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Revenue Recognition
 6 Months Ended
Aug. 01, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
NOTE 2 | REVENUE RECOGNITION
The following is information regarding the Company’s major product categories and sales channels:
Thirteen Weeks EndedTwenty-Six Weeks Ended
 August 1, 2020August 3, 2019August 1, 2020August 3, 2019
(in thousands)
Apparel$207,421 $408,305 $387,004 $797,195 
Accessories and other25,888 50,596 47,268 96,456 
Other revenue12,394 13,814 21,706 30,335 
Total net sales$245,703 $472,715 $455,978 $923,986 
Thirteen Weeks EndedTwenty-Six Weeks Ended
 August 1, 2020August 3, 2019August 1, 2020August 3, 2019
(in thousands)
Retail$164,745 $337,606 $324,282 $665,945 
Outlet68,564 121,295 109,990 227,706 
Other revenue12,394 13,814 21,706 30,335 
Total net sales$245,703 $472,715 $455,978 $923,986 
Other revenue consists primarily of revenue earned from our private label credit card agreement, shipping and handling revenue related to eCommerce activity, revenue from gift card breakage, sell-off revenue related to marked-out-of-stock inventory sales to third parties, and revenue from franchise agreements.

Revenue related to the Company’s international franchise operations was not material for any period presented and, therefore, are not reported separately from domestic revenue.
Revenue Recognition Policies
Merchandise Sales
The Company recognizes sales for in-store purchases at the point-of-sale. Revenue related to eCommerce transactions is recognized upon shipment based on the fact that control transfers to the customer at that time. The Company has made a policy election to treat shipping and handling as costs to fulfill the contract and as a result any amounts received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of goods sold, buying and occupancy costs in the unaudited Consolidated Statements of Income and Comprehensive Income for amounts paid to applicable carriers. Associate discounts on merchandise purchases are classified as a reduction of net sales. Net sales excludes sales tax collected from customers and remitted to governmental authorities.
Loyalty Program
The Company maintains a customer loyalty program in which customers earn points toward rewards for qualifying purchases and other marketing activities. Upon reaching specified point values, customers are issued a reward, which they may redeem on merchandise purchases at the Company’s stores or on its website. Generally, rewards earned must be redeemed within 60 days from the date of issuance. The Company defers a portion of merchandise sales based on the estimated standalone selling price of the points earned. This deferred revenue is recognized as certificates that are redeemed or expire. To calculate this deferral, the Company makes assumptions related to card holder redemption rates based on historical experience. The loyalty liability is included in deferred revenue on the unaudited Consolidated Balance Sheets.

Thirteen Weeks EndedTwenty-Six Weeks Ended
 August 1, 2020August 3, 2019August 1, 2020August 3, 2019
(in thousands)
Beginning balance loyalty deferred revenue$9,585 $14,716 $14,063 $15,319 
Reduction in revenue/(revenue recognized)284 50 (4,194)(553)
Ending balance loyalty deferred revenue$9,869 $14,766 $9,869 $14,766 
Sales Returns Reserve
The Company reduces net sales and provides a reserve for projected merchandise returns based on prior experience. Merchandise returns are often resalable merchandise and are refunded by issuing the same payment tender as the original purchase. The sales returns reserve was $7.8 million and $9.1 million as of August 1, 2020 and February 1, 2020, respectively, and is included in accrued expenses on the unaudited Consolidated Balance Sheets. The asset related to projected returned merchandise is included in other assets on the unaudited Consolidated Balance Sheets.
Gift Cards
The Company sells gift cards in its stores, on its eCommerce website, and through third parties. These gift cards do not expire or lose value over periods of inactivity. The Company accounts for gift cards by recognizing a liability at the time a gift card is sold. The gift card liability balance was $20.9 million and $24.1 million, as of August 1, 2020 and February 1, 2020, respectively, and is included in deferred revenue on the unaudited Consolidated Balance Sheets. The Company recognizes revenue from gift cards when they are redeemed by the customer. The Company also recognizes income on unredeemed gift cards, referred to as “gift card breakage.” Gift card breakage is recognized proportionately using a time-based attribution method from issuance of the gift card to the time when it can be determined that the likelihood of the gift card being redeemed is remote and that there is no legal obligation to remit unredeemed gift cards to relevant jurisdictions. The gift card breakage rate is based on historical redemption patterns. Gift card breakage is included in net sales in the unaudited Consolidated Statements of Income and Comprehensive Income.
Thirteen Weeks EndedTwenty-Six Weeks Ended
 August 1, 2020August 3, 2019August 1, 2020August 3, 2019
(in thousands)
Beginning gift card liability$21,728 $21,576 $24,142 $25,133 
Issuances4,353 7,956 8,393 15,669 
Redemptions(4,728)(8,799)(10,146)(18,918)
Gift card breakage(488)(767)(1,524)(1,918)
Ending gift card liability$20,865 $19,966 $20,865 $19,966 
Private Label Credit Card
The Company has an agreement with Comenity Bank (the “Bank”) to provide customers with private label credit cards (the “Card Agreement”) which was amended on August 28, 2017 to extend the term of the arrangement through December 31, 2024. Each private label credit card bears the logo of the Express brand and can only be used at the Company’s store locations and eCommerce channel. The Bank is the sole owner of the accounts issued under the private label credit card program and absorbs the losses associated with non-payment by the private label card holders and a portion of any fraudulent usage of the accounts.
Pursuant to the Card Agreement, the Company receives amounts from the Bank during the term based on a percentage of private label credit card sales and is also eligible to receive incentive payments for the achievement of certain performance targets. These funds are recorded as net sales in the unaudited Consolidated Statements of Income and Comprehensive Income. The Company also receives reimbursement funds from the Bank for certain expenses the Company incurs. These reimbursement funds are used by the Company to fund marketing and other programs associated with the private label credit card. The reimbursement funds received related to private label credit cards are recorded as net sales in the unaudited Consolidated Statements of Income and Comprehensive Income.

In connection with the Card Agreement, the Bank agreed to pay the Company a $20.0 million refundable payment which the Company recognized upon receipt as deferred revenue within other long-term liabilities in the Consolidated Balance Sheets and began to recognize into income on a straight-line basis commencing January of 2018. As of August 1, 2020, the deferred revenue balance of $12.7 million will be recognized over the remaining term of the amended Card Agreement within the other revenue component of net sales.
Thirteen Weeks EndedTwenty-Six Weeks Ended
 August 1, 2020August 3, 2019August 1, 2020August 3, 2019
(in thousands)
Beginning balance refundable payment liability$13,431 $16,309 $14,150 $17,028 
Recognized in revenue(720)(720)(1,439)(1,439)
Ending balance refundable payment liability $12,711 $15,589 $12,711 $15,589