10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

Form 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 3, 2019

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number 1-14035

Stage Stores, Inc.

(Exact name of registrant as specified in its charter)

Nevada		91-1826900
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
2425 West Loop South		77027
Houston,	Texas	(Zip Code)
(Address of principal executive offices)

(800) 579-2302

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($0.01 par value)	SSI	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☑
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of September 4, 2019, there were 28,876,878 shares of the registrant’s common stock outstanding.

TABLE OF CONTENTS
PART I  FINANCIAL INFORMATION
			Page No.
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets
		August 3, 2019, February 2, 2019 and August 4, 2018	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss
		Three and Six Months Ended August 3, 2019 and August 4, 2018	5
	Condensed Consolidated Statements of Cash Flows
		Six Months Ended August 3, 2019 and August 4, 2018	6
	Condensed Consolidated Statements of Stockholders’ Equity
		Three and Six Months Ended August 3, 2019 and August 4, 2018	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)		8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		30
Item 4.	Controls and Procedures		30
PART II  OTHER INFORMATION
Item 1.	Legal Proceedings		30
Item 1A.	Risk Factors		31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		32
Item 3.	Defaults Upon Senior Securities		33
Item 4.	Mine Safety Disclosures		33
Item 5.	Other Information		33
Item 6.	Exhibits		33
SIGNATURES			34

PART I – FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

Stage Stores, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except par value)

(Unaudited)

	August 3, 2019			February 2, 2019			August 4, 2018
ASSETS
Cash and cash equivalents	$	25,418		$	15,830		$	26,573
Merchandise inventories, net	499,001			424,555			476,883
Prepaid expenses and other current assets	50,138			52,518			48,525
Total current assets	574,557			492,903			551,981
Property, equipment and leasehold improvements, net of accumulated depreciation of $757,296, $733,366 and $722,938, respectively	201,928			224,803			236,151
Operating lease assets	321,982			—			—
Intangible assets	2,225			2,225			17,135
Other non-current assets, net	21,354			24,230			24,409
Total assets	$	1,122,046		$	744,161		$	829,676
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	155,865		$	106,825		$	122,680
Current portion of debt obligations	5,000			4,812			3,542
Current portion of operating lease liabilities	74,906			—			—
Accrued expenses and other current liabilities	76,455			65,715			73,506
Total current liabilities	312,226			177,352			199,728
Long-term debt obligations	318,775			250,294			268,682
Long-term operating lease liabilities	279,009			—			—
Other long-term liabilities	32,213			61,990			65,431
Total liabilities	942,223			489,636			533,841
Commitments and contingencies
Common stock, par value $0.01, 100,000 shares authorized, 34,052, 33,469 and 33,418 shares issued, respectively	341			335			334
Additional paid-in capital	425,033			423,535			421,621
Treasury stock, at cost, 5,175 shares, respectively	(43,546		)	(43,579		)	(43,388		)
Accumulated other comprehensive loss	(5,485		)	(5,857		)	(4,823		)
Accumulated deficit	(196,520		)	(119,909		)	(77,909		)
Total stockholders' equity	179,823			254,525			295,835
Total liabilities and stockholders' equity	$	1,122,046		$	744,161		$	829,676

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Stage Stores, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	August 3, 2019			August 4, 2018			August 3, 2019			August 4, 2018
Net sales	$	367,865		$	369,294		$	695,586		$	713,523
Credit income	13,988			14,305			27,096			29,819
Total revenues	381,853			383,599			722,682			743,342
Cost of sales and related buying, occupancy and distribution expenses	295,204			286,807			572,803			568,548
Selling, general and administrative expenses	106,310			110,914			212,886			218,191
Interest expense	4,123			2,650			8,117			4,903
Loss before income tax	(23,784		)	(16,772		)	(71,124		)	(48,300		)
Income tax expense	150			150			300			300
Net loss	$	(23,934	)	$	(16,922	)	$	(71,424	)	$	(48,600	)
Other comprehensive income:
Amortization of employee benefit related costs, net of tax of $0, respectively	$	202		$	155		$	372		$	354
Total other comprehensive income	202			155			372			354
Comprehensive loss	$	(23,732	)	$	(16,767	)	$	(71,052	)	$	(48,246	)
Net loss per share:
Basic	$	(0.83	)	$	(0.60	)	$	(2.50	)	$	(1.74	)
Diluted	$	(0.83	)	$	(0.60	)	$	(2.50	)	$	(1.74	)
Weighted average shares outstanding:
Basic	28,791			28,152			28,616			27,959
Diluted	28,791			28,152			28,616			27,959

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Stage Stores, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Six Months Ended
	August 3, 2019			August 4, 2018
Cash flows from operating activities:
Net loss	$	(71,424	)	$	(48,600	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of long-lived assets	29,872			30,147
Impairment of long-lived assets	1,615			1,070
(Gain) loss on retirements of property, equipment and leasehold improvements	(678		)	17
Non-cash operating lease expense	34,919			—
Stock-based compensation expense	1,585			3,049
Dividends charged to compensation expense	21			—
Amortization of debt issuance costs	341			148
Deferred compensation obligation	(33		)	90
Amortization of employee benefit related costs	372			354
Construction allowances from landlords	3,553			757
Other changes in operating assets and liabilities:
Increase in merchandise inventories	(74,446		)	(38,506		)
Decrease in other assets	8,464			2,412
Decrease in operating lease liabilities	(37,601		)	—
Increase (decrease) in accounts payable and other liabilities	61,788			(19,958		)
Net cash used in operating activities	(41,652		)	(69,020		)
Cash flows from investing activities:
Additions to property, equipment and leasehold improvements	(18,610		)	(12,822		)
Proceeds from insurance and disposal of assets	678			1,802
Net cash used in investing activities	(17,932		)	(11,020		)
Cash flows from financing activities:
Proceeds from revolving credit facility borrowings	257,426			298,509
Payments of revolving credit facility borrowings	(186,445		)	(233,148		)
Proceeds from long-term debt obligation	—			25,000
Payments of long-term debt obligations	(1,758		)	(1,472		)
Payments of debt issuance costs	(36		)	(354		)
Payments for stock related compensation	(15		)	(260		)
Cash dividends paid	—			(2,912		)
Net cash provided by financing activities	69,172			85,363
Net increase in cash and cash equivalents	9,588			5,323
Cash and cash equivalents:
Beginning of period	15,830			21,250
End of period	$	25,418		$	26,573
Supplemental disclosures including non-cash investing and financing activities:
Interest paid	$	7,726		$	4,866
Income taxes paid	$	473		$	14
Unpaid liabilities for capital expenditures	$	4,166		$	4,798

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Stage Stores, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except per share amounts)

(Unaudited)

	Common Stock			Additional Paid-in Capital			Treasury Stock					Accumulated Other Comprehensive Loss			Accumulated Deficit
	Shares	Amount					Shares		Amount									Total
Balance at May 4, 2019	33,805	$	338	$	424,407		(5,175	)	$	(43,552	)	$	(5,687	)	$	(172,607	)	$	202,899
Net loss	—	—		—			—		—			—			(23,934		)	(23,934		)
Other comprehensive income	—	—		—			—		—			202			—			202
Deferred compensation	—	—		(6		)	—		6			—			—			—
Issuance of equity awards, net	247	3		(3		)	—		—			—			—			—
Tax withholdings paid for net settlement of stock awards	—	—		(1		)	—		—			—			—			(1		)
Stock-based compensation expense	—	—		636			—		—			—			—			636
Dividends on forfeited stock awards charged to compensation expense	—	—		—			—		—			—			21			21
Balance at August 3, 2019	34,052	$	341	$	425,033		(5,175	)	$	(43,546	)	$	(5,485	)	$	(196,520	)	$	179,823
	Common Stock			Additional Paid-in Capital			Treasury Stock					Accumulated Other Comprehensive Loss			Accumulated Deficit
	Shares	Amount					Shares		Amount									Total
Balance at May 5, 2018	33,111	331		420,091			(5,175	)	(43,339		)	(4,978		)	(59,520		)	312,585
Net loss	—	—		—			—		—			—			(16,922		)	(16,922		)
Other comprehensive income	—	—		—			—		—			155			—			155
Dividends on common stock, $0.05 per share	—	—		—			—		—			—			(1,467		)	(1,467		)
Deferred compensation	—	—		49			—		(49		)	—			—			—
Issuance of equity awards, net	307	3		(3		)	—		—			—			—			—
Tax withholdings paid for net settlement of stock awards	—	—		(7		)	—		—			—			—			(7		)
Stock-based compensation expense	—	—		1,491			—		—			—			—			1,491
Balance at August 4, 2018	33,418	$	334	$	421,621		(5,175	)	$	(43,388	)	$	(4,823	)	$	(77,909	)	$	295,835

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

Stage Stores, Inc.

Condensed Consolidated Statements of Stockholders’ Equity - continued

(in thousands, except per share amounts)

(Unaudited)

	Common Stock			Additional Paid-in Capital			Treasury Stock					Accumulated Other Comprehensive Loss			Accumulated Deficit
	Shares	Amount					Shares		Amount									Total
Balance at February 2, 2019	33,469	$	335	$	423,535		(5,175	)	$	(43,579	)	$	(5,857	)	$	(119,909	)	$	254,525
Cumulative-effect adjustment (a)	—	—		—			—		—			—			(5,208		)	(5,208		)
Net loss	—	—		—			—		—			—			(71,424		)	(71,424		)
Other comprehensive income	—	—		—			—		—			372			—			372
Deferred compensation	—	—		(33		)	—		33			—			—			—
Issuance of equity awards, net	583	6		(6		)	—		—			—			—			—
Tax withholdings paid for net settlement of stock awards	—	—		(48		)	—		—			—			—			(48		)
Stock-based compensation expense	—	—		1,585			—		—			—			—			1,585
Dividends on forfeited stock awards charged to compensation expense	—	—		—			—		—			—			21			21
Balance at August 3, 2019	34,052	$	341	$	425,033		(5,175	)	$	(43,546	)	$	(5,485	)	$	(196,520	)	$	179,823
(a) Related to the adoption of the new lease accounting standard. See Note 1 for further disclosures regarding the adoption impact.
	Common Stock			Additional Paid-in Capital			Treasury Stock					Accumulated Other Comprehensive Loss			Accumulated Deficit
	Shares	Amount					Shares		Amount									Total
Balance at February 3, 2018	32,806	$	328	$	418,658		(5,175	)	$	(43,298	)	$	(5,177	)	$	(26,397	)	$	344,114
Net loss	—	—		—			—		—			—			(48,600		)	(48,600		)
Other comprehensive income	—	—		—			—		—			354			—			354
Dividends on common stock, $0.10 per share	—	—		—			—		—			—			(2,912		)	(2,912		)
Deferred compensation	—	—		90			—		(90		)	—			—			—
Issuance of equity awards, net	612	6		(6		)	—		—			—			—			—
Tax withholdings paid for net settlement of stock awards	—	—		(170		)	—		—			—			—			(170		)
Stock-based compensation expense	—	—		3,049			—		—			—			—			3,049
Balance at August 4, 2018	33,418	$	334	$	421,621		(5,175	)	$	(43,388	)	$	(4,823	)	$	(77,909	)	$	295,835

Stage Stores, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of Stage Stores, Inc. and its subsidiary (“we,” “us” or “our”) have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. Those adjustments that are, in the opinion of management, necessary for a fair presentation of the results of the interim periods have been made. Results of operations for such interim periods are not necessarily indicative of the results of operations for a full year due to seasonality and other factors. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto filed with our Annual Report on Form 10-K for the year ended February 2, 2019 (“Form 10-K”).    

We are a retailer of trend-right, moderately priced, name-brand apparel, accessories, cosmetics, footwear and home goods. As of August 3, 2019, we operated in 42 states through 645 BEALLS, GOODY’S, PALAIS ROYAL, PEEBLES and STAGE specialty department stores and 141 GORDMANS off-price stores, as well as an e-commerce website (www.stage.com). Our department stores are predominantly located in small towns and rural communities. Our off-price stores are predominantly located in smaller and mid-sized markets in the Midwest.

References to a particular year are to our fiscal year, which is the 52- or 53-week period ending on the Saturday closest to January 31st of the following calendar year.  For example, a reference to “2019” is a reference to the fiscal year ending February 1, 2020, and “2018” is a reference to the fiscal year ended February 2, 2019. Fiscal years 2019 and 2018 are comprised of 52 weeks. References to the “three months ended August 3, 2019” and “three months ended August 4, 2018” are for the respective 13-week fiscal quarters. References to quarters relate to our fiscal quarters. References to the “six months ended August 3, 2019” and “six months ended August 4, 2018” are for the respective 26-week fiscal periods.

Recently Adopted Accounting Pronouncements. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates (“ASU”) 2016-02, Leases (Topic 842), and subsequently issued related ASUs, which were incorporated into Topic 842. Under the new standard, lessees are required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the later of the lease commencement date and the date of adoption. The guidance also requires qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. We adopted the new standard on February 3, 2019, the first day of fiscal 2019.

Transition elections:

• We elected to apply the effective date transition method as of the February 3, 2019 adoption date. Comparative periods prior to the adoption of the new standard have not been restated and are reported under the legacy guidance in Accounting Standards Codification (“ASC”) Topic 840, Leases.

• We elected the package of practical expedients in the transition guidance, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.

• We elected not to use the practical expedient of using hindsight to determine the lease term and in assessing impairment of the right-of-use assets.

Accounting policy elections:

• We elected the short-term lease exemption for leases that have a lease term of twelve months or less. For leases that qualify for the short-term exemption, we will not recognize a right-of-use asset or liability and will recognize those lease expenses on a straight-line basis over the lease term.

• We elected to not separate lease and non-lease components for all of our current lease classes.

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

The adoption of the standard resulted in the recognition of operating lease assets and liabilities of $344.2 million and $375.8 million, respectively, as of February 3, 2019. Included in the measurement of the operating lease assets and liabilities is the reclassification of balances historically recorded as deferred rent and deferred rent tenant allowances. We also recognized a cumulative effect charge of $5.2 million, net of tax, to the opening accumulated deficit balance. This adjustment reflects $5.8 million in depreciation of leasehold improvements associated with conforming the asset useful life to the remaining lease life as of the transition date. It also reflects $0.6 million associated with the derecognition of lease obligations that had been classified as finance obligations under the former failed sale-leaseback guidance applied to build-to-suit arrangements. Under the new standard, these leases are classified as operating leases. The adoption of the standard did not have a material impact on our results of operations or cash flows. In addition, our bank covenants under our Credit Facility were not affected by the adoption of the standard. See Note 5 for further disclosures regarding leases.

Recent Accounting Pronouncements Not Yet Adopted.    In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds and modifies certain disclosure requirements for fair value measurements. The new standard will be effective for us in the first quarter of fiscal 2020, with early adoption permitted. We are currently evaluating the impact of the new guidance on our disclosures.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force), which aligns the requirements for capitalizing implementation costs in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance also requires disclosure of the nature of hosting arrangements that are service contracts. The new standard will be effective for us in the first quarter of fiscal 2020, with early adoption permitted. We are currently evaluating the impact of the new guidance on our financial statements and disclosures.

NOTE 2 - FAIR VALUE MEASUREMENTS

We recognize or disclose the fair value of our financial and non-financial assets and liabilities on a recurring and non-recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we assume the highest and best use of the asset by market participants in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability.

We applied the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 –	Quoted prices in active markets for identical assets or liabilities.
Level 2 –	Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 –	Inputs that are both unobservable and significant to the overall fair value measurement reflect our estimates of assumptions that market participants would use in pricing the asset or liability.

9

Financial assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):

	August 3, 2019
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	16,763	$	16,763	$	—	$	—
	February 2, 2019
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	19,536	$	19,536	$	—	$	—
	August 4, 2018
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	20,188	$	20,188	$	—	$	—

^(a) The liability for the amount due to participants corresponding in value to the securities held in the grantor trust is recorded in other long-term liabilities.

^(b) Using the market approach, the fair values of these securities represent quoted market prices multiplied by the quantities held. Net gains and losses related to the changes in fair value in the assets and liabilities under the various deferred compensation plans are recorded in selling, general and administrative expenses and were nil for the six months ended August 3, 2019 and August 4, 2018, and for the fiscal year ended February 2, 2019.

10

Non-financial assets measured at fair value on a nonrecurring basis were as follows (in thousands):

	August 3, 2019
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Assets held for sale (a)	$	2,799	$	—	$	—	$	2,799
Operating lease assets (b)	4,585		—		—		4,585
Store property, equipment and leasehold improvements (b)	629		—		—		629
Total Assets	$	8,013	$	—	$	—	$	8,013
	February 2, 2019
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Store property, equipment and leasehold improvements (a)	$	1,583	$	—	$	—	$	1,583
	August 4, 2018
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Store property, equipment and leasehold improvements (a)	$	1,101	$	—	$	—	$	1,101

^(a) Assets held for sale are recorded at the asset’s fair value less estimated costs to sell and are reflected in prepaid expenses and other current assets. For the six months ended August 3, 2019, we recognized impairment charges of $1.0 million based on a third party valuation of the underlying assets. These impairment charges are recorded in selling, general and administrative expenses.

^(b) Using an undiscounted cash flow model, we evaluate the cash flow trends of our stores at least annually and when events or changes in circumstances, such as a store closure, indicate that the asset group may not be fully recoverable. When a store’s projected undiscounted cash flows indicate its asset carrying value may not be recoverable, we use a discounted cash flow model to estimate the fair value of the underlying asset group. An impairment write-down is recorded if the carrying value of an asset exceeds its fair value. Key assumptions in estimating future cash flows include, among other things, expected future operating performance, including expected closure date and lease term, and changes in economic conditions. We believe estimated future cash flows are sufficient to support the carrying value of our right-of-use operating lease and long-lived assets. Significant changes in the key assumptions used in our cash flow projections may result in additional asset impairments. For the six months ended August 3, 2019 and August 4, 2018 and during fiscal year 2018, we recognized impairment charges of $0.6 million, $1.1 million, and $2.8 million, respectively. Impairment charges related to store property, equipment and leasehold improvements are recorded in cost of sales and related buying, occupancy and distribution expenses.

Due to the short-term nature of cash and cash equivalents, payables and short-term debt obligations, the carrying value approximates the fair value of these instruments. In addition, we believe that the credit facility obligation approximates its fair value because interest rates are adjusted daily based on current market rates.

11

NOTE 3 - DEBT OBLIGATIONS

Debt obligations for each period presented consisted of the following (in thousands):

	August 3, 2019		February 2, 2019		August 4, 2018
Revolving loan	$	275,025	$	204,044	$	244,649
Term loan	48,750		50,000		25,000
Finance obligations	—		554		1,064
Other financing	—		508		1,511
Total debt obligations	323,775		255,106		272,224
Less: Current portion of debt obligations	5,000		4,812		3,542
Long-term debt obligations	$	318,775	$	250,294	$	268,682

We have total availability of $448.7 million with a seasonal increase to $473.7 million under our senior secured revolving credit facility agreement including a revolving loan (“Revolving Loan”) and term loans (“Term Loan”), jointly referred to as the “Credit Facility”. Additionally, we have a $25.0 million letter of credit sublimit. The Term Loan is payable in quarterly installments of $1.3 million that began on June 15, 2019, with the remaining balance due upon maturity. The Credit Facility matures on December 16, 2021.

We use the Credit Facility to provide financing for working capital and general corporate purposes, as well as to finance capital expenditures and to support our letter of credit requirements. Borrowings under the Credit Facility are limited to the availability under a borrowing base that is determined principally on eligible inventory as defined by the Credit Facility agreement. The Credit Facility is secured by our inventory, cash, cash equivalents, and substantially all of our other assets. The daily interest rates are determined by a prime rate or LIBOR, plus an applicable margin, as set forth in the Credit Facility agreement. For the six months ended August 3, 2019, the weighted average interest rate on outstanding borrowings and the average daily borrowings on the Credit Facility, were 4.7% and $309.9 million, respectively.

Letters of credit issued under the Credit Facility support certain merchandise purchases and collateralize retained risks and deductibles under various insurance programs. At August 3, 2019, outstanding letters of credit totaled approximately $8.6 million. These letters of credit expire within 12 months of issuance and may be renewed.

The Credit Facility agreement contains a covenant requiring us to maintain excess availability at or above $35.0 million or 10% of the Adjusted Combined Loan Cap (as defined therein). The Credit Facility agreement also contains covenants which, among other things, restrict (i) the amount of additional debt or capital lease obligations, (ii) the payment of dividends to $30.0 million in a fiscal year, and (iii) the repurchase of common stock under certain circumstances. At August 3, 2019, we were in compliance with the debt covenants of the Credit Facility agreement and we expect to remain in compliance. Excess availability under the Credit Facility at August 3, 2019 was $66.1 million.

We derecognized finance obligations of $0.6 million upon adoption of ASC Topic 842, Leases, on February 3, 2019. See Note 1 for further disclosures regarding the adoption impact.

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NOTE 4 - REVENUE

Net Sales

We recognize revenue for merchandise sales, net of expected returns and sales tax, at the time of in-store purchase or delivery of the product to our guest. When merchandise is shipped to our guests, we estimate receipt based on historical experience. Revenue is deferred and a liability is established for sales returns based on historical return rates and sales for the return period. We recognize an asset and corresponding adjustment to cost of sales for our right to recover returned merchandise. At each financial reporting date, we assess our estimates of expected returns, refund liabilities and return assets. For merchandise sold in our stores and online, tender is accepted at the point of sale. When we receive payment before the guest has taken possession of the merchandise, the amount received is recorded as deferred revenue until the transaction is complete. Our performance obligations for unfulfilled merchandise orders are typically satisfied within one week. Shipping and handling fees charged to guests relate to fulfillment activities and are included in net sales with the corresponding costs recorded in cost of sales.

