|
☑
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from
|
|
to
|
|
|
DESIGNER BRANDS INC.
|
|
(Exact name of registrant as specified in its charter)
|
|
Ohio
|
|
31-0746639
|
|||
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|||
|
|
|
|
|
|
|
|
810 DSW Drive,
|
Columbus,
|
Ohio
|
|
|
43219
|
|
(Address of principal executive offices)
|
|
|
(Zip Code)
|
||
|
Not Applicable
|
|
(Former name, former address and former fiscal year, if changed since last report)
|
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
|
Class A Common Shares, without par value
|
DBI
|
New York Stock Exchange
|
|
Large accelerated filer
|
☑
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
|
|
|
Page
|
|
PART I. FINANCIAL INFORMATION
|
|
|
Item 1. Financial Statements
|
|
|
PART II. OTHER INFORMATION
|
|
|
PART I.
|
FINANCIAL INFORMATION
|
|
Item 1.
|
Financial Statements
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
||||||||
|
Revenue:
|
|
|
|
|
|
|
|
||||||||
|
Net sales
|
$
|
928,608
|
|
|
$
|
831,669
|
|
|
$
|
2,648,240
|
|
|
$
|
2,335,841
|
|
|
Commission, franchise and other revenue
|
7,656
|
|
|
1,334
|
|
|
26,737
|
|
|
4,532
|
|
||||
|
Total revenue
|
936,264
|
|
|
833,003
|
|
|
2,674,977
|
|
|
2,340,373
|
|
||||
|
Cost of sales
|
(660,518
|
)
|
|
(560,586
|
)
|
|
(1,869,253
|
)
|
|
(1,605,038
|
)
|
||||
|
Operating expenses
|
(217,476
|
)
|
|
(226,491
|
)
|
|
(666,898
|
)
|
|
(590,230
|
)
|
||||
|
Income from equity investment in ABG-Camuto
|
2,662
|
|
|
—
|
|
|
7,354
|
|
|
—
|
|
||||
|
Impairment adjustments (charges)
|
(4,824
|
)
|
|
7,163
|
|
|
(4,824
|
)
|
|
(29,077
|
)
|
||||
|
Operating profit
|
56,108
|
|
|
53,089
|
|
|
141,356
|
|
|
116,028
|
|
||||
|
Interest income (expense), net
|
(2,174
|
)
|
|
870
|
|
|
(5,947
|
)
|
|
2,339
|
|
||||
|
Non-operating income (expenses), net
|
15
|
|
|
(108
|
)
|
|
(128
|
)
|
|
(49,594
|
)
|
||||
|
Income before income taxes and loss from equity investment in TSL
|
53,949
|
|
|
53,851
|
|
|
135,281
|
|
|
68,773
|
|
||||
|
Income tax provision
|
(10,489
|
)
|
|
(14,532
|
)
|
|
(33,220
|
)
|
|
(42,203
|
)
|
||||
|
Loss from equity investment in TSL
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,310
|
)
|
||||
|
Net income
|
$
|
43,460
|
|
|
$
|
39,319
|
|
|
$
|
102,061
|
|
|
$
|
25,260
|
|
|
Basic and diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
|
Basic earnings per share
|
$
|
0.60
|
|
|
$
|
0.49
|
|
|
$
|
1.38
|
|
|
$
|
0.31
|
|
|
Diluted earnings per share
|
$
|
0.60
|
|
|
$
|
0.48
|
|
|
$
|
1.36
|
|
|
$
|
0.31
|
|
|
Weighted average shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
|
Basic shares
|
72,123
|
|
|
80,321
|
|
|
74,219
|
|
|
80,231
|
|
||||
|
Diluted shares
|
72,947
|
|
|
82,287
|
|
|
75,149
|
|
|
81,686
|
|
||||
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
||||||||
|
Net income
|
$
|
43,460
|
|
|
$
|
39,319
|
|
|
$
|
102,061
|
|
|
$
|
25,260
|
|
|
Other comprehensive income (loss), net of income taxes:
|
|
|
|
|
|
|
|
||||||||
|
Foreign currency translation gain (loss)
|
236
|
|
|
(271
|
)
|
|
(17
|
)
|
|
(6,321
|
)
|
||||
|
Unrealized net gain (loss) on debt securities
|
37
|
|
|
(133
|
)
|
|
475
|
|
|
(450
|
)
|
||||
|
Reclassification adjustment for net losses (gains) realized in net income
|
(24
|
)
|
|
14
|
|
|
(89
|
)
|
|
14,179
|
|
||||
|
Total other comprehensive income (loss), net of income taxes
|
249
|
|
|
(390
|
)
|
|
369
|
|
|
7,408
|
|
||||
|
Total comprehensive income
|
$
|
43,709
|
|
|
$
|
38,929
|
|
|
$
|
102,430
|
|
|
$
|
32,668
|
|
|
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
||||||
|
ASSETS
|
|
|
|
|
|
||||||
|
Cash and cash equivalents
|
$
|
87,838
|
|
|
$
|
99,369
|
|
|
$
|
222,419
|
|
|
Investments
|
25,939
|
|
|
69,718
|
|
|
71,848
|
|
|||
|
Accounts receivable, net
|
87,313
|
|
|
68,870
|
|
|
14,902
|
|
|||
|
Inventories
|
677,696
|
|
|
645,317
|
|
|
624,167
|
|
|||
|
Prepaid expenses and other current assets
|
48,077
|
|
|
71,945
|
|
|
49,924
|
|
|||
|
Total current assets
|
926,863
|
|
|
955,219
|
|
|
983,260
|
|
|||
|
Property and equipment, net
|
394,695
|
|
|
409,576
|
|
|
383,110
|
|
|||
|
Operating lease assets
|
950,514
|
|
|
—
|
|
|
—
|
|
|||
|
Goodwill
|
113,644
|
|
|
89,513
|
|
|
25,899
|
|
|||
|
Intangible assets
|
23,297
|
|
|
46,129
|
|
|
20,000
|
|
|||
|
Deferred tax assets
|
39,452
|
|
|
30,283
|
|
|
42,966
|
|
|||
|
Equity investment in ABG-Camuto
|
54,964
|
|
|
58,125
|
|
|
—
|
|
|||
|
Other assets
|
33,549
|
|
|
31,739
|
|
|
19,394
|
|
|||
|
Total assets
|
$
|
2,536,978
|
|
|
$
|
1,620,584
|
|
|
$
|
1,474,629
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
||||||
|
Accounts payable
|
$
|
266,335
|
|
|
$
|
261,625
|
|
|
$
|
198,499
|
|
|
Accrued expenses
|
190,897
|
|
|
201,535
|
|
|
182,964
|
|
|||
|
Current operating lease liabilities
|
184,598
|
|
|
—
|
|
|
—
|
|
|||
|
Total current liabilities
|
641,830
|
|
|
463,160
|
|
|
381,463
|
|
|||
|
Debt
|
235,000
|
|
|
160,000
|
|
|
—
|
|
|||
|
Non-current operating lease liabilities
|
880,883
|
|
|
—
|
|
|
—
|
|
|||
|
Other non-current liabilities
|
36,084
|
|
|
165,047
|
|
|
150,730
|
|
|||
|
Total liabilities
|
1,793,797
|
|
|
788,207
|
|
|
532,193
|
|
|||
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|||
|
Shareholders' equity:
|
|
|
|
|
|
||||||
|
Common shares paid-in capital, no par value
|
993,086
|
|
|
978,794
|
|
|
975,658
|
|
|||
|
Treasury shares, at cost
|
(515,065
|
)
|
|
(373,436
|
)
|
|
(325,906
|
)
|
|||
|
Retained earnings
|
292,490
|
|
|
254,718
|
|
|
320,343
|
|
|||
|
Basis difference related to acquisition of commonly controlled entity
|
(24,993
|
)
|
|
(24,993
|
)
|
|
(24,993
|
)
|
|||
|
Accumulated other comprehensive loss
|
(2,337
|
)
|
|
(2,706
|
)
|
|
(2,666
|
)
|
|||
|
Total shareholders' equity
|
743,181
|
|
|
832,377
|
|
|
942,436
|
|
|||
|
Total liabilities and shareholders' equity
|
$
|
2,536,978
|
|
|
$
|
1,620,584
|
|
|
$
|
1,474,629
|
|
|
|
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
|
|||||||||||||||
|
Three months ended November 2, 2019
|
||||||||||||||||||||||||||||||||
|
Balance, August 3, 2019
|
64,911
|
|
|
7,733
|
|
|
21,169
|
|
|
$
|
988,305
|
|
|
$
|
(498,436
|
)
|
|
$
|
266,957
|
|
|
$
|
(24,993
|
)
|
|
$
|
(2,586
|
)
|
|
$
|
729,247
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,460
|
|
|
—
|
|
|
—
|
|
|
43,460
|
|
||||||
|
Stock-based compensation activity
|
105
|
|
|
—
|
|
|
—
|
|
|
4,781
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,781
|
|
||||||
|
Repurchase of Class A common shares
|
(1,000
|
)
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|
(16,629
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,629
|
)
|
||||||
|
Dividends ($0.25 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,927
|
)
|
|
—
|
|
|
—
|
|
|
(17,927
|
)
|
||||||
