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Change in Accounting Principle-Stock-Based Compensation
3 Months Ended
May 04, 2013
Accounting Changes And Error Corrections [Abstract]  
Change in Accounting Principle-Stock-Based Compensation

NOTE 2—CHANGE IN ACCOUNTING PRINCIPLE—STOCK-BASED COMPENSATION

In the third quarter of fiscal 2012, the Company changed its policy for recognizing stock-based compensation expense from the graded method of accounting to the straight-line method of accounting for its time-based units (or service-only awards). The Company previously disclosed this change in accounting policy and retrospectively restated its consolidated financial statements for such change in its audited consolidated financial statements for fiscal 2012.

Based on research and analysis, the Company believes the straight-line method of accounting for stock-based compensation expense for service-only awards is the predominant method used in its industry. In order for the Company’s results of operations to be comparable to its peers, it has concluded that the straight-line method of accounting for stock-based compensation is a preferable accounting method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 250-10-45.

The following table presents the unaudited comparative effect of the change in accounting method and its impact on key components of the Company’s condensed consolidated statements of operations (in thousands, except share and per share amounts):

 

     Three Months Ended  
     April 28,
2012
 
     Graded
Method
    Straight-Line
Method
 

Net revenues

   $ 217,914      $ 217,914   

Cost of goods sold

     142,646        142,646   
  

 

 

   

 

 

 

Gross profit

     75,268        75,268   

Selling, general and administrative expense

     77,401        77,365   
  

 

 

   

 

 

 

Loss from operations

     (2,133     (2,097

Interest expense

     (1,575     (1,575
  

 

 

   

 

 

 

Loss before income taxes

     (3,708     (3,672

Income tax expense

     56        56   
  

 

 

   

 

 

 

Net loss

   $ (3,764   $ (3,728
  

 

 

   

 

 

 

Shares used in computing basic and diluted net loss per share

     1,000        1,000   

Basic and diluted net loss per share

   $ (3,764   $ (3,728