We record deferred revenue for the sale of gift cards and merchandise credits issued for returned merchandise, and we recognize revenue in net sales upon redemption. Gift card and merchandise credit redemptions typically occur within 12 months of the date of issuance with the majority redeemed within the first three months. Our gift cards and merchandise credits do not expire. Based on historical redemption rates, a small percentage of gift cards and merchandise credits will never be redeemed. We recognize estimated breakage income for gift cards and merchandise credits that will never be redeemed in proportion to actual historical redemption patterns.

Under our loyalty program, members can accumulate points, based on their spending, toward earning a reward certificate that can be redeemed for future merchandise purchases. Points earned by loyalty members reset to zero at the end of each calendar year. Reward certificates expire 30 days after the date of issuance. We allocate and defer a portion of our sales to reward certificates expected to be earned, based on the relative stand-alone sales transaction price and reward certificate value, and recognize the reward certificate as a net sale when it is redeemed.

The following table presents the composition of net sales by merchandise category (in thousands):

	Three Months Ended
	August 3, 2019									August 4, 2018
Merchandise Category	Department Stores			Off-price Stores			Total Company			Department Stores			Off-price Stores			Total Company
Women’s	$	100,639		$	24,954		$	125,593		$	117,209		$	19,264		$	136,473
Men’s	49,582			11,534			61,116			53,124			8,913			62,037
Children's	25,198			9,870			35,068			29,400			7,530			36,930
Apparel	175,419			46,358			221,777			199,733			35,707			235,440
Footwear	39,227			6,097			45,324			45,141			4,505			49,646
Accessories	17,988			3,865			21,853			18,426			3,889			22,315
Cosmetics/Fragrances	27,188			2,856			30,044			31,287			2,428			33,715
Home/Gifts	25,539			20,708			46,247			10,950			15,939			26,889
Other	2,859			651			3,510			1,039			807			1,846
Non-apparel	112,801			34,177			146,978			106,843			27,568			134,411
Revenue adjustments not allocated (a)	(347		)	(543		)	(890		)	(281		)	(276		)	(557		)
Net sales	$	287,873		$	79,992		$	367,865		$	306,295		$	62,999		$	369,294
(a) Includes adjustments related to deferred revenue, estimated sales returns, breakage income, shipping and miscellaneous revenues, which are not allocated to merchandise categories.

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	Six Months Ended
	August 3, 2019									August 4, 2018
Merchandise Category	Department Stores			Off-price Stores			Total Company			Department Stores			Off-price Stores			Total Company
Women’s	$	184,254		$	45,815		$	230,069		$	220,696		$	39,231		$	259,927
Men’s	88,690			20,048			108,738			94,460			16,458			110,918
Children's	50,336			19,750			70,086			58,478			15,626			74,104
Apparel	323,280			85,613			408,893			373,634			71,315			444,949
Footwear	79,498			11,171			90,669			89,624			9,324			98,948
Accessories	34,702			8,209			42,911			37,298			8,255			45,553
Cosmetics/Fragrances	55,057			5,669			60,726			62,473			4,910			67,383
Home/Gifts	45,865			40,561			86,426			19,794			33,822			53,616
Other	7,687			1,503			9,190			5,004			1,431			6,435
Non-apparel	222,809			67,113			289,922			214,193			57,742			271,935
Revenue adjustments not allocated (a)	(2,259		)	(970		)	(3,229		)	(3,169		)	(192		)	(3,361		)
Net sales	$	543,830		$	151,756		$	695,586		$	584,658		$	128,865		$	713,523
(a) Includes adjustments related to deferred revenue, estimated sales returns, breakage income, shipping and miscellaneous revenues, which are not allocated to merchandise categories.

Contract Liabilities

Contract liabilities reflect our performance obligations related to gift cards, merchandise credits, loyalty program rewards and merchandise orders that have not been satisfied as of a given date, and therefore, revenue recognition has been deferred. Contract liabilities (recorded in accrued expenses and other current liabilities) for each period presented were as follows (in thousands):

	August 3, 2019		February 2, 2019		August 4, 2018
Gift cards and merchandise credits, net	$	9,759	$	12,433	$	9,657
Loyalty program rewards, net	5,147		1,484		4,612
Merchandise fulfillment liability	859		488		850
Total contract liabilities	$	15,765	$	14,405	$	15,119

    

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The following table summarizes contract liability activity for each period presented (in thousands):

	Three Months Ended						Six Months Ended
	August 3, 2019			August 4, 2018			August 3, 2019			August 4, 2018
Beginning balance	$	14,440		$	14,028		$	14,405		$	13,474
Net sales recognized during the period from amounts included in contract liability balances at the beginning of the period	(5,522		)	(5,484		)	(6,571		)	(6,284		)
Current period additions to contract liability balances included in contract liability balances at the end of the period	6,847			6,575			7,931			7,929
Ending balance	$	15,765		$	15,119		$	15,765		$	15,119

Credit Income

We earn credit income from our private label credit card (“PLCC”) through a profit-sharing arrangement with Comenity Bank, an affiliate of Alliance Data Systems Corporation. Comenity Bank owns the PLCC portfolio and manages the account activation, receivables funding, card authorization, card issuance, statement generation, remittance processing and guest service functions for our PLCC program. We perform certain duties, including electronic processing and transmitting of transaction records, and executing marketing promotions designed to increase card usage. We also accept payments in our stores from cardholders on behalf of Comenity Bank. We receive a monthly net portfolio yield payment from Comenity Bank, and we can potentially earn an annual bonus based upon the performance of the PLCC portfolio. The receivable for credit income, which is recorded in prepaid expenses and other current assets, was $4.5 million, $4.9 million and $4.7 million as of August 3, 2019, February 2, 2019 and August 4, 2018, respectively.

On April 11, 2019, we entered into an amendment to our profit-sharing arrangement with Comenity Bank. The amendment extended the term of the arrangement from July 31, 2021 to July 31, 2024.

We recorded deferred revenue for certain upfront payments received from Comenity Bank associated with the execution of the PLCC agreement. The amounts recognized in credit income related to these upfront payments for each period presented were as follows (in thousands):

	Three Months Ended				Six Months Ended
	August 3, 2019		August 4, 2018		August 3, 2019		August 4, 2018
Upfront payments recognized in credit income	$	250	$	438	$	875	$	875

As of August 3, 2019, deferred revenue of $7.0 million remained to be amortized.

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NOTE 5 - LEASES

Our lease agreements include leases for our retail stores, distribution centers and corporate headquarters. As of August 3, 2019, all of our leases were classified as operating leases. Our store leases typically have an initial term of 10 years and often have two renewal options of five years each. The exercise of a lease renewal option is at our sole discretion. The lease term includes the initial contractual term as well as any options to extend the lease when it is reasonably certain that we will exercise that option. Our lease agreements do not contain any residual value guarantees or material restrictive covenants.

We recognize a lease liability for our obligation to make lease payments arising from the lease and a related asset for our right to use the underlying asset for the lease term. The lease liability is measured based on the present value of lease payments over the lease term, and the asset is measured based on the value of the lease liability, net of landlord allowances. As the implicit interest rate in our lease agreements is not readily identifiable, we use our estimated collateralized incremental borrowing rate in determining the present value of lease payments. For all current lease classes, we made an accounting policy election not to separate lease and non-lease components.

The majority of our leases include fixed rent payments. A number of store leases provide for escalating minimum rent payments at pre-determined dates. Certain store leases provide for contingent rent payments based on a percentage of retail sales over contractual levels. Some of our leases include variable payments for maintenance, taxes and insurance.

Operating lease payments are expensed on a straight-line basis over the lease term. Variable payments are not included in the measurement of the lease liability or asset and are expensed as incurred.

We sublease our former corporate office building to a third party and recognize sublease income on a straight-line basis over the lease term.

ASC 842 Disclosures

Lease cost includes both the fixed and variable expenses recorded for leases. The components of lease cost were as follows (in thousands):

	Three Months Ended			Six Months Ended
	August 3, 2019			August 3, 2019
Operating lease cost	$	26,163		$	52,457
Variable lease cost	9,784			19,441
Short-term lease cost	24			24
Sublease income	(369		)	(737		)
Total net lease cost	$	35,602		$	71,185
Net lease cost in cost of sales and related buying, occupancy and distribution expenses	$	34,818		$	68,876
Net lease cost in selling, general and administrative expenses	784			2,309
Total net lease cost	$	35,602		$	71,185

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Cash and non-cash activities associated with our leases were as follows (in thousands):

	Six Months Ended
	August 3, 2019
Cash paid for operating leases	$	55,139
Cash received from sublease	724
Lease assets obtained in exchange for lease liabilities (a)	12,701

^(a) Excludes operating lease assets of $344.2 million recognized on February 3, 2019 as a result of the adoption of ASU 2016-02, Leases (Topic 842). See Note 1 for further disclosures regarding the adoption impact.

The weighted average remaining lease term and weighted-average discount rate associated with our leases as of August 3, 2019 were as follows:

Weighted average remaining lease term	5.3 years
Weighted average discount rate	10.1	%

Maturities of operating leases as of August 3, 2019 were as follows (in thousands):

Fiscal Year	Operating Leases		Sublease
2019 (remainder of year)	$	54,535	$	(723	)
2020	102,731		(1,492		)
2021	87,965		(1,582		)
2022	71,781		(1,582		)
2023	50,986		(1,054		)
2024	33,063		—
Thereafter	59,818		—
Total lease payments	460,879		$	(6,433	)
Less: Effects of discounting	106,964
Present value of lease liabilities	353,915
Less: Current portion of lease liabilities	74,906
Long-term lease liabilities	$	279,009

As of August 3, 2019, there were no leases that had not yet commenced.

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Comparative Period Disclosures Reported Under ASC 840

Future minimum rental commitments on long-term, non-cancelable operating leases at February 2, 2019, were as follows (in thousands):

Fiscal Year	Commitments		Sublease Income			Net Minimum Lease Commitments
2019	$	108,541	$	(1,447	)	$	107,094
2020	98,859		(1,492		)	97,367
2021	83,377		(1,582		)	81,795
2022	67,447		(1,582		)	65,865
2023	46,887		(1,054		)	45,833
Thereafter	77,910		—			77,910
Total	$	483,021	$	(7,157	)	$	475,864

While infrequent in occurrence, occasionally we are responsible for the construction of leased stores and for paying project costs. ASC 840-40-55, The Effect of Lessee Involvement in Asset Construction, requires us to be considered the owner (for accounting purposes) of such build-to-suit arrangements during the construction period. The leases are accounted for as finance obligations with the amounts received from the landlord being recorded in debt obligations. Interest expense is recognized at a rate that will amortize the finance obligation over the initial term of the lease. Where ASC 840-40-55 was applicable, we have recorded finance obligations with interest rates of 6.1% and 12.3% on our condensed consolidated financial statements related to two store leases as of February 2, 2019.

Future minimum annual payments required under existing finance obligations as of February 2, 2019 were as follows (in thousands):

Fiscal Year	Minimum Payments		Less: Interest		Principal Payments
2019	$	580	$	26	$	554

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NOTE 6 - STOCK-BASED COMPENSATION

Stock-based compensation expense by type of grant for each period presented was as follows (in thousands):

	Three Months Ended					Six Months Ended
	August 3, 2019			August 4, 2018		August 3, 2019		August 4, 2018
Non-vested stock	$	515		$	1,079	$	1,296	$	2,266
Restricted stock units	68			259		246		751
Stock-settled performance share units	121			412		289		783
Cash-settled performance share units	(51		)	96		28		150
Total stock-based compensation expense	653			1,846		1,859		3,950
Related tax benefit	—			—		—		—
Stock-based compensation expense, net of tax	$	653		$	1,846	$	1,859	$	3,950

As of August 3, 2019, we have estimated unrecognized compensation cost of $5.5 million related to stock-based compensation awards granted, which is expected to be recognized over a weighted average period of 2.3 years.

Non-vested Stock

We grant shares of non-vested stock to our employees and non-employee directors. Shares of non-vested stock awarded to employees vest 25% annually over a period of four years from the grant date. Shares of non-vested stock awarded to non-employee directors cliff vest after one year. At the end of the vesting period, shares of non-vested stock convert one-for-one to common stock. Certain non-vested stock awards have shareholder rights, including the right to vote and to receive dividends. The fair value of non-vested stock awards with dividend rights is based on the closing share price of our common stock on the grant date. The fair value of non-vested stock awards that do not have dividend rights is discounted for the present value of expected dividends during the vesting period. Compensation expense is recognized ratably over the vesting period.

The following table summarizes non-vested stock activity for the six months ended August 3, 2019:

Non-vested Stock	Number of Shares		Weighted Average Grant  Date Fair Value
Outstanding at February 2, 2019	1,379,616		$	4.43
Granted	954,670		0.96
Vested	(630,901	)	5.40
Forfeited	(39,664	)	6.89
Outstanding at August 3, 2019	1,663,721		2.01

The weighted-average grant date fair value for non-vested stock granted during the six months ended August 3, 2019 and August 4, 2018 was $0.96 and $2.41, respectively. The aggregate intrinsic value of non-vested stock that vested during the six months ended August 3, 2019 and August 4, 2018, was $0.4 million and $1.6 million, respectively. The payment of employees’ tax liabilities for a portion of the vested shares was satisfied by withholding shares with a fair value equal to the tax liabilities. As a result, the actual number of shares issued during the six months ended August 3, 2019 was 582,980.

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Restricted Stock Units (“RSUs”)

We grant RSUs to our employees, which vest 25% annually over a period of four years from the grant date.  Each vested RSU is settled in cash in an amount equal to the fair market value of one share of our common stock on the vesting date, not to exceed five times the per share fair market value of our common stock on the grant date. Unvested RSUs have the right to receive a dividend equivalent payment equal to cash dividends paid on our common stock. RSUs are accounted for as a liability in accordance with accounting guidance for cash settled stock awards. The liability for RSUs is remeasured based on the closing share price of our common stock at each reporting period until the award vests. Compensation expense is recognized ratably over the vesting period and adjusted with changes in the fair value of the liability.

The following table summarizes RSU activity for the six months ended August 3, 2019:

Restricted Stock Units	Number of Units		Weighted Average Grant  Date Fair Value
Outstanding at February 2, 2019	1,740,314		$	2.16
Granted	1,615,000		0.98
Vested	(482,814	)	2.17
Forfeited	(562,500	)	1.61
Outstanding at August 3, 2019	2,310,000		1.47

Stock-settled Performance Share Units (“Stock-settled PSUs”)

We grant stock-settled PSUs as a means of rewarding management for our long-term performance based on total shareholder return relative to a specific group of companies over a performance cycle of three years. These awards cliff vest following a performance cycle of three years, and if earned, are settled in shares of our common stock, unless otherwise determined by our Board of Directors (“Board”), or its Compensation Committee. The actual number of shares of our common stock that may be earned ranges from zero to a maximum of twice the number of target units awarded to the recipient. Grant recipients do not have any shareholder rights on unvested or unearned stock-settled PSUs. The fair value of these PSUs is estimated using a Monte Carlo simulation, based on the expected term of the award, a risk-free rate, expected dividends, expected volatility, and share price of our common stock and the specified peer group. The expected term is estimated based on the vesting period of the awards, the risk-free rate is based on the yield on U.S. Treasury securities matching the vesting period, and the volatility is based on the historical volatility over the expected term. Compensation expense is recognized ratably over the corresponding vesting period for stock-settled PSUs.

The following table summarizes stock-settled PSU activity for the six months ended August 3, 2019:

Period Granted	Target PSUs Outstanding at February 2, 2019	Target PSUs Granted	Target PSUs Forfeited		Target PSUs Outstanding at August 3, 2019	Weighted Average Grant Date Fair Value per Target PSU
2017	470,000	—	(50,000	)	420,000	$	1.80
2018	280,000	—	—		280,000	3.05
2019	—	375,000	—		375,000	1.39
Total	750,000	375,000	(50,000	)	1,075,000	1.98

The weighted-average grant date fair value for stock-settled PSUs granted during the six months ended August 3, 2019 and August 4, 2018 was $1.39 and $3.05, respectively. No stock-settled PSUs vested during the six months ended August 3, 2019 and August 4, 2018.

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Cash-settled Performance Share Units (“Cash-settled PSUs”)

We grant cash-settled PSUs as a means of rewarding management for our long-term performance based on total shareholder return relative to a specific group of companies over a performance cycle of three years. These awards cliff vest following a performance cycle of three years, and if earned, are settled in cash. The amount of settlement ranges from zero to a maximum of twice the number of target units awarded multiplied by the fair market value of one share of our common stock on the vesting date. Grant recipients do not have any shareholder rights on unvested or unearned cash-settled PSUs. Cash-settled PSUs are accounted for as a liability in accordance with accounting guidance for cash settled stock awards. The liability for cash-settled PSUs is remeasured based on their fair value at each reporting period until the award vests, which is estimated using a Monte Carlo simulation. Assumptions used in the valuation include the expected term of the award, a risk-free rate, expected dividends, expected volatility, and share price of our common stock and the specified peer group. The expected term is estimated based on the vesting period of the awards, the risk-free rate is based on the yield on U.S. Treasury securities matching the vesting period, and the volatility is based on the historical volatility over the expected term. Compensation expense is recognized ratably over the corresponding vesting period and adjusted with changes in the fair value of the liability.

The following table summarizes cash-settled PSU activity six months ended August 3, 2019:

Period Granted	Target PSUs Outstanding at February 2, 2019	Target PSUs Granted	Target PSUs Forfeited		Target PSUs Outstanding at August 3, 2019	Weighted Average Grant Date Fair Value per Target PSU
2018	300,000	—	(50,000	)	250,000	$	3.05
2019	—	530,000	(50,000	)	480,000	$	1.39
Total	300,000	530,000	(100,000	)	730,000	$	1.96

NOTE 7 - PENSION PLAN

We sponsor a frozen defined benefit pension plan. The components of net periodic pension cost, which were recognized in selling, general and administrative expenses, were as follows (in thousands):

	Three Months Ended						Six Months Ended
	August 3, 2019			August 4, 2018			August 3, 2019			August 4, 2018
Employer service cost	$	135		$	133		$	270		$	256
Interest cost on pension benefit obligation	317			317			644			675
Expected return on plan assets	(359		)	(456		)	(727		)	(870		)
Amortization of net loss	202			155			372			354
Net periodic pension cost	$	295		$	149		$	559		$	415

Our funding policy is to make contributions to maintain the minimum funding requirements for our pension obligations in accordance with the Employee Retirement Income Security Act. We may elect to contribute additional amounts to maintain a level of funding to minimize the Pension Benefit Guaranty Corporation premium costs or to cover the short-term liquidity needs of the plan in order to maintain current invested positions. We contributed $0.5 million during the six months ended August 3, 2019, and we expect to contribute an additional $0.8 million in 2019.

NOTE 8 - EARNINGS PER SHARE

For the three and six months ended August 3, 2019 and August 4, 2018, respectively, participating securities had no impact on loss per common share and there were no anti-dilutive securities.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Concerning Forward-Looking Statements for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

The Private Securities Litigation Reform Act of 1995 (“Act”) provides a safe harbor for forward-looking statements to encourage companies to provide prospective information, so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the statements. We wish to take advantage of the “safe harbor” provisions of the Act.

Certain statements in this report are forward-looking statements within the meaning of the Act, and such statements are intended to qualify for the protection of the safe harbor provided by the Act. The words “anticipate,” “estimate,” “expect,” “objective,” “goal,” “project,” “intend,” “plan,” “believe,” “will,” “should,” “may,” “target,” “forecast,” “guidance,” “outlook,” and similar expressions generally identify forward-looking statements. Similarly, descriptions of our objectives, strategies, plans, goals or targets are also forward-looking statements. Forward-looking statements relate to the expectations of management as to future occurrences and trends, including statements expressing optimism or pessimism about future operating results or events and projected sales, earnings, capital expenditures and business strategy.

Forward-looking statements are based upon a number of assumptions and factors concerning future conditions that may ultimately prove to be inaccurate and could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements that are made herein and in other reports and releases are not guarantees of future performance and actual results may differ materially from those discussed in such forward-looking statements as a result of various factors. These factors include, but are not limited to, the ability for us to maintain normal trade terms with vendors, the ability for us to comply with the various covenant requirements contained in the credit facility agreement, the demand for apparel, and other factors. The demand for apparel and sales volume can be affected by significant changes in economic conditions, including an economic downturn, employment levels in our markets, consumer confidence, energy and gasoline prices, the value of the Mexican peso, and other factors influencing discretionary consumer spending. Other factors affecting the demand for apparel and sales volume include unusual weather patterns, an increase in the level of competition in our market areas, competitors’ marketing strategies, changes in fashion trends, changes in the average cost of merchandise purchased for resale, availability of product on normal payment terms and the failure to achieve the expected results of our merchandising and marketing plans as well as our store opening or relocation plans. Additional assumptions, factors and risks concerning future conditions are discussed in the Risk Factors section of the Form 10-K, and may be discussed from time to time in our other filings with the SEC, including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Most of these factors are difficult to predict accurately and are generally beyond our control.

Forward-looking statements are and will be based upon management’s then-current views and assumptions regarding future events and operating performance, and are applicable only as of the dates of such statements. Although management believes the expectations expressed in forward-looking statements are based on reasonable assumptions within the bounds of our knowledge, forward-looking statements, by their nature, involve risks, uncertainties and other factors, any one or a combination of which could materially affect our business, financial condition, results of operations or liquidity.

