Revenue Recognition and Receivables

9 Months Ended

Oct. 28, 2023

Revenue Recognition and Receivables

Revenue Recognition and Receivables

3.    Revenue Recognition and Receivables: Our revenue consists of direct to consumer sales, including our retail store, e-commerce and food and beverage operations, and wholesale sales, as well as royalty income, which is included in royalties and other operating income in our consolidated statements of operations. We recognize revenue when performance obligations under the terms of the contracts with our customers are satisfied. Our accounting policies related to revenue recognition for each type of contract with customers is described in the significant accounting policies described in our Fiscal 2022 Form 10-K.

The table below quantifies net sales by distribution channel (in thousands) for each period presented.

	Third Quarter				First Nine Months
	Fiscal 2023		Fiscal 2022		Fiscal 2023		Fiscal 2022
Retail	$	121,804	$	112,344	$	449,546	$	402,400
E-commerce		113,531		107,756		391,559		323,045
Food & Beverage		22,562		23,157		84,097		81,333
Wholesale		68,716		69,292		241,857		220,707
Other		17		484		(13)		1,559
Net sales	$	326,630	$	313,033	$	1,167,046	$	1,029,044

An estimated sales return liability of $8 million, $12 million and $9 million for expected direct to consumer returns is classified in accrued expenses and other liabilities in our consolidated balance sheet as of October 28, 2023, January 28, 2023, and October 29, 2022, respectively. As of October 28, 2023, January 28, 2023, and October 29, 2022, prepaid expenses and other current assets included $3 million, $4 million and $4 million, respectively, relating to the estimated value of inventory for expected direct to consumer and wholesale sales returns.

Substantially all amounts recognized in receivables, net represent trade receivables related to contracts with customers. In the ordinary course of our wholesale operations, we offer discounts, allowances and cooperative advertising support to and accept returns from certain of our wholesale customers for certain products. As of October 28, 2023, January 28, 2023, and October 29, 2022, reserve balances recorded as a reduction to receivables related to these items were $3 million, $4 million and $5 million, respectively. As of October 28, 2023, January 28, 2023, and October 29, 2022, our provision for credit losses related to receivables included in our consolidated balance sheets was $1 million, $1 million and $1 million, respectively.

Contract liabilities for gift cards purchased by consumers and merchandise credits received by customers but not yet redeemed, less any breakage income recognized to date, is included in accrued expenses and other liabilities in our consolidated balance sheet and totaled $18 million, $19 million and $17 million as of October 28, 2023, January 28, 2023, and October 29, 2022, respectively.