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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Carters Inc | NYSE:CRI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.365 | -0.52% | 69.415 | 69.8627 | 69.17 | 69.77 | 8,899 | 14:42:22 |
x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2018 OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____
TO ______
|
Delaware
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|
13-3912933
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(state or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
|
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Common Stock
|
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Outstanding Shares at April 20, 2018
|
|
Common stock, par value $0.01 per share
|
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46,940,990
|
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Page
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Unaudited Condensed Consolidated Balance Sheets as of March 31, 2018, December 30, 2017 and April 1, 2017
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Unaudited Condensed Consolidated Statements of Operations for the fiscal quarter ended March 31, 2018 and April 1, 2017
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Unaudited Condensed Consolidated Statements of Comprehensive Income for the fiscal quarter ended March 31, 2018 and April 1, 2017
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Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity for the fiscal quarter ended March 31, 2018
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Unaudited Condensed Consolidated Statements of Cash Flows for the fiscal quarter ended March 31, 2018 and April 1, 2017
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Item 1
|
||
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|||
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|||
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Item 3
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Defaults upon Senior Securities
|
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|||
|
|||
|
|||
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March 31, 2018
|
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December 30, 2017
|
|
April 1, 2017
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
180,256
|
|
|
$
|
178,494
|
|
|
$
|
154,278
|
|
Accounts receivable, net
|
221,186
|
|
|
240,561
|
|
|
206,707
|
|
|||
Finished goods inventories
|
479,344
|
|
|
548,722
|
|
|
434,712
|
|
|||
Prepaid expenses and other current assets
|
54,297
|
|
|
52,935
|
|
|
48,396
|
|
|||
Total current assets
|
935,083
|
|
|
1,020,712
|
|
|
844,093
|
|
|||
Property, plant, and equipment, net of accumulated depreciation of $416,153, $404,173, and $365,733, respectively
|
369,064
|
|
|
377,924
|
|
|
386,275
|
|
|||
Tradenames, net
|
365,506
|
|
|
365,551
|
|
|
365,684
|
|
|||
Goodwill
|
230,008
|
|
|
230,424
|
|
|
232,925
|
|
|||
Customer relationships, net
|
47,369
|
|
|
47,996
|
|
|
35,695
|
|
|||
Other assets
|
28,176
|
