XML 26 R14.htm IDEA: XBRL DOCUMENT
v3.19.2

Leases and Other Commitments | 3 Months Ended
--- | ---
Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract] |
Leases and Other Commitments | Leases and Other Commitments Leases The Company primarily leases retail stores, showrooms, offices, and distribution facilities under operating lease contracts. Some of the Company's operating leases contain extension options of anywhere from one to 15 years. Historically, the Company has not entered into finance leases and its lease agreements generally do not contain residual value guarantees, options to purchase underlying assets, or material restrictive covenants. Operating lease assets and liabilities. The Company determines if an arrangement contains a lease at inception of a contract. The Company recognizes operating lease assets and lease liabilities in the condensed consolidated balance sheets on the lease commencement date, based on the present value of the unpaid lease payments over the reasonably certain lease term. The lease term includes the non-cancellable period at the lease commencement date, plus any additional periods covered by the Company's options to extend (or not to terminate) the lease that are reasonably certain of exercise, or an option to extend (or not to terminate) a lease that is controlled by the lessor. Operating lease assets are initially measured at cost, which comprise the initial amount of the associated operating lease liabilities, adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred, less any lease incentives, such as tenant allowances. Operating lease assets are subsequently measured throughout the lease term at the carrying amount of the associated lease liabilities, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Rent expense for operating lease payments is recognized on a straight-line basis over the lease term in SG&A expenses in the condensed consolidated statements of comprehensive loss. Lease payments included in the operating lease liability include (1) fixed payments, including in-substance fixed payments, owed over the lease term, including fixed rate increases and (2) exclude any lease prepayments as of the period presented. Operating lease assets are presented separately in the condensed consolidated balance sheets. The associated lease liabilities are presented as operating lease liabilities, with the current portion of operating lease liabilities included in other current liabilities and the long-term portion presented separately as long-term operating lease liabilities in the condensed consolidated balance sheets. Certain leases require additional payments based on actual or forecasted sales volume (either monthly or annually), as well as reimbursement for real estate taxes (tax), common area maintenance (CAM), and insurance (collectively, variable lease payments). Variable lease payments are generally excluded from operating lease assets and liabilities, discussed above, and are recognized in rent expense and recorded as a component of SG&A expenses in the condensed consolidated statements of comprehensive loss. Some leases are dependent upon forecasted annual sales volume, and lease payments are recognized on a straight-line basis as rent expense over each annual period when the achievement of the related sales target is reasonably likely to occur. Other variable lease payments, such as tax, CAM and insurance, are recognized in rent expense as incurred. Some leases contain one fixed lease payment that include variable lease payments, which are considered non-lease components. The Company has elected to account for these instances as a single lease component and the total of these fixed payments are used to measure the operating lease assets and lease liabilities, discussed above. The Company has elected not to recognize operating lease assets and lease liabilities for short-term leases, which are defined as those operating leases with a term of 12 months or less. Instead, lease payments for short-term leases are recognized on a straight-line basis over the lease term in rent expense and recorded as a component of SG&A expenses in the condensed consolidated statements of comprehensive loss. Discount Rate. The Company discounts its unpaid lease payments using the interest rate implicit in the lease or, if the rate cannot be readily determined, its IBR. Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor's estimated residual value or the amount of the lessor's deferred initial direct costs. Therefore, the Company generally derives a discount rate at the lease commencement date by utilizing its IBR, which is based on what the Company would have to pay on a collateralized basis to borrow an amount equal to its lease payments under similar terms. Because the Company does not generally borrow on a collateralized basis under its revolving credit facilities, it uses the interest rate it pays on its noncollateralized borrowings under its Primary Credit Facility as an input for deriving an appropriate IBR, adjusted for the amount of the lease payments, the lease term, and the effect on that rate of designating specific collateral with a value equal to the unpaid lease payments for that lease. Remeasurements. The Company monitors for events that require a change in estimates for its operating lease assets and liabilities, such as contract terms modifications or lease term estimates. When a change in estimate results in the remeasurement of the operating lease liability, a corresponding adjustment is made to the carrying amount of the operating lease asset. Reassessments may include impairments of operating lease assets as determined under the requirements of ASC Subtopic 360-10, Property, Plant, and Equipment – Overall (ASC 360). Any impairment charges incurred under the requirements of ASC 360 are allocated to the long-lived assets in the defined asset group, which include the operating lease asset unless doing so would reduce the carrying amount of the operating lease asset to an amount less than zero. Impairment charges are recorded in SG&A expenses in the condensed consolidated statements of comprehensive loss. After impairment, the operating lease asset is remeasured and amortized on a straight-line basis over the remaining lease term, with no impact to the operating lease liability. Rent Expense. The components of rent expense for operating leases recorded in the condensed consolidated statements of comprehensive loss are as follows:
| Three Months Ended June 30, 2019
Operating | $ | 14,247 |
Variable | 5,454 |
Short-term | 542 |
Total | $ | 20,243 |
The components of rent expense for operating leases recorded in the condensed consolidated statements of comprehensive loss under legacy US GAAP are as follows:
| Three Months Ended June 30, 2018
Minimum rentals | $ | 14,800 |
Contingent rentals | 1,205 |
Total | $ | 16,005 |
Operating Lease Liabilities. Maturities of undiscounted operating lease liabilities remaining as of June 30, 2019 under the new lease standard, reconciled to the present value of operating lease liabilities recorded in the condensed consolidated balance sheets, are as follows:
Years Ending March 31, |  | Amount
2020 |  | $ | 38,269 |
2021 |  | 50,069 |
2022 |  | 42,737 |
2023 |  | 37,983 |
2024 |  | 33,334 |
Thereafter |  | 82,848 |
Total undiscounted future lease payments |  | 285,240 |
Less: Imputed interest |  | (30,213 | )
Total |  | $ | 255,027 |
Operating lease liabilities recorded in the condensed consolidated balance sheets, exclude $2,829 of legally binding undiscounted minimum lease payments for leases signed but not yet commenced, which are included in the legacy US GAAP future minimum commitments, presented below. Future minimum commitments for operating lease contracts as of March 31, 2019 under legacy US GAAP are as follows:
Years Ending March 31, |  | Amount
2020 |  | $ | 53,015 |
2021 |  | 47,803 |
2022 |  | 40,629 |
2023 |  | 35,915 |
2024 |  | 31,329 |
Thereafter |  | 81,746 |
Total |  | $ | 290,437 |
Supplemental Disclosure. Key estimates and judgments related to operating lease assets and liabilities presented in the condensed consolidated balance sheets are as follows:
| June 30, 2019
Weighted-average remaining lease term in years | 6.6 |
Weighted-average discount rate | 3.3 | %
Supplemental information for amounts presented in the condensed consolidated statements of cash flows related to operating leases is as follows:
| Three Months Ended June 30, 2019
Non-cash operating activities |
ROU assets obtained in exchange for lease liabilities* | $ | 16,422 |
Reductions to ROU assets resulting from reductions to lease liabilities* | (2,549 | )
*Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements. Other Commitments During the three months ended June 30, 2019, there were no material changes to the obligations reported in the 2019 Annual Report with respect to (1) purchase obligations for product; (2) purchase obligations for commodities; (3) future capital expenditures, commitments under service contracts, or contractual requirements to pay promotional expenses; and (4) legal proceedings, other than those that occurred in the ordinary course of business.
Leases and Other Commitments | Leases and Other Commitments Leases The Company primarily leases retail stores, showrooms, offices, and distribution facilities under operating lease contracts. Some of the Company's operating leases contain extension options of anywhere from one to 15 years. Historically, the Company has not entered into finance leases and its lease agreements generally do not contain residual value guarantees, options to purchase underlying assets, or material restrictive covenants. Operating lease assets and liabilities. The Company determines if an arrangement contains a lease at inception of a contract. The Company recognizes operating lease assets and lease liabilities in the condensed consolidated balance sheets on the lease commencement date, based on the present value of the unpaid lease payments over the reasonably certain lease term. The lease term includes the non-cancellable period at the lease commencement date, plus any additional periods covered by the Company's options to extend (or not to terminate) the lease that are reasonably certain of exercise, or an option to extend (or not to terminate) a lease that is controlled by the lessor. Operating lease assets are initially measured at cost, which comprise the initial amount of the associated operating lease liabilities, adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred, less any lease incentives, such as tenant allowances. Operating lease assets are subsequently measured throughout the lease term at the carrying amount of the associated lease liabilities, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Rent expense for operating lease payments is recognized on a straight-line basis over the lease term in SG&A expenses in the condensed consolidated statements of comprehensive loss. Lease payments included in the operating lease liability include (1) fixed payments, including in-substance fixed payments, owed over the lease term, including fixed rate increases and (2) exclude any lease prepayments as of the period presented. Operating lease assets are presented separately in the condensed consolidated balance sheets. The associated lease liabilities are presented as operating lease liabilities, with the current portion of operating lease liabilities included in other current liabilities and the long-term portion presented separately as long-term operating lease liabilities in the condensed consolidated balance sheets. Certain leases require additional payments based on actual or forecasted sales volume (either monthly or annually), as well as reimbursement for real estate taxes (tax), common area maintenance (CAM), and insurance (collectively, variable lease payments). Variable lease payments are generally excluded from operating lease assets and liabilities, discussed above, and are recognized in rent expense and recorded as a component of SG&A expenses in the condensed consolidated statements of comprehensive loss. Some leases are dependent upon forecasted annual sales volume, and lease payments are recognized on a straight-line basis as rent expense over each annual period when the achievement of the related sales