Readers should carefully review the Form 10-K in its entirety including, but not limited to, our financial statements and the notes thereto and the risks and uncertainties described in Part I, Item 1A (Risk Factors) of the Form 10-K. This report should be read in conjunction with the Form 10-K, and you should consider all of these risks, uncertainties and other factors carefully in evaluating forward-looking statements.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update forward-looking statements whether as a result of new information, future events or otherwise. Readers are advised, however, to consult any further disclosures we make on related subjects in our public announcements and SEC filings.

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For purposes of the following discussion, all references to the “second quarter 2019” and the “second quarter 2018” are for the 13-week fiscal periods ended August 3, 2019 and August 4, 2018, respectively, and all references to the “year-to-date 2019” and the “year-to-date 2018” are for the 26-week fiscal periods ended August 3, 2019 and August 4, 2018, respectively

The financial information, discussion and analysis that follow should be read in conjunction with our consolidated financial statements and the related notes included in this Form 10-Q as well as the financial and other information included in the Form 10-K.

Our Business

We are a retailer of trend-right, moderately priced, name-brand apparel, accessories, cosmetics, footwear and home goods. As of August 3, 2019, we operated in 42 states through 645 specialty department stores under the BEALLS, GOODY’S, PALAIS ROYAL, PEEBLES and STAGE nameplates and 141 GORDMANS off-price stores. We also operate an e-commerce website. Our department stores are predominantly located in small towns and rural communities. Our off-price stores are predominantly located in smaller and mid-sized markets in the Midwest.

Second Quarter 2019 Financial Overview

Select financial results for the second quarter 2019 were as follows (comparisons are to the second quarter 2018):

• Net sales decreased $1.4 million, or 0.4%.

• Comparable sales increased 1.8%. Comparable sales consist of store sales after a store has been in operation for 14 full months, including stores converted to off-price stores, and e-commerce sales.

• Net loss was $23.9 million compared to $16.9 million.

• Loss per common share was $0.83, compared to a loss per common share of $0.60.

• Adjusted EBITDA was $(0.1) million compared to adjusted EBITDA of $2.0 million (see the reconciliation of non-GAAP financial measures on page 25).

2019 Outlook and Strategy

For 2019, we are focused on growing our off-price stores, emphasizing trending merchandise to drive sales, and exiting underperforming department stores. Our off-price store conversions and expansion of the home category within our department stores during the current year contributed to the 1.8% increase in comparable sales for the second quarter 2019. We expect these initiatives, along with additional off-price store conversions scheduled for the second half of the year, to generate positive comparable sales for 2019.

Store counts at the end of the second quarter 2019 and second quarter 2018 were as follows:        

	August 3, 2019	August 4, 2018
Department stores	645	764
Off-price stores	141	59
Total stores	786	823

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Our 2019 and long-term strategic objectives are to:

• Broaden our presence in the off-price sector with the conversion of approximately 89 department stores to off-price in 2019, and another 250 stores in the first half of 2020. Following the 2020 conversions, we will have more than 400 off-price stores, representing approximately 60% of our total sales volume in 2020. During the year-to-date 2019, we completed 72 store conversions and opened one new off-price store.

• Close between 55 to 60 underperforming department stores in 2019. During the year-to-date 2019, we permanently closed 11 department stores. The majority of the remaining closures are planned for the fourth quarter 2019.

• Expand the home department in our department stores to drive sales in this trending category. During the first quarter 2019, we relocated the home department to the store front and added new high capacity home fixtures in the majority of our department stores. This, along with expanded merchandise assortments, drove home department sales up by more than 100% in our department stores for the year-to-date 2019. We expect home department sales as a percent of total sales to increase in penetration throughout the year with the greatest benefit to sales during the fourth quarter holiday gift period.

• Promote brand recognition of our nameplates through our private label credit card and loyalty program, which guests can use across all our stores and online. In March 2019, we rebranded our Gordmans loyalty program and integrated it with our existing department store multi-tender loyalty program, Style Circle Rewards^®. In July 2019, we reissued our existing credit cards as a combined off-price and department store branded credit card to more than 2 million cardholders.

• Optimize our supply chain through capital investments and by engaging outside expertise to mitigate higher supply chain costs and prepare us for future off-price store growth.

Non-GAAP Financial Measures

The following table presents earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted EBITDA, non-GAAP financial measures. We believe the presentation of these supplemental non-GAAP financial measures helps facilitate comparisons of our operating performance across periods. In addition, management uses these non-GAAP financial measures to assess the results of our operations. Non-GAAP financial information should not be considered in isolation or viewed as a substitute for net income, cash flow from operations, diluted earnings per common share or other measures of performance as defined by GAAP.  Moreover, the inclusion of non-GAAP financial information as used herein is not necessarily comparable to other similarly titled measures of other companies due to the potential inconsistencies in the method of presentation and items considered. The following table sets forth the supplemental financial information and the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure (in thousands): 

	Three Months Ended						Six Months Ended
	August 3, 2019			August 4, 2018			August 3, 2019			August 4, 2018
Net loss (GAAP)	$	(23,934	)	$	(16,922	)	$	(71,424	)	$	(48,600	)
Interest expense	4,123			2,650			8,117			4,903
Income tax expense	150			150			300			300
Depreciation and amortization	14,528			14,997			29,872			30,147
EBITDA (non-GAAP)	(5,133		)	875			(33,135		)	(13,250		)
Impairment of long-lived assets	1,096			1,070			1,615			1,070
Severance	1,467			72			2,503			119
Pre-opening expenses	1,295			—			2,897			—
Store closing services	1,178			—			1,178			—
Adjusted EBITDA (non-GAAP)	$	(97	)	$	2,017		$	(24,942	)	$	(12,061	)

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Results of Operations

Second Quarter 2019 compared to Second Quarter 2018 and Year-to-Date 2019 compared to Year-to-Date 2018 (amounts in thousands, except percentages):

Net Sales

	Three Months Ended							Six Months Ended
	August 3, 2019		August 4, 2018		Change			August 3, 2019		August 4, 2018		Change
Net sales	$	367,865	$	369,294	$	(1,429	)	$	695,586	$	713,523	$	(17,937	)
Sales percent change:
Total net sales					(0.4		)%					(2.5		)%
Comparable sales					1.8		%					(0.6		)%

Net sales for the second quarter 2019 decreased compared to the second quarter 2018 primarily due to store closures, partially offset by an increase in comparable sales. Our off-price store conversions and strong performance of our home category contributed to the comparable sales increase. The increase in comparable sales reflects increases in transaction count and units per transaction, partially offset by a decrease in average unit retail.

Net sales for the year-to-date 2019 decreased compared to the year-to-date 2018 primarily due to store closures and a decrease in comparable sales. Sales for the year-to-date 2019 were negatively impacted by disruptions from temporary store closures associated with the off-price store conversions and the installation of high capacity home fixtures in our department stores during the first quarter. However, sales benefited from the strong performance of our converted off-price stores and home category later in the period as a result of these initiatives.

Credit Income

	Three Months Ended									Six Months Ended
	August 3, 2019			August 4, 2018			Change			August 3, 2019			August 4, 2018			Change
Credit Income	$	13,988		$	14,305		$	(317	)	$	27,096		$	29,819		$	(2,723	)
As a percent of net sales	3.8		%	3.9		%	(0.1		)%	3.9		%	4.2		%	(0.3		)%

The decrease in credit income for the year-to-date 2019 compared to the year-to-date 2018 is primarily due to the off-price store conversions. Off-price store credit sales are generally underpenetrated as compared to department stores. However, we expect off-price credit sales as a percentage of total off-price sales to continue to grow in 2019 as compared to 2018. For the year-to-date 2019 compared to the year-to-date 2018, the credit sales penetration rate in our off-price stores increased by 240 basis points.

25

Cost of Sales and Gross Margin

	Three Months Ended									Six Months Ended
	August 3, 2019			August 4, 2018			Change			August 3, 2019			August 4, 2018			Change
Net sales	$	367,865		$	369,294		$	(1,429	)	$	695,586		$	713,523		$	(17,937	)
Cost of sales and related buying, occupancy and distribution expenses	295,204			286,807			8,397			572,803			568,548			4,255
Gross profit	$	72,661		$	82,487		$	(9,826	)	$	122,783		$	144,975		$	(22,192	)
As a percent of net sales	19.8		%	22.3		%	(2.5		)%	17.7		%	20.3		%	(2.6		)%

The decrease in gross profit rate for the second quarter 2019 compared to the second quarter 2018 and the year-to-date 2019 compared to the year-to-date 2018 is primarily due to increased supply chain costs associated with our off-price stores.

Selling, General and Administrative Expenses (“SG&A Expenses”)

	Three Months Ended									Six Months Ended
	August 3, 2019			August 4, 2018			Change			August 3, 2019			August 4, 2018			Change
SG&A Expenses	$	106,310		$	110,914		$	(4,604	)	$	212,886		$	218,191		$	(5,305	)
As a percent of net sales	28.9		%	30.0		%	(1.1		)%	30.6		%	30.6		%	—		%

The decrease in SG&A expenses for the second quarter 2019 compared to the second quarter 2018 is primarily due to lower marketing costs associated with operating our off-price stores and planned reductions in department store advertising. The decrease in SG&A expenses for the year-to-date 2019 compared to the year-to-date 2018 is primarily due to lower store expenses driven by a reduction in number of stores compared to year-to-date 2018, lower marketing costs associated with operating our off-price stores and planned reductions in department store advertising, partially offset by pre-opening expenses associated with conversion stores in the year-to-date 2019 and insurance casualty gains realized in the year-to-date 2018.

Interest Expense

	Three Months Ended									Six Months Ended
	August 3, 2019			August 4, 2018			Change			August 3, 2019			August 4, 2018			Change
Interest Expense	$	4,123		$	2,650		$	1,473		$	8,117		$	4,903		$	3,214
As a percent of net sales	1.1		%	0.7		%	0.4		%	1.2		%	0.7		%	0.5		%

Interest expense is comprised of interest on borrowings under the Credit Facility, related letters of credit and commitment fees, amortization of debt issuance costs and interest on finance obligations. The increase in interest expense is primarily due to an increase in average borrowings and higher interest rates under the Credit Facility for the second quarter 2019 compared to the second quarter 2018 and for the year-to-date 2019 compared to the year-to-date 2018. For the second quarter 2019, the weighted average interest rate on outstanding borrowings and the average daily borrowings under the credit facility, including the term loan, were 4.7% and $320.7 million, respectively, as compared to 3.4% and $272.4 million for the second quarter 2018. For the year-to-date 2019, the weighted average interest rate on outstanding borrowings and the average daily borrowings under the credit facility, including the term loan, were 4.7% and $309.9 million, respectively, as compared to 3.3% and $259.9 million for the year-to-date 2018.

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Income Taxes

	Three Months Ended									Six Months Ended
	August 3, 2019			August 4, 2018			Change			August 3, 2019			August 4, 2018			Change
Income tax expense	$	150		$	150		$	—		$	300		$	300		$	—
Effective tax rate	(0.6		)%	(0.9		)%	0.3		%	(0.4		)%	(0.6		)%	0.2		%

The effective income tax rate for the second quarter and year-to-date 2019 and the second quarter and year-to-date 2018, was approximately 0%. A valuation allowance has been recognized for substantially all tax benefits generated by tax losses in each period due to the uncertainly of realization, which is dependent upon generation of future taxable income. We expect our effective income tax rate to be approximately 0% percent for 2019.

Loss Before Income Tax and Net Loss

	Three Months Ended									Six Months Ended
	August 3, 2019			August 4, 2018			Change			August 3, 2019			August 4, 2018			Change
Loss before income tax	$	(23,784	)	$	(16,772	)	$	(7,012	)	$	(71,124	)	$	(48,300	)	$	(22,824	)
Net loss	(23,934		)	(16,922		)	(7,012		)	(71,424		)	(48,600		)	(22,824		)

Seasonality and Inflation

Our business, like many other retailers, is subject to seasonal influences, with a significant portion of sales and income typically realized during the last quarter of our fiscal year. Working capital requirements fluctuate during the year and generally reach their highest levels during the third and fourth quarters. Because of the seasonality of our business, results from any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.

We do not believe that inflation has had a material effect on our results of operations. However, there can be no assurance that our business will not be affected by inflation in the future.

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Liquidity and Capital Resources

Our liquidity is currently provided by (i) existing cash balances, (ii) operating cash flows, (iii) trade credit terms from our vendors and their factors and (iv) the Credit Facility. The loss of key vendors, or material changes in support by our vendors or their factors, can have a material impact on our business and liquidity. To date, we have successfully managed our vendor relationships to maintain inventory purchases at planned levels on acceptable payment terms. However, if we fail to meet our performance objectives, we may experience a tightening of credit or payment terms from our vendors or their factors. Our primary cash requirements are for operational needs, including rent and salaries, inventory purchases, and capital investments in our stores, supply chain and information technology.

Our working capital fluctuates with seasonal variations which affect our borrowings and availability under the Credit Facility. Our availability under the Credit Facility is generally highest after the holiday selling season and is lowest just before this season as we build inventory levels. Based on our current expectations regarding our operating results, we believe that our sources of liquidity will be sufficient to cover working capital needs, planned capital expenditures and debt service requirements for at least the next 12 months.

 Key components of our cash flow are summarized below (in thousands):

	Six Months Ended
	August 3, 2019			August 4, 2018			Change
Net cash (used in) provided by:
Operating activities	$	(41,652	)	$	(69,020	)	$	27,368
Investing activities	(17,932		)	(11,020		)	(6,912		)
Financing activities	69,172			85,363			(16,191		)

Operating Activities

During the year-to-date 2019, we used $41.7 million in cash from operating activities. Net loss, adjusted for non-cash expenses, used cash of approximately $3.4 million, including non-cash operating lease expense of $34.9 million. Changes in operating assets and liabilities used net cash of approximately $41.8 million, which included a $74.4 million increase in merchandise inventories, primarily due to the seasonal build of inventories and accelerated merchandise receipts in the second quarter 2019 to reduce peak period shipping costs, and a $37.6 million decrease in operating lease liabilities, partially offset by an $8.5 million decrease in other assets and a $61.8 million increase in accounts payable and other liabilities. Additionally, cash flows from operating activities included construction allowances from landlords of $3.6 million, which funded a portion of the capital expenditures in investing activities.

During the year-to-date 2018, we used $69.0 million in cash from operating activities. Net loss, adjusted for non-cash expenses, used cash of approximately $13.7 million.  Changes in operating assets and liabilities used net cash of approximately $56.1 million, which included a $38.5 million increase in merchandise inventories, primarily due to the seasonal build of inventories, and a $20.0 million decrease in accounts payable and other liabilities, partially offset by a $2.4 million decrease in other assets. Additionally, cash flows from operating activities included construction allowances from landlords of $0.8 million, which funded a portion of the capital expenditures in investing activities.

The year-over-year change primarily reflects a $51.9 million increase in cash flow from working capital, offset by a higher net loss of $22.8 million. The increase in cash flow from working capital was largely due to an $81.7 million favorable change in cash flows from accounts payable and other liabilities driven by accelerated merchandise receipts in the second quarter 2019 and paying down our elevated payables balance at the end of 2017 in 2018, partially offset by a $35.9 million unfavorable change in cash flows from inventories attributable to accelerated merchandise receipts in the second quarter 2019.

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Investing Activities

Net cash used in investing activities increased $6.9 million to $17.9 million for the year-to-date 2019, compared to $11.0 million for the year-to-date 2018.

Capital expenditures were $18.6 million for the year-to-date 2019, compared to $12.8 million for the year-to-date 2018. The increase in capital expenditures reflect our investments in converting stores to off-price and adding high capacity home fixtures in our department stores. We received construction allowances from landlords of $3.6 million in the year-to-date 2019, which are included in cash flows from operating activities, and were used to fund a portion of the capital expenditures. These funds are recorded as a reduction from our operating lease assets on the balance sheet and are recognized as an offset to rent expense over the lease term commencing with the date the allowances are earned.

We estimate that capital expenditures in 2019, net of construction allowances to be received from landlords, will be approximately $30.0 million. The expenditures will principally be for investments in our stores, supply chain and technology.

Financing Activities

Net cash provided by financing activities decreased $16.2 million to $69.2 million for the year-to-date 2019, compared to $85.4 million for the year-to-date 2018, primarily due to lower net borrowings during the current year under the Credit Facility.

We use the Credit Facility to provide financing for working capital and general corporate purposes, as well as to finance capital expenditures and to support our letter of credit requirements. Borrowings are limited to the availability under a borrowing base that is determined principally on eligible inventory as defined by the Credit Facility agreement. The Credit Facility is secured by our inventory, cash, cash equivalents, and substantially all of our other assets. The daily interest rates are determined by a prime rate or LIBOR, plus an applicable margin, as set forth in the credit facility agreement. For the six months ended August 3, 2019, the weighted average interest rate on outstanding borrowings and the average daily borrowings on the credit facility, including the term loan, were 4.7% and $309.9 million, respectively, compared to 3.3% and $259.9 million for the year-to-date 2018.

Letters of credit issued under the credit facility support certain merchandise purchases and collateralize retained risks and deductibles under various insurance programs. At August 3, 2019, outstanding letters of credit totaled approximately $8.6 million. These letters of credit expire within 12 months of issuance and may be renewed.

The Credit Facility agreement contains a covenant requiring us to maintain excess availability at or above $35.0 million or 10% of the Adjusted Combined Loan Cap (as defined therein). The Credit Facility agreement also contains covenants which, among other things, restrict (i) the amount of additional debt or capital lease obligations, (ii) the payment of dividends to $30.0 million in a fiscal year, and (iii) the repurchase of common stock under certain circumstances. At August 3, 2019, we were in compliance with the debt covenants of the credit facility agreement and we expect to remain in compliance for the next 12 months. Excess availability under the credit facility at August 3, 2019 was $66.1 million.

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Recent Accounting Standards

Disclosure concerning recent accounting standards is incorporated by reference to Note 1 of our Condensed Consolidated Financial Statements (Unaudited) contained in this Form 10-Q.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

No response is required under Item 305 of Regulation S-K.

ITEM 4.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as that term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have each concluded that such disclosure controls and procedures were effective as of the end of the period covered by this report.

Internal Control Over Financial Reporting

As defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act, the term “internal control over financial reporting” means a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material adverse effect on the financial statements.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. There were no changes in our internal control over financial reporting during the three months ended August 3, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

No response is required under Item 103 of Regulation S-K.

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ITEM 1A.    RISK FACTORS

In addition to the other information set forth in this report, readers should carefully consider the factors discussed in Part I, Item 1A (Risk Factors) of the Form 10-K. There have not been any material changes from the risk factors as previously disclosed in the Form 10-K, except updates to the following risk factors:

Risks associated with our vendors from whom our products are sourced may have a material adverse effect on our business and financial condition. Our merchandise is sourced from a variety of domestic and international vendors. All our vendors must comply with applicable laws, including our required standards of conduct. Political or financial instability, trade restrictions, tariffs, currency exchange rates, transport capacity and costs and other factors relating to foreign trade, the ability to access suitable merchandise on acceptable terms and the financial viability of our vendors are beyond our control and may adversely impact our performance.

We are evaluating the expected impact of the current U.S. Administration’s recently imposed and planned tariffs on imports from China, including a potential continued escalation of retaliatory tariffs, as well as other recent changes in foreign trade policy on our supply chain, costs, sales and profitability. We are actively working through strategies to mitigate such impact, including reviewing sourcing options and working with our vendors and merchants. At this time, it is unknown how long U.S. tariffs on Chinese goods will remain in effect or whether additional tariffs will be imposed. While it is too early to predict how these changes in foreign trade policy and any recently enacted, proposed and future tariffs on products imported by us from China will affect our business, these changes could negatively impact our business and results of operations if they seriously disrupt the movement of products through our supply chain or increase their cost. In addition, while we may be able to shift our sourcing options, executing such a shift would be time consuming and would be difficult or impracticable for many products and may result in an increase in our merchandise costs. The adoption and expansion of trade restrictions, retaliatory tariffs, or other governmental action related to tariffs or international trade agreements or policies has the potential to adversely impact demand for our products, our costs, our customers, our suppliers, and/or the U.S. economy, which in turn could adversely impact our results of operations and business.

If we cannot meet the continued listing requirements of the New York Stock Exchange (“NYSE”), the NYSE may delist our common stock. On June 20, 2019, we received written notice from the NYSE that we are no longer in compliance with the NYSE continued listing standard set forth in Section 802.01C of the NYSE Listed Company Manual, which requires that the average closing price of our common stock be above $1.00 over 30 consecutive trading days.

To regain compliance with the minimum share price requirement, we have a six-month cure period, ending on December 20, 2019, subject to extension if we determine to remedy the non-compliance by taking action that will require shareholder approval. We can also demonstrate compliance at any time during the cure period, if on the last trading day of any calendar month during the cure period, our common stock has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month. We notified the NYSE of our intent to cure the deficiency and return to compliance with the NYSE continued listing requirements by December 20, 2019 and if we determine that we will cure the non-compliance by taking action that will require shareholder approval, we will obtain shareholder approval by no later than our next annual meeting and will implement the action promptly thereafter.

Our common stock will continue to be listed and traded on the NYSE during the cure period, subject to continued compliance with the other listing requirements. However, our common stock trading symbol “SSI” will be assigned a “.BC” indicator by the NYSE to signify that the status of the stock is “below compliance” with the NYSE continued listing requirements. The “.BC” indicator will be removed when we regain compliance.

