þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
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to
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DESIGNER BRANDS INC.
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(Exact name of registrant as specified in its charter)
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Ohio
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31-0746639
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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810 DSW Drive, Columbus, Ohio
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43219
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Class A Common Shares, without par value
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New York Stock Exchange
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Page
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PART I
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PART II
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PART III
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PART IV
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Page
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•
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our success in growing our store base and digital demand;
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•
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risks related to our acquisitions of Camuto Group and TSL, including the possibility that the anticipated benefits of the acquisitions are not realized when expected or at all;
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•
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our ability to protect our reputation and to maintain the brands we license;
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•
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maintaining strong relationships with our vendors, manufacturers and wholesale customers;
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•
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our ability to anticipate and respond to fashion trends, consumer preferences and changing customer expectations;
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•
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risks related to the loss or disruption of our distribution and/or fulfillment operations;
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•
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continuation of agreements with and our reliance on the financial condition of Stein Mart;
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•
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our ability to execute our strategies;
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•
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fluctuation of our comparable sales and quarterly financial performance;
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•
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risks related to the loss or disruption of our information systems and data;
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•
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our ability to prevent or mitigate breaches of our information security and the compromise of sensitive and confidential data;
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•
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failure to retain our key executives or attract qualified new personnel;
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•
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our reliance on our loyalty programs and marketing to drive traffic, sales and customer loyalty;
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•
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risks related to leases of our properties;
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•
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our competitiveness with respect to style, price, brand availability and customer service;
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•
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our reliance on foreign sources for merchandise and risks inherent to international trade, including escalating trade tensions between the U.S. and other countries, as well as U.S. laws affecting the importation of goods, such as recent tariffs imposed on Chinese goods imported to the U.S.;
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•
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uncertainty related to future legislation, regulatory reform, policy changes, or interpretive guidance on existing legislation, including the impact of the Tax Cuts and Jobs Act;
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•
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uncertain general economic conditions;
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•
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risks related to holdings of cash and investments and access to liquidity;
and
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•
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fluctuations in foreign currency exchange rates
.
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ITEM 1.
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BUSINESS
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|
Stores
|
|
U.S. Retail segment - DSW Designer Shoe Warehouse
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516
|
|
Canada Retail segment:
|
|
|
The Shoe Company / Shoe Warehouse
|
112
|
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DSW Designer Shoe Warehouse
|
27
|
|
|
139
|
|
Total
|
655
|
|
|
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Percent of Total Net Sales
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|
Women's footwear
|
|
67
|
%
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Men's footwear
|
|
21
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%
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Accessories and other
|
|
12
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%
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ITEM 1A.
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RISK FACTORS
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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Facility
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Location
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Owned/Leased
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Segment
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Approximate Square Feet
|
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Principal corporate office
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Columbus, Ohio
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Owned
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Corporate, U.S. Retail and Other
|
|
178,000
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Office space
|
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Toronto, Ontario, Canada
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Leased
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Corporate and Canada Retail
|
|
43,500
|
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Office space
|
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Greenwich, Connecticut
|
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Leased
|
|
Brand Portfolio
|
|
47,000
|
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Office space
|
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Bonita Springs, Florida
|
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Leased
|
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Corporate and Brand Portfolio
|
|
10,000
|
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Distribution center
|
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Columbus, Ohio
|
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Owned
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U.S. Retail and Other
|
|
625,000
|
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Fulfillment center
(1)
|
|
Columbus, Ohio
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Leased
|
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U.S. Retail
|
|
854,000
|
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Distribution center
|
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Westampton, New Jersey
|
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Leased
|
|
Brand Portfolio
|
|
683,000
|
|
U.S. retail stores
(2)
|
|
516 various U.S. locations
|
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Leased
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U.S. Retail
|
|
10,529,000
|
|
Canada retail stores
(3)
|
|
139 various Canadian locations
|
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Leased
|
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Canada Retail
|
|
1,150,000
|
|
Showrooms
|
|
10 various U.S. locations
|
|
Leased
|
|
Brand Portfolio
|
|
99,000
|
|
Foreign sourcing offices
|
|
Two locations in China
|
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Leased
|
|
Brand Portfolio
|
|
108,000
|
|
Foreign sourcing office
|
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One location in Brazil
|
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Leased
|
|
Brand Portfolio
|
|
15,000
|
|
(1)
|
Our fulfillment center is leased from Schottenstein Affiliates, a related party, and expires in
September 2022
with two renewal options of five years each.
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(2)
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Our DSW U.S. stores average approximately
20,400
square feet. Most of the store leases are for a fixed term with options for extension periods, exercisable at our option, with
18
stores leased from Schottenstein Affiliates, a related party.
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(3)
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The Shoe Company, Shoe Warehouse and DSW stores in Canada average approximately
8,200
square feet. Most of the store leases are for a fixed term with options for extension periods, exercisable at our option.
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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(1)
|
The total number of shares repurchased includes shares repurchased as part of publicly announced programs (the average price paid per share includes any broker commissions) and
32,186
shares withheld in connection with tax payments due upon vesting of employee restricted stock awards.
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(2)
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The total number of shares repurchased represents shares withheld in connection with tax payments due upon vesting of employee restricted stock awards.
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Company / Index
|
|
February 1, 2014
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January 31, 2015
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January 30, 2016
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January 28, 2017
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February 3, 2018
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February 2, 2019
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||||||||||||
Designer Brands Inc.
|
|
$
|
100.00
|
|
|
$
|
96.64
|
|
|
$
|
66.98
|
|
|
$
|
58.69
|
|
|
$
|
58.91
|
|
|
$
|
83.70
|
|
S&P MidCap 400 Index
|
|
$
|
100.00
|
|
|
$
|
109.29
|
|
|
$
|
100.35
|
|
|
$
|
129.21
|
|
|
$
|
146.05
|
|
|
$
|
140.24
|
|
S&P MidCap 400 Retail Index
|
|
$
|
100.00
|
|
|
$
|
120.42
|
|
|
$
|
104.25
|
|
|
$
|
105.52
|
|
|
$
|
105.77
|
|
|
$
|
106.42
|
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ITEM 6.
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SELECTED FINANCIAL DATA
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(in thousands, except percentages, per share and per square foot data, and store count)
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Fiscal
(1)
|
||||||||||||||||||
2018
(2)
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|
2017
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|
2016
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|
2015
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|
2014
|
|||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
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|
||||||||||
Total revenue
|
$
|
3,183,738
|
|
|
$
|
2,810,720
|
|
|
$
|
2,718,299
|
|
|
$
|
2,620,248
|
|
|
$
|
2,496,092
|
|
Gross profit
(3)
|
$
|
935,191
|
|
|
$
|
799,132
|
|
|
$
|
779,898
|
|
|
$
|
768,369
|
|
|
$
|
755,021
|
|
Operating profit
|
$
|
59,005
|
|
|
$
|
125,058
|
|
|
$
|
199,977
|
|
|
$
|
213,551
|
|
|
$
|
242,485
|
|
Net income (loss)
|
$
|
(20,466
|
)
|
|
$
|
67,452
|
|
|
$
|
124,419
|
|
|
$
|
136,034
|
|
|
$
|
153,299
|
|
Diluted earnings (loss) per share
(4)
|
$
|
(0.26
|
)
|
|
$
|
0.84
|
|
|
$
|
1.51
|
|
|
$
|
1.54
|
|
|
$
|
1.69
|
|
Weighted average number of diluted shares outstanding
|
80,026
|
|
|
80,687
|
|
|
82,135
|
|
|
88,501
|
|
|
90,612
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents and investments
|
$
|
169,087
|
|
|
$
|
300,537
|
|
|
$
|
287,091
|
|
|
$
|
330,475
|
|
|
$
|
447,128
|
|
Inventory
|
$
|
645,317
|
|
|
$
|
501,903
|
|
|
$
|
499,995
|
|
|
$
|
484,236
|
|
|
$
|
450,836
|
|
Total assets
|
$
|
1,620,584
|
|
|
$
|
1,421,517
|
|
|
$
|
1,436,884
|
|
|
$
|
1,369,109
|
|
|
$
|
1,438,243
|
|
Debt
|
$
|
160,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total shareholders' equity
|
$
|
832,377
|
|
|
$
|
955,251
|
|
|
$
|
942,234
|
|
|
$
|
904,924
|
|
|
$
|
1,011,120
|
|
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Comparable sales change
(5)
|
6.1
|
%
|
|
(0.4
|
)%
|
|
(3.0
|
)%
|
|
0.8
|
%
|
|
1.8
|
%
|
|||||
Number of U.S. Retail stores:
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning of period
|
512
|
|
|
501
|
|
|
468
|
|
|
431
|
|
|
394
|
|
|||||
New stores
|
9
|
|
|
15
|
|
|
34
|
|
|
40
|
|
|
37
|
|
|||||
Closed stores
|
(5
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
—
|
|
|||||
End of period
|
516
|
|
|
512
|
|
|
501
|
|
|
468
|
|
|
431
|
|
|||||
Number of Canada Retail stores:
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning of period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquired stores
|
180
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
New stores
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Closed stores
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
End of period
|
139
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Store square footage:
(6)
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Retail
|
10,529
|
|
|
10,485
|
|
|
10,336
|
|
|
9,805
|
|
|
9,277
|
|
|||||
Canada Retail
|
1,150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net sales per average square foot:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Retail
|
$
|
260
|
|
|
$
|
246
|
|
|
$
|
246
|
|
|
$
|
258
|
|
|
$
|
261
|
|
Canada Retail
(7)
|
$
|
212
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
ABG stores serviced
|
287
|
|
|
293
|
|
|
395
|
|
|
379
|
|
|
371
|
|
|||||
Cash dividends per share
|
$
|
1.00
|
|
|
$
|
0.80
|
|
|
$
|
0.80
|
|
|
$
|
0.80
|
|
|
$
|
0.75
|
|
(1)
|
All fiscal years are based on a
52
-week year, except for fiscal 2017, which is based on a
53
-week year.
|
(2)
|
On
May 10, 2018
, we acquired the remaining interest in TSL that we did not previously own. Beginning with our second quarter of fiscal 2018, TSL ceased being accounted for under the equity method of accounting and was accounted for as a consolidated wholly-owned subsidiary. On
November 5, 2018
, we completed the acquisition of Camuto Group.
|
(3)
|
Gross profit is defined as net sales, which excludes commission, franchise and other revenue, less cost of sales.
|
(4)
|
Diluted loss per share for
fiscal 2018
included net after-tax charges of
$155.3 million
, or
$1.92
per diluted share, primarily related to impairment charges, acquisition-related activities, the exit of the Town Shoes banner, other restructuring costs, and the net tax expense impact of finalizing the U.S. Tax Reform implementation assessment. Diluted earnings per share for
fiscal 2017
included net after-tax charges of
$55.5 million
, or
$0.68
per diluted share, primarily related to impairment charges, inventory write-downs, amortization of intangibles and the change in fair value of the contingent consideration liability associated with Ebuys, restructuring costs, foreign exchange net losses, and the initial net tax expense impact of implementing the U.S. Tax Reform.
|
(5)
|
A store is considered comparable when in operation for at least 14 months at the beginning of the fiscal year. Stores are added to the comparable base at the beginning of the year and are dropped for comparative purposes in the quarter they are closed. Comparable sales includes e-commerce sales. Stores added due to the TSL acquisition that are in operation for at least 14 months at the beginning of fiscal 2019, along with its e-commerce sales, will be added to the comparable base beginning with the second quarter of fiscal 2019. The calculation of comparable sales varies across the retail industry and, as a result, the calculations of other retail companies may not be consistent with our calculation.
|
(6)
|
Store square footage represents the total amount of square footage as of the end of the fiscal year for stores and does not include ABG or square footage of the distribution and fulfillment centers.
|
(7)
|
Canada Retail sales included in the calculation have been annualized on a full year basis. The calculation excludes the Town Shoes banner that was exited during fiscal 2018.