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249
|
|
|
249
|
|
||||||
|
Balance, November 2, 2019
|
64,016
|
|
|
7,733
|
|
|
22,169
|
|
|
$
|
993,086
|
|
|
$
|
(515,065
|
)
|
|
$
|
292,490
|
|
|
$
|
(24,993
|
)
|
|
$
|
(2,337
|
)
|
|
$
|
743,181
|
|
|
Three months ended November 3, 2018
|
||||||||||||||||||||||||||||||||
|
Balance, August 4, 2018
|
72,561
|
|
|
7,733
|
|
|
13,091
|
|
|
$
|
971,653
|
|
|
$
|
(325,906
|
)
|
|
$
|
301,006
|
|
|
$
|
(24,993
|
)
|
|
$
|
(2,276
|
)
|
|
$
|
919,484
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,319
|
|
|
—
|
|
|
—
|
|
|
39,319
|
|
||||||
|
Stock-based compensation activity
|
54
|
|
|
—
|
|
|
—
|
|
|
4,005
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,005
|
|
||||||
|
Dividends ($0.25 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,982
|
)
|
|
—
|
|
|
—
|
|
|
(19,982
|
)
|
||||||
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(390
|
)
|
|
(390
|
)
|
||||||
|
Balance, November 3, 2018
|
72,615
|
|
|
7,733
|
|
|
13,091
|
|
|
$
|
975,658
|
|
|
$
|
(325,906
|
)
|
|
$
|
320,343
|
|
|
$
|
(24,993
|
)
|
|
$
|
(2,666
|
)
|
|
$
|
942,436
|
|
|
Nine months ended November 2, 2019
|
||||||||||||||||||||||||||||||||
|
Balance, February 2, 2019
|
70,672
|
|
|
7,733
|
|
|
15,091
|
|
|
$
|
978,794
|
|
|
$
|
(373,436
|
)
|
|
$
|
254,718
|
|
|
$
|
(24,993
|
)
|
|
$
|
(2,706
|
)
|
|
$
|
832,377
|
|
|
Cumulative effect of accounting change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,556
|
)
|
|
—
|
|
|
—
|
|
|
(9,556
|
)
|
||||||
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102,061
|
|
|
—
|
|
|
—
|
|
|
102,061
|
|
||||||
|
Stock-based compensation activity
|
422
|
|
|
—
|
|
|
—
|
|
|
14,292
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,292
|
|
||||||
|
Repurchase of Class A common shares
|
(7,078
|
)
|
|
—
|
|
|
7,078
|
|
|
—
|
|
|
(141,629
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(141,629
|
)
|
||||||
|
Dividends ($0.75 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54,733
|
)
|
|
—
|
|
|
—
|
|
|
(54,733
|
)
|
||||||
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
369
|
|
|
369
|
|
||||||
|
Balance, November 2, 2019
|
64,016
|
|
|
7,733
|
|
|
22,169
|
|
|
$
|
993,086
|
|
|
$
|
(515,065
|
)
|
|
$
|
292,490
|
|
|
$
|
(24,993
|
)
|
|
$
|
(2,337
|
)
|
|
$
|
743,181
|
|
|
Nine months ended November 3, 2018
|
||||||||||||||||||||||||||||||||
|
Balance, February 3, 2018
|
72,294
|
|
|
7,733
|
|
|
13,091
|
|
|
$
|
961,245
|
|
|
$
|
(325,906
|
)
|
|
$
|
354,979
|
|
|
$
|
(24,993
|
)
|
|
$
|
(10,074
|
)
|
|
$
|
955,251
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,260
|
|
|
—
|
|
|
—
|
|
|
25,260
|
|
||||||
|
Stock-based compensation activity
|
321
|
|
|
—
|
|
|
—
|
|
|
14,413
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,413
|
|
||||||
|
Dividends ($0.75 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59,896
|
)
|
|
—
|
|
|
—
|
|
|
(59,896
|
)
|
||||||
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,408
|
|
|
7,408
|
|
||||||
|
Balance, November 3, 2018
|
72,615
|
|
|
7,733
|
|
|
13,091
|
|
|
$
|
975,658
|
|
|
$
|
(325,906
|
)
|
|
$
|
320,343
|
|
|
$
|
(24,993
|
)
|
|
$
|
(2,666
|
)
|
|
$
|
942,436
|
|
|
|
Nine months ended
|
||||||
|
|
November 2, 2019
|
|
November 3, 2018
|
||||
|
Cash flows from operating activities:
|
|
|
|
||||
|
Net income
|
$
|
102,061
|
|
|
$
|
25,260
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
|
Depreciation and amortization
|
64,226
|
|
|
57,679
|
|
||
|
Stock-based compensation expense
|
13,748
|
|
|
13,633
|
|
||
|
Deferred income taxes
|
(11,411
|
)
|
|
(15,205
|
)
|
||
|
Loss (income) from equity investments
|
(7,354
|
)
|
|
1,310
|
|
||
|
Loss on previously held equity investment in TSL and notes receivable from TSL
|
—
|
|
|
33,988
|
|
||
|
Impairment charges
|
4,824
|
|
|
29,077
|
|
||
|
Lease exit non-cash charges
|
—
|
|
|
7,105
|
|
||
|
Loss on foreign currency reclassified from accumulated other comprehensive loss
|
—
|
|
|
13,963
|
|
||
|
Other
|
(561
|
)
|
|
5,879
|
|
||
|
Change in operating assets and liabilities, net of acquired amounts:
|
|
|
|
||||
|
Accounts receivable
|
(17,484
|
)
|
|
6,171
|
|
||
|
Inventories
|
(35,394
|
)
|
|
(57,679
|
)
|
||
|
Prepaid expenses and other current assets
|
4,403
|
|
|
951
|
|
||
|
Accounts payable
|
8,853
|
|
|
(3,646
|
)
|
||
|
Accrued expenses
|
(7,838
|
)
|
|
28,849
|
|
||
|
Net cash provided by operating activities
|
118,073
|
|
|
147,335
|
|
||
|
Cash flows from investing activities:
|
|
|
|
||||
|
Cash paid for property and equipment
|
(59,574
|
)
|
|
(48,545
|
)
|
||
|
Purchases of available-for-sale investments
|
(19,889
|
)
|
|
(16,735
|
)
|
||
|
Sales of available-for-sale investments
|
64,233
|
|
|
68,468
|
|
||
|
Additional borrowings by TSL
|
—
|
|
|
(15,989
|
)
|
||
|
Proceeds from working capital settlement (cash paid) for business acquisitions, net of cash acquired
|
4,965
|
|
|
(28,152
|
)
|
||
|
Net cash used in investing activities
|
(10,265
|
)
|
|
(40,953
|
)
|
||
|
Cash flows from financing activities:
|
|
|
|
||||
|
Borrowing on revolving line of credit
|
375,200
|
|
|
—
|
|
||
|
Payments on revolving line of credit
|
(300,200
|
)
|
|
—
|
|
||
|
Cash paid for treasury shares
|
(141,629
|
)
|
|
—
|
|
||
|
Dividends paid
|
(54,733
|
)
|
|
(59,894
|
)
|
||
|
Other
|
733
|
|
|
(751
|
)
|
||
|
Net cash used in financing activities
|
(120,629
|
)
|
|
(60,645
|
)
|
||
|
Effect of exchange rate changes on cash balances
|
91
|
|
|
750
|
|
||
|
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
(12,730
|
)
|
|
46,487
|
|
||
|
Cash, cash equivalents, and restricted cash, beginning of period
|
100,568
|
|
|
175,932
|
|
||
|
Cash and cash equivalents, end of period
|
$
|
87,838
|
|
|
$
|
222,419
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
|
Cash paid for income taxes
|
$
|
31,523
|
|
|
$
|
40,366
|
|
|
Cash paid for interest on debt
|
$
|
6,577
|
|
|
$
|
—
|
|
|
Cash paid for operating lease liabilities
|
$
|
178,225
|
|
|
$
|
—
|
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
|
Property and equipment purchases not yet paid
|
$
|
7,442
|
|
|
$
|
7,405
|
|
|
Operating lease liabilities arising from lease asset additions (excluding ASU 2016-02 transition adjustments)
|
$
|
17,729
|
|
|
$
|
—
|
|
|
Adjustment to operating lease assets and lease liabilities for modifications
|
$
|
60,736
|
|
|
$
|
—
|
|
|
(in thousands)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
||||||
|
Cash and cash equivalents
|
$
|
87,838
|
|
|
$
|
99,369
|
|
|
$
|
222,419
|
|
|
Restricted cash, included in prepaid expenses and other current assets
|
—
|
|
|
1,199
|
|
|
—
|
|
|||
|
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows
|
$
|
87,838
|
|
|
$
|
100,568
|
|
|
$
|
222,419
|
|
|
•
|
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.
