Revenue Recognition: Our revenue consists of direct to consumer sales, including our retail store, e-commerce and restaurant operations, and wholesale sales, which are included in net sales in our consolidated statements of operations, as well as royalty income, which represents substantially all amounts included in royalties and other income in our consolidated statements of operations. We recognize revenue when performance obligations under the terms of the contracts with our customers are satisfied. Our accounting policies related to revenue recognition for each type of contract with customers, including a description of the related performance obligations, return rights, allowances, discounts, credit terms and other information, is described in the significant accounting policies described in our Annual Report on Form 10-K for Fiscal 2018.

The table below quantifies the amount of net sales by distribution channel (in thousands) for each period presented.



	First Quarter of Fiscal 2019		First Quarter of Fiscal 2018
Retail	$	108,006	$	107,735
E-commerce	47,989		44,522
Restaurant	23,601		25,293
Wholesale	101,926		94,376
Other	451		702
Net sales	$	281,973	$	272,628

Substantially all amounts recognized in receivables, net represent receivables related to contracts with customers. In the ordinary course of our wholesale operations, we offer discounts, allowances and cooperative advertising support to some of our wholesale customers for certain products. We record the discounts, returns and allowances as a reduction to net sales in our consolidated statements of operations and as a reduction to receivables, net in our consolidated balance sheets. As of May 4, 2019, February 2, 2019 and May 5, 2018, reserve balances recorded as a reduction to receivables related to these items were $8 million, $7 million and $6 million, respectively

In addition to trade and other receivables, income tax receivables of $1 million, $1 million and $5 million and tenant allowances due from landlord of $1 million, $0 million and $1 million are included in receivables, net in our consolidated balance sheet as of May 4, 2019, February 2, 2019 and May 5, 2018, respectively. As of May 4, 2019, February 2, 2019 and May 5, 2018, prepaid expenses and other current assets included $3 million, $2 million and $3 million representing the estimated value of inventory for wholesale and direct to consumer sales returns. We did not have any significant contract assets related to contracts with customers, other than receivables and the value of inventory associated with reserves for expected sales returns, as of May 4, 2019, February 2, 2019 and May 5, 2018.

An estimated sales return liability of $5 million, $3 million and $5 million for expected direct to consumer returns is classified in other accrued expenses and liabilities in our consolidated balance sheet as of May 4, 2019, February 2, 2019 and May 5, 2018, respectively. Contract liabilities for gift cards purchased by consumers and merchandise credits received by customers but not yet redeemed, less any breakage income recognized to date, is included in other accrued expenses and liabilities in our consolidated balance sheets and totaled $12 million, $12 million and $10 million as of May 4, 2019, February 2, 2019, and May 5, 2018, respectively.