AMERICAN EAGLE OUTFITTERS INC, 10-K filed on 3/16/2018
Annual Report
v3.8.0.1
Document and Entity Information - USD ($)
12 Months Ended
Feb. 03, 2018
Mar. 12, 2018
Jul. 29, 2017
Document And Entity Information [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Feb. 03, 2018    
Document Fiscal Year Focus 2017    
Document Fiscal Period Focus FY    
Trading Symbol AEO    
Entity Registrant Name AMERICAN EAGLE OUTFITTERS INC    
Entity Central Index Key 0000919012    
Current Fiscal Year End Date --02-03    
Entity Well-known Seasoned Issuer Yes    
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Filer Category Large Accelerated Filer    
Entity Common Stock, Shares Outstanding   177,607,606  
Entity Public Float     $ 1,929,085,816
v3.8.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Feb. 03, 2018
Jan. 28, 2017
Current assets:    
Cash and cash equivalents $ 413,613 $ 378,613
Merchandise inventory 398,213 358,446
Accounts receivable, net 78,304 86,634
Prepaid expenses and other 78,400 77,536
Total current assets 968,530 901,229
Property and equipment, net of accumulated depreciation 724,239 707,797
Intangible assets, net of accumulated amortization 46,666 49,373
Goodwill 15,070 14,887
Deferred income taxes 9,344 49,250
Other assets 52,464 60,124
Total assets 1,816,313 1,782,660
Current liabilities:    
Accounts payable 236,703 246,204
Accrued compensation and payroll taxes 54,324 54,184
Accrued rent 83,312 78,619
Accrued income and other taxes 12,781 12,220
Unredeemed gift cards and gift certificates 52,347 52,966
Current portion of deferred lease credits 11,203 12,780
Other liabilities and accrued expenses 34,551 36,810
Total current liabilities 485,221 493,783
Non-current liabilities:    
Deferred lease credits 47,977 45,114
Non-current accrued income taxes 7,269 4,537
Other non-current liabilities 29,055 34,657
Total non-current liabilities 84,301 84,308
Commitments and contingencies
Stockholders’ equity:    
Preferred stock, $0.01 par value; 5,000 shares authorized; none issued and outstanding
Common stock, $0.01 par value; 600,000 shares authorized; 249,566 shares issued; 177,316 and 181,886 shares outstanding, respectively 2,496 2,496
Contributed capital 593,770 603,890
Accumulated other comprehensive loss, net of tax (30,795) (36,462)
Retained earnings 1,883,592 1,775,775
Treasury stock, 72,250 and 67,680 shares, respectively, at cost (1,202,272) (1,141,130)
Total stockholders' equity 1,246,791 1,204,569
Total liabilities and stockholders’ equity $ 1,816,313 $ 1,782,660
v3.8.0.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Jan. 31, 2015
Statement Of Financial Position [Abstract]        
Preferred stock, par value $ 0.01 $ 0.01 $ 0.01 $ 0.01
Preferred stock, shares authorized 5,000,000 5,000,000 5,000,000 5,000,000
Preferred stock, issued 0 0 0 0
Preferred stock, outstanding 0 0 0 0
Common stock, par value $ 0.01 $ 0.01 $ 0.01 $ 0.01
Common stock, shares authorized 600,000,000 600,000,000 600,000,000 600,000,000
Common stock, shares issued 249,566,000 249,566,000 249,566,000 249,566,000
Common stock, shares outstanding 177,316,000 181,886,000 180,135,000 194,516,000
Treasury stock, shares 72,250,000 67,680,000 69,431,000  
v3.8.0.1
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Income Statement [Abstract]      
Total net revenue $ 3,795,549 $ 3,609,865 $ 3,521,848
Cost of sales, including certain buying, occupancy and warehousing expenses 2,425,044 2,242,938 2,219,114
Gross profit 1,370,505 1,366,927 1,302,734
Selling, general and administrative expenses 879,685 857,562 834,700
Impairment and restructuring charges 20,611 21,166 0
Depreciation and amortization expense 167,421 156,723 148,156
Operating income 302,788 331,476 319,878
Other (expense) income, net (15,615) 3,786 1,993
Income before income taxes 287,173 335,262 321,871
Provision for income taxes 83,010 122,813 108,580
Income from continuing operations 204,163 212,449 213,291
Discontinued operations, net of tax     4,847
Net income $ 204,163 $ 212,449 $ 218,138
Basic income per common share:      
Income from continuing operations $ 1.15 $ 1.17 $ 1.10
Discontinued operations     0.02
Basic net income per common share 1.15 1.17 1.12
Diluted income per common share:      
Income from continuing operations 1.13 1.16 1.09
Discontinued operations     0.02
Diluted net income per common share $ 1.13 $ 1.16 $ 1.11
Weighted average common shares outstanding - basic 177,938 181,429 194,351
Weighted average common shares outstanding - diluted 180,156 183,835 196,237
v3.8.0.1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Statement Of Income And Comprehensive Income [Abstract]      
Net income $ 204,163 $ 212,449 $ 218,138
Other comprehensive gain (loss):      
Foreign currency translation gain (loss) 5,667 (6,594) (19,924)
Other comprehensive gain (loss) 5,667 (6,594) (19,924)
Comprehensive income $ 209,830 $ 205,855 $ 198,214
v3.8.0.1
Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock
Contributed Capital
Retained Earnings
Treasury Stock
[1]
Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Jan. 31, 2015 $ 1,139,746 $ 2,496 $ 569,675 $ 1,543,085 $ (965,566) $ (9,944)
Beginning Balance (in shares) at Jan. 31, 2015 194,516,000 194,516,000 [2]        
Stock awards $ 31,937   31,937      
Repurchase of common stock as part of publicly announced programs (227,071)       (227,071)  
Repurchase of common stock as part of publicly announced programs (in shares) [2]   (15,563,000)        
Repurchase of common stock from employees (5,163)       (5,163)  
Repurchase of common stock from employees (in shares) [2]   (324,000)        
Reissuance of treasury stock $ 10,892   (13,237) (2,332) 26,461  
Reissuance of treasury stock (in shares) 1,506,000 1,506,000 [2]        
Net income $ 218,138     218,138    
Other comprehensive loss (19,924)         (19,924)
Cash dividends and dividend equivalents ($0.50 per share) (97,179)   2,445 (99,624)    
Ending Balance at Jan. 30, 2016 $ 1,051,376 $ 2,496 590,820 1,659,267 (1,171,339) (29,868)
Ending Balance (in shares) at Jan. 30, 2016 180,135,000 180,135,000 [2]        
Stock awards $ 27,877   27,877      
Repurchase of common stock from employees (7,032)       (7,032)  
Repurchase of common stock from employees (in shares) [2]   (455,000)        
Reissuance of treasury stock $ 17,173   (17,247) (2,821) 37,241  
Reissuance of treasury stock (in shares) 2,206,000 2,206,000 [2]        
