Inventory

3 Months Ended

May 01, 2021

Inventory Disclosure [Abstract]

Inventory

INVENTORY

We use the moving average cost method to determine the cost of merchandise inventories. We identify potentially excess and slow-moving inventories by evaluating inventory aging, turn rates and inventory levels in conjunction with our overall sales trend. Further, inventory realization exposure is identified through analysis of gross margins and markdowns in combination with changes in current business trends. We record excess and slow-moving inventories at net realizable value.

Inventory write-offs for last year's first quarter were $43.1 million, which was primarily the result of changes in the market for those inventories and the resulting slowdown in sell through rates due to the impact of the pandemic during last year's first quarter. We did not record inventory write-offs during the first quarter other than adjustments in ordinary course which are presented in inventories in the accompanying unaudited condensed consolidated statements of cash flows.