Revenue Recognition

6 Months Ended

Jan. 28, 2022

Revenue Recognition [Abstract]

Revenue Recognition

7. Revenue Recognition

Revenue consists primarily of sales from restaurant and retail operations. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a restaurant guest, retail customer or other customer.  The Company’s policy is to present sales in the Condensed Consolidated Statements of Income on a net presentation basis after deducting sales tax.

Disaggregation of revenue

Total revenue was comprised of the following for the specified periods:

	Quarter Ended				Six Months Ended
	January 28, 2022		January 29, 2021		January 28, 2022		January 29, 2021
Revenue:
Restaurant	$	656,080	$	521,243	$	1,271,494	$	1,036,467
Retail		206,180		155,926		375,696		287,156
Total revenue	$	862,260	$	677,169	$	1,647,190	$	1,323,623

Restaurant Revenue

The Company recognizes revenues from restaurant sales when payment is tendered at the point of sale, as the Company’s performance obligation to provide food and beverages is satisfied.

Retail Revenue

The Company recognizes revenues from retail sales when payment is tendered at the point of sale, as the Company’s performance obligation to provide merchandise is satisfied.  Ecommerce sales, including shipping revenue, are recorded upon delivery to the customer. Additionally, estimated sales returns are calculated based on return history and sales levels.

Gift Card Breakage

Included in restaurant and retail revenue is gift card breakage.  Customer purchases of gift cards, to be utilized at the Company’s stores, are not recognized as sales until the card is redeemed and the customer purchases food and/or merchandise.   Gift cards do not carry an expiration date; therefore, customers can redeem their gift cards indefinitely. A certain number of gift cards will not be fully redeemed. Management estimates unredeemed balances and recognizes gift card breakage revenue for these amounts in the Company’s Condensed Consolidated Statements of Income over the expected redemption period.  Gift card breakage is recognized when the likelihood of a gift card being redeemed by the customer is remote, and the Company determines that there is not a legal obligation to remit the unredeemed gift card balance to the relevant jurisdiction.

The determination of the gift card breakage rate is based upon the Company’s specific historical redemption patterns. The Company recognizes gift card breakage by applying its estimate of the rate of gift card breakage over the period of estimated redemption.  For the quarter and six months ended January 28, 2022, gift card breakage was $2,164 and $3,269, respectively.  For the quarter and six months ended January 29, 2021, gift card breakage was $1,754 and $2,694, respectively.

Deferred revenue related to the Company’s gift cards was $119,996 and $93,098, respectively, at January 28, 2022 and July 30, 2021.  Revenue recognized in the Condensed Consolidated Statements of Income for the six months ended January 28, 2022 and January 29, 2021, respectively, for the redemption of gift cards which were included in the deferred revenue balance at the beginning of the fiscal year was $28,809 and $26,944.