Revenue Contracts With Customers

9 Months Ended

Nov. 02, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 clarifies the principles for recognizing revenue from contracts with customers. The Company adopted the standard during the thirteen weeks ended May 5, 2018 using the modified retrospective method by recognizing the cumulative effect as an adjustment to retained earnings.

Revenue Transactions

Revenue from store operations is recognized at the point of sale when control of the product is transferred to the customer at such time. Internet sales, through the Company's fivebelow.com e-commerce website, are recognized when the consumer receives the product as control transfers upon delivery. Returns subsequent to the period end are immaterial; accordingly, no reserve has been recorded. Gift card sales to customers are initially recorded as liabilities and recognized as sales upon redemption for merchandise or as breakage revenue in proportion to the pattern of redemption of the gift cards by the customer in net sales.

The transaction price for the Company’s sales is based on the item’s stated price. To the extent that the Company charges customers for shipping and handling on e-commerce sales, the Company records such amounts in net sales. Shipping and handling costs, which include fulfillment and shipping costs related to the Company's e-commerce operations, are included in costs of goods sold. The Company has chosen the pronouncement's policy election which allows it to exclude all sales taxes from net sales in the accompanying consolidated statements of operations.

Disaggregation of Revenue

The following table provides information about disaggregated revenue by groups of products: leisure, fashion and home, and party and snack (in thousands):



	Thirteen Weeks Ended				Thirteen Weeks Ended
	November 2, 2019				November 3, 2018
	Amount		Percentage of Net Sales		Amount		Percentage of Net Sales
Leisure	$	188,627	50.0	%	$	161,634	51.7	%
Fashion and home	120,636		32.0	%	97,107		31.0	%
Party and snack	68,175		18.0	%	54,082		17.3	%
Total	$	377,438	100.0	%	$	312,823	100.0	%



	Thirty-Nine Weeks Ended				Thirty-Nine Weeks Ended
	November 2, 2019				November 3, 2018
	Amount		Percentage of Net Sales		Amount		Percentage of Net Sales
Leisure	$	587,649	50.7	%	$	493,650	51.6	%
Fashion and home	352,593		30.4	%	288,944		30.2	%
Party and snack	219,358		18.9	%	174,285		18.2	%
Total	$	1,159,600	100.0	%	$	956,879	100.0	%

Financial Statement Impact of Adopting ASU 2014-09

All of the Company's revenue is recognized from contracts with customers and, therefore, is subject to ASU 2014-09. The Company adopted ASU 2014-09 using a modified retrospective approach during the thirteen weeks ended May 5, 2018 and recognized the cumulative effect as an adjustment by increasing retained earnings by $0.5 million and income taxes payable by $0.1 million, and reducing accrued expenses by $0.7 million and deferred tax asset by $0.1 million. The cumulative adjustment was related to the recognition of gift card breakage.