property and equipment operating leases during the three and six months ended August 4, 2018 aggregated $70.6 million and $142.8 million , respectively, including percentage rent of $15.5 million and $31.9 million , respectively. During the three and six months ended August 4, 2018 , the Company also recognized insurance, taxes, sales promotion and common area maintenance charges totaling $16.4 million and $31.3 million , respectively, related to its operating leases. 2 Amortization of leased assets related to finance leases are included in depreciation expense in the Company’s condensed consolidated statements of income. |
Operating lease liabilities maturity schedule | Maturities of the Company’s operating and finance lease liabilities as of August 3, 2019 are as follows (in thousands): Maturity of Lease Liabilities Operating Leases Finance Leases Total 2020 1 $ 131,202 $ 1,825 $ 133,027 2021 201,770 3,342 205,112 2022 189,492 3,646 193,138 2023 158,132 3,255 161,387 2024 132,342 3,092 135,434 After 2024 255,194 7,577 262,771 Total lease payments 1,068,132 22,737 1,090,869 Less: Interest 106,429 4,654 111,083 Present value of lease liabilities $ 961,703 $ 18,083 $ 979,786 ______________________________________________________________________ Notes: 1 Represents the maturity of lease liabilities for the remainder of fiscal 2020 and does not include payments made during the six months ended August 3, 2019 . |
Finance lease liabilities maturity schedule | Maturities of the Company’s operating and finance lease liabilities as of August 3, 2019 are as follows (in thousands): Maturity of Lease Liabilities Operating Leases Finance Leases Total 2020 1 $ 131,202 $ 1,825 $ 133,027 2021 201,770 3,342 205,112 2022 189,492 3,646 193,138 2023 158,132 3,255 161,387 2024 132,342 3,092 135,434 After 2024 255,194 7,577 262,771 Total lease payments 1,068,132 22,737 1,090,869 Less: Interest 106,429 4,654 111,083 Present value of lease liabilities $ 961,703 $ 18,083 $ 979,786 ______________________________________________________________________ Notes: 1 Represents the maturity of lease liabilities for the remainder of fiscal 2020 and does not include payments made during the six months ended August 3, 2019 . |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted net earnings per common share attributable to common stockholders | The computation of basic and diluted net earnings per common share attributable to common stockholders is as follows (in thousands, except per share data): Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Net earnings attribu table to Guess?, Inc. $ 25,322 $ 25,530 $ 3,948 $ 4,309 Less net earnings attributable to nonvested restricted stockholders 233 268 235 390 Net earnings attributable to common stockholders $ 25,089 $ 25,262 $ 3,713 $ 3,919 Weighted average common shares used in basic computations 70,508 80,110 75,216 80,006 Effect of dilutive securities: Stock options and restricted stock units 848 1,440 939 1,242 Weighted average common shares used in diluted computations 71,356 81,550 76,155 81,248 Net earnings per common share attributable to common stockholders: Basic $ 0.36 $ 0.32 $ 0.05 $ 0.05 Diluted $ 0.35 $ 0.31 $ 0.05 $ 0.05 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Equity [Abstract] | |
Dividends declared | The following table sets forth the cash dividend declared per share for the three and six months ended August 3, 2019 and August 4, 2018 : Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Cash dividend declared per share $ 0.1125 $ 0.2250 $ 0.3375 $ 0.4500 |
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 the three and six months ended August 3, 2019 and August 4, 2018 are as follows (in thousands): Three Months Ended Aug 3, 2019 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Defined Benefit Plans Total Balance at May 4, 2019 $ (131,923 ) $ 8,663 $ (9,446 ) $ (132,706 ) Gains (losses) arising during the period (4,841 ) 1,978 (151 ) (3,014 ) Reclassification to net earnings for (gains) losses realized — (1,572 ) 90 (1,482 ) Net other comprehensive income (loss) (4,841 ) 406 (61 ) (4,496 ) Balance at August 3, 2019 $ (136,764 ) $ 9,069 $ (9,507 ) $ (137,202 ) Six Months Ended Aug 3, 2019 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Defined Benefit Plans Total Balance at February 2, 2019 $ (119,546 ) $ 2,999 $ (9,632 ) $ (126,179 ) Cumulative adjustment reclassified from retained earnings due to adoption of new accounting guidance 1 — 1,981 — 1,981 Gains (losses) arising during the period (17,218 ) 5,842 (55 ) (11,431 ) Reclassification to net earnings for (gains) losses realized — (1,753 ) 180 (1,573 ) Net other comprehensive income (loss) (17,218 ) 4,089 125 (13,004 ) Balance at August 3, 2019 $ (136,764 ) $ 9,069 $ (9,507 ) $ (137,202 ) ______________________________________________________________________ Notes: 1 During the first quarter of fiscal 2020, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) during the three and six months ended August 3, 2019 . Upon adoption of this guidance, the Company reclassified approximately $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting. Three Months Ended Aug 4, 2018 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Defined Benefit Plans Total Balance at May 5, 2018 $ (91,297 ) $ (6,285 ) $ (11,208 ) $ (108,790 ) Gains (losses) arising during the period (23,464 ) 4,111 (34 ) (19,387 ) Reclassification to net earnings for losses realized — 2,032 125 2,157 Net other comprehensive income (loss) (23,464 ) 6,143 91 (17,230 ) Balance at August 4, 2018 $ (114,761 ) $ (142 ) $ (11,117 ) $ (126,020 ) Six Months Ended Aug 4, 2018 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Defined Benefit Plans Total Balance at February 3, 2018 $ (67,049 ) $ (14,369 ) $ (11,644 ) $ (93,062 ) Gains (losses) arising during the period (47,712 ) 10,579 277 (36,856 ) Reclassification to net earnings for losses realized — 3,648 250 3,898 Net other comprehensive income (loss) (47,712 ) 14,227 527 (32,958 ) Balance at August 4, 2018 $ (114,761 ) $ (142 ) $ (11,117 ) $ (126,020 ) |
Reclassifications out of accumulated other comprehensive income (loss) to net earnings | Details on reclassifications out of accumulated other comprehensive income (loss) to net earnings during the three and six months ended August 3, 2019 and August 4, 2018 are as follows (in thousands): Three Months Ended Six Months Ended Location of (Gain) Loss Reclassified from Accumulated OCI into Earnings Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Derivative financial instruments designated as cash flow hedges: Foreign exchange currency contracts $ (1,757 ) $ 2,342 $ (1,987 ) $ 4,028 Cost of product sales Foreign exchange currency contracts — — — 201 Other income (expense) Interest rate swap (44 ) (31 ) (90 ) (39 ) Interest expense Less income tax effect 229 (279 ) 324 (542 ) Income tax expense (1,572 ) 2,032 (1,753 ) 3,648 Defined benefit plans: Net actuarial loss amortization 111 151 222 303 Other income (expense) Prior service credit amortization (9 ) (7 ) (19 ) (14 ) Other income (expense) Less income tax effect (12 ) (19 ) (23 ) (39 ) Income tax expense 90 125 180 250 Total reclassifications during the period $ (1,482 ) $ 2,157 $ (1,573 ) $ 3,898 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable is summarized as follows (in thousands): Aug 3, 2019 Feb 2, 2019 Trade $ 284,543 $ 314,651 Royalty 6,399 5,992 Other 10,968 9,892 301,910 330,535 Less allowances 8,925 8,540 $ 292,985 $ 321,995 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consist of the following (in thousands): Aug 3, 2019 Feb 2, 2019 Raw materials $ 2,669 $ 881 Work in progress 69 162 Finished goods 481,498 467,854 $ 484,236 $ 468,897 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Segment Reporting [Abstract] | |
Summary of net revenue and earnings (loss) from operations by segment | Net revenue and earnings (loss) from operations are summarized as follows for the three and six months ended August 3, 2019 and August 4, 2018 (in thousands): Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Net revenue: Americas Retail $ 198,966 $ 197,125 $ 375,389 $ 368,465 Americas Wholesale 41,902 34,253 88,107 74,932 Europe 340,509 311,998 550,564 517,433 Asia 83,301 82,786 168,491 166,837 Licensing 18,542 19,709 37,360 39,493 Total net revenue $ 683,220 $ 645,871 $ 1,219,911 $ 1,167,160 Earnings (loss) from operations: Americas Retail $ 5,957 $ 5,582 $ 4,145 $ (98 ) Americas Wholesale 8,422 5,325 16,236 11,351 Europe 51,594 30,531 35,267 10,198 Asia (4,800 ) 1,634 (8,003 ) 5,699 Licensing 15,547 17,437 32,191 34,923 Total segment earnings from operations 76,720 60,509 79,836 62,073 Corporate overhead (29,229 ) (25,647 ) (55,041 ) (51,492 ) Asset impairment charges 1 (1,504 ) (2,981 ) (3,279 ) (3,740 ) Net gains on lease terminations 2 — — — 152 Total earnings from operations $ 45,987 $ 31,881 $ 21,516 $ 6,993 ______________________________________________________________________ Notes: 1 During each of the periods presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. Refer to Note 15 for more information regarding these asset impairment charges. 2 During the six months ended August 4, 2018 , the Company recorded net gains on lease terminations related primarily to the early termination of certain lease agreements in North America. The net gains on lease terminations were recorded during the three months ended May 5, 2018. |
