Revenue Recognition

9 Months Ended

Oct. 28, 2023

Revenue Recognition and Deferred Revenue [Abstract]

Revenue Recognition

Revenue Recognition

Accounts receivable, net from revenue-generating activities were $84 million as of October 28, 2023, $79 million as of January 28, 2023 and $103 million as of October 29, 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 rewards 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 $163 million as of October 28, 2023, $195 million as of January 28, 2023 and $147 million as of October 29, 2022. The Company recognized $123 million as revenue year-to-date 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 third quarters of and year-to-date 2023 and 2022:

	Third Quarter				Year-to-Date
	2023		2022		2023		2022
	(in millions)
Stores - U.S. and Canada	$	1,168	$	1,178	$	3,345	$	3,398
Direct - U.S. and Canada	317		345		926		1,030
International (a)	77		81		246		244
Total Net Sales	$	1,562	$	1,604	$	4,517	$	4,672

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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 $161 million and $160 million for the third quarters of 2023 and 2022, respectively, and $468 million and $462 million for year-to-date 2023 and 2022, respectively.