QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ________ to ________ |
(State of incorporation) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
(Nasdaq Global Select Market) |
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Class | Outstanding at November 27, 2021 | |||||||
Common Stock - $0.01 par value |
November 27, 2021 | February 27, 2021 | |||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Merchandise inventories | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Long term investment securities | ||||||||||||||
Property and equipment, net | ||||||||||||||
Operating lease assets | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued expenses and other current liabilities | ||||||||||||||
Merchandise credit and gift card liabilities | ||||||||||||||
Current operating lease liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Other liabilities | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Income taxes payable | ||||||||||||||
Long term debt | ||||||||||||||
Total liabilities | ||||||||||||||
Shareholders' equity: | ||||||||||||||
Preferred stock - $ | ||||||||||||||
Common stock - $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Treasury stock, at cost; | ( | ( | ||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total shareholders' equity | ||||||||||||||
Total liabilities and shareholders' equity | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
November 27, 2021 | November 28, 2020 | November 27, 2021 | November 28, 2020 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Impairments, including on assets held for sale | |||||||||||||||||||||||
Restructuring and transformation initiative expenses | |||||||||||||||||||||||
Loss (gain) on sale of businesses | ( | ||||||||||||||||||||||
Operating loss | ( | ( | ( | ( | |||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Loss (gain) on extinguishment of debt | ( | ||||||||||||||||||||||
Loss before provision (benefit) for income taxes | ( | ( | ( | ( | |||||||||||||||||||
Provision (benefit) for income taxes | ( | ( | |||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss per share - Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss per share - Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average shares outstanding - Basic | |||||||||||||||||||||||
Weighted average shares outstanding - Diluted | |||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
November 27, 2021 | November 28, 2020 | November 27, 2021 | November 28, 2020 | ||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive (loss) income: | |||||||||||||||||||||||
Change in temporary impairment of auction rate securities, net of taxes | ( | ( | ( | ||||||||||||||||||||
Pension adjustment, net of taxes | ( | ( | ( | ( | |||||||||||||||||||
Reclassification adjustment on settlement of pension plan, net of taxes | |||||||||||||||||||||||
Currency translation adjustment | ( | ( | |||||||||||||||||||||
Other comprehensive income (loss) | ( | ||||||||||||||||||||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended November 27, 2021 | ||||||||||||||||||||||||||
Common Stock | Additional Paid- in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Balance at August 28, 2021 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||
Net loss | — | — | — | ( | — | — | — | ( | ||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | ||||||||||||||||||||
Dividends forfeited | — | — | — | — | — | — | ||||||||||||||||||||
Issuance of restricted shares, net | ( | — | — | — | — | |||||||||||||||||||||
Payment and vesting of performance stock units | ( | — | — | — | — | |||||||||||||||||||||
Stock-based compensation expense, net | — | — | — | — | — | — | ||||||||||||||||||||
Accelerated share repurchase program | — | — | — | — | — | — | ||||||||||||||||||||
Director fees paid in stock | — | — | — | — | — | — | — | |||||||||||||||||||
Repurchase of common stock, including fees | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||
Balance at November 27, 2021 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
Nine Months Ended November 27, 2021 | ||||||||||||||||||||||||||
Common Stock | Additional Paid- in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Balance at February 27, 2021 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||
Net loss | — | — | — | ( | — | — | — | ( | ||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | ||||||||||||||||||||
Dividends forfeited | — | — | — | — | — | — | ||||||||||||||||||||
Issuance of restricted shares, net | ( | — | — | — | — | |||||||||||||||||||||
Payment and vesting of performance stock units | ( | — | — | — | — | |||||||||||||||||||||
Stock-based compensation expense, net | — | — | — | — | — | — | ||||||||||||||||||||
Accelerated share repurchase program | — | — | — | ( | ( | — | ||||||||||||||||||||
Director fees paid in stock | — | — | — | — | — | |||||||||||||||||||||
Repurchase of common stock, including fees | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||
Balance at November 27, 2021 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
Three Months Ended November 28, 2020 | ||||||||||||||||||||||||||
Common Stock | Additional Paid- in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Balance at August 29, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||
Net loss | — | — | — | ( | — | — | — | ( | ||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | — | ( | ( | ||||||||||||||||||
Dividends forfeited | — | — | — | — | — | — | ||||||||||||||||||||
Forfeiture of restricted shares, net | ( | ( | — | — | — | — | ||||||||||||||||||||
Payment and vesting of performance stock units | — | — | — | — | — | — | — | |||||||||||||||||||
Stock-based compensation expense, net | — | — | — | — | — | — | ||||||||||||||||||||
Accelerated share repurchase program | — | — | ( | — | ( | ( | — | ( | ||||||||||||||||||
Director fees paid in stock | — | — | — | — | — | — | — | |||||||||||||||||||
Repurchase of common stock, including fees | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||
Balance at November 28, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
Nine Months Ended November 28, 2020 | ||||||||||||||||||||||||||
Common Stock | Additional Paid- in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Balance at February 29, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||
Net loss | — | — | — | ( | — | — | — | ( | ||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | ||||||||||||||||||||
Dividends forfeited | — | — | — | — | — | — | ||||||||||||||||||||
Forfeiture of restricted shares, net | ( | ( | — | — | — | — | ||||||||||||||||||||
Payment and vesting of performance stock units | ( | — | — | — | — | |||||||||||||||||||||
Stock-based compensation expense, net | — | — | — | — | — | — | ||||||||||||||||||||
Accelerated share repurchase program | — | — | ( | — | ( | ( | — | ( | ||||||||||||||||||
Director fees paid in stock | — | — | — | — | — | — | — | |||||||||||||||||||
Repurchase of common stock, including fees | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||
Balance at November 28, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
Nine Months Ended | |||||||||||
November 27, 2021 | November 28, 2020 | ||||||||||
Cash Flows from Operating Activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Impairments, including on assets held for sale | |||||||||||
Stock-based compensation | |||||||||||
Deferred income taxes | ( | ||||||||||
Loss (gain) on sale of businesses | ( | ||||||||||
Loss (gain) on debt extinguishment | ( | ||||||||||
Other | ( | ||||||||||
Decrease (increase) in assets: | |||||||||||
Merchandise inventories | ( | ( | |||||||||
Other current assets | ( | ||||||||||
Other assets | ( | ||||||||||
Increase (decrease) in liabilities: | |||||||||||
Accounts payable | ( | ||||||||||
Accrued expenses and other current liabilities | |||||||||||
Merchandise credit and gift card liabilities | ( | ||||||||||
Income taxes payable | ( | ( | |||||||||
Operating lease assets and liabilities, net | ( | ||||||||||
Other liabilities | ( | ||||||||||
Net cash (used in) provided by operating activities | ( | ||||||||||
Cash Flows from Investing Activities: | |||||||||||
Purchases of held-to-maturity investment securities | ( | ||||||||||
Redemption of held-to-maturity investment securities | |||||||||||
Net proceeds from sale of business | |||||||||||
Net proceeds from sale of property | |||||||||||
Capital expenditures | ( | ( | |||||||||
Net cash (used in) provided by investing activities | ( | ||||||||||
Cash Flows from Financing Activities: | |||||||||||
Borrowing of long-term debt | |||||||||||
Repayments of long-term debt | ( | ( | |||||||||
Prepayment under share repurchase agreement | ( | ||||||||||
Repurchase of common stock, including fees | ( | ( | |||||||||
Payment of dividends | ( | ( | |||||||||
Payment of deferred financing fees | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | ( | ||||||||||
Change in cash balances classified as held-for-sale | |||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash: | |||||||||||
Beginning of period | |||||||||||
End of period | $ | $ |
(in millions) | November 27, 2021 | February 27, 2021 | ||||||||||||
Available-for-sale securities: | ||||||||||||||
Long term | $ | $ | ||||||||||||
Held-to-maturity securities: | ||||||||||||||
Short term | ||||||||||||||
Total investment securities | $ | $ |
(in thousands) | Statement of Operations Location | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
November 27, 2021 | November 28, 2020 | November 27, 2021 | November 28, 2020 | ||||||||||||||||||||||||||
Operating lease cost | Cost of sales and SG&A | $ | $ | $ | $ | ||||||||||||||||||||||||
Finance lease cost: | |||||||||||||||||||||||||||||
Depreciation of property | SG&A | ||||||||||||||||||||||||||||
Interest on lease liabilities | Interest expense, net | ||||||||||||||||||||||||||||
Variable lease cost | Cost of sales and SG&A | ||||||||||||||||||||||||||||
Sublease income | SG&A | ( | ( | ( | ( | ||||||||||||||||||||||||
Total lease cost | $ | $ | $ | $ |
(in thousands) | Consolidated Balance Sheet Location | November 27, 2021 | February 27, 2021 | ||||||||||||||
Assets | |||||||||||||||||
Operating leases | Operating lease assets | $ | $ | ||||||||||||||
Total lease assets | $ | $ | |||||||||||||||
Liabilities | |||||||||||||||||
Current: | |||||||||||||||||
Operating leases | Current operating lease liabilities | $ | $ | ||||||||||||||
Noncurrent: | |||||||||||||||||
Operating leases | Operating lease liabilities | ||||||||||||||||
Total lease liabilities | $ | $ |
(in thousands) | Operating Leases | |||||||
Fiscal Year: | ||||||||
Remainder of 2021 | $ | |||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
Total lease payments | $ | |||||||
Less imputed interest | ( | |||||||
Present value of lease liabilities | $ |
November 27, 2021 | February 27, 2021 | |||||||||||||
Weighted-average remaining lease term (in years) | ||||||||||||||
Operating leases | ||||||||||||||
Weighted-average discount rate | ||||||||||||||
Operating leases | % | % | ||||||||||||
(in thousands) | Nine Months Ended | |||||||||||||
November 27, 2021 | November 28, 2020 | |||||||||||||
Cash paid for amounts included in the measurement of lease liabilities | ||||||||||||||
Operating cash flows for operating leases | $ | |||||||||||||
Operating cash flows for finance leases | ||||||||||||||
Operating lease assets obtained in exchange for new operating lease liabilities |
(Shares in thousands) | Number of Restricted Shares | Weighted Average Grant-Date Fair Value | |||||||||
Unvested restricted stock awards, beginning of period | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Unvested restricted stock awards, end of period | $ |
(Shares in thousands) | Number of Restricted Stock Units | Weighted Average Grant-Date Fair Value | |||||||||
Unvested restricted stock units, beginning of period | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Unvested restricted stock units, end of period | $ |
Fiscal Year | Performance Period | Performance Metrics | Target Achievement Range (%) | ||||||||
2019 | TSR and EBIT | ||||||||||
2020 | TSR | ||||||||||
2021 | TSR and GM |
Nine Months Ended | ||||||||
Monte Carlo Simulation Assumptions | November 27, 2021 | |||||||
Risk Free Interest Rate | % | |||||||
Expected Dividend Yield | % | |||||||
Expected Volatility | % | |||||||
Expected Term |
(Shares in thousands) | Number of Performance Stock Units | Weighted Average Grant-Date Fair Value | |||||||||
Unvested performance stock units, beginning of period | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited or performance condition adjustments | ( | ||||||||||
Unvested performance stock units, end of period | $ |
(Shares in thousands) | Number of Restricted Stock Units | Weighted Average Grant-Date Fair Value | ||||||||||||
Unvested restricted stock units, beginning of period | $ | |||||||||||||
Granted | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | ||||||||||||||
Unvested restricted stock units, end of period | $ |
