Accounts Payable, Accrued Expenses and Other Current Liabilities

3 Months Ended

May 02, 2020

Accounts Payable, Accrued Expenses and Other Current Liabilities

Accounts Payable, Accrued Expenses and Other Current Liabilities

NOTE 5—ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accounts payable and accrued expenses consist of the following (in thousands):

	May 2,		February 1,
	2020		2020
Accounts payable	$	151,890	$	180,714
Accrued compensation		61,950		64,659
Accrued freight and duty		18,260		25,170
Accrued sales taxes		16,792		19,618
Accrued occupancy		9,266		12,067
Accrued catalog costs		6,250		8,267
Accrued professional fees		5,187		4,381
Other accrued expenses		15,385		15,433
Total accounts payable and accrued expenses	$	284,980	$	330,309

Other current liabilities consist of the following (in thousands):

	May 2,		February 1,
	2020		2020
Promissory notes on asset under construction	$	53,000	$	53,000
Unredeemed gift card and merchandise credit liability		21,877		16,625
Current portion of equipment promissory notes		19,587		22,009
Allowance for sales returns		17,962		19,206
Finance lease liabilities		11,752		9,188
Federal and state taxes payable		6,048		13,591
Product recall reserve		1,819		2,055
Other current liabilities		5,291		5,040
Total other current liabilities	$	137,336	$	140,714

Contract Liabilities

We defer revenue associated with merchandise delivered via the home-delivery channel. We expect that substantially all of the deferred revenue, customer deposits and deferred membership fees as of May 2, 2020 will be recognized within the next six months as the performance obligations are satisfied.

In addition, we defer revenue when cash payments are received in advance of performance for unsatisfied obligations related to our gift cards and merchandise credits. During the three months ended May 2, 2020 and May 4, 2019, we recorded $4.1 million and $4.7 million, respectively, of revenue for previous deferrals related to our gift cards and merchandise credits. During the three months ended May 2, 2020 and May 4, 2019, we recorded gift card breakage of $0.6 million and $0.4 million, respectively. We expect that approximately 70% of the remaining gift card and merchandise credit liabilities as of May 2, 2020 will be recognized within the next twelve months as the gift cards are redeemed by customers.