Revenue Recognition

9 Months Ended

Oct. 30, 2021

Revenue Recognition and Deferred Revenue [Abstract]

Revenue Recognition

Revenue Recognition

Accounts receivable, net from revenue-generating activities were $86 million as of October 30, 2021, $74 million as of January 30, 2021 and $93 million as of October 31, 2020. Accounts receivable primarily relate to amounts due from the Company's franchise, license and wholesale partners. Under these arrangements, payment terms are typically 60 to 90 days.

The Company records deferred revenue when cash payments are received in advance of transfer of control of goods or services. Deferred revenue primarily relates to gift cards, loyalty and private label credit card programs and direct channel shipments, which are all impacted by seasonal and holiday-related sales patterns. Deferred revenue was $214 million as of October 30, 2021, $256 million as of January 30, 2021 and $215 million as of October 31, 2020. The Company recognized $125 million as revenue year-to-date 2021 from amounts recorded as deferred revenue at the beginning of the year. As of October 30, 2021, the Company recorded deferred revenue of $205 million within Accrued Expenses and Other, and $9 million within Other Long-term Liabilities on the Consolidated and Combined Balance Sheet.

The following table provides a disaggregation of Net Sales for the third quarter and year-to-date 2021 and 2020:

	Third Quarter				Year-to-Date
	2021		2020		2021		2020
	(in millions)
Stores – North America	$	920	$	755	$	2,890	$	1,633
Direct	406		470		1,396		1,391
International (a)	115		128		323		289
Total Net Sales	$	1,441	$	1,353	$	4,609	$	3,313

 _______________

(a)Results include Greater China, royalties associated with franchised stores, wholesale sales and company-operated stores in the U.K. (before our joint venture with Next).

The Company recognized Net Sales of $30 million and $33 million for the third quarter of 2021 and 2020, respectively, related to revenue earned in connection with its U.S. private label credit card arrangement. The Company recognized Net Sales of $89 million and $86 million for year-to-date 2021 and 2020, respectively, related to revenue earned in connection with its U.S. private label credit card arrangement.

The Company’s international net sales include sales from company-operated stores, royalty revenue from franchise and license arrangements, wholesale revenues and direct sales shipped internationally. Certain of these sales are subject to the impact of fluctuations in foreign currency. The Company’s net sales outside of the U.S. totaled $170 million and $186 million for the third quarter of 2021 and 2020, respectively. The Company’s net sales outside of the U.S. totaled $500 million and $429 million for year-to-date 2021 and 2020, respectively.