United States | Canada | Australia | Europe | Total | ||||||||||||||||
Fiscal 2018 | ||||||||||||||||||||
Intangible asset impairment charges | $ | 11.2 | $ | — | $ | — | $ | 31.9 | $ | 43.1 | ||||||||||
Store and other asset impairment charges | 1.3 | — | 0.2 | 0.6 | 2.1 | |||||||||||||||
Total | $ | 12.5 | $ | — | $ | 0.2 | $ | 32.5 | $ | 45.2 | ||||||||||
Fiscal 2017 | ||||||||||||||||||||
Intangible asset impairment charges | $ | 11.0 | $ | — | $ | — | $ | — | $ | 11.0 | ||||||||||
Store and other asset impairment charges | 1.3 | — | 0.3 | 1.2 | 2.8 | |||||||||||||||
Total | $ | 12.3 | $ | — | $ | 0.3 | $ | 1.2 | $ | 13.8 | ||||||||||
Fiscal 2016 | ||||||||||||||||||||
Intangible asset impairment charges | $ | 7.0 | $ | — | $ | — | $ | 7.4 | $ | 14.4 | ||||||||||
Store and other asset impairment charges | 2.7 | 0.2 | — | 2.3 | 5.2 | |||||||||||||||
Total | $ | 9.7 | $ | 0.2 | $ | — | $ | 9.7 | $ | 19.6 |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Gains (losses) on the changes in fair value of derivative instruments | $ | 9.6 | $ | (24.6 | ) | $ | 20.0 | |||||
(Losses) gains on the re-measurement of related intercompany loans and foreign currency assets and liabilities | (6.6 | ) | 27.0 | (15.5 | ) | |||||||
Net gains | $ | 3.0 | $ | 2.4 | $ | 4.5 |
February 2, 2019 | February 3, 2018 | |||||||
Customer-related liabilities | $ | 268.7 | $ | 302.2 | ||||
Deferred revenue | 124.2 | 132.4 | ||||||
Employee benefits, compensation and related taxes | 140.7 | 152.2 | ||||||
Checks and transfers yet to be presented for payment from zero balance cash accounts | 82.7 | 176.4 | ||||||
Other taxes | 45.5 | 63.4 | ||||||
Other accrued liabilities(1) | 91.0 | 123.5 | ||||||
Total accrued liabilities | $ | 752.8 | $ | 950.1 |
(1) | Includes acquisition-related contingent consideration of $12.2 million as of February 3, 2018. See Note 5, \"Fair Value Measurements and Financial Instruments\" for additional information. |
February 2, 2019 | February 3, 2018 | ||||||
2019 Senior Notes principal amount | $ | 350.0 | $ | 350.0 | |||
2021 Senior Notes principal amount | 475.0 | 475.0 | |||||
Less: Unamortized debt financing costs | (4.2 | ) | (7.1 | ) | |||
820.8 | 817.9 | ||||||
Less: Current portion | (349.2 | ) | — | ||||
Long-term debt, net | $ | 471.6 | $ | 817.9 |
Contract Liabilities | ||||
Balance at February 3, 2018 | $ | 426.0 | ||
Adoption of ASU 2014-09 | (16.8 | ) | ||
Increase to contract liabilities (1) | 1,238.1 | |||
Decrease to contract liabilities (2) | (1,262.9 | ) | ||
Other adjustments (3) | (7.5 | ) | ||
Balance at February 2, 2019 | $ | 376.9 |
(1) | Includes issuances of gift cards, trade-in credits and loyalty points, new reservation deposits, new subscriptions to Game Informer and extended warranties sold. |
(2) | Includes redemptions of gift cards, trade-in credits, loyalty points and reservation deposits as well as revenues recognized for Game Informer and extended warranties. During the 52 weeks ended February 2, 2019, there were $65.8 million of gift cards redeemed that were outstanding as of February 3, 2018. |
(3) | Primarily includes foreign currency translation adjustments. |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
New video game hardware (1) | $ | 1,767.8 | $ | 1,791.8 | $ | 1,396.7 | ||||||
New video game software | 2,449.7 | 2,582.0 | 2,493.4 | |||||||||
Pre-owned and value video game products | 1,866.3 | 2,149.6 | 2,254.1 | |||||||||
Video game accessories | 956.5 | 784.3 | 676.7 | |||||||||
Digital | 194.0 | 189.2 | 181.0 | |||||||||
Collectibles | 707.5 | 636.2 | 494.1 | |||||||||
Other (2) | 343.5 | 414.0 | 469.0 | |||||||||
Total | $ | 8,285.3 | $ | 8,547.1 | $ | 7,965.0 |
(1) | Includes sales of hardware bundles, in which physical hardware and digital or physical software are sold together as a single SKU. |
(2) | Includes mobile and consumer electronics sold through our Simply Mac and Cricket Wireless branded stores. We sold our Cricket Wireless branded stores in January 2018. Also includes sales of PC entertainment software, interactive game figures, strategy guides, mobile and consumer electronics sold through our Video Game Brands segments, and revenues from PowerUp Pro loyalty members receiving Game Informer magazine in print form. |
Fiscal Year 2016 | ||||
Total number of shares purchased | 3.0 | |||
Average price per share | $ | 24.94 | ||
Aggregate value of shares purchased | $ | 75.1 |
Options | Weighted- Average Exercise Price | ||||||
Balance, February 3, 2018 | 1,194,025 | $ | 35.30 | ||||
Expired | (594,770 | ) | $ | 41.84 | |||
Balance, February 2, 2019 | 599,255 | $ | 28.81 |
Time-Based Restricted Stock Awards | Performance-Based Restricted Stock Awards | |||||||||||||
Shares | Weighted- Average Grant Date Fair Value | Shares | Weighted- Average Grant Date Fair Value | |||||||||||
Nonvested shares at February 3, 2018 | 912,360 | $ | 27.96 | 553,189 | $ | 28.83 | ||||||||
Granted | 969,043 | $ | 15.67 | 257,667 | $ | 15.80 | ||||||||
Vested | (791,891 | ) | $ | 25.66 | (298,454 | ) | $ | 30.49 | ||||||
Forfeited | (282,484 | ) | $ | 19.86 | (225,095 | ) | $ | 22.56 | ||||||
Nonvested shares at February 2, 2019 | 807,028 | $ | 18.30 | 287,307 | $ | 20.33 |
Fiscal Year | |||||||||||
2018 | 2017 | 2016 | |||||||||
Net sales | $ | 565.4 | $ | 677.5 | $ | 642.9 | |||||
Cost of sales | 73.1 | 122.3 | 133.5 | ||||||||
Gross profit | 492.3 | 555.2 | 509.4 | ||||||||
Selling, general and administrative expenses | 395.9 | 453.4 | 390.7 | ||||||||
Depreciation and amortization | 20.1 | 28.4 | 28.5 | ||||||||
Goodwill impairments | — | 32.8 | — | ||||||||
Asset impairments | — | 344.2 | 14.2 | ||||||||
Operating earnings (loss) | 76.3 | (303.6 | ) | 76.0 | |||||||
Gain on sale of discontinued operations | 100.8 | — | — | ||||||||
Earnings (loss) from discontinued operations before income taxes | 177.1 | (303.6 | ) | 76.0 | |||||||
Income tax expense (benefit) | 55.3 | (107.9 | ) | 27.3 | |||||||
Net income (loss) from discontinued operations | $ | 121.8 | $ | (195.7 | ) | $ | 48.7 |
February 3, 2018 | |||
Assets: | |||
Cash and cash equivalents | $ | 10.2 | |
Receivables, net | 44.1 | ||
Merchandise inventories, net | 116.4 | ||
Prepaid expenses and other current assets | 9.7 | ||
Property and equipment, net | 82.2 | ||
Goodwill | 316.8 | ||
Other intangible assets, net | 77.0 | ||
Other assets | 3.7 | ||
Total assets held for sale | $ | 660.1 | |
Liabilities: | |||
Accounts payable | $ | 9.7 | |
Accrued liabilities | 26.0 | ||
Other liabilities | 15.2 | ||
