(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended February 2, 2019
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OR
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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
to
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Delaware
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26-2828128
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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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1 Express Drive
Columbus, Ohio
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43230
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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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Common Stock, $0.01 Par Value
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New York Stock Exchange
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
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Smaller reporting company
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o
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Emerging growth company
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o
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Table Of Contents
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Part I
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Part II
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Part III
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ITEM 12
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Part IV
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Location
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Count
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Location
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Count
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Location
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Count
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Alabama
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5
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Louisiana
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7
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Ohio
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19
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Arizona
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10
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Maine
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3
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Oklahoma
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5
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Arkansas
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3
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Maryland
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14
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Oregon
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5
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California
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78
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Massachusetts
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17
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Pennsylvania
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29
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Colorado
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11
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Michigan
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20
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Puerto Rico
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4
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Connecticut
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11
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Minnesota
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14
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Rhode Island
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3
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Delaware
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2
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Mississippi
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1
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South Carolina
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7
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Florida
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50
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Missouri
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10
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South Dakota
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1
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Georgia
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18
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Nebraska
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4
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Tennessee
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8
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Hawaii
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2
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Nevada
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10
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Texas
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57
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Idaho
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1
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New Hampshire
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5
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Utah
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5
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Illinois
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32
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New Jersey
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25
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Virginia
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16
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Indiana
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14
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New Mexico
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3
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Washington
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10
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Iowa
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9
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New York
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44
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West Virginia
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1
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Kansas
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4
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North Carolina
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16
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Wisconsin
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12
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Kentucky
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5
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North Dakota
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1
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Total
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631
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Location
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Count
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Mexico
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10
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Costa Rica
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2
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Panama
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2
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El Salvador
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1
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Guatemala
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1
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Total
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16
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•
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the imposition of additional trade law provisions or regulations;
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•
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the imposition of additional duties, tariffs, and other charges on imports and exports;
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•
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quotas imposed by bilateral textile agreements;
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•
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foreign currency fluctuations;
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•
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natural disasters and theft;
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•
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restrictions on the transfer of funds;
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•
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the financial instability or bankruptcy of manufacturers; and
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•
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significant labor disputes.
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•
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place liens on our assets;
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•
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make investments other than permitted investments;
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•
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incur additional indebtedness;
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•
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prepay certain indebtedness;
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•
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merge, consolidate or dissolve;
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•
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sell assets;
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•
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engage in transactions with affiliates;
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•
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change the nature of our business;
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•
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change our fiscal year or organizational documents; and
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•
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make other restricted payments, including share repurchases and dividends.
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•
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establish a classified Board of Directors so that not all members of our Board of Directors are elected at one time;
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•
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authorize the issuance of undesignated preferred stock, the terms of which may be established, and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock;
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•
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prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; and
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•
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establish advance notice requirements for nominations for elections to our Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.
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Month
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Total Number of Shares Purchased
(1)
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Average Price Paid per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs
(2)
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(in thousands, except per share amounts)
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||||||||||
November 4, 2018 - December 1, 2018
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2,393
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$
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8.39
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2,388
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$56,722
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December 2, 2018 - January 5, 2019
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1,111
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$
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6.28
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1,110
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$49,759
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January 6, 2019 - February 2, 2019
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2
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$
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5.26
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—
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$49,759
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Total
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3,506
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3,498
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2/1/14
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1/31/15
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1/30/16
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1/28/17
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2/3/18
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2/2/19
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Express, Inc.
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$
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100.00
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$
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75.52
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$
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97.92
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$
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58.55
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$
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38.39
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$
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30.48
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S&P 500 Index
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$
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100.00
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$
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111.92
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$
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108.84
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$
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128.73
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$
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154.95
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$
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151.83
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Dow Jones U.S. Apparel Retailers Index
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$
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100.00
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$
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119.30
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$
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115.89
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$
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110.65
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$
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121.07
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$
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131.24
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Fiscal Year Ended
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2018
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2017
(1)
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2016
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2015
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2014
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(dollars in thousands, excluding net sales per gross square foot and per share data)
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Statement of Operations Data:
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Net sales
(4)
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$
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2,116,344
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$
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2,158,502
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$
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2,204,417
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$
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2,350,129
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$
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2,165,481
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Cost of goods sold, buying and occupancy costs
(4)
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$
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1,501,433
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$
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1,530,991
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$
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1,529,728
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$
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1,554,852
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$
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1,504,527
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Gross profit
(4)
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$
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614,911
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$
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627,511
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$
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674,689
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$
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795,277
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$
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660,954
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Selling, general, and administrative expenses
(4)
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$
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587,348
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$
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573,550
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$
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569,546
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$
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587,747
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$
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524,041
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Operating income
(4)
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$
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28,215
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$
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30,556
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$
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105,081
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$
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207,238
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$
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136,597
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Net income
(4)
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$
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9,630
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$
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18,873
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$
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58,340
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$
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116,513
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$
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68,325
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Dividends declared per share
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$
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—
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$
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—
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$
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—
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$
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—
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$
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—
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Earnings per share:
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Basic
(4)
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$
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0.13
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$
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0.24
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$
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0.74
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$
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1.39
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$
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0.81
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Diluted
(4)
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$
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0.13
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$
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0.24
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$
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0.74
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$
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1.38
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$
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0.81
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Weighted Average Diluted Shares Outstanding
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73,239
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78,870
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79,049
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84,591
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84,554
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Other Financial and Operating Data:
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Comparable sales
(2)
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(1
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)%
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(3
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)%
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(9
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)%
|
6
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%
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(5
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)%
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|||||
Comparable sales (excluding e-commerce sales)
(2)
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(9
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)%
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(10
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)%
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(12
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)%
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4
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%
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(7
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)%
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|||||
Total gross square feet (in thousands) (average)
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5,384
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|
5,487
|
|
5,604
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|
5,573
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|
5,529
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|||||
Number of stores (at year end)
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631
|
|
635
|
|
656
|
|
653
|
|
641
|
|
|||||
Capital expenditures
|
$
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49,778
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|
$
|
57,435
|
|
$
|
98,712
|
|
$
|
115,343
|
|
$
|
115,088
|
|
Balance Sheet Data (at period end):
|
|
|
|
|
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Cash and cash equivalents
|
$
|
171,670
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|
$
|
236,222
|
|
$
|
207,373
|
|
$
|
186,903
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|
$
|
346,159
|
|
Working capital
(3) (4)
|
65,666
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|
30,518
|
|
16,014
|
|
19,113
|
|
20,618
|
|
|||||
Total assets
(4)
|
1,086,627
|
|
1,186,924
|
|
1,185,028
|
|
1,178,644
|
|
1,278,150
|
|
|||||
Total debt
|
—
|
|
—
|
|
—
|
|
—
|
|
199,527
|
|
|||||
Total stockholders' equity
(4)
|
$
|
585,178
|
|
$
|
648,314
|
|
$
|
630,494
|
|
$
|
617,593
|
|
$
|
556,339
|
|
(1)
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2017 represents a 53-week year.
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(2)
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Comparable sales have been calculated based upon stores that were open at least twelve full months as of the end of the reporting period. For
2018
, comparable sales were calculated based upon the
52-week period ended
February 2, 2019
compared to the
52-week period ended
February 3, 2018
. For
2017
, comparable sales were calculated based upon the
53-week period ended
February 3, 2018
compared to the
53-week period ended
February 4, 2017. See full definition of comparable sales in the section titled "How We Assess the Performance of Our Business" in Management's Discussion and Analysis of Financial Condition and Results of Operations.
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(3)
|
Working capital is defined as current assets, less cash and cash equivalents, less current liabilities.
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(4)
|
In 2018, we adopted ASC 606, which impacted our annual recognition of revenue and certain expenses. Years before 2016 have not been adjusted for this new accounting standard.
|
2018 vs. 2017
|
•
Net sales decreased 2% to $2.1 billion
•
Comparable sales decreased 1%
•
Comparable sales (excluding e-commerce sales) decreased 9%
•
E-commerce sales increased 20% to $609 million
•
Gross margin percentage remained flat at 29.1%
•
Operating income decreased 8% to $28.2 million
•
Net income decreased 49% to $9.6 million
•
Diluted earnings per share decreased 46% to $0.13
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Store Performance
|
|
Real Estate Activity
|
In 2018, comparable sales (excluding e-commerce sales) decreased 9%. The decrease was primarily driven by the following:
•
Decreased traffic at our stores as a result of shifting consumer shopping patterns;
•
Increased promotional activity in our stores; and
•
Customers spending less at our stores per transaction.
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As of February 2, 2019, we operated 631 stores, including 184 factory outlet stores.
In 2018 we:
•
Opened 39 factory outlet stores in the U.S., 29 of which were converted from existing retail locations; and
•
Closed 43 U.S. retail stores, 29 of which were converted to outlet locations.