If we are unable to satisfy the NYSE’s criteria for continued listing, our common stock would be subject to delisting. A delisting of our common stock could negatively impact us by, among other things, reducing the number of investors willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing; reducing the liquidity and market price of the common stock; decreasing the amount of news coverage of us; and limiting our ability to issue additional securities or obtain additional financing in the future. If our stock price does not increase as a result of normal market fluctuation based on our results of operation and financial condition, it may be necessary to effect a reverse stock split in order to raise our average closing stock price back above $1.00. The number of shares available on the public market following a reverse stock split will be reduced significantly, which may affect the volume and liquidity of our common stock. In addition, delisting from the NYSE might negatively impact our reputation and, as a consequence, our business.

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ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On March 7, 2011, our Board approved a stock repurchase program (“2011 Stock Repurchase Program”), which authorized us to repurchase up to $200.0 million of our outstanding common stock. The 2011 Stock Repurchase Program will expire when we have exhausted the authorization, unless terminated earlier by our Board. Through August 3, 2019, we repurchased approximately $141.6 million of our outstanding common shares under the 2011 Stock Repurchase Program. Also in March 2011, our Board authorized us to repurchase shares of our outstanding common stock equal to the amount of the proceeds and related tax benefits from the exercise of stock options, stock appreciation rights and other equity grants. Purchases of shares of our common stock may be made from time to time, either on the open market or through privately negotiated transactions and are financed by our existing cash, cash flow and other liquidity sources, as appropriate.

The table below sets forth information regarding our repurchases of common stock during the three months ended August 3, 2019:

ISSUER PURCHASES OF EQUITY SECURITIES
Period	Total Number of Shares Purchased (a)	Average Price Paid Per Share (a)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (b)
May 5, 2019 to June 1, 2019	8,737	$	1.07	—	$	58,351,202
June 2, 2019 to July 6, 2019	11,663	0.83		—	$	58,351,202
July 7, 2019 to August 3, 2019	12,554	0.76		—	$	58,351,202
Total	32,954	$	0.87	—

^(a) Although we did not repurchase any of our common stock during the three months ended August 3, 2019 under the 2011 Stock Repurchase Program:

• We reacquired 689 shares of common stock from certain employees to cover tax withholding obligations from the vesting of restricted stock at a weighted average acquisition price of $0.76 per common share; and

• The trustee of the grantor trust established by us for the purpose of holding assets under our deferred compensation plan purchased an aggregate of 32,265 shares of our common stock in the open market at a weighted average price of $0.87 in connection with the option to invest in our stock under the deferred compensation plan and reinvestment of dividends paid on our common stock held in trust in the deferred compensation plan.

^(b) Reflects the $200.0 million authorized under the 2011 Stock Purchase Program, less the $141.6 million repurchased as of August 3, 2019 using our existing cash, cash flow and other liquidity sources since March 2011.

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ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    MINE SAFETY DISCLOSURES

None.

ITEM 5.    OTHER INFORMATION

None.

ITEM 6.    EXHIBITS

The following documents are the exhibits to this Form 10-Q. For convenient reference, each exhibit is listed according to the Exhibit Table of Item 601 of Regulation S-K.

Exhibit Number	Description
10.1*	Severance Agreement and Waiver and General Release of Claims between Steven L. Hunter and Stage Stores, Inc. dated July 29, 2019.
31.1*	Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Certification 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 Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

_______________________________________

*	Filed electronically herewith.
#	Certain confidential portions with a [****] have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	STAGE STORES, INC.
Dated: September 12, 2019	/s/ Michael L. Glazer
	Michael L. Glazer
	President and Chief Executive Officer
	(Principal Executive Officer)
Dated: September 12, 2019	/s/ Jason T. Curtis
	Jason T. Curtis
	Executive Vice President, Chief Financial Officer and Treasurer
	(Principal Financial Officer)

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EX-10.1

EXHIBIT 10.1

SEVERANCE AGREEMENT AND WAIVER AND GENERAL RELEASE OF CLAIMS

This Severance Agreement and Waiver and General Release of Claims (“Agreement”) is entered into by and among Stage Stores, Inc. on behalf and for the benefit of such entities and such entities’ parents, subsidiaries, affiliates, predecessors, successors and assigns and any and all of those collective entities’ respective past and present officers, directors, employees, agents, partners, stockholders, insurers, attorneys and benefit plans (collectively referred to in this Agreement as “Stage”) and Steven Hunter (“Executive”) in connection with the Executive’s submission of his written notice of resignation and the resulting termination of his employment agreement, effective July 29, 2019 (“Separation Date”).

Purpose of Agreement

1.The purpose of this Agreement is to provide the Executive a severance payment in connection with his separation from employment in exchange for the resolution of any and all potential or actual disputes, claims, differences, and causes of action the Executive and Stage may have with or against the other and for the Executive’s additional ongoing obligations to Stage described in this Agreement.

Termination of Agreements

2.The Executive agrees and acknowledges that his Employment Agreement dated May 11, 2017 has been terminated pursuant to Section 4.5. Specifically that the Executive has voluntarily and freely provided written notice of termination and that Stage has accepted said notice and terminated the employment agreement effective July 29, 2019. The Executive acknowledges, agrees and reiterates his obligation to comply with all post termination provisions under said agreement. The Executive also acknowledges and agrees that the Incentive Award Agreement dated March 27, 2018 is likewise terminated and that he has been paid all monies due under said agreement with no future payments due or owing post-termination.

Severance Payment

3. Subject to the terms and conditions of this Agreement, including the Executive’s on-going obligations to Stage, and provided the Executive has not exercised his right to revoke this Agreement pursuant to Paragraph 10 below, Stage agrees to pay to and provide the Executive a severance payment that, apart from this Agreement, the Executive is not otherwise entitled to receive, as follows: a payment in the gross amount of $40,000.00 (the “Severance Payment”), which shall be subject to all required and appropriate taxes and withholdings, no later than 14 days after the expiration of the Revocation Period (described in Section 10, below).

Wages and Benefits through the Separation Date

4.The Executive agrees that he has been paid all wages or other monetary amounts due and owing to him from Stage except as set forth in this Agreement. This Agreement does not affect the Executive’s entitlement to receive (a) wages accrued during the final pay period immediately prior to and through the Separation Date (subject to all required and appropriate taxes and withholdings); (b) any health, dental and vision benefits which the Executive is currently

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receiving under the applicable Stage plan or policy as of and through the Separation Date; (c) any other applicable benefit plan payments for accrued/vested benefits as of and through the Separation Date; and (d) any reimbursement for authorized business expenses incurred prior to and through the Separation Date. Executive acknowledges and agrees that he is not eligible nor entitled to any bonus or additional compensation for fiscal year 2019. Executive shall be entitled to exercise any vested equity awards subject to and consistent with the terms of any applicable plan and award agreement, Stage’s Insider Trading Policy for Reporting Persons, and applicable law. Executive acknowledges that he shall not be entitled to vesting of any equity awards or other rights as of and after the Separation Date and that all such unvested equity awards or other rights will be forfeited as of the Separation Date.

Claims That Are Being Released by this Agreement

5.Stage, along with its affiliated entities, partners shareholders, members, owners, officers, directors, managers, insurers, attorneys, consultants, agents and employees and the Executive, on behalf of himself and his heirs, executors, administrators, successors, representatives, attorneys and assigns, agree to and do hereby release and forever discharge the other from any and all claims, liabilities, lawsuits, debts, obligations, promises, covenants, agreements, controversies, damages, expenses and causes of action, known or unknown, fixed or contingent, which they may have or claim to have arising up to and through the date this Agreement is signed (“General Release”). Such released claims include, but are not limited to, any and all claims that pertain to or relate to the Executive’s employment with Stage, his separation of employment from Stage, and specifically include, but are not limited to, any claims which the Executive may have or have had against Stage arising under Title VII of the Civil Rights Act of 1964, the Civil Rights Acts of 1866 and 1991, the Fair Labor Standards Act of 1938, the Pregnancy Discrimination Act of 1978, the Equal Pay Act of 1963, the National Labor Relations Act of 1935, the Civil Rights Act of 1991, 42 U.S.C. § 1981, the Family and Medical Leave Act of 1993, the Older Workers Benefit Protection Act of 1990, the Age Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973, the Americans With Disabilities Act of 1990, the Americans with Disabilities Act Amendment Act, the Employee Retirement Income Security Act of 1974, the Veterans Reemployment Rights Act, the Occupational Safety and Health Act of 1970, the Sarbanes-Oxley Act of 2002, and the Worker Adjustment and Retraining Notification Act of 1988 (all as amended from time to time). The General Release also includes claims of discrimination, harassment or retaliation, including alleged wrongful discharge based upon race, color, gender, age, national origin, marital status, religion, sexual orientation, appearance, handicap, disability (including failure to accommodate), military status, other protected status or based upon any other factor that he has alleged or could have alleged against Stage under any applicable federal, state or local law or regulations (including common law).

The General Release also includes, but is not limited to, any and all claims in tort or contract based upon any other federal, state or local law or regulation (including common law), including but not limited to, any claim for breach of contract (express or implied), interference with contracts or other business advantages, promissory estoppel, defamation, infliction of emotional distress, workplace exposure, fraudulent inducement or misrepresentation, discrimination, harassment or retaliation, as well as claims of constructive discharge, wrongful termination, “whistleblower” or other claims on any other basis or alleged status under any federal, state or local law or regulation, and public policy exceptions to at-will employment (i.e., claims for wrongful discharge in violation of common law and any other state or local equivalents) and all claims that are waivable by law under the Fair Labor Standards Act of 1938. The General

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Release also includes any claims based on pension, benefit, welfare, equity or stock plans, or that he was denied any money, leave, or any other term of employment (other than sums due pursuant to this Agreement or as described in Paragraph 4 above) including any claims for bonuses or incentive payments.

Stage and the Executive agree that this Agreement shall be construed to waive any and all claims to the maximum extent allowed by law. Stage and the Executive further promise that they will never sue the other based on any and all claims arising up to and through the date this Agreement is signed.

Permitted Claims and Conduct

6.This Agreement does not release any claims that may not be released as a matter of law, and this Agreement does not waive claims or rights that arise after the Executive signs this Agreement. Further, this Agreement will not prevent the Executive from doing any of the following:

(a)Seeking unemployment compensation, state disability insurance or workers’ compensation benefits from the appropriate agency of the state in which the Executive lives or worked;

(b) Filing a charge, giving testimony or participating in any investigation conducted by the Equal Employment Opportunity Commission or any duly authorized agency of the United States or any state. However, by signing this Agreement, the Executive is waiving, to the fullest extent permitted by law, the right to receive any personal monetary recovery or other personal relief should the Equal Employment Opportunity Commission (or any similarly authorized agency) pursue any class, representative or individual charges in part or entirely on the Executive’s behalf. The Executive will not seek, will not be entitled to recover, and agrees to waive any monetary benefits or recovery against Stage in connection with any such claim, charge or proceeding from any action against Stage before any federal, state or local administrative agency or before any federal, state or local court, for allegations arising up to and though the date of his signature on this Agreement, without regard to who has brought such complaint, lawsuit or charge; or

(c)Nothing in this Agreement is intended to prohibit the Executive from reporting possible violations of federal law or regulation to any governmental agency, including but not limited to the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. In addition, Employee does not need the prior authorization of the Company to make any such reports or disclosures, nor is Employee required to notify the Company that Employee has made such reports or disclosures. This Agreement does not limit Employee's right to receive a whistleblower reward or bounty for providing information to the Securities and Exchange Commission.

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The Executive’s On-going Obligations

7.(a) The Executive agrees not to opt-in or become a member of any class, representative and/or collective action involving or suing Stage, for allegations up to and through the date the Executive signs this Agreement. If the Executive becomes a member of such a collective, representative and/or class action, the Executive agrees to be dismissed immediately and/or opt-out of such suit and not participate further in any such suit, unless otherwise required by law. If the Executive receives a subpoena or court order or is otherwise required to participate in any proceeding against Stage, except as provided in Paragraphs 6(b) and (c), the Executive agrees to notify Stage by e-mail to legalnotices@stagestores.com within 5 days if the participation is to occur no earlier than 7 days or within 24 hours if the participation is to occur within fewer than 7 days. This notification must be given before the Executive responds to any subpoena or court order, including providing information or documentation or participating in any proceedings.

(c) The Executive agrees to voluntarily assist Stage upon its request in any litigation, arbitration, administrative proceedings, governmental inquiries, internal or external investigations or other matters of which he has knowledge or relevant information based on his prior employment or otherwise. This obligation shall include being available for interviews, depositions and/or testimony without the need for a subpoena.

(d) The Executive agrees not to defame, disparage or make statements at any time in the future that could embarrass or cause harm to Stage. This obligation applies to communications with the current, former or prospective employees, vendors and customers of Stage, to the press and media and to the general public and includes both verbal and written or electronic statements, texts and any postings on social media sites. Nothing in this Paragraph or elsewhere in this Agreement is intended to prevent or prohibit the Executive from giving testimony or participating in any investigation with the Equal Employment Opportunity Commission (or other government agency), as more fully set out in Paragraphs 6(b) and (c) above.

(e) Except as provided in Paragraphs 6(b) and (c), the Executive agrees that he will not at any time in the future make any independent use of or disclose to any other person or organization, any of Stage’s confidential information, proprietary information or trade secrets. This shall apply to any information which is of a special and unique value and includes, without limitation, both written and unwritten information relating to operations and marketing; business planning and strategies; finance; accounting; costs of providing goods or services; operating and maintenance costs; and pricing matters. This obligation regarding Stage’s confidential information, proprietary information or trade secrets is in addition to, but does not replace, any prior agreement between the Executive and Stage regarding confidentiality.

Consultation With an Attorney

8.The Executive is hereby encouraged and advised to confer with an attorney regarding this Agreement. By signing this Agreement, the Executive acknowledges that the Executive has consulted, or had sufficient opportunity to consult with, an attorney of the Executive’s choosing, if any, and that the Executive is not relying on any advice from Stage, its agents or attorneys in executing this Agreement.

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Time Period to Consider and Revoke this Agreement

9.The Executive has 21 days from the date he first received this Agreement to consider whether to enter into this Agreement. If this Agreement is not signed by the Executive and returned to Stage’s Legal Department by mail to the attention of the General Counsel at 2425 West Loop South, 11^th Floor, Houston, TX 77027 or by email to legalnotices@stagestores.com by 5:00 p.m. Central Time on the 21st day following the Executive’s receipt of this Agreement, then this Agreement becomes null and void and will have no force or effect. If this Agreement is signed by the Executive prior to the expiration of the 21 days, the Executive certifies and agrees that the decision is knowing and voluntary and is not induced by Stage through (a) fraud, misrepresentation or a threat to withdraw or alter the offer, or (b) an offer to provide different terms in exchange for signing this Agreement before the end of such 21 day period. Additionally, if executed by the Executive prior to the expiration of the 21 days, the Executive will be considered to have voluntarily waived any remaining time otherwise available in which to consider this Agreement.

10. The Executive is entitled to revoke this Agreement during a period of 7 days following his signing this Agreement (the “Revocation Period”). This Revocation Period cannot be waived by the Executive or Stage, with the result that this Agreement shall not be considered to have become an enforceable agreement until the expiration of the Revocation Period. If the Executive elects to revoke this Agreement within such time period by giving notice to Stage, then this Agreement becomes null and void and will have no force or effect.

11. To revoke this Agreement, the Executive must deliver written notice of revocation to Stage’s Legal Department by mail, courier or personal delivery to the attention of the General Counsel at 2425 West Loop South, 11^th Floor 77027 or by email to legalnotices@stagestores.com within 7 days after the Executive executes this Agreement. The Executive understands that, upon delivery of such revocation, this Agreement shall terminate and become null and void and the Executive will not be entitled to the severance payment or any other benefits under this Agreement.

12.The Executive acknowledges that this Agreement will not take effect until the Revocation Period has expired without this Agreement having been revoked. As a result, until this Agreement becomes irrevocable, Stage shall have no obligation to make any of the payments, provide any of the benefits or take any of the other actions required by this Agreement. If this Agreement is not revoked within the Revocation Period, then this Agreement will become fully binding upon Stage and the Executive.

Breach of Release

13.The Executive agrees that in the event he may attempt to revoke or rescind this Agreement at any time after the 7^th day following his execution, including but not limited to any attempt to assert any employment related claims against Stage, he shall immediately return to and/or reimburse Stage the Severance Payment provided by Stage under this Agreement, and the Executive shall have no right to receive any other benefits under this Agreement.

Confidential Agreement

14.The Executive understands and agrees that all discussions or negotiations of this Agreement, the Severance Payment provided under this Agreement and all other terms and conditions of this Agreement have been and shall be kept strictly confidential, and have not been

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and shall not be disclosed (directly or indirectly) to any person for any reason, except to the Executive’s legal or financial adviser or the Executive’s immediate family, both of which shall be advised of the confidential nature of the information. The Executive may also disclose this Agreement and its terms to the Equal Employment Opportunity Commission or any other government agency, or to a person as required by law. In the event any improper disclosure or other breach of confidentiality by the Executive or any of the individuals to which disclosure is permitted under this Paragraph, the Executive acknowledges and agrees that Stage may take legal action to enforce the terms and conditions of the Agreement and, in addition, shall be entitled to a refund or repayment of the Severance Payment provided by Stage under this Agreement, with the exception of 10% of the Severance Payment, which shall be considered adequate and sufficient consideration for claims released pursuant to this Agreement.

Additional Representations by the Executive

15.The Executive represents that (a) as of the date that he signs this Agreement, he has not filed any lawsuits against Stage or that, if he has done so, those suits have been dismissed with prejudice; (b) he has sustained no injuries during the course of his employment with Stage that he has not previously reported prior to the date the Executive signs this Agreement; (c) he has returned to Stage all property, files, records, keys, identification badges, computers, portable media, credit cards or other items belonging to Stage; and (d) except as set out in this Agreement, the Executive has been fully compensated for all wages (including regular pay, bonuses, incentive award payments, overtime and other payments) and benefits, and that he is not due any vacation or sick pay, or other compensation, remuneration or benefits of any kind including bonus or incentive payments.

No Admission of Claims or Liability

16.By entering into this Agreement, Stage does not admit to the breach of any contractual or other promises to the Executive, and does not admit to the violation of any federal, state, local or other law, regulation, ordinance or rule, including, but not limited to, those laws referred to in this Agreement, and any claimed breaches or violations are hereby specifically denied. The Executive and Stage agree that this Agreement shall in no way be construed as an admission that the Executive has any claims against Stage or that there is any liability to or wrongdoing on the part by Stage with regard to the Executive.

No Representations

17.Except for representations specifically made in this Agreement, it is understood and expressly agreed that each party has relied solely on hi own independent analysis of the facts and that he has not been influenced in any way whatsoever in executing this Agreement by any representations made by the other or the other’s attorneys or representatives.

Resolution of Disputes

18.The Executive acknowledges and agrees that he is bound by the Stage Stores Dispute Resolution Program, which requires that any dispute between the Executive and Stage be resolved through the internal company procedures, mediation or final and binding arbitration. No such dispute or claim can be taken to court or heard by a jury. The Executive agrees that this includes any dispute arising out of the Agreement or the Executive’s employment with Stage.

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Governing Law

19.The parties agree that this Agreement shall be governed by the substantive laws of the State of Texas, without regard to conflicts of law, and by federal law where applicable, for example with regard to the arbitration of disputes pursuant to Paragraph 18 above. The parties agree that any and all actions for injunction or other equitable relief pending arbitration pursuant to Paragraph 18 must and shall be brought in the state and federal courts located in Harris County, Texas.

Authority

20.The Executive represents and warrants that no other person or entity has had, nor does any other person or entity now claim, any interest in any of the claims, demands, rights or obligations stated, covered or referred to in this Agreement; that the Executive has the sole right and exclusive authority to execute this Agreement and to receive consideration therefor; and that the Executive has not sold, assigned, transferred, conveyed or otherwise disposed of any of his/her claims, demands, rights, or obligations stated, covered or referred to in this Agreement.

Severability

21.The invalidity of any one or more provisions of this Agreement shall not affect the validity of this Agreement as a whole, and in case of any such invalidity, such provision shall be treated as severable and this Agreement shall be construed as if the invalid provision had not been included herein.

Entire Agreement

22.The parties agree that this Agreement contains the entire agreement and understanding between the Executive and Stage with respect to the Executive’s separation from employment, severance benefits and any and all disputes or claims that the Executive has, or could have had, against Stage, and supersedes all other agreements between the Executive and Stage with regard to such topics. This Agreement shall not be changed unless in writing and signed by both the Executive and an authorized representative of Stage.

SIGNATURE PAGE FOLLOWS

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THIS AGREEMENT AFFECTS IMPORTANT LEGAL RIGHTS AND CONTAINS A WAIVER AND GENERAL RELEASE OF ALL OF THE EXECUTIVE’S KNOWN AND UNKNOWN CLAIMS UP TO AND THROUGH THE DATE THE EXECUTIVE SIGNS IT. PLEASE READ THIS AGREEMENT CAREFULLY AND CONSULT WITH AN ATTORNEY BEFORE SIGNING.

