x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fifty-two weeks ended January 30, 2016 | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 31‑1241495 | |
(State or other jurisdiction of | (I.R.S. employer | |
incorporation or organization) | identification number) | |
500 Plaza Drive | ||
Secaucus, New Jersey | 07094 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer | x | Accelerated filer | o | Non-accelerated filer (Do not check if smaller reporting Company) | o | Smaller reporting company | o |
PAGE | ||
• | Fiscal 2015 - The fifty-two weeks ended January 30, 2016 |
• | Fiscal 2014 - The fifty-two weeks ended January 31, 2015 |
• | Fiscal 2013 - The fifty-two weeks ended February 1, 2014 |
• | Fiscal 2016 - Our next fiscal year representing the fifty-two weeks ending January 28, 2017 |
• | GAAP - Generally Accepted Accounting Principles |
• | Comparable Retail Sales — Net sales, in constant currency, from stores that have been open for at least 14 consecutive months and from our e-commerce store, excluding postage and handling fees. Store closures in the current fiscal year will be excluded from Comparable Retail Sales beginning in the fiscal quarter in which the store closes. Stores that temporarily close for non- substantial remodeling will be excluded from Comparable Retail Sales for only the period that they were closed. A store is considered substantially remodeled if it has been relocated or materially changed in size and will be excluded from Comparable Retail Sales for at least 14 months beginning in the period in which the remodel occurred. |
• | SEC - U.S. Securities and Exchange Commission |
• | FASB- Financial Accounting Standards Board |
• | FASB ASC - FASB Accounting Standards Codification, which serves as the source for authoritative U.S. GAAP, except that rules and interpretive releases by the SEC are also sources of authoritative U.S. GAAP for SEC registrants |
• | CCPSA - Canadian Consumer Product Safety Commission |
• | CPSA - U.S. Consumer Product Safety Act |
• | CPSC - U.S. Consumer Products Safety Commission |
• | CPSIA - U.S. Consumer Product Safety Improvement Act of 2008 |
1. | Superior Product - Product will always be our number one priority. We continue to significantly differentiate and upgrade the look of our merchandise, which has resonated well with our customers. In addition to apparel, we offer a full line of accessories and footwear and other items so busy moms can quickly and easily put together head-to-toe outfits. |
2. | Business Transformation through Technology - We continue to make progress on our business transformation initiatives to improve sales and margin. The insights from the implementation of our assortment planning tool are delivering gross margin benefits by adding enhanced data driven analytics to our internal processes leading to a better optimization of our overall buys and a better matching of the breadth of assortment with the depth of inventory. Our new inventory allocation and replenishment tool also went live during the back-to-school Fiscal 2015 season. These initiatives have contributed to improved gross margin during Fiscal 2015. Additionally, our digital initiatives continue to gain traction and are focused on driving improvements in customer acquisition, retention and engagement. We also implemented a new digital order management system during Fiscal 2015 which will enable us to pilot omni-channel fulfillment capabilities in Fiscal 2016. |
3. | Growth through Alternate Channels of Distribution - We are pursuing new channels of distribution, including international expansion and wholesale distribution. We continued our international expansion program with our franchise partners adding 29 additional international points of distribution (stores, shop in shops, e-commerce site) during Fiscal 2015 bringing our total count to 102, operating in 16 countries. During Fiscal 2015, in India we opened our first retail store, our first ever shop in shop location and also launched an e-commerce business with our partner Arvind Lifestyle Brands. We also announced a new partnership with El Palacio de Hierro to open free-standing stores and shop in shops in Mexico, and we opened our first shop in shop in Mexico. In our wholesale business, we expanded categories of merchandise available for distribution to our customers during Fiscal 2015. |
4. | Fleet Optimization - We continue to evaluate our store fleet as part of our fleet optimization initiative to improve store productivity and plan to close approximately 200 underperforming stores through fiscal 2017, which includes the 32 stores we closed during Fiscal 2015, the 35 stores we closed in Fiscal 2014 and the 41 stores we closed during Fiscal 2013. Our customer segmentation analysis helps us to better understand customer shopping habits at the store level in order to understand what our ideal store portfolio should look like. These closures should ultimately result in operating margin accretion due to sales transfer, low cost of exit and the elimination of the underperforming locations. In those markets where we have closed stores, we are seeing the neighboring stores along with the e-commerce business become more productive from both a Comparative Retail Sales and profitability perspective. These results further our commitment to executing this optimization program while dramatically slowing down new store openings. |
Fiscal Year Ended | ||||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | ||||||||||
Net sales: | ||||||||||||
The Children's Place U.S. | $ | 1,518,117 | $ | 1,528,762 | $ | 1,528,276 | ||||||
The Children's Place International (1) | 207,660 | 232,562 | 237,513 | |||||||||
Total net sales | $ | 1,725,777 | $ | 1,761,324 | $ | 1,765,789 |
(1) | Net sales from The Children's Place International are primarily derived from revenues from Canadian operations. Our foreign subsidiaries, primarily in Canada, have operating results based in foreign currencies and are thus subject to the fluctuations of the corresponding translation rates into U.S. dollars. For Fiscal 2015, the effects of these translation rate changes on net sales was a decrease of $29.9 million. |
Fiscal Year Ended | ||||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | ||||||||||
Operating income: | ||||||||||||
The Children's Place U.S. | $ | 65,221 | $ | 63,586 | $ | 60,267 | ||||||
The Children's Place International (1) | 24,859 | 16,457 | 16,016 | |||||||||
Total operating income | $ | 90,080 | $ | 80,043 | $ | 76,283 | ||||||
Operating income as a percent of net sales: | ||||||||||||
The Children's Place U.S. | 4.3 | % | 4.2 | % | 3.9 | % | ||||||
The Children's Place International | 12.0 | % | 7.1 | % | 6.7 | % | ||||||
Total operating income as a percent of net sales | 5.2 | % | 4.5 | % | 4.3 | % |
(1) | Our foreign subsidiaries, primarily in Canada, have operating results based in foreign currencies and are thus subject to the fluctuations of the corresponding translation rates into U.S. dollars. For Fiscal 2015, the effects of these translation rate changes on operating income was a decrease of $1.9 million. |
January 30, 2016 | January 31, 2015 | |||||||
Total assets: | ||||||||
The Children's Place U.S. | $ | 748,975 | $ | 805,462 | ||||
The Children's Place International | 148,973 | 153,156 | ||||||
Total assets | $ | 897,948 | $ | 958,618 |
• | Consistently offering high-quality and age-appropriate products and trend-right fashion at value prices in a friendly and convenient shopping environment; |
• | Providing coordinated outfits and accessories for our customers' lifestyle needs; |
• | Creating strong merchandising and visual presentations to create a compelling in-store experience; |
• | Emphasizing our great value and fashion in marketing visuals to convey a consistent brand message across all channels; |
• | Segmenting and leveraging our customer database to frequently communicate with our customers and tailor promotions to maximize customer satisfaction; |
• | Using our MyPLACE Loyalty Rewards Program to drive customer engagement; and |
• | Providing exclusive assortments in our e-commerce business to further expand the breadth of our offerings and brand recognition. |
• | Vendor Code of Conduct - By formally acknowledging and agreeing to our code of conduct, our vendors affirm their commitment to integrate compliance with local law and industry standards into their manufacturing and sourcing practices. Topics covered by these standards include child labor, involuntary or forced labor, slavery and human-trafficking, coercion/harassment, discrimination, health and safety, compensation, working hours, freedom of association, environment, unauthorized subcontracting, security practices and undue influence of independent auditors. |
• | Ongoing Auditing Program - We administer a factory auditing program staffed by our internal sourcing team and/or professional third party auditors who visit factory locations at least once a year on average to provide insight into general factory working conditions and other production characteristics in all factories that manufacture The Children's Place products. With this information, we can understand factories’ challenges, help the factories identify non-compliance with industry standards and offer guidance on corrective action plans for the factories to achieve better compliance, All factories that are approved for The Children’s Place production must undergo a social compliance audit prior to any orders being placed and at least once annually thereafter. |
• | Corrective Action Plans - Following each social audit, a corrective action plan outlines any areas of non-compliance identified through the factory audit. Each factory is expected to develop a remediation plan and remediation timeline for any non-compliance found. Through follow-up social audits, we assess a factory’s progress in achieving its remediation plan. It is our preference to work with factories to remediate and achieve compliance rather than terminate our relationship; however, where there is serious non-compliance of critical standards, repeated non-compliance or failure of the factories to invest in continued improvement, we reserve the right to terminate our relationship. |
• | Vendor Factory Engagement - Our responsible sourcing team provides guidance and training to vendors and factories in order to help vendors and factories improve compliance with industry standards. Our goal is to serve as a resource for vendors and factories as they develop and strengthen their capabilities to better manage the working conditions of their employees. |
• | Worker Education and Community Investment - In some cases, we will provide support to factories that wish to implement worker training and community investment initiatives. We have encouraged factories to invest in health and nutrition education for their workers, which we have financially supported in factories in Bangladesh, China, India, Indonesia, and Vietnam. |
Number of Stores | Number of Stores | ||||||||||
Location | January 30, 2016 | January 31, 2015 | January 30, 2016 | January 31, 2015 | |||||||
United States & Puerto Rico | United States & Puerto Rico (continued) | ||||||||||
Alabama | 15 | 15 | North Carolina | 29 | 28 | ||||||
Arizona | 19 | 19 | North Dakota | 4 | 4 | ||||||
Arkansas | 9 | 8 | Ohio | 32 | 33 | ||||||
California | 90 | 93 | Oklahoma | 8 | 8 | ||||||
Colorado | 14 | 14 | Oregon | 7 | 8 | ||||||
Connecticut | 13 | 13 | Pennsylvania | 41 | 43 | ||||||
Delaware | 3 | 3 | Rhode Island | 2 | 3 | ||||||
District of Columbia | 1 | 1 | South Carolina | 16 | 16 | ||||||
Florida | 38 | 39 | South Dakota | 1 | 2 | ||||||
Georgia | 32 | 31 | Tennessee | 20 | 21 | ||||||
Hawaii | 1 | 2 | Texas | 89 | 91 | ||||||
Idaho | 4 | 4 | Utah | 11 | 13 | ||||||
Illinois | 37 | 39 | Vermont | 1 | 1 | ||||||
Indiana | 18 | 19 | Virginia | 23 | 24 | ||||||
Iowa | 10 | 10 | Washington | 13 | 13 | ||||||
Kansas | 5 | 6 | West Virginia | 6 | 6 | ||||||
Kentucky | 15 | 15 | Wisconsin | 13 | 13 | ||||||
Louisiana | 16 | 16 | Wyoming | 2 | 2 | ||||||
Maine | 4 | 5 | Puerto Rico | 11 | 13 | ||||||
Maryland | 23 | 23 | Total United States & Puerto Rico | 937 | 963 | ||||||
Massachusetts | 23 | 24 | |||||||||
Michigan | 20 | 19 | Canada | ||||||||
Minnesota | 12 | 13 | Alberta | 19 | 19 | ||||||
Mississippi | 14 | 14 | British Columbia | 17 | 17 | ||||||
Missouri | 18 | 18 | Manitoba | 4 | 4 | ||||||
Montana | 2 | 2 | New Brunswick | 3 | 3 | ||||||
Nebraska | 5 | 5 | Nova Scotia | 4 | 4 | ||||||
New Hampshire | 6 | 6 | Ontario | 55 | 56 | ||||||
New Jersey | 44 | 46 | Prince Edward Island | 1 | 1 | ||||||
New Mexico | 6 | 6 | Quebec | 25 | 26 | ||||||
New York | 83 | 85 | Saskatchewan | 3 | 3 | ||||||
Nevada | 8 | 8 | Newfoundland and Labrador | 1 | 1 | ||||||
Total Canada | 132 | 134 | |||||||||
Total Stores | 1,069 | 1,097 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||
Quarterly net sales as a percentage of full year | ||||||||||||
Fiscal 2015 | 23.5 | % | 21.2 | % | 26.4 | % | 28.9 | % | ||||
Fiscal 2014 | 23.3 | % | 21.8 | % | 27.7 | % | 27.2 | % | ||||
Quarterly operating income (loss) as a percentage of full year | ||||||||||||
Fiscal 2015 | 25.8 | % | (22.3 | )% | 64.0 | % | 32.6 | % | ||||
Fiscal 2014 | 25.1 | % | (20.6 | )% | 69.8 | % | 25.8 | % |
Item 1A. | RISK FACTORS |
Location | Use | Approximate Sq. Footage | Current Lease Term Expiration | ||||
Fort Payne, AL (1) | Warehouse Distribution Center | 700,000 | Owned | ||||
Ontario, Canada (2) | Warehouse Distribution Center | 95,000 | 4/30/2019 | ||||
500 Plaza Drive, Secaucus, NJ (3) | Corporate Offices | 200,000 | 5/31/2029 | ||||
Hong Kong, China (3) | Product Support | 28,000 | 4/30/2018 | ||||
Shanghai, China (3) | Product Support | 2,200 | 8/10/2016 | ||||
Gurgaon, India (3) | Product Support | 11,000 | 5/14/2018 | ||||
Dhaka, Bangladesh (3) | Product Support | 5,000 | 1/19/2019 | ||||
Ho Chi Minh City, Vietnam (3) | Product Support | 2,000 | 12/31/2016 |
(1) | Supports The Children's Place U.S. stores and e-commerce business. |
(2) | Supports The Children's Place Canadian stores. |
(3) | Supports both The Children's Place U.S. stores, our e-commerce business, The Children's Place Canadian stores and our international franchisees. |
High | Low | |||||||
2015 | ||||||||
First Quarter | $64.19 | $55.69 | ||||||
Second Quarter | 69.01 | 57.90 | ||||||
Third Quarter | 61.59 | 53.20 | ||||||
Fourth Quarter | 65.10 | 47.25 | ||||||
2014 | ||||||||
First Quarter | $55.10 | $47.25 | ||||||
Second Quarter | 51.30 | 45.49 | ||||||
Third Quarter | 54.38 | 47.07 | ||||||
Fourth Quarter | 63.65 | 47.75 |
Fiscal Year Ended January 30, 2016 | ||||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Fiscal 2015 | ||||||||||||||||
Cash dividends declared and paid per common share | $ | 0.1500 | $ | 0.1500 | $ | 0.1500 | $ | 0.1500 | $ | 0.60 | ||||||||||
Cash dividends paid (in thousands) | $ | 3,130 | $ | 3,069 | $ | 3,033 | $ | 2,985 | $ | 12,217 |
Fiscal Year Ended | ||||||||||
January 30, 2016 | January 31, 2015 | |||||||||
Shares | Value | Shares | Value | |||||||
Share repurchases related to (1): | ||||||||||
2012 Share buyback program | — | — | 282 | 14,671 | ||||||
2014 Share buyback program | 640 | 39,791 | 1,189 | 60,209 | ||||||
2015 Share buyback program | 1,338 | 79,274 | — | — | ||||||
Withholding taxes | 30 | 1,828 | 22 | 1,249 | ||||||
Shares acquired and held in treasury | 4 | 257 | 2 | 107 |
(1) | Subsequent to January 30, 2016 and through March 22, 2016, we repurchased an additional 0.3 million shares for approximately $22.3 million. |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value (in thousands) of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||
11/1/15-11/28/15 (1) | 114,276 | $50.82 | 112,138 | $303,335 | ||||||||
11/29/15-1/2/16 (2) | 311,672 | 54.01 | 311,650 | 286,504 | ||||||||
1/3/16-1/30/16 (3) | 252,691 | 62.29 | 252,485 | 270,776 | ||||||||
Total | 678,639 | $56.55 | 676,273 | $270,776 |
(1) | Includes 1,008 shares acquired as treasury stock as directed by participants in the Company's deferred compensation plan and 1,130 shares withheld to cover taxes in conjunction with the vesting of a stock award. |
(3) | Includes 206 shares withheld to cover taxes in conjunction with the vesting of a stock award. |
COLUMN (A) | COLUMN (B) | COLUMN (C) | ||||||
Plan Category | Securities to be issued upon exercise of outstanding options (1) | Weighted average exercise price of outstanding options | Securities remaining available for future issuances under equity compensation plans (excluding securities reflected in Column (A)) (2) | |||||
Equity Compensation Plans Approved by Security Holders | 15,000 | $29.05 | 605,499 | |||||
Equity Compensation Plans Not Approved by Security Holders | N/A | N/A | N/A | |||||
Total | 15,000 | $29.05 | 605,499 |
(1) | Amount consists of 15,000 shares issuable under our 2005 Equity Incentive Plan. |
(2) | Includes shares forfeited or withheld to cover taxes related to awards granted under the Prior Plans, which are available for future issuances under the 2011 Equity Plan. |
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |||||||||||||
The Children's Place---"PLCE" | 42.270 | 50.050 | 49.530 | 52.670 | 59.950 | 65.100 | ||||||||||||
CRSP Total Return Index for the NASDAQ Stock Market (US Companies) | 742.933 | 1,011.628 | 1,163.278 | 1,518.350 | 1,736.188 | 1,763.447 | ||||||||||||
CRSP Total Return Index for the NASDAQ Retail Trade | 577.479 | 699.415 | 827.442 | 912.911 | 1,111.523 | 1,126.735 |
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | ||||||||||
The Children's Place---"PLCE" | 100.000 | 118.410 | 117.180 | 124.60 | 143.26 | 157.13 | |||||||||
CRSP Total Return Index for the NASDAQ Stock Market (US Companies) | 100.000 | 107.250 | 123.530 | 161.35 | 184.81 | 188.12 | |||||||||
CRSP Total Return Index for the NASDAQ Retail Trade | 100.000 | 121.130 | 143.290 | 158.07 | 192.48 | 195.12 |
Fiscal Year Ended (1) | ||||||||||||||||||||
Statement of Operations Data (in thousands, except per share and square footage data): | January 30, 2016 | January 31, 2015 | February 1, 2014 | February 2, 2013 | January 28, 2012 | |||||||||||||||
Net sales | $1,725,777 | $1,761,324 | $1,765,789 | $1,809,486 | $1,715,862 | |||||||||||||||
Cost of sales | 1,100,645 | 1,139,024 | 1,110,268 | 1,118,046 | 1,056,213 | |||||||||||||||
Gross profit | 625,132 | 622,300 | 655,521 | 691,440 | 659,649 | |||||||||||||||
Selling, general and administrative expenses | 469,898 | 470,686 | 485,653 | 510,918 | 477,425 | |||||||||||||||
Asset impairment charges (2) | 2,371 | 11,145 | 29,633 | 2,284 | 2,208 | |||||||||||||||
Other costs (income) (3) | 98 | (68 | ) | (906 | ) | 11,088 | — | |||||||||||||
Depreciation and amortization | 62,685 | 60,494 | 64,858 | 77,435 | 74,573 | |||||||||||||||
Operating income | 90,080 | 80,043 | 76,283 | 89,715 | 105,443 | |||||||||||||||
Interest income (expense), net | (698 | ) | (168 | ) | 265 | (20 | ) | (690 | ) | |||||||||||
Income before income taxes | 89,382 | 79,875 | 76,548 | 89,695 | 104,753 | |||||||||||||||
Provision for income taxes | 31,498 | 22,987 | 23,522 | 26,452 | 30,408 | |||||||||||||||
Net income | 57,884 | 56,888 | 53,026 | 63,243 | 74,345 | |||||||||||||||
Diluted income per common share | $ | 2.80 | $ | 2.59 | $ | 2.32 | $ | 2.61 | $ | 2.90 | ||||||||||
Cash dividends declared and paid per common share (4) | $ | 0.60 | $ | 0.53 | — | — | — | |||||||||||||
Selected Operating Data for Continuing Operations: | ||||||||||||||||||||
Number of Company operated stores open at end of period | 1,069 | 1,097 | 1,107 | 1,095 | 1,049 | |||||||||||||||
Comparable retail sales increase (decrease) | 0.4 | % | 0.4 | % | (2.8 | )% | 2.0 | % | (2.5 | )% | ||||||||||
Average net sales per store (5) | $ | 1,318 | $ | 1,316 | $ | 1,354 | $ | 1,393 | $ | 1,492 | ||||||||||
Average square footage per store (6) | 4,666 | 4,675 | 4,704 | 4,791 | 4,903 | |||||||||||||||
Average net sales per square foot (7) | $ | 282 | $ | 280 | $ | 285 | $ | 300 | $ | 299 | ||||||||||
Balance Sheet Data (in thousands): | ||||||||||||||||||||
Working capital (8) | $ | 306,286 | $ | 334,812 | $ | 357,971 | $ | 353,729 | $ | 357,373 | ||||||||||
Total assets | 897,948 | 958,618 | 990,630 | 923,410 | 866,252 | |||||||||||||||
Long-term debt | — | — | — | — | — | |||||||||||||||
Stockholders’ equity | 527,793 | 589,118 | 616,778 | 620,949 | 624,969 |
(1) | The period ending February 2, 2013 was a 53-week year. All other periods presented were 52-week years. |
(2) | Asset impairment charges generally relate to the write-off of fixed assets related to underperforming stores. In Fiscal 2013, asset impairment charges also included the write-off of obsolete systems of $9.1 million. |
(3) | Other costs include exit costs associated with the closures of the West Coast DC and Northeast DC in fiscal 2012 and additional sublease agreements executed in Fiscal 2013. |
(4) | The Company instituted its quarterly dividend program and paid its first dividend during the first quarter of Fiscal 2014. |
(5) | Average net sales per store represents net sales from stores open throughout the full period divided by the number of such stores. |
(6) | Average square footage per store represents the square footage of stores operated on the last day of the period divided by the number of such stores. |
(7) | Average net sales per square foot represent net sales from stores open throughout the full period divided by the square footage of such stores. |
(8) | Working capital is calculated by subtracting our current liabilities from our current assets. |
• | Fiscal 2015 - The fifty-two weeks ended January 30, 2016 |
• | Fiscal 2014 - The fifty-two weeks ended January 31, 2015 |
• | Fiscal 2013 - The fifty-two weeks ended February 1, 2014 |
• | Fiscal 2016 - Our next fiscal year representing the fifty-two weeks ending January 28, 2017 |
• | FASB- Financial Accounting Standards Board |
• | FASB ASC - FASB Accounting Standards Codification, which serves as the source for authoritative U.S. GAAP, except that rules and interpretive releases by the SEC are also sources of authoritative U.S. GAAP for SEC registrants |
• | GAAP - U.S. Generally Accepted Accounting Principles |
• | SEC- The U.S. Securities and Exchange Commission |
• | AUR- Average unit retail price |
• | Comparable Retail Sales — Net sales, in constant currency, from stores that have been open for at least 14 consecutive months and from our e-commerce store, excluding postage and handling fees. Store closures in the current fiscal year will be excluded from Comparable Retail Sales beginning in the fiscal quarter in which the store closes. Stores that temporarily close for non- substantial remodeling will be excluded from Comparable Retail Sales for only the period that they were closed. A store is considered substantially remodeled if it has been relocated or materially changed in size and will be excluded from Comparable Retail Sales for at least 14 months beginning in the period in which the remodel occurred. |
• | Gross Margin - Gross profit expressed as a percentage of net sales |
• | SG&A - Selling, general and administrative expenses |
Fiscal 2015 | Fiscal 2014 | Fiscal 2013 | ||||
Average Translation Rates (1) | ||||||
Canadian Dollar | 0.7733 | 0.8980 | 0.9647 | |||
Hong Kong Dollar | 0.1290 | 0.1290 | 0.1289 | |||
China Yuan Renminbi | 0.1585 | 0.1617 | 0.1630 |
(1) | The average translation rates are the average of the monthly translation rates used during each fiscal year to translate the respective income statements. The rates represent the U.S. dollar equivalent of each foreign currency. |
• | Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities |
• | Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly |
• | Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities |
Fiscal Year Ended | ||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | ||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | ||
Cost of sales (exclusive of depreciation and amortization) | 63.8 | 64.7 | 62.9 | |||||
Gross profit | 36.2 | 35.3 | 37.1 | |||||
Selling, general and administrative expenses | 27.2 | 26.7 | 27.5 | |||||
Asset impairment charge | 0.1 | 0.6 | 1.7 | |||||
Other (income) costs | — | — | (0.1 | ) | ||||
Depreciation and amortization | 3.6 | 3.4 | 3.7 | |||||
Operating income | 5.2 | 4.5 | 4.3 | |||||
Interest (expense), net | — | — | — | |||||
Income before income taxes | 5.2 | 4.5 | 4.3 | |||||
Provision for income taxes | 1.8 | 1.3 | 1.3 | |||||
Net income | 3.4 | % | 3.2 | % | 3.0 | % | ||
Number of stores operated by the Company, end of period | 1,069 | 1,097 | 1,107 |
Fiscal Year Ended | |||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||||
Net sales: | |||||||||||
The Children’s Place U.S. | $ | 1,518,117 | $ | 1,528,762 | $ | 1,528,276 | |||||
The Children’s Place International (1) | 207,660 | 232,562 | 237,513 | ||||||||
Total net sales | $ | 1,725,777 | $ | 1,761,324 | $ | 1,765,789 |
(1) | Net sales from The Children's Place International are primarily derived from revenues from Canadian operations. Our foreign subsidiaries, primarily in Canada, have operating results based in foreign currencies and are thus subject to the fluctuations of the corresponding translation rates into U.S. dollars. For Fiscal 2015 and Fiscal 2014, the effects of these translation rate changes on net sales was a decrease of $29.9 million and $14.7 million, respectively. |
Fiscal Year Ended | |||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||||
Gross profit: | |||||||||||
The Children’s Place U.S. | $ | 539,030 | $ | 535,226 | $ | 558,156 | |||||
The Children’s Place International | 86,102 | 87,074 | 97,365 | ||||||||
Total gross profit | $ | 625,132 | $ | 622,300 | $ | 655,521 | |||||
Gross Margin: | |||||||||||
The Children’s Place U.S. | 35.5 | % | 35.0 | % | 36.5 | % | |||||
The Children’s Place International | 41.5 | % | 37.4 | % | 41.0 | % | |||||
Total gross margin | 36.2 | % | 35.3 | % | 37.1 | % |
• | store expenses decreased approximately $13.6 million, or 70 basis points, primarily due to expense reduction initiatives in payroll, supplies and maintenance costs; and |
• | a decrease in administrative expenses of approximately $1.1 million, or 10 basis points, primarily related to expense reduction initiatives in payroll, corporate expenses and marketing expenses, which resulted primarily from fewer direct mailings, partially offset by increased training costs associated with our ongoing transformation initiatives. |
(i) | the prime rate plus a margin of 0.50% to 0.75% based on the amount of our average excess availability under the facility; or |
(ii) | the London InterBank Offered Rate, or “LIBOR”, for an interest period of one, two, three or six months, as selected by us, plus a margin of 1.25% to 1.50% based on the amount of our average excess availability under the facility. |
January 30, 2016 | January 31, 2015 | ||||||
Credit facility maximum | $ | 250.0 | $ | 200.0 | |||
Borrowing base | 211.7 | 183.2 | |||||
Outstanding borrowings | — | — | |||||
Letters of credit outstanding—merchandise | — | — | |||||
Letters of credit outstanding—standby | 7.1 | 9.1 | |||||
Utilization of credit facility at end of period | 7.1 | 9.1 | |||||
Availability (1) | $ | 204.6 | $ | 174.1 | |||
Interest rate at end of period | 4.0 | % | 3.8 | % |
Fiscal 2015 | Fiscal 2014 | ||||||
Average end of day loan balance during the period | $ | 28.5 | $ | 9.4 | |||
Highest end of day loan balance during the period | 67.5 | 40.9 | |||||
Average interest rate | 2.7 | % | 3.2 | % |
(1) | The sublimit availability for letters of credit was $42.9 million and $40.9 million at January 30, 2016 and January 31, 2015, respectively. |
Payment Due By Period | ||||||||||||||||||||
Contractual Obligations (dollars in thousands) | Total | 1 year or less | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Operating leases(1) | $ | 774,085 | $ | 155,352 | $ | 258,747 | $ | 191,761 | $ | 168,225 | ||||||||||
Total---Contractual Obligations | $ | 774,085 | $ | 155,352 | $ | 258,747 | $ | 191,761 | $ | 168,225 | ||||||||||
Amounts of Commitment Expiration Per Period | ||||||||||||||||||||
Other Commercial Commitments (dollars in thousands) | Total | 1 year or less | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Purchase commitments(2) | 335,295 | 335,295 | — | — | — | |||||||||||||||
Standby letters of credit(3) | 7,100 | 7,100 | — | — | — | |||||||||||||||
Total---Other Commercial Commitments | $ | 342,395 | $ | 342,395 | $ | — | $ | — | $ | — | ||||||||||
Total---Contractual Obligations and Other Commercial Commitments | $ | 1,116,480 | $ | 497,747 | $ | 258,747 | $ | 191,761 | $ | 168,225 |
(1) | Certain of our operating leases include common area maintenance and other charges in our monthly rental expense. For other leases which do not include these charges in the minimum lease payments, we incur monthly charges, which are billed and recorded separately. These additional charges approximated 53% of our minimum lease payments over the last three fiscal years. Additionally, our minimum lease obligation does not include contingent rent based upon sales volume, which represented approximately 0.6% of our minimum lease payments over the last three fiscal years. |
(2) | Represents purchase orders for merchandise for re-sale of approximately $319.4 million and equipment, construction and other non-merchandise commitments of approximately $15.9 million. |
(3) | Represents letters of credit issued to landlords, banks and insurance companies. |
Fiscal Year Ended January 30, 2016 | ||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Net sales | $ | 404,865 | $ | 366,455 | $ | 455,913 | $ | 498,544 | ||||||||
Gross profit | 152,109 | 115,004 | 180,513 | 177,506 | ||||||||||||
Selling, general and administrative expenses | 114,514 | 118,342 | 105,797 | 131,245 | ||||||||||||
Asset impairment charges | — | 1,452 | 919 | — | ||||||||||||
Other (income) costs | (3 | ) | 76 | 14 | 11 | |||||||||||
Depreciation and amortization | 14,394 | 15,252 | 16,136 | 16,903 | ||||||||||||
Operating income (loss) | 23,204 | (20,118 | ) | 57,647 | 29,347 | |||||||||||
Income (loss) before income taxes | 23,028 | (20,323 | ) | 57,393 | 29,284 | |||||||||||
Provision (benefit) for income taxes | 7,421 | (6,628 | ) | 18,898 | 11,807 | |||||||||||
Net income (loss) | 15,607 | (13,695 | ) | 38,495 | 17,477 | |||||||||||
Diluted earnings (loss) per share | $ | 0.73 | $ | (0.67 | ) | $ | 1.88 | $ | 0.87 | |||||||
Diluted weighted average common shares outstanding | 21,366 | 20,576 | 20,517 | 20,174 | ||||||||||||
Cash dividends declared and paid per common share | $ | 0.1500 | $ | 0.1500 | $ | 0.1500 | $ | 0.1500 |
January 30, 2016 | January 31, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 187,534 | $ | 173,291 | |||
Short-term investments | 40,100 | 52,000 | |||||
Accounts receivable | 26,315 | 31,928 | |||||
Inventories | 268,831 | 297,631 | |||||
Prepaid expenses and other current assets | 43,042 | 39,349 | |||||
Deferred income taxes | 15,486 | 15,080 | |||||
Total current assets | 581,308 | 609,279 | |||||
Long-term assets: | |||||||
Property and equipment, net | 290,980 | 310,301 | |||||
Deferred income taxes | 22,230 | 35,580 | |||||
Other assets | 3,430 | 3,458 | |||||
Total assets | $ | 897,948 | $ | 958,618 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
LIABILITIES: | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 154,541 | $ | 155,323 | |||
Income taxes payable | 1,611 | 420 | |||||
Accrued expenses and other current liabilities | 118,870 | 118,724 | |||||
Total current liabilities | 275,022 | 274,467 | |||||
Long-term liabilities: | |||||||
Deferred rent liabilities | 70,250 | 80,214 | |||||
Other tax liabilities | 9,713 | 6,446 | |||||
Other long-term liabilities | 15,170 | 8,373 | |||||
Total liabilities | 370,155 | 369,500 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS’ EQUITY: | |||||||
Preferred stock, $1.00 par value, 1,000 shares authorized, 0 shares issued and outstanding | — | — | |||||
Common stock, $0.10 par value, 100,000 shares authorized; 19,479 and 21,075 issued; 19,440 and 21,040 outstanding | 1,948 | 2,108 | |||||
Additional paid-in capital | 232,182 | 230,429 | |||||
Treasury stock, at cost (39 and 35 shares) | (1,939 | ) | (1,682 | ) | |||
Deferred compensation | 1,939 | 1,682 | |||||
Accumulated other comprehensive loss | (27,485 | ) | (17,493 | ) | |||
Retained earnings | 321,148 | 374,074 | |||||
Total stockholders’ equity | 527,793 | 589,118 | |||||
Total liabilities and stockholders’ equity | $ | 897,948 | $ | 958,618 |
Fiscal Year Ended | |||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||||
Net sales | $ | 1,725,777 | $ | 1,761,324 | $ | 1,765,789 | |||||
Cost of sales (exclusive of depreciation and amortization) | 1,100,645 | 1,139,024 | 1,110,268 | ||||||||
Gross profit | 625,132 | 622,300 | 655,521 | ||||||||
Selling, general and administrative expenses | 469,898 | 470,686 | 485,653 | ||||||||
Asset impairment charges | 2,371 | 11,145 | 29,633 | ||||||||
Other (income) costs | 98 | (68 | ) | (906 | ) | ||||||
Depreciation and amortization | 62,685 | 60,494 | 64,858 | ||||||||
Operating income | 90,080 | 80,043 | 76,283 | ||||||||
Interest (expense) income, net | (698 | ) | (168 | ) | 265 | ||||||
Income before income taxes | 89,382 | 79,875 | 76,548 | ||||||||
Provision for income taxes | 31,498 | 22,987 | 23,522 | ||||||||
Net income | $ | 57,884 | $ | 56,888 | $ | 53,026 | |||||
Earnings per common share | |||||||||||
Basic | $ | 2.83 | $ | 2.62 | $ | 2.35 | |||||
Diluted | $ | 2.80 | $ | 2.59 | $ | 2.32 | |||||
Weighted average common shares outstanding | |||||||||||
Basic | 20,438 | 21,681 | 22,537 | ||||||||
Diluted | 20,702 | 21,924 | 22,835 |
