| CHANGE IN ACCOUNTING PRINCIPLE |
CHANGE IN ACCOUNTING PRINCIPLE The Company elected to change its method of accounting for inventory from the lower of cost or market utilizing the retail method to the weighted average cost method effective February 2, 2013. In accordance with generally accepted accounting principles, all periods have been retroactively adjusted to reflect the period-specific effects of the change to the weighted average cost method. The Company believes that accounting under the weighted average cost method is preferable as it better aligns with the Company's focus on realized selling margin and improves the comparability of the Company's financial results with those of its competitors. Additionally, it will improve the matching of cost of goods sold with the related net sales and reflect the acquisition cost of inventory outstanding at each balance sheet date. The cumulative adjustment as of January 30, 2010, was an increase in its inventory of $73.6 million and an increase in retained earnings of $47.3 million.
As a result of the retroactive application of the change in accounting for inventory, the following items in the Company's Consolidated Statements of Operations and Comprehensive Income and Consolidated Statements of Cash Flows have been restated:
Fiscal Year Ended January 28, 2012 (in thousands, except per share data) | | | | | | | | | | | | | | As Reported | | Effect of Change | | As Restated | | | | | | | Net Sales | $ | 4,158,058 |
| | $ | — |
| | $ | 4,158,058 |
| Cost of Goods Sold | 1,639,188 |
| | (31,354 | ) | | 1,607,834 |
| Gross Profit | 2,518,870 |
| | 31,354 |
| | 2,550,224 |
| Operating Income | 190,030 |
| | 31,354 |
| | 221,384 |
| Income from Continuing Operations Before Taxes | 186,453 |
| | 31,354 |
| | 217,807 |
| Tax Expense for Continuing Operations | 59,591 |
| | 15,078 |
| | 74,669 |
| Net Income from Continuing Operations | 126,862 |
| | 16,276 |
| | 143,138 |
| Net Income | 127,658 |
| | 16,276 |
| | 143,934 |
| Net Income Per Share from Continuing Operations: | | | | | | Basic | $ | 1.46 |
| | $ | 0.19 |
| | $ | 1.65 |
| Diluted | $ | 1.42 |
| | $ | 0.18 |
| | $ | 1.60 |
| Net Income Per Share: | | | | | | Basic | $ | 1.47 |
| | $ | 0.19 |
| | $ | 1.66 |
| Diluted | $ | 1.43 |
| | $ | 0.18 |
| | $ | 1.61 |
| Foreign Currency Translation Adjustments | (8,655 | ) | | (3 | ) | | (8,658 | ) | Other Comprehensive Income (Loss) | 12,971 |
| | (3 | ) | | 12,968 | Comprehensive Income | 140,629 |
| | 16,273 |
| | 156,902 |
| | | | | | | | | | | | | | As Reported | | Effect of Change | | As Restated | | | | | | | Cash flow from operating activities: | | | | | | Net Income | $ | 127,658 |
| | $ | 16,276 |
| | $ | 143,934 |
| Deferred Taxes | (46,330 | ) | | 15,078 |
| | (31,252 | ) | Inventories | (184,784 | ) | | (31,349 | ) | | (216,133 | ) |
Fiscal Year Ended January 29, 2011 (in thousands, except per share data) | | | | | | | | | | | | | | As Reported | | Effect of Change | | As Restated | | | | | | | Net Sales | $ | 3,468,777 |
| | $ | — |
| | $ | 3,468,777 |
| Cost of Goods Sold | 1,256,596 |
| | (5,248 | ) | | 1,251,348 |
| Gross Profit | 2,212,181 |
| | 5,248 |
| | 2,217,429 |
| Operating Income | 231,932 |
| | 5,248 |
| | 237,180 |
| Income from Continuing Operations Before Taxes | 228,570 |
| | 5,248 |
| | 233,818 |
| Tax Expense for Continuing Operations | 78,287 |
| | (178 | ) | | 78,109 |
| Net Income from Continuing Operations | 150,283 |
| | 5,426 |
| | 155,709 |
| Net Income | 150,283 |
| | 5,426 |
| | 155,709 |
| Net Income Per Share from Continuing Operations: | | | | | | Basic | $ | 1.71 |
| | $ | 0.06 |
| | $ | 1.77 |
| Diluted | $ | 1.67 |
| | $ | 0.06 |
| | $ | 1.73 |
| Net Income Per Share: | | | | | | Basic | $ | 1.71 |
| | $ | 0.06 |
| | $ | 1.77 |
| Diluted | $ | 1.67 |
| | $ | 0.06 |
| | $ | 1.73 |
| Foreign Currency Translation Adjustments | 3,399 |
| | $ | (161 | ) | | $ | 3,238 |
| Other Comprehensive Income (Loss) | 2,457 |
| | $ | (161 | ) | | $ | 2,296 |
| Comprehensive Income | 152,740 |
| | $ | 5,265 |
| | $ | 158,005 |
|
| | | | | | | | | | | | |
| As Reported | | Effect of Change | | As Restated | | | | | | | Cash flow from operating activities: | | | | | | Net Income | $ | 150,283 |
| | $ | 5,426 |
| | $ | 155,709 |
| Deferred Taxes | (27,823 | ) | | (178 | ) | | (28,001 | ) | Inventories | (74,689 | ) | | (5,180 | ) | | (79,869 | ) |
As a result of the retroactive application of the change in accounting for inventories, the following items in the Company's Consolidated Balance Sheets have been restated:
January 28, 2012 (in thousands): | | | | | | | | | | | | | | As Reported | | Effect of Change | | As Restated | | | | | | | Inventories | $ | 569,818 |
| | $ | 110,117 |
| | $ | 679,935 |
| Deferred Income Taxes | 77,120 |
| | (41,238 | ) | | 35,882 |
| Total Current Assets | 1,488,775 |
| | 68,879 |
| | 1,557,654 |
| Total Assets | 3,048,153 |
| | 68,879 |
| | 3,117,032 |
| Retained Earnings | 2,320,571 |
| | 69,043 |
| | 2,389,614 |
| Total Stockholders' Equity | 1,862,456 |
| | 68,879 |
| | 1,931,335 |
| Total Liabilities and Stockholders' Equity | 3,048,153 |
| | 68,879 |
| | 3,117,032 |
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