Revenue

6 Months Ended

Aug. 01, 2020

Revenue From Contract With Customer [Abstract]

Revenue

Note 6 – Revenue

Disaggregation of Revenue by Product Category

Revenue is disaggregated by product category below. Net sales and percentage of net sales for the thirteen and twenty-six weeks ended August 1, 2020 and August 3, 2019 were as follows:

(In thousands)	Thirteen Weeks Ended August 1, 2020				Thirteen Weeks Ended August 3, 2019
Non-Athletics:
Women’s	$	65,167	22	%	$	66,277	25	%
Men’s		42,319	14			40,108	15
Children’s		16,544	6			13,567	5
Total		124,030	42			119,952	45
Athletics:
Women’s		55,961	19			43,027	16
Men’s		72,941	24			56,837	21
Children’s		31,417	10			35,707	13
Total		160,319	53			135,571	50
Accessories and Other		16,445	5			12,698	5
Total	$	300,794	100	%	$	268,221	100	%

(In thousands)	Twenty-six Weeks Ended August 1, 2020				Twenty-six Weeks Ended August 3, 2019
Non-Athletics:
Women’s	$	94,088	21	%	$	126,707	24	%
Men’s		61,034	14			75,971	15
Children’s		23,553	5			25,935	5
Total		178,675	40			228,613	44
Athletics:
Women’s		88,873	20			92,714	18
Men’s		104,401	23			110,141	21
Children’s		52,081	12			66,525	13
Total		245,355	55			269,380	52
Accessories and Other		24,259	5			24,038	4
Total	$	448,289	100	%	$	522,031	100	%

Accounting Policy and Performance Obligations

We operate as a multi-channel, family footwear retailer and provide the convenience of shopping at our brick-and-mortar stores or shopping online through our e-commerce and mobile platforms.  As part of our multi-channel strategy, we offer Shoes 2U, a program that enables us to ship product to a customer’s home or selected store if the product is not in stock.  We also offer “buy online, pick up in store” services for our customers.  “Buy online, pick up in store” provides the convenience of local pickup for our customers.

For our brick-and-mortar stores, we satisfy our performance obligation and control is transferred at the point of sale when the customer takes possession of the products.  This also includes the “buy online, pick up in store” scenario described above and includes sales made via our Shoes 2U program when customers choose to pick up their goods in-store.  For sales made through our e-commerce site or mobile app in which the customer chooses home delivery, we transfer control and recognize revenue when the product is shipped from our stores or distribution center.  This also includes sales made via our Shoes 2U program when the customer chooses home delivery.

We offer our customers sales incentives including coupons, discounts, and free merchandise.  Sales are recorded net of such incentives and returns and allowances.  If an incentive involves free merchandise, that merchandise is recorded as a zero sale and the cost is included in cost of sales.  Gift card revenue is recognized at the time of redemption.  When a customer makes a purchase as part of our

rewards program, we allocate the transaction price between the goods purchased and the loyalty reward points and recognize the loyalty revenue based on estimated customer redemptions.

Transaction Price and Payment Terms

The transaction price is the amount of consideration we expect to receive from our customers and is reduced by any stated promotional discounts at the time of purchase.  The transaction price may be variable due to terms that permit customers to exchange or return products for a refund within a limited period of time.  The implicit contract with the customer reflected in the transaction receipt states the final terms of the sale, including the description, quantity, and price of each product purchased.  The customer agrees to a stated price in the contract that does not vary over the term of the contract and may include revenue to offset shipping costs.  Taxes imposed by governmental authorities such as sales taxes are excluded from net sales.  

Our brick-and-mortar stores accept various forms of payment from customers at the point of sale.  These include cash, checks, credit/debit cards and gift cards.  Our e-commerce and mobile platforms accept credit/debit cards, PayPal, Apple Pay, gift cards and a third-party installment payment option as forms of payment.  Payments made for products are generally collected when control passes to the customer, either at the point of sale or at the time the customer order is shipped.  For Shoes 2U transactions, customers may order the product at the point of sale.  For these transactions, customers pay in advance and unearned revenue is recorded as a contract liability.  We recognize the related revenue when control has been transferred to the customer (i.e., when the product is picked up by the customer or shipped to the customer).  Unearned revenue related to our Shoes 2U program was not material to our Condensed Consolidated Financial Statements at August 1, 2020, February 1, 2020 and August 3, 2019.

Returns and Refunds

Customers can exchange or return products for a refund within a limited period of time.  We have established a returns allowance based upon historical experience in order to estimate these transactions.  This allowance is recorded as a reduction in sales with a corresponding refund liability recorded in accrued and other liabilities.  The estimated cost of merchandise inventory is recorded as a reduction to cost of sales and an increase in merchandise inventories.  Approximately $718,000 of refund liabilities and $500,000 of right of return assets associated with estimated product returns were recorded in our Condensed Consolidated Balance Sheets at each of August 1, 2020 and February 1, 2020.  Approximately $600,000 of refund liabilities and $410,000 of right of return assets associated with estimated product returns were recorded in our Condensed Consolidated Balance Sheet at August 3, 2019.

Contract Liabilities

We sell gift cards in our brick-and-mortar stores and through our e-commerce and mobile platforms.  Gift card purchases are recorded as an increase to contract liabilities at the time of purchase and a decrease to contract liabilities when a customer redeems a gift card.  Estimated breakage is determined based on historical breakage percentages and recognized as revenue based on expected gift card usage.  We do not record breakage revenue when escheat liability to relevant jurisdictions exists.  At August 1, 2020, February 1, 2020 and August 3, 2019, approximately $1.3 million, $1.5 million and $1.2 million of contract liabilities associated with unredeemed gift cards were recorded in our Condensed Consolidated Balance Sheets, respectively.  We expect the revenue associated with these liabilities to be recognized in proportion to the pattern of customer redemptions within two years.  Breakage revenue associated with our gift cards of $23,000 and $42,000 was recognized in net sales during the thirteen and twenty-six weeks ended August 1, 2020, respectively.   Breakage revenue associated with our gift cards of $30,000 and $63,000 was recognized in net sales during the thirteen and twenty-six weeks ended August 3, 2019, respectively.  

Our Shoe Perks rewards program allows customers to accrue points and provides customers with the opportunity to earn rewards.  Points under Shoe Perks are earned primarily by making purchases either in-store or through our online platform.  Once a certain threshold of accumulated points is reached, the customer earns a reward certificate, which is redeemable at any of our stores or online.

When a Shoe Perks customer makes a purchase, we allocate the transaction price between the goods purchased and the loyalty reward points earned based on the relative standalone selling price.  The portion allocated to the points program is recorded as a contract liability for rewards that are expected to be redeemed.  We then recognize revenue based on an estimate of when customers redeem rewards, which incorporates an estimate of points expected to expire using historical rates.  During the thirteen and twenty-six weeks ended August 1, 2020, approximately $922,000 and $1.9 million, respectively, of loyalty rewards were recognized in net sales.  During the thirteen and twenty-six weeks ended August 3, 2019, approximately $448,000 and $854,000, respectively, of loyalty rewards were recognized in net sales.  At August 1, 2020, February 1, 2020 and August 3, 2019, approximately $827,000, $679,000 and $352,000, of contract liabilities associated with loyalty rewards were recorded in our Condensed Consolidated Balance Sheets, respectively. We expect the revenue associated with these liabilities to be recognized in proportion to the pattern of customer redemptions in less than one year.