☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
Tennessee | 62-1287151 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
5310 Maryland Way, Brentwood, TN | 37027 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of Each Exchange on Which Registered | |
Common Stock, no par value per share | The Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☒ | |||
Emerging growth company | ☐ |
Page | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
Item 15. | ||
Item 16. | ||
Item 1. | Business |
% of Net Sales | ||||||||
Merchandise Category | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | |||||
Holiday | 17 | % | 16 | % | 14 | % | ||
Furniture | 11 | 11 | 10 | |||||
Art | 10 | 11 | 12 | |||||
Fragrance and Accessories | 10 | 9 | 10 | |||||
Ornamental Wall Décor | 9 | 9 | 10 | |||||
Decorative Accessories | 6 | 6 | 6 | |||||
Mirrors | 6 | 7 | 7 | |||||
Lamps | 6 | 7 | 6 | |||||
Textiles | 6 | 5 | 7 | |||||
Floral | 4 | 4 | 3 | |||||
Gift | 4 | 4 | 4 | |||||
Housewares | 4 | 4 | 5 | |||||
Outdoor Living | 3 | 3 | 2 | |||||
Frames | 2 | 2 | 2 | |||||
Clocks | 2 | 2 | 2 | |||||
Total | 100 | % | 100 | % | 100 | % |
Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | Fiscal 2014 | ||||||||||
Stores open at beginning of period | 418 | 404 | 376 | 344 | 324 | |||||||||
Store openings | 25 | 31 | 42 | 43 | 34 | |||||||||
Store closings | (15 | ) | (17 | ) | (14 | ) | (11 | ) | (14 | ) | ||||
Stores open at end of period | 428 | 418 | 404 | 376 | 344 |
Item 1A. | Risk Factors |
• | locate and obtain favorable store sites and negotiate acceptable lease terms; |
• | construct or refurbish store sites; |
• | obtain and distribute adequate product supplies to our stores; |
• | maintain adequate warehousing and distribution capability at acceptable costs; |
• | hire, train and retain skilled managers and personnel; and |
• | continue to upgrade our information and other operating systems to control the anticipated growth and expanded operations. |
• | fire, flood and other natural disasters; |
• | power loss, computer systems failures, internet and telecommunications or data network failure, operator negligence, improper operation by or supervision of employees, physical and electronic loss of data or security breaches, misappropriation and similar events; and |
• | computer viruses and malicious attacks and security breaches. |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
State | Number of Stores | State | Number of Stores | |||||
Texas | 63 | Mississippi | 9 | |||||
Florida | 38 | Arkansas | 8 | |||||
California | 28 | Oklahoma | 8 | |||||
Georgia | 25 | New York | 7 | |||||
North Carolina | 23 | Colorado | 5 | |||||
Tennessee | 20 | Kansas | 5 | |||||
Alabama | 16 | Wisconsin | 5 | |||||
Louisiana | 15 | Delaware | 4 | |||||
Arizona | 14 | Maryland | 4 | |||||
Illinois | 13 | Minnesota | 4 | |||||
Pennsylvania | 13 | Nevada | 3 | |||||
Virginia | 13 | Utah | 3 | |||||
Missouri | 11 | Iowa | 2 | |||||
Ohio | 11 | Nebraska | 2 | |||||
South Carolina | 11 | New Mexico | 2 | |||||
Indiana | 10 | North Dakota | 2 | |||||
Michigan | 10 | South Dakota | 1 | |||||
New Jersey | 10 | West Virginia | 1 | |||||
Kentucky | 9 | |||||||
Total | 428 |
Item 3. | Legal Proceedings |
Item 4. | Mine Safety Disclosures |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Fiscal 2018 | Fiscal 2017 | ||||||||||||||
High | Low | High | Low | ||||||||||||
First Quarter | $ | 11.89 | $ | 8.74 | $ | 13.88 | $ | 10.88 | |||||||
Second Quarter | $ | 12.83 | $ | 10.26 | $ | 12.18 | $ | 8.64 | |||||||
Third Quarter | $ | 12.12 | $ | 9.02 | $ | 12.49 | $ | 8.23 | |||||||
Fourth Quarter | $ | 11.14 | $ | 7.53 | $ | 13.20 | $ | 10.61 |
Period | Total Number of Shares Repurchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Dollar Value of Shares that May Yet Be Purchased (in 000s) | ||||||||||
November 4, 2018 to December 1, 2018 | 227,875 | $ | 9.22 | 227,875 | $ | 6,937 | ||||||||
December 2, 2018 to January 5, 2019 | 242,917 | 9.31 | 242,917 | 4,676 | ||||||||||
January 6, 2019 to February 2, 2019 | 97,839 | 10.19 | 97,839 | 3,679 | ||||||||||
Total | 568,631 | $ | 9.42 | 568,631 | $ | 3,679 |
Item 6. | Selected Financial Data |
Fiscal Year (1) | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
(Numbers in thousands, except store, square footage data and per share amounts) | |||||||||||||||||||
Summary of Operations | |||||||||||||||||||
Net sales (2) | $ | 647,071 | $ | 634,117 | $ | 594,328 | $ | 561,807 | $ | 507,621 | |||||||||
Gross profit | 203,069 | 207,536 | 202,492 | 202,501 | 188,712 | ||||||||||||||
Operating expenses | 198,188 | 198,184 | 185,493 | 176,310 | 160,071 | ||||||||||||||
Operating income | 4,881 | 9,352 | 16,999 | 26,191 | 28,641 | ||||||||||||||
Income before income taxes | 5,811 | 9,816 | 16,975 | 26,097 | 28,820 | ||||||||||||||
Net income | 3,780 | 5,296 | 11,046 | 16,573 | 17,814 | ||||||||||||||
GAAP diluted earnings per share | $ | 0.24 | $ | 0.33 | $ | 0.68 | $ | 0.94 | $ | 1.00 | |||||||||
Dividends declared per common share outstanding | $ | — | $ | — | $ | — | $ | 1.50 | $ | — | |||||||||
Other Financial Data | |||||||||||||||||||
Comparable store sales (decrease) increase (3) | (1.3 | )% | 0.3 | % | (2.9 | )% | 2.9 | % | 6.1 | % | |||||||||
Number of stores at year end | 428 | 418 | 404 | 376 | 344 | ||||||||||||||
Average net sales per store (4) | $ | 1,323 | $ | 1,389 | $ | 1,385 | $ | 1,454 | $ | 1,441 | |||||||||
Average net sales per gross square foot (5) | $ | 166 | $ | 176 | $ | 179 | $ | 191 | $ | 191 | |||||||||
Average net sales per selling square foot (6) | $ | 225 | $ | 238 | $ | 241 | $ | 257 | $ | 257 | |||||||||
Average gross square footage per store at fiscal year end | 7,958 | 7,893 | 7,798 | 7,666 | 7,550 | ||||||||||||||
Merchandise margin as a percentage of net sales (7) | 54.2 | % | 54.3 | % | 54.5 | % | 54.7 | % | 55.4 | % | |||||||||
Gross profit as a percentage of net sales | 31.4 | % | 32.7 | % | 34.1 | % | 36.0 | % | 37.2 | % | |||||||||
Operating expenses as a percentage of net sales | 30.6 | % | 31.3 | % | 31.2 | % | 31.4 | % | 31.5 | % | |||||||||
Effective tax rate | 35.0 | % | 46.0 | % | 34.9 | % | 36.5 | % | 38.2 | % | |||||||||
Return on assets (ROA) (8) | 1.3 | % | 1.9 | % | 4.4 | % | 6.7 | % | 7.3 | % | |||||||||
Return on equity (ROE) (9) | 2.8 | % | 3.9 | % | 8.7 | % | 12.2 | % | 12.4 | % | |||||||||
Balance Sheet Data | |||||||||||||||||||
Current assets | $ | 157,941 | $ | 177,399 | $ | 153,040 | $ | 127,780 | $ | 163,791 | |||||||||
Current liabilities | $ | 86,536 | $ | 96,940 | $ | 74,441 | $ | 59,495 | $ | 57,380 | |||||||||
Working capital | $ | 71,405 | $ | 80,459 | $ | 78,599 | $ | 68,285 | $ | 106,411 | |||||||||
Total assets | $ | 277,148 | $ | 299,197 | $ | 270,146 | $ | 235,256 | $ | 256,949 | |||||||||
Total liabilities | $ | 146,348 | $ | 158,436 | $ | 136,333 | $ | 115,561 | $ | 105,887 | |||||||||
Total shareholders’ equity | $ | 130,800 | $ | 140,761 | $ | 133,813 | $ | 119,695 | $ | 151,062 |
(1) | Fiscal 2017 includes 53 weeks. Other fiscal years presented include 52 weeks. |
(2) | Net sales include gift card breakage revenue of approximately $1.1 million in fiscal 2018, as compared to approximately $0.8 million, $1.1 million, $1.0 million, and $0.9 million in fiscal years 2017, 2016, 2015, and 2014, respectively. |
(3) | Comparable store sales are calculated by including new stores in the comparable store sales base on the first day of the month following the 13th full fiscal month of sales. Stores closed during the year are included in the comparable store sales calculation only for the full fiscal months of the year in which the stores were open. Relocated stores are removed from the comparable store base when the existing store closes, and the new replacement store is added into the comparable store sales calculation after 13 full fiscal months of activity. The e-commerce store is included in comparable store sales. The fiscal 2017 comparable store sales increase is shown on a 52-week basis. |
(4) | Based on the average net sales of all stores that were open at both the beginning and end of the period and excludes e-commerce store sales and gift card breakage revenue. |
(5) | Calculated using the gross square footage of all stores open at both the beginning and the end of the period. |
(6) | Calculated using the selling square footage (excluding storage, receiving and office space square footage) of all stores open at both the beginning and the end of the period. |
(7) | Merchandise margin is calculated as net sales minus product cost of sales (including inbound freight, damages and inventory shrinkage and loyalty reward program charges). Merchandise margin excludes outbound freight costs (including e-commerce shipping), store occupancy costs, central distribution costs and depreciation of leasehold improvements, equipment and other property in our stores and distribution centers. |
(8) | Return on assets equals net income divided by average total assets. |
(9) | Return on equity equals net income divided by average total shareholders’ equity. |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
As of February 2, 2019 | As of February 3, 2018 | ||||
Number of stores | 428 | 418 | |||
Square footage | 3,405,830 | 3,299,172 | |||
Average square footage per store | 7,958 | 7,893 |
Fiscal 2018 | Fiscal 2017 | Change | ||||||||||||||||||
$ | % | $ | % | $ | % | |||||||||||||||
Net sales | 647,071 | 100.0 | % | 634,117 | 100.0 | % | 12,954 | 2.0 | % | |||||||||||
Cost of sales | 444,002 | 68.6 | 426,581 | 67.3 | 17,421 | 4.1 | ||||||||||||||
Gross profit | 203,069 | 31.4 | 207,536 | 32.7 | (4,467 | ) | (2.2 | ) | ||||||||||||
Operating expenses: | ||||||||||||||||||||
Compensation and benefits | 116,272 | 18.0 | 116,895 | 18.4 | (623 | ) | (0.5 | ) | ||||||||||||
Other operating expenses | 74,682 | 11.6 | 74,299 | 11.7 | 383 | 0.5 | ||||||||||||||
Depreciation (exclusive of depreciation included in cost of sales) | 7,234 | 1.1 | 6,990 | 1.1 | 244 | 3.5 | ||||||||||||||
Operating income | 4,881 | 0.7 | 9,352 | 1.5 | (4,471 | ) | (47.8 | ) | ||||||||||||
Interest expense | 267 | — | 275 | — | (8 | ) | (2.9 | ) | ||||||||||||
Other income | (1,197 | ) | (0.2 | ) | (739 | ) | — | (458 | ) | 62.0 | ||||||||||
Income before income taxes | 5,811 | 0.9 | 9,816 | 1.5 | (4,005 | ) | (40.8 | ) | ||||||||||||
Income tax expense | 2,031 | 0.3 | 4,520 | 0.7 | (2,489 | ) | (55.1 | ) | ||||||||||||
Net income | $ | 3,780 | 0.6 | % | $ | 5,296 | 0.8 | % | $ | (1,516 | ) | (28.6 | )% |
Fiscal 2017 | Fiscal 2016 | Change | ||||||||||||||||||
$ | % | $ | % | $ | % | |||||||||||||||
Net sales | 634,117 | 100.0 | % | 594,328 | 100.0 | % | 39,789 | 6.7 | % | |||||||||||
Cost of sales | 426,581 | 67.3 | 391,836 | 65.9 | 34,745 | 8.9 | ||||||||||||||
Gross profit | 207,536 | 32.7 | 202,492 | 34.1 | 5,044 | 2.5 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||
Compensation and benefits | 116,895 | 18.4 | 110,277 | 18.5 | 6,618 | 6.0 | ||||||||||||||
Other operating expenses | 74,299 | 11.7 | 68,873 | 11.6 | 5,426 | 7.9 | ||||||||||||||
Depreciation (exclusive of depreciation included in cost of sales) | 6,990 | 1.1 | 6,343 | 1.1 | 647 | 10.2 | ||||||||||||||
Operating income | 9,352 | 1.5 | 16,999 | 2.9 | (7,647 | ) | (45.0 | ) | ||||||||||||
Interest expense | 275 | — | 276 | — | (1 | ) | (0.4 | ) | ||||||||||||
Other income | (739 | ) | — | (252 | ) | — | (487 | ) | 193.3 | |||||||||||
Income before income taxes | 9,816 | 1.5 | 16,975 | 2.9 | (7,159 | ) | (42.2 | ) | ||||||||||||
Income tax expense | 4,520 | 0.7 | 5,929 | 1.0 | (1,409 | ) | (23.8 | ) | ||||||||||||
Net income | $ | 5,296 | 0.8 | % | $ | 11,046 | 1.9 | % | $ | (5,750 | ) | (52.1 | )% |
52-Week Period Ended | 53-Week Period Ended | ||||
February 2, 2019 | February 3, 2018 | ||||
Shares repurchased and retired | 1,650,748 | 51,923 | |||
Share repurchase cost | 15,717 | 604 |
52 Weeks Ended February 2, 2019 | 53 Weeks Ended February 3, 2018 | 52 Weeks Ended January 28, 2017 | |||||||||
Related Party Vendor | |||||||||||
Purchases | $ | 54,280 | $ | 57,427 | $ | 44,703 | |||||
Purchases as a percent of total merchandise purchases | 20.7 | % | 21.5 | % | 17.6 | % | |||||
Cost of Sales | $ | 53,253 | $ | 51,646 | $ | 40,560 | |||||
Payable amounts outstanding at fiscal year end | $ | 8,166 | $ | 7,523 | $ | 5,008 |
Item 7A. | Quantitative and Qualitative Disclosure About Market Risk |
Item 8. | Financial Statements and Supplementary Data |
February 2, 2019 | February 3, 2018 | ||||||
(In thousands, except share data) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 57,946 | $ | 80,156 | |||
Inventories, net | 84,434 | 81,255 | |||||
Prepaid expenses and other current assets | 15,561 | 15,988 | |||||
Total current assets | 157,941 | 177,399 | |||||
Property and equipment: | |||||||
Equipment | 21,425 | 20,835 | |||||
Furniture and fixtures | 81,523 | 80,299 | |||||
Leasehold improvements | 126,784 | 119,272 | |||||
Computer software and hardware | 69,444 | 59,331 | |||||
Projects in progress | 8,344 | 7,685 | |||||
Property and equipment, gross | 307,520 | 287,422 | |||||
Accumulated depreciation | (196,697 | ) | (174,383 | ) | |||
Property and equipment, net | 110,823 | 113,039 | |||||
Deferred income taxes | 1,703 | 2,216 | |||||
Other assets | 6,681 | 6,543 | |||||
Total assets | $ | 277,148 | $ | 299,197 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 40,004 | $ | 45,602 | |||
Accounts payable to related party vendor | 8,166 | 7,523 | |||||
Income taxes payable | 701 | 4,943 | |||||
Accrued expenses | 37,665 | 38,872 | |||||
Total current liabilities | 86,536 | 96,940 | |||||
Deferred rent | 51,871 | 53,303 | |||||
Other liabilities | 7,941 | 8,193 | |||||
Total liabilities | 146,348 | 158,436 | |||||
Commitments and contingencies (Note 8) | — | — | |||||
Shareholders’ equity: | |||||||
Preferred stock, no par value, 10,000,000 shares authorized; no shares issued or outstanding at February 2, 2019, and February 3, 2018 | — | — | |||||
Common stock, no par value, 100,000,000 shares authorized; 14,504,824 and 15,977,239 shares issued and outstanding at February 2, 2019, and February 3, 2018, respectively | 169,477 | 167,501 | |||||
Accumulated deficit | (38,677 | ) | (26,740 | ) | |||
Total shareholders’ equity | 130,800 | 140,761 | |||||
Total liabilities and shareholders’ equity | $ | 277,148 | $ | 299,197 |
52 Weeks Ended February 2, 2019 | 53 Weeks Ended February 3, 2018 | 52 Weeks Ended January 28, 2017 | |||||||||
(In thousands, except per share data) | |||||||||||
Net sales | $ | 647,071 | $ | 634,117 | $ | 594,328 | |||||
Cost of sales | 390,749 | 374,935 | 351,276 | ||||||||
Cost of sales related to merchandise purchased from related party vendor | 53,253 | 51,646 | 40,560 | ||||||||
Cost of sales | 444,002 | 426,581 | 391,836 | ||||||||
Gross profit | 203,069 | 207,536 | 202,492 | ||||||||
Operating expenses: | |||||||||||
Compensation and benefits | 116,272 | 116,895 | 110,277 | ||||||||
Other operating expenses | 74,682 | 74,299 | 68,873 | ||||||||
Depreciation (exclusive of depreciation included in cost of sales) | 7,234 | 6,990 | 6,343 | ||||||||
Total operating expenses | 198,188 | 198,184 | 185,493 | ||||||||
Operating income | 4,881 | 9,352 | 16,999 | ||||||||
Interest expense | 267 | 275 | 276 | ||||||||
Other income | (1,197 | ) | (739 | ) | (252 | ) | |||||
Income before income taxes | 5,811 | 9,816 | 16,975 | ||||||||
Income tax expense | 2,031 | 4,520 | 5,929 | ||||||||
Net income | $ | 3,780 | $ | 5,296 | $ | 11,046 | |||||
Earnings per share: | |||||||||||
Basic | $ | 0.24 | $ | 0.33 | $ | 0.70 | |||||
Diluted | $ | 0.24 | $ | 0.33 | $ | 0.68 | |||||
Weighted average shares outstanding: | |||||||||||
Basic | 15,445 | 15,973 | 15,859 | ||||||||
Effect of dilutive common stock equivalents | 121 | 193 | 286 | ||||||||
Diluted | 15,566 | 16,166 | 16,145 |
Common Stock | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||
Shares | Amount | |||||||||||||
(In thousands, except share data) | ||||||||||||||
Balance at January 30, 2016 | 15,774,681 | $ | 162,173 | $ | (42,478 | ) | $ | 119,695 | ||||||
Employee stock purchases | 31,879 | 369 | — | 369 | ||||||||||
Exercise of stock options | 35,000 | — | — | — | ||||||||||
Restricted stock issued | 96,751 | — | — | — | ||||||||||
Net share settlement of stock options and restricted stock | (31,676 | ) | (263 | ) | — | (263 | ) | |||||||
Tax shortfall from exercise of stock options and vesting of restricted stock | — | (228 | ) | — | (228 | ) | ||||||||
Stock-based compensation expense | — | 3,194 | — | 3,194 | ||||||||||
Net income | — | — | 11,046 | 11,046 | ||||||||||
Balance at January 28, 2017 | 15,906,635 | 165,245 | (31,432 | ) | 133,813 | |||||||||
Employee stock purchases | 34,963 | 328 | — | 328 | ||||||||||
Exercise of stock options | 28,346 | — | — | — | ||||||||||
Restricted stock issued | 103,479 | — | — | — | ||||||||||
Net share settlement of stock options and restricted stock | (44,261 | ) | (206 | ) | — | (206 | ) | |||||||
Stock-based compensation expense | — | 2,134 | — | 2,134 | ||||||||||
Repurchase and retirement of common stock | (51,923 | ) | — | (604 | ) | (604 | ) | |||||||
Net income | — | — | 5,296 | 5,296 | ||||||||||
Balance at February 3, 2018 | 15,977,239 | 167,501 | (26,740 | ) | 140,761 | |||||||||
Employee stock purchases | 37,128 | 320 | — | 320 | ||||||||||
Exercise of stock options | 177,526 | 23 | — | 23 | ||||||||||
Restricted stock issued | 110,400 | — | — | — | ||||||||||
Net share settlement of stock options and restricted stock | (146,721 | ) | (382 | ) | — | (382 | ) | |||||||
Stock-based compensation expense | — | 2,015 | — | 2,015 | ||||||||||
Repurchase and retirement of common stock | (1,650,748 | ) | — | (15,717 | ) | (15,717 | ) | |||||||
Net income | — | — | 3,780 | 3,780 | ||||||||||
Balance at February 2, 2019 | 14,504,824 | $ | 169,477 | $ | (38,677 | ) | $ | 130,800 |
52 Weeks Ended February 2, 2019 | 53 Weeks Ended February 3, 2018 | 52 Weeks Ended January 28, 2017 | |||||||||
(In thousands) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 3,780 | $ | 5,296 | $ | 11,046 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation of property and equipment | 29,453 | 27,150 | 25,322 | ||||||||
Amortization of deferred rent | (9,222 | ) | (8,147 | ) | (5,779 | ) | |||||
Amortization of debt issue costs | 54 | 54 | 89 | ||||||||
Loss on disposal of property and equipment | 383 | 173 | 313 | ||||||||
Stock-based compensation expense | 2,015 | 2,134 | 3,194 | ||||||||
Deferred income taxes | 513 | (1,497 | ) | (2,242 | ) | ||||||
Changes in assets and liabilities: | |||||||||||
Inventories, net | (3,179 | ) | (8,064 | ) | (7,137 | ) | |||||
Prepaid expenses and other current assets | 633 | (75 | ) | 1,462 | |||||||
Other noncurrent assets | (192 | ) | (1,559 | ) | (2,922 | ) | |||||
Accounts payable | (4,443 | ) | 11,644 | 7,672 | |||||||
Accounts payable to related party vendor | 643 | 2,515 | 2,750 | ||||||||
Income taxes (refundable) payable | (4,448 | ) | (1,331 | ) | 1,363 | ||||||
Accrued expenses and other current and noncurrent liabilities | 6,331 | 16,832 | 16,795 | ||||||||
Net cash provided by operating activities | 22,321 | 45,125 | 51,926 | ||||||||
Cash flows from investing activities: | |||||||||||
Proceeds from sales of property and equipment | — | — | 4 | ||||||||
Capital expenditures | (28,775 | ) | (28,424 | ) | (32,180 | ) | |||||
Net cash used in investing activities | (28,775 | ) | (28,424 | ) | (32,176 | ) | |||||
Cash flows from financing activities: | |||||||||||
Refinancing costs | — | — | (271 | ) | |||||||
Cash used in net share settlement of stock options and restricted stock | (382 | ) | (206 | ) | (263 | ) | |||||
