What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-12-12 compared with 2024-09-12 · 74 added, 104 removed, 443 unchanged (29% of the section changed)

44 unchanged sentences

Preferred stock, par value $ 0.01 , Shares authorized:

No shares issued or outstanding at August 3, 2024, February 3, 2024 and July 29, 2023

No shares issued or outstanding at November 2, 2024, February 3, 2024 and October 28, 2023

Common stock, par value $ 0.01 , Shares authorized:

18 unchanged sentences

Thirteen weeks ended

Twenty-six weeks ended

Thirty-nine weeks ended

Net retail sales

41 unchanged sentences

(Dollars in thousands)

Twenty-six weeks ended

Thirty-nine weeks ended

Cash flows provided by operating activities:

4 unchanged sentences

Provision/adjustments for doubtful accounts

( 44 ) ( 90 )

Loss on disposal of property and equipment

6 unchanged sentences

Prepaid expenses and other assets

( 664 ) 7,525

Accounts payable and accrued expenses

57 unchanged sentences

The Company's disaggregated revenue is fully disclosed as net sales to external customers by reporting segment and by geographic area (See Note 11 — Segment Information for additional information).

The Company's direct-to-consumer reporting segment represents 93 % of consolidated revenue for the second quarter of fiscal 2024.

The Company's direct-to-consumer reporting segment represents 92 % of consolidated revenue for the third quarter of fiscal 2024.

The majority of these sales transactions were single performance obligations that were recorded when control of merchandise was transferred to the customer.

8 unchanged sentences

In addition, unredeemed gift cards or breakage revenue is recorded in proportion to the customers’ redemption pattern using an estimated breakage rate based on historical experience.

Subsequent to stores reopening following shutdowns caused by COVID, the Company experienced lower redemptions of its gift cards for all periods of outstanding activated cards compared to pre-pandemic redemption patterns (fiscal year 2019 and earlier), which impacts the gift card breakage rate.

Subsequent to stores reopening following shutdowns caused by the pandemic, the Company experienced lower redemptions of its gift cards for all periods of outstanding activated cards compared to pre-pandemic redemption patterns (fiscal year 2019 and earlier), which impacts the gift card breakage rate.

The Company does not believe that the redemption pattern experienced during the pandemic reflects the pattern in the future and has adjusted the historical redemption data used to calculate the breakage rate.

25 unchanged sentences

Additionally, the Company amortizes these capitalized costs into expense in the same pattern as the development fee's recording of revenue as described previously.

These capitalized costs for the thirteen and twenty-six weeks ended August 3, 2024 are not material to the financial statements.

These capitalized costs for the thirteen and thirty-nine weeks ended November 2, 2024 are not material to the financial statements.

The Company reserves for “expected” credit losses on financial instruments and other commitments to extend credit rather than the “incurred loss” model.

These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions and reasonable and supportable forecasts.

For the twenty-six weeks ended August 3, 2024 and July 29, 2023 , the Company's accounts receivable are net of $ 6.5 million and $ 6.4 million, inclusive the allowance for credit losses and the reserve for the UK's tax, payments and customers authority "HMRC" matter of $ 3.1 million and $ 3.3 million, respectively.

For the thirty-nine weeks ended November 2, 2024 and October 28, 2023 , the Company's accounts receivable are net of $ 6.8 million and $ 6.2 million, inclusive of the allowance for credit losses and the reserve for the UK's customs authority "HMRC" matter of $ 3.4 million and $ 3.5 million, respectively.

See Note 12 for further discussion of the HMRC matter.

7 unchanged sentences

Additionally, certain leases contain incentives, such as construction allowances from landlords and/or rent abatements subsequent to taking possession of the leased property.

The table below presents certain information related to the lease costs for operating leases for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023 (in thousands).

The table below presents certain information related to the lease costs for operating leases for the thirteen and thirty-nine weeks ended November 2, 2024 and October 28, 2023 (in thousands).

Thirteen weeks ended

Twenty-six weeks ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

Thirty-nine weeks ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Operating lease costs

7 unchanged sentences

Other information

The table below presents supplemental cash flow information related to leases for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023 (in thousands).

The table below presents supplemental cash flow information related to leases for the thirteen and thirty-nine weeks ended November 2, 2024 and October 28, 2023 (in thousands).