|
|
28,435
|
|
|
23,034
|
|
|||
Total assets
|
$
|
1,975,206
|
|
|
$
|
2,071,042
|
|
|
$
|
1,887,706
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
116,310
|
|
|
$
|
182,114
|
|
|
$
|
101,386
|
|
Other current liabilities
|
109,626
|
|
|
149,134
|
|
|
125,634
|
|
|||
Total current liabilities
|
225,936
|
|
|
331,248
|
|
|
227,020
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt, net
|
617,541
|
|
|
617,306
|
|
|
581,621
|
|
|||
Deferred income taxes
|
87,422
|
|
|
84,944
|
|
|
133,652
|
|
|||
Other long-term liabilities
|
189,493
|
|
|
180,128
|
|
|
173,280
|
|
|||
Total liabilities
|
$
|
1,120,392
|
|
|
$
|
1,213,626
|
|
|
$
|
1,115,573
|
|
|
|
|
|
|
|
||||||
Commitments and contingencies - Note 14
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Stockholders' equity:
|
|
|
|
|
|
||||||
Preferred stock; par value $.01 per share; 100,000 shares authorized; none issued or outstanding at March 31, 2018, December 30, 2017, and April 1, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock, voting; par value $.01 per share; 150,000,000 shares authorized; 47,113,576, 47,178,346 and 48,517,417 shares issued and outstanding at March 31, 2018, December 30, 2017 and April 1, 2017, respectively
|
471
|
|
|
472
|
|
|
485
|
|
|||
Accumulated other comprehensive loss
|
(30,855
|
)
|
|
(29,093
|
)
|
|
(33,793
|
)
|
|||
Retained earnings
|
885,198
|
|
|
886,037
|
|
|
805,441
|
|
|||
Total stockholders' equity
|
854,814
|
|
|
857,416
|
|
|
772,133
|
|
|||
Total liabilities and stockholders' equity
|
$
|
1,975,206
|
|
|
$
|
2,071,042
|
|
|
$
|
1,887,706
|
|
|
Fiscal quarter ended
|
||||||
|
March 31, 2018
|
|
April 1, 2017
|
||||
Net sales
|
$
|
755,786
|
|
|
$
|
732,827
|
|
Cost of goods sold
|
423,309
|
|
|
417,135
|
|
||
Gross profit
|
332,477
|
|
|
315,692
|
|
||
Royalty income, net
|
7,994
|
|
|
10,558
|
|
||
Selling, general, and administrative expenses
|
280,162
|
|
|
247,794
|
|
||
Operating income
|
60,309
|
|
|
78,456
|
|
||
Interest expense
|
7,985
|
|
|
7,104
|
|
||
Interest income
|
(166
|
)
|
|
(139
|
)
|
||
Other income, net
|
(382
|
)
|
|
(221
|
)
|
||
Income before income taxes
|
52,872
|
|
|
71,712
|
|
||
Provision for income taxes
|
10,403
|
|
|
25,117
|
|
||
Net income
|
$
|
42,469
|
|
|
$
|
46,595
|
|
|
|
|
|
||||
Basic net income per common share
|
$
|
0.90
|
|
|
$
|
0.96
|
|
Diluted net income per common share
|
$
|
0.89
|
|
|
$
|
0.95
|
|
Dividend declared and paid per common share
|
$
|
0.45
|
|
|
$
|
0.37
|
|
|
Fiscal quarter ended
|
||||||
|
March 31, 2018
|
|
April 1, 2017
|
||||
Net income
|
$
|
42,469
|
|
|
$
|
46,595
|
|
Other comprehensive income:
|
|
|
|
||||
Foreign currency translation adjustments
|
(1,762
|
)
|
|
947
|
|
||
Comprehensive income
|
$
|
40,707
|
|
|
$
|
47,542
|
|
|
Common stock - shares
|
|
Common
stock - $
|
|
Additional
paid-in
capital
|
|
Accumulated other comprehensive
loss
|
|
Retained
earnings
|
|
Total
stockholders’
equity
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 30, 2017
|
47,178,346
|
|
|
$
|
472
|
|
|
$
|
—
|
|
|
$
|
(29,093
|
)
|
|
$
|
886,037