In 2019, we expect to:
•
Open 29 factory outlet stores, 24 of which will be converted from existing retail locations; and
•
Close 30 U.S. retail stores, 24 of which will be converted to outlet locations.
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E-commerce
|
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Progress Against our Other Key Initiatives
|
In 2018, our e-commerce sales increased 20% compared to 2017. We believe the increase was primarily driven by:
•
The shift in customer shopping patterns towards e-commerce and mobile;
•
Expanded sizing and assortments online; and
•
Omni-channel capabilities delivering incremental sales.
E-commerce sales represented 29% of net sales in 2018 compared to 24% in 2017.
|
|
•
Cost Savings Initiatives.
In 2016, we announced cost savings opportunities of $44 to $54 million, which we expect to realize through 2019. We achieved our target of $40 million in costs savings through 2018 and are on track to deliver the $44 to $54 million dollars of annualized cost savings by 2019.
•
Increasing Brand Awareness
. During 2018, we entered into a partnership with Olivia Culpo to produce a co-designed collection. Additionally, we continued to build our relationship with the National Basketball Association ("NBA") by increasing our licensed product assortment.
•
Elevating our Customer Experience.
In 2018, we continued the expansion of our ship-from-store capabilities, which allowed us to fulfill orders that may have been out of stock at our online fulfillment distribution center, to a total of approximately 400 retail stores.
|
Financial Measures
|
Description
|
Discussion
|
Net Sales
|
Revenue from the sale of merchandise, less returns and discounts, as well as shipping and handling revenue related to e-commerce, advertising revenue from the rental of our LED sign in Times Square, gift card breakage, revenue earned from the Card Agreement, and revenue earned from our franchise agreements.
|
Our business is seasonal, and we have historically realized a higher portion of our net sales in the third and fourth quarters due primarily to the impact of the holiday season. Generally, approximately 46% of our annual net sales occur in the Spring season, which includes the first and second quarters, and 54% occur in the Fall season, which includes the third and fourth quarters.
|
Comparable Sales
|
Comparable sales is a measure of the amount of sales generated in a period relative to the amount of sales generated in the comparable prior year period. Comparable sales for the fourth quarter of
2018 were calculated using the 52-week period
ended February 2, 2019 as compared to the 52-
week period ended February 3, 2018.
Comparable sales includes:
•
Sales from stores that were open 12 months or more as of the end of the reporting period, including conversions
•
E-commerce sales
Comparable sales excludes:
•
Sales from stores where the square footage has changed during the year by more than 20% due to remodel or relocation activity
•
Sales from stores in a phased remodel where a portion of the store is under construction and therefore not productive selling space
•
Sales from stores that cannot open due to weather damage or other catastrophe
|
Our business and our comparable sales are subject, at certain times, to calendar shifts, which may occur during key selling periods close to holidays such as Easter, Thanksgiving, and Christmas.
|
Financial Measures
|
Description
|
Discussion
|
Cost of goods sold, buying and occupancy costs
|
Includes the following:
•
Direct cost of purchased merchandise
•
Inventory shrink and other adjustments
•
Inbound and outbound freight
•
Merchandising, design, planning and allocation, and manufacturing/production costs
•
Occupancy costs related to store operations, such as rent and common area maintenance, utilities, and depreciation on assets
•
Logistics costs associated with our e-commerce business
|
Our cost of goods sold typically increases in higher volume quarters because the direct cost of purchased merchandise is tied to sales.
The primary drivers of the costs of individual goods are raw materials, labor in the countries where our merchandise is sourced, and logistics costs associated with transporting our merchandise.
Buying and occupancy costs related to stores are largely fixed and do not necessarily increase as volume increases; however, buying and occupancy costs related to e-commerce sales are variable and increase as volume increases.
Changes in the mix of products sold by type of product or by channel may also impact our overall cost of goods sold, buying and occupancy costs.
|
Gross Profit/Gross Margin
|
Gross profit is net sales less cost of goods sold, buying and occupancy costs. Gross margin measures gross profit as a percentage of net sales.
|
Gross profit/gross margin is impacted by the price at which we are able to sell our merchandise and the direct cost of goods sold and buying and occupancy costs.
We review our inventory levels on an on-going basis in order to identify slow-moving merchandise and generally use markdowns to clear such merchandise. The timing and level of markdowns are driven primarily by seasonality and customer acceptance of our merchandise and have a direct effect on our gross margin.
Any marked down merchandise that is not sold is marked-out-of-stock. We use third-party vendors to dispose of this marked-out-of-stock merchandise.
|
Selling, General, and Administrative Expenses
|
Includes operating costs not included in cost of goods sold, buying and occupancy costs such as:
•
Payroll and other expenses related to operations at our corporate offices
•
Store expenses other than occupancy costs
•
Marketing expenses, including production, mailing, print, and digital advertising costs, among other things
|
With the exception of store payroll, certain marketing expenses, and incentive compensation, selling, general, and administrative expenses generally do not vary proportionally with net sales. As a result, selling, general, and administrative expenses as a percentage of net sales are usually higher in lower volume quarters and lower in higher volume quarters.
|
|
Year Ended
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales (in thousands)
|
$
|
2,116,344
|
|
|
$
|
2,158,502
|
|
|
$
|
2,204,417
|
|
Comparable sales
|
(1
|
)%
|
|
(3
|
)%
|
|
(9
|
)%
|
|||
Comparable sales (excluding e-commerce sales)
|
(9
|
)%
|
|
(10
|
)%
|
|
(12
|
)%
|
|||
Gross square footage at end of period (in thousands)
|
5,367
|
|
|
5,425
|
|
|
5,662
|
|
|||
Number of:
|
|
|
|
|
|
||||||
Stores open at beginning of period
|
635
|
|
|
656
|
|
|
653
|
|
|||
New retail stores
|
—
|
|
|
—
|
|
|
—
|
|
|||
New outlet stores
|
39
|
|
|
41
|
|
|
23
|
|
|||
Retail stores converted to outlets
|
(29
|
)
|
|
(24
|
)
|
|
(4
|
)
|
|||
Closed stores
|
(14
|
)
|
|
(38
|
)
|
|
(16
|
)
|
|||
Stores open at end of period
|
631
|
|
|
635
|
|
|
656
|
|
|
Year Ended
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands, except percentages)
|
||||||||||
Cost of goods sold, buying and occupancy costs
|
$
|
1,501,433
|
|
|
$
|
1,530,991
|
|
|
$
|
1,529,728
|
|
Gross profit
|
$
|
614,911
|
|
|
$
|
627,511
|
|
|
$
|
674,689
|
|
Gross margin percentage
|
29.1
|
%
|
|
29.1
|
%
|
|
30.6
|
%
|
|
Year Ended
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Selling, general, and administrative expenses
|
$
|
587,348
|
|
|
$
|
573,550
|
|
|
$
|
569,546
|
|
Selling, general, and administrative expenses, as a percentage of net sales
|
27.8
|
%
|
|
26.6
|
%
|
|
25.8
|
%
|
|
Year Ended
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands, except percentages)
|
||||||||||
Restructuring costs
|
$
|
166
|
|
|
$
|
22,869
|
|
|
$
|
—
|
|
|
Year Ended
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Interest expense, net
|
$
|
25
|
|
|
$
|
2,242
|
|
|
$
|
13,468
|
|
|
Year Ended
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Other expense/(income), net
|
$
|
7,900
|
|
|
$
|
(537
|
)
|
|
$
|
(484
|
)
|
|
Year Ended
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Income tax expense
|
$
|
10,660
|
|
|
$
|
9,978
|
|
|
$
|
33,757
|
|
|
Year Ended
|
|||||||||||
|
2018
|
|
2017
|
|
2016
|
|
||||||
|
(in thousands, except per share amounts)
|
|||||||||||
Operating Income
|
$
|
28,215
|
|
|
$
|
30,556
|
|
|
$
|
105,081
|
|
|
Adjusted Operating Income
|
$
|
33,651
|
|
|
$
|
54,707
|
|
|
$
|
105,081
|
|
*
|
Net Income
|
$
|
9,630
|
|
|
$
|
18,873
|
|
|
$
|
58,340
|
|
|
Adjusted Net Income (Non-GAAP)
|
$
|
23,553
|
|
|
$
|
28,907
|
|
|
$
|
65,266
|
|
|
Diluted Earnings Per Share
|
$
|
0.13
|
|
|
$
|
0.24
|
|
|
$
|
0.74
|
|
|
Adjusted Diluted Earnings Per Share (Non-GAAP)
|
$
|
0.32
|
|
|
$
|
0.37
|
|
|
$
|
0.83
|
|
|
|
2018
|
|||||||||||||||||
(in thousands, except per share amounts)
|
Operating Income
|
|
Income Tax Impact
|
|
Net Income
|
|
Diluted Earnings per Share
|
|
Weighted Average Diluted Shares Outstanding
|
|||||||||
Reported GAAP Measure
|
$
|
28,215
|
|
|
|
|
|
$
|
9,630
|
|
|
$
|
0.13
|
|
|
73,239
|
|
|
Impact of CEO Departure
|
5,436
|
|
|
$
|
(1,386
|
)
|
|
4,050
|
|
|
0.06
|
|
|
|
||||
162(m) impact as a result of CEO departure
|
—
|
|
|
1,473
|
|
|
1,473
|
|
|
0.02
|
|
|
|
|||||
Equity method investment impairment (a)
|
$
|
—
|
|
|
|
|
|
8,400
|
|
|
0.12
|
|
|
|
||||
Adjusted Non-GAAP Measure
|
$
|
33,651
|
|
|
|
|
|
$
|
23,553
|
|
|
$
|
0.32
|
|
|
|
(a)
|
The tax effect of the $8.4 million impairment of our equity method investment is $2.1 million offset by a full valuation allowance against the related deferred tax assets.