Summary of net revenue by country | Net revenue is classified primarily based on the country where the Company’s customer is located (in thousands): Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Net revenue: U.S. $ 176,557 $ 171,802 $ 340,928 $ 325,112 Italy 86,497 84,663 136,932 142,334 Canada 44,001 45,059 82,582 84,579 Spain 39,900 39,954 67,897 66,351 South Korea 32,898 35,624 66,815 73,256 Other foreign countries 284,825 249,060 487,397 436,035 Total product sales 664,678 626,162 1,182,551 1,127,667 Net royalties 18,542 19,709 37,360 39,493 Net revenue $ 683,220 $ 645,871 $ 1,219,911 $ 1,167,160 |
Borrowings and Finance Lease _2
Borrowings and Finance Lease Obligations (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Debt Disclosure [Abstract] | |
Summary of borrowings and finance lease obligations | Borrowings and finance lease obligations are summarized as follows (in thousands): Aug 3, 2019 Feb 2, 2019 Mortgage debt, maturing monthly through January 2026 $ 19,384 $ 19,738 Finance lease obligations 18,083 16,702 Borrowings under credit facilities 27,770 — Other 2,829 2,887 68,066 39,327 Less current installments 32,554 4,315 Long-term debt and finance lease obligations $ 35,512 $ 35,012 |
Convertible Senior Notes and _2
Convertible Senior Notes and Related Transactions (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Debt | The Notes consist of the following components as of August 3, 2019 (in thousands): Liability component: Principal $ 300,000 Unamortized debt discount (53,913 ) Unamortized issuance costs (4,032 ) Net carrying amount $ 242,055 Equity component, net 1 $ 42,324 ______________________________________________________________________ Notes: 1 Included in paid-in capital within stockholders’ equity on the condensed consolidated balance sheets and is net of debt issuance costs and deferred taxes. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
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 the three and six months ended August 3, 2019 and August 4, 2018 (in thousands): Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Stock options $ 697 $ 672 $ 1,287 $ 1,367 Stock awards/units 4,205 3,292 8,020 6,462 Employee Stock Purchase Plan 84 67 147 160 Total share-based compensation expense $ 4,986 $ 4,031 $ 9,454 $ 7,989 |
Schedule of activity for nonvested performance-based units | The following table summarizes the activity for nonvested performance-based units during the six months ended August 3, 2019 : Number of Units Weighted Average Grant Date Fair Value Nonvested at February 2, 2019 1,371,230 $ 16.44 Granted 455,339 18.33 Vested 103,369 20.70 Forfeited 334,526 18.01 Nonvested at August 3, 2019 1,388,674 $ 16.37 |
Schedule of activity for nonvested market-based units | The following table summarizes the activity for nonvested market-based units during the six months ended August 3, 2019 : Number of Units Weighted Average Grant Date Fair Value Nonvested at February 2, 2019 518,409 $ 14.28 Granted 1 17,557 15.20 Vested 1 158,014 15.20 Forfeited 89,750 15.58 Nonvested at August 3, 2019 288,202 $ 13.43 ______________________________________________________________________ Notes: 1 As a result of the achievement of certain market-based vesting conditions, there were 17,557 shares that vested in addition to the original target number of shares granted in fiscal 2017. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Redeemable Noncontrolling Interest | A reconciliation of the total carrying amount of redeemable noncontrolling interests for the six months ended August 3, 2019 and August 4, 2018 is as follows (in thousands): Six Months Ended Aug 3, 2019 Aug 4, 2018 Beginning balance $ 4,853 $ 5,590 Foreign currency translation adjustment (69 ) (639 ) Ending balance $ 4,784 $ 4,951 |
Defined Benefit Plans (Tables)
Defined Benefit Plans (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Defined Benefit Plan [Abstract] | |
Components of net periodic defined benefit pension cost related to the Company's defined benefit plans | The components of net periodic defined benefit pension cost for the three and six months ended August 3, 2019 and August 4, 2018 related to the Company’s defined benefit plans are as follows (in thousands): Three Months Ended Aug 3, 2019 SERP Foreign Pension Plans Total Service cost $ — $ 808 $ 808 Interest cost 481 67 548 Expected return on plan assets — (78 ) (78 ) Net amortization of unrecognized prior service credit — (9 ) (9 ) Net amortization of actuarial losses 15 96 111 Net periodic defined benefit pension cost $ 496 $ 884 $ 1,380 Six Months Ended Aug 3, 2019 SERP Foreign Pension Plans Total Service cost $ — $ 1,615 $ 1,615 Interest cost 962 135 1,097 Expected return on plan assets — (155 ) (155 ) Net amortization of unrecognized prior service credit — (19 ) (19 ) Net amortization of actuarial losses 31 191 222 Net periodic defined benefit pension cost $ 993 $ 1,767 $ 2,760 Three Months Ended Aug 4, 2018 SERP Foreign Pension Plans Total Service cost $ — $ 754 $ 754 Interest cost 472 55 527 Expected return on plan assets — (75 ) (75 ) Net amortization of unrecognized prior service credit — (7 ) (7 ) Net amortization of actuarial losses 46 105 151 Net periodic defined benefit pension cost $ 518 $ 832 $ 1,350 Six Months Ended Aug 4, 2018 SERP Foreign Pension Plans Total Service cost $ — $ 1,494 $ 1,494 Interest cost 944 110 1,054 Expected return on plan assets — (149 ) (149 ) Net amortization of unrecognized prior service credit — (14 ) (14 ) Net amortization of actuarial losses 93 210 303 Net periodic defined benefit pension cost $ 1,037 $ 1,651 $ 2,688 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
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 August 3, 2019 and February 2, 2019 (in thousands): Fair Value Measurements Fair Value Measurements at Aug 3, 2019 at Feb 2, 2019 Recurring Fair Value Measures Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Foreign exchange currency contracts $ — $ 6,912 $ — $ 6,912 $ — $ 4,690 $ — $ 4,690 Interest rate swap — — — — — 1,033 — 1,033 Total $ — $ 6,912 $ — $ 6,912 $ — $ 5,723 $ — $ 5,723 Liabilities: Foreign exchange currency contracts $ — $ — $ — $ — $ — $ 77 $ — $ 77 Interest rate swaps — 53 — 53 — — — — Deferred compensation obligations — 15,554 — 15,554 — 14,405 — 14,405 Total $ — $ 15,607 $ — $ 15,607 $ — $ 14,482 $ — $ 14,482 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of fair value of derivative instruments in the condensed consolidated balance sheets | The fair value of derivative instruments in the condensed consolidated balance sheets as of August 3, 2019 and February 2, 2019 is as follows (in thousands): Derivative Balance Sheet Location Fair Value at Fair Value at ASSETS: Derivatives designated as hedging instruments: Cash flow hedges: Foreign exchange currency contracts Other current assets/ Other assets $ 5,894 $ 4,058 Interest rate swap Other assets — 1,033 Total derivatives designated as hedging instruments 5,894 5,091 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Other current assets 1,018 632 Total $ 6,912 $ 5,723 LIABILITIES: Derivatives designated as hedging instruments: Cash flow hedges: Foreign exchange currency contracts Accrued expenses and other current liabilities $ — $ 77 Interest rate swap Other long-term liabilities 53 — Total $ 53 $ 77 |
Summary of gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings | The following table summarizes the gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings for the three and six months ended August 3, 2019 and August 4, 2018 (in thousands): Gains (Losses) Recognized in OCI 1 Location of Gains (Losses) Reclassified from Accumulated OCI into Earnings 1 Gains (Losses) Reclassified from Accumulated OCI into Earnings Three Months Ended Three Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ 3,063 $ 4,638 Cost of product sales $ 1,757 $ (2,342 ) Interest rate swap (777 ) 37 Interest expense 44 31 Gains (Losses) Recognized in OCI 1 Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings 1 Gains (Losses) Reclassified from Accumulated OCI into Earnings Six Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ 7,718 $ 12,060 Cost of product sales $ 1,987 $ (4,028 ) Foreign exchange currency contracts — 2 Other income (expense) — (201 ) Interest rate swap (996 ) 105 Interest expense 90 39 ______________________________________________________________________ Notes: 1 During the first quarter of fiscal 2020, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) during the three and six months ended August 3, 2019 . Upon adoption of this guidance, the Company reclassified $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting. During the three and six months ended August 4, 2018 , the Company recognized gains of $0.8 million and $1.4 million , respectively, resulting from the ineffective portion related to foreign exchange currency contracts in interest income. There was no ineffectiveness recognized related to the interest rate swap during the three and six months ended August 4, 2018 . |
