x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended August 3, 2013 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from to |
Tennessee | 62-0211340 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
Genesco Park, 1415 Murfreesboro Road Nashville, Tennessee | 37217-2895 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | x | Accelerated filer | o | ||
Non-accelerated filer | o (Do not check if smaller reporting company) | Smaller reporting company | o |
INDEX | |
Genesco Inc. |
and Subsidiaries |
Condensed Consolidated Balance Sheets |
(In Thousands, except share amounts) |
Assets | August 3, 2013 | February 2, 2013 (As restated) | July 28, 2012 (As restated) | ||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | 46,027 | $ | 59,795 | $ | 47,222 | |||||
Accounts receivable, net of allowances of $5,048 at August 3, 2013, | |||||||||||
$6,082 at February 2, 2013 and $6,071 at July 28, 2012 | 50,188 | 48,214 | 45,709 | ||||||||
Inventories | 628,074 | 505,344 | 555,626 | ||||||||
Deferred income taxes | 24,076 | 23,725 | 22,685 | ||||||||
Prepaids and other current assets | 60,867 | 45,193 | 57,990 | ||||||||
Total current assets | 809,232 | 682,271 | 729,232 | ||||||||
Property and equipment: | |||||||||||
Land | 6,066 | 6,128 | 6,119 | ||||||||
Buildings and building equipment | 20,256 | 20,390 | 20,336 | ||||||||
Computer hardware, software and equipment | 122,203 | 120,757 | 122,881 | ||||||||
Furniture and fixtures | 155,981 | 148,903 | 137,063 | ||||||||
Construction in progress | 14,590 | 8,702 | 11,388 | ||||||||
Improvements to leased property | 322,082 | 318,376 | 305,891 | ||||||||
Property and equipment, at cost | 641,178 | 623,256 | 603,678 | ||||||||
Accumulated depreciation | (396,589 | ) | (381,587 | ) | (372,150 | ) | |||||
Property and equipment, net | 244,589 | 241,669 | 231,528 | ||||||||
Deferred income taxes | 19,795 | 18,731 | 19,542 | ||||||||
Goodwill | 277,398 | 273,827 | 269,310 | ||||||||
Trademarks, net of accumulated amortization of $3,884 at August 3, | |||||||||||
2013, $3,350 at February 2, 2013 and $2,787 at July 28, 2012 | 75,815 | 77,408 | 77,768 | ||||||||
Other intangibles, net of accumulated amortization of $18,812 at | |||||||||||
August 3, 2013, $17,220 at February 2, 2013 and $15,406 at | |||||||||||
July 28, 2012 | 10,223 | 11,598 | 13,177 | ||||||||
Other noncurrent assets | 20,297 | 20,568 | 33,203 | ||||||||
Total Assets | $ | 1,457,349 | $ | 1,326,072 | $ | 1,373,760 |
Genesco Inc. |
and Subsidiaries |
Condensed Consolidated Balance Sheets |
(In Thousands, except share amounts) |
Liabilities and Equity | August 3, 2013 | February 2, 2013 (As restated) | July 28, 2012 (As restated) | ||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | 244,752 | $ | 118,350 | $ | 212,938 | |||||
Accrued employee compensation | 49,045 | 55,241 | 42,923 | ||||||||
Accrued other taxes | 22,855 | 25,985 | 22,393 | ||||||||
Accrued income taxes | 43 | 2,096 | 2,778 | ||||||||
Current portion – long-term debt | 5,312 | 5,675 | 5,497 | ||||||||
Other accrued liabilities | 55,532 | 60,659 | 65,141 | ||||||||
Provision for discontinued operations | 7,243 | 7,192 | 7,511 | ||||||||
Total current liabilities | 384,782 | 275,198 | 359,181 | ||||||||
Long-term debt | 67,813 | 45,007 | 95,001 | ||||||||
Pension liability | 19,704 | 20,514 | 24,470 | ||||||||
Deferred rent and other long-term liabilities | 147,678 | 157,407 | 141,328 | ||||||||
Provision for discontinued operations | 4,180 | 4,159 | 4,267 | ||||||||
Total liabilities | 624,157 | 502,285 | 624,247 | ||||||||
Commitments and contingent liabilities | |||||||||||
Equity | |||||||||||
Non-redeemable preferred stock | 1,307 | 3,924 | 4,066 | ||||||||
Common equity: | |||||||||||
Common stock, $1 par value: | |||||||||||
Authorized: 80,000,000 shares | |||||||||||
Issued/Outstanding: | |||||||||||
August 3, 2013 – 24,468,597/23,980,133 | |||||||||||
February 2, 2013 – 24,484,915/23,996,451 | |||||||||||
July 28, 2012 – 24,782,586/24,294,122 | 24,469 | 24,485 | 24,783 | ||||||||
Additional paid-in capital | 181,196 | 170,360 | 164,032 | ||||||||
Retained earnings | 673,939 | 669,189 | 605,190 | ||||||||
Accumulated other comprehensive loss | (31,804 | ) | (28,241 | ) | (32,825 | ) | |||||
Treasury shares, at cost (488,464 shares) | (17,857 | ) | (17,857 | ) | (17,857 | ) | |||||
Total Genesco equity | 831,250 | 821,860 | 747,389 | ||||||||
Noncontrolling interest – non-redeemable | 1,942 | 1,927 | 2,124 | ||||||||
Total equity | 833,192 | 823,787 | 749,513 | ||||||||
Total Liabilities and Equity | $ | 1,457,349 | $ | 1,326,072 | $ | 1,373,760 |
Genesco Inc. |
and Subsidiaries |
Condensed Consolidated Statements of Operations |
(In Thousands, except per share amounts) |
Three Months Ended | Six Months Ended | |||||||||||||
August 3, 2013 | July 28, 2012 (As restated) | August 3, 2013 | July 28, 2012 (As restated) | |||||||||||
Net sales | $ | 574,746 | $ | 543,522 | $ | 1,166,134 | $ | 1,143,666 | ||||||
Cost of sales | 291,938 | 270,463 | 584,889 | 563,701 | ||||||||||
Selling and administrative expenses | 274,420 | 256,810 | 545,804 | 526,578 | ||||||||||
Asset impairments and other, net | (7,140 | ) | 404 | (5,811 | ) | 539 | ||||||||
Earnings from operations | 15,528 | 15,845 | 41,252 | 52,848 | ||||||||||
Interest expense, net: | ||||||||||||||
Interest expense | 1,158 | 1,217 | 2,219 | 2,349 | ||||||||||
Interest income | (18 | ) | (10 | ) | (40 | ) | (25 | ) | ||||||
Total interest expense, net | 1,140 | 1,207 | 2,179 | 2,324 | ||||||||||
Earnings from continuing operations before income taxes | 14,388 | 14,638 | 39,073 | 50,524 | ||||||||||
Income tax expense | 5,923 | 4,629 | 16,099 | 18,761 | ||||||||||
Earnings from continuing operations | 8,465 | 10,009 | 22,974 | 31,763 | ||||||||||
Provision for discontinued operations, net | 125 | 41 | 224 | 218 | ||||||||||
Net Earnings | $ | 8,340 | $ | 9,968 | $ | 22,750 | $ | 31,545 | ||||||
Basic earnings per common share: | ||||||||||||||
Continuing operations | $ | 0.36 | $ | 0.41 | $ | 0.99 | $ | 1.30 | ||||||
Discontinued operations | 0.00 | 0.00 | (0.01 | ) | (0.01 | ) | ||||||||
Net earnings | $ | 0.36 | $ | 0.41 | $ | 0.98 | $ | 1.29 | ||||||
Diluted earnings per common share: | ||||||||||||||
Continuing operations | $ | 0.36 | $ | 0.41 | $ | 0.97 | $ | 1.29 | ||||||
Discontinued operations | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | ||||||
Net earnings | $ | 0.35 | $ | 0.40 | $ | 0.96 | $ | 1.28 |
Genesco Inc. |
and Subsidiaries |
Condensed Consolidated Statements of Comprehensive Income |
(In Thousands, except as noted) |
Three Months Ended | Six Months Ended | |||||||||||||
August 3, 2013 | July 28, 2012 (As restated) | August 3, 2013 | July 28, 2012 (As restated) | |||||||||||
Net earnings | $ | 8,340 | $ | 9,968 | $ | 22,750 | $ | 31,545 | ||||||
Other comprehensive income (loss): | ||||||||||||||
Loss on foreign currency forward contract, net of tax of | ||||||||||||||
$0.0 million for three and six months ended July 28, 2012 | — | (9 | ) | — | (20 | ) | ||||||||
Pension liability adjustment net of tax of $0.6 million and | ||||||||||||||
$1.2 million for the three and six months ended Aug. 3, 2013 | 916 | — | 1,900 | — | ||||||||||
Postretirement liability adjustment net of tax of $0.0 million | ||||||||||||||
for the three and six months ended August 3, 2013 | 16 | — | 32 | — | ||||||||||
Foreign currency translation adjustments | (3,175 | ) | (4,169 | ) | (5,495 | ) | 161 | |||||||
Total other comprehensive (loss) income | (2,243 | ) | (4,178 | ) | (3,563 | ) | 141 | |||||||
Comprehensive income | $ | 6,097 | $ | 5,790 | $ | 19,187 | $ | 31,686 |
Genesco Inc. |
and Subsidiaries |
Condensed Consolidated Statements of Cash Flows |
(In Thousands) |
Three Months Ended | Six Months Ended | |||||||||||||
August 3, 2013 | July 28, 2012 (As restated) | August 3, 2013 | July 28, 2012 (As restated) | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||
Net earnings | $ | 8,340 | $ | 9,968 | $ | 22,750 | $ | 31,545 | ||||||
Adjustments to reconcile net earnings to net cash | ||||||||||||||
provided by operating activities: | ||||||||||||||
Depreciation and amortization | 16,454 | 15,291 | 32,883 | 30,544 | ||||||||||
Amortization of deferred note expense and debt discount | 198 | 198 | 396 | 396 | ||||||||||
Deferred income taxes | 2,667 | 1,099 | (2,726 | ) | (2,510 | ) | ||||||||
(Recoveries) provision for losses on accounts receivable | (443 | ) | (592 | ) | (636 | ) | 855 | |||||||
Impairment of long-lived assets | 209 | 391 | 1,417 | 437 | ||||||||||
Restricted stock expense | 2,954 | 2,444 | 5,852 | 4,655 | ||||||||||
Provision for discontinued operations | 206 | 67 | 369 | 360 | ||||||||||
Tax benefit of stock options and restricted stock exercised | (3,000 | ) | (2,340 | ) | (3,080 | ) | (4,666 | ) | ||||||
Other | 567 | 281 | 515 | 639 | ||||||||||
Effect on cash from changes in working capital and other | ||||||||||||||
assets and liabilities, before acquisitions: | ||||||||||||||
Accounts receivable | (5,683 | ) | 2,474 | (1,533 | ) | (2,864 | ) | |||||||
Inventories | (118,727 | ) | (109,802 | ) | (123,396 | ) | (118,708 | ) | ||||||
Prepaids and other current assets | (20,286 | ) | (15,048 | ) | (15,811 | ) | (17,763 | ) | ||||||
Accounts payable | 104,525 | 55,981 | 122,721 | 64,386 | ||||||||||
Other accrued liabilities | 12,733 | 9,934 | (18,659 | ) | (16,892 | ) | ||||||||
Other assets and liabilities | (7,751 | ) | 587 | (4,572 | ) | 8,093 | ||||||||
Net cash (used in) provided by operating activities | (7,037 | ) | (29,067 | ) | 16,490 | (21,493 | ) | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||
Capital expenditures | (19,425 | ) | (18,415 | ) | (37,206 | ) | (32,533 | ) | ||||||
Acquisitions, net of cash acquired | (11,006 | ) | (10,797 | ) | (11,006 | ) | (10,797 | ) | ||||||
Proceeds from asset sales | 60 | 21 | 60 | 38 | ||||||||||
Net cash used in investing activities | (30,371 | ) | (29,191 | ) | (48,152 | ) | (43,292 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||
Payments of long-term debt | (1,917 | ) | (6,404 | ) | (3,243 | ) | (7,597 | ) | ||||||
Borrowings under revolving credit facility | 91,100 | 156,400 | 200,700 | 190,700 | ||||||||||
Payments on revolving credit facility | (69,400 | ) | (84,600 | ) | (174,600 | ) | (123,900 | ) | ||||||
Tax benefit of stock options and restricted stock exercised | 3,000 | 2,340 | 3,080 | 4,666 | ||||||||||
Share repurchases | (2,589 | ) | (20,227 | ) | (11,218 | ) | (20,227 | ) | ||||||
Change in overdraft balances | 22,808 | 4,058 | 4,487 | 9,612 | ||||||||||
Redemption of preferred shares | — | — | (1,462 | ) | — | |||||||||
Dividends paid on non-redeemable preferred stock | — | (35 | ) | (33 | ) | (81 | ) | |||||||
Exercise of stock options and issue shares - Employee Stock | ||||||||||||||
Purchase Plan | 761 | — | 920 | 4,783 | ||||||||||
Other | 1 | (1 | ) | 2 | — | |||||||||
Net cash provided by financing activities | 43,764 | 51,531 | 18,633 | 57,956 | ||||||||||
Effect of foreign exchange rate fluctuations on cash | 3 | (875 | ) | (739 | ) | 261 | ||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | 6,359 | (7,602 | ) | (13,768 | ) | (6,568 | ) | |||||||
Cash and cash equivalents at beginning of period | 39,668 | 54,824 | 59,795 | 53,790 | ||||||||||
Cash and cash equivalents at end of period | $ | 46,027 | $ | 47,222 | $ | 46,027 | $ | 47,222 | ||||||
Supplemental Cash Flow Information: | ||||||||||||||
Net cash paid for: | ||||||||||||||
Interest | $ | 891 | $ | 850 | $ | 1,762 | $ | 1,709 | ||||||
Income taxes | 24,662 | 27,528 | 29,204 | 44,913 |
Genesco Inc. |
and Subsidiaries |
Condensed Consolidated Statements of Equity |
(In Thousands) |
Total Non-Redeemable Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Shares | Non Controlling Interest Non-Redeemable | Total Equity | ||||||||||||||||||||||||
Balance January 28, 2012 (As restated) | $ | 4,957 | $ | 24,758 | $ | 149,479 | $ | 598,360 | $ | (32,966 | ) | $ | (17,857 | ) | $ | 2,249 | $ | 728,980 | |||||||||||||
Net earnings (As restated) | — | — | — | 112,435 | — | — | — | 112,435 | |||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 4,725 | — | — | 4,725 | |||||||||||||||||||||||
Dividends paid on non-redeemable preferred stock | — | — | — | (147 | ) | — | — | — | (147 | ) | |||||||||||||||||||||
Exercise of stock options | — | 224 | 4,584 | — | — | — | — | 4,808 | |||||||||||||||||||||||
Issue shares – Employee Stock Purchase Plan | — | 2 | 155 | — | — | — | — | 157 | |||||||||||||||||||||||
Employee and non-employee restricted stock | — | — | 10,508 | — | — | — | — | 10,508 | |||||||||||||||||||||||
Restricted stock issuance | — | 194 | (194 | ) | — | — | — | — | — | ||||||||||||||||||||||
Restricted shares withheld for taxes | — | (76 | ) | — | (4,455 | ) | — | — | — | (4,531 | ) | ||||||||||||||||||||
Tax benefit of stock options and restricted stock exercised | — | — | 4,820 | — | — | — | — | 4,820 | |||||||||||||||||||||||
Shares repurchased | — | (646 | ) | — | (37,004 | ) | — | — | — | (37,650 | ) | ||||||||||||||||||||
Other | (1,033 | ) | 29 | 1,008 | — | — | — | — | 4 | ||||||||||||||||||||||
Noncontrolling interest – loss | — | — | — | — | — | — | (322 | ) | (322 | ) | |||||||||||||||||||||
Balance February 2, 2013 (As restated) | 3,924 | 24,485 | 170,360 | 669,189 | (28,241 | ) | (17,857 | ) | 1,927 | 823,787 | |||||||||||||||||||||
Net earnings (As restated) | — | — | — | 22,750 | — | — | — | 22,750 | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (3,563 | ) | — | — | (3,563 | ) | |||||||||||||||||||||
Dividends paid on non-redeemable preferred stock | — | — | — | (33 | ) | — | — | — | (33 | ) | |||||||||||||||||||||
Exercise of stock options | — | 43 | 877 | — | — | — | — | 920 | |||||||||||||||||||||||
Employee and non-employee restricted stock | — | — | 5,852 | — | — | — | — | 5,852 | |||||||||||||||||||||||
Restricted stock issuance | — | 213 | (213 | ) | — | — | — | — | — | ||||||||||||||||||||||
Restricted shares withheld for taxes | — | (105 | ) | 105 | (6,938 | ) | — | — | — | (6,938 | ) | ||||||||||||||||||||
Tax benefit of stock options and | |||||||||||||||||||||||||||||||
restricted stock exercised | — | — | 3,080 | — | — | — | — | 3,080 | |||||||||||||||||||||||
Shares repurchased | — | (189 | ) | — | (11,029 | ) | — | — | — | (11,218 | ) | ||||||||||||||||||||
Redemption of preferred shares | (1,462 | ) | — | — | — | — | — | — | (1,462 | ) | |||||||||||||||||||||
Other | (1,155 | ) | 22 | 1,135 | — | — | — | — | 2 | ||||||||||||||||||||||
Noncontrolling interest – loss | — | — | — | — | — | — | 15 | 15 | |||||||||||||||||||||||
Balance August 3, 2013 | $ | 1,307 | $ | 24,469 | $ | 181,196 | $ | 673,939 | $ | (31,804 | ) | $ | (17,857 | ) | $ | 1,942 | $ | 833,192 |
Buildings and building equipment | 20-45 years |
Computer hardware, software and equipment | 3-10 years |
Furniture and fixtures | 10 years |
Fair Values | |||||||||||||||
In thousands | August 3, 2013 | February 2, 2013 | |||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
U.S. Revolver Borrowings | $ | 53,800 | $ | 53,969 | $ | 27,700 | $ | 27,742 | |||||||
UK Term Loans | 19,325 | 19,333 | 22,982 | 22,982 |
Foreign Currency Translation | Unrecognized Pension/Postretirement Benefit Costs | Total Accumulated Other Comprehensive Income (Loss) | ||||||||
(In thousands) | ||||||||||
Balance February 2, 2013 | $ | (1,931 | ) | $ | (26,310 | ) | $ | (28,241 | ) | |
Other comprehensive income (loss) before reclassifications: | ||||||||||
Foreign currency translation adjustment | (5,495 | ) | — | (5,495 | ) | |||||
Amounts reclassified from AOCI: | ||||||||||
Amortization of net actuarial loss (1) | — | 3,188 | 3,188 | |||||||
Amortization reclassified from AOCI, before tax | — | 3,188 | 3,188 | |||||||
Income tax expense (2) | — | 1,256 | 1,256 | |||||||
Current period other comprehensive (loss) income, net of tax | (5,495 | ) | 1,932 | (3,563 | ) | |||||
Balance August 3, 2013 | $ | (7,426 | ) | $ | (24,378 | ) | $ | (31,804 | ) |
As of and for the year ended February 2, 2013 | ||||||||||
As Previously Reported | Adjustments | As Restated | ||||||||
(In Thousands, except per share amounts) | ||||||||||
Consolidated Balance Sheets | ||||||||||
Deferred income taxes | $ | 26,448 | $ | (7,717 | ) | $ | 18,731 | |||
Total assets | 1,333,789 | (7,717 | ) | 1,326,072 | ||||||
Accrued employee compensation | 55,078 | 163 | 55,241 | |||||||
Accrued other taxes | 27,004 | (1,019 | ) | 25,985 | ||||||
Total current liabilities | 276,054 | (856 | ) | 275,198 | ||||||
Deferred rent and other long-term liabilities | 177,537 | (20,130 | ) | 157,407 | ||||||
Total liabilities | 523,271 | (20,986 | ) | 502,285 | ||||||
Retained earnings | 655,920 | 13,269 | 669,189 | |||||||
Total Genesco equity | 808,591 | 13,269 | 821,860 | |||||||
Total equity | 810,518 | 13,269 | 823,787 | |||||||