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Fiscal
|
|||||||||||||||||||
(dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net sales
|
$
|
3,174,420
|
|
|
99.7
|
%
|
|
$
|
2,805,555
|
|
|
99.8
|
%
|
|
$
|
2,713,355
|
|
|
99.8
|
%
|
Commission, franchise and other revenue
|
9,318
|
|
|
0.3
|
|
|
5,165
|
|
|
0.2
|
|
|
4,944
|
|
|
0.2
|
|
|||
Total revenue
|
3,183,738
|
|
|
100.0
|
|
|
2,810,720
|
|
|
100.0
|
|
|
2,718,299
|
|
|
100.0
|
|
|||
Cost of sales
|
(2,239,229
|
)
|
|
(70.3
|
)
|
|
(2,006,423
|
)
|
|
(71.4
|
)
|
|
(1,933,457
|
)
|
|
(71.1
|
)
|
|||
Operating expenses
|
(826,042
|
)
|
|
(25.9
|
)
|
|
(622,546
|
)
|
|
(22.1
|
)
|
|
(605,016
|
)
|
|
(22.3
|
)
|
|||
Income from equity investment in ABG-Camuto
|
1,298
|
|
|
0.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Impairment charges
|
(60,760
|
)
|
|
(1.9
|
)
|
|
(89,440
|
)
|
|
(3.2
|
)
|
|
—
|
|
|
—
|
|
|||
Change in fair value of contingent consideration liability
|
—
|
|
|
—
|
|
|
32,747
|
|
|
1.2
|
|
|
20,151
|
|
|
0.7
|
|
|||
Operating profit
|
59,005
|
|
|
1.9
|
|
|
125,058
|
|
|
4.5
|
|
|
199,977
|
|
|
7.3
|
|
|||
Interest income, net
|
1,288
|
|
|
0.0
|
|
|
2,789
|
|
|
0.1
|
|
|
2,141
|
|
|
0.1
|
|
|||
Non-operating income (expenses), net
|
(49,616
|
)
|
|
(1.6
|
)
|
|
(1,885
|
)
|
|
(0.1
|
)
|
|
338
|
|
|
0.0
|
|
|||
Income before income taxes and income (loss) from equity investment in TSL
|
10,677
|
|
|
0.3
|
|
|
125,962
|
|
|
4.5
|
|
|
202,456
|
|
|
7.4
|
|
|||
Income tax provision
|
(29,833
|
)
|
|
(0.9
|
)
|
|
(59,567
|
)
|
|
(2.1
|
)
|
|
(78,778
|
)
|
|
(2.9
|
)
|
|||
Income (loss) from equity investment in TSL
|
(1,310
|
)
|
|
0.0
|
|
|
1,057
|
|
|
0.0
|
|
|
741
|
|
|
0.0
|
|
|||
Net income (loss)
|
$
|
(20,466
|
)
|
|
(0.6
|
)%
|
|
$
|
67,452
|
|
|
2.4
|
%
|
|
$
|
124,419
|
|
|
4.5
|
%
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales for the previous fiscal year
|
$
|
2,805,555
|
|
|
$
|
2,713,355
|
|
|
$
|
2,620,248
|
|
Increase (decrease) in comparable sales
|
158,225
|
|
|
(10,229
|
)
|
|
(75,267
|
)
|
|||
Net sales during the 53
rd
week in fiscal 2017
|
(35,626
|
)
|
|
35,626
|
|
|
—
|
|
|||
Net increase from non-comparable store net sales and other changes
|
43,767
|
|
|
66,803
|
|
|
168,374
|
|
|||
Incremental external net sales from 2018 acquired businesses
|
306,463
|
|
|
—
|
|
|
—
|
|
|||
Loss of net sales from the exit of Gordmans and Ebuys
|
(103,964
|
)
|
|
—
|
|
|
—
|
|
|||
Total net sales
|
$
|
3,174,420
|
|
|
$
|
2,805,555
|
|
|
$
|
2,713,355
|
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
U.S. Retail
|
$
|
2,738,989
|
|
|
$
|
2,577,711
|
|
|
$
|
2,479,902
|
|
Canada Retail
|
220,325
|
|
|
—
|
|
|
—
|
|
|||
Brand Portfolio
(1)
|
86,138
|
|
|
—
|
|
|
—
|
|
|||
Other
(2)
|
128,968
|
|
|
227,844
|
|
|
233,453
|
|
|||
Total net sales
|
$
|
3,174,420
|
|
|
$
|
2,805,555
|
|
|
$
|
2,713,355
|
|
(1)
|
Excludes intersegment net sales in fiscal 2018 of
$9.8 million
, which is eliminated in consolidation.
|
(2)
|
Other represents net sales for ABG and Ebuys.
|
|
Fiscal
|
||||||||||
(dollars in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
3,174,420
|
|
|
$
|
2,805,555
|
|
|
$
|
2,713,355
|
|
Cost of sales
|
(2,239,229
|
)
|
|
(2,006,423
|
)
|
|
(1,933,457
|
)
|
|||
Gross profit
|
$
|
935,191
|
|
|
$
|
799,132
|
|
|
$
|
779,898
|
|
Gross profit as a percentage of net sales
|
29.5
|
%
|
|
28.5
|
%
|
|
28.7
|
%
|
|
Payments due by Period
|
||||||||||||||||||
(in thousands)
|
Total
|
|
Less Than
1 Year
|
|
1 - 3
Years
|
|
3 -5
Years
|
|
More Than
5 Years
|
||||||||||
Operating lease obligations
(1)
|
$
|
1,306,576
|
|
|
$
|
242,662
|
|
|
$
|
449,865
|
|
|
$
|
310,016
|
|
|
$
|
304,033
|
|
Debt, including estimated interest payments
(2)
|
183,169
|
|
|
6,487
|
|
|
12,975
|
|
|
163,707
|
|
|
—
|
|
|||||
Minimum license commitments
(3)
|
305,606
|
|
|
33,984
|
|
|
71,159
|
|
|
62,418
|
|
|
138,045
|
|
|||||
Purchase obligations
(4)
|
19,634
|
|
|
15,278
|
|
|
4,356
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
1,814,985
|
|
|
$
|
298,411
|
|
|
$
|
538,355
|
|
|
$
|
536,141
|
|
|
$
|
442,078
|
|
(1)
|
Operating lease obligations include real estate leases, including leased locations that were abandoned, and non-real estate leases. Future minimum lease payment requirements excludes contingent rental payments, maintenance, insurance, real estate taxes, and the amortization of deferred rent and construction and tenant allowances.
|
(2)
|
Interest payments on our revolving line of credit were estimated using the effective interest rate as of
February 2, 2019
and assuming interest payments on
$160.0 million
outstanding on our revolving line of credit through
August 25, 2022
, the maturity date of our Credit Facility.
|
(3)
|
Minimum license commitments includes guaranteed minimum royalties, including amounts due to the ABG-Camuto joint venture, and fixed consulting and other fees due to other parties under various licensing agreements.
|
(4)
|
Purchase obligations include commitments where we would not be able to cancel such obligations without payment or penalty, including items to be purchased for projects that were under construction or for which a lease has been signed.
|
Policy
|
Judgments and Estimates
|
Effect if Actual Results Differ from Assumptions
|
Business Combinations.
We account for business combinations using the acquisition method of accounting, which requires that once control is obtained, all the assets acquired and liabilities assumed be recorded at their respective fair values at the date of acquisition. The determination of fair values of assets and liabilities acquired requires estimates and the use of valuation techniques when market value is not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill.
|
The fair values for property and equipment were determined using the cost and market approaches. The fair value of inventories, which is made up of finished goods, was determined based on market assumptions for realizing a reasonable profit after selling costs. For intangible assets, we generally use an income approach to determine fair value. The income approach requires management to make significant estimates and assumptions. These estimates and assumptions may include the use of discount rates, growth rates, customer attrition rates, royalty rates, and forecasts of revenue and operating income. The discount rates applied to the projections reflect the risk factors associated with those projections.
|
Although we believe our estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could result in future impairment charges of long-lived assets and goodwill and other indefinite lived intangible assets, discussed in more detail below.
|
Policy
|
Judgments and Estimates
|
Effect if Actual Results Differ from Assumptions
|
Income Taxes.
We determine the aggregate amount of income tax expense to accrue and the amount which will be currently payable based upon tax statutes of each jurisdiction we do business in. Deferred tax assets and liabilities, as a result of these timing differences, are reflected on our balance sheet for temporary differences that will reverse in subsequent years. A valuation allowance is established against deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. We review and update our tax positions as necessary to add any new uncertain tax positions taken, or to remove previously identified uncertain positions that have been adequately resolved. Additionally, uncertain positions may be remeasured as warranted by changes in facts or law.
|
Tax laws, regulations, and policies in various jurisdictions may be subject to significant change due to economic, political and other conditions, and significant judgment is required in estimating our provision and accruals for taxes. There may be transactions that occur during the ordinary course of business for which the ultimate tax determination is uncertain. The U.S. Tax Reform that was enacted in fiscal 2017 significantly changed how the U.S. taxes corporations and requires complex computations to be performed that were not previously required in U.S. tax law. The U.S. Treasury Department, the U.S. Internal Revenue Service, and other standard-setting bodies could interpret or issue guidance on how provisions of the U.S. Tax Reform will be applied or otherwise administered that is different from our interpretation. In addition, state, local or foreign jurisdictions may enact tax laws in response to the U.S. Tax Reform that could result in further changes to taxation and materially affect our financial position and results of operations.
|
As of February 2, 2019, we had a valuation allowance of $14.1 million and gross unrecognized tax benefits of $11.6 million. However, we may be required to make adjustments that may materially impact our provision for income taxes in the period in which the adjustments are made based on additional information, additional guidance or revised interpretations.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
|
Plan Category
|
|
(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights
(1)(2)(3)
|
|
(b) Weighted-average exercise price of outstanding options, warrants and rights
(2)
|
|
(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(3)
|
||||
Equity compensation plans approved by security holders
|
|
5,977,650
|
|
|
$
|
24.36
|
|
|
4,026,240
|
|
Equity compensation plans not approved by security holders
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Total
|
|
5,977,650
|
|
|
$
|
24.36
|
|
|
4,026,240
|
|
(1)
|
DSW Inc. 2005 Equity Incentive Plan.
|
(2)
|
Includes
4,000,799
shares issuable pursuant to the exercise of outstanding stock options,
989,013
shares issuable pursuant to restricted stock units,
595,936
shares issuable pursuant to performance-based restricted stock units and
391,902
shares issuable pursuant to director stock units. Since the restricted stock units, performance-based restricted stock units and director stock units have no exercise price, they are not included in the weighted average exercise price calculation in column (b).
|
(3)
|
DSW Inc. 2014 Equity Incentive Plan.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Statements of Operations for the years ended February 2, 2019, February 3, 2018 and January 28, 2017
|
|
Consolidated Statements of Comprehensive Income (Loss) for the years ended February 2, 2019, February 3, 2018 and January 28, 2017
|
|
Consolidated Balance Sheets as of February 2, 2019 and February 3, 2018
|
|
Consolidated Statements of Shareholders' Equity for the years ended February 2, 2019, February 3, 2018 and January 28, 2017
|
|
Consolidated Statements of Cash Flows for the years ended February 2, 2019, February 3, 2018 and January 28, 2017
|
|
Notes to Consolidated Financial Statements
|
Exhibit No.
