Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 30, 2016 | Aug. 19, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | AEO | |
Entity Registrant Name | AMERICAN EAGLE OUTFITTERS INC | |
Entity Central Index Key | 919,012 | |
Current Fiscal Year End Date | --01-28 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 181,763,310 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 30, 2016 | Jan. 30, 2016 | Aug. 01, 2015 |
Current assets: | |||
Cash and cash equivalents | $ 247,934 | $ 260,067 | $ 327,290 |
Merchandise inventory | 422,151 | 305,178 | 408,541 |
Accounts receivable | 65,282 | 80,912 | 50,693 |
Prepaid expenses and other | 90,852 | 77,218 | 72,106 |
Total current assets | 826,219 | 723,375 | 858,630 |
Property and equipment, at cost, net of accumulated depreciation | 700,270 | 703,586 | 715,650 |
Intangible assets, at cost, net of accumulated amortization | 50,761 | 51,832 | 47,154 |
Goodwill | 17,399 | 17,186 | 13,006 |
Non-current deferred income taxes | 44,370 | 64,927 | 74,140 |
Other assets | 54,169 | 51,340 | 51,629 |
Total assets | 1,693,188 | 1,612,246 | 1,760,209 |
Current liabilities: | |||
Accounts payable | 286,691 | 182,789 | 263,145 |
Accrued compensation and payroll taxes | 35,908 | 79,302 | 37,851 |
Accrued rent | 78,621 | 77,482 | 77,127 |
Accrued income and other taxes | 10,250 | 22,223 | 14,654 |
Unredeemed gift cards and gift certificates | 31,532 | 48,274 | 30,502 |
Current portion of deferred lease credits | 12,810 | 12,711 | 13,240 |
Other liabilities and accrued expenses | 42,719 | 40,901 | 55,625 |
Total current liabilities | 498,531 | 463,682 | 492,144 |
Non-current liabilities: | |||
Deferred lease credits | 51,100 | 50,104 | 56,421 |
Non-current accrued income taxes | 4,795 | 4,566 | 5,441 |
Other non-current liabilities | 38,365 | 42,518 | 40,525 |
Total non-current liabilities | 94,260 | 97,188 | 102,387 |
Commitments and contingencies | |||
Stockholders’ equity: | |||
Preferred stock, $0.01 par value; 5,000 shares authorized; none issued and outstanding | |||
Common stock, $0.01 par value; 600,000 shares authorized; 249,566 shares issued; 180,907, 180,135 and 195,429 shares outstanding, respectively | 2,496 | 2,496 | 2,496 |
Contributed capital | 591,532 | 590,820 | 577,146 |
Accumulated other comprehensive loss | (29,356) | (29,868) | (18,378) |
Retained earnings | 1,693,371 | 1,659,267 | 1,553,380 |
Treasury stock, 68,659, 69,431 and 54,137 shares, respectively | (1,157,646) | (1,171,339) | (948,966) |
Total stockholders’ equity | 1,100,397 | 1,051,376 | 1,165,678 |
Total liabilities and stockholders’ equity | $ 1,693,188 | $ 1,612,246 | $ 1,760,209 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jul. 30, 2016 | Jan. 30, 2016 | Aug. 01, 2015 |
Statement Of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 | 0 |
Preferred stock, outstanding | 0 | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 | 600,000,000 |
Common stock, shares issued | 249,566,000 | 249,566,000 | 249,566,000 |
Common stock, shares outstanding | 180,907,000 | 180,135,000 | 195,429,000 |
Treasury stock, shares | 68,659,000 | 69,431,000 | 54,137,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 30, 2016 | Aug. 01, 2015 | Jul. 30, 2016 | Aug. 01, 2015 | |
Income Statement [Abstract] | ||||
Total net revenue | $ 822,594 | $ 797,428 | $ 1,572,010 | $ 1,496,948 |
Cost of sales, including certain buying, occupancy and warehousing expenses | 515,499 | 512,389 | 971,463 | 949,697 |
Gross profit | 307,095 | 285,039 | 600,547 | 547,251 |
Selling, general and administrative expenses | 199,536 | 195,791 | 395,529 | 380,882 |
Depreciation and amortization expense | 38,900 | 36,109 | 77,683 | 71,237 |
Operating income | 68,659 | 53,139 | 127,335 | 95,132 |
Other (expense) income, net | (3,134) | (2,237) | 1,801 | 3,733 |
Income before income taxes | 65,525 | 50,902 | 129,136 | 98,865 |
Provision for income taxes | 23,933 | 17,637 | 47,068 | 36,547 |
Net income | $ 41,592 | $ 33,265 | $ 82,068 | $ 62,318 |
Net income per basic share | $ 0.23 | $ 0.17 | $ 0.45 | $ 0.32 |
Net income per diluted share | 0.23 | 0.17 | 0.45 | 0.32 |
Cash dividends per common share | $ 0.125 | $ 0.125 | $ 0.250 | $ 0.250 |
Weighted average common shares outstanding - basic | 181,048 | 195,508 | 180,872 | 195,241 |
Weighted average common shares outstanding - diluted | 183,413 | 196,885 | 182,922 | 196,532 |
Retained earnings, beginning | $ 1,675,031 | $ 1,545,674 | $ 1,659,267 | $ 1,543,085 |
Net income | 41,592 | 33,265 | 82,068 | 62,318 |
Cash dividends and dividend equivalents | (23,246) | (24,428) | (46,405) | (49,417) |
Reissuance of treasury stock | (6) | (1,131) | (1,559) | (2,606) |
Retained earnings, ending | $ 1,693,371 | $ 1,553,380 | $ 1,693,371 | $ 1,553,380 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 30, 2016 | Aug. 01, 2015 | Jul. 30, 2016 | Aug. 01, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 41,592 | $ 33,265 | $ 82,068 | $ 62,318 |
Other comprehensive (loss) income: | ||||
Foreign currency translation (loss) income | (4,873) | (7,334) | 511 | (8,434) |
Other comprehensive (loss) income: | (4,873) | (7,334) | 511 | (8,434) |
Comprehensive income | $ 36,719 | $ 25,931 | $ 82,579 | $ 53,884 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 30, 2016 | Aug. 01, 2015 | |
Operating activities: | ||
Net income | $ 82,068 | $ 62,318 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 78,142 | 71,582 |
Share-based compensation | 16,748 | 22,091 |
Deferred income taxes | 20,262 | (1,272) |
Foreign currency transaction gain | (2,268) | (1,062) |
Changes in assets and liabilities: | ||
Merchandise inventory | (115,371) | (131,345) |
Accounts receivable | 14,081 | 16,189 |
Prepaid expenses and other | (13,360) | (1,800) |
Other assets | (3,482) | (16,074) |
Accounts payable | 92,027 | 67,869 |
Unredeemed gift cards and gift certificates | (16,953) | (17,285) |
Deferred lease credits | 718 | 2,349 |
Accrued compensation and payroll taxes | (42,796) | (6,407) |
Accrued income and other taxes | (12,020) | (22,926) |
Accrued liabilities | 3,570 | 3,289 |
Total adjustments | 19,298 | (14,802) |
Net cash provided by operating activities | 101,366 | 47,516 |
Investing activities: | ||
Capital expenditures for property and equipment | (60,539) | (78,927) |
Acquisition of intangible assets | (1,034) | (1,680) |
Net cash used for investing activities | (61,573) | (80,607) |
Financing activities: | ||
Payments on capital leases | (3,902) | (3,084) |
Repurchase of common stock from employees | (6,868) | (5,149) |
Net proceeds from stock options exercised | 1,905 | 6,362 |
Excess tax benefit from share-based payments | 486 | 653 |
Cash dividends paid | (45,213) | (48,809) |
Net cash used for financing activities | (53,592) | (50,027) |
Effect of exchange rates changes on cash | 1,666 | (289) |
Net decrease in cash and cash equivalents | (12,133) | (83,407) |
Cash and cash equivalents - beginning of period | 260,067 | 410,697 |
Cash and cash equivalents - end of period | 247,934 | 327,290 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for income taxes | 63,631 | 60,936 |
Cash paid during the period for interest | $ 610 | $ 611 |
Interim Financial Statements
Interim Financial Statements | 6 Months Ended |