|
|
|
$
|
857,416
|
|
Exercise of stock options
|
95,006
|
|
|
1
|
|
|
4,768
|
|
|
—
|
|
|
—
|
|
|
4,769
|
|
|||||
Withholdings from vesting of restricted stock
|
(55,164
|
)
|
|
(1
|
)
|
|
(6,582
|
)
|
|
—
|
|
|
—
|
|
|
(6,583
|
)
|
|||||
Restricted stock activity
|
116,701
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
4,944
|
|
|
—
|
|
|
—
|
|
|
4,944
|
|
|||||
Repurchase of common stock
|
(221,313
|
)
|
|
(2
|
)
|
|
(3,129
|
)
|
|
—
|
|
|
(22,064
|
)
|
|
(25,195
|
)
|
|||||
Cash dividends declared and paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,244
|
)
|
|
(21,244
|
)
|
|||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,762
|
)
|
|
42,469
|
|
|
40,707
|
|
|||||
Balance at March 31, 2018
|
47,113,576
|
|
|
$
|
471
|
|
|
$
|
—
|
|
|
$
|
(30,855
|
)
|
|
$
|
885,198
|
|
|
$
|
854,814
|
|
|
Fiscal quarter ended
|
||||||
|
March 31, 2018
|
|
April 1, 2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
42,469
|
|
|
$
|
46,595
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation of property, plant, and equipment
|
21,137
|
|
|
19,513
|
|
||
Amortization of intangible assets
|
921
|
|
|
250
|
|
||
Amortization of debt issuance costs
|
431
|
|
|
373
|
|
||
Stock-based compensation expense
|
4,944
|
|
|
4,779
|
|
||
Unrealized foreign currency exchange gain, net
|
(353
|
)
|
|
(62
|
)
|
||
Provisions for doubtful accounts receivable from customers
|
11,051
|
|
|
(1,651
|
)
|
||
Loss on disposal of property, plant, and equipment, net of recoveries
|
350
|
|
|
189
|
|
||
Deferred income taxes
|
2,968
|
|
|
3,451
|
|
||
Effect of changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
8,623
|
|
|
17,898
|
|
||
Finished goods inventories
|
68,294
|
|
|
82,086
|
|
||
Prepaid expenses and other assets
|
(1,970
|
)
|
|
(15,008
|
)
|
||
Accounts payable and other liabilities
|
(94,758
|
)
|
|
(74,233
|
)
|
||
Net cash provided by operating activities
|
64,107
|
|
|
84,180
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(14,744
|
)
|
|
(17,991
|
)
|
||
Acquisitions of businesses, net of cash acquired
|
—
|
|
|
(143,704
|
)
|
||
Disposals and recoveries from property, plant, and equipment
|
373
|
|
|
—
|
|
||
Net cash used in investing activities
|
(14,371
|
)
|
|
(161,695
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings under secured revolving credit facility
|
50,000
|
|
|
20,000
|
|
||
Payments on secured revolving credit facility
|
(50,000
|
)
|
|
(18,965
|
)
|
||
Repurchases of common stock
|
(25,195
|
)
|
|
(46,627
|
)
|
||
Dividends paid
|
(21,244
|
)
|
|
(17,998
|
)
|
||
Withholdings from vestings of restricted stock
|
(6,583
|
)
|
|
(5,552
|
)
|
||
Proceeds from exercises of stock options
|
4,769
|
|
|
1,626
|
|
||
Net cash used in financing activities
|
(48,253
|
)
|
|
(67,516
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
279
|
|
|
(49
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
1,762
|
|
|
(145,080
|
)
|
||
Cash and cash equivalents, beginning of period
|
178,494
|
|
|
299,358
|
|
||
Cash and cash equivalents, end of period
|
$
|
180,256
|
|
|
$
|