|
|
Description
|
2.1
|
|
|
2.2
|
|
|
2.3##
|
|
|
2.4##
|
|
|
2.4.1##*
|
|
|
2.4.2##*
|
|
|
3.1*
|
|
|
3.2
|
|
|
4.1
|
|
|
10.1
|
|
|
10.1.1
|
|
|
10.2#
|
|
|
10.2.1#
|
|
|
10.2.2#
|
|
|
10.3#
|
|
|
10.3.1#*
|
|
|
10.3.2#
|
|
|
10.3.3#
|
|
|
10.3.4#
|
|
|
10.3.5#
|
|
Exhibit No.
|
|
Description
|
10.4
|
|
|
10.4.1
|
|
|
10.5
|
|
|
10.6#
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.9.1
|
|
|
10.10
|
|
|
10.10.1
|
|
|
10.10.2
|
|
|
10.10.3
|
|
|
10.10.4
|
|
|
10.10.5
|
|
|
10.10.6
|
|
|
10.11#
|
|
|
10.12
|
|
|
10.12.1
|
|
|
10.12.2
|
|
|
10.12.3
|
|
Exhibit No.
|
|
Description
|
10.12.4*
|
|
|
10.13
|
|
|
10.14#
|
|
|
10.14.1#
|
|
|
10.15#
|
|
|
10.15.1#
|
|
|
10.16#
|
|
|
10.17#
|
|
|
10.18#
|
|
|
21.1*
|
|
|
23.1*
|
|
|
24.1*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1*
|
|
|
32.2*
|
|
|
101*
|
|
XBRL Instance documents.
|
*
|
Filed herewith.
|
#
|
Management contract or compensatory plan or arrangement.
|
##
|
Certain schedules to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K and Designer Brands Inc. agrees to furnish supplementary to the Securities and Exchange Commission a copy of any omitted schedule.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
DESIGNER BRANDS INC.
|
|
|
|
|
March 26, 2019
|
By:
|
/s/ Jared Poff
|
|
|
Jared Poff,
Executive Vice President and Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Roger Rawlins
|
|
Chief Executive Officer and Director
|
|
March 26, 2019
|
Roger Rawlins
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Jared Poff
|
|
Executive Vice President and Chief Financial Officer
|
|
March 26, 2019
|
Jared Poff
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Mark Haley
|
|
Senior Vice President and Controller
|
|
March 26, 2019
|
Mark Haley
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
*
|
|
Executive Chairman of the Board and Director
|
|
March 26, 2019
|
Jay L. Schottenstein
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 26, 2019
|
Peter Cobb
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 26, 2019
|
Joanne Zaiac
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 26, 2019
|
Elaine J. Eisenman
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 26, 2019
|
Carolee Lee
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 26, 2019
|
Joanna T. Lau
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 26, 2019
|
Joseph A. Schottenstein
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 26, 2019
|
Harvey L. Sonnenberg
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 26, 2019
|
Allan J. Tanenbaum
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 26, 2019
|
Ekta Singh-Bushell
|
|
|
|
|
*By:
|
/s/ Jared Poff
|
|
Jared Poff (Attorney-in-fact)
|
|
Fiscal
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Net sales
|
$
|
3,174,420
|
|
|
$
|
2,805,555
|
|
|
$
|
2,713,355
|
|
Commission, franchise and other revenue
|
9,318
|
|
|
5,165
|
|
|
4,944
|
|
|||
Total revenue
|
3,183,738
|
|
|
2,810,720
|
|
|
2,718,299
|
|
|||
Cost of sales
|
(2,239,229
|
)
|
|
(2,006,423
|
)
|
|
(1,933,457
|
)
|
|||
Operating expenses
|
(826,042
|
)
|
|
(622,546
|
)
|
|
(605,016
|
)
|
|||
Income from equity investment in ABG-Camuto
|
1,298
|
|
|
—
|
|
|
—
|
|
|||
Impairment charges
|
(60,760
|
)
|
|
(89,440
|
)
|
|
—
|
|
|||
Change in fair value of contingent consideration liability
|
—
|
|
|
32,747
|
|
|
20,151
|
|
|||
Operating profit
|
59,005
|
|
|
125,058
|
|
|
199,977
|
|
|||
Interest expense
|
(2,433
|
)
|
|
(488
|
)
|
|
(238
|
)
|
|||
Interest income
|
3,721
|
|
|
3,277
|
|
|
2,379
|
|
|||
Interest income, net
|
1,288
|
|
|
2,789
|
|
|
2,141
|
|
|||
Non-operating income (expenses), net
|
(49,616
|
)
|
|
(1,885
|
)
|
|
338
|
|
|||
Income before income taxes and income (loss) from equity investment in TSL
|
10,677
|
|
|
125,962
|
|
|
202,456
|
|
|||
Income tax provision
|
(29,833
|
)
|
|
(59,567
|
)
|
|
(78,778
|
)
|
|||
Income (loss) from equity investment in TSL
|
(1,310
|
)
|
|
1,057
|
|
|
741
|
|
|||
Net income (loss)
|
$
|
(20,466
|
)
|
|
$
|
67,452
|
|
|
$
|
124,419
|
|
Basic and diluted earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
$
|
(0.26
|
)
|
|
$
|
0.84
|
|
|
$
|
1.53
|
|
Diluted earnings (loss) per share
|
$
|
(0.26
|
)
|
|
$
|
0.84
|
|
|
$
|
1.51
|
|
Weighted average shares used in per share calculations:
|
|
|
|
|
|
||||||
Basic shares
|
80,026
|
|
|
80,160
|
|
|
81,536
|
|
|||
Diluted shares
|
80,026
|
|
|
80,687
|
|
|
82,135
|
|
|
Fiscal
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
$
|
(20,466
|
)
|
|
$
|
67,452
|
|
|
$
|
124,419
|
|
Other comprehensive income (loss), net of income taxes:
|
|
|
|
|
|
||||||
Foreign currency translation gain (loss)
|
(7,013
|
)
|
|
3,681
|
|
|
6,831
|
|
|||
Unrealized net gain (loss) on debt securities
|
192
|
|
|
(1,095
|
)
|
|
127
|
|
|||
Reclassification adjustment for net losses (gains) realized in net income (loss)
|
14,189
|
|
|
1,281
|
|
|
(196
|
)
|
|||
Total other comprehensive income, net of income taxes
|
7,368
|
|
|
3,867
|
|
|
6,762
|
|
|||
Total comprehensive income (loss)
|
$
|
(13,098
|
)
|
|
$
|
71,319
|
|
|
$
|
131,181
|
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
99,369
|
|
|
$
|
175,932
|
|
Investments
|
69,718
|
|
|
124,605
|
|
||
Accounts receivable, net
|
68,870
|
|
|
19,236
|
|
||
Inventories
|
645,317
|
|
|
501,903
|
|
||
Prepaid expenses and other current assets
|
71,945
|
|
|
49,197
|
|
||
Total current assets
|
955,219
|
|
|
870,873
|
|
||
Property and equipment, net
|
409,576
|
|
|
355,199
|
|
||
Goodwill
|
89,513
|
|
|
25,899
|
|
||
Intangible assets
|
46,129
|
|
|
135
|
|
||
Deferred tax assets
|
30,283
|
|
|
27,711
|
|
||
Equity investments
|
58,125
|
|
|
6,096
|
|
||
Notes receivable from TSL
|
—
|
|
|
115,895
|
|
||
Other assets
|
31,739
|
|
|
19,709
|
|
||
Total assets
|
$
|
1,620,584
|
|
|
$
|
1,421,517
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Accounts payable
|
$
|
261,625
|
|
|
$
|
179,308
|
|
Accrued expenses
|
201,535
|
|
|
148,226
|
|
||
Total current liabilities
|
463,160
|
|
|
327,534
|
|
||
Debt
|
160,000
|
|
|
—
|
|
||
Non-current liabilities
|
165,047
|
|
|
138,732
|
|
||
Total liabilities
|
788,207
|
|
|
466,266
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Shareholders' equity:
|
|
|
|
||||
Common shares paid in-capital, no par value
|
978,794
|
|
|
961,245
|
|
||
Treasury shares, at cost
|
(373,436
|
)
|
|
(325,906
|
)
|
||
Retained earnings
|
254,718
|
|
|
354,979
|
|
||
Basis difference related to acquisition of commonly controlled entity
|
(24,993
|
)
|
|
(24,993
|
)
|
||
Accumulated other comprehensive loss
|
(2,706
|
)
|
|
(10,074
|
)
|
||
Total shareholders' equity
|
832,377
|
|
|
955,251
|
|
||
Total liabilities and shareholders' equity
|
$
|
1,620,584
|
|
|
$
|
1,421,517
|
|
|
Number of Shares
|
|
Amounts
|
|||||||||||||||||||||||||||||
|
Class A
common shares |
|
Class B
common shares |
|
Treasury shares
|
|
Common shares paid in capital
|
|
Treasury shares
|
|
Retained
earnings |
|
Basis difference related to acquisition of commonly controlled entity
|
|
Accumulated other comprehensive loss
|
|
Total |
|||||||||||||||
Balance, January 30, 2016
|
74,185
|
|
|
7,733
|
|
|
10,211
|
|
|
$
|
930,011
|
|
|
$
|
(266,531
|
)
|
|
$
|
287,140
|
|
|
$
|
(24,993
|
)
|
|
$
|
(20,703
|
)
|
|
$
|
904,924
|
|
Cumulative effect of accounting change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,864
|
|
|
—
|
|
|
—
|
|
|
4,864
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124,419
|
|
|
—
|
|
|
—
|
|
|
124,419
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
12,687
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,687
|
|
||||||
Stock-based compensation issuances and exercises
|
642
|
|
|
—
|
|
|
—
|
|
|
3,693
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,693
|
|
||||||
Repurchase of Class A common shares
|
(2,380
|
)
|
|
—
|
|
|
2,380
|
|
|
—
|
|
|
(50,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,000
|
)
|
||||||
Excess tax detriments related to stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
||||||
Dividends paid ($0.80 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65,073
|
)
|
|
—
|
|
|
—
|
|
|
(65,073
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,762
|
|
|
6,762
|
|
||||||
Balance, January 28, 2017
|
72,447
|
|
|
7,733
|
|
|
12,591
|
|
|
946,351
|
|
|
(316,531
|
)
|
|
351,350
|
|
|
(24,993
|
)
|
|
(13,941
|
)
|
|
942,236
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67,452
|
|
|
—
|
|
|
—
|
|
|
67,452
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
14,704
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,704
|
|
||||||
Stock-based compensation issuances and exercises
|
347
|
|
|
—
|
|
|
—
|
|
|
190
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190
|
|
||||||
Repurchase of Class A common shares
|
(500
|
)
|
|
—
|
|
|
500
|
|
|
—
|
|
|
(9,375
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,375
|
)
|
||||||
Dividends paid ($0.80 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63,823
|
)
|
|
—
|
|
|
—
|
|
|
(63,823
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,867
|
|
|
3,867
|
|
||||||
Balance, February 3, 2018
|
72,294
|
|
|
7,733
|
|
|
13,091
|
|
|
961,245
|
|
|