Jul. 30, 2016 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | 1. Interim Financial Statements The accompanying Consolidated Financial Statements of American Eagle Outfitters, Inc. (the “Company”) at July 30, 2016 and August 1, 2015 and for the 13 week and 26 week periods ended July 30, 2016 and August 1, 2015 have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Certain notes and other information have been condensed or omitted from the interim Consolidated Financial Statements presented in this Quarterly Report on Form 10-Q. Therefore, these Consolidated Financial Statements should be read in conjunction with the Company’s Fiscal 2015 Annual Report. In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and those described in the footnotes that follow) considered necessary for a fair presentation have been included. The existence of subsequent events has been evaluated through the filing date of this Quarterly Report on Form 10-Q. As used in this report, all references to “we,” “our” and the “Company” refer to American Eagle Outfitters, Inc. and its wholly owned subsidiaries. “American Eagle Outfitters,” “American Eagle,” “AEO” and the “AE Brand” refer to our American Eagle Outfitters stores. “Aerie” refers to our Aerie ® ® The Company’s business is affected by the pattern of seasonality common to most retail apparel businesses. The results for the current and prior periods are not necessarily indicative of future financial results. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jul. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. At July 30, 2016, the Company operated in one reportable segment. Fiscal Year The Company’s financial year is a 52/53 week year that ends on the Saturday nearest to January 31. As used herein, “Fiscal 2016” refers to the 52 week period ending January 28, 2017. “Fiscal 2015” refers to the 52 week period ended January 30, 2016. Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of our contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, our management reviews the Company’s estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU No. 2016-02, Leases Leases . In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718) Foreign Currency Translation In accordance with Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters Comprehensive Income Revenue Recognition Revenue is recorded for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue upon the estimated customer receipt date of the merchandise. Shipping and handling revenues are included in total net revenue. Sales tax collected from customers is excluded from revenue and is included as part of accrued income and other taxes on the Company’s Consolidated Balance Sheets. Revenue is recorded net of estimated and actual sales returns and deductions for coupon redemptions and other promotions. The Company records the impact of adjustments to its sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects an estimate of sales returns based on projected merchandise returns determined through the use of historical average return percentages. Revenue is not recorded on the issuance of gift cards. A current liability is recorded upon issuance, and revenue is recognized when the gift card is redeemed for merchandise. Additionally, the Company recognizes revenue on unredeemed gift cards based on an estimate of the amounts that will not be redeemed (“gift card breakage”), determined through historical redemption trends. Gift card breakage revenue is recognized in proportion to actual gift card redemptions as a component of total net revenue. For further information on the Company’s gift card program, refer to the Gift Cards caption below. The Company recognizes royalty revenue generated from its licensee or franchise agreements based on a percentage of merchandise sales by the licensee/franchisee. This revenue is recorded as a component of total net revenue when earned. Cost of Sales, Including Certain Buying, Occupancy and Warehousing Expenses Cost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively “merchandise costs”) and buying, occupancy and warehousing costs. Design costs are related to the Company's Design Center operations and include compensation, travel, supplies and samples for our design teams, as well as rent and depreciation for our Design Center. These costs are included in cost of sales as the respective inventory is sold. Buying, occupancy and warehousing costs consist of compensation, employee benefit expenses and travel for our buyers and certain senior merchandising executives; rent and utilities related to our stores, corporate headquarters, distribution centers and other office space; freight from our distribution centers to the stores; compensation and supplies for our distribution centers, including purchasing, receiving and inspection costs; and shipping and handling costs related to our e-commerce operation. Gross profit is the difference between total net revenue and cost of sales. Selling, General and Administrative Expenses Selling, general and administrative expenses consist of compensation and employee benefit expenses, including salaries, incentives and related benefits associated with our stores and corporate headquarters. Selling, general and administrative expenses also include advertising costs, supplies for our stores and home office, communication costs, travel and entertainment, leasing costs and services purchased. Selling, general and administrative expenses do not include compensation, employee benefit expenses and travel for our design, sourcing and importing teams, our buyers and our distribution centers as these amounts are recorded in cost of sales. Other (Expense) Income, Net Other (expense) income, net consists primarily of foreign currency transaction gain/loss, interest income/expense and investment gain/loss. Cash and Cash Equivalents and Investments The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. As of July 30, 2016 and August 1, 2015, the Company held no short or long term investments. Refer to Note 3 to the Consolidated Financial Statements for information regarding cash and cash equivalents. Merchandise Inventory Merchandise inventory is valued at the lower of average cost or market, utilizing the retail method. Average cost includes merchandise design and sourcing costs and related expenses. The Company records merchandise receipts when both title and risk of loss for the merchandise have transferred to the Company. The Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear merchandise. Additionally, the Company estimates a markdown reserve for future planned permanent markdowns related to current inventory. Markdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of fashion items, competition, or if it is determined that the inventory in stock will not sell at its currently ticketed price. Such markdowns may have a material adverse impact on earnings, depending on the extent and amount of inventory affected. The Company also estimates a shrinkage reserve for the period between the last physical count and the balance sheet date. The estimate for the shrinkage reserve, based on historical results, can be affected by changes in merchandise mix and changes in actual shrinkage trends. Income Taxes The Company calculates income taxes in accordance with ASC 740, Income Taxes The Company evaluates its income tax positions in accordance with ASC 740, which prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. Under ASC 740, a tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits. The calculation of the deferred tax assets and liabilities, as well as the decision to recognize a tax benefit from an uncertain position and to establish a valuation allowance require management to make estimates and assumptions. The Company believes that its assumptions and estimates are reasonable, although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities, valuation allowances or net income. Refer to Note 10 to the Consolidated Financial Statements for additional information regarding income taxes. Property and Equipment Property and equipment is recorded on the basis of cost, including costs to prepare the asset for use, with depreciation computed utilizing the straight-line method over the assets’ estimated useful lives. The useful lives of our major classes of assets are as follows: Buildings 25 years Leasehold improvements Lesser of 10 years or the term of the lease Fixtures, equipment and technology 5 years In accordance