Total liabilities and equity | 1,333,789 | (7,717 | ) | 1,326,072 | ||||||
Consolidated Statements of Operations and Comprehensive Income | ||||||||||
Cost of sales | $ | 1,306,470 | $ | (270 | ) | $ | 1,306,200 | |||
Selling and administrative expenses | 1,113,340 | (1,623 | ) | 1,111,717 | ||||||
Earnings from operations | 167,970 | 1,893 | 169,863 | |||||||
Earnings from continuing operations before income taxes | 162,939 | 1,893 | 164,832 | |||||||
Income tax expense | 51,941 | (6 | ) | 51,935 | ||||||
Earnings from continuing operations | 110,998 | 1,899 | 112,897 | |||||||
Net earnings | 110,536 | 1,899 | 112,435 | |||||||
Comprehensive Income | 115,261 | 1,899 | 117,160 | |||||||
Basic EPS - continuing operations | 4.70 | 0.08 | 4.78 | |||||||
Basic EPS - net earnings | 4.68 | 0.08 | 4.76 | |||||||
Diluted EPS - continuing operations | 4.62 | 0.07 | 4.69 | |||||||
Diluted EPS - net earnings | 4.60 | 0.08 | 4.68 | |||||||
Consolidated Statements of Cash Flows | ||||||||||
Net earnings | $ | 110,536 | $ | 1,899 | $ | 112,435 | ||||
Deferred income taxes | (17,831 | ) | 213 | (17,618 | ) | |||||
Other accrued liabilities | (6,908 | ) | 284 | (6,624 | ) | |||||
Other assets and liabilities | 51,739 | (2,396 | ) | 49,343 |
As of and for the year ended January 28, 2012 | ||||||||||
As Previously Reported | Adjustments | As Restated | ||||||||
(In Thousands, except per share amounts) | ||||||||||
Consolidated Balance Sheets | ||||||||||
Deferred income taxes | $ | 28,152 | $ | (7,504 | ) | $ | 20,648 | |||
Total assets | 1,237,265 | (7,504 | ) | 1,229,761 | ||||||
Accrued employee compensation | 53,029 | (300 | ) | 52,729 | ||||||
Accrued other taxes | 26,293 | (1,059 | ) | 25,234 | ||||||
Accrued income taxes | 16,390 | 219 | 16,609 | |||||||
Total current liabilities | 304,462 | (1,140 | ) | 303,322 | ||||||
Deferred rent and other long-term liabilities | 156,794 | (17,734 | ) | 139,060 | ||||||
Total liabilities | 519,655 | (18,874 | ) | 500,781 | ||||||
Retained earnings | 586,990 | 11,370 | 598,360 | |||||||
Total Genesco equity | 715,361 | 11,370 | 726,731 | |||||||
Total equity | 717,610 | 11,370 | 728,980 | |||||||
Total liabilities and equity | 1,237,265 | (7,504 | ) | 1,229,761 | ||||||
Consolidated Statements of Operations and Comprehensive Income | ||||||||||
Cost of sales | $ | 1,144,281 | $ | (649 | ) | $ | 1,143,632 | |||
Selling and administrative expenses | 1,001,159 | (16,966 | ) | 984,193 | ||||||
Earnings from operations | 143,870 | 17,615 | 161,485 | |||||||
Earnings from continuing operations before income taxes | 138,778 | 17,615 | 156,393 | |||||||
Income tax expense | 55,794 | 7,148 | 62,942 | |||||||
Earnings from continuing operations | 82,984 | 10,467 | 93,451 | |||||||
Net earnings | 81,959 | 10,467 | 92,426 | |||||||
Comprehensive Income | 73,298 | 10,467 | 83,765 | |||||||
Basic EPS - continuing operations | 3.56 | 0.33 | 3.89 | |||||||
Basic EPS - net earnings | 3.52 | 0.32 | 3.84 | |||||||
Diluted EPS - continuing operations | 3.48 | 0.35 | 3.83 | |||||||
Diluted EPS - net earnings | 3.43 | 0.36 | 3.79 | |||||||
Consolidated Statements of Cash Flows | ||||||||||
Net earnings | $ | 81,959 | $ | 10,467 | $ | 92,426 | ||||
Deferred income taxes | 2,732 | 6,929 | 9,661 | |||||||
Other accrued liabilities | 9,046 | 338 | 9,384 | |||||||
Other assets and liabilities | 23,270 | (17,734 | ) | 5,536 |
As of and for the year ended January 29, 2011 | ||||||||||
As Previously Reported | Adjustments | As Restated | ||||||||
(In Thousands, except per share amounts) | ||||||||||
Consolidated Balance Sheets | ||||||||||
Deferred income taxes | $ | 19,130 | $ | (575 | ) | $ | 18,555 | |||
Total current assets | 513,055 | (575 | ) | 512,480 | ||||||
Total assets | 961,082 | (575 | ) | 960,507 | ||||||
Accrued employee compensation | 38,188 | (1,381 | ) | 36,807 | ||||||
Accrued other taxes | 17,289 | (97 | ) | 17,192 | ||||||
Total current liabilities | 234,363 | (1,478 | ) | 232,885 | ||||||
Total liabilities | 334,261 | (1,478 | ) | 332,783 | ||||||
Retained earnings | 505,224 | 903 | 506,127 | |||||||
Total Genesco equity | 624,318 | 903 | 625,221 | |||||||
Total equity | 626,821 | 903 | 627,724 | |||||||
Total liabilities and equity | 961,082 | (575 | ) | 960,507 | ||||||
Consolidated Statements of Operations and Comprehensive Income | ||||||||||
Cost of sales | $ | 891,764 | $ | (76 | ) | $ | 891,688 | |||
Selling and administrative expenses | 803,425 | $ | (1,069 | ) | 802,356 | |||||
Earnings from operations | 86,083 | 1,145 | 87,228 | |||||||
Earnings from continuing operations before income taxes | 84,961 | 1,145 | 86,106 | |||||||
Income tax expense | 30,414 | 448 | 30,862 | |||||||
Earnings from continuing operations | 54,547 | 697 | 55,244 | |||||||
Net earnings | 53,211 | 697 | 53,908 | |||||||
Comprehensive Income | 57,710 | 697 | 58,407 | |||||||
Basic EPS - continuing operations | 2.34 | (0.04 | ) | 2.30 | ||||||
Basic EPS - net earnings | 2.28 | (0.04 | ) | 2.24 | ||||||
Diluted EPS - continuing operations | 2.29 | (0.02 | ) | 2.27 | ||||||
Diluted EPS - net earnings | 2.24 | (0.02 | ) | 2.22 | ||||||
Consolidated Statements of Cash Flows | ||||||||||
Net earnings | $ | 53,211 | $ | 697 | $ | 53,908 | ||||
Deferred income taxes | (11,866 | ) | 448 | (11,418 | ) | |||||
Other accrued liabilities | 41,597 | (1,145 | ) | 40,452 |
As of and for the three months ended May 4, 2013 | ||||||||||
As Previously Reported | Adjustments | As Restated | ||||||||
(In Thousands, except per share amounts) | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
Deferred income taxes | $ | 28,469 | $ | (5,145 | ) | $ | 23,324 | |||
Total assets | 1,307,219 | (5,145 | ) | 1,302,074 | ||||||
Accrued employee compensation | 25,229 | (1,139 | ) | 24,090 | ||||||
Accrued other taxes | 21,726 | (858 | ) | 20,868 | ||||||
Total current liabilities | 247,109 | (1,997 | ) | 245,112 | ||||||
Deferred rent and other long-term liabilities | 170,174 | (12,445 | ) | 157,729 | ||||||
Total liabilities | 489,307 | (14,442 | ) | 474,865 | ||||||
Retained earnings | 663,240 | 9,297 | 672,537 | |||||||
Total Genesco equity | 816,078 | 9,297 | 825,375 | |||||||
Total equity | 817,912 | 9,297 | 827,209 | |||||||
Total liabilities and equity | 1,307,219 | (5,145 | ) | 1,302,074 | ||||||
Consolidated Statements of Operations and Comprehensive Income | ||||||||||
Cost of sales | $ | 292,777 | $ | 174 | $ | 292,951 | ||||
Selling and administrative expenses | 265,014 | 6,370 | 271,384 | |||||||
Earnings from operations | 32,268 | (6,544 | ) | 25,724 | ||||||
Earnings from continuing operations before income taxes | 31,229 | (6,544 | ) | 24,685 | ||||||
Income tax expense | 12,748 | (2,572 | ) | 10,176 | ||||||
Earnings from continuing operations | 18,481 | (3,972 | ) | 14,509 | ||||||
Net earnings | 18,382 | (3,972 | ) | 14,410 | ||||||
Comprehensive Income | 17,062 | (3,972 | ) | 13,090 | ||||||
Basic EPS - continuing operations | 0.79 | (0.17 | ) | 0.62 | ||||||
Basic EPS - net earnings | 0.79 | (0.17 | ) | 0.62 | ||||||
Diluted EPS - continuing operations | 0.78 | (0.17 | ) | 0.61 | ||||||
Diluted EPS - net earnings | 0.77 | (0.16 | ) | 0.61 | ||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
Net earnings | $ | 18,382 | $ | (3,972 | ) | $ | 14,410 | |||
Deferred income taxes | (2,821 | ) | (2,572 | ) | (5,393 | ) | ||||
Other accrued liabilities | (30,251 | ) | (1,141 | ) | (31,392 | ) | ||||
Other assets and liabilities | (4,506 | ) | 7,685 | 3,179 |
As of and for the three months ended April 28, 2012 | ||||||||||
As Previously Reported | Adjustments | As Restated | ||||||||
(In Thousands, except per share amounts) | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
Deferred income taxes | $ | 28,813 | $ | (7,756 | ) | $ | 21,057 | |||
Total assets | 1,260,373 | (7,756 | ) | 1,252,617 | ||||||
Accrued employee compensation | 40,009 | (6,807 | ) | 33,202 | ||||||
Accrued other taxes | 22,745 | (1,198 | ) | 21,547 | ||||||
Total current liabilities | 299,235 | (8,005 | ) | 291,230 | ||||||
Deferred rent and other long-term liabilities | 156,307 | (12,084 | ) | 144,223 | ||||||
Total liabilities | 508,603 | (20,089 | ) | 488,514 | ||||||
Retained earnings | 607,558 | 12,333 | 619,891 | |||||||
Total Genesco equity | 749,568 | 12,333 | 761,901 | |||||||
Total equity | 751,770 | 12,333 | 764,103 | |||||||
Total liabilities and equity | 1,260,373 | (7,756 | ) | 1,252,617 | ||||||
Consolidated Statements of Operations and Comprehensive Income | ||||||||||
Cost of sales | $ | 293,480 | $ | (242 | ) | 293,238 | ||||
Selling and administrative expenses | 270,522 | (754 | ) | 269,768 | ||||||
Earnings from operations | 36,007 | 996 | 37,003 | |||||||
Earnings from continuing operations before income taxes | 34,890 | 996 | 35,886 | |||||||
Income tax expense | 14,099 | 33 | 14,132 | |||||||
Earnings from continuing operations | 20,791 | 963 | 21,754 | |||||||
Net earnings | 20,614 | 963 | 21,577 | |||||||
Comprehensive Income | 24,933 | 963 | 25,896 | |||||||
Basic EPS - continuing operations | 0.88 | 0.01 | 0.89 | |||||||
Basic EPS - net earnings | 0.87 | 0.01 | 0.88 | |||||||
Diluted EPS - continuing operations | 0.86 | 0.02 | 0.88 | |||||||
Diluted EPS - net earnings | 0.85 | 0.02 | 0.87 | |||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
Net earnings | $ | 20,614 | $ | 963 | $ | 21,577 | ||||
Deferred income taxes | (3,861 | ) | 252 | (3,609 | ) | |||||
Other accrued liabilities | (19,961 | ) | (6,865 | ) | (26,826 | ) | ||||
Other assets and liabilities | 1,856 | 5,650 | 7,506 |
As of and for the three months Ended July 28, 2012 | ||||||||||
As Previously Reported | Adjustments | As Restated | ||||||||
(In Thousands, except per share amounts) | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
Deferred income taxes | $ | 26,740 | $ | (7,198 | ) | $ | 19,542 | |||
Total assets | 1,380,958 | (7,198 | ) | 1,373,760 | ||||||
Accrued employee compensation | 50,587 | (7,664 | ) | 42,923 | ||||||
Accrued other taxes | 23,436 | (1,043 | ) | 22,393 | ||||||
Total current liabilities | 367,888 | (8,707 | ) | 359,181 | ||||||
Deferred rent and other long-term liabilities | 151,600 | (10,272 | ) | 141,328 | ||||||
Total liabilities | 643,226 | (18,979 | ) | 624,247 | ||||||
Retained earnings | 593,409 | 11,781 | 605,190 | |||||||
Total Genesco equity | 735,608 | 11,781 | 747,389 | |||||||
Total equity | 737,732 | 11,781 | 749,513 | |||||||
Total liabilities and equity | 1,380,958 | (7,198 | ) | 1,373,760 | ||||||
Consolidated Statements of Operations and Comprehensive Income | ||||||||||
Cost of sales | $ | 270,500 | $ | (37 | ) | $ | 270,463 | |||
Selling and administrative expenses | 255,663 | 1,147 | 256,810 | |||||||
Earnings from operations | 16,955 | (1,110 | ) | 15,845 | ||||||
Earnings from continuing operations before income taxes | 15,748 | (1,110 | ) | 14,638 | ||||||
Income tax expense | 5,187 | (558 | ) | 4,629 | ||||||
Earnings from continuing operations | 10,561 | (552 | ) | 10,009 | ||||||
Net earnings | 10,520 | (552 | ) | 9,968 | ||||||
Comprehensive Income | 6,342 | (552 | ) | 5,790 | ||||||
Basic EPS - continuing operations | 0.44 | (0.03 | ) | 0.41 | ||||||
Basic EPS - net earnings | 0.44 | (0.03 | ) | 0.41 | ||||||
Diluted EPS - continuing operations | 0.44 | (0.03 | ) | 0.41 | ||||||
Diluted EPS - net earnings | 0.43 | (0.03 | ) | 0.40 | ||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
Net earnings | $ | 10,520 | $ | (552 | ) | $ | 9,968 | |||
Deferred income taxes | 1,657 | (558 | ) | 1,099 | ||||||
Other accrued liabilities | 10,636 | (702 | ) | 9,934 | ||||||
Other assets and liabilities | (1,225 | ) | 1,812 | 587 |
As of and for the six months ended July 28, 2012 | ||||||||||
As Previously Reported | Adjustments | As Restated | ||||||||
(In Thousands, except per share amounts) | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
Deferred income taxes | $ | 26,740 | $ | (7,198 | ) | $ | 19,542 | |||
Total assets | 1,380,958 | (7,198 | ) | 1,373,760 | ||||||
Accrued employee compensation | 50,587 | (7,664 | ) | 42,923 | ||||||
Accrued other taxes | 23,436 | (1,043 | ) | 22,393 | ||||||
Total current liabilities | 367,888 | (8,707 | ) | 359,181 | ||||||
Deferred rent and other long-term liabilities | 151,600 | (10,272 | ) | 141,328 | ||||||
Total liabilities | 643,226 | (18,979 | ) | 624,247 | ||||||
Retained earnings | 593,409 | 11,781 | 605,190 | |||||||
Total Genesco equity | 735,608 | 11,781 | 747,389 | |||||||
Total equity | 737,732 | 11,781 | 749,513 | |||||||
Total liabilities and equity | 1,380,958 | (7,198 | ) | 1,373,760 | ||||||
Consolidated Statements of Operations and Comprehensive Income | ||||||||||
Cost of sales | $ | 563,980 | $ | (279 | ) | $ | 563,701 | |||
Selling and administrative expenses | 526,185 | 393 | 526,578 | |||||||
Earnings from operations | 52,962 | (114 | ) | 52,848 | ||||||
Earnings from continuing operations before income taxes | 50,638 | (114 | ) | 50,524 | ||||||
Income tax expense | 19,286 | (525 | ) | 18,761 | ||||||
Earnings from continuing operations | 31,352 | 411 | 31,763 | |||||||
Net earnings | 31,134 | 411 | 31,545 | |||||||
Comprehensive Income | 31,275 | 411 | 31,686 | |||||||
Basic EPS - continuing operations | 1.32 | (0.02 | ) | 1.30 | ||||||
Basic EPS - net earnings | 1.31 | (0.02 | ) | 1.29 | ||||||
Diluted EPS - continuing operations | 1.29 | 0.00 | 1.29 | |||||||
Diluted EPS - net earnings | 1.29 | (0.01 | ) | 1.28 | ||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
Net earnings | $ | 31,134 | $ | 411 | $ | 31,545 | ||||
Deferred income taxes | (2,204 | ) | (306 | ) | (2,510 | ) | ||||
Other accrued liabilities | (9,325 | ) | (7,567 | ) | (16,892 | ) | ||||
Other assets and liabilities | 631 | 7,462 | 8,093 |
Leases | Customer Lists | Other* | Total | ||||||||||||||||||||||||
(In Thousands) | Aug. 3, 2013 | Feb. 2, 2013 | Aug. 3, 2013 | Feb. 2, 2013 | Aug. 3, 2013 | Feb. 2, 2013 | Aug. 3, 2013 | Feb. 2, 2013 | |||||||||||||||||||
Gross other intangibles | $ | 12,805 | $ | 12,584 | $ | 14,079 | $ | 14,116 | $ | 2,151 | $ | 2,118 | $ | 29,035 | $ | 28,818 | |||||||||||
Accumulated amortization | (11,337 | ) | (10,800 | ) | (6,282 | ) | (5,312 | ) | (1,193 | ) | (1,108 | ) | (18,812 | ) | (17,220 | ) | |||||||||||
Net Other Intangibles | $ | 1,468 | $ | 1,784 | $ | 7,797 | $ | 8,804 | $ | 958 | $ | 1,010 | $ | 10,223 | $ | 11,598 |
Accrued Provision for Discontinued Operations | |||
In thousands | Facility Shutdown Costs | ||
Balance January 28, 2012 | $ | 12,517 | |
Additional provision Fiscal 2013 | 796 | ||
Charges and adjustments, net | (1,962 | ) | |
Balance February 2, 2013 | 11,351 | ||
Additional provision Fiscal 2014 | 369 | ||
Charges and adjustments, net | (297 | ) | |
Balance August 3, 2013* | 11,423 | ||
Current provision for discontinued operations | 7,243 | ||
Total Noncurrent Provision for Discontinued Operations | $ | 4,180 |
In thousands | August 3, 2013 | February 2, 2013 | |||||
Raw materials | $ | 25,149 | $ | 24,223 | |||
Wholesale finished goods | 58,817 | 57,161 | |||||
Retail merchandise | 544,108 | 423,960 | |||||
Total Inventories | $ | 628,074 | $ | 505,344 |
Long-Lived Assets Held and Used | Level 1 | Level 2 | Level 3 | Total Losses | |||||||||||||||
Measured as of May 4, 2013 | $ | 191 | $ | — | $ | — | $ | 191 | $ | 1,208 | |||||||||
Measured as of August 3, 2013 | $ | 93 | $ | — | $ | — | $ | 93 | $ | 209 | |||||||||
Sub-total asset impairment YTD | $ | 1,417 |
Components of Net Periodic Benefit Cost | |||||||||||||||
Pension Benefits | Other Benefits | ||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||
In thousands | August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
Service cost | $ | 88 | $ | 88 | $ | 113 | $ | 89 | |||||||
Interest cost | 1,145 | 1,239 | 43 | 39 | |||||||||||
Expected return on plan assets | (1,663 | ) | (1,750 | ) | — | — | |||||||||
Amortization: | |||||||||||||||
Prior service cost | — | 1 | — | — | |||||||||||
Losses | 1,512 | 1,478 | 26 | 21 | |||||||||||
Net amortization | 1,512 | 1,479 | 26 | 21 | |||||||||||
Net Periodic Benefit Cost | $ | 1,082 | $ | 1,056 | $ | 182 | $ | 149 |
Components of Net Periodic Benefit Cost | |||||||||||||||
Pension Benefits | Other Benefits | ||||||||||||||
Six Months Ended | Six Months Ended | ||||||||||||||
In thousands | August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
Service cost | $ | 176 | $ | 176 | $ | 226 | $ | 178 | |||||||
Interest cost | 2,293 | 2,483 | 86 | 78 | |||||||||||
Expected return on plan assets | (3,328 | ) | (3,504 | ) | — | — | |||||||||
Amortization: | |||||||||||||||
Prior service cost | — | 2 | — | — | |||||||||||
Losses | 3,136 | 3,076 | 52 | 42 | |||||||||||
Net amortization | 3,136 | 3,078 | 52 | 42 | |||||||||||
Net Periodic Benefit Cost | $ | 2,277 | $ | 2,233 | $ | 364 | $ | 298 |
Shares Authorized | Number of Shares Outstanding | Amounts in Thousands | Common Convertible Ratio | No. of Votes per share | ||||||||||||||||