|
|
2017
|
|||||||||||||||||
(in thousands, except per share amounts)
|
Operating Income
|
|
Income Tax Impact
|
|
Net Income
|
|
Diluted Earnings per Share
|
|
Weighted Average Diluted Shares Outstanding
|
|||||||||
Reported GAAP Measure
|
$
|
30,556
|
|
|
|
|
$
|
18,873
|
|
|
$
|
0.24
|
|
|
78,870
|
|
||
Impact of Canadian Exit (a)
|
24,151
|
|
|
$
|
(12,067
|
)
|
|
12,084
|
|
|
0.15
|
|
|
|
||||
Impact of Tax Reform
|
—
|
|
|
(2,050
|
)
|
|
(2,050
|
)
|
|
(0.03
|
)
|
|
|
|||||
Adjusted Non-GAAP Measure
|
$
|
54,707
|
|
|
|
|
$
|
28,907
|
|
|
$
|
0.37
|
|
|
|
|
2016
|
|||||||||
(in thousands, except per share amounts)
|
Net Income
|
|
Diluted Earnings per Share
|
|
Weighted Average Diluted Shares Outstanding
|
|||||
Reported GAAP Measure
|
$
|
58,340
|
|
|
$
|
0.74
|
|
|
79,049
|
|
Interest Expense (a)
|
11,354
|
|
|
0.14
|
|
|
|
|||
Income Tax Benefit (b)
|
(4,428
|
)
|
|
(0.06
|
)
|
|
|
|||
Adjusted Non-GAAP Measure
|
$
|
65,266
|
|
|
$
|
0.83
|
|
|
|
(a)
|
Represents non-core items related to the amendment of the Times Square Flagship store lease discussed in Note 5 of our Consolidated Financial Statements.
|
(b)
|
Items were tax affected at our statutory rate of approximately 39% for 2016.
|
|
Year Ended
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
|
(in thousands)
|
||||||||||
Provided by operating activities
|
$
|
73,717
|
|
|
$
|
118,567
|
|
|
$
|
186,708
|
|
Used in investing activities
|
(49,778
|
)
|
|
(66,667
|
)
|
|
(108,866
|
)
|
|||
Used in financing activities
|
(88,491
|
)
|
|
(22,613
|
)
|
|
(58,271
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
(64,552
|
)
|
|
28,849
|
|
|
20,470
|
|
|||
Cash and cash equivalents at end of period
|
$
|
171,670
|
|
|
$
|
236,222
|
|
|
$
|
207,373
|
|
Contractual Obligations:
|
Payments Due by Period
|
||||||||||||||
Total
|
<1 Year
|
1-3 Years
|
3-5 Years
|
Thereafter
|
|||||||||||
|
(in thousands)
|
||||||||||||||
Operating Leases
(1)
|
$
|
1,152,702
|
|
$
|
221,816
|
|
$
|
353,033
|
|
$
|
287,063
|
|
$
|
290,790
|
|
Purchase Obligations
(2)
|
191,239
|
|
191,239
|
|
—
|
|
—
|
|
—
|
|
|||||
Other Long-Term Obligations
(3)
|
47,774
|
|
10,261
|
|
12,934
|
|
12,008
|
|
12,571
|
|
|||||
Total
|
$
|
1,391,715
|
|
$
|
423,316
|
|
$
|
365,967
|
|
$
|
299,071
|
|
$
|
303,361
|
|
(1)
|
We enter into operating leases in the normal course of business. Most lease arrangements provide us with the option to renew the leases at defined terms. The future operating lease obligations would change if we were to exercise these options, or if we were to enter into additional operating leases. These amounts also include all contractual lease commitments related to our flagship locations, which we are considered the owner of for accounting purposes. Common area maintenance, real estate tax, and other customary charges included in our operating lease agreements are not included above. Estimated annual expense for such charges is approximately $119 million.
|
(2)
|
Purchase obligations are made up of merchandise purchase orders and unreserved fabric commitments.
|
(3)
|
Other long-term obligations consist of employment related agreements and obligations under other long-term agreements.
|
Description of Policy
|
Judgments and Uncertainties
|
Effect if Actual Results Differ from Assumptions
|
Inventories - Lower of Cost or Net Realizable Value
|
||
Inventories are principally valued at the lower of cost or net realizable value on a weighted-average cost basis. We record a lower of cost or net realizable value adjustment for our inventories if the cost of specific inventory items on hand exceeds the amount we expect to realize from the ultimate sale or disposal of the inventory.
We have not made any material changes in the accounting methodology used to determine the lower of cost or net realizable value adjustment over the past three years.
|
Our accounting methodology for determining the lower of cost or net realizable value adjustment contains uncertainties because it requires management to make assumptions and estimates that are based on factors such as merchandise seasonality, historical trends, and estimated inventory levels, including sell-through of remaining units.
|
We have no reason to believe that there will be a material change in the future estimates or assumptions we use to measure the lower of cost or net realizable value adjustment. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to losses or gains that could be material.
A 10% increase or decrease in the lower of cost or net realizable value adjustment would not have had a material impact on the inventory balance or pre-tax income as of and for the year ended February 2, 2019. |
Intangible Assets
|
||
Intangible assets with indefinite lives, primarily tradenames, are reviewed for impairment annually in the fourth quarter and may be reviewed more frequently if indicators of impairment are present. The impairment review is performed by assessing qualitative factors to determine whether it is more likely than not that the fair value of the asset is less than its carrying amount.
|
Our consideration of indefinite lived intangible assets for impairment requires judgments surrounding future operating performance, economic conditions, and business plans, among other factors.
|
There are inherent uncertainties related to our assessment and, if actual results are not consistent with our estimates or assumptions, we may be exposed to impairment losses that could be material.
|
Leasehold Improvements
|
||
Leasehold improvements are reviewed for impairment if indicators of impairment are present. The impairment review is performed at the store level by comparing the carrying value of the asset to the undiscounted cash flows derived from the asset group. If the undiscounted cash flows of the asset are less than the carrying value of the respective asset group, then the carrying value is compared to the estimated fair value as determined using the discounted store cash flows, and a loss is recognized for the difference.
We have not made any material changes in the triggering events used to evaluate our leasehold improvements for impairment over the past three years.
|
Our analysis of leasehold improvements for impairment requires judgment surrounding identification of appropriate triggering events. This judgment can be affected by factors such as expectations for future store performance, real estate demand, and economic conditions that can be difficult to predict.
|
We have no reason to believe that there will be a material change in the future estimates or assumptions we use in this evaluation. However, if we become aware of additional triggering events there is potential that additional stores could be required to be tested for impairment and could be impaired.
|
Description of Policy
|
Judgments and Uncertainties
|
Effect if Actual Results Differ from Assumptions
|
Uncertain Tax Positions
|
||
Uncertain tax positions arise from the fact that we may be subject to periodic audits by the Internal Revenue Service and other taxing authorities.
|
Internal Revenue Service audits may challenge certain of our tax positions, such as the timing and amount of deductions and allocation of taxable income to various jurisdictions.
|
To the extent that we prevail in matters for which unrecognized tax benefit liabilities have been established or are required to pay amounts in excess of recorded unrecognized tax benefit liabilities, our effective tax rate in a given financial statement period could be materially affected. An unfavorable tax settlement would require use of our cash and result in an increase in our effective tax rate in the period of resolution. A favorable tax settlement would be recognized as a reduction in our effective tax rate in the period of resolution.