STEVEN HUNTER	SPECIALTY RETAILERS, INC.
______________________________	By:________________________________
Date:__________________________	Name:______________________________
	Title:_______________________________
	Date:_______________________________
	STAGE STORES, INC.
	By:________________________________
	Name:______________________________
	Title:_______________________________
	Date:_______________________________

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael L. Glazer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Stage Stores, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant, and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	September 12, 2019	/s/ Michael L. Glazer
		Michael L. Glazer
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jason T. Curtis, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Stage Stores, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant, and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	September 12, 2019	/s/ Jason T. Curtis
		Jason T. Curtis
		Executive Vice President,
		Chief Financial Officer and Treasurer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Stage Stores, Inc. (the “Company”) on Form 10-Q for the quarter ended August 3, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Michael L. Glazer and Jason T. Curtis, President and Chief Executive Officer and Executive Vice President, Chief Financial Officer and Treasurer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	September 12, 2019	/s/ Michael L. Glazer
		Michael L. Glazer
		President and Chief Executive Officer

/s/ Jason T. Curtis

Jason T. Curtis

Executive Vice President,

Chief Financial Officer and Treasurer

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Revenue Recognition (Policies)

6 Months Ended

Aug. 03, 2019

Revenue Recognition and Deferred Revenue [Abstract]

Revenue Recognition, Merchandise Sales [Policy Text Block]

We recognize revenue for merchandise sales, net of expected returns and sales tax, at the time of in-store purchase or delivery of the product to our guest. When merchandise is shipped to our guests, we estimate receipt based on historical experience. Revenue is deferred and a liability is established for sales returns based on historical return rates and sales for the return period. We recognize an asset and corresponding adjustment to cost of sales for our right to recover returned merchandise. At each financial reporting date, we assess our estimates of expected returns, refund liabilities and return assets. For merchandise sold in our stores and online, tender is accepted at the point of sale. When we receive payment before the guest has taken possession of the merchandise, the amount received is recorded as deferred revenue until the transaction is complete. Our performance obligations for unfulfilled merchandise orders are typically satisfied within one week. Shipping and handling fees charged to guests relate to fulfillment activities and are included in net sales with the corresponding costs recorded in cost of sales.

Revenue Recognition, Gift Cards and Merchandise Credits [Text Block]

We record deferred revenue for the sale of gift cards and merchandise credits issued for returned merchandise, and we recognize revenue in net sales upon redemption. Gift card and merchandise credit redemptions typically occur within 12 months of the date of issuance with the majority redeemed within the first three months. Our gift cards and merchandise credits do not expire. Based on historical redemption rates, a small percentage of gift cards and merchandise credits will never be redeemed. We recognize estimated breakage income for gift cards and merchandise credits that will never be redeemed in proportion to actual historical redemption patterns.

Revenue Recognition, Loyalty Programs [Policy Text Block]

Under our loyalty program, members can accumulate points, based on their spending, toward earning a reward certificate that can be redeemed for future merchandise purchases. Points earned by loyalty members reset to zero at the end of each calendar year. Reward certificates expire 30 days after the date of issuance. We allocate and defer a portion of our sales to reward certificates expected to be earned, based on the relative stand-alone sales transaction price and reward certificate value, and recognize the reward certificate as a net sale when it is redeemed.

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Stock-Based Compensation (Notes)

6 Months Ended

Aug. 03, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

Stock-based compensation expense by type of grant for each period presented was as follows (in thousands):

	Three Months Ended					Six Months Ended
	August 3, 2019			August 4, 2018		August 3, 2019		August 4, 2018
Non-vested stock	$	515		$	1,079	$	1,296	$	2,266
Restricted stock units	68			259		246		751
Stock-settled performance share units	121			412		289		783
Cash-settled performance share units	(51		)	96		28		150
Total stock-based compensation expense	653			1,846		1,859		3,950
Related tax benefit	—			—		—		—
Stock-based compensation expense, net of tax	$	653		$	1,846	$	1,859	$	3,950

As of August 3, 2019, we have estimated unrecognized compensation cost of $5.5 million related to stock-based compensation awards granted, which is expected to be recognized over a weighted average period of 2.3 years.

Non-vested Stock

We grant shares of non-vested stock to our employees and non-employee directors. Shares of non-vested stock awarded to employees vest 25% annually over a period of four years from the grant date. Shares of non-vested stock awarded to non-employee directors cliff vest after one year. At the end of the vesting period, shares of non-vested stock convert one-for-one to common stock. Certain non-vested stock awards have shareholder rights, including the right to vote and to receive dividends. The fair value of non-vested stock awards with dividend rights is based on the closing share price of our common stock on the grant date. The fair value of non-vested stock awards that do not have dividend rights is discounted for the present value of expected dividends during the vesting period. Compensation expense is recognized ratably over the vesting period.

The following table summarizes non-vested stock activity for the six months ended August 3, 2019:

Non-vested Stock	Number of Shares		Weighted Average Grant  Date Fair Value
Outstanding at February 2, 2019	1,379,616		$	4.43
Granted	954,670		0.96
Vested	(630,901	)	5.40
Forfeited	(39,664	)	6.89
Outstanding at August 3, 2019	1,663,721		2.01

The weighted-average grant date fair value for non-vested stock granted during the six months ended August 3, 2019 and August 4, 2018 was $0.96 and $2.41, respectively. The aggregate intrinsic value of non-vested stock that vested during the six months ended August 3, 2019 and August 4, 2018, was $0.4 million and $1.6 million, respectively. The payment of employees’ tax liabilities for a portion of the vested shares was satisfied by withholding shares with a fair value equal to the tax liabilities. As a result, the actual number of shares issued during the six months ended August 3, 2019 was 582,980.

Restricted Stock Units (“RSUs”)

We grant RSUs to our employees, which vest 25% annually over a period of four years from the grant date.  Each vested RSU is settled in cash in an amount equal to the fair market value of one share of our common stock on the vesting date, not to exceed five times the per share fair market value of our common stock on the grant date. Unvested RSUs have the right to receive a dividend equivalent payment equal to cash dividends paid on our common stock. RSUs are accounted for as a liability in accordance with accounting guidance for cash settled stock awards. The liability for RSUs is remeasured based on the closing share price of our common stock at each reporting period until the award vests. Compensation expense is recognized ratably over the vesting period and adjusted with changes in the fair value of the liability.

The following table summarizes RSU activity for the six months ended August 3, 2019:

Restricted Stock Units	Number of Units		Weighted Average Grant  Date Fair Value
Outstanding at February 2, 2019	1,740,314		$	2.16
Granted	1,615,000		0.98
Vested	(482,814	)	2.17
Forfeited	(562,500	)	1.61
Outstanding at August 3, 2019	2,310,000		1.47

Stock-settled Performance Share Units (“Stock-settled PSUs”)

We grant stock-settled PSUs as a means of rewarding management for our long-term performance based on total shareholder return relative to a specific group of companies over a performance cycle of three years. These awards cliff vest following a performance cycle of three years, and if earned, are settled in shares of our common stock, unless otherwise determined by our Board of Directors (“Board”), or its Compensation Committee. The actual number of shares of our common stock that may be earned ranges from zero to a maximum of twice the number of target units awarded to the recipient. Grant recipients do not have any shareholder rights on unvested or unearned stock-settled PSUs. The fair value of these PSUs is estimated using a Monte Carlo simulation, based on the expected term of the award, a risk-free rate, expected dividends, expected volatility, and share price of our common stock and the specified peer group. The expected term is estimated based on the vesting period of the awards, the risk-free rate is based on the yield on U.S. Treasury securities matching the vesting period, and the volatility is based on the historical volatility over the expected term. Compensation expense is recognized ratably over the corresponding vesting period for stock-settled PSUs.

The following table summarizes stock-settled PSU activity for the six months ended August 3, 2019:

Period Granted	Target PSUs Outstanding at February 2, 2019	Target PSUs Granted	Target PSUs Forfeited		Target PSUs Outstanding at August 3, 2019	Weighted Average Grant Date Fair Value per Target PSU
2017	470,000	—	(50,000	)	420,000	$	1.80
2018	280,000	—	—		280,000	3.05
2019	—	375,000	—		375,000	1.39
Total	750,000	375,000	(50,000	)	1,075,000	1.98

The weighted-average grant date fair value for stock-settled PSUs granted during the six months ended August 3, 2019 and August 4, 2018 was $1.39 and $3.05, respectively. No stock-settled PSUs vested during the six months ended August 3, 2019 and August 4, 2018.

Cash-settled Performance Share Units (“Cash-settled PSUs”)

We grant cash-settled PSUs as a means of rewarding management for our long-term performance based on total shareholder return relative to a specific group of companies over a performance cycle of three years. These awards cliff vest following a performance cycle of three years, and if earned, are settled in cash. The amount of settlement ranges from zero to a maximum of twice the number of target units awarded multiplied by the fair market value of one share of our common stock on the vesting date. Grant recipients do not have any shareholder rights on unvested or unearned cash-settled PSUs. Cash-settled PSUs are accounted for as a liability in accordance with accounting guidance for cash settled stock awards. The liability for cash-settled PSUs is remeasured based on their fair value at each reporting period until the award vests, which is estimated using a Monte Carlo simulation. Assumptions used in the valuation include the expected term of the award, a risk-free rate, expected dividends, expected volatility, and share price of our common stock and the specified peer group. The expected term is estimated based on the vesting period of the awards, the risk-free rate is based on the yield on U.S. Treasury securities matching the vesting period, and the volatility is based on the historical volatility over the expected term. Compensation expense is recognized ratably over the corresponding vesting period and adjusted with changes in the fair value of the liability.

The following table summarizes cash-settled PSU activity six months ended August 3, 2019:

Period Granted	Target PSUs Outstanding at February 2, 2019	Target PSUs Granted	Target PSUs Forfeited		Target PSUs Outstanding at August 3, 2019	Weighted Average Grant Date Fair Value per Target PSU
2018	300,000	—	(50,000	)	250,000	$	3.05
2019	—	530,000	(50,000	)	480,000	$	1.39
Total	300,000	530,000	(100,000	)	730,000	$	1.96

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Stock-Based Compensation Non-vested Stock (Details) - Non-vested stock - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Aug. 03, 2019	Aug. 04, 2018
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Settlement at the end of vesting period	one-for-one to common stock
Number of shares
Outstanding at February 2, 2019	1,379,616
Granted	954,670
Vested	(630,901)
Forfeited	(39,664)
Outstanding at August 3, 2019	1,663,721
Weighted average grant date fair value (in dollars per share)
Outstanding at February 2, 2019, weighted average grant date fair value (in dollars per share)	$ 4.43
Grants in period, weighted average grant date fair value (in dollars per share)	0.96	$ 2.41
Vested in period, weighted average grant date fair value (in dollars per share)	5.40
Forfeitures in period, weighted average grant date fair value (in dollars per share)	6.89
Outstanding at August 3, 2019, weighted average grant date fair value (in dollars per share)	$ 2.01
Aggregate intrinsic value
Aggregate intrinsic value, vested	$ 0.4	$ 1.6
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures
Shares issued in period	582,980
Employees
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award annual vesting rights, percentage	25.00%
Award vesting period	4 years
Non-employee directors
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	1 year

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Revenue - Net Sales by Merchandise Category (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Aug. 03, 2019	Aug. 04, 2018	Aug. 03, 2019	Aug. 04, 2018
Revenue from Contract with Customer [Abstract]
Typical Redemption Period of Gift Cards and Merchandise Credits				12 months
Typical Redemption Period of Majority of Gift Cards and Merchandise Credits				3 months
Expiration Period for Reward Certificates				30 days
Disaggregation of Revenue [Line Items]
Net sales		$ 367,865	$ 369,294	$ 695,586	$ 713,523
Apparel
Disaggregation of Revenue [Line Items]
Net sales		221,777	235,440	408,893	444,949
Apparel | Women's
Disaggregation of Revenue [Line Items]
Net sales		125,593	136,473	230,069	259,927
Apparel | Men's
Disaggregation of Revenue [Line Items]
Net sales		61,116	62,037	108,738	110,918
Apparel | Children's
Disaggregation of Revenue [Line Items]
Net sales		35,068	36,930	70,086	74,104
Non-Apparel
Disaggregation of Revenue [Line Items]
Net sales		146,978	134,411	289,922	271,935
Non-Apparel | Footwear
Disaggregation of Revenue [Line Items]
Net sales		45,324	49,646	90,669	98,948
Non-Apparel | Accessories
Disaggregation of Revenue [Line Items]
Net sales		21,853	22,315	42,911	45,553
Non-Apparel | Cosmetics/Fragrances
Disaggregation of Revenue [Line Items]
Net sales		30,044	33,715	60,726	67,383
Non-Apparel | Home/Gifts
Disaggregation of Revenue [Line Items]
Net sales		46,247	26,889	86,426	53,616
Non-Apparel | Other
Disaggregation of Revenue [Line Items]
Net sales		3,510	1,846	9,190	6,435
Revenue Adjustments Not Allocated
Disaggregation of Revenue [Line Items]
Net sales	[1]	(890)	(557)	(3,229)	(3,361)
Department Stores
Disaggregation of Revenue [Line Items]
Net sales		287,873	306,295	543,830	584,658
Department Stores | Apparel
Disaggregation of Revenue [Line Items]
Net sales		175,419	199,733	323,280	373,634
Department Stores | Apparel | Women's
Disaggregation of Revenue [Line Items]
Net sales		100,639	117,209	184,254	220,696
Department Stores | Apparel | Men's
Disaggregation of Revenue [Line Items]
Net sales		49,582	53,124	88,690	94,460
Department Stores | Apparel | Children's
Disaggregation of Revenue [Line Items]
Net sales		25,198	29,400	50,336	58,478
Department Stores | Non-Apparel
Disaggregation of Revenue [Line Items]
Net sales		112,801	106,843	222,809	214,193
Department Stores | Non-Apparel | Footwear
Disaggregation of Revenue [Line Items]
Net sales		39,227	45,141	79,498	89,624
Department Stores | Non-Apparel | Accessories
Disaggregation of Revenue [Line Items]
Net sales		17,988	18,426	34,702	37,298
Department Stores | Non-Apparel | Cosmetics/Fragrances
Disaggregation of Revenue [Line Items]
Net sales		27,188	31,287	55,057	62,473
Department Stores | Non-Apparel | Home/Gifts
Disaggregation of Revenue [Line Items]
Net sales		25,539	10,950	45,865	19,794
Department Stores | Non-Apparel | Other
Disaggregation of Revenue [Line Items]
Net sales		2,859	1,039	7,687	5,004
Department Stores | Revenue Adjustments Not Allocated
Disaggregation of Revenue [Line Items]
Net sales	[1]	(347)	(281)	(2,259)	(3,169)
Off-Price Stores
Disaggregation of Revenue [Line Items]
Net sales		79,992	62,999	151,756	128,865
Off-Price Stores | Apparel
Disaggregation of Revenue [Line Items]
Net sales		46,358	35,707	85,613	71,315
Off-Price Stores | Apparel | Women's
Disaggregation of Revenue [Line Items]
Net sales		24,954	19,264	45,815	39,231
Off-Price Stores | Apparel | Men's
Disaggregation of Revenue [Line Items]
Net sales		11,534	8,913	20,048	16,458
Off-Price Stores | Apparel | Children's
Disaggregation of Revenue [Line Items]
Net sales		9,870	7,530	19,750	15,626
Off-Price Stores | Non-Apparel
Disaggregation of Revenue [Line Items]
Net sales		34,177	27,568	67,113	57,742
Off-Price Stores | Non-Apparel | Footwear
Disaggregation of Revenue [Line Items]
Net sales		6,097	4,505	11,171	9,324
Off-Price Stores | Non-Apparel | Accessories
Disaggregation of Revenue [Line Items]
Net sales		3,865	3,889	8,209	8,255
Off-Price Stores | Non-Apparel | Cosmetics/Fragrances
Disaggregation of Revenue [Line Items]
Net sales		2,856	2,428	5,669	4,910
Off-Price Stores | Non-Apparel | Home/Gifts
Disaggregation of Revenue [Line Items]
Net sales		20,708	15,939	40,561	33,822
Off-Price Stores | Non-Apparel | Other
Disaggregation of Revenue [Line Items]
Net sales		651	807	1,503	1,431
Off-Price Stores | Revenue Adjustments Not Allocated
Disaggregation of Revenue [Line Items]
Net sales	[1]	$ (543)	$ (276)	$ (970)	$ (192)

[1] Includes adjustments related to deferred revenue, estimated sales returns, breakage income, shipping and miscellaneous revenues, which are not allocated to merchandise categories.

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Leases (Details)	6 Months Ended
	Aug. 03, 2019
Leases [Abstract]
Lessee, Operating Lease, Description	Our lease agreements include leases for our retail stores, distribution centers and corporate headquarters. As of August 3, 2019 all of our leases were classified as operating leases. Our store leases typically have an initial term of 10 years and often have two renewal options of five years each. The exercise of a lease renewal option is at our sole discretion. The lease term includes the initial contractual term as well as any options to extend the lease when it is reasonably certain that we will exercise that option. Our lease agreements do not contain any residual value guarantees or material restrictive covenants. The majority of our leases include fixed rent payments. A number of store leases provide for escalating minimum rent payments at pre-determined dates. Certain store leases provide for contingent rent payments based on a percentage of retail sales over contractual levels. Some of our leases include variable payments for maintenance, taxes and insurance.
Lessee, Operating Lease, Term of Contract	10 years
Lessee, Operating Lease, Number of Renewal Options Available After Initial Term	2
Lessee, Operating Lease, Renewal Term	5 years

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Fair Value Measurements (Notes)

6 Months Ended

Aug. 03, 2019

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

FAIR VALUE MEASUREMENTS

We recognize or disclose the fair value of our financial and non-financial assets and liabilities on a recurring and non-recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we assume the highest and best use of the asset by market participants in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability.

We applied the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 –	Quoted prices in active markets for identical assets or liabilities.
Level 2 –	Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 –	Inputs that are both unobservable and significant to the overall fair value measurement reflect our estimates of assumptions that market participants would use in pricing the asset or liability.

Financial assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):

	August 3, 2019
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	16,763	$	16,763	$	—	$	—
	February 2, 2019
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	19,536	$	19,536	$	—	$	—
	August 4, 2018
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	20,188	$	20,188	$	—	$	—

^(a) The liability for the amount due to participants corresponding in value to the securities held in the grantor trust is recorded in other long-term liabilities.

^(b) Using the market approach, the fair values of these securities represent quoted market prices multiplied by the quantities held. Net gains and losses related to the changes in fair value in the assets and liabilities under the various deferred compensation plans are recorded in selling, general and administrative expenses and were nil for the six months ended August 3, 2019 and August 4, 2018, and for the fiscal year ended February 2, 2019.

Non-financial assets measured at fair value on a nonrecurring basis were as follows (in thousands):

	August 3, 2019
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Assets held for sale (a)	$	2,799	$	—	$	—	$	2,799
Operating lease assets (b)	4,585		—		—		4,585
Store property, equipment and leasehold improvements (b)	629		—		—		629
Total Assets	$	8,013	$	—	$	—	$	8,013
	February 2, 2019
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Store property, equipment and leasehold improvements (a)	$	1,583	$	—	$	—	$	1,583
	August 4, 2018
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Store property, equipment and leasehold improvements (a)	$	1,101	$	—	$	—	$	1,101

^(a) Assets held for sale are recorded at the asset’s fair value less estimated costs to sell and are reflected in prepaid expenses and other current assets. For the six months ended August 3, 2019, we recognized impairment charges of $1.0 million based on a third party valuation of the underlying assets. These impairment charges are recorded in selling, general and administrative expenses.

^(b) Using an undiscounted cash flow model, we evaluate the cash flow trends of our stores at least annually and when events or changes in circumstances, such as a store closure, indicate that the asset group may not be fully recoverable. When a store’s projected undiscounted cash flows indicate its asset carrying value may not be recoverable, we use a discounted cash flow model to estimate the fair value of the underlying asset group. An impairment write-down is recorded if the carrying value of an asset exceeds its fair value. Key assumptions in estimating future cash flows include, among other things, expected future operating performance, including expected closure date and lease term, and changes in economic conditions. We believe estimated future cash flows are sufficient to support the carrying value of our right-of-use operating lease and long-lived assets. Significant changes in the key assumptions used in our cash flow projections may result in additional asset impairments. For the six months ended August 3, 2019 and August 4, 2018 and during fiscal year 2018, we recognized impairment charges of $0.6 million, $1.1 million, and $2.8 million, respectively. Impairment charges related to store property, equipment and leasehold improvements are recorded in cost of sales and related buying, occupancy and distribution expenses.

Due to the short-term nature of cash and cash equivalents, payables and short-term debt obligations, the carrying value approximates the fair value of these instruments. In addition, we believe that the credit facility obligation approximates its fair value because interest rates are adjusted daily based on current market rates.