Proceeds received from employee stock option exercises | 23 | — | — | ||||||||
Employee stock purchases | 320 | 328 | 369 | ||||||||
Repurchase and retirement of common stock | (15,717 | ) | (604 | ) | — | ||||||
Net cash used in financing activities | (15,756 | ) | (482 | ) | (165 | ) | |||||
Cash and cash equivalents: | |||||||||||
Net (decrease) increase | (22,210 | ) | 16,219 | 19,585 | |||||||
Beginning of the year | 80,156 | 63,937 | 44,352 | ||||||||
End of the year | $ | 57,946 | $ | 80,156 | $ | 63,937 | |||||
Supplemental cash flow information: | |||||||||||
Interest paid | $ | 190 | $ | 190 | $ | 159 | |||||
Income taxes paid | $ | 5,966 | $ | 7,614 | $ | 7,214 | |||||
Supplemental schedule of non-cash activities: | |||||||||||
Non-cash accruals for purchases of property and equipment | $ | 1,272 | $ | 2,427 | $ | 1,359 |
February 2, 2019 | February 3, 2018 | ||||||
Salaries and wages | $ | 5,555 | $ | 5,704 | |||
Gift cards | 13,032 | 11,326 | |||||
Sales taxes | 1,552 | 2,596 | |||||
Deferred rent | 10,591 | 10,206 | |||||
Workers’ compensation and general liability reserves | 2,894 | 3,137 | |||||
Sales return reserve | 1,520 | 1,520 | |||||
Other | 2,521 | 4,383 | |||||
$ | 37,665 | $ | 38,872 |
52 Weeks Ended February 2, 2019 | 53 Weeks Ended February 3, 2018 | 52 Weeks Ended January 28, 2017 | |||||||||
Current tax expense: | |||||||||||
Federal | $ | 708 | $ | 5,141 | $ | 7,325 | |||||
State | 810 | 876 | 845 | ||||||||
Deferred tax expense (benefit): | |||||||||||
Federal | 455 | (1,207 | ) | (1,379 | ) | ||||||
State | 58 | (290 | ) | (862 | ) | ||||||
$ | 2,031 | $ | 4,520 | $ | 5,929 |
52 Weeks Ended February 2, 2019 | 53 Weeks Ended February 3, 2018 | 52 Weeks Ended January 28, 2017 | |||||||||
Tax at federal statutory rate | $ | 1,220 | $ | 3,308 | $ | 5,941 | |||||
State income taxes, net of federal benefit | 651 | 559 | 598 | ||||||||
Tax credits | (437 | ) | (174 | ) | (255 | ) | |||||
Enactment of tax legislation | — | 419 | — | ||||||||
Unrecognized tax positions | — | (185 | ) | (202 | ) | ||||||
Stock based compensation programs | 545 | 575 | 23 | ||||||||
Other | 52 | 18 | (176 | ) | |||||||
Income tax expense | $ | 2,031 | $ | 4,520 | $ | 5,929 |
February 2, 2019 | February 3, 2018 | ||||||
Deferred tax assets: | |||||||
Accruals | $ | 2,914 | $ | 2,884 | |||
Inventory valuation | 664 | 671 | |||||
State tax credit carryforwards | 144 | 197 | |||||
State net operating loss carryforwards | 85 | 14 | |||||
Deferred rent | 3,755 | 3,966 | |||||
Other | 3,294 | 3,933 | |||||
Total deferred tax assets | 10,856 | 11,665 | |||||
Valuation allowance for deferred tax assets | (83 | ) | (73 | ) | |||
Net deferred tax assets | 10,773 | 11,592 | |||||
Deferred tax liabilities: | |||||||
Depreciation | (8,352 | ) | (8,742 | ) | |||
Prepaid assets | (718 | ) | (634 | ) | |||
Total deferred tax liabilities | (9,070 | ) | (9,376 | ) | |||
Net deferred tax assets | $ | 1,703 | $ | 2,216 |
52 Weeks Ended February 2, 2019 | 53 Weeks Ended February 3, 2018 | ||||||
(In thousands) | |||||||
Balance at the beginning of the year | $ | — | $ | 144 | |||
Reductions due to lapse of the statute of limitations | — | (144 | ) | ||||
Balance at the end of the year | $ | — | $ | — |
52 Weeks Ended February 2, 2019 | 53 Weeks Ended February 3, 2018 | 52 Weeks Ended January 28, 2017 | |||||||||
Minimum rent | $ | 55,596 | $ | 57,330 | $ | 53,329 | |||||
Contingent rent | 1,553 | 1,786 | 2,019 | ||||||||
$ | 57,149 | $ | 59,116 | $ | 55,348 |
(In thousands) | |||
2019 | $ | 67,354 | |
2020 | 62,102 | ||
2021 | 53,164 | ||
2022 | 44,087 | ||
2023 | 35,606 | ||
Thereafter | 91,629 | ||
Total minimum lease payments | $ | 353,942 |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | ||||||
Balance at February 3, 2018 | 1,239,201 | $ | 13.22 | |||||
Options granted | 157,700 | 12.54 | ||||||
Options exercised | (177,526 | ) | 8.05 | |||||
Options forfeited | (319,280 | ) | 15.40 | |||||
Options expired | (3,750 | ) | 14.87 | |||||
Balance at February 2, 2019 | 896,345 | $ | 13.35 | 5.3 | ||||
Options Exercisable As of: | ||||||||
February 2, 2019 | 588,290 | $ | 14.12 | 3.6 |
52 Weeks Ended February 2, 2019 | 53 Weeks Ended February 3, 2018 | 52 Weeks Ended January 28, 2017 | ||||||
Expected price volatility | 47 | % | 46 | % | 48 | % | ||
Risk-free interest rate | 2.79 | % | 1.96 | % | 1.68 | % | ||
Expected life | 6.3 years | 6.3 years | 6.3 years | |||||
Dividend yield | 0 | % | 0 | % | 0 | % |
Shares | Weighted Average Grant Date Fair Value | |||||
Non-Vested at February 3, 2018 | 245,700 | $ | 13.29 | |||
Granted | 243,734 | 10.83 | ||||
Vested | (110,400 | ) | 15.98 | |||
Forfeited | (64,750 | ) | 12.00 | |||
Non-Vested at February 2, 2019 | 314,284 | $ | 10.71 |
52 Weeks Ended February 2, 2019 | 53 Weeks Ended February 3, 2018 | 52 Weeks Ended January 28, 2017 | |||||||||
Related Party Vendor | |||||||||||
Purchases | $ | 54,280 | $ | 57,427 | $ | 44,703 | |||||
Purchases as a percent of total merchandise purchases | 20.7 | % | 21.5 | % | 17.6 | % |
52-Week Period Ended | 53-Week Period Ended | ||||||
February 2, 2019 | February 3, 2018 | ||||||
Shares repurchased and retired | 1,650,748 | 51,923 | |||||
Share repurchase cost | $ | 15,717 | $ | 604 |
Fiscal 2018 Quarter Ended | |||||||||||||||
May 5, 2018 | August 4, 2018 | November 3, 2018 | February 2, 2019 | ||||||||||||
Net sales | $ | 142,454 | $ | 133,899 | $ | 154,571 | $ | 216,147 | |||||||
Gross profit | 45,312 | 36,798 | 46,653 | 74,306 | |||||||||||
Operating (loss) income | (1,620 | ) | (8,961 | ) | (3,618 | ) | 19,080 | ||||||||
Net (loss) income | (882 | ) | (6,715 | ) | (2,780 | ) | 14,157 | ||||||||
(Loss) earnings per share: | |||||||||||||||
Basic | (0.06 | ) | (0.43 | ) | (0.18 | ) | 0.96 | ||||||||
Diluted | (0.06 | ) | (0.43 | ) | (0.18 | ) | 0.95 | ||||||||
Fiscal 2017 Quarter Ended | |||||||||||||||
April 29, 2017 | July 29, 2017 | October 28, 2017 | February 3, 2018 | ||||||||||||
Net sales | $ | 132,841 | $ | 131,683 | $ | 144,979 | $ | 224,614 | |||||||
Gross profit | 42,848 | 40,086 | 45,471 | 79,131 | |||||||||||
Operating (loss) income | (2,278 | ) | (5,696 | ) | (3,767 | ) | 21,093 | ||||||||
Net (loss) income | (1,435 | ) | (3,772 | ) | (2,362 | ) | 12,865 | ||||||||
(Loss) earnings per share: | |||||||||||||||
Basic | (0.09 | ) | (0.24 | ) | (0.15 | ) | 0.80 | ||||||||
Diluted | (0.09 | ) | (0.24 | ) | (0.15 | ) | 0.79 |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
Item 9B. | Other Information |
Item 10. | Directors, Executive Officers and Corporate Governance |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||
(a) | (b) | (c) | ||||||||
Equity compensation plans approved by security holders: | ||||||||||
Equity Incentive Plan | 1,210,629 | 12.66 | 878,355 | |||||||
Employee Stock Purchase Plan | — | — | 104,198 | |||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||
Total | 1,210,629 | $ | 12.66 | 982,553 |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Item 14. | Principal Accounting Fees and Services |
Item 15. | Exhibits and Financial Statement Schedules |
Exhibit Number | Description | |||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
— | ||||
101 | — | Interactive Data File (Annual Report on form 10-K, for the year ended February 2, 2019, furnished in XBRL (eXtensible Business Reporting Language)) |
* | Incorporated by reference. |
+ | Management contract of compensatory plan or arrangement. |
By: | /S/ Steve C. Woodward | |
Steve C. Woodward | ||
Chief Executive Officer |
Signature | Title | Date | ||
/S/ Steve C. Woodward | Chief Executive Officer and Director | March 29, 2019 | ||
Steve C. Woodward | (Principal Executive Officer) | |||
/S/ Nicole A. Strain | Interim Chief Financial Officer | March 29, 2019 | ||
Nicole A. Strain | (Principal Financial and Accounting Officer) | |||
/S/ Steven J. Collins | Director | March 29, 2019 | ||
Steven J. Collins | ||||
/S/ Miles T. Kirkland | Director | March 29, 2019 | ||
Miles T. Kirkland | ||||
/S/ Susan S. Lanigan | Director | March 29, 2019 | ||
Susan S. Lanigan | ||||
/S/ R. Wilson Orr, III | Director | March 29, 2019 | ||
R. Wilson Orr, III | ||||
/S/ Jeffery C. Owen | Director | March 29, 2019 | ||
Jeffery C. Owen | ||||
/S/ Charlie Pleas, III | Director | March 29, 2019 | ||
Charlie Pleas, III | ||||
/S/ Gregory A. Sandfort | Director | March 29, 2019 | ||
Gregory A. Sandfort | ||||
/S/ Chris L. Shimojima | Director | March 29, 2019 | ||
Chris L. Shimojima |
Whereas | NFI provides storage, reception, distribution, inventory management, value added and logistics services for various products and possesses the know-how, experience, personnel, equipment, space and ability required for providing the services, as defined below, to KIRKLAND’S; |
Whereas | KIRKLAND’S wishes to receive from NFI the logistics services and the value added work set forth in Appendix A to this AGREEMENT (hereinafter, “SERVICES”) for imported products and/or domestically procured products (hereinafter, “GOODS”), in accordance with the appendices to this document as well as the terms and conditions set forth in this AGREEMENT and the appendices hereto; |
Whereas | NFI operates storage and distribution centers that are suitable for providing the SERVICES, including the facility that is located at 1901 Danieldale Road, Lancaster, TX 75134 (hereinafter, “DC”); |
Whereas | the PARTIES wish to memorialize their relationship and their mutual rights and obligations in this AGREEMENT; |
Whereas | the preamble and Appendices A through E to this AGREEMENT constitute an integral part of this AGREEMENT; |
• | The preamble to this AGREEMENT constitutes an integral part hereof. |
• | The appendices to this AGREEMENT constitute an integral part hereof. |
• | The section headings are solely for the sake of convenience and shall not serve to interpret this AGREEMENT. |
2.1 | NFI shall provide the SERVICES for the GOODS that shall be submitted by KIRKLAND’S for handling at NFI’s DC, in accordance with the terms and conditions set forth in this AGREEMENT and pursuant to the requirements set forth in the appendices to this Agreement, unless otherwise instructed in writing by KIRKLAND’S with regard to specific GOODS in particular. The number of square feet at the DC to be designated for KIRKLAND’S GOODS hereunder shall be two hundred thousand (200,000) square feet. KIRKLAND’S shall be responsible for the payment of the fixed fees set forth hereunder for the entire 200,000 square feet, even if the number of square feet actually utilized for the storage of GOODS is less than 200,000. NFI will assure that such space is reserved exclusively for KIRKLAND’s, and if such space is used for any other NFI client KIRKLAND’S will receive credit. |
2.2 | The transfer of GOODS from import or from domestic procurement to NFI’s storage and DC shall be implemented by KIRKLAND’S, at its expense and at its sole responsibility. If KIRKLAND’S should choose to utilize the SERVICES of NFI for this matter, it shall be costed and updated accordingly, including with regard to shipping liability. |
2.3 | The transfer of GOODS from NFI’s DC to the various Distribution points shall be managed and implemented by NFI, at KIRKLAND’S’s expense. |
2.4 | Transfer of KIRKLAND’S’s GOODS to the DC by KIRKLAND’S shall begin on or about July 01, 2019 and shall progress as coordinated between the PARTIES until the date of commencement as defined below. |
2.5 | KIRKLAND’S shall promptly provide up-to-date and reasonably detailed information to NFI regarding the dates of arrival and the type and quantity of the GOODS that are expected to arrive at the DC each time. |
3. | Declarations and undertakings |
3.1 | It is the lessee and legal possessor of the DC under a valid lease (the “Lease”) expiring on April 30, 2020 and NFI has the right to renew the Lease through April 30, 2030. NFI shall promptly provide written notice to KIRKLAND’S of any default or notice of default under the Lease. |
3.2 | It possesses all necessary licenses and permits required to operate the DC and to provide the SERVICES. |
3.3 | It shall ensure that the DC is clean and maintains certification from all applicable regulators. NFI shall ensure that the DC and its operation are in compliance with all applicable Federal, State, or Local laws. |
3.4 | It shall comply in all material respects with the requirements of the Quality Agreement attached hereto as Appendix C, which is hereby incorporated herein by reference |
3.5 | [Intentionally Omitted] |
3.6 | Subject to the Operational Assumptions (as hereinafter defined), NFI has the capacity to prepare orders of different volumes and the ability to deal with different types of carriers. |
3.7 | The DC shall comply with the Warehouse Security Standards set forth on Appendix D. |
3.8 | Upon arrival of the GOODS into the DC, NFI shall conduct an external visual and physical inspection of the most external packaging of the GOODS. If a defect should be discovered in such external packaging of the GOODS that arrive at the DC from KIRKLAND’S (i.e., visible or readily detectable damage to the package, a quantitative discrepancy between the inventory and the details in the shipping documents, and so forth), NFI shall notify KIRKLAND’S in writing providing details of the defect/ fault/shortage. Appendix G sets forth procedures to be followed by NFI in handling and reporting any such defects, damage or discrepancies. |
3.9 | Notification of the visual or readily detectable defect or damage to external packaging inspected by NFI shall be submitted to KIRKLAND’S within one business day from the date of arrival of the GOODS into the DC. |
3.10 | For the avoidance of doubt and subject to Section 7, NFI shall not be liable for any damage of any type or kind whatsoever which it can establish occurred prior to its receipt of the GOODS. |
3.12 | It has seen and examined the DC and its various systems and facilities, the access roads thereto, and the area designated for the GOODS and the SERVICES, and, subject to NFI’s compliance with the terms and conditions of this AGREEMENT, it has found them all to be reasonably suitable for its needs and requirements. |
3.13 | The SERVICES and operating procedures set forth in the appendices to this Agreement were formulated in conjunction with KIRKLAND’S and accurately reflect KIRKLAND’S’s requirements. NFI shall have no obligation to perform any other services that are not contemplated herein or in the Quality Agreement and/or which were not agreed upon separately in writing between the PARTIES. |
3.14 | If necessary, KIRKLAND’S shall appoint a representative on its behalf who shall coordinate the work with NFI, and he/she shall be authorized to act and to obligate KIRKLAND’S with regard to various matters that shall derive from the performance of this AGREEMENT. |
3.15 | KIRKLAND’S shall package, wrap, label and mark its GOODS that are the subject of the SERVICES in all material respects in accordance with all local, state, provincial, federal and international laws, rules, regulations and ordinances (“Applicable Laws”). KIRKLAND’S will provide NFI prior written notice of any materials or substances which constitute “Hazardous Materials.” For purposes of this AGREEMENT, “Hazardous Materials” means any substance which is or becomes regulated under any Applicable Law, statute, regulation, ordinance, rule or order relating to the environment or the transportation or storage of GOODS, materials or substances. For all such materials, products or substances for which Material Safety Data Sheets exist, KIRKLAND’S will provide NFI with the most up-to-date forms and will update NFI with amended Material |
3.16 | KIRKLAND’S warrants that it is either the owner, or the authorized agent of the owner of the GOODS subject to this AGREEMENT and, also, that it is accepting these terms and conditions not only for itself, but also as agent for and on behalf of the owner, if someone else. |
4. | Hours of provision of the SERVICES |
4.1 | On the interim days of holidays and at other times requested, the DC shall be open upon prior coordination between NFI and KIRKLAND’S. Notwithstanding the foregoing, NFI shall be solely responsible for establishing operating hours and, subject to the Operational Assumptions, providing staffing sufficient to provide the SERVICES (including without limitation, during peak volume periods) in accordance with the terms of this AGREEMENT. |
4.1 | KIRKLAND’S and/or anyone on its behalf shall be entitled to visit the DC during normal business hours upon reasonable advance notice. |
5. | The SERVICES |
5.1 | NFI undertakes to supply the SERVICES as set forth in Appendix A to this AGREEMENT in a professional and workmanlike manner, in accordance with prevailing industry standards and in compliance with all Applicable Laws. |
5.2 | This AGREEMENT, together with its Appendices and the Quality Agreement accurately reflects everything agreed between NFI and KIRKLAND’S in all matters pertaining to the SERVICES, including, but not limited to, work procedures, work methods, communications, reports, inventory, stocktaking, allowable depreciation/shrinkage, and so forth. |
5.3 | NFI undertakes to maintain in the DC all the appropriate systems and infrastructure, as well as the professional personnel required, to fulfill all its undertakings as set forth in this AGREEMENT and the appendices hereto. |
5.4 | The date of commencement of provision of the SERVICES pursuant to this AGREEMENT shall be July 1, 2019 (hereinafter, “Date of Commencement”). |
5.5 | NFI may not move any GOODS from the DC other than in compliance with this Agreement or with KIRKLAND’S’s prior written consent. NFI may move GOODS within the DC. Notwithstanding the foregoing, NFI may, one time during the Term of this Agreement upon giving KIRKLAND’S sixty (60) days’ prior written notice, move KIRKLAND’S GOODS out of the DC and to a different warehouse facility (of similar quality) within a seven (7) mile radius of the DC (which facility shall then be deemed the “DC” for purposes of this Agreement), which move shall occur at NFI’s sole cost and expense, and provide the Services at such new facility for the remainder of the Term pursuant to the terms hereof. Notwithstanding the foregoing such move shall not occur during KIRKLAND’S peak season (September 1 thru January 31). |
6. | The Consideration and Payment Terms |
6.1 | In consideration of fulfillment of its obligations pursuant to this AGREEMENT, KIRKLAND’S shall pay NFI the consideration set forth in Appendix B to this AGREEMENT. KIRKLAND’S agrees that two (2) times during the term of this AGREEMENT it will negotiate in good faith an increase to the rates in the event that there are material increases in costs beyond the control of NFI, including but not limited to increases due to (a) increases in minimum wages or (b) regulatory actions (provided that any statutory increase in minimum wages that will be phased in over time may be accounted for in one or more rate increases mutually agreed upon at the time of negotiation). |
6.2 | NFI shall invoice KIRKLAND’S separately for each of the fixed fees and the variable handling fees. The fixed fees shall be invoiced on the first of each month with thirty (30) day terms (no advance billing). The variable handling fees shall be invoiced on a weekly basis following provision of such Services and be payable by KIRKLAND’S within thirty (30) days from the date of invoice. Notwithstanding the foregoing, in the event that KIRKLAND’S becomes insolvent, KIRKLAND’S shall be required to make advance payment for all Services to be provided hereunder. |
