Revenue Recognition

12 Months Ended

Jan. 28, 2023

Revenue Recognition and Deferred Revenue [Abstract]

Revenue Recognition

Revenue Recognition

Accounts receivable, net from revenue-generating activities were $101 million as of January 28, 2023 and $101 million as of January 29, 2022. 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 credit card programs and direct channel shipments, which are all impacted by seasonal and holiday-related sales patterns. Deferred revenue was $309 million as of January 28, 2023 and $258 million as of January 29, 2022. The Company recognized $135 million as revenue in 2022 from amounts recorded as deferred revenue at the beginning of the period. As of January 28, 2023, the Company recorded deferred revenues of $291 million within Accrued Expenses and Other, and $18 million within Other Long-term Liabilities on the Consolidated Balance Sheet.

The following table provides a disaggregation of Net Sales for 2022, 2021 and 2020:

	2022		2021		2020
	(in millions)
Stores — North America	$	3,909	$	4,194	$	2,795
Direct	1,843		2,114		2,223
International (a)	592		477		395
Total Net Sales	$	6,344	$	6,785	$	5,413

_______________

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

In April 2022, the Company launched a new co-branded credit card through which customers can earn points on purchases of Company product as well as on purchases outside of the Company. The co-branded credit card is in addition to the Company's existing U.S. private label credit card. A third-party financing company is the sole owner of the accounts and underwrites the credit issued under the credit card programs. Revenue earned in connection with the Company's credit card arrangements with the third-party is primarily recognized based on credit card sales and usage.

The Company recognized Net Sales of $123 million, $132 million and $135 million for 2022, 2021 and 2020, respectively, related to revenue earned in connection with its credit card arrangements.

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 $830 million, $736 million and $643 million for 2022, 2021 and 2020, respectively.