target is reasonably likely to occur. Other variable lease payments, such as tax, CAM and insurance, are recognized in rent expense as incurred. Some leases contain one fixed lease payment that include variable lease payments, which are considered non-lease components. The Company has elected to account for these instances as a single lease component and the total of these fixed payments are used to measure the operating lease assets and lease liabilities, discussed above. The Company has elected not to recognize operating lease assets and lease liabilities for short-term leases, which are defined as those operating leases with a term of 12 months or less. Instead, lease payments for short-term leases are recognized on a straight-line basis over the lease term in rent expense and recorded as a component of SG&A expenses in the condensed consolidated statements of comprehensive loss. Discount Rate. The Company discounts its unpaid lease payments using the interest rate implicit in the lease or, if the rate cannot be readily determined, its IBR. Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor's estimated residual value or the amount of the lessor's deferred initial direct costs. Therefore, the Company generally derives a discount rate at the lease commencement date by utilizing its IBR, which is based on what the Company would have to pay on a collateralized basis to borrow an amount equal to its lease payments under similar terms. Because the Company does not generally borrow on a collateralized basis under its revolving credit facilities, it uses the interest rate it pays on its noncollateralized borrowings under its Primary Credit Facility as an input for deriving an appropriate IBR, adjusted for the amount of the lease payments, the lease term, and the effect on that rate of designating specific collateral with a value equal to the unpaid lease payments for that lease. Remeasurements. The Company monitors for events that require a change in estimates for its operating lease assets and liabilities, such as contract terms modifications or lease term estimates. When a change in estimate results in the remeasurement of the operating lease liability, a corresponding adjustment is made to the carrying amount of the operating lease asset. Reassessments may include impairments of operating lease assets as determined under the requirements of ASC Subtopic 360-10, Property, Plant, and Equipment – Overall (ASC 360). Any impairment charges incurred under the requirements of ASC 360 are allocated to the long-lived assets in the defined asset group, which include the operating lease asset unless doing so would reduce the carrying amount of the operating lease asset to an amount less than zero. Impairment charges are recorded in SG&A expenses in the condensed consolidated statements of comprehensive loss. After impairment, the operating lease asset is remeasured and amortized on a straight-line basis over the remaining lease term, with no impact to the operating lease liability. Rent Expense. The components of rent expense for operating leases recorded in the condensed consolidated statements of comprehensive loss are as follows:
| Three Months Ended June 30, 2019
Operating | $ | 14,247 |
Variable | 5,454 |
Short-term | 542 |
Total | $ | 20,243 |
The components of rent expense for operating leases recorded in the condensed consolidated statements of comprehensive loss under legacy US GAAP are as follows:
| Three Months Ended June 30, 2018
Minimum rentals | $ | 14,800 |
Contingent rentals | 1,205 |
Total | $ | 16,005 |
Operating Lease Liabilities. Maturities of undiscounted operating lease liabilities remaining as of June 30, 2019 under the new lease standard, reconciled to the present value of operating lease liabilities recorded in the condensed consolidated balance sheets, are as follows:
Years Ending March 31, |  | Amount
2020 |  | $ | 38,269 |
2021 |  | 50,069 |
2022 |  | 42,737 |
2023 |  | 37,983 |
2024 |  | 33,334 |
Thereafter |  | 82,848 |
Total undiscounted future lease payments |  | 285,240 |
Less: Imputed interest |  | (30,213 | )
Total |  | $ | 255,027 |
Operating lease liabilities recorded in the condensed consolidated balance sheets, exclude $2,829 of legally binding undiscounted minimum lease payments for leases signed but not yet commenced, which are included in the legacy US GAAP future minimum commitments, presented below. Future minimum commitments for operating lease contracts as of March 31, 2019 under legacy US GAAP are as follows:
Years Ending March 31, |  | Amount
2020 |  | $ | 53,015 |
2021 |  | 47,803 |
2022 |  | 40,629 |
2023 |  | 35,915 |
2024 |  | 31,329 |
Thereafter |  | 81,746 |
Total |  | $ | 290,437 |
Supplemental Disclosure. Key estimates and judgments related to operating lease assets and liabilities presented in the condensed consolidated balance sheets are as follows:
| June 30, 2019
Weighted-average remaining lease term in years | 6.6 |
Weighted-average discount rate | 3.3 | %
Supplemental information for amounts presented in the condensed consolidated statements of cash flows related to operating leases is as follows:
| Three Months Ended June 30, 2019
Non-cash operating activities |
ROU assets obtained in exchange for lease liabilities* | $ | 16,422 |
Reductions to ROU assets resulting from reductions to lease liabilities* | (2,549 | )
*Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements. Other Commitments During the three months ended June 30, 2019, there were no material changes to the obligations reported in the 2019 Annual Report with respect to (1) purchase obligations for product; (2) purchase obligations for commodities; (3) future capital expenditures, commitments under service contracts, or contractual requirements to pay promotional expenses; and (4) legal proceedings, other than those that occurred in the ordinary course of business.

X
- References No definition available. + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -URI http://asc.fasb.org/topic&trid=2127136 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -URI http://asc.fasb.org/topic&trid=2144648 + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration