ý | 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 |
Delaware | 30-0641353 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
933 MacArthur Boulevard, Mahwah, New Jersey | 07430 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer ¨ |
Non-accelerated filer ¨ | (Do not check if a smaller reporting company) |
Smaller reporting company ¨ | |
Emerging growth company ¨ |
PART I. FINANCIAL INFORMATION (Unaudited) | ||
Page | ||
Item 1. | Condensed Financial Statements: | |
Condensed Consolidated Balance Sheets | ||
Condensed Consolidated Statements of Operations | ||
Condensed Consolidated Statements of Comprehensive Income | ||
Condensed Consolidated Statements of Cash Flows | ||
Notes to Condensed Consolidated Financial Statements | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | |
Item 4. | Controls and Procedures | |
PART II. OTHER INFORMATION | ||
Item 1. | Legal Proceedings | |
Item 1A. | Risk Factors | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 6. | Exhibits | |
Signatures |
October 28, 2017 | July 29, 2017 | ||||||
(millions, except per share data) (unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 303.0 | $ | 325.6 | |||
Inventories | 744.2 | 639.3 | |||||
Prepaid expenses and other current assets | 203.6 | 157.4 | |||||
Total current assets | 1,250.8 | 1,122.3 | |||||
Property and equipment, net | 1,378.8 | 1,437.6 | |||||
Goodwill | 683.0 | 683.0 | |||||
Other intangible assets, net | 528.3 | 532.4 | |||||
Other assets | 60.6 | 96.2 | |||||
Total assets | $ | 3,901.5 | $ | 3,871.5 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 425.4 | $ | 411.6 | |||
Accrued expenses and other current liabilities | 359.2 | 360.0 | |||||
Deferred income | 116.2 | 121.5 | |||||
Current portion of long-term debt | 21.5 | 44.0 | |||||
Total current liabilities | 922.3 | 937.1 | |||||
Long-term debt, less current portion | 1,524.9 | 1,494.1 | |||||
Lease-related liabilities | 339.3 | 348.3 | |||||
Deferred income taxes | 98.6 | 79.3 | |||||
Other non-current liabilities | 185.0 | 191.7 | |||||
Total liabilities | 3,070.1 | 3,050.5 | |||||
Commitments and contingencies (Note 13) | |||||||
Equity: | |||||||
Common stock, par value $0.01 per share; 196.0 million and 195.1 million shares issued and outstanding as of October 28, 2017 and July 29, 2017, respectively | 2.0 | 2.0 | |||||
Additional paid-in capital | 1,074.2 | 1,068.2 | |||||
Retained deficit | (232.4 | ) | (238.8 | ) | |||
Accumulated other comprehensive loss | (12.4 | ) | (10.4 | ) | |||
Total equity | 831.4 | 821.0 | |||||
Total liabilities and equity | $ | 3,901.5 | $ | 3,871.5 |
Three Months Ended | |||||||
October 28, 2017 | October 29, 2016 | ||||||
(millions, except per share data) (unaudited) | |||||||
Net sales | $ | 1,589.7 | $ | 1,678.4 | |||
Cost of goods sold | (624.6 | ) | (664.4 | ) | |||
Gross margin | 965.1 | 1,014.0 | |||||
Other operating expenses: | |||||||
Buying, distribution and occupancy expenses | (318.1 | ) | (320.6 | ) | |||
Selling, general and administrative expenses | (492.8 | ) | (524.4 | ) | |||
Acquisition and integration expenses | (2.1 | ) | (12.0 | ) | |||
Restructuring and other related charges | (22.2 | ) | (11.9 | ) | |||
Depreciation and amortization expense | (90.0 | ) | (93.9 | ) | |||
Total other operating expenses | (925.2 | ) | (962.8 | ) | |||
Operating income | 39.9 | 51.2 | |||||
Interest expense | (26.6 | ) | (25.3 | ) | |||
Interest income and other income (expense), net | 0.2 | (0.1 | ) | ||||
Income before provision for income taxes | 13.5 | 25.8 | |||||
Provision for income taxes | (6.9 | ) | (11.4 | ) | |||
Net income | $ | 6.6 | $ | 14.4 | |||
Net income per common share: | |||||||
Basic | $ | 0.03 | $ | 0.07 | |||
Diluted | $ | 0.03 | $ | 0.07 | |||
Weighted average common shares outstanding: | |||||||
Basic | 195.4 | 194.4 | |||||
Diluted | 195.4 | 195.3 |
Three Months Ended | |||||||
October 28, 2017 | October 29, 2016 | ||||||
(millions) (unaudited) | |||||||
Net income | $ | 6.6 | $ | 14.4 | |||
Other comprehensive loss, net of tax: | |||||||
Net actuarial loss on defined benefit plan, net of income tax benefit of $0.4 million | — | (0.7 | ) | ||||
Foreign currency translation adjustment | (2.0 | ) | (0.8 | ) | |||
Total other comprehensive loss before reclassification | (2.0 | ) | (1.5 | ) | |||
Reclassification of settlement charges for ANN's pension plan, net of income tax benefit of $1.3 million | — | 2.0 | |||||
Total comprehensive income | $ | 4.6 | $ | 14.9 |
Three Months Ended | |||||||
October 28, 2017 | October 29, 2016 | ||||||
(millions) (unaudited) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 6.6 | $ | 14.4 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization expense | 90.0 | 93.9 | |||||
Deferred income tax benefit (expense) | 18.7 | (0.8 | ) | ||||
Deferred rent and other occupancy costs | (12.2 | ) | (16.6 | ) | |||
Stock-based compensation expense | 6.0 | 7.0 | |||||
Impairment of long-lived assets | 6.6 | 4.7 | |||||
Non-cash interest expense | 3.1 | 3.1 | |||||
Gain on sale of fixed assets | (2.0 | ) | — | ||||
Other non-cash (income) expense, net | (4.9 | ) | 2.3 | ||||
Changes in operating assets and liabilities: | |||||||
Inventories | (104.9 | ) | (158.5 | ) | |||
Accounts payable, accrued liabilities and income tax liabilities | — | 67.8 | |||||
Deferred income | 1.2 | (0.7 | ) | ||||
Lease-related liabilities | 5.1 | 12.1 | |||||
Other balance sheet changes, net | 0.2 | 27.3 | |||||
Net cash provided by operating activities | 13.5 | 56.0 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (50.6 | ) | (106.6 | ) | |||
Purchase of investments | (0.2 | ) | — | ||||
Proceeds from sale of assets | 9.7 | — | |||||
Net cash used in investing activities | (41.1 | ) | (106.6 | ) | |||
Cash flows from financing activities: | |||||||
Redemptions and repayments of term loan | (22.5 | ) | (100.0 | ) | |||
Proceeds from revolver borrowings | 232.5 | 298.3 | |||||
Repayments of revolver borrowings | (204.8 | ) | (248.9 | ) | |||
Tax payments related to share-based awards | (0.2 | ) | — | ||||
Proceeds from stock options exercised and employee stock purchases | — | 0.1 | |||||
Net cash provided by (used in) financing activities | 5.0 | (50.5 | ) | ||||
Net decrease in cash and cash equivalents | (22.6 | ) | (101.1 | ) | |||
Cash and cash equivalents at beginning of period | 325.6 | 371.8 | |||||
Cash and cash equivalents at end of period | $ | 303.0 | $ | 270.7 |
October 28, 2017 | July 29, 2017 | ||||||
(millions) | |||||||
Premium Fashion | $ | 255.3 | $ | 208.2 | |||
Value Fashion | 211.4 | 180.6 | |||||
Plus Fashion | 173.7 | 161.9 | |||||
Kids Fashion | 103.8 | 88.6 | |||||
Total inventories | $ | 744.2 | $ | 639.3 |
Three Months Ended | |||||||
October 28, 2017 | October 29, 2016 | ||||||
(millions) | |||||||
Premium Fashion | $ | — | $ | 0.7 | |||
Value Fashion (a) | 3.2 | 2.1 | |||||
Plus Fashion | 1.7 | 1.1 | |||||
Kids Fashion | 0.6 | 0.8 | |||||
Total impairment charges | $ | 5.5 | $ | 4.7 |
Three Months Ended | |||||||
October 28, 2017 | October 29, 2016 | ||||||
(millions) | |||||||
Cash restructuring charges: | |||||||
Severance and benefit costs (a) | $ | 3.9 | $ | 8.1 | |||
Other related charges (b) | 17.2 | 3.8 | |||||
Total cash charges | 21.1 | 11.9 | |||||
Non-cash charges: | |||||||
Impairment of assets | 1.1 | — | |||||
Total non-cash charges | 1.1 | — | |||||
Total restructuring and other related charges | $ | 22.2 | $ | 11.9 |
Severance and benefit costs | Other related charges | Total | |||||||||
(millions) | |||||||||||
Balance at July 29, 2017 | $ | 17.3 | $ | 5.1 | $ | 22.4 | |||||
Additions charged to expense | 3.9 | 17.2 | 21.1 | ||||||||
Cash payments | (6.5 | ) | (12.2 | ) | (18.7 | ) | |||||
Balance at October 28, 2017 | $ | 14.7 | $ | 10.1 | $ | 24.8 |
Debt consists of the following: | October 28, 2017 | July 29, 2017 | |||||
(millions) | |||||||
Revolving credit facility | $ | 27.7 | $ | — | |||
Less: unamortized debt issuance costs (a) | (4.0 | ) | (4.4 | ) | |||
23.7 | (4.4 | ) | |||||
Term loan | 1,574.0 | 1,596.5 | |||||
Less: unamortized original issue discount (b) | (23.9 | ) | (25.2 | ) | |||
unamortized debt issuance costs (b) | (27.4 | ) | (28.8 | ) | |||
1,522.7 | 1,542.5 | ||||||
Less: current portion | (21.5 | ) | (44.0 | ) | |||
Total long-term debt | $ | 1,524.9 | $ | 1,494.1 |
Fiscal Year | Amount | |||
(millions) | ||||
2018 | $ | 21.5 | ||
2019 | 90.0 | |||
2020 | 67.5 | |||
2021 | 117.7 | |||
2022 | 90.0 | |||
Thereafter | 1,215.0 | |||
Total maturities | $ | 1,601.7 |
Level 1 | Quoted prices for identical instruments in active markets; |
Level 2 | Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are recently traded (not active); and |
Level 3 | Instruments with little, if any, market activity are valued using significant unobservable inputs or valuation techniques. |
October 28, 2017 | July 29, 2017 | |||||||
(millions) | ||||||||
Prepaid expenses | $ | 82.1 | $ | 73.6 | ||||
Accounts and other receivables | 83.9 | 82.3 | ||||||
Short-term investments | 1.2 | 1.0 | ||||||
Other current assets (a) | 36.4 | 0.5 | ||||||
Total prepaid expenses and other current assets | $ | 203.6 | $ | 157.4 |
Three Months Ended | |||||||
Summary of Changes in Equity: | October 28, 2017 | October 29, 2016 | |||||
(millions) | |||||||
Balance at beginning of period | $ | 821.0 | $ | 1,863.3 | |||
Net income | 6.6 | 14.4 | |||||
Total other comprehensive (loss) income | (2.0 | ) | 0.5 | ||||
Common stock issued and equity grants made pursuant to stock-based compensation plans | 6.0 | 5.7 | |||||
Other | (0.2 | ) | (0.3 | ) | |||
Balance at end of period | $ | 831.4 | $ | 1,883.6 |
Three Months Ended | |||||
October 28, 2017 | October 29, 2016 | ||||
(millions) | |||||
Basic | 195.4 | 194.4 | |||
Dilutive effect of stock options and restricted stock units (a) | — | 0.9 | |||
Diluted shares | 195.4 | 195.3 |
Three Months Ended | |||||||
October 28, 2017 | October 29, 2016 | ||||||
(millions) | |||||||
Compensation expense | $ | 6.0 | $ | 7.0 | |||
Current income tax benefit | $ | 2.3 | $ | 2.6 |
Three Months Ended | |||||||
October 28, 2017 | October 29, 2016 | ||||||
Expected term (years) | 5.1 | 5.1 | |||||
Expected volatility | 43.7 | % | 37.3 | % | |||
Risk-free interest rate | 1.9 | % | 1.2 | % | |||
Expected dividend yield | — | % | — | % | |||
Weighted-average grant date fair value | $ | 0.97 | $ | 1.94 |
Number of Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Terms | Aggregate Intrinsic Value (a) | |||||||||
(thousands) | (years) | (millions) | ||||||||||
Options outstanding – July 29, 2017 | 16,413.7 | $ | 11.42 | 4.5 | $ | 0.2 | ||||||
Granted | 4,510.4 | 2.38 | ||||||||||
Exercised | — | — | ||||||||||
Canceled/Forfeited | (842.9 | ) | 11.82 | |||||||||
Options outstanding – October 28, 2017 | 20,081.2 | $ | 9.37 | 4.9 | $ | — | ||||||
Options vested and expected to vest at October 28, 2017 (b) | 19,560.2 | $ | 9.51 | 4.9 | $ | — | ||||||
Options exercisable at October 28, 2017 | 10,772.8 | $ | 13.23 | 3.8 | $ | — |