Class (In order of preference)* | August 3, 2013 | February 2, 2013 | August 3, 2013 | February 2, 2013 | ||||||||||||||||
Subordinated Serial Preferred (Cumulative) | ||||||||||||||||||||
Aggregate | 3,000,000 | ** | — | — | — | — | N/A | N/A | ||||||||||||
$2.30 Series 1 | 64,368 | — | 16,203 | $ | — | $ | 648 | .83 | 1 | |||||||||||
$4.75 Series 3 | 40,449 | — | 7,398 | — | 740 | 2.11 | 2 | |||||||||||||
$4.75 Series 4 | 53,764 | — | 3,247 | — | 325 | 1.52 | 1 | |||||||||||||
Series 6 | 800,000 | — | — | — | — | 100 | ||||||||||||||
$1.50 Subordinated Cumulative Preferred | 5,000,000 | — | 30,067 | — | 902 | 1 | ||||||||||||||
— | 56,915 | — | 2,615 | |||||||||||||||||
Employees’ Subordinated Convertible Preferred | 5,000,000 | 46,132 | 46,852 | 1,384 | 1,405 | 1.00 | *** | 1 | ||||||||||||
Stated Value of Issued Shares | 1,384 | 4,020 | ||||||||||||||||||
Employees’ Preferred Stock Purchase Accounts | (77 | ) | (96 | ) | ||||||||||||||||
Total Non-Redeemable Preferred Stock | $ | 1,307 | $ | 3,924 |
** | The Company’s charter permits the board of directors to issue Subordinated Serial Preferred Stock in as many series, each with as many shares and such rights and preferences, as the board may designate. |
In thousands | Non-Redeemable Preferred Stock | Non-Redeemable Employees’ Preferred Stock | Employees’ Preferred Stock Purchase Accounts | Total Non-Redeemable Preferred Stock | |||||||||||
Balance January 28, 2012 | 3,621 | 1,437 | (101 | ) | 4,957 | ||||||||||
Other stock conversions | (1,006 | ) | (32 | ) | 5 | (1,033 | ) | ||||||||
Balance February 2, 2013 | 2,615 | 1,405 | (96 | ) | 3,924 | ||||||||||
Preferred stock redemptions | (1,462 | ) | — | — | (1,462 | ) | |||||||||
Other stock conversions | (1,153 | ) | (21 | ) | 19 | (1,155 | ) | ||||||||
Balance August 3, 2013 | $ | — | $ | 1,384 | $ | (77 | ) | $ | 1,307 |
For the Three Months Ended | For the Three Months Ended | ||||||||||||||||||||
(As restated) | |||||||||||||||||||||
August 3, 2013 | July 28, 2012 | ||||||||||||||||||||
(In thousands, except per share amounts) | Income (Numerator) | Shares (Denominator) | Per Share Amount | Income (Numerator) | Shares (Denominator) | Per Share Amount | |||||||||||||||
Earnings from continuing operations | $ | 8,465 | $ | 10,009 | |||||||||||||||||
Less: Preferred stock dividends and income from participating securities | — | (320 | ) | ||||||||||||||||||
Basic EPS from continuing operations | |||||||||||||||||||||
Income available to | |||||||||||||||||||||
common shareholders | 8,465 | 23,274 | $ | 0.36 | 9,689 | 23,743 | $ | .41 | |||||||||||||
Effect of Dilutive Securities from continuing operations | |||||||||||||||||||||
Plus: Income from participating securities | — | 2 | |||||||||||||||||||
Options/Restricted Stock | 203 | 124 | |||||||||||||||||||
Convertible preferred stock(1) | — | — | — | — | |||||||||||||||||
Employees' preferred stock(2) | 46 | 48 | |||||||||||||||||||
Diluted EPS from continuing operations | |||||||||||||||||||||
Income available to common | |||||||||||||||||||||
shareholders plus assumed | |||||||||||||||||||||
conversions | $ | 8,465 | 23,523 | $ | 0.36 | $ | 9,691 | 23,915 | $ | .41 |
(1) | As a result of the Company issuing a notice of mandatory redemption to the holders of Series 1, 3 and 4 preferred stock in the first quarter of Fiscal 2014, there were no remaining convertible preferred stock of that series outstanding as of August 3, 2013. Therefore, convertible preferred stocks were not included in diluted earnings per share for the three months ended August 3, 2013. The amount of the dividend on the convertible preferred stock per common share obtainable on conversion of the convertible preferred stock was higher than basic earnings per share for Series 1, 3 and 4 preferred stocks for the three months ended July 28, 2012. Therefore, conversion of the convertible preferred stock for the three months ended July 28, 2012 was not reflected in diluted earnings per share because it would have been antidilutive. |
(2) | The Company's Employees' Subordinated Convertible Preferred Stock is convertible one for one to the Company's common stock. Because no dividends are paid on this stock, these shares are assumed to be converted in the diluted earnings per share calculations for the second quarter ended August 3, 2013 and July 28, 2012. |
For the Six Months Ended | For the Six Months Ended | ||||||||||||||||||||
(As restated) | |||||||||||||||||||||
August 3, 2013 | July 28, 2012 | ||||||||||||||||||||
(In thousands, except per share amounts) | Income (Numerator) | Shares (Denominator) | Per Share Amount | Income (Numerator) | Shares (Denominator) | Per Share Amount | |||||||||||||||
Earnings from continuing operations | $ | 22,974 | $ | 31,763 | |||||||||||||||||
Less: Preferred stock dividends and income from participating securities | (33 | ) | (1,059 | ) | |||||||||||||||||
Basic EPS from continuing operations | |||||||||||||||||||||
Income available to | |||||||||||||||||||||
common shareholders | 22,941 | 23,284 | $ | 0.99 | 30,704 | 23,652 | $ | 1.30 | |||||||||||||
Effect of Dilutive Securities from continuing operations | |||||||||||||||||||||
Plus: Income from participating securities | — | 9 | |||||||||||||||||||
Options/Restricted Stock | 297 | 157 | |||||||||||||||||||
Convertible preferred stock(1) | — | — | 21 | 18 | |||||||||||||||||
Employees' preferred stock(2) | 46 | 48 | |||||||||||||||||||
Diluted EPS from continuing operations | |||||||||||||||||||||
Income available to common | |||||||||||||||||||||
shareholders plus assumed | |||||||||||||||||||||
conversions | $ | 22,941 | 23,627 | $ | 0.97 | $ | 30,734 | 23,875 | $ | 1.29 |
(1) | As a result of the Company issuing a notice of mandatory redemption to the holders of Series 1, 3 and 4 preferred stock in the first quarter of Fiscal 2014, there were no remaining convertible preferred stock of that series outstanding as of August 3, 2013. Therefore, convertible preferred stocks were not included in diluted earnings per share for the six months ended August 3, 2013. The amount of the dividend on the convertible preferred stock per common share obtainable on conversion of the convertible preferred stock was less than basic earnings per share for Series 3 preferred stock for the six months ended July 28, 2012. Therefore, conversion of Series 3 preferred shares was included in diluted earnings per share for the six months ended July 28, 2012. The amount of the dividend on the convertible preferred stock per common share obtainable on conversion of the convertible preferred stock was higher than basic earnings per share for Series 1 and 4 preferred stocks for the six months ended July 28, 2012. Therefore, conversion of the Series 1 and 4 convertible preferred stocks for the six months ended July 28, 2012 were not reflected in diluted earnings per share because it would have been antidilutive. |
(2) | The Company's Employees' Subordinated Convertible Preferred Stock is convertible one for one to the Company's common stock. Because no dividends are paid on this stock, these shares are assumed to be converted in the diluted earnings per share calculations for the six months ended August 3, 2013 and July 28, 2012. |
Three Months Ended | |||||||||||||||||||||||||||
August 3, 2013 | Journeys Group | Schuh Group | Lids Sports Group | Johnston & Murphy Group | Licensed Brands | Corporate & Other | Consolidated | ||||||||||||||||||||
In thousands | |||||||||||||||||||||||||||
Sales | $ | 222,471 | $ | 82,109 | $ | 192,779 | $ | 53,258 | $ | 23,896 | $ | 583 | $ | 575,096 | |||||||||||||
Intercompany Sales | — | — | (323 | ) | — | (27 | ) | — | (350 | ) | |||||||||||||||||
Net sales to external customers | $ | 222,471 | $ | 82,109 | $ | 192,456 | $ | 53,258 | $ | 23,869 | $ | 583 | $ | 574,746 | |||||||||||||
Segment operating income (loss) | $ | 1,717 | $ | (1,433 | ) | $ | 12,725 | $ | 1,751 | $ | 1,471 | $ | (7,843 | ) | $ | 8,388 | |||||||||||
Asset impairments and other* | — | — | — | — | — | 7,140 | 7,140 | ||||||||||||||||||||
Earnings (loss) from operations | 1,717 | (1,433 | ) | 12,725 | 1,751 | 1,471 | (703 | ) | 15,528 | ||||||||||||||||||
Interest expense | — | — | — | — | — | (1,158 | ) | (1,158 | ) | ||||||||||||||||||
Interest income | — | — | — | — | — | 18 | 18 | ||||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | $ | 1,717 | $ | (1,433 | ) | $ | 12,725 | $ | 1,751 | $ | 1,471 | $ | (1,843 | ) | $ | 14,388 | |||||||||||
Total assets** | $ | 352,135 | $ | 228,520 | $ | 575,096 | $ | 103,384 | $ | 37,943 | $ | 160,271 | $ | 1,457,349 | |||||||||||||
Depreciation and amortization | 4,691 | 2,675 | 6,806 | 973 | 126 | 1,183 | 16,454 | ||||||||||||||||||||
Capital expenditures | 5,680 | 3,331 | 6,769 | 2,373 | 388 | 884 | 19,425 |
Three Months Ended | |||||||||||||||||||||||||||
July 28, 2012 (As restated) | Journeys Group | Schuh Group | Lids Sports Group | Johnston & Murphy Group | Licensed Brands | Corporate & Other | Consolidated | ||||||||||||||||||||
In thousands | |||||||||||||||||||||||||||
Sales | $ | 209,439 | 81,156 | $ | 182,598 | $ | 48,286 | $ | 22,307 | $ | 513 | $ | 544,299 | ||||||||||||||
Intercompany Sales | — | — | (719 | ) | (7 | ) | (51 | ) | — | (777 | ) | ||||||||||||||||
Net sales to external customers | $ | 209,439 | $ | 81,156 | $ | 181,879 | $ | 48,279 | $ | 22,256 | $ | 513 | $ | 543,522 | |||||||||||||
Segment operating income (loss) | $ | 2,352 | $ | 192 | $ | 19,980 | $ | 1,805 | $ | 1,430 | $ | (9,510 | ) | $ | 16,249 | ||||||||||||
Asset impairments and other* | — | — | — | — | — | (404 | ) | (404 | ) | ||||||||||||||||||
Earnings (loss) from operations | 2,352 | 192 | 19,980 | 1,805 | 1,430 | (9,914 | ) | 15,845 | |||||||||||||||||||
Interest expense | — | — | — | — | — | (1,217 | ) | (1,217 | ) | ||||||||||||||||||
Interest income | — | — | — | — | — | 10 | 10 | ||||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | $ | 2,352 | $ | 192 | $ | 19,980 | $ | 1,805 | $ | 1,430 | $ | (11,121 | ) | $ | 14,638 | ||||||||||||
Total assets** | $ | 336,788 | $ | 221,257 | $ | 527,555 | $ | 84,353 | $ | 32,906 | $ | 170,901 | $ | 1,373,760 | |||||||||||||
Depreciation and amortization | 4,987 | 2,531 | 6,198 | 918 | 82 | 575 | 15,291 | ||||||||||||||||||||
Capital expenditures | 4,656 | 5,322 | 5,271 | 1,704 | 527 | 935 | 18,415 |
Six Months Ended | |||||||||||||||||||||||||||
August 3, 2013 | Journeys Group | Schuh Group | Lids Sports Group | Johnston & Murphy Group | Licensed Brands | Corporate & Other | Consolidated | ||||||||||||||||||||
In thousands | |||||||||||||||||||||||||||
Sales | $ | 479,614 | $ | 150,432 | $ | 370,887 | $ | 111,683 | $ | 53,337 | $ | 820 | $ | 1,166,773 | |||||||||||||
Intercompany Sales | — | — | (526 | ) | — | (113 | ) | — | (639 | ) | |||||||||||||||||
Net sales to external customers | $ | 479,614 | $ | 150,432 | $ | 370,361 | $ | 111,683 | $ | 53,224 | $ | 820 | $ | 1,166,134 | |||||||||||||
Segment operating income (loss) | $ | 23,930 | $ | (6,076 | ) | $ | 23,521 | 5,599 | 4,392 | $ | (15,925 | ) | $ | 35,441 | |||||||||||||
Asset impairments and other* | — | — | — | — | — | 5,811 | 5,811 | ||||||||||||||||||||
Earnings (loss) from operations | 23,930 | (6,076 | ) | 23,521 | 5,599 | 4,392 | (10,114 | ) | 41,252 | ||||||||||||||||||
Interest expense | — | — | — | — | — | (2,219 | ) | (2,219 | ) | ||||||||||||||||||
Interest income | — | — | — | — | — | 40 | 40 | ||||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | $ | 23,930 | $ | (6,076 | ) | $ | 23,521 | $ | 5,599 | $ | 4,392 | $ | (12,293 | ) | $ | 39,073 | |||||||||||
Total assets** | $ | 352,135 | $ | 228,520 | $ | 575,096 | $ | 103,384 | $ | 37,943 | $ | 160,271 | $ | 1,457,349 | |||||||||||||
Depreciation and amortization | 9,641 | 5,384 | 13,778 | 1,953 | 252 | 1,875 | 32,883 | ||||||||||||||||||||
Capital expenditures | 10,719 | 6,123 | 14,044 | 4,323 | 686 | 1,311 | 37,206 |
Six Months Ended | |||||||||||||||||||||||||||
July 28, 2012 (As restated) | Journeys Group | Schuh Group | Lids Sports Group | Johnston & Murphy Group | Licensed Brands | Corporate & Other | Consolidated | ||||||||||||||||||||
In thousands | |||||||||||||||||||||||||||
Sales | 473,279 | 151,468 | 365,973 | 99,699 | 53,650 | 690 | $ | 1,144,759 | |||||||||||||||||||
Intercompany Sales | — | — | (958 | ) | (7 | ) | (128 | ) | — | (1,093 | ) | ||||||||||||||||
Net sales to external customers | $ | 473,279 | $ | 151,468 | $ | 365,015 | $ | 99,692 | $ | 53,522 | $ | 690 | $ | 1,143,666 | |||||||||||||
Segment operating income (loss) | 29,195 | (1,889 | ) | 38,728 | 5,801 | 4,799 | (23,247 | ) | $ | 53,387 | |||||||||||||||||
Asset impairments and other* | — | — | — | — | — | (539 | ) | (539 | ) | ||||||||||||||||||
Earnings (loss) from operations | 29,195 | (1,889 | ) | 38,728 | 5,801 | 4,799 | (23,786 | ) | 52,848 | ||||||||||||||||||
Interest expense | — | — | — | — | — | (2,349 | ) | (2,349 | ) | ||||||||||||||||||
Interest income | — | — | — | — | — | 25 | 25 | ||||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | $ | 29,195 | $ | (1,889 | ) | $ | 38,728 | $ | 5,801 | $ | 4,799 | $ | (26,110 | ) | $ | 50,524 | |||||||||||
Total assets** | $ | 336,788 | $ | 221,257 | $ | 527,555 | $ | 84,353 | $ | 32,906 | $ | 170,901 | $ | 1,373,760 | |||||||||||||
Depreciation and amortization | 9,957 | 4,773 | 12,707 | 1,811 | 158 | 1,138 | 30,544 | ||||||||||||||||||||
Capital expenditures | 8,815 | 7,895 | 9,772 | 3,575 | 582 | 1,894 | 32,533 |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
• | Adjustments to estimates reflected in forward-looking statements, including the amount of required accruals related to the earn-out bonus potentially payable to Schuh management based on the achievement of certain performance objectives. |
• | The timing and amount of non-cash asset impairments related to retail store fixed assets or to intangible assets of acquired businesses. |
• | Weakness in the consumer economy. |
• | Competition in the Company's markets. |
• | Inability of customers to obtain credit. |
• | Fashion trends that affect the sales or product margins of the Company's retail product offerings. |
• | Changes in buying patterns by significant wholesale customers. |
• | Bankruptcies or deterioration in the financial condition of significant wholesale customers, limiting their ability to buy or pay for merchandise offered by the Company. |
• | Disruptions in product supply or distribution. |
• | Unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs and other factors affecting the cost of products. |
• | The Company's ability to continue to complete and integrate acquisitions, expand its business and diversify its product base. |
• | Changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons. |
• | The Company's ability to build, open, staff and support additional retail stores and to renew leases in existing stores and maintain reductions in occupancy costs achieved in recent lease negotiations, and to conduct required remodeling or refurbishment on schedule and at expected expense levels. |
• | Deterioration in the performance of individual businesses or of the Company's market value relative to its book value, resulting in impairments of fixed assets or intangible assets or other adverse financial consequences. |
• | Unexpected changes to the market for the Company's shares. |
• | Variations from expected pension-related charges caused by conditions in the financial markets. |
• | Disruptions in the Company's information technology systems either by security breaches and incidents or by potential problems associated with the implementation of new or upgraded systems. |
• | The outcome of litigation, investigations and environmental matters involving the Company, including but not limited to the matters discussed in Note 10 to the Condensed Consolidated Financial Statements. |
• | Other risk factors described in our Annual Report on form 10-K for the fiscal year ended February 2, 2013 and other Filings with the Securities and Exchange Commission (the "SEC"). |
Three Months Ended | ||||||||||
August 3, 2013 | July 28, 2012 (As restated) | % Change | ||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 222,471 | $ | 209,439 | 6.2 | % | ||||
Earnings from operations | $ | 1,717 | $ | 2,352 | (27.0 | )% | ||||
Operating margin | 0.8 | % | 1.1 | % |
Three Months Ended | ||||||||||
August 3, 2013 | July 28, 2012 (As restated) | % Change | ||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 82,109 | $ | 81,156 | 1.2 | % | ||||
(Loss) earnings from operations | $ | (1,433 | ) | $ | 192 | NM | ||||
Operating margin | (1.7 | )% | 0.2 | % |
Three Months Ended | ||||||||||
August 3, 2013 | July 28, 2012 (As restated) | % Change | ||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 192,456 | $ | 181,879 | 5.8 | % | ||||