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): Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Beginning balance gain (loss) $ 8,663 $ (6,285 ) $ 2,999 $ (14,369 ) Cumulative adjustment from adoption of new accounting guidance 1 — — 1,981 — Net gains from changes in cash flow hedges 1,978 4,111 5,842 10,579 Net (gains) losses reclassified into earnings (1,572 ) 2,032 (1,753 ) 3,648 Ending balance gain (loss) $ 9,069 $ (142 ) $ 9,069 $ (142 ) ______________________________________________________________________ Notes: 1 During the first quarter of fiscal 2020, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) during the three and six months ended August 3, 2019 . Upon adoption of this guidance, the Company reclassified $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting. |
Summary of gains before taxes recognized on the derivative instruments not designated as hedging instruments in other income (expense) | The following table summarizes the gains before taxes recognized on the derivative instruments not designated as hedging instruments in other income (expense) for the three and six months ended August 3, 2019 and August 4, 2018 (in thousands): Location of Gain Recognized in Earnings Gain Recognized in Earnings Three Months Ended Six Months Ended Aug 3, 2019 Aug 4, 2018 Aug 3, 2019 Aug 4, 2018 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Other income (expense) $ 233 $ 2,216 $ 808 $ 5,906 |
Basis of Presentation and New_3
Basis of Presentation and New Accounting Guidance (Details) $ in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
Aug. 03, 2019AUD ($) | Aug. 03, 2019USD ($) | Aug. 04, 2018USD ($) | Aug. 03, 2019USD ($) | Aug. 04, 2018USD ($) | Feb. 01, 2020USD ($) | Feb. 02, 2019USD ($) | Feb. 03, 2018 | Aug. 03, 2019USD ($) | Feb. 03, 2019USD ($) | Feb. 04, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Fiscal period duration | 364 days | 371 days | |||||||||
Cumulative adjustment from adoption of new accounting guidance | $ 297 | $ 5,829 | |||||||||
Operating lease right-of-use assets | $ 0 | $ 900,062 | |||||||||
Present value of lease liabilities | 961,703 | ||||||||||
Accounting Standards Update 2016-02 | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Operating lease right-of-use assets | 1,000,000 | ||||||||||
Present value of lease liabilities | 1,000,000 | ||||||||||
Retained Earnings | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Cumulative adjustment from adoption of new accounting guidance | (1,684) | $ 5,829 | |||||||||
Retained Earnings | Accounting Standards Update 2016-02 | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Cumulative adjustment from adoption of new accounting guidance | 300 | ||||||||||
Retained Earnings | Accounting Standards Update 2017-12 | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Cumulative adjustment from adoption of new accounting guidance | (2,000) | ||||||||||
Accumulated Other Comprehensive Loss | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Cumulative adjustment from adoption of new accounting guidance | 1,981 | ||||||||||
Accumulated Other Comprehensive Loss | Accounting Standards Update 2017-12 | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Cumulative adjustment from adoption of new accounting guidance | $ 2,000 | ||||||||||
Scenario, Forecast | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Fiscal period duration | 364 days | ||||||||||
Scenario, Forecast | Cost of product sales | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Reclassification to net earnings for gains realized | $ 1,400 | ||||||||||
Royalties | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Net royalties revenue recognized | $ 3,100 | $ 3,600 | $ 6,100 | $ 6,900 | |||||||
Minimum | Royalties | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
License agreement term | 3 years | ||||||||||
Maximum | Royalties | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
License agreement term | 10 years | ||||||||||
Accrued expenses | Royalties | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Current deferred royalties | 6,400 | 6,700 | |||||||||
Other long-term liabilities | Royalties | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Noncurrent deferred royalties | 15,500 | 12,600 | |||||||||
Privately Held Apparel Company | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Equity method investment | $ 8,300 | ||||||||||
Minority interest | 30.00% | ||||||||||
Privately Held Apparel Company | Other income/expense | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Net loss from equity method investment | 2,900 | $ 2,900 | |||||||||
Disposal Group, Disposed of by Sale | Australian Retail Locations | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Proceeds from divestiture of business | $ 7.3 | 5,100 | |||||||||
Loss on divestiture of business | 1.1 | $ 800 | |||||||||
Disposal Group, Disposed of by Sale | Australian Retail Locations | Accounts receivable | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Proceeds from divestiture of business | 2 | 1,400 | |||||||||
Disposal Group, Disposed of by Sale | Australian Retail Locations | Other assets | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Proceeds from divestiture of business | $ 5.3 | $ 3,700 |
Lease Accounting - Narrative (D
Lease Accounting - Narrative (Details) $ in Millions | 6 Months Ended |
Aug. 03, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Lease not yet commenced | $ 9.6 |
Retail Store | Minimum | |
Lessee, Lease, Description [Line Items] | |
Percentage of annual sales volume used for incremental rent on certain retail location leases | 3.00% |
Retail Store | Maximum | |
Lessee, Lease, Description [Line Items] | |
Percentage of annual sales volume used for incremental rent on certain retail location leases | 23.00% |
Retail Concession | Weighted Average | |
Lessee, Lease, Description [Line Items] | |
Percentage of annual sales volume used for incremental rent on certain retail location leases | 35.00% |
Lease Accounting - Lease Assets
Lease Accounting - Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Aug. 03, 2019 | Feb. 02, 2019 |
Assets | ||
Operating | $ 900,062 | $ 0 |
Finance | 17,402 | |
Total lease assets | 917,464 | |
Current: | ||
Operating | 213,912 | 0 |
Finance | 2,465 | |
Noncurrent: | ||
Operating | 747,791 | $ 0 |
Finance | 15,618 | |
Total lease liabilities | $ 979,786 |
Lease Accounting - Lease Cost (
Lease Accounting - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Finance lease costs | ||||
Total lease costs | $ 91,330 | $ 182,147 | ||
Rent expense | $ 70,600 | $ 142,800 | ||
Percentage rent expense | 15,500 | 31,900 | ||
Other operating lease costs | $ 16,400 | $ 31,300 | ||
Cost of product sales | ||||
Lease costs | ||||
Operating lease cost | 58,749 | 117,565 | ||
Finance lease costs | ||||
Amortization of leased assets | 44 | 87 | ||
Variable lease costs | 25,083 | 49,908 | ||
Selling, general and administrative expenses | ||||
Lease costs | ||||
Operating lease cost | 5,720 | 10,984 | ||
Finance lease costs | ||||
Amortization of leased assets | 637 | 1,180 | ||
Variable lease costs | 628 | 1,455 | ||
Short-term lease costs | 183 | 395 | ||
Interest expense | ||||
Finance lease costs | ||||
Interest on lease liabilities | $ 286 | $ 573 |
Lease Accounting - Maturity of
Lease Accounting - Maturity of Lease Liabilities (Details) $ in Thousands | Aug. 03, 2019USD ($) |
Operating Leases | |
2020 | $ 131,202 |
2021 | 201,770 |
2022 | 189,492 |
2023 | 158,132 |
2024 | 132,342 |
After 2024 | 255,194 |
Total lease payments | 1,068,132 |
Less: Interest | 106,429 |
Present value of lease liabilities | 961,703 |
Finance Leases | |
2020 | 1,825 |
2021 | 3,342 |
2022 | 3,646 |
2023 | 3,255 |
2024 | 3,092 |
After 2024 | 7,577 |
Total lease payments | 22,737 |
Less: Interest | 4,654 |
Present value of lease liabilities | 18,083 |
Total | |
2020 | 133,027 |
2021 | 205,112 |
2022 | 193,138 |
2023 | 161,387 |
2024 | 135,434 |
After 2024 | 262,771 |
Total lease payments | 1,090,869 |
Less: Interest | 111,083 |
Present value of lease liabilities | $ 979,786 |
Lease Accounting - Lease Term a
Lease Accounting - Lease Term and Discount Rate (Details) | Aug. 03, 2019 |
Weighted-average remaining lease term (years) | |
Operating leases | 6 years |
Finance leases | 6 years 9 months 18 days |
Weighted-average discount rate | |
Operating leases | 3.60% |
Finance leases | 7.10% |
Lease Accounting - Other Inform
Lease Accounting - Other Information (Details) $ in Thousands | 6 Months Ended |
Aug. 03, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash flows from operating leases | $ 124,687 |
New operating ROU assets obtained in exchange for lease liabilities | $ 99,951 |
Earnings per Share - Basic and
Earnings per Share - Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | May 01, 2019 | Apr. 30, 2019 | Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 |
Earnings Per Share [Abstract] | ||||||
Net earnings attributable to Guess, Inc. | $ 25,322 | $ 25,530 | $ 3,948 | $ 4,309 | ||
Less net earnings attributable to nonvested restricted stockholders | 233 | 268 | 235 | 390 | ||
Net earnings attributable to common stockholders | $ 25,089 | $ 25,262 | $ 3,713 | $ 3,919 | ||