with ASC 360, Property, Plant, and Equipment Refer to Note 6 to the Consolidated Financial Statements for additional information regarding property and equipment. Goodwill The Company’s goodwill is related to the acquisition of its importing operations, Canada, Hong Kong and China businesses and the recent acquisition of Tailgate Clothing Co. in Fiscal 2015. In accordance with ASC 350, Intangibles – Goodwill and Other Intangible Assets Intangible assets are recorded on the basis of cost with amortization computed utilizing the straight-line method over the assets’ estimated useful lives. The Company’s intangible assets, which primarily include trademark assets, are generally amortized over 15 to 25 years. The Company evaluates intangible assets for impairment in accordance with ASC 350 when events or circumstances indicate that the carrying value of the asset may not be recoverable. Such an evaluation includes the estimation of undiscounted future cash flows to be generated by those assets. If the sum of the estimated future undiscounted cash flows are less than the carrying amounts of the assets, then the assets are impaired and are adjusted to their estimated fair value. No intangible asset impairment charges were recorded during the 13 or 26 weeks ended July 30, 2016 or August 1, 2015. Refer to Note 7 to the Consolidated Financial Statements for additional information regarding intangible assets. Gift Cards The value of a gift card is recorded as a current liability upon issuance, and revenue is recognized when the gift card is redeemed for merchandise. The Company estimates gift card breakage and recognizes revenue in proportion to actual gift card redemptions as a component of total net revenue. The Company determines an estimated gift card breakage rate by continuously evaluating historical redemption data and the time when there is a remote likelihood that a gift card will be redeemed. The Company recorded $1.7 million and $1.5 million of revenue related to gift card breakage during the 13 weeks ended July 30, 2016 and August 1, 2015, respectively. During the 26 weeks ended July 30, 2016 and August 1, 2015, the Company recorded $3.8 million and $3.2 million, respectively, of revenue related to gift card breakage. Deferred Lease Credits Deferred lease credits represent the unamortized portion of construction allowances received from landlords related to the Company’s retail stores. Construction allowances are generally comprised of cash amounts received by the Company from its landlords as part of the negotiated lease terms. The Company records a receivable and a deferred lease credit liability at the lease commencement date (date of initial possession of the store). The deferred lease credit is amortized on a straight-line basis as a reduction of rent expense over the term of the original lease (including the pre-opening build-out period). The receivable is reduced as amounts are received from the landlord. Co-branded Credit Card and Customer Loyalty Program The Company offers a co-branded credit card (the “AEO Visa Card”) and a private label credit card (the “AEO Credit Card”) under the AEO and Aerie brands. These credit cards are issued by a third-party bank (the “Bank”) in accordance with a credit card agreement (“the Agreement”). The Company has no liability to the Bank for bad debt expense, provided that purchases are made in accordance with the Bank’s procedures. We receive additional funding from the Bank based on the Agreement and card activity. We recognize revenue for the additional funding when the amounts are fixed or determinable and collectability is reasonably assured. This revenue is recorded as a component of total net revenue. Once a customer is approved to receive the AEO Visa Card or the AEO Credit Card and the card is activated, the customer is eligible to participate in the credit card rewards program. Customers who make purchases at AEO and Aerie earn discounts in the form of savings certificates when certain purchase levels are reached. Also, AEO Visa Card customers who make purchases at other retailers where the card is accepted earn additional discounts. Savings certificates are valid for 90 days from issuance. Points earned under the credit card rewards program on purchases at AEO and Aerie are accounted for by analogy to ASC 605-25, Revenue Recognition, Multiple Element Arrangements The Company offers its customers the AEREWARDS ® Segment Information In accordance with ASC 280, Segment Reporting |
Cash and Cash Equivalents and I
Cash and Cash Equivalents and Investments | 6 Months Ended |
Jul. 30, 2016 | |
Cash And Cash Equivalents [Abstract] | |
Cash and Cash Equivalents and Investments | 3. Cash and Cash Equivalents and Investments The following table summarizes the fair market values for the Company’s cash and marketable securities, which are recorded on the Consolidated Balance Sheets: (In thousands) July 30, 2016 January 30, 2016 August 1, 2015 Cash and cash equivalents: Cash $ 173,921 $ 205,359 $ 248,824 Interest Bearing Deposits and Money Market Funds 74,013 54,708 78,466 Total cash and cash equivalents $ 247,934 $ 260,067 $ 327,290 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements ASC 820, Fair Value Measurement Disclosures Financial Instruments Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. In addition, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: · Level 1 — Quoted prices in active markets for identical assets or liabilities. · Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 — Unobservable inputs (i.e., projections, estimates, interpretations, etc.) that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of July 30, 2016 and August 1, 2015, the Company held certain assets that are required to be measured at fair value on a recurring basis. These include cash and cash equivalents. In accordance with ASC 820, the following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents) measured at fair value on a recurring basis at July 30, 2016 and August 1, 2015: Fair Value Measurements at July 30, 2016 (In thousands) Carrying Amount Quoted Market Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents: Cash $ 173,921 $ 173,921 — — Interest Bearing Deposits 74,013 74,013 — — Total cash and cash equivalents $ 247,934 $ 247,934 — — Fair Value Measurements at August 1, 2015 (In thousands) Carrying Amount Quoted Market Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents: Cash $ 248,824 $ 248,824 — — Interest Bearing Deposits and Money Market Funds 78,466 78,466 — — Total cash and cash equivalents $ 327,290 $ 327,290 — — In the event the Company holds Level 3 investments, a discounted cash flow model is used to value those investments. There were no Level 3 investments at July 30, 2016 or August 1, 2015. Non-Financial Assets The Company’s non-financial assets, which include goodwill, intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur, or if an annual impairment test is required, and the Company is required to evaluate the non-financial instrument for impairment, a resulting asset impairment would require that the non-financial asset be recorded at the estimated fair value. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jul. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 5. Earnings per Share The following is a reconciliation between basic and diluted weighted average shares outstanding: 13 Weeks Ended 26 Weeks Ended July 30, August 1, July 30, August 1, (In thousands) 2016 2015 2016 2015 Weighted average common shares outstanding: Basic number of common shares outstanding 181,048 195,508 180,872 195,241 Dilutive effect of stock options and non-vested restricted stock 2,365 1,377 2,050 1,291 Diluted number of common shares outstanding 183,413 196,885 182,922 196,532 Equity awards to purchase 2.8 million shares of common stock during both the 13 and 26 weeks ended July 30, 2016, respectively, and approximately 40,000 shares of common stock during both the 13 and 26 weeks ended August 1, 2015 were outstanding, but were not included in the computation of weighted average diluted common share amounts as the effect of doing so would be anti-dilutive. Additionally, approximately 0.1 million shares of restricted stock units for the 13 and 26 weeks ended July 30, 2016, respectively, were not included in the computation of weighted average diluted common share amounts because the number of shares ultimately issued is contingent on the Company’s performance compared to pre-established annual performance goals. Refer to Note 9 to the Consolidated Financial Statements for additional information regarding share-based compensation. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jul. 30, 2016 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 6. Property and Equipment Property and equipment consists of the following: July 30, January 30, August 1, (In thousands) 2016 2016 2015 Property and equipment, at cost $ 1,824,869 $ 1,792,382 $ 1,757,957 Less: Accumulated depreciation (1,124,599 ) (1,088,796 ) (1,042,307 ) Property and equipment, net $ 700,270 $ 703,586 $ 715,650 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jul. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7. Intangible Assets Intangible assets consist of the following: July 30, January 30, August 1, (In thousands) 2016 2016 2015 Trademarks and other intangibles, at cost $ 68,430 $ 67,398 $ 61,065 Less: Accumulated amortization (17,669 ) (15,566 ) (13,911 ) Intangible assets, net $ 50,761 $ 51,832 $ 47,154 |
Other Credit Arrangements
Other Credit Arrangements | 6 Months Ended |
Jul. 30, 2016 | |
Debt Disclosure [Abstract] | |
Other Credit Arrangements | 8. Other Credit Arrangements The Company currently participates in a Credit Agreement (“Credit Agreement”) consisting of a five-year, syndicated, asset-based revolving credit facilities (the “Credit Facilities”). The Credit Agreement provides senior secured revolving credit for loans and letters of credit up to $400 million, subject to customary borrowing base limitations. The Credit Facilities provide increased financial flexibility and take advantage of a favorable credit environment. All obligations under the Credit Facilities are unconditionally guaranteed by certain subsidiaries. The obligations under the Credit Agreement are secured by a first-priority security interest in certain working capital assets of the borrowers and guarantors, consisting primarily of cash, receivables, inventory and certain other assets and have been further secured by first-priority mortgages on certain real property. As of July 30, 2016, the Company was in compliance with the terms of the Credit Agreement and had $8.1 million outstanding in stand-by letters of credit. No loans were outstanding under the Credit Agreement as of July 30, 2016. Additionally, the Company has a borrowing agreement with one financial institution under which it may borrow an aggregate of $5.0 million USD for the purposes of trade letter of credit issuances. The availability of any future borrowings under the trade letter of credit facilities is subject to acceptance by the financial institution. As of July 30, 2016, the Company had no outstanding trade letters of credit. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jul. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | 9. Share-Based Compensation The Company accounts for share-based compensation under the provisions of ASC 718, Compensation - Stock Compensation Stock Option Grants The Company grants both time-based and performance-based stock options. A summary of the Company’s stock option activity for the 26 weeks ended July 30, 2016 follows: Weighted- Average Weighted- Average Remaining Contractual Aggregate Options Exercise Price Term Intrinsic Value (In thousands) (In years) (In thousands) Outstanding - January 30, 2016 1,213 $ 14.83 Granted 2,211 $ 15.35 Exercised (1) 121 $ 13.74 Cancelled 42 $ 14.50 Outstanding - July 30, 2016 3,261 $ 15.23 4.8 8,802 Vested and expected to vest - July 30, 2016 3,079 $ 15.22 4.7 8,336 Exercisable - July 30, 2016 (2) 1,036 $ 14.90 0.6 3,125 (1) Options exercised during the 26 weeks ended July 30, 2016 had exercise prices ranging from $11.50 to $14.50. (2) Options exercisable represent “in-the-money” vested options based upon the weighted-average exercise price of vested options compared to the Company’s stock price at July 30, 2016. Cash received from the exercise of stock options was $1.9 million for the 26 weeks ended July 30, 2016 and $6.4 million for the 26 weeks ended August 1, 2015. The actual tax benefit realized from stock option exercises totaled $0.1 million for the 26 weeks ended July 30, 2016 and $0.6 million for the 26 weeks ended August 1, 2015. The fair value of stock options was estimated based on the closing market price of the Company’s common stock on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions: 26 July 30, Black-Scholes Option Valuation Assumptions 2016 Risk-free interest rate (1) 1.3 % Dividend yield 3.0 % Volatility factor (2) 35.4 % Weighted-average expected term (3) 4.4 years Expected forfeiture rate (4) 8.0 % (1) Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options. (2) Based on a combination of historical volatility of the Company’s common stock and implied volatility. (3) Represents the period of time options are expected to be outstanding, based on historical experience. (4) Based upon historical experience. As of July 30, 2016, there was $7.2 million of unrecognized compensation expense related to non-vested time-based stock option awards that is expected to be recognized over a weighted average period of 3.1 years. Restricted Stock Grants Time-based restricted stock awards are comprised of time-based restricted stock units. These awards vest over three years. Time-based restricted stock units receive dividend equivalents in the form of additional time-based restricted stock units, which are subject to the same restrictions and forfeiture provisions as the original award. Performance-based restricted stock awards include performance-based restricted stock units. These awards cliff vest at the end of a three year period based upon the Company’s achievement of pre-established goals throughout the term of the award. Performance-based restricted stock units receive dividend equivalents in the form of additional performance-based restricted stock units, which are subject to the same restrictions and forfeiture provisions as the original award. The grant date fair value of all restricted stock awards is based on the closing market price of the Company’s common stock on the date of grant. A summary of the Company’s restricted stock activity is presented in the following tables: Time-Based Restricted Stock Units Performance-Based Restricted Stock Units 26 Weeks Ended 26 Weeks Ended July 30, 2016 July 30, 2016 (Shares in thousands) Shares Weighted -Average Grant Date Fair Value Shares Weighted -Average Grant Date Fair Value Nonvested - January 30, 2016 1,935 $ 15.17 2,609 $ 16.02 Granted 946 $ 16.02 1,077 $ 15.70 Vested (885 ) $ 16.11 (195 ) $ 14.82 Cancelled (44 ) $ 10.50 (700 ) $ 19.72 Nonvested - July 30, 2016 1,952 $ 15.26 2,791 $ 15.05 As of July 30, 2016, there was $26.6 million of unrecognized compensation expense related to non-vested, time-based restricted stock unit awards that is expected to be recognized over a weighted-average period of 2.3 years. Based on current probable performance, there is $13.6 million of unrecognized compensation expense related to performance-based restricted stock unit awards which will be recognized as achievement of performance goals is probable over a one to three year period. As of July 30, 2016, the Company had 3.5 million shares available for all equity