Attached files
file | filename |
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EX-32.1 - EX-32.1 - Zumiez Inc | zumz-ex321_7.htm |
EX-31.2 - EX-31.2 - Zumiez Inc | zumz-ex312_8.htm |
EX-31.1 - EX-31.1 - Zumiez Inc | zumz-ex311_6.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED MAY 2, 2020
OR
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 000-51300
ZUMIEZ INC.
(Exact name of registrant as specified in its charter)
Washington |
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91-1040022 |
(State or other jurisdiction of |
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(I.R.S. Employer |
incorporation or organization) |
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Identification No.) |
4001 204th Street SW, Lynnwood, WA 98036
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (425) 551-1500
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
☐ |
Accelerated filer |
☒ |
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Non-accelerated filer |
☐ |
Smaller reporting company |
☐ |
Emerging growth company |
☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock |
ZUMZ |
Nasdaq Global Select |
At June 1, 2020, there were 25,430,813 shares outstanding of common stock.
FORM 10-Q
TABLE OF CONTENTS
Part I. |
Financial Information |
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Item 1. |
Condensed Consolidated Financial Statements |
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3 |
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4 |
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5 |
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6 |
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7 |
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8 |
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Item 2. |
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17 |
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Item 3. |
30 |
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Item 4. |
30 |
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Part II. |
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Item 1. |
31 |
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Item 1A. |
31 |
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Item 2. |
31 |
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Item 3. |
31 |
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Item 4. |
31 |
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Item 5. |
31 |
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Item 6. |
32 |
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33 |
2
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
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May 2, 2020 |
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February 1, 2020 |
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(Unaudited) |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
63,731 |
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$ |
52,428 |
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Marketable securities |
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153,494 |
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198,768 |
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Receivables |
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16,837 |
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16,841 |
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Inventories |
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136,354 |
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135,095 |
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Prepaid expenses and other current assets |
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5,179 |
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9,456 |
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Total current assets |
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375,595 |
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412,588 |
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Fixed assets, net |
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109,573 |
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113,051 |
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Operating lease right-of-use assets |
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285,416 |
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301,784 |
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Goodwill |
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56,706 |
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57,099 |
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Intangible assets, net |
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14,366 |
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14,564 |
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Deferred tax assets, net |
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11,206 |
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6,303 |
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Other long-term assets |
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8,571 |
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8,869 |
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Total long-term assets |
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485,838 |
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501,670 |
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Total assets |
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$ |
861,433 |
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$ |
914,258 |
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Liabilities and Shareholders’ Equity |
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Current liabilities |
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Trade accounts payable |
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$ |
49,497 |
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$ |
47,787 |
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Accrued payroll and payroll taxes |
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13,173 |
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23,653 |
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Income taxes payable |
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4,430 |
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4,686 |
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Operating lease liabilities |
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70,584 |
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61,800 |
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Other liabilities |
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19,197 |
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21,784 |
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Total current liabilities |
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156,881 |
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159,710 |
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Long-term operating lease liabilities |
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269,608 |
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284,717 |
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Other long-term liabilities |
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3,790 |
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3,745 |
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Total long-term liabilities |
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273,398 |
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288,462 |
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Total liabilities |
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430,279 |
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448,172 |
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Commitments and contingencies (Note 5) |
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Shareholders’ equity |
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Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding |
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— |
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— |
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Common stock, no par value, 50,000 shares authorized; 25,431 shares issued and outstanding at May 2, 2020 and 25,828 shares issued and outstanding at February 1, 2020 |
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163,349 |
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161,458 |
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Accumulated other comprehensive loss |
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(14,896 |
) |
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(12,591 |
) |
Retained earnings |
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282,701 |
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317,219 |
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Total shareholders’ equity |
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431,154 |
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466,086 |
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Total liabilities and shareholders’ equity |
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$ |
861,433 |
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$ |
914,258 |
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See accompanying notes to condensed consolidated financial statements
3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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Three Months Ended |
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May 2, 2020 |
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May 4, 2019 |
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Net sales |
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$ |
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137,772 |
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$ |
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212,928 |
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Cost of goods sold |
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114,036 |
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146,464 |
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Gross profit |