|
|
2018
|
|
2017
|
|
2016
|
||||||
NET SALES
|
$
|
2,116,344
|
|
|
$
|
2,158,502
|
|
|
$
|
2,204,417
|
|
COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS
|
1,501,433
|
|
|
1,530,991
|
|
|
1,529,728
|
|
|||
Gross profit
|
614,911
|
|
|
627,511
|
|
|
674,689
|
|
|||
OPERATING EXPENSES:
|
|
|
|
|
|
||||||
Selling, general, and administrative expenses
|
587,348
|
|
|
573,550
|
|
|
569,546
|
|
|||
Restructuring costs
|
166
|
|
|
22,869
|
|
|
—
|
|
|||
Other operating (income)/expense, net
|
(818
|
)
|
|
536
|
|
|
62
|
|
|||
Total operating expenses
|
586,696
|
|
|
596,955
|
|
|
569,608
|
|
|||
|
|
|
|
|
|
||||||
OPERATING INCOME
|
28,215
|
|
|
30,556
|
|
|
105,081
|
|
|||
|
|
|
|
|
|
||||||
INTEREST EXPENSE, NET
|
25
|
|
|
2,242
|
|
|
13,468
|
|
|||
OTHER EXPENSE/(INCOME), NET
|
7,900
|
|
|
(537
|
)
|
|
(484
|
)
|
|||
INCOME BEFORE INCOME TAXES
|
20,290
|
|
|
28,851
|
|
|
92,097
|
|
|||
INCOME TAX EXPENSE
|
10,660
|
|
|
9,978
|
|
|
33,757
|
|
|||
NET INCOME
|
$
|
9,630
|
|
|
$
|
18,873
|
|
|
$
|
58,340
|
|
|
|
|
|
|
|
||||||
OTHER COMPREHENSIVE INCOME:
|
|
|
|
|
|
||||||
Foreign currency translation gain (loss)
|
$
|
—
|
|
|
$
|
(402
|
)
|
|
$
|
862
|
|
Amount reclassified to earnings
|
—
|
|
|
4,205
|
|
|
—
|
|
|||
COMPREHENSIVE INCOME
|
$
|
9,630
|
|
|
$
|
22,676
|
|
|
$
|
59,202
|
|
|
|
|
|
|
|
||||||
EARNINGS PER SHARE:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.13
|
|
|
$
|
0.24
|
|
|
$
|
0.74
|
|
Diluted
|
$
|
0.13
|
|
|
$
|
0.24
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
||||||
WEIGHTED AVERAGE SHARES OUTSTANDING:
|
|
|
|
|
|
||||||
Basic
|
72,518
|
|
|
78,592
|
|
|
78,669
|
|
|||
Diluted
|
73,239
|
|
|
78,870
|
|
|
79,049
|
|
|
Common Stock
|
|
|
|
Treasury Stock
|
|
||||||||||||||||
|
Shares Outstanding
|
Par Value
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Accumulated Other Comprehensive Loss
|
Shares
|
At Average Cost
|
Total
|
||||||||||||||
BALANCE, January 30, 2016
|
80,914
|
|
$
|
911
|
|
$
|
169,515
|
|
$
|
633,298
|
|
$
|
(4,665
|
)
|
10,213
|
|
$
|
(181,106
|
)
|
$
|
617,953
|
|
Adoption of ASC 606
|
—
|
|
—
|
|
—
|
|
(6,116
|
)
|
—
|
|
—
|
|
—
|
|
(6,116
|
)
|
||||||
Net income
|
—
|
|
—
|
|
—
|
|
58,340
|
|
—
|
|
—
|
|
—
|
|
58,340
|
|
||||||
Exercise of stock options and restricted stock
|
936
|
|
10
|
|
2,724
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,734
|
|
||||||
Share-based compensation
|
—
|
|
—
|
|
12,858
|
|
—
|
|
—
|
|
—
|
|
—
|
|
12,858
|
|
||||||
Repurchase of common stock
|
(3,428
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
3,428
|
|
(56,137
|
)
|
(56,137
|
)
|
||||||
Foreign currency translation
|
—
|
|
—
|
|
—
|
|
—
|
|
862
|
|
—
|
|
—
|
|
862
|
|
||||||
BALANCE, January 28, 2017
|
78,422
|
|
$
|
921
|
|
$
|
185,097
|
|
$
|
685,522
|
|
$
|
(3,803
|
)
|
13,641
|
|
$
|
(237,243
|
)
|
$
|
630,494
|
|
Net income
|
—
|
|
—
|
|
—
|
|
18,873
|
|
—
|
|
—
|
|
—
|
|
18,873
|
|
||||||
Exercise of stock options and restricted stock
|
584
|
|
5
|
|
(6
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
||||||
Share-based compensation
|
—
|
|
—
|
|
14,008
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14,008
|
|
||||||
Repurchase of common stock
|
(2,282
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
2,282
|
|
(18,863
|
)
|
(18,863
|
)
|
||||||
Foreign currency translation
|
—
|
|
—
|
|
—
|
|
—
|
|
(402
|
)
|
—
|
|
—
|
|
(402
|
)
|
||||||
Amount reclassified to earnings
|
—
|
|
—
|
|
—
|
|
—
|
|
4,205
|
|
—
|
|
—
|
|
4,205
|
|
||||||
BALANCE, February 3, 2018
|
76,724
|
|
$
|
926
|
|
$
|
199,099
|
|
$
|
704,395
|
|
$
|
—
|
|
15,923
|
|
$
|
(256,106
|
)
|
$
|
648,314
|
|
Net income
|
—
|
|
—
|
|
—
|
|
9,630
|
|
—
|
|
—
|
|
—
|
|
9,630
|
|
||||||
Exercise of stock options and restricted stock
|
1,013
|
|
10
|
|
(232
|
)
|
(161
|
)
|
—
|
|
(28
|
)
|
384
|
|
1
|
|
||||||
Share-based compensation
|
—
|
|
—
|
|
13,114
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13,114
|
|
||||||
Repurchase of common stock
|
(10,313
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
10,313
|
|
(85,881
|
)
|
(85,881
|
)
|
||||||
BALANCE, February 2, 2019
|
67,424
|
|
$
|
936
|
|
$
|
211,981
|
|
$
|
713,864
|
|
—
|
|
26,208
|
|
$
|
(341,603
|
)
|
$
|
585,178
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
9,630
|
|
|
$
|
18,873
|
|
|
$
|
58,340
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
85,853
|
|
|
90,221
|
|
|
82,144
|
|
|||
Loss on disposal of property and equipment
|
368
|
|
|
2,891
|
|
|
942
|
|
|||
Impairment charge
|
818
|
|
|
9,850
|
|
|
5,108
|
|
|||
Equity method investment impairment
|
8,400
|
|
|
—
|
|
|
—
|
|
|||
Loss on deconsolidation of Canada
|
—
|
|
|
10,672
|
|
|
—
|
|
|||
Amortization of lease financing obligation discount
|
—
|
|
|
—
|
|
|
11,354
|
|
|||
Share-based compensation
|
13,114
|
|
|
14,008
|
|
|
12,858
|
|
|||
Deferred taxes
|
536
|
|
|
396
|
|
|
20,622
|
|
|||
Landlord allowance amortization
|
(11,606
|
)
|
|
(13,183
|
)
|
|
(11,280
|
)
|
|||
Other non-cash adjustments
|
(500
|
)
|
|
(500
|
)
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables, net
|
(5,284
|
)
|
|
3,279
|
|
|
6,371
|
|
|||
Inventories
|
(7,038
|
)
|
|
(28,279
|
)
|
|
18,297
|
|
|||
Accounts payable, deferred revenue, and accrued expenses
|
(21,097
|
)
|
|
(14,166
|
)
|
|
(17,138
|
)
|
|||
Other assets and liabilities
|
523
|
|
|
24,505
|
|
|
(910
|
)
|
|||
Net cash provided by operating activities
|
73,717
|
|
|
118,567
|
|
|
186,708
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Capital expenditures
|
(49,778
|
)
|
|
(57,435
|
)
|
|
(98,712
|
)
|
|||
Decrease in cash and cash equivalents resulting from deconsolidation of Canada
|
—
|
|
|
(9,232
|
)
|
|
—
|
|
|||
Purchase of intangible assets
|
—
|
|
|
—
|
|
|
(21
|
)
|
|||
Investment in equity interests
|
—
|
|
|
—
|
|
|
(10,133
|
)
|
|||
Net cash used in investing activities
|
(49,778
|
)
|
|
(66,667
|
)
|
|
(108,866
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Payments on lease financing obligations
|
(1,860
|
)
|
|
(1,710
|
)
|
|
(1,595
|
)
|
|||
Repayments of financing arrangements
|
(750
|
)
|
|
(2,040
|
)
|
|
(3,274
|
)
|
|||
Proceeds from exercise of stock options
|
—
|
|
|
—
|
|
|
2,735
|
|
|||
Repurchase of common stock under share repurchase programs (see Note 9)
|
(83,172
|
)
|
|
(17,264
|
)
|
|
(51,538
|
)
|
|||
Repurchase of common stock for tax withholding obligations
|
(2,709
|
)
|
|
(1,599
|
)
|
|
(4,599
|
)
|
|||
Net cash used in financing activities
|
(88,491
|
)
|
|
(22,613
|
)
|
|
(58,271
|
)
|
|||
|
|
|
|
|
|
|
|
||||
EFFECT OF EXCHANGE RATE ON CASH
|
—
|
|
|
(438
|
)
|
|
899
|
|
|||
|
|
|
|
|
|
|
|
||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(64,552
|
)
|
|
28,849
|
|
|
20,470
|
|
|||