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Document and Entity Information - $ / shares	6 Months Ended
	Aug. 03, 2019	Sep. 04, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Aug. 03, 2019
Document Transition Report	false
Entity File Number	1-14035
Entity Registrant Name	Stage Stores, Inc.
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	91-1826900
Entity Address, Address Line One	2425 West Loop South
Entity Address, City or Town	Houston,
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77027
City Area Code	(800)
Local Phone Number	579-2302
Title of 12(b) Security	Common Stock ($0.01 par value)
Trading Symbol	SSI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		28,876,878
Entity Central Index Key (CIK)	0000006885
Current Fiscal Year End Date	--02-01
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false
Par value of common stock	$ 0.01

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Aug. 03, 2019	Aug. 04, 2018
Cash flows from operating activities:
Net loss	$ (71,424)	$ (48,600)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of long-lived assets	29,872	30,147
Impairment of long-lived assets	1,615	1,070
(Gain) loss on retirements of property, equipment and leasehold improvements	(678)	17
Non-cash operating lease expense	34,919
Stock-based compensation expense	1,585	3,049
Dividends on forfeited stock awards charged to compensation expense	21
Amortization of debt issuance costs	341	148
Deferred compensation obligation	(33)	90
Amortization of employee benefit related costs	372	354
Construction allowances from landlords	3,553	757
Other changes in operating assets and liabilities:
Increase in merchandise inventories	(74,446)	(38,506)
Decrease in other assets	8,464	2,412
Decrease in operating lease liabilities	(37,601)
Increase (decrease) in accounts payable and other liabilities	61,788	(19,958)
Net cash used in operating activities	(41,652)	(69,020)
Cash flows from investing activities:
Additions to property, equipment and leasehold improvements	(18,610)	(12,822)
Proceeds from insurance and disposal of assets	678	1,802
Net cash used in investing activities	(17,932)	(11,020)
Cash flows from financing activities:
Proceeds from revolving credit facility borrowings	257,426	298,509
Payments of revolving credit facility borrowings	(186,445)	(233,148)
Proceeds from long-term debt obligation		25,000
Payments of long-term debt obligations	(1,758)	(1,472)
Payments of debt issuance costs	(36)	(354)
Payments for stock related compensation	(15)	(260)
Cash dividends paid		(2,912)
Net cash provided by financing activities	69,172	85,363
Net increase in cash and cash equivalents	9,588	5,323
Cash and cash equivalents:
Beginning of period	15,830	21,250
End of period	25,418	26,573
Supplemental disclosures including non-cash investing and financing activities:
Interest paid	7,726	4,866
Income taxes paid	473	14
Unpaid liabilities for capital expenditures	$ 4,166	$ 4,798

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Stock-Based Compensation Stock-settled Performance Share Units (Details) - Performance Share Units (PSUs) - Stock-Settled Award	6 Months Ended
	Aug. 03, 2019 shares $ / shares	Aug. 04, 2018 $ / shares
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award requisite service period	3 years
Settlement at the end of vesting period	Converts to common stock (unless otherwise determined by our Board of Directors, or its Compensation Committee) ranging from zero to a maximum of twice the number of granted shares outstanding on the vesting date.
Method used to determine fair value	Monte Carlo simulation
Number of shares
Outstanding at February 2, 2019	750,000
Granted	375,000
Forfeited	(50,000)
Outstanding at August 3, 2019	1,075,000
Weighted average grant date fair value (in dollars per share)
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 1.98
Maximum
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Multiple of the number of granted shares outstanding for issuable shares	2
Minimum
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Multiple of the number of granted shares outstanding for issuable shares	0
2017 Performance Share Units Granted
Number of shares
Outstanding at February 2, 2019	470,000
Forfeited	(50,000)
Outstanding at August 3, 2019	420,000
Weighted average grant date fair value (in dollars per share)
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 1.80
2018 Performance Share Units Granted
Number of shares
Outstanding at February 2, 2019	280,000
Outstanding at August 3, 2019	280,000
Weighted average grant date fair value (in dollars per share)
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 3.05	$ 3.05
2019 Performance Share Units Granted
Number of shares
Granted	375,000
Outstanding at August 3, 2019	375,000
Weighted average grant date fair value (in dollars per share)
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 1.39

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Basis of Presentation Impact of Adoption of ASU 2016-02 Leases (Detail) - USD ($) $ in Thousands		Aug. 03, 2019	Feb. 03, 2019	Feb. 02, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets		$ 321,982
Operating lease liabilities		$ 353,915
Cumulative-effect adjustment	[1]			$ (5,208)
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets			$ 344,200
Operating lease liabilities			$ 375,800
Cumulative-effect adjustment				5,200
Accounting Standards Update 2016-02 | Depreciation of leasehold improvements
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative-effect adjustment				(5,800)
Accounting Standards Update 2016-02 | Derecognition of finance obligations
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative-effect adjustment				$ 600

[1] Related to the adoption of the new lease accounting standard. See Note 1 for further disclosures regarding the adoption impact.

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Leases (Tables)

6 Months Ended

Aug. 03, 2019

Leases [Abstract]

Lease, Cost [Table Text Block]

The components of lease cost were as follows (in thousands):

	Three Months Ended			Six Months Ended
	August 3, 2019			August 3, 2019
Operating lease cost	$	26,163		$	52,457
Variable lease cost	9,784			19,441
Short-term lease cost	24			24
Sublease income	(369		)	(737		)
Total net lease cost	$	35,602		$	71,185
Net lease cost in cost of sales and related buying, occupancy and distribution expenses	$	34,818		$	68,876
Net lease cost in selling, general and administrative expenses	784			2,309
Total net lease cost	$	35,602		$	71,185

Lease Cash And Noncash Activities [Table Text Block]

Cash and non-cash activities associated with our leases were as follows (in thousands):

	Six Months Ended
	August 3, 2019
Cash paid for operating leases	$	55,139
Cash received from sublease	724
Lease assets obtained in exchange for lease liabilities (a)	12,701

^(a) Excludes operating lease assets of $344.2 million recognized on February 3, 2019 as a result of the adoption of ASU 2016-02, Leases (Topic 842). See Note 1 for further disclosures regarding the adoption impact.

Lease, Weighted-Average Remaining Lease Term [Table Text Block]

The weighted average remaining lease term and weighted-average discount rate associated with our leases as of August 3, 2019 were as follows:

Weighted average remaining lease term	5.3 years
Weighted average discount rate	10.1	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Maturities of operating leases as of August 3, 2019 were as follows (in thousands):

Fiscal Year	Operating Leases		Sublease
2019 (remainder of year)	$	54,535	$	(723	)
2020	102,731		(1,492		)
2021	87,965		(1,582		)
2022	71,781		(1,582		)
2023	50,986		(1,054		)
2024	33,063		—
Thereafter	59,818		—
Total lease payments	460,879		$	(6,433	)
Less: Effects of discounting	106,964
Present value of lease liabilities	353,915
Less: Current portion of lease liabilities	74,906
Long-term lease liabilities	$	279,009

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Future minimum rental commitments on long-term, non-cancelable operating leases at February 2, 2019, were as follows (in thousands):

Fiscal Year	Commitments		Sublease Income			Net Minimum Lease Commitments
2019	$	108,541	$	(1,447	)	$	107,094
2020	98,859		(1,492		)	97,367
2021	83,377		(1,582		)	81,795
2022	67,447		(1,582		)	65,865
2023	46,887		(1,054		)	45,833
Thereafter	77,910		—			77,910
Total	$	483,021	$	(7,157	)	$	475,864

Schedule Of Maturities Of Finance Obligations [Table Text Block]

Future minimum annual payments required under existing finance obligations as of February 2, 2019 were as follows (in thousands):

Fiscal Year	Minimum Payments		Less: Interest		Principal Payments
2019	$	580	$	26	$	554

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Debt Obligations Finance Obligations (Details) $ in Thousands	Feb. 02, 2019 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative-effect adjustment	$ (5,208)	[1]
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative-effect adjustment	5,200
Accounting Standards Update 2016-02 | Derecognition of finance obligations
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative-effect adjustment	$ 600

[1] Related to the adoption of the new lease accounting standard. See Note 1 for further disclosures regarding the adoption impact.

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Stock-Based Compensation Cash-settled Performance Share Units (Details) - Performance Share Units (PSUs) - Cash-Settled Award	6 Months Ended
	Aug. 03, 2019 shares $ / shares
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award requisite service period	3 years
Settlement at the end of vesting period	Settles in cash ranging from zero to a maximum of twice the number of target units awarded multiplied by the fair market value of one share of our common stock on the vesting date.
Method used to determine fair value	Monte Carlo simulation
Number of shares
Outstanding at February 2, 2019	300,000
Granted	530,000
Forfeited	(100,000)
Outstanding at August 3, 2019	730,000
Weighted average grant date fair value (in dollars per share)
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 1.96
Maximum
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Multiple of the number of granted units outstanding for amount of settlement	2
Minimum
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Multiple of the number of granted units outstanding for amount of settlement	0
2018 Performance Share Units Granted
Number of shares
Outstanding at February 2, 2019	300,000
Forfeited	(50,000)
Outstanding at August 3, 2019	250,000
Weighted average grant date fair value (in dollars per share)
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 3.05
2019 Performance Share Units Granted
Number of shares
Granted	530,000
Forfeited	(50,000)
Outstanding at August 3, 2019	480,000
Weighted average grant date fair value (in dollars per share)
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 1.39

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Debt Obligations Credit Facility (Details) $ in Millions	6 Months Ended
	Aug. 03, 2019 USD ($)
Line of Credit | Term Loan
Debt Instruments [Abstract]
Credit Facility, Term Loan, maturity date	Dec. 16, 2021
Credit Facility
Line of Credit Facility [Line Items]
Credit Facility, Maximum Borrowing Capacity	$ 448.7
Credit Facility, higher borrowing capacity, seasonal increase	$ 473.7
Credit Facility, maturity date	Dec. 16, 2021
Credit Facility, collateral	The Credit Facility is secured by our inventory, cash, cash equivalents, and substantially all of our other assets.
Credit Facility, interest rate description	The daily interest rates are determined by a prime rate or LIBOR, plus an applicable margin, as set forth in the Credit Facility agreement.
Credit Facility, weighted average interest rate during period	4.70%
Credit Facility, average daily borrowings	$ 309.9
Credit Facility, excess borrowing availability	66.1
Credit Facility, excess borrowing capacity required, amount (greater of)	$ 35.0
Credit Facility, excess borrowing capacity required, percent of Adjusted Combined Loan Cap (greater of)	10.00%
Credit Facility, dividend restriction amount	$ 30.0
Credit Facility, covenant compliance	in compliance with the debt covenants of the Credit Facility agreement
Credit Facility | Term Loan
Debt Instruments [Abstract]
Credit Facility, Term Loan, frequency of periodic payment	quarterly
Credit Facility, Term Loan, periodic payment, principal	$ 1.3
Credit Facility, Term Loan, date of first required payment	Jun. 15, 2019
Letter of Credit
Line of Credit Facility [Line Items]
Letter of credit subfacility, maximum borrowing capacity	$ 25.0
Letters of credit outstanding, amount	$ 8.6
Letters of credit, expiration period	12 months

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Basis of Presentation (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Aug. 03, 2019 States stores	Aug. 04, 2018	Aug. 03, 2019 States stores	Aug. 04, 2018	Feb. 01, 2020	Feb. 02, 2019
Number of states in which entity operates stores | States	42		42
Fiscal Year [Line Items]
Fiscal Period Duration	91 days	91 days	182 days	182 days	364 days	364 days
Department Stores
Number of stores operated by entity	645		645
Off-Price Stores
Number of stores operated by entity	141		141
Length of some fiscal years | Minimum
Fiscal Year [Line Items]
Fiscal Period Duration			364 days
Length of some fiscal years | Maximum
Fiscal Year [Line Items]
Fiscal Period Duration			371 days

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Revenue (Tables)

6 Months Ended

Aug. 03, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table presents the composition of net sales by merchandise category (in thousands):

	Three Months Ended
	August 3, 2019									August 4, 2018
Merchandise Category	Department Stores			Off-price Stores			Total Company			Department Stores			Off-price Stores			Total Company
Women’s	$	100,639		$	24,954		$	125,593		$	117,209		$	19,264		$	136,473
Men’s	49,582			11,534			61,116			53,124			8,913			62,037
Children's	25,198			9,870			35,068			29,400			7,530			36,930
Apparel	175,419			46,358			221,777			199,733			35,707			235,440
Footwear	39,227			6,097			45,324			45,141			4,505			49,646
Accessories	17,988			3,865			21,853			18,426			3,889			22,315
Cosmetics/Fragrances	27,188			2,856			30,044			31,287			2,428			33,715
Home/Gifts	25,539			20,708			46,247			10,950			15,939			26,889
Other	2,859			651			3,510			1,039			807			1,846
Non-apparel	112,801			34,177			146,978			106,843			27,568			134,411
Revenue adjustments not allocated (a)	(347		)	(543		)	(890		)	(281		)	(276		)	(557		)
Net sales	$	287,873		$	79,992		$	367,865		$	306,295		$	62,999		$	369,294
(a) Includes adjustments related to deferred revenue, estimated sales returns, breakage income, shipping and miscellaneous revenues, which are not allocated to merchandise categories.

	Six Months Ended
	August 3, 2019									August 4, 2018
Merchandise Category	Department Stores			Off-price Stores			Total Company			Department Stores			Off-price Stores			Total Company
Women’s	$	184,254		$	45,815		$	230,069		$	220,696		$	39,231		$	259,927
Men’s	88,690			20,048			108,738			94,460			16,458			110,918
Children's	50,336			19,750			70,086			58,478			15,626			74,104
Apparel	323,280			85,613			408,893			373,634			71,315			444,949
Footwear	79,498			11,171			90,669			89,624			9,324			98,948
Accessories	34,702			8,209			42,911			37,298			8,255			45,553
Cosmetics/Fragrances	55,057			5,669			60,726			62,473			4,910			67,383
Home/Gifts	45,865			40,561			86,426			19,794			33,822			53,616
Other	7,687			1,503			9,190			5,004			1,431			6,435
Non-apparel	222,809			67,113			289,922			214,193			57,742			271,935
Revenue adjustments not allocated (a)	(2,259		)	(970		)	(3,229		)	(3,169		)	(192		)	(3,361		)
Net sales	$	543,830		$	151,756		$	695,586		$	584,658		$	128,865		$	713,523
(a) Includes adjustments related to deferred revenue, estimated sales returns, breakage income, shipping and miscellaneous revenues, which are not allocated to merchandise categories.

Contract Liability Components

Contract liabilities (recorded in accrued expenses and other current liabilities) for each period presented were as follows (in thousands):

	August 3, 2019		February 2, 2019		August 4, 2018
Gift cards and merchandise credits, net	$	9,759	$	12,433	$	9,657
Loyalty program rewards, net	5,147		1,484		4,612
Merchandise fulfillment liability	859		488		850
Total contract liabilities	$	15,765	$	14,405	$	15,119

Contract Liability Balances and Activity

The following table summarizes contract liability activity for each period presented (in thousands):

	Three Months Ended						Six Months Ended
	August 3, 2019			August 4, 2018			August 3, 2019			August 4, 2018
Beginning balance	$	14,440		$	14,028		$	14,405		$	13,474
Net sales recognized during the period from amounts included in contract liability balances at the beginning of the period	(5,522		)	(5,484		)	(6,571		)	(6,284		)
Current period additions to contract liability balances included in contract liability balances at the end of the period	6,847			6,575			7,931			7,929
Ending balance	$	15,765		$	15,119		$	15,765		$	15,119

Credit Income

The amounts recognized in credit income related to these upfront payments for each period presented were as follows (in thousands):

	Three Months Ended				Six Months Ended
	August 3, 2019		August 4, 2018		August 3, 2019		August 4, 2018
Upfront payments recognized in credit income	$	250	$	438	$	875	$	875

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Basis of Presentation (Policies)

6 Months Ended

Aug. 03, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Fiscal Period, Policy

References to a particular year are to our fiscal year, which is the 52- or 53-week period ending on the Saturday closest to January 31st of the following calendar year.  For example, a reference to “2019” is a reference to the fiscal year ending February 1, 2020, and “2018” is a reference to the fiscal year ended February 2, 2019. Fiscal years 2019 and 2018 are comprised of 52 weeks. References to the “three months ended August 3, 2019” and “three months ended August 4, 2018” are for the respective 13-week fiscal quarters. References to quarters relate to our fiscal quarters. References to the “six months ended August 3, 2019” and “six months ended August 4, 2018” are for the respective 26-week fiscal periods.

Short-term Leases, Policy

We elected the short-term lease exemption for leases that have a lease term of twelve months or less. For leases that qualify for the short-term exemption, we will not recognize a right-of-use asset or liability and will recognize those lease expenses on a straight-line basis over the lease term.

Separation of Lease and Nonlease Components, Policy

We elected to not separate lease and non-lease components for all of our current lease classes.

New Accounting Pronouncements, Policy

Recently Adopted Accounting Pronouncements. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates (“ASU”) 2016-02, Leases (Topic 842), and subsequently issued related ASUs, which were incorporated into Topic 842. Under the new standard, lessees are required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the later of the lease commencement date and the date of adoption. The guidance also requires qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. We adopted the new standard on February 3, 2019, the first day of fiscal 2019.

Transition elections:

• We elected to apply the effective date transition method as of the February 3, 2019 adoption date. Comparative periods prior to the adoption of the new standard have not been restated and are reported under the legacy guidance in Accounting Standards Codification (“ASC”) Topic 840, Leases.

• We elected the package of practical expedients in the transition guidance, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.

• We elected not to use the practical expedient of using hindsight to determine the lease term and in assessing impairment of the right-of-use assets.

Accounting policy elections:

• We elected the short-term lease exemption for leases that have a lease term of twelve months or less. For leases that qualify for the short-term exemption, we will not recognize a right-of-use asset or liability and will recognize those lease expenses on a straight-line basis over the lease term.

• We elected to not separate lease and non-lease components for all of our current lease classes.

The adoption of the standard resulted in the recognition of operating lease assets and liabilities of $344.2 million and $375.8 million, respectively, as of February 3, 2019. Included in the measurement of the operating lease assets and liabilities is the reclassification of balances historically recorded as deferred rent and deferred rent tenant allowances. We also recognized a cumulative effect charge of $5.2 million, net of tax, to the opening accumulated deficit balance. This adjustment reflects $5.8 million in depreciation of leasehold improvements associated with conforming the asset useful life to the remaining lease life as of the transition date. It also reflects $0.6 million associated with the derecognition of lease obligations that had been classified as finance obligations under the former failed sale-leaseback guidance applied to build-to-suit arrangements. Under the new standard, these leases are classified as operating leases. The adoption of the standard did not have a material impact on our results of operations or cash flows. In addition, our bank covenants under our Credit Facility were not affected by the adoption of the standard. See Note 5 for further disclosures regarding leases.

Recent Accounting Pronouncements Not Yet Adopted.    In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds and modifies certain disclosure requirements for fair value measurements. The new standard will be effective for us in the first quarter of fiscal 2020, with early adoption permitted. We are currently evaluating the impact of the new guidance on our disclosures.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force), which aligns the requirements for capitalizing implementation costs in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance also requires disclosure of the nature of hosting arrangements that are service contracts. The new standard will be effective for us in the first quarter of fiscal 2020, with early adoption permitted. We are currently evaluating the impact of the new guidance on our financial statements and disclosures.

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Leases (Notes)

6 Months Ended

Aug. 03, 2019

Leases [Abstract]

Lessee, Operating Leases [Text Block]

LEASES

Our lease agreements include leases for our retail stores, distribution centers and corporate headquarters. As of August 3, 2019, all of our leases were classified as operating leases. Our store leases typically have an initial term of 10 years and often have two renewal options of five years each. The exercise of a lease renewal option is at our sole discretion. The lease term includes the initial contractual term as well as any options to extend the lease when it is reasonably certain that we will exercise that option. Our lease agreements do not contain any residual value guarantees or material restrictive covenants.

We recognize a lease liability for our obligation to make lease payments arising from the lease and a related asset for our right to use the underlying asset for the lease term. The lease liability is measured based on the present value of lease payments over the lease term, and the asset is measured based on the value of the lease liability, net of landlord allowances. As the implicit interest rate in our lease agreements is not readily identifiable, we use our estimated collateralized incremental borrowing rate in determining the present value of lease payments. For all current lease classes, we made an accounting policy election not to separate lease and non-lease components.

The majority of our leases include fixed rent payments. A number of store leases provide for escalating minimum rent payments at pre-determined dates. Certain store leases provide for contingent rent payments based on a percentage of retail sales over contractual levels. Some of our leases include variable payments for maintenance, taxes and insurance.

Operating lease payments are expensed on a straight-line basis over the lease term. Variable payments are not included in the measurement of the lease liability or asset and are expensed as incurred.

We sublease our former corporate office building to a third party and recognize sublease income on a straight-line basis over the lease term.

ASC 842 Disclosures

Lease cost includes both the fixed and variable expenses recorded for leases. The components of lease cost were as follows (in thousands):

	Three Months Ended			Six Months Ended
	August 3, 2019			August 3, 2019
Operating lease cost	$	26,163		$	52,457
Variable lease cost	9,784			19,441
Short-term lease cost	24			24
Sublease income	(369		)	(737		)
Total net lease cost	$	35,602		$	71,185
Net lease cost in cost of sales and related buying, occupancy and distribution expenses	$	34,818		$	68,876
Net lease cost in selling, general and administrative expenses	784			2,309
Total net lease cost	$	35,602		$	71,185

Cash and non-cash activities associated with our leases were as follows (in thousands):

	Six Months Ended
	August 3, 2019
Cash paid for operating leases	$	55,139
Cash received from sublease	724
Lease assets obtained in exchange for lease liabilities (a)	12,701

^(a) Excludes operating lease assets of $344.2 million recognized on February 3, 2019 as a result of the adoption of ASU 2016-02, Leases (Topic 842). See Note 1 for further disclosures regarding the adoption impact.

The weighted average remaining lease term and weighted-average discount rate associated with our leases as of August 3, 2019 were as follows:

Weighted average remaining lease term	5.3 years
Weighted average discount rate	10.1	%

Maturities of operating leases as of August 3, 2019 were as follows (in thousands):

Fiscal Year	Operating Leases		Sublease
2019 (remainder of year)	$	54,535	$	(723	)
2020	102,731		(1,492		)
2021	87,965		(1,582		)
2022	71,781		(1,582		)
2023	50,986		(1,054		)
2024	33,063		—
Thereafter	59,818		—
Total lease payments	460,879		$	(6,433	)
Less: Effects of discounting	106,964
Present value of lease liabilities	353,915
Less: Current portion of lease liabilities	74,906
Long-term lease liabilities	$	279,009

As of August 3, 2019, there were no leases that had not yet commenced.