Fiscal Year Ended | |||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||||
Net income | $ | 57,884 | $ | 56,888 | $ | 53,026 | |||||
Other Comprehensive Income: | |||||||||||
Foreign currency translation adjustment | (10,444 | ) | (15,964 | ) | (14,787 | ) | |||||
Change in fair value of cash flow hedges, net of income taxes of $(223) | 452 | — | — | ||||||||
Comprehensive income | $ | 47,892 | $ | 40,924 | $ | 38,239 |
Accumulated | ||||||||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||||||||
Common Stock | Paid-In | Deferred | Retained | Comprehensive | Treasury Stock | Stockholders' | ||||||||||||||||||||||||||||
Shares | Amount | Capital | Compensation | Earnings | Income | Shares | Value | Equity | ||||||||||||||||||||||||||
BALANCE, February 2, 2013 | 23,179 | $ | 2,318 | $ | 215,691 | $ | 1,119 | $ | 389,682 | $ | 13,258 | (24 | ) | ($1,119 | ) | $ | 620,949 | |||||||||||||||||
Exercise of stock options | 49 | 5 | 1,474 | 1,479 | ||||||||||||||||||||||||||||||
Excess tax benefits from stock-based compensation | 211 | 211 | ||||||||||||||||||||||||||||||||
Vesting of stock awards | 300 | 30 | (30 | ) | — | |||||||||||||||||||||||||||||
Stock-based compensation expense | 21,210 | 21,210 | ||||||||||||||||||||||||||||||||
Capitalized stock-based compensation | 520 | 520 | ||||||||||||||||||||||||||||||||
Purchase and retirement of shares | (1,298 | ) | (130 | ) | (12,555 | ) | (53,145 | ) | (65,830 | ) | ||||||||||||||||||||||||
Change in cumulative translation adjustment | (14,787 | ) | (14,787 | ) | ||||||||||||||||||||||||||||||
Deferral of common stock into deferred compensation plan | 456 | (9 | ) | (456 | ) | — | ||||||||||||||||||||||||||||
Net income | 53,026 | 53,026 | ||||||||||||||||||||||||||||||||
BALANCE, February 1, 2014 | 22,230 | 2,223 | 226,521 | 1,575 | 389,563 | (1,529 | ) | (33 | ) | (1,575 | ) | 616,778 | ||||||||||||||||||||||
Exercise of stock options | 2 | — | 55 | 55 | ||||||||||||||||||||||||||||||
Excess tax benefits from stock-based compensation | 268 | 268 | ||||||||||||||||||||||||||||||||
Vesting of stock awards | 336 | 34 | (34 | ) | — | |||||||||||||||||||||||||||||
Stock-based compensation expense | 17,783 | 17,783 | ||||||||||||||||||||||||||||||||
Capitalized stock-based compensation | 930 | 930 | ||||||||||||||||||||||||||||||||
Purchase and retirement of shares | (1,493 | ) | (149 | ) | (15,600 | ) | (60,380 | ) | (76,129 | ) | ||||||||||||||||||||||||
Dividends ($0.53 per share) | (11,491 | ) | (11,491 | ) | ||||||||||||||||||||||||||||||
Unvested dividends | 506 | (506 | ) | — | ||||||||||||||||||||||||||||||
Change in cumulative translation adjustment | (15,964 | ) | (15,964 | ) | ||||||||||||||||||||||||||||||
Deferral of common stock into deferred compensation plan | 107 | (2 | ) | (107 | ) | — | ||||||||||||||||||||||||||||
Net income | 56,888 | 56,888 | ||||||||||||||||||||||||||||||||
BALANCE, January 31, 2015 | 21,075 | 2,108 | 230,429 | 1,682 | 374,074 | (17,493 | ) | (35 | ) | (1,682 | ) | 589,118 | ||||||||||||||||||||||
Exercise of stock options | 15 | 2 | 436 | 438 | ||||||||||||||||||||||||||||||
Excess tax benefits from stock-based compensation | 1,639 | 1,639 | ||||||||||||||||||||||||||||||||
Vesting of stock awards | 397 | 40 | (40 | ) | — | |||||||||||||||||||||||||||||
Stock-based compensation expense | 21,119 | 21,119 | ||||||||||||||||||||||||||||||||
Capitalized stock-based compensation | 697 | 697 | ||||||||||||||||||||||||||||||||
Purchase and retirement of shares | (2,008 | ) | (202 | ) | (22,643 | ) | (98,048 | ) | (120,893 | ) | ||||||||||||||||||||||||
Dividends ($0.60 per share) | (12,217 | ) | (12,217 | ) | ||||||||||||||||||||||||||||||
Unvested dividends | 545 | (545 | ) | — | ||||||||||||||||||||||||||||||
Change in cumulative translation adjustment | (10,444 | ) | (10,444 | ) | ||||||||||||||||||||||||||||||
Change in fair value of cash flow hedges, net of income taxes of $(223) | 452 | 452 | ||||||||||||||||||||||||||||||||
Deferral of common stock into deferred compensation plan | 257 | (4 | ) | (257 | ) | — | ||||||||||||||||||||||||||||
Net income | 57,884 | 57,884 | ||||||||||||||||||||||||||||||||
BALANCE, January 30, 2016 | 19,479 | $ | 1,948 | $ | 232,182 | $ | 1,939 | $ | 321,148 | $ | (27,485 | ) | (39 | ) | ($1,939 | ) | $ | 527,793 |
Fiscal Year Ended | |||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | 57,884 | $ | 56,888 | $ | 53,026 | |||||
Reconciliation of net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 62,685 | 60,494 | 64,858 | ||||||||
Stock-based compensation | 21,119 | 17,783 | 21,210 | ||||||||
Excess tax benefits from stock-based compensation | (1,639 | ) | (268 | ) | (211 | ) | |||||
Asset impairment charges | 2,371 | 11,145 | 29,633 | ||||||||
Deferred taxes | 12,166 | 5,627 | (3,552 | ) | |||||||
Deferred rent expense and lease incentives | (9,519 | ) | (8,889 | ) | (11,999 | ) | |||||
Other | 1,216 | 2,208 | 6,891 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Inventories | 26,121 | 21,022 | (58,941 | ) | |||||||
Accounts receivable and other assets | 2,318 | (6,268 | ) | (6,039 | ) | ||||||
Income taxes payable, net of prepayments | 1,845 | (7,341 | ) | 3,441 | |||||||
Accounts payable and other current liabilities | (4,040 | ) | 6,049 | 73,609 | |||||||
Deferred rent and other liabilities | 10,123 | 2,960 | 1,544 | ||||||||
Total adjustments | 124,766 | 104,522 | 120,444 | ||||||||
Net cash provided by operating activities | 182,650 | 161,410 | 173,470 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Property and equipment purchases, lease acquisition and software costs | (42,145 | ) | (72,212 | ) | (72,606 | ) | |||||
Purchase of short-term investments | (99,680 | ) | (81,000 | ) | (97,500 | ) | |||||
Redemption of short-term investments | 111,580 | 91,500 | 50,000 | ||||||||
Change in company-owned life insurance policies | (379 | ) | 5 | 406 | |||||||
Net cash used in investing activities | (30,624 | ) | (61,707 | ) | (119,700 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Borrowings under revolving credit facility | 556,856 | 320,230 | 124,289 | ||||||||
Repayments under revolving credit facility | (556,856 | ) | (320,230 | ) | (124,289 | ) | |||||
Purchase and retirement of common stock, including transaction costs | (120,893 | ) | (76,129 | ) | (65,830 | ) | |||||
Cash dividends paid | (12,217 | ) | (11,491 | ) | — | ||||||
Exercise of stock options | 438 | 55 | 1,479 | ||||||||
Excess tax benefits from stock-based compensation | 1,639 | 268 | 211 | ||||||||
Deferred financing costs | (320 | ) | (306 | ) | — | ||||||
Net cash used in financing activities | (131,353 | ) | (87,603 | ) | (64,140 | ) | |||||
Effect of exchange rate changes on cash | (6,430 | ) | (12,806 | ) | (9,761 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 14,243 | (706 | ) | (20,131 | ) | ||||||
Cash and cash equivalents, beginning of period | 173,291 | 173,997 | 194,128 | ||||||||
Cash and cash equivalents, end of period | $ | 187,534 | $ | 173,291 | $ | 173,997 |
Fiscal Year Ended | |||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||||
OTHER CASH FLOW INFORMATION: | |||||||||||
Net cash paid during the year for income taxes | $ | 13,887 | $ | 23,598 | $ | 24,826 | |||||
Cash paid during the year for interest | 1,399 | 936 | 499 | ||||||||
Increase (decrease) in accrued purchases of property and equipment | (462 | ) | 3,611 | (5,924 | ) |
1. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
• | Fiscal 2015 - The fifty-two weeks ended January 30, 2016 |
• | Fiscal 2014 - The fifty-two weeks ended January 31, 2015 |
• | Fiscal 2013 - The fifty-two weeks ended February 1, 2014 |
• | Fiscal 2016 - The Company's next fiscal year representing the fifty-two weeks ending January 28, 2017 |
• | SEC- The U.S. Securities and Exchange Commission |
• | GAAP - Generally Accepted Accounting Principles |
• | FASB- Financial Accounting Standards Board |
• | FASB ASC - FASB Accounting Standards Codification, which serves as the source for authoritative U.S. GAAP, except that rules and interpretive releases by the SEC are also sources of authoritative U.S. GAAP for SEC registrants |
1. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
1. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Fiscal Year Ended | |||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||||
Net income | $ | 57,884 | $ | 56,888 | $ | 53,026 | |||||
Basic weighted average common shares | 20,438 | 21,681 | 22,537 | ||||||||
Dilutive effect of stock awards | 264 | 243 | 298 | ||||||||
Diluted weighted average common shares | 20,702 | 21,924 | 22,835 | ||||||||
Antidilutive stock awards | — | — | 32 |
1. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
1. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
• | management, having the authority to approve the action, commits to a plan of termination; |
• | the plan identifies the number of employees to be terminated, their job classifications or functions and their locations, and the expected completion date; |
• | the plan establishes the terms of the benefit arrangement, including the benefits that employees will receive upon termination (including but not limited to cash payments), in sufficient detail to enable employees to determine the type and amount of benefits they will receive if they are involuntarily terminated; and |
• | actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. |
Lease Termination Costs | Other Associated Costs | Total | ||||||||||
Balance at February 1, 2014 | $ | 2,679 | $ | — | $ | 2,679 | ||||||
Restructuring costs | (222 | ) | 154 | (68 | ) | |||||||
Payments and other adjustments | (949 | ) | (154 | ) | (1,103 | ) | ||||||
Balance at January 31, 2015 | 1,508 | — | 1,508 | |||||||||
Restructuring costs | 62 | 36 | 98 | |||||||||
Payments and other adjustments | (800 | ) | (36 | ) | (836 | ) | ||||||
Balance at January 30, 2016 | $ | 770 | $ | — | $ | 770 |
1. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
1. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
• | Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities |
• | Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly |
• | Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities |
1. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Fiscal Year Ended | |||||||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||||||||
Shares | Value | Shares | Value | Shares | Value | ||||||||||
Share repurchases related to (1): | |||||||||||||||
2012 Share buyback program | — | — | 282 | 14,671 | 1,296 | 65,691 | |||||||||
2014 Share buyback program | 640 | 39,791 | 1,189 | 60,209 | — | — | |||||||||
2015 Share buyback program | 1,338 | 79,274 | — | — | — | — | |||||||||
Withholding taxes and other | 30 | 1,828 | 22 | 1,249 | 2 | 139 | |||||||||
Shares acquired and held in treasury | 4 | 257 | 2 | 107 | 9 | 456 |
(1) | Subsequent to January 30, 2016 and through March 22, 2016, the Company repurchased an additional 0.3 million shares for approximately $22.3 million. |
Fiscal Year Ended | |||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||||
Deferred Awards | $ | 10,653 | $ | 10,529 | $ | 12,873 | |||||
Performance Awards | 10,466 | 7,254 | 8,337 | ||||||||
Total stock-based compensation expense (1) | $ | 21,119 | $ | 17,783 | $ | 21,210 |
Fiscal Year Ended | ||||||||||||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | ||||||||||||||||||
Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||
Unvested Deferred Awards at beginning of year | 592 | $ | 49.02 | 691 | $ | 49.27 | 560 | $ | 49.53 | |||||||||||
Granted | 196 | 64.62 | 273 | 48.50 | 395 | 48.93 | ||||||||||||||
Vested (1) | (250 | ) | 49.02 | (229 | ) | 48.97 | (205 | ) | 49.46 | |||||||||||
Forfeited | (65 | ) | 55.35 | (143 | ) | 49.31 | (59 | ) | 48.82 | |||||||||||
Unvested Deferred Awards at end of year | 473 | $ | 54.62 | 592 | $ | 49.02 | 691 | $ | 49.27 |
(1) | In Fiscal 2015, Fiscal 2014 and Fiscal 2013, the Company withheld shares of 29,654, 21,788 and 2,089, respectively, to satisfy minimum withholding tax requirements. These shares were immediately retired. |
Fiscal Year Ended | ||||||||||||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | ||||||||||||||||||
Number of Performance Shares (1) | Weighted Average Grant Date Fair Value | Number of Performance Shares (1) | Weighted Average Grant Date Fair Value | Number of Performance Shares (1) | Weighted Average Grant Date Fair Value | |||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||
Unvested Performance Awards at beginning of year | 345 | $ | 50.18 | 267 | $ | 47.67 | 172 | $ | 48.59 | |||||||||||
Granted | 195 | 70.91 | 245 | 50.91 | 204 | 47.89 | ||||||||||||||
Vested shares | (147 | ) | 48.02 | (107 | ) | 46.34 | (95 | ) | 49.84 | |||||||||||
Forfeited | (18 | ) | 59.49 | (60 | ) | 48.87 | (14 | ) | 47.55 | |||||||||||
Unvested Performance Awards at end of year | 375 | $ | 61.37 | 345 | $ | 50.18 | 267 | $ | 47.67 |
(1) | For those awards in which the performance period is complete, the number of unvested shares is based on actual shares that will vest upon completion of the service period. |
Fiscal Year Ended | |||||||||||||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||||||||||||||
Number of Options | Weighted Average Exercise Price | Number of Options | Weighted Average Exercise Price | Number of Options | Weighted Average Exercise Price | ||||||||||||||||
(in thousands) | (in thousands) | (in thousands) | |||||||||||||||||||
Options outstanding at beginning of year | 30 | $ | 29.05 | 34 | $ | 28.77 | 84 | $ | 30.08 | ||||||||||||
Granted | — | — | — | — | — | — | |||||||||||||||
Exercised (1) | (15 | ) | 29.05 | (2 | ) | 24.54 | (49 | ) | 31.06 | ||||||||||||
Forfeited | — | — | (2 | ) | 29.54 | (1 | ) | 27.11 | |||||||||||||
Options outstanding at end of year (2) | 15 | $ | 29.05 | 30 | $ | 29.05 | 34 | $ | 28.77 | ||||||||||||
Options exercisable at end of year (2) | 15 | $ | 29.05 | 30 | $ | 29.05 | 34 | $ | 28.77 |
(1) | The aggregate intrinsic value of options exercised was approximately $0.5 million, $0.1 million and $0.9 million for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. |
(2) | The aggregate intrinsic value of options outstanding and exercisable at the end of Fiscal 2015, Fiscal 2014 and Fiscal 2013 was approximately $0.5 million, $0.9 million and $0.8 million, respectively. |
Options Outstanding and Exercisable | ||||||||||
Range of Exercise Prices | Options (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | |||||||
$22.02 | $31.63 | 15 | 29.05 | 2.3 |
Asset Life | January 30, 2016 | January 31, 2015 | |||||||
Property and equipment: | |||||||||
Land and land improvements | — | $ | 3,403 | $ | 3,403 | ||||
Building and improvements | 20-25 yrs | 35,548 | 35,548 | ||||||
Material handling equipment | 10-15 yrs | 48,345 | 48,479 | ||||||
Leasehold improvements | 3-15 yrs | 317,410 | 339,474 | ||||||
Store fixtures and equipment | 3-10 yrs | 218,566 | 231,797 | ||||||
Capitalized software | 3-10 yrs | 177,849 | 120,054 | ||||||
Construction in progress | — | 8,357 | 24,644 | ||||||
809,478 | 803,399 | ||||||||
Less accumulated depreciation and amortization | (518,498 | ) | (493,098 | ) | |||||
Property and equipment, net | $ | 290,980 | $ | 310,301 |
(i) | the prime rate plus a margin of 0.50% to 0.75% based on the amount of the Company’s average excess availability under the facility; or |
(ii) | the London InterBank Offered Rate, or “LIBOR”, for an interest period of one, two, three or six months, as selected by the Company, plus a margin of 1.25% to 1.50% based on the amount of the Company’s average excess availability under the facility. |
January 30, 2016 | January 31, 2015 | ||||||
Credit facility maximum | $ | 250.0 | $ | 200.0 | |||
Borrowing base | 211.7 | 183.2 | |||||
Outstanding borrowings | — | — | |||||
Letters of credit outstanding—merchandise | — | — | |||||
Letters of credit outstanding—standby | 7.1 | 9.1 | |||||
Utilization of credit facility at end of period | 7.1 | 9.1 | |||||
Availability (1) | $ | 204.6 | $ | 174.1 | |||
Interest rate at end of period | 4.0 | % | 3.8 | % |
Fiscal 2015 | Fiscal 2014 | ||||||
Average end of day loan balance during the period | $ | 28.5 | $ | 9.4 | |||
Highest end of day loan balance during the period | 67.5 | 40.9 | |||||
Average interest rate | 2.7 | % | 3.2 | % |
(1) | The sublimit availability for letters of credit was $42.9 million and $40.9 million at January 30, 2016 and January 31, 2015, respectively. |
6. | INTEREST (EXPENSE) INCOME, NET |
Fiscal Year Ended | |||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||||
Interest income | $ | 1,019 | $ | 1,120 | $ | 1,123 | |||||
Less: | |||||||||||
Interest expense – revolver | 789 | 313 | — | ||||||||
Interest expense – credit facilities | 68 | 92 | 120 | ||||||||
Unused line fee | 463 | 447 | 305 | ||||||||
Amortization of deferred financing fees | 318 | 352 | 364 | ||||||||
Other interest and fees | 79 | 84 | 69 | ||||||||
Total interest expense | 1,717 | 1,288 | 858 | ||||||||
Interest (expense) income, net | $ | (698 | ) | $ | (168 | ) | $ | 265 |
7. | PREPAID EXPENSES AND OTHER CURRENT ASSETS |
January 30, 2016 | January 31, 2015 | |||||||
Prepaid property expense | $ | 20,148 | $ | 20,781 | ||||
Prepaid income taxes | 11,458 | 10,289 | ||||||
Prepaid marketing | 3,898 | 1,385 | ||||||
Prepaid maintenance contracts | 3,411 | 3,664 | ||||||
Prepaid insurance | 2,279 | 2,393 | ||||||
Other | 1,848 | 837 | ||||||
Prepaid expenses and other current assets | $ | 43,042 | $ | 39,349 |
8. | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
January 30, 2016 | January 31, 2015 | |||||||
Accrued salaries and benefits | $ | 36,108 | $ | 33,633 | ||||
Customer liabilities | 24,357 | 32,794 | ||||||
Accrued professional fees | 12,647 | 7,802 | ||||||
Sales taxes and other taxes payable | 6,193 | 6,369 | ||||||
Accrued marketing | 5,350 | 5,794 | ||||||
Accrued store expenses | 4,742 | 4,573 | ||||||
Accrued construction-in-progress | 4,736 | 3,631 | ||||||
Accrued freight | 4,581 | 6,622 | ||||||
Accrued insurance | 4,224 | 3,759 | ||||||
Accrued real estate expenses | 2,258 | 3,717 | ||||||
Accrued short-term restructuring costs | 475 | 798 | ||||||
Other | 13,199 | 9,232 | ||||||
Accrued expenses and other current liabilities | $ | 118,870 | $ | 118,724 |
9. | COMMITMENTS AND CONTINGENCIES |
Fiscal Year Ended | |||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||
Minimum rentals | 159,641 | 164,510 | 168,112 | ||||||
Additional rent based upon sales | 751 | 797 | 943 | ||||||
Sublease income | (2,766 | ) | (2,967 | ) | (1,138 | ) |
9. | COMMITMENTS AND CONTINGENCIES (Continued) |
Minimum Operating Lease Payments | ||||
2016 | $ | 155,352 | ||
2017 | 139,682 | |||
2018 | 119,065 | |||
2019 | 103,482 | |||
2020 | 88,279 | |||
Thereafter | 168,225 | |||
Total minimum lease payments | $ | 774,085 |
11. | INCOME TAXES |
Fiscal Year Ended | ||||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | ||||||||||
U.S. | $ | 46,053 | $ | 47,888 | $ | 36,487 | ||||||
Foreign | 43,329 | 31,987 | 40,061 | |||||||||
Total | $ | 89,382 | $ | 79,875 | $ | 76,548 |
11. | INCOME TAXES (Continued) |
Fiscal Year Ended | ||||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | ||||||||||
Current - | ||||||||||||
Federal | $ | 7,248 | $ | 8,212 | $ | 13,240 | ||||||
State | 2,275 | 3,691 | 4,371 | |||||||||
Foreign | 9,809 | 5,457 | 9,463 | |||||||||
Total current | 19,332 | 17,360 | 27,074 | |||||||||
Deferred - | ||||||||||||
Federal | 9,649 | 5,260 | (1,513 | ) | ||||||||
State | 2,548 | 1,426 | (731 | ) | ||||||||
Foreign | (31 | ) | (1,059 | ) | (1,308 | ) | ||||||
Total deferred | 12,166 | 5,627 | (3,552 | ) | ||||||||
Tax provision as shown on the consolidated statements of operations | $ | 31,498 | $ | 22,987 | $ | 23,522 | ||||||
Effective tax rate | 35.2 | % | 28.8 | % | 30.7 | % |
Fiscal Year Ended | ||||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | ||||||||||
Calculated income tax provision at federal statutory rate | $ | 31,284 | $ | 27,956 | $ | 26,792 | ||||||
State income taxes, net of federal benefit | 3,052 | 3,326 | 2,366 | |||||||||
Foreign tax rate differential (1) | (9,744 | ) | (8,849 | ) | (7,224 | ) | ||||||
Nondeductible expenses | 2,729 | 1,685 | 1,792 | |||||||||
Unrecognized tax benefit | 3,892 | 807 | (1,347 | ) | ||||||||
Change in valuation allowance | 399 | (1,472 | ) | 447 | ||||||||
Other | (114 | ) | (466 | ) | 696 | |||||||
Total tax provision | $ | 31,498 | $ | 22,987 | $ | 23,522 |
11. | INCOME TAXES (Continued) |
January 30, 2016 | January 31, 2015 | |||||||
Current – | ||||||||
Assets | ||||||||
Inventory | 4,472 | 4,128 | ||||||
Reserves | 15,965 | 15,169 | ||||||
Hedging transactions | (223 | ) | — | |||||
Total current assets | 20,214 | 19,297 | ||||||
Liabilities-prepaid expenses | (4,728 | ) | (4,217 | ) | ||||
Total current, net | 15,486 | 15,080 | ||||||
Noncurrent – | ||||||||
Property and equipment | (6,855 | ) | 7,654 | |||||
Deferred rent | 14,548 | 14,830 | ||||||
Equity compensation | 9,757 | 7,101 | ||||||
Reserves and other | 4,780 | 5,995 | ||||||
Net operating loss carryover and other tax credits | 2,293 | 1,930 | ||||||
Total noncurrent, gross | 24,523 | 37,510 | ||||||
Valuation allowance | (2,293 | ) | (1,930 | ) | ||||
Net noncurrent | 22,230 | 35,580 | ||||||
Total deferred tax asset, net | $ | 37,716 | $ | 50,660 |
11. | INCOME TAXES (Continued) |
January 30, 2016 | January 31, 2015 | |||||||
Beginning Balance | $ | 5,479 | $ | 4,412 | ||||
Additions for current year tax positions | 3,800 | 833 | ||||||
Additions for prior year tax positions | — | 1,070 | ||||||
Reductions for prior year tax positions | (242 | ) | (156 | ) | ||||
Settlements | (60 | ) | (43 | ) | ||||
Reductions due to a lapse of the applicable statute of limitations | (596 | ) | (637 | ) | ||||
$ | 8,381 | $ | 5,479 |
12. | RETIREMENT AND SAVINGS PLANS |
13. | SEGMENT INFORMATION |
Fiscal Year Ended | |||||||||||
January 30, 2016 | January 31, 2015 | February 1, 2014 | |||||||||
Net sales: | |||||||||||
The Children’s Place U.S. | $ | 1,518,117 | $ | 1,528,762 | $ | 1,528,276 | |||||
The Children’s Place International (1) | 207,660 | 232,562 | 237,513 | ||||||||
Total net sales | $ | 1,725,777 | $ | 1,761,324 | $ | 1,765,789 | |||||
Gross profit: | |||||||||||
The Children’s Place U.S. | $ | 539,030 | $ | 535,226 | $ | 558,156 | |||||
The Children’s Place International | 86,102 | 87,074 | 97,365 | ||||||||
Total gross profit | $ | 625,132 | $ | 622,300 | $ | 655,521 | |||||
Gross Margin: | |||||||||||
The Children’s Place U.S. | 35.5 | % | 35.0 | % | 36.5 | % | |||||
The Children’s Place International | 41.5 | % | 37.4 | % | 41.0 | % | |||||
Total gross margin | 36.2 | % | 35.3 | % | 37.1 | % | |||||
Operating income: | |||||||||||
The Children’s Place U.S. (2) | $ | 65,221 | $ | 63,586 | $ | 60,267 | |||||
The Children’s Place International (3) | 24,859 | 16,457 | 16,016 | ||||||||
Total operating income | $ | 90,080 | $ | 80,043 | $ | 76,283 |
Operating income as a percent of net sales: | |||||||||||
The Children’s Place U.S. | 4.3 | % | 4.2 | % | 3.9 | % | |||||
The Children’s Place International | 12.0 | % | 7.1 | % | 6.7 | % | |||||
Total operating income | 5.2 | % | 4.5 | % | 4.3 | % | |||||
Depreciation and amortization: | |||||||||||
The Children’s Place U.S. | $ | 55,937 | $ | 52,565 | $ | 55,595 | |||||
The Children’s Place International | 6,748 | 7,929 | 9,263 | ||||||||
Total depreciation and amortization | $ | 62,685 | $ | 60,494 | $ | 64,858 | |||||
Capital expenditures: | |||||||||||
The Children’s Place U.S. | $ | 41,304 | $ | 68,847 | $ | 64,486 | |||||
The Children’s Place International | 841 | 3,365 | 8,120 | ||||||||
Total capital expenditures | $ | 42,145 | $ | 72,212 | $ | 72,606 |
13. | SEGMENT INFORMATION (Continued) |
(1) | Net sales from The Children's Place International are primarily derived from revenues from Canadian operations. Our foreign subsidiaries, primarily in Canada, have operating results based in foreign currencies and are thus subject to the fluctuations of the corresponding translation rates into U.S. dollars. For Fiscal 2015, the effects of these translation rate changes on net sales was a decrease of $29.9 million. |
(2) | Includes exit costs (income) associated with the closures of the West Coast DC and Northeast DC of approximately $0.1 million, $(0.1) million and $(0.9) million for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. Also includes a $1.7 million, $10.5 million and a $25.4 million asset impairment charge for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. Also includes additional costs incurred related to corporate severance and reorganizations of approximately $6.0 million, $7.1 million and $4.2 million for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. Fiscal 2015 also includes costs incurred related to a class action wage and hour legal settlement, proxy contest costs and a sales tax audit of approximately $12.1 million. |
(3) | Our foreign subsidiaries, primarily in Canada, have operating results based in foreign currencies and are thus subject to the fluctuations of the corresponding translation rates into U.S. dollars. For Fiscal 2015, the effects of these translation rate changes on operating income was a decrease of $1.9 million. Includes a $0.7 million, $0.6 million and $4.2 million asset impairment charge for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. |
January 30, 2016 | January 31, 2015 | ||||||
Total assets: | |||||||
The Children’s Place U.S. | $ | 748,975 | $ | 805,462 | |||
The Children’s Place International | 148,973 | 153,156 | |||||
Total assets | $ | 897,948 | $ | 958,618 |
January 30, 2016 | January 31, 2015 | |||||||
Long-lived assets (1): | ||||||||
United States | $ | 276,612 | $ | 289,820 | ||||
Canada | 16,212 | 22,697 | ||||||
Asia | 1,586 | 1,242 | ||||||
Total long-lived assets | $ | 294,410 | $ | 313,759 |
(1) | The Company's long-lived assets are comprised of net property and equipment and other assets. |
14. | QUARTERLY FINANCIAL DATA (UNAUDITED) |
14. | QUARTERLY FINANCIAL DATA (UNAUDITED) (Continued) |
Fiscal Year Ended January 30, 2016 | ||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter (1) | |||||||||||||
Net sales | $ | 404,865 | $ | 366,455 | $ | 455,913 | $ | 498,544 | ||||||||
Gross profit | 152,109 | 115,004 | 180,513 | 177,506 | ||||||||||||
Selling, general and administrative expenses | 114,514 | 118,342 | 105,797 | 131,245 | ||||||||||||
Asset impairment charges | — | 1,452 | 919 | — | ||||||||||||
Other costs (income) | (3 | ) | 76 | 14 | 11 | |||||||||||
Depreciation and amortization | 14,394 | 15,252 | 16,136 | 16,903 | ||||||||||||
Operating income (loss) | 23,204 | (20,118 | ) | 57,647 | 29,347 | |||||||||||
Income (loss) before income taxes | 23,028 | (20,323 | ) | 57,393 | 29,284 | |||||||||||
Provision (benefit) for income taxes | 7,421 | (6,628 | ) | 18,898 | 11,807 | |||||||||||
Net income (loss) | 15,607 | (13,695 | ) | 38,495 | 17,477 | |||||||||||
Diluted earnings (loss) per share | $ | 0.73 | $ | (0.67 | ) | $ | 1.88 | $ | 0.87 | |||||||
Diluted weighted average common shares outstanding | 21,366 | 20,576 | 20,517 | 20,174 | ||||||||||||
Cash dividends declared and paid per common share | $ | 0.1500 | $ | 0.1500 | $ | 0.1500 | $ | 0.1500 |
Fiscal Year Ended January 31, 2015 | ||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter (1) | |||||||||||||
Net sales | $ | 410,149 | $ | 384,628 | $ | 487,304 | $ | 479,243 | ||||||||
Gross profit | 148,261 | 119,118 | 190,111 | 164,810 | ||||||||||||
Selling, general and administrative expenses | 113,720 | 117,111 | 116,120 | 123,735 | ||||||||||||
Asset impairment charges | — | 3,045 | 3,306 | 4,794 | ||||||||||||
Other costs (income) | 231 | (98 | ) | (286 | ) | 85 | ||||||||||
Depreciation and amortization | 14,227 | 15,557 | 15,168 | 15,542 | ||||||||||||
Operating income (loss) | 20,083 | (16,497 | ) | 55,803 | 20,654 | |||||||||||
Income (loss) before income taxes | 20,102 | (16,557 | ) | 55,721 | 20,609 | |||||||||||
Provision (benefit) for income taxes | 6,506 | (5,870 | ) | 18,779 | 3,572 | |||||||||||
Net income (loss) | 13,596 | (10,687 | ) | 36,942 | 17,037 | |||||||||||
Diluted earnings (loss) per share | $ | 0.61 | $ | (0.49 | ) | $ | 1.70 | $ | 0.79 | |||||||
Diluted weighted average common shares outstanding | 22,419 | 21,837 | 21,756 | 21,512 | ||||||||||||
Cash dividends declared and paid per common share | $ | 0.1325 | $ | 0.1325 | $ | 0.1325 | $ | 0.1325 |
14. | QUARTERLY FINANCIAL DATA (UNAUDITED) (Continued) |
(1) | Items impacting the fourth quarter of Fiscal 2014 include approximately $4.8 million of asset impairment charges and $3.2 million of additional costs related to corporate severance and reorganizations. |
15. | DERIVATIVE INSTRUMENTS |
16. | SUBSEQUENT EVENTS |
Column A | Column B | Column C | Column D | Column E | ||||||||||||
Balance at beginning of year | Charged to expense | Deductions | Balance at end of year | |||||||||||||
Lower of cost or market reserve (1) | ||||||||||||||||
Fiscal year ended January 30, 2016 | $ | 1,925 | $ | 2,356 | $ | (585 | ) | $ | 3,696 | |||||||
Fiscal year ended January 31, 2015 | $ | 4,268 | $ | — | $ | (2,343 | ) | $ | 1,925 | |||||||
Fiscal year ended February 1, 2014 | $ | 2,413 | $ | 1,881 | $ | (26 | ) | $ | 4,268 |
(1) | Reflects adjustment of out-of-season merchandise inventories to realizable value. Column C represents increases to the reserve and Column D represents decreases to the reserve based on quarterly assessments of the reserve. |
Exhibit | Description | |
3.1 | Amended and Restated Certificate of Incorporation of the Company dated June 14, 2014 filed as Exhibit 3.1 to the registrant's Current Report on Form 8-K filed on June 12, 2014 is incorporated by reference herein. | |
3.2 | Fourth Amended and Restated By-Laws of the Company filed as Exhibit 3.1 to the registrant's Form 8-K filed on June 9, 2009, is incorporated by reference herein. | |
3.3 | First Amendment to the Fourth Amended and Restated Bylaws of the Company filed as Exhibit 3.2 to the registrant's Current Report on Form 8-K filed on June 12, 2014, is incorporated by reference herein. | |
3.4(+) | Fifth Amended and Restated Bylaws of the Company. | |
4.1(1) | Form of Certificate for Common Stock of the Company filed as an exhibit to the registrant's Registration Statement No. 333‑31535 on Form S-1, is incorporated by reference herein. | |
10.1(1)(*) | 1997 Stock Option Plan of the Company filed as an exhibit to the registrant's Registration Statement No. 333‑31535 on Form S-1, is incorporated by reference herein. | |
10.2(*) | Amended and Restated 2005 Equity Incentive Plan of the Company, filed as Exhibit 10.3 to the registrant's Annual Report on Form 10-K for the period ended January 31, 2009, is incorporated by reference herein. | |
10.3(*) | 2011 Equity Incentive Plan, filed as Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on May 23, 2011, is incorporated by reference herein. | |
10.4 | Lease Agreement as of August 12, 2003 between Orlando Corporation and The Children's Place (Canada), LP, together with Indemnity Agreement as of August 12, 2003 between the Company and Orlando Corporation, together with Surrender of Lease as of August 12, 2003 between the Company and Orlando Corporation and Orion Properties Ltd. (Canadian Distribution Center) filed as Exhibit 10.2 to the registrant's Quarterly Report on Form 10‑Q for the period ended November 1, 2003, is incorporated by reference herein. | |
10.5 | Lease Agreement between the Company and Turnpike Crossing I, LLC (Dayton New Jersey Distribution Center), dated as of July 14, 2004 filed as Exhibit 10.2 to registrant's Quarterly Report on Form 10‑Q for the period ended July 31, 2004, is incorporated by reference herein. | |
10.6 | Form of Indemnity Agreement between the Company and certain members of management and the Board of Directors filed as Exhibit 10.7 to registrant's Quarterly Report on Form 10-Q for the period ended August 2, 2008, is incorporated by reference herein. | |
10.7 | Lease Agreement between The Children's Place Services Company, LLC and 500 Plaza Drive Corp. effective as of March 12, 2009 (500 Plaza Drive), Secaucus, New Jersey filed as Exhibit 10.67 to the registrant's Annual Report on Form 10-K for the period ended January 31, 2009, is incorporated by reference herein. | |
10.8 | Guaranty between the Company and 500 Plaza Drive Corp. effective as of March 12, 2009 filed as Exhibit 10.68 to the registrant's Annual Report on Form 10-K for the period ended January 31, 2009, is incorporated by reference herein. | |
10.9 | The First Lease Modification Agreement, dated as of August 27, 2009, between The Children's Place Services Company, LLC and 500 Plaza Drive Corp. filed as Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the period ended August 1, 2009, is incorporated by reference herein. | |
10.10 | The Company Nonqualified Deferred Compensation Plan effective January 1, 2010 filed as Exhibit 10.82 to the registrant's Annual Report on Form 10-K for the period ended January 30, 2010, is incorporated by reference herein. | |
10.11(*) | Amended and Restated Employment Agreement, dated as of March 28, 2011, by and between the Company and Jane T. Elfers filed as Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2011, is incorporated by reference herein. | |
10.12(*) | Amendment No. 1 as of March 23, 2012 to Amended and Restated Employment Agreement dated as of March 28, 2011, by and between the Company and Jane T. Elfers filed as Exhibit 10.31 to the Registrant's Annual Report on Form 10-K for the period ended January 28, 2012, is incorporated by reference herein. | |
10.13(*) | Deferred Stock Award Agreement, dated as of January 4, 2010, by and between the Company and Jane T. Elfers filed as Exhibit 10.84 to the registrant's Annual Report on Form 10-K for the period ended January 30, 2010, is incorporated by reference herein. | |