CASH AND CASH EQUIVALENTS, Beginning of period
|
236,222
|
|
|
207,373
|
|
|
186,903
|
|
|||
CASH AND CASH EQUIVALENTS, End of period
|
$
|
171,670
|
|
|
$
|
236,222
|
|
|
$
|
207,373
|
|
|
|
|
|
|
|
||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Cash paid to taxing authorities
|
$
|
11,642
|
|
|
$
|
6,142
|
|
|
$
|
40,413
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
Fifty-Three Weeks Ended February 3, 2018
|
||||||||||
(in thousands, except per share amounts)
|
As Reported
|
|
Adjustments for adoption of ASC 606
|
|
As Adjusted
|
||||||
NET SALES
|
$
|
2,138,030
|
|
|
$
|
20,472
|
|
|
$
|
2,158,502
|
|
COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS
|
1,522,797
|
|
|
8,194
|
|
|
1,530,991
|
|
|||
Gross profit
|
615,233
|
|
|
12,278
|
|
|
627,511
|
|
|||
OPERATING EXPENSES:
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
562,088
|
|
|
11,462
|
|
|
573,550
|
|
|||
Restructuring costs
|
22,869
|
|
|
—
|
|
|
22,869
|
|
|||
Other operating expense, net
|
536
|
|
|
—
|
|
|
536
|
|
|||
Total operating expenses
|
585,493
|
|
|
11,462
|
|
|
596,955
|
|
|||
|
|
|
|
|
|
||||||
OPERATING INCOME/(LOSS)
|
29,740
|
|
|
816
|
|
|
30,556
|
|
|||
|
|
|
|
|
|
||||||
INTEREST EXPENSE, NET
|
2,242
|
|
|
—
|
|
|
2,242
|
|
|||
OTHER INCOME, NET
|
(537
|
)
|
|
—
|
|
|
(537
|
)
|
|||
INCOME/(LOSS) BEFORE INCOME TAXES
|
28,035
|
|
|
816
|
|
|
28,851
|
|
|||
INCOME TAX (BENEFIT) EXPENSE
|
8,669
|
|
|
1,309
|
|
|
9,978
|
|
|||
NET INCOME/(LOSS)
|
$
|
19,366
|
|
|
$
|
(493
|
)
|
|
$
|
18,873
|
|
|
|
|
|
|
|
||||||
EARNINGS PER SHARE:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.25
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.24
|
|
Diluted
|
$
|
0.25
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.24
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
Fifty-Two Weeks Ended January 28, 2017
|
||||||||||
(in thousands, except per share amounts)
|
As Reported
|
|
Adjustments for adoption of ASC 606
|
|
As Adjusted
|
||||||
NET SALES
|
$
|
2,192,547
|
|
|
$
|
11,870
|
|
|
$
|
2,204,417
|
|
COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS
|
1,529,343
|
|
|
385
|
|
|
1,529,728
|
|
|||
Gross profit
|
663,204
|
|
|
11,485
|
|
|
674,689
|
|
|||
OPERATING EXPENSES:
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
559,541
|
|
|
10,005
|
|
|
569,546
|
|
|||
Restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other operating expense, net
|
62
|
|
|
—
|
|
|
62
|
|
|||
Total operating expenses
|
559,603
|
|
|
10,005
|
|
|
569,608
|
|
|||
|
|
|
|
|
|
||||||
OPERATING INCOME/(LOSS)
|
103,601
|
|
|
1,480
|
|
|
105,081
|
|
|||
|
|
|
|
|
|
||||||
INTEREST EXPENSE, NET
|
13,468
|
|
|
—
|
|
|
13,468
|
|
|||
OTHER INCOME, NET
|
(484
|
)
|
|
—
|
|
|
(484
|
)
|
|||
INCOME/(LOSS) BEFORE INCOME TAXES
|
90,617
|
|
|
1,480
|
|
|
92,097
|
|
|||
INCOME TAX (BENEFIT) EXPENSE
|
33,200
|
|
|
557
|
|
|
33,757
|
|
|||
NET INCOME/(LOSS)
|
$
|
57,417
|
|
|
$
|
923
|
|
|
$
|
58,340
|
|
|
|
|
|
|
|
||||||
EARNINGS PER SHARE:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.73
|
|
|
$
|
0.01
|
|
|
$
|
0.74
|
|
Diluted
|
$
|
0.73
|
|
|
$
|
0.01
|
|
|
$
|
0.74
|
|
CONSOLIDATED STATEMENT OF CASH FLOWS
|
Fifty-Three Weeks Ended February 3, 2018
|
||||||||||
(in thousands)
|
As Reported
|
|
Adjustments for adoption of ASC 606
|
|
As Adjusted
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income/(loss)
|
$
|
19,366
|
|
|
$
|
(493
|
)
|
|
$
|
18,873
|
|
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
90,221
|
|
|
—
|
|
|
90,221
|
|
|||
Loss on disposal of property and equipment
|
2,891
|
|
|
—
|
|
|
2,891
|
|
|||
Impairment charge
|
9,850
|
|
|
—
|
|
|
9,850
|
|
|||
Loss on deconsolidation of Canada
|
10,672
|
|
|
—
|
|
|
10,672
|
|
|||
Share-based compensation
|
14,008
|
|
|
—
|
|
|
14,008
|
|
|||
Deferred taxes
|
(912
|
)
|
|
1,308
|
|
|
396
|
|
|||
Landlord allowance amortization
|
(13,183
|
)
|
|
—
|
|
|
(13,183
|
)
|
|||
Other non-cash adjustments
|
(500
|
)
|
|
—
|
|
|
(500
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables, net
|
3,279
|
|
|
—
|
|
|
3,279
|
|
|||
Inventories
|
(28,954
|
)
|
|
675
|
|
|
(28,279
|
)
|
|||
Accounts payable, deferred revenue, and accrued expenses
|
(12,862
|
)
|
|
(1,304
|
)
|
|
(14,166
|
)
|
|||
Other assets and liabilities
|
24,691
|
|
|
(186
|
)
|
|
24,505
|
|
|||
Net cash provided by operating activities
|
118,567
|
|
|
—
|
|
|
118,567
|
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Capital expenditures
|
(57,435
|
)
|
|
—
|
|
|
(57,435
|
)
|
|||
Decrease in cash and cash equivalents resulting from deconsolidation of Canada
|
(9,232
|
)
|
|
—
|
|
|
(9,232
|
)
|
|||
Net cash used in investing activities
|
(66,667
|
)
|
|
—
|
|
|
(66,667
|
)
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Payments on lease financing obligations
|
(1,710
|
)
|
|
—
|
|
|
(1,710
|
)
|
|||
Repayments of financing arrangements
|
(2,040
|
)
|
|
—
|
|
|
(2,040
|
)
|
|||
Repurchase of common stock under share repurchase program
|
(17,264
|
)
|
|
—
|
|
|
(17,264
|
)
|
|||
Repurchase of common stock for tax withholding obligations
|
(1,599
|
)
|
|
—
|
|
|
(1,599
|
)
|
|||
Net cash used in financing activities
|
(22,613
|
)
|
|
—
|
|
|
(22,613
|
)
|
|||
|
|
|
|
|
|
||||||
EFFECT OF EXCHANGE RATE ON CASH
|
(438
|
)
|
|
—
|
|
|
(438
|
)
|
|||
|
|
|
|
|
|
||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
28,849
|
|
|
—
|
|
|
28,849
|
|
|||
CASH AND CASH EQUIVALENTS, Beginning of period
|
207,373
|
|
|
—
|
|
|
207,373
|
|
|||
CASH AND CASH EQUIVALENTS, End of period
|
$
|
236,222
|
|
|
$
|
—
|
|
|
$
|
236,222
|
|
CONSOLIDATED STATEMENT OF CASH FLOWS
|
Fifty-Two Weeks Ended January 28, 2017
|
||||||||||
(in thousands)
|
As Reported
|
|
Adjustments for adoption of ASC 606
|
|
As Adjusted
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income/(loss)
|
$
|
57,417
|
|
|
$
|
923
|
|
|
$
|
58,340
|
|
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
82,144
|
|
|
—
|
|
|
82,144
|
|
|||
Loss on disposal of property and equipment
|
942
|
|
|
—
|
|
|
942
|
|
|||
Impairment charge
|
5,108
|
|
|
—
|
|
|
5,108
|
|
|||
Amortization of lease financing obligation
|
11,354
|
|
|
—
|
|
|
11,354
|
|
|||
Share-based compensation
|
12,858
|
|
|
—
|
|
|
12,858
|
|
|||
Deferred taxes
|
20,065
|
|
|
557
|
|
|
20,622
|
|
|||
Landlord allowance amortization
|
(11,280
|
)
|
|
—
|
|
|
(11,280
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables, net
|
6,371
|
|
|
—
|
|
|
6,371
|
|
|||
Inventories
|
14,144
|
|
|
4,153
|
|
|
18,297
|
|
|||
Accounts payable, deferred revenue, and accrued expenses
|
(15,857
|
)
|
|
(1,281
|
)
|
|
(17,138
|
)
|
|||
Other assets and liabilities
|
3,442
|
|
|
(4,352
|
)
|
|
(910
|
)
|
|||
Net cash provided by operating activities
|
186,708
|
|
|
—
|
|
|
186,708
|