(a) | The intrinsic value is the amount by which the market price at the end of the period of the underlying share of stock exceeds the exercise price of the stock option. |
(b) | The number of options expected to vest takes into consideration estimated expected forfeitures. |
Service-based Restricted Equity Awards | ||||||
Number of Shares | Weighted- Average Grant Date Fair Value Per Share | |||||
(thousands) | ||||||
Nonvested at July 29, 2017 | 3,110.0 | $ | 8.05 | |||
Granted | 2,531.9 | 2.47 | ||||
Vested | (909.2 | ) | 8.47 | |||
Cancelled/Forfeited | (82.3 | ) | 7.47 | |||
Nonvested at October 28, 2017 | 4,650.4 | $ | 4.94 |
• | Premium Fashion segment – consists primarily of the specialty retail, outlet and ecommerce operations of the Ann Taylor and LOFT brands. |
• | Value Fashion segment – consists of the specialty retail, outlet and ecommerce operations of the maurices and dressbarn brands. |
• | Plus Fashion segment – consists of the specialty retail, outlet and ecommerce operations of the Lane Bryant and Catherines brands. |
• | Kids Fashion segment – consists of the specialty retail, outlet, ecommerce and licensing operations of the Justice brand. |
Three Months Ended | |||||||
October 28, 2017 | October 29, 2016 | ||||||
(millions) | |||||||
Net sales: | |||||||
Premium Fashion | $ | 555.1 | $ | 579.2 | |||
Value Fashion | 471.3 | 504.1 | |||||
Plus Fashion | 304.2 | 317.7 | |||||
Kids Fashion | 259.1 | 277.4 | |||||
Total net sales | $ | 1,589.7 | $ | 1,678.4 | |||
Operating income: | |||||||
Premium Fashion | $ | 38.5 | $ | 43.6 | |||
Value Fashion | 10.9 | 12.1 | |||||
Plus Fashion | (0.9 | ) | 6.2 | ||||
Kids Fashion | 15.7 | 13.2 | |||||
Unallocated acquisition and integration expenses | (2.1 | ) | (12.0 | ) | |||
Unallocated restructuring and other related charges (a) | (22.2 | ) | (11.9 | ) | |||
Total operating income | $ | 39.9 | $ | 51.2 | |||
Depreciation and amortization expense: | |||||||
Premium Fashion | $ | 32.9 | $ | 34.2 | |||
Value Fashion | 26.3 | 26.4 | |||||
Plus Fashion | 15.4 | 16.1 | |||||
Kids Fashion | 15.4 | 17.2 | |||||
Total depreciation and amortization expense | $ | 90.0 | $ | 93.9 |
Three Months Ended | |||||||
October 28, 2017 | October 29, 2016 | ||||||
(millions) | |||||||
Cash related charges (i): | |||||||
Severance and benefit costs: | |||||||
Premium Fashion | $ | 1.4 | $ | — | |||
Value Fashion | (1.2 | ) | 2.3 | ||||
Plus Fashion | 4.7 | 1.7 | |||||
Kids Fashion | (0.3 | ) | 0.7 | ||||
Corporate | (0.7 | ) | 3.4 | ||||
Total Severance and benefit costs: | 3.9 | 8.1 | |||||
Other related charges | |||||||
Plus Fashion | 1.2 | — | |||||
Corporate | 16.0 | 3.8 | |||||
Total Other related charges | 17.2 | 3.8 | |||||
Total Cash related charges | 21.1 | 11.9 | |||||
Non-cash charges: | |||||||
Impairment of assets: | |||||||
Value Fashion | 1.1 | — | |||||
Total Non-cash charges | 1.1 | — | |||||
Total restructuring and other related charges | $ | 22.2 | $ | 11.9 |
Three Months Ended | |||||||
Cash Interest and Taxes: | October 28, 2017 | October 29, 2016 | |||||
(millions) | |||||||
Cash paid for interest | $ | 30.9 | $ | 35.5 | |||
Cash paid for income taxes | $ | 1.8 | $ | 2.1 |
• | Comparable sales decreased by 5% and were down at all four segments primarily due to a highly promotional selling environment and traffic declines at three of our four segments; |
• | Operating income was $39.9 million compared to $51.2 million in the year-ago period mainly due to the lower comparable sales; and |
• | Net income per diluted share was $0.03, compared to $0.07 in the year-ago period. |
• | Cash provided by operations was $13.5 million compared to $56.0 million in the year-ago period; |
• | Capital expenditures were $50.6 million compared to $106.6 million in the year-ago period; and |
• | Term loan repayments totaled $22.5 million, and net borrowings under our revolving credit agreement totaled $27.7 million. |
Three Months Ended | |||||||
October 28, 2017 | October 29, 2016 | ||||||
(millions) | |||||||
Acquisition and integration expenses (a) | $ | (2.1 | ) | $ | (12.0 | ) | |
Restructuring and other related charges (b) | (22.2 | ) | (11.9 | ) |
Three Months Ended | ||||||||||||||
October 28, 2017 | October 29, 2016 | $ Change | % Change | |||||||||||
(millions, except per share data) | ||||||||||||||
Net sales | $ | 1,589.7 | $ | 1,678.4 | $ | (88.7 | ) | (5.3 | )% | |||||
Cost of goods sold | (624.6 | ) | (664.4 | ) | 39.8 | 6.0 | % | |||||||
Cost of goods sold as % of net sales | 39.3 | % | 39.6 | % | ||||||||||
Gross margin | 965.1 | 1,014.0 | (48.9 | ) | (4.8 | )% | ||||||||
Gross margin as % of net sales | 60.7 | % | 60.4 | % | ||||||||||
Other operating expenses: | ||||||||||||||
Buying, distribution and occupancy expenses | (318.1 | ) | (320.6 | ) | 2.5 | 0.8 | % | |||||||
BD&O expenses as % of net sales | 20.0 | % | 19.1 | % | ||||||||||
Selling, general and administrative expenses | (492.8 | ) | (524.4 | ) | 31.6 | 6.0 | % | |||||||
SG&A expenses as % of net sales | 31.0 | % | 31.2 | % | ||||||||||
Acquisition and integration expenses | (2.1 | ) | (12.0 | ) | 9.9 | 82.5 | % | |||||||
Restructuring and other related charges | (22.2 | ) | (11.9 | ) | (10.3 | ) | (86.6 | )% | ||||||
Depreciation and amortization expense | (90.0 | ) | (93.9 | ) | 3.9 | 4.2 | % | |||||||
Total other operating expenses | (925.2 | ) | (962.8 | ) | 37.6 | 3.9 | % | |||||||
Operating income | 39.9 | 51.2 | (11.3 | ) | 22.1 | % | ||||||||
Operating income as % of net sales | 2.5 | % | 3.1 | % | ||||||||||
Interest expense | (26.6 | ) | (25.3 | ) | (1.3 | ) | (5.1 | )% | ||||||
Interest income and other income (expense), net | 0.2 | (0.1 | ) | 0.3 | NM | |||||||||
Income before provision for income taxes | 13.5 | 25.8 | (12.3 | ) | 47.7 | % | ||||||||
Provision for income taxes | (6.9 | ) | (11.4 | ) | 4.5 | 39.5 | % | |||||||
Effective tax rate (a) | 51.1 | % | 44.2 | % | ||||||||||
Net income | $ | 6.6 | $ | 14.4 | $ | (7.8 | ) | 54.2 | % | |||||
Net income per common share: | ||||||||||||||
Basic | $ | 0.03 | $ | 0.07 | $ | (0.04 | ) | 57.1 | % | |||||
Diluted | $ | 0.03 | $ | 0.07 | $ | (0.04 | ) | 57.1 | % |
Three Months Ended | ||||||||||||||
October 28, 2017 | October 29, 2016 | $ Change | % Change | |||||||||||
(millions) | ||||||||||||||
Net sales: | ||||||||||||||
Premium Fashion | $ | 555.1 | $ | 579.2 | $ | (24.1 | ) | (4.2 | )% | |||||
Value Fashion | 471.3 | 504.1 | (32.8 | ) | (6.5 | )% | ||||||||
Plus Fashion | 304.2 | 317.7 | (13.5 | ) | (4.2 | )% | ||||||||
Kids Fashion | 259.1 | 277.4 | (18.3 | ) | (6.6 | )% | ||||||||
Total net sales | $ | 1,589.7 | $ | 1,678.4 | $ | (88.7 | ) | (5.3 | )% | |||||
Comparable sales (a) | (5 | )% |
• | a decrease of $11.4 million, or 6%, in comparable sales at Ann Taylor and a decrease of $23.1 million, or 6%, in comparable sales at LOFT during the three months ended October 28, 2017; |
• | a decrease of $2.6 million in non-comparable sales due to 20 net store closures at Ann Taylor and an increase of $2.2 million in non-comparable sales at LOFT, as the positive impact of 17 new store openings in the last twelve months more than offset the negative impact of 19 store closures; and |
• | an increase of $10.8 million in other revenues primarily due to higher gift card breakage and higher credit revenue. |
• | a decrease of $12.8 million, or 5%, in comparable sales at maurices and a decrease of $22.3 million, or 10%, in comparable sales at dressbarn during the three months ended October 28, 2017; |
• | an increase of $2.7 million in non-comparable sales at maurices, as the positive impact of 25 new store openings in the last twelve months more than offset the negative impact of 23 store closures, and a decrease of $5.9 million in non-comparable sales at dressbarn due to 37 net store closures in the last twelve months; and |
• | an increase of $5.5 million in other revenues primarily due to the segment's new credit card program. |
• | a decrease of $10.2 million, or 5%, in comparable sales at Lane Bryant and a decrease of $1.9 million, or 3% in comparable sales at Catherines during the three months ended October 28, 2017; |
• | a decrease of $1.7 million in non-comparable sales at Lane Bryant due to 12 net store closures in the last twelve months and a decrease of $1.3 million in non-comparable sales at Catherines due to 15 net store closures in the last twelve months; and |
• | an increase of $1.6 million in other revenues. |
• | a decrease of $4.1 million, or 2%, in comparable sales during the three months ended October 28, 2017. During the first quarter, vouchers distributed in connection with the pricing litigation, discussed more fully in Note 13 to the unaudited condensed consolidated financial statements, began to be redeemed. Comparable sales related to these transactions includes the t |
• | a decrease of $5.4 million in non-comparable sales primarily due to 42 net store closures in the last twelve months; and |
• | a decrease of $8.8 million in other revenue primarily due to lower wholesale revenue. |
• | Premium Fashion gross margin rate performance declined by approximately 110 basis points reflecting a higher level of promotional selling resulting from soft product acceptance partially offset by the segment's cost of goods sold initiative. |
• | Value Fashion gross margin rate performance improved approximately 200 basis points as a result of lower promotional selling at maurices, increased penetration of internally sourced product across the segment, and improved economics related to the segment’s new credit card program. These increases were offset in part by higher markdown requirements at dressbarn to maintain appropriate inventory levels on lower than expected customer demand. |
• | Plus Fashion gross margin rate performance declined by approximately 80 basis points primarily reflecting higher shipping costs and markdown requirements. |
• | Kids Fashion gross margin rate performance improved approximately 140 basis points as a result of effective inventory management and greater product acceptance. |
Three Months Ended | ||||||||||||||
October 28, 2017 | October 29, 2016 | $ Change | % Change | |||||||||||
(millions) | ||||||||||||||
Operating income: | ||||||||||||||
Premium Fashion | $ | 38.5 | $ | 43.6 | $ | (5.1 | ) | (11.7 | )% | |||||
Value Fashion | 10.9 | 12.1 | (1.2 | ) | (9.9 | )% | ||||||||
Plus Fashion | (0.9 | ) | 6.2 | (7.1 | ) | (114.5 | )% | |||||||
Kids Fashion | 15.7 | 13.2 | 2.5 | 18.9 | % | |||||||||
Unallocated acquisition and integration expenses | (2.1 | ) | (12.0 | ) | 9.9 | 82.5 | % | |||||||
Unallocated restructuring and other related charges | (22.2 | ) | (11.9 | ) | (10.3 | ) | (86.6 | )% | ||||||
Total operating income | $ | 39.9 | $ | 51.2 | $ | (11.3 | ) | (22.1 | )% |
Three Months Ended | |||||||
October 28, 2017 | October 29, 2016 | ||||||
(millions) | |||||||
Net cash provided by operating activities | $ | 13.5 | $ | 56.0 | |||
Net cash used in investing activities | (41.1 | ) | (106.6 | ) | |||
Net cash provided by (used in) financing activities | 5.0 | (50.5 | ) | ||||
Net decrease in cash and cash equivalents | $ | (22.6 | ) | $ | (101.1 | ) |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a) | ||||||||
Month # 1 (July 30, 2017 – August 26, 2017) | — | $ | — | — | $ 181 million | |||||||
Month # 2 (August 27, 2017 – September 30, 2017) | — | $ | — | — | $ 181 million | |||||||
Month # 3 (October 1, 2017 – October 28, 2017) | — | $ | — | — | $ 181 million |
Exhibit | Description | |
Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. | ||
Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. | ||
Certification of David Jaffe pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* | ||
Certification of Robb Giammatteo pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* | ||
101.INS | XBRL Instance Document† | |
101.SCH | XBRL Taxonomy Extension Schema Document† | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document† | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document† | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document† | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document† |
ASCENA RETAIL GROUP, INC. | |
Date: December 4, 2017 | BY: /s/ David Jaffe |
David Jaffe | |
Chief Executive Officer | |
(Principal Executive Officer) | |
Date: December 4, 2017 | BY: /s/ Robb Giammatteo |
Robb Giammatteo | |
Executive Vice President and Chief Financial Officer | |
(Principal Financial Officer) |
/s/ David Jaffe |
David Jaffe |
Chief Executive Officer |
/s/ Robb Giammatteo |
Robb Giammatteo |
Executive Vice President and Chief Financial Officer |
/s/ David Jaffe |
David Jaffe |
Chief Executive Officer |
December 4, 2017 |
/s/ Robb Giammatteo |
Robb Giammatteo |
Executive Vice President and Chief Financial Officer |
December 4, 2017 |
Document And Entity Information - shares |
3 Months Ended | |
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Oct. 28, 2017 |
Nov. 30, 2017 |
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Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Oct. 28, 2017 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | asna | |
Entity Registrant Name | Ascena Retail Group, Inc. | |
Entity Central Index Key | 0001498301 | |
Current Fiscal Year End Date | --08-04 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 196,039,686.0 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions |
Oct. 28, 2017 |
Jul. 29, 2017 |
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Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, issued | 196.0 | 195.1 |
Common stock, outstanding | 196.0 | 195.1 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |||
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Oct. 28, 2017 |
Oct. 29, 2016 |
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Income Statement [Abstract] | ||||
Net sales | $ 1,589.7 | $ 1,678.4 | ||
Cost of goods sold | (624.6) | (664.4) | ||
Gross margin | 965.1 | 1,014.0 | ||
Other operating expenses: | ||||
Buying, distribution and occupancy expenses | (318.1) | (320.6) | ||
Selling, general and administrative expenses | (492.8) | (524.4) | ||
Acquisition and integration expenses | (2.1) | (12.0) | ||
Restructuring and other related charges | [1] | (22.2) | (11.9) | |
Depreciation and amortization expense | (90.0) | (93.9) | ||
Total other operating expenses | (925.2) | (962.8) | ||
Operating income | 39.9 | 51.2 | ||
Interest expense | (26.6) | (25.3) | ||
Interest income and other income (expense), net | 0.2 | (0.1) | ||
Income before provision for income taxes | 13.5 | 25.8 | ||
Provision for income taxes | (6.9) | (11.4) | ||
Net income | $ 6.6 | $ 14.4 | ||
Net income per common share: | ||||
Basic | $ 0.03 | $ 0.07 | ||
Diluted | $ 0.03 | $ 0.07 | ||
Weighted average common shares outstanding: | ||||
Basic | 195.4 | 194.4 | ||
Diluted | 195.4 | 195.3 | ||
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 6.6 | $ 14.4 |
Other comprehensive loss, net of tax: | ||
Net actuarial loss on defined benefit plan, net of income tax benefit of $0.4 million | 0.0 | (0.7) |
Foreign currency translation adjustment | (2.0) | (0.8) |
Total other comprehensive loss before reclassification | (2.0) | (1.5) |
Reclassification of settlement charges for ANN's pension plan, net of income tax benefit of $1.3 million | 0.0 | 2.0 |
Total comprehensive income | $ 4.6 | $ 14.9 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) $ in Millions |
3 Months Ended |
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Oct. 29, 2016
USD ($)
| |
Statement of Comprehensive Income [Abstract] | |
Net actuarial loss on a defined benefit plan, tax benefit | $ 0.4 |
Reclassification for settlement of ANN's pension plan, tax benefit | $ 1.3 |
Description of Business |
3 Months Ended |
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Oct. 28, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business ascena retail group, inc., a Delaware corporation (“ascena” or the “Company”), is a leading national specialty retailer of apparel for women and tween girls. The Company operates, through its 100% owned subsidiaries, ecommerce operations and approximately 4,800 stores in the United States, Canada and Puerto Rico. The Company had annual revenues for the fiscal year ended July 29, 2017 of approximately $6.6 billion. The Company and its subsidiaries are collectively referred to herein as the “Company,” “ascena,” “we,” “us,” “our” and “ourselves,” unless the context indicates otherwise. The Company operates its business in four operating segments: Premium Fashion, Value Fashion, Plus Fashion and Kids Fashion. All of our segments sell fashion merchandise to the women's and girls' apparel market across a wide range of ages, sizes and demographics. Our segments consist of specialty retail, outlet and ecommerce as well as licensed franchises in international territories at our Kids Fashion segment. Our Premium Fashion segment consists of our Ann Taylor and LOFT brands; our Value Fashion segment consists of our maurices and dressbarn brands; our Plus Fashion segment consists of our Lane Bryant and Catherines brands; and our Kids Fashion segment consists of our Justice brand. For a more detailed description of each brand's products and markets in which they serve, see Part I, Item 1 "Business" in our Annual Report on Form 10-K for the fiscal year ended July 29, 2017 (the "Fiscal 2017 10-K"). The Company's brands had the following store counts as of October 28, 2017: Ann Taylor 320 stores; LOFT 681 stores; maurices 1,008 stores; dressbarn 772 stores; Lane Bryant 764 stores; Catherines 355 stores; and Justice 894 stores. |
Basis of Presentation |
3 Months Ended |
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Oct. 28, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Interim Financial Statements These interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and are unaudited. In the opinion of management, however, such condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the condensed consolidated financial condition, results of operations, comprehensive income and cash flows of the Company for the interim periods presented. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted from this report as permitted by the SEC’s rules and regulations. However, the Company believes that the disclosures herein are adequate to ensure that the information is fairly presented. The condensed consolidated balance sheet data as of July 29, 2017 is derived from the audited consolidated financial statements included in the Company’s Fiscal 2017 10-K, which should be read in conjunction with these interim financial statements. Reference is made to the Fiscal 2017 10-K for a complete set of financial statements. Fiscal Period Fiscal year 2018 will end on August 4, 2018 and will be a 53-week period ("Fiscal 2018") as the Company conforms its fiscal periods to the National Retail Federation calendar. Fiscal year 2017 ended on July 29, 2017 and was a 52-week period (“Fiscal 2017”). The three months ended October 28, 2017 and the three months ended October 29, 2016 are both 13-week periods. |
Recently Issued Accounting Standards |
3 Months Ended |
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Oct. 28, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Recently adopted standards In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” The guidance simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and the classification in the statement of cash flows. The new standard requires excess tax benefits and shortfalls to be recorded within the provision for income taxes in the consolidated statements of operations in the period they are realized. The impact of this change will depend on changes in the Company's stock price and the timing of the exercise of stock options and the vesting of restricted stock units, so the full effect of the standard is not able to be quantified. However, the recognition of these changes within the consolidated statements of operations will likely result in increased volatility of our provision for income taxes and earnings. The Company adopted the guidance on a prospective basis in the first quarter of Fiscal 2018, which resulted in additional non-cash income tax expense of approximately $3.2 million in the first quarter of Fiscal 2018. Finally, in connection with the new standard, the Company has elected to maintain its practice of estimating forfeitures when recognizing expense for share-based payment awards rather than accounting for forfeitures when they occur. Recently issued standards In February 2016, the FASB issued ASU 2016-02, "Leases." The guidance requires the lessee to recognize the assets and liabilities for the rights and obligations created by leases with terms of 12 months or more. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. Adoption of the standard requires a modified retrospective approach where the guidance is applied to the earliest comparative period presented. The Company does not expect that the guidance will have a significant impact on its condensed consolidated statements of cash flows and is currently evaluating the guidance and its impact on its other condensed consolidated financial statements, but expects that it will result in a significant increase to its long-term assets and liabilities. The Company is also in the process of identifying changes to its business processes, systems and controls to support adoption of the new standard in fiscal 2020. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," which supersedes the revenue recognition requirements in FASB Accounting Standards Codification, "Revenue Recognition (Topic 605)." The guidance requires that an entity recognize revenue in a way that depicts the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. The guidance, which was deferred in July 2015, is effective for annual reporting periods beginning after December 15, 2017 and interim periods therein. The guidance may be applied retrospectively to each period presented or with the cumulative effect recognized as of the initial date of application. The Company is currently in the process of evaluating the impact that adopting ASU 2014-09 will have on its consolidated financial statements and notes thereto. Based on these efforts, the Company currently anticipates that the performance obligations underlying its core revenue streams (its retail store and ecommerce businesses) and related timing of revenue recognition thereof, will remain substantially unchanged. The Company is in the process of evaluating the impact of the new standard on ancillary sources of revenue, such as its loyalty and credit card programs, which represented approximately 2% of total net sales in Fiscal 2017. The Company has not yet determined whether the guidance will be adopted using the full retrospective restatement of all prior periods presented, or using the modified retrospective basis with a cumulative adjustment to opening retained earnings in the year of initial adoption. Finally, the Company is also analyzing the impact of the new standard on our current accounting policies and internal controls. Upon completion of these assessments, the Company will evaluate the impact of adopting the new standard on the Company's condensed consolidated financial statements. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories substantially consist of finished goods merchandise. Inventory by segment is set forth below:
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Long-Lived Assets Impairment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Lived Assets Impairment | Long-lived Asset Impairments The charges below reduced the net carrying value of certain long-lived assets to their estimated fair value, which was determined based on discounted expected cash flows, which are classified as Level 3 measurements in the fair value measurements hierarchy. These impairment charges arose from the Company's routine assessment of under-performing retail stores and are included as a component of Selling, general and administrative expenses in the accompanying condensed consolidated statements of operations for all periods. Impairment charges related to retail store assets by segment are as follows:
________ (a) The Company incurred additional store impairment charges of $1.1 million in connection with the Change for Growth program which are considered to be outside the Company’s typical quarterly real-estate review, and are included within Restructuring and other related charges for the three months ended October 28, 2017, as more fully described in Note 6. No such expenses were recorded in the three months ended October 29, 2016. |
Restructuring and Other Related Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Other Related Charges | Restructuring and Other Related Charges In October 2016, the Company initiated a transformation plan with the objective of supporting sustainable long-term growth and increasing shareholder value (the "Change for Growth" program). The Change for Growth program is expected to (i) refine the Company's operating model to increase its focus on key customer segments, (ii) reduce the time to bring product to market, (iii) reduce working capital requirements and (iv) enhance the Company's ability to serve customers on any purchasing platform, all while better leveraging the Company's shared service platform. The Company's new operating model is designed to focus on enhancing customer-facing capabilities while eliminating organizational inefficiencies. Activities under the Change for Growth program during the first quarter of Fiscal 2018 included the continued transition of certain transaction processing functions in Human Resources and Finance within its brand services group to an independent third-party managed service provider. In addition, in connection with its ongoing fleet optimization store program, the Company recognized charges for non-cash asset impairments to write down the underlying assets of certain program stores to fair value based on their discounted cash flows. Activities under the program during the first quarter of Fiscal 2017 primarily included the elimination of a number of executive positions and organizational changes which resulted in the creation of the Premium Fashion, Value Fashion, Plus Fashion and Kids Fashion operating segments. As the Company continues to execute on the initiatives identified under the Change for Growth program, we currently expect to incur additional charges in the remainder of Fiscal 2018 of approximately $25-$35 million. In addition, we have identified capital projects of approximately $40 million, which are expected to be incurred during Fiscal 2018. Of that amount, approximately $5 million was spent in the first quarter of Fiscal 2018. The Company may incur significant additional charges and capital expenditures in future periods as it more fully defines incremental Change for Growth program initiatives, and moves into the execution phases of those projects. Actions associated with the Change for Growth program are currently expected to continue through fiscal 2019. As a result of the Change for Growth program, the Company incurred the following charges, which are included within Restructuring and other related charges, for all periods presented:
_______ (a) Severance and benefit costs in Fiscal 2018 reflect additional severance accruals associated with previously announced initiatives as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. Fiscal 2017 amounts reflect accruals associated with the October 2016 restructuring announcement. (b) Other related charges in both periods consist of professional fees incurred in connection with the identification and implementation of transformation initiatives associated with the Change for Growth program. A summary of activity for the three months ended October 28, 2017 in the restructuring-related liabilities associated with the Change for Growth program, which is included within Accrued expenses and other current liabilities, is as follows:
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt
_______ (a) The unamortized debt issuance costs are amortized on a straight-line basis over the life of the amended revolving credit agreement. (b) The original issue discount and debt issuance costs for the term loan are amortized over the life of the term loan using the interest method based on an imputed interest rate of approximately 6.3%. Amended Revolving Credit Agreement The Company amended its revolving credit facility in August 2015 (the "Amended Revolving Credit Agreement"). The Amended Revolving Credit Agreement provides aggregate revolving commitments up to $600 million, with an optional increase of up to $200 million and expires in August 2020. As of October 28, 2017, borrowings under the Amended Revolving Credit Agreement consisted of $27.7 million of Eurodollar borrowings at a rate of 2.50%, and the Company had $540.8 million of availability under the Amended Revolving Credit Agreement. Under the Amended Revolving Credit Agreement, the Company is required to maintain a fixed charge coverage ratio, as defined in the Amended Revolving Credit Agreement, of at least 1.00 any time in which the Company is in a covenant period, as defined in the Amended Revolving Credit Agreement (the "Covenant Period"). Such Covenant Period is in effect if Availability is less than the greater of (a) 10% of the Credit Limit (the lesser of total Revolving Commitments and the Borrowing Base) and (b) $45 million for three consecutive business days and ends when Availability is greater than these thresholds for thirty consecutive days. The Covenant Period was not in effect as of October 28, 2017. For a more detailed description of the Company’s Amended Revolving Credit Agreement and restrictions thereunder, refer to Note 12 to the audited consolidated financial statements included in the Fiscal 2017 10-K. Term Loan In connection with the August 2015 acquisition of ANN INC., the Company entered into a $1.8 billion variable-rate term loan (the "Term Loan"), which was issued at a 2% discount and provides for an additional term facility of $200 million. The Term Loan matures on August 21, 2022 and requires quarterly repayments of $22.5 million with a remaining balloon payment of approximately $1.2 billion required at maturity. The Company is also required to make mandatory prepayments in connection with certain prepayment events. As of October 28, 2017, borrowings under the Term Loan consisted entirely of Eurodollar Borrowings at a rate of 5.75%. For a more detailed description of the Company’s Term Loan and restrictions thereunder, refer to Note 12 to the audited consolidated financial statements included in the Fiscal 2017 10-K. Maturities of Debt The Company's debt matures as follows:
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Fair Value Measurements |
3 Months Ended | ||||||||||
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Oct. 28, 2017 | |||||||||||
Fair Value Disclosures [Abstract] | |||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is 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. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the lowest level of inputs used that are significant to the fair value measurement as of the measurement date as follows:
As of October 28, 2017 and July 29, 2017, the Company believes that the carrying value of cash and cash equivalents approximate its estimated fair value based on Level 1 measurements. As the Company’s revolving credit facility is variable rate, the Company believes that there is no significant difference between the estimated fair value and the carrying value as of October 28, 2017 and July 29, 2017. The fair value of the Term Loan was determined to be $1.377 billion as of October 28, 2017 and $1.345 billion as of July 29, 2017 based on quoted market prices from recent transactions, which are considered Level 2 inputs within the fair value hierarchy. The Company’s non-financial instruments, which primarily consist of goodwill, other intangible assets and property and equipment, are not required to be measured at fair values on a recurring basis and are reported at their carrying values. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be recoverable (and at least annually for goodwill and other indefinite-lived intangible assets), non-financial instruments are assessed for impairment and, if applicable, written-down to (and recorded at) fair values. For further discussion of the determination of the fair value of non-financial assets, see Note 5. |
Equity |
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Equity | Equity
