XML 36 R26.htm IDEA: XBRL DOCUMENT v3.10.0.1
REVENUE RECOGNITION (Tables)
 9 Months Ended
Sep. 29, 2018
Revenue from Contract with Customer [Abstract]  
ASC 606 Initial Application
The effects of retrospective adoption on the Company's consolidated Statements of Operations were as follows:
 
 
Third Quarter
 
Three Fiscal Quarters
 
Year
 
Year
(dollars in thousands, except per share data)
 
Fiscal 2017
 
Fiscal 2017
 
Fiscal 2017
 
Fiscal 2016
Net sales
 
$
(186
)
 
$
(480
)
 
$
92

 
$
(637
)
Cost of goods sold
 
$
84

 
$
110

 
$
52

 
$
(7
)
Income before income taxes
 
$
(270
)
 
$
(590
)
 
$
40

 
$
(630
)
Net income
 
$
(170
)
 
$
(371
)
 
$
84

 
$
(397
)
 
 
 
 
 
 
 
 

Basic net income per common share
 
$
—

 
$
(0.01
)
 
$
—

 
$
(0.01
)
Diluted net income per common share
 
$
—

 
$
(0.01
)
 
$
—

 
$
—


The cumulative effect to the Company’s retained earnings at January 2, 2016 was an after-tax increase of approximately $0.6 million.
The effects of adoption of ASC 606 on the Company’s consolidated balance sheet at December 30, 2017 were as follows:
(dollars in thousands)
As Previously
Reported
 
ASC 606 Adjustments
 
As Amended for
ASC 606
ASSETS
 
 
 
 
 
Prepaid expenses and other current assets
$
49,892

 
$
3,043

(1) 
$
52,935

Total current assets
$
1,017,669

 
$
3,043

 
$
1,020,712

Total assets
$
2,067,999

 
$
3,043

 
$
2,071,042

 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
Other current liabilities
$
146,510

 
$
2,624

(2) 
$
149,134

Total current liabilities
$
328,624

 
$
2,624

 
$
331,248

Deferred income taxes
$
84,848

 
$
96

 
$
84,944

Total liabilities
$
1,210,906

 
$
2,720

 
$
1,213,626

 
 
 
 
 
 
Retained earnings
885,714

 
323

(3) 
886,037

Total stockholder's equity
$
857,093

 
$
323

 
$
857,416

 
 
 
 
 
 
Total liabilities and stockholders' equity
$
2,067,999

 
$
3,043

 
$
2,071,042

(1)
Reclassification of estimated inventory expected to be returned by customers through future sales refund transactions. This amount was reclassified from the returns reserve (current liability) to a current asset. Prior to the Company's adoption of ASC 606, the Company's returns reserve (current liability) was reported net of the estimated inventory expected to be returned by customers through sales refund transactions.
(2)
Amount includes a reclassification of approximately $3.0 million for estimated inventory expected to be returned by customers, partially offset by a reclassification of approximately $0.4 million for gift card liabilities.
(3)
Cumulative impact of approximately $0.6 million for after-tax adjustments to retained earnings at the beginning of fiscal 2016, offset by ASC 606 effects on fiscal 2017 and fiscal 2016 results of operations.         
The retrospective adoption of ASC 606 at the beginning of fiscal 2018 also had the following effects on the Company’s unaudited condensed consolidated balance sheet at September 30, 2017:
(dollars in thousands)
As Previously
Reported
 
ASC 606 Adjustments
 
As Amended for
ASC 606
ASSETS
 
 
 
 
 
Prepaid expenses and other current assets
$
48,083

 
$
2,873

(1) 
$
50,956

Total current assets
$
1,049,100

 
$
2,873

 
$
1,051,973

Total assets
$
2,104,063

 
$
2,873

 
$
2,106,936

 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
Other current liabilities
$
134,031

 
$
3,083

(2) 
$
137,114

Total current liabilities
$
327,909

 
$
3,083

 
$
330,992

Deferred income taxes
$
138,239

 
$
(78
)
 
138,161

Total liabilities
$
1,332,100

 
$
3,005

 
$
1,335,105

 
 
 
 
 
 
Retained earnings
$
797,985

 
$
(132
)
(3) 
$
797,853

Total stockholder's equity
$
771,963

 
$
(132
)
 
$
771,831

 
 
 
 
 
 