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Capital expenditures
|
(98,712
|
)
|
|
—
|
|
|
(98,712
|
)
|
|||
Decrease in cash and cash equivalents resulting from deconsolidation of Canada
|
—
|
|
|
—
|
|
|
—
|
|
|||
Purchase of intangible assets
|
(21
|
)
|
|
—
|
|
|
(21
|
)
|
|||
Investment in equity interests
|
(10,133
|
)
|
|
—
|
|
|
(10,133
|
)
|
|||
Net cash used in investing activities
|
(108,866
|
)
|
|
—
|
|
|
(108,866
|
)
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Payments on lease financing obligations
|
(1,595
|
)
|
|
—
|
|
|
(1,595
|
)
|
|||
Repayments of financing arrangements
|
(3,274
|
)
|
|
—
|
|
|
(3,274
|
)
|
|||
Proceeds from exercise of stock options
|
2,735
|
|
|
—
|
|
|
2,735
|
|
|||
Repurchase of common stock under share repurchase program
|
(51,538
|
)
|
|
—
|
|
|
(51,538
|
)
|
|||
Repurchase of common stock for tax withholding obligations
|
(4,599
|
)
|
|
—
|
|
|
(4,599
|
)
|
|||
Net cash used in financing activities
|
(58,271
|
)
|
|
—
|
|
|
(58,271
|
)
|
|||
|
|
|
|
|
|
||||||
EFFECT OF EXCHANGE RATE ON CASH
|
899
|
|
|
—
|
|
|
899
|
|
|||
|
|
|
|
|
|
||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
20,470
|
|
|
—
|
|
|
20,470
|
|
|||
CASH AND CASH EQUIVALENTS, Beginning of period
|
186,903
|
|
|
—
|
|
|
186,903
|
|
|||
CASH AND CASH EQUIVALENTS, End of period
|
$
|
207,373
|
|
|
$
|
—
|
|
|
$
|
207,373
|
|
|
February 2, 2019
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(in thousands)
|
||||||||||
Money market funds
|
$
|
155,014
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
||||||||||
|
February 3, 2018
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(in thousands)
|
||||||||||
Money market funds
|
$
|
139,920
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial Paper
|
—
|
|
|
79,908
|
|
|
—
|
|
|||
|
$
|
139,920
|
|
|
$
|
79,908
|
|
|
$
|
—
|
|
Category
|
Depreciable Life
|
Software, including software developed for internal use
|
3 - 7 years
|
Store related assets and other property and equipment
|
3 - 10 years
|
Furniture, fixtures and equipment
|
5 - 7 years
|
Leasehold improvements
|
Shorter of lease term or useful life of the asset, typically no longer than 15 years
|
Building improvements
|
6 - 30 years
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Apparel
|
$
|
1,828,836
|
|
|
$
|
1,873,376
|
|
|
$
|
1,916,891
|
|
Accessories and other
|
222,611
|
|
|
228,317
|
|
|
236,194
|
|
|||
Other revenue
|
64,897
|
|
|
56,809
|
|
|
51,332
|
|
|||
Total net sales
|
$
|
2,116,344
|
|
|
$
|
2,158,502
|
|
|
$
|
2,204,417
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Stores
|
$
|
1,442,601
|
|
|
$
|
1,592,222
|
|
|
$
|
1,740,160
|
|
E-commerce
|
608,846
|
|
|
509,471
|
|
|
412,925
|
|
|||
Other revenue
|
64,897
|
|
|
56,809
|
|
|
51,332
|
|
|||
Total net sales
|
$
|
2,116,344
|
|
|
$
|
2,158,502
|
|
|
$
|
2,204,417
|
|
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Beginning balance loyalty deferred revenue
|
$
|
14,186
|
|
|
$
|
15,662
|
|
Reduction in revenue/(revenue recognized)
|
1,133
|
|
|
(1,476
|
)
|
||
Ending balance loyalty deferred revenue
|
$
|
15,319
|
|
|
$
|
14,186
|
|
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Beginning gift card liability
|
$
|
26,737
|
|
|
$
|
27,498
|
|
Issuances
|
46,977
|
|
|
49,526
|
|
||
Redemptions
|
(45,076
|
)
|
|
(46,943
|
)
|
||
Gift card breakage
|
(3,505
|
)
|
|
(3,344
|
)
|
||
Ending gift card liability
|
$
|
25,133
|
|
|
$
|
26,737
|
|
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Beginning balance refundable payment liability
|
$
|
19,906
|
|
|
$
|
347
|
|
Refundable Payment Received
|
—
|
|
|
20,000
|
|
||
Recognized in revenue
|
(2,878
|
)
|
|
(441
|
)
|
||
Ending balance refundable payment liability
|
$
|
17,028
|
|
|
$
|
19,906
|
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
|
(in thousands)
|
||||||
Building improvements
|
$
|
86,487
|
|
|
$
|
86,487
|
|
Furniture, fixtures and equipment, and software
|
535,256
|
|
|
503,276
|
|
||
Leasehold improvements
|
444,906
|
|
|
437,323
|
|
||
Construction in process
|
15,911
|
|
|
19,550
|
|
||
Other
|
787
|
|
|
811
|
|
||
Total
|
1,083,347
|
|
|
1,047,447
|
|
||
Less: accumulated depreciation
|
(719,068
|
)
|
|
(642,434
|
)
|
||
Property and equipment, net
|
$
|
364,279
|
|
|
$
|
405,013
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Store rent:
|
(in thousands)
|
||||||||||
Fixed minimum
|
$
|
200,378
|
|
|
$
|
208,058
|
|
|
$
|
214,696
|
|
Contingent
|
5,165
|
|
|
4,002
|
|
|
4,927
|
|
|||
Total store rent
|
205,543
|
|
|
212,060
|
|
|
219,623
|
|
|||
Home office, distribution center, other
|
7,556
|
|
|
7,468
|
|
|
5,945
|
|
|||
Total rent expense
|
$
|
213,099
|
|
|
$
|
219,528
|
|
|
$
|
225,568
|
|
2019
|
$
|
221,816
|
|
2020
|
189,285
|
|
|
2021
|
163,748
|
|
|
2022
|
151,718
|
|
|
2023
|
135,345
|
|
|
Thereafter
|
290,790
|
|
|
Total
|
$
|
1,152,702
|
|
|
February 2, 2019
|
||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Ending Net Balance
|
||||||
|
(in thousands)
|
||||||||||
Tradename/domain names/trademarks
|
$
|
197,618
|
|
|
$
|
—
|
|
|
$
|
197,618
|
|
Licensing arrangements
|
425
|
|
|
319
|
|
|
106
|
|
|||
|
$
|
198,043
|
|
|
$
|
319
|
|
|
$
|
197,724
|
|
|
February 3, 2018
|
||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Ending Net Balance
|
||||||
|
(in thousands)
|
||||||||||
Tradename/domain names/trademarks
|
$
|
197,618
|
|
|
$
|
—
|
|
|
$
|
197,618
|
|
Licensing arrangements
|
425
|
|
|
270
|
|
|
155
|
|
|||
|
$
|
198,043
|
|
|
$
|
270
|
|
|
$
|
197,773
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current:
|
(in thousands)
|
||||||||||
U.S. federal
|
$
|
7,644
|
|
|
$
|
8,415
|
|
|
$
|
7,600
|
|
U.S. state and local
|
2,480
|
|
|
1,167
|
|
|
4,721
|
|
|||
Foreign
|
—
|
|
|
—
|
|
|
814
|
|
|||
Total
|
10,124
|
|
|
9,582
|
|
|
13,135
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
U.S. federal
|
371
|
|
|
(513
|
)
|
|
19,828
|
|
|||
U.S. state and local
|
165
|
|
|
909
|
|
|
928
|
|
|||
Foreign
|
—
|
|
|
—
|
|
|
(134
|
)
|
|||
Total
|
536
|
|
|
396
|
|
|
20,622
|
|
|||
Provision for income taxes
|
$
|
10,660
|
|
|
$
|
9,978
|
|
|
$
|
33,757
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Federal income tax rate
|
21.0
|
%
|
|
33.7
|
%
|
|
35.0
|
%
|
State income taxes, net of federal income tax effect
|
13.2
|
%
|
|
5.6
|
%
|
|
4.4
|
%
|
(Benefit)/Expense for uncertain tax positions
|
(1.5
|
)%
|
|
(1.0
|
)%
|
|
(7.0
|
)%
|
Share-based compensation
|
5.5
|
%
|
|
7.8
|
%
|
|
4.0
|
%
|
Non-deductible executive compensation
|
13.8
|
%
|
|
6.9
|
%
|
|
0.3
|
%
|
Excess tax over book basis on investment in Express Canada
|
—
|
%
|
|
(17.5
|
)%
|
|
—
|
%
|
Write-off of Express Canada deferred tax assets
|
—
|
%
|
|
15.7
|
%
|
|
—
|
%
|