First Quarter | Second Quarter | Third Quarter | ||||||
Nestwell™ | Our Table™ | Studio 3B™ | ||||||
Haven™ | Wild Sage™ | H For Happy™ | ||||||
Simply Essential™ | Squared Away™ |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly or Announced Plans Programs (1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (2) | ||||||||||
August 29, 2021 - September 25, 2021 | 598,000 | $ | 25.17 | 598,000 | $ | 1,601,552,747 | ||||||||
September 26, 2021 - October 23, 2021 | 98,600 | $ | 20.72 | 98,600 | $ | 1,599,510,126 | ||||||||
October 24, 2021 - November 27, 2021 | 4,569,500 | $ | 22.27 | 4,569,500 | $ | 1,497,744,522 | ||||||||
Total | 5,266,100 | $ | 22.57 | 5,266,100 | $ | 1,497,744,522 |
Exhibit No. | Exhibit | ||||
10.1 | |||||
31.1* | |||||
31.2* | |||||
32* | |||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
104 | The cover page of Bed Bath & Beyond Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 27, 2021, formatted in Inline XBRL (included within Exhibit 101 attachments) |
* | Filed herewith. |
BED BATH & BEYOND INC. | |||||||||||
(Registrant) | |||||||||||
Date: January 6, 2022 | By: | /s/ Gustavo Arnal | |||||||||
Gustavo Arnal | |||||||||||
Chief Financial Officer | |||||||||||
Date: January 6, 2022 | /s/ Mark J. Tritton | |||||||
Mark J. Tritton | ||||||||
President and Chief Executive Officer |
Date: January 6, 2022 | /s/ Gustavo Arnal | |||||||
Gustavo Arnal | ||||||||
Chief Financial Officer | ||||||||
Date: January 6, 2022 | /s/ Mark J. Tritton | |||||||
Mark J. Tritton | ||||||||
President and Chief Executive Officer | ||||||||
/s/ Gustavo Arnal | ||||||||
Gustavo Arnal | ||||||||
Chief Financial Officer | ||||||||
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Nov. 27, 2021 |
Feb. 27, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 900,000,000 | 900,000,000 |
Common stock, shares issued (in shares) | 344,140,000 | 343,241,000 |
Common stock, shares outstanding (in shares) | 96,338,000 | 109,621,000 |
Treasury stock (in shares) | 247,802,000 | 233,620,000 |
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 27, 2021 |
Nov. 28, 2020 |
Nov. 27, 2021 |
Nov. 28, 2020 |
|
Income Statement [Abstract] | ||||
Net sales | $ 1,877,874 | $ 2,618,472 | $ 5,816,382 | $ 6,613,887 |
Cost of sales | 1,208,954 | 1,661,905 | 3,912,699 | 4,321,294 |
Gross profit | 668,920 | 956,567 | 1,903,683 | 2,292,593 |
Selling, general and administrative expenses | 697,953 | 890,740 | 2,009,687 | 2,461,365 |
Impairments, including on assets held for sale | 1,759 | 57,997 | 18,472 | 172,434 |
Restructuring and transformation initiative expenses | 41,219 | 16,770 | 99,400 | 47,648 |
Loss (gain) on sale of businesses | 14,100 | 113,909 | 18,221 | (75,619) |
Operating loss | (86,111) | (122,849) | (242,097) | (313,235) |
Interest expense, net | 15,772 | 17,805 | 47,893 | 58,347 |
Loss (gain) on extinguishment of debt | 0 | 0 | 376 | (77,038) |
Loss before provision (benefit) for income taxes | (101,883) | (140,654) | (290,366) | (294,544) |
Provision (benefit) for income taxes | 174,546 | (65,213) | 110,152 | (134,712) |
Net loss | $ (276,429) | $ (75,441) | $ (400,518) | $ (159,832) |
Net loss per share - Basic (in dollars per share) | $ (2.78) | $ (0.61) | $ (3.90) | $ (1.29) |
Net loss per share - Diluted (in dollars per share) | $ (2.78) | $ (0.61) | $ (3.90) | $ (1.29) |
Weighted average shares outstanding - Basic (in shares) | 99,591 | 122,885 | 102,772 | 123,576 |
Weighted average shares outstanding - Diluted (in shares) | 99,591 | 122,885 | 102,772 | 123,576 |
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 27, 2021 |
Nov. 28, 2020 |
Nov. 27, 2021 |
Nov. 28, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (276,429) | $ (75,441) | $ (400,518) | $ (159,832) |
Other comprehensive (loss) income: | ||||
Change in temporary impairment of auction rate securities, net of taxes | (186) | 215 | (226) | (397) |
Pension adjustment, net of taxes | (1,786) | (5,183) | (1,562) | (5,174) |
Reclassification adjustment on settlement of pension plan, net of taxes | 9,938 | 0 | 9,938 | 0 |
Currency translation adjustment | (2,383) | 2,332 | (246) | 5,745 |
Other comprehensive income (loss) | 5,583 | (2,636) | 7,904 | 174 |
Comprehensive loss | $ (270,846) | $ (78,077) | $ (392,614) | $ (159,658) |
Basis of Presentation |
9 Months Ended |
---|---|
Nov. 27, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared without audit. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals and elimination of intercompany balances and transactions) necessary to present fairly the financial position of Bed Bath & Beyond Inc. and subsidiaries (the "Company") as of November 27, 2021 and February 27, 2021 and the results of its operations, shareholders' equity, and comprehensive (loss) income for the three and nine months ended November 27, 2021 and November 28, 2020 and its cash flows for the nine months ended November 27, 2021 and November 28, 2020. The accompanying unaudited consolidated financial statements are presented in accordance with the requirements for Form 10-Q and consequently do not include all the disclosures normally required by U.S. generally accepted accounting principles ("GAAP"). Reference should be made to the Company’s Annual Report on Form 10-K for the fiscal year ended February 27, 2021 for additional disclosures, including a summary of the Company’s significant accounting policies, and to subsequently filed Form 8-Ks. For fiscal 2021, the Company is accounting for its operations as one operating segment, North American Retail. For fiscal 2020, until the divestiture of Linen Holdings in October 2020, the Company accounted for its operations as two operating segments: North American Retail and Institutional Sales (which was comprised of Linen Holdings), which did not meet the quantitative thresholds under U.S. generally accepted accounting principles and, therefore, was not a reportable segment. Net sales outside of the U.S. for the Company were not material for the three and nine months ended November 27, 2021 and November 28, 2020. As the Company operates in the retail industry, its results of operations are affected by general economic conditions and consumer spending habits.
|
Impact of the COVID-19 Pandemic |
9 Months Ended |
---|---|
Nov. 27, 2021 | |
Impact of the COVID-19 Pandemic [Abstract] | |
Impact of the COVID-19 Pandemic | IMPACT OF THE COVID-19 PANDEMIC In March 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. That same month, as a result of the COVID-19 pandemic, the Company began to temporarily close certain store locations that did not have a health and personal care department, and as of March 23, 2020, all of the Company's retail stores across the U.S. and Canada were temporarily closed except for most stand-alone buybuy BABY and Harmon stores, subject to state and local regulations. In May 2020, the Company announced a phased approach to re-open its stores in compliance with relevant government directives, and as of the end of July 2020, nearly all of its stores re-opened. During portions of fiscal 2021, a limited number of stores in Canada either closed temporarily or continued to operate under restrictions in compliance with local governmental orders. As of November 27, 2021, all of the Company's stores were operating without restriction subject to compliance with mask and vaccine requirements. In the first half of fiscal 2020, the Company had also suspended its plans for debt reduction and postponed share repurchases, but lifted the debt repurchase suspension in August 2020 and the postponement of share repurchases in October 2020. Similar to other retailers, the Company also withheld portions of and/or delayed payments to certain of its business partners as the Company negotiated revisions to its payment terms, in order to further maintain liquidity given the temporary store closures (See "Leases," Note 9). On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in the United States, which provided for certain changes to tax laws, which impacted the Company’s results of operations, financial position and cash flows. The Company implemented certain provisions of the CARES Act, such as deferring employer payroll taxes and utilizing the ability to carry back and deduct losses to offset prior income in previously filed tax returns. As of both November 27, 2021 and February 27, 2021, the Company has deferred $3.1 million of employer payroll taxes, of which approximately 50% was deposited during December 2021 with the remaining 50% required to be deposited by December 2022. During the three and nine months ended November 27, 2021, under the CARES Act, the Company recorded income tax benefits of $2.4 million and $18.6 million, respectively, as a result of the fiscal 2020 and fiscal 2019 net operating losses that were carried back to prior years during which the federal tax rate was 35%. During the three and nine months ended November 28, 2020, under the CARES Act, the Company recorded income tax benefits of $0.7 million and $43.7 million, respectively. In addition, during the three and nine months ended November 27, 2021, the Company recorded credits of approximately $0.8 million and $3.7 million, respectively, as an offset to selling, general and administrative expenses as a result of the employee retention credits made available under the CARES Act for U.S. employees and under the Canada Emergency Wage Subsidy for Canadian employees. During three and nine months ended November 28, 2020, the Company recorded credits of approximately $1.0 million and $28.3 million, respectively.The COVID-19 pandemic materially adversely impacted the Company’s results of operations and cash flows for the three and nine months ended November 28, 2020. Numerous uncertainties continue to surround the pandemic and its ultimate impact on the Company. Further discussion of the risks and uncertainties posed by the COVID-19 pandemic is disclosed in “Risk Factors” under Part II, Item 1A of this Form 10-Q and Part I, Item 1A of the Company’s 2020 Form 10-K.
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Revenue Recognition |
9 Months Ended |
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Nov. 27, 2021 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION Sales are recognized upon purchase by customers at the Company’s retail stores or upon delivery for products purchased from its websites. The value of point-of-sale coupons and point-of-sale rebates that result in a reduction of the price paid by the customer are recorded as a reduction of sales. Shipping and handling fees that are billed to a customer in a sale transaction are recorded in sales. Taxes, such as sales tax, use tax and value added tax, are not included in sales. Revenues from gift cards, gift certificates and merchandise credits are recognized when redeemed. Gift cards have no provisions for reduction in the value of unused card balances over defined time periods and have no expiration dates. For the nine months ended November 27, 2021 and November 28, 2020, the Company recognized net sales for gift card and merchandise credit redemptions of approximately $60.5 million and $79.4 million, respectively, which were included in merchandise credit and gift card liabilities on the consolidated balance sheet as of February 27, 2021 and February 29, 2020, respectively. Sales returns are provided for in the period that the related sales are recorded based on historical experience. Although the estimate for sales returns has not varied materially from historical provisions, actual experience could vary from historical experience in the future if the level of sales return activity changes materially. In the future, if the Company concludes that an adjustment is required due to material changes in the returns activity, the liability for estimated returns and the corresponding right of return asset will be adjusted accordingly. As of November 27, 2021 and February 27, 2021, the Company recorded a liability for estimated returns of $32.0 million and $36.2 million, respectively, in accrued expenses and other current liabilities, and the corresponding right of return asset for merchandise of $19.6 million and $23.4 million, respectively, in prepaid expenses and other current assets. The Company sells a wide assortment of domestics merchandise and home furnishings. Domestics merchandise includes categories such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings (including furniture and wall décor), consumables and certain juvenile products. Sales of domestics merchandise and home furnishings accounted for approximately 37.6% and 62.4% of net sales, respectively, for the three months ended November 27, 2021, and approximately 35.7% and 64.3% of net sales, respectively, for the three months ended November 28, 2020. Sales of domestics merchandise and home furnishings accounted for approximately 38.4% and 61.6% of net sales, respectively, for the nine months ended November 27, 2021, and approximately 35.4% and 64.6% of net sales, respectively, for the nine months ended November 28, 2020.