Weighted average common shares used in basic computations (in shares) | 70,508,000 | 80,110,000 | 75,216,000 | 80,006,000 | ||
Effect of dilutive securities: | ||||||
Stock options and restricted stock units (in shares) | 848,000 | 1,440,000 | 939,000 | 1,242,000 | ||
Weighted average common shares used in diluted computations (in shares) | 71,356,000 | 81,550,000 | 76,155,000 | 81,248,000 | ||
Net earnings per common share attributable to common stockholders: | ||||||
Basic (in dollars per share) | $ 0.36 | $ 0.32 | $ 0.05 | $ 0.05 | ||
Diluted (in dollars per share) | $ 0.35 | $ 0.31 | $ 0.05 | $ 0.05 | ||
Antidilutive securities excluded from computation of earnings (loss) per share | ||||||
Antidilutive equity awards excluded from computation of diluted weighted average common shares (in shares) | 3,258,910 | 1,385,422 | 2,899,760 | 2,116,751 | ||
Conversion price of convertible senior notes (in dollars per share) | $ 46.88 | $ 25.78 | $ 25.78 | |||
Warrants outstanding (in shares) | 11,600,000 | 11,600,000 | 11,600,000 | |||
Strike price of warrants (in dollars per share) | $ 46.88 | $ 46.88 | $ 46.88 | |||
Performance-based units | ||||||
Antidilutive securities excluded from computation of earnings (loss) per share | ||||||
Performance or market awards excluded from computation of EPS (in shares) | 1,228,017 | 1,361,550 | 1,228,017 | 1,361,550 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) | Sep. 04, 2019 | Aug. 28, 2019 | Apr. 26, 2019 | Aug. 03, 2019 | May 04, 2019 | Aug. 04, 2018 | May 05, 2018 | Sep. 04, 2019 | Aug. 03, 2019 | Aug. 04, 2018 | Feb. 02, 2019 | Jun. 26, 2012 |
Class of Stock [Line Items] | ||||||||||||
Share repurchases | $ 11,000,000 | $ 201,564,000 | $ 17,587,000 | |||||||||
Purchase of treasury stock | $ 212,564,000 | $ 23,620,000 | ||||||||||
Dividends per share (in dollars per share) | $ 0.1125 | $ 0.1125 | $ 0.2250 | $ 0.3375 | $ 0.4500 | $ 0.225 | ||||||
Subsequent Events | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Dividends per share (in dollars per share) | $ 0.1125 | |||||||||||
Share Repurchase Program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Authorized amount for repurchase | $ 500,000,000 | |||||||||||
Share repurchases (in shares) | 749,252 | 10,264,052 | 11,013,304 | 1,118,808 | ||||||||
Share repurchases | $ 11,000,000 | $ 201,500,000 | $ 212,500,000 | $ 17,600,000 | ||||||||
Remaining purchase amount authorized | 94,100,000 | 94,100,000 | ||||||||||
Accelerated Share Repurchase Contract | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Authorized amount for repurchase | $ 170,000,000 | |||||||||||
Share repurchases (in shares) | 5,200,000 | |||||||||||
Share repurchases | $ 102,000,000 | |||||||||||
Remaining purchase amount authorized | $ 68,000,000 | $ 68,000,000 | ||||||||||
Purchase of treasury stock | $ 170,000,000 | |||||||||||
Percentage of contract | 60.00% | |||||||||||
Accelerated Share Repurchase Contract | Subsequent Events | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Share repurchases (in shares) | 5,400,000 | 10,600,000 | ||||||||||
Average price per share (in dollars per share) | $ 16.09 | |||||||||||
First Quarter, Fiscal Year Ended 2019 | Share Repurchase Program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Share repurchases (in shares) | 1,118,808 | |||||||||||
Share repurchases | $ 17,600,000 | |||||||||||
Fourth Quarter, Fiscal Year Ended 2018 | Share Repurchase Program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Share repurchases | $ 6,000,000 |
Stockholders' Equity - Cash Div
Stockholders' Equity - Cash Dividend Declared Per Share (Details) - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Aug. 03, 2019 | May 04, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | Feb. 02, 2019 | |
Equity [Abstract] | ||||||
Dividends per share (in dollars per share) | $ 0.1125 | $ 0.1125 | $ 0.2250 | $ 0.3375 | $ 0.4500 | $ 0.225 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | May 05, 2019 | Feb. 03, 2019 | May 06, 2018 | Feb. 04, 2018 | |
Accumulated other comprehensive income (loss), net of tax | ||||||||
Beginning balance | $ 565,078 | $ 874,257 | $ 853,645 | $ 933,475 | ||||
Cumulative adjustment from adoption of new accounting guidance | $ 297 | $ 5,829 | ||||||
Gains (losses) arising during the period | (3,014) | (19,387) | (11,431) | (36,856) | ||||
Reclassification to net loss for (gains) losses realized | (1,482) | 2,157 | (1,573) | 3,898 | ||||
Net other comprehensive income (loss) | (4,496) | (17,230) | (13,004) | (32,958) | ||||
Ending balance | 572,795 | 866,081 | 572,795 | 866,081 | ||||
Foreign Currency Translation Adjustment | ||||||||
Accumulated other comprehensive income (loss), net of tax | ||||||||
Beginning balance | (131,923) | (91,297) | (119,546) | (67,049) | ||||
Cumulative adjustment from adoption of new accounting guidance | 0 | |||||||
Gains (losses) arising during the period | (4,841) | (23,464) | (17,218) | (47,712) | ||||
Reclassification to net loss for (gains) losses realized | 0 | 0 | 0 | 0 | ||||
Net other comprehensive income (loss) | (4,841) | (23,464) | (17,218) | (47,712) | ||||
Ending balance | (136,764) | (114,761) | (136,764) | (114,761) | ||||
Derivative Financial Instruments Designated as Cash Flow Hedges | ||||||||
Accumulated other comprehensive income (loss), net of tax | ||||||||
Beginning balance | 8,663 | 2,999 | ||||||
Cumulative adjustment from adoption of new accounting guidance | $ 0 | 1,981 | ||||||
Gains (losses) arising during the period | 1,978 | 5,842 | ||||||
Reclassification to net loss for (gains) losses realized | (1,572) | (1,753) | ||||||
Net other comprehensive income (loss) | 406 | 4,089 | ||||||
Ending balance | 9,069 | 9,069 | ||||||
Derivative Financial Instruments Designated as Cash Flow Hedges | ||||||||
Accumulated other comprehensive income (loss), net of tax | ||||||||
Beginning balance | (6,285) | (14,369) | ||||||
Cumulative adjustment from adoption of new accounting guidance | $ 0 | 0 | ||||||
Gains (losses) arising during the period | 4,111 | 10,579 | ||||||
Reclassification to net loss for (gains) losses realized | 2,032 | 3,648 | ||||||
Net other comprehensive income (loss) | 6,143 | 14,227 | ||||||
Ending balance | (142) | (142) | ||||||
Defined Benefit Plans | ||||||||
Accumulated other comprehensive income (loss), net of tax | ||||||||
Beginning balance | (9,446) | (11,208) | (9,632) | (11,644) | ||||
Cumulative adjustment from adoption of new accounting guidance | 0 | |||||||
Gains (losses) arising during the period | (151) | (34) | (55) | 277 | ||||
Reclassification to net loss for (gains) losses realized | 90 | 125 | 180 | 250 | ||||
Net other comprehensive income (loss) | (61) | 91 | 125 | 527 | ||||
Ending balance | (9,507) | (11,117) | (9,507) | (11,117) | ||||
Accumulated Other Comprehensive Loss | ||||||||
Accumulated other comprehensive income (loss), net of tax | ||||||||
Beginning balance | (132,706) | (108,790) | (126,179) | (93,062) | ||||
Cumulative adjustment from adoption of new accounting guidance | 1,981 | |||||||
Ending balance | (137,202) | (126,020) | (137,202) | (126,020) | ||||
Retained Earnings | ||||||||
Accumulated other comprehensive income (loss), net of tax | ||||||||
Beginning balance | 1,036,386 | 1,098,291 | 1,077,747 | 1,132,173 | ||||
Cumulative adjustment from adoption of new accounting guidance | (1,684) | $ 5,829 | ||||||
Ending balance | $ 1,053,604 | $ 1,105,173 | $ 1,053,604 | $ 1,105,173 | ||||
Accounting Standards Update 2017-12 | Accumulated Other Comprehensive Loss | ||||||||
Accumulated other comprehensive income (loss), net of tax | ||||||||
Cumulative adjustment from adoption of new accounting guidance | 2,000 | |||||||
Accounting Standards Update 2017-12 | Retained Earnings | ||||||||
Accumulated other comprehensive income (loss), net of tax | ||||||||
Cumulative adjustment from adoption of new accounting guidance | $ (2,000) |
Stockholders' Equity - Reclassi
Stockholders' Equity - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||
Cost of product sales | $ 417,554 | $ 406,440 | $ 772,296 | $ 753,791 |
Other income (expense), net | 6,355 | (1,360) | 4,284 | 1,254 |
Interest expense | 4,951 | 863 | 6,210 | 1,602 |
Income tax expense | 8,818 | 7,776 | 6,101 | 1,499 |
Net earnings attributable to Guess, Inc. | (25,322) | (25,530) | (3,948) | (4,309) |
Reclassifications out of accumulated other comprehensive income (loss) | ||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||
Net earnings attributable to Guess, Inc. | (1,482) | 2,157 | (1,573) | 3,898 |
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 | (1,757) | (1,987) | ||
Other income (expense), net | 0 | 0 | ||
Interest expense | (44) | (90) | ||
Income tax expense | 229 | 324 | ||
Net earnings attributable to Guess, Inc. | (1,572) | (1,753) | ||
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 | 2,342 | 4,028 | ||
Other income (expense), net | 0 | 201 | ||
Interest expense | (31) | (39) | ||
Income tax expense | (279) | (542) | ||
Net earnings attributable to Guess, Inc. | 2,032 | 3,648 | ||
Net Actuarial Loss Amortization | Reclassifications out of accumulated other comprehensive income (loss) | ||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||
