þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Pennsylvania | 75-3000378 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
701 Market Street, Suite 300 | ||
Philadelphia, PA | 19106 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock | FIVE | NASDAQ Global Select Market |
Large accelerated filer | ý | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ |
INDEX | ||
Page | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. |
May 4, 2019 | February 2, 2019 | May 5, 2018 | |||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 220,778 | $ | 251,748 | $ | 84,399 | |||||
Short-term investment securities | 67,875 | 85,412 | 189,804 | ||||||||
Inventories | 268,437 | 243,636 | 215,376 | ||||||||
Prepaid income taxes | 1,517 | 1,337 | 2,168 | ||||||||
Prepaid expenses and other current assets | 47,167 | 60,124 | 37,378 | ||||||||
Total current assets | 605,774 | 642,257 | 529,125 | ||||||||
Property and equipment, net of accumulated depreciation and amortization of $177,885, $168,588, and $136,983, respectively. | 319,221 | 301,297 | 195,885 | ||||||||
Operating lease assets | 659,155 | — | — | ||||||||
Deferred income taxes | 4,796 | 6,126 | 5,455 | ||||||||
Long-term investment securities | — | — | 2,930 | ||||||||
Other assets | 3,330 | 2,584 | 1,645 | ||||||||
$ | 1,592,276 | $ | 952,264 | $ | 735,040 | ||||||
Liabilities and Shareholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Line of credit | $ | — | $ | — | $ | — | |||||
Accounts payable | 112,460 | 103,692 | 95,081 | ||||||||
Income taxes payable | 19,263 | 20,626 | 28,146 | ||||||||
Accrued salaries and wages | 7,397 | 24,586 | 5,936 | ||||||||
Other accrued expenses | 72,416 | 104,201 | 51,500 | ||||||||
Operating lease liabilities | 109,339 | — | — | ||||||||
Total current liabilities | 320,875 | 253,105 | 180,663 | ||||||||
Deferred rent and other | — | 84,065 | 76,459 | ||||||||
Long-term operating lease liabilities | 635,402 | — | — | ||||||||
Total liabilities | 956,277 | 337,170 | 257,122 | ||||||||
Commitments and contingencies (note 6) | |||||||||||
Shareholders’ equity: | |||||||||||
Common stock, $0.01 par value. Authorized 120,000,000 shares; issued and outstanding 55,955,893, 55,759,048, and 55,620,019 shares, respectively. | 559 | 557 | 555 | ||||||||
Additional paid-in capital | 347,943 | 352,702 | 343,369 | ||||||||
Retained earnings | 287,497 | 261,835 | 133,994 | ||||||||
Total shareholders’ equity | 635,999 | 615,094 | 477,918 | ||||||||
$ | 1,592,276 | $ | 952,264 | $ | 735,040 |
Thirteen Weeks Ended | |||||||
May 4, 2019 | May 5, 2018 | ||||||
Net sales | $ | 364,762 | $ | 296,322 | |||
Cost of goods sold | 244,777 | 199,084 | |||||
Gross profit | 119,985 | 97,238 | |||||
Selling, general and administrative expenses | 95,516 | 72,532 | |||||
Operating income | 24,469 | 24,706 | |||||
Interest income, net | 1,687 | 1,079 | |||||
Income before income taxes | 26,156 | 25,785 | |||||
Income tax expense | 494 | 3,981 | |||||
Net income | $ | 25,662 | $ | 21,804 | |||
Basic income per common share | $ | 0.46 | $ | 0.39 | |||
Diluted income per common share | $ | 0.46 | $ | 0.39 | |||
Weighted average shares outstanding: | |||||||
Basic shares | 55,899,324 | 55,586,037 | |||||
Diluted shares | 56,268,586 | 56,001,939 |
Common stock | Additional paid-in capital | Retained earnings | Total shareholders’ equity | |||||||||||||||||
Shares | Amount | |||||||||||||||||||
Thirteen weeks ended May 4, 2019 | ||||||||||||||||||||
Balance, February 2, 2019 | 55,759,048 | $ | 557 | $ | 352,702 | $ | 261,835 | $ | 615,094 | |||||||||||
Share-based compensation expense | — | — | 2,822 | — | 2,822 | |||||||||||||||
Issuance of unrestricted stock awards | 307 | — | 45 | — | 45 | |||||||||||||||
Exercise of options to purchase common stock | 72,365 | 1 | 2,246 | — | 2,247 | |||||||||||||||
Vesting of restricted stock units and performance-based restricted stock units | 203,429 | 2 | — | — | 2 | |||||||||||||||
Common shares withheld for taxes | (79,256 | ) | (1 | ) | (9,872 | ) | — | (9,873 | ) | |||||||||||
Net income | — | — | — | 25,662 | 25,662 | |||||||||||||||
Balance, May 4, 2019 | 55,955,893 | $ | 559 | $ | 347,943 | $ | 287,497 | $ | 635,999 | |||||||||||
Thirteen weeks ended May 5, 2018 | ||||||||||||||||||||
Balance, February 3, 2018 | 55,438,089 | $ | 554 | $ | 346,300 | $ | 111,704 | $ | 458,558 | |||||||||||
Cumulative effect of ASC 606 adoption | — | — | — | 486 | 486 | |||||||||||||||
Share-based compensation expense | — | — | 2,692 | — | 2,692 | |||||||||||||||
Issuance of unrestricted stock awards | 876 | — | 62 | — | 62 | |||||||||||||||
Exercise of options to purchase common stock | 39,237 | — | 1,222 | — | 1,222 | |||||||||||||||
Vesting of restricted stock units and performance-based restricted stock units | 243,745 | 2 | — | — | 2 | |||||||||||||||
Common shares withheld for taxes | (101,928 | ) | (1 | ) | (6,907 | ) | — | (6,908 | ) | |||||||||||
Net income | — | — | — | 21,804 | 21,804 | |||||||||||||||
Balance, May 5, 2018 | 55,620,019 | $ | 555 | $ | 343,369 | $ | 133,994 | $ | 477,918 |
Thirteen Weeks Ended | |||||||
May 4, 2019 | May 5, 2018 | ||||||
Operating activities: | |||||||
Net income | $ | 25,662 | $ | 21,804 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 11,861 | 9,304 | |||||
Share-based compensation expense | 2,878 | 2,762 | |||||
Deferred income tax expense | 1,330 | 1,221 | |||||
Other non-cash expenses | (5 | ) | 7 | ||||
Changes in operating assets and liabilities: | |||||||
Inventories | (24,801 | ) | (28,339 | ) | |||
Prepaid income taxes | (180 | ) | 96 | ||||
Prepaid expenses and other assets | 12,212 | 8,031 | |||||
Accounts payable | 8,021 | 24,237 | |||||
Income taxes payable | (1,363 | ) | 2,871 | ||||
Accrued salaries and wages | (17,189 | ) | (16,970 | ) | |||
Deferred rent | (92,329 | ) | 3,390 | ||||
Operating leases | 85,586 | — | |||||
Other accrued expenses | 9,147 | 4,587 | |||||
Net cash provided by operating activities | 20,830 | 33,001 | |||||
Investing activities: | |||||||
Purchases of investment securities | (36,739 | ) | (49,251 | ) | |||
Sales, maturities, and redemptions of investment securities | 54,276 | 16,177 | |||||
Capital expenditures | (61,713 | ) | (22,513 | ) | |||
Net cash used in investing activities | (44,176 | ) | (55,587 | ) | |||
Financing activities: | |||||||
Proceeds from exercise of options to purchase common stock and vesting of restricted and performance-based restricted stock units | 2,249 | 1,224 | |||||
Common shares withheld for taxes | (9,873 | ) | (6,908 | ) | |||
Net cash used in financing activities | (7,624 | ) | (5,684 | ) | |||
Net decrease in cash and cash equivalents | (30,970 | ) | (28,270 | ) | |||
Cash and cash equivalents at beginning of period | 251,748 | 112,669 | |||||
Cash and cash equivalents at end of period | $ | 220,778 | $ | 84,399 | |||
Supplemental disclosures of cash flow information: | |||||||
Non-cash investing activities | |||||||
(Decrease) increase in accrued purchases of property and equipment | $ | (31,931 | ) | $ | 1,026 |
(1) | Summary of Significant Accounting Policies |
(a) | Description of Business |
(b) | Fiscal Year |
Impact of ASC 842 Adoption | |||||||||||
As Reported February 2, 2019 | Adjustments | Adjusted February 3, 2019 | |||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Prepaid expenses and other current assets | 60,124 | (11,077 | ) | 49,047 | |||||||
Total current assets | 642,257 | (11,077 | ) | 631,180 | |||||||
Operating lease assets | — | 628,924 | 628,924 | ||||||||
$ | 952,264 | $ | 617,847 | $ | 1,570,111 | ||||||
Liabilities and Shareholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Other accrued expenses | 104,201 | (8,033 | ) | 96,168 | |||||||
Total current liabilities | 253,105 | (8,033 | ) | 245,072 | |||||||
Deferred rent and other | 84,065 | (84,065 | ) | — | |||||||
Long-term operating lease liabilities | — | 709,945 | 709,945 | ||||||||
Total liabilities | 337,170 | 617,847 | 955,017 | ||||||||
Shareholders’ equity: | |||||||||||
Total shareholders’ equity | 615,094 | — | 615,094 | ||||||||
$ | 952,264 | $ | 617,847 | $ | 1,570,111 |
As of May 4, 2019 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | |||||||||||||
Short-term: | ||||||||||||||||
Corporate bonds | $ | 65,451 | $ | — | $ | 23 | $ | 65,428 | ||||||||
Municipal bonds | 2,424 | — | 1 | 2,423 | ||||||||||||
Total | $ | 67,875 | $ | — | $ | 24 | $ | 67,851 |
As of February 2, 2019 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | |||||||||||||
Short-term: | ||||||||||||||||
Corporate bonds | $ | 83,128 | $ | — | $ | 63 | $ | 83,065 | ||||||||
Municipal bonds | 2,284 | — | 2 | 2,282 | ||||||||||||
Total | $ | 85,412 | $ | — | $ | 65 | $ | 85,347 |
As of May 5, 2018 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | |||||||||||||
Short-term: | ||||||||||||||||
Corporate bonds | $ | 177,966 | $ | — | $ | 505 | $ | 177,461 | ||||||||
Municipal bonds | 11,838 | — | 11 | 11,827 | ||||||||||||
Total | $ | 189,804 | $ | — | $ | 516 | $ | 189,288 | ||||||||
Long-term: | ||||||||||||||||
Corporate bonds | $ | 856 | $ | — | $ | 6 | $ | 850 | ||||||||
Municipal bonds | 2,074 | — | 8 | 2,066 | ||||||||||||
Total | $ | 2,930 | $ | — | $ | 14 | $ | 2,916 |
(2) | Revenue from Contracts with Customers |
Thirteen Weeks Ended | Thirteen Weeks Ended | ||||||||||||