grants. |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The provision for income taxes is based on the current estimate of the annual effective income tax rate and is adjusted as necessary for discrete quarterly events. The effective income tax rate for the 13 weeks ended July 30, 2016 was 36.5% compared to 34.7% for the 13 weeks ended August 1, 2015. The effective income tax rate for the 26 weeks ended July 30, 2016 was 36.4% compared to 37.0% for the 26 weeks ended August 1, 2015. The increase in the effective income tax rate for the 13 weeks ended July 30, 2016, and the decrease in the effective income tax rate for the 26 weeks ended July 30, 2016 was primarily due to prior year income tax settlements, offset by changes to foreign deferred tax assets. The Company records accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company recognizes income tax liabilities related to unrecognized tax benefits in accordance with ASC 740 and adjusts these liabilities when its judgment changes as the result of the evaluation of new information not previously available. Unrecognized tax benefits did not change significantly during the 13 weeks ended July 30, 2016. Over the next twelve months, the Company believes that it is reasonably possible that unrecognized tax benefits may decrease by approximately $3.3 million due to settlements, expiration of statute of limitations or other changes in unrecognized tax benefits. |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Jul. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Legal Proceedings | 11. Legal Proceedings The Company is subject to certain legal proceedings and claims arising out of the conduct of its business. In accordance with ASC 450, Contingencies |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jul. 30, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. At July 30, 2016, the Company operated in one reportable segment. |
Fiscal Year | Fiscal Year The Company’s financial year is a 52/53 week year that ends on the Saturday nearest to January 31. As used herein, “Fiscal 2016” refers to the 52 week period ending January 28, 2017. “Fiscal 2015” refers to the 52 week period ended January 30, 2016. |
Estimates | Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of our contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, our management reviews the Company’s estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU No. 2016-02, Leases Leases . In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718) |
Foreign Currency Translation | Foreign Currency Translation In accordance with Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters Comprehensive Income |
Revenue Recognition | Revenue Recognition Revenue is recorded for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue upon the estimated customer receipt date of the merchandise. Shipping and handling revenues are included in total net revenue. Sales tax collected from customers is excluded from revenue and is included as part of accrued income and other taxes on the Company’s Consolidated Balance Sheets. Revenue is recorded net of estimated and actual sales returns and deductions for coupon redemptions and other promotions. The Company records the impact of adjustments to its sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects an estimate of sales returns based on projected merchandise returns determined through the use of historical average return percentages. Revenue is not recorded on the issuance of gift cards. A current liability is recorded upon issuance, and revenue is recognized when the gift card is redeemed for merchandise. Additionally, the Company recognizes revenue on unredeemed gift cards based on an estimate of the amounts that will not be redeemed (“gift card breakage”), determined through historical redemption trends. Gift card breakage revenue is recognized in proportion to actual gift card redemptions as a component of total net revenue. For further information on the Company’s gift card program, refer to the Gift Cards caption below. The Company recognizes royalty revenue generated from its licensee or franchise agreements based on a percentage of merchandise sales by the licensee/franchisee. This revenue is recorded as a component of total net revenue when earned. |
Cost of Sales, Including Certain Buying, Occupancy and Warehousing Expenses | Cost of Sales, Including Certain Buying, Occupancy and Warehousing Expenses Cost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively “merchandise costs”) and buying, occupancy and warehousing costs. Design costs are related to the Company's Design Center operations and include compensation, travel, supplies and samples for our design teams, as well as rent and depreciation for our Design Center. These costs are included in cost of sales as the respective inventory is sold. Buying, occupancy and warehousing costs consist of compensation, employee benefit expenses and travel for our buyers and certain senior merchandising executives; rent and utilities related to our stores, corporate headquarters, distribution centers and other office space; freight from our distribution centers to the stores; compensation and supplies for our distribution centers, including purchasing, receiving and inspection costs; and shipping and handling costs related to our e-commerce operation. Gross profit is the difference between total net revenue and cost of sales. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses consist of compensation and employee benefit expenses, including salaries, incentives and related benefits associated with our stores and corporate headquarters. Selling, general and administrative expenses also include advertising costs, supplies for our stores and home office, communication costs, travel and entertainment, leasing costs and services purchased. Selling, general and administrative expenses do not include compensation, employee benefit expenses and travel for our design, sourcing and importing teams, our buyers and our distribution centers as these amounts are recorded in cost of sales. |
Other (Expense) Income, Net | Other (Expense) Income, Net Other (expense) income, net consists primarily of foreign currency transaction gain/loss, interest income/expense and investment gain/loss. |
Cash and Cash Equivalents and Investments | Cash and Cash Equivalents and Investments The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. As of July 30, 2016 and August 1, 2015, the Company held no short or long term investments. Refer to Note 3 to the Consolidated Financial Statements for information regarding cash and cash equivalents. |
Merchandise Inventory | Merchandise Inventory Merchandise inventory is valued at the lower of average cost or market, utilizing the retail method. Average cost includes merchandise design and sourcing costs and related expenses. The Company records merchandise receipts when both title and risk of loss for the merchandise have transferred to the Company. The Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear merchandise. Additionally, the Company estimates a markdown reserve for future planned permanent markdowns related to current inventory. Markdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of fashion items, competition, or if it is determined that the inventory in stock will not sell at its currently ticketed price. Such markdowns may have a material adverse impact on earnings, depending on the extent and amount of inventory affected. The Company also estimates a shrinkage reserve for the period between the last physical count and the balance sheet date. The estimate for the shrinkage reserve, based on historical results, can be affected by changes in merchandise mix and changes in actual shrinkage trends. |