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Fair Value Measurements |
9 Months Ended |
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Nov. 27, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., "the exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices and discounted cash flows. The hierarchy for inputs used in measuring fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect a company’s judgment concerning the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability must be classified in its entirety based on the lowest level of input that is significant to the measurement of fair value. The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows: •Level 1 - Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. •Level 2 - Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. •Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The Company’s financial instruments include cash and cash equivalents, investment securities, accounts payable, long term debt and certain other liabilities. The book value of the Company's financial instruments, excluding long term debt, is representative of their fair values. The Company’s investment securities at November 27, 2021 consisted primarily of U.S. Treasury securities, which are stated at amortized cost and are based on quoted prices in active markets for identical instruments (Level 1 valuation). As of November 27, 2021 and February 27, 2021, the fair value of the Company’s long term debt was approximately $1.097 billion and $1.118 billion, respectively, which is based on quoted prices in active markets for identical instruments (i.e., Level 1 valuation), compared with the carrying value of approximately $1.184 billion and $1.195 billion, respectively. |
Cash and Cash Equivalents |
9 Months Ended |
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Nov. 27, 2021 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTS The Company considers all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents. Included in cash and cash equivalents are credit and debit card receivables from banks, which typically settle within five business days, of $138.9 million and $64.0 million as of November 27, 2021 and February 27, 2021, respectively. There was no short-term restricted cash as of November 27, 2021. Short-term restricted cash of $5.0 million, as of February 27, 2021, is included in prepaid expenses and other current assets on the consolidated balance sheet. Long-term restricted cash of $31.4 million and $49.2 million, respectively, as of November 27, 2021 and February 27, 2021, respectively, is included in other long-term assets on the consolidated balance sheet.
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Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | INVESTMENT SECURITIES The Company’s investment securities as of November 27, 2021 and February 27, 2021 are as follows:
Auction Rate Securities As of November 27, 2021 and February 27, 2021, the Company’s long term available-for-sale investment securities represented approximately $20.3 million par value of auction rate securities, less temporary valuation adjustments of approximately $1.1 million and $0.8 million, respectively, consisting of preferred shares of closed end municipal bond funds. Since these valuation adjustments are deemed to be temporary, they are recorded in accumulated other comprehensive loss, net of a related tax benefit, and did not affect the Company’s net earnings. U.S. Treasury Securities As of November 27, 2021 and February 27, 2021, the Company had no short-term held-to-maturity securities, consisting of U.S. Treasury Bills with remaining maturities of less than one year. These securities are stated at their amortized cost, which approximates fair value based on quoted prices in active markets for identical instruments (i.e., Level 1 valuation).
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Impairment of Long-Lived Assets |
9 Months Ended |
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Nov. 27, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment of Long-Lived Assets | IMPAIRMENT OF LONG-LIVED ASSETS The Company reviews long-lived assets for impairment when events or changes in circumstances indicate the carrying value of these assets may exceed their current fair values. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held for sale are separately presented in the appropriate asset and liability sections of the balance sheet (See "Assets Held for Sale and Divestitures," Note 18). For the three and nine months ended November 27, 2021, the Company recorded $1.6 million and $15.6 million, respectively, of non-cash pre-tax impairment charges in impairments in its consolidated statement of operations for certain store-level assets, including leasehold improvements and operating lease assets. For the three and nine months ended November 28, 2020, the Company recorded $1.6 million and $84.0 million, respectively, of non-cash pre-tax impairment charges in impairments, including on assets held for sale, in its consolidated statement of operations for certain store-level assets, including leasehold improvements and operating lease assets. In the future, if events or market conditions affect the estimated fair value to the extent that a long-lived asset is impaired, the Company will adjust the carrying value of these long-lived assets in the period in which the impairment occurs.
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Property and Equipment |
9 Months Ended |
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Nov. 27, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT As of November 27, 2021 and February 27, 2021, included in property and equipment, net is accumulated depreciation of approximately $1.8 billion and $1.7 billion, respectively.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASESThe Company leases retail stores, distribution facilities, offices and equipment under agreements expiring at various dates through 2041. The leases provide for original lease terms that generally range from 10 to 15 years and most leases provide for a series of The Company subleases certain real estate to unrelated third parties, which have all been classified as operating leases. The Company recognizes sublease income on a straight-line basis over the sublease term, which generally ranges from 5 to 10 years. Most sublease arrangements provide for a series of -year renewal options, the exercise of which are at the Company's sole discretion. The Company regularly negotiates lease terms with landlords, including in connection with its transformation initiatives. Beginning in the first quarter of 2020, in order to maintain liquidity given temporary store closures as a result of the COVID-19 pandemic (See "Impact of the COVID-19 Pandemic," Note 2), the Company withheld portions of and/or delayed or deferred payments to certain landlords, including in connection with renegotiations of lease terms. In some instances, the renegotiations led to agreements with landlords for rent abatements or rental deferrals. In fiscal 2021, the Company has continued to withhold payments to certain landlords in connection with certain negotiations of payment terms. Total payments withheld and/or delayed or deferred as of November 27, 2021 and February 27, 2021 were approximately $3.0 million and $9.6 million, respectively, and are included in current liabilities. In accordance with the Financial Accounting Standards Board’s Staff Q&A regarding rent concessions related to the effects of the COVID-19 pandemic, the Company has elected to account for the concessions agreed to by landlords that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee as though enforceable rights and obligations for those concessions existed in the original lease agreements and the Company has elected to not remeasure the related lease liabilities and right-of-use assets. For qualifying rent abatement concessions, the Company has recorded negative lease expense for the amount of the concession during the period of relief, and for qualifying deferrals of rental payments, the Company has recognized a non-interest bearing payable in lieu of recognizing a decrease in cash for the lease payment that would have been made based on the original terms of the lease agreement, which will be reduced when the deferred payment is made in the future. During the three and nine months ended November 27, 2021, the Company recognized reduced rent expense of $0.3 million and $2.6 million, respectively, related to rent abatement concessions. The Company recognized $3.4 million and $7.8 million, respectively, of reduced rent expense during each of the three and nine months ended November 28, 2020. The components of total lease cost for the three and nine months ended November 27, 2021 and November 28, 2020, were as follows:
As of November 27, 2021 and February 27, 2021, assets and liabilities related to the Company’s leases were as follows:
As of November 27, 2021, the Company’s lease liabilities mature as follows:
At November 27, 2021, the Company has entered into one lease, which has not yet commenced, for a regional distribution center planned to open in fiscal 2022. The aggregate minimum rental payments over the term of the lease of approximately $107.2 million are not included in the above table. The Company’s lease terms and discount rates were as follows:
Other information with respect to the Company’s leases is as follows:
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year renewal options, often at increased rents, the exercise of which is at the Company’s sole discretion. Certain leases provide for contingent rents (which are based upon store sales exceeding stipulated amounts and are immaterial for the three and nine months ended November 27, 2021 and November 28, 2020), scheduled rent increases and renewal options. The Company is obligated under a majority of the leases to pay for taxes, insurance and common area maintenance charges. |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASESThe Company leases retail stores, distribution facilities, offices and equipment under agreements expiring at various dates through 2041. The leases provide for original lease terms that generally range from 10 to 15 years and most leases provide for a series of The Company subleases certain real estate to unrelated third parties, which have all been classified as operating leases. The Company recognizes sublease income on a straight-line basis over the sublease term, which generally ranges from 5 to 10 years. Most sublease arrangements provide for a series of -year renewal options, the exercise of which are at the Company's sole discretion. The Company regularly negotiates lease terms with landlords, including in connection with its transformation initiatives. Beginning in the first quarter of 2020, in order to maintain liquidity given temporary store closures as a result of the COVID-19 pandemic (See "Impact of the COVID-19 Pandemic," Note 2), the Company withheld portions of and/or delayed or deferred payments to certain landlords, including in connection with renegotiations of lease terms. In some instances, the renegotiations led to agreements with landlords for rent abatements or rental deferrals. In fiscal 2021, the Company has continued to withhold payments to certain landlords in connection with certain negotiations of payment terms. Total payments withheld and/or delayed or deferred as of November 27, 2021 and February 27, 2021 were approximately $3.0 million and $9.6 million, respectively, and are included in current liabilities. In accordance with the Financial Accounting Standards Board’s Staff Q&A regarding rent concessions related to the effects of the COVID-19 pandemic, the Company has elected to account for the concessions agreed to by landlords that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee as though enforceable rights and obligations for those concessions existed in the original lease agreements and the Company has elected to not remeasure the related lease liabilities and right-of-use assets. For qualifying rent abatement concessions, the Company has recorded negative lease expense for the amount of the concession during the period of relief, and for qualifying deferrals of rental payments, the Company has recognized a non-interest bearing payable in lieu of recognizing a decrease in cash for the lease payment that would have been made based on the original terms of the lease agreement, which will be reduced when the deferred payment is made in the future. During the three and nine months ended November 27, 2021, the Company recognized reduced rent expense of $0.3 million and $2.6 million, respectively, related to rent abatement concessions. The Company recognized $3.4 million and $7.8 million, respectively, of reduced rent expense during each of the three and nine months ended November 28, 2020. The components of total lease cost for the three and nine months ended November 27, 2021 and November 28, 2020, were as follows:
As of November 27, 2021 and February 27, 2021, assets and liabilities related to the Company’s leases were as follows:
As of November 27, 2021, the Company’s lease liabilities mature as follows:
At November 27, 2021, the Company has entered into one lease, which has not yet commenced, for a regional distribution center planned to open in fiscal 2022. The aggregate minimum rental payments over the term of the lease of approximately $107.2 million are not included in the above table. The Company’s lease terms and discount rates were as follows:
Other information with respect to the Company’s leases is as follows:
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year renewal options, often at increased rents, the exercise of which is at the Company’s sole discretion. Certain leases provide for contingent rents (which are based upon store sales exceeding stipulated amounts and are immaterial for the three and nine months ended November 27, 2021 and November 28, 2020), scheduled rent increases and renewal options. The Company is obligated under a majority of the leases to pay for taxes, insurance and common area maintenance charges.
Income Taxes |
9 Months Ended |
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Nov. 27, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXESThe effective income tax rate for the three months ended November 27, 2021 was (171.3)% compared with 46.4% for the three months ended November 28, 2020. The effective income tax rate for the three months ended November 27, 2021 reflects the impact of a charge to record a valuation allowance in the fiscal third quarter of $181.5 million, discussed below, as well as a benefit of $2.4 million resulting from an adjustment to the estimated net operating loss incurred in fiscal 2020 which was carried back, under the provisions of the CARES Act, to a year in which the tax rate was 35%. For the three months ended November 28, 2020, the effective tax rate included the impact of impairment charges for leasehold improvements and lease assets, a $0.7 million benefit related to fiscal 2019 net operating loss carry-back under the CARES Act and other discrete tax items. The effective income tax rate for the nine months ended November 27, 2021 was (37.9)% compared with 45.7% for the nine months ended November 28, 2020. The effective income tax rate for the nine months ended November 27, 2021 reflects the impact of a charge to record a valuation allowance in the fiscal third quarter of $181.5 million, discussed below, as well as a benefit of $18.6 million resulting from an adjustment to the estimated net operating loss incurred in fiscal 2020 which was carried back, under the provisions of the CARES Act, to a year in which the tax rate was 35%. For the nine months ended November 28, 2020, the effective tax rate included the impact of impairment charges for leasehold improvements and lease assets, a $43.7 million benefit related to fiscal 2019 net operating loss carry-back under the CARES Act and other discrete tax items. In assessing the recoverability of its deferred tax assets, the Company evaluates the available objective positive and negative evidence to estimate whether it is more likely than not that sufficient future taxable income will be generated to permit use of existing deferred tax assets in each taxpaying jurisdiction. For any deferred tax asset in excess of the amount for which it is more likely than not that the Company will realize a benefit, the Company establishes a valuation allowance. A valuation allowance is a non-cash charge, and does not limit the Company's ability to utilize its deferred tax assets, including its ability to utilize tax loss and credit carryforward amounts, against future taxable income. During the three months ended November 27, 2021, the Company concluded that, based on its evaluation of available objective positive and negative evidence, it is no longer more likely than not that its net U.S. federal and state deferred tax assets are recoverable. In assessing the realizability of deferred tax assets, the key assumptions used to determine positive and negative evidence included the Company’s cumulative taxable loss for the past three years, current trends related to actual taxable earnings or losses, and expected future reversals of existing taxable temporary differences, as well as timing and cost of the Company's transformation initiatives and their expected associated benefits. Accordingly, the Company recorded a charge of $181.5 million in the third fiscal quarter of 2021 as a reserve against its net U.S. federal and state deferred tax assets. As of November 27, 2021 and February 27, 2021, the total valuation allowance relative to U.S. federal and state deferred tax assets was $192.0 million and $10.5 million, respectively. As of November 27, 2021 and February 27, 2021, the Company had also recorded a valuation allowance of $15.5 million relative to the Company's Canadian net deferred tax asset, as the Company did not believe the deferred tax assets in that jurisdiction were more likely than not to be realized. The amount of the deferred tax assets considered realizable, and the associated valuation allowance, could be adjusted in a future period if estimates of future taxable income change or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for future growth. During the three and nine months ended November 27, 2021, the change in the gross amount of unrecognized tax benefits and accrued interest and penalties was not significant. As of November 27, 2021, the Company operated in all 50 states, the District of Columbia, Puerto Rico, Canada and Mexico and files income tax returns in the United States and various state, local and international jurisdictions. The Company is currently under examination by the Internal Revenue Service for the tax year 2014. The Company is open to examination for state, foreign and local jurisdictions with varying statutes of limitations, generally ranging from 3 to 9 years.