6.3 | KIRKLAND’S shall pay all undisputed amounts invoiced as provided in Section 6.2. KIRKLAND’S shall only dispute amounts in reasonable good faith and shall provide NFI with written notice of the basis for disputing any amounts on an invoice within 30 days of KIRKLAND’S’s receipt of NFI’s invoice. Payments not received by NFI within fifteen (15) days of KIRKLAND’S’s receipt of written notice that such payment is overdue will be subject to a service charge of 1% per month on the unpaid balance. |
6.4 | KIRKLAND’S acknowledges and agrees that the rates set forth on Appendix B are based specifically on certain operational assumptions and product characteristics, as set forth on Appendix B (the “Operational Assumptions”). In the event that at any time during the Term such Operational Assumptions do not accurately reflect the volume, types (including dimensions, weight or other characteristics) of GOODS being delivered to NFI, handling requirements or levels of services being provided by NFI hereunder in any material respect (i.e., in excess of a ten percent (10%) variance as reviewed semi-annually by the PARTIES), then NFI and KIRKLAND’S will negotiate in good faith new pricing to reflect such changed Operational Assumptions. |
6.5 | KIRKLAND’S shall pay to NFI the unpaid “Start-up Costs” under Section 3 of the Letter of Intent dated February 14, 2019 between NFI and KIRKLAND’S in the amounts and on the dates set forth thereunder. Failure to make any such payments when due will be deemed a material default of this AGREEMENT not subject to cure. In the event this AGREEMENT is terminated for any reason prior to the payment in full of all Start-up Costs under this Section 6.5, all such remaining unpaid Start-up Costs shall become immediately due and payable to the extent actually incurred. |
7. | Liability and Insurance |
7.1 | Physical inventories of the GOODS at the DC shall be taken at the request of KIRKLAND’S and such other procedures as may be mutually agreed upon. Shortages of GOODS shall be charged to NFI at KIRKLAND’S replacement cost subject to the limit of liability set forth in Section 7.2 below. For the first year that this AGREEMENT is in effect, NFI shall be allowed an annual operational no-fault "loss-damage/shrinkage” allowance, for which NFI shall not be liable, of 0.75% of the value of Throughput ("Throughput" for purposes of this Article Seven is the annual dollar value of receipts (inbound) and shipments (outbound) based on MANUFACTURER’S REPLACEMENT COST of the GOODS, divided by two). For all subsequent periods during which this AGREEMENT is in effect, Contractor shall be allowed an annual operational no-fault "loss-damage/shrinkage” allowance, for which NFI shall not be liable, of 0.50% of the value of Throughput. MANUFACTURER’S REPLACEMENT COST shall be KIRKLAND’S manufacturing or purchase cost for the GOODS plus the inbound freight and insurance costs from the production site to the DC. Any overages will be used to offset any shrinkage allowance in subsequent periods. |
7.2 | In the event of loss or damage to GOODS in the Facility in excess of the loss/damage allowance that results from a breach of the terms and conditions of this AGREEMENT or from the negligent acts or omissions of NFI or any of its officers, directors, employees, or subcontractors, NFI shall reimburse KIRKLAND’S at MANUFACTURER’S replacement cost up to a maximum of USD $5,000,000 per occurrence and in the annual aggregate. |
7.3 | NFI shall not be liable for any damage incurred to the GOODS (a) as a result of any impairment or defect whatsoever in the manufacturing or packaging of the products and/or as a result of any characteristic whatsoever that is connected with the substance or nature of the GOODS and which does not originate in provision of the SERVICES by NFI, (b) occurring prior to or subsequent to NFI’s care, custody and control of the GOODS; (c) attributable to or otherwise caused by the acts or omissions of transportation service providers; (d) attributable to concealed damage or leakage; or (e) attributable to or otherwise caused by the negligence or intentional misconduct of KIRKLAND’S or any of its employees, agents or subcontractors. |
7.4 | Liability for GOODS in transit from the DC to KIRKLAND’S customers or locations shall be per the standard terms of the specific carrier and are the responsibility of the carrier. Claims for damage or loss in this instance shall be made directly to the carrier. Notwithstanding the foregoing, NFI would remain liable for any damage to GOODS occurring during its outbound loading of trailers from the DC. |
7.5 | Other than third party indemnification claims hereunder, NFI shall not be liable for any indirect, special and/or consequential damages, whether in contract or in tort, including, but not limited to, loss of markets or loss of profits or opportunity, factory or line downtime, consequences of delay or deviation howsoever caused arising out of or in connection with this AGREEMENT or the provision of any SERVICES or any failure to provide SERVICES. |
7.6 | (a) At all times during the term of this AGREEMENT, NFI shall maintain in full force and effect the following types and minimum coverage limits of insurance for the liability of NFI and all other persons performing on NFI’s behalf: (i) commercial general liability insurance for death, bodily injury, property damage and for personal injury in limits of not less than USD 1,000,000 per occurrence; (ii) workers' compensation in compliance with the applicable statutory limits, including employers liability in limits of not less than USD 1,000,000 per incident; and (iii) warehouse liability insurance covering the provision by NFI of warehouse operator services, freight forwarding services, and logistics services (including but not limited to inventory management and pick and pack services) in limits of liability of not less than USD 5,000,000 in the aggregate. NFI agrees to name KIRKLAND’s as an additional insured on the above policies. |
7.7 | All insurance carried shall be issued by an insurance company qualified and licensed to do business in Texas and have an overall rating of Class A- or better and financial rating of Class VIII or better as rated in the most current available Best’s Key Rating guide. |
7.8 | KIRKLAND’S shall maintain insurance coverage on its own GOODS throughout the AGREEMENT PERIOD, through a licensed and reputable insurance KIRKLAND’S. |
7.9 | Subject to the limitations set forth herein, each party shall indemnify, defend and hold the other party harmless from and against any and all third party losses, damages, claims, demands, costs, expenses, suits and liabilities (including reasonable attorneys’ fees) that arise from injuries or death to persons or damage to property caused by the indemnifying party’s negligent acts or omissions (excepting any loss or damage to KIRKLAND’S’s GOODS otherwise covered by the limitations set forth above). |
7.10 | All of NFI’s policies shall be written as a primary policies and any insurance carried by KIRKLAND’S, shall be non-contributing with NFI’s policies with respect to liability assumed by NFI under this written Agreement. |
8. | Confidentiality |
9. | The AGREEMENT PERIOD |
9.1 | This AGREEMENT shall be in effect from the Effective Date until the sixtieth (60th) month anniversary of the Date of Commencement (hereinafter: the “TERM”), unless earlier terminated in accordance with the provisions of this Article 9. This AGREEMENT may only be renewed or extended by written AGREEMENT of the PARTIES hereto, and no recourse shall be had to alleged prior dealings, usage of trade, course of dealing or course of performance to extend or renew the term hereof. |
9.2 | The PARTIES agree that this AGREEMENT may be terminated forthwith: (a) by either Party, without any penalty, upon thirty (30) days’ written notice if the other party commits a material default under this AGREEMENT that is not cured by the defaulting Party within thirty (30) days following written notice of such default; or (b) by NFI, without any penalty, upon ten (10) days’ written notice if KIRKLAND’s fails to make any payment hereunder within ten (10) days after the date on which such payment is due, including payments owing under Section 6.5 hereof. The PARTIES further stipulate that the following shall constitute a material default: |
i. | Transfer or assignment of contract without the prior written consent of either party, other than a transfer or assignment of the AGREEMENT by KIRKLAND’S to an affiliate or to a purchaser or all or substantially all of the assets or business of KIRKLAND’S; |
ii. | Any act of insolvency or bankruptcy by either party; |
iii. | Failure of either party to materially comply with any terms, conditions or obligations of this AGREEMENT and to remedy any such default specified in detail in writing by the aggrieved party within thirty (30) days of receipt of such written notice; |
iv. | Failure by NFI to achieve any service level commitment set forth in Appendix A for three consecutive months during the Term or for four or more months in any twelve month period in each case following written notice of such failure by KIRKLAND’S and a meeting between the Parties to mutually determine the actions, if any, that should be taken to remedy such failures; |
v. | A material breach of any of the Warehouse Security Standards or if there are repeated theft issues or other repeated breaches of security at the DC; or |
vi. | A material adverse change in the financial condition of either party. |
9.3 | Upon any termination or expiration of this AGREEMENT, NFI shall perform such activities as are reasonably necessary in connection with KIRKLAND’S’s orderly transition of the GOODS to another location and shall charge KIRKLAND’S for any such SERVICES performed at the rates agreed to in the pricing matrix set forth |
9.4 | In any case in which a termination notice has been submitted by either party, the PARTIES' obligations vis-à-vis one another pursuant to this AGREEMENT shall continue until the end of the notice period and termination of the AGREEMENT. No termination or expiration of this AGREEMENT or any part hereof shall release KIRKLAND’S from any obligation to pay to NFI the amount of any payments due to NFI at the effective date of such termination or expiration, nor shall termination or expiration release either Party from any liability or obligation which at the time of such termination or expiration has already accrued to the other Party or which thereafter may accrue in respect of any act or omission prior to such termination or expiration, nor will any such termination or expiration affect in any way the survival of any right, duty or obligation of any Party which is expressly stated elsewhere in this Agreement to survive the expiration or termination of this Agreement. In the event of a default of this AGREEMENT by KIRKLAND’S, NFI shall use commercially reasonable efforts to mitigate its damages (e.g., by marketing the space and reletting the space on market terms to a willing replacement party). In the event of any expiration or termination of this AGREEMENT, NFI and KIRKLAND’S shall cooperate in an orderly transition of NFI’s logistics responsibilities for the SERVICES to KIRKLAND’S and/or KIRKLAND’S’s designee. |
10. | Integrity of the AGREEMENT and amending conditions |
10.1 | The PARTIES hereby acknowledge that this AGREEMENT and the appendices hereto accurately encompass all the rights and obligations of the PARTIES in connection with everything pertaining to this AGREEMENT, and any prior agreement and any exchanges of words and documents between them prior to the signing hereof shall be null and void upon the signing of this AGREEMENT. |
10.2 | Any change, deletion or addition to this AGREEMENT shall be implemented in writing signed by both Parties. Any waiver or concession of a right and the creation of estoppel against one of the PARTIES shall be valid only if expressly made by that party in writing. |
10.3 | The PARTIES expressly agree that upon the signing of this AGREEMENT, a relationship of independent contractor and customer shall be formed between them. Nothing in this AGREEMENT shall be interpreted to mean that an employer - employee relationship of any type whatsoever exists under this AGREEMENT between KIRKLAND’S and NFI and/or any of its employees and/or anyone on its behalf. Each party shall compensate and/or indemnify the other party for any payment and/or damage that shall be sustained by the indemnified party as a result of a claim that shall be filed against it, if any, by an employee of the indemnifying party, the cause of which stems from and/or is connected to the existence of employer - employee relations. |
10.4 | This AGREEMENT has been negotiated freely and openly by the PARTIES, and it shall be intepreted without regard to any presumption or rule requiring construction against the party causing this AGREEMENT, or any part thereof, to be drafted. The PARTIES also agree that recourse shall not be had to alleged prior dealings, usage of trade, course of dealing, or course of performance to explain or supplement the express terms of the AGREEMENT. |
11. | No Lien Rights |
12. | Miscellaneous |
12.1 | This Agreement shall be interpreted under the state laws of Tennessee, without regard to any conflict of laws provisions. |
12.2 | Any controversy, dispute or claim arising out of or relating to this AGREEMENT, or the breach or alleged breach thereof, shall be settled by final, binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. Any such arbitration proceeding shall be conducted by three arbitrators, one selected by KIRKLAND’S, one selected by NFI, and the third to be mutually agreed upon by the two arbitrators |
12.3 | The consent of the PARTIES to deviate from the conditions of this AGREEMENT in a certain case, or a discount or deferment given by one party to the other shall not constitute a precedent and shall not serve as an implication for another case. |
12.4 | If, in a certain case, one of the PARTIES does not exercise its rights pursuant to this AGREEMENT, this shall not be deemed mitigation or waiver of those rights in another case, and this conduct shall not be deemed a mitigation or waiver of the PARTIES’ rights pursuant to this AGREEMENT. |
12.5 | This AGREEMENT may be executed in counterparts. Each counterpart, including a signature page executed by each of the PARTIES hereto, shall be an original counterpart of this AGREEMENT and all such counterparts together shall constitute one instrument. Each counterpart may be signed and executed by the PARTIES and transmitted by facsimile transmission and shall be valid and effective as if executed as an original. |
12.6 | NFI shall not assign, delegate or subcontract any of its rights or obligations under this AGREEMENT, or any part thereof, to any other person, firm or other entity without the prior written consent of KIRKLAND’S. Notwithstanding the foregoing, NFI may subcontract or delegate customary tasks in performance of the SERVICES, such as the engagement of carriers and temporary workers, without the prior written consent of KIRKLAND’S. NFI shall also be permitted to assign or delegate all or any part of its rights or obligations under this AGREEMENT to any of its Affiliates. The term “Affiliates” shall be defined as any entity directly or indirectly controlling or controlled by, or under direct or indirect common control of NFI whether now existing, or subsequently created or acquired during the term of this AGREEMENT (including, without limitation, joint ventures or other entities in which any such entity is a shareholder). KIRKLAND’S may assign this AGREEMENT to any purchaser of all or substantially all of the business or assets of KIRKLAND’S with notice to NFI. Every covenant, term, provision and agreement contained in the AGREEMENT shall be binding upon and inure to the benefit of the PARTIES hereto and their respective successors and permitted assigns. |
13. | Notices |
14. | Intellectual Property; Publicity; Press Releases. Notwithstanding anything in this AGREEMENT to the contrary, (a) KIRKLAND’S or an affiliate of KIRKLAND’S is and shall remain the exclusive owner or licensee of all intellectual property in the GOODS and the trademarks, service marks, trade names, trade dress, logos and copyrights related thereto, and NFI shall not during the term of this AGREEMENT or at any time thereafter dispute or contest KIRKLAND’S’s or its licensors' or another manufacturer's intellectual property rights associated with or in the GOODS; (b) NFI shall not, without the KIRKLAND’S’s prior written consent, use the name, service marks or trademarks of KIRKLAND’S or any of its affiliates; and (c) NFI shall not issue any press release or make any other written public statement with respect to this AGREEMENT, its contents and matters related thereto without the prior written consent of KIRKLAND’S subject to any applicable legal requirements. |
15. | Record Retention and Right to Inspect: NFI shall keep and maintain at its principal office complete, true and correct documents and records relating to all material aspects of the SERVICES, including all sales and inventory transactions and available reports and/or information provided by NFI’s computer system as may be relevant to the SERVICES provided to KIRKLAND’S, for a period of not less than three (3) years from the date of generation. KIRKLAND’S and its authorized agents shall have full access to all reasonable documents and records described in this Section (subject to Applicable Laws) for a three year period from the generation date and shall, at KIRKLAND’S’s cost, have the right to audit, inspect and copy all such reasonable books and records upon reasonable request during normal business hours. In addition, KIRKLAND’S has the right to inspect NFI’s warehouse and Distribution systems upon reasonable prior written request. This request will be during normal business hours and will give NFI at least seventy-two (72) hours’ notice. The right to audit shall expire upon the earlier of the expiration date of the retention period of the applicable document or one year from the termination or expiration of this AGREEMENT. |
16. | Title: The KIRKLAND’S shall own all right, title and interest in and to all GOODS at all times prior to transfer of title of such GOODS to KIRKLAND’S’s customers. NFI agrees to place and maintain any GOODS furnished by KIRKLAND’S in a reasonably clean, secure environment within the DC. NFI shall place GOODS in a space within the DC that is physically segregated from all other products and equipment (the "Storage Space"), properly identified by signage as being the exclusive property of KIRKLAND’S, and NFI shall not commingle such GOODS with the products or equipment of any other person or entity or use such GOODS for any other customer or for any other purpose other than performing the SERVICES under this AGREEMENT. NFI agrees that it will not take any actions or make any representations to third parties, including, but not limited to NFI’s creditors and potential creditors, inconsistent with KIRKLAND’S’s exclusive title to the GOODS. Any attempt by NFI to pledge, sell, transfer or otherwise dispose of the GOODS shall be null and void. NFI agrees to negotiate in good faith with KIRKLAND’S or its lenders such reasonable documents as may be reasonably required by KIRKLAND’S or its lenders, in order to lawfully protect the GOODS stored in the DC from claims of NFI’s creditors. |
17. | Language: The PARTIES have required that this AGREEMENT and all deeds, documents, and notices relating to this AGREEMENT be drawn up in the English language. |