Net income $ 212,449     212,449    
Other comprehensive loss (6,594)         (6,594)
Cash dividends and dividend equivalents ($0.50 per share) (90,680)   2,440 (93,120)    
Ending Balance at Jan. 28, 2017 $ 1,204,569 $ 2,496 603,890 1,775,775 (1,141,130) (36,462)
Ending Balance (in shares) at Jan. 28, 2017 181,886,000 181,886,000 [2]        
Stock awards $ 17,202   17,202      
Repurchase of common stock as part of publicly announced programs (87,672)       (87,672)  
Repurchase of common stock as part of publicly announced programs (in shares) [2]   (6,000,000)        
Repurchase of common stock from employees (12,513)       (12,513)  
Repurchase of common stock from employees (in shares) [2]   (871,000)        
Reissuance of treasury stock $ 3,923   (29,632) (5,488) 39,043  
Reissuance of treasury stock (in shares) 2,301,000 2,301,000 [2]        
Net income $ 204,163     204,163    
Other comprehensive loss 5,667         5,667
Cash dividends and dividend equivalents ($0.50 per share) (88,548)   2,310 (90,858)    
Ending Balance at Feb. 03, 2018 $ 1,246,791 $ 2,496 $ 593,770 $ 1,883,592 $ (1,202,272) $ (30,795)
Ending Balance (in shares) at Feb. 03, 2018 177,316,000 177,316,000 [2]        
[1] 72,250 shares, 67,680 shares and 69,431 shares at February 3, 2018, January 28, 2017 and January 30, 2016 respectively. During Fiscal 2017, Fiscal 2016, and Fiscal 2015, 2,301 shares, 2,206 shares, and 1,506 shares, respectively, were reissued from treasury stock for the issuance of share-based payments.
[2] 600,000 authorized, 249,566 issued and 177,316 outstanding, $0.01 par value common stock at February 3, 2018; 600,000 authorized, 249,566 issued and 181,886 outstanding, $0.01 par value common stock at January 28, 2017; 600,000 authorized, 249,566 issued and 180,135 outstanding, $0.01 par value common stock at January 30, 2016; 600,000 authorized, 249,566 issued and 194,516 outstanding, $0.01 par value common stock at January 31, 2015. The Company has 5,000 authorized, with none issued or outstanding, $0.01 par value preferred stock for all periods presented.
v3.8.0.1
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Statement Of Stockholders Equity [Abstract]      
Cash dividends and dividend equivalents, Per share $ 0.50 $ 0.50 $ 0.50
Common stock, shares authorized 600,000,000 600,000,000 600,000,000
Common stock, shares issued 249,566,000 249,566,000 249,566,000
Common stock, shares outstanding 177,316,000 181,886,000 180,135,000
Common stock, par value $ 0.01 $ 0.01 $ 0.01
Preferred stock, shares authorized 5,000,000 5,000,000 5,000,000
Preferred stock, shares issued 0 0 0
Preferred stock, shares outstanding 0 0 0
Preferred stock, par value $ 0.01 $ 0.01 $ 0.01
Treasury stock, shares 72,250,000 67,680,000 69,431,000
Reissuance of treasury stock, shares 2,301,000 2,206,000 1,506,000
v3.8.0.1
Consolidated Statements of Cash Flows - USD ($)
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Operating activities:      
Net income $ 204,163,000 $ 212,449,000 $ 218,138,000
Gain from discontinued operations, net of tax     (4,847,000)
Income from continuing operations 204,163,000 212,449,000 213,291,000
Adjustments to reconcile net income to net cash provided by operating activities      
Depreciation and amortization 169,473,000 158,174,000 148,858,000
Share-based compensation 16,890,000 29,137,000 34,977,000
Deferred income taxes 44,312,000 14,838,000 4,680,000
Foreign currency transaction (gain) loss (5,616,000) (835,000) 2,977,000
Loss on impairment of assets 0 20,576,000 [1] 0
Gain on sale of assets     (9,422,000)
Changes in assets and liabilities:      
Merchandise inventory (35,912,000) (53,613,000) (22,259,000)
Accounts receivable 8,837,000 (7,705,000) (10,093,000)
Prepaid expenses and other (399,000) (332,000) (7,027,000)
Other assets 5,317,000 (6,705,000) (10,017,000)
Accounts payable (16,663,000) 52,347,000 (3,189,000)
Unredeemed gift cards and gift certificates (874,000) 4,465,000 755,000
Deferred lease credits 984,000 (5,229,000) (4,099,000)
Accrued compensation and payroll taxes 1,289,000 (25,809,000) 34,234,000
Accrued income and other taxes 565,000 (10,695,000) (17,615,000)
Accrued liabilities 2,060,000 (15,467,000) (14,133,000)
Total adjustments 190,263,000 153,147,000 128,627,000
Net cash provided by operating activities from continuing operations 394,426,000 365,596,000 341,918,000
Investing activities:      
Capital expenditures for property and equipment (169,469,000) (161,494,000) (153,256,000)
Acquisitions and purchase of long-lived assets in business combination     (10,442,000)
Proceeds from sale of assets     12,579,000
Acquisition of intangible assets (2,681,000) (1,528,000) (2,382,000)
Net cash used for investing activities from continuing operations (172,150,000) (163,022,000) (153,501,000)
Financing activities:      
Payments on capital leases and other (3,384,000) (4,375,000) (7,635,000)
Repurchase of common stock as part of publicly announced programs (87,682,000)   (227,071,000)
Repurchase of common stock from employees (12,513,000) (7,032,000) (5,163,000)
Net proceeds from stock options exercised 3,355,000 16,260,000 7,283,000
Excess tax benefit from share-based payments   763,000 657,000
Cash dividends paid (88,548,000) (90,680,000) (97,237,000)
Net cash used for financing activities from continuing operations (188,772,000) (85,064,000) (329,166,000)
Effect of exchange rates on cash 1,496,000 1,036,000 (3,076,000)
Cash flows of discontinued operations      
Net cash used for operating activities     (6,805,000)
Net cash used for discontinued operations     (6,805,000)
Net increase (decrease) in cash and cash equivalents 35,000,000 118,546,000 (150,630,000)
Cash and cash equivalents - beginning of period 378,613,000 260,067,000 410,697,000
Cash and cash equivalents - end of period $ 413,613,000 $ 378,613,000 $ 260,067,000
[1] Non-cash impairment charges of $20.6 million for Fiscal 2016 consisting of $7.2 million for the impairment of all Company-owned retail stores in the United Kingdom, Hong Kong and China, as well as $10.8 million of impairment and restructuring charges related to non-store corporate assets that support the international retail stores and e-commerce operations and $2.5 million of goodwill impairment for the China and Hong Kong retail operations.
v3.8.0.1
Business Operations
12 Months Ended
Feb. 03, 2018
Accounting Policies [Abstract]  
Business Operations

