Accounts Payable, Accrued Expenses and Other Current Liabilities

9 Months Ended

Oct. 28, 2023

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:

	OCTOBER 28,		JANUARY 28,
	2023		2023
	(in thousands)
Accounts payable	$	179,539	$	166,082
Accrued compensation		43,403		76,650
Accrued occupancy		31,346		28,830
Accrued sales and use tax(1)		25,426		21,950
Accrued legal settlements(1)(2)		17,804		47
Accrued interest		15,640		14,456
Accrued freight and duty		13,285		17,497
Excise tax payable on share repurchases(1)		12,491		3,700
Accrued catalog costs(1)		11,107		1,546
Accrued professional fees		5,793		7,447
Accrued legal contingencies(1)(2)		4,583		8,874
Other accrued expenses(1)		39,310		27,870
Total accounts payable and accrued expenses	$	399,727	$	374,949

(1) Prior year amounts have been adjusted to conform to the current period presentation.

(2) Refer to Note 16¾Commitments and Contingencies.

Reorganization

As reported in our 2022 Form 10-K, we implemented a restructuring on March 24, 2023 that included workforce and expense reductions in order to improve and simplify our organizational structure, streamline certain aspects of our business operations and better position us for further growth. The workforce reduction associated with the initiative included the elimination of numerous leadership and other positions throughout the organization, which affected approximately 440 roles. The reorganization was completed during the first quarter of fiscal 2023. During the nine months ended October 28, 2023, we incurred total charges relating to the reorganization of $7.6 million consisting primarily of severance costs and related taxes. As of October 28, 2023, we had accruals of $1.3 million included in accounts payable and accrued expenses related to the reorganization.

Other current liabilities consist of the following:

	OCTOBER 28,		JANUARY 28,
	2023		2023
	(in thousands)
Unredeemed gift card and merchandise credit liability	$	27,328	$	26,733
Current portion of term loans		25,000		25,000
Allowance for sales returns		19,729		20,747
Finance lease liabilities		18,151		17,007
Foreign tax payable		4,232		4,365
Other current liabilities		6,532		9,338
Total other current liabilities	$	100,972	$	103,190

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 October 28, 2023 will be recognized within 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. During the three months ended October 28, 2023 and October 29, 2022, we recognized $7.5 million and $5.0 million, respectively, of revenue related to previous deferrals related to our gift cards. During the nine months ended October 28, 2023 and October 29, 2022, we recognized $19 million and $16 million, respectively, of revenue related to previous deferrals related to our gift cards. We expect that approximately 70 percent of the remaining gift card liabilities will be recognized when the gift cards are redeemed by customers.