What changed in this filing

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Item 1. Financial Statements

2023-11-30 compared with 2023-08-24 · 45 added, 33 removed, 255 unchanged (23% of the section changed)

21 unchanged sentences

Current operating lease liabilities

Short-term debt

Total current liabilities

8 unchanged sentences

48,659 , 50,364 , and 51,029 shares outstanding;

at July 29, 2023 (unaudited), January 28, 2023, and July 30, 2022 (unaudited), respectively

at October 28, 2023 (unaudited), January 28, 2023, and October 29, 2022 (unaudited), respectively

Treasury stock-common, at cost

13 unchanged sentences

Operating income

Interest (income) expense, net

Interest income, net

Income before income taxes

28 unchanged sentences

Financing activities

Borrowings from credit facility

Repurchase of common shares

2 unchanged sentences

Net cash used in financing activities

Net (decrease) increase in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

19 unchanged sentences

Balance – July 29, 2023

Stock-based compensation

Stock options exercised and other awards

Purchase of treasury shares

Repurchase of common shares, including excise tax

Balance – October 28, 2023

See accompanying notes to consolidated financial statements.

14 unchanged sentences

Balance – July 30, 2022

Stock-based compensation

Stock options exercised and other awards

Purchase of treasury shares

Repurchase of common shares

Balance – October 29, 2022

See accompanying notes to consolidated financial statements.

8 unchanged sentences

and its consolidated subsidiaries.

As of July 29, 2023, the Company operated 1,362 stores across 50 states, as shown in the table below.

As of October 28, 2023, the Company operated 1,374 stores across 50 states, as shown in the table below.

New Hampshire

10 unchanged sentences

The Company’s business is subject to seasonal fluctuation, with significant portions of net sales and net income being realized during the fourth quarter of the fiscal year due to the holiday selling season.

The results for the 13 and 26 weeks ended July 29, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending February 3, 2024, or for any other future interim period or for any future year.

The results for the 13 and 39 weeks ended October 28, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending February 3, 2024, or for any other future interim period or for any future year.

These unaudited interim consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended January 28, 2023.

5 unchanged sentences

The Company’s quarterly periods are the 13 weeks ending on the Saturday closest to April 30, July 31, October 31, and January 31.

The second quarter in fiscal 2023 and 2022 ended on July 29, 2023 and July 30, 2022, respectively.

The third quarter in fiscal 2023 and 2022 ended on October 28, 2023 and October 29, 2022, respectively.

Use of estimates

17 unchanged sentences

In addition, breakage on gift cards is recognized proportionately as redemption occurs.

The following table provides a summary of the changes included in deferred revenue during the 13 and 26 weeks ended July 29, 2023 and July 30, 2022:

The following table provides a summary of the changes included in deferred revenue during the 13 and 39 weeks ended October 28, 2023 and October 29, 2022:

13 Weeks Ended

7 unchanged sentences

(2) Revenue recognized in the current period related to the beginning liability.

Other amounts included in deferred revenue were $ 8,186 and $ 10,658 at July 29, 2023 and July 30, 2022, respectively.

Other amounts included in deferred revenue were $ 6,546 and $ 8,141 at October 28, 2023 and October 29, 2022, respectively.

Goodwill and other intangible assets

Goodwill, which represents the excess of cost over the fair value of net assets acquired, was $ 10,870 at July 29, 2023, January 28, 2023, and July 30, 2022.

No additional goodwill was recognized during the 13 and 26 weeks ended July 29, 2023.

Goodwill, which represents the excess of cost over the fair value of net assets acquired, was $ 10,870 at October 28, 2023, January 28, 2023, and October 29, 2022.

No additional goodwill was recognized during the 13 and 39 weeks ended October 28, 2023.

The recoverability of goodwill is reviewed annually during the fourth quarter or more frequently if an event occurs or circumstances change that would indicate that impairment may exist.

18 unchanged sentences

Operating lease assets obtained in exchange for operating lease liabilities (non-cash)

(1) Excludes $ 17,450 and $ 13,363 related to cash received for tenant incentives for the 26 weeks ended July 29, 2023 and July 30, 2022, respectively.

