Net Sales

12 Months Ended

Jan. 29, 2022

Net Sales [Abstract]

Net Sales

(2) Net Sales

Ollie’s recognizes retail sales in its stores when merchandise is sold and the customer takes possession of merchandise.  Also included in net sales is revenue allocated to certain redeemed discounts earned via the Ollie’s Army loyalty program and gift card breakage.  Net sales are presented net of returns and sales tax. The Company provides an allowance for estimated retail merchandise returns based on prior experience.

Revenue Recognition

Revenue is deferred for the Ollie’s Army loyalty program where members accumulate points that can be redeemed for discounts on future purchases.  The Company has determined it has an additional performance obligation to Ollie’s Army members at the time of the initial transaction.  The Company allocates the transaction price to the initial transaction and the discount awards based upon its relative standalone selling price, which considers historical redemption patterns for the award.  Revenue is recognized as those discount awards are redeemed.  Discount awards issued upon the achievement of specified point levels are subject to expiration.  Unless temporarily extended, the maximum redemption period is 45 days.  At the end of each fiscal period, unredeemed discount awards and accumulated points to earn a future discount award are reflected as a liability.  Discount awards are combined in one homogeneous pool and are not separately identifiable.  Therefore, the revenue recognized consists of discount awards redeemed that were included in the deferred revenue balance at the beginning of the period as well as discount awards issued during the current period.  The following table is a reconciliation of the liability related to this program (in thousands):

	Fiscal year ended
	January 29, 2022			January 30, 2021			February 1, 2020
Beginning balance	$	8,113		$	8,254		$	9,055
Revenue deferred		15,290			17,813			15,720
Revenue recognized		(15,621	)		(17,954	)		(16,521	)
Ending balance	$	7,782		$	8,113		$	8,254

Gift card breakage for gift card liabilities not subject to escheatment is recognized as revenue in proportion to the redemption of gift cards. Gift cards do not expire. The rate applied to redemptions is based upon a historical breakage rate.  Gift cards are combined in one homogenous pool and are not separately identifiable.  Therefore, the revenue recognized consists of gift cards that were included in the liability at the beginning of the period as well as gift cards that were issued during the period.  The following table is a reconciliation of the gift card liability (in thousands):

	Fiscal year ended
	January 29, 2022			January 30, 2021			February 1, 2020
Beginning balance	$	1,902		$	1,679		$	1,448
Gift card issuances		5,433			4,906			5,178
Gift card redemption and breakage		(5,044	)		(4,683	)		(4,947	)
Ending balance	$	2,291		$	1,902		$	1,679

Sales return allowance is recorded on a gross basis on the consolidated balance sheets as a refund liability and an asset for recovery.  The allowance for estimated retail merchandise returns is based on prior experience. The following table provides a reconciliation of the activity related to the Company’s sales returns allowance (in thousands):

	Fiscal year ended
	January 29, 2022			January 30, 2021			February 1, 2020
Beginning balance	$	1,060		$	1,060		$	798
Provisions		54,475			52,472			55,649
Sales returns		(54,434	)		(52,472	)		(55,387	)
Ending balance	$	1,101		$	1,060		$	1,060