(Decrease)/Increase in valuation allowance
|
6.3
|
%
|
|
(8.4
|
)%
|
|
1.3
|
%
|
Impact of Tax Cuts and Jobs Act on deferred taxes
|
(1.0
|
)%
|
|
(7.1
|
)%
|
|
—
|
%
|
Tax credits
|
(5.0
|
)%
|
|
(2.3
|
)%
|
|
(1.0
|
)%
|
Other items, net
|
0.2
|
%
|
|
1.2
|
%
|
|
(0.3
|
)%
|
Effective tax rate
|
52.5
|
%
|
|
34.6
|
%
|
|
36.7
|
%
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
|
(in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Accrued expenses and deferred compensation
|
$
|
12,163
|
|
|
$
|
17,774
|
|
Rent
|
20,768
|
|
|
21,110
|
|
||
Lease financing obligations
|
20,043
|
|
|
20,643
|
|
||
Inventory
|
5,312
|
|
|
1,195
|
|
||
Deferred revenue
|
9,920
|
|
|
3,799
|
|
||
Tax credits/carryforwards
|
239
|
|
|
463
|
|
||
Valuation allowance
|
(2,108
|
)
|
|
(832
|
)
|
||
Total deferred tax assets
|
66,337
|
|
|
64,152
|
|
||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Prepaid expenses
|
3,967
|
|
|
3,340
|
|
||
Other
|
701
|
|
|
82
|
|
||
Intangible assets
|
20,694
|
|
|
17,443
|
|
||
Property and equipment
|
37,592
|
|
|
39,368
|
|
||
Total deferred tax liabilities
|
62,954
|
|
|
60,233
|
|
||
Net deferred tax asset
|
$
|
3,383
|
|
|
$
|
3,919
|
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
|
(in thousands)
|
||||||
Deferred tax assets
|
$
|
5,442
|
|
|
$
|
7,346
|
|
Other long-term liabilities
|
(2,059
|
)
|
|
(3,427
|
)
|
||
Net deferred tax assets
|
$
|
3,383
|
|
|
$
|
3,919
|
|
|
February 2, 2019
|
|
February 3, 2018
|
|
January 28, 2017
|
||||||
|
(in thousands)
|
||||||||||
Unrecognized tax benefits, beginning of year
|
$
|
2,398
|
|
|
$
|
3,104
|
|
|
$
|
9,506
|
|
Gross addition for tax positions of the current year
|
42
|
|
|
118
|
|
|
296
|
|
|||
Gross addition for tax positions of the prior year
|
—
|
|
|
30
|
|
|
527
|
|
|||
Settlements
|
—
|
|
|
(147
|
)
|
|
—
|
|
|||
Reduction for tax positions of prior years
|
(28
|
)
|
|
(46
|
)
|
|
(23
|
)
|
|||
Lapse of statute of limitations
|
(484
|
)
|
|
(661
|
)
|
|
(7,202
|
)
|
|||
Unrecognized tax benefits, end of year
|
$
|
1,928
|
|
|
$
|
2,398
|
|
|
$
|
3,104
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Restricted stock units and restricted stock
|
$
|
10,982
|
|
|
$
|
12,050
|
|
|
$
|
10,394
|
|
Stock options
|
1,564
|
|
|
1,958
|
|
|
2,464
|
|
|||
Performance-based restricted stock units
|
568
|
|
|
—
|
|
|
—
|
|
|||
Total share-based compensation
|
$
|
13,114
|
|
|
$
|
14,008
|
|
|
$
|
12,858
|
|
|
Number of
Shares
|
|
Grant Date
Weighted Average
Fair Value
|
|||
|
(in thousands, except per share amounts)
|
|||||
Unvested, February 3, 2018
|
2,902
|
|
|
$
|
11.06
|
|
Granted
|
2,105
|
|
|
$
|
7.06
|
|
Performance Shares Adjustment
(1)
|
(599
|
)
|
|
|
|
|
Vested
|
(1,013
|
)
|
|
$
|
13.60
|
|
Forfeited
|
(331
|
)
|
|
$
|
9.97
|
|
Unvested, February 2, 2019
|
3,064
|
|
|
$
|
8.95
|
|
(1)
|
Relates to a change in estimate of RSUs with performance conditions granted in
2017
. As of year-end 2018, it is estimated that
none
of the shares granted in
2017
will vest based on the performance against predefined financial targets to date.
|
|
Number of
Shares
|
|
Grant Date
Weighted Average
Exercise Price
|
|
Weighted-Average Remaining Contractual Life
(in years)
|
|
Aggregate Intrinsic Value
|
|||||
|
(in thousands, except per share amounts and years)
|
|||||||||||
Outstanding, February 3, 2018
|
2,609
|
|
|
$
|
16.43
|
|
|
|
|
|
||
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Forfeited or expired
|
(230
|
)
|
|
$
|
16.73
|
|
|
|
|
|
||
Outstanding, February 2, 2019
|
2,379
|
|
|
$
|
16.40
|
|
|
4.7
|
|
$
|
—
|
|
Expected to vest at February 2, 2019
|
475
|
|
|
$
|
12.37
|
|
|
7.7
|
|
$
|
—
|
|
Exercisable at February 2, 2019
|
1,892
|
|
|
$
|
17.45
|
|
|
3.9
|
|
$
|
—
|
|
|
2017
|
|
2016
|
||||
|
(in thousands, except per share amounts)
|
||||||
Weighted average grant date fair value of options granted
|
$
|
4.35
|
|
|
$
|
9.32
|
|
Total intrinsic value of options exercised
|
$
|
—
|
|
|
$
|
547
|
|
|
2017
|
|
2016
|
||
Risk-free interest rate
(1)
|
2.27
|
%
|
|
1.62
|
%
|
Price Volatility
(2)
|
45.58
|
%
|
|
43.23
|
%
|
Expected term (years)
(3)
|
6.10
|
|
|
6.52
|
|
Dividend yield
(4)
|
—
|
|
|
—
|
|
(1)
|
Represents the yield on U.S. Treasury securities with a term consistent with the expected term of the stock options.
|
(2)
|
Primarily based on the historical volatility of the Company's common stock over a period consistent with the expected term of the stock options.
|
(3)
|
The Company calculated the expected term assumption using the midpoint scenario, which combines historical exercise data with hypothetical exercise data for outstanding options. The Company believes this data currently represents the best estimate of the expected term of new employee options.
|
(4)
|
The Company does not currently plan on paying regular dividends.
|
|
2018
|
|
2017
|
|
2016
|
|||
|
(in thousands)
|
|||||||
Weighted-average shares - basic
|
72,518
|
|
|
78,592
|
|
|
78,669
|
|
Dilutive effect of stock options, restricted stock units, and restricted stock
|
721
|
|
|
278
|
|
|
380
|
|
Weighted-average shares - diluted
|
73,239
|
|
|
78,870
|
|
|
79,049
|
|
2018 Quarter
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
|
(in thousands, except per share amounts)
|
||||||||||||||
Net sales
|
|
$
|
479,352
|
|
|
$
|
493,605
|
|
|
$
|
514,961
|
|
|
$
|
628,426
|
|
Gross profit
|
|
$
|
143,162
|
|
|
$
|
140,403
|
|
|
$
|
158,149
|
|
|
$
|
173,197
|
|
Net income/(loss)
|
|
$
|
517
|
|
|
$
|
2,234
|
|
|
$
|
7,967
|
|
|
$
|
(1,088
|
)
|
Earnings per basic share
|
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
0.11
|
|
|
$
|
(0.02
|
)
|
Earnings per diluted share
|
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
0.11
|
|
|
$
|
(0.02
|
)
|
2017 Quarter
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
|
(in thousands, except per share amounts)
|
||||||||||||||
Net sales
|
|
$
|
474,192
|
|
|
$
|
481,209
|
|
|
$
|
503,419
|
|
|
$
|
699,682
|
|
Gross profit
|
|
$
|
132,281
|
|
|
$
|
133,757
|
|
|
$
|
151,192
|
|
|
$
|
210,281
|
|
Net income
|
|
$
|
(2,668
|
)
|
|
$
|
(11,891
|
)
|
|
$
|
6,031
|
|
|
$
|
27,401
|
|
Earnings per basic share
|
|
$
|
(0.03
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
0.08
|
|
|
$
|
0.35
|
|
Earnings per diluted share
|
|
$
|
(0.03
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
0.08
|
|
|
$
|
0.35
|
|
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plan (excluding securities reflected in column (a))
|
|||
Category
|
|
(a)
|
|
(b)
|
|
(c)
|
|||
Equity compensation plans approved by security holders
|
|
6,924,032
|
|
|
16.40
|
|
|
6,237,153
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
6,924,032
|
|
|
16.40
|
|
|
6,237,153
|
|
(3)
|
List of Exhibits
|
Exhibit No.