10.14(*) | Form of Time-Based Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan, filed as Exhibit 10.2 to the registrant's Current Report on Form 8-K filed on May 23, 2011, is incorporated by reference herein. |
Exhibit | Description | |
10.15(*) | Form of Performance-Based Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan, filed as Exhibit 10.3 to the registrant's Current Report on Form 8-K filed on May 23, 2011, is incorporated by reference herein. | |
10.16(*) | Form of Deferred Stock Award Agreement under the Company's Amended and Restated 2005 Equity Incentive Plan, filed as Exhibit 10.4 to the registrant's Current Report on Form 8-K filed on May 23, 2011, is incorporated by reference herein. | |
10.17(*) | Form of Performance Stock Award Agreement under the Company's Amended and Restated 2005 Equity Incentive Plan, filed as Exhibit 10.5 to the registrant's Current Report on Form 8-K filed on May 23, 2011, is incorporated by reference herein. | |
10.18 | Form of Amended and Restated Change in Control Agreement filed as Exhibit 10.41 to the registrant's Annual Report on Form 10-K for the period ended January 29, 2011, is incorporated by reference herein. | |
10.19(*) | Employment Offer Letter, dated as of November 26, 2012, by and between the Company and Michael Scarpa filed as Exhibit 10.40 to the registrant's Annual Report on Form 10-K for the period ended February 2, 2013, is incorporated by reference herein. | |
10.20 | Eleventh Amendment to the Credit Agreement, dated March 4, 2014, by and among the Company and The Children's Place Services Company, LLC, as borrowers, The Children's Place (International), LLC, The Children's Place Canada Holdings, Inc., the childrensplace.com, inc., TCP IH II, LLC, TCP International IP Holdings, LLC and TCP International Product Holdings, LLC, as guarantors, and Wells Fargo Bank, National Association (successor by merger to Wells Fargo Retail Finance, LLC), as Administrative Agent and Collateral Agent, L/C Issuer, SwingLine Lender and as a Lender, Bank of America, N.A., HSBC Bank USA, N.A.and JPMorgan Chase Bank, N.A. filed as Exhibit 10.33 to the registrant's Annual Report on Form 10-K for the period ended February 1, 2014, is incorporated by reference herein. | |
10.21(*) | Letter Agreement dated October 3, 2014 between Anurup Pruthi and The Children's Place Services Company, LLC filed as Exhibit 10.22 to the registrant's Annual Report on Form 10-K for the period ended January 31, 2015, is incorporated by reference herein. | |
10.22(*) | Agreement and General Release dated as of January 30, 2015 between Natalie Levy and The Children's Place Services Company, LLC. filed as Exhibit 10.23 to the registrant's Annual Report on Form 10-K for the period ended January 31, 2015, is incorporated by reference herein. | |
10.23 | Agreement dated May 22, 2015, by and among The Children’s Place, Inc., Macellum SPV II, LP, Barington Companies Equity Partners, L.P., Jonathan Duskin, James A. Mitarotonda, certain of their affiliates listed on Schedule A to the Agreement, and Robert L. Mettler filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on May 29, 2015, is incorporated herein by reference. | |
10.24(*) | Form of Performance-Based Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan (Senior Vice President & above) filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the period ended May 2, 2015, is incorporated by reference herein. | |
10.25(*) | Form of Performance-Based Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan (below Senior Vice President) filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the period ended May 2, 2015, is incorporated by reference herein. | |
10.26(*) | Form of Time-Based Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan (Senior Vice President & above) filed as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the period ended May 2, 2015, is incorporated by reference herein. | |
10.27(*) | Form of Time-Based Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan (below Senior Vice President) filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q for the period ended May 2, 2015, is incorporated by reference herein. | |
10.28(*)(+) | The Company Profit Sharing/401(k) Plan Adoption Agreement No.001 for use with Fidelity Basic Plan Document No. 17 entered into by the Company and Fidelity Management Trust Company on September 11, 2015. | |
10.29 | Twelfth Amendment to the Credit Agreement, dated September 15, 2015, by and among the Company and The Children's Place Services Company, LLC, as borrowers, The Children's Place (International), LLC, The Children's Place Canada Holdings, Inc., the childrensplace.com, inc., TCP IH II, LLC, TCP International IP Holdings, LLC and TCP International Product Holdings, LLC, as guarantors, and Wells Fargo Bank, National Association (successor by merger to Wells Fargo Retail Finance, LLC), as Administrative Agent and Collateral Agent, L/C Issuer, Swing Line Lender and as a Lender, Bank of America, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. filed as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the period ended October 31, 2015, is incorporated by reference herein. | |
10.30(*) | Agreement and General Release dated as of November 30, 2015, between Brian Ferguson and The Children's Place Services Company, LLC filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the period ended October 31, 2015, is incorporated by reference herein. |
Exhibit | Description | |
10.31(+) | The Children's Place Inc. First Amended and Restated 2011 Equity Incentive Plan. | |
18.1 | Preferability Letter dated March 28, 2013 from BDO USA, LLP, The Children's Place Retail Stores, Inc.'s registered independent accounting firm, regarding change in accounting principle filed as Exhibit 18.1 to the registrant's Annual Report on Form 10-K for the period ended February 2, 2013, is incorporated by reference herein. | |
21.1(+) | Subsidiaries of the Company. | |
23.1(+) | Consent of Independent Registered Public Accounting Firm. | |
31.1(+) | Certificate of Principal Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. | |
31.2(+) | Certificate of Principal Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. | |
32(+) | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS* | XBRL Instance Document. | |
101.SCH* | XBRL Taxonomy Extension Schema. | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase. | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase. | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase. | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase. |
THE CHILDREN’S PLACE, INC. | |||
By: | /S/ Jane T. Elfers | ||
Jane T. Elfers | |||
Chief Executive Officer and President | |||
March 24, 2016 |
Signature | Title | Date | ||
/S/ Norman Matthews | Chairman of the Board | March 24, 2016 | ||
Norman Matthews | ||||
/S/ Jane T. Elfers | Director, Chief Executive Officer and President | March 24, 2016 | ||
Jane T. Elfers | (Principal Executive Officer) | |||
/S/ Anurup Pruthi | Chief Financial Officer | March 24, 2016 | ||
Anurup Pruthi | (Principal Financial and Accounting Officer) | |||
/S/ Joseph Alutto | Director | March 24, 2016 | ||
Joseph Alutto | ||||
/S/ Marla Malcolm Beck | Director | March 24, 2016 | ||
Marla Malcolm Beck | ||||
/S/ Susan Patricia Griffith | Director | March 24, 2016 | ||
Susan Patricia Griffith | ||||
/S/ Joseph Gromek | Director | March 24, 2016 | ||
Joseph Gromek | ||||
/S/ Robert Mettler | Director | March 24, 2016 | ||
Robert Mettler | ||||
/S/ Kenneth Reiss | Director | March 24, 2016 | ||
Kenneth Reiss | ||||
/S/ Stanley W. Reynolds | Director | March 24, 2016 | ||
Stanley Reynolds | ||||
/S/ Susan Sobbott | Director | March 24, 2016 | ||
Susan Sobbott |
1.23 | CORRECTION TO MEET 415 REQUIREMENTS UNDER MULTIPLE DEFINED CONTRIBUTION PLANS .......................................................................................................................................................................... 25 |
1.01 | PLAN INFORMATION (a) Name of Plan: |
(d) | Plan Year End (month/day): 12/31 (e) Three Digit Plan Number: 001 (f) Limitation Year (check one): |
(1) | Adoption Agreement Effective Date: 10/01/2015 (cannot be earlier than the later of (i) the first day of the 2007 Plan Year or (ii) the effective date of the Plan) |
(3) | ¨ Special Effective Dates. Certain provisions of the Plan shall be effective as of a date other than the date specified in Subsection 1.01(g)(1) above. Please complete the Special |
(B) | ¨ Contributions under the Plan are temporarily suspended. The Employer contemplates that contributions will resume at a later date. |
(b) | The term "Employer" includes the following participating employers (choose one): (1) ¨ No other employers participate in the Plan. |
(a) | Trustee Name: | Fidelity Management Trust Company |
Address: | 82 Devonshire Street | |
Boston, MA 02109 |
(b) | Eligibility Service Requirement(s) - There shall be no eligibility service requirements for contributions to the Plan unless selected below for the following contributions: |
(1) Deferral Contributions, Employee Contributions, Qualified Nonelective Employer Contributions | (2) Nonelective Employer Contributions | (3) Matching Employer Contributions | |
X | N/A – not applicable – type(s) of contribution not selected | ||
days of Eligibility Service requirement (no minimum Hours of Service). (Do not indicate more than 365 days in column (1) or 730 days in either of the other columns.) | |||
3.00 | 12.00 | months of Eligibility Service requirement (no minimum Hours of Service). (Do not indicate more than 12 months in column (1) or 24 months in either of the other columns.) | |
one year of Eligibility Service requirement (at least (not to exceed 1,000) Hours of Service are required during the Eligibility Computation Period). | |||
two years of Eligibility Service requirement (at least (not to exceed 1,000) Hours of Service are required during the Eligibility Computation Period). (Select only for column (2) or (3).) |
(i) | ¨ any collective bargaining agreement with the Employer, provided that the agreement requires the employees to be included under the Plan. |
(A) | þ | employees covered by a collective bargaining agreement, unless the agreement requires the employees to be included under the Plan. (Do not choose if Option |
1.04(d)(1)(B) is selected above.) | ||
(B) | Â | Highly Compensated Employees as defined in Subsection 2.01(bb) of the Basic Plan Document. |
(C) | þ | Leased Employees as defined in Subsection 2.01(ee) of the Basic Plan Document. |
(D) | þ | nonresident aliens who do not receive any earned income from the Employer which constitutes United States source income. |
(E) | þ | other: |
Freelance Personnel | ||
Note: | The eligible group defined above must be a definitely determinable group and |
(1) Deferral Contributions, Employee Contributions, Qualified Nonelective Employer Contributions | (2) Nonelective Employer Contributions | (3) Matching Employer Contributions | ||
(A) | X | N/A – not applicable – type(s) of contribution not selected | ||
(B) | Immediate upon meeting the eligibility requirements specified in Subsections 1.04(a) and 1.04(b) | |||
(C) | the first day of each Plan Year and the first day of the seventh month of each Plan Year | |||
(D) | the first day of each Plan Year and the first day of the fourth, seventh, and tenth months of each Plan Year | |||
(E) | X | X | the first day of each month | |
(F) | the first day of each Plan Year (Do not select if there is an Eligibility Service requirement of more than six months in Subsection 1.04(b) for the type(s) of contribution or if there is an age requirement of more than 20 1/2 in Subsection 1.04(a) for the type(s) of contribution.) |
(f) | Date of Initial Participation - An Eligible Employee shall become a Participant on the Entry Date coinciding with or immediately following the date such Eligible Employee completes the age and service requirement(s) in Subsections 1.04(a) and (b), if any, or in Subsection 1.04(d)(2)(E)(i), if applicable, except (check one): |
(a) | þ | Deferral Contributions - Participants may elect to have a portion of their Compensation contributed to the Plan on a before-tax basis pursuant to Code Section 401(k). |
(1) | Regular Contributions - The Employer shall make a Deferral Contribution in accordance with Section 5.03 of the Basic Plan Document on behalf of each Participant who has an executed salary reduction agreement in effect with the Employer for the payroll period in question. Such Deferral Contribution shall not exceed the deferral limit below. | |
(A) þ The deferral limit is 60.00% (must be a whole number multiple of one percent) of Compensation. |
(C) | A Participant may change, on a prospective basis, his salary reduction agreement (check one): |
(i) | þ | as of the beginning of each payroll period. |
(ii) | Â | as of the first day of each month. |
(iii) | Â | as of each Entry Date. (Do not select if immediate entry is elected with respect to Deferral Contributions in Subsection 1.04(e).) |
(iv) | Â | as of the first day of each calendar quarter. |
(v) | Â | as of the first day of each Plan Year. |
(iii) | ¨ the next Entry Date. (Do not select if immediate entry is elected with respect to Deferral Contributions in Subsection 1.04(e).) |
(A) | þ | All such Participants. |
(B) | Â | All such Participants except those covered by a collective-bargaining agreement under which retirement benefits were a subject of good faith bargaining unless the bargaining agreement specifically provides for Catch-Up Contributions to be made on behalf of such Participants. |
(5) | þ | Roth 401(k) Contributions. Participants shall be permitted to irrevocably designate pursuant to Subsection 5.03(b) of the Basic Plan Document that a portion or all of the Deferral Contributions made under this Subsection 1.07(a) are Roth 401(k) Contributions that are includable in the Participant's gross income at the time deferred. | |
(6) | Â | Automatic Enrollment Contributions. Unless they affirmatively elect otherwise, certain Eligible Employees will have their Compensation reduced in accordance with the provisions of Subsection 5.03(c) of the Basic Plan Document (an "Automatic Enrollment Contribution"), Section 1.07(b) of the Additional Provisions Addendum, and the following: | |
(A) | Â | All newly Eligible Employees shall be subject to the same automatic enrollment provisions. | |
(B) | Â | The automatic enrollment provisions of the Plan shall be/are different for different groups of Eligible Employees. | |
(C) | Â | Some form of automatic deferral increase will be part of the automatic enrollment provisions. | |
(D) | Â | A qualified automatic contribution arrangement described in Code Section 401(k)(13) (“QACA”) has been adopted. (Select Option 1.11(a)(3) or 1.12(a)(3) and complete appropriate Addendum.) | |
(E) | Â | An eligible automatic enrollment arrangement described in Code Section 414(w) (“EACA”) has been adopted. |
Contribution made on behalf of an Active Participant each payroll period shall not exceed the contribution limit specified in Subsection 1.08(a)(1) below. | ||
(1) | The contribution limit is % of Compensation. | |
(b) | Â | Frozen Employee Contributions - Participants may not currently make after-tax Employee Contributions to the Plan, but the Employer does maintain frozen Employee Contributions Accounts. |
(a) | þ | Rollover Contributions - Employees may roll over eligible amounts from other plans to the Plan subject to the additional following requirements: |
(1) | þ The Plan will not accept rollovers of after-tax employee contributions. | |
(2) | Â The Plan will not accept rollovers of designated Roth contributions. (Must be selected if Roth 401(k) Contributions are not elected in Subsection 1.07(a)(5).) | |
(b) | Â | In-Plan Roth Rollover Contributions (Choose only if Roth 401(k) Contributions are selected in |
Option 1.07(a)(5) above) – Unless Option 1.09(b)(1) is selected below and in accordance with Section 5.06 of the Basic Plan Document, any Participant, spousal alternate payee or spousal Beneficiary may elect to have otherwise distributable portions of his Account, which are not part of an outstanding loan balance pursuant to Article 9 of the Basic Plan Document and are not “designated Roth contributions” under the Plan, be considered “designated Roth contributions” for purposes of the Plan. | ||
(1) | Â Only a Participant who is still employed by the Employer (or a spousal alternate payee or | |
spousal Beneficiary of such a Participant) may elect to make such an in-plan Roth Rollover. |
(B) | ¨ Tiered Match: % of the first % of the "eligible" Participant's Compensation contributed to the Plan, |
(C) | Â | Li app | mit on Non-Discretionary Matching Employer Contributions (check the ropriate box(es)): |
(i) | Â | Contributions in excess of _% of the "eligible" Participant's Compensation for the Contribution Period shall not be considered for non-discretionary Matching Employer Contributions. | |
(ii) | Â | Matching Employer Contributions for each "eligible" Participant for each Plan Year shall be limited to $_ . |
(A) | Â 4% Limitation on Discretionary Matching Employer Contributions for Deemed Satisfaction of "ACP" Test - In no event may the dollar amount of the | |
discretionary Matching Employer Contribution made on an "eligible" Participant's behalf for the Plan Year exceed 4% of the "eligible" Participant's Compensation for the Plan Year. (Only if Option 1.12(a)(3), 401(k) Safe Harbor Formula, with respect to Nonelective Employer Contributions is checked.) | ||
(3) | þ | 401(k) Safe Harbor Matching Employer Contributions - If the Employer elects one of the safe harbor formula Options provided in the 401(k) Safe Harbor Matching Employer Contributions Addendum to the Adoption Agreement and provides written notice each Plan Year to all Active Participants of their rights and obligations under the Plan, the Plan shall be deemed to satisfy the "ADP" test and, under certain circumstances, the "ACP" test. |
(4) | þ | See Additional Provisions Addendum. |
(A) | þ Catch-Up Contributions made to the Plan pursuant to Subsection 1.07(a)(4) are matched at the rates specified in this Section 1.11. |
(f) | Â Qualified Matching Employer Contributions - Prior to making any Matching Employer Contribution hereunder (other than a 401(k) Safe Harbor Matching Employer Contribution), the Employer may designate all or a portion of such Matching Employer Contribution as a Qualified Matching Employer Contribution that may be used to satisfy the "ADP" test on Deferral Contributions and excluded in applying the "ACP" test on Employee and Matching Employer Contributions. Unless the additional eligibility requirement is selected below, Qualified Matching Employer Contributions shall be allocated to all Participants who were Active Participants during the Contribution Period and who meet the continuing eligibility requirement(s) described in Subsection 1.11(e) above for the type of Matching Employer Contribution being characterized as a Qualified Matching Employer Contribution. |
(2) | Â | Fixed Flat Dollar Employer Contribution - The Employer shall contribute for each "eligible" Participant an amount equal to: |
(A) | $ to all “eligible” Participants. (Complete (i) below). | |
(i)The contribution amount is based on an "eligible" Participant's service for the following period (check one of the following): | ||
(I)ÂEach paid hour. | ||
(II)ÂEach Plan Year. |
(A) | "Integration level" means the Social Security taxable wage base for the Plan Year, unless the Employer elects a lesser amount in (i) or (ii) below. |
The "Integration Level" is % of the Taxable Wage Base | The "Permitted Disparity Limit" is | |
20% or less | 5.7% | |
More than 20%, but not more than 80% | ||
(7) | Â Is not a partner or a member of the Employer, if the Employer is a partnership or an entity taxed as a partnership. |
 | Death, Disability, and Retirement Exceptions - All Participants who become disabled, as defined in Section 1.15, retire, as provided in Subsection 1.14(a), (b), or (c), or die are excepted from any last day or Hours of Service requirement. For purposes of this Section, any Participant who dies while performing qualified military service as defined in Code Section 414(u)(5) will be excepted from any last day or Hours of Service requirement. |
(c) | þ A Participant who becomes disabled, as defined in Section 1.15, is eligible for disability retirement. |
(a) | Â | The Participant satisfies the requirements for benefits under the Employer's long-term disability |
(b) | þ | plan. The Participant satisfies the requirements for Social Security disability benefits. |
(c) | Â | The Participant is determined to be disabled by a physician approved by the Employer. |
(b) | Â Years of Vesting Service shall exclude service prior to the Plan's original Effective Date as listed in Subsection 1.01(g)(1) or Subsection 1.01(g)(2), as applicable. |
Years of Vesting Service | Applicable Vesting Schedule(s) | |||
C | D | E1 | E2 |
Years of Vesting Service | Applicable Vesting Schedule(s) | |||||
C | D | E1 | E2 | |||
0 | 0% | % | — | % | ||
0% | % | — | % | |||
20% | % | 25 | % | |||
3 | 100% | 40% | % | 50 | % | |
4 | 100% | 60% | % | 75 | % | |
5 | 100% | 80% | % | 100 | % | |
6 or more | 100% | 100% | % | 100% |
(a) | þ | Hardship Withdrawals - Hardship withdrawals shall be allowed in accordance with Section 10.05 of the Basic Plan Document, subject to a $500.00 minimum amount. |
(1) | Hardship withdrawals will be permitted from: | |
(A)ÂA Participant's Deferral Contributions Account only. | ||
(B)þThe Accounts specified in the In-Service Withdrawals Addendum. Please complete Section (a) of the In-Service Withdrawals Addendum. | ||
(b) | þ | Age 59 1/2 - Participants shall be entitled to receive a distribution of all or any portion of the |
following Accounts upon attainment of age 59 1/2: | ||
(1) | ÂDeferral Contributions Account. | |
(2) | þAll vested Account balances. | |
(3) | ÂSee In-Service Withdrawals Addendum. |
(A) | Â Employees may not make withdrawals of Employee Contributions more frequently than: |
(2) | Rollover Contributions may be withdrawn in accordance with Section 10.03 of the Basic Plan Document at any time. | |
(3) | Active Military Distribution (HEART Act) - Certain contributions restricted from distribution only due to Code Section 401(k)(2)(B)(i)(I) may be withdrawn by Participants performing military service in accordance with Section 10.01 of the Basic Plan Document at any time. | |
(d) | Â | Qualified Disaster Distribution - One or more Qualified Disaster Distributions shall be allowed in accordance with Section 10.08 of the Basic Plan Document. Please complete the In-Service Withdrawals Addendum to the Adoption Agreement identifying each such Qualified Disaster Distribution. |
(e) | þ | Qualified Reservist Distribution - A Qualified Reservist Distribution shall be allowed in accordance with Section 10.09 of the Basic Plan Document. |
(f) | Â | Age 62 Distribution of Money Purchase Benefits - A Participant who has attained at least age 62, shall be entitled to receive a distribution of all or any portion of the vested amounts attributable to benefit amounts accrued as a result of the Participant’s participation in a money purchase pension plan (due to a merger into this Plan of money purchase pension plan assets), if any. (Choose only |
if Option 1.20(d)(1)(B) is selected.) |
(i) | Â Special restrictions apply to such in-service withdrawals, see the In- Service Withdrawals Addendum to the Adoption Agreement. |
(i) | Â Special restrictions apply to such in-service withdrawals, see the In- Service Withdrawals Addendum to the Adoption Agreement. |
(a) | Lump Sum Payments - Lump sum payments are always available under the Plan and are the normal form of payment under the Plan except as modified in Subsection 1.20(d)(2) below. |
(b) | þ | Installment Payments - Participants may elect distribution under a systematic withdrawal plan (installments). |
(c) | Â | Partial Withdrawals - A Participant whose employment has terminated and whose Account is distributable in accordance with the provisions of Article 12 of the Basic Plan Document may elect to withdraw any portion of his Distributable vested interest in his Account in cash at any time. |
(d) | Â | Annuities (Check if the Plan is retaining any annuity form(s) of payment.) |
(1) | ÂAn annuity form of payment is available under the Plan because the Plan either converted | |
from or received a transfer of assets from a plan that was subject to the minimum funding requirements of Code Section 412 and therefore an annuity form of payment is a protected benefit under the Plan in accordance with Code Section 411(d)(6). | ||
(2) | The normal form of payment under the Plan is (check (A) or (B)): | |
(A)ÂLump sum is the normal form of payment for: | ||
(i)ÂAll Participants | ||
(ii)ÂAll Participants except those as indicated on the Forms of Payment Addendum. |
(1) | Â | The minimum Employer Contribution shall be paid under this Plan in any event. |
(2) | Â | Another method of satisfying the requirements of Code Section 416. Please complete the 416 Contributions Addendum to the Adoption Agreement describing the way in which the minimum contribution requirements will be satisfied in the event the Plan is or is treated as a "top-heavy plan". |
(3) | Â | Not applicable. (Choose only if (A) Plan covers only employees subject to a collective bargaining agreement, or (B) Option 1.11(a)(3), 401(k) Safe Harbor Matching Employer Contributions, or Option 1.12(b)(3), 401(k) Safe Harbor Formula, is selected, and the Plan does not provide for Employee Contributions or any other type of Employer Contributions.) |
Note: | The | minimum Employer Contribution may be less than the percentage indicated in |
1.23 | CORRECTION TO MEET 415 REQUIREMENTS UNDER MULTIPLE DEFINED CONTRIBUTION PLANS |
 | Other Order for Limiting Annual Additions - If the Employer maintains other defined contribution plans, annual additions to a Participant's Account shall be limited as provided in Section 6.12 of the Basic Plan Document to meet the requirements of Code Section 415, unless the Employer elects this Option and completes the 415 Correction Addendum describing the order in which annual additions shall be limited among the plans. |
(a) | Â | in accordance with the investment directions provided to the Trustee by the Employer for allocating all Participant Accounts among the Permissible Investments. |
(b) | þ | in accordance with the investment directions provided to the Trustee by each Participant for allocating his entire Account among the Permissible Investments. |
(c) | Â | in accordance with the investment directions provided to the Trustee by each Participant for all |
contribution sources in his Account, except that the following sources shall be invested in accordance with the investment directions provided by the Employer (check (1) and/or (2)): | ||
(1) | ÂNonelective Employer Contributions | |
(2) | ÂMatching Employer Contributions |
(a) | þ | Additional Provisions - The Plan includes certain provisions that are not delineated through the above elections in this Adoption Agreement, but are incorporated into Fidelity Basic Plan Document 17 and are described within the Additional Provisions Addendum. The provisions included within the Additional Provisions Addendum supplement and/or alter the provisions of this Adoption Agreement and/or the Basic Plan Document. |
(b) | Â | Protected Benefit Provisions - The Plan includes provisions that are “protected benefits” under Code Section 411(d)(6) and are not delineated through the above elections in this Adoption Agreement, but are described within the Protected Benefit Provisions Addendum. |
(a) | Â | The Employer has completed the Plan Superseding Provisions Addendum to show the provisions of the Plan which supersede provisions of this Adoption Agreement and/or the Basic Plan Document. |
Note: If the Employer elects superseding provisions in Option (a) above, the Employer may not be permitted to rely on the Volume Submitter Sponsor's advisory letter for qualification of its Plan. In addition, such superseding provisions may in certain circumstances affect the Plan's status as a pre-approved volume submitter plan eligible for the 6-year remedial amendment cycle. | ||
(b) | Â | The Employer has completed the Trust Superseding Provisions Addendum to show the provisions of the Plan which supersede provisions of the Trust Agreement in the Basic Plan Document. |
(a) | þ | Only the following Related Employers (as defined in Subsection 2.01(rr) of the Basic Plan Document) participate in the Plan (list each participating Related Employer and its Employer Tax Identification Number): |
The Children’s Place Services Company, LLC, 20-0859065 | ||
(b) | Â | All Related Employer(s) as defined in Subsection 2.01(rr) of the Basic Plan Document participate in the Plan. |
(1) | A vesting schedule different from the vesting schedule selected in Section 1.16 applies to the Participants and contributions described below. |
(A) | The following vesting schedule applies to the class of Participants described in (a)(1)(B) and the contributions described in (a)(1)(C) below: |
Years of Vesting Service | Vested Interest |
0 | 100 |
1 | 100 |
(B) | The vesting schedule specified in (a)(1)(A) above applies to the following class of Participants: Participants with the Safe Harbor Match source. |
(C) | The vesting schedule specified in (a)(1)(A) above applies to the following contributions: Safe Harbor Match. |
(A) | The following vesting schedule applies to the class of Participants described in (a)(2)(B) and the contributions described in (a)(2)(C) below: |
Years of Vesting Service | Vested Interest |
0 | 100 |
(B) | The vesting schedule specified in (a)(2)(A) above applies to the following class of Participants: Participants with assets in the Frozen Prior Vested ER Balance. |
(C) | The vesting schedule specified in (a)(2)(A) above applies to the following contributions: Frozen Prior Vested ER Balance. |
(i) | Flat percentage match of 50.00% shall be allocated only to the "eligible" Participants described below: |
(c) | PPA Compliance - Unless a different date is specified below, the following changes for compliance with PPA were effective as of the first day of the first Plan Year beginning on or after January 1, 2007: |
(2) | Direct Rollovers - Unless a later date is specified below, the Plan was amended to provide for the following changes: |
(A) | o Later Effective Date: (cannot be later than the date the Plan was restated onto the Fidelity Volume Submitter) |
(A) | o Later Effective Date: (cannot be later than the date the Plan was restated onto the Fidelity Volume Submitter) |
(A) | o Later Effective Date: (cannot be later than the date the Plan was restated onto the Fidelity Volume Submitter) |
(A) | o Later Effective Date: (cannot be later than the date the Plan was restated onto the Fidelity Volume Submitter) |
(I) | For the first Plan Year to which this paragraph applies, the applicable percentage is 33. |
(II) | For the second Plan Year to which this paragraph applies, the applicable percentage is 66. |
(III) | For the third Plan Year to which this paragraph applies and following, the applicable percentage is 100. |
(i) | o Later Effective Date. The Plan was amended to include Differential Wages in the definition of Compensation for wages paid after the following |
(B) | The Plan was amended to provide that Compensation shall not include Differential Wages for purposes of determining the amount or allocation of contributions under Article 5 of the Plan. |
(i) | o Later Effective Date. The Plan was amended to exclude Differential Wages from Compensation for purposes of determining contributions for wages paid |
(4) | Available In-Service Withdrawal. Unless a later effective date is specified below, the Plan was amended to provide that a Participant performing service in the uniformed services as described in Code Section |
(e) | Modification of minimum distribution rules for 2009 - The Plan was amended to provide all of the following with regard to required minimum distributions for 2009 but for the enactment of Code Section 401(a)(9)(H) (“2009 |
(5) | Solely for purposes of applying the direct rollover provisions of the plan, 2009 RMDs will be treated as eligible rollover distributions. |
(f) | SBJA Compliance - If selected below and on the effective date provided below, the Plan was amended to allow a conversion of pre-tax assets available for withdrawal to a Roth rollover subject to the same distribution requirements as Roth Deferral Contributions according to the following: |
(1) | Â | In-Plan Roth Conversion. The Plan was amended, effective on the date provided below, to allow any Participant or Beneficiary, unless otherwise specified in (B) below, to elect to have otherwise distributable portions of his Account, which are not part of an outstanding loan balance pursuant to Article 9 of the Basic Plan Document and are not “designated Roth contributions” under the Plan, be considered “designated Roth contributions” for purposes of the Plan. |
(A) | Effective Date: (cannot be prior to September 27, 2010) | |
(B) | ÂOn the same effective date as stated in (A) above, unless provided otherwise in (i) below, | |
only a Participant who is still employed by the Employer or an alternate payee or spousal Beneficiary of such a Participant may elect to make such an in-plan Roth Rollover. | ||
(i)oLater Effective Date. The Plan was amended to only allow the transaction for | ||
such Participants, alternate payees and beneficiaries on and after the following date: |