Earnings from operations | $ | 12,725 | $ | 19,980 | (36.3 | )% | ||||
Operating margin | 6.6 | % | 11.0 | % |
Three Months Ended | ||||||||||
August 3, 2013 | July 28, 2012 (As restated) | % Change | ||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 53,258 | $ | 48,279 | 10.3 | % | ||||
Earnings from operations | $ | 1,751 | $ | 1,805 | (3.0 | )% | ||||
Operating margin | 3.3 | % | 3.7 | % |
Three Months Ended | ||||||||||
August 3, 2013 | July 28, 2012 (As restated) | % Change | ||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 23,869 | $ | 22,256 | 7.2 | % | ||||
Earnings from operations | $ | 1,471 | $ | 1,430 | 2.9 | % | ||||
Operating margin | 6.2 | % | 6.4 | % |
Six Months Ended | ||||||||||
August 3, 2013 | July 28, 2012 (As restated) | % Change | ||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 479,614 | $ | 473,279 | 1.3 | % | ||||
Earnings from operations | $ | 23,930 | $ | 29,195 | (18.0 | )% | ||||
Operating margin | 5.0 | % | 6.2 | % |
Six Months Ended | ||||||||||
August 3, 2013 | July 28, 2012 (As restated) | % Change | ||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 150,432 | $ | 151,468 | (0.7 | )% | ||||
Loss from operations | $ | (6,076 | ) | $ | (1,889 | ) | (221.7 | )% | ||
Operating margin | (4.0 | )% | (1.2 | )% |
Six Months Ended | ||||||||||
August 3, 2013 | July 28, 2012 (As restated) | % Change | ||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 370,361 | $ | 365,015 | 1.5 | % | ||||
Earnings from operations | $ | 23,521 | $ | 38,728 | (39.3 | )% | ||||
Operating margin | 6.4 | % | 10.6 | % |
Six Months Ended | ||||||||||
August 3, 2013 | July 28, 2012 (As restated) | % Change | ||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 111,683 | $ | 99,692 | 12.0 | % | ||||
Earnings from operations | $ | 5,599 | $ | 5,801 | (3.5 | )% | ||||
Operating margin | 5.0 | % | 5.8 | % |
Six Months Ended | ||||||||||
August 3, 2013 | July 28, 2012 (As restated) | % Change | ||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 53,224 | $ | 53,522 | (0.6 | )% | ||||
Earnings from operations | $ | 4,392 | $ | 4,799 | (8.5 | )% | ||||
Operating margin | 8.3 | % | 9.0 | % |
August 3, 2013 | February 2, 2013 (As restated) | July 28, 2012 (As restated) | |||||||||
(dollars in millions) | |||||||||||
Cash and cash equivalents | $ | 46.0 | $ | 59.8 | $ | 47.2 | |||||
Working capital | $ | 424.5 | $ | 407.1 | $ | 370.1 | |||||
Long-term debt (including current portion) | $ | 73.1 | $ | 50.7 | $ | 100.5 |
Period | (a) Total Number of Shares Purchased | (b) Average Price Paid per Share | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) | ||||||
May 2013 | ||||||||||
5-5-13 to 6-1-13 | — | $ | — | — | $ | — | ||||
June 2013 | ||||||||||
6-2-13 to 6-29-13 | — | $ | — | — | $ | — | ||||
July 2013 | ||||||||||
6-30-13 to 8-3-13(1) | 29,980 | $ | 64.30 | — | $ | — | ||||
6-30-13 to 8-3-13(1) | 58,135 | $ | 66.73 | — | $ | — | ||||
6-30-13 to 8-3-13(1) | 17,078 | $ | 66.99 | — | $ | — |
(1) | These shares represent shares withheld from vested restricted stock to satisfy the minimum withholding requirement for federal and state taxes. |
Exhibits | ||
(31.1) | Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
(31.2) | Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
(32.1) | Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
(32.2) | Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Schema Document | |
101.CAL | XBRL Calculation Linkbase Document | |
101.DEF | XBRL Definition Linkbase Document | |
101.LAB | XBRL Label Linkbase Document | |
101.PRE | XBRL Presentation Linkbase Document |
Genesco Inc. | ||
By: | /s/ James S. Gulmi | |
James S. Gulmi | ||
Senior Vice President - Finance and | ||
Chief Financial Officer |
/s/ Robert J. Dennis |
Robert J. Dennis |
Chief Executive Officer |
/s/ James S. Gulmi |
James S. Gulmi |
Chief Financial Officer |
/s/ Robert J. Dennis |
Robert J. Dennis |
Chief Executive Officer |
September 12, 2013 |
/s/ James S. Gulmi |
James S. Gulmi |
Chief Financial Officer |
September 12, 2013 |
Earnings Per Share
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Aug. 03, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share
Note 9 Earnings Per Share, Continued
Note 9 Earnings Per Share, Continued The Company repurchased 189,300 shares of common stock during the six months ended August 3, 2013 for $11.2 million. The Company has $47.0 million remaining under its current $75.0 million share repurchase authorization. The Company repurchased 346,398 shares during the six months ended July 28, 2012 for a total cost of 20.8 million. |
Condensed Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||||||||
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Aug. 03, 2013
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Jul. 28, 2012
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Aug. 03, 2013
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Jul. 28, 2012
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Income Statement [Abstract] | ||||||||||||||||
Net sales | $ 574,746 | $ 543,522 | $ 1,166,134 | $ 1,143,666 | ||||||||||||
Cost of sales | 291,938 | 270,463 | 584,889 | 563,701 | ||||||||||||
Selling and administrative expenses | 274,420 | 256,810 | 545,804 | 526,578 | ||||||||||||
Asset impairments and other, net | (7,140) | [1] | 404 | [2] | (5,811) | [3] | 539 | [4] | ||||||||
Earnings from operations | 15,528 | 15,845 | 41,252 | 52,848 | ||||||||||||
Interest expense, net: | ||||||||||||||||
Interest expense | 1,158 | 1,217 | 2,219 | 2,349 | ||||||||||||
Interest income | (18) | (10) | (40) | (25) | ||||||||||||
Total interest expense, net | 1,140 | 1,207 | 2,179 | 2,324 | ||||||||||||
Earnings from continuing operations before income taxes | 14,388 | 14,638 | 39,073 | 50,524 | ||||||||||||
Income tax expense | 5,923 | 4,629 | 16,099 | 18,761 | ||||||||||||
Earnings from continuing operations | 8,465 | 10,009 | 22,974 | 31,763 | ||||||||||||
Provision for discontinued operations, net | 125 | 41 | 224 | 218 | ||||||||||||
Net Earnings | $ 8,340 | $ 9,968 | $ 22,750 | $ 31,545 | ||||||||||||
Basic earnings per common share: | ||||||||||||||||
Continuing operations | $ 0.36 | $ 0.41 | $ 0.99 | $ 1.30 | ||||||||||||
Discontinued operations | $ 0.00 | $ 0.00 | $ (0.01) | $ (0.01) | ||||||||||||
Net earnings | $ 0.36 | $ 0.41 | $ 0.98 | $ 1.29 | ||||||||||||
Diluted earnings per common share: | ||||||||||||||||
Continuing operations | $ 0.36 | $ 0.41 | $ 0.97 | $ 1.29 | ||||||||||||
Discontinued operations | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.01) | ||||||||||||
Net earnings | $ 0.35 | $ 0.40 | $ 0.96 | $ 1.28 | ||||||||||||
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Restatement of Previously Issued Financial Statements
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Aug. 03, 2013
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restatement of Previously Issued Financial Statements | Restatement of Previously Issued Financial Statements The Company intends to restate its Consolidated Financial Statements for Fiscal 2013, 2012 and 2011 and its Condensed Consolidated Financial Statements for the three month periods ended May 4, 2013 and April 28, 2012. This report on Form 10-Q includes restated Condensed Consolidated Financial Statements for the three and six months ended July 28, 2012. Under the Company's EVA Incentive Plan, bonus awards in excess of a specified cap in any year are retained and paid out over the three subsequent years, subject to reduction or elimination by deteriorating financial performance or subject to forfeiture if the participant voluntarily resigns from employment with the Company or is terminated for cause before the retained amount is paid. Historically, the Company has expensed the full amount of the retained bonus in the year in which it was determined. As a result of a review of this treatment, the Company has determined that the retained bonus should be expensed across the three-year service period rather than fully expensed in the year it is determined. Following is a summary of the expected effects of these changes on the Company's Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income, and Consolidated Statements of Cash Flows for Fiscal 2013, 2012 and 2011; and on the Company's Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Income and Statements of Cash Flows for the three months ended May 4, 2013, three months ended April 28, 2012 and the three and six months ended July 28, 2012. The corrections have no impact on total revenues or total cash flows for the restated periods and had no impact on the Company's compliance with debt covenants in any period presented. Note 2 Restatement of Previously Issued Financial Statements, Continued
Note 2 Restatement of Previously Issued Financial Statements, Continued
Note 2 Restatement of Previously Issued Financial Statements, Continued
Note 2 Restatement of Previously Issued Financial Statements, Continued
Note 2 Restatement of Previously Issued Financial Statements, Continued
Note 2 Restatement of Previously Issued Financial Statements, Continued
Note 2 Restatement of Previously Issued Financial Statements, Continued
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Asset Impairments and Other Charges and Discontinued Operations (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 03, 2013
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Asset Impairments and Other Charges and Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued provision for discontinued operations |
*Includes a $11.9 million environmental provision, including $7.8 million in current provision for discontinued operations. |
Legal Proceedings
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6 Months Ended |
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Aug. 03, 2013
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Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings Environmental Matters New York State Environmental Matters In August 1997, the New York State Department of Environmental Conservation (“NYSDEC”) and the Company entered into a consent order whereby the Company assumed responsibility for conducting a remedial investigation and feasibility study (“RIFS”) and implementing an interim remedial measure (“IRM”) with regard to the site of a knitting mill operated by a former subsidiary of the Company from 1965 to 1969. The Company undertook the IRM and RIFS voluntarily, without admitting liability or accepting responsibility for any future remediation of the site. The Company has completed the IRM and the RIFS. In the course of preparing the RIFS, the Company identified remedial alternatives with estimated undiscounted costs ranging from $0 million to $24.0 million, excluding amounts previously expended or provided for by the Company. The United States Environmental Protection Agency (“EPA”), which has assumed primary regulatory responsibility for the site from NYSDEC, issued a Record of Decision in September 2007. The Record of Decision requires a remedy of a combination of groundwater extraction and treatment and in-site chemical oxidation at an estimated present cost of approximately $10.7 million. In July 2009, the Company agreed to a Consent Order with the EPA requiring the Company to perform certain remediation actions, operations, maintenance and monitoring at the site. In September 2009, a Consent Judgment embodying the Consent Order was filed in the U.S. District Court for the Eastern District of New York. The Village of Garden City, New York (the "Village"), has additionally asserted that the Company is liable for the costs associated with enhanced treatment required by the impact of the groundwater plume from the site on two public water supply wells, including historical costs ranging from approximately $1.8 million to in excess of $2.5 million, and future operation and maintenance costs which the Village estimates at $126,400 annually while the enhanced treatment continues. On December 14, 2007, the Village filed a complaint against the Company and the owner of the property under the Resource Conservation and Recovery Act (“RCRA”), the Safe Drinking Water Act, and the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) as well as a number of state law theories in the U.S. District Court for the Eastern District of New York, seeking an injunction requiring the defendants to remediate contamination from the site and to establish their liability for future costs that may be incurred in connection with it, which the complaint alleges could exceed $41 million, undiscounted, over a 70-year period. Note 10 Legal Proceedings, Continued The Company has not verified the estimates of either historic or future costs asserted by the Village, but believes that an estimate of future costs based on a 70-year remediation period is unreasonable given the expected remedial period reflected in the EPA's Record of Decision. On May 23, 2008, the Company filed a motion to dismiss the Village's complaint on grounds including applicable statutes of limitation and preemption of certain claims by the NYSDEC's and the EPA's diligent prosecution of remediation. On January 27, 2009, the Court granted the motion to dismiss all counts of the plaintiff's complaint except for the CERCLA claim and a state law claim for indemnity for costs incurred after November 27, 2000. On September 23, 2009, on a motion for reconsideration by the Village, the Court reinstated the claims for injunctive relief under RCRA and for equitable relief under certain of the state law theories. The Company intends to continue to defend the action if an acceptable settlement agreement cannot be reached. Whitehall Environmental Matters The Company has performed sampling and analysis of soil, sediments, surface water, groundwater and waste management areas at the Company's former Volunteer Leather Company facility in Whitehall, Michigan. In October 2010, the Company and the Michigan Department of Natural Resources and Environment entered into a Consent Decree providing for implementation of a remedial Work Plan for the facility site designed to bring the site into compliance with applicable regulatory standards. The Work Plan's implementation is substantially complete and the Company expects, based on its present understanding of the condition of the site, that its future obligations with respect to the site will be limited to periodic monitoring and that future costs related to the site should not have a material effect on its financial condition or results of operations. Accrual for Environmental Contingencies Related to all outstanding environmental contingencies, the Company had accrued $11.9 million as of August 3, 2013, $11.9 million as of February 2, 2013 and $12.3 million as of July 28, 2012. All such provisions reflect the Company's estimates of the most likely cost (undiscounted, including both current and noncurrent portions) of resolving the contingencies, based on facts and circumstances as of the time they were made. There is no assurance that relevant facts and circumstances will not change, necessitating future changes to the provisions. Such contingent liabilities are included in the liability arising from provision for discontinued operations on the accompanying Condensed Consolidated Balance Sheets because it relates to former facilities operated by the Company. The Company has made pretax accruals for certain of these contingencies, including approximately $0.2 million and $0.1 million reflected in the second quarters of Fiscal 2014 and 2013, respectively, and $0.4 million for each of the first six months of Fiscal 2014 and 2013. These charges are included in provision for discontinued operations, net in the Condensed Consolidated Statements of Operations and represent changes in estimates. Note 10 Legal Proceedings, Continued Other Matters On December 10, 2010, the Company announced that it had suffered a criminal intrusion into the portion of its computer network that processes payments for transactions in certain of its retail stores. Visa, Inc., MasterCard Worldwide and American Express Travel Related Services Company, Inc. asserted claims totaling approximately $15.6 million in connection with the intrusion and the claims of two of the claimants have been collected by withholding payment card receivables of the Company. In the fourth quarter of Fiscal 2013, the Company recorded a $15.4 million charge to earnings in connection with the disputed liability. On March 7, 2013, the Company filed an action in the U.S. District Court for the Middle District of Tennessee against Visa U.S.A. Inc., Visa Inc. and Visa International Service Association seeking to recover $13.3 million in non-compliance fines and issuer reimbursement assessments collected from the Company in connection with the intrusion. The Company does not currently expect any future