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23,736 |
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66,464 |
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Selling, general and administrative expenses |
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51,584 |
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65,496 |
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Operating (loss) profit |
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(27,848 |
) |
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968 |
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Interest income, net |
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1,074 |
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852 |
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Other income, net |
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106 |
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153 |
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(Loss) earnings before income taxes |
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(26,668 |
) |
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1,973 |
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Provision for income taxes |
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(5,567 |
) |
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1,180 |
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Net (loss) income |
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$ |
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(21,101 |
) |
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$ |
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793 |
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Basic (loss) earnings per share |
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$ |
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(0.84 |
) |
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$ |
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0.03 |
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Diluted (loss) earnings per share |
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$ |
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(0.84 |
) |
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$ |
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0.03 |
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Weighted average shares used in computation of (loss) earnings per share: |
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Basic |
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25,040 |
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25,090 |
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Diluted |
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25,040 |
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25,351 |
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See accompanying notes to condensed consolidated financial statements
4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
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Three Months Ended |
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May 2, 2020 |
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May 4, 2019 |
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Net (loss) income |
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$ |
(21,101 |
) |
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$ |
793 |
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Other comprehensive loss, net of tax and reclassification adjustments: |
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Foreign currency translation |
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(1,961 |
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(3,035 |
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Net change in unrealized loss on available-for-sale debt securities |
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(344 |
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(16 |
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Other comprehensive loss, net |
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(2,305 |
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(3,051 |
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Comprehensive loss |
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$ |
(23,406 |
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$ |
(2,258 |
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See accompanying notes to condensed consolidated financial statements
5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(In thousands)
(Unaudited)
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Common Stock |
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Accumulated Other Comprehensive |
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Retained |
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Shares |
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Amount |
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Loss |
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Earnings |
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Total |
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Balance at February 1, 2020 |
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25,828 |
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$ |
161,458 |
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$ |
(12,591 |
) |
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$ |
317,219 |
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$ |
466,086 |
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Net loss |
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— |
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— |
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— |
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(21,101 |
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(21,101 |
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Other comprehensive loss, net |
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— |
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— |
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(2,305 |
) |
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— |
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(2,305 |
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Issuance and exercise of stock-based awards |
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297 |
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335 |
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— |
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— |
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335 |
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Stock-based compensation expense |
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— |
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1,556 |
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— |
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— |
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1,556 |
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Repurchase of common stock |
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(694 |
) |
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— |
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— |
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(13,417 |
) |
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(13,417 |
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Balance at May 2, 2020 |
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25,431 |
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$ |
163,349 |
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$ |
(14,896 |
) |
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$ |
282,701 |
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$ |
431,154 |
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Common Stock |
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Accumulated Other Comprehensive |
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Retained |
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Shares |
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Amount |
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Income (Loss) |
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Earnings |
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Total |
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Balance at February 2, 2019 |
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25,521 |
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$ |
153,066 |
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$ |
(9,224 |
) |
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$ |
256,614 |
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$ |
400,456 |
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Net income |
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— |
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— |
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— |
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793 |
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793 |
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Other comprehensive loss, net |
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— |
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— |
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(3,051 |
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— |
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(3,051 |
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Issuance and exercise of stock-based awards |
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220 |
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345 |
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— |
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— |
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345 |
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Stock-based compensation expense |
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— |
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1,693 |
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— |
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— |
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1,693 |