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Indefinite Lived Intangible Assets |
9 Months Ended |
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Nov. 27, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Indefinite Lived Intangible Assets | INDEFINITE LIVED INTANGIBLE ASSETS Included in other assets in the accompanying consolidated balance sheets as of November 27, 2021 and February 27, 2021, respectively, are $19.1 million and $22.0 million for indefinite lived tradenames and trademarks. The Company reviews intangibles that have indefinite lives for impairment annually as of the end of the fiscal year or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values. Impairment testing is based upon the best information available including estimates of fair value which incorporate assumptions marketplace participants would use in making their estimates of fair value. Significant assumptions and estimates are required, including, but not limited to, projecting future cash flows, determining appropriate discount rates and terminal growth rates, and other assumptions, to estimate the fair value of indefinite lived intangible assets. Although the Company believes the assumptions and estimates made are reasonable and appropriate, different assumptions and estimates could materially impact its reported financial results. Indefinite-lived intangible assets were recorded as a result of acquisitions and primarily consist of tradenames. The Company values its tradenames using a relief-from-royalty approach, which assumes the value of the tradename is the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the tradename and instead licensed the tradename from another company. During the three and nine months ended November 27, 2021, the Company completed a quantitative impairment analysis for certain of its indefinite lived intangible assets, by comparing the fair value of the tradenames to their carrying value and recognized a non-cash pre-tax tradename impairment charge of $0.2 million and $2.9 million, respectively, in impairments, including on assets held for sale, in its consolidated statements of operations. During the three and nine months ended November 28, 2020, the Company recorded tradename impairment charges of $2.4 million and $35.1 million, respectively, in impairments, including on assets held for sale, in its consolidated statements of operations. As of November 27, 2021, for the remaining indefinite lived intangible assets, the Company assessed qualitative factors in order to determine whether any events and circumstances existed which indicated that it was more likely than not that the fair value of these indefinite lived assets did not exceed their carrying values and concluded no such events or circumstances existed which would require an impairment test be performed. In the future, if events or market conditions affect the estimated fair value to the extent that an asset is impaired, the Company will adjust the carrying value of these assets in the period in which the impairment occurs.
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Long Term Debt |
9 Months Ended |
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Nov. 27, 2021 | |
Debt Disclosure [Abstract] | |
Long Term Debt | LONG TERM DEBT Senior Unsecured Notes On July 17, 2014, the Company issued $300.0 million aggregate principal amount of 3.749% senior unsecured notes due August 1, 2024, $300.0 million aggregate principal amount of 4.915% senior unsecured notes due August 1, 2034 and $900.0 million aggregate principal amount of 5.165% senior unsecured notes due August 1, 2044 (collectively, the "Notes"). Interest on the Notes is payable semi-annually on February 1 and August 1 of each year. The Notes were issued under an indenture (the "Base Indenture"), as supplemented by a first supplemental indenture (together, with the Base Indenture, the "Indenture"), which contains various restrictive covenants, which are subject to important limitations and exceptions that are described in the Indenture. The Company was in compliance with all covenants related to the Notes as of November 27, 2021. The Company did not purchase any of its outstanding unsecured notes during the three months ended November 27, 2021. During the nine months ended November 27, 2021, the Company purchased approximately $11.0 million aggregate principal amount of its outstanding 3.749% senior unsecured notes due August 1, 2024. The total consideration paid for the notes accepted for purchase of $11.4 million during the nine months ended November 27, 2021 included accrued and unpaid interest up to, but not including, the early settlement date. The Company recorded a loss on extinguishment of debt of $0.4 million in its consolidated statement of operations for the nine months ended November 27, 2021, including the write off of unamortized debt financing costs related to the extinguished portion of the notes accepted for purchase and reacquisition costs. During the second quarter of fiscal 2020, the Company purchased $75.0 million aggregate principal amount of its outstanding 4.915% senior unsecured notes due 2034 and approximately $225.0 million aggregate principal amount of its outstanding 5.165% senior unsecured notes due 2044. The total consideration paid for the notes accepted for purchase of $220.9 million included an early tender premium of $50 per $1,000 principal amount of the notes accepted for purchase, plus accrued and unpaid interest up to, but not including, the early settlement date. The Company recorded a gain on extinguishment of debt of $77.0 million in its consolidated statement of operations for the nine months ended November 28, 2020, including the write off of unamortized debt financing costs related to the extinguished portion of the notes accepted for purchase and reacquisition costs. As of November 27, 2021 and February 27, 2021, unamortized deferred financing costs associated with the Company’s Notes were $4.7 million and $5.0 million, respectively, and are included in long-term debt in the Company's consolidated balance sheets. Asset-Based Credit Agreement On August 9, 2021, the Company amended its asset-based credit agreement (the “Amended Credit Agreement”) among the Company, certain of the Company’s U.S. and Canadian subsidiaries party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (in such capacity, the “Agent”), and the lenders party thereto, which replaced the Company's previous $850.0 million which was due to mature on June 19, 2023. The Amended Credit Agreement provides for an asset-based revolving credit facility (the “ABL Facility”) with aggregate revolving commitments established at closing of $1.0 billion, including a swingline subfacility and a letter of credit subfacility. The Amended Credit Agreement has an uncommitted expansion feature which allows the borrowers to request, at any time following the delivery of an initial field exam and appraisal, an increase in aggregate revolving commitments under the ABL Facility or elect to enter into a first-in-last-out loan facility, collectively, in an aggregate amount of up to $375.0 million, subject to certain customary conditions. The Amended Credit Agreement matures on August 9, 2026. As of November 27, 2021, the Company had no loans outstanding under the ABL Facility, but had outstanding letters of credit of $92.2 million. The ABL Facility is secured on a first priority basis (subject to customary exceptions) on all accounts receivable (including credit card receivables), inventory, certain deposit accounts and securities accounts, and certain related assets, of the Company and its subsidiaries that are borrowers or guarantors under the ABL Facility. Amounts available to be drawn from time to time under the ABL Facility (including, in part, in the form of letters of credit) are equal to the lesser of (i) outstanding revolving commitments under the Amended Credit Agreement and (ii) a borrowing base equal to the sum of (a) 90% of eligible credit card receivables plus (b) 90% of eligible inventory, valued at the lower of cost or market value, determined on a weighted average cost basis, minus (c) customary reserves. Subject to customary exceptions and restrictions, the Company may voluntarily repay outstanding amounts under the ABL Facility at any time without premium or penalty. Any voluntary prepayments made will not reduce commitments under the ABL Facility. If at any time the outstanding amount under the ABL Facility exceeds the lesser of (i) the aggregate revolving commitments and (ii) the borrowing base, the Company will be required to prepay outstanding amounts or cash collateralize letter of credit obligations under the ABL Facility. Outstanding amounts under the Amended Credit Agreement bear interest at a rate per annum equal to, at the applicable borrower’s election: (i) in the case of loans denominated in U.S. dollars, such loans shall be comprised entirely of Alternate Base Rate ("ABR") loans and London Inter-Bank Offered ("LIBO") Rate loans and (ii) in the case of loans denominated in Canadian dollars, such loans shall be comprised entirely of Canadian Prime Rate loans and Canadian Dollar Offered Rate ("CDOR") loans, in each case as set forth in the Amended Credit Agreement, plus an interest rate margin based on average quarterly availability ranging from (i) in the case of ABR loans and Canadian Prime Rate loans, 0.25% to 0.75%; provided that if ABR or the Canadian Prime Rate is less than 1.00%, such rate shall be deemed to be 1.00%, as applicable, and (ii) in the case of LIBO Rate loans and CDOR Loans, 1.25% to 1.75%; provided that if the LIBO Rate is less than 0.00%, such rate shall be deemed to be 0.00%, as applicable. The Amended Credit Agreement contains customary representations and warranties, events of default and financial, affirmative and negative covenants for facilities of this type, including but not limited to a springing financial covenant relating to a fixed charge coverage ratio, and restrictions on indebtedness, liens, investments and acquisitions, asset dispositions, restricted payments and prepayment of certain indebtedness. The Company was in compliance with all covenants related to the Amended Credit Agreement as of November 27, 2021. As of November 27, 2021 and February 27, 2021, deferred financing costs associated with the Company's ABL Facility were $7.9 million and $6.1 million, respectively, and were recorded in other assets in the Company's consolidated balance sheets. The Company amortizes deferred financing costs for the Notes and the ABL Facility over their respective terms and such amortization is included in interest expense, net in the consolidated statements of operations. Interest expense related to the Notes and the revolving credit facilities, including the commitment fee and the amortization of deferred financing costs, was approximately $16.1 million and $15.9 million, respectively, for the three months ended November 27, 2021 and November 28, 2020 and $49.0 million and $55.8 million, respectively, for the nine months ended November 27, 2021 and November 28, 2020.