Comparative Period Disclosures Reported Under ASC 840

Future minimum rental commitments on long-term, non-cancelable operating leases at February 2, 2019, were as follows (in thousands):

Fiscal Year	Commitments		Sublease Income			Net Minimum Lease Commitments
2019	$	108,541	$	(1,447	)	$	107,094
2020	98,859		(1,492		)	97,367
2021	83,377		(1,582		)	81,795
2022	67,447		(1,582		)	65,865
2023	46,887		(1,054		)	45,833
Thereafter	77,910		—			77,910
Total	$	483,021	$	(7,157	)	$	475,864

While infrequent in occurrence, occasionally we are responsible for the construction of leased stores and for paying project costs. ASC 840-40-55, The Effect of Lessee Involvement in Asset Construction, requires us to be considered the owner (for accounting purposes) of such build-to-suit arrangements during the construction period. The leases are accounted for as finance obligations with the amounts received from the landlord being recorded in debt obligations. Interest expense is recognized at a rate that will amortize the finance obligation over the initial term of the lease. Where ASC 840-40-55 was applicable, we have recorded finance obligations with interest rates of 6.1% and 12.3% on our condensed consolidated financial statements related to two store leases as of February 2, 2019.

Future minimum annual payments required under existing finance obligations as of February 2, 2019 were as follows (in thousands):

Fiscal Year	Minimum Payments		Less: Interest		Principal Payments
2019	$	580	$	26	$	554

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Revenue - Contract Liability Components (Details) - USD ($) $ in Thousands	Aug. 03, 2019	Feb. 02, 2019	Aug. 04, 2018
Components of Revenue Contract Liability [Line Items]
Gift cards and merchandise credits, net	$ 9,759	$ 12,433	$ 9,657
Loyalty program rewards, net	5,147	1,484	4,612
Merchandise fulfillment liability	859	488	850
Contract with Customer, Liability	$ 15,765	$ 14,405	$ 15,119

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Leases ASC 842 Disclosures (Details) - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
		Aug. 03, 2019	Aug. 03, 2019	Feb. 03, 2019
Lessee, Lease, Description [Line Items]
Operating Lease, Cost		$ 26,163	$ 52,457
Variable Lease, Cost		9,784	19,441
Short-term Lease, Cost		24	24
Sublease Income		(369)	(737)
Net Lease, Cost		35,602	71,185
Cash Flow, Operating Activities, Lessee [Abstract]
Operating Lease, Payments			55,139
Operating Leases, Rent Expense, Sublease Rentals			724
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	[1]		12,701
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets		$ 321,982	$ 321,982
Operating Lease, Weighted Average Remaining Lease Term		5 years 3 months 18 days	5 years 3 months 18 days
Operating Lease, Weighted Average Discount Rate, Percent		10.10%	10.10%
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
Lessee, Operating Lease, Liability, Payments, 2019		$ 54,535	$ 54,535
Lessee, Operating Lease, Liability, Payments, 2020		102,731	102,731
Lessee, Operating Lease, Liability, Payments, 2021		87,965	87,965
Lessee, Operating Lease, Liability, Payments, 2022		71,781	71,781
Lessee, Operating Lease, Liability, Payments, 2023		50,986	50,986
Lessee, Operating Lease, Liability, Payments, 2024		33,063	33,063
Lessee, Operating Lease, Liability, Payments, Thereafter		59,818	59,818
Lessee, Operating Lease, Liability, Payments, Due		460,879	460,879
Lessee, Operating Lease, Liability, Undiscounted Excess Amount		106,964	106,964
Operating Lease, Liability		353,915	353,915
Operating Lease, Liability, Current		(74,906)	(74,906)
Operating Lease, Liability, Noncurrent		279,009	279,009
Lessee, Sublease Maturities, 2019		(723)	(723)
Lessee, Sublease Maturities, 2020		(1,492)	(1,492)
Lessee, Sublease Maturities, 2021		(1,582)	(1,582)
Lessee, Sublease Maturities, 2022		(1,582)	(1,582)
Lessee, Sublease Maturities, 2023		(1,054)	(1,054)
Lessee, Sublease Maturities, Receipts		(6,433)	(6,433)
Cost of Sales and Related Buying, Occupancy and Distribution Expenses
Lessee, Lease, Description [Line Items]
Net Lease, Cost		34,818	68,876
Selling, General and Administrative Expenses
Lessee, Lease, Description [Line Items]
Net Lease, Cost		$ 784	$ 2,309
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets				$ 344,200
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
Operating Lease, Liability				$ 375,800

[1] Excludes operating lease assets of $344.2 million recognized on February 3, 2019 as a result of the adoption of ASU 2016-02, Leases (Topic 842). See Note 1 for further disclosures regarding the adoption impact.

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Stock-Based Compensation Restricted Stock Units (Details) - Restricted Stock Units (RSUs)	6 Months Ended
	Aug. 03, 2019 $ / shares shares
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award annual vesting rights, percentage	25.00%
Award vesting period	4 years
Settlement at the end of vesting period	Each vested RSU is settled in cash in an amount equal to the fair market value of one share of our common stock on the vesting date, not to exceed five times the per share fair market value of our common stock on the grant date
Number of shares
Outstanding at February 2, 2019 | shares	1,740,314
Granted | shares	1,615,000
Vested | shares	(482,814)
Forfeited | shares	562,500
Outstanding at August 3, 2019 | shares	2,310,000
Weighted average grant date fair value (in dollars per share)
Outstanding at February 2, 2019, weighted average grant date fair value (in dollars per share) | $ / shares	$ 2.16
Grants in period, weighted average grant date fair value (in dollars per share) | $ / shares	0.98
Vested in period, weighted average grant date fair value (in dollars per share) | $ / shares	2.17
Forfeitures in period, weighted average grant date fair value (in dollars per share) | $ / shares	1.61
Outstanding at August 3, 2019, weighted average grant date fair value (in dollars per share) | $ / shares	$ 1.47

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Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 03, 2019	Aug. 04, 2018	Aug. 03, 2019	Aug. 04, 2018
Income Statement [Abstract]
Net sales	$ 367,865	$ 369,294	$ 695,586	$ 713,523
Credit income	13,988	14,305	27,096	29,819
Total revenues	381,853	383,599	722,682	743,342
Cost of sales and related buying, occupancy and distribution expenses	295,204	286,807	572,803	568,548
Selling, general and administrative expenses	106,310	110,914	212,886	218,191
Interest expense	4,123	2,650	8,117	4,903
Loss before income tax	(23,784)	(16,772)	(71,124)	(48,300)
Income tax expense	150	150	300	300
Net loss	(23,934)	(16,922)	(71,424)	(48,600)
Other comprehensive income:
Amortization of employee benefit related costs, net of tax of $0, respectively	202	155	372	354
Total other comprehensive income	202	155	372	354
Comprehensive loss	$ (23,732)	$ (16,767)	$ (71,052)	$ (48,246)
Net loss per share:
Basic loss per share	$ (0.83)	$ (0.60)	$ (2.50)	$ (1.74)
Diluted loss per share	$ (0.83)	$ (0.60)	$ (2.50)	$ (1.74)
Weighted average shares outstanding:
Basic weighted average shares outstanding	28,791	28,152	28,616	27,959
Diluted weighted average shares outstanding	28,791	28,152	28,616	27,959

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Basis of Presentation (Notes)

6 Months Ended

Aug. 03, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies

BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of Stage Stores, Inc. and its subsidiary (“we,” “us” or “our”) have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. Those adjustments that are, in the opinion of management, necessary for a fair presentation of the results of the interim periods have been made. Results of operations for such interim periods are not necessarily indicative of the results of operations for a full year due to seasonality and other factors. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto filed with our Annual Report on Form 10-K for the year ended February 2, 2019 (“Form 10-K”).    

We are a retailer of trend-right, moderately priced, name-brand apparel, accessories, cosmetics, footwear and home goods. As of August 3, 2019, we operated in 42 states through 645 BEALLS, GOODY’S, PALAIS ROYAL, PEEBLES and STAGE specialty department stores and 141 GORDMANS off-price stores, as well as an e-commerce website (www.stage.com). Our department stores are predominantly located in small towns and rural communities. Our off-price stores are predominantly located in smaller and mid-sized markets in the Midwest.

References to a particular year are to our fiscal year, which is the 52- or 53-week period ending on the Saturday closest to January 31st of the following calendar year.  For example, a reference to “2019” is a reference to the fiscal year ending February 1, 2020, and “2018” is a reference to the fiscal year ended February 2, 2019. Fiscal years 2019 and 2018 are comprised of 52 weeks. References to the “three months ended August 3, 2019” and “three months ended August 4, 2018” are for the respective 13-week fiscal quarters. References to quarters relate to our fiscal quarters. References to the “six months ended August 3, 2019” and “six months ended August 4, 2018” are for the respective 26-week fiscal periods.

Recently Adopted Accounting Pronouncements. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates (“ASU”) 2016-02, Leases (Topic 842), and subsequently issued related ASUs, which were incorporated into Topic 842. Under the new standard, lessees are required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the later of the lease commencement date and the date of adoption. The guidance also requires qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. We adopted the new standard on February 3, 2019, the first day of fiscal 2019.

Transition elections:

• We elected to apply the effective date transition method as of the February 3, 2019 adoption date. Comparative periods prior to the adoption of the new standard have not been restated and are reported under the legacy guidance in Accounting Standards Codification (“ASC”) Topic 840, Leases.

• We elected the package of practical expedients in the transition guidance, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.

• We elected not to use the practical expedient of using hindsight to determine the lease term and in assessing impairment of the right-of-use assets.

Accounting policy elections:

• We elected the short-term lease exemption for leases that have a lease term of twelve months or less. For leases that qualify for the short-term exemption, we will not recognize a right-of-use asset or liability and will recognize those lease expenses on a straight-line basis over the lease term.

• We elected to not separate lease and non-lease components for all of our current lease classes.

The adoption of the standard resulted in the recognition of operating lease assets and liabilities of $344.2 million and $375.8 million, respectively, as of February 3, 2019. Included in the measurement of the operating lease assets and liabilities is the reclassification of balances historically recorded as deferred rent and deferred rent tenant allowances. We also recognized a cumulative effect charge of $5.2 million, net of tax, to the opening accumulated deficit balance. This adjustment reflects $5.8 million in depreciation of leasehold improvements associated with conforming the asset useful life to the remaining lease life as of the transition date. It also reflects $0.6 million associated with the derecognition of lease obligations that had been classified as finance obligations under the former failed sale-leaseback guidance applied to build-to-suit arrangements. Under the new standard, these leases are classified as operating leases. The adoption of the standard did not have a material impact on our results of operations or cash flows. In addition, our bank covenants under our Credit Facility were not affected by the adoption of the standard. See Note 5 for further disclosures regarding leases.

Recent Accounting Pronouncements Not Yet Adopted.    In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds and modifies certain disclosure requirements for fair value measurements. The new standard will be effective for us in the first quarter of fiscal 2020, with early adoption permitted. We are currently evaluating the impact of the new guidance on our disclosures.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force), which aligns the requirements for capitalizing implementation costs in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance also requires disclosure of the nature of hosting arrangements that are service contracts. The new standard will be effective for us in the first quarter of fiscal 2020, with early adoption permitted. We are currently evaluating the impact of the new guidance on our financial statements and disclosures.

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Fair Value Measurements (Details) - USD ($) $ in Thousands		6 Months Ended		12 Months Ended
		Aug. 03, 2019	Aug. 04, 2018	Feb. 02, 2019
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held in grantor trust for deferred compensation plans	[1],[2]	$ 16,763	$ 20,188	$ 19,536
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held in grantor trust for deferred compensation plans	[1],[2]	16,763	20,188	19,536
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets held for sale, fair value	[3]	2,799
Operating lease assets, fair value	[4]	4,585
Store property, equipment and leasehold improvements, fair value	[4]	629	1,101	1,583
Non-financial assets, fair value		8,013
Impairment of Long-Lived Assets Held-for-sale		1,000
Impairment of Long-Lived Assets Held-for-use		600	1,100	2,800
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets held for sale, fair value	[3]	2,799
Operating lease assets, fair value	[4]	4,585
Store property, equipment and leasehold improvements, fair value	[4]	629	$ 1,101	$ 1,583
Non-financial assets, fair value		$ 8,013

[1] The liability for the amount due to participants corresponding in value to the securities held in the grantor trust is recorded in other long-term liabilities.

[2] Using the market approach, the fair values of these securities represent quoted market prices multiplied by the quantities held. Net gains and losses related to the changes in fair value in the assets and liabilities under the various deferred compensation plans are recorded in selling, general and administrative expenses and were nil for the six months ended August 3, 2019 and August 4, 2018, and for the fiscal year ended February 2, 2019.

[3] Assets held for sale are recorded at the asset’s fair value less estimated costs to sell and are reflected in prepaid expenses and other current assets. For the six months ended August 3, 2019, we recognized impairment charges of $1.0 million based on a third party valuation of the underlying assets. These impairment charges are recorded in selling, general and administrative expenses.

[4] Using an undiscounted cash flow model, we evaluate the cash flow trends of our stores at least annually and when events or changes in circumstances, such as a store closure, indicate that the asset group may not be fully recoverable. When a store’s projected undiscounted cash flows indicate its asset carrying value may not be recoverable, we use a discounted cash flow model to estimate the fair value of the underlying asset group. An impairment write-down is recorded if the carrying value of an asset exceeds its fair value. Key assumptions in estimating future cash flows include, among other things, expected future operating performance, including expected closure date and lease term, and changes in economic conditions. We believe estimated future cash flows are sufficient to support the carrying value of our right-of-use operating lease and long-lived assets. Significant changes in the key assumptions used in our cash flow projections may result in additional asset impairments. For the six months ended August 3, 2019 and August 4, 2018 and during fiscal year 2018, we recognized impairment charges of $0.6 million, $1.1 million, and $2.8 million, respectively. Impairment charges related to store property, equipment and leasehold improvements are recorded in cost of sales and related buying, occupancy and distribution expenses

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Stock-Based Compensation (Tables)

6 Months Ended

Aug. 03, 2019

Share-based Payment Arrangement [Abstract]

Stock-based compensation expense by type of grant

Stock-based compensation expense by type of grant for each period presented was as follows (in thousands):

	Three Months Ended					Six Months Ended
	August 3, 2019			August 4, 2018		August 3, 2019		August 4, 2018
Non-vested stock	$	515		$	1,079	$	1,296	$	2,266
Restricted stock units	68			259		246		751
Stock-settled performance share units	121			412		289		783
Cash-settled performance share units	(51		)	96		28		150
Total stock-based compensation expense	653			1,846		1,859		3,950
Related tax benefit	—			—		—		—
Stock-based compensation expense, net of tax	$	653		$	1,846	$	1,859	$	3,950

Non-vested stock activity

The following table summarizes non-vested stock activity for the six months ended August 3, 2019:

Non-vested Stock	Number of Shares		Weighted Average Grant  Date Fair Value
Outstanding at February 2, 2019	1,379,616		$	4.43
Granted	954,670		0.96
Vested	(630,901	)	5.40
Forfeited	(39,664	)	6.89
Outstanding at August 3, 2019	1,663,721		2.01

Restricted stock units activity

The following table summarizes RSU activity for the six months ended August 3, 2019:

Restricted Stock Units	Number of Units		Weighted Average Grant  Date Fair Value
Outstanding at February 2, 2019	1,740,314		$	2.16
Granted	1,615,000		0.98
Vested	(482,814	)	2.17
Forfeited	(562,500	)	1.61
Outstanding at August 3, 2019	2,310,000		1.47

Stock-settled performance share units activity

The following table summarizes stock-settled PSU activity for the six months ended August 3, 2019:

Period Granted	Target PSUs Outstanding at February 2, 2019	Target PSUs Granted	Target PSUs Forfeited		Target PSUs Outstanding at August 3, 2019	Weighted Average Grant Date Fair Value per Target PSU
2017	470,000	—	(50,000	)	420,000	$	1.80
2018	280,000	—	—		280,000	3.05
2019	—	375,000	—		375,000	1.39
Total	750,000	375,000	(50,000	)	1,075,000	1.98

Cash-settled performance share units activity

The following table summarizes cash-settled PSU activity six months ended August 3, 2019:

Period Granted	Target PSUs Outstanding at February 2, 2019	Target PSUs Granted	Target PSUs Forfeited		Target PSUs Outstanding at August 3, 2019	Weighted Average Grant Date Fair Value per Target PSU
2018	300,000	—	(50,000	)	250,000	$	3.05
2019	—	530,000	(50,000	)	480,000	$	1.39
Total	300,000	530,000	(100,000	)	730,000	$	1.96

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Revenue - Credit Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 03, 2019	Aug. 04, 2018	Aug. 03, 2019	Aug. 04, 2018	Feb. 02, 2019
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Credit income	$ 13,988	$ 14,305	$ 27,096	$ 29,819
Credit income receivable	4,500	4,700	4,500	4,700	$ 4,900
Upfront Payments Received Private Label Credit Card Agreement
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Credit income	250	$ 438	875	$ 875
Unamortized upfront payments received upon execution of private label credit card agreement	$ 7,000		$ 7,000

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Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 03, 2019	Aug. 04, 2018	Aug. 03, 2019	Aug. 04, 2018
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 653	$ 1,846	$ 1,859	$ 3,950
Stock-based compensation expense, net of tax	653	1,846	1,859	3,950
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized [Abstract]
Unrecognized share-based compensation expense	5,500		$ 5,500
Weighted average period, unrecognized compensation expense			2 years 3 months 18 days
Non-vested stock
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	515	1,079	$ 1,296	2,266
Restricted Stock Units (RSUs)
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	68	259	246	751
Performance Share Units (PSUs) | Stock-Settled Award
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	121	412	289	783
Performance Share Units (PSUs) | Cash-Settled Award
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ (51)	$ 96	$ 28	$ 150

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Pension Plan (Notes)

6 Months Ended

Aug. 03, 2019

Retirement Benefits [Abstract]

Pension Plan

PENSION PLAN

We sponsor a frozen defined benefit pension plan. The components of net periodic pension cost, which were recognized in selling, general and administrative expenses, were as follows (in thousands):

	Three Months Ended						Six Months Ended
	August 3, 2019			August 4, 2018			August 3, 2019			August 4, 2018
Employer service cost	$	135		$	133		$	270		$	256
Interest cost on pension benefit obligation	317			317			644			675
Expected return on plan assets	(359		)	(456		)	(727		)	(870		)
Amortization of net loss	202			155			372			354
Net periodic pension cost	$	295		$	149		$	559		$	415

Our funding policy is to make contributions to maintain the minimum funding requirements for our pension obligations in accordance with the Employee Retirement Income Security Act. We may elect to contribute additional amounts to maintain a level of funding to minimize the Pension Benefit Guaranty Corporation premium costs or to cover the short-term liquidity needs of the plan in order to maintain current invested positions. We contributed $0.5 million during the six months ended August 3, 2019, and we expect to contribute an additional $0.8 million in 2019.

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Debt Obligations (Notes)

6 Months Ended

Aug. 03, 2019

Debt Disclosure [Abstract]

Debt Obligations

DEBT OBLIGATIONS

Debt obligations for each period presented consisted of the following (in thousands):

	August 3, 2019		February 2, 2019		August 4, 2018
Revolving loan	$	275,025	$	204,044	$	244,649
Term loan	48,750		50,000		25,000
Finance obligations	—		554		1,064
Other financing	—		508		1,511
Total debt obligations	323,775		255,106		272,224
Less: Current portion of debt obligations	5,000		4,812		3,542
Long-term debt obligations	$	318,775	$	250,294	$	268,682

We have total availability of $448.7 million with a seasonal increase to $473.7 million under our senior secured revolving credit facility agreement including a revolving loan (“Revolving Loan”) and term loans (“Term Loan”), jointly referred to as the “Credit Facility”. Additionally, we have a $25.0 million letter of credit sublimit. The Term Loan is payable in quarterly installments of $1.3 million that began on June 15, 2019, with the remaining balance due upon maturity. The Credit Facility matures on December 16, 2021.

We use the Credit Facility to provide financing for working capital and general corporate purposes, as well as to finance capital expenditures and to support our letter of credit requirements. Borrowings under the Credit Facility are limited to the availability under a borrowing base that is determined principally on eligible inventory as defined by the Credit Facility agreement. The Credit Facility is secured by our inventory, cash, cash equivalents, and substantially all of our other assets. The daily interest rates are determined by a prime rate or LIBOR, plus an applicable margin, as set forth in the Credit Facility agreement. For the six months ended August 3, 2019, the weighted average interest rate on outstanding borrowings and the average daily borrowings on the Credit Facility, were 4.7% and $309.9 million, respectively.

Letters of credit issued under the Credit Facility support certain merchandise purchases and collateralize retained risks and deductibles under various insurance programs. At August 3, 2019, outstanding letters of credit totaled approximately $8.6 million. These letters of credit expire within 12 months of issuance and may be renewed.

The Credit Facility agreement contains a covenant requiring us to maintain excess availability at or above $35.0 million or 10% of the Adjusted Combined Loan Cap (as defined therein). The Credit Facility agreement also contains covenants which, among other things, restrict (i) the amount of additional debt or capital lease obligations, (ii) the payment of dividends to $30.0 million in a fiscal year, and (iii) the repurchase of common stock under certain circumstances. At August 3, 2019, we were in compliance with the debt covenants of the Credit Facility agreement and we expect to remain in compliance. Excess availability under the Credit Facility at August 3, 2019 was $66.1 million.