Common Stock Repurchase Program In December 2015, the Company’s Board of Directors authorized a $200 million share repurchase program (the “2016 Stock Repurchase Program”). There were no repurchases of common stock by the Company during the three months ended October 28, 2017 and the remaining availability was approximately $181.4 million at October 28, 2017. Net Income per Common Share Basic net income per common share is computed by dividing the net income applicable to common shares after preferred dividend requirements, if any, by the weighted-average number of common shares outstanding during the period. Diluted net income per common share adjusts basic net income per common share for the effects of outstanding stock options, restricted stock units and any other potentially dilutive financial instruments, only in the periods in which such effect is dilutive under the treasury stock method. The weighted-average number of common shares outstanding used to calculate basic net income per common share is reconciled to those shares used in calculating diluted net income per common share as follows:
_______ (a) There was no dilutive effect of stock options and restricted stock units for the three months ended October 28, 2017 as the impact of these items was anti-dilutive using the treasury stock method. Options to purchase shares of common stock at an exercise price greater than the average market price of the common stock during the reporting period are anti-dilutive, and therefore not included in the computation of diluted net income per common share. In addition, the Company has outstanding restricted stock units that are issuable only upon the achievement of certain service conditions. Any performance or market-based restricted stock units outstanding are included in the computation of diluted shares only to the extent the underlying performance or market conditions (a) are satisfied prior to the end of the reporting period or (b) would be satisfied if the end of the reporting period was the end of the related contingency period, and the result would be dilutive under the treasury stock method. For the three months ended October 28, 2017 and October 29, 2016, 24.7 million and 19.6 million shares, respectively, of anti-dilutive options and/or restricted stock units were excluded from the diluted share calculations. |
Stock-based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation | Stock-based Compensation As of October 28, 2017, there were approximately 8.0 million shares remaining under the 2016 Omnibus Incentive Plan available for future grants. The Company issues new shares of common stock when stock option awards are exercised and restricted stock units vest. Impact on Results A summary of the total compensation expense and associated income tax benefit recognized related to stock-based compensation arrangements is as follows:
Stock Options The Company’s weighted-average assumptions used to estimate the fair value of stock options granted during the periods presented were as follows:
A summary of the stock option activity under all plans during the three months ended October 28, 2017 is as follows:
_______
As of October 28, 2017, there was $15.0 million of total unrecognized compensation cost related to non-vested options, which is expected to be recognized over a remaining weighted-average vesting period of 1.7 years. There were no options exercised during the three months ended October 28, 2017 and the amount exercised during the three months ended October 29, 2016 was de minimis. The total grant date fair value of options that vested during the three months ended October 28, 2017 was approximately $10.7 million and during the three months ended October 29, 2016 was approximately $12.8 million. Restricted Equity Awards A summary of restricted equity awards activity during the three months ended October 28, 2017 is as follows:
As of October 28, 2017, there was $13.6 million of total unrecognized compensation cost related to the service-based Restricted Equity Awards, which is expected to be recognized over a remaining weighted-average vesting period of 2.2 years. |
Employee Benefit Plans |
3 Months Ended |
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Oct. 28, 2017 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Long-Term Incentive Plan During Fiscal 2016, the Company created a long-term incentive program ("LTIP") for vice presidents and above under the 2016 Omnibus Incentive Plan. The LTIP entitles the holder to either a cash payment, or a stock payment for certain officers at the Company's option, equal to a predetermined target amount earned at the end of a performance period and is subject to (a) the grantee’s continuing employment and (b) the Company’s achievement of certain performance goals over the performance period. Compensation expense for the LTIP is recognized over the related performance periods based on the expected achievement of the performance goals. The Company recognized $(6.1) million in compensation expense for the three months ended October 28, 2017 and $3.7 million for the three months ended October 29, 2016, which was recorded within Selling, general and administrative expenses in the condensed consolidated financial statements. In late September 2017, the Compensation Committee of the Board of Directors, determined that although the metrics within the LTIP were achieved, it applied its discretion based upon the overall performance of the Company that the LTIP amount would not be distributed. As of October 28, 2017, there was $41.9 million of unrecognized compensation cost related to the LTIP, which is expected to be recognized over a remaining weighted-average vesting period of 2.3 years. As of October 28, 2017, the liability for LTIP Awards was $16.8 million, of which $11.8 million was classified within Accrued expenses and other current liabilities and $5.0 million was classified within Other non-current liabilities in the condensed consolidated balance sheets. In addition, the Company paid $10.4 million to settle such liabilities during the three months ended October 29, 2016. No payments were made during the three months ended October 28, 2017. Defined Benefit Plan In connection with the August 2015 acquisition of ANN INC., the Company assumed a pension plan which was frozen and then decided in Fiscal 2016 to terminate the plan. Under the terms of liquidation, some participants elected to receive lump-sum payments while the others elected to remain in the plan. The remaining obligations under the plan were transferred to a third-party and settled through a non-participating annuity contract in the second quarter of Fiscal 2017. During the first quarter of Fiscal 2017, lump sum payments were made to its participants, and the associated accumulated actuarial loss of $2.0 million, net of an income tax benefit of $1.3 million, was reclassified from Accumulated other comprehensive loss to Acquisition and integration expenses. The Company also expensed $0.6 million of professional fees during the first quarter of Fiscal 2017, which is included within Acquisition and integration expenses in the condensed consolidated statement of operations. |
Commitments and Contingencies |
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Oct. 28, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings Justice Pricing Litigation The Company is a defendant in a number of class action lawsuits that allege that Justice’s promotional practices violated state comparative pricing laws in connection with advertisements promoting a 40% discount. The plaintiffs further allege false advertising, violation of state consumer protection statutes, breach of contract, breach of express warranty and unfair benefit to Justice. A description of the lawsuits comprising the Justice pricing litigation is discussed in the Fiscal 2017 10-K and should be read in conjunction with the update below. On September 24, 2015, a formal settlement agreement was signed with the plaintiffs in the Rougvie case to settle the lawsuit on a class basis for the period of January 1, 2012 through February 28, 2015 for approximately $51 million, including payments to members of the class and payment of legal fees and expenses of settlement administration. On July 29, 2016, the Court granted the parties’ joint motion for final approval of settlement and dismissed the case with prejudice. The Court’s decision granting final approval was appealed to the United States Court of Appeals for the Third Circuit. After a court-ordered mediation on March 24, 2017, the appeals were withdrawn and dismissed with prejudice. The class settlement is now final and non-appealable. Distributions to class members pursuant to the settlement began to take place on or about September 18, 2017 and continued through mid-October in advance of the deadline of October 27, 2017. To the extent some of the pricing lawsuits previously discussed are still stayed, it is likely that they will be formally dismissed within the coming months. If the matters described herein do not occur and the pricing lawsuits are not finally resolved on a class basis for approximately $51 million in accordance with the settlement, the ultimate resolution of these matters may or may not result in an additional material loss which cannot be reasonably estimated at this time. Potential claims related to purchases made in 2010 and 2011 have been raised, including in the Metoyer case previously discussed, although no additional lawsuits have been filed. The Company believes it has strong defenses to any such claims and is prepared to defend any such claims. If the plaintiffs in the other Justice cases do not agree to dismissal, the Company will move to dismiss those cases in light of the binding release of all class members affected by the settlement. There is some possibility that individual class members who excluded themselves from the settlement may seek to pursue their own or additional claims, although the Company believes that the liability associated with those cases would not be material. Other litigation The Company is involved in routine litigation arising in the normal course of business. In the opinion of management, such litigation is not expected to have a material adverse effect on the Company’s condensed consolidated financial statements. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company's segment reporting structure reflects an approach designed to optimize the operational coordination and resource allocation of its businesses across multiple functional areas including specialty retail, ecommerce and licensing. The Company classifies its businesses into four operating segments: Premium Fashion, Value Fashion, Plus Fashion and Kids Fashion. Each segment is led by a segment manager who is directly accountable for that segment's financial performance and maintains regular contact with the Company's Chief Executive Officer, who functions as the chief operating decision maker (the "CODM"), responsible for reviewing the operating activities, financial results, forecasts and business plans of the segment. Accordingly, the Company's CODM evaluates performance and allocates resources at the segment level. The four operating segments are as follows:
The accounting policies of the Company’s operating segments are consistent with those described in the Fiscal 2017 10-K. All intercompany revenues are eliminated in consolidation. Corporate overhead expenses are allocated to the segments based upon specific usage or other reasonable allocation methods. Certain expenses, including acquisition and integration expenses and restructuring and other related charges, have not been allocated to the segments, which is consistent with the CODM's evaluation of the segments. Net sales, operating income and depreciation and amortization expense for each operating segment are as follows:
(a) Restructuring and other related charges are as follows:
(i) The charges incurred under the Company's Change for Growth program are more fully described in Note 6. |
Additional Financial Information |
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Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Financial Information | Additional Financial Information
Non-cash Transactions Non-cash investing activities include accrued purchases of fixed assets in the amount of $21.1 million as of October 28, 2017 and $32.1 million as of October 29, 2016. |
Prepaid Expenses and Other Current Assets Prepaid Expenses and Other Current Assets |
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Prepaid Expenses and Other Current Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following:
_______ (a) Increase is related to the reclassification of certain company-owned life insurance policies from other non-current assets to other current assets. The Company redeemed the cash surrender value of these policies in the second quarter of Fiscal 2018. |
Basis of Presentation (Details) |
3 Months Ended |
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Oct. 28, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Financial Statements | Interim Financial Statements These interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and are unaudited. In the opinion of management, however, such condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the condensed consolidated financial condition, results of operations, comprehensive income and cash flows of the Company for the interim periods presented. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted from this report as permitted by the SEC’s rules and regulations. However, the Company believes that the disclosures herein are adequate to ensure that the information is fairly presented. The condensed consolidated balance sheet data as of July 29, 2017 is derived from the audited consolidated financial statements included in the Company’s Fiscal 2017 10-K, which should be read in conjunction with these interim financial statements. Reference is made to the Fiscal 2017 10-K for a complete set of financial statements. |
Fiscal Period | Fiscal Period Fiscal year 2018 will end on August 4, 2018 and will be a 53-week period ("Fiscal 2018") as the Company conforms its fiscal periods to the National Retail Federation calendar. Fiscal year 2017 ended on July 29, 2017 and was a 52-week period (“Fiscal 2017”). The three months ended October 28, 2017 and the three months ended October 29, 2016 are both 13-week periods. The Company's Premium Fashion segment, which historically has followed the National Retail Federation calendar, will recognize an extra week during the second quarter of Fiscal 2018, consistent with other retail companies already on that calendar. The Company's Value Fashion, Plus Fashion, and Kids Fashion segments will recognize the extra week in the fourth quarter of Fiscal 2018 due to reporting systems constraints. |
Recently Issued Accounting Standards Recently Issued Accounting Standards (Policies) |
3 Months Ended |
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Oct. 28, 2017 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Recently adopted standards In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” The guidance simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and the classification in the statement of cash flows. The new standard requires excess tax benefits and shortfalls to be recorded within the provision for income taxes in the consolidated statements of operations in the period they are realized. The impact of this change will depend on changes in the Company's stock price and the timing of the exercise of stock options and the vesting of restricted stock units, so the full effect of the standard is not able to be quantified. However, the recognition of these changes within the consolidated statements of operations will likely result in increased volatility of our provision for income taxes and earnings. The Company adopted the guidance on a prospective basis in the first quarter of Fiscal 2018, which resulted in additional non-cash income tax expense of approximately $3.2 million in the first quarter of Fiscal 2018. Finally, in connection with the new standard, the Company has elected to maintain its practice of estimating forfeitures when recognizing expense for share-based payment awards rather than accounting for forfeitures when they occur. Recently issued standards In February 2016, the FASB issued ASU 2016-02, "Leases." The guidance requires the lessee to recognize the assets and liabilities for the rights and obligations created by leases with terms of 12 months or more. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. Adoption of the standard requires a modified retrospective approach where the guidance is applied to the earliest comparative period presented. The Company does not expect that the guidance will have a significant impact on its condensed consolidated statements of cash flows and is currently evaluating the guidance and its impact on its other condensed consolidated financial statements, but expects that it will result in a significant increase to its long-term assets and liabilities. The Company is also in the process of identifying changes to its business processes, systems and controls to support adoption of the new standard in fiscal 2020. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," which supersedes the revenue recognition requirements in FASB Accounting Standards Codification, "Revenue Recognition (Topic 605)." The guidance requires that an entity recognize revenue in a way that depicts the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. The guidance, which was deferred in July 2015, is effective for annual reporting periods beginning after December 15, 2017 and interim periods therein. The guidance may be applied retrospectively to each period presented or with the cumulative effect recognized as of the initial date of application. The Company is currently in the process of evaluating the impact that adopting ASU 2014-09 will have on its consolidated financial statements and notes thereto. Based on these efforts, the Company currently anticipates that the performance obligations underlying its core revenue streams (its retail store and ecommerce businesses) and related timing of revenue recognition thereof, will remain substantially unchanged. The Company is in the process of evaluating the impact of the new standard on ancillary sources of revenue, such as its loyalty and credit card programs, which represented approximately 2% of total net sales in Fiscal 2017. The Company has not yet determined whether the guidance will be adopted using the full retrospective restatement of all prior periods presented, or using the modified retrospective basis with a cumulative adjustment to opening retained earnings in the year of initial adoption. Finally, the Company is also analyzing the impact of the new standard on our current accounting policies and internal controls. Upon completion of these assessments, the Company will evaluate the impact of adopting the new standard on the Company's condensed consolidated financial statements. |
Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories by Brand | Inventories substantially consist of finished goods merchandise. Inventory by segment is set forth below:
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Long-Lived Assets Impairment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment charges related to long-lived tangible assets by segment | Impairment charges related to retail store assets by segment are as follows:
________ (a) The Company incurred additional store impairment charges of $1.1 million in connection with the Change for Growth program which are considered to be outside the Company’s typical quarterly real-estate review, and are included within Restructuring and other related charges for the three months ended October 28, 2017, as more fully described in Note 6. No such expenses were recorded in the three months ended October 29, 2016. |
Restructuring and Other Related Charges Restructuring and Other Related Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and other related charges | As a result of the Change for Growth program, the Company incurred the following charges, which are included within Restructuring and other related charges, for all periods presented:
_______ (a) Severance and benefit costs in Fiscal 2018 reflect additional severance accruals associated with previously announced initiatives as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. Fiscal 2017 amounts reflect accruals associated with the October 2016 restructuring announcement. (b) Other related charges in both periods consist of professional fees incurred in connection with the identification and implementation of transformation initiatives associated with the Change for Growth program. Restructuring and other related charges are as follows:
(i) The charges incurred under the Company's Change for Growth program are more fully described in Note 6. |
Restructuring and Other Related Charges Restructuring - Related Liabilities (Tables) |
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Restructuring - Related Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | A summary of activity for the three months ended October 28, 2017 in the restructuring-related liabilities associated with the Change for Growth program, which is included within Accrued expenses and other current liabilities, is as follows:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt |
_______ (a) The unamortized debt issuance costs are amortized on a straight-line basis over the life of the amended revolving credit agreement. (b) The original issue discount and debt issuance costs for the term loan are amortized over the life of the term loan using the interest method based on an imputed interest rate of approximately 6.3%. |
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Schedule of Maturities of Long-term Debt | The Company's debt matures as follows:
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Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Equity |
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Schedule of Weighted Average Number of Shares | The weighted-average number of common shares outstanding used to calculate basic net income per common share is reconciled to those shares used in calculating diluted net income per common share as follows:
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Stock-based Compensation (Tables) |
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Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Total Compensation Expense and Associated Income Tax Benefit | A summary of the total compensation expense and associated income tax benefit recognized related to stock-based compensation arrangements is as follows:
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Weighted-Average Assumptions used to Estimate Fair Value of Stock Options Granted | The Company’s weighted-average assumptions used to estimate the fair value of stock options granted during the periods presented were as follows:
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Summary of Stock Option Activity under all Plans | A summary of the stock option activity under all plans during the three months ended October 28, 2017 is as follows:
_______
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Summary of Restricted Equity Awards Activity | A summary of restricted equity awards activity during the three months ended October 28, 2017 is as follows:
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Segment Information (Tables) |
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Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment reporting disclosure | Net sales, operating income and depreciation and amortization expense for each operating segment are as follows:
(a) Restructuring and other related charges are as follows:
(i) The charges incurred under the Company's Change for Growth program are more fully described in Note 6. |
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Restructuring and other related charges | As a result of the Change for Growth program, the Company incurred the following charges, which are included within Restructuring and other related charges, for all periods presented:
_______ (a) Severance and benefit costs in Fiscal 2018 reflect additional severance accruals associated with previously announced initiatives as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. Fiscal 2017 amounts reflect accruals associated with the October 2016 restructuring announcement. (b) Other related charges in both periods consist of professional fees incurred in connection with the identification and implementation of transformation initiatives associated with the Change for Growth program. Restructuring and other related charges are as follows:
(i) The charges incurred under the Company's Change for Growth program are more fully described in Note 6. |
Additional Financial Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Interest and Taxes |
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Prepaid Expenses and Other Current Assets Prepaid Expenses and Other Current Assets (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 28, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets |
_______ (a) Increase is related to the reclassification of certain company-owned life insurance policies from other non-current assets to other current assets. The Company redeemed the cash surrender value of these policies in the second quarter of Fiscal 2018. |
Description of Business (Narrative) (Details) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Oct. 28, 2017
USD ($)
Store
segment
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Oct. 29, 2016
USD ($)
|
Jul. 29, 2017
USD ($)
|
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Segment Reporting Information [Line Items] | |||
Ownership percentage | 100.00% | ||
Number of stores | 4,800 | ||
Net sales | $ | $ 1,589.7 | $ 1,678.4 | $ 6,600.0 |
Number of Reportable Segments | segment | 4 | ||
ANN | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 320 | ||
Loft | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 681 | ||
Maurices | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 1,008 | ||
dressbarn | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 772 | ||
Lane Bryant | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 764 | ||
Catherines | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 355 | ||
Justice | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 894 |
Recently Issued Accounting Standards Accounting Policies (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Oct. 28, 2017 |
Jul. 29, 2017 |
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Accounting Policies [Abstract] | ||
Other Noncash Income Tax Expense | $ 3.2 | |
Loyalty and credit card programs, percent, net sales | 2.00% |
Inventories (Schedule of Inventories by Brand) (Details) - USD ($) $ in Millions |
Oct. 28, 2017 |
Jul. 29, 2017 |
---|---|---|
Inventory [Line Items] | ||
Total inventories | $ 744.2 | $ 639.3 |
Premium Fashion | ||
Inventory [Line Items] | ||
Total inventories | 255.3 | 208.2 |
Value Fashion | ||
Inventory [Line Items] | ||
Total inventories | 211.4 | 180.6 |
Plus Fashion | ||
Inventory [Line Items] | ||
Total inventories | 173.7 | 161.9 |
Kids Fashion | ||
Inventory [Line Items] | ||
Total inventories | $ 103.8 | $ 88.6 |
Long-Lived Assets Impairment (Impairment Charges) (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment of retail store assets | $ 5.5 | $ 4.7 | ||
Premium Fashion | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment of retail store assets | 0.0 | 0.7 | ||
Value Fashion | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment of retail store assets | 3.2 | 2.1 | ||
Plus Fashion | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment of retail store assets | [1] | 1.7 | 1.1 | |
Kids Fashion | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment of retail store assets | 0.6 | $ 0.8 | ||
Change for Growth Program [Member] | Value Fashion | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment of retail store assets | $ 1.1 | |||
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Restructuring and Other Related Charges Restructuring Related Liabilities (Details) - USD ($) $ in Millions |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
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Restructuring Cost and Reserve [Line Items] | |||||||
Additions charged to expense | [1] | $ 22.2 | $ 11.9 | ||||
Change for Growth Program [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Balance at July 29, 2017 | 22.4 | ||||||
Additions charged to expense | 22.2 | 11.9 | |||||
Cash payments | (18.7) | ||||||
Balance at October 28, 2017 | 24.8 | ||||||
Employee Severance [Member] | Change for Growth Program [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Balance at July 29, 2017 | 17.3 | ||||||
Additions charged to expense | 3.9 | ||||||
Cash payments | (6.5) | ||||||
Balance at October 28, 2017 | 14.7 | ||||||
Other Restructuring [Member] | Change for Growth Program [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Balance at July 29, 2017 | 5.1 | ||||||
Additions charged to expense | 17.2 | ||||||
Cash payments | (12.2) | ||||||
Balance at October 28, 2017 | 10.1 | ||||||
Cash-related restructuring charges [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Additions charged to expense | [2] | 21.1 | 11.9 | ||||
Cash-related restructuring charges [Member] | Change for Growth Program [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Additions charged to expense | $ 21.1 | $ 11.9 | |||||
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Restructuring and Other Related Charges Restructuring and Other Related Charges (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Aug. 04, 2018 |
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Restructuring Cost and Reserve [Line Items] | ||||||||||||
Additions charged to expense | [1] | $ 22.2 | $ 11.9 | |||||||||
Impairment of retail store assets | 5.5 | 4.7 | ||||||||||
Capital Expenditures Incurred but Not yet Paid | 21.1 | 32.1 | ||||||||||
Change for Growth Program [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Additions charged to expense | 22.2 | 11.9 | ||||||||||
Non-cash charges [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Additions charged to expense | 1.1 | 0.0 | ||||||||||
Non-cash charges [Member] | Change for Growth Program [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Additions charged to expense | 1.1 | 0.0 | ||||||||||
Impairment of retail store assets | 1.1 | 0.0 | ||||||||||
Cash-related restructuring charges [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Severance Costs | [2] | 3.9 | 8.1 | |||||||||
Professional Fees | [2] | 17.2 | 3.8 | |||||||||
Additions charged to expense | [2] | 21.1 | 11.9 | |||||||||
Cash-related restructuring charges [Member] | Change for Growth Program [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Severance Costs | [3] | 3.9 | 8.1 | |||||||||
Professional Fees | [4] | 17.2 | 3.8 | |||||||||
Additions charged to expense | 21.1 | $ 11.9 | ||||||||||
Capital Expenditures Incurred but Not yet Paid | $ 5.0 | |||||||||||
Scenario, Forecast [Member] | Cash-related restructuring charges [Member] | Change for Growth Program [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Capital Expenditures Incurred but Not yet Paid | $ 40.0 | |||||||||||
Scenario, Forecast [Member] | Minimum [Member] | Cash-related restructuring charges [Member] | Change for Growth Program [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Additions charged to expense | 25.0 | |||||||||||
Scenario, Forecast [Member] | Maximum [Member] | Cash-related restructuring charges [Member] | Change for Growth Program [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Additions charged to expense | $ 35.0 | |||||||||||
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Debt (Schedule of Debt) (Details) - USD ($) $ in Millions |
Oct. 28, 2017 |
Jul. 29, 2017 |
Aug. 21, 2015 |
|||||
---|---|---|---|---|---|---|---|---|
Debt Instrument [Line Items] | ||||||||
Long-term debt, including unamortized original issue discount and debt issuance costs | $ 1,601.7 | |||||||
Total long-term debt | 1,524.9 | $ 1,494.1 | ||||||
Less: current portion | (21.5) | (44.0) | ||||||
Term loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, including unamortized original issue discount and debt issuance costs | 1,574.0 | 1,596.5 | $ 1,800.0 | |||||
Less: unamortized debt issuance costs | [1] | (27.4) | (28.8) | |||||
unamortized original issue discount | [1] | (23.9) | (25.2) | |||||
Long-term debt | $ 1,522.7 | 1,542.5 | ||||||
Debt effective interest rate (percent) | 6.30% | |||||||
Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, including unamortized original issue discount and debt issuance costs | $ 27.7 | 0.0 | ||||||
Less: unamortized debt issuance costs | [2] | (4.0) | (4.4) | |||||
Long-term debt | $ 23.7 | $ (4.4) | ||||||
|
Debt (Term Loan) (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Oct. 28, 2017 |
Jul. 29, 2017 |
Aug. 21, 2015 |
|
Debt Instrument [Line Items] | |||
Long-term Debt, gross | $ 1,601,700,000 | ||
Term loan [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt, gross | $ 1,574,000,000 | $ 1,596,500,000 | $ 1,800,000,000 |
Debt instrument, discount percentage | 2.00% | ||
Debt instrument, additional term facility borrowing capacity | $ 200,000,000 | ||
Debt payment to be paid subsequent to current fiscal year | 22,500,000 | ||
Debt balloon payment to be paid | $ 1,200,000,000 | ||
Debt effective interest rate (percent) | 6.30% | ||
Term loan [Member] | Eurodollar Borrowings [Member] | |||
Debt Instrument [Line Items] | |||
Debt effective interest rate (percent) | 5.75% |
Debt (Maturities of Debt) (Details) - USD ($) $ in Millions |
Oct. 28, 2017 |
Jul. 29, 2017 |
Aug. 21, 2015 |
---|---|---|---|
Debt Instrument [Line Items] | |||
2018 | $ 21.5 | ||
2019 | 90.0 | ||
2020 | 67.5 | ||
2021 | 117.7 | ||
2022 | 90.0 | ||
Thereafter | 1,215.0 | ||
Total maturities | 1,601.7 | ||
Term Loan Facility [Member] | |||
Debt Instrument [Line Items] | |||
Total maturities | $ 1,574.0 | $ 1,596.5 | $ 1,800.0 |
Fair Value Measurements (Details) - USD ($) $ in Millions |
Oct. 28, 2017 |
Jul. 29, 2017 |
---|---|---|
Term Loan Facility [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 1,377 | $ 1,345 |
Equity (Summary of Changes in Equity) (Details) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Equity [Abstract] | ||
Weighted Average Number of Shares Outstanding, Basic | 195.4 | 194.4 |
Dilutive effect of stock options and restricted stock units (a) | 0.0 | 0.9 |
Weighted Average Number of Shares Outstanding, Diluted | 195.4 | 195.3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | $ 821.0 | $ 1,863.3 |
Net income | 6.6 | 14.4 |
Total other comprehensive (loss) income | (2.0) | 0.5 |
Common stock issued and equity grants made pursuant to stock-based compensation plans | 6.0 | 5.7 |
Other | (0.2) | (0.3) |
Balance at end of period | $ 831.4 | $ 1,883.6 |
Equity (Narrative) (Details) - 2016 Stock Repurchase Program [Member] - USD ($) |
Oct. 28, 2017 |
Dec. 31, 2015 |
---|---|---|
Class of Stock [Line Items] | ||
Share repurchase program authorized amount | $ 200,000,000 | |
Stock repurchase program remaining authorized repurchase amount | $ 181,400,000 |
Equity (Net Income per Common Share) (Details) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Earnings Per Share [Abstract] | ||
Basic | 195.4 | 194.4 |
Dilutive effect of stock options and restricted stock units (a) | 0.0 | 0.9 |
Diluted shares | 195.4 | 195.3 |
Antidilutive securities excluded from computation of earnings per share, amount | 24.7 | 19.6 |
Stock-based Compensation (Narrative) (Details) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized compensation costs related to non-vested options | $ 15.0 | |
Weighted-average years expected to be recognized | 1 year 8 months 26 days | |
Total fair value of options vested | $ 10.7 | $ 12.8 |
Service-based Restricted Equity Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average years expected to be recognized | 2 years 2 months | |
Total unrecognized compensation | $ 13.6 | |
2016 Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for future grants under Stock Incentive Plan | 8.0 |
Stock-based Compensation (Summary of Total Compensation Expense and Associated Income Tax Benefit) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Compensation expense | $ 6.0 | $ 7.0 |
Current income tax benefit | $ (2.3) | $ (2.6) |
Stock based Compensation (Weighted-Average Assumptions used to Estimate Fair Value of Stock Options Granted) (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected term (years) | 5 years 1 month | 5 years 1 month |
Expected volatility | 43.70% | 37.30% |
Risk-free interest rate | 1.90% | 1.20% |
Expected dividend yield | 0.00% | 0.00% |
Weighted-average grant date fair value | $ 0.97 | $ 1.94 |
Stock-based Compensation (Summary of Restricted Equity Awards Activity) (Details) - Service-based Restricted Equity Awards [Member] |
3 Months Ended |
---|---|
Oct. 28, 2017
$ / shares
shares
| |
Number of shares | |
Nonvested at July 29, 2017 | shares | 3,110,000 |
Granted | shares | 2,531,900 |
Vested | shares | (909,200) |
Cancelled/Forfeited | shares | (82,300) |
Nonvested at October 28, 2017 | shares | 4,650,400 |
Weighted Average Grant Date Fair Value Per Share | |
Nonvested at July 29, 2017 | $ / shares | $ 8.05 |
Granted | $ / shares | 2.47 |
Vested | $ / shares | 8.47 |
Cancelled/Forfeited | $ / shares | 7.47 |
Nonvested at October 28, 2017 | $ / shares | $ 4.94 |
Employee Benefit Plans (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Employee Benefit Plans [Abstract] | ||
Compensation expense | $ (6.1) | $ (3.7) |
Unrecognized compensation expense | $ 41.9 | |
Weighted-average vesting period | 2 years 4 months | |
Liability for LTIP Awards | $ 16.8 | |
Liability for LTIP Awards, current | 11.8 | |
Liability for LTIP Awards, non-current | 5.0 | |
Cash settlement for liabilities | $ 10.4 | |
Professional fees | (0.6) | |
Net actuarial loss | 2.0 | |
Income tax benefit | $ (1.3) |
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Oct. 28, 2017 |
Jul. 25, 2015 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Sales discounts percent | 40.00% | |
Litigation Settlement, Amount Awarded to Other Party | $ 51 |
Segment Information (Narrative) (Details) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Oct. 28, 2017
USD ($)
segment
|
Oct. 29, 2016
USD ($)
|
|||
Segment Reporting [Abstract] | ||||
Number of Reportable Segments | segment | 4 | |||
Restructuring and other related charges | $ | [1] | $ 22.2 | $ 11.9 | |
|
Segment Information (Net Sales and Operating Income) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Jul. 29, 2017 |
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total net sales | $ 1,589.7 | $ 1,678.4 | $ 6,600.0 | |||||||||||
Total operating income | 39.9 | 51.2 | ||||||||||||
Unallocated acquisition and integration expenses | (2.1) | (12.0) | ||||||||||||
Restructuring and other related charges | [1] | 22.2 | 11.9 | |||||||||||
Restructuring Costs and Asset Impairment Charges | 22.2 | 11.9 | ||||||||||||
Total depreciation and amortization expense | 90.0 | 93.9 | ||||||||||||
Impairment of retail store assets | 5.5 | 4.7 | ||||||||||||
Premium Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Impairment of retail store assets | 0.0 | 0.7 | ||||||||||||
Value Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Impairment of retail store assets | 3.2 | 2.1 | ||||||||||||
Plus Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Impairment of retail store assets | [2] | 1.7 | 1.1 | |||||||||||
Kids Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Impairment of retail store assets | 0.6 | 0.8 | ||||||||||||
Operating Segments [Member] | Premium Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total net sales | 555.1 | 579.2 | ||||||||||||
Total operating income | 38.5 | 43.6 | ||||||||||||
Total depreciation and amortization expense | 32.9 | 34.2 | ||||||||||||
Operating Segments [Member] | Value Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total net sales | 471.3 | 504.1 | ||||||||||||
Total operating income | 10.9 | 12.1 | ||||||||||||
Total depreciation and amortization expense | 26.3 | 26.4 | ||||||||||||
Operating Segments [Member] | Plus Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total net sales | 304.2 | 317.7 | ||||||||||||
Total operating income | (0.9) | 6.2 | ||||||||||||
Total depreciation and amortization expense | 15.4 | 16.1 | ||||||||||||
Operating Segments [Member] | Kids Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total net sales | 259.1 | 277.4 | ||||||||||||
Total operating income | 15.7 | 13.2 | ||||||||||||
Total depreciation and amortization expense | 15.4 | 17.2 | ||||||||||||
Change for Growth Program [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Restructuring and other related charges | 22.2 | 11.9 | ||||||||||||
Change for Growth Program [Member] | Value Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Impairment of retail store assets | 1.1 | |||||||||||||
Cash-related restructuring charges [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Severance Costs | [3] | 3.9 | 8.1 | |||||||||||
Restructuring and other related charges | [3] | 21.1 | 11.9 | |||||||||||
Other related charges | [3] | 17.2 | 3.8 | |||||||||||
Cash-related restructuring charges [Member] | Operating Segments [Member] | Premium Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Severance Costs | [3] | 1.4 | 0.0 | |||||||||||
Cash-related restructuring charges [Member] | Operating Segments [Member] | Value Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Severance Costs | [3] | (1.2) | 2.3 | |||||||||||
Cash-related restructuring charges [Member] | Operating Segments [Member] | Plus Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Severance Costs | [3] | 4.7 | 1.7 | |||||||||||
Other related charges | [3] | 1.2 | 0.0 | |||||||||||
Cash-related restructuring charges [Member] | Operating Segments [Member] | Kids Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Severance Costs | [3] | (0.3) | 0.7 | |||||||||||
Cash-related restructuring charges [Member] | Corporate, Non-Segment [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Severance Costs | [3] | (0.7) | 3.4 | |||||||||||
Other related charges | [3] | 16.0 | 3.8 | |||||||||||
Cash-related restructuring charges [Member] | Change for Growth Program [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Severance Costs | [4] | 3.9 | 8.1 | |||||||||||
Restructuring and other related charges | 21.1 | 11.9 | ||||||||||||
Other related charges | [5] | 17.2 | 3.8 | |||||||||||
Non-cash charges [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Restructuring and other related charges | 1.1 | 0.0 | ||||||||||||
Non-cash charges [Member] | Change for Growth Program [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Restructuring and other related charges | 1.1 | 0.0 | ||||||||||||
Impairment of retail store assets | 1.1 | 0.0 | ||||||||||||
Non-cash charges [Member] | Change for Growth Program [Member] | Value Fashion | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Impairment of retail store assets | $ 1.1 | $ 0.0 | ||||||||||||
|
Additional Financial Information (Cash Interest and Taxes) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for interest | $ 30.9 | $ 35.5 |
Cash paid for income taxes | $ 1.8 | $ 2.1 |
Additional Financial Information (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Supplemental Cash Flow Information [Abstract] | ||
Accrued purchases of fixed assets | $ 21.1 | $ 32.1 |
Prepaid Expenses and Other Current Assets Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions |
Oct. 28, 2017 |
Jul. 29, 2017 |
---|---|---|
Prepaid Expenses and Other Current Assets [Abstract] | ||
Prepaid Expense, Current | $ 82.1 | $ 73.6 |
Accounts and Other Receivables, Net, Current | 83.9 | 82.3 |
Short-term Investments | 1.2 | 1.0 |
Other Assets, Current | 36.4 | 0.5 |
Prepaid Expense and Other Assets, Current | $ 203.6 | $ 157.4 |
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