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Shareholders' Equity |
9 Months Ended |
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Nov. 27, 2021 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | SHAREHOLDERS' EQUITY The Company has authorization to make repurchases of shares of the Company’s common stock from time to time in the open market or through other parameters approved by the Board of Directors pursuant to existing rules and regulations. Between December 2004 and April 2021, the Company’s Board of Directors authorized, through several share repurchase programs, the repurchase of up to $12.950 billion of the Company’s shares of common stock. The Company also acquires shares of its common stock to cover employee related taxes withheld on vested restricted stock, restricted stock units and performance stock unit awards. Since the initial authorization in December 2004, the aggregate total of common stock repurchased is approximately 247.8 million shares for a total cost of approximately $11.5 billion. The Company had approximately $1.5 billion remaining of authorized share repurchases as of November 27, 2021. Decisions regarding share repurchases are within the discretion of the Board of Directors, and are influenced by a number of factors, including the price of the Company's common stock, general business and economic conditions, the Company's financial condition and operating results, the emergence of alternative investment or acquisition opportunities, changes in business strategy and other factors. The Company's share repurchase program could change, and could be influenced by several factors, including business and market conditions, such as the impact of the COVID-19 pandemic. The Company reviews its alternatives with respect to its capital structure on an ongoing basis. Any future share repurchases will be subject to the determination of the Board of Directors, based on an evaluation of the Company's earnings, financial condition and requirements, business conditions and other factors, including the restrictions on share repurchases under the ABL Facility (See “Long Term Debt,” Note 12). In connection with its share repurchase program, during the three and nine months ended November 27, 2021, the Company repurchased approximately 5.1 million and 13.4 million shares, respectively, of its common stock, at a total cost of approximately $113.4 million and $344.6 million, respectively, including fees. Additionally, during the three and nine months ended November 27, 2021, the Company repurchased approximately 0.2 million and 0.6 million shares, respectively, of its common stock, to cover employee related taxes withheld on vested restricted stock, restricted stock unit awards and performance stock unit awards, at a total cost of approximately $5.5 million and $14.3 million, respectively. In the first quarter of fiscal 2020, the Company had postponed share repurchases, but lifted this postponement in October 2020. In October 2020, the Company entered into an accelerated share repurchase agreement with JPMorgan Chase Bank, National Association to repurchase $225.0 million of its common stock, subject to market conditions, which settled in the fourth quarter of fiscal 2020, resulting in the repurchase of a total of 10.8 million shares. In January 2021, the Company entered into a second accelerated share repurchase agreement to repurchase an aggregate $150.0 million of its common stock, subject to market conditions. This resulted in the repurchase of 5.0 million shares in the fourth quarter of fiscal 2020, and an additional 0.2 million shares received upon final settlement in the first quarter of fiscal 2021. During the three and nine months ended November 28, 2020, the Company also repurchased approximately 0.1 million and 0.6 million shares, respectively, of its common stock, to cover employee related taxes withheld on vested restricted stock, restricted stock unit awards and performance stock unit awards, at a total cost of approximately $1.7 million and $4.7 million, respectively. During fiscal 2016, the Company’s Board of Directors authorized a quarterly dividend program. In March 2020, the Company suspended its future quarterly declarations of cash dividends as a result of the COVID-19 pandemic. During the three and nine months ended November 27, 2021, total cash dividends of $0.1 million and $0.8 million (consisting of dividends paid on restricted shares that vested in fiscal 2021), respectively, were paid. During the three and nine months ended November 28, 2020, total cash dividends of $0.1 million and $23.1 million, respectively, were paid. Any future quarterly cash dividend payments on its common stock will be subject to the determination by the Board of Directors, based on an evaluation of the Company’s earnings, financial condition and requirements, business conditions and other factors, including the restrictions on the payment of dividends contained in the Amended Credit Agreement (See “Long Term Debt,” Note 12). Cash dividends, if any, are accrued as a liability on the Company’s consolidated balance sheets and recorded as a decrease to retained earnings when declared.
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Stock-Based Compensation |
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Stock-Based Compensation | STOCK-BASED COMPENSATION The Company measures all stock-based compensation awards for employees and non-employee directors using a fair value method and records such expense, net of estimated forfeitures, in its consolidated financial statements. Currently, the Company’s stock-based compensation relates to restricted stock awards, restricted stock units and performance stock units. The Company’s restricted stock awards are considered nonvested share awards. Stock-based compensation expense for the three and nine months ended November 27, 2021 was approximately $8.9 million and $26.9 million, respectively. Stock-based compensation expense for the three and nine months ended November 28, 2020 was approximately $7.2 million and $23.1 million, respectively. In addition, the amount of stock-based compensation cost capitalized for the three and nine months ended November 27, 2021 was approximately $0.2 million and $0.8 million, respectively. Stock-based compensation cost capitalized for the three and nine months ended November 28, 2020 was approximately $0.3 million and $0.6 million, respectively. Incentive Compensation Plans The Company may grant awards under the Bed Bath & Beyond 2018 Incentive Compensation Plan (the “2018 Plan”) and the Bed Bath & Beyond 2012 Incentive Compensation Plan (the "2012 Plan"). The 2018 Plan includes an aggregate of 4.6 million shares of common stock authorized for issuance of awards permitted under the 2018 Plan, including stock options, stock appreciation rights, restricted stock awards, performance awards and other stock-based awards. The 2018 Plan supplements the 2012 Plan, which amended and restated the Bed Bath & Beyond 2004 Incentive Compensation Plan (the “2004 Plan”). The 2012 Plan includes an aggregate of 43.2 million common shares authorized for issuance of awards permitted under the 2012 Plan (similar to the 2018 Plan). Outstanding awards that were covered by the 2004 Plan continue to be in effect under the 2012 Plan. The terms of the 2012 Plan and the 2018 Plan are substantially similar and enable the Company to offer incentive compensation through stock options (whether nonqualified stock options or incentive stock options), restricted stock awards, stock appreciation rights, performance awards and other stock-based awards, and cash-based awards. Grants are determined by the Compensation Committee of the Board of Directors of the Company for those awards granted to executive officers and by the Board of Directors of the Company for awards granted to non-employee directors. Restricted stock awards generally become vested in five to seven equal annual installments beginning to three years from the date of grant, subject, in general, to the recipient remaining in the Company’s service on specified vesting dates. Restricted stock units generally become vested in one to three equal annual installments beginning one year from the date of grant, subject, in general, to the recipient remaining in the Company’s service on specified vesting dates. Performance stock units generally vest at the end of the performance period dependent on the Company’s achievement of performance-based tests and subject, in general, to the executive remaining in the Company’s service on specified vesting dates. The Company generally issues new shares for restricted stock awards and vesting of restricted stock units and performance stock units. The 2018 Plan expires in May 2028. The 2012 Plan expires in May 2022. As described in further detail below, in fiscal 2020 and 2019, the Company granted stock-based awards to certain of the Company’s new executive officers as inducements material to their commencement of employment and entry into an employment agreement with the Company. The inducement awards were made in accordance with Nasdaq Listing Rule 5635(c)(4) and were not made under the 2012 Plan or the 2018 Plan. Restricted Stock Awards Restricted stock awards are issued and measured at fair market value on the date of grant and generally become vested in five to seven equal annual installments beginning to three years from the date of grant, subject, in general, to the recipient remaining in the Company’s service on specified vesting dates. Vesting of restricted stock is based solely on time vesting. As of November 27, 2021, unrecognized compensation expense related to the unvested portion of the Company’s restricted stock awards was $11.4 million, which is expected to be recognized over a weighted average period of 2.3 years. Changes in the Company’s restricted stock for the nine months ended November 27, 2021 were as follows:
Restricted Stock Units ("RSUs") RSUs are issued and measured at fair market value on the date of grant and generally become vested in one to three equal annual installments beginning one year from the date of grant, subject, in general, to the recipient remaining in the Company’s service on specified vesting dates. RSUs are converted into shares of common stock upon vesting. As of November 27, 2021, unrecognized compensation expense related to the unvested portion of the Company’s RSUs was $33.7 million, which is expected to be recognized over a weighted average period of 2.1 years. Changes in the Company’s RSUs for the nine months ended November 27, 2021 were as follows:
Performance Stock Units ("PSUs") PSUs are issued and measured at fair market value on the date of grant using the following performance periods and performance metrics. The performance metrics generally include one or more of Earnings Before Interest and Taxes ("EBIT"), Total Shareholder Return ("TSR"), Return on Invested Capital ("ROIC") or Gross Margin Percentage ("GM") compared with the Company's peer groups as determined by the Compensation Committee of the Company's Board of Directors.
For the PSUs granted in fiscal 2018, the three year performance-based tests based on a combination of EBIT margin and ROIC were not met in the first quarter of fiscal 2021 and therefore, there was no payment of these awards following vesting. Vesting of PSUs awarded to certain of the Company’s executives is dependent on the Company’s achievement of a performance-based test from the date of grant, during the performance period and, assuming achievement of the performance-based test, vest at the end of the performance period noted above, subject, in general, to the executive remaining in the Company’s service on specified vesting dates. PSUs are converted into shares of common stock upon payment following vesting. Upon grant of the PSUs, the Company recognizes compensation expense related to these awards based on the Company’s estimate of the percentage of the award that will be achieved. The Company evaluates the estimate on these awards on a quarterly basis and adjusts compensation expense related to these awards, as appropriate. As of November 27, 2021, there was $18.1 million of unrecognized compensation expense associated with these awards, which is expected to be recognized over a weighted average period of 2.3 years. The fair value of the PSUs granted in fiscal 2021, for which performance during the three-year period will be based on a relative three-year TSR goal relative to a peer group, was estimated on the date of the grant using a Monte Carlo simulation that uses the assumptions noted in the following table.
Changes in the Company’s PSUs for the nine months ended November 27, 2021 were as follows:
Inducement Awards In fiscal 2020 and 2019, the Company granted stock-based awards to certain of the Company’s new executive officers as inducements material to their commencement of employment and entry into an employment agreement with the Company. These inducement awards were approved by the Compensation Committee of the Board of Directors of the Company and did not require shareholder approval in accordance with Nasdaq Listing Rule 5635(c)(4). The Company did not grant any such awards in fiscal 2021. RSUs granted as inducement awards are issued and measured at fair market value on the date of grant and generally become vested in one to three equal annual installments beginning one year from the date of grant, subject, in general, to the recipient remaining in the Company’s service on specified vesting dates. Changes in the RSUs granted as inducement awards for the nine months ended November 27, 2021 were as follows:
On November 4, 2019, in connection with the appointment of the Company’s President and Chief Executive Officer, the Company also granted inducement awards consisting of 273,735 PSU awards, which are not included above. The PSUs vested over two years, based on performance goals requiring the President and CEO to prepare and deliver to the Board of Directors key objectives and goals for the Company and the strategies and initiatives for the achievement of such objectives and goals, and the President and CEO's provision of updates to the Board of Directors regarding achievement of such goals and objectives. Vesting of the PSUs was also subject, in general, to the President and CEO remaining in the Company’s service through the vesting date of November 4, 2021. On November 2, 2021, the Compensation Committee of the Board of Directors determined that the performance goals established for the awards had been met, and the awards vested in full. Other than with respect to the vesting terms described above for the inducement awards to the Company's President and Chief Executive Officer, inducement awards are generally subject to substantially the same terms and conditions as awards that are made under the 2018 Plan. As of November 27, 2021, unrecognized compensation expense related to the unvested portion of the Company's inducement awards was $1.9 million and is expected to be recognized over a weighted average period of 1.5 years. Each inducement award recipient must hold at least fifty percent (50%) of the after-tax shares of common stock received pursuant to the inducement awards until they have satisfied the terms of the Company’s stock ownership guidelines.
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Earnings per Share |
9 Months Ended |
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Nov. 27, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | EARNINGS PER SHARE The Company presents earnings per share on a basic and diluted basis. Basic earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding. Diluted earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding, including the dilutive effect of stock-based awards as calculated under the treasury stock method. Stock-based awards for the three and nine months ended November 27, 2021 of approximately 2.9 million and 2.9 million shares, respectively, and for the three and nine months ended November 28, 2020 of approximately 1.3 million and 2.3 million shares, respectively, were excluded from the computation of diluted earnings per share as the effect would be anti-dilutive.
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Supplemental Cash Flow Information |
9 Months Ended |
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Nov. 27, 2021 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | SUPPLEMENTAL CASH FLOW INFORMATION The Company paid income taxes of $4.0 million and $5.1 million in the first nine months of fiscal 2021 and 2020, respectively. In addition, the Company made interest payments of approximately $34.5 million and $44.4 million in the first nine months of fiscal 2021 and 2020, respectively. The Company recorded an accrual for capital expenditures of $39.1 million and $16.2 million as of November 27, 2021 and November 28, 2020, respectively. The Company's accrual for dividends payable was $0.9 million and $2.6 million, respectively, as of November 27, 2021 and November 28, 2020.
