Change in Accounting Principle-Stock-Based Compensation

6 Months Ended

Aug. 03, 2013

Accounting Changes And Error Corrections [Abstract]

Change in Accounting Principle-Stock-Based Compensation

NOTE 2—CHANGE IN ACCOUNTING PRINCIPLE—STOCK-BASED COMPENSATION

In the third quarter of fiscal 2012, the Company changed its policy for recognizing stock-based compensation expense from the graded method of accounting to the straight-line method of accounting for its time-based units (or service-only awards). The Company previously disclosed this change in accounting policy and retrospectively restated its consolidated financial statements for such change in its audited consolidated financial statements for fiscal 2012.

Based on research and analysis, the Company believes the straight-line method of accounting for stock-based compensation expense for service-only awards is the predominant method used in its industry. In order for the Company’s results of operations to be comparable to its peers, it has concluded that the straight-line method of accounting for stock-based compensation is a preferable accounting method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 250-10-45.

The following table presents the unaudited comparative effect of the change in accounting method and its impact on key components of the Company’s condensed consolidated statements of operations (in thousands, except share and per share amounts):

	Three Months Ended						Six Months Ended
	July 28, 2012						July 28, 2012
	Graded Method			Straight-Line Method			Graded Method			Straight-Line Method
Net revenues	$	292,906		$	292,906		$	510,820		$	510,820
Cost of goods sold		178,779			178,779			321,425			321,425
Gross profit		114,127			114,127			189,395			189,395
Selling, general and administrative expense		94,328			94,465			171,729			171,830
Income from operations		19,799			19,662			17,666			17,565
Interest expense		(1,479	)		(1,479	)		(3,054	)		(3,054	)
Income before income taxes		18,320			18,183			14,612			14,511
Income tax expense		567			567			623			623
Net income	$	17,753		$	17,616		$	13,989		$	13,888
Shares used in computing basic and diluted net income per share		1,000			1,000			1,000			1,000
Basic and diluted net income per share	$	17,753		$	17,616		$	13,989		$	13,888

The change did not impact cash flows from total operating, investing or financing activities for the six months ended July 28, 2012.