1.  Business Operations

American Eagle Outfitters, Inc. (the “Company” or “AEO, Inc.”), a Delaware corporation, operates under the American Eagle Outfitters® (“AEO”) and Aerie® by American Eagle Outfitters® (“Aerie”) brands.  

Founded in 1977, AEO, Inc. is a leading multi-brand specialty retailer that operates more than 1,000 retail stores in the U.S. and internationally, online at www.ae.com and www.aerie.com and international store locations managed by third-party operators. Through its portfolio of brands, the Company offers high quality, on-trend clothing, accessories and personal care products at affordable prices. The Company’s online business, AEO Direct, ships to 81 countries worldwide.

In Fiscal 2015 , AEO Inc. acquired Tailgate Clothing Company (“Tailgate”), which owns and operates Tailgate, a vintage, sports-inspired apparel brand with a college town store concept, and Todd Snyder New York, a premium menswear brand.  

Merchandise Mix

The following table sets forth the approximate consolidated percentage of total net revenue from continuing operations attributable to each merchandise group for each of the periods indicated:

 

 

 

For the Years Ended

 

 

 

February 3,

 

 

January 28,

 

 

January 30,

 

 

 

2018

 

 

2017

 

 

2016

 

Men’s apparel and accessories

 

 

34

%

 

 

35

%

 

 

37

%

Women’s apparel and accessories (excluding Aerie)

 

 

53

%

 

 

54

%

 

 

54

%

Aerie

 

 

13

%

 

 

11

%

 

 

9

%

Total

 

 

100

%

 

 

100

%

 

 

100

%

 

v3.8.0.1
Summary of Significant Accounting Policies
12 Months Ended
Feb. 03, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Summary of Significant Accounting Policies

2.  Summary of Significant Accounting Policies

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. At February 3, 2018, the Company operated in one reportable segment.

The Company exited its 77kids brand in 2012. These Consolidated Financial Statements reflect the results of 77kids as discontinued operations for all periods presented.

Fiscal Year

Our fiscal year ends on the Saturday nearest to January 31. As used herein, “Fiscal 2018” refers to the 52-week period ending February 2, 2019. “Fiscal 2017” refers to the 53-week period ended February 3, 2018. “Fiscal 2016” and “Fiscal 2015” refer to the 52-week periods ended January 28, 2017 and January 30, 2016, respectively.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, our management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”).  ASU 2014-09 is a comprehensive new revenue recognition model that expands disclosure requirements and requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. Originally, ASU 2014-09 was effective for annual reporting periods beginning after December 15, 2016. In July 2015, the FASB voted to approve amendments deferring the effective date by one year to be effective for annual reporting periods beginning after December 15, 2017. Accordingly, the Company will adopt ASU 2014-09 on February 4, 2018 using the modified retrospective method.  The adoption of ASU 2014-09 will not have a material impact on the Company’s Consolidated Financial Statements.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016–02”) which replaces the existing guidance in ASC 840, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.   The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company will adopt as of February 3, 2019 and is currently evaluating the impact of ASU 2016-02 to its Consolidated Financial Statements, but expects that it will result in a significant increase to its long-term assets and liabilities on the Consolidated Balance Sheets.

 

Foreign Currency Translation

In accordance with Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters, assets and liabilities denominated in foreign currencies were translated into United States dollars (“USD”) (the reporting currency) at the exchange rates prevailing at the balance sheet date. Revenues and expenses denominated in foreign currencies were translated into USD at the monthly average exchange rates for the period. Gains or losses resulting from foreign currency transactions are included in the results of operations, whereas, related translation adjustments are reported as an element of other comprehensive income in accordance with ASC 220, Comprehensive Income (refer to Note 11 to the Consolidated Financial Statements).

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents.

As of February 3, 2018 and January 28, 2017, the Company held no short-term investments.

Refer to Note 3 to the Consolidated Financial Statements for information regarding cash and cash equivalents and investments.