(1) Excludes $ 27,682 and $ 21,347 related to cash received for tenant incentives for the 39 weeks ended October 28, 2023 and October 29, 2022, respectively.

Commitments and contingencies

11 unchanged sentences

Outstanding borrowings bear interest, at the Company’s election, at either a base rate plus a margin of 0 % to 0.125 % or the Term Secured Overnight Financing Rate plus a margin of 1.125 % to 1.250 %, and a credit spread adjustment of 0.10 %, with such margins based on the Company’s borrowing availability, and the unused line fee is 0.20 % per annum.

As of July 29, 2023, January 28, 2023, and July 30, 2022, there were no borrowings outstanding under the credit facility.

As of July 29, 2023, the Company was in compliance with all terms and covenants of the Loan Agreement.

As of October 28, 2023, the Company had $ 195,400 outstanding under the credit facility, and the weighted average interest rate was 8.21 % for the 39 weeks ended October 28, 2023.

As of January 28, 2023 and October 29, 2022, there were no borrowings outstanding under the credit facility.

As of October 28, 2023, the Company was in compliance with all terms and covenants of the Loan Agreement.

Fair value measurements

The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximates their estimated fair values due to the short maturities of these instruments.

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximates their estimated fair values due to the short maturities of these instruments.

Fair value is measured using inputs from the three levels of the fair value hierarchy, which are described as follows:

2 unchanged sentences

● Level 3 – unobservable inputs in which there is little or no market data, which would require the Company to develop its own assumptions.

As of July 29, 2023, January 28, 2023, and July 30, 2022, there were liabilities related to the non-qualified deferred compensation plan included in other long-term liabilities on the consolidated balance sheets of $ 42,529 , $ 37,501 , and $ 36,071 , respectively.

As of October 28, 2023 , January 28, 2023 , and October 29, 2022 , there were liabilities related to the non-qualified deferred compensation plan included in other long-term liabilities on the consolidated balance sheets of $ 41,633 , $ 37,501 , and $ 34,839 , respectively.

The liabilities are categorized as Level 2 as they are based on third-party reported values, which are based primarily on quoted market prices of underlying assets of the funds within the plan.

14 unchanged sentences

The Company does not currently pay a regular dividend.

The Company granted 42 and 48 stock options during the 26 weeks ended July 29, 2023 and July 30, 2022, respectively.

Stock-based compensation expense for stock options was $ 1,749 and $ 2,164 for the 13 weeks ended July 29, 2023 and July 30, 2022, respectively.

Stock-based compensation expense for stock options was $ 3,219 and $ 4,506 for the 26 weeks ended July 29, 2023 and July 30, 2022, respectively.

The weighted-average grant date fair value of these stock options was $ 199.15 and $ 149.14 for the 26 weeks ended July 29, 2023 and July 30, 2022, respectively.

At July 29, 2023, there was approximately $ 14,770 of unrecognized stock-based compensation expense related to unvested stock options.

There were 45 and 56 restricted stock units issued during the 26 weeks ended July 29, 2023 and July 30, 2022, respectively.

Stock-based compensation expense for restricted stock units was $ 4,934 and $ 4,987 for the 13 weeks ended July 29, 2023 and July 30, 2022, respectively.

Stock-based compensation expense for restricted stock units was $ 9,293 and $ 9,439 for the 26 weeks ended July 29, 2023 and July 30, 2022, respectively.

At July 29, 2023, there was approximately $ 36,561 of unrecognized stock-based compensation expense related to restricted stock units.

There were 33 and 37 performance-based restricted stock units issued during the 26 weeks ended July 29, 2023 and July 30, 2022, respectively.

Stock-based compensation expense for performance-based restricted stock units was $ 5,135 and $ 5,368 for the 13 weeks ended July 29, 2023 and July 30, 2022, respectively.

Stock-based compensation expense for performance-based restricted stock units was $ 9,027 and $ 8,930 for the 26 weeks ended July 29, 2023 and July 30, 2022,

respectively.