Total liabilities held for sale | $ | 50.9 |
Fiscal Year | |||||||||||
2018 | 2017 | 2016 | |||||||||
Capital expenditures | $ | 7.5 | $ | 22.2 | $ | 36.9 | |||||
Depreciation and amortization | 20.1 | 28.4 | 28.5 | ||||||||
Goodwill and asset impairments | — | 377.0 | 14.2 | ||||||||
Provision for inventory reserves | 12.7 | 12.9 | 17.6 |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Net (loss) income from continuing operations | $ | (794.8 | ) | $ | 230.4 | $ | 304.5 | |||||
Income (loss) from discontinued operations, net of tax | 121.8 | (195.7 | ) | 48.7 | ||||||||
Net (loss) income | $ | (673.0 | ) | $ | 34.7 | $ | 353.2 | |||||
Weighted-average common shares outstanding | 102.1 | 101.4 | 103.4 | |||||||||
Dilutive effect of stock options and restricted stock awards | — | 0.1 | 0.4 | |||||||||
Weighted-average diluted common shares | 102.1 | 101.5 | 103.8 | |||||||||
Basic (loss) earnings per share: (1) | ||||||||||||
Continuing operations | $ | (7.79 | ) | $ | 2.27 | $ | 2.94 | |||||
Discontinued operations | 1.19 | (1.93 | ) | 0.47 | ||||||||
Basic (loss) earnings per share | $ | (6.59 | ) | $ | 0.34 | $ | 3.42 | |||||
Diluted (loss) earnings per share: (1) | ||||||||||||
Continuing operations | $ | (7.79 | ) | $ | 2.27 | $ | 2.93 | |||||
Discontinued operations | 1.19 | (1.93 | ) | 0.47 | ||||||||
Diluted (loss) earnings per share | $ | (6.59 | ) | $ | 0.34 | $ | 3.40 | |||||
Anti-dilutive stock options and restricted stock awards | 1.7 | 2.0 | 1.4 |
(1) | The sum of (loss) earnings per share may not total to consolidated (loss) earnings per common share as amounts are calculated based on whole numbers. |
February 2, 2019 | February 3, 2018 | |||||||||||||||
Level 2 | Level 3 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Foreign currency contracts (1) | $ | 1.0 | $ | — | $ | 2.4 | $ | — | ||||||||
Company-owned life insurance(2) | 14.6 | — | 13.9 | — | ||||||||||||
Total assets | $ | 15.6 | $ | — | $ | 16.3 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Foreign currency contracts (3) | $ | 1.2 | $ | — | $ | 9.9 | $ | — | ||||||||
Nonqualified deferred compensation(3) | 1.1 | — | 1.2 | — | ||||||||||||
Contingent consideration(3) | — | — | — | 12.2 | ||||||||||||
Total liabilities | $ | 2.3 | $ | — | $ | 11.1 | $ | 12.2 |
(1) | Recognized in prepaid expenses and other current assets in our consolidated balance sheets. |
(2) | Recognized in other non-current assets in our consolidated balance sheets. |
(3) | Recognized in accrued liabilities in our consolidated balance sheets. |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Gains (losses) on the changes in fair value of derivative instruments | $ | 9.6 | $ | (24.6 | ) | $ | 20.0 | |||||
(Losses) gains on the re-measurement of related intercompany loans and foreign currency assets and liabilities | (6.6 | ) | 27.0 | (15.5 | ) | |||||||
Net gains | $ | 3.0 | $ | 2.4 | $ | 4.5 |
United States | Canada | Australia | Europe | Technology Brands | Total | |||||||||||||||||||
Balance at January 28, 2017—as reported | $ | 1,199.7 | $ | 28.6 | $ | 70.1 | $ | 74.8 | $ | 352.0 | $ | 1,725.2 | ||||||||||||
Transfers (1) | 2.4 | — | — | — | (352.0 | ) | (349.6 | ) | ||||||||||||||||
Balance at January 28, 2017—after transfers | 1,202.1 | 28.6 | 70.1 | 74.8 | — | 1,375.6 | ||||||||||||||||||
Divestitures (Note 2) | (42.6 | ) | — | — | — | — | (42.6 | ) | ||||||||||||||||
Foreign currency translation adjustment | — | 1.7 | 3.5 | 12.3 | — | 17.5 | ||||||||||||||||||
Balance at February 3, 2018 | 1,159.5 | 30.3 | 73.6 | 87.1 | — | 1,350.5 | ||||||||||||||||||
Foreign currency translation adjustment | — | (1.5 | ) | (7.2 | ) | (7.2 | ) | — | (15.9 | ) | ||||||||||||||
Impairment charge | (795.6 | ) | (28.8 | ) | (66.4 | ) | (79.9 | ) | — | (970.7 | ) | |||||||||||||
Balance at February 2, 2019 | $ | 363.9 | $ | — | $ | — | $ | — | $ | — | $ | 363.9 |
(1) | As a result of the divestiture of Spring Mobile, which was completed in January 2019, we allocated the goodwill balance associated with our former Technology Brands segment for the earliest period presented to Spring Mobile, Simply Mac and Cricket Wireless based on their relative fair values. Simply Mac and the historical results of Cricket Wireless are included in the United States segment. We allocated $349.6 million of goodwill to Spring Mobile which was impaired by $32.8 million during fiscal 2017. As of February 3, 2018, goodwill of $316.8 million related to Spring Mobile is included in assets held for sale in our consolidated balance sheets. |
February 2, 2019 | February 3, 2018 | |||||||||||||||||||||||
Gross Carrying Amount(1) | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Intangible assets with indefinite lives: | ||||||||||||||||||||||||
Trade names | $ | 8.8 | $ | — | $ | 8.8 | $ | 49.3 | $ | — | $ | 49.3 | ||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||||||
Leasehold rights | 91.8 | (67.3 | ) | 24.5 | 100.4 | (67.0 | ) | 33.4 | ||||||||||||||||
Customer relationships | — | — | — | 14.5 | (6.8 | ) | 7.7 | |||||||||||||||||
Other | 32.5 | (32.3 | ) | 0.2 | 33.5 | (31.4 | ) | 2.1 | ||||||||||||||||
Total | $ | 133.1 | $ | (99.6 | ) | $ | 33.5 | $ | 197.7 | $ | (105.2 | ) | $ | 92.5 |
(1) | The change in the gross carrying amount of intangible assets from February 3, 2018 to February 2, 2019 is due to impairments (see Note 4, \"Asset Impairments\") and the impact of exchange rate fluctuations. |
Period | Projected Amortization Expense | |||
Fiscal 2019 | $ | 5.5 | ||
Fiscal 2020 | 4.5 | |||
Fiscal 2021 | 3.7 | |||
Fiscal 2022 | 3.2 | |||
Fiscal 2023 | 2.6 |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Current tax expense: | ||||||||||||
Federal | $ | 45.0 | $ | 104.7 | $ | 122.2 | ||||||
State | 12.8 | 14.2 | 9.6 | |||||||||
Foreign | 38.5 | 28.5 | 29.2 | |||||||||
96.3 | 147.4 | 161.0 | ||||||||||
Deferred tax (benefit) expense: | ||||||||||||
Federal | (36.0 | ) | 23.4 | (3.1 | ) | |||||||
State | (4.0 | ) | (1.3 | ) | (0.1 | ) | ||||||
Foreign | (14.6 | ) | (16.0 | ) | (33.6 | ) | ||||||
(54.6 | ) | 6.1 | (36.8 | ) | ||||||||
Total income tax expense | $ | 41.7 | $ | 153.5 | $ | 124.2 |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
United States | $ | (543.4 | ) | $ | 310.7 | $ | 370.8 | |||||
International | (209.7 | ) | 73.2 | 57.9 | ||||||||
Total | $ | (753.1 | ) | $ | 383.9 | $ | 428.7 |
Fiscal Year | |||||||||
2018 | 2017 | 2016 | |||||||
Federal statutory tax rate(1) | 21.0 | % | 33.7 | % | 35.0 | % | |||