14.04. | "QUALIFIED JOINT AND SURVIVOR ANNUITY" AND "QUALIFIED PRERETIREMENT SURVIVOR ANNUITY" REQUIREMENTS. .....................................................................................................................................50 |
(a) | Participant's vested interest in the following sub-accounts shall be 100 percent: (1) his Deferral Contributions Account; |
(c) | "Contribution percentage amounts" mean those amounts included in applying the "ACP" test. (1) "Contribution percentage amounts" include the following: |
(o) | "Includable contributions" mean those amounts included in applying the "ADP" test. (1) "Includable contributions" include the following: |
(a) | (1) The transfer is conditioned upon a voluntary, fully informed election by the Participant to transfer his entire account balance to the Plan. As an alternative to the transfer, the Participant is offered the opportunity to retain the form of benefit previously available to him (or, if the transferor plan is terminated, to receive any |
(b) | (1) | The transfer satisfies the requirements of subsection (a)(1) of this Section 17.02; |
(2) | The transfer occurs at a time when the Participant is eligible, under the terms of the transferor |
(1) | (i) The transfer is conditioned upon a voluntary, fully informed election by the Participant to transfer his entire Account to the other defined contribution plan. As an alternative to the transfer, the Participant is offered the opportunity to retain the form of benefit previously available to him (or, if the Plan is terminated, to receive any optional form of benefit for which the Participant is eligible under the Plan as required by Code Section 411(d)(6)); |
1. | Purpose. The purpose of The Children’s Place, Inc. First Amended and Restated 2011 Equity Incentive Plan is to provide a means through which the Company and its Affiliates may attract and retain key personnel, including the services of experienced and knowledgeable non-executive directors, and to provide a means whereby directors, officers, employees, consultants and advisors (and prospective directors, officers, employees, consultants and advisors) of the Company and its Affiliates can acquire and maintain an equity interest in the Company, or be paid incentive compensation, including but not limited to incentive compensation measured by reference to the value of Common Stock or the results of operations of the Company, thereby strengthening their commitment to the welfare of the Company and its Affiliates and aligning their interests with those of the Company’s shareholders. This Plan document is an omnibus document which includes, in addition to the Plan, separate sub-plans (“Sub Plans”) that permit offerings of grants to employees of certain Designated Foreign Subsidiaries. Offerings under the Sub Plans may be made in particular locations outside the United States of America and shall comply with local laws applicable to offerings in such foreign jurisdictions. The Plan shall be a separate and independent plan from the Sub Plans, but the total number of shares of Common Stock authorized to be issued under the Plan applies in the aggregate to both the Plan and the Sub Plans. |
2. | Definitions. The following definitions shall be applicable throughout the Plan. |
(f) | “Change in Control” shall, in the case of a particular Award, be deemed to occur upon: |
3. | Effective Date; Duration. The Plan shall be effective as of the Effective Date. The expiration date of the Plan, on and after which date no Awards may be granted hereunder, shall be the tenth anniversary of the Effective Date; provided, however, that such expiration shall not affect Awards then outstanding, and the terms and conditions of the Plan shall continue to apply to such Awards. |
4. | Administration. (a) The Committee shall administer the Plan. The majority of the members of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present or acts approved in writing by a majority of the Committee shall be deemed the acts of the Committee. To the extent required to comply with the provisions of Rule 16b-3 |
5. | Grant of Awards; Shares Subject to the Plan; Limitations. (a) The Committee may, from time to time, grant Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards and/or Performance Compensation Awards to one or more Eligible Persons. |
6. | Eligibility. Participation shall be limited to Eligible Persons who have entered into an Award agreement or who have received written notification from the Committee, or from a person designated by the Committee, that they have been selected to participate in the Plan. |
7. | Options. (a) Generally. Each Option granted under the Plan shall be evidenced by an Award agreement. Each Option so granted shall be subject to the conditions set forth in this Section 7, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement. All Options granted under the Plan shall be Nonqualified Stock Options unless the applicable Award agreement expressly states that the Option is intended to be an Incentive Stock Option. Incentive Stock Options shall be granted only to Eligible Persons who are employees of the Company and its Affiliates, and no Incentive Stock Option shall be granted to any Eligible Person who is ineligible to receive an Incentive Stock Option under the Code. No Option shall be treated as an Incentive Stock Option unless the Plan has been approved by the shareholders of the Company in a manner intended to |
8. | Stock Appreciation Rights. (a) Generally. Each SAR granted under the Plan shall be evidenced by an Award agreement. Each SAR so granted shall be subject to the conditions set forth in this Section 8, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement. Any Option granted under the Plan may include tandem SARs. The Committee also may Award SARs to Eligible Persons independent of any Option. |
9. | Restricted Stock and Restricted Stock Units. (a) (i) Generally. Each grant of Restricted Stock and Restricted Stock Units shall be evidenced by an Award agreement. Each Restricted Stock and Restricted Stock Unit grant shall be subject to the conditions set forth in this Section 9, and to such other conditions not inconsistent with the Plan as determined by the Committee and may be reflected in the applicable Award agreement. The Committee shall establish restrictions applicable to such Restricted Stock and Restricted Stock Units, including the Restricted Period, and the time or times at which Restricted Stock or Restricted Stock Units shall be granted or become vested; provided that, a Restricted Stock or Restricted Stock Unit Award whose vesting is subject to the satisfaction of Performance Goals over a Performance Period shall be subject to a Performance Period and vesting period of not less than one year. The minimum Performance Period and vesting period specified above will not, however, apply: (1) to a Restricted Stock or Restricted Stock Unit Award made in payment of or exchange for other earned compensation (including performance-based Awards), (2) upon a Change in Control and Involuntary Termination of a Participant, (3) upon termination of service due to death, Disability or |
10. | Other Stock-Based Awards. The Committee may issue unrestricted Common Stock, rights to receive grants of Awards at a future date, or other Awards denominated in Common Stock (including, without limitation, performance shares or performance units), under the Plan to Eligible Persons, alone or in tandem with other Awards, in such amounts as the Committee shall from time to time in its sole discretion determine. Each Other Stock-Based Award granted under the Plan shall be evidenced by an Award agreement. Each Other Stock-Based Award so granted shall be subject to such conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement including, without limitation, the payment by the Participant of the Fair Market Value of such shares of Common Stock on the date of grant. Notwithstanding anything to the contrary in the Plan, except as otherwise provided in the applicable Award agreement, or any applicable employment, consulting, change in control, severance or other agreement between a Participant and the Company or an Affiliate, upon such Participant’s termination of employment or service with the Company and its Affiliates due to death, Disability or Retirement, or as provided in Section 13 hereof, such Participant’s outstanding Other Stock-Based Awards shall immediately vest in full, and the restrictions set forth in the applicable Award agreement shall have no further force or effect with respect to such Other Stock-Based Awards; provided, however, that if the vesting of any Other Stock-Based Awards would otherwise be subject to the achievement of performance conditions, then: (A) all applicable performance criteria shall be deemed to have been attained at target levels and (B) if such termination of employment or service or Change in Control occurs on or prior to the date on which 50% of the applicable performance period has elapsed, only 50% of each such Other Stock-Based Award shall immediately vest. |
11. | Performance Compensation Awards. (a) Generally. The Committee shall have the authority, at or before the time of grant of any Award described in Sections 7 through 10 of the Plan, to designate such Award as a Performance Compensation Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code. In addition, the Committee shall have the authority to make an Award of a cash bonus to any Participant and designate such Award as a Performance Compensation Award intended to qualify as “performance‑based compensation” under Section 162(m) of the Code. Notwithstanding the foregoing, (a.) any Award to a Participant who is a “covered employee” (within the meaning of Section 162(m) of the Code) for a fiscal year that satisfies the requirements of this Section 11 may be treated as a Performance Compensation Award in the absence of any such Committee designation and (b.) if the Company determines that a Participant who has been granted an Award designated as a Performance Compensation Award is not (or is no longer) a “covered employee” (within the meaning of Section 162(m) of the Code), the terms and conditions of such Award may be modified without regard to any restrictions or limitations set forth in this Section 11 (but subject otherwise to the provisions of Section 14 of the Plan). |
12. | Changes in Capital Structure and Similar Events. In the event of (a) any dividend (other than regular cash dividends) or other distribution (whether in the form of cash, shares of Common Stock, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, split-off, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to acquire shares of Common Stock or other securities of the Company, or other similar corporate transaction or event (including, without limitation, a Change in Control) that affects the shares of Common Stock, or (b) unusual or nonrecurring events (including, without limitation, a Change in Control) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation service, accounting principles or law, such that in any case an adjustment is determined by the Committee in its sole discretion to be necessary or appropriate, then the Committee shall make any such adjustments in such manner as it may deem equitable, including without limitation any or all of the following: |
13. | Effect of Change in Control. Except to the extent otherwise provided in an Award agreement, or any applicable employment, consulting, change in control, severance or other agreement between a Participant and the Company or an Affiliate, in the event of a Change in Control, notwithstanding any provision of the Plan to the contrary: |
14. | Amendments and Termination. (a) Amendment and Termination of the Plan. The Committee may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided, that no such amendment, alteration, suspension, discontinuation or termination shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Plan (including, without limitation, as necessary to comply with any rules or requirements of any securities exchange or inter-dealer quotation service on which the shares of Common Stock may be listed or quoted or for changes in GAAP to new accounting standards, to prevent the Company from being denied a tax deduction under Section 162(m) of the Code); provided, further, that any such amendment, alteration, suspension, discontinuance or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant, holder or beneficiary. Notwithstanding the foregoing, no amendment shall be made to the last proviso of Section 14(b) without stockholder approval. |
15. | General. (a) Award Agreements. Each Award under the Plan shall be evidenced by an Award agreement, which shall be delivered to the Participant and shall specify the terms and conditions of the Award and any rules applicable thereto. For purposes of the Plan, an Award agreement may be in any such form (written or electronic) as determined by the Committee (including, without limitation, a Board or Committee resolution, an employment agreement, a notice, a certificate or a letter) evidencing the Award. |
1. | I have reviewed this annual report on Form 10-K of The Children’s Place, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s Board of Directors (or persons performing equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | March 24, 2016 | By: | /S/ JANE T. ELFERS |
JANE T. ELFERS | |||
Chief Executive Officer and President | |||
(Principal Executive Officer) |
1. | I have reviewed this annual report on Form 10-K of The Children’s Place, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s Board of Directors (or persons performing equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | March 24, 2016 | By: | /S/ ANURUP PRUTHI |
ANURUP PRUTHI Chief Financial Officer (Principal Accounting and Financial Officer) |
1. | The Annual Report of the Company on Form 10-K for the year ended January 30, 2016 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in such annual report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /S/ JANE T. ELFERS | |
Chief Executive Officer and President (Principal Executive Officer) |
1. | The Annual Report of the Company on Form 10-K for the year ended January 30, 2016 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in such annual report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /S/ ANURUP PRUTHI | |
Chief Financial Officer (Principal Accounting and Financial Officer) |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jan. 30, 2016 |
Mar. 22, 2016 |
Aug. 02, 2015 |
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Document and Entity Information [Abstract] | |||
Entity Registrant Name | Childrens Place, Inc. | ||
Entity Central Index Key | 0001041859 | ||
Current Fiscal Year End Date | --01-30 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 30, 2016 | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,104,280,537 | ||
Entity Common Stock, Shares Outstanding | 19,125,551 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jan. 30, 2016 |
Jan. 31, 2015 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares Issued | 19,479,000 | 21,075,000 |
Common Stock, Shares Outstanding | 19,440,000 | 21,040,000 |
Treasury Stock, Shares | 39,000 | 35,000 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
|
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 57,884 | $ 56,888 | $ 53,026 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | (10,444) | (15,964) | (14,787) |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | 452 | 0 | 0 |
Comprehensive income | $ 47,892 | $ 40,924 | $ 38,239 |
BASIS OF PRESENTATION |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business The Children's Place, Inc. and subsidiaries (the “Company”) is the largest pure-play children's specialty apparel retailer in North America. The Company provides apparel, accessories, footwear and other items for children. The Company designs, contracts to manufacture, sells at retail and wholesale, and licenses to sell trend right, high-quality merchandise at value prices, the substantial majority of which is under our proprietary “The Children's Place”, "Place" and "Baby Place" brand names. As of January 30, 2016, the Company operated 1,069 The Children's Place stores throughout North America and an Internet business at www.childrensplace.com. As part of its merchandise procurement process, the Company maintains business operations in Asia. The Company's corporate offices are in New Jersey and it has one distribution facility in the United States and one in Canada. The Company classifies its business into two segments: The Children’s Place U.S. and The Children’s Place International. Included in The Children’s Place U.S. segment are the Company's U.S. and Puerto Rico based stores and revenue from its U.S. based wholesale customers. Included in The Children's Place International segment are its Canadian based stores, revenue from the Company's Canada wholesale customer, as well as revenue from international franchisees. Each segment includes an e-commerce business located at www.childrensplace.com. As of January 30, 2016, The Children’s Place U.S. operated 937 stores and The Children’s Place International operated 132 stores. Certain reclassifications have been made to prior period financial statements to conform to the current period presentation. Terms that are commonly used in the Company's notes to consolidated financial statements are defined as follows:
Fiscal Year The Company's fiscal year is a 52-week or 53-week period ending on the Saturday on or nearest to January 31. All years presented were 52-week years. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and amounts of revenues and expenses reported during the period. Actual results could differ from the assumptions used and estimates made by management, which could have a material impact on the Company's financial position or results of operations. Consolidation The consolidated financial statements include the accounts of the Company and its wholly‑owned subsidiaries. Intercompany balances and transactions have been eliminated. As of January 30, 2016, the Company does not have any investments in unconsolidated affiliates. The “Consolidation” topic of the FASB ASC is considered when determining whether an entity is subject to consolidation. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
Short-term Investments Short-term investments consist of investments which the Company expects to convert into cash within one year, including time deposits, which have original maturities greater than 90 days. The Company classifies its investments in securities at the time of purchase as held-to-maturity and reevaluates such classifications on a quarterly basis. Held-to-maturity investments consist of securities that the Company has the intent and ability to retain until maturity. These securities are recorded at cost and adjusted for the amortization of premiums and discounts, which approximates fair value. Cash inflows and outflows related to the sale and purchase of investments are classified as investing activities in the Company's consolidated statements of cash flows. All of the Company's short-term investments are U.S. dollar denominated time deposits with banking institutions in Hong Kong that have six month maturity dates. Revenue Recognition The Company recognizes revenue, including shipping and handling fees billed to customers, upon purchase at the Company's retail stores or when received by the customer if the product was purchased via the Internet, net of coupon redemptions and anticipated sales returns. The Company deferred approximately $0.4 million and $0.3 million as of January 30, 2016 and January 31, 2015, respectively, for Internet sales shipped but not yet received by the customer. Sales tax collected from customers is excluded from revenue. An allowance for estimated sales returns is calculated based upon the Company's sales return experience and is recorded in accrued expenses and other current liabilities. The allowance for estimated sales returns was approximately $1.1 million and $1.9 million as of January 30, 2016 and January 31, 2015, respectively. The Company's policy with respect to gift cards is to record revenue as the gift cards are redeemed for merchandise. Prior to their redemption, gift cards are recorded as a liability, included in accrued expenses and other current liabilities. After one year, the Company recognizes breakage income for the estimated portion of unredeemed gift cards that is unlikely to be redeemed. Prior to Fiscal 2015 the Company recognized breakage income after two years. The impact on the Company's net income as a result of the change was $0.5 million during Fiscal 2015. The Company recognized gift card breakage income of approximately $3.3 million, $1.6 million and $1.5 million during Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively, and is recorded in selling, general and administrative expenses. In October 2012, the Company launched a new points based customer loyalty program to replace the old program that was restricted to the Company's private label credit card customers. In this program, customers earn points based on purchases and other promotional activities. These points can be redeemed for coupons to discount future purchases. The Company has developed an estimated value of each point earned based on the awards customers can attain less a reasonable breakage rate. The value of each point earned is recorded as deferred revenue. Deferred revenue for loyalty points as of January 30, 2016 and January 31, 2015 was $5.0 million and $9.0 million, respectively, and is included in accrued expenses and other current liabilities. This change reflects the accelerated conversion of loyalty points in the current program in anticipation of transition to a new customer loyalty program in Fiscal 2016. The Company has an international expansion program through territorial agreements with franchisees. At January 30, 2016, the Company's franchisees had a total of 102 international points of distribution. The Company generates revenues from the franchisees from the sale of product and sales royalties. The Company records gross sales and cost of goods sold on the sale of product to franchisees when the franchisor takes ownership of the product. The Company records gross sales for royalties when the franchisee sells the product to their customers. Under certain agreements the Company receives a fee from each franchisee for exclusive territorial rights. The Company records this territorial fee as deferred revenue and amortizes the fee into gross sales over the life of the territorial agreement. Deferred revenue for franchisees as of January 30, 2016 and January 31, 2015 was $1.2 million and $0.8 million, respectively. Inventories Inventories, which consist primarily of finished goods, are stated at the lower of cost or market, with cost determined on an average cost basis. The Company capitalizes supply chain costs in inventory and these costs are reflected in cost of sales as the inventories are sold. Inventory includes items that have been marked down to the Company's best estimate of their lower of cost or market value and an estimate for inventory shrinkage. The Company bases its decision to mark down merchandise upon its current rate of sale, the season and the expected sell-through of the item. The Company adjusts its inventory based upon an annual
physical inventory and shrinkage is estimated in interim periods based upon the historical results of physical inventories in the context of current year facts and circumstances. Cost of Sales (exclusive of depreciation and amortization) In addition to the cost of inventory sold, the Company includes buying, design and distribution expenses, shipping and handling costs on merchandise sold directly to customers, and letter of credit fees in its cost of sales. The Company records all occupancy costs in its cost of sales, except administrative office buildings, which are recorded in selling, general and administrative expenses. All depreciation is reported on a separate line on the Company's consolidated statements of operations. Stock-based Compensation The Company's stock-based compensation plans are administered by the Compensation Committee of the Board of Directors (the “Board”). The Compensation Committee is comprised of independent members of the Board. Effective May 20, 2011, the shareholders approved the 2011 Equity Incentive Plan (the "Equity Plan"). Upon adoption of the Equity Plan, the Company ceased granting awards under its 2005 Equity Incentive Plan. The Equity Plan allows the Compensation Committee to grant multiple forms of stock‑based compensation such as stock options, stock appreciation rights, restricted stock awards, deferred stock awards and performance stock awards. The Company accounts for its stock‑based compensation in accordance with the provisions of the “Compensation-Stock Compensation” topic of the FASB ASC. These provisions require, among other things: (a) the fair value of all stock awards be expensed over their respective vesting periods; (b) the amount of cumulative compensation cost recognized at any date must at least be equal to the portion of the grant-date value of the award that is vested at that date and (c) that compensation expense include a forfeiture estimate for those shares not expected to vest. Also in accordance with these provisions, for those awards with multiple vest dates, the Company recognizes compensation cost on a straight-line basis over the requisite service period for the entire award. Earnings per Common Share The Company reports its earnings (loss) per share in accordance with the “Earnings Per Share” topic of the FASB ASC, which requires the presentation of both basic and diluted earnings (loss) per share on the statements of operations. The diluted weighted average common shares includes adjustments for the potential effects of outstanding stock options, Deferred Awards and Performance Awards (as both terms are used in Note 3 to these consolidated financial statements), but only in the periods in which such effect is dilutive under the treasury stock method. Included in our basic and diluted weighted average common shares are those shares due to participants in the deferred compensation plan, which are held in treasury stock. Antidilutive stock awards are comprised of stock options and unvested deferred, restricted and performance shares which would have been antidilutive in the application of the treasury stock method in accordance with “Earnings Per Share” topic of FASB ASC. In accordance with this topic, the following table reconciles income and share amounts utilized to calculate basic and diluted net income per common share (in thousands):
Accounts Receivable Accounts receivable consists of credit and debit card receivables, franchisee and wholesale receivables, landlord construction allowance receivables and other miscellaneous items. Credit and debit card receivables represent credit and debit card sales for which the respective third party service company has yet to remit the cash. The unremitted balance approximates the last few days of related sales for each reporting period. Bad debt associated with these sales is not material. Franchisee and wholesale receivables represent product sales and sale royalties in which cash has not yet been remitted from our partners. Landlord construction allowance receivables represent landlord contributions to our construction costs of building out the related real estate, primarily new and remodeled stores. Total construction costs are capitalized as property and equipment and the landlord construction allowances are recorded as a lease incentive, a component of deferred rent, which is amortized as a reduction of rent expense over the lease term. Insurance and Self-Insurance Reserves The Company self-insures and purchases insurance policies to provide for workers' compensation, general liability and property losses, cyber-security coverage, as well as director and officer's liability, vehicle liability and employee medical benefits. The Company estimates risks and records a liability based on historical claim experience, insurance deductibles, severity factors and other actuarial assumptions. The Company records the current portions of employee medical benefits, workers compensation and general liability reserves in accrued expenses and other current liabilities. As of January 30, 2016 and January 31, 2015, the current portions of these reserves were approximately $7.0 million and $6.5 million, respectively. The Company records the long-term portions of employee medical benefits, workers' compensation and general liability reserves in other long-term liabilities. As of January 30, 2016 and January 31, 2015, the long-term portions of these reserves were approximately $5.8 million and $6.5 million, respectively. Property and Equipment Property and equipment are stated at cost. Leasehold improvements are depreciated on a straight-line basis over the shorter of the life of the lease or the estimated useful life of the asset. All other property and equipment is depreciated on a straight-line basis based upon their estimated useful lives, which generally range from three to twenty-five years. Repairs and maintenance are expensed as incurred. The Company accounts for internally developed software intended for internal use in accordance with provisions of the “Intangibles-Goodwill and Other” topic of the FASB ASC. The Company capitalizes development‑stage costs such as direct external costs and direct payroll related costs. When development is substantially complete, the Company amortizes the cost of the software on a straight-line basis over the expected life of the software. Preliminary project costs and post-implementation costs such as training, maintenance and support are expensed as incurred. Accounting for Impairment of Long-Lived Assets The Company periodically reviews its long-lived assets when events indicate that their carrying value may not be recoverable. Such events include a history trend or projected trend of cash flow losses or a future expectation that the Company will sell or dispose of an asset significantly before the end of its previously estimated useful life. In reviewing for impairment the Company groups its long-lived assets at the lowest possible level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. In that regard, the Company groups its assets into two categories: corporate-related and store-related. Corporate-related assets consist of those associated with the Company's corporate offices, distribution centers and its information technology systems. Store-related assets consist of leasehold improvements, furniture and fixtures, certain computer equipment and lease related assets associated with individual stores. For store-related assets, the Company reviews all stores that have been open or not remodeled for at least two years, or sooner if circumstances should dictate, on at least an annual basis. The Company believes waiting two years allows a store to reach a maturity level where a more comprehensive analysis of financial performance can be performed. For each store that shows indications of operating losses, the Company projects future cash flows over the remaining life of the lease and compares the total undiscounted cash flows to the net book value of the related long-lived assets. If the undiscounted cash flows are less than the related net book value of the long-lived assets, they are written down to their fair market value. The Company primarily determines fair market value to be the discounted future cash flows associated with those assets. In evaluating future
cash flows, the Company considers external and internal factors. External factors comprise the local environment in which the store resides, including mall traffic, competition, and their effect on sales trends. Internal factors include the Company's ability to gauge the fashion taste of its customers, control variable costs such as cost of sales and payroll, and in certain cases, its ability to renegotiate lease costs. Exit or Disposal Cost Obligations In accordance with the “Exit or Disposal Cost Obligations” topic of the FASB ASC, the Company records its exit and disposal costs at fair value to terminate an operating lease or contract when termination occurs before the end of its term, or when costs will be incurred without future economic benefit to the Company, on the date the Company ceased using the leased property. In cases of employee termination benefits, the Company recognizes an obligation only when all of the following criteria are met:
During the first quarter of Fiscal 2012, management approved a plan to exit its distribution center in Ontario, California (the "West Coast DC") and move the operations to its distribution center in Fort Payne, Alabama (the "Southeast DC"). The Company ceased operations at the West Coast DC in May 2012. The lease of the West Coast DC expires in March 2016 and the Company has subleased this facility through March 2016. During the third quarter of Fiscal 2012, management approved a plan to close the Company's distribution center in Dayton, New Jersey ("Northeast DC") and move the operations to its Southeast DC. The Company ceased operations in the Northeast DC during the fourth quarter of fiscal 2012. The lease of its Northeast DC expires in January 2021 and the Company has subleased this facility through January 2021. The following table provides details of the remaining accruals for the West Coast DC and Northeast DC, of which approximately $0.5 million was included in accrued expenses and other current liabilities and approximately $0.3 million was included in other long-term liabilities (dollars in thousands):