154,278
|
|
1)
|
Identify the contract with the customer
|
2)
|
Identity the performance obligation(s)
|
3)
|
Determine the transaction price
|
4)
|
Allocate the transaction price to each performance obligation if multiple obligations exist
|
5)
|
Recognize the revenue as the performance obligations are satisfied
|
•
|
Accelerated the recognition of breakage revenue from unredeemed gift cards, which affected net sales, gross profit, income before income taxes, and net income on the Company's statement of operations. Basic and diluted net income per share were affected by
$0.01
or less for each reporting period. Related gift card liabilities and income tax liabilities were also affected.
|
•
|
A portion of the estimated value of goods expected to be returned by customers were reclassified between net sales and cost of goods sold, with no net effect on gross profit, income before income taxes, or net income on the Company's statement of operations. Related reclassifications were also made between other current assets and other current liabilities on the Company's balance sheet.
|
|
|
First Quarter
|
|
Year
|
|
Year
|
||||||
(dollars in thousands, except per share data)
|
|
Fiscal 2017
|
|
Fiscal 2017
|
|
Fiscal 2016
|
||||||
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
72
|
|
|
$
|
92
|
|
|
$
|
(637
|
)
|
Cost of goods sold
|
|
$
|
182
|
|
|
$
|
52
|
|
|
$
|
(7
|
)
|
Income before income taxes
|
|
$
|
(110
|
)
|
|
$
|
40
|
|
|
$
|
(630
|
)
|
Net income
|
|
$
|
(69
|
)
|
|
$
|
84
|
|
|
(397
|
)
|
|
|
|
|
|
|
|
|
||||||
Basic net income per common share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
Diluted net income per common share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
First Quarter Fiscal 2018
|
||||||||||||||
(dollars in thousands)
|
|
U.S. Retail
|
|
U.S. Wholesale
|
|
International
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Wholesale channel
|
|
$
|
—
|
|
|
$
|
280,832
|
|
|
$
|
37,713
|
|
|
$
|
318,545
|
|
Direct-to-consumer
|
|
383,742
|
|
|
—
|
|
|
53,499
|
|
|
437,241
|
|
||||
|
|
$
|
383,742
|
|
|
$
|
280,832
|
|
|
$
|
91,212
|
|
|
$
|
755,786
|
|
|
|
|
|
|
|
|
|
|
||||||||
Royalty income
|
|
$
|
1,585
|
|
|
$
|
5,845
|
|
|
$
|
564
|
|
|
$
|
7,994
|
|
|
|
First Quarter Fiscal 2017
|
||||||||||||||
(dollars in thousands)
|
|
U.S. Retail
|
|
U.S. Wholesale
|
|
International
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Wholesale channel
|
|
$
|
—
|
|
|
$
|
292,555
|
|
|
$
|
29,682
|
|
|
$
|
322,237
|
|
Direct-to-consumer
|
|
363,842
|
|
|
—
|
|
|
46,748
|
|
|
410,590
|
|
||||
|
|
$
|
363,842
|
|
|
$
|
292,555
|
|
|
$
|
76,430
|
|
|
$
|
732,827
|
|
|
|
|
|
|
|
|
|
|
||||||||
Royalty income
|
|
$
|
3,268
|
|
|
$
|
6,364
|
|
|
$
|
926
|
|
|
$
|
10,558
|
|
(dollars in thousands)
|
March 31,
2018
|
|
December 30, 2017
|
|
April 1, 2017
|
||||||
|
|
|
|
|
|
||||||
Contract liabilities-current:
|
|
|
|
|
|
|
|
||||
Unredeemed gift cards
|
$
|
10,903
|
|
|
$
|
11,945
|
|
|
$
|
10,569
|
|
Unredeemed customer loyalty program coupons
|
3,571
|
|
|
2,743
|
|
|
6,293
|
|
|||
Total contract liabilities-current *
|
$
|
14,474
|
|
|
$
|
14,688
|
|
|
$
|
16,862
|
|
|
Fiscal 2018
|
|
Fiscal 2019
|
Thereafter
|
|
Total
|
||||||||
(in thousands)
|
|
|
|
|
|
|
||||||||
Unearned gift card breakage
|
$
|
389
|
|
|
$
|
111
|
|
$
|
23
|
|
|
$
|
523
|
|
(dollars in thousands)
|
March 31, 2018
|
|
December 30, 2017
|
|
April 1, 2017
|
||||||
Cumulative foreign currency translation adjustments
|
$
|
(23,047
|
)
|
|
$
|
(21,285
|
)
|
|
$
|
(26,677
|
)
|
Pension and post-retirement obligations (1)
|
(7,808
|
)
|
|
(7,808
|
)
|
|
(7,116
|
)
|
|||
Total accumulated other comprehensive loss
|
$
|
(30,855
|
)
|
|
$
|
(29,093
|
)
|
|
$
|
(33,793
|
)
|
|
|
|
March 31, 2018
|
|
December 30, 2017
|
||||||||||||||||||||
(dollars in thousands)
|
Weighted-average useful life
|
|
Gross amount
|
|
Accumulated amortization
|
|
Net amount
|
|
Gross amount
|
|
Accumulated amortization
|
|
Net amount
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Carter's goodwill
|
Indefinite
|
|
$
|
136,570
|
|
|
|
|
$
|
136,570
|
|
|
$
|
136,570
|
|
|
|
|
$
|
136,570
|
|
||||
Canada goodwill
|
Indefinite
|
|
41,106
|
|
|
|
|
41,106
|
|
|
42,223
|
|
|
|
|
42,223
|
|
||||||||
Skip Hop goodwill
|
Indefinite
|
|
46,022
|
|
|
|
|
46,022
|
|
|
45,997
|
|
|
|
|
45,997
|
|
||||||||
Carter's Mexico goodwill
|
Indefinite
|
|
6,310
|
|
|
|
|
6,310
|
|
|
5,634
|
|
|
|
|
5,634
|
|
||||||||
Total goodwill
|
|
|
$
|
230,008
|
|
|
|
|
$
|
230,008
|
|
|
$
|
230,424
|
|
|
|
|
$
|
230,424
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Carter's
tradename
|
Indefinite
|
|
$
|
220,233
|
|
|
|
|
$
|
220,233
|
|
|
$
|
220,233
|
|
|
|
|
$
|
220,233
|
|
||||
OshKosh
tradename
|
Indefinite
|
|
85,500
|
|
|
|
|
85,500
|
|
|
85,500
|
|
|
|
|
85,500
|
|
||||||||
Skip Hop
tradename
|
Indefinite
|
|
56,800
|
|
|
|
|
56,800
|
|
|
56,800
|
|
|
|
|
56,800
|
|
||||||||
Finite-life tradenames
|
2-20 years
|
|
3,550
|
|
|
$
|
577
|
|
|
2,973
|
|
|
3,550
|
|
|
$
|
532
|
|
|
3,018
|
|
||||
Total tradenames, net
|
|
|
$
|
366,083
|
|
|
$
|
577
|
|
|
$
|
365,506
|
|
|
$
|
366,083
|
|
|
$
|
532
|
|
|
$
|
365,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Skip Hop customer relationships
|
15 years
|
|
$
|
47,300
|
|
|
$
|
3,098
|
|
|
$
|
44,202
|
|
|
$
|
47,300
|
|
|
$
|
2,304
|
|
|
$
|
44,996
|
|
Carter's Mexico customer relationships
|
10 years
|
|
3,384
|
|
|
217
|
|
|
3,167
|
|
|
3,135
|
|
|
135
|
|
|
3,000
|
|
||||||
Total customer relationships, net
|
|
|
$
|
50,684
|
|
|
$
|
3,315
|
|
|
$
|
47,369
|
|
|
$
|
50,435
|
|
|
$
|
2,439
|
|
|
$
|
47,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 1, 2017
|
||||||||||
(dollars in thousands)
|
Weighted-average useful life
|
|
Gross amount
|
|
Accumulated amortization
|
|
Net amount
|
||||||
|
|
|
|
|
|
|
|
||||||
Carter's goodwill
|
Indefinite
|
|
$
|
136,570
|
|
|
|
|
$
|
136,570
|
|
||
Canada goodwill
|
Indefinite
|
|
39,800
|
|
|
|
|
39,800
|
|
||||
Skip Hop goodwill
|
Indefinite
|
|
56,555
|
|
|
|
|
56,555
|
|
||||
Total goodwill
|
|
|
$
|
232,925
|
|
|
|
|
$
|
232,925
|
|
||
|
|
|
|
|
|
|
|
||||||
Carter's
