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Revenue
 9 Months Ended
Oct. 31, 2020
Revenue From Contract With Customer [Abstract]  
Revenue

Note 6 – Revenue

Disaggregation of Revenue by Product Category

 

Revenue is disaggregated by product category below. Net sales and percentage of net sales for the thirteen and thirty-nine weeks ended October 31, 2020 and November 2, 2019 were as follows:

 

(In thousands)

 

Thirteen Weeks

Ended October 31, 2020

 

 

Thirteen Weeks

Ended November 2, 2019

 

Non-Athletics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Women’s

 

$

54,164

 

 

 

20

%

 

$

61,126

 

 

 

22

%

Men’s

 

 

34,676

 

 

 

13

 

 

 

35,446

 

 

 

13

 

Children’s

 

 

15,145

 

 

 

5

 

 

 

14,713

 

 

 

5

 

Total

 

 

103,985

 

 

 

38

 

 

 

111,285

 

 

 

40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Athletics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Women’s

 

 

50,935

 

 

 

19

 

 

 

46,742

 

 

 

17

 

Men’s

 

 

59,355

 

 

 

22

 

 

 

56,112

 

 

 

20

 

Children’s

 

 

43,662

 

 

 

16

 

 

 

46,081

 

 

 

17

 

Total

 

 

153,952

 

 

 

57

 

 

 

148,935

 

 

 

54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accessories and Other

 

 

16,642

 

 

 

5

 

 

 

14,425

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

274,579

 

 

 

100

%

 

$

274,645

 

 

 

100

%

 

 

(In thousands)

 

Thirty-nine Weeks

Ended October 31, 2020

 

 

Thirty-nine Weeks

Ended November 2, 2019

 

Non-Athletics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Women’s

 

$

148,252

 

 

 

21

%

 

$

187,834

 

 

 

24

%

Men’s

 

 

95,710

 

 

 

13

 

 

 

111,417

 

 

 

14

 

Children’s

 

 

38,698

 

 

 

5

 

 

 

40,649

 

 

 

5

 

Total

 

 

282,660

 

 

 

39

 

 

 

339,900

 

 

 

43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Athletics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Women’s

 

 

139,808

 

 

 

19

 

 

 

139,457

 

 

 

18

 

Men’s

 

 

163,757

 

 

 

23

 

 

 

166,253

 

 

 

21

 

Children’s

 

 

95,743

 

 

 

13

 

 

 

112,605

 

 

 

14

 

Total

 

 

399,308

 

 

 

55

 

 

 

418,315

 

 

 

53

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accessories and Other

 

 

40,900

 

 

 

6

 

 

 

38,461

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

722,868

 

 

 

100

%

 

$

796,676

 

 

 

100

%

 

Accounting Policy and Performance Obligations

We operate as a multi-channel, family footwear retailer and provide the convenience of shopping at our physical stores or shopping online through our e-commerce and mobile platforms.  As part of our multi-channel strategy, we offer Shoes 2U, a program that enables us to ship product to a customer’s home or selected store if the product is not in stock at a particular store.  We also offer “buy online, pick up in store” services for our customers.  “Buy online, pick up in store” provides the convenience of local pickup for our customers.

For our physical stores, we satisfy our performance obligation and control is transferred at the point of sale when the customer takes possession of the products.  This also includes the “buy online, pick up in store” scenario described above and includes sales made via our Shoes 2U program when customers choose to pick up their goods at a physical store.  For sales made through our e-commerce site or mobile app in which the customer chooses home delivery, we transfer control and recognize revenue when the product is shipped from our stores or distribution center.  This also includes sales made via our Shoes 2U program when the customer chooses home delivery.

We offer our customers sales incentives including coupons, discounts, and free merchandise.  Sales are recorded net of such incentives and returns and allowances.  If an incentive involves free merchandise, that merchandise is recorded as a zero sale and the cost is included in cost of sales.  Gift card revenue is recognized at the time of redemption.  When a customer makes a purchase as part of our rewards program, we allocate the transaction price between the goods purchased and the loyalty reward points and recognize the loyalty revenue based on estimated customer redemptions.