Deferred Financing Costs The Company capitalizes costs directly associated with acquiring third party financing. Deferred financing costs are included in other assets and are amortized as interest expense over the term of the related indebtedness. At January 30, 2016, deferred financing costs, net of accumulated amortization of $3.1 million, were approximately $1.2 million. At January 31, 2015, deferred financing costs, net of accumulated amortization of $2.7 million, were approximately $1.2 million.
Treasury Stock Treasury stock is recorded at acquisition cost. Gains and losses on disposition are recorded as increases or decreases to additional paid-in capital with losses in excess of previously recorded gains charged directly to retained earnings. When treasury shares are retired and returned to authorized but unissued status, the carrying value in excess of par is allocated to additional paid-in capital and retained earnings on a pro rata basis. Pre-opening Costs Store pre-opening costs consist primarily of occupancy costs, payroll, supply, and marketing expenses, and are expensed as incurred in selling, general and administrative expenses. Pre-opening costs were $0.3 million, $1.4 million and $3.3 million for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. Advertising and Marketing Costs The Company expenses the cost of advertising over the period the advertising is run or displayed. Included in selling, general and administrative expenses for Fiscal 2015, Fiscal 2014 and Fiscal 2013 are advertising and other marketing costs of approximately $27.9 million, $30.9 million and $33.8 million, respectively. Rent Expense and Deferred Rent Rent expense and lease incentives, including landlord construction allowances, are recognized on a straight-line basis over the lease term, commencing generally on the date the Company takes possession of the leased property. The Company records rent expense and the impact of lease incentives for its stores and distribution centers as a component of cost of sales. The unamortized portion of deferred rent is included in deferred rent liabilities. Income Taxes We utilize the liability method of accounting for income taxes as set forth in the “Income Taxes” topic of the FASB ASC. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities, as well as for net operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using currently enacted tax rates that apply to taxable income in effect for the years in which the basis differences and tax assets are expected to be realized. A valuation allowance is recorded when it is more likely than not that any of the deferred tax assets will not be realized. In determining the need for valuation allowances we consider projected future taxable income and the availability of tax planning strategies. If in the future we determine that we would not be able to realize our recorded deferred tax assets, an increase in the valuation allowance would decrease earnings in the period in which such determination is made. We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Accumulated Other Comprehensive Income Accumulated other comprehensive income primarily consists of cumulative translation adjustments. Foreign Currency Translation The Company has determined that the local currencies of its Canadian and Asian subsidiaries are their functional currencies. In accordance with the “Foreign Currency Matters” topic of the FASB ASC, the assets and liabilities denominated in foreign currency are translated into U.S. dollars at the current rate of exchange existing at period-end and revenues and expenses are translated at average monthly exchange rates. Related translation adjustments are reported as a separate component of stockholders' equity. The Company also transacts certain business in foreign denominated currencies primarily with its Canadian subsidiary purchasing inventory in U.S. Dollars, and there are intercompany charges between various
subsidiaries. In Fiscal 2015, Fiscal 2014 and Fiscal 2013, the Company recorded realized and unrealized gains (losses) on such transactions of approximately $0.1 million, $(0.5) million and $0.5 million, respectively. Derivative Instruments The Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates attributable to inventory purchases denominated in a foreign currency. Specifically, its Canadian subsidiary’s functional currency is the Canadian dollar, but purchases inventory from suppliers in US dollars. In order to mitigate the variability of cash flows associated with certain of these forecasted inventory purchases, the Company began entering into foreign exchange forward contracts in the second quarter of fiscal 2015. These contracts typically mature within 12 months. The Company does not use forward contracts to engage in currency speculation and we do not enter into derivative financial instruments for trading purposes. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of Other Comprehensive Income (“OCI”) and reclassified into earnings within cost of sales (exclusive of depreciation and amortization) in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness are recognized in earnings within selling, general & administrative expenses, consistent with where the Company records realized and unrealized foreign currency gains and losses on transactions in foreign denominated currencies. All derivative instruments are presented at gross fair value on the Consolidated Balance Sheets within either prepaid expenses and other current assets or accrued expenses and other current liabilities. As of January 30, 2016 the Company had foreign exchange forward contracts with an aggregate notional amount of $26.5 million and the fair value of the derivative instruments was an asset of $0.8 million and a liability of $0.1 million. Legal Contingencies The Company reserves for the outcome of litigation and contingencies when it determines an adverse outcome is probable and can estimate losses. Estimates are adjusted as facts and circumstances require. The Company expenses the costs to resolve litigation as incurred, net of amounts, if any, recovered through our insurance coverage. Retained Earnings There are no restrictions on the Company's retained earnings. Fair Value Measurement and Financial Instruments The “Fair Value Measurements and Disclosure” topic of the FASB ASC provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. This topic 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 and establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the hierarchy are defined as follows:
The Company’s cash and cash equivalents, short-term investments, assets of the Company’s Deferred Compensation Plan, accounts receivable, accounts payable and credit facility are all short-term in nature. As such, their carrying amounts approximate fair value and fall within Level 1 of the fair value hierarchy. The Company stock included in the Deferred Compensation Plan is not subject to fair value measurement.
Our derivative assets and liabilities include foreign exchange forward contracts that are measured at fair value using observable market inputs such as forward rates, our credit risk and our counterparties’ credit risks. Based on these inputs, our derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. The Company’s assets measured at fair value on a nonrecurring basis include long-lived assets. The Company reviews the carrying amounts of such assets when events indicate that their carrying amounts may not be recoverable. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered to be Level 3 inputs. Long-lived assets, primarily comprised of property and equipment, held and used with a carrying amount of $4.6 million were written down to their fair value, resulting in an impairment charge of $2.4 million, which was included in earnings for Fiscal 2015. For Fiscal 2014, long-lived assets held and used with a carrying amount of $15.9 million were written down to their fair value, resulting in an impairment charge of $11.1 million, which was included in earnings for Fiscal 2014. For Fiscal 2013, long-lived assets held and used with a carrying amount of $44.4 million were written down to their fair value, resulting in an impairment charge of $29.6 million, which was included in earnings for Fiscal 2013. Recently Issued Accounting Updates In February 2016, the FASB issued guidance relating to the accounting for leases. This guidance applies a right of use model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset for the lease term and a liability to make lease payments. The lease term is the noncancellable period of the lease, and includes both periods covered by an option to extend the lease, if the lessee is reasonably certain to exercise that option, and periods covered by an option to terminate the lease, if the lessee is reasonably certain not to exercise that termination option. The standard is effective for the Company beginning in its fiscal year 2019, including interim periods within those fiscal years, and early adoption is permitted. We are currently reviewing the potential impact of this standard. In November 2015, the FASB issued guidance relating to balance sheet classification of deferred taxes. Currently, entities are required to present deferred tax assets and liabilities as current and noncurrent on the balance sheet. This guidance simplifies the current guidance by requiring entities to classify all deferred tax assets and liabilities, together with any related valuation allowance, as noncurrent on the balance sheet. The standard is effective for the Company beginning in its fiscal year 2018, with early adoption permitted, and may be applied prospectively or retrospectively. The adoption is not expected to impact the Company's consolidated financial statements other than the change in presentation of deferred tax assets and liabilities within its consolidated balance sheets. In May 2014, the FASB issued guidance relating to revenue recognition from contracts with customers. This guidance requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB issued guidance to defer the effective date by one year and, therefore, the standard is effective for fiscal years and interim periods within those years beginning after December 15, 2017 and is to be applied retrospectively. We are currently reviewing the potential impact of this standard. |
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STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY The Company's Board of Directors has authorized the following share repurchase programs: (1) $100.0 million on November 26, 2012 (the “2012 Share Repurchase Program”); (2) $100.0 million on March 3, 2014 (the “2014 Share Repurchase Program”); (3) $100.0 million on January 7, 2015 (the “2015 Share Repurchase Program”); and (4) $250.0 million on December 8, 2015 (the “2015 $250 Million Share Repurchase Program”). The 2012 Share Repurchase Program and 2014 Share Repurchase Program have been completed. At January 30, 2016, there was approximately $270.8 million remaining on the 2015 Share Repurchase Program and the 2015 $250 Million Share Repurchase Program. Under the 2015 Share Repurchase Program and the 2015 $250 Million Share Repurchase Program, the Company may repurchase shares in the open market at current market prices at the time of purchase or in privately negotiated transactions. The timing and actual number of shares repurchased under the program will depend on a variety of factors including price, corporate and regulatory requirements, and other market and business conditions. We may suspend or discontinue the program at any time, and may thereafter reinstitute purchases, all without prior announcement. Pursuant to restrictions imposed by the Company's equity plan during black-out periods, the Company withholds and retires shares of vesting stock awards in exchange for payments to satisfy minimum withholding tax requirements. The Company's payment of the withholding taxes in exchange for the shares constitutes a purchase of its common stock. The Company acquires shares of its common stock in conjunction with liabilities owed under a deferred compensation plan, which are held in treasury. The following table summarizes the Company's share repurchases (in thousands):
In accordance with the “Equity” topic of the FASB ASC, the par value of the shares retired is charged against common stock and the remaining purchase price is allocated between additional paid-in capital and retained earnings. The portion charged against additional paid-in capital is done using a pro rata allocation based on total shares outstanding. Related to all shares retired for Fiscal 2015, Fiscal 2014 and Fiscal 2013, approximately $98.0 million, $60.4 million and $53.1 million was charged to retained earnings, respectively. Related to Fiscal 2015 dividends, $12.8 million was charged to retained earnings, of which $12.2 million related to cash dividends paid and $0.6 million related to dividend share equivalents on unvested Deferred Awards and Performance Awards. Related to Fiscal 2014 dividends, $12.0 million was charged to retained earnings, of which $11.5 million related to cash dividends paid and $0.5 million related to dividend share equivalents on unvested Deferred Awards and Performance Awards. On February 12, 2016, the Board of Directors authorized a quarterly cash dividend of $0.20 per share to be paid on April 28, 2016 to shareholders of record on the close of business on April 7, 2016. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Company’s Board of Directors based on a number of factors, including business and market conditions, the Company’s future financial performance and other investment priorities. |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The following table summarizes the Company’s stock-based compensation expense (in thousands):
(1) A portion of stock-based compensation is included in cost of sales. Approximately $2.5 million, $1.6 million and $2.8 million in Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively, were included in cost of sales. All other stock-based compensation is included in selling, general & administrative expense. The Company recognized a tax benefit related to stock-based compensation expense of $8.3 million, $7.0 million and $8.5 million for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. The Company generally grants time vesting stock awards ("Deferred Awards") and performance-based stock awards ("Performance Awards") to employees at management levels. The Company also grants Deferred Awards to its non-employee directors. Deferred Awards are granted in the form of restricted stock units that require each recipient to complete a service period. Deferred Awards generally vest ratably over three years, except for those granted to non-employee directors, which generally vest over one year. Performance Awards are granted in the form of restricted stock units which have performance criteria that must be achieved for the awards to vest in addition to a service period requirement. With the approval of the Board's Compensation Committee, the Company may settle vested Deferred Awards and Performance Awards to the employee in shares, in a cash amount equal to the market value of such shares at the time all requirements for delivery of the award have been met, or in part shares and cash. For Performance Awards issued during Fiscal 2013 each award has a defined number of shares that an employee can earn (the “Target Shares”), and based on the adjusted operating income level achieved for the three-fiscal year period, the employee can earn from 0% to 200% of their Target Shares. The fair value of these Performance Awards and all Deferred Awards granted is based on the closing price of our common stock on the grant date. The Fiscal 2013 Performance Awards cliff vest, if earned, after completion of the three year performance period. For Performance Awards issued during Fiscal 2014 and Fiscal 2015 (the “2014 and 2015 Performance Awards”), the Target Shares earned can range from 0% to 300% and depend on the achievement of adjusted earnings per share for the three-fiscal year performance period and our total shareholder return (“TSR”) relative to that of companies in our peer group for the same period. The 2014 and 2015 Performance Awards cliff vest, if earned, after a three year service period. The 2014 and 2015 Performance Awards grant date fair value was estimated using a Monte Carlo simulation covering the period from the valuation date through the end of the performance period using our simulated stock price as well as the TSR of companies in our peer group. Stock-based compensation expense is recognized ratably over the related service period reduced for estimated forfeitures of those awards not expected to vest due to employee turnover. Stock- based compensation expense, as it relates to Performance Awards, is also adjusted based on the Company's estimate of the percentage of the aggregate Target Shares expected to be earned. At January 30, 2016, the Company had 605,499 shares available for grant under the Equity Plan. Changes in the Company’s Unvested Stock Awards during Fiscal 2015, Fiscal 2014 and Fiscal 2013 Deferred Awards
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Total unrecognized stock-based compensation expense related to unvested Deferred Awards approximated $13.3 million as of January 30, 2016, which will be recognized over a weighted average period of approximately 1.9 years. The fair value of Deferred Awards held by the Company's employees that vested during Fiscal 2015, Fiscal 2014 and Fiscal 2013 was approximately $15.5 million, $11.4 million and $9.8 million, respectively. Performance Awards
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For those awards in which the performance period is not yet complete, the number of unvested shares in the table above is based on the participants earning their Target Shares at 100%; however, the cumulative expense recognized reflects changes in estimated adjusted operating income and adjusted earnings per share as they occur. Based on the current number of Performance Awards expected to be earned, the total unrecognized stock-based compensation expense related to unvested Performance Awards approximated $15.4 million as of January 30, 2016, which will be recognized over a weighted average period of approximately 2.1 years. The fair value of Performance Awards held by the Company's employees that vested during Fiscal 2015, Fiscal 2014 and Fiscal 2013 was approximately $2.3 million, $5.5 million and $5.0 million, respectively. Stock Options No stock options were issued during Fiscal 2015, Fiscal 2014 and Fiscal 2013 and at January 30, 2016, there were no unvested stock options. Outstanding Stock Options Changes in the Company’s outstanding stock options for Fiscal 2015 were as follows:
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The following table summarizes information regarding options outstanding at January 30, 2016:
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PROPERTY AND EQUIPMENT |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consist of the following (in thousands):
The Company conducted a review of its store portfolio using business hurdles management designed to enhance profitability and improve overall operating results. Based on this review, the Company compiled a list of underperforming stores targeted for closure (the “Disposition List”). As a result of this review the Company closed 32 stores in Fiscal 2015, 35 stores in Fiscal 2014 and 41 stores in Fiscal 2013. The Company also identified additional underperforming stores for which the Company will review its options for improving their financial performance, including but not limited to negotiating occupancy relief, in order to achieve the business hurdles. If these stores are unable to do so, then the Company will move them to the Disposition List. At January 30, 2016, the Company performed impairment testing on 1,069 stores with a total net book value of $114.5 million. During Fiscal 2015, the Company recorded $2.4 million of impairment charges primarily related to 22 underperforming stores, of which 10 were fully impaired and 12 were partially impaired. Of the 22 underperforming stores 17 were in the U.S. and five were in Canada. As of January 30, 2016, the aggregate net book value of the stores that were partially impaired was approximately $1.2 million, which the Company determined to be recoverable based on an estimate of discounted future cash flows. Consistent with its impairment policy, the Company concluded that changes in circumstances affecting the carrying value of stores included on the Disposition List required the Company to review all stores included on the Disposition List regardless of whether the store had been open for at least two years. Impairment charges for all stores were recorded as a result of revenue and/or gross margins not meeting targeted levels and accelerated store lease termination dates. At January 31, 2015, the Company performed impairment testing on 1,063 stores with a total net book value of $138.9 million. During Fiscal 2014, the Company recorded $11.1 million of impairment charges primarily related to 74 underperforming stores, of which 44 were fully impaired and 30 were partially impaired. Of the 74 underperforming stores 69 were in the U.S. and five were in Canada. 4. PROPERTY AND EQUIPMENT (Continued) At February 1, 2014, the Company performed impairment testing on 1,066 stores with a total net book value of $156.9 million. During Fiscal 2013, the Company recorded $20.5 million of store impairment charges primarily related to 127 underperforming stores, of which 106 were fully impaired and 21 were partially impaired. Of the 127 underperforming stores 109 were in the U.S. and 18 were in Canada. Company management continues to believe that making progress on its systems implementations will be one of the key drivers to improve its operations and strengthen its financial performance. During the second quarter of Fiscal 2013 the Company established a strategic long term systems plan. As part of this plan, the Company concluded that certain development costs previously incurred were no longer relevant and deemed certain systems to be obsolete and needed to be replaced by enhanced capabilities in order to incorporate industry best practices as well as service our international franchisees and wholesale business partners. Accordingly, the Company recorded asset impairment charges of $9.1 million and incurred $1.2 million of selling, general and administrative expenses related to the write-down of some previously capitalized development costs and obsolete systems. During Fiscal 2015, the Company capitalized approximately $28.4 million of external software costs and approximately $13.0 million of internal programming and development costs, of which $0.7 million was related to stock-based compensation. During Fiscal 2014, the Company capitalized approximately $42.4 million of external software costs and approximately $11.6 million of internal programming and development costs, of which $0.9 million was related to stock-based compensation. During Fiscal 2013, the Company capitalized approximately $19.5 million of external software costs and approximately $8.7 million of internal programming and development costs, of which $0.5 million was related to stock-based compensation. Amortization expense of capitalized software was approximately $20.1 million, $11.1 million and $7.0 million in Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. As of January 30, 2016, the Company had approximately $6.1 million in property and equipment for which payment had not been made, which was included in accrued expenses and other current liabilities. |
CREDIT FACILITY |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CREDIT FACILITY | CREDIT FACILITY The Company and certain of its domestic subsidiaries maintain a credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”), Bank of America, N.A., HSBC Business Credit (USA) Inc., and JPMorgan Chase Bank, N.A. as lenders (collectively, the “Lenders”) and Wells Fargo, as Administrative Agent, Collateral Agent and Swing Line Lender (the “Credit Agreement”). The Credit Agreement was amended on September 15, 2015 and the provisions below reflect the amended and extended Credit Agreement. The Credit Agreement, which expires in September 2020, consists of a $250 million asset based revolving credit facility, with a $50 million sublimit for standby and documentary letters of credit and an uncommitted accordion feature that could provide up to $50 million of additional availability. Revolving credit loans outstanding under the Credit Agreement bear interest, at the Company’s option, at:
The Company is charged an unused line fee of 0.25% on the unused portion of the commitments. Letter of credit fees range from 0.625% to 0.750% for commercial letters of credit and range from 0.75% to 1.00% for standby letters of credit. Letter of credit fees are determined based on the amount of the Company's average excess availability under the facility. The amount available for loans and letters of credit under the Credit Agreement is determined by a borrowing base consisting of certain credit card receivables, certain trade and franchise receivables, certain inventory and the fair market value of certain real estate, subject to certain reserves. The outstanding obligations under the Credit Agreement may be accelerated upon the occurrence of certain events, including, among others, non-payment, breach of covenants, the institution of insolvency proceedings, defaults under other material indebtedness and a change of control, subject, in the case of certain defaults, to the expiration of applicable grace periods. The Company is not subject to any early termination fees. The Credit Agreement contains covenants, which include conditions on stock buybacks and the payment of cash dividends or similar payments. Credit extended under the Credit Agreement is secured by a first priority security interest in substantially all of the Company’s U.S. assets excluding intellectual property, software, equipment and fixtures. As of January 30, 2016, the Company has capitalized an aggregate of approximately $4.3 million in deferred financing costs related to the Credit Agreement. The unamortized balance of deferred financing costs at January 30, 2016 was approximately $1.2 million. Unamortized deferred financing costs are amortized over the remaining term of the Credit Agreement. In conjunction with amending the agreement in September 2015, we paid approximately $0.3 million in additional deferred financing costs. The table below presents the components (in millions) of the Company’s credit facility:
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INTEREST INCOME (EXPENSE), NET |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTEREST INCOME (EXPENSE), NET | INTEREST (EXPENSE) INCOME, NET The following table presents the components of the Company’s interest expense, net (in thousands):
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PREPAID EXPENSES AND OTHER CURRENT ASSETS |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses And Other Current Assets [Text Block] | PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets are comprised of the following (in thousands):
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ACCRUED EXPENSES AND OTHER CURRENT LIABILTIES |
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities are comprised of the following (in thousands):
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Lease Commitments The Company leases all of its stores, offices and distribution facilities (except the Ft. Payne, Alabama distribution center which the Company owns), and certain office equipment, store fixtures and automobiles, under operating leases expiring through 2026. The leases require fixed minimum annual rental payments plus, under the terms of certain leases, additional payments for taxes, other expenses and additional rent based upon sales. Store, office and distribution facilities minimum rent, contingent rent and sublease income are as follows (in thousands):
Future minimum annual lease payments under the Company's operating leases at January 30, 2016 were as follows (in thousands):
Purchase Commitments As of January 30, 2016, the Company has entered into various purchase commitments for merchandise for re-sale of approximately $319.4 million and approximately $15.9 million for equipment, construction and other non-merchandise commitments. Employment Agreements The Company has an employment agreement with its President and Chief Executive Officer, which provides for severance of two times the sum of base salary plus bonus, and certain other payments and benefits following any termination without cause or for “good reason”. As of January 30, 2016, these cash severance benefits approximated $6.3 million. In the event of a change in control of the Company, certain executives will receive, in the aggregate, approximately $23.7 million of cash severance benefits should they either be terminated or voluntarily terminate their employment due to a degradation of duties as defined in their change in control agreements. |
LEGAL AND REGULATORY MATTERS |
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LEGAL AND REGULATORY MATTERS [Abstract] | |
Legal Matters and Contingencies [Text Block] | LEGAL AND REGULATORY MATTERS The Company is involved in various legal proceedings arising in the normal course of business. In the opinion of management, any ultimate liability arising out of these proceedings will not have a material effect on the Company's financial position, results of operations or cash flows. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The components of income before taxes are as follows (in thousands):
The components of the Company's provision for income taxes consisted of the following (in thousands):
A reconciliation between the calculated tax provision on income based on statutory rates in effect and the effective tax rate for is as follows (in thousands):
(1) The foreign tax rate differential is due to the Company having a lower foreign effective tax rate as compared to its U.S. federal statutory tax rate of 35%. The Company has substantial operations in both Hong Kong and Canada which have lower statutory income tax rates as compared to the U.S. The Company's foreign effective tax rates for Fiscal 2015, Fiscal 2014 and Fiscal 2013 were 22.6%, 13.7% and 20.4%, respectively. This rate will fluctuate from year to year in response to changes in the mix of pre-tax earnings by country as well as changes in foreign jurisdiction tax laws.
The tax effects of temporary differences which give rise to deferred tax assets and liabilities are as follows (in thousands):
As of January 30, 2016, the Company has not provided Federal taxes on approximately $268.6 million of unremitted earnings of its foreign subsidiaries. The Company intends to reinvest these earnings to fund expansion in these and other markets outside the U.S. Accordingly, the Company has not provided any provision for income tax expense in excess of foreign jurisdiction income tax requirements relative to such unremitted earnings in the accompanying financial statements. Due to the complexities associated with the hypothetical calculation, including the availability of foreign tax credits, the Company has concluded it is not practicable to determine the unrecognized deferred tax liability related to the undistributed earnings. The Company has foreign net operating loss carryforwards of approximately $5.9 million which do not expire. The Company also has an Alternative Minimum Tax credit ("AMT") in Puerto Rico of approximately $0.8 million which does not expire. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in assessing the need for a valuation allowance. The Company has concluded that it is more likely than not that certain deferred tax assets cannot be used in the foreseeable future, principally the foreign net operating loss carryforwards and the AMT credit in Puerto Rico. Accordingly, a valuation allowance has been established for these tax benefits. However, to the extent that tax benefits related to these are realized in the future, the reduction of the valuation allowance will reduce income tax expense accordingly. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become realizable. The Company's income taxes payable have been reduced by the tax benefits from employee stock plan awards. For stock options, the Company receives an income tax benefit calculated as the tax effect of the difference between the fair market value of the stock issued at the time of the exercise and the exercise price. For Deferred Awards and Performance Awards, the
Company receives an income tax benefit upon the award's vesting equal to the tax effect of the underlying stock's fair market value. Uncertain Tax Positions Tax positions are evaluated in a two step process. The Company first determines whether it is more-likely-than-not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold it is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. A reconciliation of the gross amounts of unrecognized tax benefits, excluding accrued interest and penalties, is as follows (in thousands):