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Cumulative effect of accounting change under ASC 842 |
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— |
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— |
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— |
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(6,276 |
) |
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(6,276 |
) |
Balance at May 4, 2019 |
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25,741 |
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$ |
155,104 |
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$ |
(12,275 |
) |
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$ |
251,131 |
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$ |
393,960 |
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See accompanying notes to condensed consolidated financial statements
6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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Three Months Ended |
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May 2, 2020 |
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May 4, 2019 |
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Cash flows from operating activities: |
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Net (loss) income |
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$ |
(21,101 |
) |
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$ |
793 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation, amortization and accretion |
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6,096 |
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6,263 |
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Noncash lease expense |
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14,996 |
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13,371 |
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Deferred taxes |
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(4,856 |
) |
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1,249 |
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Stock-based compensation expense |
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1,556 |
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1,693 |
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Impairment of long-lived assets |
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1,514 |
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|
123 |
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Other |
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(173 |
) |
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|
101 |
|
Changes in operating assets and liabilities: |
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|
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Receivables |
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1,918 |
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4,708 |
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Inventories |
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(2,031 |
) |
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(7,540 |
) |
Prepaid expenses and other assets |
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4,354 |
|
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(167 |
) |
Trade accounts payable |
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1,074 |
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19,568 |
|
Accrued payroll and payroll taxes |
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(10,423 |
) |
|
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(5,636 |
) |
Income taxes payable |
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(1,078 |
) |
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(7,104 |
) |
Operating lease liabilities |
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(6,948 |
) |
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(13,770 |
) |
Other liabilities |
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(2,440 |
) |
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(3,790 |
) |
Net cash (used in) provided by operating activities |
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(17,542 |
) |
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|
9,862 |
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Cash flows from investing activities: |
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Additions to fixed assets |
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(2,504 |
) |
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(3,331 |
) |
Purchases of marketable securities and other investments |
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(9,106 |
) |
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(33,385 |
) |
Sales and maturities of marketable securities and other investments |
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54,344 |
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|
39,001 |
|
Net cash provided by investing activities |
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|
42,734 |
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|
2,285 |
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Cash flows from financing activities: |
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|
|
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Proceeds from issuance and exercise of stock-based awards |
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|
428 |
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|
583 |
|
Payments for tax withholdings on equity awards |
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(93 |
) |
|
|
(238 |
) |
Common stock repurchased |
|
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(13,417 |
) |
|
|
— |
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Net cash (used in) provided by financing activities |
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(13,082 |
) |
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|
345 |
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
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(853 |
) |
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(466 |
) |
Net increase in cash, cash equivalents, and restricted cash |
|
|
11,257 |
|
|
|
12,026 |
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Cash, cash equivalents, and restricted cash, beginning of period |
|
|
58,991 |
|
|
|
54,271 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
70,248 |
|
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$ |
66,297 |
|
Supplemental disclosure on cash flow information: |
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Cash paid during the period for income taxes |
|
$ |
343 |
|
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$ |
7,038 |
|
Accrual for purchases of fixed assets |
|
|
1,976 |
|
|
|
1,583 |
|
See accompanying notes to condensed consolidated financial statements
7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Nature of Business and Basis of Presentation
Nature of Business—Zumiez Inc., including its wholly owned subsidiaries, (the “Company,” “we,” “us,” “its” and “our”) is a leading specialty retailer of apparel, footwear, accessories and hardgoods for young men and women who want to express their individuality through the fashion, music, art and culture of action sports, streetwear, and other unique lifestyles. At May 2, 2020, we operated 719 stores; 606 in the United States (“U.S.”), 52 in Canada, 49 in Europe, and 12 in Australia. Beginning in mid-March, we experienced global store closures as a result of a novel strain of coronavirus (“COVID-19”) that extended for a significant portion of the three months ended May 2, 2020. As of May 2, 2020, 65 of our stores, which represents 9% of our total count, were open and operating. We are monitoring the evolving circumstances surrounding COVID-19 and will continue to reopen stores as it is safe to do so. We operate under the names Zumiez, Blue Tomato and Fast Times. Additionally, we operate ecommerce websites at zumiez.com, zumiez.ca, blue-tomato.com and fasttimes.com.au.
Fiscal Year—We use a fiscal calendar widely used by the retail industry that results in a fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to January 31. Each fiscal year consists of four 13-week quarters, with an extra week added to the fourth quarter every five or six years. The three months ended May 2, 2020 and May 4, 2019 were 13-week periods.
Basis of Presentation—The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of Zumiez Inc. and its wholly-owned subsidiaries. All significant intercompany transactions and balances are eliminated in consolidation.
In our opinion, the unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the condensed consolidated balance sheets, operating results and cash flows for the periods presented.
The financial data at February 1, 2020 is derived from audited consolidated financial statements, which are included in our Annual Report on Form 10-K for the year ended February 1, 2020, and should be read in conjunction with the audited consolidated financial statements and notes thereto. Interim results are not necessarily indicative of results for the full fiscal year due to seasonality and other factors.
Use of Estimates—The preparation of financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the reporting period. These estimates can also affect supplemental information disclosed by us, including information about contingencies, risk and financial condition. Actual results could differ from these estimates and assumptions.
Reclassification—Certain prior period restricted cash amounts have been reclassified to be consistent with current year presentation within our consolidated statement of cash flows.
COVID-19— In December 2019, COVID-19 was first identified, and in March 2020, the World Health Organization categorized COVID-19 as a pandemic. To help control the spread of the virus and protect the health and safety of our employees and customers, we began closing our retail stores across all markets that we operate between March 16, 2020 and March 19, 2020. Changes in our operations due to COVID-19 resulted in material reductions in revenues and operating income during the first fiscal quarter and are expected to have continued negative impacts through the balance of the year.