May 4, 2019 | May 5, 2018 | ||||||||||||
Amount | Percentage of Net Sales | Amount | Percentage of Net Sales | ||||||||||
Leisure | $ | 178,310 | 48.9 | % | $ | 144,721 | 48.8 | % | |||||
Fashion and home | 109,850 | 30.1 | % | 91,608 | 30.9 | % | |||||||
Party and snack | 76,602 | 21.0 | % | 59,993 | 20.3 | % | |||||||
Total | $ | 364,762 | 100.0 | % | $ | 296,322 | 100.0 | % |
(3) | Leases |
Thirteen Weeks Ended | ||||
May 4, 2019 | ||||
Lease Cost | ||||
Operating lease cost | $ | 33,099 | ||
Variable lease cost | 9,290 | |||
Net lease cost* | $ | 42,389 |
Operating Leases | ||||
Maturity of Lease Liabilities | ||||
2019 | $ | 107,620 | ||
2020 | 141,780 | |||
2021 | 135,771 | |||
2022 | 125,933 | |||
2023 | 115,689 | |||
After 2023 | 370,841 | |||
Total lease payments | 997,634 | |||
Less: imputed interest | 252,893 | |||
Present value of lease liabilities | $ | 744,741 |
(4) | Income Per Common Share |
Thirteen Weeks Ended | |||||||
May 4, 2019 | May 5, 2018 | ||||||
Numerator: | |||||||
Net income | $ | 25,662 | $ | 21,804 | |||
Denominator: | |||||||
Weighted average common shares outstanding - basic | 55,899,324 | 55,586,037 | |||||
Dilutive impact of options, restricted stock units and employee stock purchase plan | 369,262 | 415,902 | |||||
Weighted average common shares outstanding - diluted | 56,268,586 | 56,001,939 | |||||
Per common share: | |||||||
Basic income per common share | $ | 0.46 | $ | 0.39 | |||
Diluted income per common share | $ | 0.46 | $ | 0.39 |
(5) | Line of Credit |
(6) | Commitments and Contingencies |
(7) | Share-Based Compensation |
Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | ||||||
Balance as of February 2, 2019 | 374,257 | $ | 30.23 | 5.1 | ||||
Forfeited | (200 | ) | 39.70 | |||||
Exercised | (72,365 | ) | 31.09 | |||||
Balance as of May 4, 2019 | 301,692 | 30.02 | 4.7 | |||||
Exercisable as of May 4, 2019 | 282,885 | $ | 29.49 | 4.6 |
Restricted Stock Units | Performance-Based Restricted Stock Units | ||||||||||||
Number | Weighted-Average Grant Date Fair Value | Number | Weighted-Average Grant Date Fair Value | ||||||||||
Non-vested balance as of February 2, 2019 | 292,888 | $ | 53.52 | 416,200 | $ | 47.38 | |||||||
Granted | 70,179 | 116.95 | 83,363 | 116.94 | |||||||||
Vested | (86,292 | ) | 36.56 | (117,137 | ) | 39.21 | |||||||
Forfeited | (4,401 | ) | 57.45 | (14,535 | ) | 34.40 | |||||||
Non-vested balance as of May 4, 2019 | 272,374 | $ | 75.17 | 367,891 | $ | 66.25 |
(8) | Income Taxes |
Thirteen Weeks Ended | |||||||
May 4, 2019 | May 5, 2018 | ||||||
Income before income taxes | $ | 26,156 | $ | 25,785 | |||
Income tax expense | $ | 494 | $ | 3,981 | |||
Effective tax rate | 1.9 | % | 15.4 | % |
• | failure to successfully implement our growth strategy; |
• | disruptions in our ability to select, obtain, distribute and market merchandise profitably; |
• | reliance on merchandise manufactured outside of the United States; |
• | the direct and indirect impact of recent and potential tariffs imposed and proposed by the United States on foreign imports, including, without limitation, the tariffs themselves, any counter-measures thereto and any indirect effects on consumer discretionary spending, which could increase the cost to us of certain products, lower our margins, increase our import related expenses, and reduce consumer spending for discretionary items, each of which could have a material adverse effect on our business, financial condition and results of future operations; |
• | the impact of price increases, such as, a reduction in our unit sales, damage to our reputation with our customers, and our becoming less competitive in the marketplace; |
• | dependence on the volume of traffic to our stores and website; |
• | inability to attract and retain qualified employees; |
• | inability to successfully build, operate or expand our distribution centers or network capacity; |
• | disruptions to our distribution network or the timely receipt of inventory; |
• | extreme weather conditions in the areas in which our stores are located could negatively affect our business and results of operations; |
• | the risks of cyberattacks or other cyber incidents, such as the failure to secure customers' confidential or credit card information, or other private data relating to our employees or our company, including the costs associated with protection against or remediation of such incidents; |
• | increased operating costs or exposure to fraud or theft due to customer payment-related risks; |
• | inability to increase sales and improve the efficiencies, costs and effectiveness of our operations; |
• | dependence on our executive officers, senior management and other key personnel or inability to hire additional qualified personnel; |
• | inability to successfully manage our inventory balances and inventory shrinkage; |
• | inability to meet our lease obligations; |
• | the costs and risks of constructing and owning real property; |
• | changes in our competitive environment, including increased competition from other retailers and the presence of online retailers; |
• | increasing costs due to inflation, increased operating costs, wage rate increases or energy prices; |
• | the seasonality of our business; |
• | inability to successfully implement our expansion into online retail; |
• | disruptions to our information technology systems in the ordinary course or as a result of system upgrades; |
• | the impact of damage or interruptions to our technology systems; |
• | failure to maintain adequate internal controls; |
• | complications with the design or implementation of the new enterprise resource system; |
• | natural disasters, adverse weather conditions, pandemic outbreaks, global political events, war and terrorism; |
• | the impact of changes in tax legislation; |
• | current economic conditions and other economic factors; |
• | the impact of governmental laws and regulations; |
• | the impact of changes in accounting standards; |
• | the impact to our financial performance related to insurance programs; |
• | the costs and consequences of legal proceedings; |
• | inability to protect our brand name, trademarks and other intellectual property rights; |
• | the costs and liabilities associated with infringement of third party intellectual property rights; |
• | the impact of product and food safety claims and effects of legislation; |
• | inability to obtain additional financing, if needed; |
• | restrictions imposed by our indebtedness on our current and future operations; and |
• | regulations related to conflict minerals. |
• | Stores that have been remodeled while remaining open; |
• | Stores that have been relocated within the same trade area, to a location that is not significantly different in size, in which the new store opens at about the same time as the old store closes; and |
• | Stores that have expanded, but are not significantly different in size, within their current locations. |
• | The period beginning when the closing store receives its last merchandise delivery from one of our distribution centers through: |
▪ | the last day of the fiscal year in which the store was relocated or expanded (for stores that increased significantly in size); or |
▪ | the last day of the fiscal month in which the store re-opens (for all other stores); and |
• | The period beginning on the first anniversary of the date the store received its last merchandise delivery from one of our distribution centers through the first anniversary of the date the store re-opened. |
• | consumer preferences, buying trends and overall economic trends; |
• | our ability to identify and respond effectively to customer preferences and trends; |
• | our ability to provide an assortment of high-quality, trend-right and everyday product offerings that generate new and repeat visits to our stores; |
• | the customer experience we provide in our stores and online; |
• | the level of traffic near our locations in the power, community and lifestyle centers in which we operate; |
• | competition; |
• | changes in our merchandise mix; |
• | pricing; |
• | our ability to source and distribute products efficiently; |
• | the timing of promotional events and holidays; |
• | the timing of introduction of new merchandise and customer acceptance of new merchandise; |
• | our opening of new stores in the vicinity of existing stores; |
• | the number of items purchased per store visit; and |
• | weather conditions. |
Thirteen Weeks Ended | |||||||
May 4, 2019 | May 5, 2018 | ||||||
(in millions, except percentages and total stores) | |||||||
Consolidated Statements of Operations Data (1): | |||||||
Net sales | $ | 364.8 | $ | 296.3 | |||
Cost of goods sold | 244.8 | 199.1 | |||||
Gross profit | 120.0 | 97.2 | |||||
Selling, general and administrative expenses | 95.5 | 72.5 | |||||
Operating income | 24.5 | 24.7 | |||||
Interest income, net | 1.7 | 1.1 | |||||
Income before income taxes | 26.2 | 25.8 | |||||
Income tax expense | 0.5 | 4.0 | |||||
Net income | $ | 25.7 | $ | 21.8 | |||
Percentage of Net Sales (1): | |||||||
Net sales | 100.0 | % | 100.0 | % | |||
Cost of goods sold | 67.1 | 67.2 | |||||
Gross profit | 32.9 | 32.8 | |||||
Selling, general and administrative expenses | 26.2 | 24.5 | |||||
Operating income | 6.7 | 8.3 | |||||