Income Taxes | Income Taxes The Company calculates income taxes in accordance with ASC 740, Income Taxes The Company evaluates its income tax positions in accordance with ASC 740, which prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. Under ASC 740, a tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits. The calculation of the deferred tax assets and liabilities, as well as the decision to recognize a tax benefit from an uncertain position and to establish a valuation allowance require management to make estimates and assumptions. The Company believes that its assumptions and estimates are reasonable, although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities, valuation allowances or net income. Refer to Note 10 to the Consolidated Financial Statements for additional information regarding income taxes. |
Property and Equipment | Property and Equipment Property and equipment is recorded on the basis of cost, including costs to prepare the asset for use, with depreciation computed utilizing the straight-line method over the assets’ estimated useful lives. The useful lives of our major classes of assets are as follows: Buildings 25 years Leasehold improvements Lesser of 10 years or the term of the lease Fixtures, equipment and technology 5 years In accordance with ASC 360, Property, Plant, and Equipment Refer to Note 6 to the Consolidated Financial Statements for additional information regarding property and equipment. |
Goodwill | Goodwill The Company’s goodwill is related to the acquisition of its importing operations, Canada, Hong Kong and China businesses and the recent acquisition of Tailgate Clothing Co. in Fiscal 2015. In accordance with ASC 350, Intangibles – Goodwill and Other |
Intangible Assets | Intangible Assets Intangible assets are recorded on the basis of cost with amortization computed utilizing the straight-line method over the assets’ estimated useful lives. The Company’s intangible assets, which primarily include trademark assets, are generally amortized over 15 to 25 years. The Company evaluates intangible assets for impairment in accordance with ASC 350 when events or circumstances indicate that the carrying value of the asset may not be recoverable. Such an evaluation includes the estimation of undiscounted future cash flows to be generated by those assets. If the sum of the estimated future undiscounted cash flows are less than the carrying amounts of the assets, then the assets are impaired and are adjusted to their estimated fair value. No intangible asset impairment charges were recorded during the 13 or 26 weeks ended July 30, 2016 or August 1, 2015. Refer to Note 7 to the Consolidated Financial Statements for additional information regarding intangible assets. |
Gift Cards | Gift Cards The value of a gift card is recorded as a current liability upon issuance, and revenue is recognized when the gift card is redeemed for merchandise. The Company estimates gift card breakage and recognizes revenue in proportion to actual gift card redemptions as a component of total net revenue. The Company determines an estimated gift card breakage rate by continuously evaluating historical redemption data and the time when there is a remote likelihood that a gift card will be redeemed. The Company recorded $1.7 million and $1.5 million of revenue related to gift card breakage during the 13 weeks ended July 30, 2016 and August 1, 2015, respectively. During the 26 weeks ended July 30, 2016 and August 1, 2015, the Company recorded $3.8 million and $3.2 million, respectively, of revenue related to gift card breakage. |
Deferred Lease Credits | Deferred Lease Credits Deferred lease credits represent the unamortized portion of construction allowances received from landlords related to the Company’s retail stores. Construction allowances are generally comprised of cash amounts received by the Company from its landlords as part of the negotiated lease terms. The Company records a receivable and a deferred lease credit liability at the lease commencement date (date of initial possession of the store). The deferred lease credit is amortized on a straight-line basis as a reduction of rent expense over the term of the original lease (including the pre-opening build-out period). The receivable is reduced as amounts are received from the landlord. |
Co-branded Credit Card and Customer Loyalty Program | Co-branded Credit Card and Customer Loyalty Program The Company offers a co-branded credit card (the “AEO Visa Card”) and a private label credit card (the “AEO Credit Card”) under the AEO and Aerie brands. These credit cards are issued by a third-party bank (the “Bank”) in accordance with a credit card agreement (“the Agreement”). The Company has no liability to the Bank for bad debt expense, provided that purchases are made in accordance with the Bank’s procedures. We receive additional funding from the Bank based on the Agreement and card activity. We recognize revenue for the additional funding when the amounts are fixed or determinable and collectability is reasonably assured. This revenue is recorded as a component of total net revenue. Once a customer is approved to receive the AEO Visa Card or the AEO Credit Card and the card is activated, the customer is eligible to participate in the credit card rewards program. Customers who make purchases at AEO and Aerie earn discounts in the form of savings certificates when certain purchase levels are reached. Also, AEO Visa Card customers who make purchases at other retailers where the card is accepted earn additional discounts. Savings certificates are valid for 90 days from issuance. Points earned under the credit card rewards program on purchases at AEO and Aerie are accounted for by analogy to ASC 605-25, Revenue Recognition, Multiple Element Arrangements The Company offers its customers the AEREWARDS ® |
Segment Information | Segment Information In accordance with ASC 280, Segment Reporting |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jul. 30, 2016 | |
Accounting Policies [Abstract] | |
Useful Lives of Major Classes of Assets | The useful lives of our major classes of assets are as follows: Buildings 25 years Leasehold improvements Lesser of 10 years or the term of the lease Fixtures, equipment and technology 5 years |
Cash and Cash Equivalents and20
Cash and Cash Equivalents and Investments (Tables) | 6 Months Ended |
Jul. 30, 2016 | |
Cash And Cash Equivalents [Abstract] | |
Fair Market Values for Cash and Marketable Securities | The following table summarizes the fair market values for the Company’s cash and marketable securities, which are recorded on the Consolidated Balance Sheets: (In thousands) July 30, 2016 January 30, 2016 August 1, 2015 Cash and cash equivalents: Cash $ 173,921 $ 205,359 $ 248,824 Interest Bearing Deposits and Money Market Funds 74,013 54,708 78,466 Total cash and cash equivalents $ 247,934 $ 260,067 $ 327,290 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Hierarchy for Financial Assets (Cash Equivalents) Measured at Fair Value on Recurring Basis | In accordance with ASC 820, the following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents) measured at fair value on a recurring basis at July 30, 2016 and August 1, 2015: Fair Value Measurements at July 30, 2016 (In thousands) Carrying Amount Quoted Market Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents: Cash $ 173,921 $ 173,921 — — Interest Bearing Deposits 74,013 74,013 — — Total cash and cash equivalents $ 247,934 $ 247,934 — — Fair Value Measurements at August 1, 2015 (In thousands) Carrying Amount Quoted Market Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents: Cash $ 248,824 $ 248,824 — — Interest Bearing Deposits and Money Market Funds 78,466 78,466 — — Total cash and cash equivalents $ 327,290 $ 327,290 — — |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jul. 30, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation Between Basic and Diluted Weighted Average Shares Outstanding | The following is a reconciliation between basic and diluted weighted average shares outstanding: 13 Weeks Ended 26 Weeks Ended July 30, August 1, July 30, August 1, (In thousands) 2016 2015 2016 2015 Weighted average common shares outstanding: Basic number of common shares outstanding 181,048 195,508 180,872 195,241 Dilutive effect of stock options and non-vested restricted stock 2,365 1,377 2,050 1,291 Diluted number of common shares outstanding 183,413 196,885 182,922 196,532 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jul. 30, 2016 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | Property and equipment consists of the following: July 30, January 30, August 1, (In thousands) 2016 2016 2015 Property and equipment, at cost $ 1,824,869 $ 1,792,382 $ 1,757,957 Less: Accumulated depreciation (1,124,599 ) (1,088,796 ) (1,042,307 ) Property and equipment, net $ 700,270 $ 703,586 $ 715,650 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jul. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets consist of the following: July 30, January 30, August 1, (In thousands) 2016 2016 2015 Trademarks and other intangibles, at cost $ 68,430 $ 67,398 $ 61,065 Less: Accumulated amortization (17,669 ) (15,566 ) (13,911 ) Intangible assets, net $ 50,761 $ 51,832 $ 47,154 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jul. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity | A summary of the Company’s stock option activity for the 26 weeks ended July 30, 2016 follows: Weighted- Average Weighted- Average Remaining Contractual Aggregate Options Exercise Price Term Intrinsic Value (In thousands) (In years) (In thousands) Outstanding - January 30, 2016 1,213 $ 14.83 Granted 2,211 $ 15.35 Exercised (1) 121 $ 13.74 Cancelled 42 $ 14.50 Outstanding - July 30, 2016 3,261 $ 15.23 4.8 8,802 Vested and expected to vest - July 30, 2016 3,079 $ 15.22 4.7 8,336 Exercisable - July 30, 2016 (2) 1,036 $ 14.90 0.6 3,125 (1) Options exercised during the 26 weeks ended July 30, 2016 had exercise prices ranging from $11.50 to $14.50. (2) Options exercisable represent “in-the-money” vested options based upon the weighted-average exercise price of vested options compared to the Company’s stock price at July 30, 2016. |
Black-Scholes Option Valuation Assumptions | The fair value of stock options was estimated based on the closing market price of the Company’s common stock on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions: 26 July 30, Black-Scholes Option Valuation Assumptions 2016 Risk-free interest rate (1) 1.3 % Dividend yield 3.0 % Volatility factor (2) 35.4 % Weighted-average expected term (3) 4.4 years Expected forfeiture rate (4) 8.0 % (1) Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options. (2) Based on a combination of historical volatility of the Company’s common stock and implied volatility. (3) Represents the period of time options are expected to be outstanding, based on historical experience. (4) Based upon historical experience. |
Summary of Restricted Stock Activity | A summary of the Company’s restricted stock activity is presented in the following tables: Time-Based Restricted Stock Units Performance-Based Restricted Stock Units 26 Weeks Ended 26 Weeks Ended July 30, 2016 July 30, 2016 (Shares in thousands) Shares Weighted -Average Grant Date Fair Value Shares Weighted -Average Grant Date Fair Value Nonvested - January 30, 2016 1,935 $ 15.17 2,609 $ 16.02 Granted 946 $ 16.02 1,077 $ 15.70 Vested (885 ) $ 16.11 (195 ) $ 14.82 Cancelled (44 ) $ 10.50 (700 ) $ 19.72 Nonvested - July 30, 2016 1,952 $ 15.26 2,791 $ 15.05 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Jul. 30, 2016USD ($) | Aug. 01, 2015USD ($) | Jul. 30, 2016USD ($)Segment | Aug. 01, 2015USD ($) | |
Significant Accounting Policies [Line Items] | ||||
Number of reportable segments | Segment | 1 | |||
Investments | $ 0 | $ 0 | $ 0 | $ 0 |
Long-lived asset impairment charges | 0 | 0 | 0 | 0 |
Finite-lived impairment charges | 0 | 0 | 0 | 0 |
Revenue related to gift card breakage | $ 1,700,000 | $ 1,500,000 | $ 3,800,000 | $ 3,200,000 |
Number of operating segments | Segment | 3 | |||
Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Finite lived intangibles, useful life | 15 years | |||
Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Finite lived intangibles, useful life | 25 years |
Useful Lives of Major Classes o
Useful Lives of Major Classes of Assets (Detail) | 6 Months Ended |
Jul. 30, 2016 | |
Buildings | |
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items] | |
Useful lives in asset class | 25 years |
Leasehold Improvements | |
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items] | |
Useful lives in asset class | Lesser of 10 years or the term of the lease |
Fixtures, Equipment and Technology | |
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items] | |
Useful lives in asset class | 5 years |
Useful Lives of Major Classes28
Useful Lives of Major Classes of Assets (Parenthetical) (Detail) | 6 Months Ended |
Jul. 30, 2016 | |
Maximum | Leasehold Improvements | |
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items] | |
Useful lives in asset class | 10 years |
Fair Market Values for Cash and
Fair Market Values for Cash and Marketable Securities (Detail) - USD ($) $ in Thousands | Jul. 30, 2016 | Jan. 30, 2016 | Aug. 01, 2015 |
Cash and cash equivalents: | |||
Cash and cash equivalents | $ 247,934 | $ 260,067 | $ 327,290 |
Cash | |||
Cash and cash equivalents: | |||
Cash and cash equivalents | 173,921 | 205,359 | 248,824 |
Interest Bearing Deposits and Money Market Funds | |||
Cash and cash equivalents: | |||
Cash and cash equivalents | $ 74,013 | $ 54,708 | $ 78,466 |
Fair Value Hierarchy for Financ
Fair Value Hierarchy for Financial Assets (Cash Equivalents) Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Jul. 30, 2016 | Jan. 30, 2016 | Aug. 01, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 247,934 | $ 260,067 | $ 327,290 |
Cash | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 173,921 | 205,359 | 248,824 |
Interest Bearing Deposits and Money Market Funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 74,013 | $ 54,708 | 78,466 |
Fair Value, Measurements, Recurring | Carrying Amount | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 247,934 | 327,290 | |
Fair Value, Measurements, Recurring | Carrying Amount | Cash | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 173,921 | 248,824 | |
Fair Value, Measurements, Recurring | Carrying Amount | Interest Bearing Deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 74,013 | ||
Fair Value, Measurements, Recurring | Carrying Amount | Interest Bearing Deposits and Money Market Funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 78,466 | ||
Fair Value, Measurements, Recurring | Fair Value | Quoted Market Prices in Active Markets for Identical Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 247,934 | 327,290 | |
Fair Value, Measurements, Recurring | Fair Value | Cash | Quoted Market Prices in Active Markets for Identical Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 173,921 | 248,824 | |
Fair Value, Measurements, Recurring | Fair Value | Interest Bearing Deposits | Quoted Market Prices in Active Markets for Identical Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 74,013 | ||
Fair Value, Measurements, Recurring | Fair Value | Interest Bearing Deposits and Money Market Funds | Quoted Market Prices in Active Markets for Identical Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 78,466 |
Reconciliation Between Basic an
Reconciliation Between Basic and Diluted Weighted Average Shares Outstanding (Detail) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 30, 2016 | Aug. 01, 2015 | Jul. 30, 2016 | Aug. 01, 2015 | |
Weighted average common shares outstanding: | ||||
Basic number of common shares outstanding | 181,048 | 195,508 | 180,872 | 195,241 |