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Restructuring and Transformation Initiative Expenses |
9 Months Ended |
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Nov. 27, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Transformation Initiative Expenses | RESTRUCTURING AND TRANSFORMATION INITIATIVE EXPENSES Fiscal 2021 Restructuring and Transformation Initiative Expenses The Company recorded $47.3 million and $226.5 million in its consolidated statements of operations for the three and nine months ended November 27, 2021 for costs associated with restructuring and other transformation initiatives, of which approximately $6.1 million and $127.1 million is included in cost of sales and approximately $41.2 million and $99.4 million is included in restructuring and transformation initiative expenses in the consolidated statements of operations. These charges were comprised of, and classified in the Company’s consolidated statement of operations, as follows: Cost of Sales •$6.1 million and $127.1 million for the three and nine months ended November 27, 2021, respectively, related to the Company’s initiatives to introduce certain new proprietary Owned Brand merchandise and, to a lesser extent, to redefine certain existing proprietary Owned Brands and to rationalize product assortment across the Bed Bath & Beyond banner store base. The costs incurred in connection with these activities included higher markdowns on inventory sold in the three and nine month periods of fiscal 2021, as well as an adjustment to reduce to its estimated realizable value inventory on hand as of November 27, 2021 that will be removed from the product assortment as part of these initiatives. Restructuring and Transformation Initiative Expenses •Store Closures. During the three and nine months ended November 27, 2021, the Company had store closing activities for 5 and 26 Bed Bath & Beyond stores, respectively, as part of its store network optimization program which commenced in fiscal 2020 and includes the planned closure of approximately 200 mostly Bed Bath & Beyond stores by the end of fiscal 2021, which includes the 144 stores closed in fiscal 2020. As of November 27, 2021, the Company had closed a total of 170 stores under this program, including the 26 store closures in the first nine months of 2021. For the three and nine months ended November 27, 2021, the Company recorded costs associated with planned store closures for which the store closing process has commenced of approximately $6.9 million and $28.3 million, respectively, consisting of lease-related and other costs. At this point, the Company is unable to estimate the amount or range of amounts expected to be incurred in connection with future store closures. •Other transformation initiatives. During the three and nine months ended November 27, 2021, the Company recorded costs of $34.3 million and $71.1 million, respectively, which include costs recorded in connection with termination of facility leases, including in connection with the store network optimization program described above, as well as costs associated with other transformation initiatives, including technology transformation and business strategy and operating model transformation programs across core functions including merchandising, supply chain and finance. Fiscal 2020 & 2019 Restructuring Expenses Additionally, in fiscal 2020 and fiscal 2019, the Company recorded $149.3 million and $102.5 million, respectively, primarily for severance and related costs in conjunction with its transformation initiatives and extensive leadership changes, in selling, general and administrative expenses in its consolidated statement of operations. As of November 27, 2021, the remaining accrual for severance and related costs related to these various initiatives from fiscal 2020 and 2019 was $13.6 million.
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Assets Held for Sale and Divestitures |
9 Months Ended |
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Nov. 27, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale and Divestitures | ASSETS HELD FOR SALE AND DIVESTITURES Assets Held for Sale The Company has included businesses classified as held for sale within its continuing operations as their dispositions do not represent a strategic shift that will have a major effect on the Company’s operations and financial results. As of November 27, 2021, the Company did not have any businesses classified as held for sale. As of November 28, 2020, certain assets and liabilities related to Cost Plus World Market were classified as held for sale on the Company's consolidated balance sheet. Divestitures Cost Plus World Market. On December 14, 2020, the Company announced that it entered into a definitive agreement to sell Cost Plus World Market to Kingswood Capital Management, a Los Angeles-based private equity firm. On January 15, 2021, the Company completed the sale of Cost Plus World Market. Proceeds from the sale were approximately $63.7 million, subject to certain working capital and other adjustments. The Company recognized a loss on sale of approximately $72.0 million in loss on sale of businesses including impairment of assets held for sale in its consolidated statements of operations for the fiscal year ended February 27, 2021. The $72.0 million loss on sale includes an impairment of $54.0 million recorded in the third quarter of fiscal 2020 to remeasure the disposal group that was classified as held for sale to the lower of carrying value or fair value less costs to sell, recorded in impairments, including on assets held for sale. Christmas Tree Shops. On October 11, 2020, the Company entered into definitive agreements to sell Christmas Tree Shops ("CTS") to Handil Holdings LLC and to sell one of the CTS distribution facilities to an institutional buyer, with a leaseback term of nine months, to provide business continuity to the Company for some of its operations currently using the facility. These transactions were completed during the third quarter of fiscal 2020, generating approximately $233.3 million in proceeds, subject to certain working capital and other adjustments, and the Company recognized a loss on sale of approximately $53.8 million, which was recorded in loss on sale of businesses including impairment of assets held for sale in its consolidated statements of operations for the fiscal year ended February 27, 2021. Upon the divestiture of CTS, the Company retained liability for a non-contributory defined benefit pension plan for CTS employees hired on or before July 31, 2003, who met specified age and length-of-service requirements. During the three months ended November 27, 2021, the Company received final approval to terminate the plan, upon which the Company contributed $5.1 million to the plan. Using plan assets, the Company purchased a non-participating group annuity contract for certain participants and made lump sum distributions to all remaining participants. Net periodic pension cost included in the consolidated statement of operations includes the pre-tax release of $13.5 million from other comprehensive income in connection with the settlement of the plan, which is recorded within loss on sale of businesses. The remaining net periodic pension cost recorded during the three and nine months ended November 27, 2021 was not material to the Company’s results of operations. Linen Holdings. On October 11, 2020, the Company entered into a definitive agreement to sell Linen Holdings to The Linen Group, LLC, an affiliate of Lion Equity Partners. On October 24, 2020, the Company completed the sale of Linen Holdings for approximately $10.1 million, subject to certain working capital and other adjustments, and recognized a loss on the sale of $64.6 million, which was recorded in loss on sale of businesses including impairment of assets held for sale in its consolidated statements of operations for the fiscal year ended February 27, 2021. PersonalizationMall.com. On February 14, 2020, the Company entered into a definitive agreement to sell PersonalizationMall.com ("PMall") to 1-800-FLOWERS.COM, Inc. for $252.0 million, subject to certain working capital and other adjustments. The buyer was required to close the transaction on March 30, 2020, but failed to do so. Accordingly, the Company had filed an action to require the buyer to close the transaction. On July 20, 2020, the Company entered into a settlement agreement with respect to the litigation. Under this agreement, 1-800-FLOWERS.COM agreed to move forward with its purchase of PMall from the Company for $245.0 million, subject to certain working capital and other adjustments. The transaction closed on August 3, 2020. Net proceeds from the sale of PMall were $244.6 million, subject to certain working capital and other adjustments, and the Company recognized a gain on the sale of approximately $189.3 million, which was recorded in loss on sale of businesses including impairment of assets held for sale in its consolidated statement of operations for the fiscal year ended February 27, 2021. Upon the close of the transaction, Bed Bath & Beyond withdrew the litigation against 1-800-FLOWERS.COM and 800-FLOWERS, INC. In connection with the sale of PMall, the Company agreed to indemnify 1-800-FLOWERS.COM for certain litigation matters then existing at the time of the close of the transaction, including certain matters for which the Company is entitled to indemnification from the former owner of PMall in connection with the Company's purchase of PMall in fiscal 2016. (See Note 19, “Commitments and Contingencies” for additional information.) One Kings Lane. On April 13, 2020, the Company completed the sale of One Kings Lane ("OKL"). Proceeds from the sale were not material. During the three and nine months ended November 27, 2021, the Company recognized approximately $14.1 million and $18.2 million of loss on the sale of businesses, respectively, primarily associated with the fiscal 2021 settlement of the CTS pension plan as described above and certain working capital and other adjustments related to the above divestitures.
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Commitments and Contingencies |
9 Months Ended |
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Nov. 27, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS & CONTINGENCIES A putative securities class action was filed on April 14, 2020 against the Company and three of its officers and/or directors (Mark Tritton, Mary Winston (the Company’s former Interim Chief Executive Officer) and Robyn D’Elia (the Company’s former Chief Financial Officer and Treasurer)) in the United States District Court for the District of New Jersey (the "New Jersey federal court"). The case, which is captioned Vitiello v. Bed Bath & Beyond Inc., et al., Case No. 2:20-cv-04240-MCA-MAH, asserts claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") on behalf of a putative class of purchasers of the Company’s securities from October 2, 2019 through February 11, 2020. The Complaint alleges that certain of the Company’s disclosures about financial performance and certain other public statements during the putative class period were materially false or misleading. A similar putative securities class action, asserting the same claims on behalf of the same putative class against the same defendants, was filed on April 30, 2020. That case, captioned Kirkland v. Bed Bath & Beyond Inc., et al., Case No. 1:20-cv-05339-MCA-MAH, is also pending in the United States District Court for the District of New Jersey. On August 14, 2020, the court consolidated the two cases and appointed Kavin Bakhda as lead plaintiff pursuant to the Private Securities Litigation Reform Act of 1995 (as consolidated, the "Securities Class Action"). Lead plaintiff and additional named plaintiff Richard Lipka filed an Amended Class Action Complaint on October 20, 2020, on behalf of a putative class of purchasers of the Company’s securities from September 4, 2019 through February 11, 2020. Defendants moved to dismiss the Amended Complaint on December 21, 2020. After a mediation held in August 2021, a settlement in principle was reached between the Company and lead plaintiff in the Securities Class Action. The settlement remains subject to formal documentation and must be approved by the New Jersey federal court. If the settlement is approved, all claims in the Securities Class Action will be fully resolved and the matter will be dismissed. On July 10, 2020, the first of three related shareholder derivative actions was filed in the New Jersey federal court on behalf of the Company against various present and former directors and officers. The case, which is captioned Salu v. Tritton, et al., Case No. 2:20-cv-08673-MCA-MAH (D.N.J.), asserts claims under §§ 10(b) and 20(a) of the Exchange Act and for breach of fiduciary duty, unjust enrichment, and waste of corporate assets under state law arising from the events underlying the securities class actions described above and from the Company’s repurchases of its own shares during the class period pled in the securities cases. The two other derivative actions, which assert similar claims, are captioned Grooms v. Tritton, et al., Case No. 2:20-cv-09610-SDW-RDW (D.N.J.) (filed July 29, 2020), and Mantia v. Fleming, et al., Case No. 2:20-cv-09763-MCA-MAH (D.N.J.) (filed July 31, 2020). On August 5, 2020, the court signed a stipulation by the parties in the Salu case to stay that action pending disposition of a motion to dismiss in the Securities Class Action, subject to various terms outlined in the stipulation. The parties in all three derivative cases have moved to consolidate them and to apply the Salu stay of proceedings to all three actions. The court granted the motion on October 14, 2020, which has been subsequently lifted. On January 4, 2022, the Defendants filed a motion to dismiss this case. On August 28, 2020, another related shareholder derivative action, captioned Schneider v. Tritton, et al., Index No 516051/2020, was filed in the Supreme Court of the State of New York, County of Kings. The claims pled in the Schneider case are similar to those pled in the three federal derivative cases, except that the Schneider complaint does not plead claims under the Exchange Act. On September 21, 2020, the parties filed a stipulation seeking to stay that action pending disposition of a motion to dismiss in the securities class action, subject to various terms and conditions. On June 11, 2021, a third related derivative action was filed on behalf of the Company against certain present and former directors and officers. This Complaint is entitled Michael Anthony v Mark Tritton et. al., Index No. 514167/2021 and was filed in the Supreme Court of the State of New York, Kings County. The claims are essentially the same as in the other two derivative actions. The Company has obtained a consensual stay of this case. The derivative cases were not included in the August 2021 settlement referred to above, and the stay related to those matters has been lifted. The Company has recorded a liability for the Securities Class Action, based on the agreed settlement amount and insurance coverage available. At this time, the Company is unable to estimate any potential losses that may be incurred for the derivative cases and has not recorded a liability for those matters. On April 21, 2019, Warren Eisenberg and Leonard Feinstein transitioned to the role of Co-Founders and Co-Chairmen Emeriti of the Board of Directors of the Company. As a result of this transition, Mr. Eisenberg and Mr. Feinstein ceased to be officers of the Company effective as of April 21, 2019, and became entitled to the payments and benefits provided under their employment agreements that apply in the case of a termination without cause, which generally include continued senior status payments until May 2027 and continued participation for the Co-Founders (and their spouses, if applicable) at the Company’s expense in employee plans and programs. In addition, the Co-Founders remain entitled to supplemental pension payments specified in their employment agreements of $200,000 per year (as adjusted for a cost of living increase), until the death of the survivor of the applicable Co-Founder and his spouse, reduced by the continued senior status payments referenced above. Pursuant to their respective restricted stock and performance stock unit agreements, shares of restricted stock and performance-based stock units granted to Messrs. Eisenberg and Feinstein vested upon their resignation as members of the Board of Directors effective May 1, 2019, subject, however, to attainment of any applicable performance goals and the certification of the applicable performance-based tests by the Compensation Committee, as provided under their award agreements. The Company’s former Chief Executive Officer ("Former CEO") departed the Company effective as of May 12, 2019. In accordance with the terms of the Former CEO's employment and equity award agreements, the Former CEO was entitled to three times his then-current salary, payable over three years in normal payroll installments, except that any amount due prior to the six months after his departure, was paid in a lump sum after such six-month period. Such amounts will be reduced by any compensation earned with any subsequent employer or otherwise and will be subject to the Former CEO's compliance with a one-year non-competition and non-solicitation covenant. On October 21, 2019, the Former CEO entered into an agreement (the “Former CEO PSU Settlement Agreement”) with the Company to reduce the PSUs held by him by an excess amount of outstanding PSUs granted to the Former CEO in the Company’s 2018 fiscal year as a result of the use of the fiscal 2017 peer group in lieu of the fiscal 2018 peer group. Further, as a result of this departure, the time-vesting component of the Former CEO's stock-based awards accelerated, including (i) stock options (which were “underwater” and expired without having been exercised by the Former CEO), (ii) PSU awards which had previously met the related performance-based test, had been certified by the Compensation Committee, and remained subject solely to time-vesting, and (iii) PSU awards (assuming target level of performance) which remain subject to attainment of any performance goals and the certification of the applicable performance-based tests by the Compensation Committee, as provided under his award agreements and subject to the terms of the Former CEO PSU Settlement Agreement. The former CEO was also party to a supplemental executive retirement benefit agreement (“SERP”) and a related escrow agreement, pursuant to which the Former CEO was entitled to receive a supplemental retirement benefit as a result of the separation from service from the Company. Pursuant to the SERP, as a result of the separation from service with the Company as of May 12, 2019 being treated as a termination without cause, the Former CEO was entitled to a lump sum payment equal to the present value of an annual amount equal to 50% of the Former CEO's annual base salary on the date of termination of employment if such annual amount were paid for a period of 10 years in accordance with the Company’s normal payroll practices, subject to the Former CEO's timely execution and non-revocation of a release of claims in favor of the Company (which occurred). This amount was paid on November 13, 2019, the first business day following the six-month anniversary of the Former CEO's termination of service. The Company has no further obligations to the Former CEO under the SERP. During fiscal 2019, the Company expensed pre-tax charges related to both the transition of Messrs. Eisenberg and Feinstein to the role of Co-Founders and Co-Chairmen Emeriti of the Board of Directors of the Company and the departure of the Former CEO of approximately $36.8 million. In addition, the Company maintains employment agreements with other executives which provide for severance pay. In connection with the sale of PMall (see Note 18, “Assets held for Sale and Divestitures”), the Company agreed to indemnify 1-800-FLOWERS.COM for certain litigation matters then existing at the time of the close of the transaction, including certain matters for which the Company is entitled to indemnification from the former owner of PMall in connection with the Company's purchase of PMall in fiscal 2016. In the third quarter of fiscal 2021, the Company recorded a liability for one such matter and a corresponding asset based on the Company's assessment of the ability to recover the expected loss under the indemnification provided at the time of its purchase of PMall. The Company records an estimated liability related to its various claims and legal actions arising in the ordinary course of business when and to the extent that it concludes a liability is probable and the amount of the loss can be reasonably estimated. Such estimated loss is based on available information and advice from outside counsel, where appropriate. As additional information becomes available, the Company reassesses the potential liability related to claims and legal actions and revises its estimated liabilities, as appropriate. The Company expects the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity. The Company also cannot predict the nature and validity of claims which could be asserted in the future, and future claims could have a material impact on its earnings.
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Basis of Presentation (Policies) |
9 Months Ended |
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Nov. 27, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying consolidated financial statements have been prepared without audit. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals and elimination of intercompany balances and transactions) necessary to present fairly the financial position of Bed Bath & Beyond Inc. and subsidiaries (the "Company") as of November 27, 2021 and February 27, 2021 and the results of its operations, shareholders' equity, and comprehensive (loss) income for the three and nine months ended November 27, 2021 and November 28, 2020 and its cash flows for the nine months ended November 27, 2021 and November 28, 2020. The accompanying unaudited consolidated financial statements are presented in accordance with the requirements for Form 10-Q and consequently do not include all the disclosures normally required by U.S. generally accepted accounting principles ("GAAP"). Reference should be made to the Company’s Annual Report on Form 10-K for the fiscal year ended February 27, 2021 for additional disclosures, including a summary of the Company’s significant accounting policies, and to subsequently filed Form 8-Ks.
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Revenue Recognition | Sales are recognized upon purchase by customers at the Company’s retail stores or upon delivery for products purchased from its websites. The value of point-of-sale coupons and point-of-sale rebates that result in a reduction of the price paid by the customer are recorded as a reduction of sales. Shipping and handling fees that are billed to a customer in a sale transaction are recorded in sales. Taxes, such as sales tax, use tax and value added tax, are not included in sales. Revenues from gift cards, gift certificates and merchandise credits are recognized when redeemed. Gift cards have no provisions for reduction in the value of unused card balances over defined time periods and have no expiration dates. For the nine months ended November 27, 2021 and November 28, 2020, the Company recognized net sales for gift card and merchandise credit redemptions of approximately $60.5 million and $79.4 million, respectively, which were included in merchandise credit and gift card liabilities on the consolidated balance sheet as of February 27, 2021 and February 29, 2020, respectively. Sales returns are provided for in the period that the related sales are recorded based on historical experience. Although the estimate for sales returns has not varied materially from historical provisions, actual experience could vary from historical experience in the future if the level of sales return activity changes materially. In the future, if the Company concludes that an adjustment is required due to material changes in the returns activity, the liability for estimated returns and the corresponding right of return asset will be adjusted accordingly.
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Fair Value Measurements | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., "the exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices and discounted cash flows. The hierarchy for inputs used in measuring fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect a company’s judgment concerning the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability must be classified in its entirety based on the lowest level of input that is significant to the measurement of fair value. The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows: •Level 1 - Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. •Level 2 - Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. •Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The Company’s financial instruments include cash and cash equivalents, investment securities, accounts payable, long term debt and certain other liabilities. The book value of the Company's financial instruments, excluding long term debt, is representative of their fair values. The Company’s investment securities at November 27, 2021 consisted primarily of U.S. Treasury securities, which are stated at amortized cost and are based on quoted prices in active markets for identical instruments (Level 1 valuation).
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Cash and Cash Equivalents | The Company considers all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents. |
Intangible Assets | The Company reviews long-lived assets for impairment when events or changes in circumstances indicate the carrying value of these assets may exceed their current fair values. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held for sale are separately presented in the appropriate asset and liability sections of the balance sheet (See "Assets Held for Sale and Divestitures," Note 18).The Company reviews intangibles that have indefinite lives for impairment annually as of the end of the fiscal year or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values. Impairment testing is based upon the best information available including estimates of fair value which incorporate assumptions marketplace participants would use in making their estimates of fair value. Significant assumptions and estimates are required, including, but not limited to, projecting future cash flows, determining appropriate discount rates and terminal growth rates, and other assumptions, to estimate the fair value of indefinite lived intangible assets. Although the Company believes the assumptions and estimates made are reasonable and appropriate, different assumptions and estimates could materially impact its reported financial results. Indefinite-lived intangible assets were recorded as a result of acquisitions and primarily consist of tradenames. The Company values its tradenames using a relief-from-royalty approach, which assumes the value of the tradename is the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the tradename and instead licensed the tradename from another company. During the three and nine months ended November 27, 2021, the Company completed a quantitative impairment analysis for certain of its indefinite lived intangible assets, by comparing the fair value of the tradenames to their carrying value and recognized a non-cash pre-tax tradename impairment charge of $0.2 million and $2.9 million, respectively, in impairments, including on assets held for sale, in its consolidated statements of operations. During the three and nine months ended November 28, 2020, the Company recorded tradename impairment charges of $2.4 million and $35.1 million, respectively, in impairments, including on assets held for sale, in its consolidated statements of operations. As of November 27, 2021, for the remaining indefinite lived intangible assets, the Company assessed qualitative factors in order to determine whether any events and circumstances existed which indicated that it was more likely than not that the fair value of these indefinite lived assets did not exceed their carrying values and concluded no such events or circumstances existed which would require an impairment test be performed. In the future, if events or market conditions affect the estimated fair value to the extent that an asset is impaired, the Company will adjust the carrying value of these assets in the period in which the impairment occurs. |
Stock-based Compensation | The Company measures all stock-based compensation awards for employees and non-employee directors using a fair value method and records such expense, net of estimated forfeitures, in its consolidated financial statements. Currently, the Company’s stock-based compensation relates to restricted stock awards, restricted stock units and performance stock units. The Company’s restricted stock awards are considered nonvested share awards. |
Earnings per Share | The Company presents earnings per share on a basic and diluted basis. Basic earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding. Diluted earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding, including the dilutive effect of stock-based awards as calculated under the treasury stock method. |
Investment Securities (Tables) |
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Investment Securities | The Company’s investment securities as of November 27, 2021 and February 27, 2021 are as follows:
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Leases (Tables) |
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Schedule of Lease Cost | The components of total lease cost for the three and nine months ended November 27, 2021 and November 28, 2020, were as follows:
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Assets and Liabilities Related to Operating Leases | As of November 27, 2021 and February 27, 2021, assets and liabilities related to the Company’s leases were as follows:
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Schedule of Lease Liabilities, Operating | As of November 27, 2021, the Company’s lease liabilities mature as follows:
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Schedule of Other Lease Information | The Company’s lease terms and discount rates were as follows:
Other information with respect to the Company’s leases is as follows:
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Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 27, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Unit Activity | Changes in the Company’s restricted stock for the nine months ended November 27, 2021 were as follows:
Changes in the Company’s RSUs for the nine months ended November 27, 2021 were as follows:
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Schedule of PSU Activity |
Changes in the Company’s PSUs for the nine months ended November 27, 2021 were as follows:
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Schedule of PSU Valuation Assumptions | The fair value of the PSUs granted in fiscal 2021, for which performance during the three-year period will be based on a relative three-year TSR goal relative to a peer group, was estimated on the date of the grant using a Monte Carlo simulation that uses the assumptions noted in the following table.