tradename
|
Indefinite
|
|
$
|
220,233
|
|
|
|
|
$
|
220,233
|
|
||
OshKosh
tradename
|
Indefinite
|
|
85,500
|
|
|
|
|
85,500
|
|
||||
Skip Hop
tradename
|
indefinite
|
|
56,800
|
|
|
|
|
56,800
|
|
||||
Finite-life tradenames
|
2-20 years
|
|
42,009
|
|
|
$
|
38,858
|
|
|
3,151
|
|
||
Total tradenames, net
|
|
|
$
|
404,542
|
|
|
$
|
38,858
|
|
|
$
|
365,684
|
|
|
|
|
|
|
|
|
|
||||||
Skip Hop customer relationships, net
|
15 years
|
|
$
|
35,900
|
|
|
$
|
205
|
|
|
$
|
35,695
|
|
|
|
|
|
|
|
|
|
|
Fiscal quarter ended
|
||||||
|
March 31, 2018
|
|
April 1, 2017
|
||||
Number of shares repurchased
|
221,313
|
|
|
543,944
|
|
||
Aggregate cost of shares repurchased (dollars in thousands)
|
$
|
25,195
|
|
|
$
|
46,627
|
|
Average price per share
|
$
|
113.84
|
|
|
$
|
85.72
|
|
(dollars in thousands)
|
March 31, 2018
|
|
December 30, 2017
|
|
April 1, 2017
|
||||||
Senior notes at amounts repayable
|
$
|
400,000
|
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Less unamortized issuance-related costs for senior notes
|
(3,459
|
)
|
|
(3,694
|
)
|
|
(4,379
|
)
|
|||
Senior notes, net
|
396,541
|
|
|
396,306
|
|
|
395,621
|
|
|||
Secured revolving credit facility
|
221,000
|
|
|
221,000
|
|
|
186,000
|
|
|||
Total long-term debt, net
|
$
|
617,541
|
|
|
$
|
617,306
|
|
|
$
|
581,621
|
|
|
Fiscal quarter ended
|
||||||
(dollars in thousands)
|
March 31, 2018
|
|
April 1, 2017
|
||||
Stock options
|
$
|
1,344
|
|
|
$
|
1,244
|
|
Restricted stock:
|
|
|
|
||||
Time-based awards
|
2,284
|
|
|
2,312
|
|
||
Performance-based awards
|
1,316
|
|
|
1,223
|
|
||
Total
|
$
|
4,944
|
|
|
$
|
4,779
|
|
|
March 31, 2018
|
|
|
December 30, 2017
|
|
|
April 1, 2017
|
||||||||||||||||||||||||||
(dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Investments (1)
|
$
|
16.7
|
|
|
—
|
|
|
—
|
|
|
|
$
|
16.7
|
|
|
—
|
|
|
—
|
|
|
|
$
|
14.8
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Contingent consideration (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
$
|
3.6
|
|
|
Fiscal quarter ended
|
||||||
|
March 31, 2018
|
|
April 1, 2017
|
||||
|
|
|
|
||||
Weighted-average number of common and common equivalent shares outstanding:
|
|
|
|
||||
Basic number of common shares outstanding
|
46,772,737
|
|
|
48,322,692
|
|
||
Dilutive effect of equity awards
|
618,678
|
|
|
554,994
|
|
||
Diluted number of common and common equivalent shares outstanding
|
47,391,415
|
|
|
48,877,686
|
|
||
|
|
|
|
||||
Basic net income per common share (in thousands, except per share data):
|
|
|
|
||||
Net income
|
$
|
42,469
|
|
|
$
|
46,595
|
|
Income allocated to participating securities
|
(325
|
)
|
|
(369
|
)
|
||
Net income available to common shareholders
|
$
|
42,144
|
|
|
$
|
46,226
|
|
|
|
|
|
||||
Basic net income per common share
|
$
|
0.90
|
|
|
$
|
0.96
|
|
|
|
|
|
||||
Diluted net income per common share (in thousands, except per share data):
|
|
|
|
||||
Net income
|
$
|
42,469
|
|
|
$
|
46,595
|
|
Income allocated to participating securities
|
(323
|
)
|
|
(367
|
)
|
||
Net income available to common shareholders
|
$
|