Dilutive effect of stock options and non-vested restricted stock | 2,365 | 1,377 | 2,050 | 1,291 |
Diluted number of common shares outstanding | 183,413 | 196,885 | 182,922 | 196,532 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jul. 30, 2016 | Aug. 01, 2015 | Jul. 30, 2016 | Aug. 01, 2015 | |
Common stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Shares that were not included in the computation of weighted average diluted common share amounts as the effect of doing so would have been anti-dilutive | 2,800,000 | 40,000 | 2,800,000 | 40,000 |
Restricted Stock Units (RSUs) | Performance shares | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Shares that were not included in the computation of weighted average diluted common share amounts as the effect of doing so would have been anti-dilutive | 100,000 | 100,000 |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) $ in Thousands | Jul. 30, 2016 | Jan. 30, 2016 | Aug. 01, 2015 |
Property Plant And Equipment [Abstract] | |||
Property and equipment, at cost | $ 1,824,869 | $ 1,792,382 | $ 1,757,957 |
Less: Accumulated depreciation | (1,124,599) | (1,088,796) | (1,042,307) |
Property and equipment, net | $ 700,270 | $ 703,586 | $ 715,650 |
Intangible Assets (Detail)
Intangible Assets (Detail) - USD ($) $ in Thousands | Jul. 30, 2016 | Jan. 30, 2016 | Aug. 01, 2015 |
Finite Lived Intangible Assets Net [Abstract] | |||
Trademarks and other intangibles, at cost | $ 68,430 | $ 67,398 | $ 61,065 |
Less: Accumulated amortization | (17,669) | (15,566) | (13,911) |
Intangible assets, net | $ 50,761 | $ 51,832 | $ 47,154 |
Other Credit Arrangements - Add
Other Credit Arrangements - Additional Information (Detail) | 6 Months Ended |
Jul. 30, 2016USD ($)Entity | |
Line Of Credit Facility [Line Items] | |
Borrowing agreement, number of financial institution | Entity | 1 |
Credit Facilities | Credit Agreement | |
Line Of Credit Facility [Line Items] | |
Line of credit facility, expiration period | 5 years |
Borrowing agreements with financial institutions | $ 400,000,000 |
Stand-by Letters of Credit | Credit Agreement | |
Line Of Credit Facility [Line Items] | |
Letters of credit outstanding amount | 8,100,000 |
Credit Agreement Loans | Credit Agreement | |
Line Of Credit Facility [Line Items] | |
Outstanding borrowings | 0 |
Demand letter of credit facilities | Borrowing Agreements | |
Line Of Credit Facility [Line Items] | |
Borrowing agreements with financial institutions | 5,000,000 |
Outstanding borrowings | $ 0 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 30, 2016 | Aug. 01, 2015 | Jul. 30, 2016 | Aug. 01, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 7,900 | $ 14,000 | $ 16,748 | $ 22,091 |
Share-based compensation, net of tax | $ 5,000 | $ 8,600 | 10,600 | 13,500 |
Net proceeds from stock options exercised | 1,905 | 6,362 | ||
Tax benefit realized from stock option exercises | $ 100 | $ 600 | ||
Shares available for all equity grants | 3.5 | 3.5 | ||
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense, stock options | $ 7,200 | $ 7,200 | ||
Unrecognized compensation expense, weighted average period | 3 years 1 month 6 days | |||
Time Based Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense, weighted average period | 2 years 3 months 18 days | |||
Vesting period | 3 years | |||
Unrecognized compensation expense, restricted stock grants | 26,600 | $ 26,600 | ||
Performance-Based Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Unrecognized compensation expense, restricted stock grants | $ 13,600 | $ 13,600 | ||
Performance-Based Restricted Stock Units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense, weighted average period | 1 year | |||
Performance-Based Restricted Stock Units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense, weighted average period | 3 years |
Summary of Stock Option Activit
Summary of Stock Option Activity (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | |
Jul. 30, 2016USD ($)$ / sharesshares | ||
Options | ||
Outstanding - beginning of period | shares | 1,213 | |
Granted | shares | 2,211 | |
Exercised | shares | 121 | [1] |
Cancelled | shares | 42 | |
Outstanding- end of period | shares | 3,261 | |
Vested and expected to vest-end of period | shares | 3,079 | |
Exercisable-end of period | shares | 1,036 | [2] |
Weighted-Average Exercise Price | ||
Outstanding-beginning of period | $ / shares | $ 14.83 | |
Granted | $ / shares | 15.35 | |
Exercised | $ / shares | 13.74 | [1] |
Cancelled | $ / shares | 14.50 | |
Outstanding-end of period | $ / shares | 15.23 | |
Vested and expected to vest-end of period | $ / shares | 15.22 | |
Exercisable-end of period | $ / shares | $ 14.90 | [2] |
Weighted-Average Remaining Contractual Term (In years) | ||
Outstanding-end of period | 4 years 9 months 18 days | |
Vested and expected to vest-end of period | 4 years 8 months 12 days | |
Exercisable-end of period | 7 months 6 days | [2] |
Aggregate Intrinsic Value | ||
Outstanding-end of period | $ | $ 8,802 | |
Vested and expected to vest-end of period | $ | 8,336 | |
Exercisable-end of period | $ | $ 3,125 | [2] |
[1] | Options exercised during the 26 weeks ended July 30, 2016 had exercise prices ranging from $11.50 to $14.50. | |
[2] | Options exercisable represent “in-the-money” vested options based upon the weighted-average exercise price of vested options compared to the Company’s stock price at July 30, 2016. |
Summary of Stock Option Activ38
Summary of Stock Option Activity (Parenthetical) (Detail) | 6 Months Ended |
Jul. 30, 2016$ / shares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Options exercised, exercise price range, lower limit | $ 11.50 |
Options exercised, exercise price range, upper limit | $ 14.50 |
Black-Scholes Option Valuation
Black-Scholes Option Valuation Assumptions (Detail) | 6 Months Ended | |
Jul. 30, 2016 | ||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Risk-free interest rate | 1.30% | [1] |
Dividend yield | 3.00% | |
Volatility factor | 35.40% | [2] |
Weighted-average expected term | 4 years 4 months 24 days | [3] |
Expected forfeiture rate | 8.00% | [4] |
[1] | Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options. | |
[2] | Based on a combination of historical volatility of the Company’s common stock and implied volatility. | |
[3] | Represents the period of time options are expected to be outstanding, based on historical experience. | |
[4] | Based upon historical experience. |
Summary of Restricted Stock Act
Summary of Restricted Stock Activity (Detail) shares in Thousands | 6 Months Ended |
Jul. 30, 2016$ / sharesshares | |
Time Based Restricted Stock Units | |
Shares | |
Nonvested - beginning of period | shares | 1,935 |
Granted | shares | 946 |
Vested | shares | (885) |
Cancelled | shares | (44) |
Nonvested - end of period | shares | 1,952 |
Weighted-Average Grant Date Fair Value | |
Nonvested - beginning of period | $ / shares | $ 15.17 |
Granted | $ / shares | 16.02 |
Vested | $ / shares | 16.11 |
Cancelled | $ / shares | 10.50 |
Nonvested - end of period | $ / shares | $ 15.26 |
Performance-Based Restricted Stock Units | |
Shares | |
Nonvested - beginning of period | shares | 2,609 |
Granted | shares | 1,077 |
Vested | shares | (195) |
Cancelled | shares | (700) |
Nonvested - end of period | shares | 2,791 |
Weighted-Average Grant Date Fair Value | |
Nonvested - beginning of period | $ / shares | $ 16.02 |
Granted | $ / shares | 15.70 |
Vested | $ / shares | 14.82 |
Cancelled | $ / shares | 19.72 |
Nonvested - end of period | $ / shares | $ 15.05 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 30, 2016 | Aug. 01, 2015 | Jul. 30, 2016 | Aug. 01, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 36.50% | 34.70% | 36.40% | 37.00% |
Reasonably possible amount of reduction in unrecognized tax benefit over the next twelve months | $ 3.3 | $ 3.3 |