Interest income, net | 0.5 | 0.4 | |||||
Income before income taxes | 7.2 | 8.7 | |||||
Income tax expense | 0.1 | 1.3 | |||||
Net income | 7.0 | % | 7.4 | % | |||
Operational Data: | |||||||
Total stores at end of period | 789 | 658 | |||||
Comparable sales growth | 3.1 | % | 3.2 | % | |||
Average net sales per store (2) | $ | 0.5 | $ | 0.5 |
(1) | Components may not add to total due to rounding. |
(2) | Only includes stores open during the full thirteen weeks ended. |
Thirteen Weeks Ended | |||||||
May 4, 2019 | May 5, 2018 | ||||||
Net cash provided by operating activities | $ | 20.8 | $ | 33.0 | |||
Net cash used in investing activities | (44.2 | ) | (55.6 | ) | |||
Net cash used in financing activities | (7.6 | ) | (5.7 | ) | |||
Net decrease during period in cash and cash equivalents (1) | $ | (31.0 | ) | $ | (28.3 | ) |
• | political and economic instability; |
• | the financial instability and labor problems of the manufacturers of our merchandise; |
• | the availability and cost of raw materials; |
• | merchandise quality or safety issues; |
• | changes in currency exchange rates; |
• | the regulatory environment in the countries in which the manufacturers of our merchandise are located; |
• | work stoppages or other employee rights issues; |
• | inflation or deflation; and |
• | transportation availability, costs and disruptions. |
No. | Description | |
10.28† | Compensation Policy for Non-Employee Directors | |
31.1 | Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101* | The following financial information from this Quarterly Report on Form 10-Q for the fiscal quarter ended May 4, 2019, formatted in XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Unaudited Consolidated Balance Sheets as of May 4, 2019, February 2, 2019 and May 5, 2018; (ii) the Unaudited Consolidated Statements of Operations for the Thirteen Weeks Ended May 4, 2019 and May 5, 2018; (iii) the Unaudited Consolidated Statements of Shareholders’ Equity for the Thirteen Weeks Ended May 4, 2019 and May 5, 2018; (iv) the Unaudited Consolidated Statements of Cash Flows for the Thirteen Weeks Ended May 4, 2019 and May 5, 2018 and (v) the Notes to Unaudited Consolidated Financial Statements, tagged in detail. |
* | Pursuant to applicable securities laws and regulations, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Exchange Act of 1934, as amended, and otherwise is not subject to liability under those sections. |
† | Management contract or compensatory plan or arrangement |
FIVE BELOW, INC. | ||
Date: June 6, 2019 | /s/ Joel D. Anderson | |
Joel D. Anderson | ||
President and Chief Executive Officer (Principal Executive Officer) | ||
Date: June 6, 2019 | /s/ Kenneth R. Bull | |
Kenneth R. Bull | ||
Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) |
1. | ANNUAL CASH AND STOCK COMPENSATION |
1 | To the extent that any such reimbursements constitute compensation, (i) such amount shall be reimbursed no later than December 31 of the year following the year in which the expense was incurred, (ii) such amount shall not affect the amount of compensatory expense reimbursements in any subsequent year, and (iii) the right to such reimbursement shall not be subject to liquidation or exchange for any other benefit. |
CERTIFICATION | Exhibit 31.1 |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Joel D. Anderson | |||
Name: | Joel D. Anderson | |||
Title: | President and Chief Executive Officer |
CERTIFICATION | Exhibit 31.2 |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Kenneth R. Bull | |||
Name: | Kenneth R. Bull | |||
Title: | Chief Financial Officer and Treasurer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Joel D. Anderson | |
Joel D. Anderson | |
President and Chief Executive Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Kenneth R. Bull | |
Kenneth R. Bull | |
Chief Financial Officer and Treasurer |
Document and Entity Information - shares |
3 Months Ended | |
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May 04, 2019 |
Jun. 05, 2019 |
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Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 04, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | FIVE | |
Entity Registrant Name | Five Below, Inc. | |
Entity Central Index Key | 0001177609 | |
Current Fiscal Year End Date | --02-01 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 55,960,856 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
May 04, 2019 |
Feb. 02, 2019 |
May 05, 2018 |
---|---|---|---|
Statement of Financial Position [Abstract] | |||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 177,885 | $ 168,588 | $ 136,983 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 120,000,000 | 120,000,000 | 120,000,000 |
Common stock, shares issued | 55,955,893 | 55,759,048 | 55,620,019 |
Common stock, shares outstanding | 55,955,893 | 55,759,048 | 55,620,019 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | |
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May 04, 2019 |
May 05, 2018 |
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Income Statement [Abstract] | ||
Net sales | $ 364,762 | $ 296,322 |
Cost of goods sold | 244,777 | 199,084 |
Gross profit | 119,985 | 97,238 |
Selling, general and administrative expenses | 95,516 | 72,532 |
Operating income | 24,469 | 24,706 |
Interest income, net | 1,687 | 1,079 |
Income before income taxes | 26,156 | 25,785 |
Income tax expense | 494 | 3,981 |
Net income | $ 25,662 | $ 21,804 |
Basic (loss) income per common share (dollars per share) | $ 0.46 | $ 0.39 |
Diluted (loss) income per common share (dollars per share) | $ 0.46 | $ 0.39 |
Weighted average shares outstanding: | ||
Basic shares | 55,899,324 | 55,586,037 |
Diluted shares | 56,268,586 | 56,001,939 |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies |
Five Below, Inc. (collectively referred to herein with its wholly owned subsidiary as the "Company") is a specialty value retailer offering merchandise targeted at the tween and teen demographic. The Company offers an edited assortment of products, priced at $5 and below. The Company’s edited assortment of products includes select brands and licensed merchandise. The Company believes its merchandise is readily available, and that there are a number of potential vendors that could be utilized, if necessary, under approximately the same terms the Company is currently receiving; thus, it is not dependent on a single vendor or a group of vendors. The Company is incorporated in the Commonwealth of Pennsylvania and, as of May 4, 2019, operated in 36 states that include Pennsylvania, New Jersey, Delaware, Maryland, Virginia, Massachusetts, New Hampshire, West Virginia, North Carolina, New York, Connecticut, Rhode Island, Ohio, Illinois, Indiana, Michigan, Missouri, Georgia, Texas, Tennessee, Maine, Alabama, Kentucky, Kansas, Florida, South Carolina, Mississippi, Louisiana, Wisconsin, Oklahoma, Minnesota, California, Arkansas, Iowa, Nebraska, and Arizona. As of May 4, 2019 and May 5, 2018, the Company operated 789 stores and 658 stores, respectively, each operating under the name “Five Below” and in August 2016, the Company commenced selling merchandise on the internet, through the Company's fivebelow.com e-commerce website.
The Company operates on a 52/53-week fiscal year ending on the Saturday closest to January 31. References to "fiscal year 2019" or "fiscal 2019" refer to the period from February 3, 2019 to February 1, 2020, which is a 52-week fiscal year. References to "fiscal year 2018" or "fiscal 2018" refer to the period from February 4, 2018 to February 2, 2019, which is a 52-week fiscal year. The fiscal quarters ended May 4, 2019 and May 5, 2018 refer to the thirteen weeks ended as of those dates. (c) Basis of Presentation The consolidated balance sheets as of May 4, 2019 and May 5, 2018, the consolidated statements of operations for the thirteen weeks ended May 4, 2019 and May 5, 2018, the consolidated statements of shareholders’ equity for the thirteen weeks ended May 4, 2019 and May 5, 2018 and the consolidated statements of cash flows for the thirteen weeks ended May 4, 2019 and May 5, 2018 have been prepared by the Company in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim reporting and are unaudited. In the opinion of management, the aforementioned financial statements include all known adjustments (which consist primarily of normal, recurring accruals, estimates and assumptions that impact the financial statements) necessary to present fairly the financial position at the balance sheet dates and the results of operations and cash flows for the periods ended May 4, 2019 and May 5, 2018. The balance sheet as of February 2, 2019, presented herein, has been derived from the audited balance sheet included in the Company's Annual Report on Form 10-K for fiscal 2018 as filed with the Securities and Exchange Commission on March 28, 2019 and referred to herein as the “Annual Report,” but does not include all annual disclosures required by U.S. GAAP. These consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended February 2, 2019 and footnotes thereto included in the Annual Report. The consolidated results of operations for the thirteen weeks ended May 4, 2019 and May 5, 2018 are not necessarily indicative of the consolidated