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Revenue
 9 Months Ended
Nov. 02, 2024
Revenue from Contract with Customer [Abstract]  
Revenue

Note 7 – Revenue

Disaggregation of Net Sales by Product Category

Net Sales and percentage of Net Sales, disaggregated by product category, for the thirteen and thirty-nine weeks ended November 2, 2024 and October 28, 2023 were as follows:

 

(In thousands)

 

Thirteen Weeks
Ended November 2, 2024

 

 

Thirteen Weeks
Ended October 28, 2023

 

Non-Athletics:

 

 

 

 

 

 

 

 

 

 

 

 

Women’s

 

$

65,008

 

 

 

21

%

 

$

72,850

 

 

 

23

%

Men’s

 

 

52,180

 

 

 

17

 

 

 

47,324

 

 

 

15

 

Children’s

 

 

19,963

 

 

 

6

 

 

 

23,954

 

 

 

7

 

Total

 

 

137,151

 

 

 

44

 

 

 

144,128

 

 

 

45

 

 

 

 

 

 

 

 

 

 

 

 

 

Athletics:

 

 

 

 

 

 

 

 

 

 

 

 

Women’s

 

 

51,005

 

 

 

17

 

 

 

48,642

 

 

 

15

 

Men’s

 

 

53,599

 

 

 

17

 

 

 

54,148

 

 

 

17

 

Children’s

 

 

46,202

 

 

 

15

 

 

 

53,009

 

 

 

17

 

Total

 

 

150,806

 

 

 

49

 

 

 

155,799

 

 

 

49

 

 

 

 

 

 

 

 

 

 

 

 

 

Accessories

 

 

17,346

 

 

 

6

 

 

 

18,295

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

1,582

 

 

 

1

 

 

 

1,692

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

306,885

 

 

 

100

%

 

$

319,914

 

 

 

100

%

 

 

(In thousands)

 

Thirty-nine Weeks
Ended November 2, 2024

 

 

Thirty-nine Weeks
Ended October 28, 2023

 

Non-Athletics:

 

 

 

 

 

 

 

 

 

 

 

 

Women’s

 

$

226,821

 

 

 

24

%

 

$

233,355

 

 

 

26

%

Men’s

 

 

160,036

 

 

 

17

 

 

 

142,420

 

 

 

16

 

Children’s

 

 

64,602

 

 

 

7

 

 

 

67,800

 

 

 

8

 

Total

 

 

451,459

 

 

 

48

 

 

 

443,575

 

 

 

50

 

 

 

 

 

 

 

 

 

 

 

 

 

Athletics:

 

 

 

 

 

 

 

 

 

 

 

 

Women’s

 

 

150,836

 

 

 

16

 

 

 

132,028

 

 

 

15

 

Men’s

 

 

162,384

 

 

 

17

 

 

 

151,280

 

 

 

17

 

Children’s

 

 

119,738

 

 

 

13

 

 

 

117,051

 

 

 

13

 

Total

 

 

432,958

 

 

 

46

 

 

 

400,359

 

 

 

45

 

 

 

 

 

 

 

 

 

 

 

 

 

Accessories

 

 

51,230

 

 

 

5

 

 

 

47,724

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

4,299

 

 

 

1

 

 

 

4,055

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

939,946

 

 

 

100

%

 

$

895,713

 

 

 

100

%

Accounting Policy and Performance Obligations

We operate as an omnichannel, family footwear retailer and provide the convenience of shopping at our physical stores or shopping online through our e-commerce sales channels. As part of our omnichannel 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 sales channels in which the customer chooses home delivery, we transfer control and recognize revenue when the product is shipped. 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. 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.

We accept various forms of payment from customers at the point of sale typical for an omnichannel retailer. 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 Shoes 2U was not material to our consolidated financial statements at November 2, 2024, February 3, 2024 or October 28, 2023.

Returns and Refunds

We have established an allowance based upon historical experience in order to estimate return and refund 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 Inventories is recorded as a reduction to Cost of Sales and an increase in Merchandise Inventories. Approximately $962,000 of refund liabilities and $618,000 of right of return assets associated with estimated product returns were recorded in Accrued and Other Liabilities and Merchandise Inventories, respectively, as of November 2, 2024 and February 3, 2024. Approximately $866,000 of refund liabilities and $503,000 of right of return assets associated with estimated product returns were recorded in Accrued and Other Liabilities and Merchandise Inventories, respectively, at October 28, 2023.

Contract Liabilities

The issuance of a gift card is recorded as an increase to contract liabilities 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 November 2, 2024, February 3, 2024 and October 28, 2023, approximately $2.4 million, $2.4 million and $1.8 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 recognized in Net Sales was not material to any of the periods presented.

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 through any of our omnichannel points of sale. Once a certain threshold of accumulated points is reached, the customer earns a reward certificate, which is redeemable through any of our sales channels.

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 November 2, 2024, approximately $943,000 and $2.5 million, respectively, of loyalty rewards were recognized in Net Sales. During the thirteen and thirty-nine weeks ended October 28, 2023, approximately $1.6 million and $4.3 million, respectively, of loyalty rewards were recognized in Net Sales. At November 2, 2024, February 3, 2024 and October 28, 2023, approximately $613,000, $481,000 and $956,000, 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.