claims in connection with the intrusion to have a material effect on its financial condition, cash flows, or results of operations. On January 5, 2012, a patent infringement action against the Company and numerous other defendants was filed in the U.S. District Court for the Eastern District of Texas, GeoTag, Inc. v. Circle K Store, Inc., et al., alleging that features of certain of the Company's e-commerce websites infringe U.S. Patent No. 5,930,474, entitled “Internet Organizer for Accessing Geographically and Topically Based Information.” The plaintiff seeks relief including damages for the alleged infringement, costs, expenses and pre- and post-judgment interest and injunctive relief. The Company disputes the validity of the claim and is defending the matter. On June 13, 2012, a former vendor of a subsidiary of the Company filed an action, Perfect Curve, Inc. v. Hat World, Inc., in U.S. District Court in Massachusetts, alleging patent, trademark, trade dress, and copyright infringement against the subsidiary based on the sale of a line of products developed by the subsidiary. The Company denies the material allegations against it and is defending the action. On May 14, 2012, a putative class and collective action, Maro v. Hat World, Inc., was filed in the U.S. District Court for the Northern District of Illinois. The action alleges that the Company failed to pay the plaintiff and other, similarly situated retail store employees of Hat World, Inc., for time spent making bank deposits of store collections, and seeks to recover unpaid wages, liquidated damages, statutory penalties, attorneys fees, and costs pursuant to the federal Fair Labor Standards Act, the Illinois Minimum Wage Law and the Illinois Wage Payment and Collection Act. On July 16, 2012 and July 30, 2012, additional putative class and collective actions, Chavez v. Hat World, Inc. and Dismukes v. Hat World, Inc., were filed in the same court, alleging that certain Hat World employees were misclassified as exempt from overtime pay, and seeking similar relief. The Chavez and Dismukes actions have been consolidated. The Company disputes the material allegations in the consolidated action and in Maro and is defending the actions. Note 10 Legal Proceedings, Continued On August 30, 2012, a former employee of a Company subsidiary filed a putative class and collective action, Kershner v. Hat World, Inc., in the Philadelphia, Pennsylvania Court of Common Pleas alleging violations of the Pennsylvania Minimum Wage Act by the subsidiary. The Company and plaintiffs' counsel have reached an agreement in principle, subject to documentation and to approval by the court, to resolve the matter. The Company does not expect the matter to have a material effect on its financial condition or results of operations. On May 23, 2013, a former employee of the Company filed an action, Everett v. Genesco Inc., in the U.S. District Court for the Middle District of Florida alleging violations of the Fair Labor Standards Act, seeking designation as a collective action and the award of allegedly unpaid minimum wages, overtime pay, liquidated damages, penalties, interest, attorneys' fees, and other relief. The Company disputes the material allegations in the action and intends to defend it. On May 17, 2013, a former employee filed a putative class and representative action, Garcia v. Genesco, Inc. in the Superior Court of California for the County of Ventura, alleging various claims under the California Labor Code, including failure to provide meal and rest periods, failure to timely pay wages, failure to provide accurate itemized wage statements, and unfair competition and violation of the Private Attorneys’ General Act of 2004, and seeking unspecified damages and penalties. On August 30, 2013, the Company removed the action to the United States District Court for the Central District of California. The Company disputes the material allegations in the complaint and is defending the matter. In addition to the matters specifically described in this Note, the Company is a party to other legal and regulatory proceedings and claims arising in the ordinary course of its business. While management does not believe that the Company's liability with respect to any of these other matters is likely to have a material effect on its financial position, cash flows, or results of operations, legal proceedings are subject to inherent uncertainties and unfavorable rulings could have a material adverse impact on the Company's business and results of operations. |
Earnings Per Share (Details Textual) (USD $)
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6 Months Ended | 12 Months Ended | |
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Aug. 03, 2013
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Jul. 28, 2012
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Feb. 02, 2013
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Earnings Per Share [Abstract] | |||
Shares repurchased | 189,300 | 346,398 | |
Value of shares repurchased | $ 11,218,000 | $ 20,800,000 | $ 37,650,000 |
Remaining authorized repurchase amount for stock repurchase program | 47,000,000 | ||
Total authorized repurchase amount for stock repurchase program | $ 75,000,000 |
Asset Impairments and Other Charges and Discontinued Operations (Details ) (USD $)
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3 Months Ended | 6 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
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Aug. 03, 2013
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Jul. 28, 2012
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Aug. 03, 2013
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Jul. 28, 2012
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Feb. 02, 2013
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Aug. 03, 2013
Facility Shutdown Costs [Member]
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Feb. 02, 2013
Facility Shutdown Costs [Member]
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Accrued Provision for Discontinued Operations | ||||||||||
Balance at beginning of period | $ 11,351,000 | $ 12,517,000 | ||||||||
Additional provision | (206,000) | (67,000) | (369,000) | (360,000) | 369,000 | 796,000 | ||||
Charges and adjustments, net | (297,000) | (1,962,000) | ||||||||
Balance at end of period | 11,423,000 | [1] | 11,351,000 | |||||||
Current provision for discontinued operations | 7,243,000 | 7,511,000 | 7,243,000 | 7,511,000 | 7,192,000 | 7,243,000 | ||||
Total Noncurrent Provision for Discontinued Operations | 4,180,000 | 4,267,000 | 4,180,000 | 4,267,000 | 4,159,000 | 4,180,000 | ||||
Environmental provision | 11,900,000 | |||||||||
Current environmental provision for discontinued operations | $ 7,800,000 | |||||||||
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Defined Benefit Pension Plans and Other Benefit Plans (Tables)
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Aug. 03, 2013
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net periodic benefit cost |
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Fair Value (Tables)
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Aug. 03, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's assets and liabilities measured at fair value on a nonrecurring basis | The following table presents the Company’s assets (which excludes the Company's pension plan assets) and liabilities measured at fair value on a nonrecurring basis as of August 3, 2013 aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):
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Equity (Details Textual) (USD $)
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6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | ||||
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Aug. 03, 2013
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Feb. 02, 2013
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Jul. 28, 2012
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Aug. 03, 2013
Subordinated Serial Preferred Stock $2.30 Series 1 [Member]
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Aug. 03, 2013
Subordinated Serial Preferred Stock $2.30 Series 1 [Member]
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Aug. 03, 2013
Subordinated Serial Preferred Stock $4.75 Series 3 [Member]
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Aug. 03, 2013
Subordinated Serial Preferred Stock $4.75 Series 3 [Member]
|
Aug. 03, 2013
Subordinated Serial Preferred Stock $4.75 Series 4 [Member]
|
Aug. 03, 2013
Subordinated Serial Preferred Stock $4.75 Series 4 [Member]
|
Aug. 03, 2013
Subordinated Serial Preferred Stock Series 1, 3 and 4 [Member]
|
Aug. 03, 2013
Non-Redeemable Preferred Stock [Member]
|
Aug. 03, 2013
$1.50 Subordinated Cumulative Preferred Stock [Member]
|
Aug. 03, 2013
Employees Subordinated Convertible Preferred Stock [Member]
|
|
Equity (Textual) [Abstract] | |||||||||||||
Preferred stock, dividend rate | $ 2.30 | $ 2.30 | $ 4.75 | $ 4.75 | $ 4.75 | $ 4.75 | $ 1.50 | ||||||
Par value of preferred stock (USD per share) | $ 40 | $ 40 | $ 100 | $ 100 | $ 100 | $ 100 | $ 1.50 | ||||||
Conversion of stock, shares converted | 13,713 | 6,046 | |||||||||||
Stock redeemed, shares | 2,490 | 1,352 | 3,247 | 30,067 | |||||||||
Preferred stock, redemption amount | $ 600,000 | $ 900,000 | |||||||||||
Tender offer for outstanding common stock | 15.00% | ||||||||||||
Redeemable price per right (USD per share) | $ 0.01 | ||||||||||||
Number of common stock | 1 | ||||||||||||
Multiplication value to Quarterly dividend per share of common stock for calculation of Stated and liquidation values and redemption price | 88.00% | ||||||||||||
Stated and liquidation values and redemption price per share dividend paid on common stock plus accumulated dividends | $ 30 | $ 30 | |||||||||||
Common stock, par value (USD per share) | $ 1 | $ 1 | $ 1 | ||||||||||
Common stock, shares authorized | 80,000,000 | 80,000,000 | 80,000,000 | ||||||||||
Common stock, shares issued | 24,468,597 | 24,484,915 | 24,782,586 | ||||||||||
Exercise of stock options | 920,000 | 4,808,000 | |||||||||||
Issue shares - Employee Stock Purchase Plan | 157,000 | ||||||||||||
Common stock value repurchased and retired | $ 1,462,000 | $ 1,462,000 |
Summary of Significant Accounting Policies (Details Textual) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 03, 2013
|
May 04, 2013
|
Feb. 02, 2013
|
Jul. 28, 2012
|
Apr. 28, 2012
|
Aug. 03, 2013
Store
hour
|
Jul. 28, 2012
|
Feb. 02, 2013
|
Jan. 28, 2012
|
Jan. 29, 2011
|
|||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Total number of retail stores operated by company | 2,488 | |||||||||||||||||||
Pretax accruals for environmental contingencies included in provision for discontinued operations | $ 200,000 | $ 100,000 | $ 400,000 | $ 400,000 | ||||||||||||||||
Deferred tax valuation allowance | 3,400,000 | 3,400,000 | ||||||||||||||||||
Effective tax rate, deferred purchase price | 41.20% | 31.60% | 41.20% | 37.10% | ||||||||||||||||
Minimum number of hours of service of full time employees | 1,000 | |||||||||||||||||||
Restricted stock expense | 2,954,000 | 2,444,000 | 5,852,000 | 4,655,000 | ||||||||||||||||
Net sales | 574,746,000 | 543,522,000 | 1,166,134,000 | 1,143,666,000 | ||||||||||||||||
Operating income | 15,528,000 | 25,724,000 | 15,845,000 | 37,003,000 | 41,252,000 | 52,848,000 | 169,863,000 | 161,485,000 | 87,228,000 | |||||||||||
Total assets | 1,457,349,000 | [1] | 1,302,074,000 | 1,326,072,000 | 1,373,760,000 | [2],[3] | 1,252,617,000 | 1,457,349,000 | [1] | 1,373,760,000 | [2],[3] | 1,326,072,000 | 1,229,761,000 | 960,507,000 | ||||||
Depreciation and amortization | 16,454,000 | 15,291,000 | 32,883,000 | 30,544,000 | ||||||||||||||||
Capital expenditures | 19,425,000 | 18,415,000 | 37,206,000 | 32,533,000 | ||||||||||||||||
Revenue recognition, gift cards, breakage | 200,000 | 100,000 | 100,000 | 200,000 | ||||||||||||||||
Cash equivalents | 0 | 200,000 | 100,000 | 0 | 100,000 | 200,000 | ||||||||||||||
Excess of outstanding checks drawn on zero-balance accounts at domestic banks exceeded book cash balances | 36,100,000 | 40,600,000 | 48,600,000 | |||||||||||||||||
Tenant allowances | 21,000,000 | 20,000,000 | 18,400,000 | 21,000,000 | 18,400,000 | 20,000,000 | ||||||||||||||
Deferred rent | 39,400,000 | 37,900,000 | 35,800,000 | 39,400,000 | 35,800,000 | 37,900,000 | ||||||||||||||
Goodwill | 277,398,000 | 273,827,000 | 269,310,000 | 277,398,000 | 269,310,000 | 273,827,000 | ||||||||||||||
Wholesale and unallocated retail costs of distribution | 2,200,000 | 1,800,000 | 4,200,000 | 3,800,000 | ||||||||||||||||
Accrued liability for gift cards | 11,200,000 | 13,100,000 | 9,400,000 | 11,200,000 | 9,400,000 | 13,100,000 | ||||||||||||||
Advertising costs | 11,200,000 | 10,400,000 | 23,900,000 | 21,100,000 | ||||||||||||||||
Prepaid advertising | 2,400,000 | 1,400,000 | 1,700,000 | 2,400,000 | 1,700,000 | 1,400,000 | ||||||||||||||
Cooperative advertising costs | 800,000 | 700,000 | 1,800,000 | 1,700,000 | ||||||||||||||||
Vendor reimbursements of cooperative advertising costs | 700,000 | 700,000 | 1,200,000 | 1,600,000 | ||||||||||||||||
Accumulated other comprehensive income pension liability adjustments | 24,100,000 | 24,100,000 | ||||||||||||||||||
Accumulated other comprehensive income post retirement liability adjustment | 300,000 | 300,000 | ||||||||||||||||||
Accumulated other comprehensive income foreign currency translation adjustment | 7,400,000 | 7,400,000 | ||||||||||||||||||
Lids Sports Group [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Goodwill | 180,000,000 | 172,300,000 | 168,500,000 | 180,000,000 | 168,500,000 | 172,300,000 | ||||||||||||||
Schuh Group [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Goodwill | 96,600,000 | 100,700,000 | 100,000,000 | 96,600,000 | 100,000,000 | 100,700,000 | ||||||||||||||
Licensed Brands [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Goodwill | 800,000 | 800,000 | 800,000 | 800,000 | 800,000 | 800,000 | ||||||||||||||
Lids Teams Sports [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Goodwill | 14,000,000 | 14,000,000 | ||||||||||||||||||
Goodwill impairment analysis, fair value in excess of carrying value | 2,800,000 | 2,800,000 | ||||||||||||||||||
Amount of reduction in fair value pending increases of 100 basis points in weighted average cost of capital | 7,400,000 | 7,400,000 | ||||||||||||||||||
Amount of reduction in fair value pending decrease of 100 basis points in projected annual revenues | 400,000 | 400,000 | ||||||||||||||||||
Retainer Stock [Member] | Director [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Shares issued | 4,790 | 0 | ||||||||||||||||||
Grant date fair value (USD per share) | $ 59.53 | |||||||||||||||||||
Vesting term | 1 year | |||||||||||||||||||
Restricted Stock [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Shares issued | 199,392 | 194,232 | ||||||||||||||||||
Granted, shares | 199,392 | 194,232 | ||||||||||||||||||
Grant date fair value (USD per share) | $ 65.11 | $ 57.58 | $ 65.11 | $ 57.58 | ||||||||||||||||
Vesting term | 4 years | 4 years | 4 years | 4 years | ||||||||||||||||
Restricted Stock [Member] | Director [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Shares issued | 9,280 | 9,888 | 10,224 | |||||||||||||||||
Shares issued, weighted average price | $ 68.91 | $ 64.70 | $ 65.06 | |||||||||||||||||
Granted, shares | 9,280 | |||||||||||||||||||
Grant date fair value (USD per share) | $ 68.91 | |||||||||||||||||||
Customer Concentration Risk [Member] | Trade Accounts Receivable [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Concentration risk, number of significant customers | 1 | 2 | ||||||||||||||||||
Customer Concentration Risk [Member] | Trade Accounts Receivable [Member] | Cistomer 1 [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Concentration risk percentage | 7.00% | |||||||||||||||||||
Customer Concentration Risk [Member] | Trade Accounts Receivable [Member] | Cistomer 2 [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Concentration risk percentage | 6.00% | |||||||||||||||||||
Maximum [Member] | Customer Concentration Risk [Member] | Trade Accounts Receivable [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Concentration risk benchmark percentage | 5.00% | |||||||||||||||||||
Schuh Group [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Net sales | 82,109,000 | 81,156,000 | 150,432,000 | 151,468,000 | ||||||||||||||||
Operating income | (1,433,000) | 192,000 | (6,076,000) | (1,889,000) | ||||||||||||||||
Total assets | 228,520,000 | [1] | 221,257,000 | [2],[3] | 228,520,000 | [1] | 221,257,000 | [2],[3] | ||||||||||||
Depreciation and amortization | 2,675,000 | 2,531,000 | 5,384,000 | 4,773,000 | ||||||||||||||||
Capital expenditures | 3,331,000 | 5,322,000 | 6,123,000 | 7,895,000 | ||||||||||||||||