State income taxes, net of federal effect | (0.9 | ) | 3.0 | 1.4 | |||||
Foreign income tax rate differential | 2.8 | (1.1 | ) | (1.1 | ) | ||||
Change in valuation allowance | — | (1.1 | ) | 4.8 | |||||
Change in unrecognized tax benefits | 0.2 | (1.5 | ) | 2.7 | |||||
Transition tax | 3.0 | 2.7 | — | ||||||
Tax reform | — | 8.3 | — | ||||||
Realization of losses in foreign operations not previously benefited(2) | — | — | (9.8 | ) | |||||
Loss on investment in foreign subsidiary | — | — | (3.8 | ) | |||||
Intercompany sale of intangible assets | — | (3.4 | ) | — | |||||
Foreign tax credit | 0.1 | (2.5 | ) | (0.1 | ) | ||||
Withholding tax expense | (0.3 | ) | 2.3 | 0.2 | |||||
Impairment of goodwill | (25.6 | ) | 0.1 | — | |||||
Nondeductible interest | (4.2 | ) | 0.5 | 0.6 | |||||
Other (including permanent differences)(3) | (1.6 | ) | (1.0 | ) | (0.9 | ) | |||
(5.5 | )% | 40.0 | % | 29.0 | % |
(1) | Per IRC Section 15, we have incorporated a statutory rate of 21.0% for our year end current provision ending February 2, 2019. |
(2) | In fiscal 2016, we adopted a plan of reorganization specific to certain foreign operations which resulted in our ability to recognize the benefit of foreign net operating loss carryforwards that were previously unrecognized in affected jurisdictions. As a result, we recognized a tax benefit of $42.1 million in the fourth quarter of fiscal 2016, which is subject to a partial valuation allowance of $14.8 million. The valuation allowance established for this tax benefit is reflected in the line item “Change in valuation allowance.” |
(3) | Other is comprised of numerous items, none of which is greater than 1.05% of loss before income taxes for fiscal 2018, 1.69% of earnings before income taxes for fiscal 2017, and 1.75% of earnings before income taxes for fiscal 2016. |
February 2, 2019 | February 3, 2018 | |||||||
Deferred tax asset: | ||||||||
Inventory | $ | 14.7 | $ | 16.8 | ||||
Deferred rents | 3.9 | 6.9 | ||||||
Stock-based compensation | 1.8 | 9.2 | ||||||
Net operating losses | 78.5 | 86.2 | ||||||
Customer liabilities | 18.6 | 16.6 | ||||||
Property and equipment | 11.3 | 13.6 | ||||||
Credits | 18.2 | 9.5 | ||||||
Accrued compensation | 12.1 | 12.9 | ||||||
Intangible assets | 21.8 | 63.2 | ||||||
Other | 13.1 | 12.9 | ||||||
Total deferred tax assets | 194.0 | 247.8 | ||||||
Valuation allowance | (32.9 | ) | (36.9 | ) | ||||
Total deferred tax assets, net | 161.1 | 210.9 | ||||||
Deferred tax liabilities: | ||||||||
Goodwill | (10.2 | ) | (49.9 | ) | ||||
Prepaid expenses | (3.6 | ) | (4.5 | ) | ||||
Other | (0.1 | ) | (3.3 | ) | ||||
Total deferred tax liabilities | (13.9 | ) | (57.7 | ) | ||||
Net deferred tax assets | $ | 147.2 | $ | 153.2 | ||||
The above amounts are reflected in the consolidated financial statements as: | ||||||||
Deferred income taxes - assets | $ | 147.3 | $ | 158.2 | ||||
Deferred income taxes - liabilities | $ | (0.1 | ) | $ | (5.0 | ) |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Beginning balance of unrecognized tax benefits | $ | 24.9 | $ | 42.1 | $ | 31.9 | ||||||
Increases related to current period tax positions | 1.1 | 1.0 | 3.5 | |||||||||
Increases related to prior period tax positions | 35.5 | 11.2 | 7.9 | |||||||||
Reductions as a result of a lapse of the applicable statute of limitations | (0.6 | ) | (1.3 | ) | (0.2 | ) | ||||||
Reductions as a result of settlements with taxing authorities | (38.4 | ) | (28.1 | ) | (1.0 | ) | ||||||
Ending balance of unrecognized tax benefits | $ | 22.5 | $ | 24.9 | $ | 42.1 |
February 2, 2019 | February 3, 2018 | |||||||
Bankcard receivables | $ | 44.6 | $ | 49.2 | ||||
Vendor and other receivables (1) | 93.6 | 97.1 | ||||||
Allowance for doubtful accounts | (4.0 | ) | (7.7 | ) | ||||
Total receivables, net | $ | 134.2 | $ | 138.6 |
(1) | Vendor receivables primarily relate to vendor allowances. |
February 2, 2019 | February 3, 2018 | January 28, 2017 | ||||||||||
Cash and cash equivalents | $ | 1,624.4 | $ | 854.2 | $ | 664.5 | ||||||
Restricted cash (included in prepaid expenses and other current assets) | 2.7 | — | — | |||||||||
Restricted cash (included in other noncurrent assets) | 13.4 | 14.9 | 10.2 | |||||||||
Total cash and cash equivalents and restricted cash in the statements of cash flows | $ | 1,640.5 | $ | 869.1 | $ | 674.7 |
Fiscal Year 2018 | ||||||||||||
Under Prior Standard | Impact of New Standard | As Reported | ||||||||||
Net sales | $ | 8,240.7 | $ | 44.6 | $ | 8,285.3 | ||||||
Cost of sales | 5,937.1 | 40.1 | 5,977.2 | |||||||||
Gross profit | 2,303.6 | 4.5 | 2,308.1 | |||||||||
Operating (loss) earnings from continuing operations | (706.5 | ) | 4.5 | (702.0 | ) | |||||||
(Loss) earnings from continuing operations before income taxes | (757.6 | ) | 4.5 | (753.1 | ) | |||||||
Income tax expense | 40.5 | 1.2 | 41.7 | |||||||||
Net (loss) income from continuing operations | (798.1 | ) | 3.3 | (794.8 | ) |
February 2, 2019 | ||||||||||||
Under Prior Standard | Impact of New Standard | As Reported | ||||||||||
Merchandise inventories, net | $ | 1,246.1 | $ | 4.4 | $ | 1,250.5 | ||||||
Total current assets | 3,123.3 | 4.4 | 3,127.7 | |||||||||
Deferred income taxes | 151.9 | (4.6 | ) | 147.3 | ||||||||
Total noncurrent assets | 921.2 | (4.6 | ) | 916.6 | ||||||||
Total assets | 4,044.5 | (0.2 | ) | 4,044.3 | ||||||||
Accrued liabilities | 769.0 | (16.2 | ) | 752.8 | ||||||||
Income taxes payable | 26.0 | 1.2 | 27.2 | |||||||||
Total current liabilities | 2,196.1 | (15.0 | ) | 2,181.1 | ||||||||
Total liabilities | 2,723.1 | (15.0 | ) | 2,708.1 | ||||||||
Retained earnings | 1,347.9 | 14.8 | 1,362.7 | |||||||||
Total stockholders' equity | 1,321.4 | 14.8 | 1,336.2 | |||||||||
Total liabilities and stockholders' equity | 4,044.5 | (0.2 | ) | 4,044.3 |
February 2, 2019 | February 3, 2018 | January 28, 2017 | ||||||||||
Cash and cash equivalents | $ | 1,624.4 | $ | 854.2 | $ | 664.5 | ||||||
Restricted cash (included in prepaid expenses and other current assets) | 2.7 | — | — | |||||||||
Restricted cash (included in other noncurrent assets) | 13.4 | 14.9 | 10.2 | |||||||||
Total cash and cash equivalents and restricted cash in the statements of cash flows | $ | 1,640.5 | $ | 869.1 | $ | 674.7 |
Fiscal Year 2018 | ||||||||||||
Under Prior Standard | Impact of New Standard | As Reported | ||||||||||
Net sales | $ | 8,240.7 | $ | 44.6 | $ | 8,285.3 | ||||||
Cost of sales | 5,937.1 | 40.1 | 5,977.2 | |||||||||
Gross profit | 2,303.6 | 4.5 | 2,308.1 | |||||||||
Operating (loss) earnings from continuing operations | (706.5 | ) | 4.5 | (702.0 | ) | |||||||
(Loss) earnings from continuing operations before income taxes | (757.6 | ) | 4.5 | (753.1 | ) | |||||||
Income tax expense | 40.5 | 1.2 | 41.7 | |||||||||
Net (loss) income from continuing operations | (798.1 | ) | 3.3 | (794.8 | ) |
February 2, 2019 | ||||||||||||
Under Prior Standard | Impact of New Standard | As Reported | ||||||||||
Merchandise inventories, net | $ | 1,246.1 | $ | 4.4 | $ | 1,250.5 | ||||||
Total current assets | 3,123.3 | 4.4 | 3,127.7 | |||||||||
Deferred income taxes | 151.9 | (4.6 | ) | 147.3 | ||||||||
Total noncurrent assets | 921.2 | (4.6 | ) | 916.6 | ||||||||
Total assets | 4,044.5 | (0.2 | ) | 4,044.3 | ||||||||
Accrued liabilities | 769.0 | (16.2 | ) | 752.8 | ||||||||
Income taxes payable | 26.0 | 1.2 | 27.2 | |||||||||
Total current liabilities | 2,196.1 | (15.0 | ) | 2,181.1 | ||||||||
Total liabilities | 2,723.1 | (15.0 | ) | 2,708.1 | ||||||||
Retained earnings | 1,347.9 | 14.8 | 1,362.7 | |||||||||
Total stockholders' equity | 1,321.4 | 14.8 | 1,336.2 | |||||||||
Total liabilities and stockholders' equity | 4,044.5 | (0.2 | ) | 4,044.3 |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Minimum | $ | 350.5 | $ | 357.0 | $ | 355.9 | ||||||
Percentage rentals | 7.1 | 8.3 | 6.5 | |||||||||
Total rent expense | $ | 357.6 | $ | 365.3 | $ | 362.4 |
Period | ||||
Fiscal 2019 | $ | 296.2 | ||
Fiscal 2020 | 208.7 | |||
Fiscal 2021 | 149.1 | |||
Fiscal 2022 | 105.4 | |||
Fiscal 2023 | 71.4 | |||
Thereafter | 116.2 | |||
$ | 947.0 |
Fiscal Year 2018 | Fiscal Year 2017 | |||||||||||||||||||||||||||||||
1st Quarter | 2nd Quarter | 3rd Quarter(2) | 4th Quarter(2) | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter(2) | |||||||||||||||||||||||||
Net sales(1) | $ | 1,785.8 | $ | 1,501.1 | $ | 1,935.4 | $ | 3,063.0 | $ | 1,874.0 | $ | 1,529.5 | $ | 1,827.6 | $ | 3,316.0 | ||||||||||||||||
Gross profit(1) | 531.1 | 470.0 | 558.2 | 748.8 | 567.2 | 493.2 | 559.8 | 864.7 | ||||||||||||||||||||||||
Operating earnings (loss)(1) | 46.5 | 1.5 | (517.9 | ) | (232.1 | ) | 89.3 | 26.9 | 71.9 | 251.1 | ||||||||||||||||||||||
Net income (loss) from continuing operations | 20.4 | (39.8 | ) | (506.9 | ) | (268.5 | ) | 51.8 | 12.0 | 49.7 | 116.9 | |||||||||||||||||||||
Income (loss) from discontinued operations, net of tax | 7.8 | 14.9 | 18.3 | 80.8 | 7.2 | 10.2 | 9.7 | (222.8 | ) | |||||||||||||||||||||||
Net (loss) income | 28.2 | (24.9 | ) | (488.6 | ) | (187.7 | ) | 59.0 | 22.2 | 59.4 | (105.9 | ) | ||||||||||||||||||||
Basic earnings (loss) per share:(3) (4) | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.20 | $ | (0.39 | ) | $ | (4.96 | ) | $ | (2.63 | ) | $ | 0.51 | $ | 0.12 | $ | 0.49 | $ | 1.15 | |||||||||||||
Discontinued operations | 0.08 | 0.15 | 0.18 | 0.79 | 0.07 | 0.10 | 0.10 | (2.20 | ) | |||||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.28 | $ | (0.24 | ) | $ | (4.78 | ) | $ | (1.84 | ) | $ | 0.58 | $ | 0.22 | $ | 0.59 | $ | (1.04 | ) | ||||||||||||
Diluted earnings (loss) per share:(3) (4) | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.20 | $ | (0.39 | ) | $ | (4.96 | ) | $ | (2.63 | ) | $ | 0.51 | $ | 0.12 | $ | 0.49 | $ | 1.15 | |||||||||||||
Discontinued operations | 0.08 | 0.15 | 0.18 | 0.79 | 0.07 | 0.10 | 0.10 | (2.19 | ) | |||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.28 | $ | (0.24 | ) | $ | (4.78 | ) | $ | (1.84 | ) | $ | 0.58 | $ | 0.22 | $ | 0.59 | $ | (1.04 | ) | ||||||||||||
Dividend declared per common share | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 |
(1) | Net sales, gross profit and operating earnings (loss) differ from the amounts previously reported in our Quarterly Reports on Form 10-Q as a result of our former Spring Mobile business being classified as discontinued operations for all periods presented. See Note 2, \"Discontinued Operations and Dispositions,\" for additional information. |
(2) | The results of operations for the fourth quarter of fiscal 2018 include goodwill and asset impairment charges totaling $428.4 million on a pre-tax basis. The results of operations for the third quarter of fiscal 2018 include goodwill and asset impairment charges totaling $587.5 million on a pre-tax basis. The results of operations for the fourth quarter of fiscal 2017 include goodwill and asset impairment charges totaling $13.8 million on a pre-tax basis. |
(3) | The sum of the quarters may not necessarily be equal to the full year (loss) earnings per common share amount. |
(4) | The sum of (loss) earnings per share may not total to consolidated (loss) earnings per common share as amounts are calculated based on whole numbers. |
United States | Canada | Australia | Europe | Total | ||||||||||||||||
Fiscal 2018 | ||||||||||||||||||||
Intangible asset impairment charges | $ | 11.2 | $ | — | $ | — | $ | 31.9 | $ | 43.1 | ||||||||||
Store and other asset impairment charges | 1.3 | — | 0.2 | 0.6 | 2.1 | |||||||||||||||
Total | $ | 12.5 | $ | — | $ | 0.2 | $ | 32.5 | $ | 45.2 | ||||||||||
Fiscal 2017 | ||||||||||||||||||||
Intangible asset impairment charges | $ | 11.0 | $ | — | $ | — | $ | — | $ | 11.0 | ||||||||||
Store and other asset impairment charges | 1.3 | — | 0.3 | 1.2 | 2.8 | |||||||||||||||
Total | $ | 12.3 | $ | — | $ | 0.3 | $ | 1.2 | $ | 13.8 | ||||||||||
Fiscal 2016 | ||||||||||||||||||||
Intangible asset impairment charges | $ | 7.0 | $ | — | $ | — | $ | 7.4 | $ | 14.4 | ||||||||||
Store and other asset impairment charges | 2.7 | 0.2 | — | 2.3 | 5.2 | |||||||||||||||
Total | $ | 9.7 | $ | 0.2 | $ | — | $ | 9.7 | $ | 19.6 |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
New video game hardware (1) | $ | 1,767.8 | $ | 1,791.8 | $ | 1,396.7 | ||||||
New video game software | 2,449.7 | 2,582.0 | 2,493.4 | |||||||||
Pre-owned and value video game products | 1,866.3 | 2,149.6 | 2,254.1 | |||||||||
Video game accessories | 956.5 | 784.3 | 676.7 | |||||||||
Digital | 194.0 | 189.2 | 181.0 | |||||||||
Collectibles | 707.5 | 636.2 | 494.1 | |||||||||
Other (2) | 343.5 | 414.0 | 469.0 | |||||||||
Total | $ | 8,285.3 | $ | 8,547.1 | $ | 7,965.0 |
(1) | Includes sales of hardware bundles, in which physical hardware and digital or physical software are sold together as a single SKU. |
(2) | Includes mobile and consumer electronics sold through our Simply Mac and Cricket Wireless branded stores. We sold our Cricket Wireless branded stores in January 2018. Also includes sales of PC entertainment software, interactive game figures, strategy guides, mobile and consumer electronics sold through our Video Game Brands segments, and revenues from PowerUp Pro loyalty members receiving Game Informer magazine in print form. |
Contract Liabilities | ||||
Balance at February 3, 2018 | $ | 426.0 | ||
Adoption of ASU 2014-09 | (16.8 | ) | ||
Increase to contract liabilities (1) | 1,238.1 | |||
Decrease to contract liabilities (2) | (1,262.9 | ) | ||
Other adjustments (3) | (7.5 | ) | ||
Balance at February 2, 2019 | $ | 376.9 |
(1) | Includes issuances of gift cards, trade-in credits and loyalty points, new reservation deposits, new subscriptions to Game Informer and extended warranties sold. |
(2) | Includes redemptions of gift cards, trade-in credits, loyalty points and reservation deposits as well as revenues recognized for Game Informer and extended warranties. During the 52 weeks ended February 2, 2019, there were $65.8 million of gift cards redeemed that were outstanding as of February 3, 2018. |
(3) | Primarily includes foreign currency translation adjustments. |
February 2, 2019 | February 3, 2018 | |||||||
Bankcard receivables | $ | 44.6 | $ | 49.2 | ||||
Vendor and other receivables (1) | 93.6 | 97.1 | ||||||
Allowance for doubtful accounts | (4.0 | ) | (7.7 | ) | ||||
Total receivables, net | $ | 134.2 | $ | 138.6 |
(1) | Vendor receivables primarily relate to vendor allowances. |
February 2, 2019 | February 3, 2018 | |||||||
Customer-related liabilities | $ | 268.7 | $ | 302.2 | ||||
Deferred revenue | 124.2 | 132.4 | ||||||
Employee benefits, compensation and related taxes | 140.7 | 152.2 | ||||||
Checks and transfers yet to be presented for payment from zero balance cash accounts | 82.7 | 176.4 | ||||||
Other taxes | 45.5 | 63.4 | ||||||
Other accrued liabilities(1) | 91.0 | 123.5 | ||||||
Total accrued liabilities | $ | 752.8 | $ | 950.1 |
(1) | Includes acquisition-related contingent consideration of $12.2 million as of February 3, 2018. See Note 5, \"Fair Value Measurements and Financial Instruments\" for additional information. |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Current tax expense: | ||||||||||||
Federal | $ | 45.0 | $ | 104.7 | $ | 122.2 | ||||||
State | 12.8 | 14.2 | 9.6 | |||||||||
Foreign | 38.5 | 28.5 | 29.2 | |||||||||
96.3 | 147.4 | 161.0 | ||||||||||
Deferred tax (benefit) expense: | ||||||||||||
Federal | (36.0 | ) | 23.4 | (3.1 | ) | |||||||
State | (4.0 | ) | (1.3 | ) | (0.1 | ) | ||||||
Foreign | (14.6 | ) | (16.0 | ) | (33.6 | ) | ||||||
(54.6 | ) | 6.1 | (36.8 | ) | ||||||||
Total income tax expense | $ | 41.7 | $ | 153.5 | $ | 124.2 |
February 2, 2019 | February 3, 2018 | ||||||
2019 Senior Notes principal amount | $ | 350.0 | $ | 350.0 | |||
2021 Senior Notes principal amount | 475.0 | 475.0 | |||||
Less: Unamortized debt financing costs | (4.2 | ) | (7.1 | ) | |||
820.8 | 817.9 | ||||||
Less: Current portion | (349.2 | ) | — | ||||
Long-term debt, net | $ | 471.6 | $ | 817.9 |
February 2, 2019 | February 3, 2018 | |||||||
Deferred tax asset: | ||||||||
Inventory | $ | 14.7 | $ | 16.8 | ||||
Deferred rents | 3.9 | 6.9 | ||||||
Stock-based compensation | 1.8 | 9.2 | ||||||
Net operating losses | 78.5 | 86.2 | ||||||
Customer liabilities | 18.6 | 16.6 | ||||||
Property and equipment | 11.3 | 13.6 | ||||||
Credits | 18.2 | 9.5 | ||||||
Accrued compensation | 12.1 | 12.9 | ||||||
Intangible assets | 21.8 | 63.2 | ||||||
Other | 13.1 | 12.9 | ||||||
Total deferred tax assets | 194.0 | 247.8 | ||||||
Valuation allowance | (32.9 | ) | (36.9 | ) | ||||
Total deferred tax assets, net | 161.1 | 210.9 | ||||||
Deferred tax liabilities: | ||||||||
Goodwill | (10.2 | ) | (49.9 | ) | ||||
Prepaid expenses | (3.6 | ) | (4.5 | ) | ||||
Other | (0.1 | ) | (3.3 | ) | ||||
Total deferred tax liabilities | (13.9 | ) | (57.7 | ) | ||||
Net deferred tax assets | $ | 147.2 | $ | 153.2 | ||||
The above amounts are reflected in the consolidated financial statements as: | ||||||||
Deferred income taxes - assets | $ | 147.3 | $ | 158.2 | ||||
Deferred income taxes - liabilities | $ | (0.1 | ) | $ | (5.0 | ) |
Fiscal Year | |||||||||||
2018 | 2017 | 2016 | |||||||||
Capital expenditures | $ | 7.5 | $ | 22.2 | $ | 36.9 | |||||
Depreciation and amortization | 20.1 | 28.4 | 28.5 | ||||||||
Goodwill and asset impairments | — | 377.0 | 14.2 | ||||||||
Provision for inventory reserves | 12.7 | 12.9 | 17.6 |
Fiscal Year | |||||||||||
2018 | 2017 | 2016 | |||||||||
Net sales | $ | 565.4 | $ | 677.5 | $ | 642.9 | |||||
Cost of sales | 73.1 | 122.3 | 133.5 | ||||||||
Gross profit | 492.3 | 555.2 | 509.4 | ||||||||
Selling, general and administrative expenses | 395.9 | 453.4 | 390.7 | ||||||||
Depreciation and amortization | 20.1 | 28.4 | 28.5 | ||||||||
Goodwill impairments | — | 32.8 | — | ||||||||
Asset impairments | — | 344.2 | 14.2 | ||||||||
Operating earnings (loss) | 76.3 | (303.6 | ) | 76.0 | |||||||
Gain on sale of discontinued operations | 100.8 | — | — | ||||||||
Earnings (loss) from discontinued operations before income taxes | 177.1 | (303.6 | ) | 76.0 | |||||||
Income tax expense (benefit) | 55.3 | (107.9 | ) | 27.3 | |||||||
Net income (loss) from discontinued operations | $ | 121.8 | $ | (195.7 | ) | $ | 48.7 |
February 3, 2018 | |||
Assets: | |||
Cash and cash equivalents | $ | 10.2 | |
Receivables, net | 44.1 | ||
Merchandise inventories, net | 116.4 | ||
Prepaid expenses and other current assets | 9.7 | ||
Property and equipment, net | 82.2 | ||
Goodwill | 316.8 | ||
Other intangible assets, net | 77.0 | ||
Other assets | 3.7 | ||
Total assets held for sale | $ | 660.1 | |
Liabilities: | |||
Accounts payable | $ | 9.7 | |
Accrued liabilities | 26.0 | ||
Other liabilities | 15.2 | ||
Total liabilities held for sale | $ | 50.9 |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Net (loss) income from continuing operations | $ | (794.8 | ) | $ | 230.4 | $ | 304.5 | |||||
Income (loss) from discontinued operations, net of tax | 121.8 | (195.7 | ) | 48.7 | ||||||||
Net (loss) income | $ | (673.0 | ) | $ | 34.7 | $ | 353.2 | |||||
Weighted-average common shares outstanding | 102.1 | 101.4 | 103.4 | |||||||||
Dilutive effect of stock options and restricted stock awards | — | 0.1 | 0.4 | |||||||||
Weighted-average diluted common shares | 102.1 | 101.5 | 103.8 | |||||||||
Basic (loss) earnings per share: (1) | ||||||||||||
Continuing operations | $ | (7.79 | ) | $ | 2.27 | $ | 2.94 | |||||
Discontinued operations | 1.19 | (1.93 | ) | 0.47 | ||||||||
Basic (loss) earnings per share | $ | (6.59 | ) | $ | 0.34 | $ | 3.42 | |||||