Merchandise Inventory

Merchandise inventory is valued at the lower of average cost or market, utilizing the retail method. Average cost includes merchandise design and sourcing costs and related expenses. The Company records merchandise receipts at the time which both title and risk of loss for the merchandise transfers to the Company.

The Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear merchandise. Additionally, the Company estimates a markdown reserve for future planned permanent markdowns related to current inventory. Markdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of fashion items, competition, or if it is determined that the inventory in stock will not sell at its currently ticketed price. Such markdowns may have a material adverse impact on earnings, depending on the extent and amount of inventory affected. The Company also estimates a shrinkage reserve for the period between the last physical count and the balance sheet date. The estimate for the shrinkage reserve, based on historical results, can be affected by changes in merchandise mix and changes in actual shrinkage trends.

Property and Equipment

Property and equipment is recorded on the basis of cost with depreciation computed utilizing the straight-line method over the assets’ estimated useful lives. The useful lives of our major classes of assets are as follows:

 

Buildings

25 years

Leasehold improvements

Lesser of 10 years or the term of the lease

Fixtures and equipment

5 years

Information technology

3-5 years

 

As of February 3, 2018, the weighted average remaining useful life of our assets is approximately 8.1 years.

 

In accordance with ASC 360, Property, Plant, and Equipment, the Company’s management evaluates the value of leasehold improvements and store fixtures associated with retail stores, which have been open for a period of time sufficient to reach maturity. The Company evaluates long-lived assets for impairment at the individual store level, which is the lowest level at which individual cash flows can be identified. Impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of the assets. When events such as these occur, the impaired assets are adjusted to their estimated fair value and an impairment loss is recorded separately as a component of operating income under loss on impairment of assets. During Fiscal 2017 and Fiscal 2015, the Company recorded no asset impairment charges.

During Fiscal 2016, the Company recorded pre-tax asset impairment charges of $20.6 million that included $7.2 million for the impairment of all Company owned retail stores in the United Kingdom, Hong Kong and China.  This amount is included within impairment and restructuring charges in the Consolidated Statements of Operations. These charges were the result of business performance and exploring an initiative to convert these markets to licensed partnerships.  Retail stores in these markets no longer are able to generate sufficient cash flow over the expected remaining lease term to recover the carrying value of the respective stores’ assets. Additionally, the Company recorded $10.8 million of impairment charges related to non-store corporate assets that support the United Kingdom, Hong Kong and China Company owned retail store and e-commerce operations and $2.5 million of goodwill impairment for the China and Hong Kong retail operations.

When the Company closes, remodels or relocates a store prior to the end of its lease term, the remaining net book value of the assets related to the store is recorded as a write-off of assets within depreciation and amortization expense.

Refer to Note 7 to the Consolidated Financial Statements for additional information regarding property and equipment and Note 15 for additional information regarding impairment charges. 

 

Goodwill

The Company’s goodwill is primarily related to the acquisition of its importing operations, Canadian, Hong Kong and China businesses and the acquisition of Tailgate and Todd Snyder. In accordance with ASC 350, Intangibles-Goodwill and Other (“ASC 350”), the Company evaluates goodwill for possible impairment on at least an annual basis and last performed an annual impairment test as of February 3, 2018. As a result, there were no impairments recorded during Fiscal 2017. During Fiscal 2016, the Company concluded the goodwill was impaired for the Hong Kong and China businesses, resulting in a $2.5 million charge included within impairment and restructuring charges in the Consolidated Statements of Operations as a result of the Company’s plans to convert these markets to licensed partnerships.  All other goodwill for the Company was not impaired as a result of the annual goodwill impairment test.

Intangible Assets

Intangible assets are recorded on the basis of cost with amortization computed utilizing the straight-line method over the assets’ estimated useful lives.  The Company’s intangible assets, which primarily include trademark assets, are amortized over 15 to 25 years.

The Company evaluates intangible assets for impairment in accordance with ASC 350 when events or circumstances indicate that the carrying value of the asset may not be recoverable. Such an evaluation includes the estimation of undiscounted future cash flows to be generated by those assets. If the sum of the estimated future undiscounted cash flows is less than the carrying amounts of the assets, then the assets are impaired and are adjusted to their estimated fair value. No intangible asset impairment charges were recorded for all periods presented.

Refer to Note 8 to the Consolidated Financial Statements for additional information regarding intangible assets.

Deferred Lease Credits

Deferred lease credits represent the unamortized portion of construction allowances received from landlords related to the Company’s retail stores. Construction allowances are generally comprised of cash amounts received by the Company from its landlords as part of the negotiated lease terms. The Company records a receivable and a deferred lease credit liability at the lease commencement date (date of initial possession of the store). The deferred lease credit is amortized on a straight-line basis as a reduction of rent expense over the term of the original lease (including the pre-opening build-out period). The receivable is reduced as amounts are received from the landlord.

Self-Insurance Liability

The Company uses a combination of insurance and self-insurance mechanisms for certain losses related to employee medical benefits and worker’s compensation. Costs for self-insurance claims filed and claims incurred but not reported are accrued based on known claims and historical experience. Management believes that it has adequately reserved for its self-insurance liability, which is capped through the use of stop loss contracts with insurance companies. However, any significant variation of future claims from historical trends could cause actual results to differ from the accrued liability.

Co-branded Credit Card

The Company offers a co-branded credit card (the “AEO Visa Card”) and a private label credit card (the “AEO Credit Card”) under the AEO and Aerie brands. These credit cards are issued by a third-party bank (the “Bank”) in accordance with a credit card agreement (“the Agreement”). The Company has no liability to the Bank for bad debt expense, provided that purchases are made in accordance with the Bank’s procedures. We receive funding from the Bank based on the Agreement and card activity, which includes payments for new account activations and usage of the credit cards. We recognize revenue for this funding when the amounts are fixed or determinable and collectability is reasonably assured.  This revenue is recorded in other revenue, which is a component of total net revenue in our Consolidated Statements of Operations and Retained Earnings.