Goodwill | 96,600,000 | 100,000,000 | 96,600,000 | 100,000,000 | ||||||||||||||||
Corporate & Other [Member]
|
||||||||||||||||||||
Summary of Accounting Policies [Line Items] | ||||||||||||||||||||
Net sales | 583,000 | 513,000 | 820,000 | 690,000 | ||||||||||||||||
Operating income | (703,000) | (9,914,000) | (10,114,000) | (23,786,000) | ||||||||||||||||
Total assets | 160,271,000 | [1] | 170,901,000 | [2],[3] | 160,271,000 | [1] | 170,901,000 | [2],[3] | ||||||||||||
Depreciation and amortization | 1,183,000 | 575,000 | 1,875,000 | 1,138,000 | ||||||||||||||||
Capital expenditures | $ 884,000 | $ 935,000 | $ 1,311,000 | $ 1,894,000 | ||||||||||||||||
|
Inventories (Details) (USD $)
In Thousands, unless otherwise specified |
Aug. 03, 2013
|
Feb. 02, 2013
|
Jul. 28, 2012
|
---|---|---|---|
Inventories | |||
Raw materials | $ 25,149 | $ 24,223 | |
Wholesale finished goods | 58,817 | 57,161 | |
Retail merchandise | 544,108 | 423,960 | |
Total Inventories | $ 628,074 | $ 505,344 | $ 555,626 |
Defined Benefit Pension Plans and Other Benefit Plans (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 03, 2013
|
Jul. 28, 2012
|
Aug. 03, 2013
|
Jul. 28, 2012
|
|
Pension Benefits [Member]
|
||||
Net Periodic Benefit Cost | ||||
Service cost | $ 88 | $ 88 | $ 176 | $ 176 |
Interest cost | 1,145 | 1,239 | 2,293 | 2,483 |
Expected return on plan assets | (1,663) | (1,750) | (3,328) | (3,504) |
Amortization: | ||||
Prior service cost | 0 | 1 | 0 | 2 |
Losses | 1,512 | 1,478 | 3,136 | 3,076 |
Net amortization | 1,512 | 1,479 | 3,136 | 3,078 |
Net Periodic Benefit Cost | 1,082 | 1,056 | 2,277 | 2,233 |
Other Benefits [Member]
|
||||
Net Periodic Benefit Cost | ||||
Service cost | 113 | 89 | 226 | 178 |
Interest cost | 43 | 39 | 86 | 78 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization: | ||||
Prior service cost | 0 | 0 | 0 | 0 |
Losses | 26 | 21 | 52 | 42 |
Net amortization | 26 | 21 | 52 | 42 |
Net Periodic Benefit Cost | $ 182 | $ 149 | $ 364 | $ 298 |
Inventories (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 03, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
|
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 03, 2013
|
Jul. 28, 2012
|
Aug. 03, 2013
|
Jul. 28, 2012
|
|
Statement of Comprehensive Income [Abstract] | ||||
Loss on foreign currency forward contract, tax amount | $ 0 | $ 0 | ||
Pension liability adjustment, tax amount | 600,000 | 1,200,000 | ||
Postretirement liability adjustment, tax amount | $ 0 | $ 0 |
Condensed Consolidated Statements of Equity (USD $)
In Thousands |
Total
|
Total Non-Redeemable Preferred Stock
|
Common Stock
|
Additional Paid-In Capital
|
Retained Earnings
|
Accumulated Other Comprehensive Loss
|
Treasury Shares
|
Non Controlling Interest Non-Redeemable
|
---|---|---|---|---|---|---|---|---|
Beginning balance at Jan. 28, 2012 | $ 728,980 | $ 4,957 | $ 24,758 | $ 149,479 | $ 598,360 | $ (32,966) | $ (17,857) | $ 2,249 |
Net earnings | 112,435 | 0 | 0 | 0 | 112,435 | 0 | 0 | 0 |
Other comprehensive income (loss) | 4,725 | 0 | 0 | 0 | 0 | 4,725 | 0 | 0 |
Dividends paid on non-redeemable preferred stock | (147) | 0 | 0 | 0 | (147) | 0 | 0 | 0 |
Exercise of stock options | 4,808 | 0 | 224 | 4,584 | 0 | 0 | 0 | 0 |
Issue shares - Employee Stock Purchase Plan | 157 | 0 | 2 | 155 | 0 | 0 | 0 | 0 |
Employee and non-employee restricted stock | 10,508 | 0 | 0 | 10,508 | 0 | 0 | 0 | 0 |
Restricted stock issuance | 0 | 0 | 194 | (194) | 0 | 0 | 0 | 0 |
Restricted shares withheld for taxes | (4,531) | 0 | (76) | 0 | (4,455) | 0 | 0 | 0 |
Tax benefit of stock options and restricted stock exercised | 4,820 | 0 | 0 | 4,820 | 0 | 0 | 0 | 0 |
Shares repurchased | (37,650) | 0 | (646) | 0 | (37,004) | 0 | 0 | 0 |
Other | 4 | (1,033) | 29 | 1,008 | 0 | 0 | 0 | 0 |
Noncontrolling interest - loss | (322) | 0 | 0 | 0 | 0 | 0 | 0 | (322) |
Ending balance at Feb. 02, 2013 | 823,787 | 3,924 | 24,485 | 170,360 | 669,189 | (28,241) | (17,857) | 1,927 |
Net earnings | 22,750 | 0 | 0 | 0 | 22,750 | 0 | 0 | 0 |
Other comprehensive income (loss) | (3,563) | 0 | 0 | 0 | 0 | (3,563) | 0 | 0 |
Dividends paid on non-redeemable preferred stock | (33) | 0 | 0 | 0 | (33) | 0 | 0 | 0 |
Exercise of stock options | 920 | 0 | 43 | 877 | 0 | 0 | 0 | 0 |
Employee and non-employee restricted stock | 5,852 | 0 | 0 | 5,852 | 0 | 0 | 0 | 0 |
Restricted stock issuance | 0 | 0 | 213 | (213) | 0 | 0 | 0 | 0 |
Restricted shares withheld for taxes | (6,938) | 0 | (105) | 105 | (6,938) | 0 | 0 | 0 |
Tax benefit of stock options and restricted stock exercised | 3,080 | 0 | 0 | 3,080 | 0 | 0 | 0 | 0 |
Shares repurchased | (11,218) | 0 | (189) | 0 | (11,029) | 0 | 0 | 0 |
Redemption of preferred shares | (1,462) | (1,462) | 0 | 0 | 0 | 0 | 0 | 0 |
Other | 2 | (1,155) | 22 | 1,135 | 0 | 0 | 0 | 0 |
Noncontrolling interest - loss | 15 | 0 | 0 | 0 | 0 | 0 | 0 | 15 |
Ending balance at Aug. 03, 2013 | $ 833,192 | $ 1,307 | $ 24,469 | $ 181,196 | $ 673,939 | $ (31,804) | $ (17,857) | $ 1,942 |
Intangible Assets
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 03, 2013
|
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets Other intangibles by major classes were as follows:
*Includes non-compete agreements, vendor contract and backlog. The amortization of intangibles, including trademarks, was $0.8 million and $0.9 million for the second quarters of Fiscal 2014 and 2013, respectively, and $1.6 million and $1.7 million for the first six months of Fiscal 2014 and 2013, respectively. The amortization of intangibles, including trademarks, are expected to be $3.2 million, $2.8 million, $2.0 million, $1.6 million and $1.0 million for Fiscal 2014, 2015, 2016, 2017 and 2018, respectively. |
Summary of Significant Accounting Policies
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 03, 2013
|
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Interim Statements The condensed consolidated financial statements and notes contained in this report are unaudited but reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results for the interim periods of the fiscal year ending February 1, 2014 ("Fiscal 2014") and of the fiscal year ended February 2, 2013 ("Fiscal 2013"). The results of operations for any interim period are not necessarily indicative of results for the full year. As noted in the Form 8-K filed on September 12, 2013, the Company plans to file a Form 10-K/A to restate the Fiscal 2013, 2012 and 2011 Consolidated Financial Statements and a Form 10-Q/A to restate the three months ended May 4, 2013 Condensed Consolidated Financial Statements as further discussed in Note 2. Nature of Operations The Company's business includes the design and sourcing, marketing and distribution of footwear and accessories through retail stores in the U.S., Puerto Rico and Canada primarily under the Journeys, Journeys Kidz, Shi by Journeys, Underground by Journeys and Johnston & Murphy banners and under the Schuh banner in the United Kingdom and the Republic of Ireland; through e-commerce websites including journeys.com, journeyskidz.com, shibyjourneys.com, undergroundbyjourneys.com, schuh.co.uk and johnstonmurphy.com and catalogs, and at wholesale, primarily under the Company's Johnston & Murphy brand, the licensed Dockers brand and other brands that the Company licenses for men's footwear. The Company's business also includes Lids Sports Group, which operates headwear and accessory stores in the U.S. and Canada primarily under the Lids, Hat World and Hat Shack banners; the Lids Locker Room and Lids Clubhouse businesses, consisting of sports-oriented fan shops featuring a broad array of licensed merchandise such as apparel, hats and accessories, sports decor and novelty products, operating under various trade names; certain e-commerce operations and an athletic team dealer business operating as Lids Team Sports. Including both the footwear businesses and the Lids Sports Group business, at August 3, 2013, the Company operated 2,488 retail stores in the U.S., Puerto Rico, Canada, the United Kingdom and the Republic of Ireland. During the six months ended August 3, 2013, the Company operated five reportable business segments (not including corporate): (i) Journeys Group, comprised of the Journeys, Journeys Kidz, Shi by Journeys and Underground by Journeys retail footwear chains, catalog and e-commerce operations; (ii) Schuh Group, comprised of the Schuh retail footwear chain and e-commerce operations; (iii) Lids Sports Group, comprised as described in the preceding paragraph; (iv) Johnston & Murphy Group, comprised of Johnston & Murphy retail operations, e-commerce and catalog operations and wholesale distribution; and (v) Licensed Brands, comprised of Dockers® Footwear, sourced and marketed under a license from Levi Strauss & Company; SureGrip®Footwear, occupational footwear primarily sold directly to consumers; and other footwear brands. Principles of Consolidation All subsidiaries are consolidated in the Condensed Consolidated Financial Statements. All significant intercompany transactions and accounts have been eliminated. Note 1 Summary of Significant Accounting Policies, Continued Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant areas requiring management estimates or judgments include the following key financial areas: Inventory Valuation The Company values its inventories at the lower of cost or market. In its footwear wholesale operations, its Schuh Group segment and its Lids Sports Group wholesale operations, except for the Anaconda Sports wholesale division, cost is determined using the first-in, first-out (“FIFO”) method. Market value is determined using a system of analysis which evaluates inventory at the stock number level based on factors such as inventory turn, average selling price, inventory level, and selling prices reflected in future orders. The Company provides reserves when the inventory has not been marked down to market value based on current selling prices or when the inventory is not turning and is not expected to turn at levels satisfactory to the Company. The Lids Sports Group retail segment and its Anaconda Sports wholesale division employ the moving average cost method for valuing inventories and apply freight using an allocation method. The Company provides a valuation allowance for slow-moving inventory based on negative margins and estimated shrink based on historical experience and specific analysis, where appropriate. In its retail operations, other than the Schuh Group and Lids Sports Group retail segments, the Company employs the retail inventory method, applying average cost-to-retail ratios to the retail value of inventories. Under the retail inventory method, valuing inventory at the lower of cost or market is achieved as markdowns are taken or accrued as a reduction of the retail value of inventories. Inherent in the retail inventory method are subjective judgments and estimates, including merchandise mark-on, markups, markdowns, and shrinkage. These judgments and estimates, coupled with the fact that the retail inventory method is an averaging process, could produce a range of cost figures. To reduce the risk of inaccuracy and to ensure consistent presentation, the Company employs the retail inventory method in multiple subclasses of inventory with similar gross margins, and analyzes markdown requirements at the stock number level based on factors such as inventory turn, average selling price, and inventory age. In addition, the Company accrues markdowns as necessary. These additional markdown accruals reflect all of the above factors as well as current agreements to return products to vendors and vendor agreements to provide Note 1 Summary of Significant Accounting Policies, Continued markdown support. In addition to markdown provisions, the Company maintains provisions for shrinkage and damaged goods based on historical rates. Inherent in the analysis of both wholesale and retail inventory valuation are subjective judgments about current market conditions, fashion trends, and overall economic conditions. Failure to make appropriate conclusions regarding these factors may result in an overstatement or understatement of inventory value. Impairment of Long-Lived Assets The Company periodically assesses the realizability of its long-lived assets and evaluates such assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Asset impairment is determined to exist if estimated future cash flows, undiscounted and without interest charges, are less than the carrying amount. Inherent in the analysis of impairment are subjective judgments about future cash flows. Failure to make appropriate conclusions regarding these judgments may result in an overstatement or understatement of the value of long-lived assets. See also Notes 4 and 6. The goodwill impairment test involves performing a qualitative assessment, on a reporting unit level, based on current circumstances. If the results of the qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, a two-step impairment test will not be performed. However, if the results of the qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a two-step impairment test is performed. Alternatively, the Company may elect to bypass the qualitative assessment and proceed directly to the two-step impairment test, on a reporting unit level. The first step is a comparison of the fair value and carrying value of the business unit with which the goodwill is associated. The Company estimates fair value using the best information available, and computes the fair value derived by an income approach utilizing discounted cash flow projections. The income approach uses a projection of a reporting unit’s estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions. A key assumption in the Company’s fair value estimate is the weighted average cost of capital utilized for discounting its cash flow projections in its income approach. The Company believes the rate it used in its latest annual test, which was completed in the fourth quarter, was consistent with the risks inherent in its business and with industry discount rates. The projection uses management’s best estimates of economic and market conditions over the projected period including growth rates in sales, costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. If the carrying value of the reporting unit is higher than its fair value, there is an indication that impairment may exist and the second step must be performed to measure the amount of impairment loss. The amount of impairment is determined by comparing the implied fair value of reporting Note 1 Summary of Significant Accounting Policies, Continued unit goodwill to the carrying value of the goodwill in the same manner as if the reporting unit was being acquired in a business combination. Specifically, the Company would allocate the fair value to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that would calculate the implied fair value of goodwill. If the implied fair value of goodwill is less than the recorded goodwill, the Company would record an impairment charge for the difference. Environmental and Other Contingencies The Company is subject to certain loss contingencies related to environmental proceedings and other legal matters. The Company has made pretax accruals for certain of these contingencies, including approximately $0.2 million and $0.1 million in the second quarter of Fiscal 2014 and 2013, respectively, and $0.4 million for each of the first six months of Fiscal 2014 and 2013. These charges are included in provision for discontinued operations, net in the Condensed Consolidated Statements of Operations because they relate to former facilities operated by the Company. The Company monitors these matters on an ongoing basis and, on a quarterly basis, management reviews the Company’s reserves and accruals, adjusting provisions as management deems necessary in view of changes in available information. Changes in estimates of liability are reported in the periods when they occur. Consequently, management believes that its reserve in relation to each proceeding is a best estimate of probable loss connected to the proceeding, or in cases in which no best estimate is possible, the minimum amount in the range of estimated losses, based upon its analysis of the facts and circumstances as of the close of the most recent fiscal quarter. However, because of uncertainties and risks inherent in litigation generally and in environmental proceedings in particular, there can be no assurance that future developments will not require additional reserves, that some or all reserves will be adequate or that the amounts of any such additional reserves or any such inadequacy will not have a material adverse effect upon the Company’s financial condition or results of operations. See also Notes 4 and 10. Revenue Recognition Retail