Approximately $8.7 million of unrecognized tax benefits at January 30, 2016 would affect the Company's effective tax rate if recognized. The Company believes it is reasonably possible that there may be a reduction of approximately $2.1 million of unrecognized tax benefits in the next 12 months as a result of settlements with taxing authorities and statute of limitations expirations. The Company accrued interest and penalties related to unrecognized tax benefits as part of the provision for income taxes. At January 30, 2016 and January 31, 2015 accrued interest and penalties included in unrecognized tax benefits were approximately $1.3 million and $1.0 million, respectively. Interest, penalties and reversals, thereof, net of taxes, was a benefit of $0.4 million in each of Fiscal 2015, Fiscal 2014 and Fiscal 2013. The Company is subject to tax in the United States and foreign jurisdictions, including Canada and Hong Kong. The Company, joined by its domestic subsidiaries, files a consolidated income tax return for Federal income tax purposes. The Company, with certain exceptions, is no longer subject to income tax examinations by U.S. Federal, state and local or foreign tax authorities for tax years fiscal 2011 and prior. |
SAVINGS AND INVESTMENT PLANS |
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Compensation and Retirement Disclosure [Abstract] | |
SAVINGS AND INVESTMENT PLANS | RETIREMENT AND SAVINGS PLANS 401(k) Plan The Company has adopted The Children's Place 401(k) Savings Plan (the “401(k) Plan”), which qualifies under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). The 401(k) Plan is a defined contribution plan established to provide retirement benefits for employees. The 401(k) Plan is employee funded up to an elective annual deferral and also provides for Company matching contributions up to a certain percentage amount of the employee's salary. The 401(k) Plan is available for all U.S. employees who have completed 90 days of service with the Company. Following guidance in IRS Notice 98-52 related to the design‑based alternative, or “safe harbor,” 401(k) plan method, the Company modified its 401(k) Plan for Company match contributions for non-highly compensated associates, as defined in the Code. For non-highly compensated associates, the Company matches the first 3% of the participant's contribution and 50% of the next 2% of the participant's contribution and the Company match contribution vests immediately. For highly compensated associates, the Company has the discretion to match the lesser of 50% of the participant's contribution or 2.5% of the participant's covered compensation and the Company match contribution vests over 5 years. The Company's matching contributions were approximately $2.2 million, in each of Fiscal 2015, Fiscal 2014 and Fiscal 2013. Deferred Compensation Plan The Company has a deferred compensation plan (the “Deferred Compensation Plan”), which is a nonqualified, unfunded plan, for eligible senior level employees. Under the plan, participants may elect to defer up to 80% of his or her base salary and/or up to 100% of his or her bonus to be earned for the year following the year in which the deferral election is made. The Deferred Compensation Plan also permits members of the Board of Directors to elect to defer payment of all or a portion of their retainer and other fees to be earned for the year following the year in which a deferral election is made. In addition, eligible employees and directors of the Company may also elect to defer payment of any shares of Company stock that is earned with respect to deferred stock awards. The Company may, but is not required to, credit participants with additional Company contribution amounts. Deferred amounts are not subject to forfeiture and are deemed invested among investment funds offered under the Deferred Compensation Plan, as directed by each participant. Payments of deferred amounts (as adjusted for earnings and losses) are payable following separation from service or at a date or dates elected by the participant at the time the deferral is elected. Payments of deferred amounts are generally made in either a lump sum or in annual installments over a period not exceeding 15.0 years. During fiscal 2010, the Deferred Compensation Plan was amended to allow for cash deferrals made by members of the Board of Directors to be invested in shares of the Company’s common stock. Such elections are irrevocable and will be settled in shares of common stock. All other deferred amounts are payable in the form in which they were made; cash deferrals are payable in cash and stock deferrals are payable in stock. Earlier distributions are not permitted except in the case of an unforeseen hardship. The Company has established a rabbi trust that serves as an investment to shadow the Deferred Compensation Plan liability; however, the assets of the rabbi trust are general assets of the Company and as such, would be subject to the claims of creditors in the event of bankruptcy or insolvency. The investments of the rabbi trust consist of mutual funds and Company stock. The Deferred Compensation Plan liability, excluding Company stock, is included in other long-term liabilities and changes in the balance are recognized as compensation expense. The values of the mutual funds are included in other assets and related earnings and losses are recognized as investment income or loss, which is included in selling, general and administrative expenses. Company stock deferrals are included in the equity section of the Company’s consolidated balance sheet as treasury stock and as a deferred compensation liability. Deferred stock is recorded at fair market value at the time of deferral and any subsequent changes in fair market value are not recognized. The Deferred Compensation Plan liability, excluding Company stock, at fair value, was approximately $0.7 million and $0.5 million at January 30, 2016 and January 31, 2015, respectively. The value of the Deferred Compensation Plan assets was approximately $0.7 million and $0.3 million at January 30, 2016 and January 31, 2015, respectively. Company stock was $1.9 million and $1.7 million at January 30, 2016 and January 31, 2015, respectively. Other Plans Under statutory requirements, the Company contributes to retirement plans for its Canadian, Puerto Rican and Asian operations. Contributions under these plans were approximately $0.4 million in Fiscal 2015 and $0.3 million in Fiscal 2014 and Fiscal 2013. |
DERIVATIVE INSTRUMENTS (Notes) |
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Derivative Instruments and Hedging Activities Disclosure [Text Block] | The Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates attributable to inventory purchases denominated in a foreign currency. Specifically, our Canadian subsidiary’s functional currency is the Canadian dollar, but purchases inventory from suppliers in US dollars. In order to mitigate the variability of cash flows associated with certain of these forecasted inventory purchases, we began entering into foreign exchange forward contracts in the second quarter of Fiscal 2015. These contracts typically mature within 12 months. We do not use forward contracts to engage in currency speculation and we do not enter into derivative financial instruments for trading purposes. The Company accounts for all of its derivatives and hedging activity under the “Derivatives and Hedging” topic of the FASB ASC. Under the Company’s risk management policy and in accordance with guidance under the topic, in order to qualify for hedge accounting treatment, a derivative must be considered highly effective at offsetting changes in either the hedged item’s cash flows or fair value. Additionally, the hedge relationship must be documented to include the risk management objective and strategy, the hedging instrument, the hedged item, the risk exposure, and how hedge effectiveness will be assessed prospectively and retrospectively. The Company formally measures effectiveness of its hedging relationships both at the hedge inception and on an ongoing basis. The Company would discontinue hedge accounting under a foreign exchange forward contract prospectively (i) if management determines that the derivative is no longer highly effective in offsetting changes in the cash flows of a hedged item, (ii) when the derivative expires or is terminated, (iii) if the forecasted transaction being hedged by the derivative is no longer probable of occurring, or (iv) if management determines that designation of the derivative as a hedge instrument is no longer appropriate. All derivative instruments are presented at gross fair value on the Consolidated Balance Sheets within either prepaid expenses and other current assets or accrued expenses and other current liabilities. As of January 30, 2016 the Company had foreign exchange forward contracts with an aggregate notional amount of $26.5 million and the fair value of the derivative instruments was an asset of $0.8 million and a liability of less than $0.1 million. As these foreign exchange forward contracts are measured at fair value using observable market inputs such as forward rates, the Company's credit risk and our counterparties’ credit risks, they are classified within Level 2 of the valuation hierarchy. Cash settlements related to these forward contracts are recorded in Cash Flows from Operating Activities within the Consolidated Statements of Cash Flows. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of Other Comprehensive Income (“OCI”) and reclassified into earnings within cost of sales (exclusive of depreciation and amortization) in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness are recognized in earnings within selling, general & administrative expenses, consistent with where the Company records realized and unrealized foreign currency gains and losses on transactions in foreign denominated currencies. Gains related to hedge effectiveness during Fiscal 2015 were approximately $0.3 million and recognized in earnings within selling, general & administrative expenses. During Fiscal 2015 approximately $0.5 million of the effective portion of the gain on the derivative was reclassified into earnings within cost of sales. As of January 30, 2016 the gross value related to hedges of these transactions in OCI was approximately $0.7 million. Assuming January 30, 2016 exchange rates remain constant, $0.5 million of gains, net of tax, related to hedges of these transactions are expected to be reclassified from OCI into earnings over the next 12 months. Changes in fair value associated with derivatives that are not designated and qualified as cash flow hedges are recognized in earnings within selling, general & administrative expenses. The Company enters into foreign exchange forward contracts with major banks and has risk exposure in the event of nonperformance by either party. However, based on our assessment, the Company believes that obligations under the contracts will be fully satisfied. Accordingly, there was no requirement to post collateral or other security to support the contracts as of January 30, 2016. |
SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION In accordance with the “Segment Reporting” topic of the FASB ASC, the Company reports segment data based on geography: The Children’s Place U.S. and The Children’s Place International. Each segment includes an e-commerce business located at www.childrensplace.com. Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico based stores and U.S. revenue from the Company's wholesale customers. Included in The Children's Place International segment are the Company's Canadian based stores, revenue from the Company's Canada wholesale customer and revenue from international franchisees. The Company measures its segment profitability based on operating income, defined as income before interest and taxes. Net sales and direct costs are recorded by each segment. Certain inventory procurement functions such as production and design as well as corporate overhead, including executive management, finance, real estate, human resources, legal, and information technology services are managed by The Children’s Place U.S. segment. Expenses related to these functions, including depreciation and amortization, are allocated to The Children’s Place International segment based primarily on net sales. The assets related to these functions are not allocated. The Company periodically reviews these allocations and adjusts them based upon changes in business circumstances. Net sales from external customers are derived from merchandise sales and the Company has no major customers that account for more than 10% of its net sales. As of January 30, 2016, The Children’s Place U.S. operated 937 stores and The Children’s Place International operated 132 stores. As of January 31, 2015, The Children’s Place U.S. operated 963 stores and The Children’s Place International operated 134 stores. The following tables provide segment level financial information for Fiscal 2015, Fiscal 2014 and Fiscal 2013 (dollars in thousands):
Geographic Information The Company's long-lived assets are located in the following countries:
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QUARTERLY FINANCIAL DATA |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
QUARTERLY FINANCIAL DATA | QUARTERLY FINANCIAL DATA (UNAUDITED) In the opinion of management, the unaudited consolidated financial statements presented below contain all material adjustments, consisting of normal recurring accruals, necessary to present fairly the Company's financial position and results of operations and have been prepared in a manner consistent with the audited financial statements contained herein. Due to the seasonal nature of the Company's business, the results of operations in any given interim period are not indicative of operating results for a full fiscal year.
The following tables reflect quarterly consolidated statements of income for the periods indicated (unaudited):
____________________________________________ (1) Items impacting the fourth quarter of Fiscal 2015 include approximately $4.4 million of additional costs related to corporate severance and reorganizations partially offset by approximately $2.8 million of income related to the accelerated conversion of loyalty points in the Company's current loyalty program in anticipation of transition to a new customer loyalty program in Fiscal 2016.
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SUBSEQUENT EVENTS |
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Jan. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS Subsequent to January 30, 2016 and through March 22, 2016, the Company repurchased an additional 0.3 million shares for approximately $22.3 million, which completed the 2015 Share Repurchase Program and brought the total under the 2015 $250 Million Share Repurchase Program to approximately $1.6 million. On February 12, 2016, the Company's Board of Directors authorized a quarterly cash dividend of $0.20 per share to be paid April 28, 2016 for shareholders of record on the close of business on April 7, 2016. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Company’s Board of Directors based on a number of factors, including business and market conditions, the Company’s future financial performance and other investment priorities. |
SCHEDULE II |
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Schedule II | THE CHILDREN'S PLACE, INC. AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (in thousands)
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BASIS OF PRESENTATION (Policies) |
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Derivatives, Policy [Policy Text Block] | Derivative Instruments The Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates attributable to inventory purchases denominated in a foreign currency. Specifically, its Canadian subsidiary’s functional currency is the Canadian dollar, but purchases inventory from suppliers in US dollars. In order to mitigate the variability of cash flows associated with certain of these forecasted inventory purchases, the Company began entering into foreign exchange forward contracts in the second quarter of fiscal 2015. These contracts typically mature within 12 months. The Company does not use forward contracts to engage in currency speculation and we do not enter into derivative financial instruments for trading purposes. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of Other Comprehensive Income (“OCI”) and reclassified into earnings within cost of sales (exclusive of depreciation and amortization) in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness are recognized in earnings within selling, general & administrative expenses, consistent with where the Company records realized and unrealized foreign currency gains and losses on transactions in foreign denominated currencies. All derivative instruments are presented at gross fair value on the Consolidated Balance Sheets within either prepaid expenses and other current assets or accrued expenses and other current liabilities. As of January 30, 2016 the Company had foreign exchange forward contracts with an aggregate notional amount of $26.5 million and the fair value of the derivative instruments was an asset of $0.8 million and a liability of $0.1 million. |
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Fiscal Period, Policy [Policy Text Block] | Fiscal Year The Company's fiscal year is a 52-week or 53-week period ending on the Saturday on or nearest to January 31. All years presented were 52-week years. |
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Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and amounts of revenues and expenses reported during the period. Actual results could differ from the assumptions used and estimates made by management, which could have a material impact on the Company's financial position or results of operations. |
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Consolidation, Policy [Policy Text Block] | Consolidation The consolidated financial statements include the accounts of the Company and its wholly‑owned subsidiaries. Intercompany balances and transactions have been eliminated. As of January 30, 2016, the Company does not have any investments in unconsolidated affiliates. The “Consolidation” topic of the FASB ASC is considered when determining whether an entity is subject to consolidation. |
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Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
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Stock-based Compensation | Stock-based Compensation The Company's stock-based compensation plans are administered by the Compensation Committee of the Board of Directors (the “Board”). The Compensation Committee is comprised of independent members of the Board. Effective May 20, 2011, the shareholders approved the 2011 Equity Incentive Plan (the "Equity Plan"). Upon adoption of the Equity Plan, the Company ceased granting awards under its 2005 Equity Incentive Plan. The Equity Plan allows the Compensation Committee to grant multiple forms of stock‑based compensation such as stock options, stock appreciation rights, restricted stock awards, deferred stock awards and performance stock awards. The Company accounts for its stock‑based compensation in accordance with the provisions of the “Compensation-Stock Compensation” topic of the FASB ASC. These provisions require, among other things: (a) the fair value of all stock awards be expensed over their respective vesting periods; (b) the amount of cumulative compensation cost recognized at any date must at least be equal to the portion of the grant-date value of the award that is vested at that date and (c) that compensation expense include a forfeiture estimate for those shares not expected to vest. Also in accordance with these provisions, for those awards with multiple vest dates, the Company recognizes compensation cost on a straight-line basis over the requisite service period for the entire award. |
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Earnings Per Share, Policy [Policy Text Block] | Earnings per Common Share The Company reports its earnings (loss) per share in accordance with the “Earnings Per Share” topic of the FASB ASC, which requires the presentation of both basic and diluted earnings (loss) per share on the statements of operations. The diluted weighted average common shares includes adjustments for the potential effects of outstanding stock options, Deferred Awards and Performance Awards (as both terms are used in Note 3 to these consolidated financial statements), but only in the periods in which such effect is dilutive under the treasury stock method. Included in our basic and diluted weighted average common shares are those shares due to participants in the deferred compensation plan, which are held in treasury stock. Antidilutive stock awards are comprised of stock options and unvested deferred, restricted and performance shares which would have been antidilutive in the application of the treasury stock method in accordance with “Earnings Per Share” topic of FASB ASC. In accordance with this topic, the following table reconciles income and share amounts utilized to calculate basic and diluted net income per common share (in thousands):
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Receivables, Policy [Policy Text Block] | Accounts Receivable Accounts receivable consists of credit and debit card receivables, franchisee and wholesale receivables, landlord construction allowance receivables and other miscellaneous items. Credit and debit card receivables represent credit and debit card sales for which the respective third party service company has yet to remit the cash. The unremitted balance approximates the last few days of related sales for each reporting period. Bad debt associated with these sales is not material. Franchisee and wholesale receivables represent product sales and sale royalties in which cash has not yet been remitted from our partners. Landlord construction allowance receivables represent landlord contributions to our construction costs of building out the related real estate, primarily new and remodeled stores. Total construction costs are capitalized as property and equipment and the landlord construction allowances are recorded as a lease incentive, a component of deferred rent, which is amortized as a reduction of rent expense over the lease term. |
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Unpaid Policy Claims and Claims Adjustment Expense, Policy [Policy Text Block] | Insurance and Self-Insurance Reserves The Company self-insures and purchases insurance policies to provide for workers' compensation, general liability and property losses, cyber-security coverage, as well as director and officer's liability, vehicle liability and employee medical benefits. The Company estimates risks and records a liability based on historical claim experience, insurance deductibles, severity factors and other actuarial assumptions. The Company records the current portions of employee medical benefits, workers compensation and general liability reserves in accrued expenses and other current liabilities. As of January 30, 2016 and January 31, 2015, the current portions of these reserves were approximately $7.0 million and $6.5 million, respectively. The Company records the long-term portions of employee medical benefits, workers' compensation and general liability reserves in other long-term liabilities. As of January 30, 2016 and January 31, 2015, the long-term portions of these reserves were approximately $5.8 million and $6.5 million, respectively. |
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Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at cost. Leasehold improvements are depreciated on a straight-line basis over the shorter of the life of the lease or the estimated useful life of the asset. All other property and equipment is depreciated on a straight-line basis based upon their estimated useful lives, which generally range from three to twenty-five years. Repairs and maintenance are expensed as incurred. The Company accounts for internally developed software intended for internal use in accordance with provisions of the “Intangibles-Goodwill and Other” topic of the FASB ASC. The Company capitalizes development‑stage costs such as direct external costs and direct payroll related costs. When development is substantially complete, the Company amortizes the cost of the software on a straight-line basis over the expected life of the software. Preliminary project costs and post-implementation costs such as training, maintenance and support are expensed as incurred. |
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Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Accounting for Impairment of Long-Lived Assets The Company periodically reviews its long-lived assets when events indicate that their carrying value may not be recoverable. Such events include a history trend or projected trend of cash flow losses or a future expectation that the Company will sell or dispose of an asset significantly before the end of its previously estimated useful life. In reviewing for impairment the Company groups its long-lived assets at the lowest possible level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. In that regard, the Company groups its assets into two categories: corporate-related and store-related. Corporate-related assets consist of those associated with the Company's corporate offices, distribution centers and its information technology systems. Store-related assets consist of leasehold improvements, furniture and fixtures, certain computer equipment and lease related assets associated with individual stores. For store-related assets, the Company reviews all stores that have been open or not remodeled for at least two years, or sooner if circumstances should dictate, on at least an annual basis. The Company believes waiting two years allows a store to reach a maturity level where a more comprehensive analysis of financial performance can be performed. For each store that shows indications of operating losses, the Company projects future cash flows over the remaining life of the lease and compares the total undiscounted cash flows to the net book value of the related long-lived assets. If the undiscounted cash flows are less than the related net book value of the long-lived assets, they are written down to their fair market value. The Company primarily determines fair market value to be the discounted future cash flows associated with those assets. In evaluating future
cash flows, the Company considers external and internal factors. External factors comprise the local environment in which the store resides, including mall traffic, competition, and their effect on sales trends. Internal factors include the Company's ability to gauge the fashion taste of its customers, control variable costs such as cost of sales and payroll, and in certain cases, its ability to renegotiate lease costs. |
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Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block] | Exit or Disposal Cost Obligations In accordance with the “Exit or Disposal Cost Obligations” topic of the FASB ASC, the Company records its exit and disposal costs at fair value to terminate an operating lease or contract when termination occurs before the end of its term, or when costs will be incurred without future economic benefit to the Company, on the date the Company ceased using the leased property. In cases of employee termination benefits, the Company recognizes an obligation only when all of the following criteria are met:
During the first quarter of Fiscal 2012, management approved a plan to exit its distribution center in Ontario, California (the "West Coast DC") and move the operations to its distribution center in Fort Payne, Alabama (the "Southeast DC"). The Company ceased operations at the West Coast DC in May 2012. The lease of the West Coast DC expires in March 2016 and the Company has subleased this facility through March 2016. During the third quarter of Fiscal 2012, management approved a plan to close the Company's distribution center in Dayton, New Jersey ("Northeast DC") and move the operations to its Southeast DC. The Company ceased operations in the Northeast DC during the fourth quarter of fiscal 2012. The lease of its Northeast DC expires in January 2021 and the Company has subleased this facility through January 2021. The following table provides details of the remaining accruals for the West Coast DC and Northeast DC, of which approximately $0.5 million was included in accrued expenses and other current liabilities and approximately $0.3 million was included in other long-term liabilities (dollars in thousands):
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Deferred Charges, Policy [Policy Text Block] | Deferred Financing Costs The Company capitalizes costs directly associated with acquiring third party financing. Deferred financing costs are included in other assets and are amortized as interest expense over the term of the related indebtedness. At January 30, 2016, deferred financing costs, net of accumulated amortization of $3.1 million, were approximately $1.2 million. At January 31, 2015, deferred financing costs, net of accumulated amortization of $2.7 million, were approximately $1.2 million. |
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Start-up Activities, Cost Policy [Policy Text Block] | Pre-opening Costs Store pre-opening costs consist primarily of occupancy costs, payroll, supply, and marketing expenses, and are expensed as incurred in selling, general and administrative expenses. Pre-opening costs were $0.3 million, $1.4 million and $3.3 million for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. |
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Advertising Cost, Policy, Expensed Advertising Cost [Policy Text Block] | Advertising and Marketing Costs The Company expenses the cost of advertising over the period the advertising is run or displayed. Included in selling, general and administrative expenses for Fiscal 2015, Fiscal 2014 and Fiscal 2013 are advertising and other marketing costs of approximately $27.9 million, $30.9 million and $33.8 million, respectively. |
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Income Tax, Policy [Policy Text Block] | Income Taxes We utilize the liability method of accounting for income taxes as set forth in the “Income Taxes” topic of the FASB ASC. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities, as well as for net operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using currently enacted tax rates that apply to taxable income in effect for the years in which the basis differences and tax assets are expected to be realized. A valuation allowance is recorded when it is more likely than not that any of the deferred tax assets will not be realized. In determining the need for valuation allowances we consider projected future taxable income and the availability of tax planning strategies. If in the future we determine that we would not be able to realize our recorded deferred tax assets, an increase in the valuation allowance would decrease earnings in the period in which such determination is made. We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. |
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Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation The Company has determined that the local currencies of its Canadian and Asian subsidiaries are their functional currencies. In accordance with the “Foreign Currency Matters” topic of the FASB ASC, the assets and liabilities denominated in foreign currency are translated into U.S. dollars at the current rate of exchange existing at period-end and revenues and expenses are translated at average monthly exchange rates. Related translation adjustments are reported as a separate component of stockholders' equity. The Company also transacts certain business in foreign denominated currencies primarily with its Canadian subsidiary purchasing inventory in U.S. Dollars, and there are intercompany charges between various
subsidiaries. In Fiscal 2015, Fiscal 2014 and Fiscal 2013, the Company recorded realized and unrealized gains (losses) on such transactions of approximately $0.1 million, $(0.5) million and $0.5 million, respectively. |
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Legal Costs, Policy [Policy Text Block] | Legal Contingencies The Company reserves for the outcome of litigation and contingencies when it determines an adverse outcome is probable and can estimate losses. Estimates are adjusted as facts and circumstances require. The Company expenses the costs to resolve litigation as incurred, net of amounts, if any, recovered through our insurance coverage |
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Retained Earnings [Policy Text Block] | Retained Earnings There are no restrictions on the Company's retained earnings. |
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Fair Value Measurement and Financial Instruments | Fair Value Measurement and Financial Instruments The “Fair Value Measurements and Disclosure” topic of the FASB ASC provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. This topic 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 and establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the hierarchy are defined as follows:
The Company’s cash and cash equivalents, short-term investments, assets of the Company’s Deferred Compensation Plan, accounts receivable, accounts payable and credit facility are all short-term in nature. As such, their carrying amounts approximate fair value and fall within Level 1 of the fair value hierarchy. The Company stock included in the Deferred Compensation Plan is not subject to fair value measurement.