Diluted (loss) earnings per share: (1) | ||||||||||||
Continuing operations | $ | (7.79 | ) | $ | 2.27 | $ | 2.93 | |||||
Discontinued operations | 1.19 | (1.93 | ) | 0.47 | ||||||||
Diluted (loss) earnings per share | $ | (6.59 | ) | $ | 0.34 | $ | 3.40 | |||||
Anti-dilutive stock options and restricted stock awards | 1.7 | 2.0 | 1.4 |
(1) | The sum of (loss) earnings per share may not total to consolidated (loss) earnings per common share as amounts are calculated based on whole numbers |
Fiscal Year | |||||||||
2018 | 2017 | 2016 | |||||||
Federal statutory tax rate(1) | 21.0 | % | 33.7 | % | 35.0 | % | |||
State income taxes, net of federal effect | (0.9 | ) | 3.0 | 1.4 | |||||
Foreign income tax rate differential | 2.8 | (1.1 | ) | (1.1 | ) | ||||
Change in valuation allowance | — | (1.1 | ) | 4.8 | |||||
Change in unrecognized tax benefits | 0.2 | (1.5 | ) | 2.7 | |||||
Transition tax | 3.0 | 2.7 | — | ||||||
Tax reform | — | 8.3 | — | ||||||
Realization of losses in foreign operations not previously benefited(2) | — | — | (9.8 | ) | |||||
Loss on investment in foreign subsidiary | — | — | (3.8 | ) | |||||
Intercompany sale of intangible assets | — | (3.4 | ) | — | |||||
Foreign tax credit | 0.1 | (2.5 | ) | (0.1 | ) | ||||
Withholding tax expense | (0.3 | ) | 2.3 | 0.2 | |||||
Impairment of goodwill | (25.6 | ) | 0.1 | — | |||||
Nondeductible interest | (4.2 | ) | 0.5 | 0.6 | |||||
Other (including permanent differences)(3) | (1.6 | ) | (1.0 | ) | (0.9 | ) | |||
(5.5 | )% | 40.0 | % | 29.0 | % |
(1) | Per IRC Section 15, we have incorporated a statutory rate of 21.0% for our year end current provision ending February 2, 2019. |
(2) | In fiscal 2016, we adopted a plan of reorganization specific to certain foreign operations which resulted in our ability to recognize the benefit of foreign net operating loss carryforwards that were previously unrecognized in affected jurisdictions. As a result, we recognized a tax benefit of $42.1 million in the fourth quarter of fiscal 2016, which is subject to a partial valuation allowance of $14.8 million. The valuation allowance established for this tax benefit is reflected in the line item “Change in valuation allowance.” |
(3) | Other is comprised of numerous items, none of which is greater than 1.05% of loss before income taxes for fiscal 2018, 1.69% of earnings before income taxes for fiscal 2017, and 1.75% of earnings before income taxes for fiscal 2016. |
February 2, 2019 | February 3, 2018 | |||||||||||||||
Level 2 | Level 3 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Foreign currency contracts (1) | $ | 1.0 | $ | — | $ | 2.4 | $ | — | ||||||||
Company-owned life insurance(2) | 14.6 | — | 13.9 | — | ||||||||||||
Total assets | $ | 15.6 | $ | — | $ | 16.3 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Foreign currency contracts (3) | $ | 1.2 | $ | — | $ | 9.9 | $ | — | ||||||||
Nonqualified deferred compensation(3) | 1.1 | — | 1.2 | — | ||||||||||||
Contingent consideration(3) | — | — | — | 12.2 | ||||||||||||
Total liabilities | $ | 2.3 | $ | — | $ | 11.1 | $ | 12.2 |
(1) | Recognized in prepaid expenses and other current assets in our consolidated balance sheets. |
(2) | Recognized in other non-current assets in our consolidated balance sheets. |
(3) | Recognized in accrued liabilities in our consolidated balance sheets. |
Period | ||||
Fiscal 2019 | $ | 296.2 | ||
Fiscal 2020 | 208.7 | |||
Fiscal 2021 | 149.1 | |||
Fiscal 2022 | 105.4 | |||
Fiscal 2023 | 71.4 | |||
Thereafter | 116.2 | |||
$ | 947.0 |
United States | Canada | Australia | Europe | Technology Brands | Total | |||||||||||||||||||
Balance at January 28, 2017—as reported | $ | 1,199.7 | $ | 28.6 | $ | 70.1 | $ | 74.8 | $ | 352.0 | $ | 1,725.2 | ||||||||||||
Transfers (1) | 2.4 | — | — | — | (352.0 | ) | (349.6 | ) | ||||||||||||||||
Balance at January 28, 2017—after transfers | 1,202.1 | 28.6 | 70.1 | 74.8 | — | 1,375.6 | ||||||||||||||||||
Divestitures (Note 2) | (42.6 | ) | — | — | — | — | (42.6 | ) | ||||||||||||||||
Foreign currency translation adjustment | — | 1.7 | 3.5 | 12.3 | — | 17.5 | ||||||||||||||||||
Balance at February 3, 2018 | 1,159.5 | 30.3 | 73.6 | 87.1 | — | 1,350.5 | ||||||||||||||||||
Foreign currency translation adjustment | — | (1.5 | ) | (7.2 | ) | (7.2 | ) | — | (15.9 | ) | ||||||||||||||
Impairment charge | (795.6 | ) | (28.8 | ) | (66.4 | ) | (79.9 | ) | — | (970.7 | ) | |||||||||||||
Balance at February 2, 2019 | $ | 363.9 | $ | — | $ | — | $ | — | $ | — | $ | 363.9 |
(1) | As a result of the divestiture of Spring Mobile, which was completed in January 2019, we allocated the goodwill balance associated with our former Technology Brands segment for the earliest period presented to Spring Mobile, Simply Mac and Cricket Wireless based on their relative fair values. Simply Mac and the historical results of Cricket Wireless are included in the United States segment. We allocated $349.6 million of goodwill to Spring Mobile which was impaired by $32.8 million during fiscal 2017. As of February 3, 2018, goodwill of $316.8 million related to Spring Mobile is included in assets held for sale in our consolidated balance sheets. |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
United States | $ | (543.4 | ) | $ | 310.7 | $ | 370.8 | |||||
International | (209.7 | ) | 73.2 | 57.9 | ||||||||
Total | $ | (753.1 | ) | $ | 383.9 | $ | 428.7 |
February 2, 2019 | February 3, 2018 | |||||||||||||||||||||||
Gross Carrying Amount(1) | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Intangible assets with indefinite lives: | ||||||||||||||||||||||||
Trade names | $ | 8.8 | $ | — | $ | 8.8 | $ | 49.3 | $ | — | $ | 49.3 | ||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||||||
Leasehold rights | 91.8 | (67.3 | ) | 24.5 | 100.4 | (67.0 | ) | 33.4 | ||||||||||||||||
Customer relationships | — | — | — | 14.5 | (6.8 | ) | 7.7 | |||||||||||||||||
Other | 32.5 | (32.3 | ) | 0.2 | 33.5 | (31.4 | ) | 2.1 | ||||||||||||||||
Total | $ | 133.1 | $ | (99.6 | ) | $ | 33.5 | $ | 197.7 | $ | (105.2 | ) | $ | 92.5 |
(1) | The change in the gross carrying amount of intangible assets from February 3, 2018 to February 2, 2019 is due to impairments (see Note 4, \"Asset Impairments\") and the impact of exchange rate fluctuations. |
Time-Based Restricted Stock Awards | Performance-Based Restricted Stock Awards | |||||||||||||
Shares | Weighted- Average Grant Date Fair Value | Shares | Weighted- Average Grant Date Fair Value | |||||||||||
