Revenue Revenue (Policies)

3 Months Ended

May 05, 2018

Revenue Recognition and Deferred Revenue [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Adoption of ASU 2014-09, Revenue from Contracts with Customers- During the first quarter of fiscal 2018, we adopted the new accounting standard for revenue recognition, ASU 2014-09 and the related amendments, using the full retrospective method where each prior period presented is restated. We recorded an increase to retained earnings as of January 31, 2016 (opening balance) of $4.9 million. The adoption of ASU 2014-09 had the following impacts:

• Income from the breakage of gift cards is classified within net sales and recognized proportionately over the expected redemption period, which was previously recognized as a reduction to operating expenses when the redemption of the gift card was deemed remote.

• The loyalty program is being treated as deferred revenue, which was previously treated using the incremental cost method and recognized to cost of sales.

• We changed other classifications between net sales, franchise and other revenue, cost of sales and operating expenses for various revenue-related transactions.

• We present our estimated returns allowance on a gross basis with returns liability recorded to accrued expenses and an asset for recovery to prepaid expenses and other current assets, which were previously presented on a net basis in accrued expenses.

Revenue Recognition, Deferred Revenue [Policy Text Block]

Gift Cards- Amounts received from the sale of gift cards are recorded as a liability and are recognized as sales when the cards are redeemed for merchandise. Based on historical information, the likelihood of a gift card remaining unredeemed (referred to as “breakage”) can be reasonably estimated at the time of gift card issuance. Breakage income is recognized over the estimated average redemption period of redeemed gift cards.

Deferred Revenue Liabilities- We record deferred revenue liabilities, included in accrued expenses on the consolidated balance sheets, for remaining obligations we have to our customers.

Revenue Recognition, Sales Returns [Policy Text Block]

Sales Returns- We reduce net sales by the amount of expected returns and cost of sales by the amount of merchandise we expect to recover, which are estimated based on historical experience.