Revenue

9 Months Ended

Nov. 01, 2020

Revenue [Abstract]

Revenue

10.    REVENUE

The Company’s revenue primarily consists of the sale of apparel, footwear and hard goods. Revenue for merchandise that is shipped to our customers from our distribution centers and stores is recognized upon shipment. Store revenue is recognized at the point of sale, net of returns, and excludes taxes. Shipping and processing revenue generated from customer orders are included as a component of net sales and shipping and processing expense, including handling expense, is included as a component of selling, general and administrative expenses. Sales tax collected from customers and remitted to taxing authorities is excluded from revenue and is included in accrued expenses.

Sales disaggregated based upon sales channel is presented below.

	Three Months Ended				Nine Months Ended
	November 1, 2020		November 3, 2019		November 1, 2020		November 3, 2019
(in thousands)
Direct-to-consumer	$	86,392	$	61,581	$	273,503	$	187,549
Stores		49,139		58,187		109,320		168,426
	$	135,531	$	119,768	$	382,823	$	355,975

Contract Assets and Liabilities

The Company’s contract assets primarily consist of the right of return for amounts of inventory to be returned that is expected to be resold and is recorded in Prepaid expenses and other current assets on the Company’s consolidated balance sheets. The Company’s contract liabilities primarily consist of gift card liabilities and are recorded in Accrued expenses and other current liabilities under deferred revenue (see Note 4 “Accrued Expenses and Other Current Liabilities”) on the Company’s consolidated balance sheets. Upon issuance of a gift card, a liability is established for its cash value. The gift card liability is relieved and revenues on gift cards are recorded at the time of redemption by the customer.

Contract assets and liabilities on the Company’s consolidated balance sheets are presented in the following table:

	November 1, 2020		February 2, 2020
(in thousands)
Contract assets	$	1,900	$	1,932
Contract liabilities	$	7,030	$	9,790

Revenue from gift cards is recognized when the gift card is redeemed by the customer for merchandise, or as a gift card breakage, an estimate of gift cards which will not be redeemed. The Company does not record breakage revenue when escheat liability to the relevant jurisdictions exists. Gift card breakage is recorded within Net sales on the Company’s consolidated statement of operations. The following table provides the reconciliation of the contract liability related to gift cards for the nine months ended:

	November 1, 2020		November 3, 2019
(in thousands)
Balance as of beginning of period	$	9,790	$	8,508
Gift cards sold		5,740		5,952
Gift cards redeemed		(7,381)		(7,497)
Gift card breakage		(1,119)		-
Balance as of end of period	$	7,030	$	6,963