Our derivative assets and liabilities include foreign exchange forward contracts that are measured at fair value using observable market inputs such as forward rates, our credit risk and our counterparties’ credit risks. Based on these inputs, our derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. The Company’s assets measured at fair value on a nonrecurring basis include long-lived assets. The Company reviews the carrying amounts of such assets when events indicate that their carrying amounts may not be recoverable. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered to be Level 3 inputs. Long-lived assets, primarily comprised of property and equipment, held and used with a carrying amount of $4.6 million were written down to their fair value, resulting in an impairment charge of $2.4 million, which was included in earnings for Fiscal 2015. For Fiscal 2014, long-lived assets held and used with a carrying amount of $15.9 million were written down to their fair value, resulting in an impairment charge of $11.1 million, which was included in earnings for Fiscal 2014. For Fiscal 2013, long-lived assets held and used with a carrying amount of $44.4 million were written down to their fair value, resulting in an impairment charge of $29.6 million, which was included in earnings for Fiscal 2013. |
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Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company recognizes revenue, including shipping and handling fees billed to customers, upon purchase at the Company's retail stores or when received by the customer if the product was purchased via the Internet, net of coupon redemptions and anticipated sales returns. The Company deferred approximately $0.4 million and $0.3 million as of January 30, 2016 and January 31, 2015, respectively, for Internet sales shipped but not yet received by the customer. Sales tax collected from customers is excluded from revenue. An allowance for estimated sales returns is calculated based upon the Company's sales return experience and is recorded in accrued expenses and other current liabilities. The allowance for estimated sales returns was approximately $1.1 million and $1.9 million as of January 30, 2016 and January 31, 2015, respectively. The Company's policy with respect to gift cards is to record revenue as the gift cards are redeemed for merchandise. Prior to their redemption, gift cards are recorded as a liability, included in accrued expenses and other current liabilities. After one year, the Company recognizes breakage income for the estimated portion of unredeemed gift cards that is unlikely to be redeemed. Prior to Fiscal 2015 the Company recognized breakage income after two years. The impact on the Company's net income as a result of the change was $0.5 million during Fiscal 2015. The Company recognized gift card breakage income of approximately $3.3 million, $1.6 million and $1.5 million during Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively, and is recorded in selling, general and administrative expenses. In October 2012, the Company launched a new points based customer loyalty program to replace the old program that was restricted to the Company's private label credit card customers. In this program, customers earn points based on purchases and other promotional activities. These points can be redeemed for coupons to discount future purchases. The Company has developed an estimated value of each point earned based on the awards customers can attain less a reasonable breakage rate. The value of each point earned is recorded as deferred revenue. Deferred revenue for loyalty points as of January 30, 2016 and January 31, 2015 was $5.0 million and $9.0 million, respectively, and is included in accrued expenses and other current liabilities. This change reflects the accelerated conversion of loyalty points in the current program in anticipation of transition to a new customer loyalty program in Fiscal 2016. The Company has an international expansion program through territorial agreements with franchisees. At January 30, 2016, the Company's franchisees had a total of 102 international points of distribution. The Company generates revenues from the franchisees from the sale of product and sales royalties. The Company records gross sales and cost of goods sold on the sale of product to franchisees when the franchisor takes ownership of the product. The Company records gross sales for royalties when the franchisee sells the product to their customers. Under certain agreements the Company receives a fee from each franchisee for exclusive territorial rights. The Company records this territorial fee as deferred revenue and amortizes the fee into gross sales over the life of the territorial agreement. Deferred revenue for franchisees as of January 30, 2016 and January 31, 2015 was $1.2 million and $0.8 million, respectively |
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Inventory, Policy [Policy Text Block] | Inventories Inventories, which consist primarily of finished goods, are stated at the lower of cost or market, with cost determined on an average cost basis. The Company capitalizes supply chain costs in inventory and these costs are reflected in cost of sales as the inventories are sold. Inventory includes items that have been marked down to the Company's best estimate of their lower of cost or market value and an estimate for inventory shrinkage. The Company bases its decision to mark down merchandise upon its current rate of sale, the season and the expected sell-through of the item. The Company adjusts its inventory based upon an annual
physical inventory and shrinkage is estimated in interim periods based upon the historical results of physical inventories in the context of current year facts and circumstances. |
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Cost of Sales, Policy [Policy Text Block] | Cost of Sales (exclusive of depreciation and amortization) In addition to the cost of inventory sold, the Company includes buying, design and distribution expenses, shipping and handling costs on merchandise sold directly to customers, and letter of credit fees in its cost of sales. The Company records all occupancy costs in its cost of sales, except administrative office buildings, which are recorded in selling, general and administrative expenses. All depreciation is reported on a separate line on the Company's consolidated statements of operations. |
BASIS OF PRESENTATION Earnings per Share (Tables) |
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Schedule of Restructuring and Related Costs [Table Text Block] | The following table provides details of the remaining accruals for the West Coast DC and Northeast DC, of which approximately $0.5 million was included in accrued expenses and other current liabilities and approximately $0.3 million was included in other long-term liabilities (dollars in thousands):
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Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | In accordance with this topic, the following table reconciles income and share amounts utilized to calculate basic and diluted net income per common share (in thousands):
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Schedule of Repurchase Agreements [Table Text Block] |
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Schedule of stock-based compensation expense |
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Schedule of unvested performance awards |
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Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] |
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CREDIT FACILITY (Tables) |
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Jan. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of credit facility |
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INTEREST INCOME (EXPENSE), NET (Tables) |
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Jan. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of interest income (expense) | The following table presents the components of the Company’s interest expense, net (in thousands):
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PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid Expenses (Tables) |
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Jan. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREPAID EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Prepaid expenses and other current assets are comprised of the following (in thousands):
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ACCRUED EXPENSES AND OTHER CURRENT LIABILTIES Accrued (Tables) |
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Jan. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities [Table Text Block] |
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COMMITMENTS AND CONTINGENCIES Sublease (Tables) |
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Jan. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Rent Expense [Table Text Block] |
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Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] |
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INCOME TAXES Taxes by Country (Tables) |
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INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] |
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Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] |
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] |
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] |
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Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table Text Block] |
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SEGMENT INFORMATION (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment level financial information |
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Reconciliation of Assets from Segment to Consolidated [Table Text Block] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block] | Company's long-lived assets are located in the following countries:
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QUARTERLY FINANCIAL DATA Quarterly Financial Data (Tables) |
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Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information [Table Text Block] |
____________________________________________ (1) Items impacting the fourth quarter of Fiscal 2015 include approximately $4.4 million of additional costs related to corporate severance and reorganizations partially offset by approximately $2.8 million of income related to the accelerated conversion of loyalty points in the Company's current loyalty program in anticipation of transition to a new customer loyalty program in Fiscal 2016. |
____________________________________________
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BASIS OF PRESENTATION (Details) shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||||
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Jan. 30, 2016
USD ($)
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Oct. 31, 2015
USD ($)
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Aug. 01, 2015
USD ($)
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May. 02, 2015
USD ($)
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Jan. 31, 2015
USD ($)
|
Nov. 01, 2014
USD ($)
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Aug. 02, 2014
USD ($)
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May. 03, 2014
USD ($)
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Jan. 30, 2016
USD ($)
shares
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Jan. 31, 2015
USD ($)
shares
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Feb. 01, 2014
USD ($)
shares
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Feb. 02, 2013
USD ($)
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Stock awards | ||||||||||||||||||
Property, Plant, and Equipment, Fair Value Disclosure | $ 4,600 | $ 15,900 | $ 4,600 | $ 15,900 | $ 44,400 | |||||||||||||
Asset impairment charges | 0 | [1] | $ 919 | $ 1,452 | $ 0 | 4,794 | [2] | $ 3,306 | $ 3,045 | $ 0 | $ 2,371 | $ 11,145 | $ 29,633 | |||||
Dilutive effect of stock awards | shares | 264 | 243 | 298 | |||||||||||||||
Antidilutive stock awards | shares | 0 | 0 | 32 | |||||||||||||||
Deferred Revenue, Current | 400 | 300 | $ 400 | $ 300 | ||||||||||||||
Self Insurance Reserve, Current | 7,000 | 6,500 | 7,000 | 6,500 | ||||||||||||||
Business Exit Costs | 11 | $ 14 | $ 76 | $ (3) | 85 | $ (286) | $ (98) | $ 231 | 98 | (68) | $ (906) | |||||||
Amortization of Financing Costs | (3,100) | (2,700) | (3,100) | (2,700) | ||||||||||||||
Deferred Finance Costs, Net | $ 1,200 | 1,200 | 1,200 | 1,200 | ||||||||||||||
Pre-Opening Costs | 300 | 1,400 | 3,300 | |||||||||||||||
Advertising Expense | 27,900 | 30,900 | 33,800 | |||||||||||||||
Foreign Currency Transaction Gain (Loss), before Tax | $ 100 | (500) | 500 | |||||||||||||||
Number of Stores | 1,069,000 | 1,069,000 | ||||||||||||||||
Deferred Compensation Plan | ||||||||||||||||||
Maximum percentage of base salary elected to be deferred (as a percent) | 80.00% | |||||||||||||||||
Maximum percentage of bonus elected to be deferred (as a percent) | 100.00% | |||||||||||||||||
Maximum period over which annual installments of deferred payments are made (in years) | 15 years 12 days | |||||||||||||||||
Deferred compensation plan liability | $ 700 | 500 | $ 700 | 500 | ||||||||||||||
Cash Surrender Value of Life Insurance | 700 | 300 | 700 | 300 | ||||||||||||||
Deferred compensation - Company stock | (1,939) | (1,682) | (1,939) | (1,682) | ||||||||||||||
Self Insurance Reserve, Noncurrent | 5,800 | 6,500 | 5,800 | 6,500 | ||||||||||||||
Sales Returns and Allowances, Goods | 1,100 | 1,900 | ||||||||||||||||
Revenue Recognition, Gift Cards, Breakage | 3,300 | 1,600 | $ 1,500 | |||||||||||||||
Derivative Asset, Notional Amount | 26,500 | 26,500 | ||||||||||||||||
Derivative Asset, Fair Value, Gross Asset | 800 | 800 | ||||||||||||||||
Derivative Liability, Fair Value, Gross Asset | 100 | 100 | ||||||||||||||||
loyaltypoints [Member] | ||||||||||||||||||
Stock awards | ||||||||||||||||||
Deferred Revenue, Current | 5,000 | 9,000 | 5,000 | 9,000 | ||||||||||||||
deferredrevfranchisees [Member] | ||||||||||||||||||
Stock awards | ||||||||||||||||||
Deferred Revenue, Current | $ 1,200 | $ 800 | $ 1,200 | $ 800 | ||||||||||||||
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BASIS OF PRESENTATION (Details 2) number in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||
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Jan. 30, 2016
USD ($)
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Oct. 31, 2015
USD ($)
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Aug. 01, 2015
USD ($)
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May. 02, 2015
USD ($)
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Jan. 31, 2015
USD ($)
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Nov. 01, 2014
USD ($)
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Aug. 02, 2014
USD ($)
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May. 03, 2014
USD ($)
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Jan. 30, 2016
USD ($)
|
Jan. 31, 2015
USD ($)
|
Feb. 01, 2014
USD ($)
|
Feb. 02, 2013
USD ($)
|
|
Property, Plant, and Equipment, Fair Value Disclosure | $ 4,600 | $ 15,900 | $ 4,600 | $ 15,900 | $ 44,400 | |||||||
Accruedexitcosts | 770 | 1,508 | 770 | 1,508 | 2,679 | |||||||
Deferred Revenue, Current | 400 | 300 | 400 | 300 | ||||||||
Business Exit Costs | $ 11 | $ 14 | $ 76 | $ (3) | 85 | $ (286) | $ (98) | $ 231 | 98 | (68) | $ (906) | |
Paymentsanadjustments | $ (836) | (1,103) | ||||||||||
Number of Stores | 1,069 | 1,069 | ||||||||||
Accumulated Amortization, Deferred Finance Costs | $ (3,100) | (2,700) | $ (3,100) | (2,700) | ||||||||
Document Period End Date | Jan. 30, 2016 | |||||||||||
loyaltypoints [Member] | ||||||||||||
Deferred Revenue, Current | 5,000 | 9,000 | $ 5,000 | 9,000 | ||||||||
deferredrevfranchisees [Member] | ||||||||||||
Deferred Revenue, Current | 1,200 | 800 | 1,200 | 800 | ||||||||
Leasetermcosts [Domain] | ||||||||||||
Accruedexitcosts | 770 | 1,508 | 770 | 1,508 | 2,679 | |||||||
Business Exit Costs | 62 | (222) | ||||||||||
Paymentsanadjustments | (800) | (949) | ||||||||||
Otherassociatedexitcosts [Domain] | ||||||||||||
Business Exit Costs | 36 | 154 | ||||||||||
Otherassociatedcosts [Domain] | ||||||||||||
Accruedexitcosts | 0 | $ 0 | 0 | 0 | $ 0 | |||||||
Paymentsanadjustments | (36) | $ (154) | ||||||||||
Other Current Liabilities [Member] | ||||||||||||
Accruedexitcosts | 500 | 500 | ||||||||||
Other Noncurrent Liabilities [Member] | ||||||||||||
Accruedexitcosts | $ 300 | $ 300 |
STOCK-BASED COMPENSATION (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Allocated Share-based Compensation Expense | [1] | $ 21,119 | $ 17,783 | $ 21,210 | ||||||||||
Deferred and Performance Awards | ||||||||||||||
Forfeited (in shares) | 59 | |||||||||||||
Unrecognized costs and period of recognition | ||||||||||||||
Options outstanding at the beginning of the period (in shares) | [2] | 30 | 34 | |||||||||||
Exercised (in shares) | (15) | (2) | (49) | |||||||||||
Options outstanding at the end of the period (in shares) | [2] | 15 | 30 | 34 | ||||||||||
Weighted Average Exercise Price | ||||||||||||||
Options outstanding at the beginning of the period (in dollars per share) | $ 29.05 | $ 28.77 | ||||||||||||
Options outstanding at the end of the period (in dollars per share) | 29.05 | $ 28.77 | ||||||||||||
Weighted Average Remaining Contractual Life (in years) | ||||||||||||||
Options outstanding at the beginning of the period (in dollars per share) | $ 29.05 | $ 28.77 | ||||||||||||
Aggregate Intrinsic Value | ||||||||||||||
Options outstanding at the beginning of the period (in dollars) | $ 900 | $ 800 | ||||||||||||
Exercised (in dollars) | 500 | 100 | $ 900 | |||||||||||
Options outstanding at the end of the period (in dollars) | $ 500 | $ 900 | $ 800 | |||||||||||
Stock Option Plans | ||||||||||||||
Unrecognized costs and period of recognition | ||||||||||||||
Options outstanding at the beginning of the period (in shares) | 30 | 34 | ||||||||||||
Exercised (in shares) | [3] | (15) | (2) | |||||||||||
Forfeited (in shares) | 0 | (2) | ||||||||||||
Options outstanding at the end of the period (in shares) | 30 | 34 | ||||||||||||
Granted (in shares) | 0 | 0 | 0 | |||||||||||
Options exercisable (in shares) | [4] | 30 | 34 | |||||||||||
Weighted Average Exercise Price | ||||||||||||||
Options outstanding at the beginning of the period (in dollars per share) | $ 29.05 | $ 28.77 | $ 30.08 | |||||||||||
Exercised (in dollars per share) | 29.05 | 24.54 | 31.06 | |||||||||||
Forfeited (in dollars per share) | 0.00 | 29.54 | 27.11 | |||||||||||
Options outstanding at the end of the period (in dollars per share) | 29.05 | 29.05 | 28.77 | |||||||||||
Granted (in dollars per share) | 0 | 0 | 0 | |||||||||||
Weighted Average Remaining Contractual Life (in years) | ||||||||||||||
Options outstanding at the beginning of the period (in dollars per share) | $ 29.05 | $ 28.77 | $ 30.08 | |||||||||||
Aggregate Intrinsic Value | ||||||||||||||
Options outstanding at the beginning of the period (in dollars) | $ 84 | |||||||||||||
Exercised (in dollars) | [3] | (49) | ||||||||||||
Forfeited (in dollars) | $ (1) | |||||||||||||
Deferred and Restricted Stock (Deferred Awards) Member | ||||||||||||||
Deferred and Performance Awards | ||||||||||||||
Unvested awards at the beginning of the period (in shares) | 592 | 691 | 560 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 196 | 273 | 395 | |||||||||||
Vested (in shares) | [5] | (250) | 229 | 205 | ||||||||||
Forfeited (in shares) | (65) | 143 | ||||||||||||
Unvested awards at the end of the period (in shares) | 473 | 592 | 691 | |||||||||||
Weighted Average Grant Date Fair Value | ||||||||||||||
Unvested awards at the beginning of the period (in dollars per share) | $ 49.02 | $ 49.27 | $ 49.53 | |||||||||||
Granted (in shares) | 64.62 | 48.50 | 48.93 | |||||||||||
Vested (in dollars per share) | 49.02 | 48.97 | 49.46 | |||||||||||
Forfeited (in dollars per share) | 55.35 | 49.31 | 48.82 | |||||||||||
Unvested awards at the end of the period (in dollars per share) | $ 54.62 | $ 49.02 | $ 49.27 | |||||||||||
Unrecognized costs and period of recognition | ||||||||||||||
Unrecognized stock-based compensation expense (in dollars) | $ 13,300 | |||||||||||||
Weighted average period for recognition of unrecognized stock-based compensation expense (in years) | 1 year 11 months 12 days | |||||||||||||
Restricted stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Allocated Share-based Compensation Expense | $ 10,653 | $ 10,529 | $ 12,873 | |||||||||||
Weighted Average Grant Date Fair Value, unvested stock options | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | 15,500 | 11,400 | 9,800 | |||||||||||
Performance awards | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Allocated Share-based Compensation Expense | $ 10,466 | $ 7,254 | $ 8,337 | |||||||||||
Deferred and Performance Awards | ||||||||||||||
Unvested awards at the beginning of the period (in shares) | 345 | 267 | 172 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 195 | 245 | 204 | |||||||||||
Vested (in shares) | (147) | 107 | 95 | |||||||||||
Forfeited (in shares) | (18) | 60 | 14 | |||||||||||
Unvested awards at the end of the period (in shares) | 375 | 345 | 267 | |||||||||||
Weighted Average Grant Date Fair Value | ||||||||||||||
Unvested awards at the beginning of the period (in dollars per share) | $ 50.18 | $ 47.67 | $ 48.59 | |||||||||||
Granted (in shares) | 70.91 | 50.91 | 47.89 | |||||||||||
Vested (in dollars per share) | 48.02 | 46.34 | 49.84 | |||||||||||
Forfeited (in dollars per share) | 59.49 | 48.87 | 47.55 | |||||||||||
Unvested awards at the end of the period (in dollars per share) | $ 61.37 | $ 50.18 | $ 47.67 | |||||||||||
Unrecognized costs and period of recognition | ||||||||||||||
Unrecognized stock-based compensation expense (in dollars) | $ 15,400 | |||||||||||||
Weighted average period for recognition of unrecognized stock-based compensation expense (in years) | 2 years 1 month 12 days | |||||||||||||
Weighted Average Grant Date Fair Value, unvested stock options | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 2,300 | $ 5,500 | $ 5,000 | |||||||||||
Exercise Price Range Two [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | $ 22.02 | |||||||||||||
Unrecognized costs and period of recognition | ||||||||||||||
Options exercisable (in shares) | 15 | |||||||||||||
Weighted Average Exercise Price | ||||||||||||||
Options exercisable (in dollars per share) | $ 29.05 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 2 years 3 months 12 days | |||||||||||||
Weighted Average Grant Date Fair Value, unvested stock options | ||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 31.63 | |||||||||||||
Cost of Sales [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Allocated Share-based Compensation Expense | $ 2,500 | $ 1,600 | $ 2,800 | |||||||||||
|
PROPERTY AND EQUIPMENT (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 30, 2016
USD ($)
|
Oct. 31, 2015
USD ($)
|
Aug. 01, 2015
USD ($)
|
May. 02, 2015
USD ($)
|
Jan. 31, 2015
USD ($)
|
Nov. 01, 2014
USD ($)
|
Aug. 02, 2014
USD ($)
|
May. 03, 2014
USD ($)
|
Jan. 30, 2016
USD ($)
|
Jan. 31, 2015
USD ($)
|
Feb. 01, 2014
USD ($)
|
|||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||
numberofstorestestedforimpairment | 1,069 | 1,063 | 1,069 | 1,063 | 1,066 | ||||||||||||
net book value | $ 114,500 | $ 138,900 | $ 114,500 | $ 138,900 | $ 156,900 | ||||||||||||
Less accumulated depreciation and amortization | (518,498) | (493,098) | (518,498) | (493,098) | |||||||||||||
Property and equipment, net | 290,980 | 310,301 | 290,980 | 310,301 | |||||||||||||
Asset impairment charges | 0 | [1] | $ 919 | $ 1,452 | $ 0 | $ 4,794 | [2] | $ 3,306 | $ 3,045 | $ 0 | $ 2,371 | $ 11,145 | $ 29,633 | ||||
Number of underperforming stores | 22 | 74 | 127 | ||||||||||||||