(325,906
|
)
|
|
354,979
|
|
|
(24,993
|
)
|
|
(10,074
|
)
|
|
955,251
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,466
|
)
|
|
—
|
|
|
—
|
|
|
(20,466
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
17,393
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,393
|
|
||||||
Replacement stock-based award value attributable to TSL acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
196
|
|
||||||
Stock-based compensation issuances and exercises
|
378
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
||||||
Repurchase of Class A common shares
|
(2,000
|
)
|
|
—
|
|
|
2,000
|
|
|
—
|
|
|
(47,530
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47,530
|
)
|
||||||
Dividends paid ($1.00 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(79,795
|
)
|
|
—
|
|
|
—
|
|
|
(79,795
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,368
|
|
|
7,368
|
|
||||||
Balance, February 2, 2019
|
70,672
|
|
|
7,733
|
|
|
15,091
|
|
|
$
|
978,794
|
|
|
$
|
(373,436
|
)
|
|
$
|
254,718
|
|
|
$
|
(24,993
|
)
|
|
$
|
(2,706
|
)
|
|
$
|
832,377
|
|
|
Fiscal
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(20,466
|
)
|
|
$
|
67,452
|
|
|
$
|
124,419
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
79,048
|
|
|
80,861
|
|
|
82,824
|
|
|||
Stock-based compensation expense
|
17,393
|
|
|
14,704
|
|
|
12,687
|
|
|||
Deferred income taxes
|
(11,748
|
)
|
|
(12,804
|
)
|
|
6,861
|
|
|||
Loss on previously held equity investment in TSL and notes receivable from TSL
|
33,988
|
|
|
—
|
|
|
—
|
|
|||
Lease exit non-cash charges
|
7,237
|
|
|
—
|
|
|
—
|
|
|||
Impairment charges
|
60,760
|
|
|
89,440
|
|
|
—
|
|
|||
Change in fair value of contingent consideration liability
|
—
|
|
|
(32,747
|
)
|
|
(20,151
|
)
|
|||
Loss on foreign currency reclassified from accumulated other comprehensive loss
|
13,963
|
|
|
1,281
|
|
|
—
|
|
|||
Other
|
(3,445
|
)
|
|
(775
|
)
|
|
1,828
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
36,151
|
|
|
(230
|
)
|
|
(2,206
|
)
|
|||
Inventories
|
(4,162
|
)
|
|
(1,908
|
)
|
|
14,411
|
|
|||
Prepaid expenses and other current assets
|
(12,310
|
)
|
|
(15,895
|
)
|
|
4,138
|
|
|||
Accounts payable
|
(38,059
|
)
|
|
(8,855
|
)
|
|
(30,572
|
)
|
|||
Accrued expenses
|
16,984
|
|
|
10,492
|
|
|
18,667
|
|
|||
Net cash provided by operating activities
|
175,334
|
|
|
191,016
|
|
|
212,906
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Cash paid for property and equipment
|
(65,355
|
)
|
|
(56,282
|
)
|
|
(87,580
|
)
|
|||
Purchases of available-for-sale investments
|
(16,735
|
)
|
|
(133,153
|
)
|
|
(95,905
|
)
|
|||
Sales of available-for-sale investments
|
71,136
|
|
|
187,866
|
|
|
220,744
|
|
|||
Additional borrowings by TSL
|
(15,989
|
)
|
|
(57,396
|
)
|
|
(4,795
|
)
|
|||
Repayments of borrowings by TSL
|
1,160
|
|
|
—
|
|
|
—
|
|
|||
Equity investment in ABG-Camuto
|
(56,827
|
)
|
|
—
|
|
|
—
|
|
|||
Business acquisitions, net of cash acquired
|
(199,403
|
)
|
|
—
|
|
|
(59,776
|
)
|
|||
Net cash used in investing activities
|
(282,013
|
)
|
|
(58,965
|
)
|
|
(27,312
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Borrowing on revolving line of credit
|
160,000
|
|
|
—
|
|
|
—
|
|
|||
Cash paid for treasury shares
|
(47,530
|
)
|
|
(9,375
|
)
|
|
(50,000
|
)
|
|||
Dividends paid
|
(79,795
|
)
|
|
(63,823
|
)
|
|
(65,073
|
)
|
|||
Other
|
(2,711
|
)
|
|
1,769
|
|
|
4,618
|
|
|||
Net cash provided by (used in) financing activities
|
29,964
|
|
|
(71,429
|
)
|
|
(110,455
|
)
|
|||
Effect of exchange rate changes on cash balances
|
1,351
|
|
|
—
|
|
|
—
|
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
(75,364
|
)
|
|
60,622
|
|
|
75,139
|
|
|||
Cash, cash equivalents, and restricted cash, beginning of period
|
175,932
|
|
|
115,310
|
|
|
40,171
|
|
|||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
100,568
|
|
|
$
|
175,932
|
|
|
$
|
115,310
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
41,695
|
|
|
$
|
77,208
|
|
|
$
|
56,529
|
|
Cash paid for interest on debt
|
$
|
864
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Property and equipment purchases not yet paid
|
$
|
13,537
|
|
|
$
|
9,778
|
|
|
$
|
8,882
|
|
Ebuys contingent purchase price
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53,355
|
|
(in thousands)
|
February 2, 2019
|
|
February 3, 2018
|
|
January 28, 2017
|
||||||
Cash and cash equivalents
|
$
|
99,369
|
|
|
$
|
175,932
|
|
|
$
|
110,657
|
|
Restricted cash, included in prepaid expenses and other current assets
|
1,199
|
|
|
—
|
|
|
4,653
|
|
|||
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows
|
$
|
100,568
|
|
|
$
|
175,932
|
|
|
$
|
115,310
|
|
•
|
Level 1 - Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 - Quoted prices for similar assets or liabilities in active markets or inputs that are observable.
|
•
|
Level 3 - Unobservable inputs in which little or no market activity exists.
|
|
Useful Lives
|
Buildings
|
39 years
|
Building and leasehold improvements
|
3 to 20 years or the lease term if shorter
|
Furniture, fixtures and equipment
|
3 to 10 years
|
Software
|
5 to 10 years
|
(in thousands)
|
Fiscal 2018
|
|
Fiscal 2017
|
||||
Equity investment in TSL - beginning of period
|
$
|
6,096
|
|
|
$
|
15,830
|
|
Share of TSL's income (loss)
|
(3,553
|
)
|
|
(5,095
|
)
|
||
Foreign currency translation adjustments, included in other comprehensive income (loss)
|
(92
|
)
|
|
(4,271
|
)
|
||
Amortization of purchase price adjustments
|
(50
|
)
|
|
(368
|
)
|
||
Fair value adjustment for step acquisition
|
(2,401
|
)
|
|
—
|
|
||
Equity investment in TSL - end of period
|
$
|
—
|
|
|
$
|
6,096
|
|
(in thousands)
|
Fiscal 2018
|
|
Fiscal 2017
|
||||
Notes receivable from TSL - beginning of period
|
$
|
115,895
|
|
|
$
|
53,121
|
|
Payment-in-kind interest earned
|
1,800
|
|
|
6,520
|
|
||
TSL revolver interest earned
|
493
|
|
|
—
|
|
||
Foreign currency translation adjustments, included in other comprehensive income (loss)
|
(3,756
|
)
|
|
3,384
|
|
||
Management service fee
|
294
|
|
|
1,162
|
|
||
Additional TSL loan
|
9,469
|
|
|
51,708
|
|
||
Repayments
|
(1,160
|
)
|
|
—
|
|
||
Fair value adjustment for step acquisition
|
(31,587
|
)
|
|
—
|
|
||
Contribution to step acquisition purchase price
|
(91,448
|
)
|
|
—
|
|
||
Notes receivable from TSL - end of period
|
$
|
—
|
|
|
$
|
115,895
|
|
(in thousands)
|
Preliminary Purchase Price and Allocation as of May 10, 2018
|
|
Adjustments
|
|
Final Purchase Price and Allocation as of February 2, 2019
|
||||||
Purchase price:
|
|
|
|
|
|
||||||
Cash consideration, net of cash acquired
|
$
|
28,152
|
|
|
$
|
—
|
|
|
$
|
28,152
|
|
Replacement stock-based awards attributable to pre-acquisition services
|
196
|
|
|
—
|
|
|
196
|
|
|||
Fair value of pre-existing assets
|
92,242
|
|
|
—
|
|
|
92,242
|
|
|||
|
$
|
120,590
|
|
|
$
|
—
|
|
|
$
|
120,590
|
|
Fair value of assets and liabilities acquired:
|
|
|
|
|
|
||||||
Inventories
|
$
|
58,822
|
|
|
$
|
7,250
|
|
|
$
|
66,072
|
|
Other current assets
|
3,608
|
|
|
79
|
|
|
3,687
|
|
|||
Property and equipment
|
41,601
|
|
|
(593
|
)
|
|
41,008
|
|
|||
Goodwill
|
37,044
|
|
|
5,978
|
|
|
43,022
|
|
|||
Intangible assets
|
20,689
|
|
|
—
|
|
|
20,689
|
|
|||
Accounts payable and other liabilities
|
(33,248
|
)
|
|
52
|
|
|
(33,196
|
)
|
|||
Non-current liabilities
|
(7,926
|
)
|
|
(12,766
|
)
|
|
(20,692
|
)
|
|||
|
$
|
120,590
|
|
|
$
|
—
|
|
|
$
|
120,590
|
|
(in thousands)
|
Preliminary Purchase Price and Allocation as of November 5, 2018
|
||
Purchase price:
|
|
||
Cash consideration, net of cash acquired
|
$
|
171,251
|
|
Fair value of assets and liabilities acquired:
|
|
||
Accounts receivable
|
$
|
83,939
|
|
Inventories
|
74,499
|
|
|
Other current assets
|
7,197
|
|
|
Property and equipment
|
43,906
|
|
|
Goodwill
|
63,614
|
|
|
Intangible asset
|
27,000
|
|
|
Other assets
|
13,351
|
|
|
Accounts payable and other liabilities
|
(122,811
|
)
|
|
Non-current liabilities
|
(19,444
|
)
|
|
|
$
|
171,251
|
|
(in thousands)
|
Fiscal 2018
|
||
Balance at beginning of period
|
$
|
—
|
|
Initial investment in ABG-Camuto
|
56,827
|
|
|
Share of net earnings
|
1,298
|
|
|
Balance at end of period
|
$
|
58,125
|
|
(in thousands)
|
Fiscal 2018
|
|
Fiscal 2017
|
||||
Total revenue
|
$
|
3,562,498
|
|
|
$
|
3,487,314
|
|
Net income
|
$
|
71,257
|
|
|
$
|
15,676
|
|
•
|
Income from the breakage of gift cards is classified within net sales and recognized proportionately over the expected redemption period, which was previously recognized as a reduction to operating expenses when the redemption of the gift card was deemed remote.
|
•
|
The loyalty program is being treated as deferred revenue, which was previously treated using the incremental cost method and recognized to cost of sales.
|
•
|
We changed other classifications between net sales, franchise and other revenue, cost of sales and operating expenses for various revenue-related transactions.
|
•
|
We present our estimated returns allowance on a gross basis with returns liability recorded to accrued expenses and an asset for recovery to prepaid expenses and other current assets, which were previously presented on a net basis in accrued expenses.
|
|
Fiscal 2017
|
|
Fiscal 2016
|
||||||||||||||||||
(in thousands, except per share amounts)
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
||||||||||
Net sales
|
$
|
2,799,794
|
|
|
5,761
|
|
|
$
|
2,805,555
|
|
|
$
|
2,711,444
|
|
|
1,911
|
|
|
$
|
2,713,355
|
|
Commission, franchise and other revenue
|
$
|
—
|
|
|
5,165
|
|
|
$
|
5,165
|
|
|
$
|
—
|
|
|
4,944
|
|
|
$
|
4,944
|
|
Total revenue
|
$
|
—
|
|
|
2,810,720
|
|
|
$
|
2,810,720
|
|
|
$
|
—
|
|
|
2,718,299
|
|
|
$
|
2,718,299
|
|
Cost of sales
|
$
|
(2,010,418
|
)
|
|
3,995
|
|
|
$
|
(2,006,423
|
)
|
|
$
|
(1,939,611
|
)
|
|
6,154
|
|
|
$
|
(1,933,457
|
)
|
Operating expenses
|
$
|
(607,723
|
)
|
|
(14,823
|
)
|
|
$
|
(622,546
|
)
|
|
$
|
(591,816
|
)
|
|
(13,200
|
)
|
|
$
|
(605,016
|
)
|
Operating profit
|
$
|
124,960
|
|
|
98
|
|
|
$
|
125,058
|
|
|
$
|
200,168
|
|
|
(191
|
)
|
|
$
|
199,977
|
|
Income before income taxes and income from equity investment in TSL
|
$
|
125,864
|
|
|
98
|
|
|
$
|
125,962
|
|
|
$
|
202,647
|
|
|
(191
|
)
|
|
$
|
202,456
|
|
Income tax provision
|
$
|
(59,617
|
)
|
|
50
|
|
|
$
|
(59,567
|
)
|
|
$
|
(78,853
|
)
|
|
75
|
|
|
$
|
(78,778
|
)
|
Net income
|
$
|
67,304
|
|
|
148
|
|
|
$
|
67,452
|
|
|
$
|
124,535
|
|
|
(116
|
)
|
|
$
|
124,419
|
|
Total comprehensive income
|
$
|
71,171
|
|
|
148
|
|
|
$
|
71,319
|
|
|
$
|
131,297
|
|
|
(116
|
)
|
|
$
|
131,181
|
|
Diluted earnings per share
|
$
|
0.83
|
|
|
0.01
|
|
|
$
|
0.84
|
|
|
$
|
1.52
|
|
|
(0.01
|
)
|
|
$
|
1.51
|
|
|
February 3, 2018
|
|||||||||
(in thousands)
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
|||||
ASSETS
|
|
|
|
|
|
|||||
Prepaid expenses and other current assets
|
$
|
41,333
|
|
|
7,864
|
|
|
$
|
49,197
|
|
Total current assets
|
$
|
863,009
|
|
|
7,864
|
|
|
$
|
870,873
|
|
Deferred tax assets
|
$
|
27,671
|
|
|
40
|
|
|
$
|
27,711
|
|
Total assets
|
$
|
1,413,613
|
|
|
7,904
|
|
|
$
|
1,421,517
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|||||
Accrued expenses
|
$
|
145,218
|
|
|
3,008
|
|
|
$
|
148,226
|
|
Total current liabilities
|
$
|
324,526
|
|
|
3,008
|
|
|
$
|
327,534
|
|
Total liabilities
|
$
|
463,258
|
|
|
3,008
|
|
|
$
|
466,266
|
|
Retained earnings
|
$
|
350,083
|
|
|
4,896
|
|
|
$
|
354,979
|
|
Total shareholders' equity
|
$
|
950,355
|
|
|
4,896
|
|
|
$
|
955,251
|
|
Total liabilities and shareholders' equity
|
$
|
1,413,613
|
|
|
7,904
|
|
|
$
|
1,421,517
|
|
|
Fiscal 2017
|
|
Fiscal 2016
|
||||||||||||||||||
(in thousands)
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
67,304
|
|
|
148
|
|
|
$
|
67,452
|
|
|
$
|
124,535
|
|
|
(116
|
)
|
|
$
|
124,419
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deferred income taxes
|
$
|
(12,787
|
)
|
|
(17
|
)
|
|
$
|
(12,804
|
)
|
|
$
|
6,881
|
|
|
(20
|
)
|
|
$
|
6,861
|
|
Prepaid expenses and other current assets
|
$
|
(16,418
|
)
|
|
523
|
|
|
$
|
(15,895
|
)
|
|
$
|
3,884
|
|
|
254
|
|
|
$
|
4,138
|
|
Accrued expenses
|
$
|
11,146
|
|
|
(654
|
)
|
|
$
|
10,492
|
|
|
$
|
18,785
|
|
|
(118
|
)
|
|
$
|
18,667
|
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales:
|
|
|
|
|
|
||||||
U.S. Retail segment
|
$
|
2,738,989
|
|
|
$
|
2,577,711
|
|
|
$
|
2,479,902
|
|
Canada Retail segment
|
220,325
|
|
|
—
|
|
|
—
|
|
|||
Brand Portfolio segment
|
86,138
|
|
|
—
|
|
|
—
|
|
|||
Other:
|
|
|
|
|
|
||||||
ABG
|
123,335
|
|
|
140,887
|
|
|
149,586
|
|
|||
Ebuys
|
5,633
|
|
|
86,957
|
|
|
83,867
|
|
|||
Total Other
|
128,968
|
|
|
227,844
|
|
|
233,453
|
|
|||
Total net sales
|
3,174,420
|
|
|
2,805,555
|
|
|
2,713,355
|
|
|||
Commission, franchise and other revenue
|
9,318
|
|
|
5,165
|
|
|
4,944
|
|
|||
Total revenue
|
$
|
3,183,738
|
|
|
$
|
2,810,720
|
|
|
$
|
2,718,299
|
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales:
|
|
|
|
|
|
||||||
U.S. Retail segment:
|
|
|
|
|
|
||||||
Women's footwear
|
$
|
1,866,121
|
|
|
$
|
1,771,058
|
|
|
$
|
1,710,825
|
|
Men's footwear
|
561,722
|
|
|
556,772
|
|
|
546,657
|
|
|||
Accessories, kids and other
|
311,146
|
|
|
249,881
|
|
|
222,420
|
|
|||
|
2,738,989
|
|
|
2,577,711
|
|
|
2,479,902
|
|
|||
Canada Retail segment:
|
|
|
|
|
|
||||||
Women's footwear
|
123,323
|
|
|
—
|
|
|
—
|
|
|||
Men's footwear
|
57,567
|
|
|
—
|
|
|
—
|
|
|||
Accessories, kids and other
|
39,435
|
|
|
—
|
|
|
—
|
|
|||
|
220,325
|
|
|
—
|
|
|
—
|
|
|||
Brand Portfolio segment:
|
|
|
|
|
|
||||||
Wholesale
|
76,429
|
|
|
—
|
|
|
—
|
|
|||
Direct-to-consumer
|
9,709
|
|
|
—
|
|
|
—
|
|
|||
|
86,138
|
|
|
—
|
|
|
—
|
|
|||
Other - ABG and Ebuys
|
128,968
|
|
|
227,844
|
|
|
233,453
|
|
|||
Total net sales
|
3,174,420
|
|
|
2,805,555
|
|
|
2,713,355
|
|
|||
Commission, franchise and other revenue
|
9,318
|
|
|
5,165
|
|
|
4,944
|
|
|||
Total revenue
|
$
|
3,183,738
|
|
|
$
|
2,810,720
|
|
|
$
|
2,718,299
|
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Gift cards:
|
|
|
|
|
|
||||||
Beginning of period
|
$
|
32,792
|
|
|
$
|
30,829
|
|
|
$
|
29,172
|
|
Gift cards redeemed and breakage recognized to net sales
|
(90,569
|
)
|
|
(91,778
|
)
|
|
(83,266
|
)
|
|||
Gift cards issued
|
92,775
|
|
|
93,741
|
|
|
84,923
|
|
|||
End of period
|
$
|
34,998
|
|
|
$
|
32,792
|
|
|
$
|
30,829
|
|
Loyalty programs:
|
|
|
|
|
|
||||||
Beginning of period
|
$
|
21,282
|
|
|
$
|
19,889
|
|
|
$
|
20,604
|
|
Loyalty certificates redeemed and expired and other adjustments recognized to net sales
|
(41,210
|
)
|
|
(30,935
|
)
|
|
(31,325
|
)
|
|||
Deferred revenue for loyalty points issued
|
36,079
|
|
|
32,328
|
|
|
30,610
|
|
|||
End of period
|
$
|
16,151
|
|
|
$
|
21,282
|
|
|
$
|
19,889
|
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Sales returns reserve:
|
|
|
|
|
|
||||||
Beginning of period
|
$
|
14,130
|
|
|
$
|
14,149
|
|
|
$
|
13,369
|
|
Net sales reduced for estimated returns
|
402,274
|
|
|
353,156
|
|
|
322,139
|
|
|||
Actual returns during the period
|
(398,661
|
)
|
|
(353,175
|
)
|
|
(321,359
|
)
|
|||
End of period
|
$
|
17,743
|
|
|
$
|
14,130
|
|
|
$
|
14,149
|
|
Customer allowances and discounts reserve:
|
|
|
|
|
|
||||||
Beginning of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Assumed liability in acquisitions
|
15,434
|
|
|
—
|
|
|
—
|
|
|||
Net sales reduced for estimated allowances and discounts
|
10,669
|
|
|
—
|
|
|
—
|
|
|||
Actual allowances and discounts during the period
|
(13,009
|
)
|
|
—
|
|
|
—
|
|
|||
End of period
|
$
|
13,094
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fiscal
|
|||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
|||
Weighted average shares outstanding - Basic shares
|
80,026
|
|
|
80,160
|
|
|
81,536
|
|
Dilutive effect of stock-based compensation awards
|
—
|
|
|
527
|
|
|
599
|
|
Weighted average shares outstanding - Diluted shares
|
80,026
|
|
|
80,687
|
|
|
82,135
|
|
6
.
|
STOCK-BASED COMPENSATION
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Stock options
|
$
|
4,900
|
|
|
$
|
6,420
|
|
|
$
|
5,788
|
|
Restricted and director stock units
|
12,493
|
|
|
8,284
|
|
|
6,899
|
|
|||
|
$
|
17,393
|
|
|
$
|
14,704
|
|
|
$
|
12,687
|
|
(in thousands, except per share amounts and years)
|
Shares Subject to Options
|
|
Weighted Average Exercise Price per Share
|
|
Weighted Average Remaining Contractual Life
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding - beginning of period
|
4,333
|
|
|
$
|
23.84
|
|
|
|
|
|
||
Exercised
|
(188
|
)
|
|
$
|
12.49
|
|
|
|
|
|
||
Forfeited
|
(144
|
)
|
|
$
|
24.25
|
|
|
|
|
|
||
Outstanding - end of period
|
4,001
|
|
|
$
|
24.36
|
|
|
6.3 years
|
|
$
|
17,590
|
|
Vested and expected to vest - end of period
|
3,768
|
|
|
$
|
24.39
|
|
|
6.2 years
|
|
$
|
16,547
|
|
Exercisable - end of period
|
2,219
|
|
|
$
|
25.16
|
|
|
5.2 years
|
|
$
|
9,077
|
|
|
Time-Based RSUs
|
|
Performance-Based RSUs
|
||||||||||
(shares in thousands)
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
||||||
Outstanding - beginning of period
|
436
|
|
|
$
|
23.43
|
|
|
457
|
|
|
$
|
23.69
|
|
Granted
|
750
|
|
|
$
|
22.71
|
|
|
268
|
|
|
$
|
22.22
|
|
Vested
|
(112
|
)
|
|
$
|
16.66
|
|
|
(122
|
)
|
|
$
|
28.76
|
|
Forfeited
|
(85
|
)
|
|
$
|
21.48
|
|
|
(7
|
)
|
|
$
|
21.96
|
|
Outstanding - end of period
|
989
|
|
|
$
|
22.45
|
|
|
596
|
|
|
$
|
21.87
|
|
|
February 2, 2019
|
|
February 3, 2018
|
||||||||
(in thousands)
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||
Authorized shares
|
250,000
|
|
|
100,000
|
|
|
250,000
|
|
|
100,000
|
|
Issued shares
|
85,763
|
|
|
7,733
|
|
|
85,385
|
|
|
7,733
|
|
Outstanding shares
|
70,672
|
|
|
7,733
|
|
|
72,294
|
|
|
7,733
|
|
Treasury shares
|
15,091
|
|
|
—
|
|
|
13,091
|
|
|
—
|
|
(in thousands)
|
Foreign currency translation
|
|
Available-for-sale securities
|
|
Total
|
||||||
Balance, January 30, 2016
|
$
|
(20,530
|
)
|
|
$
|
(173
|
)
|
|
$
|
(20,703
|
)
|
Other comprehensive income before reclassifications
|
6,831
|
|
|
127
|
|
|
6,958
|
|
|||
Amounts reclassified to non-operating expenses, net
|
—
|
|
|
(196
|
)
|
|
(196
|
)
|
|||
Other comprehensive income (loss)
|
6,831
|
|
|
(69
|
)
|
|
6,762
|
|
|||
Balance, January 28, 2017
|
(13,699
|
)
|
|
(242
|
)
|
|
(13,941
|
)
|
|||
Other comprehensive income (loss) before reclassifications
|
3,681
|
|
|
(1,095
|
)
|
|
2,586
|
|
|||
Amounts reclassified to non-operating expenses, net
|
740
|
|
|
541
|
|
|
1,281
|
|
|||
Other comprehensive income (loss)
|
4,421
|
|
|
(554
|
)
|
|
3,867
|
|
|||
Balance, February 3, 2018
|
(9,278
|
)
|
|
(796
|
)
|
|
(10,074
|
)
|
|||
Other comprehensive income (loss) before reclassifications
|
(7,013
|
)
|
|
192
|
|
|
(6,821
|
)
|
|||
Amounts reclassified to non-operating expenses, net
|
13,963
|
|
|
226
|
|
|
14,189
|
|
|||
Other comprehensive income
|
6,950
|
|
|
418
|
|
|
7,368
|
|
|||
Balance, February 2, 2019
|
$
|
(2,328
|
)
|
|
$
|
(378
|
)
|
|
$
|
(2,706
|
)
|
(in thousands)
|
February 2, 2019
|
|
February 3, 2018
|
||||
Customer accounts receivables:
|
|
|
|
||||
Serviced by third-party provider with guaranteed payment
|
$
|
47,599
|
|
|
$
|
—
|
|
Serviced by third-party provider without guaranteed payment
|
280
|
|
|
—
|
|
||
Serviced in-house
|
9,892
|
|
|
5,529
|
|
||
Construction and tenant allowance receivables due from landlords
|
4,034
|
|
|
6,477
|
|
||
Accounts receivable due from related parties
|
—
|
|
|
1,704
|
|
||
Other receivables
|
8,004
|
|
|
5,526
|
|
||
Accounts receivable
|
69,809
|
|
|
19,236
|
|
||
Allowance for doubtful accounts
|
(939
|
)
|
|
—
|
|
||
Accounts receivable, net
|
$
|
68,870
|
|
|
$
|
19,236
|
|
(in thousands)
|
Fiscal 2018
|
||
Allowance for doubtful accounts - beginning of period
|
$
|
—
|
|
Provision for bad debts
|
(939
|
)
|
|
Allowance for doubtful accounts - end of period
|
$
|
(939
|
)
|
(in thousands)
|
February 2, 2019
|
|
February 3, 2018
|
||||
Carrying value of investments
|
$
|
70,195
|
|
|
$
|
125,349
|
|
Unrealized gains included in accumulated other comprehensive loss
|
44
|
|
|
23
|
|
||
Unrealized losses included in accumulated other comprehensive loss
|
(521
|
)
|
|
(767
|
)
|
||
Fair value
|
$
|
69,718
|
|
|
$
|
124,605
|
|
10
.
|
PROPERTY AND EQUIPMENT
|
(in thousands)
|
February 2, 2019
|
|
February 3, 2018
|
||||
Land
|
$
|
1,110
|
|
|
$
|
1,110
|
|
Buildings
|
12,485
|
|
|
12,485
|
|
||
Building and leasehold improvements
|
437,116
|
|
|
404,852
|
|
||
Furniture, fixtures and equipment
|
487,494
|
|
|
423,597
|
|
||
Software
|
161,226
|
|
|
137,917
|
|
||
Construction in progress
(1)
|
38,646
|
|
|
39,201
|
|
||
Total property and equipment
|
1,138,077
|
|
|
1,019,162
|
|
||
Accumulated depreciation and amortization
|
(728,501
|
)
|
|
(663,963
|
)
|
||
Property and equipment, net
|
$
|
409,576
|
|
|
$
|
355,199
|
|
(1)
|
Construction in progress is comprised primarily of the construction of leasehold improvements and furniture and fixtures related to unopened stores and internal-use software under development.
|
11
.
|
GOODWILL AND INTANGIBLE ASSETS
|
|
February 2, 2019
|
|
February 3, 2018
|
||||||||||||||||||||
(in thousands)
|
Goodwill
|
|
Accumulated Impairments
|
|
Net
|
|
Goodwill
|
|
Accumulated Impairments
|
|
Net
|
||||||||||||
Beginning of period by segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Retail
|
$
|
25,899
|
|
|
$
|
—
|
|
|
$
|
25,899
|
|
|
$
|
25,899
|
|
|
$
|
—
|
|
|
$
|
25,899
|
|
Other - Ebuys
|
53,790
|
|
|
(53,790
|
)
|
|
—
|
|
|
53,790
|
|
|
—
|
|
|
53,790
|
|
||||||
|
79,689
|
|
|
(53,790
|
)
|
|
25,899
|
|
|
79,689
|
|
|
—
|
|
|
79,689
|
|
||||||
Activity during the period by segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Canada Retail:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquired TSL goodwill
|
43,022
|
|
|
—
|
|
|
43,022
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impairment charges
|
—
|
|
|
(41,845
|
)
|
|
(41,845
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Currency translation adjustment
|
(974
|
)
|
|
(203
|
)
|
|
(1,177
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Brand Portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquired Camuto Group goodwill
|
63,614
|
|
|
—
|
|
|
63,614
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,790
|
)
|
|
(53,790
|
)
|
||||||
Eliminated Ebuys goodwill
|
(53,790
|
)
|
|
53,790
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
51,872
|
|
|
11,742
|
|
|
63,614
|
|
|
—
|
|
|
(53,790
|
)
|
|
(53,790
|
)
|
||||||
End of period by segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Retail
|
25,899
|
|
|
—
|
|
|
25,899
|
|
|
25,899
|
|
|
—
|
|
|
25,899
|
|
||||||
Canada Retail
|
42,048
|
|
|
(42,048
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Brand Portfolio
|
63,614
|
|
|
—
|
|
|
63,614
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other - Ebuys
|
—
|
|
|
—
|
|
|
—
|
|
|
53,790
|
|
|
(53,790
|
)
|
|
—
|
|
||||||
|
$
|
131,561
|
|
|
$
|
(42,048
|
)
|
|
$
|
89,513
|
|
|
$
|
79,689
|
|
|
$
|
(53,790
|
)
|
|
$
|
25,899
|
|
(in thousands)
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
February 2, 2019
|
|
|
|
|
|
||||||
Definite-lived:
|
|
|
|
|
|
||||||
Customer relationships
|
$
|
28,375
|
|
|
$
|
(1,010
|
)
|
|
$
|
27,365
|
|
Favorable leasehold interests
|
3,513
|
|
|
(295
|
)
|
|
3,218
|
|
|||
Indefinite-lived trademarks and tradenames
|
15,546
|
|
|
—
|
|
|
15,546
|
|
|||
|
$
|
47,434
|
|
|
$
|
(1,305
|
)
|
|
$
|
46,129
|
|
February 3, 2018
|
|
|
|
|
|
||||||
Definite-lived:
|
|
|
|
|
|
||||||
Online retailer and customer relationships
|
$
|
3,767
|
|
|
$
|
(3,767
|
)
|
|
$
|
—
|
|
Tradenames
|
1,260
|
|
|
(1,260
|
)
|
|
—
|
|
|||
Non-compete agreements
|
1,800
|
|
|
(1,800
|
)
|
|
—
|
|
|||
Indefinite-lived trademarks and tradenames
|
135
|
|
|
—
|
|
|
135
|
|
|||
|
$
|
6,962
|
|
|
$
|
(6,827
|
)
|
|
$
|
135
|
|
12
.
|
ACCRUED EXPENSES
|
(in thousands)
|
February 2, 2019
|
|
February 3, 2018
|
||||
Gift cards and merchandise credits
|
$
|
34,998
|
|
|
$
|
32,792
|
|
Accrued compensation and related expenses
|
53,577
|
|
|
25,082
|
|
||
Accrued taxes
|
16,491
|
|
|
20,757
|
|
||
Loyalty programs deferred revenue
|
16,151
|
|
|
21,282
|
|
||
Sales returns
|
17,743
|
|
|
14,130
|
|
||
Customer allowances and discounts
|
13,094
|
|
|
—
|
|
||
Other
(1)
|
49,481
|
|
|
34,183
|
|
||
|
$
|
201,535
|
|
|
$
|
148,226
|
|
(1)
|
Other is comprised of various other accrued expenses that we expect will settle within one year of the applicable period.
|
(in thousands)
|
February 2, 2019
|
|
February 3, 2018
|
||||
Construction and tenant allowances
|
$
|
71,634
|
|
|
$
|
80,725
|
|
Deferred rent
|
35,934
|
|
|
37,116
|
|
||
Accrual for lease obligations
|
16,483
|
|
|
6,511
|
|
||
Foreign tax contingent liabilities
|
13,429
|
|
|
—
|
|
||
Unfavorable leasehold interests
|
5,779
|
|
|
—
|
|
||
Deferred tax liabilities
|
3,260
|
|
|
—
|
|
||
Other
(1)
|
18,528
|
|
|
14,380
|
|
||
|
$
|
165,047
|
|
|
$
|
138,732
|
|
(1)
|
Other is comprised of various other accrued expenses that we expect will settle beyond one year from the end of the applicable period.
|
|
Fiscal
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Beginning of period
|
$
|
6,511
|
|
|
$
|
7,283
|
|
Assumed liability in acquisitions
|
6,792
|
|
|
—
|
|
||
Additions
|
23,507
|
|
|
—
|
|
||
Lease obligation payments, net of sublease income
|
(20,496
|
)
|
|
416
|
|
||
Adjustments
|
169
|
|
|
(1,188
|
)
|
||
End of period
|
$
|
16,483
|
|
|
$
|
6,511
|
|
14
.
|
DEBT
|
15
.