Nonvested shares at February 3, 2018 | 912,360 | $ | 27.96 | 553,189 | $ | 28.83 | ||||||||
Granted | 969,043 | $ | 15.67 | 257,667 | $ | 15.80 | ||||||||
Vested | (791,891 | ) | $ | 25.66 | (298,454 | ) | $ | 30.49 | ||||||
Forfeited | (282,484 | ) | $ | 19.86 | (225,095 | ) | $ | 22.56 | ||||||
Nonvested shares at February 2, 2019 | 807,028 | $ | 18.30 | 287,307 | $ | 20.33 |
Fiscal Year 2018 | Fiscal Year 2017 | |||||||||||||||||||||||||||||||
1st Quarter | 2nd Quarter | 3rd Quarter(2) | 4th Quarter(2) | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter(2) | |||||||||||||||||||||||||
Net sales(1) | $ | 1,785.8 | $ | 1,501.1 | $ | 1,935.4 | $ | 3,063.0 | $ | 1,874.0 | $ | 1,529.5 | $ | 1,827.6 | $ | 3,316.0 | ||||||||||||||||
Gross profit(1) | 531.1 | 470.0 | 558.2 | 748.8 | 567.2 | 493.2 | 559.8 | 864.7 | ||||||||||||||||||||||||
Operating earnings (loss)(1) | 46.5 | 1.5 | (517.9 | ) | (232.1 | ) | 89.3 | 26.9 | 71.9 | 251.1 | ||||||||||||||||||||||
Net income (loss) from continuing operations | 20.4 | (39.8 | ) | (506.9 | ) | (268.5 | ) | 51.8 | 12.0 | 49.7 | 116.9 | |||||||||||||||||||||
Income (loss) from discontinued operations, net of tax | 7.8 | 14.9 | 18.3 | 80.8 | 7.2 | 10.2 | 9.7 | (222.8 | ) | |||||||||||||||||||||||
Net (loss) income | 28.2 | (24.9 | ) | (488.6 | ) | (187.7 | ) | 59.0 | 22.2 | 59.4 | (105.9 | ) | ||||||||||||||||||||
Basic earnings (loss) per share:(3) (4) | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.20 | $ | (0.39 | ) | $ | (4.96 | ) | $ | (2.63 | ) | $ | 0.51 | $ | 0.12 | $ | 0.49 | $ | 1.15 | |||||||||||||
Discontinued operations | 0.08 | 0.15 | 0.18 | 0.79 | 0.07 | 0.10 | 0.10 | (2.20 | ) | |||||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.28 | $ | (0.24 | ) | $ | (4.78 | ) | $ | (1.84 | ) | $ | 0.58 | $ | 0.22 | $ | 0.59 | $ | (1.04 | ) | ||||||||||||
Diluted earnings (loss) per share:(3) (4) | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.20 | $ | (0.39 | ) | $ | (4.96 | ) | $ | (2.63 | ) | $ | 0.51 | $ | 0.12 | $ | 0.49 | $ | 1.15 | |||||||||||||
Discontinued operations | 0.08 | 0.15 | 0.18 | 0.79 | 0.07 | 0.10 | 0.10 | (2.19 | ) | |||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.28 | $ | (0.24 | ) | $ | (4.78 | ) | $ | (1.84 | ) | $ | 0.58 | $ | 0.22 | $ | 0.59 | $ | (1.04 | ) | ||||||||||||
Dividend declared per common share | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 |
(1) | Net sales, gross profit and operating earnings (loss) differ from the amounts previously reported in our Quarterly Reports on Form 10-Q as a result of our former Spring Mobile business being classified as discontinued operations for all periods presented. See Note 2, \"Discontinued Operations and Dispositions,\" for additional information. |
(2) | The results of operations for the fourth quarter of fiscal 2018 include goodwill and asset impairment charges totaling $428.4 million on a pre-tax basis. The results of operations for the third quarter of fiscal 2018 include goodwill and asset impairment charges totaling $587.5 million on a pre-tax basis. The results of operations for the fourth quarter of fiscal 2017 include goodwill and asset impairment charges totaling $13.8 million on a pre-tax basis. |
(3) | The sum of the quarters may not necessarily be equal to the full year (loss) earnings per common share amount. |
(4) | The sum of (loss) earnings per share may not total to consolidated (loss) earnings per common share as amounts are calculated based on whole numbers. |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Minimum | $ | 350.5 | $ | 357.0 | $ | 355.9 | ||||||
Percentage rentals | 7.1 | 8.3 | 6.5 | |||||||||
Total rent expense | $ | 357.6 | $ | 365.3 | $ | 362.4 |
United States | Canada | Australia | Europe | Total | ||||||||||||||||
As of and for the Fiscal Year Ended February 2, 2019 | ||||||||||||||||||||
Net sales | $ | 5,800.2 | $ | 434.5 | $ | 645.4 | $ | 1,405.2 | $ | 8,285.3 | ||||||||||
Operating loss | (533.9 | ) | (19.3 | ) | (46.5 | ) | (102.3 | ) | (702.0 | ) | ||||||||||
Depreciation and amortization | 67.1 | 3.7 | 9.8 | 25.0 | 105.6 | |||||||||||||||
Goodwill impairments | 795.6 | 28.8 | 66.4 | 79.9 | 970.7 | |||||||||||||||
Asset impairments | 12.5 | — | 0.2 | 32.5 | 45.2 | |||||||||||||||
Capital expenditures | 51.5 | 4.4 | 10.5 | 19.8 | 86.2 | |||||||||||||||
Property and equipment, net | 188.7 | 17.1 | 40.6 | 74.9 | 321.3 | |||||||||||||||
Total segment assets | 2,889.5 | 144.4 | 301.2 | 709.2 | 4,044.3 | |||||||||||||||
As of and for the Fiscal Year Ended February 3, 2018 | ||||||||||||||||||||
Net sales | $ | 5,876.0 | $ | 434.9 | $ | 702.2 | $ | 1,534.0 | $ | 8,547.1 | ||||||||||
Operating earnings | 332.8 | 18.5 | 34.9 | 53.0 | 439.2 | |||||||||||||||
Depreciation and amortization | 81.6 | 3.9 | 10.4 | 26.4 | 122.3 | |||||||||||||||
Asset impairments | 12.3 | — | 0.3 | 1.2 | 13.8 | |||||||||||||||
Capital expenditures | 61.5 | 4.3 | 10.1 | 15.3 | 91.2 | |||||||||||||||
Property and equipment, net | 207.6 | 17.4 | 44.2 | 81.8 | 351.0 | |||||||||||||||
Total segment assets (1) | 2,919.0 | 187.3 | 457.5 | 817.7 | 4,381.5 | |||||||||||||||
As of and for the Fiscal Year Ended January 28, 2017 | ||||||||||||||||||||
Net sales | $ | 5,660.0 | $ | 382.0 | $ | 609.5 | $ | 1,313.5 | $ | 7,965.0 | ||||||||||
Operating earnings | 398.4 | 22.4 | 34.9 | 26.0 | 481.7 | |||||||||||||||
Depreciation and amortization | 98.5 | 3.8 | 9.4 | 25.0 | 136.7 | |||||||||||||||
Asset impairments | 9.7 | 0.2 | — | 9.7 | 19.6 | |||||||||||||||
Capital expenditures | 63.6 | 1.3 | 15.1 | 25.8 | 105.8 | |||||||||||||||
Property and equipment, net | 226.9 | 16.1 | 43.4 | 76.9 | 363.3 | |||||||||||||||
Total segment assets | 2,628.7 | 271.6 | 434.6 | 567.9 | 3,902.8 |
(1) | The total segment assets for the United States and Europe as of fiscal year ended February 3, 2018, have been revised to correct an error. See Note 1, \"Nature of Operations and Summary of Significant Accounting Policies,\" for additional information. |
Options | Weighted- Average Exercise Price | ||||||
Balance, February 3, 2018 | 1,194,025 | $ | 35.30 | ||||
Expired | (594,770 | ) | $ | 41.84 | |||
Balance, February 2, 2019 | 599,255 | $ | 28.81 |
Fiscal Year 2016 | ||||
Total number of shares purchased | 3.0 | |||
Average price per share | $ | 24.94 | ||
Aggregate value of shares purchased | $ | 75.1 |
Balance at Beginning of Period | Charged to Costs and Expenses | Charged to Other Accounts- Accounts Payable (1) | Deductions- Write-Offs Net of Recoveries (2) | Balance at End of Period | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Inventory Reserve(3) | ||||||||||||||||||||