netbookvauepartiallyimpairedstores | $ 1,200 | $ 1,200 | |||||||||||||||
fullyimpairedstores | 10 | 44 | 10 | 44 | 106 | ||||||||||||
partiallyimpairedstores | 12 | 30 | 12 | 30 | 21 | ||||||||||||
Payments for Software | $ 28,400 | $ 42,400 | $ 19,500 | ||||||||||||||
Payments to Develop Software | 13,000 | 11,600 | 8,700 | ||||||||||||||
Capitalized Computer Software, Amortization | 20,100 | 11,100 | 7,000 | ||||||||||||||
Property and equipment, outstanding | 6,100 | ||||||||||||||||
Land and land improvements | |||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||
Property and equipment, gross | $ 3,403 | $ 3,403 | $ 3,403 | 3,403 | |||||||||||||
Building and improvements | |||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||
Property and Equipment, Useful Life (in years) | 20-25 yrs | ||||||||||||||||
Property and equipment, gross | 35,548 | 35,548 | $ 35,548 | 35,548 | |||||||||||||
Material handling equipment | |||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||
Property and Equipment, Useful Life (in years) | 10-15 yrs | ||||||||||||||||
Property and equipment, gross | 48,345 | 48,479 | $ 48,345 | 48,479 | |||||||||||||
Leasehold improvements | |||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||
Property and Equipment, Useful Life (in years) | 3-15 yrs | ||||||||||||||||
Property and equipment, gross | 317,410 | 339,474 | $ 317,410 | 339,474 | |||||||||||||
Store fixtures and equipment | |||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||
Property and Equipment, Useful Life (in years) | 3-10 yrs | ||||||||||||||||
Property and equipment, gross | 218,566 | 231,797 | $ 218,566 | 231,797 | |||||||||||||
Capitalized software | |||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||
Property and Equipment, Useful Life (in years) | 3-10 yrs | ||||||||||||||||
Property and equipment, gross | 177,849 | 120,054 | $ 177,849 | 120,054 | |||||||||||||
Construction in progress | |||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||
Property and equipment, gross | $ 8,357 | $ 24,644 | $ 8,357 | $ 24,644 | |||||||||||||
storeimpairment [Member] | |||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||
Asset impairment charges | 20,500 | ||||||||||||||||
ITimpairment [Member] | |||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||
Asset impairment charges | 9,100 | ||||||||||||||||
sgawritedown [Member] | |||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||
Asset impairment charges | $ 1,200 | ||||||||||||||||
|
CREDIT FACILITY (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
|||
Credit facilities | |||||
Interest expense – revolver | $ 789 | $ 313 | $ 0 | ||
Sublimit availability | 42,900 | 40,900 | |||
Borrowing capacity, accordion feature | 50,000 | ||||
Deferred financing costs, remaining unamortized balance | 1,200 | 1,200 | |||
Line of Credit Facility, Maximum Borrowing Capacity | 250,000 | 200,000 | |||
Line of credit facility, current borrowing capacity | 211,700 | 183,200 | |||
Outstanding borrowings | 0 | 0 | |||
Utilization of credit facility at end of period | 7,100 | 9,100 | |||
Availability | [1] | $ 204,600 | $ 174,100 | ||
Interest rate at end of period (as a percent) | 4.00% | 3.80% | |||
Average loan balance during the period | $ 28,500 | $ 9,400 | |||
Highest end of day loan balance during the period | $ 67,500 | $ 40,900 | |||
Average interest rate (as a percent) | 2.70% | 3.20% | |||
Letter of Credit [Member] | |||||
Credit facilities | |||||
Letters of credit outstanding | $ 0 | $ 0 | |||
Standby Letters of Credit [Member] | |||||
Credit facilities | |||||
Letters of credit outstanding | 7,100 | $ 9,100 | |||
Credit Agreement | |||||
Credit facilities | |||||
Letters of Credit sublimit | $ 50,000 | ||||
Line of credit facility, unused line fee percentage (as a percent) | 0.25% | ||||
Deferred financing costs gross | $ 4,300 | ||||
Deferred financing costs, remaining unamortized balance | 1,200 | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 250,000 | ||||
Credit Agreement | Prime rate | |||||
Credit facilities | |||||
Basis spread on variable rate, low end of range (as a percent) | 0.50% | ||||
Basis spread on variable rate, high end of range (as a percent) | 0.75% | ||||
Credit Agreement | LIBOR | |||||
Credit facilities | |||||
Basis spread on variable rate, low end of range (as a percent) | 1.25% | ||||
Basis spread on variable rate, high end of range (as a percent) | 1.50% | ||||
Debt Instrument, Description of Variable Rate Basis | one, two, three or six | ||||
Credit Agreement | Letter of Credit [Member] | |||||
Credit facilities | |||||
Letters of credit facility fee, low end of range (as a percent) | 0.625% | ||||
Letters of credit facility fee, high end of range (as a percent) | 0.75% | ||||
Credit Agreement | Standby Letters of Credit [Member] | |||||
Credit facilities | |||||
Letters of credit facility fee, low end of range (as a percent) | 0.75% | ||||
Letters of credit facility fee, high end of range (as a percent) | 1.00% | ||||
2008 Credit Agreement 2014 Amendment [Member] | |||||
Credit facilities | |||||
Deferred financing costs gross | $ 0 | ||||
|
INTEREST INCOME (EXPENSE), NET (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
||||||
Components of interest income (expense), net | ||||||||
Interest income | $ 1,019 | $ 1,120 | $ 1,123 | |||||
Less: | ||||||||
Interest expense – revolver | 789 | 313 | 0 | |||||
Interest expense - credit facilities | 68 | 92 | 120 | |||||
Unused line fee | 463 | 447 | 305 | |||||
Amortization of deferred financing costs | 318 | 352 | 364 | [1] | ||||
Other interest and fees | 79 | 84 | 69 | [2] | ||||
Total interest expense | 1,717 | 1,288 | 858 | |||||
Interest (expense), net | $ (698) | $ (168) | $ 265 | |||||
|
PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid Expenses (Details) - USD ($) $ in Thousands |
Jan. 30, 2016 |
Jan. 31, 2015 |
---|---|---|
PREPAID EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | ||
Prepaid property expense | $ 20,148 | $ 20,781 |
Prepaid income taxes | 11,458 | 10,289 |
Prepaid marketing | 3,898 | 1,385 |
Prepaid maintenance contracts | 3,411 | 3,664 |
Prepaid insurance | 2,279 | 2,393 |
Other | 1,848 | 837 |
Prepaid expenses and other current assets | $ 43,042 | $ 39,349 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILTIES Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Jan. 30, 2016 |
Jan. 31, 2015 |
---|---|---|
Accrued Expenses [Abstract] | ||
Customer liabilities | $ 24,357 | $ 32,794 |
Accrued salaries and benefits | 36,108 | 33,633 |
Sales taxes and other taxes payable | 6,193 | 6,369 |
Accrued store expenses | 4,742 | 4,573 |
Accrued real estate expenses | 2,258 | 3,717 |
Accrued construction-in-progress | 4,736 | 3,631 |
Short Term Exit Costs Accual | 475 | 798 |
Accrued insurance | 4,224 | 3,759 |
Accrued marketing | 5,350 | 5,794 |
Accrued freight | 4,581 | 6,622 |
Accrued professional fees | 12,647 | 7,802 |
Other | 13,199 | 9,232 |
Accrued expenses and other current liabilities | $ 118,870 | $ 118,724 |
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
|
Operating Leased Assets [Line Items] | |||
Minimum rentals | $ 159,641 | $ 164,510 | $ 168,112 |
Additional rent based upon sales | 751 | 797 | 943 |
Sublease income | (2,766) | $ (2,967) | $ (1,138) |
2012 | 155,352 | ||
2013 | 139,682 | ||
2014 | 119,065 | ||
2015 | 103,482 | ||
2016 | 88,279 | ||
Thereafter | 168,225 | ||
Total minimum lease payments | 774,085 | ||
Severance Benefits Non-change in Control | 6,300 | ||
Severance Benefits Change in Control | 23,700 | ||
Purchase Commitments Construction [Member] | |||
Operating Leased Assets [Line Items] | |||
Unrecorded Unconditional Purchase Obligation | 15,900 | ||
Purchase Commitments Merchandise [Member] | |||
Operating Leased Assets [Line Items] | |||
Unrecorded Unconditional Purchase Obligation | $ 319,400 |
INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 30, 2016 |
Oct. 31, 2015 |
Aug. 01, 2015 |
May. 02, 2015 |
Jan. 31, 2015 |
Nov. 01, 2014 |
Aug. 02, 2014 |
May. 03, 2014 |
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
|||||||
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||||||||||||||||
U.S. | $ 46,053 | $ 47,888 | $ 36,487 | ||||||||||||||
Foreign | 43,329 | 31,987 | 40,061 | ||||||||||||||
Income (loss) from continuing operations before income taxes | $ 29,284 | [1] | $ 57,393 | $ (20,323) | $ 23,028 | $ 20,609 | [2] | $ 55,721 | $ (16,557) | $ 20,102 | 89,382 | 79,875 | 76,548 | ||||
Federal | 7,248 | 8,212 | 13,240 | ||||||||||||||
State | 2,275 | 3,691 | 4,371 | ||||||||||||||
Foreign | 9,809 | 5,457 | 9,463 | ||||||||||||||
Total current | 19,332 | 17,360 | 27,074 | ||||||||||||||
Federal | 9,649 | 5,260 | (1,513) | ||||||||||||||
State | 2,548 | 1,426 | (731) | ||||||||||||||
Foreign | (31) | (1,059) | (1,308) | ||||||||||||||
Total deferred | 12,166 | 5,627 | (3,552) | ||||||||||||||
Total tax provision | 11,807 | [1] | 18,898 | (6,628) | 7,421 | 3,572 | [2] | 18,779 | (5,870) | 6,506 | $ 31,498 | $ 22,987 | $ 23,522 | ||||
Effective tax rate from continuing operations (as a percent) | 35.20% | 28.80% | 30.70% | ||||||||||||||
Deferred Income Taxes, Current – | |||||||||||||||||
Calculated income tax provision at federal statutory rate | $ 31,284 | $ 27,956 | $ 26,792 | ||||||||||||||
State income taxes, net of federal benefit | 3,052 | 3,326 | 2,366 | ||||||||||||||
Foreign tax rate differential | (9,744) | (8,849) | (7,224) | ||||||||||||||
Nondeductible expenses | 2,729 | 1,685 | 1,792 | ||||||||||||||
Unrecognized tax expense (benefit) | (3,892) | (807) | 1,347 | ||||||||||||||
Foreign tax credits | 399 | (1,472) | 447 | ||||||||||||||
Other | (114) | (466) | 696 | ||||||||||||||
Total tax provision | 11,807 | [1] | $ 18,898 | $ (6,628) | 7,421 | 3,572 | [2] | $ 18,779 | $ (5,870) | 6,506 | 31,498 | 22,987 | 23,522 | ||||
Assets | |||||||||||||||||
Inventory | 4,472 | 4,128 | 4,472 | 4,128 | |||||||||||||
Reserves | 15,965 | 15,169 | 15,965 | 15,169 | |||||||||||||
Hedging transactions | (223) | 0 | (223) | 0 | |||||||||||||
Total current assets | 20,214 | 19,297 | 20,214 | 19,297 | |||||||||||||
Liabilities-prepaid expenses | (4,728) | (4,217) | (4,728) | (4,217) | |||||||||||||
Total current assets | 15,486 | 15,080 | 15,486 | 15,080 | |||||||||||||
Noncurrent – | |||||||||||||||||
Property and equipment | (6,855) | 7,654 | (6,855) | 7,654 | |||||||||||||
Deferred rent | 14,548 | 14,830 | 14,548 | 14,830 | |||||||||||||
Equity compensation | 9,757 | 7,101 | 9,757 | 7,101 | |||||||||||||
Reserves and other | 4,780 | 5,995 | 4,780 | 5,995 | |||||||||||||
Net Operating Loss Carryover | 2,293 | 1,930 | 2,293 | 1,930 | |||||||||||||
Total noncurrent, gross | 24,523 | 37,510 | 24,523 | 37,510 | |||||||||||||
Valuation allowance | (2,293) | (1,930) | (2,293) | (1,930) | |||||||||||||
Net noncurrent | 22,230 | 35,580 | 22,230 | 35,580 | |||||||||||||
Total deferred tax asset, net | 37,716 | 50,660 | 37,716 | 50,660 | |||||||||||||
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | 5,900 | 5,900 | |||||||||||||||
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax | 800 | 800 | |||||||||||||||
Undistributed Earnings of Foreign Subsidiaries | 268,600 | 268,600 | |||||||||||||||
Beginning Balance | $ 5,479 | $ 4,412 | 5,479 | 4,412 | |||||||||||||
Additions for current year tax positions | 3,800 | 833 | |||||||||||||||
Additions for prior year tax positions | 0 | 1,070 | |||||||||||||||
Reductions for prior year tax positions | (242) | (156) | |||||||||||||||
Settlements | (60) | (43) | |||||||||||||||
Reductions due to a lapse of the applicable statute of limitations | (596) | (637) | |||||||||||||||
Unrecognized Tax Benefits, Ending Balance | 8,381 | 5,479 | 8,381 | 5,479 | $ 4,412 | ||||||||||||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 8,700 | 8,700 | |||||||||||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | 2,100 | 2,100 | |||||||||||||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 1,300 | $ 1,000 | 1,300 | $ 1,000 | |||||||||||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 400 | ||||||||||||||||
|
SAVINGS AND INVESTMENT PLANS SAVINGS AND INVESTMENT PLANS (Details) |
12 Months Ended | ||
---|---|---|---|
Jan. 30, 2016
USD ($)
|
Feb. 01, 2014
USD ($)
|
Jan. 31, 2015
USD ($)
|
|
Defined Benefit Plan Disclosure [Line Items] | |||
First Three Percent of Company Match | 3.00% | ||
Fifty Percent of Next Two Percent Company Match | 50.00% | ||
Next Two Percent of Company Match | 2.00% | ||
Highly Compensated 401k Match | 50.00% | ||
Highly Compensated 2.5 Percent Match | 2.50% | ||
highlycompensatedvestyears | 5 | ||
Defined Benefit Plan, Contributions by Employer | $ 2,200,000 | ||
Deferred Compensation Arrangements Maximum Percentage of Base Salary | 80.00% | ||
Deferred Compensation Arrangements Maximum Percentage of Bonus | 100.00% | ||
Maximum period over which annual installments of deferred payments are made (in years) | 15 years 12 days | ||
Deferred compensation plan liability | $ 700,000 | $ 500,000 | |
Cash Surrender Value of Life Insurance | 700,000 | 300,000 | |
Common Stock Issued, Employee Trust, Deferred | (1,939,000) | $ (1,682,000) | |
Foreign Plan Contributions [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Contributions by Employer | $ 400,000 | $ 300,000 |
DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
|
Derivative Asset, Notional Amount | $ 26,500 | ||
Derivative Asset, Fair Value, Gross Asset | 800 | ||
Derivative Liability, Fair Value, Gross Asset | 100 | ||
Gain on Cash Flow Hedge Ineffectiveness | 300 | ||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | $ 452 | $ 0 | $ 0 |
SEGMENT INFORMATION (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 30, 2016
USD ($)
|
Oct. 31, 2015
USD ($)
|
Aug. 01, 2015
USD ($)
|
May. 02, 2015
USD ($)
|
Jan. 31, 2015
USD ($)
|
Nov. 01, 2014
USD ($)
|
Aug. 02, 2014
USD ($)
|
May. 03, 2014
USD ($)
|
Jan. 30, 2016
USD ($)
|
Jan. 31, 2015
USD ($)
|
Feb. 01, 2014
USD ($)
|
|||||||||||||||
Segment information | |||||||||||||||||||||||||
Impairment of Long-Lived Assets Held-for-use | $ 0 | [1] | $ 919 | $ 1,452 | $ 0 | $ 4,794 | [2] | $ 3,306 | $ 3,045 | $ 0 | $ 2,371 | $ 11,145 | $ 29,633 | ||||||||||||
Severance Costs | $ 4,400 | ||||||||||||||||||||||||
Restructuring Charges | $ 12,100 | ||||||||||||||||||||||||
Percentage of entity-wide sales qualifying purchaser as major customer (as a percent) | 10.00% | ||||||||||||||||||||||||
Number of Stores | 1,069,000 | 1,069,000 | |||||||||||||||||||||||
Net sales: | |||||||||||||||||||||||||
Total net sales | $ 498,544 | [1] | 455,913 | 366,455 | 404,865 | 479,243 | [2] | 487,304 | 384,628 | 410,149 | $ 1,725,777 | 1,761,324 | 1,765,789 | ||||||||||||
Gross Profit: | |||||||||||||||||||||||||
Gross Profit | 177,506 | [1] | 180,513 | 115,004 | 152,109 | 164,810 | [2] | 190,111 | 119,118 | 148,261 | $ 625,132 | $ 622,300 | $ 655,521 | ||||||||||||
Gross Margin: | |||||||||||||||||||||||||
Total Gross Margin (as a percent) | 36.20% | 35.30% | 37.10% | ||||||||||||||||||||||
Operating income (loss): | |||||||||||||||||||||||||
Total operating income (loss) | 29,347 | [1] | 57,647 | (20,118) | 23,204 | 20,654 | [2] | 55,803 | (16,497) | 20,083 | $ 90,080 | $ 80,043 | $ 76,283 | ||||||||||||
Operating income (loss) as a percent of net sales: | |||||||||||||||||||||||||
Total operating income (loss) (as a percent) | 5.21968% | 4.54448% | 4.32005% | ||||||||||||||||||||||
Depreciation and amortization: | |||||||||||||||||||||||||
Total depreciation and amortization | 16,903 | [1] | 16,136 | 15,252 | 14,394 | 15,542 | [2] | 15,168 | 15,557 | 14,227 | $ 62,685 | $ 60,494 | $ 64,858 | ||||||||||||
Capital expenditures: | |||||||||||||||||||||||||
Total capital expenditures | 42,145 | 72,212 | 72,606 | ||||||||||||||||||||||
Business Exit Costs | 11 | $ 14 | $ 76 | $ (3) | 85 | $ (286) | $ (98) | $ 231 | 98 | (68) | (906) | ||||||||||||||
Total assets: | |||||||||||||||||||||||||
Total assets | 897,948 | 958,618 | 897,948 | 958,618 | |||||||||||||||||||||
Geographic Areas, Long-Lived Assets [Abstract] | |||||||||||||||||||||||||
Disclosure on Geographic Areas, Long-Lived Assets in Entity's Country of Domicile | [3] | $ 294,410 | $ 313,759 | 294,410 | 313,759 | ||||||||||||||||||||
The Children's Place U.S. | |||||||||||||||||||||||||
Segment information | |||||||||||||||||||||||||
Impairment of Long-Lived Assets Held-for-use | 1,700 | 10,500 | 25,400 | ||||||||||||||||||||||
Severance Costs | $ 6,000 | $ 7,100 | 4,200 | ||||||||||||||||||||||
Number of Stores | 937 | 963 | 937 | 963 | |||||||||||||||||||||
Net sales: | |||||||||||||||||||||||||
Total net sales | $ 1,518,117 | $ 1,528,762 | 1,528,276 | ||||||||||||||||||||||
Gross Profit: | |||||||||||||||||||||||||
Gross Profit | $ 539,030 | $ 535,226 | $ 558,156 | ||||||||||||||||||||||
Gross Margin: | |||||||||||||||||||||||||
Total Gross Margin (as a percent) | 35.50% | 35.00% | 36.50% | ||||||||||||||||||||||
Operating income (loss): | |||||||||||||||||||||||||
Total operating income (loss) | $ 65,221 | $ 63,586 | $ 60,267 | [4] | |||||||||||||||||||||
Operating income (loss) as a percent of net sales: | |||||||||||||||||||||||||
Total operating income (loss) (as a percent) | 4.29618% | 4.15931% | 3.94346% | ||||||||||||||||||||||
Depreciation and amortization: | |||||||||||||||||||||||||
Total depreciation and amortization | $ 55,937 | $ 52,565 | $ 55,595 | ||||||||||||||||||||||
Capital expenditures: | |||||||||||||||||||||||||
Total capital expenditures | 41,304 | 68,847 | 64,486 | ||||||||||||||||||||||
Total assets: | |||||||||||||||||||||||||
Total assets | $ 748,975 | $ 805,462 | 748,975 | 805,462 | |||||||||||||||||||||
Geographic Areas, Long-Lived Assets [Abstract] | |||||||||||||||||||||||||
Disclosure on Geographic Areas, Long-Lived Assets in Entity's Country of Domicile | [3] | $ 276,612 | $ 289,820 | 276,612 | 289,820 | ||||||||||||||||||||
The Children's Place Canada [Member] | |||||||||||||||||||||||||
Segment information | |||||||||||||||||||||||||
Impairment of Long-Lived Assets Held-for-use | $ 700 | $ 600 | 4,200 | ||||||||||||||||||||||
Number of Stores | 132 | 134 | 132 | 134 | |||||||||||||||||||||
Net sales: | |||||||||||||||||||||||||
Total net sales | [5] | $ 207,660 | $ 232,562 | 237,513 | |||||||||||||||||||||
Gross Profit: | |||||||||||||||||||||||||
Gross Profit | $ 86,102 | $ 87,074 | $ 97,365 | ||||||||||||||||||||||
Gross Margin: | |||||||||||||||||||||||||
Total Gross Margin (as a percent) | 41.50% | 37.40% | 41.00% | ||||||||||||||||||||||
Operating income (loss): | |||||||||||||||||||||||||
Total operating income (loss) | $ 24,859 | $ 16,457 | $ 16,016 | ||||||||||||||||||||||
Operating income (loss) as a percent of net sales: | |||||||||||||||||||||||||
Total operating income (loss) (as a percent) | 11.97101% | 7.07639% | 6.74321% | ||||||||||||||||||||||
Depreciation and amortization: | |||||||||||||||||||||||||
Total depreciation and amortization | $ 6,748 | $ 7,929 | $ 9,263 | ||||||||||||||||||||||
Capital expenditures: | |||||||||||||||||||||||||
Total capital expenditures | 841 | 3,365 | $ 8,120 | ||||||||||||||||||||||
Total assets: | |||||||||||||||||||||||||
Total assets | $ 148,973 | $ 153,156 | 148,973 | 153,156 | |||||||||||||||||||||
Geographic Areas, Long-Lived Assets [Abstract] | |||||||||||||||||||||||||
Disclosure on Geographic Areas, Long-Lived Assets in Entity's Country of Domicile | [3] | 16,212 | 22,697 | 16,212 | 22,697 | ||||||||||||||||||||
The Children's Place Asia [Member] [Member] | |||||||||||||||||||||||||
Geographic Areas, Long-Lived Assets [Abstract] | |||||||||||||||||||||||||
Disclosure on Geographic Areas, Long-Lived Assets in Entity's Country of Domicile | [3] | $ 1,586 | 1,242 | $ 1,586 | $ 1,242 | ||||||||||||||||||||
EastCoastDCSeveranceOther [Member] | |||||||||||||||||||||||||
Segment information | |||||||||||||||||||||||||
Impairment of Long-Lived Assets Held-for-use | 4,800 | ||||||||||||||||||||||||
Severance Costs | $ 3,200 | ||||||||||||||||||||||||
|
QUARTERLY FINANCIAL DATA Quarterly Financial Data (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 30, 2016 |
Oct. 31, 2015 |
Aug. 01, 2015 |
May. 02, 2015 |
Jan. 31, 2015 |
Nov. 01, 2014 |
Aug. 02, 2014 |
May. 03, 2014 |
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
|||||||
Net sales | $ 498,544 | [1] | $ 455,913 | $ 366,455 | $ 404,865 | $ 479,243 | [2] | $ 487,304 | $ 384,628 | $ 410,149 | $ 1,725,777 | $ 1,761,324 | $ 1,765,789 | ||||
Gross profit | 177,506 | [1] | 180,513 | 115,004 | 152,109 | 164,810 | [2] | 190,111 | 119,118 | 148,261 | 625,132 | 622,300 | 655,521 | ||||
Selling, general and administrative expenses | 131,245 | [1] | 105,797 | 118,342 | 114,514 | 123,735 | [2] | 116,120 | 117,111 | 113,720 | 469,898 | 470,686 | 485,653 | ||||
Asset impairment charges | 0 | [1] | 919 | 1,452 | 0 | 4,794 | [2] | 3,306 | 3,045 | 0 | 2,371 | 11,145 | 29,633 | ||||
Other costs (income) | 11 | 14 | 76 | (3) | 85 | (286) | (98) | 231 | 98 | (68) | (906) | ||||||
Depreciation and amortization | 16,903 | [1] | 16,136 | 15,252 | 14,394 | 15,542 | [2] | 15,168 | 15,557 | 14,227 | 62,685 | 60,494 | 64,858 | ||||
Operating income (loss) | 29,347 | [1] | 57,647 | (20,118) | 23,204 | 20,654 | [2] | 55,803 | (16,497) | 20,083 | 90,080 | 80,043 | 76,283 | ||||
Income (loss) from continuing operations before income taxes | 29,284 | [1] | 57,393 | (20,323) | 23,028 | 20,609 | [2] | 55,721 | (16,557) | 20,102 | 89,382 | 79,875 | 76,548 | ||||
Provision (benefit) for income taxes | 11,807 | [1] | 18,898 | (6,628) | 7,421 | 3,572 | [2] | 18,779 | (5,870) | 6,506 | $ 31,498 | $ 22,987 | $ 23,522 | ||||
Income (loss) from continuing operations | $ 17,477 | [1] | $ 38,495 | $ (13,695) | $ 15,607 | $ 17,037 | [2] | $ 36,942 | $ (10,687) | $ 13,596 | |||||||
Diluted earnings (loss) per share from continuing operations | $ 0 | [1] | $ 1.88 | $ (0.67) | $ 0.73 | $ 0.79 | [2] | $ 1.70 | $ 0 | $ 0.61 | $ 2.80 | $ 2.59 | $ 2.32 | ||||
Diluted weighted average common shares outstanding (in shares) | 20,174 | 20,517 | 20,576 | 21,366 | 21,512 | 21,756 | 21,837 | 22,419 | 20,702 | 21,924 | 22,835 | ||||||
State | $ 2,275 | $ 3,691 | $ 4,371 | ||||||||||||||
Share-based Compensation | $ 21,119 | $ 17,783 | $ 21,210 | ||||||||||||||
Severance Costs | $ 4,400 | ||||||||||||||||
Cash dividends declared and paid per common share | $ 0.1500 | $ 0.1500 | $ 0.1500 | $ 0.1500 | $ 0.20 | ||||||||||||
Disposition stores [Member] | |||||||||||||||||
Asset impairment charges | $ 4,800 | ||||||||||||||||
Severance Costs | $ 3,200 | ||||||||||||||||
|
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
2 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 24, 2015 |
Jan. 30, 2016 |
Oct. 31, 2015 |
Aug. 01, 2015 |
May. 02, 2015 |
Jan. 31, 2015 |
Nov. 01, 2014 |
Aug. 02, 2014 |
May. 03, 2014 |
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
|
Subsequent Events | ||||||||||||
Stock Repurchased and Retired During Period, Shares | (2,008) | (1,493) | (1,298) | |||||||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.1500 | $ 0.1500 | $ 0.1500 | $ 0.1500 | $ 0.20 | |||||||
Business Exit Costs | $ 11 | $ 14 | $ 76 | $ (3) | $ 85 | $ (286) | $ (98) | $ 231 | $ 98 | $ (68) | $ (906) | |
Line of Credit Facility, Maximum Borrowing Capacity | 250,000 | $ 200,000 | 250,000 | $ 200,000 | ||||||||
Line Of Credit Facility Accordion Borrowing Capacity | $ 50,000 | 50,000 | ||||||||||
2014 Share Repurchase Program [Member] [Member] | ||||||||||||
Subsequent Events | ||||||||||||
Stock Repurchased and Retired During Period, Shares | 300 | |||||||||||
Value of shares repurchased | $ 22,300 | $ 1,600 | ||||||||||
2014 Share Repurchase Program [Member] [Member] | ||||||||||||
Subsequent Events | ||||||||||||
Stock Repurchased and Retired During Period, Shares | 1,338 | |||||||||||
Value of shares repurchased | $ 79,274 |
SCHEDULE II SCHEUDLE II (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
Feb. 02, 2013 |
||||
Valuation Allowances and Reserves, Balance | [1] | $ 3,696 | $ 1,925 | $ 4,268 | $ 2,413 | ||
Valuation Allowances and Reserves, Charged to Cost and Expense | [1] | 2,356 | 0 | 1,881 | |||
Valuation Allowances and Reserves, Deductions | [1] | $ (585) | $ (2,343) | $ (26) | |||
|
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