Other income (expense), net | 111 | 151 | 222 | 303 |
Prior Service Credit Amortization | Reclassifications out of accumulated other comprehensive income (loss) | ||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||
Other income (expense), net | (9) | (7) | (19) | (14) |
Defined Benefit Plans | Reclassifications out of accumulated other comprehensive income (loss) | ||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | ||||
Income tax expense | (12) | (19) | (23) | (39) |
Net earnings attributable to Guess, Inc. | $ 90 | $ 125 | $ 180 | $ 250 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Aug. 03, 2019 | Feb. 02, 2019 |
Accounts receivable | ||
Accounts receivable, gross | $ 301,910 | $ 330,535 |
Less allowances | 8,925 | 8,540 |
Accounts receivable, net | 292,985 | 321,995 |
Trade receivables | ||
Accounts receivable | ||
Accounts receivable, gross | 284,543 | 314,651 |
Royalty receivables | ||
Accounts receivable | ||
Accounts receivable, gross | 6,399 | 5,992 |
Other receivables | ||
Accounts receivable | ||
Accounts receivable, gross | $ 10,968 | $ 9,892 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Aug. 03, 2019 | Feb. 02, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,669 | $ 881 |
Work in progress | 69 | 162 |
Finished goods | 481,498 | 467,854 |
Inventories | 484,236 | 468,897 |
Allowance to write down inventories to the lower of cost or net realizable value | $ 27,100 | $ 30,900 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Feb. 02, 2019 | Nov. 03, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Operating Loss Carryforwards [Line Items] | ||||
Effective income tax rate (as a percent) | 52.20% | 24.00% | ||
Measurement period adjustment, tax expense (benefit) | $ 25.8 | $ (19.6) | ||
Transition tax liability | $ 23.2 | |||
Aggregate accruals for uncertain tax positions, including penalties and interest | 41.4 | 40.1 | ||
Other long-term liabilities | ||||
Operating Loss Carryforwards [Line Items] | ||||
Transition tax liability | $ 25.8 | $ 23.2 |
Segment Information - Net Reven
Segment Information - Net Revenue and Earnings (Loss) from Operations (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019USD ($) | Aug. 04, 2018USD ($) | Aug. 03, 2019USD ($)segment | Aug. 04, 2018USD ($) | |
Segment Reporting Information | ||||
Number of reportable segments | segment | 5 | |||
Net revenue | $ 683,220 | $ 645,871 | $ 1,219,911 | $ 1,167,160 |
Earnings (loss) from operations | 45,987 | 31,881 | 21,516 | 6,993 |
Asset impairment charges | (1,504) | (2,981) | (3,279) | (3,740) |
Net gains on lease terminations | 0 | 0 | 0 | 152 |
Operating Segments | ||||
Segment Reporting Information | ||||
Earnings (loss) from operations | 76,720 | 60,509 | 79,836 | 62,073 |
Corporate overhead | ||||
Segment Reporting Information | ||||
Earnings (loss) from operations | (29,229) | (25,647) | (55,041) | (51,492) |
Reconciling items | ||||
Segment Reporting Information | ||||
Asset impairment charges | (1,504) | (2,981) | (3,279) | (3,740) |
Net gains on lease terminations | 0 | 0 | 0 | 152 |
Americas Retail | ||||
Segment Reporting Information | ||||
Net revenue | 198,966 | 197,125 | 375,389 | 368,465 |
Americas Retail | Operating Segments | ||||
Segment Reporting Information | ||||
Earnings (loss) from operations | 5,957 | 5,582 | 4,145 | (98) |
Americas Wholesale | ||||
Segment Reporting Information | ||||
Net revenue | 41,902 | 34,253 | 88,107 | 74,932 |
Americas Wholesale | Operating Segments | ||||
Segment Reporting Information | ||||
Earnings (loss) from operations | 8,422 | 5,325 | 16,236 | 11,351 |
Europe | ||||
Segment Reporting Information | ||||
Net revenue | 340,509 | 311,998 | 550,564 | 517,433 |
Europe | Operating Segments | ||||
Segment Reporting Information | ||||
Earnings (loss) from operations | 51,594 | 30,531 | 35,267 | 10,198 |
Asia | ||||
Segment Reporting Information | ||||
Net revenue | 83,301 | 82,786 | 168,491 | 166,837 |
Asia | Operating Segments | ||||
Segment Reporting Information | ||||
Earnings (loss) from operations | (4,800) | 1,634 | (8,003) | 5,699 |
Licensing | ||||
Segment Reporting Information | ||||
Net revenue | 18,542 | 19,709 | 37,360 | 39,493 |
Licensing | Operating Segments | ||||
Segment Reporting Information | ||||
Earnings (loss) from operations | $ 15,547 | $ 17,437 | $ 32,191 | $ 34,923 |
Segment Information - Net Rev_2
Segment Information - Net Revenue by Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Segment Reporting Information | ||||
Net revenue | $ 683,220 | $ 645,871 | $ 1,219,911 | $ 1,167,160 |
Product sales | ||||
Segment Reporting Information | ||||
Net revenue | 664,678 | 626,162 | 1,182,551 | 1,127,667 |
Product sales | U.S. | ||||
Segment Reporting Information | ||||
Net revenue | 176,557 | 171,802 | 340,928 | 325,112 |
Product sales | Italy | ||||
Segment Reporting Information | ||||
Net revenue | 86,497 | 84,663 | 136,932 | 142,334 |
Product sales | Canada | ||||
Segment Reporting Information | ||||
Net revenue | 44,001 | 45,059 | 82,582 | 84,579 |
Product sales | Spain | ||||
Segment Reporting Information | ||||
Net revenue | 39,900 | 39,954 | 67,897 | 66,351 |
Product sales | South Korea | ||||
Segment Reporting Information | ||||
Net revenue | 32,898 | 35,624 | 66,815 | 73,256 |
Product sales | Other foreign countries | ||||
Segment Reporting Information | ||||
Net revenue | 284,825 | 249,060 | 487,397 | 436,035 |
Net royalties | ||||
Segment Reporting Information | ||||
Net revenue | $ 18,542 | $ 19,709 | $ 37,360 | $ 39,493 |
Borrowings and Finance Lease _3
Borrowings and Finance Lease Obligations (Details) - USD ($) | Feb. 16, 2016 | Jun. 23, 2015 | Aug. 03, 2019 | Aug. 04, 2018 | Feb. 03, 2018 | Mar. 31, 2019 | Feb. 02, 2019 |
Debt Instrument [Line Items] | |||||||
Mortgage debt, maturing monthly through January 2026 | $ 19,384,000 | $ 19,738,000 | |||||
Finance lease obligations | 18,083,000 | ||||||
Finance lease obligations | 16,702,000 | ||||||
Borrowings under credit facilities | 27,770,000 | 0 | |||||
Other | 2,829,000 | 2,887,000 | |||||
Less current installments | 32,554,000 | 4,315,000 | |||||
Mortgage Debt | |||||||
Mortgage debt, maturing monthly through January 2026 | 19,384,000 | 19,738,000 | |||||
Debt issuance costs | 4,032,000 | ||||||
Finance Lease | |||||||
Finance lease obligations incurred | 3,055,000 | $ 1,164,000 | |||||
Finance lease obligations | 18,083,000 | ||||||
Capital lease obligations | 16,702,000 | ||||||
Credit Facilities | |||||||
Credit Facility, outstanding amount | $ 27,770,000 | 0 | |||||
Interest rate swap | Derivatives designated as hedging instruments | Cash flow hedges | |||||||
Mortgage Debt | |||||||
Fixed rate of interest rate swap derivative (as a percent) | 3.06% | ||||||
Europe | Foreign line of credit | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings under credit facilities | $ 27,800,000 | ||||||
Credit Facilities | |||||||
Current borrowing capacity | 126,500,000 | ||||||
Letters of credit outstanding | 0 | ||||||
Credit Facility, outstanding amount | $ 27,800,000 | ||||||
Europe | Foreign line of credit | Minimum | |||||||
Credit Facilities | |||||||
Interest rate (as a percent) | 0.50% | ||||||
Europe | Foreign line of credit | Maximum | |||||||
Credit Facilities | |||||||
Interest rate (as a percent) | 4.60% | ||||||
Mortgage debt | Building | U.S. | |||||||
Debt Instrument [Line Items] | |||||||
Mortgage debt, maturing monthly through January 2026 | $ 21,500,000 | $ 19,400,000 | 19,700,000 | ||||
Mortgage Debt | |||||||
Debt maturity period (in years) | 10 years | ||||||
Mortgage debt, maturing monthly through January 2026 | $ 21,500,000 | 19,400,000 | 19,700,000 | ||||
Debt amortization period (in years) | 25 years | ||||||
Debt issuance costs | $ 100,000 | 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 liability | $ (100,000) | ||||||
Fair value of cash flow hedge asset | 1,000,000 | ||||||
Mortgage debt | Building | U.S. | Interest rate swap | Derivatives designated as hedging instruments | Cash flow hedges | |||||||
Mortgage Debt | |||||||
Fixed rate of interest rate swap derivative (as a percent) | 3.06% | ||||||
Finance lease | Equipment | Netherlands | |||||||
Debt Instrument [Line Items] | |||||||
Finance lease obligations | 13,600,000 | ||||||
Finance lease obligations | 14,700,000 | ||||||
Finance Lease | |||||||
Finance lease obligations incurred | $ 17,000,000 | ||||||
Effective interest rate on finance lease obligations | 6.00% | ||||||
Finance lease obligations | 13,600,000 | ||||||
Capital lease obligations | 14,700,000 | ||||||
Finance lease | Computer hardware and software | |||||||
Debt Instrument [Line Items] | |||||||
Finance lease obligations | 4,500,000 | ||||||
Finance lease obligations | 2,000,000 | ||||||
Finance Lease | |||||||
Finance lease obligations incurred | 3,100,000 | ||||||
Finance lease obligations | 4,500,000 | ||||||
Capital lease obligations | 2,000,000 | ||||||
Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings under credit facilities | 0 | ||||||
Credit Facilities | |||||||
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 | |||||||
Mortgage Debt | |||||||
Debt maturity period (in years) | 5 years | ||||||
Credit Facilities | |||||||
Maximum borrowing capacity | $ 150,000,000 | ||||||
Current borrowing capacity | $ 134,000,000 | ||||||
Credit Facility | Accordion feature | |||||||
Credit Facilities | |||||||
Maximum borrowing capacity | 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 | |||||||
Credit Facilities | |||||||
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 | |||||||
Credit Facilities | |||||||
Interest rate margin added to respective base rate | 0.50% | ||||||
Credit Facility | Standby letters of credit | |||||||
Credit Facilities | |||||||
Letters of credit outstanding | $ 2,300,000 | ||||||
Credit Facility | Documentary letters of credit | |||||||
Credit Facilities | |||||||
Letters of credit outstanding | $ 0 | ||||||
Credit Facility | Canada | Foreign line of credit | |||||||
Credit Facilities | |||||||
Maximum borrowing capacity | $ 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 | |||||||
Credit Facilities | |||||||
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 | |||||||
Credit Facilities | |||||||
Interest rate margin added to respective base rate | 0.50% | ||||||
Long-term debt and finance lease liabilities, excluding convertible senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Total debt and finance lease obligations | $ 68,066,000 | 39,327,000 | |||||
Less current installments | 32,554,000 | 4,315,000 | |||||
Long-term debt and finance lease obligations, net | 35,512,000 | $ 35,012,000 | |||||
Multicurrency Borrowing Agreement | |||||||
Credit Facilities | |||||||
Maximum borrowing capacity | $ 20,000,000 | ||||||
Letters of credit outstanding | 0 | ||||||
Outstanding borrowings | $ 0 |
Convertible Senior Notes and _3
Convertible Senior Notes and Related Transactions - Narrative (Details) | May 01, 2019$ / shares | Apr. 30, 2019USD ($)$ / sharesshares | Aug. 03, 2019USD ($)$ / sharesshares | Aug. 03, 2019USD ($)$ / sharesshares | Aug. 04, 2018USD ($) |
Debt Instrument [Line Items] | |||||
Amortization of debt discount | $ 2,662,000 | $ 0 | |||
Amortization of debt issuance costs | $ 276,000 | 0 | |||
Option to purchase, number of shares (in shares) | shares | 11,600,000 | ||||
Conversion price of convertible senior notes (in dollars per share) | $ / shares | $ 46.88 | $ 25.78 | $ 25.78 | ||
Convertible note hedge cost | $ (61,000,000) | ||||
Warrants outstanding (in shares) | shares | 11,600,000 | 11,600,000 | 11,600,000 | ||
Strike price of warrants (in dollars per share) | $ / shares | $ 46.88 | $ 46.88 | $ 46.88 | ||
Proceeds from issuance of warrants | $ 28,100,000 | $ 28,080,000 | $ 0 | ||
Deferred tax liability | $ (13,300,000) | (13,300,000) | |||
Deferred tax asset | 14,500,000 | 14,500,000 | |||
Senior Notes | 2.00% Convertible Senior Notes Due 2024 | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 2.00% | ||||
Convertible debt issued | $ 300,000,000 | ||||
Conversion ratio | 0.0387879 | ||||
Conversion price (in dollars per share) | $ / shares | $ 25.78 | ||||
Percentage of principal and interest of the Notes that the Company may be required to purchase in the event of a fundamental change | 100.00% | ||||
Minimum percentage of holders of the Notes which may be able to declare the Notes to be due and payable upon the occurrence of certain events of default | 25.00% | ||||
Percentage of principal and interest that may be declared due and payable upon the occurrence of certain events of default | 100.00% | ||||
Effective interest rate | 6.80% | ||||
Amortization of debt discount | 2,400,000 | 2,700,000 | |||
Debt issuance costs | 5,300,000 | 5,300,000 | |||
Amortization of debt issuance costs | 200,000 | 200,000 | |||
Fair value of convertible senior notes | 226,600,000 | 226,600,000 | |||
Initial Purchasers | Senior Notes | 2.00% Convertible Senior Notes Due 2024 | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 3,800,000 | ||||
Third Party Offerers | Senior Notes | 2.00% Convertible Senior Notes Due 2024 | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 1,500,000 | ||||
Accrued expenses and other current liabilities | Senior Notes | 2.00% Convertible Senior Notes Due 2024 | |||||
Debt Instrument [Line Items] | |||||
Deferred financing cost payable | $ 200,000 | $ 200,000 |
Convertible Senior Notes and _4
Convertible Senior Notes and Related Transactions - Components of Debt (Details) $ in Thousands | Aug. 03, 2019USD ($) |
Debt Disclosure [Abstract] | |
Principal | $ 300,000 |
Unamortized debt discount | (53,913) |
Unamortized issuance costs | (4,032) |
Net carrying amount | 242,055 |
Equity component, net | $ 42,324 |
Share-Based Compensation - Shar
Share-Based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 4,986 | $ 4,031 | $ 9,454 | $ 7,989 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 697 | 672 | 1,287 | 1,367 |
Stock awards/units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 4,205 | 3,292 | 8,020 | 6,462 |
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 84 | $ 67 | $ 147 | $ 160 |
Share-Based Compensation Share-
Share-Based Compensation Share-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 20, 2019 | Jun. 10, 2019 | Mar. 29, 2019 | Feb. 20, 2019 | Jun. 25, 2018 | Mar. 30, 2018 | Aug. 03, 2019 | Aug. 04, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unrecognized compensation cost related to nonvested stock options | $ 10.4 | |||||||
Weighted average period for recognition of unrecognized compensation cost (in years/months/days) | 1 year 9 months 18 days | |||||||
Weighted average fair values of stock options granted during the period (in dollars per share) | $ 5.41 | $ 5.89 | ||||||
Stock options granted (in shares) | 1,077,700 | 5,100 | 431,371 | |||||
Stock awards/units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unrecognized compensation cost related to nonvested stock awards/units | $ 23.8 | |||||||
Equity instruments granted (in shares) | 280,700 | 490,528 | ||||||
Performance-based units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity instruments granted (in shares) | 455,339 | |||||||
Performance-based or market-based units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity instruments granted (in shares) | 205,339 | 619,578 | ||||||
Nonvested performance shares | Minimum | Vesting, Tranches After Initial Vesting Period | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 2 years | |||||||
Nonvested performance shares | Maximum | Vesting, Tranches After Initial Vesting Period | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 3 years | |||||||
Target performance units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 3 years | |||||||
Target performance units | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target vesting percentage | 0.00% | |||||||
Target performance units | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target vesting percentage | 200.00% | |||||||
Market-based units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity instruments granted (in shares) | 17,557 | |||||||
Award vesting period | 3 years | |||||||
Market-based units | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target vesting percentage | 0.00% | |||||||
Market-based units | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target vesting percentage | 150.00% | |||||||
Chief Executive Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock options granted (in shares) | 600,000 | |||||||
Chief Executive Officer | Performance-based units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity instruments granted (in shares) | 250,000 | |||||||
Chief Executive Officer | Restricted stock units subject to clawback contingency | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity instruments granted (in shares) | 150,000 |
Share-Based Compensation - Equi
Share-Based Compensation - Equity Instrument Activity (Details) | 6 Months Ended |
Aug. 03, 2019$ / sharesshares | |
Performance-based units | |
Number of Units | |
Balance at beginning of period (in shares) | shares | 1,371,230 |
Granted (in shares) | shares | 455,339 |
Vested (in shares) | shares | 103,369 |
Forfeited (in shares) | shares | 334,526 |
Balance at end of period (in shares) | shares | 1,388,674 |
Weighted Average Grant Date Fair Value | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 16.44 |
Granted (in dollars per share) | $ / shares | 18.33 |
Vested (in dollars per share) | $ / shares | 20.70 |
Forfeited (in dollars per share) | $ / shares | 18.01 |
Balance at end of period (in dollars per share) | $ / shares | $ 16.37 |
Market-based units | |
Number of Units | |
Balance at beginning of period (in shares) | shares | 518,409 |
Granted (in shares) | shares | 17,557 |
Vested (in shares) | shares | 158,014 |
Forfeited (in shares) | shares | 89,750 |
Balance at end of period (in shares) | shares | 288,202 |
Weighted Average Grant Date Fair Value | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 14.28 |
Granted (in dollars per share) | $ / shares | 15.20 |
Vested (in dollars per share) | $ / shares | 15.20 |
Forfeited (in dollars per share) | $ / shares | 15.58 |
Balance at end of period (in dollars per share) | $ / shares | $ 13.43 |
Related Party Transactions (Det
Related Party Transactions (Details) | 6 Months Ended | |
Aug. 03, 2019USD ($)lease | Aug. 04, 2018USD ($) | |
Marciano Trusts | ||
Related Party Transactions | ||
Number of leases under related party lease agreements | lease | 4 | |
Marciano Trusts | Related party leases | ||
Related Party Transactions | ||
Expenses under related party arrangement | $ 2,600,000 | $ 2,500,000 |
Aircraft Entities | Payments for aircraft charter | ||
Related Party Transactions | ||
Payments under related party agreement | $ 0 | $ 800,000 |
Commitments and Contingencies -
Commitments and Contingencies - Investment Commitments (Details) - Aug. 03, 2019 € in Millions, $ in Millions | USD ($) | EUR (€) |
Private equity fund | ||
Investment commitments | ||
Unfunded commitment to invest in private equity fund | $ 4 | € 3.6 |
Commitments and Contingencies_2
Commitments and Contingencies - Legal and Other Proceedings (Details) - 6 months ended Aug. 03, 2019 - Italy - Europe - Customs tax audit and appeals € in Millions, $ in Millions | USD ($)subsidiary | EUR (€)subsidiary | EUR (€) |
Pending litigation | |||
Loss Contingencies [Line Items] | |||
Number of subsidiaries under audit by the Italian Customs Agency | 1 | 1 | |
Customs tax assessments including potential penalties and interest | $ 10.9 | € 9.8 | |
Appealed customs tax assessments | 10.8 | € 9.7 | |
Settled litigation | |||
Loss Contingencies [Line Items] | |||
Amount with appealed ruling in favor of the Company | 9.4 | 8.5 | |
Monetary damages awarded by court to the plaintiff | $ 1.4 | € 1.2 |
Commitments and Contingencies_3
Commitments and Contingencies - Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 03, 2018 | Aug. 03, 2019 | Feb. 02, 2019 | Aug. 04, 2018 | |
Loss Contingencies [Line Items] | ||||
Redeemable noncontrolling interests | $ 5,590 | $ 4,784 | $ 4,853 | $ 4,951 |
Guess Brazil | ||||
Loss Contingencies [Line Items] | ||||
Ownership percentage | 40.00% | |||
Guess CIS | ||||
Loss Contingencies [Line Items] | ||||
Ownership percentage by parent | 30.00% | |||
Guess Brazil | ||||
Loss Contingencies [Line Items] | ||||
Redeemable noncontrolling interests | $ 1,300 | 1,400 | ||
Guess CIS | ||||
Loss Contingencies [Line Items] | ||||
Redeemable noncontrolling interests | $ 3,500 | $ 3,500 | ||
Payments in joint venture | 3,200 | |||
Payments to acquire joint venture | $ 2,200 |
Commitments and Contingencies_4
Commitments and Contingencies - Reconciliation of Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 03, 2019 | Aug. 04, 2018 | |
Redeemable Noncontrolling Interest [Roll Forward] | ||
Beginning balance | $ 4,853 | $ 5,590 |
Foreign currency translation adjustment | (69) | (639) |
Ending balance | $ 4,784 | $ 4,951 |
Defined Benefit Plans (Details)
Defined Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | Feb. 02, 2019 | |
SERP | |||||
Defined Benefit Plans | |||||
SERP benefit payments | $ 400 | $ 400 | $ 800 | $ 800 | |
Components of net periodic defined benefit pension cost | |||||
Service cost | 0 | 0 | 0 | 0 | |
Interest cost | 481 | 472 | 962 | 944 | |
Expected return on plan assets | 0 | 0 | 0 | 0 | |
Net amortization of unrecognized prior service credit | 0 | 0 | 0 | 0 | |
Net amortization of actuarial losses | 15 | 46 | 31 | 93 | |
Net periodic defined benefit pension cost | 496 | 518 | 993 | 1,037 | |
SERP | Other income/expense | |||||
Defined Benefit Plans | |||||
Gain (loss) as a result of changes in value of the insurance policy investments, included in other income (expense) | (200) | 1,700 | 3,000 | 700 | |
Pension | |||||
Components of net periodic defined benefit pension cost | |||||
Service cost | 808 | 754 | 1,615 | 1,494 | |
Interest cost | 548 | 527 | 1,097 | 1,054 | |
Expected return on plan assets | (78) | (75) | (155) | (149) | |
Net amortization of unrecognized prior service credit | (9) | (7) | (19) | (14) | |
Net amortization of actuarial losses | 111 | 151 | 222 | 303 | |
Net periodic defined benefit pension cost | 1,380 | 1,350 | 2,760 | 2,688 | |
Pension | Foreign Plan | |||||
Defined Benefit Plans | |||||
Projected benefit obligation | 33,600 | 33,600 | $ 31,100 | ||
Plan assets at fair value | 27,400 | 27,400 | 25,400 | ||
Components of net periodic defined benefit pension cost | |||||
Service cost | 808 | 754 | 1,615 | 1,494 | |
Interest cost | 67 | 55 | 135 | 110 | |
Expected return on plan assets | (78) | (75) | (155) | (149) | |
Net amortization of unrecognized prior service credit | (9) | (7) | (19) | (14) | |
Net amortization of actuarial losses | 96 | 105 | 191 | 210 | |
Net periodic defined benefit pension cost | 884 | $ 832 | 1,767 | $ 1,651 | |
Other assets | SERP | |||||
Defined Benefit Plans | |||||
Cash surrender values of the insurance policies held in a rabbi trust | 63,900 | 63,900 | 61,700 | ||
Accrued expenses and other long-term liabilities | SERP | |||||
Defined Benefit Plans | |||||
Projected benefit obligation | 52,300 | 52,300 | 52,200 | ||
Other long-term liabilities | Pension | Foreign Plan | |||||
Defined Benefit Plans | |||||
Net liability | $ 6,200 | $ 6,200 | $ 5,700 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Hierarchy for Assets and Liabilities (Details) - Assets and liabilities measured at fair value on a recurring basis - USD ($) $ in Thousands | Aug. 03, 2019 | Feb. 02, 2019 |
Assets: | ||
Total Assets | $ 6,912 | $ 5,723 |
Liabilities: | ||
Deferred compensation obligations | 15,554 | 14,405 |
Total Liabilities | 15,607 | 14,482 |
Level 1 | ||
Assets: | ||
Total Assets | 0 | 0 |
Liabilities: | ||
Deferred compensation obligations | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
Total Assets | 6,912 | 5,723 |
Liabilities: | ||
Deferred compensation obligations | 15,554 | 14,405 |
Total Liabilities | 15,607 | 14,482 |
Level 3 | ||
Assets: | ||
Total Assets | 0 | 0 |
Liabilities: | ||
Deferred compensation obligations | 0 | 0 |
Total Liabilities | 0 | 0 |
Foreign exchange currency contracts | ||
Assets: | ||
Derivative assets | 6,912 | 4,690 |
Liabilities: | ||
Derivative liabilities | 0 | 77 |
Foreign exchange currency contracts | Level 1 | ||
Assets: | ||
Derivative assets | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Foreign exchange currency contracts | Level 2 | ||
Assets: | ||
Derivative assets | 6,912 | 4,690 |
Liabilities: | ||
Derivative liabilities | 0 | 77 |
Foreign exchange currency contracts | Level 3 | ||
Assets: | ||
Derivative assets | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Interest rate swap | ||
Assets: | ||
Derivative assets | 0 | 1,033 |
Liabilities: | ||
Derivative liabilities | 53 | 0 |
Interest rate swap | Level 1 | ||
Assets: | ||
Derivative assets | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Interest rate swap | Level 2 | ||
Assets: | ||
Derivative assets | 0 | 1,033 |
Liabilities: | ||
Derivative liabilities | 53 | 0 |
Interest rate swap | Level 3 | ||
Assets: | ||
Derivative assets | 0 | 0 |
Liabilities: | ||
Derivative liabilities | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands, € in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Aug. 03, 2019USD ($) | Aug. 04, 2018USD ($) | Aug. 03, 2019USD ($) | Aug. 03, 2019EUR (€) | Aug. 04, 2018USD ($) | Aug. 04, 2018EUR (€) | Feb. 02, 2019USD ($) | Feb. 02, 2019EUR (€) | Aug. 03, 2019EUR (€) | Feb. 02, 2019EUR (€) | |
Asset impairment charge | ||||||||||
Payments to acquire investment in private equity fund | $ 0 | $ 1,581 | ||||||||
Period of time new regular retail locations in penetrated markets would need to be opened to be considered for impairment | 1 year | 1 year | ||||||||
North America and Europe | Retail locations | ||||||||||
Asset impairment charge | ||||||||||
Asset impairment charges | $ 1,500 | $ 3,000 | $ 3,300 | 3,700 | ||||||
Private equity fund | ||||||||||
Asset impairment charge | ||||||||||
Unfunded commitment to invest in private equity fund | 4,000 | 4,000 | € 3.6 | |||||||
Fair Value Measured at Net Asset Value Per Share | Private equity fund | ||||||||||
Asset impairment charge | ||||||||||
Payments to acquire investment in private equity fund | $ 1,100 | € 0.9 | ||||||||
Unfunded commitment to invest in private equity fund | 4,000 | 4,000 | 3.6 | |||||||
Fair Value Measured at Net Asset Value Per Share | Private equity fund | Other expense | ||||||||||
Asset impairment charge | ||||||||||
Unrealized loss on investments | (100) | € (0.1) | $ (200) | € (0.1) | ||||||
Fair Value Measured at Net Asset Value Per Share | Private equity fund | Other assets | ||||||||||
Asset impairment charge | ||||||||||
Alternative investment | $ 1,300 | $ 1,300 | $ 1,400 | € 1.2 | € 1.2 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Fair Value of Derivatives (Details) - USD ($) $ in Thousands | Aug. 03, 2019 | Feb. 02, 2019 |
ASSETS: | ||
Derivatives, assets | $ 6,912 | $ 5,723 |
LIABILITIES: | ||
Derivatives, liabilities | 53 | 77 |
Derivatives designated as hedging instruments | Cash flow hedges | ||
ASSETS: | ||
Derivatives, assets | 5,894 | 5,091 |
Derivatives designated as hedging instruments | Foreign exchange currency contracts | Other current assets/Other assets | Cash flow hedges | ||
ASSETS: | ||
Derivatives, assets | 5,894 | 4,058 |
Derivatives designated as hedging instruments | Foreign exchange currency contracts | Accrued expenses and other current liabilities | Cash flow hedges | ||