We derecognized finance obligations of $0.6 million upon adoption of ASC Topic 842, Leases, on February 3, 2019. See Note 1 for further disclosures regarding the adoption impact.

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Fair Value Measurements (Tables)

6 Months Ended

Aug. 03, 2019

Fair Value Disclosures [Abstract]

Assets and liabilities measured at fair value on a recurring basis [Table Text Block]

Financial assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):

	August 3, 2019
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	16,763	$	16,763	$	—	$	—
	February 2, 2019
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	19,536	$	19,536	$	—	$	—
	August 4, 2018
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	20,188	$	20,188	$	—	$	—

^(a) The liability for the amount due to participants corresponding in value to the securities held in the grantor trust is recorded in other long-term liabilities.

^(b) Using the market approach, the fair values of these securities represent quoted market prices multiplied by the quantities held. Net gains and losses related to the changes in fair value in the assets and liabilities under the various deferred compensation plans are recorded in selling, general and administrative expenses and were nil for the six months ended August 3, 2019 and August 4, 2018, and for the fiscal year ended February 2, 2019.

Assets and liabilities measured at fair value on a nonrecurring basis [Table Text Block]

Non-financial assets measured at fair value on a nonrecurring basis were as follows (in thousands):

	August 3, 2019
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Assets held for sale (a)	$	2,799	$	—	$	—	$	2,799
Operating lease assets (b)	4,585		—		—		4,585
Store property, equipment and leasehold improvements (b)	629		—		—		629
Total Assets	$	8,013	$	—	$	—	$	8,013
	February 2, 2019
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Store property, equipment and leasehold improvements (a)	$	1,583	$	—	$	—	$	1,583
	August 4, 2018
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Store property, equipment and leasehold improvements (a)	$	1,101	$	—	$	—	$	1,101

^(a) Assets held for sale are recorded at the asset’s fair value less estimated costs to sell and are reflected in prepaid expenses and other current assets. For the six months ended August 3, 2019, we recognized impairment charges of $1.0 million based on a third party valuation of the underlying assets. These impairment charges are recorded in selling, general and administrative expenses.

^(b) Using an undiscounted cash flow model, we evaluate the cash flow trends of our stores at least annually and when events or changes in circumstances, such as a store closure, indicate that the asset group may not be fully recoverable. When a store’s projected undiscounted cash flows indicate its asset carrying value may not be recoverable, we use a discounted cash flow model to estimate the fair value of the underlying asset group. An impairment write-down is recorded if the carrying value of an asset exceeds its fair value. Key assumptions in estimating future cash flows include, among other things, expected future operating performance, including expected closure date and lease term, and changes in economic conditions. We believe estimated future cash flows are sufficient to support the carrying value of our right-of-use operating lease and long-lived assets. Significant changes in the key assumptions used in our cash flow projections may result in additional asset impairments. For the six months ended August 3, 2019 and August 4, 2018 and during fiscal year 2018, we recognized impairment charges of $0.6 million, $1.1 million, and $2.8 million, respectively. Impairment charges related to store property, equipment and leasehold improvements are recorded in cost of sales and related buying, occupancy and distribution expenses.

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Aug. 03, 2019	Feb. 02, 2019	Aug. 04, 2018
ASSETS
Cash and cash equivalents	$ 25,418	$ 15,830	$ 26,573
Merchandise inventories, net	499,001	424,555	476,883
Prepaid expenses and other current assets	50,138	52,518	48,525
Total current assets	574,557	492,903	551,981
Property, equipment and leasehold improvements, net of accumulated depreciation of $757,296, $733,366 and $722,938, respectively	201,928	224,803	236,151
Operating lease assets	321,982
Intangible assets	2,225	2,225	17,135
Other non-current assets, net	21,354	24,230	24,409
Total assets	1,122,046	744,161	829,676
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	155,865	106,825	122,680
Current portion of debt obligations	5,000	4,812	3,542
Current portion of operating lease liabilities	74,906
Accrued expenses and other current liabilities	76,455	65,715	73,506
Total current liabilities	312,226	177,352	199,728
Long-term debt obligations	318,775	250,294	268,682
Long-term operating lease liabilities	279,009
Other long-term liabilities	32,213	61,990	65,431
Total liabilities	942,223	489,636	533,841
Commitments and contingencies
Common stock, par value $0.01, 100,000 shares authorized, 34,052, 33,469 and 33,418 shares issued, respectively	341	335	334
Additional paid-in capital	425,033	423,535	421,621
Treasury stock, at cost, 5,175 shares, respectively	(43,546)	(43,579)	(43,388)
Accumulated other comprehensive loss	(5,485)	(5,857)	(4,823)
Accumulated deficit	(196,520)	(119,909)	(77,909)
Total stockholders' equity	179,823	254,525	295,835
Total liabilities and stockholders' equity	$ 1,122,046	$ 744,161	$ 829,676

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands		Total	Common Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Other Comprehensive Loss	Accumulated Deficit
Balance at Feb. 03, 2018		$ 344,114	$ 328	$ 418,658	$ (43,298)	$ (5,177)	$ (26,397)
Balance (in shares) at Feb. 03, 2018			32,806		5,175
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss		(48,600)					(48,600)
Other comprehensive income		354				354
Dividends on common stock		(2,912)					(2,912)
Deferred compensation				90	$ (90)
Issuance of equity awards, net			$ 6	(6)
Issuance of equity awards, net (in shares)			612
Tax withholdings paid for net settlement of stock awards		(170)		(170)
Stock-based compensation expense		3,049		3,049
Balance at Aug. 04, 2018		295,835	$ 334	421,621	$ (43,388)	(4,823)	(77,909)
Balance (in shares) at Aug. 04, 2018			33,418		5,175
Balance at May. 05, 2018		312,585	$ 331	420,091	$ (43,339)	(4,978)	(59,520)
Balance (in shares) at May. 05, 2018			33,111		5,175
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss		(16,922)					(16,922)
Other comprehensive income		155				155
Dividends on common stock		(1,467)					(1,467)
Deferred compensation				49	$ (49)
Issuance of equity awards, net			$ 3	(3)
Issuance of equity awards, net (in shares)			307
Tax withholdings paid for net settlement of stock awards		(7)		(7)
Stock-based compensation expense		1,491		1,491
Balance at Aug. 04, 2018		295,835	$ 334	421,621	$ (43,388)	(4,823)	(77,909)
Balance (in shares) at Aug. 04, 2018			33,418		5,175
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative-effect adjustment	[1]	(5,208)					(5,208)
Balance at Feb. 02, 2019		254,525	$ 335	423,535	$ (43,579)	(5,857)	(119,909)
Balance (in shares) at Feb. 02, 2019			33,469		5,175
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss		(71,424)					(71,424)
Other comprehensive income		372				372
Deferred compensation				(33)	$ 33
Issuance of equity awards, net			$ 6	(6)
Issuance of equity awards, net (in shares)			583
Tax withholdings paid for net settlement of stock awards		(48)		(48)
Stock-based compensation expense		1,585		1,585
Dividends on forfeited stock awards charged to compensation expense		21					21
Balance at Aug. 03, 2019		179,823	$ 341	425,033	$ (43,546)	(5,485)	(196,520)
Balance (in shares) at Aug. 03, 2019			34,052		5,175
Balance at May. 04, 2019		202,899	$ 338	424,407	$ (43,552)	(5,687)	(172,607)
Balance (in shares) at May. 04, 2019			33,805		5,175
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss		(23,934)					(23,934)
Other comprehensive income		202				202
Deferred compensation				(6)	$ 6
Issuance of equity awards, net			$ 3	(3)
Issuance of equity awards, net (in shares)			247
Tax withholdings paid for net settlement of stock awards		(1)		(1)
Stock-based compensation expense		636		636
Dividends on forfeited stock awards charged to compensation expense		21					21
Balance at Aug. 03, 2019		$ 179,823	$ 341	$ 425,033	$ (43,546)	$ (5,485)	$ (196,520)
Balance (in shares) at Aug. 03, 2019			34,052		5,175

[1] Related to the adoption of the new lease accounting standard. See Note 1 for further disclosures regarding the adoption impact.

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Revenue - Contract Liability Activity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 03, 2019	Aug. 04, 2018	Aug. 03, 2019	Aug. 04, 2018
Change in Contract with Customer, Liability [Abstract]
Contract liabilities, beginning balance	$ 14,440	$ 14,028	$ 14,405	$ 13,474
Contract liabilities, net sales recognized	(5,522)	(5,484)	(6,571)	(6,284)
Contract liabilities, current period additions	6,847	6,575	7,931	7,929
Contract liabilities, ending balance	$ 15,765	$ 15,119	$ 15,765	$ 15,119

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Leases Comparative Period Disclosures Reported Under ASC 840 (Details) $ in Thousands	Feb. 02, 2019 USD ($) stores
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Operating Leases, Future Minimum Payments, Due in 2019	$ 108,541
Operating Leases, Future Minimum Payments, Due in 2020	98,859
Operating Leases, Future Minimum Payments, Due in 2021	83,377
Operating Leases, Future Minimum Payments, Due in 2022	67,447
Operating Leases, Future Minimum Payments, Due in 2023	46,887
Operating Leases, Future Minimum Payments, Due Thereafter	77,910
Operating Leases, Future Minimum Payments Due	483,021
Operating Leases, Future Minimum Sublease Receipts, Due in 2019	(1,447)
Operating Leases, Future Minimum Sublease Receipts, Due in 2020	(1,492)
Operating Leases, Future Minimum Sublease Receipts, Due in 2021	(1,582)
Operating Leases, Future Minimum Sublease Receipts, Due in 2022	(1,582)
Operating Leases, Future Minimum Sublease Receipts, Due in 2023	(1,054)
Operating Leases, Future Minimum Receipts Due on Sublease Rentals	(7,157)
Operating Leases, Future Minimum Payments Net of Sublease Receipts, Due in 2019	107,094
Operating Leases, Future Minimum Payments Net of Sublease Receipts, Due in 2020	97,367
Operating Leases, Future Minimum Payments Net of Sublease Receipts, Due in 2021	81,795
Operating Leases, Future Minimum Payments Net of Sublease Receipts, Due in 2022	65,865
Operating Leases, Future Minimum Payments Net of Sublease Receipts, Due in 2023	45,833
Operating Leases, Future Minimum Payments Net of Sublease Receipts, Due Thereafter	77,910
Operating Leases, Future Minimum Payments Due, Net of Sublease Receipts	475,864
Finance Obligations
Future Minimum Payments Due
2019	580
Less: Interest
2019	26
Principal Payments
2019	$ 554
Number of store leases | stores	2
Finance Obligations | Minimum
Principal Payments
Debt Instrument, Interest Rate, Effective Percentage	6.10%
Finance Obligations | Maximum
Principal Payments
Debt Instrument, Interest Rate, Effective Percentage	12.30%

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Debt Obligations (Tables)

6 Months Ended

Aug. 03, 2019

Debt Disclosure [Abstract]

Debt obligations

Debt obligations for each period presented consisted of the following (in thousands):

	August 3, 2019		February 2, 2019		August 4, 2018
Revolving loan	$	275,025	$	204,044	$	244,649
Term loan	48,750		50,000		25,000
Finance obligations	—		554		1,064
Other financing	—		508		1,511
Total debt obligations	323,775		255,106		272,224
Less: Current portion of debt obligations	5,000		4,812		3,542
Long-term debt obligations	$	318,775	$	250,294	$	268,682

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Earnings per Share (Notes)

6 Months Ended

Aug. 03, 2019

Earnings Per Share [Abstract]

Earnings per Share

EARNINGS PER SHAREFor the three and six months ended August 3, 2019 and August 4, 2018, respectively, participating securities had no impact on loss per common share and there were no anti-dilutive securities.

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Revenue (Notes)

6 Months Ended

Aug. 03, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer

REVENUE

Net Sales

We recognize revenue for merchandise sales, net of expected returns and sales tax, at the time of in-store purchase or delivery of the product to our guest. When merchandise is shipped to our guests, we estimate receipt based on historical experience. Revenue is deferred and a liability is established for sales returns based on historical return rates and sales for the return period. We recognize an asset and corresponding adjustment to cost of sales for our right to recover returned merchandise. At each financial reporting date, we assess our estimates of expected returns, refund liabilities and return assets. For merchandise sold in our stores and online, tender is accepted at the point of sale. When we receive payment before the guest has taken possession of the merchandise, the amount received is recorded as deferred revenue until the transaction is complete. Our performance obligations for unfulfilled merchandise orders are typically satisfied within one week. Shipping and handling fees charged to guests relate to fulfillment activities and are included in net sales with the corresponding costs recorded in cost of sales.

We record deferred revenue for the sale of gift cards and merchandise credits issued for returned merchandise, and we recognize revenue in net sales upon redemption. Gift card and merchandise credit redemptions typically occur within 12 months of the date of issuance with the majority redeemed within the first three months. Our gift cards and merchandise credits do not expire. Based on historical redemption rates, a small percentage of gift cards and merchandise credits will never be redeemed. We recognize estimated breakage income for gift cards and merchandise credits that will never be redeemed in proportion to actual historical redemption patterns.

Under our loyalty program, members can accumulate points, based on their spending, toward earning a reward certificate that can be redeemed for future merchandise purchases. Points earned by loyalty members reset to zero at the end of each calendar year. Reward certificates expire 30 days after the date of issuance. We allocate and defer a portion of our sales to reward certificates expected to be earned, based on the relative stand-alone sales transaction price and reward certificate value, and recognize the reward certificate as a net sale when it is redeemed.

The following table presents the composition of net sales by merchandise category (in thousands):

	Three Months Ended
	August 3, 2019									August 4, 2018
Merchandise Category	Department Stores			Off-price Stores			Total Company			Department Stores			Off-price Stores			Total Company
Women’s	$	100,639		$	24,954		$	125,593		$	117,209		$	19,264		$	136,473
Men’s	49,582			11,534			61,116			53,124			8,913			62,037
Children's	25,198			9,870			35,068			29,400			7,530			36,930
Apparel	175,419			46,358			221,777			199,733			35,707			235,440
Footwear	39,227			6,097			45,324			45,141			4,505			49,646
Accessories	17,988			3,865			21,853			18,426			3,889			22,315
Cosmetics/Fragrances	27,188			2,856			30,044			31,287			2,428			33,715
Home/Gifts	25,539			20,708			46,247			10,950			15,939			26,889
Other	2,859			651			3,510			1,039			807			1,846
Non-apparel	112,801			34,177			146,978			106,843			27,568			134,411
Revenue adjustments not allocated (a)	(347		)	(543		)	(890		)	(281		)	(276		)	(557		)
Net sales	$	287,873		$	79,992		$	367,865		$	306,295		$	62,999		$	369,294
(a) Includes adjustments related to deferred revenue, estimated sales returns, breakage income, shipping and miscellaneous revenues, which are not allocated to merchandise categories.

	Six Months Ended
	August 3, 2019									August 4, 2018
Merchandise Category	Department Stores			Off-price Stores			Total Company			Department Stores			Off-price Stores			Total Company
Women’s	$	184,254		$	45,815		$	230,069		$	220,696		$	39,231		$	259,927
Men’s	88,690			20,048			108,738			94,460			16,458			110,918
Children's	50,336			19,750			70,086			58,478			15,626			74,104
Apparel	323,280			85,613			408,893			373,634			71,315			444,949
Footwear	79,498			11,171			90,669			89,624			9,324			98,948
Accessories	34,702			8,209			42,911			37,298			8,255			45,553
Cosmetics/Fragrances	55,057			5,669			60,726			62,473			4,910			67,383
Home/Gifts	45,865			40,561			86,426			19,794			33,822			53,616
Other	7,687			1,503			9,190			5,004			1,431			6,435
Non-apparel	222,809			67,113			289,922			214,193			57,742			271,935
Revenue adjustments not allocated (a)	(2,259		)	(970		)	(3,229		)	(3,169		)	(192		)	(3,361		)
Net sales	$	543,830		$	151,756		$	695,586		$	584,658		$	128,865		$	713,523
(a) Includes adjustments related to deferred revenue, estimated sales returns, breakage income, shipping and miscellaneous revenues, which are not allocated to merchandise categories.

Contract Liabilities

Contract liabilities reflect our performance obligations related to gift cards, merchandise credits, loyalty program rewards and merchandise orders that have not been satisfied as of a given date, and therefore, revenue recognition has been deferred. Contract liabilities (recorded in accrued expenses and other current liabilities) for each period presented were as follows (in thousands):

	August 3, 2019		February 2, 2019		August 4, 2018
Gift cards and merchandise credits, net	$	9,759	$	12,433	$	9,657
Loyalty program rewards, net	5,147		1,484		4,612
Merchandise fulfillment liability	859		488		850
Total contract liabilities	$	15,765	$	14,405	$	15,119

    

The following table summarizes contract liability activity for each period presented (in thousands):

	Three Months Ended						Six Months Ended
	August 3, 2019			August 4, 2018			August 3, 2019			August 4, 2018
Beginning balance	$	14,440		$	14,028		$	14,405		$	13,474
Net sales recognized during the period from amounts included in contract liability balances at the beginning of the period	(5,522		)	(5,484		)	(6,571		)	(6,284		)
Current period additions to contract liability balances included in contract liability balances at the end of the period	6,847			6,575			7,931			7,929
Ending balance	$	15,765		$	15,119		$	15,765		$	15,119

Credit Income

We earn credit income from our private label credit card (“PLCC”) through a profit-sharing arrangement with Comenity Bank, an affiliate of Alliance Data Systems Corporation. Comenity Bank owns the PLCC portfolio and manages the account activation, receivables funding, card authorization, card issuance, statement generation, remittance processing and guest service functions for our PLCC program. We perform certain duties, including electronic processing and transmitting of transaction records, and executing marketing promotions designed to increase card usage. We also accept payments in our stores from cardholders on behalf of Comenity Bank. We receive a monthly net portfolio yield payment from Comenity Bank, and we can potentially earn an annual bonus based upon the performance of the PLCC portfolio. The receivable for credit income, which is recorded in prepaid expenses and other current assets, was $4.5 million, $4.9 million and $4.7 million as of August 3, 2019, February 2, 2019 and August 4, 2018, respectively.

On April 11, 2019, we entered into an amendment to our profit-sharing arrangement with Comenity Bank. The amendment extended the term of the arrangement from July 31, 2021 to July 31, 2024.

We recorded deferred revenue for certain upfront payments received from Comenity Bank associated with the execution of the PLCC agreement. The amounts recognized in credit income related to these upfront payments for each period presented were as follows (in thousands):

	Three Months Ended				Six Months Ended
	August 3, 2019		August 4, 2018		August 3, 2019		August 4, 2018
Upfront payments recognized in credit income	$	250	$	438	$	875	$	875

As of August 3, 2019, deferred revenue of $7.0 million remained to be amortized.

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Aug. 03, 2019	Feb. 02, 2019	Aug. 04, 2018
Statement of Financial Position [Abstract]
Accumulated depreciation	$ 757,296	$ 733,366	$ 722,938
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000	100,000	100,000
Common stock, shares issued (in shares)	34,052	33,469	33,418
Treasury stock, at cost (in shares)	5,175	5,175	5,175

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Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended	6 Months Ended
	Aug. 04, 2018	Aug. 04, 2018
Statement of Stockholders' Equity [Abstract]
Dividends on common stock (in dollars per share)	$ 0.05	$ 0.10

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Pension Plan (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 03, 2019	Aug. 04, 2018	Aug. 03, 2019	Aug. 04, 2018
Retirement Benefits [Abstract]
Employer service cost	$ 135	$ 133	$ 270	$ 256
Interest cost on pension benefit obligation	317	317	644	675
Expected return on plan assets	(359)	(456)	(727)	(870)
Amortization of net loss	202	155	372	354
Net periodic pension cost	295	$ 149	559	$ 415
Contributions by employer			500
Expected future employer contributions, remainder of fiscal year	$ 800		$ 800

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Debt Obligations Schedule of Debt (Details) - USD ($) $ in Thousands	Aug. 03, 2019	Feb. 02, 2019	Aug. 04, 2018
Debt Instrument [Line Items]
Total debt obligations	$ 323,775	$ 255,106	$ 272,224
Current portion of debt obligations	5,000	4,812	3,542
Long-term debt obligations	318,775	250,294	268,682
Line of Credit | Credit Facility
Debt Instrument [Line Items]
Total debt obligations	275,025	204,044	244,649
Term Loan | Credit Facility
Debt Instrument [Line Items]
Total debt obligations	$ 48,750	50,000	25,000
Finance Obligations
Debt Instrument [Line Items]
Total debt obligations		554	1,064
Other Financing
Debt Instrument [Line Items]
Total debt obligations		$ 508	$ 1,511

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Pension Plan (Tables)

6 Months Ended

Aug. 03, 2019

Retirement Benefits [Abstract]

Components of pension cost

We sponsor a frozen defined benefit pension plan. The components of net periodic pension cost, which were recognized in selling, general and administrative expenses, were as follows (in thousands):

	Three Months Ended						Six Months Ended
	August 3, 2019			August 4, 2018			August 3, 2019			August 4, 2018
Employer service cost	$	135		$	133		$	270		$	256
Interest cost on pension benefit obligation	317			317			644			675
Expected return on plan assets	(359		)	(456		)	(727		)	(870		)
Amortization of net loss	202			155			372			354
Net periodic pension cost	$	295		$	149		$	559		$	415