Significant Accounting Policies (Tables)

12 Months Ended

Feb. 02, 2019

Summary of Condensed Consolidated Balance Sheets Illustrating Effect of Revision

The following are selected line items from the Company’s consolidated balance sheets and consolidated statements of stockholders’ equity (deficit) illustrating the effect of the revision (in thousands):

	Consolidated Balance Sheets
	February 3, 2018
	As Reported			Adjustment			As Revised
Stockholders’ deficit:
Common stock	$	2		$	—		$	2
Additional paid-in capital		860,288			(19,523	)		840,765
Accumulated other comprehensive income		(171	)		—			(171	)
Retained earnings		152,394			—			152,394
Treasury stock		(1,019,849	)		19,523			(1,000,326	)
Total stockholders’ deficit	$	(7,336	)	$	—		$	(7,336	)
	Unaudited Condensed Consolidated Balance Sheets
	May 5, 2018
	As Reported			Adjustment			As Revised
Stockholders’ equity:
Common stock	$	2		$	—		$	2
Additional paid-in capital		870,751			(19,523	)		851,228
Accumulated other comprehensive income		(1,436	)		—			(1,436	)
Retained earnings		159,417			—			159,417
Treasury stock		(1,020,092	)		19,523			(1,000,569	)
Total stockholders’ equity	$	8,642		$	—		$	8,642
	Unaudited Condensed Consolidated Balance Sheets
	August 4, 2018
	As Reported			Adjustment			As Revised
Stockholders’ equity:
Common stock	$	2		$	—		$	2
Additional paid-in capital		944,610			(19,523	)		925,087
Accumulated other comprehensive income		(1,918	)		—			(1,918	)
Retained earnings		223,459			—			223,459
Treasury stock		(1,020,092	)		19,523			(1,000,569	)
Total stockholders’ equity	$	146,061		$	—		$	146,061

Schedule of Product Recall Adjustments Effect on Income Before Taxes

Product recalls had the following effect on the Company’s income before income taxes (in thousands):

	Year Ended
	February 2,			February 3,		January 28,
	2019			2018		2017
Reduction of net revenues	$	4,733		$	3,207	$	3,441
Impact on cost of goods sold		(4,139	)		4,315		535
Impact on gross profit		594			7,522		3,976
Incremental selling, general and administrative expenses		1,025			185		639
Impact on income before income taxes	$	1,619		$	7,707	$	4,615

Schedule of Property and Equipment Useful Lives

Property and equipment is recorded at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method, generally using the following useful lives:

Category of Property and Equipment	Useful Life
Building and building improvements	40 years
Machinery, equipment and aircraft	3 to 10 years
Furniture, fixtures and equipment	3 to 7 years
Computer software	3 to 10 years

Summary of RHCA liability for lease loss

The RHCA lease loss liability activity in fiscal 2018 and fiscal 2017 was as follows (in thousands):

	Year Ended
	February 2,			February 3,
	2019			2018
Balance at beginning of fiscal year	$	7,100		$	3,188
Lease loss liability remeasurement		3,411			4,417
Payments made under lease agreement		(2,249	)		(1,699	)
Payments received under sublease agreement		1,138			1,003
Interest		415			191
Balance at end of fiscal year	$	9,815		$	7,100

Summary of Allowance for Sales Returns

A summary of the allowance for sales returns is as follows (in thousands):

	Year Ended
	February 2,			February 3,			January 28,
	2019			2018			2017
Balance at beginning of fiscal year	$	10,565		$	10,077		$	12,688
Waterworks acquisition—beginning balance		—			—			523
Impact of Topic 606 adoption		5,862			—			—
Provision for sales returns		112,218			108,134			106,508
Actual sales returns		(108,824	)		(107,646	)		(109,642	)
Balance at end of fiscal year	$	19,821		$	10,565		$	10,077

Summary of Impact of Adopting Topic 606 Condensed Consolidated Statements of Income and Balance Sheets

The following tables summarize the impact of adopting Topic 606 on the Company’s consolidated statement of income (in thousands):

	Year Ended February 2, 2019
	As Reported		Adjustments			Balances without Adoption of Topic 606
Net revenues	$	2,505,653	$	(9,868	)	$	2,495,785
Cost of goods sold		1,504,806		(3,485	)		1,501,321
Gross profit		1,000,847		(6,383	)		994,464
Selling, general and administrative expenses		711,617		(2,616	)		709,001
Income from operations		289,230		(3,767	)		285,463
Other expenses
Interest expense—net		75,074		—			75,074
Goodwill and tradename impairment		32,086		—			32,086
Loss on extinguishment of debt		917		—			917
Total other expenses		108,077		—			108,077
Income before income taxes		181,153		(3,767	)		177,386
Income tax expense		30,514		(3,945	)		26,569
Net income	$	150,639	$	178		$	150,817

The following table summarizes the impact of adopting Topic 606 on certain line items of the Company’s consolidated balance sheet (in thousands):

	As of February 2, 2019
	As Reported			Adjustments			Balances without Adoption of Topic 606
Prepaid expense and other current assets	$	104,719		$	33,587		$	138,306
Deferred tax assets		30,033			(6,561	)		23,472
Accounts payable and accrued expenses		320,441			(686	)		319,755
Deferred revenue and customer deposits		152,595			9,304			161,899
Other current liabilities		101,347			(2,806	)		98,541
Accumulated deficit		(376,810	)		21,214			(355,596	)

As mentioned above, the adoption of the ASUs will result in the derecognition of the build-to-suit property asset (included in property and equipment—net) and the financing obligations under build-to-suit lease transactions on the consolidated balance sheets as follows (in thousands):

	February 2,		February 3,
	2019		2018
Build-to-suit property	$	245,217	$	237,909
Financing obligations under build-to-suit lease transactions		228,928		229,323

The Company preliminarily expects the adoption to result in the following amounts being recorded on its consolidated balance sheets for its operating and finance leases (in millions):

	February 2,	February 3,
	2019	2018
ROU assets	$1,090 - $1,190	$930 - $1,030
Lease liabilities	$880 - $980	$750 - $850

Distribution Center Closures [Member]

Summary of Distribution Center Lease Loss Liability Activity

The distribution center lease loss liability activity in fiscal 2018 and fiscal 2017 was as follows (in thousands):

	Year Ended
	February 2,			February 3,
	2019			2018
Balance at beginning of fiscal year	$	2,585		$	—
Lease loss liability additions		1,927			2,447
Lease loss liability remeasurements		(1,232	)		—
Payments made under lease agreements		(6,041	)		(583	)
Payments received under sublease agreements		4,904			716
Interest		34			5
Balance at end of fiscal year	$	2,177		$	2,585