Earnings Per Common Share

9 Months Ended

Oct. 29, 2022

Basic earnings per common share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed based on the weighted average number of shares of common stock outstanding, plus the effect of dilutive potential common shares, which include shares the Company could be obligated to issue from its Convertible Senior Notes and warrants, and stock-based awards, such as stock options and restricted stock. Dilutive potential common shares are excluded from the computation of earnings per share if their effect is anti-dilutive.

For all periods presented, dilutive potential common shares for the Company’s stock-based awards and warrants were determined using the treasury stock method. For the 13 and 39 weeks ended October 30, 2021, the dilutive effect of the Convertible Senior Notes was calculated using the treasury stock method; however, upon the adoption of ASU 2020-06, the Company was required to calculate diluted earnings per common share using the if-converted method, which was applied to the 13 and 39 weeks ended October 29, 2022. See Note 1 – Description of Business and Basis of Presentation for further discussion.

The computations for basic and diluted earnings per common share were as follows for the periods presented (in thousands, except per share data):


	13 Weeks Ended				39 Weeks Ended
	October 29, 2022		October 30, 2021		October 29, 2022		October 30, 2021
Numerator:
Numerator for basic earnings per common share - Net income	$	228,456	$	316,513	$	807,517	$	1,173,778
Effect of dilutive securities
Interest expense associated with Convertible Senior Notes, net of tax	8,472		—		24,673		—
Numerator for diluted earnings per common share - Net income after the effect of dilutive securities	$	236,928	$	316,513	$	832,190	$	1,173,778

Denominator:
Weighted average common shares outstanding - basic	77,789		83,537		76,527		84,266
Dilutive effect of stock-based awards	5,120		6,791		5,357		6,498
Dilutive effect of warrants	4,947		10,542		6,754		7,988
Dilutive effect of Convertible Senior Notes	8,825		12,794		13,262		10,896
Weighted average common shares outstanding - diluted	96,681		113,664		101,900		109,648

Earnings per common share:
Basic	$	2.94	$	3.79	$	10.55	$	13.93
Diluted	$	2.45	$	2.78	$	8.17	$	10.70

Stock-based awards excluded from diluted shares	—		1		185		55

The dilutive effect of the Convertible Senior Notes included 6.2 million and 12.8 million shares for the 13 weeks ended October 29, 2022 and October 30, 2021, respectively, and 8.9 million and 10.9 million shares for the 39 weeks ended October 29, 2022 and October 30, 2021, respectively, that are designed to be offset at settlement by shares delivered from the bond hedge purchased by the Company. The shares provided by the bond hedge are anti-dilutive; accordingly, they are not treated as a reduction to diluted weighted average shares outstanding for any periods presented. In addition, the dilutive effect of the Convertible Senior Notes for the 13 and 39 weeks ended October 29, 2022 included approximately 2.6 million and 4.4 million shares, respectively, related to the principal amount of the Convertible Senior Notes, which the Company intends to settle in cash.