At July 29, 2023, there was approximately $ 33,091 of unrecognized stock-based compensation expense related to performance-based restricted stock units.

The Company granted 42 and 48 stock options during the 39 weeks ended October 28, 2023 and October 29, 2022, respectively.

Stock-based compensation expense for stock options was $ 1,742 and $ 1,646 for the 13 weeks ended October 28, 2023 and October 29, 2022, respectively.

Stock-based compensation expense for stock options was $ 4,961 and $ 6,152 for the 39 weeks ended October 28, 2023 and October 29, 2022, respectively.

The weighted-average grant date fair value of these stock options was $ 199.15 and $ 149.14 for the 39 weeks ended October 28, 2023 and October 29, 2022, respectively.

At October 28, 2023, there was approximately $ 13,028 of unrecognized stock-based compensation expense related to unvested stock options.

There were 48 and 58 restricted stock units issued during the 39 weeks ended October 28, 2023 and October 29, 2022, respectively.

Stock-based compensation expense for restricted stock units was $ 4,959 and $ 4,544 for the 13 weeks ended October 28, 2023 and October 29, 2022, respectively.

Stock-based compensation expense for restricted stock units was $ 14,252 and $ 13,983 for the 39 weeks ended October 28, 2023 and October 29, 2022, respectively.

At October 28, 2023, there was approximately $ 32,630 of unrecognized stock-based compensation expense related to restricted stock units.

There were 33 and 37 performance-based restricted stock units issued during the 39 weeks ended October 28, 2023 and October 29, 2022, respectively.

Stock-based compensation expense for performance-based restricted stock units was $ 5,237 and $ 3,489 for the 13 weeks ended October 28, 2023 and October 29, 2022, respectively.

Stock-based compensation expense for performance-based restricted stock units was $ 14,264 and $ 12,419 for the 39 weeks ended October 28, 2023 and October 29, 2022, respectively.

At October 28, 2023, there was approximately $ 28,755 of unrecognized stock-based compensation expense related to performance-based restricted stock units.

Income tax expense reflects the federal statutory tax rate and the weighted average state statutory tax rate for the states in which the Company operates stores.

Income tax expense of $ 95,989 for the 13 weeks ended July 29, 2023 represents an effective tax rate of 24.2 %, compared to $ 95,859 of tax expense representing an effective tax rate of 24.5 % for the 13 weeks ended July 30, 2022.

Income tax expense of $ 198,356 for the 26 weeks ended July 29, 2023 represents an effective tax rate of 23.5 %, compared to $ 201,771 of tax expense representing an effective tax rate of 24.3 % for the 26 weeks ended July 30, 2022.

Income tax expense of $ 80,241 for the 13 weeks ended October 28, 2023 represents an effective tax rate of 24.3 %, compared to $ 88,120 of tax expense representing an effective tax rate of 24.3 % for the 13 weeks ended October 29, 2022.

Income tax expense of $ 278,597 for the 39 weeks ended October 28, 2023 represents an effective tax rate of 23.7 %, compared to $ 289,891 of tax expense representing an effective tax rate of 24.3 % for the 39 weeks ended October 29, 2022.

The lower effective tax rate is primarily due to benefits from income tax accounting for stock-based compensation.

11 unchanged sentences

Net income per common share:

The denominator for diluted net income per common share for the 13 weeks ended July 29, 2023 and July 30, 2022 excludes 127 and 67 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects.

The denominator for diluted net income per common share for the 26 weeks ended July 29, 2023 and July 30, 2022 excludes 133 and 125 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects.

The denominator for diluted net income per common share for the 13 weeks ended October 28, 2023 and October 29, 2022 excludes 124 and 50 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects.

The denominator for diluted net income per common share for the 39 weeks ended October 28, 2023 and October 29, 2022 excludes 144 and 119 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects.

Outstanding performance-based restricted stock units are included in the computation of dilutive shares only to the extent that the underlying performance conditions are satisfied prior to the end of the reporting period or would be considered satisfied if the end of the reporting period were the end of the related contingency period and the results would be dilutive under the treasury stock method.

10 unchanged sentences

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