Once a customer is approved to receive the AEO Visa Card or the AEO Credit Card and the card is activated, the customer is eligible to participate in the customer loyalty program offered by the Company. For further information on the Company’s loyalty program, refer to the Customer Loyalty Program caption below.

Customer Loyalty Program

The Company recently launched a new, highly digitized loyalty program called AEO ConnectedTM (the “Program”).  This Program integrates the current credit card rewards program and the AEREWARDS® loyalty program into one combined customer offering.  Under the Program, customers accumulate points based on purchase activity and earn rewards by reaching certain point thresholds, and when reached, rewards are distributed.  Customers earn rewards in the form of discount savings certificates. Rewards earned are valid through the stated expiration date, which is 45 days from the issuance date of the reward. Additional rewards are also given for key items such as jeans and bras.  Rewards not redeemed during the 45-day redemption period are forfeited.

Points earned under the Program on purchases at AE and Aerie are accounted for in accordance with ASC 605-25, Revenue Recognition, Multiple Element Arrangements (“ASC 605-25”).  The Company believes that points earned under the Program represent deliverables in a multiple element arrangement rather than a rebate or refund of cash.  Accordingly, the portion of the sales revenue attributed to the award points is deferred and recognized when the award is redeemed or when the points expire.  Additionally, reward points earned using the Co-branded credit card on non-AEO or Aerie purchases are accounted for in accordance with ASC 605-25.  As the points are earned, a current liability is recorded for the estimated cost of the award, and the impact of adjustments is recorded in cost of sales.

Income Taxes

The Company calculates income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires the use of the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on the difference between the Consolidated Financial Statement carrying amounts of existing assets and liabilities and their respective tax bases as computed pursuant to ASC 740. Deferred tax assets and liabilities are measured using the tax rates, based on certain judgments regarding enacted tax laws and published guidance, in effect in the years when those temporary differences are expected to reverse. A valuation allowance is established against the deferred tax assets when it is more likely than not that some portion or all of the deferred taxes may not be realized. Changes in the Company’s level and composition of earnings, tax laws or the deferred tax valuation allowance, as well as the results of tax audits, may materially impact the Company’s effective income tax rate.

The Company evaluates its income tax positions in accordance with ASC 740 which prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. Under ASC 740, a tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits.

The calculation of the deferred tax assets and liabilities, as well as the decision to recognize a tax benefit from an uncertain position and to establish a valuation allowance require management to make estimates and assumptions. The Company believes that its assumptions and estimates are reasonable, although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities, valuation allowances or net income.

The Company has included the estimated impact of the recently enacted U.S. Tax Act in our financial results for the period ended February 3, 2018. The Securities and Exchange Commission (“SEC”) has issued interpretive guidance under Staff Accounting Bulletin No. 118 ("SAB 118") that allows for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. Our future results could include additional adjustments, and those adjustments could be material. Refer to Note 14 to the Consolidated Financial Statements for additional information.

Revenue Recognition

Revenue is recorded for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue upon the estimated customer receipt date of the merchandise. Shipping and handling revenues are included in total net revenue. Sales tax collected from customers is excluded from revenue and is included as part of accrued income and other taxes on the Company’s Consolidated Balance Sheets.

Revenue is recorded net of estimated and actual sales returns and deductions for coupon redemptions and other promotions. The Company records the impact of adjustments to its sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects an estimate of sales returns based on projected merchandise returns determined through the use of historical average return percentages.

 

 

 

For the Years Ended

 

 

 

February 3,

 

 

January 28,

 

 

January 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2016

 

Beginning balance

 

$

3,639

 

 

$

3,349

 

 

$

3,249

 

Returns

 

 

(103,393

)

 

 

(97,126

)

 

 

(90,719

)

Provisions

 

 

104,471

 

 

 

97,416

 

 

 

90,819

 

Ending balance

 

$

4,717

 

 

$

3,639

 

 

$

3,349

 

 

Revenue is not recorded on the purchase of gift cards. A current liability is recorded upon purchase, and revenue is recognized when the gift card is redeemed for merchandise.  Additionally, the Company recognizes revenue on unredeemed gift cards based on an estimate of the amounts that will not be redeemed (“gift card breakage”), determined through historical redemption trends. Gift card breakage revenue is recognized in proportion to actual gift card redemptions as a component of total net revenue. For further information on the Company’s gift card program, refer to the Gift Cards caption below.

The Company recognizes royalty revenue generated from its license or franchise agreements based upon a percentage of merchandise sales by the licensee/franchisee.  This revenue is recorded as a component of total net revenue when earned.

Cost of Sales, Including Certain Buying, Occupancy and Warehousing Expenses

Cost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively "merchandise costs") and buying, occupancy and warehousing costs.

Design costs are related to the Company's Design Center operations and include compensation, travel and entertainment, supplies and samples for our design teams, as well as rent and depreciation for our Design Center. These costs are included in cost of sales as the respective inventory is sold.

Buying, occupancy and warehousing costs consist of compensation, employee benefit expenses and travel and entertainment for our buyers and certain senior merchandising executives; rent and utilities related to our stores, corporate headquarters, distribution centers and other office space; freight from our distribution centers to the stores; compensation and supplies for our distribution centers, including purchasing, receiving and inspection costs; and shipping and handling costs related to our e-commerce operation. Gross profit is the difference between total net revenue and cost of sales.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of compensation and employee benefit expenses, including salaries, incentives and related benefits associated with our stores and corporate headquarters. Selling, general and administrative expenses also include advertising costs, supplies for our stores and home office, communication costs, travel and entertainment, leasing costs and services purchased. Selling, general and administrative expenses do not include compensation, employee benefit expenses and travel for our design, sourcing and importing teams, our buyers and our distribution centers as these amounts are recorded in cost of sales.  Additionally, selling, general and administrative expenses do not include rent and utilities related to our stores, operating costs of our distribution centers, and shipping and handling costs related to our e-commerce operations.