The COVID-19 pandemic remains a rapidly evolving situation. The continuation of the outbreak may cause prolonged periods of store closures and modified operating schedules and may result in changes in customer behaviors, including a potential reduction in consumer discretionary spending in our stores. These may lead to increased asset recovery and valuation risks, such as impairment of our stores and other assets and an inability to realize deferred tax assets due to sustaining losses in certain jurisdictions. Uncertainties in the global economy could impact the financial viability of our suppliers, vendors and other business partners, which could interrupt our supply chain, limit our ability to sell to our consumer and require other changes to our operations. These and other factors could adversely impact our net revenues, operating income and earnings per share financial measures.
8
Restricted Cash— Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded as restricted cash in other long-term assets on our condensed consolidated balance sheets. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statement of cash flows (in thousands):
|
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February 1, 2020 |
|
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February 2, 2019 |
|
|||
Cash and cash equivalents |
|
$ |
|
52,428 |
|
|
$ |
52,422 |
|
Restricted cash included in other long-term assets |
|
|
|
6,563 |
|
|
|
1,849 |
|
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows |
|
$ |
|
58,991 |
|
|
$ |
54,271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
May 2, 2020 |
|
|
May 4, 2019 |
|
|||
Cash and cash equivalents |
|
$ |
|
63,731 |
|
|
$ |
60,616 |
|
Restricted cash included in other long-term assets |
|
|
|
6,517 |
|
|
|
5,681 |
|
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows |
|
$ |
|
70,248 |
|
|
$ |
66,297 |
|
Restricted cash included in other long-term assets represents amounts held as insurance collateral and collateral for bank guarantees on certain store operating leases.
Significant Accounting Policies—Our significant accounting policies are detailed in Note 2, “Summary of Significant Accounting Policies” within Part IV Item 15 of the Annual Report on Form 10-K for the year ended February 1, 2020. There have been no changes in accounting policies other than specific accounting considerations herein that we have taken as a result of COVID-19.
Zumiez evaluates its long-lived assets for indicators of impairment quarterly or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. Given the substantial reduction in our sales and reduced cash flow projections as a result of the store closures due to the COVID-19 pandemic, we determined that a triggering event occurred and that an impairment assessment was warranted for certain stores. This analysis resulted in the Company recording $1.5M of impairment charges related to long-lived assets and operating lease right of use assets in the first quarter of fiscal 2020. As we open our stores and have better visibility to the current operating environment including the potential sublease market this may result in additional impairment of our long-lived assets later in fiscal 2020.
We assess goodwill and indefinite-lived intangible assets for impairment annually in the fourth quarter or more frequently if indicators of impairment arise. We perform this analysis at the reporting unit level by determining whether the fair value of a reporting unit is less than its carrying amount. Given the aforementioned circumstances surrounding COVID-19, we determined that a triggering event had, in fact, occurred. Based on our prior year fourth quarter impairment analysis, in which the fair values of all reporting units were in excess of their carrying amounts, we concluded that impairment was not needed. At this time, we do not believe that additional impairment of goodwill for the first fiscal quarter of 2020 is warranted; however, we are currently monitoring the ongoing negative effects of COVID-19 and if our results decline from our current estimates, we may incur future potential impairments.
Merchandise inventories are stated at the lower of cost (primarily average cost) or net realizable value. We record reserves for obsolete and slow-moving inventory and for estimated shrinkage between physical inventory counts. During the three months ended May 2, 2020, we recorded no inventory write-offs as a result of excess inventory due to the temporary closure of our retail stores. However, the pace of store reopenings as well as future customer behavior, among other factors, may result in additional inventory write-offs later in fiscal 2020.
During the first quarter of fiscal 2020, we received an immaterial amount of COVID-19 related lease concessions and deferrals for certain stores in United States, Europe and Australia, generally correlating with the limited time period our stores were closed during stay-at-home mandates. Consistent with updated guidance from the Financial Accounting Standards Board (“FASB”) in April 2020, we have elected to treat COVID-19-related rent concessions as variable lease expense and lease deferrals as there is no change in the contract assuming they are short-term in nature. COVID-19 related rent concessions that are expected to extend well beyond the fiscal year or change the other terms in the lease are treated as lease modifications and a full re-valuation of the right of use asset and liability is performed. We are having ongoing conversations with landlords in various markets to seek commercially reasonable lease concessions given the current environment.
