Revenue Recognition

6 Months Ended

Jul. 31, 2021

Revenue Recognition and Deferred Revenue [Abstract]

Revenue Recognition

Revenue RecognitionAccounts receivable, net from revenue-generating activities were $73 million as of July 31, 2021, $74 million as of January 30, 2021 and $72 million as of August 1, 2020. Accounts receivable primarily relate to amounts due from the Company's franchise, license and wholesale partners. Under these arrangements, payment terms are typically 60 to 90 days.

The Company records deferred revenue when cash payments are received in advance of transfer of control of goods or services. Deferred revenue primarily relates to gift cards, loyalty and private label credit card programs and direct channel shipments, which are all impacted by seasonal and holiday-related sales patterns. Deferred revenue was $219 million as of July 31, 2021, $256 million as of January 30, 2021 and $217 million as of August 1, 2020. The Company recognized $110 million as revenue year-to-date 2021 from amounts recorded as deferred revenue at the beginning of the year. As of July 31, 2021, the Company recorded deferred revenue of $210 million within Accrued Expenses and Other, and $9 million within Other Long-term Liabilities on the Combined Balance Sheet.

The following table provides a disaggregation of Net Sales for the second quarter and year-to-date 2021 and 2020:

	Second Quarter				Year-to-Date
	2021		2020		2021		2020
	(in millions)
Stores – North America	$	1,037	$	364	$	1,970	$	877
Direct	469		614		990		922
International (a)	108		88		208		161
Total Net Sales	$	1,614	$	1,066	$	3,168	$	1,960

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(a)Results include Greater China, royalties associated with franchised stores, wholesale sales and company-operated stores in the U.K. (before our joint venture with Next).

The Company recognized Net Sales of $31 million and $28 million for the second quarter of 2021 and 2020, respectively, related to revenue earned in connection with its U.S. private label credit card arrangement. The Company recognized Net Sales of $59 million and $53 million for year-to-date 2021 and 2020, respectively, related to revenue earned in connection with its U.S. private label credit card arrangement.

The Company’s international net sales include sales from company-operated stores, royalty revenue from franchise and license arrangements, wholesale revenues and direct sales shipped internationally. Certain of these sales are subject to the impact of fluctuations in foreign currency. The Company’s net sales outside of the U.S. totaled $167 million and $137 million for the second quarter of 2021 and 2020, respectively. The Company’s net sales outside of the U.S. totaled $330 million and $243 million for year-to-date 2021 and 2020, respectively.