Advertising Costs

Certain advertising costs, including direct mail, in-store photographs and other promotional costs are expensed when the marketing campaign commences. As of February 3, 2018 and January 28, 2017, the Company had prepaid advertising expense of $6.6 million and $8.4 million, respectively. All other advertising costs are expensed as incurred. The Company recognized $129.8 million, $124.5 million and $104.1 million in advertising expense during Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively.

Store Pre-Opening Costs

Store pre-opening costs consist primarily of rent, advertising, supplies and payroll expenses. These costs are expensed as incurred.

Other (Expense) Income, Net

Other (expense) income, net consists primarily of allowances for uncollectible receivables, foreign currency transaction gain/loss, interest income/expense and realized investment gains/losses.

Gift Cards

The value of a gift card is recorded as a current liability upon purchase and revenue is recognized when the gift card is redeemed for merchandise.  The Company estimates gift card breakage and recognizes revenue in proportion to actual gift card redemptions as a component of total net revenue. The Company determines an estimated gift card breakage rate by continuously evaluating historical redemption data and the time when there is a remote likelihood that a gift card will be redeemed. The Company recorded gift card breakage of $10.1 million, $9.1 million and $8.2 million during Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively.

Legal Proceedings and Claims

The Company is subject to certain legal proceedings and claims arising out of the conduct of its business. In accordance with ASC 450, Contingencies (“ASC 450”), the Company records a reserve for estimated losses when the loss is probable and the amount can be reasonably estimated. If a range of possible loss exists and no anticipated loss within the range is more likely than any other anticipated loss, the Company records the accrual at the low end of the range, in accordance with ASC 450.  As the Company believes that it has provided adequate reserves, it anticipates that the ultimate outcome of any matter currently pending against the Company will not materially affect the consolidated financial position, results of operations or consolidated cash flows of the Company.  However, our assessment of any litigation or other legal claims could potentially change in light of the discovery of facts not presently known or determinations by judges, juries, or other finders of fact which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.

Supplemental Disclosures of Cash Flow Information

The table below shows supplemental cash flow information for cash amounts paid during the respective periods:

 

 

 

For the Years Ended

 

 

 

February 3,

 

 

January 28,

 

 

January 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2016

 

Cash paid during the periods for:

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

$

47,094

 

 

$

126,592

 

 

$

116,765

 

Interest

 

$

1,098

 

 

$

1,155

 

 

$

1,173

 

 

Segment Information

In accordance with ASC 280, Segment Reporting (“ASC 280”), the Company has identified two operating segments (American Eagle Brand and Aerie Brand) that reflect the Company’s operational structure as well as the business’s internal view of analyzing results and allocating resources. All of the operating segments have met the aggregation criteria and have been aggregated and are presented as one reportable segment, as permitted by ASC 280.  

The following tables present summarized geographical information:

 

 

 

For the Years Ended

 

 

 

February 3,

 

 

January 28,

 

 

January 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2016

 

Total net revenue:

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

3,295,066

 

 

$

3,160,699

 

 

$

3,091,205

 

Foreign (1)

 

 

500,483

 

 

 

449,166

 

 

 

430,643

 

Total net revenue

 

$

3,795,549

 

 

$

3,609,865

 

 

$

3,521,848

 

 

(1)

Amounts represent sales from American Eagle and Aerie international retail stores, and e-commerce sales that are billed to and/or shipped to foreign countries and international franchise royalty revenue.

 

 

 

February 3,

 

 

January 28,

 

(In thousands)

 

2018

 

 

2017

 

Long-lived assets, net:

 

 

 

 

 

 

 

 

United States

 

$

706,778

 

 

$

693,061

 

Foreign

 

 

79,197

 

 

 

78,996

 

Total long-lived assets, net

 

$

785,975

 

 

$

772,057

 

 

v3.8.0.1
Cash and Cash Equivalents
12 Months Ended
Feb. 03, 2018
Cash And Cash Equivalents [Abstract]  
Cash and Cash Equivalents

3.  Cash and Cash Equivalents

The following table summarizes the fair market value of our cash and marketable securities, which are recorded on the Consolidated Balance Sheets:

 

(In thousands)

 

February 3,

2018

 

 

January 28,

2017

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

Cash

 

$

184,107

 

 

$

265,332

 

Interest bearing deposits

 

 

174,577

 

 

 

83,281

 

Commercial paper

 

 

54,929

 

 

 

30,000

 

Total cash and cash equivalents

 

$

413,613

 

 

$

378,613

 

 

 

v3.8.0.1
Fair Value Measurements
12 Months Ended
Feb. 03, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements

4.  Fair Value Measurements

ASC 820, Fair Value Measurement Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements.  Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date.

Financial Instruments

Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. In addition, ASC 820 establishes this three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

Level 1 — Quoted prices in active markets.

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In accordance with ASC 820, the following tables represent the fair value hierarchy for the Company’s financial assets (cash equivalents) measured at fair value on a recurring basis as of February 3, 2018 and January 28, 2017:

 

 

Fair Value Measurements at February 3, 2018

 

(In thousands)

Carrying Amount

 

 

Quoted Market

Prices in Active

Markets for

Identical

Assets

(Level 1)

 

 

Significant Other

Observable Inputs

(Level 2)

 

 

Significant Unobservable

Inputs

(Level 3)

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

$

184,107

 

 

$

184,107

 

 

 

 

 

 

 

 

 

Interest bearing deposits

 

174,577

 

 

 

174,577

 

 

 

 

 

 

 

Commercial paper

 

54,929

 

 

 

54,929

 

 

 

 

 

 

 

Total cash and cash equivalents

$

413,613

 

 

 

413,613

 

 

 

 

 

 

 

Percent to total

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

 

 

Fair Value Measurements at January 28, 2017

 

(In thousands)

Carrying Amount

 

 

Quoted Market

Prices in Active

Markets for

Identical

Assets

(Level 1)

 

 

Significant Other

Observable Inputs

(Level 2)

 

 

Significant Unobservable

Inputs

(Level 3)

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

$

265,332

 

 

$

265,332

 

 

$

 

 

$

 

Interest bearing deposits

 

83,281

 

 

 

83,281

 

 

 

 

 

 

 

Commercial paper

 

30,000

 

 

 

30,000

 

 

 

 

 

 

 

Total cash and cash equivalents

$

378,613

 

 

$

378,613

 

 

$

 

 

$

 

Percent to total

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

 

In the event the Company holds Level 3 investments, a discounted cash flow model is used to value those investments. There were no Level 3 investments at February 3, 2018 or January 28, 2017.

