Revenue Recognition

12 Months Ended

Feb. 03, 2024

Revenue Recognition and Deferred Revenue [Abstract]

Revenue Recognition

Revenue Recognition

Accounts receivable, net from revenue-generating activities were $103 million as of February 3, 2024 and $101 million as of January 28, 2023. 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 credit card programs and direct channel shipments, which are all impacted by seasonal and holiday-related sales patterns. Deferred revenue was $310 million as of February 3, 2024 and $309 million as of January 28, 2023. The Company recognized $134 million as revenue in 2023 from amounts recorded as deferred revenue at the beginning of the period. As of February 3, 2024, the Company recorded deferred revenues of $295 million within Accrued Expenses and Other, and $15 million within Other Long-term Liabilities on the Consolidated Balance Sheet.

The following table provides a disaggregation of Net Sales for 2023, 2022 and 2021:

	2023		2022		2021
	(in millions)
Stores — North America (a)	$	3,480	$	3,909	$	4,194
Direct (a)	2,015		1,843		2,114
International (b)	687		592		477
Total Net Sales	$	6,182	$	6,344	$	6,785

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(a)Results in 2023 include Adore Me sales.

(b)Results include consolidated joint venture sales in China, royalties associated with franchised stores and wholesale sales.

The Company has a Victoria's Secret and PINK multi-tender loyalty program along with a co-branded credit card and a U.S. private label credit card through which customers can earn points on purchases of Victoria's Secret and PINK product and through the co-branded credit card can earn points on purchases outside of the Company. A third-party financing company is the sole owner of the credit card accounts and underwrites the credit issued under the credit card programs. Revenue earned in connection with the Company's credit card arrangements with the third-party is primarily recognized based on credit card sales and usage.

The Company recognized Net Sales of $95 million, $123 million and $132 million for 2023, 2022 and 2021, respectively, related to revenue earned in connection with its credit card arrangements.

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 $910 million, $830 million and $736 million for 2023, 2022 and 2021, respectively.