Thirteen weeks ended

Twenty-six weeks ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

Thirty-nine weeks ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Operating cash flows for operating leases

$ 10,737 $ 9,994 $ 30,852 $ 29,775

As of August 3, 2024 and July 29, 2023 , the weighted-average remaining operating lease term was 5.6 years and 3.9 years, respectively, and the weighted-average discount rate was 7.2 % and 6.4 %, respectively, for operating leases recognized on the Company's condensed consolidated balance sheets.

The value of our operating lease asset was $ 94.2 million and $ 70.9 million as of August 3, 2024 and July 29, 2023 , respectively.

As of November 2, 2024 and October 28, 2023 , the weighted-average remaining operating lease term was 5.7 years and 4.0 years, respectively, and the weighted-average discount rate was 7.2 % and 6.5 %, respectively, for operating leases recognized on the Company's condensed consolidated balance sheets.

The value of our operating lease asset was $ 91.3 million and $ 67.8 million as of November 2, 2024 and October 28, 2023 , respectively.

The increase was driven by the Company entering into leases for new stores as well as securing longer-term extensions for existing stores resulting in contracts with more favorable terms.

For the thirteen and twenty-six weeks ended August 3, 2024 and the thirteen and twenty-six weeks ended July 29, 2023 the Company incurred no impairment charges against its right-of-use operating lease assets.

For the thirteen and thirty-nine weeks ended November 2, 2024 and the thirteen and thirty-nine weeks ended October 28, 2023 the Company incurred no impairment charges against its right-of-use operating lease assets.

Undiscounted cash flows

6 unchanged sentences

Long-term lease obligations

As of August 3, 2024 , the Company had additional executed leases that had not yet commenced with operating lease liab ilities of $ 28.8 millio n.

As of November 2, 2024 , the Company had additional executed leases that had not yet commenced with operating lease liab ilities of $ 26.5 millio n.

These leases are expected to commence in fiscal 2024 and fiscal 2025 with lease terms of three to twenty years.

4 unchanged sentences

1,209 1,250 550

Prepaid gift card fees

Prepaid taxes (2)

579 199 4,092

Prepaid gift card fees

Prepaid royalties

18 unchanged sentences

2,043 2,447 2,466

Accrued rent and related expenses (1)

1,040 1,356 3,413

Current income taxes payable

1,869 1,602 329

Accrued rent and related expenses (1)

772 1,356 954

Accrued expense - other (2)

14 unchanged sentences

2017 Omnibus Incentive Plan (the “2017 Plan”) that on or after April 14, 2020 may be forfeited, expire or be settled for cash.

For the thirteen weeks ended August 3, 2024 and July 29, 2023 , selling, general and administrative expense included stock-based compensation expense of $ 0.6 million and $ 0.7 million, respectively.

For the twenty-six weeks ended August 3, 2024 and July 29, 2023 , selling, general, and administrative expense included stock-based compensation expense of $ 1.0 million and $ 1.1 million, respectively.

As of August 3, 2024 , there was $ 3.4 million of total unrecognized compensation expense related to unvested restricted stock awards which is expected to be recognized over a weighted-average period of 1.9 years.

The following table is a summary of the balances and activity for stock options for the twenty-six weeks ended August 3, 2024 :

For the thirteen weeks ended November 2, 2024 and October 28, 2023 , selling, general and administrative expense included stock-based compensation expense of $ 0.7 million and $ 0.7 million, respectively.

For the thirty-nine weeks ended November 2, 2024 and October 28, 2023 , selling, general, and administrative expense included stock-based compensation expense of $ 1.7 million and $ 2.5 million, respectively.

As of November 2, 2024 , there was $ 3.4 million of total unrecognized compensation expense related to unvested restricted stock awards which is expected to be recognized over a weighted-average period of 1.8 years.

The following table is a summary of the balances and activity for stock options for the thirty-nine weeks ended November 2, 2024 :

Weighted Average Exercise Price

3 unchanged sentences

Canceled or expired

Outstanding, August 3, 2024

The following table is a summary of the balances and activity related to time-based and performance-based restricted stock for the twenty-six weeks ended August 3, 2024 :

Outstanding, November 2, 2024

The following table is a summary of the balances and activity related to time-based and performance-based restricted stock for the thirty-nine weeks ended November 2, 2024 :

Time-Based Restricted Stock

12 unchanged sentences

( 3,333 ) 24.75 ( 3,333 ) 24.75

Outstanding, August 3, 2024 (1)

Outstanding, November 2, 2024 (1)

97,538 $ 25.21 193,273 $ 23.17

( 1 ) Performance-based restricted stock outstanding, granted, and forfeited are presented at 100% of target.