Total liabilities and stockholders' equity
$
2,104,063

 
$
2,873

 
$
2,106,936

(1)
Reclassification of estimated inventory expected to be returned by customers through future sales refund transactions. This amount was reclassified from the returns reserve (current liability) to a current asset. Prior to the Company's adoption of ASC 606, the Company's returns reserve (current liability) was reported net of the estimated inventory expected to be returned by customers through sales refund transactions.
(2)
Amount includes a reclassification of approximately $2.9 million for estimated inventory expected to be returned by customers and an adjustment of approximately $0.2 million for gift card liabilities.
(3)
Cumulative impact of approximately $0.6 million for after-tax adjustments to retained earnings at the beginning of fiscal 2016, offset by ASC 606 impact on fiscal 2017 and fiscal 2016 results of operations.
Disaggregation of Revenue
Disaggregation of Revenue
The Company sells its products directly to consumers ("direct-to-consumer") and to other retail companies and partners that subsequently sell the products directly to their own retail customers. The Company also earns royalties from its licensees. Disaggregated revenues from these sources for the third quarter and three quarters ended fiscal 2018 and 2017 were as follows:
 
 
Fiscal quarter ended September 29, 2018
(dollars in thousands)
 
U.S. Retail
 
U.S. Wholesale
 
International
 
Total
Wholesale channel
 
$
—

 
$
338,963

 
$
54,373

 
$
393,336

Direct-to-consumer
 
459,101

 
—

 
71,470

 
530,571

 
 
$
459,101

 
$
338,963

 
$
125,843

 
$
923,907

 
 
 
 
 
 
 
 
 
Royalty income
 
$
3,614

 
$
5,891

 
$
719

 
$
10,224

 
 
Three fiscal quarters ended September 29, 2018
(dollars in thousands)
 
U.S. Retail
 
U.S. Wholesale
 
International
 
Total
Wholesale channel
 
$
—

 
$
829,272

 
$
117,255

 
$
946,527

Direct-to-consumer
 
1,244,863

 
—

 
184,500

 
1,429,363

 
 
$
1,244,863

 
$
829,272

 
$
301,755

 
$
2,375,890

 
 
 
 
 
 
 
 
 
Royalty income
 
$
9,625

 
$
16,693

 
$
2,255

 
$
28,573

 
 
Fiscal quarter ended September 30, 2017
(dollars in thousands)
 
U.S. Retail
 
U.S. Wholesale
 
International
 
Total
Wholesale channel
 
$
—

 
$
369,577

 
$
55,524

 
$
425,101

Direct-to-consumer
 
453,843

 
—

 
69,102

 
522,945

 
 
$
453,843

 
$
369,577

 
$
124,626

 
$
948,046

 
 
 
 
 
 
 
 
 
Royalty income
 
$
3,038

 
$
6,648

 
$
664

 
$
10,350

 
 
Three fiscal quarters ended September 30, 2017
(dollars in thousands)
 
U.S. Retail
 
U.S. Wholesale
 
International
 
Total
Wholesale channel
 
$
—

 
$
879,842

 
$
112,827

 
$
992,669

Direct-to-consumer
 
1,209,143

 
—

 
170,812

 
1,379,955

 
 
$
1,209,143

 
$
879,842

 
$
283,639

 
$
2,372,624

 
 
 
 
 
 
 
 
 
Royalty income
 
$
11,201

 
$
18,153

 
$
2,764

 
$
32,118


Accounts Receivable from Customers and Licensees
The components of Accounts receivable, net, were as follows:
(dollars in thousands)
 
September 29, 2018
 
December 30, 2017
 
September 30, 2017
Trade receivables from wholesale customers, net
 
$
281,190

 
$
229,968

 
$
274,238

Royalties receivable
 
9,667

 
9,818

 
9,331

Tenant allowances and other receivables
 
14,165

 
14,511

 
13,863

Total gross receivables
 
$
305,022

 
$
254,297

 
$
297,432

Less:
 
 
 
 
 
 
Wholesale accounts receivable reserves
 
(11,533
)
 
(13,736
)
 
(11,781
)
Accounts receivable, net
 
$
293,489

 
$
240,561

 
$
285,651
Contract Liabilities
Contract Assets and Liabilities
The Company's contract assets are not material.
Contract Liabilities
The Company recognizes a contract liability when it has received consideration from the customer and has a future obligation to transfer goods to the customer. Total contract liabilities consisted of the following amounts:        
(dollars in thousands)
September 29, 2018
 
December 30, 2017
 
September 30, 2017
Contract liabilities-current:


 


 
 
Unredeemed gift cards
$
11,304

 
$
11,945

 
$
10,236

Unredeemed customer loyalty rewards
8,441

 
7,355

 
8,485

Total contract liabilities-current(*)
$
19,745

 
$
19,300

 
$
18,721

*
Included with Other current liabilities on the Company's consolidated balance sheet.