Recent Accounting Standards— In April 2020, the FASB issued interpretive guidance that indicated it would be acceptable for entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842, as though enforceable rights and obligations for those concessions existed (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the contract). The FASB also indicated it was acceptable to treat deferral of lease payments with no substantive changes to the contract as if there was no change to the contract. The Company has elected to treat COVID-19 related lease concessions as variable lease expense and COVID-19 related lease deferrals as there was no change to the contract assuming they are short-term in nature. For leases where rent concessions are
9
expected to extend well beyond the fiscal year or change the other terms of the lease these are treated as a lease modification. We have adopted this standard prospectively for the fiscal year beginning February 2, 2020 and due to the changing landscape are not able to estimate the impact on our condensed consolidated financial statements for fiscal year 2020.
In December 2019, the FASB issued an update simplifying the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. We early adopted this update for the fiscal year, and interim periods, beginning February 2, 2020. The impact on our condensed consolidated financial statements was not material.
In August 2018, the FASB issued a new standard over customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The standard requires implementation costs incurred in a hosting arrangement that is a service contract be accounted for in accordance with ASC 350-40. The new standard is effective for annual periods beginning after December 15, 2019, with early adoption permitted. We adopted this standard prospectively for the fiscal year beginning February 3, 2019 and the impact on our condensed consolidated financial statements was not material.
In January 2017, the FASB issued a new standard simplifying the test for goodwill impairment. The standard eliminates Step 2 from the goodwill impairment test. The standard requires entities perform the goodwill impairment test by comparing the fair value of a reporting unit to its carrying amount and recognize the impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total goodwill allocated to that reporting unit. The new standard is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. We do expect this standard to have a material impact on our condensed consolidated financial statements.
2. Revenue
The following table disaggregates net sales by geographic region (in thousands):
|
|
Three Months Ended |
|
||||||
|
|
May 2, 2020 |
|
|
May 4, 2019 |
|
|||
United States |
|
$ |
|
110,364 |
|
|
$ |
176,918 |
|
Canada |
|
|
|
6,173 |
|
|
|
11,032 |
|
Europe |
|
|
|
19,600 |
|
|
|
22,946 |
|
Australia |
|
|
|
1,635 |
|
|
|
2,032 |
|
Net sales |
|
$ |
|
137,772 |
|
|
$ |
212,928 |
|
Net sales for the three months ended May 2, 2020 included a $1.0 million decrease due to the change in foreign exchange rates, which consisted of $0.2 million in Canada, $0.6 million in Europe and $0.2 million in Australia.
Our contract liabilities include deferred revenue related to our customer loyalty program and gift cards. The current liability for gift cards was $3.3 million at May 2, 2020 and $4.3 million at February 1, 2020, respectively. Deferred revenue related to our STASH loyalty program was $0.5 million at May 2, 2020 and $0.7 million at February 1, 2020, respectively.
10
3. Cash, Cash Equivalents and Marketable Securities
The following tables summarize the estimated fair value of our cash, cash equivalents and marketable securities and the gross unrealized holding gains and losses (in thousands)
|
|
May 2, 2020 |
|
|||||||||||||
|
|
Amortized Cost |
|
|
Gross Unrealized Holding Gains |
|
|
Gross Unrealized Holding Losses |
|
|
Estimated Fair Value |
|
||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
45,384 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
45,384 |
|
Money market funds |
|
|
15,747 |
|
|
|
— |
|
|
|
— |
|
|
|
15,747 |
|
U.S. treasury and government agency securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Corporate debt securities |
|
|
2,600 |
|
|
|
— |
|
|
|
— |
|
|
|
2,600 |
|
Total cash and cash equivalents |
|
|
63,731 |
|
|
|
— |
|
|
|
— |
|
|
|
63,731 |
|
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and government agency securities |
|
|
19,936 |
|
|
|
399 |
|
|
|
— |
|
|
|
20,335 |
|
Corporate debt securities |
|
|
115,947 |
|
|
|
1,001 |
|
|
|
(401 |
) |
|
|
116,547 |
|
State and local government securities |
|
|
16,601 |
|
|
|
117 |
|
|
|
(106 |
) |
|
|
16,612 |
|
Variable-rate demand notes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total marketable securities |
|
$ |
152,484 |
|
|
$ |
1,517 |
|
|
$ |
(507 |
) |
|
$ |
153,494 |
|
|
|
February 1, 2020 |
|
|||||||||||||
|
|
Amortized Cost |
|
|
Gross Unrealized Holding Gains |
|
|
Gross Unrealized Holding Losses |
|
|
Estimated Fair Value |
|
||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
34,233 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
34,233 |
|
Money market funds |
|
|
9,850 |
|
|
|
— |
|
|
|
— |
|
|
|
9,850 |
|
Corporate debt securities |
|
|
8,345 |
|
|
|
— |
|
|
|
— |
|
|
|
8,345 |
|
Total cash and cash equivalents |
|
|
52,428 |
|
|
|
— |
|
|
|
— |
|
|
|
52,428 |
|
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and government agency securities |
|
|
25,452 |
|
|
|
142 |
|
|
|
(2 |
) |
|
|
25,592 |
|
Corporate debt securities |
|
|
148,608 |
|
|
|
1,121 |
|
|
|
— |
|
|
|
149,729 |
|
State and local government securities |
|
|
22,310 |
|
|
|
207 |
|
|
|
— |
|
|
|
22,517 |
|
Variable-rate demand notes |
|
|
930 |
|
|
|
— |
|
|
|
— |
|
|
|
930 |
|
Total marketable securities |
|
$ |
197,300 |
|
|
$ |
1,470 |
|
|
$ |
(2 |
) |
|
$ |
198,768 |
|
All of our marketable securities have an effective maturity date of five years or less and may be liquidated, at our discretion, prior to maturity.