42,146
|
|
|
$
|
46,228
|
|
|
|
|
|
||||
Diluted net income per common share
|
$
|
0.89
|
|
|
$
|
0.95
|
|
|
|
|
|
||||
Anti-dilutive awards excluded from diluted earnings per share computation
|
137,980
|
|
|
530,697
|
|
(dollars in thousands)
|
March 31, 2018
|
|
December 30, 2017
|
|
April 1, 2017
|
||||||
Accrued bonuses and incentive compensation
|
$
|
3,322
|
|
|
$
|
27,566
|
|
|
$
|
2,924
|
|
Income taxes payable
|
12,101
|
|
|
16,252
|
|
|
25,960
|
|
|||
Accrued salaries and wages
|
11,745
|
|
|
4,264
|
|
|
11,616
|
|
|||
Unredeemed gift cards
|
10,903
|
|
|
11,945
|
|
|
10,569
|
|
|||
Accrued employee benefits
|
9,443
|
|
|
21,735
|
|
|
8,453
|
|
|||
Accrued and deferred rent
|
18,093
|
|
|
18,213
|
|
|
17,022
|
|
(dollars in thousands)
|
March 31, 2018
|
|
December 30, 2017
|
|
April 1, 2017
|
||||||
Deferred lease incentives
|
$
|
74,608
|
|
|
$
|
75,104
|
|
|
$
|
74,447
|
|
|
Fiscal quarter ended
|
||||||||||||
(dollars in thousands)
|
March 31,
2018 |
|
% of
Total Net Sales |
|
April 1,
2017 |
|
% of
Total Net Sales |
||||||
Net sales
:
|
|
|
|
|
|
|
|
||||||
U.S. Wholesale
|
$
|
280,832
|
|
|
37.1
|
%
|
|
$
|
292,555
|
|
|
39.9
|
%
|
U.S. Retail
|
383,742
|
|
|
50.8
|
%
|
|
363,843
|
|
|
49.7
|
%
|
||
International
|
91,212
|
|
|
12.1
|
%
|
|
76,429
|
|
|
10.4
|
%
|
||
Total net sales
|
$
|
755,786
|
|
|
100.0
|
%
|
|
$
|
732,827
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
Operating income (loss)
:
|
|
|
% of
Segment
Net Sales
|
|
|
|
% of
Segment
Net Sales
|
||||||
U.S. Wholesale (a)
|
$
|
50,272
|
|
|
17.9
|
%
|
|
$
|
69,695
|
|
|
23.8
|
%
|
U.S. Retail (b)
|
29,518
|
|
|
7.7
|
%
|
|
29,790
|
|
|
8.2
|
%
|
||
International
|
3,762
|
|
|
4.1
|
%
|
|
3,685
|
|
|
4.8
|
%
|
||
Corporate expenses (c) (d)
|
(23,243
|
)
|
|
|
|
|
(24,714
|
)
|
|
|
|
||
Total operating income
|
$
|
60,309
|
|
|
8.0
|
%
|
|
$
|
78,456
|
|
|
10.7
|
%
|
(a)
|
Includes approximately
$12.8 million
of charges related to a customer bankruptcy.
|
(b)
|
Includes insurance recoveries of approximately
$0.4 million
associated with storm-related store closures.
|
(c)
|
Corporate expenses include expenses related to incentive compensation, stock-based compensation, executive management, severance and relocation, finance, office occupancy, information technology, certain legal fees, consulting, and audit fees.
|
|
|
Fiscal quarter ended
|
||
(dollars in millions)
|
|
April 1,
2017 |
||
Direct sourcing initiative
|
|
$
|
239
|
|
Acquisition-related costs
|
|
$
|
1,633
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
460,986
|
|
|
$
|
426,463
|
|
|
$
|
84,597
|
|
|
$
|
(216,260
|
)
|
|
$
|
755,786
|
|
Cost of goods sold
|
—
|
|
|
329,999
|
|
|
251,082
|
|
|
45,601
|
|
|
(203,373
|
)
|
|
423,309
|
|
||||||
Gross profit
|
—
|
|
|
130,987
|
|
|
175,381
|
|
|
38,996
|
|
|
(12,887
|
)
|
|
332,477
|
|
||||||
Royalty income, net
|
—
|
|
|
6,927
|
|
|
3,820
|
|
|
—
|
|
|
(2,753
|
)
|
|
7,994
|
|
||||||
Selling, general, and administrative expenses
|
—
|
|
|
41,816
|
|
|
215,166
|
|
|
31,502
|
|
|
(8,322
|
)
|
|
280,162
|
|
||||||