52 Weeks Ended February 2, 2019 | $ | 59.2 | $ | 50.1 | $ | 46.7 | $ | (86.6 | ) | $ | 69.4 | |||||||||
53 Weeks Ended February 3, 2018 | $ | 59.0 | $ | 57.3 | $ | 50.7 | $ | (107.8 | ) | $ | 59.2 | |||||||||
52 Weeks Ended January 28, 2017 | $ | 61.5 | $ | 47.5 | $ | 49.6 | $ | (99.6 | ) | $ | 59.0 | |||||||||
Valuation Allowance for Deferred Tax Assets | ||||||||||||||||||||
52 Weeks Ended February 2, 2019 | $ | 36.9 | $ | — | $ | — | $ | (4.0 | ) | $ | 32.9 | |||||||||
53 Weeks Ended February 3, 2018 | $ | 39.4 | $ | 3.6 | $ | — | $ | (6.1 | ) | $ | 36.9 | |||||||||
52 Weeks Ended January 28, 2017 | $ | 18.8 | $ | 20.9 | $ | — | $ | (0.3 | ) | $ | 39.4 |
(1) | Consists primarily of amounts received from vendors for defective allowances. |
(2) | The 52 weeks ended February 2, 2019 includes the disposition of $3.6 million of Spring Mobile inventory reserves as of the date of the sale. |
(3) | Includes inventory reserve activity related to Spring Mobile. Spring Mobile was sold in January 2019. |
Period | Projected Amortization Expense | |||
Fiscal 2019 | $ | 5.5 | ||
Fiscal 2020 | 4.5 | |||
Fiscal 2021 | 3.7 | |||
Fiscal 2022 | 3.2 | |||
Fiscal 2023 | 2.6 |
United States | Canada | Australia | Europe | Total | ||||||||||||||||
As of and for the Fiscal Year Ended February 2, 2019 | ||||||||||||||||||||
Net sales | $ | 5,800.2 | $ | 434.5 | $ | 645.4 | $ | 1,405.2 | $ | 8,285.3 | ||||||||||
Operating loss | (533.9 | ) | (19.3 | ) | (46.5 | ) | (102.3 | ) | (702.0 | ) | ||||||||||
Depreciation and amortization | 67.1 | 3.7 | 9.8 | 25.0 | 105.6 | |||||||||||||||
Goodwill impairments | 795.6 | 28.8 | 66.4 | 79.9 | 970.7 | |||||||||||||||
Asset impairments | 12.5 | — | 0.2 | 32.5 | 45.2 | |||||||||||||||
Capital expenditures | 51.5 | 4.4 | 10.5 | 19.8 | 86.2 | |||||||||||||||
Property and equipment, net | 188.7 | 17.1 | 40.6 | 74.9 | 321.3 | |||||||||||||||
Total segment assets | 2,889.5 | 144.4 | 301.2 | 709.2 | 4,044.3 | |||||||||||||||
As of and for the Fiscal Year Ended February 3, 2018 | ||||||||||||||||||||
Net sales | $ | 5,876.0 | $ | 434.9 | $ | 702.2 | $ | 1,534.0 | $ | 8,547.1 | ||||||||||
Operating earnings | 332.8 | 18.5 | 34.9 | 53.0 | 439.2 | |||||||||||||||
Depreciation and amortization | 81.6 | 3.9 | 10.4 | 26.4 | 122.3 | |||||||||||||||
Asset impairments | 12.3 | — | 0.3 | 1.2 | 13.8 | |||||||||||||||
Capital expenditures | 61.5 | 4.3 | 10.1 | 15.3 | 91.2 | |||||||||||||||
Property and equipment, net | 207.6 | 17.4 | 44.2 | 81.8 | 351.0 | |||||||||||||||
Total segment assets (1) | 2,919.0 | 187.3 | 457.5 | 817.7 | 4,381.5 | |||||||||||||||
As of and for the Fiscal Year Ended January 28, 2017 | ||||||||||||||||||||
Net sales | $ | 5,660.0 | $ | 382.0 | $ | 609.5 | $ | 1,313.5 | $ | 7,965.0 | ||||||||||
Operating earnings | 398.4 | 22.4 | 34.9 | 26.0 | 481.7 | |||||||||||||||
Depreciation and amortization | 98.5 | 3.8 | 9.4 | 25.0 | 136.7 | |||||||||||||||
Asset impairments | 9.7 | 0.2 | — | 9.7 | 19.6 | |||||||||||||||
Capital expenditures | 63.6 | 1.3 | 15.1 | 25.8 | 105.8 | |||||||||||||||
Property and equipment, net | 226.9 | 16.1 | 43.4 | 76.9 | 363.3 | |||||||||||||||
Total segment assets | 2,628.7 | 271.6 | 434.6 | 567.9 | 3,902.8 |
(1) | The total segment assets for the United States and Europe as of fiscal year ended February 3, 2018, have been revised to correct an error. See Note 1, \"Nature of Operations and Summary of Significant Accounting Policies,\" for additional information. |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Total segment capital expenditures | $ | 86.2 | $ | 91.2 | $ | 105.8 | ||||||
Discontinued operations | 7.5 | 22.2 | 36.9 | |||||||||
Total capital expenditures | $ | 93.7 | $ | 113.4 | $ | 142.7 |
February 2, 2019 | February 3, 2018 | |||||||
Total segment assets | $ | 4,044.3 | $ | 4,381.5 | ||||
Assets held for sale | — | 660.1 | ||||||
Consolidated total assets | $ | 4,044.3 | $ | 5,041.6 |
February 2, 2019 | February 3, 2018 | January 28, 2017 | ||||||||||
Cash and cash equivalents | $ | 1,624.4 | $ | 854.2 | $ | 664.5 | ||||||
Restricted cash (included in prepaid expenses and other current assets) | 2.7 | — | — | |||||||||
Restricted cash (included in other noncurrent assets) | 13.4 | 14.9 | 10.2 | |||||||||
Total cash and cash equivalents and restricted cash in the statements of cash flows | $ | 1,640.5 | $ | 869.1 | $ | 674.7 |
Fiscal Year 2018 | ||||||||||||
Under Prior Standard | Impact of New Standard | As Reported | ||||||||||
Net sales | $ | 8,240.7 | $ | 44.6 | $ | 8,285.3 | ||||||
Cost of sales | 5,937.1 | 40.1 | 5,977.2 | |||||||||
Gross profit | 2,303.6 | 4.5 | 2,308.1 | |||||||||
Operating (loss) earnings from continuing operations | (706.5 | ) | 4.5 | (702.0 | ) | |||||||
(Loss) earnings from continuing operations before income taxes | (757.6 | ) | 4.5 | (753.1 | ) | |||||||
Income tax expense | 40.5 | 1.2 | 41.7 | |||||||||
Net (loss) income from continuing operations | (798.1 | ) | 3.3 | (794.8 | ) |
February 2, 2019 | ||||||||||||
Under Prior Standard | Impact of New Standard | As Reported | ||||||||||
Merchandise inventories, net | $ | 1,246.1 | $ | 4.4 | $ | 1,250.5 | ||||||
Total current assets | 3,123.3 | 4.4 | 3,127.7 | |||||||||
Deferred income taxes | 151.9 | (4.6 | ) | 147.3 | ||||||||
Total noncurrent assets | 921.2 | (4.6 | ) | 916.6 | ||||||||
Total assets | 4,044.5 | (0.2 | ) | 4,044.3 | ||||||||
Accrued liabilities | 769.0 | (16.2 | ) | 752.8 | ||||||||
Income taxes payable | 26.0 | 1.2 | 27.2 | |||||||||
Total current liabilities | 2,196.1 | (15.0 | ) | 2,181.1 | ||||||||
Total liabilities | 2,723.1 | (15.0 | ) | 2,708.1 | ||||||||
Retained earnings | 1,347.9 | 14.8 | 1,362.7 | |||||||||
Total stockholders' equity | 1,321.4 | 14.8 | 1,336.2 | |||||||||
Total liabilities and stockholders' equity | 4,044.5 | (0.2 | ) | 4,044.3 |
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Beginning balance of unrecognized tax benefits | $ | 24.9 | $ | 42.1 | $ | 31.9 | ||||||
Increases related to current period tax positions | 1.1 | 1.0 | 3.5 | |||||||||
Increases related to prior period tax positions | 35.5 | 11.2 | 7.9 | |||||||||
Reductions as a result of a lapse of the applicable statute of limitations | (0.6 | ) | (1.3 | ) | (0.2 | ) | ||||||
Reductions as a result of settlements with taxing authorities | (38.4 | ) | (28.1 | ) | (1.0 | ) | ||||||
Ending balance of unrecognized tax benefits | $ | 22.5 | $ | 24.9 | $ | 42.1 |