Non-Financial Assets

The Company’s non-financial assets, which include goodwill, intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis.  However, if certain triggering events occur, or if an annual impairment test is required and the Company is required to evaluate the non-financial instrument for impairment, a resulting asset impairment would require that the non-financial asset be recorded at the estimated fair value.  During Fiscal 2016, the Company concluded the goodwill was impaired for the Hong Kong and China businesses, resulting in a $2.5 million charge included within impairment and restructuring charges in the Consolidated Statements of Operations as a result of the performance of those businesses and the Company’s exploration of alternatives, including the licensing of these markets to third-party operators.  All other goodwill for the Company was not impaired as a result of the annual goodwill impairment test.

Certain long-lived assets were measured at fair value on a nonrecurring basis using Level 3 inputs as defined in ASC 820.  During Fiscal 2017, the Company recorded no asset impairment charges. During Fiscal 2016, certain long-lived assets related to the Company’s retail stores, goodwill and corporate assets were determined to be unable to recover their respective carrying values and were written down to their fair value, resulting in a loss of $20.6 million, which is recorded within impairment and restructuring charges within the Consolidated Statements of Operations. The fair value of the impaired assets after the recorded loss is an immaterial amount.

The fair value of the Company’s stores was determined by estimating the amount and timing of net future cash flows and discounting them using a risk-adjusted rate of interest.  The Company estimates future cash flows based on its experience and knowledge of the market in which the store is located.

v3.8.0.1
Earnings per Share
12 Months Ended
Feb. 03, 2018
Earnings Per Share [Abstract]  
Earnings per Share

5.  Earnings per Share

The following is a reconciliation between basic and diluted weighted average shares outstanding:

 

 

 

For the Years Ended

 

 

 

February 3,

 

 

January 28,

 

 

January 30,

 

(In thousands, except per share amounts)

 

2018

 

 

2017

 

 

2016

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic number of common shares outstanding

 

 

177,938

 

 

 

181,429

 

 

 

194,351

 

Dilutive effect of stock options and non-vested

   restricted stock

 

 

2,218

 

 

 

2,406

 

 

 

1,886

 

Dilutive number of common shares outstanding

 

 

180,156

 

 

 

183,835

 

 

 

196,237

 

 

Stock option awards to purchase approximately 2.2 million, 2.2 million and 13,000 shares of common stock during the Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively, were outstanding, but were not included in the computation of weighted average diluted common share amounts as the effect of doing so would have been anti-dilutive.

Additionally, approximately 0.9 million, 0.1 million, and 0.7 million of performance-based restricted stock awards for Fiscal 2017, Fiscal 2016, and Fiscal 2015, respectively, were not included in the computation of weighted average diluted common share amounts because the number of shares ultimately issued is contingent on the Company’s performance compared to pre-established performance goals.  

Refer to Note 12 to the Consolidated Financial Statements for additional information regarding share-based compensation.

v3.8.0.1
Accounts Receivable, net
12 Months Ended
Feb. 03, 2018
Receivables [Abstract]  
Accounts Receivable, net

6.  Accounts Receivable, net

Accounts receivable, net are comprised of the following:

 

 

 

February 3,

 

 

January 28,

 

(In thousands)

 

2018

 

 

2017

 

Franchise and license receivable

 

$

32,930

 

 

$

35,983

 

Merchandise sell-offs and vendor receivables

 

 

15,742

 

 

 

20,089

 

Credit card program receivable

 

 

9,544

 

 

 

11,869

 

Tax refunds

 

 

8,271

 

 

 

4,731

 

Landlord construction allowances

 

 

5,605

 

 

 

2,412

 

Gift card receivable

 

 

1,799

 

 

 

6,567

 

Other items

 

 

4,413

 

 

 

4,983

 

Total

 

$

78,304

 

 

$

86,634

 

 

v3.8.0.1
Property and Equipment
12 Months Ended
Feb. 03, 2018
Property Plant And Equipment [Abstract]  
Property and Equipment

7.  Property and Equipment

Property and equipment consists of the following:

 

 

 

February 3,

 

 

January 28,

 

(In thousands)

 

2018

 

 

2017

 

Land

 

$

17,910

 

 

$

17,910

 

Buildings

 

 

206,505

 

 

 

204,890

 

Leasehold improvements

 

 

630,725

 

 

 

606,522

 

Fixtures and equipment

 

 

1,143,140

 

 

 

1,028,117

 

Construction in progress

 

 

25,595

 

 

 

26,858

 

Property and equipment, at cost

 

$

2,023,875

 

 

$

1,884,297

 

Less:  Accumulated depreciation

 

 

(1,299,636

)

 

 

(1,176,500

)

Property and equipment, net

 

$

724,239

 

 

$

707,797

 

 

Depreciation expense is summarized as follows:

 

 

 

For the Years Ended

 

 

 

February 3,

 

 

January 28,

 

 

January 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2016

 

Depreciation expense

 

$

158,969

 

 

$

152,644

 

 

$

140,616

 

 

Additionally, during Fiscal 2017, Fiscal 2016 and Fiscal 2015, the Company recorded $6.0 million, $1.5 million and $4.8 million, respectively, related to asset write-offs within depreciation and amortization expense.

 

v3.8.0.1
Intangible Assets
12 Months Ended
Feb. 03, 2018
Goodwill And Intangible Assets Disclosure [Abstract]  
Intangible Assets

8.  Intangible Assets

Intangible assets include costs to acquire and register the Company’s trademark assets. The following table represents intangible assets as of February 3, 2018 and January 28, 2017:

 

 

 

February 3,

 

 

January 28,

 

(In thousands)

 

2018

 

 

2017

 

Trademarks, at cost

 

$

70,322

 

 

$

68,978

 

Less: Accumulated amortization

 

 

(23,656

)

 

 

(19,605

)

Intangible assets, net

 

$

46,666

 

 

$

49,373

 

 

Amortization expense is summarized as follows:

 

 

 

For the Years Ended

 

 

 

February 3,

 

 

January 28,

 

 

January 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2016

 

Amortization expense

 

$

4,551

 

 

$

4,007

 

 

$

3,483

 

 

The table below summarizes the estimated future amortization expense for intangible assets existing as of February 3, 2018 for the next five Fiscal Years:

 

 

 

Future

 

(In thousands)

 

Amortization

 

2018

 

$

3,732

 

2019

 

$

3,732

 

2020

 

$

3,059

 

2021

 

$

2,732

 

2022

 

$

2,730

 

 

 

v3.8.0.1
Other Credit Arrangements
12 Months Ended
Feb. 03, 2018
Debt Disclosure [Abstract]  
Other Credit Arrangements

9.  Other Credit Arrangements

In Fiscal 2014, the Company entered into a new Credit Agreement (“Credit Agreement”) for a five-year, syndicated, asset-based revolving credit facilities (the “Credit Facilities”). The Credit Agreement provides senior secured revolving credit for loans and letters of credit up to $400 million, subject to customary borrowing base limitations. The Credit Facilities provide increased financial flexibility and take advantage of a favorable credit environment.

All obligations under the Credit Facilities are unconditionally guaranteed by certain subsidiaries. The obligations under the Credit Agreement are secured by a first-priority security interest in certain working capital assets of the borrowers and guarantors, consisting primarily of cash, receivables, inventory and certain other assets, and will be further secured by first-priority mortgages on certain real property.

As of February 3, 2018, the Company was in compliance with the terms of the Credit Agreement and had $8.1 million outstanding in stand-by letters of credit. No loans were outstanding under the Credit Agreement on February 3, 2018.

Additionally, the Company has a borrowing agreement with one financial institution under which it may borrow an aggregate of $5.0 million USD for the purposes of trade letter of credit issuances.  The availability of any future borrowings under the trade letter of credit facilities is subject to acceptance by the respective financial institutions.

As of February 3, 2018, the Company had no outstanding trade letters of credit.  

v3.8.0.1
Leases
12 Months Ended
Feb. 03, 2018
Leases [Abstract]  
Leases

10.  Leases

The Company leases all store premises, some of its office space and certain information technology and office equipment. The store leases generally have initial terms of 10 years and are classified as operating leases. Most of these store leases provide for base rentals and the payment of a percentage of sales as additional contingent rent when sales exceed specified levels. Additionally, most leases contain construction allowances and/or rent holidays. In recognizing landlord incentives and minimum rent expense, the Company amortizes the items on a straight-line basis over the lease term (including the pre-opening build-out period).

A summary of fixed minimum and contingent rent expense for all operating leases follows:

 

 

 

For the Years Ended

 

 

 

February 3,

 

 

January 28,

 

 

January 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2016

 

Store rent:

 

 

 

 

 

 

 

 

 

 

 

 

Fixed minimum

 

$

298,458

 

 

$

286,850

 

 

$

282,300

 

Contingent

 

 

9,566

 

 

 

8,519

 

 

 

9,035

 

Total store rent, excluding common area maintenance

   charges, real estate taxes and certain other expenses

 

$

308,025

 

 

$

295,369

 

 

$

291,335

 

Offices, distribution facilities, equipment and other

 

 

26,960

 

 

 

18,172

 

 

 

16,063

 

Total rent expense

 

$

334,985

 

 

$

313,541

 

 

$

307,398

 

 

In addition, the Company is typically responsible under its store, office and distribution center leases for tenant occupancy costs, including maintenance costs, common area charges, real estate taxes and certain other expenses.

The table below summarizes future minimum lease obligations, consisting of fixed minimum rent, under operating leases in effect at February 3, 2018:

 

(In thousands)

 

Future Minimum

 

Fiscal years:

 

Lease Obligations

 

2018

 

$

286,300

 

2019

 

$

252,150

 

2020

 

$

229,056

 

2021

 

$

202,605

 

2022

 

$

168,993

 

Thereafter

 

$

435,616

 

Total

 

$

1,574,720

 

 

v3.8.0.1
Other Comprehensive Income
12 Months Ended
Feb. 03, 2018
Equity [Abstract]  
Other Comprehensive Income

11.  Other Comprehensive Income

The accumulated balances of other comprehensive income included as part of the Consolidated Statements of Stockholders’ Equity follow:

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

Before

 

 

Tax

 

 

Other

 

 

 

Tax

 

 

Benefit

 

 

Comprehensive

 

(In thousands)

 

Amount

 

 

(Expense)

 

 

Income

 

Balance at January 31, 2015

 

$

(9,944

)

 

 

 

 

$

(9,944

)

Foreign currency translation loss (1)

 

 

(14,535

)

 

 

 

 

 

(14,535

)

Loss on long-term intra-entity foreign currency transactions

 

 

(8,805

)

 

 

3,416

 

 

 

(5,389

)

Balance at January 30, 2016

 

$

(33,284

)

 

 

 

 

$

(29,868

)

Foreign currency translation loss (1)

 

 

(8,380

)

 

 

 

 

 

(8,380

)

Gain on long-term intra-entity foreign currency transactions

 

 

2,919

 

 

 

(1,133

)

 

 

1,786

 

Balance at January 28, 2017

 

$

(38,745

)

 

 

2,283

 

 

$