|
LEASES
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Minimum rentals:
|
|
|
|
|
|
||||||
Unrelated parties
|
$
|
204,873
|
|
|
$
|
178,353
|
|
|
$
|
172,483
|
|
Related parties
|
9,220
|
|
|
9,150
|
|
|
8,091
|
|
|||
Contingent rentals to unrelated parties
|
23,822
|
|
|
27,804
|
|
|
30,172
|
|
|||
|
$
|
237,915
|
|
|
$
|
215,307
|
|
|
$
|
210,746
|
|
(in thousands)
|
Unrelated Parties
|
|
Related Parties
|
|
Total
|
||||||
Fiscal 2019
|
$
|
233,237
|
|
|
$
|
9,425
|
|
|
$
|
242,662
|
|
Fiscal 2020
|
227,001
|
|
|
9,364
|
|
|
236,365
|
|
|||
Fiscal 2021
|
204,803
|
|
|
8,697
|
|
|
213,500
|
|
|||
Fiscal 2022
|
170,030
|
|
|
6,518
|
|
|
176,548
|
|
|||
Fiscal 2023
|
131,594
|
|
|
1,874
|
|
|
133,468
|
|
|||
Future fiscal years thereafter
|
298,437
|
|
|
5,596
|
|
|
304,033
|
|
|||
|
$
|
1,265,102
|
|
|
$
|
41,474
|
|
|
$
|
1,306,576
|
|
16
.
|
COMMITMENTS AND CONTINGENCIES
|
(in thousands)
|
Fiscal 2017
|
||
Contingent consideration liability - beginning of period
|
$
|
33,204
|
|
Accretion in value
|
3,589
|
|
|
Fair value adjustments
|
(36,336
|
)
|
|
Other adjustments
|
(457
|
)
|
|
Contingent consideration liability - end of period
|
$
|
—
|
|
|
|
|
Guaranteed Minimum Royalties
|
||||||||||||
(in thousands)
|
Noncancelable Purchase Obligations
|
|
Unrelated Parties
|
|
Related Party
|
|
Total
|
||||||||
Fiscal 2019
|
$
|
15,278
|
|
|
$
|
16,634
|
|
|
$
|
17,350
|
|
|
$
|
33,984
|
|
Fiscal 2020
|
4,356
|
|
|
18,021
|
|
|
17,350
|
|
|
35,371
|
|
||||
Fiscal 2021
|
—
|
|
|
18,438
|
|
|
17,350
|
|
|
35,788
|
|
||||
Fiscal 2022
|
—
|
|
|
13,859
|
|
|
17,350
|
|
|
31,209
|
|
||||
Fiscal 2023
|
—
|
|
|
13,859
|
|
|
17,350
|
|
|
31,209
|
|
||||
Future fiscal years thereafter
|
—
|
|
|
46,545
|
|
|
91,500
|
|
|
138,045
|
|
||||
|
$
|
19,634
|
|
|
$
|
127,356
|
|
|
$
|
178,250
|
|
|
$
|
305,606
|
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Domestic income
|
$
|
123,172
|
|
|
$
|
131,131
|
|
|
$
|
205,812
|
|
Foreign losses, including income (loss) from equity investment in TSL
|
(113,805
|
)
|
|
(4,112
|
)
|
|
(2,615
|
)
|
|||
Income, including income (loss) from equity investment in TSL, before income taxes
|
$
|
9,367
|
|
|
$
|
127,019
|
|
|
$
|
203,197
|
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
29,073
|
|
|
$
|
60,041
|
|
|
$
|
61,510
|
|
Foreign
|
188
|
|
|
901
|
|
|
954
|
|
|||
State and local
|
12,268
|
|
|
11,382
|
|
|
9,181
|
|
|||
Total current tax expense
|
41,529
|
|
|
72,324
|
|
|
71,645
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(2,234
|
)
|
|
(10,431
|
)
|
|
4,889
|
|
|||
Foreign
|
(9,273
|
)
|
|
927
|
|
|
674
|
|
|||
State and local
|
(189
|
)
|
|
(3,253
|
)
|
|
1,570
|
|
|||
Total deferred tax expense
|
(11,696
|
)
|
|
(12,757
|
)
|
|
7,133
|
|
|||
Income tax provision
|
$
|
29,833
|
|
|
$
|
59,567
|
|
|
$
|
78,778
|
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Income tax provision at federal statutory rate
|
$
|
1,966
|
|
|
$
|
44,457
|
|
|
$
|
71,119
|
|
State and local taxes, net of federal benefit
|
5,688
|
|
|
3,896
|
|
|
7,207
|
|
|||
Foreign tax rate differential
|
(3,270
|
)
|
|
922
|
|
|
802
|
|
|||
Foreign impairment charges
|
11,196
|
|
|
—
|
|
|
—
|
|
|||
Valuation allowance
|
8,157
|
|
|
834
|
|
|
763
|
|
|||
Non-deductible compensation
|
2,219
|
|
|
54
|
|
|
32
|
|
|||
Uncertain tax positions
|
2,611
|
|
|
1,245
|
|
|
865
|
|
|||
Net impact of implementing the U.S. Tax Reform
|
2,144
|
|
|
10,079
|
|
|
—
|
|
|||
Other
|
(878
|
)
|
|
(1,920
|
)
|
|
(2,010
|
)
|
|||
Income tax provision
|
$
|
29,833
|
|
|
$
|
59,567
|
|
|
$
|
78,778
|
|
(in thousands)
|
February 2, 2019
|
|
February 3, 2018
|
||||
Deferred tax assets:
|
|
|
|
||||
State bonus depreciation
|
$
|
3,233
|
|
|
$
|
3,171
|
|
Inventory
|
11,131
|
|
|
6,557
|
|
||
Construction and tenant allowances
|
3,048
|
|
|
1,311
|
|
||
Stock-based compensation
|
9,081
|
|
|
9,402
|
|
||
Gift cards
|
2,763
|
|
|
539
|
|
||
Accrued expenses
|
3,389
|
|
|
2,184
|
|
||
Accrued rewards
|
3,356
|
|
|
5,657
|
|
||
Accrued rent
|
13,441
|
|
|
11,284
|
|
||
Change in fair value of contingent consideration
|
—
|
|
|
9,108
|
|
||
Foreign net operating losses
|
13,627
|
|
|
—
|
|
||
Acquisition-related transaction costs
|
2,832
|
|
|
—
|
|
||
Other
|
4,540
|
|
|
4,886
|
|
||
|
70,441
|
|
|
54,099
|
|
||
Less: valuation allowance
|
(14,097
|
)
|
|
(2,736
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
56,344
|
|
|
51,363
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property and equipment
|
(23,423
|
)
|
|
(21,800
|
)
|
||
Intangible assets
|
(3,287
|
)
|
|
—
|
|
||
Prepaid expenses and other
|
(2,611
|
)
|
|
(1,852
|
)
|
||
|
(29,321
|
)
|
|
(23,652
|
)
|
||
Net deferred tax assets
|
$
|
27,023
|
|
|
$
|
27,711
|
|
(in thousands)
|
February 2, 2019
|
|
February 3, 2018
|
||||
Deferred tax assets
|
$
|
30,283
|
|
|
$
|
27,711
|
|
Deferred tax liabilities included in non-current liabilities
|
(3,260
|
)
|
|
—
|
|
||
Net deferred tax assets as shown above
|
$
|
27,023
|
|
|
$
|
27,711
|
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Valuation allowance - beginning of period
|
$
|
2,736
|
|
|
$
|
1,972
|
|
|
$
|
1,250
|
|
Additions charged to income tax provision
|
8,157
|
|
|
834
|
|
|
763
|
|
|||
Additions related to acquisitions
|
6,124
|
|
|
—
|
|
|
—
|
|
|||
Allowances taken or written off
|
(2,920
|
)
|
|
(70
|
)
|
|
(41
|
)
|
|||
Valuation allowance - end of period
|
$
|
14,097
|
|
|
$
|
2,736
|
|
|
$
|
1,972
|
|
|
Fiscal
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Unrecognized tax benefits - beginning of period
|
$
|
7,925
|
|
|
$
|
6,773
|
|
|
$
|
5,767
|
|
Additions for tax positions taken in the current year
|
4,105
|
|
|
1,835
|
|
|
2,513
|
|
|||
Reductions for tax positions taken in prior years:
|
|
|
|
|
|
||||||
Lapses of applicable statutes of limitations
|
—
|
|
|
(233
|
)
|
|
(475
|
)
|
|||
Settlements
|
(422
|
)
|
|
(450
|
)
|
|
(1,032
|
)
|
|||
Unrecognized tax benefits - end of period
|
$
|
11,608
|
|
|
$
|
7,925
|
|
|
$
|
6,773
|
|
18
.
|
SEGMENT REPORTING
|
(in thousands)
|
U.S. Retail
|
|
Canada Retail
|
|
Brand Portfolio
|
|
Other
|
|
Corporate / Eliminations
|
|
Total
|
||||||||||||
Fiscal 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
$
|
2,738,989
|
|
|
$
|
220,325
|
|
|
$
|
86,138
|
|
|
$
|
128,968
|
|
|
$
|
—
|
|
|
$
|
3,174,420
|
|
Commission, franchise and other revenue
|
—
|
|
|
—
|
|
|
3,498
|
|
|
—
|
|
|
5,820
|
|
|
9,318
|
|
||||||
Total revenue
|
$
|
2,738,989
|
|
|
$
|
220,325
|
|
|
$
|
89,636
|
|
|
$
|
128,968
|
|
|
$
|
5,820
|
|
|
$
|
3,183,738
|
|
Intersegment revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,176
|
|
|
$
|
—
|
|
|
$
|
(10,176
|
)
|
|
$
|
—
|
|
Gross profit
(1)
|
$
|
840,174
|
|
|
$
|
55,937
|
|
|
$
|
15,026
|
|
|
$
|
25,252
|
|
|
$
|
(1,198
|
)
|
|
$
|
935,191
|
|
Income from Equity investment in ABG-Camuto
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,298
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,298
|
|
Cash paid for property and equipment
|
$
|
32,544
|
|
|
$
|
6,396
|
|
|
$
|
447
|
|
|
$
|
147
|
|
|
$
|
25,821
|
|
|
$
|
65,355
|
|
Depreciation and amortization
|
$
|
49,552
|
|
|
$
|
6,951
|
|
|
$
|
1,971
|
|
|
$
|
604
|
|
|
$
|
19,970
|
|
|
$
|
79,048
|
|
Fiscal 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total net sales
|
$
|
2,577,711
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
227,844
|
|
|
$
|
—
|
|
|
$
|
2,805,555
|
|
Commission, franchise and other revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,165
|
|
|
5,165
|
|
||||||
Total revenue
|
$
|
2,577,711
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
227,844
|
|
|
$
|
5,165
|
|
|
$
|
2,810,720
|
|
Gross profit
(1)
|
$
|
783,399
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,733
|
|
|
$
|
—
|
|
|
$
|
799,132
|
|
Cash paid for property and equipment
|
$
|
28,608
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,483
|
|
|
$
|
24,191
|
|
|
$
|
56,282
|
|
Depreciation and amortization
|
$
|
54,917
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,524
|
|
|
$
|
21,420
|
|
|
$
|
80,861
|
|
Fiscal 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total net sales
|
$
|
2,479,902
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
233,453
|
|
|
$
|
—
|
|
|
$
|
2,713,355
|
|
Commission, franchise and other revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,944
|
|
|
4,944
|
|
||||||
Total revenue
|
$
|
2,479,902
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
233,453
|
|
|
$
|
4,944
|
|
|
$
|
2,718,299
|
|
Gross profit
(1)
|
$
|
745,488
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34,410
|
|
|
$
|
—
|
|
|
$
|
779,898
|
|
Cash paid for property and equipment
|
$
|
51,076
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,180
|
|
|
$
|
35,324
|
|
|
$
|
87,580
|
|
Depreciation and amortization
|
$
|
56,653
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,863
|
|
|
$
|
21,308
|
|
|
$
|
82,824
|
|
(1)
|
Gross profit is defined as net sales, which excludes commission, franchise and other revenue, less cost of sales.