|
|
Description
|
|
Certificate of Incorporation of Express, Inc. (incorporated by reference to Exhibit 4.1 to Express, Inc.'s registration statement on Form S-8 (File No. 333-168097), filed with the SEC on July 14, 2010 (the “Express S-8”)).
|
|
|
Certificate of Amendment of Certificate of Incorporation of Express, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on June 11, 2013).
|
|
|
Bylaws of Express, Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K, filed with the SEC on June 11, 2013).
|
|
|
Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1 (File No. 333-164906), filed with the SEC on April 30, 2010 (the "Express S-1").)
|
|
|
Second Amended and Restated Employment Agreement by and between the Company and David Kornberg (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on July 21, 2014).
|
|
|
Form of Amended and Restated Employment Agreement (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q, filed with the SEC on June 6, 2013).
|
|
|
Form of Amended and Restated Severance Agreement (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q, filed with the SEC on June 6, 2013).
|
|
|
Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.11 to the Express S-1).
|
|
|
Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.17 to the Express S-1).
|
|
|
Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.19 to the Express S-1).
|
|
|
Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.13 to the Express S-1).
|
|
|
Form of Stock Option Grant Agreement (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q, filed with the SEC on June 6, 2013).
|
|
|
Form of Performance Share Unit Agreement (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q, filed with the SEC on June 6, 2013).
|
|
|
Form of Non-Qualified Stock Option Grant (incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on April 4, 2014).
|
|
|
Form of Restricted Stock Unit Agreement for Restricted Stock Units (incorporated by reference to Exhibit 10.2 to the Form 8-K filed with the SEC on April 4, 2014).
|
|
|
Form of Restricted Stock Unit Agreement for Performance Stock Units (incorporated by reference to Exhibit 10.3 to the Form 8-K filed with the SEC on April 4, 2014).
|
|
|
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.22 to the Express S-1, filed with the SEC on April 30, 2010).
|
|
|
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on January 5, 2012).
|
|
|
Form of Letter Agreement by and among Limited Brands, Inc., Express, Inc., Express Topco LLC, Express Holding, LLC, Express, LLC, Express Finance Corp. and Express GC, LLC (incorporated by reference to Exhibit 10.23 to the Express S-1).
|
|
|
Form of Letter Agreement by and among Golden Gate Private Equity, Inc., Express, Inc., Express Topco LLC, Express Holding, LLC, Express, LLC, Express Finance Corp. and Express GC, LLC (incorporated by reference to Exhibit 10.24 to the Express S-1).
|
|
|
Letter Agreement, dated as of April 28, 2010, between Michael F. Devine, III and Express Parent LLC (incorporated by reference to Exhibit 10.26 to the Express S-1).
|
|
|
Letter Agreement, dated as of July 23, 2010, between Mylle H. Mangum and Express, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on August 3, 2010).
|
|
Second Amended and Restated $250,000,000 Asset-Based Loan Credit Agreement, dated as of May 20, 2015 among Express Holding, LLC, as Parent, Express, LLC, as Borrower, the Initial Lenders, Initial Issuing Bank and Swing Line Bank, Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent, U.S. Bank National Association, as Syndication Agent, and Wells Fargo Bank, National Association, as Sole Lead Arranger and Sole Bookrunner (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on May 27, 2015).
|
|
|
Form of Severance Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on July 7, 2015).
|
|
|
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on July 7, 2015).
|
|
|
Form of Restricted Stock Unit Agreement for Performance Stock Units (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on April 1, 2016).
|
|
|
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on August 3, 2016).
|
|
|
Form of Restricted Stock Unit Agreement for Performance Stock Units (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on March 17, 2017).
|
|
|
Form of Second Amended and Restated Employment Agreement (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on March 17, 2017).
|
|
|
Form of Amended and Restated Severance Agreement (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed with the SEC on March 17, 2017).
|
|
|
Second Amended and Restated Express, Inc. 2010 Incentive Compensation Plan (incorporated by reference to Appendix B to Express, Inc.'s definitive proxy statement on Schedule 14A, filed with the SEC on April 28, 2017).
|
|
|
Form of Restricted Stock Unit and Other Cash-Based Award Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on April 6, 2018).
|
|
|
Express, Inc. 2018 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-8, filed with the SEC on June 13, 2018.
|
|
|
Form of Restricted Stock Unit Agreement for Directors (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on June 14, 2018).
|
|
|
Letter Agreement, dated as of January 28, 2019, between Express, Inc. and Matt Moellering.
|
|
|
List of subsidiaries of registrant.
|
|
|
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certification of Principal Financial Officer and Principal Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS*
|
|
XBRL Instance Document.
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
Date:
|
March 19, 2019
|
EXPRESS, INC.
|
|
|
|
|
|
|
|
By:
|
/s/ Periclis Pericleous
|
|
|
|
Periclis Pericleous
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
|
|
|
Date:
|
March 19, 2019
|
By:
|
/s/ Matthew Moellering
|
|
|
|
Matthew Moellering
|
|
|
|
Executive Vice President, Chief Operating Officer, and Interim President and Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
Date:
|
March 19, 2019
|
By:
|
/s/ Periclis Pericleous
|
|
|
|
Periclis Pericleous
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
Date:
|
March 19, 2019
|
By:
|
/s/ Michael G. Archbold
|
|
|
|
Michael G. Archbold
|
|
|
|
Director
|
|
|
|
|
Date:
|
March 19, 2019
|
By:
|
/s/ Terry Davenport
|
|
|
|
Terry Davenport
|
|
|
|
Director
|
|
|
|
|
Date:
|
March 19, 2019
|
By:
|
/s/ Michael F. Devine
|
|
|
|
Michael F. Devine
|
|
|
|
Director
|
|
|
|
|
Date:
|
March 19, 2019
|
By:
|
/s/ Karen Leever
|
|
|
|
Karen Leever
|
|
|
|
Director
|
|
|
|
|
Date:
|
March 19, 2019
|
By:
|
/s/ Mylle H. Mangum
|
|
|
|
Mylle H. Mangum
|
|
|
|
Director
|
|
|
|
|
Date:
|
March 19, 2019
|
By:
|
/s/ Peter Swinburn
|
|
|
|
Peter Swinburn
|
|
|
|
Director
|
|
|
|
|
Date:
|
March 19, 2019
|
By:
|
/s/ Winifred Park
|
|
|
|
Winifred Park
|
|
|
|
Director
|
Name
|
|
Jurisdiction of Formation
|
Express Topco LLC
|
|
Delaware
|
Express Holding, LLC
|
|
Delaware
|
Express, LLC
|
|
Delaware
|
Express Finance Corp.
|
|
Delaware
|
Express GC, LLC
|
|
Ohio
|
Express Fashion Operations, LLC
|
|
Delaware
|
Express Fashion Logistics, LLC
|
|
Delaware
|
1.
|
I have reviewed this Annual Report on Form 10-K of Express, Inc. for the year ended
February 2, 2019
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
March 19, 2019
|
By:
|
/s/ Matthew Moellering
|
|
|
|
Matthew Moellering
|
|
|
|
Executive Vice President, Chief Operating Officer, and Interim President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Express, Inc. for the year ended
February 2, 2019
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
March 19, 2019
|
By:
|
/s/ Periclis Pericleous
|
|
|
|
Periclis Pericleous
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
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 consolidated financial condition and results of operations of the Company and its subsidiaries.
|
|
/s/ Matthew Moellering
|
Matthew Moellering
|
Executive Vice President, Chief Operating Officer, and Interim President and Chief Executive Officer
|
|
/s/ Periclis Pericleous
|
Periclis Pericleous
|
Senior Vice President, Chief Financial Officer and Treasurer
|