The total fair value of shares vested during the twenty-six weeks ended August 3, 2024 and July 29, 2023 was $ 2.2 million and $ 2.1 million, respectively.

The outstanding performance shares as of August 3, 2024 consist of the following:

The total fair value of shares vested during the thirty-nine weeks ended November 2, 2024 and October 28, 2023 was $ 2.2 million and $ 2.1 million, respectively.

The outstanding performance shares as of November 2, 2024 consist of the following:

Performance Shares

6 unchanged sentences

2024 - 2026 consolidated, cumulative revenue objectives

Performance shares outstanding, August 3, 2024

The Company's effective tax rate was 23.8 % and 24.0 % for the thirteen and twenty-six weeks ended August 3, 2024 , compared to 20.4 % and 23.1 % for the thirteen and twenty-six weeks ended July 29, 2023 .

Performance shares outstanding, November 2, 2024

The Company's effective tax rate was 24.5 % and 24.1 % for the thirteen and thirty-nine weeks ended November 2, 2024 , respectively, compared to 26.7 % and 24.0 % for the thirteen and thirty-nine weeks ended October 28, 2023 , respectively.

The 2024 and 2023 effective tax rates differed from the statutory rate of 21 % primarily due to state income tax expense partially offset by the tax impact of equity awards vesting.

2 unchanged sentences

Stockholders’ Equity

The following table sets forth the changes in stockholders’ equity (in thousands) for the thirteen weeks ended August 3, 2024 and July 29, 2023 (in thousands):

For the thirteen weeks ended August 3, 2024

For the thirteen weeks ended July 29, 2023

The following table sets forth the changes in stockholders’ equity (in thousands) for the thirteen weeks ended November 2, 2024 and October 28, 2023 (in thousands):

For the thirteen weeks ended November 2, 2024

For the thirteen weeks ended October 28, 2023

Balance, beginning

1 unchanged sentence

Shares issued under employee stock plans

- 2 1,572 - - 1,574

Stock-based compensation

1 unchanged sentence

Shares withheld in lieu of tax withholdings

- ( 2 ) ( 3,639 ) - - ( 3,641 )

Share Repurchase

2 unchanged sentences

( 2,704 ) ( 2,704 ) -

- - - - - 196 196

Other comprehensive (loss) income

Other comprehensive income (loss)

102 102 ( 302 ) ( 302 )

4 unchanged sentences

( 2 ) Accumulated other comprehensive loss (“AOCI”)

The following table sets forth the changes in stockholders’ equity (in thousands) for the twenty-six weeks ended August 3, 2024 and July 29, 2023 (in thousands):

For the twenty-six weeks ended August 3, 2024

For the twenty-six weeks ended July 29, 2023

The following table sets forth the changes in stockholders’ equity (in thousands) for the thirty-nine weeks ended November 2, 2024 and October 28, 2023 (in thousands):

For the thirty-nine weeks ended November 2, 2024

For the thirty-nine weeks ended October 28, 2023

Balance, beginning

14 unchanged sentences

( 8,269 ) ( 8,269 ) ( 22,049 ) ( 22,049 )

Other comprehensive (loss) income

Other comprehensive income (loss)

271 271 ( 45 ) ( 45 )

4 unchanged sentences

( 2 ) Accumulated other comprehensive loss (“AOCI”)

During the thirteen and twenty-six weeks ended August 3, 2024 , the Company utilized $ 9.1 million in cash to repurchase 341,621 shares and utilized $ 18.2 million in cash to repurchase 685,027 shares, respectively, under its $ 50.0 million program that was authorized by its Board of Directors on August 31, 2022 ( the "August 2022 Stock Repurchase Program").

S ince the end of the second fiscal quarter, the Company utilized $ 2.0 million in cash to repurchase 73,274 shares leaving $ 5.9 million available under the August 2022 Stock Repurchase Program.

For the thirteen and twenty-six weeks ended August 3, 2024 , the Company's Board of Directors authorized cash dividends to shareholders of $ 2.7 million and $ 5.6 million, respectively.

Additionally, on September 11, 2024, the Board of Directors declared a quarterly cash dividend of $ 0.20 per share on the issued and outstanding common stock of the company.

The dividend will be paid on October 10, 2024 , to all stockholders of record as of September 26, 2024 .

On September 11, 2024, the Company announced that our Board of Directors terminated the August 2022 Stock Repurchase Program and authorized a new share repurchase program of up to $ 100 million (the “September 2024 Stock Repurchase Program”).

The primary source of funding for the share repurchase program is expected to be cash on hand.

The timing and amount of share repurchases, if any, will depend on price, market conditions, applicable regulatory requirements, and other factors.

The September 2024 Stock Repurchase Program authorizes us to repurchase shares through September 30, 2028 , does not require us to repurchase any specific number of shares, and may be modified, suspended or terminated at any time without prior notice.

Shares repurchased under the program will be subsequently retired.

The Company believes that the multi-year, multi-million dollar share buy-back program is reflective of the strong confidence that the Board of Directors has in the future of the Company.

For the twenty-six weeks ended July 29, 2023 , the Company recorded credit impairment charges of $ 0.8 million on trade receivables into retained earnings as a result of the adoption of ASC 326 - Credit Impairment.

During the first fiscal half of 2023, the Company utilized $ 8.1 million in cash to repurchase 394,321 shares under the August 2022 Stock Repurchase Program.

The Company's Board of Directors also authorized a special cash dividend of $ 1.50 per share that was paid on April 6, 2023 , to all stockholders of record as of March 23, 2023 , following a $ 1.25 per share special cash dividend declared on November 30, 2021.

During the thirteen and thirty-nine weeks ended November 2, 2024 , the Company utilized $ 4.8 million in cash to repurchase 147,917 shares and utilized $ 23.0 million in cash to repurchase 832,944 shares, respectively.

During the quarter, the Company repurchased shares under two separate stock repurchase programs.

For the thirteen weeks ending November 2, 2024, the company repurchased 73,274 shares utilizing $ 2.0 million in cash under the Company's $ 50.0 million stock repurchase program that was authorized by its Board of Directors on August 31, 2022 ( the "August 2022 Stock Repurchase Program").

On September 11, 2024, the Company announced that its Board of Directors terminated the August 2022 Stock Repurchase Program and authorized a new share repurchase program of up to $ 100 million (the “September 2024 Stock Repurchase Program”).

During the thirteen weeks ended November 2, 2024 , the Company utilized $ 2.8 million in cash to repurchase 74,643 shares under the September 2024 Stock Repurchase Program.

S ince the end of the third fiscal quarter, the Company utilized $ 0.2 million in cash to repurchase 5,288 shares leaving $ 97.0 million available under the September 2024 Stock Repurchase Program .

For the thirteen and thirty-nine weeks ended November 2, 2024 , the Company's Board of Directors authorized cash dividends to shareholders of $ 2.7 million and $ 8.3 million, respectively.

Additionally, on November 12, 2024, the Board of Directors declared a quarterly cash dividend of $ 0.20 per share on the issued and outstanding common stock of the company.

The dividend will be paid on January 9, 2025 , to all stockholders of record as of Novem ber 27, 2024 .

For the thirty-nine weeks ended October 28, 2023 , the Company recorded credit impairment charges of $ 0.8 million on trade receivables into retained earnings as a result of the adoption of ASC 326 - Credit Impairment.

During the thirteen and thirty-nine weeks ended October 28, 2023, the Company utilized $ 4.0 million in cash to repurchase 146,028 shares and the Company utilized $ 15.2 million in cash to repurchase 672,734 shares under the August 2022 Stock Repurchase Program.

The Company's Board of Directors also authorized a special cash dividend of $ 1.50 per share that was paid on April 6, 2023 , to all stockholders of record as of March 23, 2023 .

Income per Share

1 unchanged sentence

Thirteen weeks ended

Twenty-six weeks ended

Thirty-nine weeks ended

$ 9,870 $ 7,586 $ 30,107 $ 30,532

9 unchanged sentences

$ 0.73 $ 0.53 $ 2.20 $ 2.10

In calculating the diluted income per share for the twenty-six weeks ended August 3, 2024 and July 29, 2023 , respectively, there were 8,199 and 56,191 shares of common stock that were outstanding at the end of the period that were not included in the computation of diluted income per share due to their anti-dilutive effect.

In calculating the diluted income per share for the thirteen and thirty-nine weeks ended November 2, 2024 , there were 1,141 and 29,288 shares of common stock, respectively, that were outstanding at the end of the period that were not included in the computation of diluted income per share due to their anti-dilutive effect.

For the thirteen and thirty-nine weeks ended October 28, 2023 , there were zero and 43,673 shares of common stock, respectively, that were outstanding at the end of the period that were not included in the computation of diluted income per share due to their anti-dilutive effect.

Comprehensive Income

The difference between comprehensive income or loss and net income or loss is the result of foreign currency translation adjustments on the balance sheets of subsidiaries whose functional currency is not the U.S.

The accumulated other comprehensive loss balance on August 3, 2024 and July 29, 2023 was comprised entirely of foreign currency translation.

For the thirteen weeks ended August 3, 2024 and July 29, 2023 , the Company had no reclassifications out of accumulated other comprehensive loss.

The accumulated other comprehensive loss balance on November 2, 2024 and October 28, 2023 was comprised entirely of foreign currency translation.

For the thirteen weeks ended November 2, 2024 and October 28, 2023 , the Company had no reclassifications out of accumulated other comprehensive loss.

Segment Information

9 unchanged sentences

International

Thirteen weeks ended August 3, 2024

Thirteen weeks ended November 2, 2024

Net sales to external customers

$ 103,455 $ 7,294 $ 1,049 $ 111,798

Income before income taxes

7,384 3,835 326 11,545

Capital expenditures

3,270 - - 3,270

Depreciation and amortization

3,582 54 - 3,636

Thirteen weeks ended July 29, 2023

Thirteen weeks ended October 28, 2023

Net sales to external customers

$ 103,465 $ 4,978 $ 782 $ 109,225

Income before income taxes

8,037 2,252 190 10,479

Capital expenditures

3,073 - - 3,073

Depreciation and amortization

3,141 88 - 3,229

Twenty-six weeks ended August 3, 2024

Thirty-nine weeks ended November 2, 2024

Net sales to external customers

$ 211,323 $ 13,278 $ 1,927 $ 226,528

Income before income taxes

19,106 6,942 526 26,574

Capital expenditures

5,700 - - 5,700

Depreciation and amortization

7,188 106 - 7,294

Twenty-six weeks ended July 29, 2023

Thirty-nine weeks ended October 28, 2023

Net sales to external customers

$ 215,561 $ 11,666 $ 2,048 $ 229,275

Income before income taxes

23,992 5,142 698 29,832

Capital expenditures

6,138 - - 6,138

Depreciation and amortization

6,114 195 - 6,309

Total Assets as of:

August 3, 2024

$ 268,047 $ 10,345 $ 1,067 $ 279,459

November 2, 2024

February 3, 2024

262,299 8,801 1,225 272,325

July 29, 2023

249,021 8,379 1,013 258,413

October 28, 2023

The Company’s reportable segments are primarily determined by the types of products and services that they offer.

2 unchanged sentences

The following schedule is a summary of the Company’s sales to external customers and long-lived assets by geographic area (in thousands):

Thirteen weeks ended August 3, 2024

Thirteen weeks ended November 2, 2024

Net sales to external customers

$ 96,766 $ 14,012 $ 1,020 $ 111,798

Thirteen weeks ended July 29, 2023

Thirteen weeks ended October 28, 2023

Net sales to external customers

$ 97,336 $ 11,127 $ 762 $ 109,225

Twenty-six weeks ended August 3, 2024

Thirty-nine weeks ended November 2, 2024

Net sales to external customers

$ 196,217 $ 28,461 $ 1,850 $ 226,528

Property and equipment, net

49,436 3,867 0 53,303

Twenty-six weeks ended July 29, 2023

Thirty-nine weeks ended October 28, 2023

Net sales to external customers

$ 204,200 $ 23,785 $ 1,290 $ 229,275

Property and equipment, net

47,062 3,373 0 50,435

For purposes of this table only:

18 unchanged sentences

The Company maintains a provision against the related receivable, based on a current evaluation of collectability, using the latest facts available in the dispute.

As of August 3, 2024 , the Company had a gross receivable balance of $ 4.7 million and a reserve of $ 3.1 million, leaving a net receivable of $ 1.6 million.

As of November 2, 2024 , the Company had a gross receivable balance of $ 4.9 million and a reserve of $ 3.4 million, leaving a net receivable of $ 1.5 million.

The Company believes that the outcome of this dispute will not have a material adverse impact on the results of operations, liquidity, or financial position of the Company.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements