Revenue Recognition

3 Months Ended

Apr. 29, 2023

Revenue Recognition and Deferred Revenue [Abstract]

Revenue Recognition

Revenue Recognition

Accounts receivable, net from revenue-generating activities were $79 million as of April 29, 2023, $79 million as of January 28, 2023 and $77 million as of April 30, 2022. These accounts receivable primarily relate to amounts due from the Company's franchise, license and wholesale partners. Under these arrangements, payment terms are typically 45 to 75 days.

The Company records deferred revenue when cash payments are received in advance of transfer of control of goods or services. Deferred revenue primarily relates to gift cards, loyalty points and awards and direct channel shipments, which are all impacted by seasonal and holiday-related sales patterns. Deferred revenue, which is recorded within Accrued Expenses and Other on the Consolidated Balance Sheets, was $171 million as of April 29, 2023, $195 million as of January 28, 2023 and $133 million as of April 30, 2022. The Company recognized $77 million as revenue during the first quarter of 2023 from amounts recorded as deferred revenue at the beginning of the Company's fiscal year.

The following table provides a disaggregation of Net Sales for the first quarters of 2023 and 2022:

	First Quarter
	2023		2022
	(in millions)
Stores - U.S. and Canada	$	1,034	$	1,059
Direct - U.S. and Canada	280		318
International (a)	82		73
Total Net Sales	$	1,396	$	1,450

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(a)Results include royalties associated with franchised stores and wholesale sales.

The Company’s net sales outside of the U.S. include sales from Company-operated stores and its e-commerce site in Canada, royalties associated with franchised stores and wholesale sales. Certain of these sales are subject to the impact of fluctuations in foreign currency. The Company’s net sales outside of the U.S. totaled $145 million and $137 million for the first quarters of 2023 and 2022, respectively.