Revolving Credit Agreement

12 Months Ended

Jan. 29, 2022

Line of Credit Facility [Abstract]

Revolving Credit Agreement

Revolving Credit Agreement

The Company maintains a credit facility (“credit agreement”) for general corporate purposes including, among other uses, working capital financing, the issuance of letters of credit, capital expenditures and, subject to certain restrictions, the repayment of existing indebtedness and share repurchases. The credit agreement provides a borrowing capacity of $800 million, subject to certain limitations as outlined in the credit agreement, with a $200 million expansion option ("credit agreement").

As part of the Company's liquidity strategy during the COVID-19 pandemic, in March 2020, the company borrowed $779 million under the credit agreement.

In April 2020, the Company amended its credit agreement (the "2020 amendment"). Pursuant to the 2020 amendment, the credit agreement became secured by certain deposit accounts of the Company and certain inventory of certain subsidiaries. The borrowings of $779 million were repaid concurrent with the execution of the 2020 amendment. During fiscal 2020, the Company paid $3.2 million in issuance costs related to the 2020 amendment, which were recorded in other assets on the consolidated balance sheet.

In April 2021, the Company further amended the credit agreement (the "2021 amendment"). Pursuant to the 2021 amendment, the Company pays a variable rate of interest on borrowings under the credit agreement and a commitment fee to the participating banks. The rate of interest on borrowings is LIBOR plus 1.75% if average quarterly availability is less than 50% of the total commitment, as defined in the 2021 amended credit agreement ("total commitment"), and the rate of interest on borrowings is LIBOR plus 1.50% if average quarterly availability is greater than or equal to 50% of the total commitment. The commitment fee for unused borrowings is 0.30% per annum if average borrowings are less than 35% of the total commitment and 0.25% if average borrowings are greater than or equal to 35% of the total commitment. As long as availability exceeds $80 million and certain events of default have not occurred and are not continuing, there are no financial covenant

requirements under the credit agreement. The credit agreement, as amended by the 2021 amendment, matures on April 28, 2026.No borrowings were outstanding at January 29, 2022. Letters of credit totaling $20.1 million were issued under the credit agreement leaving unutilized availability under the facility of $700.6 million at January 29, 2022. The Company had no borrowings during fiscal 2021, and the Company had weighted-average borrowings of $148.6 million and $76.9 million during fiscal 2020 and 2019, respectively.