LIABILITIES: | ||
Derivatives, liabilities | 0 | 77 |
Derivatives designated as hedging instruments | Interest rate swap | Other assets | Cash flow hedges | ||
ASSETS: | ||
Derivatives, assets | 0 | 1,033 |
Derivatives designated as hedging instruments | Interest rate swap | Other long-term liabilities | Cash flow hedges | ||
LIABILITIES: | ||
Derivatives, liabilities | 53 | 0 |
Derivatives not designated as hedging instruments | Foreign exchange currency contracts | Other current assets | ||
ASSETS: | ||
Derivatives, assets | $ 1,018 | $ 632 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Narrative (Details) - USD ($) | 6 Months Ended | ||||||
Aug. 03, 2019 | May 04, 2019 | Feb. 02, 2019 | Aug. 04, 2018 | May 05, 2018 | Feb. 03, 2018 | Jan. 28, 2017 | |
Derivative [Line Items] | |||||||
Gain (loss) on derivative financial instruments designated as cash flow hedges | $ 572,795,000 | $ 565,078,000 | $ 853,645,000 | $ 866,081,000 | $ 874,257,000 | $ 933,475,000 | |
Foreign exchange currency cash flow hedge unrealized gain to be recognized in cost of product sales over the following 12 months | 7,500,000 | ||||||
Derivative Financial Instruments Designated as Cash Flow Hedges | |||||||
Derivative [Line Items] | |||||||
Gain (loss) on derivative financial instruments designated as cash flow hedges | $ 9,069,000 | $ 8,663,000 | 2,999,000 | ||||
Cash flow hedges | Europe | Derivatives designated as hedging instruments | |||||||
Derivative [Line Items] | |||||||
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 13 months | ||||||
Foreign exchange currency contracts | Derivative Financial Instruments Designated as Cash Flow Hedges | |||||||
Derivative [Line Items] | |||||||
Gain (loss) on derivative financial instruments designated as cash flow hedges | $ 9,100,000 | ||||||
Foreign exchange currency contracts | Cash flow hedges | Europe | Derivatives designated as hedging instruments | |||||||
Derivative [Line Items] | |||||||
Total notional amount of derivatives purchased | 68,600,000 | ||||||
Notional amount of derivative outstanding | 151,800,000 | 175,200,000 | |||||
Foreign exchange currency contracts | Cash flow hedges | Canada | Derivatives designated as hedging instruments | |||||||
Derivative [Line Items] | |||||||
Notional amount of derivative outstanding | 0 | 3,900,000 | |||||
Interest rate swap | Derivative Financial Instruments Designated as Cash Flow Hedges | |||||||
Derivative [Line Items] | |||||||
Gain (loss) on derivative financial instruments designated as cash flow hedges | $ (100,000) | ||||||
Interest rate swap | Cash flow hedges | Derivatives designated as hedging instruments | |||||||
Derivative [Line Items] | |||||||
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% | ||||||
Euro Member Countries, Euro | Derivatives not designated as hedging instruments | |||||||
Derivative [Line Items] | |||||||
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 1 month | ||||||
Euro Member Countries, Euro | Foreign exchange currency contracts | Derivatives not designated as hedging instruments | |||||||
Derivative [Line Items] | |||||||
Notional amount of derivative outstanding | $ 14,100,000 | 8,200,000 | |||||
Canada, Dollars | Foreign exchange currency contracts | Derivatives not designated as hedging instruments | |||||||
Derivative [Line Items] | |||||||
Notional amount of derivative outstanding | $ 0 | $ 0 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Gains (Losses) Before Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | Feb. 03, 2019 | Feb. 04, 2018 | |
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | ||||||
Gains arising during the period | $ 2,286,000 | $ 6,722,000 | ||||
Gains recognized in OCI under prior accounting | $ 4,675,000 | $ 12,167,000 | ||||
Gain (loss) reclassified from accumulated OCI into earnings | 1,801,000 | 2,077,000 | ||||
Cumulative adjustment from adoption of new accounting guidance | $ 297,000 | $ 5,829,000 | ||||
Foreign exchange currency contracts | ||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | ||||||
Amount of ineffectiveness recognized in net earnings on foreign exchange currency contracts | 800,000 | 1,400,000 | ||||
Foreign exchange currency contracts | Cost of product sales | ||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | ||||||
Gains arising during the period | 3,063,000 | 7,718,000 | ||||
Gains recognized in OCI under prior accounting | 4,638,000 | 12,060,000 | ||||
Gain (loss) reclassified from accumulated OCI into earnings | 1,757,000 | 1,987,000 | ||||
Gain (loss) reclassified from accumulated OCI into earnings under prior accounting | (2,342,000) | (4,028,000) | ||||
Foreign exchange currency contracts | Other income/expense | ||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | ||||||
Gains arising during the period | 0 | |||||
Gains recognized in OCI under prior accounting | 2,000 | |||||
Gain (loss) reclassified from accumulated OCI into earnings | 0 | |||||
Gain (loss) reclassified from accumulated OCI into earnings under prior accounting | (201,000) | |||||
Interest rate swap | ||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | ||||||
Amount of ineffectiveness recognized in net earnings on foreign exchange currency contracts | 0 | 0 | ||||
Interest rate swap | Interest expense | ||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | ||||||
Gains arising during the period | (777,000) | (996,000) | ||||
Gains recognized in OCI under prior accounting | 37,000 | 105,000 | ||||
Gain (loss) reclassified from accumulated OCI into earnings | $ 44,000 | $ 90,000 | ||||
Gain (loss) reclassified from accumulated OCI into earnings under prior accounting | $ 31,000 | $ 39,000 | ||||
Retained Earnings | ||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | ||||||
Cumulative adjustment from adoption of new accounting guidance | (1,684,000) | $ 5,829,000 | ||||
Accumulated Other Comprehensive Loss | ||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | ||||||
Cumulative adjustment from adoption of new accounting guidance | 1,981,000 | |||||
Accounting Standards Update 2017-12 | Retained Earnings | ||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | ||||||
Cumulative adjustment from adoption of new accounting guidance | (2,000,000) | |||||
Accounting Standards Update 2017-12 | Accumulated Other Comprehensive Loss | ||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | ||||||
Cumulative adjustment from adoption of new accounting guidance | $ 2,000,000 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Derivative Activity in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | May 05, 2019 | Feb. 03, 2019 | May 06, 2018 | Feb. 04, 2018 | |
Accumulated Other Comprehensive Income, Derivatives Qualifying as Hedges, Net of Tax [Roll Forward] | ||||||||
Beginning balance | $ 565,078 | $ 874,257 | $ 853,645 | $ 933,475 | ||||
Cumulative adjustment from adoption of new accounting guidance | $ 297 | $ 5,829 | ||||||
Ending balance | 572,795 | 866,081 | 572,795 | 866,081 | ||||
Derivative Financial Instruments Designated as Cash Flow Hedges | ||||||||
Accumulated Other Comprehensive Income, Derivatives Qualifying as Hedges, Net of Tax [Roll Forward] | ||||||||
Beginning balance | 8,663 | 2,999 | ||||||
Cumulative adjustment from adoption of new accounting guidance | $ 0 | $ 1,981 | ||||||
Net gains from changes in cash flow hedges | 1,978 | 5,842 | ||||||
Net (gains) losses reclassified into earnings | (1,572) | (1,753) | ||||||
Ending balance | $ 9,069 | $ 9,069 | ||||||
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | ||||||||
Accumulated Other Comprehensive Income, Derivatives Qualifying as Hedges, Net of Tax [Roll Forward] | ||||||||
Beginning balance | (6,285) | (14,369) | ||||||
Cumulative adjustment from adoption of new accounting guidance | $ 0 | $ 0 | ||||||
Net gains from changes in cash flow hedges | 4,111 | 10,579 | ||||||
Net (gains) losses reclassified into earnings | 2,032 | 3,648 | ||||||
Ending balance | $ (142) | $ (142) |
Derivative Financial Instrume_7
Derivative Financial Instruments - Derivative Instruments Not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Foreign exchange currency contracts | Other income/expense | ||||
Derivatives not designated as hedging instruments: | ||||
Foreign exchange currency contracts | $ 233 | $ 2,216 | $ 808 | $ 5,906 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares shares in Millions | Sep. 04, 2019 | Aug. 28, 2019 | Apr. 26, 2019 | Aug. 03, 2019 | May 04, 2019 | Aug. 04, 2018 | Sep. 04, 2019 | Aug. 03, 2019 | Aug. 04, 2018 | Feb. 02, 2019 |
Subsequent Events | ||||||||||
Cash dividend announced on common stock (in dollars per share) | $ 0.1125 | $ 0.1125 | $ 0.2250 | $ 0.3375 | $ 0.4500 | $ 0.225 | ||||
Subsequent Events | ||||||||||
Subsequent Events | ||||||||||
Cash dividend announced on common stock (in dollars per share) | $ 0.1125 | |||||||||
Accelerated Share Repurchase Contract | ||||||||||
Subsequent Events | ||||||||||
Share repurchases (in shares) | 5.2 | |||||||||
Accelerated Share Repurchase Contract | Subsequent Events | ||||||||||
Subsequent Events | ||||||||||
Share repurchases (in shares) | 5.4 | 10.6 | ||||||||
Average price per share (in dollars per share) | $ 16.09 |