sales are recorded at the point of sale and are net of estimated returns and exclude sales and value added taxes. Catalog and internet sales are recorded at estimated time of delivery to the customer and are net of estimated returns and exclude sales and value added taxes. Wholesale revenue is recorded net of estimated returns and allowances for markdowns, damages and miscellaneous claims when the related goods have been shipped and legal title has passed to the customer. Shipping and handling costs charged to customers are included in net sales. Estimated returns are based on historical returns and claims. Actual amounts of markdowns have not differed materially from estimates. Actual returns and claims in any future period may differ from historical experience. Note 1 Summary of Significant Accounting Policies, Continued Income Taxes As part of the process of preparing the Condensed Consolidated Financial Statements, the Company is required to estimate its income taxes in each of the tax jurisdictions in which it operates. This process involves estimating actual current tax obligations together with assessing temporary differences resulting from differing treatment of certain items for tax and accounting purposes, such as depreciation of property and equipment and valuation of inventories. These temporary differences result in deferred tax assets and liabilities, which are included within the Condensed Consolidated Balance Sheets. The Company then assesses the likelihood that its deferred tax assets will be recovered from future taxable income. Actual results could differ from this assessment if adequate taxable income is not generated in future periods. To the extent the Company believes that recovery of an asset is at risk, valuation allowances are established. To the extent valuation allowances are established or increased in a period, the Company includes an expense within the tax provision in the Condensed Consolidated Statements of Operations. These deferred tax valuation allowances may be released in future years when management considers that it is more likely than not that some portion or all of the deferred tax assets will be realized. In making such a determination, management will need to periodically evaluate whether or not all available evidence, such as future taxable income and reversal of temporary differences, tax planning strategies, and recent results of operations, provides sufficient positive evidence to offset any potential negative evidence that may exist at such time. In the event the deferred tax valuation allowance is released, the Company would record an income tax benefit for the portion or all of the deferred tax valuation allowance released. At August 3, 2013, the Company had a deferred tax valuation allowance of $3.4 million. Income tax reserves for certain tax positions are determined using the methodology required by the Income Tax Topic of the Accounting Standards Codification ("Codification"). This methodology requires companies to assess each income tax position taken using a two step process. A determination is first made as to whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position. Uncertain tax positions require determinations and estimated liabilities to be made based on provisions of the tax law which may be subject to change or varying interpretation. If the Company’s determinations and estimates prove to be inaccurate, the resulting adjustments could be material to its future financial results. The Company recorded an effective income tax rate of 41.2% in the second quarter of Fiscal 2014 compared to 31.6% for the same period last year and 41.2% and 37.1% for the first six months of Fiscal 2014 and 2013, respectively. The tax rates for Fiscal 2013 were lower due to certain state tax credits recognized last year compared to this year. Note 1 Summary of Significant Accounting Policies, Continued Postretirement Benefits Plan Accounting Full-time employees who had at least 1,000 hours of service in calendar year 2004, except employees in the Lids Sports Group and Schuh Group segments, are covered by a defined benefit pension plan. The Company froze the defined benefit pension plan effective January 1, 2005. The Company also provides certain former employees with limited medical and life insurance benefits. The Company funds at least the minimum amount required by the Employee Retirement Income Security Act. As required by the Compensation – Retirement Benefits Topic of the Codification, the Company is required to recognize the overfunded or underfunded status of postretirement benefit plans as an asset or liability in its Condensed Consolidated Balance Sheets and to recognize changes in that funded status in accumulated other comprehensive loss, net of tax, in the year in which the changes occur. The Company accounts for the defined benefit pension plans using the Compensation-Retirement Benefits Topic of the Codification. As permitted under this topic, pension expense is recognized on an accrual basis over employees’ approximate service periods. The calculation of pension expense and the corresponding liability requires the use of a number of critical assumptions, including the expected long-term rate of return on plan assets and the assumed discount rate, as well as the recognition of actuarial gains and losses. Changes in these assumptions can result in different expense and liability amounts, and future actual experience can differ from these assumptions. Share-Based Compensation The Company has share-based compensation plans covering certain members of management and non-employee directors. The Company recognizes compensation expense for share-based payments based on the fair value of the awards as required by the Compensation – Stock Compensation Topic of the Codification. There was no share-based compensation expense related to stock options for the second quarters and first six months of Fiscal 2014 or 2013. The Company has not issued any new stock option awards since the first quarter of Fiscal 2008. For the second quarter of Fiscal 2014 and 2013, restricted stock expense was $3.0 million and $2.4 million, respectively. For the first six months of Fiscal 2014 and 2013, restricted stock expense was $5.9 million and $4.7 million, respectively. The fair value of employee restricted stock is determined based on the closing price of the Company’s stock on the date of the grant. The benefits of tax deductions in excess of recognized compensation expense are reported as a financing cash flow. During the three months and six months ended August 3, 2013, the Company issued 199,392 shares of employee restricted stock at a grant date fair value of $65.11 per share which vest in four equal annual installments over a four-year term. For the three months and six months ended July 28, 2012, the Company issued 194,232 shares of employee restricted stock at a grant date fair value of $57.58 per share which vest in four equal annual installments over a four-year term. For the three and six months ended August 3, 2013, the Company issued 9,280 shares of director restricted stock at a weighted average price of $68.91 which vest on the first anniversary of the Note 1 Summary of Significant Accounting Policies, Continued grant date. For the three months and six months ended July 28, 2012, the Company issued 9,888 shares and 10,224 shares, respectively, of director restricted stock at a weighted average price of $64.70 and $65.06, respectively, which vest on the first anniversary of the grant date. An outside director can elect irrevocably to receive all or a specified portion of his annual retainers for board membership and any committee chairmanship for the following fiscal year in a number of shares of restricted stock (the "Retainer Stock"). Shares of the Retainer Stock are granted as of the first business day of the fiscal year as to which the election is effective, subject to forfeiture to the extent not earned upon the outside director's ceasing to serve as a director or committee chairman during such fiscal year. During the six months ended August 3, 2013, the Company issued 4,790 shares of Retainer Stock at a grant date fair value of $59.53 per share which vest over one year. The Company did not issue any Retainer Stock for the three months ended August 3, 2013 or the three and six months ended July 28, 2012. Cash and Cash Equivalents Included in cash and cash equivalents at August 3, 2013, February 2, 2013 and July 28, 2012 are cash equivalents of $0.0 million, $0.2 million and $0.1 million, respectively. Cash equivalents are highly-liquid financial instruments having an original maturity of three months or less. At August 3, 2013, substantially all of the Company’s domestic cash was invested in deposit accounts at FDIC-insured banks. The majority of payments due from banks for domestic customer credit card transactions process within 24 - 48 hours and are accordingly classified as cash and cash equivalents. At August 3, 2013, February 2, 2013 and July 28, 2012, outstanding checks drawn on zero-balance accounts at certain domestic banks exceeded book cash balances at those banks by approximately $40.6 million, $36.1 million and $48.6 million, respectively. These amounts are included in accounts payable. Concentration of Credit Risk and Allowances on Accounts Receivable The Company’s footwear wholesale businesses sell primarily to independent retailers and department stores across the United States. Receivables arising from these sales are not collateralized. Customer credit risk is affected by conditions or occurrences within the economy and the retail industry as well as by customer specific factors. The Company’s Lids Team Sports wholesale business sells primarily to colleges and high school athletic teams and their fan bases. Including both footwear wholesale and Lids Team Sports wholesale business receivables, one customer accounted for 7% and two other customers each accounted for 6% of the Company’s total trade receivables balance, while no other customer accounted for more than 5% of the Company’s total trade receivables balance as of August 3, 2013. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information, as well as customer specific factors. The Company also establishes allowances for sales returns, customer deductions and co-op advertising based on specific circumstances, historical trends and projected probable outcomes. Note 1 Summary of Significant Accounting Policies, Continued Property and Equipment Property and equipment are recorded at cost and depreciated or amortized over the estimated useful life of related assets. Depreciation and amortization expense are computed principally by the straight-line method over the following estimated useful lives:
Leases Leasehold improvements and properties under capital leases are amortized on the straight-line method over the shorter of their useful lives or their related lease terms and the charge to earnings is included in selling and administrative expenses in the Condensed Consolidated Statements of Operations. Certain leases include rent increases during the initial lease term. For these leases, the Company recognizes the related rental expense on a straight-line basis over the term of the lease (which includes any rent holidays and the pre-opening period of construction, renovation, fixturing and merchandise placement) and records the difference between the amounts charged to operations and amounts paid as deferred rent. The Company occasionally receives reimbursements from landlords to be used towards construction of the store the Company intends to lease. Leasehold improvements are recorded at their gross costs including items reimbursed by landlords. The reimbursements are amortized as a reduction of rent expense over the initial lease term. Tenant allowances of $21.0 million, $20.0 million and $18.4 million at August 3, 2013, February 2, 2013 and July 28, 2012, respectively, and deferred rent of $39.4 million, $37.9 million and $35.8 million at August 3, 2013, February 2, 2013 and July 28, 2012, respectively, are included in deferred rent and other long-term liabilities on the Condensed Consolidated Balance Sheets. Goodwill and Other Intangibles Under the provisions of the Intangibles – Goodwill and Other Topic of the Codification, goodwill and intangible assets with indefinite lives are not amortized, but are tested at least annually, during the fourth quarter, for impairment. The Company will update the tests between annual tests if events or circumstances occur that would more likely than not reduce the fair value of the business unit with which the goodwill is associated below its carrying amount. It is also required that intangible assets with finite lives be amortized over their respective lives to their estimated residual values, and reviewed for impairment in accordance with the Property, Plant and Equipment Topic of the Codification. Intangible assets of the Company with indefinite lives are primarily goodwill and identifiable trademarks, net of amortization, acquired in connection with the acquisition of Schuh Group Ltd. in June 2011 and Hat World Corporation in April 2004. The Condensed Consolidated Balance Note 1 Summary of Significant Accounting Policies, Continued Sheets include goodwill of $180.0 million for the Lids Sports Group, $96.6 million for the Schuh Group and $0.8 million for Licensed Brands at August 3, 2013, $172.3 million for the Lids Sports Group, $100.7 million for the Schuh Group and $0.8 million for Licensed Brands at February 2, 2013 and $168.5 million for the Lids Sports Group, $100.0 million for the Schuh Group and $0.8 million for Licensed Brands at July 28, 2012. The Company tests for impairment of intangible assets with an indefinite life, relying on a number of factors including operating results, business plans, projected future cash flows and observable market data. The impairment test for identifiable assets not subject to amortization consists of a comparison of the fair value of the intangible asset with its carrying amount. The Company has not recorded an impairment charge for intangible assets. In connection with acquisitions, the Company records goodwill on its Condensed Consolidated Financial Statements. This asset is not amortized but is subject to an impairment test at least annually, based on projected future cash flows from the acquired business discounted at a rate commensurate with the risk the Company considers to be inherent in its current business model. The Company performs the impairment test annually as of the close of its fiscal year, or more frequently if events or circumstances indicate that the value of the asset might be impaired. As a result of the various acquisitions comprising the Lids Team Sports team dealer business, the Company carries goodwill related to such acquisitions at a value of $14.0 million on its Condensed Consolidated Balance Sheets. The Company found that the result of its annual impairment test in January 2013, which valued the business at approximately $2.8 million in excess of its carrying value, indicated no impairment at that time. The Company may determine in future impairment tests that some or all of the carrying value of the goodwill may not be recoverable. Such a finding would require a write-off of the amount of the carrying value that is impaired, which would reduce the Company's profitability in the period of the impairment charge. Holding all other assumptions constant as of the measurement date, the Company noted that an increase in the weighted average cost of capital of 100 basis points would reduce the fair value of the Lids Team Sports business by $7.4 million. Furthermore, the Company noted that a decrease in projected annual revenue growth by one percent would reduce the fair value of the Lids Team Sports business by $0.4 million. However, if other assumptions do not remain constant, the fair value of the Lids Team Sports business may decrease by a greater amount. Identifiable intangible assets of the Company with finite lives are trademarks, customer lists, in-place leases, non-compete agreements and a vendor contract. They are subject to amortization based upon their estimated useful lives. Finite-lived intangible assets are evaluated for impairment using a process similar to that used to evaluate other definite-lived long-lived assets, a comparison of the fair value of the intangible asset with its carrying amount. An impairment loss is recognized for the amount by which the carrying value exceeds the fair value of the asset. Note 1 Summary of Significant Accounting Policies, Continued Fair Value of Financial Instruments The carrying amounts and fair values of the Company’s financial instruments at August 3, 2013 and February 2, 2013 are:
Debt fair values were determined using a discounted cash flow analysis based on current market interest rates for similar types of financial instruments and would be classified in Level 2 as defined in Note 6. Carrying amounts reported on the Condensed Consolidated Balance Sheets for cash, cash equivalents, receivables and accounts payable approximate fair value due to the short-term maturity of these instruments. Cost of Sales For the Company’s retail operations, the cost of sales includes actual product cost, the cost of transportation to the Company’s warehouses from suppliers and the cost of transportation from the Company’s warehouses to the stores. Additionally, the cost of its distribution facilities allocated to its retail operations is included in cost of sales. For the Company’s wholesale operations, the cost of sales includes the actual product cost and the cost of transportation to the Company’s warehouses from suppliers. Selling and Administrative Expenses Selling and administrative expenses include all operating costs of the Company excluding (i) those related to the transportation of products from the supplier to the warehouse, (ii) for its retail operations, those related to the transportation of products from the warehouse to the store and (iii) costs of its distribution facilities which are allocated to its retail operations. Wholesale and unallocated retail costs of distribution are included in selling and administrative expenses on the Condensed Consolidated Statements of Operations in the amounts of $2.2 million and $1.8 million for the second quarters of Fiscal 2014 and 2013, respectively, and $4.2 million and $3.8 million for the first six months of Fiscal 2014 and 2013, respectively. Gift Cards The Company has a gift card program that began in calendar year 1999 for its Lids Sports operations and calendar year 2000 for its footwear operations. The gift cards issued to date do not expire. As such, the Company recognizes income when: (i) the gift card is redeemed by the customer; or (ii) Note 1 Summary of Significant Accounting Policies, Continued the likelihood of the gift card being redeemed by the customer for the purchase of goods in the future is remote and there are no related escheat laws (referred to as “breakage”). The gift card breakage rate is based upon historical redemption patterns and income is recognized for unredeemed gift cards in proportion to those historical redemption patterns. Gift card breakage is recognized in revenues each period for which financial statements are updated. Gift card breakage recognized as revenue was $0.2 million and $0.1 million for the second quarter of Fiscal 2014 and 2013, respectively, and $0.1 million and $0.2 million for the first six months of Fiscal 2014 and 2013, respectively. The Condensed Consolidated Balance Sheets include an accrued liability for gift cards of $11.2 million, $13.1 million and $9.4 million at August 3, 2013, February 2, 2013 and July 28, 2012, respectively. Buying, Merchandising and Occupancy Costs The Company records buying, merchandising and occupancy costs in selling and administrative expense on the Condensed Consolidated Statements of Operations. Because the Company does not include these costs in cost of sales, the Company’s gross margin may not be comparable to other retailers that include these costs in the calculation of gross margin. Shipping and Handling Costs Shipping and handling costs related to inventory purchased from suppliers are included in the cost of inventory and are charged to cost of sales in the period that the inventory is sold. All other shipping and handling costs are charged to cost of sales in the period incurred except for wholesale and unallocated retail costs of distribution, which are included in selling and administrative expenses on the Condensed Consolidated Statements of Operations. Preopening Costs Costs associated with the opening of new stores are expensed as incurred, and are included in selling and administrative expenses on the accompanying Condensed Consolidated Statements of Operations. Store Closings and Exit Costs From time to time, the Company makes strategic decisions to close stores or exit locations or activities. If stores or operating activities to be closed or exited constitute components, as defined by the Property, Plant and Equipment Topic of the Codification, and will not result in a migration of customers and cash flows, these closures will be considered discontinued operations when the related assets meet the criteria to be classified as held for sale, or at the cease-use date, whichever occurs first. The results of operations of discontinued operations are presented retroactively, net of tax, as a separate component on the Condensed Consolidated Statements of Operations, if material individually or cumulatively. To date, in Fiscal 2014, no store closings meeting the discontinued operations criteria have been material individually or cumulatively. Assets related to planned store closures or other exit activities are reflected as assets held for sale and recorded at the lower of carrying value or fair value less costs to sell when the required criteria, Note 1 Summary of Significant Accounting Policies, Continued as defined by the Property, Plant and Equipment Topic of the Codification, are satisfied. Depreciation ceases on the date that the held for sale criteria are met. Assets related to planned store closures or other exit activities that do not meet the criteria to be classified as held for sale are evaluated for impairment in accordance with the Company’s normal impairment policy, but with consideration given to revised estimates of future cash flows. In any event, the remaining depreciable useful lives are evaluated and adjusted as necessary. Exit costs related to anticipated lease termination costs, severance benefits and other expected charges are accrued for and recognized in accordance with the Exit or Disposal Cost Obligations Topic of the Codification. Advertising Costs Advertising costs are predominantly expensed as incurred. Advertising costs were $11.2 million and $10.4 million for the second quarters of Fiscal 2014 and 2013, respectively, and $23.9 million and $21.1 million for the first six months of Fiscal 2014 and 2013, respectively. Direct response advertising costs for catalogs are capitalized in accordance with the Other Assets and Deferred Costs Topic for Capitalized Advertising Costs of the Codification. Such costs are amortized over the estimated future period as revenues are realized from such advertising, not to exceed six months. The Condensed Consolidated Balance Sheets include prepaid assets for direct response advertising costs of $2.4 million, $1.4 million and $1.7 million at August 3, 2013, February 2, 2013 and July 28, 2012, respectively. Consideration to Resellers The Company does not have any written buy-down programs with retailers, but the Company has provided certain retailers with markdown allowances for obsolete and slow moving products that are in the retailer’s inventory. The Company estimates these allowances and provides for them as reductions to revenues at the time revenues are recorded. Markdowns are negotiated with retailers and changes are made to the estimates as agreements are reached. Actual amounts for markdowns have not differed materially from estimates. Cooperative Advertising Cooperative advertising funds are made available to most of the Company’s wholesale footwear customers. In order for retailers to receive reimbursement under such programs, the retailer must meet specified advertising guidelines and provide appropriate documentation of expenses to be reimbursed. The Company’s cooperative advertising agreements require that wholesale customers present documentation or other evidence of specific advertisements or display materials used for the Company’s products by submitting the actual print advertisements presented in catalogs, newspaper inserts or other advertising circulars, or by permitting physical inspection of displays. Additionally, the Company’s cooperative advertising agreements require that the amount of reimbursement requested for such advertising or materials be supported by invoices or other evidence of the actual costs incurred by the retailer. The Company accounts for these cooperative advertising costs as selling and administrative expenses, in accordance with the Revenue Recognition Topic for Customer Payments and Incentives of the Codification. Note 1 Summary of Significant Accounting Policies, Continued Cooperative advertising costs recognized in selling and administrative expenses on the Condensed Consolidated Statements of Operations were $0.8 million and $0.7 million for the second quarters of Fiscal 2014 and 2013, respectively, and $1.8 million and $1.7 million for the first six months of Fiscal 2014 and 2013, respectively. During the first six months of Fiscal 2014 and 2013, the Company’s cooperative advertising reimbursements paid did not exceed the fair value of the benefits received under those agreements. Vendor Allowances From time to time, the Company negotiates allowances from its vendors for markdowns taken or expected to be taken. These markdowns are typically negotiated on specific merchandise and for specific amounts. These specific allowances are recognized as a reduction in cost of sales in the period in which the markdowns are taken. Markdown allowances not attached to specific inventory on hand or already sold are applied to concurrent or future purchases from each respective vendor. The Company receives support from some of its vendors in the form of reimbursements for cooperative advertising and catalog costs for the launch and promotion of certain products. The reimbursements are agreed upon with vendors and represent specific, incremental, identifiable costs incurred by the Company in selling the vendor’s specific products. Such costs and the related reimbursements are accumulated and monitored on an individual vendor basis, pursuant to the respective cooperative advertising agreements with vendors. Such cooperative advertising reimbursements are recorded as a reduction of selling and administrative expenses in the same period in which the associated expense is incurred. If the amount of cash consideration received exceeds the costs being reimbursed, such excess amount would be recorded as a reduction of cost of sales. Vendor reimbursements of cooperative advertising costs recognized as a reduction of selling and administrative expenses were $0.7 million for each of the second quarters of Fiscal 2014 and 2013, and $1.2 million and $1.6 million for the first six months of Fiscal 2014 and 2013, respectively. During the first six months of Fiscal 2014 and 2013, the Company’s cooperative advertising reimbursements received were not in excess of the costs incurred. Environmental Costs Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures relating to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated and are evaluated independently of any future claims for recovery. Generally, the timing of these accruals coincides with completion of a feasibility study or the Company's commitment to a formal plan of action. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Note 1 Summary of Significant Accounting Policies, Continued Earnings Per Common Share Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities to issue common stock were exercised or converted to common stock (see Note 9). Other Comprehensive Income The Comprehensive Income Topic of the Codification requires, among other things, the Company’s pension liability adjustment, postretirement liability adjustment and foreign currency translation adjustments to be included in other comprehensive income net of tax. Accumulated other comprehensive loss at August 3, 2013 consisted of $24.1 million of cumulative pension liability adjustments, net of tax, a cumulative post retirement liability adjustment of $0.3 million, net of tax, and a cumulative foreign currency translation adjustment of $7.4 million. The following table summarizes the components of accumulated other comprehensive income for the six months ended August 3, 2013:
(1) Amount is included in net periodic benefit cost, which is recorded in selling and administrative expense on the Condensed Consolidated Statements of Operations. (2) Relates to amounts reclassified from AOCI. Business Segments The Segment Reporting Topic of the Codification requires that companies disclose “operating segments” based on the way management disaggregates the Company’s operations for making internal operating decisions (see Note 11). New Accounting Principles In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (“AOCI”), which sets forth additional disclosure requirements for items reclassified out of accumulated other comprehensive income and into net income, and is effective for annual and interim reporting periods beginning after December 15, 2012. The Company adopted ASU No. 2013-02 in the first quarter of Fiscal 2014 by presenting amounts reclassified out of AOCI as a separate disclosure in Note 1 to the Condensed Consolidated Financial Statements. Amounts reclassified out of AOCI were related to amortization of net actuarial loss associated with the Company's pension and postretirement plans. |
Fair Value (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||||
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Aug. 03, 2013
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Jul. 28, 2012
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Aug. 03, 2013
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Jul. 28, 2012
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Aug. 03, 2013
Fair Value Measurements Nonrecurring [Member]
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May 04, 2013
Fair Value Measurements Nonrecurring [Member]
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Aug. 03, 2013
Level 1 [Member]
Fair Value Measurements Nonrecurring [Member]
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May 04, 2013
Level 1 [Member]
Fair Value Measurements Nonrecurring [Member]
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Aug. 03, 2013
Level 2 [Member]
Fair Value Measurements Nonrecurring [Member]
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May 04, 2013
Level 2 [Member]
Fair Value Measurements Nonrecurring [Member]
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Aug. 03, 2013
Level 3 [Member]
Fair Value Measurements Nonrecurring [Member]
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May 04, 2013
Level 3 [Member]
Fair Value Measurements Nonrecurring [Member]
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Company's assets and liabilities measured at fair value on a nonrecurring basis | ||||||||||||
Long-Lived Assets Held and Used | $ 93 | $ 191 | $ 0 | $ 0 | $ 0 | $ 0 | $ 93 | $ 191 | ||||
Total Losses | 209 | 1,208 | ||||||||||
Sub-total asset impairment YTD | $ 209 | $ 391 | $ 1,417 | $ 437 |
Equity (Tables)
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Aug. 03, 2013
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non redeemable preferred stock | Non-Redeemable Preferred Stock
* In order of preference for liquidation and dividends.
*** Also convertible into one share of $1.50 Subordinated Cumulative Preferred Stock. |
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Preferred stock transactions | Preferred Stock Transactions
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Summary of Significant Accounting Policies (Details 1) (USD $)
In Thousands, unless otherwise specified |
Aug. 03, 2013
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Feb. 02, 2013
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Revolver Borrowings [Member]
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Carrying amounts and fair values of the Company's financial instruments | ||
Carrying Amount | $ 53,800 | $ 27,700 |
Fair Value | 53,969 | 27,742 |
UK Term Loans [Member]
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Carrying amounts and fair values of the Company's financial instruments | ||
Carrying Amount | 19,325 | 22,982 |
Fair Value | $ 19,333 | $ 22,982 |
Intangible Assets (Details Textual) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Aug. 03, 2013
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Jul. 28, 2012
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Aug. 03, 2013
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Jul. 28, 2012
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangibles assets | $ 0.8 | $ 0.9 | $ 1.6 | $ 1.7 |
Future amortization expense, 2014 | 3.2 | 3.2 | ||
Future amortization expense, 2015 | 2.8 | 2.8 | ||
Future amortization expense, 2016 | 2.0 | 2.0 | ||
Future amortization expense, 2017 | 1.6 | 1.6 | ||
Future amortization expense, 2018 | $ 1.0 | $ 1.0 |