|
|
(in thousands)
|
Final Purchase Price and Allocation
|
||
|
Purchase price:
|
|
||
|
Cash consideration, net of cash acquired
|
$
|
28,152
|
|
|
Replacement stock-based awards attributable to pre-acquisition services
|
196
|
|
|
|
Fair value of previously held assets
|
92,242
|
|
|
|
|
$
|
120,590
|
|
|
Fair value of assets and liabilities acquired:
|
|
||
|
Inventories
|
$
|
66,072
|
|
|
Other current assets
|
3,687
|
|
|
|
Property and equipment
|
41,008
|
|
|
|
Goodwill
|
43,022
|
|
|
|
Intangible assets
|
20,689
|
|
|
|
Accounts payable and accrued expenses
|
(33,196
|
)
|
|
|
Non-current liabilities
|
(20,692
|
)
|
|
|
|
$
|
120,590
|
|
|
(in thousands)
|
Preliminary Purchase Price and Allocation
as of November 5, 2018
|
|
Measurement Period Adjustments
|
|
Final Purchase Price and Allocation as of November 2, 2019
|
||||||
|
Purchase price -
|
|
|
|
|
|
||||||
|
Cash consideration, net of cash acquired
|
$
|
171,251
|
|
|
$
|
(4,965
|
)
|
|
$
|
166,286
|
|
|
Fair value of assets and liabilities acquired:
|
|
|
|
|
|
||||||
|
Accounts receivable
|
$
|
83,939
|
|
|
$
|
3,410
|
|
|
$
|
87,349
|
|
|
Inventories
|
74,499
|
|
|
(2,999
|
)
|
|
71,500
|
|
|||
|
Other current assets
|
7,197
|
|
|
1,105
|
|
|
8,302
|
|
|||
|
Property and equipment
|
43,906
|
|
|
(1,469
|
)
|
|
42,437
|
|
|||
|
Goodwill
|
63,614
|
|
|
24,131
|
|
|
87,745
|
|
|||
|
Intangible asset
|
27,000
|
|
|
(19,000
|
)
|
|
8,000
|
|
|||
|
Other assets
|
13,351
|
|
|
—
|
|
|
13,351
|
|
|||
|
Accounts payable and other liabilities
|
(122,811
|
)
|
|
(2,030
|
)
|
|
(124,841
|
)
|
|||
|
Non-current liabilities
|
(19,444
|
)
|
|
(8,113
|
)
|
|
(27,557
|
)
|
|||
|
|
$
|
171,251
|
|
|
$
|
(4,965
|
)
|
|
$
|
166,286
|
|
|
(in thousands)
|
Nine months ended November 2, 2019
|
||
|
Balance at beginning of period
|
$
|
58,125
|
|
|
Share of net earnings
|
7,354
|
|
|
|
Distributions received
|
(10,515
|
)
|
|
|
Balance at end of period
|
$
|
54,964
|
|
|
(in thousands)
|
Three months ended November 3, 2018
|
|
Nine months ended November 3, 2018
|
||||
|
Total revenue
|
$
|
963,923
|
|
|
$
|
2,719,133
|
|
|
Net income
|
$
|
48,047
|
|
|
$
|
98,190
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
(in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
||||||||
|
Segment net sales:
|
|
|
|
|
|
|
|
||||||||
|
U.S. Retail
|
$
|
716,775
|
|
|
$
|
721,746
|
|
|
$
|
2,086,535
|
|
|
$
|
2,083,287
|
|
|
Canada Retail
|
76,299
|
|
|
80,072
|
|
|
191,421
|
|
|
152,604
|
|
||||
|
Brand Portfolio
|
130,582
|
|
|
—
|
|
|
326,871
|
|
|
—
|
|
||||
|
Other
|
28,848
|
|
|
29,851
|
|
|
93,935
|
|
|
99,950
|
|
||||
|
Total segment net sales
|
952,504
|
|
|
831,669
|
|
|
2,698,762
|
|
|
2,335,841
|
|
||||
|
Commission, franchise and other revenue
|
9,352
|
|
|
1,334
|
|
|
30,028
|
|
|
4,532
|
|
||||
|
|
961,856
|
|
|
833,003
|
|
|
2,728,790
|
|
|
2,340,373
|
|
||||
|
Elimination of intersegment revenue
|
(25,592
|
)
|
|
—
|
|
|
(53,813
|
)
|
|
—
|
|
||||
|
Total revenue
|
$
|
936,264
|
|
|
$
|
833,003
|
|
|
$
|
2,674,977
|
|
|
$
|
2,340,373
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
(in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
||||||||
|
Net sales:
|
|
|
|
|
|
|
|
||||||||
|
U.S. Retail segment:
|
|
|
|
|
|
|
|
||||||||
|
Women's footwear
|
$
|
492,062
|
|
|
$
|
496,531
|
|
|
$
|
1,432,573
|
|
|
$
|
1,433,152
|
|
|
Men's footwear
|
132,158
|
|
|
136,503
|
|
|
402,042
|
|
|
421,235
|
|
||||
|
Accessories, kids and other
|
92,555
|
|
|
88,712
|
|
|
251,920
|
|
|
228,900
|
|
||||
|
|
716,775
|
|
|
721,746
|
|
|
2,086,535
|
|
|
2,083,287
|
|
||||
|
Canada Retail segment:
|
|
|
|
|
|
|
|
||||||||
|
Women's footwear
|
38,887
|
|
|
42,595
|
|
|
103,046
|
|
|
84,662
|
|
||||
|
Men's footwear
|
17,282
|
|
|
18,835
|
|
|
46,722
|
|
|
38,290
|
|
||||
|
Accessories, kids and other
|
20,130
|
|
|
18,642
|
|
|
41,653
|
|
|
29,652
|
|
||||
|
|
76,299
|
|
|
80,072
|
|
|
191,421
|
|
|
152,604
|
|
||||
|
Brand Portfolio segment:
|
|
|
|
|
|
|
|
||||||||
|
Wholesale
|
117,359
|
|
|
—
|
|
|
297,690
|
|
|
—
|
|
||||
|
Direct-to-consumer
|
13,223
|
|
|
—
|
|
|
29,181
|
|
|
—
|
|
||||
|
|
130,582
|
|
|
—
|
|
|
326,871
|
|
|
—
|
|
||||
|
Other
|
28,848
|
|
|
29,851
|
|
|
93,935
|
|
|
99,950
|
|
||||
|
Total segment net sales
|
952,504
|
|
|
831,669
|
|
|
2,698,762
|
|
|
2,335,841
|
|
||||
|
Commission, franchise and other revenue
|
9,352
|
|
|
1,334
|
|
|
30,028
|
|
|
4,532
|
|
||||
|
|
961,856
|
|
|
833,003
|
|
|
2,728,790
|
|
|
2,340,373
|
|
||||
|
Elimination of intersegment revenue
|
(25,592
|
)
|
|
—
|
|
|
(53,813
|
)
|
|
—
|
|
||||
|
Total revenue
|
$
|
936,264
|
|
|
$
|
833,003
|
|
|
$
|
2,674,977
|
|
|
$
|
2,340,373
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
(in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
||||||||
|
Gift cards:
|
|
|
|
|
|
|
|
||||||||
|
Beginning of period
|
$
|
28,277
|
|
|
$
|
26,791
|
|
|
$
|
34,998
|
|
|
$
|
32,792
|
|
|
Gift cards redeemed and breakage recognized to net sales
|
(18,027
|
)
|
|
(17,390
|
)
|
|
(62,125
|
)
|
|
(61,424
|
)
|
||||
|
Gift cards issued
|
15,848
|
|
|
15,507
|
|
|
53,225
|
|
|
53,540
|
|
||||
|
End of period
|
$
|
26,098
|
|
|
$
|
24,908
|
|
|
$
|
26,098
|
|
|
$
|
24,908
|
|
|
Loyalty programs:
|
|
|
|
|
|
|
|
||||||||
|
Beginning of period
|
$
|
16,034
|
|
|
$
|
16,786
|
|
|
$
|
16,151
|
|
|
$
|
21,282
|
|
|
Loyalty certificates redeemed and expired and other adjustments recognized to net sales
|
(9,008
|
)
|
|
(6,465
|
)
|
|
(27,836
|
)
|
|
(29,850
|
)
|
||||
|
Deferred revenue for loyalty points issued
|
10,054
|
|
|
7,669
|
|
|
28,765
|
|
|
26,558
|
|
||||
|
End of period
|
$
|
17,080
|
|
|
$
|
17,990
|
|
|
$
|
17,080
|
|
|
$
|
17,990
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||
|
(in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
||||
|
Weighted average basic shares outstanding
|
72,123
|
|
|
80,321
|
|
|
74,219
|
|
|
80,231
|
|
|
Dilutive effect of stock-based compensation awards
|
824
|
|
|
1,966
|
|
|
930
|
|
|
1,455
|
|
|
Weighted average diluted shares outstanding
|
72,947
|
|
|
82,287
|
|
|
75,149
|
|
|
81,686
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
(in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
||||||||
|
Stock options
|
$
|
428
|
|
|
$
|
960
|
|
|
$
|
1,814
|
|
|
$
|
4,098
|
|
|
Restricted and director stock units
|
3,589
|
|
|
2,975
|
|
|
11,934
|
|
|
9,535
|
|
||||
|
|
$
|
4,017
|
|
|
$
|
3,935
|
|
|
$
|
13,748
|
|
|
$
|
13,633
|
|
|
|
Number of shares
|
|||||||
|
(in thousands)
|
Stock Options
|
|
Time-Based RSUs
|
|
Performance-Based RSUs
|
|||
|
Outstanding - beginning of period
|
4,001
|
|
|
989
|
|
|
596
|
|
|
Granted
|
—
|
|
|
943
|
|
|
493
|
|
|
Exercised / vested
|
(169
|
)
|
|
(145
|
)
|
|
(97
|
)
|
|
Forfeited / expired
|
(48
|
)
|
|
(83
|
)
|
|
—
|
|
|
Outstanding - end of period
|
3,784
|
|
|
1,704
|
|
|
992
|
|
|
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
||||||||||||
|
(in thousands)
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||
|
Authorized shares
|
250,000
|
|
|
100,000
|
|
|
250,000
|
|
|
100,000
|
|
|
250,000
|
|
|
100,000
|
|
|
Issued shares
|
86,185
|
|
|
7,733
|
|
|
85,763
|
|
|
7,733
|
|
|
85,706
|
|
|
7,733
|
|
|
Outstanding shares
|
64,016
|
|
|
7,733
|
|
|
70,672
|
|
|
7,733
|
|
|
72,615
|
|
|
7,733
|
|
|
Treasury shares
|
22,169
|
|
|
—
|
|
|
15,091
|
|
|
—
|
|
|
13,091
|
|
|
—
|
|
|
|
Three months ended
|
||||||||||||||||||||||
|
|
November 2, 2019
|
|
November 3, 2018
|
||||||||||||||||||||
|
(in thousands)
|
Foreign Currency Translation
|
|
Available-for-Sale Securities
|
|
Total
|
|
Foreign Currency Translation
|
|