|
19
.
|
QUARTERLY FINANCIAL DATA (UNAUDITED)
|
|
Fiscal 2018 Quarters Ended
(1)
|
||||||||||||||
(in thousands, except per share data)
|
May 5, 2018
|
|
August 4, 2018
|
|
November 3, 2018
|
|
February 2, 2019
|
||||||||
Total revenue
|
$
|
712,102
|
|
|
$
|
795,268
|
|
|
$
|
833,003
|
|
|
$
|
843,365
|
|
Gross profit
|
$
|
205,225
|
|
|
$
|
254,495
|
|
|
$
|
271,083
|
|
|
$
|
204,388
|
|
Operating profit (loss)
|
$
|
38,470
|
|
|
$
|
24,469
|
|
|
$
|
53,089
|
|
|
$
|
(57,023
|
)
|
Net income (loss)
(2)
|
$
|
24,297
|
|
|
$
|
(38,356
|
)
|
|
$
|
39,319
|
|
|
$
|
(45,726
|
)
|
Diluted earnings (loss) per share
(6)
|
$
|
0.30
|
|
|
$
|
(0.48
|
)
|
|
$
|
0.48
|
|
|
$
|
(0.58
|
)
|
|
Fiscal 2017 Quarters Ended
(3)
|
||||||||||||||
(in thousands, except per share data)
|
April 29, 2017
|
|
July 29, 2017
|
|
October 28, 2017
|
|
February 3, 2018
(5)
|
||||||||
Total revenue
|
$
|
692,038
|
|
|
$
|
683,012
|
|
|
$
|
710,992
|
|
|
$
|
724,678
|
|
Gross profit
|
$
|
197,085
|
|
|
$
|
199,297
|
|
|
$
|
208,727
|
|
|
$
|
194,023
|
|
Operating profit
|
$
|
40,652
|
|
|
$
|
46,866
|
|
|
$
|
3,370
|
|
|
$
|
34,170
|
|
Net income
(4)
|
$
|
22,818
|
|
|
$
|
28,677
|
|
|
$
|
4,005
|
|
|
$
|
11,952
|
|
Diluted earnings per share
(6)
|
$
|
0.28
|
|
|
$
|
0.36
|
|
|
$
|
0.05
|
|
|
$
|
0.15
|
|
(1)
|
During
fiscal 2018
, operating results were impacted by the following pre-tax items for the quarters presented:
|
|
Fiscal 2018 Quarters Ended
|
||||||||||||||
(in thousands)
|
May 5, 2018
|
|
August 4, 2018
|
|
November 3, 2018
|
|
February 2, 2019
|
||||||||
Lease exit and other termination costs
|
$
|
3,994
|
|
|
$
|
409
|
|
|
$
|
16,301
|
|
|
$
|
2,337
|
|
Acquisition-related costs and target acquisition costs
|
$
|
508
|
|
|
$
|
5,104
|
|
|
$
|
12,982
|
|
|
$
|
9,335
|
|
Impairment charges (adjustments)
|
$
|
—
|
|
|
$
|
36,240
|
|
|
$
|
(7,163
|
)
|
|
$
|
31,683
|
|
Fair value adjustments of TSL's previously held assets
|
$
|
—
|
|
|
$
|
33,988
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Camuto Group Inventory step-up
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,300
|
|
Restructuring expenses
|
$
|
—
|
|
|
$
|
2,708
|
|
|
$
|
563
|
|
|
$
|
2,342
|
|
Foreign currency transaction losses (gains)
|
$
|
1,978
|
|
|
$
|
13,318
|
|
|
$
|
94
|
|
|
$
|
(1
|
)
|
(2)
|
During the fourth quarter of fiscal 2018, we recognized
$2.1 million
of additional net tax expense as a result of finalizing the U.S. Tax Reform implementation assessment.
|
|
Fiscal 2017 Quarters Ended
|
||||||||||||||
(in thousands)
|
April 29, 2017
|
|
July 29, 2017
|
|
October 28, 2017
|
|
February 3, 2018
|
||||||||
Impairment charges
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
82,701
|
|
|
$
|
6,739
|
|
Inventory write-downs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,257
|
|
Loss (gain) due to change in fair value of contingent consideration liability
|
$
|
1,084
|
|
|
$
|
1,168
|
|
|
$
|
(31,178
|
)
|
|
$
|
(3,821
|
)
|
(4)
|
During the fourth quarter of fiscal 2017, we recognized
$10.1 million
of additional net tax expense as a result of our initial assessment for implementing the U.S. Tax Reform.
|
(5)
|
The fourth quarter of fiscal 2017 includes an additional week of activity when compared to the previous quarters during fiscal 2017 due to fiscal 2017 consisting of
53
weeks. The additional week added
$35.6 million
of sales,
$15.9 million
of gross margin,
$7.9 million
of operating profit, and
$4.9 million
of net income, or
$0.06
diluted earnings per share.
|
(6)
|
The sum of the quarterly diluted earnings (loss) per share amounts may not equal the fiscal year amount due to rounding and the use of weighted average shares outstanding for each period.
|
(A)
|
to extend the Delivery Deadline for the Preliminary Closing Statement to February 28, 2019 (the “
Revised Deadline
”); and
|
(B)
|
that neither Buyer shall be deemed to have breached the Purchase Agreement in requesting such extension from Sellers, and that none of Buyers’ or Sellers’ rights set forth in Section 1.3 of the Purchase Agreement, or otherwise, shall be waived or forfeited by agreeing to the Revised Deadline.
|
A.
|
DSW Inc. (the “Company”) previously adopted and currently maintains the DSW Inc. 2014 Long-Term Incentive Plan (the “Plan”).
|
B.
|
The Company desires to amend the Plan, effective for awards granted on or after January 1, 2018, to eliminate the automatic right to full vesting of awards upon a participant’s retirement and instead provide for such an acceleration of vesting at retirement only if the Compensation Committee of the Company’s Board of Directors approves of such terms in an individual award agreement.
|
C.
|
Section 9.01 of the Plan gives the Company’s Board of Directors the authority to amend the Plan at any time.
|
1.
|
Section 5.01(C)(3) is deleted and replaced with the following:
|
2.
|
The second to last sentence in Section 5.02(2)(A) is deleted and replaced with the following:
|
3.
|
The remainder of the Plan shall remain unchanged.
|
(a)
|
As of the Effective Date, the table set forth in Section 1.2 of the Lease is hereby deleted and restated as follows:
|
Date of Delivery by Landlord
|
Square Footage Delivered
|
Total Square Footage (1
st
Flr.)
|
Basement Square Footage
|
Expansion Space Square Footage
|
Expansion Space 2017 Square Footage
|
October 1, 2007
|
267,450
|
267,450
|
0
|
0
|
0
|
September 1, 2010
|
79,270
|
346,720
|
0
|
0
|
0
|
December 1, 2010
|
8,073
|
354,793
|
0
|
0
|
0
|
June 1, 2011
|
186,571
|
541,364
|
0
|
0
|
0
|
March 1, 2012
|
100,000
|
541,364
|
100,000
|
0
|
0
|
September 1, 2012
|
90,032
|
631,396
|
100,000
|
0
|
0
|
March 1, 2013
|
40,000
|
671,396
|
100,000
|
40,000
|
0
|
January 1, 2017
|
82,718
|
754,114
|
100,000
|
40,000
|
82,718
|
LANDLORD:
4300 VENTURE 34910 LLC,
a Delaware limited liability company
By: _______________________________
Print Name: ________________________
Title: ______________________________
|
TENANT:
eTAILDIRECT LLC
a Delaware limited liability company
By: ________________________________
William L. Jordan, EVP / Chief Administrative Officer
|
Ref.
No.
|
|
Name
|
|
Jurisdiction of
Incorporation
|
|
Parent
Company No.
|
1
|
|
Designer Brands Inc.
|
|
Ohio
|
|
N/A
|
2
|
|
DSW Shoe Warehouse, Inc.
|
|
Missouri
|
|
1
|
3
|
|
Brand Card Services LLC
|
|
Ohio
|
|
1
|
4
|
|
DSW Information Technology LLC
|
|
Ohio
|
|
1
|
5
|
|
eTailDirect LLC
|
|
Delaware
|
|
2
|
6
|
|
Ebuys, Inc.
|
|
California
|
|
2
|
7
|
|
DSW MS LLC
|
|
Ohio
|
|
1
|
8
|
|
DSW Leased Business Division LLC aka Affiliated Business Group
|
|
Ohio
|
|
2
|
9
|
|
810 AC LLC
|
|
Ohio
|
|
1
|
10
|
|
DSW PR LLC
|
|
Puerto Rico
|
|
2
|
11
|
|
Retail Ventures Services, Inc.
|
|
Ohio
|
|
7
|
12
|
|
DSW Shoe Warehouse Lux S.a.r.l.
|
|
Luxembourg
|
|
2
|
13
|
|
DSW Canada TS, Inc.
|
|
Canada
|
|
12
|
14
|
|
Camuto LLC
|
|
Ohio
|
|
2
|
15
|
|
Designer Brand Licensing LLC
|
|
Ohio
|
|
2
|
16
|
|
Camuto Overseas Holding Subsidiary LLC
|
|
Ohio
|
|
14
|
17
|
|
Victory Assessoria EM Compras EIRELLA
|
|
Brazil
|
|
16
|
18
|
|
CGA Design Ltd
|
|
Hong Kong
|
|
16
|
19
|
|
CGA Dongguan Ltd
|
|
China
|
|
18
|
20
|
|
VCJS LLC
|
|
Connecticut
|
|
14
|
21
|
|
VCS Group LLC
|
|
Delaware
|
|
14
|
22
|
|
Article II JV, LLC
|
|
Delaware
|
|
21
|
23
|
|
BC/VC Ventures LLC
|
|
Delaware
|
|
21
|
24
|
|
Vince Camuto LLC
|
|
Connecticut
|
|
14
|
25
|
|
CCI Operations LLC
|
|
Ohio
|
|
14
|
26
|
|
VC Footwear LLC
|
|
Connecticut
|
|
25
|
27
|
|
Camuto Castillo LLC
|
|
Delaware
|
|
25
|
28
|
|
VC Line Building Services LLC
|
|
Connecticut
|
|
25
|
29
|
|
Hot on Time LLC
|
|
Connecticut
|
|
25
|
30
|
|
Sole Society Group Inc.
|
|
Delaware
|
|
25
|
31
|
|
ABG Camuto LLC
|
|
Delaware
|
|
15
|
Date:
|
March 26, 2019
|
By:
|
/s/ Roger Rawlins
|
|
|
|
Roger Rawlins
|
|
|
|
Chief Executive Officer
|
Date:
|
March 26, 2019
|
By:
|
/s/ Jared Poff
|
|
|
|
Jared Poff, Executive Vice President and
|
|
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
Dated:
|
March 26, 2019
|
By:
|
/s/ Roger Rawlins
|
|
|
|
Roger Rawlins,
Chief Executive Officer |
*
|
This Certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the "Exchange Act") and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This Certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
Dated:
|
March 26, 2019
|
By:
|
/s/ Jared Poff
|
|
|
|
Jared Poff,
|
|
|
|
Executive Vice President and Chief Financial Officer
|
*
|
This Certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the "Exchange Act") and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This Certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.
|