Accounts Payable, Accrued Expenses and Other Current Liabilities

6 Months Ended

Jul. 31, 2021

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):

	JULY 31,		JANUARY 30,
	2021		2021
Accounts payable	$	238,607	$	224,906
Accrued compensation		71,748		84,860
Accrued freight and duty		30,685		29,754
Accrued sales taxes		27,158		23,706
Accrued occupancy		26,680		17,671
Accrued professional fees		9,135		5,383
Accrued catalog costs		3,979		4,354
Deferred consideration for asset purchase		—		14,387
Other accrued expenses		18,793		19,401
Total accounts payable and accrued expenses	$	426,785	$	424,422

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

	JULY 31,		JANUARY 30,
	2021		2021
Current portion of equipment promissory notes	$	24,072	$	22,747
Allowance for sales returns		23,574		25,559
Unredeemed gift card and merchandise credit liability		20,322		19,173
Finance lease liabilities		14,231		14,671
Product recall reserve		5,780		8,181
Federal and state tax payable		—		49,539
Other current liabilities		4,357		2,821
Total other current liabilities	$	92,336	$	142,691

Contract Liabilities

We defer revenue associated with merchandise delivered via the home-delivery channel. We expect that substantially all of the deferred revenue and customer deposits as of July 31, 2021 will be recognized within the next six months as the performance obligations are satisfied. New membership fees are recorded as deferred revenue when collected from customers and recognized as revenue based on expected product revenues over the annual membership period, based on historical trends of sales to members. Membership renewal fees are recorded as deferred revenue when collected from customers and are recognized as revenue on a straight-line basis over the membership period, or one year.

In addition, we defer revenue when cash payments are received in advance of performance for unsatisfied obligations related to our gift cards. During the three months ended July 31, 2021 and August 1, 2020, we recognized $4.9 million and $6.5 million, respectively, of revenue related to previous deferrals related to our gift cards. During the six months ended July 31, 2021 and August 1, 2020, we recognized $9.8 million and $10.6 million, respectively, of revenue related to previous deferrals related to our gift cards. During the three months ended July 31, 2021 and August 1, 2020, we recorded gift card breakage of $0.5 million and $0.2 million, respectively. During the six months ended July 31, 2021 and August 1, 2020, we recorded gift card breakage of $0.9 million and $0.8 million, respectively. We expect that approximately 75% of the remaining gift card liabilities as of July 31, 2021 will be recognized when the gift cards are redeemed by customers.