Earnings (Loss) Per Share Attributable to Common Stockholders

9 Months Ended

May 02, 2020

Earnings (Loss) Per Share Attributable to Common Stockholders

Basic and diluted earnings (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. We consider convertible preferred stock and early exercised share options to be participating securities. In connection with our IPO, we established two classes of authorized common stock: Class A common stock and Class B common stock. As a result, all then-outstanding shares of common stock were converted into shares of Class B common stock upon effectiveness of our IPO. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting, conversion, and transfer rights. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into one share of Class A common stock.

Undistributed earnings allocated to participating securities are subtracted from net income (loss) in determining net income (loss) attributable to common stockholders. Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. All participating securities are excluded from basic weighted-average common shares outstanding.

For the calculation of diluted earnings (loss) per share (“EPS”), net income (loss) attributable to common stockholders for basic EPS is adjusted by the effect of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding, including all potentially dilutive common shares. The undistributed earnings are allocated based on the contractual participation rights of the Class A and Class B common shares as if the earnings for the year have been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The computation of the diluted net income (loss) per share of Class A common stock assumes the conversion of Class B common stock, while diluted net income (loss) per share of Class B common stock does not assume the conversion of Class A common stock as Class A common stock is not convertible into Class B common stock.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted EPS attributable to common stockholders is as follows:


	For the Three Months Ended
	May 2, 2020						April 27, 2019
(in thousands, except share and per share amounts)	Class A		Class B		Class A		Class B
Numerator:
Net income (loss)	$	(18,714)	$	(15,189)	$	3,286	$	3,762

Less: undistributed earnings to participating securities	—		—		—		—
Net income (loss) attributable to common stockholders - basic	(18,714)		(15,189)		3,286		3,762


Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares	—		—		3,762		—
Reallocation of undistributed earnings (loss) to Class B shares	—		—		—		45
Net income (loss) attributable to common stockholders - diluted	$	(18,714)	$	(15,189)	$	7,048	$	3,807
Denominator:
Weighted-average shares of common stock - basic	56,661,027		45,989,128		46,770,816		53,530,262
Conversion of Class B to Class A common shares outstanding	—		—		53,530,262		—
Effect of dilutive stock options and restricted stock units	—		—		3,314,081		2,492,226

Weighted-average shares of common stock - diluted	56,661,027		45,989,128		103,615,159		56,022,488
Earnings (loss) per share attributable to common stockholders:
Basic	$	(0.33)	$	(0.33)	$	0.07	$	0.07
Diluted	$	(0.33)	$	(0.33)	$	0.07	$	0.07


	For the Nine Months Ended
	May 2, 2020						April 27, 2019
(in thousands, except share and per share amounts)	Class A		Class B		Class A		Class B
Numerator:
Net income (loss)	$	(12,370)	$	(10,280)	$	12,680	$	17,022

Less: undistributed earnings to participating securities	—		—		(9)		(12)
Net income (loss) attributable to common stockholders - basic	(12,370)		(10,280)		12,671		17,010

Add: adjustments to undistributed earnings to participating securities	—		—		1		—
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	—		—		17,010		—
Reallocation of undistributed earnings to Class B shares	—		—		—		236
Net income (loss) attributable to common stockholders - diluted	$	(12,370)	$	(10,280)	$	29,682	$	17,246
Denominator:
Weighted-average shares of common stock - basic	55,754,290		46,330,439		42,526,494		57,092,932
Conversion of Class B to Class A common shares outstanding	—		—		57,092,932		—
Effect of dilutive stock options and restricted stock units	—		—		3,956,276		3,086,758

Weighted-average shares of common stock - diluted	55,754,290		46,330,439		103,575,702		60,179,690
Earnings (loss) per share attributable to common stockholders:
Basic	$	(0.22)	$	(0.22)	$	0.30	$	0.30
Diluted	$	(0.22)	$	(0.22)	$	0.29	$	0.29

The following common stock equivalents were excluded from the computation of diluted earnings (loss) per share for the periods presented because including them would have been antidilutive:


	For the Three Months Ended			For the Nine Months Ended
	May 2, 2020	April 27, 2019	May 2, 2020	April 27, 2019


Restricted stock units	8,625,483	1,563,723	8,027,468	2,378,821
Stock options to purchase Class A common stock	3,064,975	1,456,543	3,002,050	1,425,213
Stock options to purchase Class B common stock	3,751,705	1,200,479	3,745,626	1,047,268
Total	15,442,163	4,220,745	14,775,144	4,851,302