Transaction Price and Payment Terms

The transaction price is the amount of consideration we expect to receive from our customers and is reduced by any stated promotional discounts at the time of purchase.  The transaction price may be variable due to terms that permit customers to exchange or return products for a refund within a limited period of time.  The implicit contract with the customer reflected in the transaction receipt states the final terms of the sale, including the description, quantity, and price of each product purchased.  The customer agrees to a stated price in the contract that does not vary over the term of the contract and may include revenue to offset shipping costs.  Taxes imposed by governmental authorities such as sales taxes are excluded from net sales.  

Our physical stores accept various forms of payment from customers at the point of sale.  These include cash, checks, credit/debit cards and gift cards.  Our e-commerce and mobile platforms accept credit/debit cards, PayPal, Apple Pay, Klarna and gift cards as forms of payment.  Payments made for products are generally collected when control passes to the customer, either at the point of sale or at the time the customer order is shipped.  For Shoes 2U transactions, customers may order the product at the point of sale.  For these transactions, customers pay in advance and unearned revenue is recorded as a contract liability.  We recognize the related revenue when control has been transferred to the customer (i.e., when the product is picked up by the customer or shipped to the customer).  Unearned revenue related to our Shoes 2U program was not material to our Condensed Consolidated Financial Statements at October 31, 2020, February 1, 2020 and November 2, 2019.

Returns and Refunds

Customers can exchange or return products for a refund within a limited period of time.  We have established a returns allowance based upon historical experience in order to estimate these transactions.  This allowance is recorded as a reduction in sales with a corresponding refund liability recorded in accrued and other liabilities.  The estimated cost of merchandise inventory is recorded as a reduction to cost of sales and an increase in merchandise inventories.  Approximately $718,000 of refund liabilities and $500,000 of right of return assets associated with estimated product returns were recorded in accrued and other liabilities at each of October 31, 2020 and February 1, 2020.  Approximately $600,000 of refund liabilities and $410,000 of right of return assets associated with estimated product returns were recorded in accrued and other liabilities at November 2, 2019.

Contract Liabilities

We offer gift cards in our stores and through our e-commerce and mobile platforms.  When a gift card is issued, the issuance is recorded as an increase to contract liabilities at the time of issuance and a decrease to contract liabilities when a customer redeems a gift card.  Estimated breakage is determined based on historical breakage percentages and recognized as revenue based on expected gift card usage.  We do not record breakage revenue when escheat liability to relevant jurisdictions exists.  At October 31, 2020, February 1, 2020 and November 2, 2019, approximately $1.2 million, $1.5 million and $1.1 million of contract liabilities associated with unredeemed gift cards were recorded in accrued and other liabilities, respectively.  We expect the revenue associated with these liabilities to be recognized in proportion to the pattern of customer redemptions within two years.  Breakage revenue associated with our gift cards of $27,000 and $69,000 was recognized in net sales during the thirteen and thirty-nine weeks ended October 31, 2020, respectively. Breakage revenue associated with our gift cards of $29,000 and $91,000 was recognized in net sales during the thirteen and thirty-nine weeks ended November 2, 2019, respectively.  

Our Shoe Perks rewards program allows customers to accrue points and provides customers with the opportunity to earn rewards.  Points under Shoe Perks are earned primarily by making purchases either in-store or through our online platform.  Once a certain threshold of accumulated points is reached, the customer earns a reward certificate, which is redeemable at any of our stores or online.

When a Shoe Perks customer makes a purchase, we allocate the transaction price between the goods purchased and the loyalty reward points earned based on the relative standalone selling price.  The portion allocated to the points program is recorded as a contract liability for rewards that are expected to be redeemed.  We then recognize revenue based on an estimate of when customers redeem rewards, which incorporates an estimate of points expected to expire using historical rates.  During the thirteen and thirty-nine weeks ended October 31, 2020, approximately $1.3 million and $3.2 million, respectively, of loyalty rewards were recognized in net sales.  During the thirteen and thirty-nine weeks ended November 2, 2019, approximately $632,000 and $1.5 million, respectively, of loyalty rewards were recognized in net sales.  At October 31, 2020, February 1, 2020 and November 2, 2019, approximately $828,000, $679,000 and $533,000, respectively, of contract liabilities associated with loyalty rewards were recorded in accrued and other liabilities. We expect the revenue associated with these liabilities to be recognized in proportion to the pattern of customer redemptions in less than one year.