18. | Force Majeure. For the purposes of this AGREEMENT, "Force Majeure" means, in relation to either party, any circumstances beyond the reasonable control of that party including, without limitation, any strike, lock-out or other form of industrial action (except by employees, third-party contractors, sub-contractors, or any other parties under the control of the party claiming Force Majeure), civil disturbance, war, fire, explosion, storms, flood, earthquake, epidemic or other natural physical disaster. If any Force Majeure occurs in relation to either party which affects or may affect the performance of any of its obligations under this AGREEMENT, it shall forthwith notify the other party as to the nature and extent of the circumstances in question. Neither party shall be deemed to be in breach (including material breach) of this AGREEMENT, or shall otherwise be liable to the other, by reason of any delay in performance, or the non-performance, of any of its obligations hereunder, to the extent that the delay or non-performance is due to any Force Majeure and the time for performance of that obligation shall be extended accordingly. If the performance by either party of any of its obligations under this AGREEMENT is prevented or delayed by Force Majeure for a continuous period in excess of thirty (30) days, the PARTIES shall enter into bona fide discussions with a view to alleviating its effects, or to agreeing upon such alternative arrangements as may be fair and reasonable. If the performance by either party of any of its obligations under this AGREEMENT is prevented or delayed by Force Majeure for a continuous period in excess of sixty (60) days, either party may terminate this AGREEMENT by providing not less than ten (10) days written notice to the other. |
19. | Order of Precedence. In the event of a direct conflict between the terms of this AGREEMENT and any exhibits or appendices, including without limitation, the Quality Agreement this AGREEMENT shall govern. |
20. | Disaster Recovery, Business Continuity, and Change Control |
20.1 | During the term of this AGREEMENT, NFI shall at all times maintain a disaster recovery plan and a business continuity plan, each of which shall be reasonably sufficient to substantially restore NFI’s operations in the event of a physical disaster or other business interruption within a commercially reasonable amount of time. NFI represents and warrants that during the term of this AGREEMENT, such disaster recovery plan and business continuity plan shall each be reviewed and tested annually to ensure that they are sufficient to substantially restore NFI’s operations in the event of a physical disaster or other business interruption within a commercially reasonable amount of time |
20.2 | During the term of this AGREEMENT, NFI shall maintain reasonable and adequate change control process designed to ensure that all information technology system changes are properly tested prior to implementation in a production environment and do not disrupt NFI’s ability to communicate with and serve KIRKLAND’S. |
20.3 | NFI represents and warrants that the descriptions of its disaster recovery plan, business continuity plan and change control process set forth in Appendix E accurately describes the material aspects of each such plan or process. KIRKLAND’S reserves the right to audit these plans and processes at any time for the duration of this AGREEMENT to ensure that they are in effect and properly maintained. |
21.1 | If, for any reason, NFI fails to maintain these plans in a manner reasonably acceptable to KIRKLAND’S and consistent with prevailing industry standards, KIRKLAND’S will notify NFI in writing of such deficiency, and such deficiency must be corrected to KIRKLAND’S’s reasonable satisfaction within 90 days of such notification. If NFI fails to correct such deficiency to KIRKLAND’S’s reasonable satisfaction within such 90 day notice period, such failure shall constitute a material breach of this AGREEMENT, and KIRKLAND’S shall be entitled to terminate this AGREEMENT immediately upon written notice to NFI. |
NATIONAL DISTRIBUTION CENTERS, LLC | KIRKLAND’S, INC. | ||
BY: | /s/ Kevin Patterson | BY: | /s/ Mike Cairnes |
NAME: | KEVIN PATTERSON | NAME: | MIKE CAIRNES |
TITLE: | PRESIDENT | TITLE: | PRESIDENT |
DATE: | March 22, 2019 | DATE: | March 20, 2019 |
Subsidiaries | Jurisdiction of Corporation or Organization | |
Kirkland’s DC, Inc. | Tennessee | |
Kirkland’s Stores, Inc. | Tennessee | |
Kirkland’s Texas, LLC | Tennessee |
/s/ Steve C. Woodward | |
Steve C. Woodward | |
Chief Executive Officer |
/s/ Nicole A. Strain | |
Nicole A. Strain | |
Interim Chief Financial Officer |
/s/ Steve C. Woodward | |
Steve C. Woodward | |
Chief Executive Officer |
/s/ Nicole A. Strain | |
Nicole A. Strain | |
Interim Chief Financial Officer |
Document and Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Mar. 15, 2019 |
Aug. 03, 2018 |
|
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Feb. 02, 2019 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | KIRK | ||
Entity Registrant Name | KIRKLAND'S, INC | ||
Entity Central Index Key | 0001056285 | ||
Current Fiscal Year End Date | --02-02 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 175 | ||
Entity Common Stock, Shares Outstanding | 14,366,707 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Feb. 02, 2019 |
Feb. 03, 2018 |
---|---|---|
Preferred Stock | ||
Par value (dollars per share) | $ 0 | $ 0 |
Shares authorized (in shares) | 10,000,000 | 10,000,000 |
Shares issued (in shares) | 0 | 0 |
Shares outstanding (in shares) | 0 | 0 |
Common Stock | ||
Par value (dollars per share) | $ 0 | $ 0 |
Shares authorized (in shares) | 100,000,000 | 100,000,000 |
Shares issued (in shares) | 14,504,824 | 15,977,239 |
Shares outstanding (in shares) | 14,504,824 | 15,977,239 |
Description of Business and Significant Accounting Policies |
12 Months Ended |
---|---|
Feb. 02, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Significant Accounting Policies | Description of Business and Significant Accounting Policies Kirkland’s, Inc. (the “Company”) is a specialty retailer of home décor in the United States with 428 stores in 37 states as of February 2, 2019. The consolidated financial statements of the Company include the accounts of Kirkland’s, Inc. and its wholly-owned subsidiaries Kirkland’s Stores, Inc., Kirkland’s DC, Inc. and Kirkland’s Texas, LLC. Significant intercompany accounts and transactions have been eliminated. The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from the estimates and assumptions used. Changes in estimates are recognized in the period when new information becomes available to management. Areas where the nature of the estimate makes it reasonably possible that actual results could materially differ from amounts estimated include, but are not limited to, impairment assessments on long-lived assets, inventory reserves and self-insurance reserves. Fiscal year — The Company’s fiscal year is comprised of the 52 or 53-week period ending on the Saturday closest to January 31. Accordingly, fiscal 2018 represented the 52 weeks ended on February 2, 2019, fiscal 2017 represented the 53 weeks ended on February 3, 2018 and fiscal 2016 represented the 52 weeks ended on January 28, 2017. Cash equivalents — Cash and cash equivalents consist of cash on deposit in banks and payments due from banks for customer credit cards, as they generally settle within 24-48 hours. Inventory — The Company’s inventory is stated at the lower of cost or net realizable value, net of reserves and allowances, with cost determined using the average cost method, with average cost approximating current cost. Inventory cost consists of the direct cost of merchandise including freight. The Company incurs various types of warehousing, transportation and delivery costs in connection with inventory purchases and distribution. Such costs are included as a component of the overall cost of inventories and recognized as a component of cost of sales as the related inventory is sold. As of February 2, 2019 and February 3, 2018, there were $6.1 million and $5.1 million, respectively, of distribution center costs included in inventory. The Company estimates the amount of shrinkage that has occurred through theft or damage and adjusts that amount to actual at the time of its physical inventory counts which occur throughout the fiscal year. The Company also evaluates the cost of inventory by category and class of merchandise in relation to the estimated sales price. This evaluation is performed to ensure that inventory is not carried at a value in excess of the amount expected to be realized upon the sale of the merchandise. The Company receives various payments and allowances from vendors, including rebates and other credits. The amounts received are subject to the terms of vendor agreements, which generally do not state an expiration date, but are subject to ongoing negotiations that may be impacted in the future based on changes in market conditions and changes in the profitability, quality, or sell-through of the related merchandise. For all such vendor allowances, the Company records the vendor funds as a reduction of inventories. As the related inventory is sold, such allowances and credits are recognized as a reduction to cost of sales. Prepaid expenses and other current assets — The Company recognizes assets for expenses paid but not yet incurred, as well as other items such as supplies inventory and miscellaneous receivables. As of February 2, 2019 and February 3, 2018, prepaid expenses and other current assets included receivables of approximately $3.2 million and $4.0 million, respectively, mainly related to incentives receivable from landlords in the form of construction allowances. Property and equipment — Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the respective assets. Furniture, fixtures and equipment are generally depreciated over five years. Leasehold improvements are amortized over the shorter of the useful life of the asset or the expected lease term, typically ranging from five to 10 years. Maintenance and repairs are expensed as incurred, and improvements are capitalized. Gains or losses on the disposition of fixed assets are recorded upon disposal of the related asset. Cost of internal use software — The Company capitalizes the cost of computer software developed or obtained for internal use. Capitalized computer software costs consist primarily of payroll-related and consulting costs incurred during the application development stage. The Company expenses costs related to preliminary project assessments, research and development, re-engineering, training and application maintenance as they are incurred. Capitalized software costs are amortized on a straight-line basis over an estimated life of three to 10 years. For fiscal years 2018, 2017 and 2016, the Company recorded approximately $7.4 million, $7.1 million and $6.1 million, respectively, for depreciation of capitalized software. The net book value of these assets totaled $19.6 million and $20.3 million at the end of fiscal years 2018 and 2017, respectively. At the end of fiscal years 2018 and 2017, property and equipment included capitalized computer software currently under development of $6.3 million and $4.7 million, respectively. Asset retirement obligations — The Company recognizes a liability for the fair value of required asset retirement obligations (“ARO”) when such obligations are incurred. The Company’s AROs are primarily associated with leasehold improvements which, at the end of a lease, the Company is contractually obligated to remove in order to comply with the lease agreement. At the inception of a lease with such conditions, the Company records an ARO liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. The liability is estimated based on various assumptions requiring management’s judgment and is accreted to its projected future value over time. The capitalized asset is depreciated using the convention for depreciation of leasehold improvement assets. Upon satisfaction of the ARO conditions, any difference between the recorded ARO liability and the actual retirement costs incurred is recognized as an operating gain or loss in the consolidated statements of income. As of February 2, 2019 and February 3, 2018, the liability for asset retirement obligations was approximately $768,000 and $722,000, respectively. Impairment of long-lived assets — The Company evaluates the recoverability of the carrying amounts of long-lived assets whenever events or changes in circumstances dictate that their carrying values may not be recoverable. This review includes the evaluation of individual underperforming retail stores and assessing the recoverability of the carrying values of the assets related to the stores. Future cash flows are projected for the remaining lease life. The Company calculates the fair values of long-lived assets using the age-life method. If the estimated fair values are less than the carrying values of the assets, the Company records an impairment charge equal to the difference, if any, between the assets’ fair values and carrying values. Insurance reserves — Workers’ compensation, general liability and employee medical insurance programs are predominately self-insured. It is the Company’s policy to record a self-insurance liability using estimates of claims incurred but not yet reported or paid, based on historical claims experience and actuarial methods. Actual results can vary from estimates for many reasons, including, among others, inflation rates, claim settlement patterns, litigation trends and legal interpretations. The Company monitors its claims experience in light of these factors and revises its estimates of insurance reserves accordingly. The level of insurance reserves may increase or decrease as a result of these changing circumstances or trends. As of February 2, 2019, the Company’s net self-insurance reserve estimates related to workers’ compensation, general liability and employee medical were $7.4 million compared to $7.1 million as of February 3, 2018. Customer loyalty program — The Company has established a loyalty program called the K Club, whereby members receive access to coupons, birthday rewards, monthly sweepstakes, sneak peeks, exclusive deals and more. During fiscal 2018, the Company eliminated the program whereby customers earned loyalty points, which became discount certificates at specified levels, in return for making purchases in the Company’s stores, including the e-commerce store. In fiscal years 2017 and prior, the Company accrued for the expected liability associated with the discount certificates issued, as well as the accumulated points that have not yet resulted in the issuance of a certificate, adjusted for expected redemption rates. The Company has also established a private-label credit card program for its customers. Customers in the private label credit card program are eligible to earn five percent off of their total transaction price. The card program is operated and managed by a third-party bank that assumes all credit risk with no recourse to the Company. Deferred rent — Many of the Company’s operating leases contain predetermined fixed escalations of minimum rentals during the initial term. Additionally, the Company does not typically pay rent during the construction period for new stores. For these leases, the Company recognizes the related rental expense on a straight-line basis over the life of the lease commencing with the date of initial access to the leased space, and records the difference between amounts charged to operations and amounts paid as a liability. As of February 2, 2019, the cumulative net excess of recorded rent expense over lease payments totaled $14.8 million, of which $1.7 million was reflected as a current liability in accrued expenses and $13.1 million was reflected as a noncurrent liability in deferred rent on the consolidated balance sheet. As of February 3, 2018, the cumulative net excess of recorded rent expense over lease payments totaled $15.4 million, of which $1.9 million was reflected as a current liability in accrued expenses and $13.5 million was reflected as a noncurrent liability in deferred rent on the consolidated balance sheet. The Company also receives incentives from landlords in the form of construction allowances. These construction allowances are recorded as deferred rent and amortized as a reduction to rent expense over the lease term. As of February 2, 2019, the unamortized amount of construction allowances totaled $47.7 million, of which $8.9 million was reflected as a current liability in accrued expenses and $38.8 million was reflected as a noncurrent liability in deferred rent on the consolidated balance sheet. As of February 3, 2018, the unamortized amount of construction allowances totaled $48.1 million, of which $8.3 million was reflected as a current liability in accrued expenses and $39.8 million was reflected as a noncurrent liability in deferred rent on the consolidated balance sheet. Revenue recognition and sales returns — Net sales includes the sale of merchandise, net of returns, shipping revenue and gift card breakage revenue and excludes sales taxes. The Company estimates a liability for sales returns based on historical return trends, and the Company believes that its estimate for sales returns is an accurate reflection of future returns associated with past sales. However, as with any estimate, refund activity may vary from estimated amounts. The Company had a liability of $1.5 million reserved for sales returns at February 2, 2019 and February 3, 2018. The related sales return reserve product recovery asset included in prepaid expenses and other current assets on the consolidated balance sheet was $0.6 million at both February 2, 2019 and February 3, 2018, respectively. The Company recognizes revenue at the time of sale of merchandise to customers in its stores. E-commerce revenue is recorded at estimated time of delivery to the customer. If the Company receives payment before completion of its customer obligations, the revenue is deferred until the customer takes possession of the merchandise and the sale is complete. Deferred revenue included in accrued expenses on the consolidated balance sheet was $1.0 million and $0.7 million at February 2, 2019 and February 3, 2018, respectively. The related contract assets, reflected in inventory on the consolidated balance sheet, totaled $0.4 million and $0.3 million at February 2, 2019 and February 3, 2018, respectively. Gift card sales are recognized as revenue when tendered for payment. While the Company honors all gift cards presented for payment, the Company determines the likelihood of redemption to be remote for certain gift card balances due to long periods of inactivity. The Company uses the redemption recognition method to account for breakage for unused gift card amounts where breakage is recognized as gift cards are redeemed for the purchase of goods based upon a historical breakage rate. In these circumstances, to the extent the Company determines there is no requirement for remitting card balances to government agencies under unclaimed property laws, such amounts are recognized in the consolidated statement of income as a component of net sales. The Company recognized approximately $1.1 million, $0.8 million and $1.1 million in gift card breakage revenue during fiscal 2018, fiscal 2017 and fiscal 2016, respectively. The Company’s gift card liability, net of estimated breakage, was $13.0 million, $11.3 million and $9.5 million as of February 2, 2019, February 3, 2018, and January 28, 2017, respectively, which is included in accrued expenses on the condensed consolidated balance sheet. During the fiscal year ended February 2, 2019, the Company recognized $6.2 million of gift card redemptions related to amounts included in the gift card contract liability balance of $11.3 million as of February 3, 2018. Cost of sales — Cost of sales includes costs of product purchased from vendors, including inbound freight, receiving costs, inspection costs, warehousing costs, outbound freight, inventory damage and shrinkage, payroll and overhead associated with our distribution facility and its network, store occupancy costs and depreciation of leasehold improvements, equipment, and other property in our stores and distribution centers. Distribution facility costs, excluding depreciation, included in cost of sales were approximately $22.6 million, $20.8 million and $18.8 million for fiscal 2018, 2017, and 2016, respectively. Compensation and benefits — Compensation and benefits includes all store and corporate office salaries and wages and incentive pay as well as stock compensation, employee health benefits, 401(k) plan benefits, social security and unemployment taxes. Stock-based compensation — Stock-based compensation includes expenses associated with stock option grants, restricted stock grants, and other transactions under the Company’s stock plans. The Company recognizes compensation expense for its stock-based payments based on the fair value of the awards. The expense is recorded on a straight-line basis over the vesting period within compensation and benefits in the consolidated statements of income. See Note 6 — Stock-Based Compensation for further discussion. Other operating expenses — Other operating expenses consist of such items as advertising, credit card processing and other bank fees, utilities, professional fees, software maintenance costs, supplies and postage, workers’ compensation and general liability insurance, trash removal, maintenance and repairs, travel and various other store and corporate expenses. Store pre-opening expenses — Store pre-opening expenses, which consist primarily of occupancy, payroll and supplies costs, are expensed as incurred. Advertising expenses — Advertising costs are expensed in the period in which the related activity first takes place. These expenses include costs associated with specific marketing campaigns, direct mail, email communications, paid search and other digital advertising, social media, public relations, in-store collateral and signage and other expenses related to the in-store experience. Total advertising expense was $12.8 million, $10.5 million and $9.3 million for fiscal years 2018, 2017 and 2016, respectively. Prepaid advertising costs were approximately $0.4 million and $0.1 million as of February 2, 2019 and February 3, 2018, respectively. Income taxes — Deferred tax assets and liabilities are recognized based on the differences between the financial statement and the tax law treatment of certain items. Realization of certain components of deferred tax assets is dependent upon the occurrence of future events. The Company records valuation allowances to reduce its deferred tax assets to the amount it believes is more likely than not to be realized. These valuation allowances can be impacted by changes in tax laws, changes to statutory tax rates, and future taxable income levels and are based on the Company’s judgment, estimates and assumptions regarding those future events. In the event the Company were to determine that it would not be able to realize all or a portion of the net deferred tax assets in the future, the Company would increase the valuation allowance through a charge to income tax expense in the period that such determination is made. Conversely, if the Company were to determine that it would be able to realize its deferred tax assets in the future, in excess of the net carrying amounts, the Company would decrease the recorded valuation allowance through a decrease to income tax expense in the period that such determination is made. The Company provides for uncertain tax positions and the related interest and penalties, if any, based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected. The Company’s income tax returns are subject to audit by local, state and federal authorities, and the Company is typically engaged in various tax examinations at any given time. Tax contingencies often arise due to uncertainty or differing interpretations of the application of tax rules throughout the various jurisdictions in which the Company operates. The contingencies are influenced by items such as tax audits, changes in tax laws, litigation, appeals and experience with previous similar tax positions. The Company regularly reviews its tax reserves for these items and assesses the adequacy of the amount recorded. The Company evaluates potential exposures associated with its various tax filings by estimating a liability for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires estimation and measurement of the tax benefit as the largest amount that is more than 50% likely to be recognized upon settlement. Sales and use taxes — Governmental authorities assess sales and use taxes on the sale and purchase of goods and services. The Company excludes taxes collected from customers in its reported sales results. Such amounts are reflected as accrued expenses until remitted to the taxing authorities. Concentrations of risk — Most of the Company’s merchandise is purchased through vendors in the United States who import the merchandise manufactured primarily in China. However, the Company believes alternative merchandise sources could be procured over a relatively short period of time. Fair value of financial instruments — Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying amounts of cash and cash equivalents, accounts receivable, other current assets and accounts payable approximate fair value because of their short maturities. The Company also maintains The Executive Non-Qualified Excess Plan (the “Deferred Compensation Plan”) as discussed further in Note 7 - Retirement Benefit Plans. The Deferred Compensation Plan is funded, and the Company invests participant deferrals into trust assets, which are invested in a variety of mutual funds that are Level 1 inputs. The plan assets and plan liabilities are adjusted to fair value on a recurring basis. Earnings per share — Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding during each period presented. Diluted earnings per share is computed by dividing net income by the weighted average number of shares outstanding plus the dilutive effect of stock equivalents outstanding during the applicable periods using the treasury stock method. Diluted earnings per share reflects the potential dilution that could occur if options to purchase stock were exercised into common stock and if outstanding grants of restricted stock were vested. Stock options and restricted stock units that were not included in the computation of diluted earnings per share, because to do so would have been antidilutive, were approximately 923,000 shares, 686,000 shares and 629,000 shares for fiscal 2018, 2017 and 2016, respectively. Comprehensive income — Comprehensive income does not differ from the consolidated net income presented in the consolidated statements of income. Operating segments — The Company has determined that each of its stores is an operating segment. The operating performance of all stores has been aggregated into one reportable segment. The Company’s operating segments are aggregated for financial reporting purposes because they are similar in each of the following areas: economic characteristics, class of consumer, nature of products and distribution methods. Revenues from external customers are derived from merchandise sales, and the Company does not rely on any major customers as a source of revenue. Across its store base, the Company operates one store format under the Kirkland’s name in which each store offers the same general mix of merchandise with similar categories and similar customers. The Company believes that disaggregating its operating segments would not provide meaningful additional information. |
Accrued Expenses |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued Expenses Accrued expenses are comprised of the following (in thousands):
|
Income Taxes |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Income Tax Provision The Company’s income tax expense is computed based on the federal statutory rates and the state statutory rates, net of related federal benefit. The Company’s provision for income taxes consists of the following (in thousands):
Income tax expense differs from the amount computed by applying the statutory federal income tax rate to pre-tax income. A reconciliation of income tax expense at the statutory federal income tax rate to the amount provided is as follows (in thousands):
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):
On December 22, 2017 the U.S. Government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including but not limited to, reducing the U.S. federal corporate rate from 35% to 21% effective as of January 1, 2018. This change required the Company to re-measure the Company’s deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21% for federal income tax purposes. As permitted by the SEC Staff Accounting Bulletin 118, “Income Tax Accounting Implications of the Tax Cut and Jobs Act”, the Company recorded a provisional amount of $419,000, which was included as a component of income tax expense from continuing operations for the year ended February 3, 2018. The Company subsequently finalized its accounting analysis based on the guidance, interpretations, and data available as of February 2, 2019. Adjustments made for the year ended February 2, 2019 upon finalization of the Company’s accounting analysis were not material to the Company’s consolidated financial statements. As of February 2, 2019, the Company has state net operating loss carryforwards of approximately $1.3 million expiring in 2033 and state tax credit carryforwards of approximately $183,000 expiring in years 2023 through 2025. Future utilization of the deferred tax assets is evaluated by the Company and any valuation allowance is adjusted accordingly. At February 2, 2019, the Company recorded an $83,000 valuation allowance related to state tax credit carryforwards. At February 3, 2018, there was a $73,000 valuation allowance against the Company’s deferred tax assets. Adjustments could be required in the future if the Company estimates that the amount of deferred tax assets to be realized is more or less than the net amount the Company has recorded. The Company and one or more of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by authorities for years prior to 2015. With few exceptions, the Company is no longer subject to state and local income tax examinations for years prior to 2012. The Company is not currently engaged in any U.S. federal, state or local income tax examinations. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. The Company had no amounts accrued for the payment of interest and penalties associated with unrecognized tax benefits as of February 2, 2019 and February 3, 2018. |
Senior Credit Facility |
12 Months Ended |
---|---|
Feb. 02, 2019 | |
Debt Disclosure [Abstract] | |
Senior Credit Facility | Senior Credit Facility The Company is party to a Joinder and First Amendment to Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent and collateral agent, and the lenders named therein (the “Lenders”). The Credit Agreement includes a senior secured revolving credit facility of $75 million, a swingline availability of $10 million, a $25 million incremental accordion feature and a maturity date of February 2021. Borrowings under the Credit Agreement bear interest at an annual rate equal to LIBOR plus a margin ranging from 125 to 175 basis points with no LIBOR floor, and the fee paid to the Lenders on the unused portion of the credit facility is 25 basis points per annum. Borrowings under the Credit Agreement are subject to certain conditions and contain customary events of default, including, without limitation, failure to make payments, a cross-default to certain other debt, breaches of covenants, breaches of representations and warranties, a change in control, certain monetary judgments and bankruptcy and ERISA events. Upon any such event of default, the principal amount of any unpaid loans and all other obligations under the Credit Agreements may be declared immediately due and payable. The maximum availability under the facility is limited by a borrowing base formula which consists of a percentage of eligible inventory and eligible credit card receivables, less reserves. The Company is subject to an Amended and Restated Security Agreement (“Security Agreement”) with its Lenders. Pursuant to the Security Agreement, the Company pledged and granted to the administrative agent, for the benefit of itself and the secured parties specified therein, a lien on and security interest in all of the rights, title and interest in substantially all of the Company’s assets to secure the payment and performance of the obligations under the Credit Agreement. As of February 2, 2019, the Company was in compliance with the covenants in the Credit Agreement, and there were no outstanding borrowings under the credit facility, with approximately $53.0 million available for borrowing. |
Long-Term Leases |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Leases | Long-Term Leases The Company leases retail store facilities, corporate office space, warehouse facilities and certain vehicles and equipment under operating leases with terms generally ranging up to 10 years and expiring at various dates through 2029. Most of the retail store lease agreements include renewal options and provide for minimum rentals. Some retail store lease agreements also contain contingent rentals based on sales performance in excess of specified minimums. Rent expense under operating leases including cash rent and straight-line rent for lease escalations and construction allowance amortization is as follows (in thousands):
Future minimum lease payments under all operating leases with initial terms of one year or more consist of the following:
|
Stock-Based Compensation |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation — Stock-based compensation includes stock option grants, restricted stock unit grants, and other transactions under the Company’s equity plans. Total stock-based compensation expense is included as a component of compensation and benefits and was approximately $2.0 million, $2.1 million and $3.2 million for fiscal years 2018, 2017 and 2016, respectively. On June 4, 2013, the Company adopted the Kirkland’s, Inc. Amended and Restated 2002 Equity Incentive Plan (the “2002 Plan”), replacing the plan adopted in July 2002. The 2002 Plan provides for the award of restricted stock, restricted stock units (“RSUs”), incentive stock options, non-qualified stock options and stock appreciation rights with respect to shares of common stock to employees, directors, consultants and other individuals who perform services for the Company. The 2002 Plan is authorized to provide awards for up to a maximum of 3,500,000 shares of common stock. As of February 2, 2019, options to purchase 896,345 shares of common stock were outstanding under the 2002 Plan at exercise prices ranging from $2.33 to $25.52 per share. As of February 2, 2019, there were 314,284 RSUs outstanding under the 2002 Plan with fair value grant prices ranging from $8.98 to $15.85 per share. Shares reserved for future stock-based grants under the 2002 Plan was 878,355 at February 2, 2019. Stock options — The Company allows for the settlement of vested stock options on a net share basis (“net settled stock options”), instead of settlement with a cash payment (“cash settled stock options”), if so desired by the holder. With net settled stock options, the employee does not surrender any cash or shares upon exercise. Rather, the Company withholds the number of shares to cover the option exercise price and the minimum statutory tax withholding obligations from the shares that would otherwise be issued upon exercise. The settlement of vested stock options on a net share basis results in fewer shares issued by the Company. Options issued to employees under the 2002 Plan have maximum contractual terms of 10 years and generally vest ratably over 3 or 4 years. As of February 2, 2019, there were 318,536 outstanding in-the-money options. The aggregate intrinsic value of in-the-money options outstanding and options exercisable as of February 2, 2019 was approximately $0.5 million and $0.3 million, respectively. The weighted average grant date fair values of options granted during fiscal 2018, fiscal 2017 and fiscal 2016 were $6.18, $4.23 and $6.48, respectively. The intrinsic value of options exercised was approximately $0.7 million in fiscal 2018, $0.1 million in fiscal 2017, and $0.3 million in fiscal 2016. At February 2, 2019, unrecognized stock compensation expense related to the unvested portion of outstanding stock options was approximately $1.4 million, which is expected to be recognized over a weighted average period of 2.7 years. Stock option activity for the fiscal year ended February 2, 2019 was as follows:
The fair value of each option is recorded as compensation expense on a straight-line basis over the applicable vesting period. The Company has estimated the fair value of all stock option awards as of the date of the grant by applying the Black-Scholes option pricing model. The application of this valuation model involves assumptions that are judgmental and highly subjective in the determination of compensation expense. The weighted averages for key assumptions used in determining the fair value of options granted in fiscal years 2018, 2017 and 2016 and a summary of the methodology applied to develop each assumption are as follows:
Expected price volatility — The expected price volatility is a measure of the amount by which the stock price has fluctuated or is expected to fluctuate. The Company uses actual historical changes in the market value of its stock to calculate the volatility assumption as it is management’s belief that this is the best indicator of future volatility. The Company calculates daily market value changes using the historical volatility of returns for the six years prior to the grant. An increase in the expected volatility will increase compensation expense. Risk-free interest rate — The risk-free interest rate is the U.S. Treasury rate for the week of the grant having a term equal to the expected life of the option. An increase in the risk-free interest rate will increase compensation expense. Expected life — The expected life is the period of time over which the options granted are expected to remain outstanding. The Company uses the “simplified” method found in the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107 to estimate the expected life of stock option grants. Options granted have a maximum term of ten years. An increase in the expected life will increase compensation expense. Dividend yield — The dividend yield is the estimated dividend yield for the weighted average expected life of the option granted. The Company paid a dividend on its common stock in fiscal 2016. In fiscal 2017 and fiscal 2018, the Company did not pay a dividend on its common stock. The Company does not pay a regular, reoccurring dividend. The addition or increase of a dividend will decrease compensation expense. The Company currently has no plans to pay additional dividends. Forfeiture rate — The forfeiture rate is the percentage of options granted that were forfeited or canceled before becoming fully vested. The Company accounts for forfeitures of share-based awards as they occur. An increase in the forfeiture rate will decrease compensation expense. Restricted stock units — The Company periodically grants restricted stock units for a fixed number of shares to various employees and directors. The RSUs granted to directors become 100% vested on the first anniversary of the grant date. The RSUs granted to employees typically vest 25% annually on the anniversary of the grant date over 4 years. The fair values of the RSUs are equal to the closing price of the Company’s common stock on the date of the grant. The Company granted 243,734, 148,500 and 132,500 RSUs during fiscal 2018, 2017 and 2016, respectively. The weighted average grant date fair values of the RSUs granted during fiscal 2018, 2017 and 2016 were $10.83, $9.01 and $13.49, respectively. Compensation expense related to RSUs is recognized ratably over the requisite service period. Compensation expense for RSUs during fiscal 2018, 2017 and 2016 was approximately $1.1 million, $0.9 million and $1.7 million, respectively. As of February 2, 2019, there was approximately $2.5 million of unrecognized compensation expense related to RSUs which is expected to be recognized over a weighted average period of 2.0 years. RSU activity for the fiscal year ended February 2, 2019, was as follows:
Employee stock purchase plan — In July 2002, the Company adopted an Employee Stock Purchase Plan (“ESPP”) which was amended in 2006, 2008 and 2016. Under the ESPP, full-time employees who have completed twelve consecutive months of service are allowed to purchase shares of the Company’s common stock, subject to certain limitations, through payroll deduction, at a 15% discount from fair market value. The Company’s ESPP was originally authorized to issue up to 500,000 shares of common stock. In June 2016, the shareholders ratified the amendment to the Company’s ESPP to increase the number of shares of common stock authorized to be issued under the ESPP by 125,000 shares with an optional annual increase thereafter each January 1 commencing on January 1, 2017 by up to an additional 35,000 shares. During fiscal 2018, 2017 and 2016, there were 37,128, 34,963 and 31,879 shares of common stock, respectively, issued to participants under the ESPP. As of February 2, 2019, the amount authorized under the ESPP was 695,000 with approximately 104,198 shares remaining under the authorization. |
Retirement Benefit Plans |
12 Months Ended |
---|---|
Feb. 02, 2019 | |
Postemployment Benefits [Abstract] | |
Retirement Benefit Plans | Retirement Benefit Plans 401(k) savings plan — The Company maintains a defined contribution 401(k) employee benefit plan, which provides retirement benefits for eligible employees. The Company matches 100% of the employee’s elective contributions up to 4% of eligible compensation. Prior to January 1, 2018, the Company matched 50% of the employee’s elective contributions up to 6% of eligible compensation. The Company’s matching contributions were approximately $904,000, $585,000 and $531,000 in fiscal 2018, 2017 and 2016, respectively. The Company has the option to make additional contributions to the Plan on behalf of covered employees; however, no such contributions were made in fiscal 2018, 2017 or 2016. Deferred compensation plan — The Company maintains The Executive Non-Qualified Excess Plan (the “Deferred Compensation Plan”). The Deferred Compensation Plan is available for certain employees whose benefits under the 401(k) Savings Plan are limited due to provisions of the Internal Revenue Code. Deferred Compensation Plan assets and liabilities were $1.9 million and $2.2 million as of February 2, 2019, and February 3, 2018, respectively, and were recorded in other assets and other liabilities in the consolidated balance sheets. The Company had no matching contributions to this Plan in fiscal year 2018. The Company’s matching contributions to this Plan were $41,000 and $48,000 in fiscal 2017 and 2016, respectively. |
Commitments and Contingencies |
12 Months Ended |
---|---|
Feb. 02, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Financial instruments that potentially subject the Company to concentration of risk are primarily cash and cash equivalents. The Company places its cash and cash equivalents in insured depository institutions and limits the amount of credit exposure to any one institution within the covenant restrictions imposed by the Company’s debt agreements. The Company was named as a defendant in a putative class action filed in April 2017 in the United States District Court for the Western District of Pennsylvania, Gennock v. Kirkland’s, Inc. The Complaint alleges that the Company, in violation of federal law, published more than the last five digits of a credit or debit card number on customers’ receipts. The Company denies the material allegations of the complaint. On January 9, 2018, the District Court denied the Company’s motion to dismiss this matter. On January 31, 2018, the Court granted the Company’s motion to stay the proceedings in its case pending the Third Circuit’s decision in Kamal v. J. Crew Group, Inc., No. 17-2345 (3d. Cir.). On March 8, 2019, the Third Circuit issued its opinion in the J. Crew case, and ruled that the plaintiff did not have standing in that case without the showing of a concrete injury. The J. Crew ruling is binding on the Court in the Kirkland’s case, and the Company will now move to once again dismiss Gennock’s Complaint. The Company continues to believe that the case is without merit and intends to vigorously defend itself against the allegations. The matter is covered by insurance, and the Company does not believe that the case will have a material adverse effect on its consolidated financial condition, operating results or cash flows. The Company has been named as a defendant in a putative class action filed in May 2018 in the Superior Court of California, Miles v. Kirkland’s Stores, Inc. The case has been removed to Federal Court, Central District of California, and trial is not yet set. The complaint alleges, on behalf of Miles and all other hourly Kirkland’s employees in California, various wage and hour violations. Kirkland’s denies the material allegations in the complaint and believes that its employment policies are generally compliant with California law. The parties have agreed to a mediation to be held on April 1, 2019, and to date have exchanged the court mandated initial disclosures. The Company believes the case is without merit and intends to vigorously defend itself against the allegations. The Company is also party to other pending legal proceedings and claims that arise in the normal course of business. Although the outcome of such proceedings and claims cannot be determined with certainty, the Company’s management is of the opinion that it is unlikely that such proceedings and any claims in excess of insurance coverage will have a material effect on its consolidated financial condition, operating results or cash flows. |
Related Party Transactions |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions The Company has a vendor agreement with a related party vendor to purchase merchandise inventory. The vendor is considered a related party for financial reporting purposes because its principal owner is the spouse of the Company’s Vice President of Product Development and Trends. The table below sets forth selected results related to this vendor in dollars (in thousands) and percentages for the periods indicated:
|
Stock Repurchase Plan |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity, Class of Treasury Stock [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Treasury Stock [Text Block] | Stock Repurchase Plan On August 22, 2017, the Company announced that its Board of Directors authorized a stock repurchase plan providing for the purchase in the aggregate of up to $10 million of the Company’s outstanding common stock. This stock repurchase plan was completed during the third quarter of fiscal 2018. On September 24, 2018, the Company announced that its Board of Directors authorized a new stock repurchase plan providing for the purchase in the aggregate of up to $10 million of the Company’s outstanding stock. Repurchases of shares are made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases is based on a variety of factors, including stock acquisition price, regulatory limitations and other market and economic factors. The stock repurchase program does not require the Company to repurchase any specific number of shares, and the Company may terminate the repurchase program at any time. As of February 2, 2019, the Company had approximately $3.7 million remaining under the current stock repurchase plan. The table below sets forth selected stock repurchase plan information (in thousands, except share amounts) for the periods indicated:
|
New Accounting Pronouncements |
12 Months Ended |
---|---|
Feb. 02, 2019 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements New Accounting Pronouncements Recently Adopted In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. ASU 2014-09 also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in ASU 2014-09 were effective for the Company at the beginning of its fiscal 2018 year. Companies that transitioned to this new standard could either retrospectively restate each prior reporting period or reflect the cumulative effect of initially applying the updates with an adjustment to retained earnings at the date of adoption. The Company adopted this standard in the first quarter of fiscal 2018 using the modified retrospective method. The Company identified its loyalty program as the area that was most affected by the new revenue recognition guidance. Additionally, the Company’s historical accounting for gift card breakage is consistent with the new revenue recognition guidance. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”). This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless (a) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, (b) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified and (c) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments in ASU 2017-09 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not been issued. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. The Company adopted this guidance in the first quarter of fiscal 2018. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. New Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which supersedes the existing guidance for lease accounting, Leases (Topic 840) (“ASU 2016-02”). ASU 2016-02 requires lessees to recognize a lease liability and a right-of-use asset for both operating leases and finance leases on the balance sheet at the lease commencement date. For operating leases, the lessee would recognize a straight-line total lease expense, while for finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset. The Company currently only has operating leases. Lessor accounting remains largely unchanged, and the Company is not a lessor in any lease agreements. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. There have been multiple standard updates amending this guidance or providing corrections or improvements on issues in the guidance. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which provides an optional transition method in addition to the existing modified retrospective transition method by allowing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Under this transition method, companies may continue to report comparative periods under ASC 840, although they must also provide the required disclosures under ASC 840 for all periods presented under ASC 840. The Company plans to elect the alternative transition method, apply the transition approach as of the beginning of the period of adoption and not restate comparative periods. The Company plans to elect the package of practical expedients available under the transition provisions of ASC 842, including (i) not reassessing whether expired or existing contracts contain leases, (ii) not reassessing lease classification, and (iii) not revaluing initial direct costs for existing leases. Further, the Company expects to elect a short-term lease exception policy, permitting it to exclude the recognition requirements of this standard from short-term leases (i.e. leases with initial terms of 12 months or less). The majority of the Company’s leases have variable non-lease components. For leases where the non-lease components are fixed, the Company has elected an accounting policy to account for lease and non-lease components as a single component. In January 2018, the FASB issued ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842.” This update permits an entity to elect an optional transition practical expedient to not evaluate land easements that exist or expired before the entity’s adoption of ASU 2016-02 and that were not accounted for as leases under previous lease guidance. The Company plans to elect this practical expedient. The Company currently estimates it will record operating lease liabilities of between approximately $290 million to $300 million based on the present value of the remaining minimum rental payments using discount rates as of the effective date. The Company currently estimates that it will record corresponding right-of-use assets between approximately $235 million and $245 million, based upon the present value of remaining operating lease liabilities adjusted for prepaid and deferred rent, including deferred construction allowances from landlords and initial direct costs. These new leasing standards are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted for all entities. The Company intends to adopt this guidance in the first quarter of fiscal 2019. The Company is finalizing the impact of the standard on its accounting policies, processes, disclosures, and internal control over financial reporting and has implemented a new lease accounting system. The Company is currently evaluating the impact of this new standard on its condensed consolidated financial statements and is anticipating a material impact on the Company’s consolidated balance sheet, as noted in the ranges above. In August 2018, the FASB issued ASU 2018-15, “Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is A Service Contract” (“ASU 2018-15”). This update clarifies the accounting treatment for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The amendments may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company intends to adopt this guidance in the first quarter of fiscal 2019 using the prospective adoption method. The Company is still evaluating the prospective impact of this guidance on its future consolidated financial statements and related disclosures. |
Subsequent Events |
12 Months Ended |
---|---|
Feb. 02, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Events Subsequent to February 2, 2019, the Company has repurchased and retired 182,556 shares of common stock at an aggregate cost of approximately $1.7 million. On March 22, 2019, the Company entered into a logistics agreement with a third-party for storage, distribution and inventory management services including the lease of 200,000 square feet of distribution center space. On March 26, 2019, the Board approved the grant of 429,268 stock options and 214,632 restricted stock units to various employees. Both the stock options and also the RSUs will vest ratably on an annual basis over four years. |
Quarterly Financial Information (Unaudited) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) The following is selected unaudited quarterly financial data for the fiscal years ended February 2, 2019 and February 3, 2018. Each quarterly period listed below was a 13-week accounting period, with the exception of the fourth quarter of fiscal 2017, which was a 14-week accounting period. The sum of the four quarters for any given year may not equal annual totals due to rounding. Summarized quarterly financial results for fiscal 2018 and fiscal 2017 follow (in thousands, except per share amounts):
|
Description of Business and Significant Accounting Policies (Policies) |
12 Months Ended |
---|---|
Feb. 02, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal year | Fiscal year — The Company’s fiscal year is comprised of the 52 or 53-week period ending on the Saturday closest to January 31. Accordingly, fiscal 2018 represented the 52 weeks ended on February 2, 2019, fiscal 2017 represented the 53 weeks ended on February 3, 2018 and fiscal 2016 represented the 52 weeks ended on January 28, 2017. |
Cash equivalents | Cash equivalents — Cash and cash equivalents consist of cash on deposit in banks and payments due from banks for customer credit cards, as they generally settle within 24-48 hours. |
Inventory | The Company estimates the amount of shrinkage that has occurred through theft or damage and adjusts that amount to actual at the time of its physical inventory counts which occur throughout the fiscal year. The Company also evaluates the cost of inventory by category and class of merchandise in relation to the estimated sales price. This evaluation is performed to ensure that inventory is not carried at a value in excess of the amount expected to be realized upon the sale of the merchandise. The Company receives various payments and allowances from vendors, including rebates and other credits. The amounts received are subject to the terms of vendor agreements, which generally do not state an expiration date, but are subject to ongoing negotiations that may be impacted in the future based on changes in market conditions and changes in the profitability, quality, or sell-through of the related merchandise. For all such vendor allowances, the Company records the vendor funds as a reduction of inventories. As the related inventory is sold, such allowances and credits are recognized as a reduction to cost of sales. Inventory — The Company’s inventory is stated at the lower of cost or net realizable value, net of reserves and allowances, with cost determined using the average cost method, with average cost approximating current cost. Inventory cost consists of the direct cost of merchandise including freight. The Company incurs various types of warehousing, transportation and delivery costs in connection with inventory purchases and distribution. Such costs are included as a component of the overall cost of inventories and recognized as a component of cost of sales as the related inventory is sold. |
Prepaid expenses and other current assets | Prepaid expenses and other current assets — The Company recognizes assets for expenses paid but not yet incurred, as well as other items such as supplies inventory and miscellaneous receivables. |
Property and equipment | Property and equipment — Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the respective assets. Furniture, fixtures and equipment are generally depreciated over five years. Leasehold improvements are amortized over the shorter of the useful life of the asset or the expected lease term, typically ranging from five to 10 years. Maintenance and repairs are expensed as incurred, and improvements are capitalized. Gains or losses on the disposition of fixed assets are recorded upon disposal of the related asset. |
Cost of internal use software | Cost of internal use software — The Company capitalizes the cost of computer software developed or obtained for internal use. Capitalized computer software costs consist primarily of payroll-related and consulting costs incurred during the application development stage. The Company expenses costs related to preliminary project assessments, research and development, re-engineering, training and application maintenance as they are incurred. Capitalized software costs are amortized on a straight-line basis over an estimated life of three to 10 years. |
Asset retirement obligations | Asset retirement obligations — The Company recognizes a liability for the fair value of required asset retirement obligations (“ARO”) when such obligations are incurred. The Company’s AROs are primarily associated with leasehold improvements which, at the end of a lease, the Company is contractually obligated to remove in order to comply with the lease agreement. At the inception of a lease with such conditions, the Company records an ARO liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. The liability is estimated based on various assumptions requiring management’s judgment and is accreted to its projected future value over time. The capitalized asset is depreciated using the convention for depreciation of leasehold improvement assets. Upon satisfaction of the ARO conditions, any difference between the recorded ARO liability and the actual retirement costs incurred is recognized as an operating gain or loss in the consolidated statements of income. |
Impairment of long-lived assets | Impairment of long-lived assets — The Company evaluates the recoverability of the carrying amounts of long-lived assets whenever events or changes in circumstances dictate that their carrying values may not be recoverable. This review includes the evaluation of individual underperforming retail stores and assessing the recoverability of the carrying values of the assets related to the stores. Future cash flows are projected for the remaining lease life. The Company calculates the fair values of long-lived assets using the age-life method. If the estimated fair values are less than the carrying values of the assets, the Company records an impairment charge equal to the difference, if any, between the assets’ fair values and carrying values. |
Insurance reserves | Insurance reserves — Workers’ compensation, general liability and employee medical insurance programs are predominately self-insured. It is the Company’s policy to record a self-insurance liability using estimates of claims incurred but not yet reported or paid, based on historical claims experience and actuarial methods. Actual results can vary from estimates for many reasons, including, among others, inflation rates, claim settlement patterns, litigation trends and legal interpretations. The Company monitors its claims experience in light of these factors and revises its estimates of insurance reserves accordingly. The level of insurance reserves may increase or decrease as a result of these changing circumstances or trends. |
Customer loyalty program | Customer loyalty program — The Company has established a loyalty program called the K Club, whereby members receive access to coupons, birthday rewards, monthly sweepstakes, sneak peeks, exclusive deals and more. During fiscal 2018, the Company eliminated the program whereby customers earned loyalty points, which became discount certificates at specified levels, in return for making purchases in the Company’s stores, including the e-commerce store. In fiscal years 2017 and prior, the Company accrued for the expected liability associated with the discount certificates issued, as well as the accumulated points that have not yet resulted in the issuance of a certificate, adjusted for expected redemption rates. The Company has also established a private-label credit card program for its customers. Customers in the private label credit card program are eligible to earn five percent off of their total transaction price. The card program is operated and managed by a third-party bank that assumes all credit risk with no recourse to the Company. |
Deferred rent | Deferred rent — Many of the Company’s operating leases contain predetermined fixed escalations of minimum rentals during the initial term. Additionally, the Company does not typically pay rent during the construction period for new stores. For these leases, the Company recognizes the related rental expense on a straight-line basis over the life of the lease commencing with the date of initial access to the leased space, and records the difference between amounts charged to operations and amounts paid as a liability. The Company also receives incentives from landlords in the form of construction allowances. These construction allowances are recorded as deferred rent and amortized as a reduction to rent expense over the lease term. |
Revenue recognition and sales returns | Revenue recognition and sales returns — Net sales includes the sale of merchandise, net of returns, shipping revenue and gift card breakage revenue and excludes sales taxes. The Company estimates a liability for sales returns based on historical return trends, and the Company believes that its estimate for sales returns is an accurate reflection of future returns associated with past sales. However, as with any estimate, refund activity may vary from estimated amounts. Gift card sales are recognized as revenue when tendered for payment. While the Company honors all gift cards presented for payment, the Company determines the likelihood of redemption to be remote for certain gift card balances due to long periods of inactivity. The Company uses the redemption recognition method to account for breakage for unused gift card amounts where breakage is recognized as gift cards are redeemed for the purchase of goods based upon a historical breakage rate. In these circumstances, to the extent the Company determines there is no requirement for remitting card balances to government agencies under unclaimed property laws, such amounts are recognized in the consolidated statement of income as a component of net sales. The Company recognizes revenue at the time of sale of merchandise to customers in its stores. E-commerce revenue is recorded at estimated time of delivery to the customer. If the Company receives payment before completion of its customer obligations, the revenue is deferred until the customer takes possession of the merchandise and the sale is complete. |
Cost of sales | Cost of sales — Cost of sales includes costs of product purchased from vendors, including inbound freight, receiving costs, inspection costs, warehousing costs, outbound freight, inventory damage and shrinkage, payroll and overhead associated with our distribution facility and its network, store occupancy costs and depreciation of leasehold improvements, equipment, and other property in our stores and distribution centers. |
Compensation and benefits | Compensation and benefits — Compensation and benefits includes all store and corporate office salaries and wages and incentive pay as well as stock compensation, employee health benefits, 401(k) plan benefits, social security and unemployment taxes. |
Stock-based compensation | Stock-based compensation — Stock-based compensation includes expenses associated with stock option grants, restricted stock grants, and other transactions under the Company’s stock plans. The Company recognizes compensation expense for its stock-based payments based on the fair value of the awards. The expense is recorded on a straight-line basis over the vesting period within compensation and benefits in the consolidated statements of income. The Company allows for the settlement of vested stock options on a net share basis (“net settled stock options”), instead of settlement with a cash payment (“cash settled stock options”), if so desired by the holder. With net settled stock options, the employee does not surrender any cash or shares upon exercise. Rather, the Company withholds the number of shares to cover the option exercise price and the minimum statutory tax withholding obligations from the shares that would otherwise be issued upon exercise. The settlement of vested stock options on a net share basis results in fewer shares issued by the Company. Expected price volatility — The expected price volatility is a measure of the amount by which the stock price has fluctuated or is expected to fluctuate. The Company uses actual historical changes in the market value of its stock to calculate the volatility assumption as it is management’s belief that this is the best indicator of future volatility. The Company calculates daily market value changes using the historical volatility of returns for the six years prior to the grant. An increase in the expected volatility will increase compensation expense. Risk-free interest rate — The risk-free interest rate is the U.S. Treasury rate for the week of the grant having a term equal to the expected life of the option. An increase in the risk-free interest rate will increase compensation expense. Expected life — The expected life is the period of time over which the options granted are expected to remain outstanding. The Company uses the “simplified” method found in the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107 to estimate the expected life of stock option grants. Options granted have a maximum term of ten years. An increase in the expected life will increase compensation expense. Dividend yield — The dividend yield is the estimated dividend yield for the weighted average expected life of the option granted. The Company paid a dividend on its common stock in fiscal 2016. In fiscal 2017 and fiscal 2018, the Company did not pay a dividend on its common stock. The Company does not pay a regular, reoccurring dividend. The addition or increase of a dividend will decrease compensation expense. The Company currently has no plans to pay additional dividends. Forfeiture rate — The forfeiture rate is the percentage of options granted that were forfeited or canceled before becoming fully vested. The Company accounts for forfeitures of share-based awards as they occur. An increase in the forfeiture rate will decrease compensation expense. Restricted stock units — The Company periodically grants restricted stock units for a fixed number of shares to various employees and directors. The RSUs granted to directors become 100% vested on the first anniversary of the grant date. The RSUs granted to employees typically vest 25% annually on the anniversary of the grant date over 4 years. |
Other operating expenses | Other operating expenses — Other operating expenses consist of such items as advertising, credit card processing and other bank fees, utilities, professional fees, software maintenance costs, supplies and postage, workers’ compensation and general liability insurance, trash removal, maintenance and repairs, travel and various other store and corporate expenses. |
Store preopening expenses | Store pre-opening expenses — Store pre-opening expenses, which consist primarily of occupancy, payroll and supplies costs, are expensed as incurred. |
Advertising expenses | Advertising expenses — Advertising costs are expensed in the period in which the related activity first takes place. These expenses include costs associated with specific marketing campaigns, direct mail, email communications, paid search and other digital advertising, social media, public relations, in-store collateral and signage and other expenses related to the in-store experience. |
Income taxes | Income taxes — Deferred tax assets and liabilities are recognized based on the differences between the financial statement and the tax law treatment of certain items. Realization of certain components of deferred tax assets is dependent upon the occurrence of future events. The Company records valuation allowances to reduce its deferred tax assets to the amount it believes is more likely than not to be realized. These valuation allowances can be impacted by changes in tax laws, changes to statutory tax rates, and future taxable income levels and are based on the Company’s judgment, estimates and assumptions regarding those future events. In the event the Company were to determine that it would not be able to realize all or a portion of the net deferred tax assets in the future, the Company would increase the valuation allowance through a charge to income tax expense in the period that such determination is made. Conversely, if the Company were to determine that it would be able to realize its deferred tax assets in the future, in excess of the net carrying amounts, the Company would decrease the recorded valuation allowance through a decrease to income tax expense in the period that such determination is made. The Company provides for uncertain tax positions and the related interest and penalties, if any, based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected. The Company’s income tax returns are subject to audit by local, state and federal authorities, and the Company is typically engaged in various tax examinations at any given time. Tax contingencies often arise due to uncertainty or differing interpretations of the application of tax rules throughout the various jurisdictions in which the Company operates. The contingencies are influenced by items such as tax audits, changes in tax laws, litigation, appeals and experience with previous similar tax positions. The Company regularly reviews its tax reserves for these items and assesses the adequacy of the amount recorded. The Company evaluates potential exposures associated with its various tax filings by estimating a liability for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires estimation and measurement of the tax benefit as the largest amount that is more than 50% likely to be recognized upon settlement. |
Sales and use taxes | Sales and use taxes — Governmental authorities assess sales and use taxes on the sale and purchase of goods and services. The Company excludes taxes collected from customers in its reported sales results. Such amounts are reflected as accrued expenses until remitted to the taxing authorities. |
Concentrations of risk | Concentrations of risk — Most of the Company’s merchandise is purchased through vendors in the United States who import the merchandise manufactured primarily in China. However, the Company believes alternative merchandise sources could be procured over a relatively short period of time. |
Fair value of financial instruments | Fair value of financial instruments — Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying amounts of cash and cash equivalents, accounts receivable, other current assets and accounts payable approximate fair value because of their short maturities. The Company also maintains The Executive Non-Qualified Excess Plan (the “Deferred Compensation Plan”) as discussed further in Note 7 - Retirement Benefit Plans. The Deferred Compensation Plan is funded, and the Company invests participant deferrals into trust assets, which are invested in a variety of mutual funds that are Level 1 inputs. The plan assets and plan liabilities are adjusted to fair value on a recurring basis. |
Earnings per share | Earnings per share — Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding during each period presented. Diluted earnings per share is computed by dividing net income by the weighted average number of shares outstanding plus the dilutive effect of stock equivalents outstanding during the applicable periods using the treasury stock method. Diluted earnings per share reflects the potential dilution that could occur if options to purchase stock were exercised into common stock and if outstanding grants of restricted stock were vested. |
Comprehensive income | Comprehensive income — Comprehensive income does not differ from the consolidated net income presented in the consolidated statements of income. |
Operating segments | Operating segments — The Company has determined that each of its stores is an operating segment. The operating performance of all stores has been aggregated into one reportable segment. The Company’s operating segments are aggregated for financial reporting purposes because they are similar in each of the following areas: economic characteristics, class of consumer, nature of products and distribution methods. Revenues from external customers are derived from merchandise sales, and the Company does not rely on any major customers as a source of revenue. Across its store base, the Company operates one store format under the Kirkland’s name in which each store offers the same general mix of merchandise with similar categories and similar customers. The Company believes that disaggregating its operating segments would not provide meaningful additional information. |
New accounting pronouncements recently adopted and new accounting pronouncements not yet adopted | New Accounting Pronouncements Recently Adopted In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. ASU 2014-09 also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in ASU 2014-09 were effective for the Company at the beginning of its fiscal 2018 year. Companies that transitioned to this new standard could either retrospectively restate each prior reporting period or reflect the cumulative effect of initially applying the updates with an adjustment to retained earnings at the date of adoption. The Company adopted this standard in the first quarter of fiscal 2018 using the modified retrospective method. The Company identified its loyalty program as the area that was most affected by the new revenue recognition guidance. Additionally, the Company’s historical accounting for gift card breakage is consistent with the new revenue recognition guidance. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”). This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless (a) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, (b) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified and (c) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments in ASU 2017-09 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not been issued. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. The Company adopted this guidance in the first quarter of fiscal 2018. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. New Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which supersedes the existing guidance for lease accounting, Leases (Topic 840) (“ASU 2016-02”). ASU 2016-02 requires lessees to recognize a lease liability and a right-of-use asset for both operating leases and finance leases on the balance sheet at the lease commencement date. For operating leases, the lessee would recognize a straight-line total lease expense, while for finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset. The Company currently only has operating leases. Lessor accounting remains largely unchanged, and the Company is not a lessor in any lease agreements. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. There have been multiple standard updates amending this guidance or providing corrections or improvements on issues in the guidance. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which provides an optional transition method in addition to the existing modified retrospective transition method by allowing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Under this transition method, companies may continue to report comparative periods under ASC 840, although they must also provide the required disclosures under ASC 840 for all periods presented under ASC 840. The Company plans to elect the alternative transition method, apply the transition approach as of the beginning of the period of adoption and not restate comparative periods. The Company plans to elect the package of practical expedients available under the transition provisions of ASC 842, including (i) not reassessing whether expired or existing contracts contain leases, (ii) not reassessing lease classification, and (iii) not revaluing initial direct costs for existing leases. Further, the Company expects to elect a short-term lease exception policy, permitting it to exclude the recognition requirements of this standard from short-term leases (i.e. leases with initial terms of 12 months or less). The majority of the Company’s leases have variable non-lease components. For leases where the non-lease components are fixed, the Company has elected an accounting policy to account for lease and non-lease components as a single component. In January 2018, the FASB issued ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842.” This update permits an entity to elect an optional transition practical expedient to not evaluate land easements that exist or expired before the entity’s adoption of ASU 2016-02 and that were not accounted for as leases under previous lease guidance. The Company plans to elect this practical expedient. The Company currently estimates it will record operating lease liabilities of between approximately $290 million to $300 million based on the present value of the remaining minimum rental payments using discount rates as of the effective date. The Company currently estimates that it will record corresponding right-of-use assets between approximately $235 million and $245 million, based upon the present value of remaining operating lease liabilities adjusted for prepaid and deferred rent, including deferred construction allowances from landlords and initial direct costs. These new leasing standards are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted for all entities. The Company intends to adopt this guidance in the first quarter of fiscal 2019. The Company is finalizing the impact of the standard on its accounting policies, processes, disclosures, and internal control over financial reporting and has implemented a new lease accounting system. The Company is currently evaluating the impact of this new standard on its condensed consolidated financial statements and is anticipating a material impact on the Company’s consolidated balance sheet, as noted in the ranges above. In August 2018, the FASB issued ASU 2018-15, “Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is A Service Contract” (“ASU 2018-15”). This update clarifies the accounting treatment for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The amendments may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company intends to adopt this guidance in the first quarter of fiscal 2019 using the prospective adoption method. The Company is still evaluating the prospective impact of this guidance on its future consolidated financial statements and related disclosures. |
Accrued Expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued expenses are comprised of the following (in thousands):
|
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Expense | The Company’s income tax expense is computed based on the federal statutory rates and the state statutory rates, net of related federal benefit. The Company’s provision for income taxes consists of the following (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Income Tax Expense at the Statutory Federal Income Tax Rate | A reconciliation of income tax expense at the statutory federal income tax rate to the amount provided is as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|
Long-Term Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rent Expense Under Operating Leases | Rent expense under operating leases including cash rent and straight-line rent for lease escalations and construction allowance amortization is as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Lease Payments Under Operating Leases | Future minimum lease payments under all operating leases with initial terms of one year or more consist of the following:
|
Stock-Based Compensation (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option Activity | Stock option activity for the fiscal year ended February 2, 2019 was as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average for Key Assumptions Used in Determining the Fair Value of Options Granted | The weighted averages for key assumptions used in determining the fair value of options granted in fiscal years 2018, 2017 and 2016 and a summary of the methodology applied to develop each assumption are as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Activity | RSU activity for the fiscal year ended February 2, 2019, was as follows:
|
Related Party Transactions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Results Related to Vendor | The table below sets forth selected results related to this vendor in dollars (in thousands) and percentages for the periods indicated:
|
Stock Repurchase Plan (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||
Class of Treasury Stock | The table below sets forth selected stock repurchase plan information (in thousands, except share amounts) for the periods indicated:
|
Quarterly Financial Information (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Quarterly Financial Results | Summarized quarterly financial results for fiscal 2018 and fiscal 2017 follow (in thousands, except per share amounts):
|
Description of Business and Significant Accounting Policies - Description of Business and Reclassifications (Details) |
Feb. 02, 2019
state
store
|
---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of home decor and gifts stores | store | 428 |
Number of states in which the company operates | state | 37 |
Description of Business and Significant Accounting Policies - Inventory (Details) - USD ($) $ in Millions |
Feb. 02, 2019 |
Feb. 03, 2018 |
---|---|---|
Inventory [Abstract] | ||
Distribution center costs included in inventory | $ 6.1 | $ 5.1 |
Description of Business and Significant Accounting Policies - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions |
Feb. 02, 2019 |
Feb. 03, 2018 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Receivables included in prepaid expenses and other current assets | $ 3.2 | $ 4.0 |
Description of Business and Significant Accounting Policies - Property and Equipment (Details) |
12 Months Ended |
---|---|
Feb. 02, 2019 | |
Furniture, fixtures and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of assets | 5 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of assets | 5 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of assets | 10 years |
Description of Business and Significant Accounting Policies - Cost of Internal Use Software (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Depreciation of capitalized software | $ 7.4 | $ 7.1 | $ 6.1 |
Net book value of capitalized software assets | 19.6 | 20.3 | |
Capitalized computer software currently under development | $ 6.3 | $ 4.7 | |
Capitalized Software Costs | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated life of software | 3 years | ||
Capitalized Software Costs | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated life of software | 10 years |
Description of Business and Significant Accounting Policies - Asset Retirement Obligations (Details) - USD ($) $ in Thousands |
Feb. 02, 2019 |
Feb. 03, 2018 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Liability for asset retirement obligations | $ 768 | $ 722 |
Description of Business and Significant Accounting Policies - Insurance Reserves (Details) - USD ($) $ in Millions |
Feb. 02, 2019 |
Feb. 03, 2018 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Self-insurance reserve | $ 7.4 | $ 7.1 |
Description of Business and Significant Accounting Policies - Revenue Recognition and Sales Returns, Advertising Expenses, Income Taxes, Earnings Per Share, and Operating Segments (Details) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019
USD ($)
Segment
shares
|
Feb. 03, 2018
USD ($)
shares
|
Jan. 28, 2017
USD ($)
shares
|
|
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Distribution Expense | $ 22,600 | $ 20,800 | $ 18,800 |
Liability for sales returns | 1,520 | 1,520 | |
Sales return reserve product recovery asset | 600 | 600 | |
Deferred revenue | 1,000 | 700 | |
Contract assets in inventory | 400 | 300 | |
Gift card breakage recognized as revenue | 1,100 | 800 | 1,100 |
Advertising expense | $ 12,800 | $ 10,500 | $ 9,300 |
Tax benefit likelihood recognized | 50.00% | ||
Stock options not included in the computation of diluted earnings per share (in shares) | shares | 923 | 686 | 629 |
Number of reportable segments | Segment | 1 | ||
Gift cards | $ 13,032 | $ 11,326 | $ 9,500 |
Gift card redemptions revenue recognized | 6,200 | ||
Prepaid Advertising | $ 400 | $ 100 |
Accrued Expenses (Details) - USD ($) $ in Thousands |
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
---|---|---|---|
Payables and Accruals [Abstract] | |||
Salaries and wages | $ 5,555 | $ 5,704 | |
Gift cards | 13,032 | 11,326 | $ 9,500 |
Sales taxes | 1,552 | 2,596 | |
Deferred rent | 10,591 | 10,206 | |
Workers’ compensation and general liability reserves | 2,894 | 3,137 | |
Sales return reserve | 1,520 | 1,520 | |
Other | 2,521 | 4,383 | |
Total accrued expenses | $ 37,665 | $ 38,872 |
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Apr. 29, 2017 |
Feb. 02, 2019 |
Feb. 03, 2018 |
|
Income Tax [Line Items] | |||
Tax expense due to revaluation from the Tax Cuts and Jobs Act | $ 419 | ||
Valuation allowance for deferred tax assets | $ 83 | $ 73 | |
Unrecognized tax benefits reductions due to lapse of the statute of limitations | 0 | 144 | |
Accrued payment of interest and penalties associated with unrecognized tax benefits | 0 | $ 0 | |
State and Local | |||
Income Tax [Line Items] | |||
Operating loss carryforwards | 1,300 | ||
State tax credit carryforwards | $ 183 |
Income Taxes - Income Tax Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Current tax expense: | |||
Federal | $ 708 | $ 5,141 | $ 7,325 |
State | 810 | 876 | 845 |
Deferred tax expense (benefit): | |||
Federal | 455 | (1,207) | (1,379) |
State | 58 | (290) | (862) |
Income tax expense | $ 2,031 | $ 4,520 | $ 5,929 |
Income Taxes - Reconciliation of Income Tax Expense at the Statutory Federal Income Tax Rate (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Income Tax Disclosure [Abstract] | |||
Tax at federal statutory rate | $ 1,220 | $ 3,308 | $ 5,941 |
State income taxes, net of federal benefit | 651 | 559 | 598 |
Tax credits | (437) | (174) | (255) |
Enactment of tax legislation | 0 | 419 | 0 |
Unrecognized tax positions | 0 | (185) | (202) |
Stock based compensation programs | 545 | 575 | 23 |
Other | 52 | 18 | (176) |
Income tax expense | $ 2,031 | $ 4,520 | $ 5,929 |
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Feb. 02, 2019 |
Feb. 03, 2018 |
---|---|---|
Deferred tax assets: | ||
Accruals | $ 2,914 | $ 2,884 |
Inventory valuation | 664 | 671 |
State tax credit carryforwards | 144 | 197 |
State net operating loss carryforwards | 85 | 14 |
Deferred rent | 3,755 | 3,966 |
Other | 3,294 | 3,933 |
Total deferred tax assets | 10,856 | 11,665 |
Valuation allowance for deferred tax assets | (83) | (73) |
Net deferred tax assets | 10,773 | 11,592 |
Deferred tax liabilities: | ||
Depreciation | (8,352) | (8,742) |
Prepaid assets | (718) | (634) |
Total deferred tax liabilities | (9,070) | (9,376) |
Net deferred tax assets | $ 1,703 | $ 2,216 |
Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
|
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount [Abstract] | ||
Balance at the beginning of the year | $ 0 | $ 144 |
Reductions due to lapse of the statute of limitations | 0 | (144) |
Balance at the end of the year | $ 0 | $ 0 |
Senior Credit Facility (Details) - Secured Credit Facility - USD ($) |
Feb. 26, 2016 |
Feb. 02, 2019 |
---|---|---|
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 75,000,000 | |
Swingline availability | $ 10,000,000 | |
Percentage of fee on unused portion of the facility | 0.25% | |
Incremental accordion feature amount | $ 25,000,000 | |
Outstanding borrowings | $ 0 | |
Available borrowing capacity | $ 53,000,000 | |
Minimum | ||
Line of Credit Facility [Line Items] | ||
Interest at an annual rate equal to LIBOR plus a margin range | 1.25% | |
Maximum | ||
Line of Credit Facility [Line Items] | ||
Interest at an annual rate equal to LIBOR plus a margin range | 1.75% |
Long-Term Leases - Additional Information (Details) |
Feb. 02, 2019 |
---|---|
Leases [Abstract] | |
Maximum term of operating leases | 10 years |
Long-Term Leases - Rent Expense Under Operating Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Leases [Abstract] | |||
Minimum rent | $ 55,596 | $ 57,330 | $ 53,329 |
Contingent rent | 1,553 | 1,786 | 2,019 |
Total rent expense | $ 57,149 | $ 59,116 | $ 55,348 |
Long-Term Leases - Future Minimum Lease Payments Under Operating Leases (Details) $ in Thousands |
Feb. 02, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
2019 | $ 67,354 |
2020 | 62,102 |
2021 | 53,164 |
2022 | 44,087 |
2023 | 35,606 |
Thereafter | 91,629 |
Total minimum lease payments | $ 353,942 |
Stock-Based Compensation - Weighted Average for Key Assumptions Used in Determining the Fair Value of Options Granted (Details) |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expected price volatility | 47.00% | 46.00% | 48.00% |
Risk-free interest rate | 2.79% | 1.96% | 1.68% |
Expected life | 6 years 3 months 18 days | 6 years 3 months 18 days | 6 years 3 months 18 days |
Dividend yield | 0.00% | 0.00% | 0.00% |
Stock-Based Compensation - RSU Activity (Details) - Restricted Stock Units - $ / shares |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Shares | |||
Beginning balance, non-vested (in shares) | 245,700 | ||
Granted (in shares) | 243,734 | 148,500 | 132,500 |
Vested (in shares) | (110,400) | ||
Forfeited (in shares) | (64,750) | ||
Ending balance, non-vested (in shares) | 314,284 | 245,700 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 13.29 | ||
Granted (in dollars per share) | 10.83 | $ 9.01 | $ 13.49 |
Vested (in dollars per share) | 15.98 | ||
Forfeited (in dollars per share) | 12.00 | ||
Ending balance (in dollars per share) | $ 10.71 | $ 13.29 |
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - shares |
1 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jan. 01, 2019 |
Jan. 01, 2017 |
Jun. 30, 2016 |
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
Jun. 04, 2013 |
Jul. 31, 2002 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Maximum shares of common stock award (in shares) | 3,500,000 | |||||||
Shares remaining under the original authorization (in shares) | 878,355 | |||||||
Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Discount rate of employee stock purchase plan | 15.00% | |||||||
Maximum shares of common stock award (in shares) | 695,000 | 500,000 | ||||||
Number of additional shares authorized (in shares) | 35,000 | 35,000 | 125,000 | |||||
Shares of common stock issued (in shares) | 37,128 | 34,963 | 31,879 | |||||
Shares remaining under the original authorization (in shares) | 104,198 |
Retirement Benefit Plans (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Jan. 01, 2018 |
Jan. 01, 2017 |
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Postemployment Benefits [Abstract] | |||||
Maximum matching contribution percent for 401(k) savings plan | 4.00% | 6.00% | |||
Percent of employee's contribution matched for 401(k) savings plan | 100.00% | 50.00% | |||
Company's matching contributions to the 401(k) savings plan | $ 904,000 | $ 585,000 | $ 531,000 | ||
Additional contributions made on behalf of employees to 401(k) savings plan | 0 | 0 | 0 | ||
Deferred Compensation Plan assets | 1,900,000 | 2,200,000 | |||
Deferred Compensation Plan liabilities | 1,900,000 | 2,200,000 | |||
Company's matching contributions | $ 0 | $ 41,000 | $ 48,000 |
Related Party Transactions (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Related Party Transactions [Abstract] | |||
Purchases | $ 54,280 | $ 57,427 | $ 44,703 |
Purchases as a percent of total merchandise purchases | 20.70% | 21.50% | 17.60% |
Stock Repurchase Plan (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Sep. 24, 2018 |
Aug. 22, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate amount of common stock authorized for repurchase | $ 10,000,000 | $ 10,000,000 | ||
Common stock repurchased and retired (in shares) | 1,650,748 | 51,923 | ||
Common stock repurchased and retired | $ 15,717,000 | $ 604,000 | ||
Remaining amount of common stock available for repurchase | $ 3,700,000 |
New Accounting Pronouncements New Accounting Pronouncements (Details) - Scenario, Forecast [Member] $ in Millions |
May 04, 2019
USD ($)
|
---|---|
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating Lease, Liability | $ 290 |
Operating Lease, Right-of-Use Asset | 235 |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating Lease, Liability | 300 |
Operating Lease, Right-of-Use Asset | $ 245 |
Subsequent Events (Details) - USD ($) $ in Thousands |
2 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 26, 2019 |
Mar. 29, 2019 |
Feb. 02, 2019 |
Feb. 03, 2018 |
|
Subsequent Event [Line Items] | ||||
Common stock repurchased and retired (in shares) | 1,650,748 | 51,923 | ||
Common stock repurchased and retired | $ 15,717 | $ 604 | ||
Options granted (in shares) | 157,700 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Common stock repurchased and retired (in shares) | 182,556 | |||
Common stock repurchased and retired | $ 1,700 | |||
Options granted (in shares) | 429,268 | |||
Restricted stock units granted (in shares) | 214,632 |
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 |
Nov. 03, 2018 |
Aug. 04, 2018 |
May 05, 2018 |
Feb. 03, 2018 |
Oct. 28, 2017 |
Jul. 29, 2017 |
Apr. 29, 2017 |
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 216,147 | $ 154,571 | $ 133,899 | $ 142,454 | $ 224,614 | $ 144,979 | $ 131,683 | $ 132,841 | $ 647,071 | $ 634,117 | $ 594,328 |
Gross profit | 74,306 | 46,653 | 36,798 | 45,312 | 79,131 | 45,471 | 40,086 | 42,848 | 203,069 | 207,536 | 202,492 |
Operating (loss) income | 19,080 | (3,618) | (8,961) | (1,620) | 21,093 | (3,767) | (5,696) | (2,278) | 4,881 | 9,352 | 16,999 |
Net (loss) income | $ 14,157 | $ (2,780) | $ (6,715) | $ (882) | $ 12,865 | $ (2,362) | $ (3,772) | $ (1,435) | $ 3,780 | $ 5,296 | $ 11,046 |
(Loss) earnings per share: | |||||||||||
Basic (in dollars per share) | $ 0.96 | $ (0.18) | $ (0.43) | $ (0.06) | $ 0.80 | $ (0.15) | $ (0.24) | $ (0.09) | $ 0.24 | $ 0.33 | $ 0.70 |
Diluted (in dollars per share) | $ 0.95 | $ (0.18) | $ (0.43) | $ (0.06) | $ 0.79 | $ (0.15) | $ (0.24) | $ (0.09) | $ 0.24 | $ 0.33 | $ 0.68 |
9N"*(9C0%<.-
M3Z"M&;AB$!-(A>+.I]#5+/\HLALPN<,TP_\E<,4H;GT*; D@IKWTC^:X0&F>JXIF8K_"1>0
M&!Z48([22!=74O;.&S6QH!3%7\==Z+@/XTVZFV#K@&0")#-@'_.P,5%4_HU[
M7F36#,2.O>]X>.+M(<'>E,$96Q'O4+Q#[Z78[M.,70+1%',<8Y)ES!S!D'U.
MD:RE.";_P9-U^&Y5X2["=Y\47J\3I*L$:21(/Q'"EQ+>;V2Q*VZ*D"V\1I
MA2?>':CO316
=
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M=R(\\?;$?6^*X(RMB'<^>>N]MYP?]BF[!:$).XQ2^.]P N[@WHG;HU'D
M?Z;=)F2)D$V$U?I+0IX(^16!1&WF2IE 772_S@KE?EINX8""BMWZ[<7O>CIP^L:H>Q2L?9
MGOT!4$L#!!0 ( .V$?4X.T3N,60( ,0' 9 >&PO=V]R:W-H965T
M
!+@=60VU<]$D3P3O'5$][8:8C8%>L5Z,4]FT*Z=?::SE7KTGF/D9][=
M&/6:7:<)1IK@6;&?*W R2#P-,% $($5@X_$3!8(-,&B K4'X9#"!W'6:R&IJ
MJT%^E*))*I J\#
3IP3N_6@5AB[CCVHE"1+QS*:7:4&Q-F.
M*1F4_-(J&PO=V]R:W-H965T
>ON-CNL])YSROS1MN\=&[RO-(F>?_17,%V.EZ?3Q*]J>I#98Z+]F-*>U+E
MA^Y#D7?^6C7Z'U!+ P04 " #MA'U.+,-;,/%] "\U@$ % 'AL+W-H
M87)E9%-TWR3")OL#7H1