operating results for the year ending February 1, 2020 or any other period. The Company's business is seasonal and as a result, the Company's net sales fluctuate from quarter to quarter. Net sales are usually highest in the fourth fiscal quarter due to the year-end holiday season. (d) Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 clarifies the principles for recognizing revenue from contracts with customers and outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. On February 4, 2018, the Company adopted the pronouncement using the modified retrospective method by recognizing the cumulative effect of gift card breakage as an adjustment to retained earnings resulting in a $0.5 million increase to retained earnings. In February 2016, the FASB issued ASU 2016-02, “Leases.” ASU 2016-02 requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. On February 3, 2019, the Company adopted this pronouncement on a modified retrospective basis and applied the new standard to all leases. As a result, comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which includes, among other things, the ability to carry forward the existing lease classification. We also elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements. Adoption of the new standard had a material impact on the Company's balance sheets resulting in an increase in net assets and liabilities of approximately $618 million, as the Company has a significant number of leases for its stores. Although the standard impacts the treatment of certain initial direct leases costs that were previously capitalizable, it did not materially impact the Company's consolidated statements of operations and had no impact on the Company's cash flows. The following is a discussion of the Company’s lease policy under the new lease accounting standard: The Company determines if an arrangement contains a lease at the inception of a contract. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease assets and operating lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company discounts the lease liability utilizing its estimated incremental borrowing rate, on a collateralized basis over a similar term, that the Company would have incurred to borrow the funds necessary to purchase the leased asset. The operating lease assets also include lease payments made before commencement and exclude lease incentives. The Company’s real estate leases typically contain options that permit renewals for additional periods of up to five years each. For real estate leases, except for renewals that generally take the lease to a ten-year term, the options to renew are not considered reasonably certain at lease commencement because the Company reevaluates each lease on a regular basis to consider the economic and strategic incentives of exercising the renewal options, and regularly opens, relocates or closes stores to align with its operating strategy. Generally, except for renewals that generally take the lease to a ten-year term, the renewal option periods are not included within the lease term and the associated payments are not included in the measurement of the operating lease asset and operating lease liability as the exercise of such options is not reasonably certain. Similarly, renewal options are not included in the lease term for non-real estate leases because they are not considered reasonably certain of being exercised at lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheets and lease expense is recognized on a straight-line basis over the term of the short-term lease. For certain real estate leases, the Company accounts for lease components and nonlease components as a single lease component. Certain real estate leases require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance and insurance, which are expensed as incurred as variable lease costs. Other real estate leases contain one fixed lease payment that includes real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and included in the operating lease assets and operating lease liabilities. See Note 3 ‘‘Leases’’ for additional information. Impact of New Lease Standard on Balance Sheet Line Items As a result of applying the new lease standard using the modified retrospective method, the following adjustments were made to accounts on the consolidated balance sheet as of February 3, 2019 (in thousands):
In August 2018, the FASB issued ASU 2018-15, "Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract." ASU 2018-15 requires implementation costs incurred by customers in cloud computing arrangements to be deferred over the noncancellable term of the cloud computing arrangements plus any optional renewal periods (1) that are reasonably certain to be exercised by the customer or (2) for which exercise of the renewal option is controlled by the cloud service provider. The effective date of this pronouncement is for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and early adoption is permitted. The standard can be adopted either using the prospective or retrospective transition approach. During the thirteen weeks ended November 3, 2018, the Company adopted the pronouncement using the prospective transition method and it did not have a significant impact to the Company's financial statements. (e) Use of Estimates The preparation of the consolidated financial statements requires management of the Company to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, valuation allowances for inventories, income taxes, share-based compensation expense and the incremental borrowing rate utilized in operating lease liabilities. (f) Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation at the measurement date: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Inputs, other than Level 1, that are either directly or indirectly observable. Level 3: Unobservable inputs developed using the Company’s estimates and assumptions which reflect those that market participants would use. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. The Company’s financial instruments consist primarily of cash equivalents, short-term and long-term investment securities, accounts payable, and borrowings, if any, under a line of credit. The Company believes that: (1) the carrying value of cash equivalents and accounts payable are representative of their respective fair value due to the short-term nature of these instruments; and (2) the carrying value of the borrowings, if any, under the line of credit approximates fair value because the line of credit’s interest rates vary with market interest rates. Under the fair value hierarchy, the fair market values of the short-term and long-term investments in corporate bonds are level 1 while the short-term and long-term investments in municipal bonds are level 2. The fair market values of level 2 instruments are determined by management with the assistance of a third party pricing service. Since quoted prices in active markets for identical assets are not available, these prices are determined by the third party pricing service using observable market information such as quotes from less active markets and quoted prices of similar securities. As of May 4, 2019, February 2, 2019, and May 5, 2018, the Company had cash equivalents of $188.0 million, $215.7 million and $60.4 million, respectively. The Company’s cash equivalents consist of credit and debit card receivables, money market funds, and corporate bonds, which mature in less than 90 days. Fair value for cash equivalents was determined based on level 1 inputs. As of May 4, 2019, February 2, 2019, and May 5, 2018, the Company's short-term and long-term investment securities are classified as held-to-maturity since the Company has the intent and ability to hold the investments to maturity. Such securities are carried at amortized cost plus accrued interest and consist of the following (in thousands):
Short-term investment securities as of May 4, 2019, February 2, 2019, and May 5, 2018 all mature in one year or less. Long-term investment securities as of May 5, 2018 all mature after one year but in less than three years. (g) Prepaid Expenses and Other Current Assets Prepaid expenses as of May 4, 2019, February 2, 2019, and May 5, 2018 were $16.7 million, $26.1 million, and $19.8 million, respectively. Other current assets as of May 4, 2019, February 2, 2019, and May 5, 2018 were $30.5 million, $34.0 million, and $17.6 million, respectively. (h) Other Accrued Expenses Other accrued expenses include accrued capital expenditures of $21.5 million, $54.2 million, and $8.2 million as of May 4, 2019, February 2, 2019, and May 5, 2018, respectively. |
Revenue Contracts With Customers |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer | Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 clarifies the principles for recognizing revenue from contracts with customers. The Company adopted the standard during the thirteen weeks ended May 5, 2018 using the modified retrospective method by recognizing the cumulative effect as an adjustment to retained earnings. Revenue Transactions Revenue from store operations are recognized at the point of sale when control of the product is transferred to the customer at such time. Internet sales, through the Company's fivebelow.com e-commerce website, are recognized when the consumer receives the product as control transfers upon delivery. Returns subsequent to the period end are immaterial; accordingly, no reserve has been recorded. Gift card sales to customers are initially recorded as liabilities and recognized as sales upon redemption for merchandise or as breakage revenue in proportion to the pattern of redemption of the gift cards by the customer in net sales. The transaction price for the Company’s sales are based on the item’s stated price. To the extent that the Company charges customers for shipping and handling on e-commerce sales, the Company records such amounts in net sales. Shipping and handling costs, which include fulfillment and shipping costs related to the Company's e-commerce operations, are included in costs of goods sold. The Company has chosen the pronouncement's policy election which allows it to exclude all sales taxes from net sales in the accompanying consolidated statements of operations. Disaggregation of Revenue The following table provides information about disaggregated revenue by groups of products: leisure, fashion and home, and party and snack (in thousands):
Financial Statement Impact of Adopting ASU 2014-09 All of the Company's revenue is recognized from contracts with customers and, therefore, is subject to ASU 2014-09. The Company adopted ASU 2014-09 using a modified retrospective approach during the thirteen weeks ended May 5, 2018 and recognized the cumulative effect as an adjustment by increasing retained earnings by $0.5 million and income taxes payable by $0.1 million, and reducing accrued expenses by $0.7 million and deferred tax asset by $0.1 million. The cumulative adjustment was related to the recognition of gift card breakage. |
Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases |
The Company leases property and equipment under non-cancelable operating leases. Certain retail store lease agreements provide for contingent rental payments if the store’s net sales exceed stated levels (percentage rents) and/or contain escalation clauses, which provide for increases in base rental payments for increases in future operating costs. Many of the Company’s leases provide for one or more renewal options for periods of five years. The Company’s operating lease agreements, including assumed renewals, which are generally those that take the lease to a ten-year term, expire through fiscal 2033. During the thirteen weeks ended May 4, 2019, the Company committed to 39 new store leases with terms of 10 to 15 years that have future minimum lease payments of approximately $69.1 million. All of the Company's leases are classified as operating leases and the associated assets and liabilities are presented as separate captions in the consolidated balance sheets. As of May 4, 2019, the weighted average remaining lease term for the Company's operating leases is 7.8 years, and the weighted average discount rate is 7.6%. For the thirteen weeks ended May 4, 2019, cash paid amounts included in the measurement of operating lease liabilities of $29.2 million was reflected in cash flows from operating activities in the consolidated statements of cash flows. The following table is a summary of the Company's components for net lease costs for the thirteen weeks ended May 4, 2019 (in thousands):
* Excludes short-term lease cost which is immaterial The following table summarizes the maturity of lease liabilities under operating leases as of May 4, 2019 (in thousands):
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Income Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Per Common Share |
Basic income per common share amounts are calculated using the weighted average number of common shares outstanding for the period. Diluted income per common share amounts are calculated using the weighted average number of common shares outstanding for the period and include the dilutive impact of exercised stock options as well as assumed lapse of restrictions on restricted stock awards and shares currently available for purchase under the Company's Employee Stock Purchase Plan, using the treasury stock method. Performance-based restricted stock units are considered contingently issuable shares for diluted income per common share purposes and the dilutive impact, if any, is not included in the weighted average shares until the performance conditions are met. The following table reconciles net income and the weighted average common shares outstanding used in the computations of basic and diluted income per common share (in thousands, except for share and per share data):
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Debt Disclosure [Abstract] | |||||
Line of Credit |
On May 10, 2017, the Company entered into a Fourth Amended and Restated Loan and Security Agreement (the “Amended Loan and Security Agreement”), among the Company, 1616 Holdings, Inc. (formerly known as Five Below Merchandising, Inc.), a wholly-owned subsidiary of the Company, and Wells Fargo Bank, National Association. The Amended Loan and Security Agreement amends and restates the Third Amended and Restated Loan and Security Agreement, dated June 12, 2013, among the Company, 1616 Holdings, Inc. and Wells Fargo Bank, National Association, which governed the Revolving Credit Facility. The Amended Loan and Security Agreement includes a revolving line of credit in the amount of up to $20.0 million (the “Amended Revolving Credit Facility”). Pursuant to the Amended Loan and Security Agreement, advances under the Amended Revolving Credit Facility are no longer tied to a borrowing base; however, the Company is required to maintain eligible inventory at all times in an amount equal to at least $100.0 million. The Amended Revolving Credit Facility expires on the earliest to occur of (i) May 10, 2022 or (ii) an event of default. The Amended Revolving Credit Facility may be increased to up to $50.0 million, subject to certain conditions. The Amended Revolving Credit Facility also includes a $20.0 million sub-limit for the issuance of letters of credit. The Amended Loan and Security Agreement reduces the interest rate payable on borrowings to be, at the Company’s option, a per annum rate equal to (a) a prime rate or (b) a LIBOR-based rate plus a margin of 1.00%. Letter of credit fees are equal to the interest rate payable on LIBOR-based loans. The interest rate and letter of credit fees under the Amended Loan and Security Agreement are subject to an increase of 2.00% per annum upon an event of default. The Amended Loan and Security Agreement removes restrictions on the Company’s ability to pay or make dividends and distributions or repurchase its stock, but the Amended Loan and Security Agreement continues to include other customary negative and affirmative covenants including, among other things, limitations on the Company’s ability to (i) incur additional debt; (ii) create liens; (iii) make certain investments, loans and advances; (iv) sell assets; (v) engage in mergers or consolidations; or (vi) change its business. The Amended Loan and Security Agreement also removes the provisions that required the Company to make prepayments on outstanding Amended Revolving Credit Facility balances upon the receipt of certain proceeds, including those from the sale of certain assets. Amounts under the Amended Revolving Credit Facility may become due upon certain events of default including, among other things, the Company’s failure to comply with the Amended Revolving Credit Facility’s covenants, bankruptcy, default on certain other indebtedness or a change in control. Under the Amended Loan and Security Agreement, all obligations under the Amended Revolving Credit Facility continue to be guaranteed by 1616 Holdings, Inc. and are secured by substantially all of the assets of the Company and 1616 Holdings, Inc. As of May 4, 2019, the Company had no borrowings under the Amended Revolving Credit Facility and had approximately $20.0 million available on the line of credit. All obligations under the Amended Revolving Credit Facility are secured by substantially all of the Company's assets and are guaranteed by the Company's subsidiary. As of May 4, 2019 and May 5, 2018, the Company was in compliance with the covenants applicable to it under the Amended Revolving Credit Facility. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies |
Commitments Other contractual commitments As of May 4, 2019, the Company has other purchase commitments of approximately $4.9 million consisting of purchase agreements for materials that will be used in the construction of new stores. In March 2019, we completed the purchase of an approximately 700,000 square foot build-to-suit distribution center in Forsyth, Georgia for approximately $42 million for land and building, to support our anticipated growth. Contingencies Legal Matters From time to time, the Company is involved in certain legal actions arising in the ordinary course of business. In management’s opinion, the outcome of such actions will not have a material adverse effect on the Company’s financial condition or results of operations. |
Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation |
Equity Incentive Plan Pursuant to the Company's 2002 Equity Incentive Plan (the “Plan”), the Company’s board of directors may grant stock options, restricted shares, and restricted stock units to officers, directors, key employees and professional service providers. The Plan, as amended, allows for the issuance of up to a total of 7.6 million shares under the Plan. As of May 4, 2019, approximately 3.3 million stock options, restricted shares, or restricted stock units were available for grant. Common Stock Options All stock options have a term not greater than ten years. Stock options vest and become exercisable in whole or in part, in accordance with vesting conditions set by the Company’s board of directors. Options granted to date generally vest over four years from the date of grant. Stock option activity during the thirteen weeks ended May 4, 2019 was as follows:
The fair value of each option award granted to employees, including outside directors, is estimated on the date of grant using the Black-Scholes option-pricing model. There were no stock options granted during the thirteen weeks ended May 4, 2019. Restricted Stock Units and Performance-Based Restricted Stock Units All restricted stock units ("RSU") and performance-based restricted stock units ("PSU") vest in accordance with vesting conditions set by the compensation committee of the Company’s board of directors. RSUs granted to date have vesting periods ranging from less than one year to five years from the date of grant. PSUs granted to date have vesting periods ranging from one year to five years from the date of grant, including grants that have a cumulative three year performance period, subject to satisfaction of the applicable performance goals established for the respective grant. The Company periodically assesses the probability of achievement of the performance criteria and adjusts the amount of compensation expense accordingly. Compensation is recognized over the vesting period and adjusted for the probability of achievement of the performance criteria. RSU and PSU activity during the thirteen weeks ended May 4, 2019 was as follows:
In connection with the vesting of RSUs and PSUs during the thirteen weeks ended May 4, 2019, the Company withheld 79,256 shares with an aggregate value of $9.9 million in satisfaction of minimum tax withholding obligations due upon vesting. As of May 4, 2019, there was $27.7 million of total unrecognized compensation costs related to non-vested share-based compensation arrangements (including stock options, RSUs and PSUs) granted under the Plan. The cost is expected to be recognized over a weighted average vesting period of 2.7 years. |
Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
The following table summarizes the Company’s income tax expense and effective tax rates for the thirteen weeks ended May 4, 2019 and May 5, 2018 (dollars in thousands):
The effective tax rates for the thirteen weeks ended May 4, 2019 and May 5, 2018 were based on the Company’s forecasted annualized effective tax rates and were adjusted for discrete items that occurred within the periods presented. The effective tax rate for the thirteen weeks ended May 4, 2019 was lower than such rate for the thirteen weeks ended May 5, 2018 primarily due to discrete items, which primarily represent the impact of ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting," with respect to the requirement to recognize excess income tax benefits or deficiencies as income tax benefit or expense in the consolidated statements of operations rather than as additional paid-in capital in the consolidated balance sheets. The Company had no material accrual for uncertain tax positions or interest and/or penalties related to income taxes on the Company’s balance sheets as of May 4, 2019, February 2, 2019, or May 5, 2018 and has not recognized any material uncertain tax positions or interest and/or penalties related to income taxes in the consolidated statements of operations for the thirteen weeks ended May 4, 2019 or May 5, 2018. The Company files a federal income tax return as well as state tax returns. The Company’s U.S. federal income tax returns for the fiscal years ended January 31, 2015 and thereafter remain subject to examination by the U.S. Internal Revenue Service. State returns are filed in various state jurisdictions, as appropriate, with varying statutes of limitation and remain subject to examination for varying periods up to three to four years depending on the state. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Business |
Five Below, Inc. (collectively referred to herein with its wholly owned subsidiary as the "Company") is a specialty value retailer offering merchandise targeted at the tween and teen demographic. The Company offers an edited assortment of products, priced at $5 and below. The Company’s edited assortment of products includes select brands and licensed merchandise. The Company believes its merchandise is readily available, and that there are a number of potential vendors that could be utilized, if necessary, under approximately the same terms the Company is currently receiving; thus, it is not dependent on a single vendor or a group of vendors. The Company is incorporated in the Commonwealth of Pennsylvania and, as of May 4, 2019, operated in 36 states that include Pennsylvania, New Jersey, Delaware, Maryland, Virginia, Massachusetts, New Hampshire, West Virginia, North Carolina, New York, Connecticut, Rhode Island, Ohio, Illinois, Indiana, Michigan, Missouri, Georgia, Texas, Tennessee, Maine, Alabama, Kentucky, Kansas, Florida, South Carolina, Mississippi, Louisiana, Wisconsin, Oklahoma, Minnesota, California, Arkansas, Iowa, Nebraska, and Arizona. As of May 4, 2019 and May 5, 2018, the Company operated 789 stores and 658 stores, respectively, each operating under the name “Five Below” and in August 2016, the Company commenced selling merchandise on the internet, through the Company's fivebelow.com e-commerce website. |
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Fiscal Year |
The Company operates on a 52/53-week fiscal year ending on the Saturday closest to January 31. References to "fiscal year 2019" or "fiscal 2019" refer to the period from February 3, 2019 to February 1, 2020, which is a 52-week fiscal year. References to "fiscal year 2018" or "fiscal 2018" refer to the period from February 4, 2018 to February 2, 2019, which is a 52-week fiscal year. The fiscal quarters ended May 4, 2019 and May 5, 2018 refer to the thirteen weeks ended as of those dates. |
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Basis of Presentation | (c) Basis of Presentation The consolidated balance sheets as of May 4, 2019 and May 5, 2018, the consolidated statements of operations for the thirteen weeks ended May 4, 2019 and May 5, 2018, the consolidated statements of shareholders’ equity for the thirteen weeks ended May 4, 2019 and May 5, 2018 and the consolidated statements of cash flows for the thirteen weeks ended May 4, 2019 and May 5, 2018 have been prepared by the Company in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim reporting and are unaudited. In the opinion of management, the aforementioned financial statements include all known adjustments (which consist primarily of normal, recurring accruals, estimates and assumptions that impact the financial statements) necessary to present fairly the financial position at the balance sheet dates and the results of operations and cash flows for the periods ended May 4, 2019 and May 5, 2018. The balance sheet as of February 2, 2019, presented herein, has been derived from the audited balance sheet included in the Company's Annual Report on Form 10-K for fiscal 2018 as filed with the Securities and Exchange Commission on March 28, 2019 and referred to herein as the “Annual Report,” but does not include all annual disclosures required by U.S. GAAP. These consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended February 2, 2019 and footnotes thereto included in the Annual Report. The consolidated results of operations for the thirteen weeks ended May 4, 2019 and May 5, 2018 are not necessarily indicative of the consolidated operating results for the year ending February 1, 2020 or any other period. The Company's business is seasonal and as a result, the Company's net sales fluctuate from quarter to quarter. Net sales are usually highest in the fourth fiscal quarter due to the year-end holiday season. |
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Recently Issued Accounting Pronouncements | (d) Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 clarifies the principles for recognizing revenue from contracts with customers and outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. On February 4, 2018, the Company adopted the pronouncement using the modified retrospective method by recognizing the cumulative effect of gift card breakage as an adjustment to retained earnings resulting in a $0.5 million increase to retained earnings. In February 2016, the FASB issued ASU 2016-02, “Leases.” ASU 2016-02 requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. On February 3, 2019, the Company adopted this pronouncement on a modified retrospective basis and applied the new standard to all leases. As a result, comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which includes, among other things, the ability to carry forward the existing lease classification. We also elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements. Adoption of the new standard had a material impact on the Company's balance sheets resulting in an increase in net assets and liabilities of approximately $618 million, as the Company has a significant number of leases for its stores. Although the standard impacts the treatment of certain initial direct leases costs that were previously capitalizable, it did not materially impact the Company's consolidated statements of operations and had no impact on the Company's cash flows. The following is a discussion of the Company’s lease policy under the new lease accounting standard: The Company determines if an arrangement contains a lease at the inception of a contract. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease assets and operating lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company discounts the lease liability utilizing its estimated incremental borrowing rate, on a collateralized basis over a similar term, that the Company would have incurred to borrow the funds necessary to purchase the leased asset. The operating lease assets also include lease payments made before commencement and exclude lease incentives. The Company’s real estate leases typically contain options that permit renewals for additional periods of up to five years each. For real estate leases, except for renewals that generally take the lease to a ten-year term, the options to renew are not considered reasonably certain at lease commencement because the Company reevaluates each lease on a regular basis to consider the economic and strategic incentives of exercising the renewal options, and regularly opens, relocates or closes stores to align with its operating strategy. Generally, except for renewals that generally take the lease to a ten-year term, the renewal option periods are not included within the lease term and the associated payments are not included in the measurement of the operating lease asset and operating lease liability as the exercise of such options is not reasonably certain. Similarly, renewal options are not included in the lease term for non-real estate leases because they are not considered reasonably certain of being exercised at lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheets and lease expense is recognized on a straight-line basis over the term of the short-term lease. For certain real estate leases, the Company accounts for lease components and nonlease components as a single lease component. Certain real estate leases require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance and insurance, which are expensed as incurred as variable lease costs. Other real estate leases contain one fixed lease payment that includes real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and included in the operating lease assets and operating lease liabilities. See Note 3 ‘‘Leases’’ for additional information. Impact of New Lease Standard on Balance Sheet Line Items As a result of applying the new lease standard using the modified retrospective method, the following adjustments were made to accounts on the consolidated balance sheet as of February 3, 2019 (in thousands):
In August 2018, the FASB issued ASU 2018-15, "Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract." ASU 2018-15 requires implementation costs incurred by customers in cloud computing arrangements to be deferred over the noncancellable term of the cloud computing arrangements plus any optional renewal periods (1) that are reasonably certain to be exercised by the customer or (2) for which exercise of the renewal option is controlled by the cloud service provider. The effective date of this pronouncement is for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and early adoption is permitted. The standard can be adopted either using the prospective or retrospective transition approach. During the thirteen weeks ended November 3, 2018, the Company adopted the pronouncement using the prospective transition method and it did not have a significant impact to the Company's financial statements. |
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Use of Estimates | (e) Use of Estimates The preparation of the consolidated financial statements requires management of the Company to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, valuation allowances for inventories, income taxes, share-based compensation expense and the incremental borrowing rate utilized in operating lease liabilities. |
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Fair Value of Financial Instruments | (f) Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation at the measurement date: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Inputs, other than Level 1, that are either directly or indirectly observable. Level 3: Unobservable inputs developed using the Company’s estimates and assumptions which reflect those that market participants would use. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. The Company’s financial instruments consist primarily of cash equivalents, short-term and long-term investment securities, accounts payable, and borrowings, if any, under a line of credit. The Company believes that: (1) the carrying value of cash equivalents and accounts payable are representative of their respective fair value due to the short-term nature of these instruments; and (2) the carrying value of the borrowings, if any, under the line of credit approximates fair value because the line of credit’s interest rates vary with market interest rates. Under the fair value hierarchy, the fair market values of the short-term and long-term investments in corporate bonds are level 1 while the short-term and long-term investments in municipal bonds are level 2. The fair market values of level 2 instruments are determined by management with the assistance of a third party pricing service. Since quoted prices in active markets for identical assets are not available, these prices are determined by the third party pricing service using observable market information such as quotes from less active markets and quoted prices of similar securities. As of May 4, 2019, February 2, 2019, and May 5, 2018, the Company had cash equivalents of $188.0 million, $215.7 million and $60.4 million, respectively. The Company’s cash equivalents consist of credit and debit card receivables, money market funds, and corporate bonds, which mature in less than 90 days. Fair value for cash equivalents was determined based on level 1 inputs. As of May 4, 2019, February 2, 2019, and May 5, 2018, the Company's short-term and long-term investment securities are classified as held-to-maturity since the Company has the intent and ability to hold the investments to maturity. Such securities are carried at amortized cost plus accrued interest and consist of the following (in thousands):
Short-term investment securities as of May 4, 2019, February 2, 2019, and May 5, 2018 all mature in one year or less. Long-term investment securities as of May 5, 2018 all mature after one year but in less than three years. |
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Prepaid Expenses and Other Current Assets | (g) Prepaid Expenses and Other Current Assets Prepaid expenses as of May 4, 2019, February 2, 2019, and May 5, 2018 were $16.7 million, $26.1 million, and $19.8 million, respectively. Other current assets as of May 4, 2019, February 2, 2019, and May 5, 2018 were $30.5 million, $34.0 million, and $17.6 million, respectively. |
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Other Accrued Expenses | (h) Other Accrued Expenses Other accrued expenses include accrued capital expenditures of $21.5 million, $54.2 million, and $8.2 million as of May 4, 2019, February 2, 2019, and May 5, 2018, respectively. |
Revenue Contracts With Customers (Policies) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition |
In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 clarifies the principles for recognizing revenue from contracts with customers. The Company adopted the standard during the thirteen weeks ended May 5, 2018 using the modified retrospective method by recognizing the cumulative effect as an adjustment to retained earnings. Revenue Transactions Revenue from store operations are recognized at the point of sale when control of the product is transferred to the customer at such time. Internet sales, through the Company's fivebelow.com e-commerce website, are recognized when the consumer receives the product as control transfers upon delivery. Returns subsequent to the period end are immaterial; accordingly, no reserve has been recorded. Gift card sales to customers are initially recorded as liabilities and recognized as sales upon redemption for merchandise or as breakage revenue in proportion to the pattern of redemption of the gift cards by the customer in net sales. The transaction price for the Company’s sales are based on the item’s stated price. To the extent that the Company charges customers for shipping and handling on e-commerce sales, the Company records such amounts in net sales. Shipping and handling costs, which include fulfillment and shipping costs related to the Company's e-commerce operations, are included in costs of goods sold. The Company has chosen the pronouncement's policy election which allows it to exclude all sales taxes from net sales in the accompanying consolidated statements of operations. Disaggregation of Revenue The following table provides information about disaggregated revenue by groups of products: leisure, fashion and home, and party and snack (in thousands):
Financial Statement Impact of Adopting ASU 2014-09 All of the Company's revenue is recognized from contracts with customers and, therefore, is subject to ASU 2014-09. The Company adopted ASU 2014-09 using a modified retrospective approach during the thirteen weeks ended May 5, 2018 and recognized the cumulative effect as an adjustment by increasing retained earnings by $0.5 million and income taxes payable by $0.1 million, and reducing accrued expenses by $0.7 million and deferred tax asset by $0.1 million. The cumulative adjustment was related to the recognition of gift card breakage. |
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncement, Early Adoption | As a result of applying the new lease standard using the modified retrospective method, the following adjustments were made to accounts on the consolidated balance sheet as of February 3, 2019 (in thousands):
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Revenue Contracts With Customers (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Disaggregation of Revenue The following table provides information about disaggregated revenue by groups of products: leisure, fashion and home, and party and snack (in thousands):
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Leases (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 04, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net lease cost | The following table is a summary of the Company's components for net lease costs for the thirteen weeks ended May 4, 2019 (in thousands):
* Excludes short-term lease cost which is immaterial |
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Maturity of lease liabilities under operating leases | The following table summarizes the maturity of lease liabilities under operating leases as of May 4, 2019 (in thousands):
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Income Per Common Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 04, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computations Of Basic And Diluted Income (Loss) Per Share | The following table reconciles net income and the weighted average common shares outstanding used in the computations of basic and diluted income per common share (in thousands, except for share and per share data):
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Share-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | Stock option activity during the thirteen weeks ended May 4, 2019 was as follows:
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Schedule of Share-based Compensation, Restricted Stock Units Award Activity | RSU and PSU activity during the thirteen weeks ended May 4, 2019 was as follows:
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Income Taxes (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 04, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | The following table summarizes the Company’s income tax expense and effective tax rates for the thirteen weeks ended May 4, 2019 and May 5, 2018 (dollars in thousands):
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Summary of Significant Accounting Policies (Nature of Business) (Details) |
May 04, 2019
USD ($)
Store
state
|
May 05, 2018
Store
|
---|---|---|
Accounting Policies [Abstract] | ||
Products offering price, maximum price | $ | $ 5 | |
Number of states in which entity operates (state) | state | 36 | |
Number of stores (store) | Store | 789 | 658 |
Summary of Significant Accounting Policies Prepaid expenses and OCA (Details) - USD ($) $ in Millions |
May 04, 2019 |
Feb. 02, 2019 |
May 05, 2018 |
---|---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid expense | $ 16.7 | $ 26.1 | $ 19.8 |
Other current assets | $ 30.5 | $ 34.0 | $ 17.6 |
Summary of Significant Accounting Policies Other Accrued Expenses (Details) - USD ($) $ in Millions |
May 04, 2019 |
Feb. 02, 2019 |
May 05, 2018 |
---|---|---|---|
Payables and Accruals [Abstract] | |||
Other accrued expenses | $ 21.5 | $ 54.2 | $ 8.2 |
Revenue Contracts With Customers (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
May 04, 2019 |
May 05, 2018 |
Feb. 02, 2019 |
|
Net sales | $ 364,762 | $ 296,322 | |
Net sales as a percentage of net sales | 100.00% | 100.00% | |
Cumulative effect on retained earnings, net of tax | 486 | ||
Retained earnings | |||
Cumulative effect on retained earnings, net of tax | $ 486 | ||
Notes Payable, Other Payables | |||
Cumulative effect on retained earnings, net of tax | 114 | ||
Accrued Liabilities | |||
Cumulative effect on retained earnings, net of tax | 686 | ||
Deferred Income Tax Charge | |||
Cumulative effect on retained earnings, net of tax | $ 100 | ||
Leisure | |||
Net sales | $ 178,310 | $ 144,721 | |
Net sales as a percentage of net sales | 48.90% | 48.80% | |
Fashion and home | |||
Net sales | $ 109,850 | $ 91,608 | |
Net sales as a percentage of net sales | 30.10% | 30.90% | |
Total | |||
Net sales | $ 76,602 | $ 59,993 | |
Net sales as a percentage of net sales | 21.00% | 20.30% |
Leases - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
May 04, 2019
USD ($)
lease
| |
Lessee, Lease, Description [Line Items] | |
Number of leases (lease) | lease | 39 |
Long-term purchase commitment, amount | $ 69.1 |
Operating lease, weighted average remaining lease term (years) | 7 years 9 months 18 days |
Operating lease, weighted average discount rate, percent | 7.60% |
Operating lease, payments | $ 29.2 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, renewal term (years) | 10 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, renewal term (years) | 15 years |
Leases - Components of Net Lease Cost (Details) $ in Thousands |
3 Months Ended |
---|---|
May 04, 2019
USD ($)
| |
Leases [Abstract] | |
Operating lease cost | $ 33,099 |
Variable lease cost | 9,290 |
Net lease cost | $ 42,389 |
Leases - Maturity of Lease Liabilities Under Operating Leases (Details) $ in Thousands |
May 04, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
2019 | $ 107,620 |
2020 | 141,780 |
2021 | 135,771 |
2022 | 125,933 |
2023 | 115,689 |
After 2023 | 370,841 |
Total lease payments | 997,634 |
Less: imputed interest | 252,893 |
Present value of lease liabilities | $ 744,741 |
Income Per Common Share (Computations Of Basic And Diluted Income (Loss) Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
May 04, 2019 |
May 05, 2018 |
|
Numerator: | ||
Net income | $ 25,662 | $ 21,804 |
Denominator: | ||
Weighted-average common shares outstanding - basic (shares) | 55,899,324 | 55,586,037 |
Dilutive impact of options and warrants (shares) | 369,262 | 415,902 |
Weighted average common share outstanding - diluted (shares) | 56,268,586 | 56,001,939 |
Per common share: | ||
Basic income (loss) per common share (dollars per share) | $ 0.46 | $ 0.39 |
Diluted income (loss) per common share (dollars per share) | $ 0.46 | $ 0.39 |
Line of Credit (Line of Credit) (Details) - Renewed Credit Facility |
3 Months Ended |
---|---|
May 04, 2019
USD ($)
| |
Debt Instrument [Line Items] | |
Revolving credit facility maximum borrowings | $ 20,000,000 |
Revolving credit facility collateral amount | 100,000,000.0 |
Increase in revolving credit facility | 50,000,000.0 |
Issuance of letters of credit | $ 20,000,000.0 |
Debt instrument, interest rate, increase (decrease) | 2.00% |
Line of credit facility, current borrowing capacity | $ 0 |
LIBOR Plus | |
Debt Instrument [Line Items] | |
Interest rate on borrowings (percent) | 1.00% |
Commitments and Contingencies (Narrative) (Details) ft² in Thousands, $ in Millions |
3 Months Ended |
---|---|
May 04, 2019
USD ($)
ft²
| |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase commitment, remaining minimum amount committed | $ 4.9 |
Area of real estate property (in sqft) | ft² | 700 |
Payments to acquire buildings | $ 42.0 |
Share-Based Compensation (2002 Equity Incentive Plan) (Details) - 2002 Equity Incentive Plan - shares |
May 04, 2019 |
Jul. 24, 2012 |
---|---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for issuance (shares) | 7,600,000 | |
Stock options and restricted shares available for grant (shares) | 3,278,000 |
Share-Based Compensation (Share-Based Compensation Valuation of Stock Options) (Details) |
3 Months Ended |
---|---|
May 04, 2019
shares
| |
Share-based Compensation [Abstract] | |
Stock options granted | 0 |
Income Taxes (Narrative) (Details) - USD ($) |
3 Months Ended | |
---|---|---|
May 04, 2019 |
May 05, 2018 |
|
Income Tax [Line Items] | ||
Income before income taxes | $ 26,156,000 | $ 25,785,000 |
Income tax expense | $ 494,000 | $ 3,981,000 |
Effective tax rate | 1.90% | 15.40% |
Accrual for uncertain tax, interest or penalties | $ 0 | |
Minimum | ||
Income Tax [Line Items] | ||
State income taxes, statute of limitations period (years) | 3 years | |
Maximum | ||
Income Tax [Line Items] | ||
State income taxes, statute of limitations period (years) | 4 years |
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