Available-for-Sale Securities
|
|
Total
|
||||||||||||
|
Accumulated other comprehensive loss - beginning of period
|
$
|
(2,581
|
)
|
|
$
|
(5
|
)
|
|
$
|
(2,586
|
)
|
|
$
|
(1,365
|
)
|
|
$
|
(911
|
)
|
|
$
|
(2,276
|
)
|
|
Other comprehensive income (loss) before reclassifications
|
236
|
|
|
37
|
|
|
273
|
|
|
(271
|
)
|
|
(133
|
)
|
|
(404
|
)
|
||||||
|
Amounts reclassified to non-operating income (expenses), net
|
—
|
|
|
(24
|
)
|
|
(24
|
)
|
|
—
|
|
|
14
|
|
|
14
|
|
||||||
|
Other comprehensive income (loss)
|
236
|
|
|
13
|
|
|
249
|
|
|
(271
|
)
|
|
(119
|
)
|
|
(390
|
)
|
||||||
|
Accumulated other comprehensive loss - end of period
|
$
|
(2,345
|
)
|
|
$
|
8
|
|
|
$
|
(2,337
|
)
|
|
$
|
(1,636
|
)
|
|
$
|
(1,030
|
)
|
|
$
|
(2,666
|
)
|
|
|
Nine months ended
|
||||||||||||||||||||||
|
|
November 2, 2019
|
|
November 3, 2018
|
||||||||||||||||||||
|
(in thousands)
|
Foreign Currency Translation
|
|
Available-for-Sale Securities
|
|
Total
|
|
Foreign Currency Translation
|
|
Available-for-Sale Securities
|
|
Total
|
||||||||||||
|
Accumulated other comprehensive loss - beginning of period
|
$
|
(2,328
|
)
|
|
$
|
(378
|
)
|
|
$
|
(2,706
|
)
|
|
$
|
(9,278
|
)
|
|
$
|
(796
|
)
|
|
$
|
(10,074
|
)
|
|
Other comprehensive income (loss) before reclassifications
|
(17
|
)
|
|
475
|
|
|
458
|
|
|
(6,321
|
)
|
|
(450
|
)
|
|
(6,771
|
)
|
||||||
|
Amounts reclassified to non-operating expenses, net
|
—
|
|
|
(89
|
)
|
|
(89
|
)
|
|
13,963
|
|
|
216
|
|
|
14,179
|
|
||||||
|
Other comprehensive income
|
(17
|
)
|
|
386
|
|
|
369
|
|
|
7,642
|
|
|
(234
|
)
|
|
7,408
|
|
||||||
|
Accumulated other comprehensive loss - end of period
|
$
|
(2,345
|
)
|
|
$
|
8
|
|
|
$
|
(2,337
|
)
|
|
$
|
(1,636
|
)
|
|
$
|
(1,030
|
)
|
|
$
|
(2,666
|
)
|
|
(in thousands)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
||||||
|
Customer accounts receivables:
|
|
|
|
|
|
||||||
|
Serviced by third-party provider with guaranteed payment
|
$
|
70,301
|
|
|
$
|
47,599
|
|
|
$
|
—
|
|
|
Serviced by third-party provider without guaranteed payment
|
699
|
|
|
280
|
|
|
—
|
|
|||
|
Serviced in-house
|
8,094
|
|
|
9,892
|
|
|
2,181
|
|
|||
|
Construction and tenant allowance receivables due from landlords(1)
|
—
|
|
|
4,034
|
|
|
5,043
|
|
|||
|
Other receivables
|
10,854
|
|
|
8,004
|
|
|
7,678
|
|
|||
|
Accounts receivable
|
89,948
|
|
|
69,809
|
|
|
14,902
|
|
|||
|
Allowance for doubtful accounts
|
(2,635
|
)
|
|
(939
|
)
|
|
—
|
|
|||
|
Accounts receivable, net
|
$
|
87,313
|
|
|
$
|
68,870
|
|
|
$
|
14,902
|
|
|
(1)
|
Upon transition to ASU 2016-02 at the beginning of fiscal 2019, amounts for construction and tenant allowance receivables due from landlords were netted against the operating lease liabilities.
|
|
(in thousands)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
||||||
|
Carrying value of investments
|
$
|
25,903
|
|
|
$
|
70,195
|
|
|
$
|
72,827
|
|
|
Unrealized gains included in accumulated other comprehensive loss
|
43
|
|
|
44
|
|
|
3
|
|
|||
|
Unrealized losses included in accumulated other comprehensive loss
|
(7
|
)
|
|
(521
|
)
|
|
(982
|
)
|
|||
|
Fair value
|
$
|
25,939
|
|
|
$
|
69,718
|
|
|
$
|
71,848
|
|
|
(in thousands)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
||||||
|
Land
|
$
|
1,110
|
|
|
$
|
1,110
|
|
|
$
|
1,110
|
|
|
Buildings
|
13,445
|
|
|
12,485
|
|
|
12,485
|
|
|||
|
Building and leasehold improvements
|
442,609
|
|
|
437,116
|
|
|
432,367
|
|
|||
|
Furniture, fixtures and equipment
|
478,463
|
|
|
487,494
|
|
|
455,263
|
|
|||
|
Software
|
174,324
|
|
|
161,226
|
|
|
152,793
|
|
|||
|
Construction in progress(1)
|
36,489
|
|
|
38,646
|
|
|
41,908
|
|
|||
|
Total property and equipment
|
1,146,440
|
|
|
1,138,077
|
|
|
1,095,926
|
|
|||
|
Accumulated depreciation and amortization
|
(751,745
|
)
|
|
(728,501
|
)
|
|
(712,816
|
)
|
|||
|
Property and equipment, net
|
$
|
394,695
|
|
|
$
|
409,576
|
|
|
$
|
383,110
|
|
|
(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.
|
|
|
Nine months ended
|
||||||||||||||||||||||
|
|
November 2, 2019
|
|
November 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
|
|
|
Canada Retail
|
42,048
|
|
|
(42,048
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Brand Portfolio
|
63,614
|
|
|
—
|
|
|
63,614
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
53,790
|
|
|
(53,790
|
)
|
|
—
|
|
||||||
|
|
131,561
|
|
|
(42,048
|
)
|
|
89,513
|
|
|
79,689
|
|
|
(53,790
|
)
|
|
25,899
|
|
||||||
|
Activity by segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. Retail -
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Allocation of goodwill from Brand Portfolio
|
67,756
|
|
|
—
|
|
|
67,756
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Canada Retail:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Acquired TSL goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
29,807
|
|
|
—
|
|
|
29,807
|
|
||||||
|
Impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,077
|
)
|
|
(29,077
|
)
|
||||||
|
Currency translation adjustment
|
(195
|
)
|
|
195
|
|
|
—
|
|
|
(762
|
)
|
|
32
|
|
|
(730
|
)
|
||||||
|
Brand Portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Purchase price and allocation adjustments
|
24,131
|
|
|
—
|
|
|
24,131
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Allocation of goodwill to U.S. Retail
|
(67,756
|
)
|
|
—
|
|
|
(67,756
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Other - Eliminated goodwill from Ebuys exit
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,790
|
)
|
|
53,790
|
|
|
—
|
|
||||||
|
|
23,936
|
|
|
195
|
|
|
24,131
|
|
|
(24,745
|
)
|
|
24,745
|
|
|
—
|
|
||||||
|
End of period by segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. Retail
|
93,655
|
|
|
—
|
|
|
93,655
|
|
|
25,899
|
|
|
—
|
|
|
25,899
|
|
||||||
|
Canada Retail
|
41,853
|
|
|
(41,853
|
)
|
|
—
|
|
|
29,045
|
|
|
(29,045
|
)
|
|
—
|
|
||||||
|
Brand Portfolio
|
19,989
|
|
|
—
|
|
|
19,989
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
$
|
155,497
|
|
|
$
|
(41,853
|
)
|
|
$
|
113,644
|
|
|
$
|
54,944
|
|
|
$
|
(29,045
|
)
|
|
$
|
25,899
|
|
|
(in thousands)
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
|
November 2, 2019
|
|
|
|
|
|
||||||
|
Definite-lived customer relationships
|
$
|
9,369
|
|
|
$
|
(1,684
|
)
|
|
$
|
7,685
|
|
|
Indefinite-lived trademarks and tradenames
|
15,612
|
|
|
—
|
|
|
15,612
|
|
|||
|
|
$
|
24,981
|
|
|
$
|
(1,684
|
)
|
|
$
|
23,297
|
|
|
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
|
|
|
November 3, 2018
|
|
|
|
|
|
||||||
|
Definite-lived:
|
|
|
|
|
|
||||||
|
Customer relationships
|
$
|
1,373
|
|
|
$
|
(229
|
)
|
|
$
|
1,144
|
|
|
Favorable leasehold interests
|
3,510
|
|
|
(200
|
)
|
|
3,310
|
|
|||
|
Indefinite-lived trademarks and tradenames
|
15,546
|
|
|
—
|
|
|
15,546
|
|
|||
|
|
$
|
20,429
|
|
|
$
|
(429
|
)
|
|
$
|
20,000
|
|
|
(in thousands)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
||||||
|
Gift cards and merchandise credits
|
$
|
26,098
|
|
|
$
|
34,998
|
|
|
$
|
24,908
|
|
|
Accrued compensation and related expenses
|
26,023
|
|
|
53,577
|
|
|
37,317
|
|
|||
|
Accrued taxes
|
29,203
|
|
|
16,491
|
|
|
30,321
|
|
|||
|
Loyalty programs deferred revenue
|
17,080
|
|
|
16,151
|
|
|
17,990
|
|
|||
|
Sales returns
|
24,371
|
|
|
17,743
|
|
|
17,286
|
|
|||
|
Customer allowances and discounts
|
10,326
|
|
|
13,094
|
|
|
—
|
|
|||
|
Other(1)
|
57,796
|
|
|
49,481
|
|
|
55,142
|
|
|||
|
|
$
|
190,897
|
|
|
$
|
201,535
|
|
|
$
|
182,964
|
|
|
(1)
|
Other is comprised of various other accrued expenses that we expect will settle within one year of the applicable period.
|
|
(in thousands)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
||||||
|
Foreign tax contingent liabilities
|
$
|
15,542
|
|
|
$
|
13,429
|
|
|
$
|
—
|
|
|
Deferred tax liabilities
|
1,146
|
|
|
3,260
|
|
|
—
|
|
|||
|
Construction and tenant allowances(1)
|
—
|
|
|
71,634
|
|
|
73,531
|
|
|||
|
Deferred rent(1)
|
—
|
|
|
35,934
|
|
|
35,644
|
|
|||
|
Accrual for lease obligations(1)
|
—
|
|
|
16,483
|
|
|
12,348
|
|
|||
|
Unfavorable leasehold interests(1)
|
—
|
|
|
5,779
|
|
|
6,310
|
|
|||
|
Other(2)
|
19,396
|
|
|
18,528
|
|
|
22,897
|
|
|||
|
|
$
|
36,084
|
|
|
$
|
165,047
|
|
|
$
|
150,730
|
|
|
(1)
|
Upon transition to ASU 2016-02 at the beginning of fiscal 2019, amounts for construction and tenant allowances, deferred rent, the accrual for lease obligations, and unfavorable leasehold interests were netted against the operating lease assets.
|
|
(2)
|
Other is comprised of various other accrued expenses that we expect will settle beyond one year from the end of the applicable period.
|
|
|
Nine months ended
|
||||||
|
(in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
||||
|
Beginning of period
|
$
|
16,483
|
|
|
$
|
6,511
|
|
|
Netted against lease assets upon transition to ASU 2016-02
|
(16,483
|
)
|
|
—
|
|
||
|
Additions
|
—
|
|
|
21,008
|
|
||
|
Lease obligation payments, net of sublease income
|
—
|
|
|
(15,244
|
)
|
||
|
Adjustments
|
—
|
|
|
73
|
|
||
|
End of period
|
$
|
—
|
|
|
$
|
12,348
|
|
|
15.
|
LEASES
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
(in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
||||||||
|
Operating lease income
|
$
|
2,462
|
|
|
$
|
1,172
|
|
|
$
|
6,910
|
|
|
$
|
3,469
|
|
|
Operating lease expense:
|
|
|
|
|
|
|
|
||||||||
|
Lease expense to unrelated parties
|
$
|
53,674
|
|
|
$
|
50,838
|
|
|
$
|
159,735
|
|
|
$
|
147,586
|
|
|
Lease expense to related parties
|
2,387
|
|
|
2,304
|
|
|
7,100
|
|
|
6,895
|
|
||||
|
Variable lease expense to unrelated parties
|
13,539
|
|
|
5,804
|
|
|
39,542
|
|
|
18,302
|
|
||||
|
Variable lease expense to related parties
|
325
|
|
|
—
|
|
|
975
|
|
|
—
|
|
||||
|
|
$
|
69,925
|
|
|
$
|
58,946
|
|
|
$
|
207,352
|
|
|
$
|
172,783
|
|
|
|
November 2, 2019
|
|
|
Other operating lease information:
|
|
|
|
Weighted-average remaining lease term
|
6.1 years
|
|
|
Weighted-average discount rate
|
4.0
|
%
|
|
(in thousands)
|
Unrelated Parties
|
|
Related Parties
|
|
Total
|
||||||
|
Remainder of fiscal 2019
|
$
|
38,662
|
|
|
$
|
1,580
|
|
|
$
|
40,242
|
|
|
Fiscal 2020
|
234,020
|
|
|
9,364
|
|
|
243,384
|
|
|||
|
Fiscal 2021
|
219,997
|
|
|
8,697
|
|
|
228,694
|
|
|||
|
Fiscal 2022
|
186,327
|
|
|
7,418
|
|
|
193,745
|
|
|||
|
Fiscal 2023
|
146,263
|
|
|
4,573
|
|
|
150,836
|
|
|||
|
Future fiscal years thereafter
|
332,968
|
|
|
15,493
|
|
|
348,461
|
|
|||
|
|
1,158,237
|
|
|
47,125
|
|
|
1,205,362
|
|
|||
|
Less discounting impact on operating leases
|
(134,290
|
)
|
|
(5,591
|
)
|
|
(139,881
|
)
|
|||
|
Total operating lease liabilities
|
1,023,947
|
|
|
41,534
|
|
|
1,065,481
|
|
|||
|
Less current operating lease liabilities
|
(177,414
|
)
|
|
(7,184
|
)
|
|
(184,598
|
)
|
|||
|
Non-current operating lease liabilities
|
$
|
846,533
|
|
|
$
|
34,350
|
|
|
$
|
880,883
|
|
|
(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
|
|
|
(in thousands)
|
U.S. Retail
|
|
Canada Retail
|
|
Brand Portfolio
|
|
Other
|
|
Corporate/Eliminations
|
|
Total
|
||||||||||||
|
Three months ended November 2, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
External revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Net sales
|
$
|
716,775
|
|
|
$
|
76,299
|
|
|
$
|
106,686
|
|
|
$
|
28,848
|
|
|
$
|
—
|
|
|
$
|
928,608
|
|
|
Commission, franchise and other revenue
|
—
|
|
|
—
|
|
|
5,218
|
|
|
—
|
|
|
2,438
|
|
|
7,656
|
|
||||||
|
Total revenue
|
$
|
716,775
|
|
|
$
|
76,299
|
|
|
$
|
111,904
|
|
|
$
|
28,848
|
|
|
$
|
2,438
|
|
|
$
|
936,264
|
|
|
Intersegment revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,592
|
|
|
$
|
—
|
|
|
$
|
(25,592
|
)
|
|
$
|
—
|
|
|
Gross profit(1)
|
$
|
201,409
|
|
|
$
|
27,485
|
|
|
$
|
33,936
|
|
|
$
|
6,291
|
|
|
$
|
(1,031
|
)
|
|
$
|
268,090
|
|
|
Income from equity investment in ABG-Camuto
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,662
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,662
|
|
|
Three months ended November 3, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Net sales
|
$
|
721,746
|
|
|
$
|
80,072
|
|
|
$
|
—
|
|
|
$
|
29,851
|
|
|
$
|
—
|
|
|
$
|
831,669
|
|
|
Commission, franchise and other revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,334
|
|
|
1,334
|
|
||||||
|
Total revenue
|
$
|
721,746
|
|
|
$
|
80,072
|
|
|
$
|
—
|
|
|
$
|
29,851
|
|
|
$
|
1,334
|
|
|
$
|
833,003
|
|
|
Gross profit(1)
|
$
|
239,650
|
|
|
$
|
25,364
|
|
|
$
|
—
|
|
|
$
|
6,069
|
|
|
$
|
—
|
|
|
$
|
271,083
|
|
|
Nine months ended November 2, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
External revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net sales
|
$
|
2,086,535
|
|
|
$
|
191,421
|
|
|
$
|
276,349
|
|
|
$
|
93,935
|
|
|
$
|
—
|
|
|
$
|
2,648,240
|
|
|
Commission, franchise and other revenue
|
—
|
|
|
—
|
|
|
14,827
|
|
|
—
|
|
|
11,910
|
|
|
26,737
|
|
||||||
|
Total revenue
|
$
|
2,086,535
|
|
|
$
|
191,421
|
|
|
$
|
291,176
|
|
|
$
|
93,935
|
|
|
$
|
11,910
|
|
|
$
|
2,674,977
|
|
|
Intersegment revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53,813
|
|
|
$
|
—
|
|
|
$
|
(53,813
|
)
|
|
$
|
—
|
|
|
Gross profit(1)
|
$
|
619,356
|
|
|
$
|
65,171
|
|
|
$
|
75,191
|
|
|
$
|
21,643
|
|
|
$
|
(2,374
|
)
|
|
$
|
778,987
|
|
|
Income from equity investment in ABG-Camuto
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,354
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,354
|
|
|
Nine months ended November 3, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Net sales
|
$
|
2,083,287
|
|
|
$
|
152,604
|
|
|
$
|
—
|
|
|
$
|
99,950
|
|
|
$
|
—
|
|
|
$
|
2,335,841
|
|
|
Commission, franchise and other revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,532
|
|
|
4,532
|
|
||||||
|
Total revenue
|
$
|
2,083,287
|
|
|
$
|
152,604
|
|
|
$
|
—
|
|
|
$
|
99,950
|
|
|
$
|
4,532
|
|
|
$
|
2,340,373
|
|
|
Gross profit(1)
|
$
|
667,595
|
|
|
$
|
43,582
|
|
|
$
|
—
|
|
|
$
|
19,626
|
|
|
$
|
—
|
|
|
$
|
730,803
|
|
|
(1)
|
Gross profit is defined as net sales, which excludes commission, franchise and other revenue, less cost of sales.
|
|
•
|
our success in growing our store base and digital demand;
|
|
•
|
our ability to successfully integrate recently acquired businesses or realize the anticipated benefits of the acquisitions after we complete our integration efforts;
|
|
•
|
our ability to protect our reputation and to maintain the brands we license;
|
|
•
|
maintaining strong relationships with our vendors, manufacturers and wholesale customers;
|
|
•
|
our ability to anticipate and respond to fashion trends, consumer preferences and changing customer expectations;
|
|
•
|
risks related to the loss or disruption of our distribution and/or fulfillment operations;
|
|
•
|
continuation of agreements with and our reliance on the financial condition of Stein Mart;
|
|
•
|
our ability to execute our strategies;
|
|
•
|
fluctuation of our comparable sales and quarterly financial performance;
|
|
•
|
risks related to the loss or disruption of our information systems and data;
|
|
•
|
our ability to prevent or mitigate breaches of our information security and the compromise of sensitive and confidential data;
|
|
•
|
failure to retain our key executives or attract qualified new personnel;
|
|
•
|
our reliance on our loyalty programs and marketing to drive traffic, sales and customer loyalty;
|
|
•
|
risks related to leases of our properties;
|
|
•
|
our competitiveness with respect to style, price, brand availability and customer service;
|
|
•
|
our reliance on foreign sources for merchandise and risks inherent to international trade;
|
|
•
|
the imposition of new tariffs on our products;
|
|
•
|
exposure to foreign tax contingencies;
|
|
•
|
uncertainty related to future legislation, regulatory reform, policy changes, or interpretive guidance on existing legislation;
|
|
•
|
uncertain general economic conditions;
|
|
•
|
risks related to holdings of cash and investments and access to liquidity; and
|
|
•
|
fluctuations in foreign currency exchange rates.
|
|
•
|
On May 10, 2018, we acquired the remaining interest in TSL that we did not previously own. TSL results were included in the condensed consolidated results of operations as a wholly-owned subsidiary, beginning with the second quarter of fiscal 2018. The loss from our equity investment interest in TSL was included in our condensed consolidated results of operations for the first quarter of fiscal 2018. Due to the acquisition of the remaining interest in TSL, we remeasured to fair value our previously held assets, which included our equity investment in TSL and notes and accounts receivable from TSL. During the second quarter of fiscal 2018, as a result of the remeasurement, we recorded a loss of $34.0 million to non-operating income (expenses), net. Also during the second quarter of fiscal 2018, we reclassified a net loss of $12.2 million of foreign currency translation adjustments related to the previously held balances from accumulated other comprehensive loss to non-operating income (expenses), net. In addition, with the TSL acquisition being accounted for as a step acquisition, the purchase price included the fair value of our previously held assets, which considered the valuation of the TSL enterprise. This valuation identified that the resulting goodwill was not supportable as the value of the acquired net assets exceeded the enterprise fair value. As a result, during fiscal 2018, we recorded a goodwill impairment charge, net of adjustments as a result of recording adjustments to the preliminary purchase allocations, which resulted in impairing all of TSL’s goodwill.
|
|
•
|
During the three and nine months ended November 3, 2018, as a result of our decision to exit the Town Shoes banner, we closed certain Town Shoes banner stores with remaining lease terms and recorded a lease exit charge of $13.4 million and $13.8 million, respectively.
|
|
•
|
On November 5, 2018, we completed the acquisition of Camuto Group. Camuto Group's results were included in the condensed consolidated results of operations as a wholly-owned subsidiary, beginning with the fourth quarter of fiscal 2018.
|
|
•
|
During the three and nine months ended November 3, 2018, we incurred acquisition-related costs and target acquisition costs of $13.0 million and $18.6 million, respectively.
|
|
•
|
During the three and nine months ended November 2, 2019, we incurred integration and restructuring costs related to our prior year acquisition activity of $1.5 million and $13.6 million, respectively, which consisted primarily of severance, termination fees for terminating the JVs, and professional fees and other integration costs. During the nine months ended November 3, 2018, we incurred restructuring costs of $3.3 million in severance, primarily related to changes in our store staffing model.
|
|
•
|
During the three and nine months ended November 2, 2019, we recorded impairment charges of $4.8 million related to the planned consolidation of certain Brand Portfolio segment locations as part of our integration efforts and under-performing stores in the Canada Retail segment.
|
|
•
|
The first quarter of fiscal 2018 included the wind-down operations of Ebuys, including incremental income tax expense of $2.3 million. In addition, during the three and nine months ended November 3, 2018, we recorded lease exit and other termination costs of $2.7 million and $7.2 million, respectively.
|
|
|
Three months ended
|
|
|
|
|
|||||||||||||||
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Change
|
|||||||||||||||
|
(dollars in thousands, except per share amounts)
|
Amount
|
|
% of Total Revenue
|
|
Amount
|
|
% of Total Revenue
|
|
Amount
|
|
%
|
|||||||||
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net sales
|
$
|
928,608
|
|
|
99.2
|
%
|
|
$
|
831,669
|
|
|
99.8
|
%
|
|
$
|
96,939
|
|
|
11.7
|
%
|
|
Commission, franchise and other revenue
|
7,656
|
|
|
0.8
|
|
|
1,334
|
|
|
0.2
|
|
|
6,322
|
|
|
473.9
|
%
|
|||
|
Total revenue
|
936,264
|
|
|
100.0
|
|
|
833,003
|
|
|
100.0
|
|
|
103,261
|
|
|
12.4
|
%
|
|||
|
Cost of sales
|
(660,518
|
)
|
|
(70.5
|
)
|
|
(560,586
|
)
|
|
(67.3
|
)
|
|
(99,932
|
)
|
|
17.8
|
%
|
|||
|
Operating expenses
|
(217,476
|
)
|
|
(23.2
|
)
|
|
(226,491
|
)
|
|
(27.2
|
)
|
|
9,015
|
|
|
(4.0
|
)%
|
|||
|
Income from equity investment in ABG-Camuto
|
2,662
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
2,662
|
|
|
NM
|
||||
|
Impairment adjustments (charges)
|
(4,824
|
)
|
|
(0.5
|
)
|
|
7,163
|
|
|
0.9
|
|
|
(11,987
|
)
|
|
NM
|
||||
|
Operating profit
|
56,108
|
|
|
6.1
|
|
|
53,089
|
|
|
6.4
|
|
|
3,019
|
|
|
5.7
|
%
|
|||
|
Interest income (expense), net
|
(2,174
|
)
|
|
(0.3
|
)
|
|
870
|
|
|
0.1
|
|
|
(3,044
|
)
|
|
NM
|
||||
|
Non-operating income (expenses), net
|
15
|
|
|
0.0
|
|
|
(108
|
)
|
|
(0.0
|
)
|
|
123
|
|
|
NM
|
||||
|
Income before income taxes
|
53,949
|
|
|
5.8
|
|
|
53,851
|
|
|
6.5
|
|
|
98
|
|
|
0.2
|
%
|
|||
|
Income tax provision
|
(10,489
|
)
|
|
(1.1
|
)
|
|
(14,532
|
)
|
|
(1.7
|
)
|
|
4,043
|
|
|
(27.8
|
)%
|
|||
|
Net income
|
$
|
43,460
|
|
|
4.7
|
%
|
|
$
|
39,319
|
|
|
4.8
|
%
|
|
$
|
4,141
|
|
|
10.5
|
%
|
|
Basic and diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Basic earnings per share
|
$
|
0.60
|
|
|
|
|
$
|
0.49
|
|
|
|
|
$
|
0.11
|
|
|
22.4
|
%
|
||
|
Diluted earnings per share
|
$
|
0.60
|
|
|
|
|
$
|
0.48
|
|
|
|
|
$
|
0.12
|
|
|
25.0
|
%
|
||
|
Weighted average shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Basic shares
|
72,123
|
|
|
|
|
80,321
|
|
|
|
|
(8,198
|
)
|
|
(10.2
|
)%
|
|||||
|
Diluted shares
|
72,947
|
|
|
|
|
82,287
|
|
|
|
|
(9,340
|
)
|
|
(11.4
|
)%
|
|||||
|
(in thousands)
|
Three months ended November 2, 2019
|
||
|
Consolidated net sales for the same period last year
|
$
|
831,669
|
|
|
Increase in comparable sales(1)
|
2,041
|
|
|
|
Net increase from non-comparable sales and other changes
|
1,956
|
|
|
|
Loss of net sales from closed stores
|
(13,744
|
)
|
|
|
Incremental external net sales from Camuto Group
|
106,686
|
|
|
|
Consolidated net sales
|
$
|
928,608
|
|
|
(1)
|
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 include e-commerce sales. Stores in Canada from the TSL acquisition that were in operation for at least 14 months at the beginning of fiscal 2019, along with its e-commerce sales, were added to the comparable base beginning with the second quarter of fiscal 2019. Comparable sales for the Canada Retail segment exclude the impact of foreign currency translation and are calculated by translating current period results at the foreign currency exchange rate used in the comparable period in the prior year. 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.
|
|
|
Three months ended
|
|
Change
|
|||||||||||||
|
(dollars in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
|
Amount
|
|
%
|
|
Comparable Sales %
|
|||||||
|
Segment net sales:
|
|
|
|
|
|
|
|
|
|
|||||||
|
U.S. Retail
|
$
|
716,775
|
|
|
$
|
721,746
|
|
|
$
|
(4,971
|
)
|
|
(0.7
|
)%
|
|
—%
|
|
Canada Retail
|
76,299
|
|
|
80,072
|
|
|
(3,773
|
)
|
|
(4.7
|
)%
|
|
4.4%
|
|||
|
Brand Portfolio
|
130,582
|
|
|
—
|
|
|
130,582
|
|
|
NM
|
|
|
NA
|
|||
|
Other
|
28,848
|
|
|
29,851
|
|
|
(1,003
|
)
|
|
(3.4
|
)%
|
|
(2.4)%
|
|||
|
Total segment net sales
|
952,504
|
|
|
831,669
|
|
|
120,835
|
|
|
14.5
|
%
|
|
0.3%
|
|||
|
Elimination of intersegment net sales
|
(23,896
|
)
|
|
—
|
|
|
(23,896
|
)
|
|
NM
|
|
|
|
|||
|
Consolidated net sales
|
$
|
928,608
|
|
|
$
|
831,669
|
|
|
$
|
96,939
|
|
|
11.7
|
%
|
|
|
|
|
Three months ended
|
|
Change
|
|||||||||||
|
(dollars in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
|
Amount
|
|
%
|
|||||||
|
Commission income from Brand Portfolio segment
|
$
|
6,914
|
|
|
$
|
—
|
|
|
$
|
6,914
|
|
|
NM
|
|
|
Franchise and other revenue
|
2,438
|
|
|
1,334
|
|
|
1,104
|
|
|
82.8
|
%
|
|||
|
|
9,352
|
|
|
1,334
|
|
|
8,018
|
|
|
601.0
|
%
|
|||
|
Elimination of intersegment commission income
|
(1,696
|
)
|
|
—
|
|
|
(1,696
|
)
|
|
NM
|
|
|||
|
Consolidated commission, franchise and other revenue
|
$
|
7,656
|
|
|
$
|
1,334
|
|
|
$
|
6,322
|
|
|
473.9
|
%
|
|
|
Three months ended
|
|
|
||||||||||||||||||||
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Change
|
||||||||||||||||||
|
(dollars in thousands)
|
Amount
|
|
% of Net Sales
|
|
Amount
|
|
% of Net Sales
|
|
Amount
|
|
%
|
|
Basis Points
|
||||||||||
|
Net sales
|
$
|
928,608
|
|
|
100.0
|
%
|
|
$
|
831,669
|
|
|
100.0
|
%
|
|
|
|
|
|
|
||||
|
Cost of sales
|
(660,518
|
)
|
|
(71.1
|
)
|
|
(560,586
|
)
|
|
(67.4
|
)
|
|
|
|
|
|
|
||||||
|
Gross profit
|
$
|
268,090
|
|
|
28.9
|
%
|
|
$
|
271,083
|
|
|
32.6
|
%
|
|
$
|
(2,993
|
)
|
|
(1.1
|
)%
|
|
(370
|
)
|
|
|
Three months ended
|
|
|
||||||||||||||||||||
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Change
|
||||||||||||||||||
|
(dollars in thousands)
|
Amount
|
|
% of Segment Net Sales
|
|
Amount
|
|
% of Segment Net Sales
|
|
Amount
|
|
%
|
|
Basis Points
|
||||||||||
|
Segment gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. Retail
|
$
|
201,409
|
|
|
28.1
|
%
|
|
$
|
239,650
|
|
|
33.2
|
%
|
|
$
|
(38,241
|
)
|
|
(16.0
|
)%
|
|
(510
|
)
|
|
Canada Retail
|
27,485
|
|
|
36.0
|
%
|
|
25,364
|
|
|
31.7
|
%
|
|
$
|
2,121
|
|
|
8.4
|
%
|
|
430
|
|
||
|
Brand Portfolio
|
33,936
|
|
|
26.0
|
%
|
|
—
|
|
|
—
|
%
|
|
$
|
33,936
|
|
|
NM
|
|
|
NM
|
|
||
|
Other
|
6,291
|
|
|
21.8
|
%
|
|
6,069
|
|
|
20.3
|
%
|
|
$
|
222
|
|
|
3.7
|
%
|
|
150
|
|
||
|
|
269,121
|
|
|
|
|
271,083
|
|
|
|
|
|
|
|
|
|
||||||||
|
Elimination of intersegment gross profit
|
(1,031
|
)
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
Consolidated gross profit
|
$
|
268,090
|
|
|
|
|
$
|
271,083
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Three months ended
|
||||||
|
(in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
||||
|
Elimination of intersegment activity:
|
|
|
|
||||
|
Net sales recognized by Brand Portfolio segment
|
$
|
(23,896
|
)
|
|
$
|
—
|
|
|
Cost of sales:
|
|
|
|
||||
|
Cost of sales recognized by Brand Portfolio segment
|
17,363
|
|
|
—
|
|
||
|
Recognition of intersegment gross profit for inventory previously purchased that was subsequently sold to external customers during the current period
|
5,502
|
|
|
—
|
|
||
|
Gross profit
|
$
|
(1,031
|
)
|
|
$
|
—
|
|
|
|
Nine months ended
|
|
|
|
|
|||||||||||||||
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Change
|
|||||||||||||||
|
(dollars in thousands, except per share amounts)
|
Amount
|
|
% of Total Revenue
|
|
Amount
|
|
% of Total Revenue
|
|
Amount
|
|
%
|
|||||||||
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net sales
|
$
|
2,648,240
|
|
|
99.0
|
%
|
|
$
|
2,335,841
|
|
|
99.8
|
%
|
|
$
|
312,399
|
|
|
13.4
|
%
|
|
Commission, franchise and other revenue
|
26,737
|
|
|
1.0
|
|
|
4,532
|
|
|
0.2
|
|
|
22,205
|
|
|
490.0
|
%
|
|||
|
Total revenue
|
2,674,977
|
|
|
100.0
|
|
|
2,340,373
|
|
|
100.0
|
|
|
334,604
|
|
|
14.3
|
%
|
|||
|
Cost of sales
|
(1,869,253
|
)
|
|
(69.9
|
)
|
|
(1,605,038
|
)
|
|
(68.6
|
)
|
|
(264,215
|
)
|
|
16.5
|
%
|
|||
|
Operating expenses
|
(666,898
|
)
|
|
(24.9
|
)
|
|
(590,230
|
)
|
|
(25.2
|
)
|
|
(76,668
|
)
|
|
13.0
|
%
|
|||
|
Income from equity investment in ABG-Camuto
|
7,354
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
7,354
|
|
|
NM
|
||||
|
Impairment charges
|
(4,824
|
)
|
|
(0.2
|
)
|
|
(29,077
|
)
|
|
(1.2
|
)
|
|
24,253
|
|
|
(83.4
|
)%
|
|||
|
Operating profit
|
141,356
|
|
|
5.3
|
|
|
116,028
|
|
|
5.0
|
|
|
25,328
|
|
|
21.8
|
%
|
|||
|
Interest income (expense), net
|
(5,947
|
)
|
|
(0.3
|
)
|
|
2,339
|
|
|
0.1
|
|
|
(8,286
|
)
|
|
NM
|
||||
|
Non-operating expenses, net
|
(128
|
)
|
|
(0.0
|
)
|
|
(49,594
|
)
|
|
(2.1
|
)
|
|
49,466
|
|
|
(99.7
|
)%
|
|||
|
Income before income taxes and loss from equity investment in TSL
|
135,281
|
|
|
5.0
|
|
|
68,773
|
|
|
3.0
|
|
|
66,508
|
|
|
96.7
|
%
|
|||
|
Income tax provision
|
(33,220
|
)
|
|
(1.2
|
)
|
|
(42,203
|
)
|
|
(1.8
|
)
|
|
8,983
|
|
|
(21.3
|
)%
|
|||
|
Loss from equity investment in TSL
|
—
|
|
|
—
|
|
|
(1,310
|
)
|
|
(0.1
|
)
|
|
1,310
|
|
|
NM
|
||||
|
Net income
|
$
|
102,061
|
|
|
3.8
|
%
|
|
$
|
25,260
|
|
|
1.1
|
%
|
|
$
|
76,801
|
|
|
304.0
|
%
|
|
Basic and diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Basic earnings per share
|
$
|
1.38
|
|
|
|
|
$
|
0.31
|
|
|
|
|
$
|
1.07
|
|
|
345.2
|
%
|
||
|
Diluted earnings per share
|
$
|
1.36
|
|
|
|
|
$
|
0.31
|
|
|
|
|
$
|
1.05
|
|
|
338.7
|
%
|
||
|
Weighted average shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Basic shares
|
74,219
|
|
|
|
|
80,231
|
|
|
|
|
(6,012
|
)
|
|
(7.5
|
)%
|
|||||
|
Diluted shares
|
75,149
|
|
|
|
|
81,686
|
|
|
|
|
(6,537
|
)
|
|
(8.0
|
)%
|
|||||
|
(in thousands)
|
Nine months ended November 2, 2019
|
||
|
Consolidated net sales for the same period last year
|
$
|
2,335,841
|
|
|
Increase in comparable sales
|
18,199
|
|
|
|
Net increase from non-comparable sales and other changes
|
5,098
|
|
|
|
Loss of net sales from closed stores
|
(33,431
|
)
|
|
|
Incremental external net sales from 2018 acquired businesses
|
328,165
|
|
|
|
Loss of net sales from the exit of Ebuys
|
(5,632
|
)
|
|
|
Consolidated net sales
|
$
|
2,648,240
|
|
|
|
Nine months ended
|
|
Change
|
|||||||||||||
|
(dollars in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
|
Amount
|
|
%
|
|
Comparable Sales %
|
|||||||
|
Segment net sales:
|
|
|
|
|
|
|
|
|
|
|||||||
|
U.S. Retail
|
$
|
2,086,535
|
|
|
$
|
2,083,287
|
|
|
$
|
3,248
|
|
|
0.2
|
%
|
|
0.5%
|
|
Canada Retail
|
191,421
|
|
|
152,604
|
|
|
38,817
|
|
|
25.4
|
%
|
|
6.1%
|
|||
|
Brand Portfolio
|
326,871
|
|
|
—
|
|
|
326,871
|
|
|
NM
|
|
|
NA
|
|||
|
Other
|
93,935
|
|
|
99,950
|
|
|
(6,015
|
)
|
|
(6.0
|
)%
|
|
0.9%
|
|||
|
Total segment net sales
|
2,698,762
|
|
|
2,335,841
|
|
|
362,921
|
|
|
15.5
|
%
|
|
0.8%
|
|||
|
Elimination of intersegment net sales
|
(50,522
|
)
|
|
—
|
|
|
(50,522
|
)
|
|
NM
|
|
|
|
|||
|
Consolidated net sales
|
$
|
2,648,240
|
|
|
$
|
2,335,841
|
|
|
$
|
312,399
|
|
|
13.4
|
%
|
|
|
|
|
Nine months ended
|
|
Change
|
|||||||||||
|
(dollars in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
|
Amount
|
|
%
|
|||||||
|
Commission income from Brand Portfolio segment
|
$
|
18,118
|
|
|
$
|
—
|
|
|
$
|
18,118
|
|
|
NM
|
|
|
Franchise and other revenue
|
11,910
|
|
|
4,532
|
|
|
7,378
|
|
|
162.8
|
%
|
|||
|
|
30,028
|
|
|
4,532
|
|
|
25,496
|
|
|
562.6
|
%
|
|||
|
Elimination of intersegment commission income
|
(3,291
|
)
|
|
—
|
|
|
(3,291
|
)
|
|
NM
|
|
|||
|
Consolidated commission, franchise and other revenue
|
$
|
26,737
|
|
|
$
|
4,532
|
|
|
$
|
22,205
|
|
|
490.0
|
%
|
|
|
Nine months ended
|
|
|
||||||||||||||||||||
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Change
|
||||||||||||||||||
|
(dollars in thousands)
|
Amount
|
|
% of Net Sales
|
|
Amount
|
|
% of Net Sales
|
|
Amount
|
|
%
|
|
Basis Points
|
||||||||||
|
Net sales
|
$
|
2,648,240
|
|
|
100.0
|
%
|
|
$
|
2,335,841
|
|
|
100.0
|
%
|
|
|
|
|
|
|
||||
|
Cost of sales
|
(1,869,253
|
)
|
|
(70.6
|
)
|
|
(1,605,038
|
)
|
|
(68.7
|
)
|
|
|
|
|
|
|
||||||
|
Gross profit
|
$
|
778,987
|
|
|
29.4
|
%
|
|
$
|
730,803
|
|
|
31.3
|
%
|
|
$
|
48,184
|
|
|
6.6
|
%
|
|
(190
|
)
|
|
|
Nine months ended
|
|
|
||||||||||||||||||||
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Change
|
||||||||||||||||||
|
(dollars in thousands)
|
Amount
|
|
% of Segment Net Sales
|
|
Amount
|
|
% of Segment Net Sales
|
|
Amount
|
|
%
|
|
Basis Points
|
||||||||||
|
Segment gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. Retail
|
$
|
619,356
|
|
|
29.7
|
%
|
|
$
|
667,595
|
|
|
32.0
|
%
|
|
$
|
(48,239
|
)
|
|
(7.2
|
)%
|
|
(230
|
)
|
|
Canada Retail
|
65,171
|
|
|
34.0
|
%
|
|
43,582
|
|
|
28.6
|
%
|
|
$
|
21,589
|
|
|
49.5
|
%
|
|
540
|
|
||
|
Brand Portfolio
|
75,191
|
|
|
23.0
|
%
|
|
—
|
|
|
—
|
%
|
|
$
|
75,191
|
|
|
NM
|
|
|
NM
|
|
||
|
Other
|
21,643
|
|
|
23.0
|
%
|
|
19,626
|
|
|
19.6
|
%
|
|
$
|
2,017
|
|
|
10.3
|
%
|
|
340
|
|
||
|
|
781,361
|
|
|
|
|
730,803
|
|
|
|
|
|
|
|
|
|
||||||||
|
Elimination of intersegment gross profit
|
(2,374
|
)
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
Consolidated gross profit
|
$
|
778,987
|
|
|
|
|
$
|
730,803
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Nine months ended
|
||||||
|
(in thousands)
|
November 2, 2019
|
|
November 3, 2018
|
||||
|
Elimination of intersegment activity:
|
|
|
|
||||
|
Net sales recognized by Brand Portfolio segment
|
$
|
(50,522
|
)
|
|
$
|
—
|
|
|
Cost of sales:
|
|
|
|
||||
|
Cost of sales recognized by Brand Portfolio segment
|
39,281
|
|
|
—
|
|
||
|
Recognition of intersegment gross profit for inventory previously purchased that was subsequently sold to external customers during the current period
|
8,867
|
|
|
—
|
|
||
|
Gross profit
|
$
|
(2,374
|
)
|
|
$
|
—
|
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
(1)
|
The total number of shares repurchased includes the shares repurchased as part of publicly announced programs (the average price paid per share includes any broker commissions) and 6,552 shares withheld in connection with tax payments due upon vesting of employee restricted stock awards.
|
|
Exhibit No.
|
|
Description
|
|
3.1
|
|
|
|
3.2
|
|
|
|
4.1
|
|
|
|
10.1*
|
|
|
|
31.1*
|
|
|
|
31.2*
|
|
|
|
32.1*
|
|
|
|
32.2*
|
|
|
|
101*
|
|
The following materials from the Designer Brands Inc. Quarterly Report on Form 10-Q for the quarter ended November 2, 2019, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations; (ii) Condensed Consolidated Statements of Comprehensive Income; (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Shareholders’ Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements.
|
|
104*
|
|
Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101.
|
|
*
|
Filed herewith
|
|
Date:
|
December 10, 2019
|
|
By:
|
/s/ Jared Poff
|
|
|
|
|
|
Jared Poff
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
(Principal Financial Officer and duly authorized officer)
|
|
[b]
|
With respect to nonqualified stock options, the Executive will have ninety (90) days following the effective date of Involuntary Termination Without Cause, or the grant expiration date set forth in the applicable stock option agreement between the Executive and the Company, whichever period is shorter, to exercise any portion of any outstanding nonqualified stock options that are vested and exercisable on the effective date of Involuntary Termination Without Cause, subject to the trading rules set forth in the Company’s policies and procedures, including the Designer Brands Inc. Insider Trading Policy.
|
|
[c]
|
With respect to Awards that would vest solely upon the passage of time and such vesting date would occur within the eighteen (18) month period following the effective date of Involuntary Termination Without Cause, such Award shall vest and, if applicable, be awarded to the Executive as of the date of termination Without Cause.
|
|
[d]
|
With respect to Awards that would vest upon the satisfaction of a specified requirement, or upon satisfaction of the passage of time and satisfaction of a specified requirement; in the event that all such requirements are satisfied prior to the expiration of the eighteen (18) month period following the date of termination Without Cause, such Award shall vest and be awarded to the Executive upon the satisfaction of all applicable requirements.
|
|
December 10, 2019
|
By:
|
/s/ Roger Rawlins
|
|
|
|
Roger Rawlins
|
|
|
|
Chief Executive Officer
|
|
December 10, 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 (the "Exchange Act"); and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
December 10, 2019
|
By:
|
/s/ Roger Rawlins
|
|
|
|
Roger Rawlins
|
|
|
|
Chief Executive Officer
|
|
*
|
This Certification is being furnished as required by Rule 13a-14(b) under 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 (the "Exchange Act"); and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
December 10, 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 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.
|