Revision of Previously Issued Consolidated Financial Statements

12 Months Ended

Mar. 04, 2023

Revision of Previously Issued Consolidated Financial Statements

Revision of Previously Issued Consolidated Financial Statements

25. Revision of Previously Issued Consolidated Financial Statements

Subsequent to the issuance of the Company’s consolidated financial statements as of and for the fiscal year ended March 4, 2023, management evaluated the materiality of a misstatement in accordance with the U.S. SEC Staff’s Accounting Bulletin Nos. 99, Materiality (“SAB 99”) and 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB 108”). The misstatement pertains to the Company’s historical accounting for closed store liabilities. Based on their evaluation, management concluded the misstatement is not material to the Company’s previously issued consolidated financial statements as of and for each of the three fiscal years ended March 4, 2023 and each of the interim and year-to-date periods then ended, (collectively the “previously issued financial statements”). However, as prescribed by SAB 108, in conjunction with the re-issuance of the Company’s previously issued financial statements, the misstatement has been corrected as an immaterial revision of the accompanying consolidated financial statements as of and for each of the three fiscal years ended March 4, 2023 and the related notes hereto. A summary of the nature of the misstatement and its impact on the Company’s previously issued financial statements is summarized as follows.

The Company adopted ASC 842, Leases, (“ASC 842”) on the first day of fiscal year 2020 under the alternative transition method as permissible under ASC 842. As part of this adoption, the Company elected the practical expedients, as permitted under the transition guidance, which included, among other things, the ability to carry forward existing lease classifications. Based on this election, the Company appropriately eliminated the majority of its closed store and lease exit liabilities as of the date of adoption, which had been accrued in accordance with ASC 420, Exit or Disposal Cost Obligations, (“ASC 420”). Moreover, due to the Company’s practical expedients election, variable costs, consisting primarily of real estate taxes and common area maintenance expenses, associated with store closures that occur subsequent to the adoption of ASC 842 may no longer be accrued under ASC 420, but rather recognized as expense as they are incurred.

Due to an oversight in their evaluation of an amendment to ASC 420 as a result of the adoption of ASC 842, management determined that the Company incorrectly continued to accrue estimated costs associated with store closures as a liability subsequent to the date of adoption, rather than recognize the costs as they are incurred. The impact of the misstatement resulted in an overstatement of these costs, which have historically been classified within Facility exit and impairment charges in the Company’s Consolidated Statements of Operations, and an overstatement of store closure liabilities, which have historically been classified within Accrued salaries, wages and other current liabilities (current

portion) and Other noncurrent liabilities (long-term portion) in the Company’s Consolidated Balance Sheets. The misstatement had no impact on the Company’s previously issued consolidated financial statements as of and for the fiscal year ended February 29, 2020 and each of the interim and year-to-date periods then ended.

A summary of revisions to the Company’s previously reported financial statements is presented below.

As of and for the fiscal year ended March 4, 2023

	Previously				As
(In 000’s, except per share amounts )	Reported		Adjustment		Revised
Balance Sheet:
Accrued salaries, wages, and other current liabilities	$	724,529	$	(14,638)	$	709,891
Total current liabilities		2,727,875		(14,638)		2,713,237
Other noncurrent liabilities		130,482		(32,905)		97,577
Total liabilities		8,169,138		(47,543)		8,121,595
Accumulated deficit		(6,601,517)		(47,543)		(6,553,974)
Total stockholders’ (deficit) equity		(641,776)		(47,543)		(594,233)
Statements of Operations and Comprehensive Loss:
Facility exit and impairment charges	$	211,385	$	(30,748)	$	180,637
Loss from continuing operations before income taxes		(756,403)		30,748		(725,655)
Net loss from continuing operations		(749,936)		30,748		(719,188)
Net loss		(749,936)		30,748		(719,188)
Comprehensive loss		(749,351)		30,748		(718,603)
Basic and diluted loss per share from continuing operations		(13.71)		0.56		(13.15)
Net basic and diluted loss per share		(13.71)		0.56		(13.15)
Statement of Cash Flows:
Net loss	$	(749,936)	$	30,748	$	(719,188)
Net loss from continuing operations		(749,936)		30,748		(719,188)
Facility exit and impairment charges		211,385		(30,748)		180,637

As of and for the fiscal year ended February 26, 2022

	Previously				As
(In 000’s, except per share amounts)	Reported		Adjustment		Revised
Balance Sheet:
Accrued salaries, wages, and other current liabilities	$	780,632	$	(4,073)	$	776,559
Total current liabilities		2,933,088		(4,073)		2,929,015
Other noncurrent liabilities		151,976		(12,722)		139,254
Total liabilities		8,429,970		(16,795)		8,413,175
Accumulated deficit		(5,851,581)		16,795		(5,834,786)
Total stockholders’ (deficit) equity		99,033		16,795		115,828
Statements of Operations and Comprehensive Loss:
Facility exit and impairment charges	$	180,190	$	(16,106)	$	164,084
Loss from continuing operations before income taxes		(542,258)		16,106		(526,152)
Net loss from continuing operations		(538,478)		16,106		(522,372)
Net loss		(538,478)		16,106		(522,372)
Comprehensive loss		(529,861)		16,106		(513,755)
Basic and diluted loss per share from continuing operations		(9.96)		0.30		(9.66)
Net basic and diluted loss per share		(9.96)		0.30		(9.66)
Statement of Cash Flows:
Net loss	$	(538,478)	$	16,106	$	(522,372)
Net loss from continuing operations		(538,478)		16,106		(522,372)
Facility exit and impairment charges		180,190		(16,106)		164,084

As of and for the fiscal year ended February 27, 2021

	Previously				As
(In 000’s, except per share amounts)	Reported		Adjustment		Revised
Balance Sheet:
Accrued salaries, wages, and other current liabilities	$	642,364	$	854	$	643,218
Total current liabilities		2,602,946		854		2,603,800
Other noncurrent liabilities		208,213		(1,543)		206,670
Total liabilities		8,720,250		(689)		8,719,561
Accumulated deficit		(5,313,103)		689		(5,312,414)
Total stockholders’ (deficit) equity		615,154		689		615,843
Statements of Operations and Comprehensive Loss:
Facility exit and impairment charges	$	58,403	$	(689)	$	57,714
Loss from continuing operations before income taxes		(120,227)		689		(119,538)
Net loss from continuing operations		(100,070)		689		(99,381)
Net loss		(90,909)		689		(90,220)
Comprehensive loss		(66,065)		689		(65,376)
Basic and diluted loss per share from continuing operations		(1.87)		0.01		(1.86)
Net basic and diluted loss per share		(1.69)		0.01		(1.68)
Statement of Cash Flows:
Net loss	$	(90,909)	$	689	$	(90,220)
Net loss from continuing operations		(100,070)		689		(99,381)
Facility exit and impairment charges		58,403		(689)		57,714