Accounts Payable, Accrued Expenses and Other Current Liabilities

6 Months Ended

Aug. 01, 2020

Accounts Payable, Accrued Expenses and Other Current Liabilities

Accounts Payable, Accrued Expenses and Other Current Liabilities

NOTE 6—ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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

	August 1,		February 1,
	2020		2020
Accounts payable	$	182,944	$	180,714
Accrued compensation		59,218		64,659
Accrued freight and duty		21,620		25,170
Accrued sales taxes		21,327		19,618
Accrued occupancy		14,086		12,067
Deferred consideration for asset purchase		13,739		—
Accrued catalog costs		6,346		8,267
Accrued professional fees		4,810		4,381
Other accrued expenses		16,176		15,433
Total accounts payable and accrued expenses	$	340,266	$	330,309

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

	August 1,		February 1,
	2020		2020
Promissory notes on asset under construction	$	53,000	$	53,000
Current portion of equipment promissory notes		22,235		22,009
Allowance for sales returns		18,795		19,206
Unredeemed gift card and merchandise credit liability		17,597		16,625
Federal and state taxes payable		15,198		13,591
Finance lease liabilities		14,117		9,188
Product recall reserve		6,429		2,055
Other current liabilities		3,388		5,040
Total other current liabilities	$	150,759	$	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 August 1, 2020 will be recognized within the next six months (with the exception of cancelled orders) 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 August 1, 2020 and August 3, 2019, we recognized $6.5 million and $4.6 million, respectively, of revenue related to previous deferrals related to our gift cards and merchandise credits. During the six months ended August 1, 2020 and August 3, 2019, we recognized $10.6 million and $9.3 million, respectively, of revenue related to previous deferrals related to our gift cards and merchandise credits. During the three months ended August 1, 2020 and August 3, 2019, we recorded gift card breakage of $0.2 million and $0.4 million, respectively. During both the six months ended August 1, 2020 and August 3, 2019, we recorded gift card breakage of $0.8 million. We expect that approximately 70% of the remaining gift card and merchandise credit liabilities as of August 1, 2020 will be recognized within the next twelve months as the gift cards are redeemed by customers.