The following tables summarize the gross unrealized holding losses and fair value for investments in an unrealized loss position, and the length of time that individual securities have been in a continuous loss position (in thousands):
|
|
May 2, 2020 |
|
|||||||||||||||||||||
|
|
Less Than 12 Months |
|
|
12 Months or Greater |
|
|
Total |
|
|||||||||||||||
|
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
||||||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and government agency securities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Corporate debt securities |
|
$ |
25,160 |
|
|
$ |
(401 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
25,160 |
|
|
$ |
(401 |
) |
State and local government securities |
|
$ |
4,664 |
|
|
$ |
(106 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,664 |
|
|
$ |
(106 |
) |
Total marketable securities |
|
$ |
29,824 |
|
|
$ |
(507 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
29,824 |
|
|
$ |
(507 |
) |
11
|
|
February 1, 2020 |
|
|||||||||||||||||||||
|
|
Less Than 12 Months |
|
|
12 Months or Greater |
|
|
Total |
|
|||||||||||||||
|
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
||||||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and government agency securities |
|
$ |
567 |
|
|
$ |
(2 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
567 |
|
|
$ |
(2 |
) |
Corporate debt securities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
State and local government securities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Total marketable securities |
|
$ |
567 |
|
|
$ |
(2 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
567 |
|
|
$ |
(2 |
) |
We did not record a realized loss for other-than-temporary impairments during the three months ended May 2, 2020 or May 4, 2019.
4. Leases
At May 2, 2020, we had operating leases for our retail stores, certain distribution and fulfillment facilities, vehicles and equipment. Our remaining lease terms vary from one month to ten years, with varying renewal and termination options. At May 2, 2020, the weighted-average of the remaining lease term was 5.7 years and the weighted-average discount rate was 3.3%.
The following table presents components of lease expense (in thousands):
|
|
Three Months Ended |
|
|||||
|
|
May 2, 2020 |
|
|
May 4, 2019 |
|
||
Operating lease expense |
|
$ |
17,953 |
|
|
$ |
17,082 |
|
Variable lease expense |
|
|
676 |
|
|
|
894 |
|
Total lease expense (1) |
|
$ |
18,629 |
|
|
$ |
17,976 |
|
|
(1) |
Total lease expense includes short-term lease expense and sublease income which is immaterial to the Company. Total lease expense does not include right-of-use asset impairment charges, common area maintenance charges and other non-lease components. |
Supplemental cash flow information related to leases is as follows (in thousands):
|
|
Three Months Ended |
|
|||||
|
|
May 2, 2020 |
|
|
May 4, 2019 |
|
||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
|
|
Operating cash flows from operating leases |
|
$ |
(6,948 |
) |
|
$ |
(13,770 |
) |
Right-of-use assets obtained in exchange for new operating lease liabilities |
|
|
2,214 |
|
|
|
20,296 |
|
At May 2, 2020, the maturities of our operating leases liabilities are as follows (in thousands):
Fiscal 2020 |
|
$ |
61,945 |
|
Fiscal 2021 |
|
|
72,657 |
|
Fiscal 2022 |
|
|
63,948 |
|
Fiscal 2023 |
|
|
53,603 |
|
Fiscal 2024 |
|
|
46,058 |
|
Thereafter |
|
|
73,943 |
|