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Schedule of Share-based Compensation, Restricted Stock Units Activity | Changes in the RSUs granted as inducement awards for the nine months ended November 27, 2021 were as follows:
|
Basis of Presentation (Details Textual) - segment |
7 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2020 |
Nov. 27, 2021 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of operating segments | 2 | 1 |
Impact of COVID-19 Pandemic (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Nov. 27, 2021 |
Nov. 28, 2020 |
Nov. 27, 2021 |
Nov. 28, 2020 |
Feb. 27, 2021 |
|
Impact of the COVID-19 Pandemic [Abstract] | |||||
Deferred employer payroll taxes | $ 3.1 | $ 3.1 | $ 3.1 | ||
Effective income tax reconciliation, CARES Act, amount | 2.4 | $ 0.7 | 18.6 | $ 43.7 | |
Offset to selling, general and administrative expenses | $ 0.8 | $ 1.0 | $ 3.7 | $ 28.3 |
Revenue Recognition (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Nov. 27, 2021 |
Nov. 28, 2020 |
Nov. 27, 2021 |
Nov. 28, 2020 |
Feb. 27, 2021 |
|
Revenue Recognition [Line Items] | |||||
Net sales for gift card and merchandise credit redemptions | $ 60.5 | $ 79.4 | |||
Liability for estimated returns | $ 32.0 | 32.0 | $ 36.2 | ||
Right of return asset for merchandise | $ 19.6 | $ 19.6 | $ 23.4 | ||
Revenue from Contract with Customer, Product and Service Benchmark | Domestic Merchandise | Product Concentration Risk | |||||
Revenue Recognition [Line Items] | |||||
Percentage of net sales | 37.60% | 35.70% | 38.40% | 35.40% | |
Revenue from Contract with Customer, Product and Service Benchmark | Home Furnishings | Product Concentration Risk | |||||
Revenue Recognition [Line Items] | |||||
Percentage of net sales | 62.40% | 64.30% | 61.60% | 64.60% |
Fair Value Measurements (Details Textual) - USD ($) $ in Millions |
Nov. 27, 2021 |
Feb. 27, 2021 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Long-term debt, fair value | $ 1,097 | $ 1,118 |
Long-term debt, carrying value | $ 1,184 | $ 1,195 |
Cash and Cash Equivalents (Details) - USD ($) $ in Millions |
Nov. 27, 2021 |
Feb. 27, 2021 |
---|---|---|
Cash and Cash Equivalents [Abstract] | ||
Credit and debit card receivables from banks | $ 138.9 | $ 64.0 |
Restricted Cash and Cash Equivalents, Current | 0.0 | 5.0 |
Restricted Cash and Cash Equivalents, Noncurrent | $ 31.4 | $ 49.2 |
Investment Securities - Summary of Investment Securities (Details) - USD ($) |
Nov. 27, 2021 |
Feb. 27, 2021 |
---|---|---|
Available-for-sale securities: | ||
Long term | $ 19,100,000 | $ 19,400,000 |
Held-to-maturity securities: | ||
Short term | 0 | 0 |
Total investment securities | $ 19,100,000 | $ 19,400,000 |
Investment Securities - Narrative (Details) - USD ($) |
Nov. 27, 2021 |
Feb. 27, 2021 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Short term held-to-maturity securities | $ 0 | $ 0 |
Auction Rate Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Long term available-for-sale investment securities | 20,300,000 | 20,300,000 |
Valuation adjustments | $ 1,100,000 | $ 800,000 |
Impairment of Long-Lived Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 27, 2021 |
Nov. 28, 2020 |
Nov. 27, 2021 |
Nov. 28, 2020 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment charge | $ 1.6 | $ 1.6 | $ 15.6 | $ 84.0 |
Property and Equipment (Details) - USD ($) $ in Billions |
Nov. 27, 2021 |
Feb. 27, 2021 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Accumulated depreciation | $ 1.8 | $ 1.7 |
Leases - Narrative (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Nov. 27, 2021
USD ($)
lease
|
Nov. 28, 2020
USD ($)
|
Nov. 27, 2021
USD ($)
lease
|
Nov. 28, 2020
USD ($)
|
Feb. 27, 2021
USD ($)
|
|
Lessee, Lease, Description [Line Items] | |||||
Operating lease renewal term | 5 years | 5 years | |||
Sublease renewal term | 5 years | ||||
Total payments withheld and/or delayed or deferred | $ 3.0 | $ 3.0 | $ 9.6 | ||
Reduced rent expense related to rent abatement | $ 0.3 | $ 3.4 | $ 2.6 | $ 7.8 | |
Number of leases not yet commenced | lease | 1 | 1 | |||
Lease not yet commenced, aggregate minimum rental payments | $ 107.2 | $ 107.2 | |||
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Original lease terms, operating | 10 years | 10 years | |||
Sublease term | 5 years | ||||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Original lease terms, operating | 15 years | 15 years | |||
Sublease term | 10 years |
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 27, 2021 |
Nov. 28, 2020 |
Nov. 27, 2021 |
Nov. 28, 2020 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 105,230 | $ 152,402 | $ 332,952 | $ 442,120 |
Finance lease cost: | ||||
Depreciation of property | 0 | 642 | 0 | 1,938 |
Interest on lease liabilities | 0 | 2,234 | 0 | 6,692 |
Variable lease cost | 40,753 | 50,060 | 112,270 | 149,755 |
Sublease income | (9,929) | (1,852) | (34,735) | (2,408) |
Total lease cost | $ 136,054 | $ 203,486 | $ 410,487 | $ 598,097 |
Leases - Schedule of Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Nov. 27, 2021 |
Feb. 27, 2021 |
---|---|---|
Assets | ||
Operating leases | $ 1,603,536 | $ 1,587,101 |
Total lease assets | 1,603,536 | 1,587,101 |
Current: | ||
Operating leases | 347,721 | 360,061 |
Noncurrent: | ||
Operating leases | 1,532,873 | 1,509,767 |
Total lease liabilities | $ 1,880,594 | $ 1,869,828 |
Leases - Schedule of Lease Maturities (Details) $ in Thousands |
Nov. 27, 2021
USD ($)
|
---|---|
Operating Leases | |
Remainder of 2021 | $ 108,467 |
2022 | 440,898 |
2023 | 377,833 |
2024 | 323,075 |
2025 | 261,771 |
2026 | 191,406 |
Thereafter | 598,862 |
Total lease payments | 2,302,312 |
Less imputed interest | (421,718) |
Present value of lease liabilities | $ 1,880,594 |
Leases - Lease Terms and Discount Rates (Details) |
Nov. 27, 2021 |
Feb. 27, 2021 |
---|---|---|
Weighted-average remaining lease term | ||
Operating leases | 6 years 10 months 24 days | 6 years 9 months 18 days |
Weighted-average discount rate | ||
Operating leases | 6.00% | 6.40% |
Leases - Cash Flow Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Nov. 27, 2021 |
Nov. 28, 2020 |
|
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows for operating leases | $ 340,314 | $ 431,679 |
Operating cash flows for finance leases | 0 | 7,875 |
Operating lease assets obtained in exchange for new operating lease liabilities | ||
Operating lease assets obtained in exchange for new operating lease liabilities | $ 293,824 | $ 236,222 |
Income Taxes (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Nov. 27, 2021
USD ($)
state
|
Nov. 28, 2020
USD ($)
|
Nov. 27, 2021
USD ($)
state
|
Nov. 28, 2020
USD ($)
|
Feb. 27, 2021
USD ($)
|
|
Tax Credit Carryforward [Line Items] | |||||
Effective income tax rate | (171.30%) | 46.40% | (37.90%) | 45.70% | |
Charge to record valuation allowance | $ 181.5 | ||||
Effective income tax reconciliation, CARES Act, amount | 2.4 | $ 0.7 | $ 18.6 | $ 43.7 | |
Valuation allowance, deferred tax assets | 192.0 | 192.0 | |||
Valuation allowance relative to charitable contribution | $ 10.5 | $ 10.5 | $ 10.5 | ||
Number of states in which entity operates | state | 50 | 50 | |||
CANADA | |||||
Tax Credit Carryforward [Line Items] | |||||
Expected unrealizable tax asset | $ 15.5 | $ 15.5 | $ 15.5 | ||
Minimum | |||||
Tax Credit Carryforward [Line Items] | |||||
Number of years under examination | 3 years | ||||
Maximum | |||||
Tax Credit Carryforward [Line Items] | |||||
Number of years under examination | 9 years |
Indefinite Lived Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Nov. 27, 2021 |
Nov. 28, 2020 |
Nov. 27, 2021 |
Nov. 28, 2020 |
Feb. 27, 2021 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Impairments of indefinite lived intangible assets | $ 0.2 | $ 2.4 | $ 2.9 | $ 35.1 | |
Indefinite lived tradenames and trademarks | $ 19.1 | $ 19.1 | $ 22.0 |
Stock-Based Compensation - Textual (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 27, 2021 |
Nov. 28, 2020 |
Nov. 27, 2021 |
Nov. 28, 2020 |
|
Share-based Payment Arrangement [Abstract] | ||||
Stock-based compensation expense | $ 8.9 | $ 7.2 | $ 26.9 | $ 23.1 |
Stock-based compensation cost capitalized | $ 0.2 | $ 0.3 | $ 0.8 | $ 0.6 |
Stock-Based Compensation - Restricted Stock Textual (Details) - Restricted Stock Awards - 2012 and 2018 Incentive Compensation Plans $ in Millions |
9 Months Ended |
---|---|
Nov. 27, 2021
USD ($)
installment
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Service period from date of grant | 1 year |
Unrecognized compensation expense related to unvested restricted stock awards | $ | $ 11.4 |
Period for recognition, weighted average period (in years) | 2 years 3 months 18 days |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period, number of equal annual installments | 5 |
Service period from date of grant | 1 year |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period, number of equal annual installments | 7 |
Service period from date of grant | 3 years |
Stock-Based Compensation - Restricted Stock Units Textual (Details) - 2012 and 2018 Incentive Compensation Plans - Restricted Stock Units (RSUs) $ in Millions |
9 Months Ended |
---|---|
Nov. 27, 2021
USD ($)
installment
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense related to unvested restricted stock | $ | $ 33.7 |
Period for recognition, weighted average period (in years) | 2 years 1 month 6 days |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period, number of equal annual installments | 1 |
Vesting period commencement (in years) | 1 year |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period, number of equal annual installments | 3 |
Stock-Based Compensation - Monte Carlo Simulation Assumptions (Details) - Performance Stock Units |
9 Months Ended |
---|---|
Nov. 27, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk Free Interest Rate | 0.29% |
Expected Dividend Yield | 0.00% |
Expected Volatility | 52.21% |
Expected Term | 3 years |
Stock-Based Compensation - Inducement Awards Textual (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Nov. 04, 2019 |
Nov. 27, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Threshold percentage stock price trigger (more than) | 50.00% | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 1,026,000 | |
Restricted Stock Units (RSUs) | Inducement Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 0 | |
Unrecognized compensation expense | $ 1.9 | |
Period for recognition, weighted average period (in years) | 1 year 6 months | |
Performance Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 635,000 | |
Performance Stock Units | Inducement Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 273,735 |
Earnings per Share (Details Textual) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 27, 2021 |
Nov. 28, 2020 |
Nov. 27, 2021 |
Nov. 28, 2020 |
|
Earnings Per Share [Abstract] | ||||
Anti-dilutive stock-based awards excluded from computation of diluted earnings per share (in shares) | 2.9 | 1.3 | 2.9 | 2.3 |
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Nov. 27, 2021 |
Nov. 28, 2020 |
|
Supplemental Cash Flow Information [Abstract] | ||
Income taxes paid | $ 4.0 | $ 5.1 |
Interest payments | 34.5 | 44.4 |
Accrual for capital expenditures | 39.1 | 16.2 |
Accrual for dividends payable | $ 0.9 | $ 2.6 |
Commitments and Contingencies (Details) |
12 Months Ended | ||||
---|---|---|---|---|---|
May 12, 2019 |
Feb. 29, 2020
USD ($)
|
Aug. 28, 2020
case
|
Jul. 10, 2020
case
|
Apr. 21, 2019
USD ($)
|
|
Related Party Transaction [Line Items] | |||||
Number of derivative cases | case | 3 | 3 | |||
Co-Founders | |||||
Related Party Transaction [Line Items] | |||||
Supplemental pension payments specified per year | $ 200,000 | ||||
Percentage of base salary | 50.00% | ||||
Payment term (in years) | 10 years | ||||
Transition costs | $ 36,800,000 |
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