Operating income (loss)
|
—
|
|
|
96,098
|
|
|
(35,965
|
)
|
|
7,494
|
|
|
(7,318
|
)
|
|
60,309
|
|
||||||
Interest expense
|
—
|
|
|
7,975
|
|
|
1,327
|
|
|
10
|
|
|
(1,327
|
)
|
|
7,985
|
|
||||||
Interest income
|
—
|
|
|
(1,342
|
)
|
|
—
|
|
|
(151
|
)
|
|
1,327
|
|
|
(166
|
)
|
||||||
(Income) loss in subsidiaries
|
(42,469
|
)
|
|
26,012
|
|
|
(6,588
|
)
|
|
—
|
|
|
23,045
|
|
|
—
|
|
||||||
Other expense (income), net
|
—
|
|
|
21
|
|
|
11
|
|
|
(414
|
)
|
|
—
|
|
|
(382
|
)
|
||||||
Income (loss) before income taxes
|
42,469
|
|
|
63,432
|
|
|
(30,715
|
)
|
|
8,049
|
|
|
(30,363
|
)
|
|
52,872
|
|
||||||
Provision (benefit) for income taxes
|
—
|
|
|
13,645
|
|
|
(4,703
|
)
|
|
1,461
|
|
|
—
|
|
|
10,403
|
|
||||||
Net income (loss)
|
$
|
42,469
|
|
|
$
|
49,787
|
|
|
$
|
(26,012
|
)
|
|
$
|
6,588
|
|
|
$
|
(30,363
|
)
|
|
$
|
42,469
|
|
|
Parent
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
453,515
|
|
|
$
|
395,850
|
|
|
$
|
61,032
|
|
|
$
|
(177,570
|
)
|
|
$
|
732,827
|
|
Cost of goods sold
|
—
|
|
|
330,634
|
|
|
228,947
|
|
|
37,429
|
|
|
(179,875
|
)
|
|
417,135
|
|
||||||
Gross profit
|
—
|
|
|
122,881
|
|
|
166,903
|
|
|
23,603
|
|
|
2,305
|
|
|
315,692
|
|
||||||
Royalty income, net
|
—
|
|
|
8,430
|
|
|
4,125
|
|
|
—
|
|
|
(1,997
|
)
|
|
10,558
|
|
||||||
Selling, general, and administrative expenses
|
—
|
|
|
40,932
|
|
|
189,504
|
|
|
26,271
|
|
|
(8,913
|
)
|
|
247,794
|
|
||||||
Operating income (loss)
|
—
|
|
|
90,379
|
|
|
(18,476
|
)
|
|
(2,668
|
)
|
|
9,221
|
|
|
78,456
|
|
||||||
Interest expense
|
—
|
|
|
6,973
|
|
|
1,369
|
|
|
89
|
|
|
(1,327
|
)
|
|
7,104
|
|
||||||
Interest income
|
—
|
|
|
(1,439
|
)
|
|
—
|
|
|
(27
|
)
|
|
1,327
|
|
|
(139
|
)
|
||||||
(Income) loss in subsidiaries
|
(46,595
|
)
|
|
21,101
|
|
|
2,449
|
|
|
—
|
|
|
23,045
|
|
|
—
|
|
||||||
Other (income) expense, net
|
—
|
|
|
(368
|
)
|
|
368
|
|
|
(221
|
)
|
|
—
|
|
|
(221
|
)
|
||||||
Income (loss) before income taxes
|
46,595
|
|
|
64,112
|
|
|
(22,662
|
)
|
|
(2,509
|
)
|
|
(13,824
|
)
|
|
71,712
|
|
||||||
Provision (benefit) for income taxes
|
—
|
|
|
26,738
|
|
|
(1,559
|
)
|
|
(62
|
)
|
|
—
|
|
|
25,117
|
|
||||||
Net income (loss)
|
$
|
46,595
|
|
|
$
|
37,374
|
|
|
$
|
(21,103
|
)
|
|
$
|
(2,447
|
)
|
|
$
|
(13,824
|
)
|
|
$
|
46,595
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net income (loss)
|
|
$
|
42,469
|
|
|
$
|
49,787
|
|
|
$
|
(26,012
|
)
|
|
$
|
6,588
|
|
|
$
|
(30,363
|
)
|
|
$
|
42,469
|
|
Foreign currency translation adjustments
|
|
(1,762
|
)
|
|
(1,762
|
)
|
|
(1,762
|
)
|
|
(1,762
|
)
|
|
5,286
|
|
|
(1,762
|
)
|
||||||
Comprehensive income (loss)
|
|
$
|
40,707
|
|
|
$
|
48,025
|
|
|
$
|
(27,774
|
)
|
|
$
|
4,826
|
|
|
$
|
(25,077
|
)
|
|
$
|
40,707
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net income (loss)
|
|
$
|
46,595
|
|
|
$
|
37,374
|
|
|
$
|
(21,103
|
)
|
|
$
|
(2,447
|
)
|
|
$
|
(13,824
|
)
|
|
$
|
46,595
|
|
Foreign currency translation adjustments
|
|
947
|
|
|
947
|
|
|
947
|
|
|
947
|
|
|
(2,841
|
)
|
|
947
|
|
||||||
Comprehensive income (loss)
|
|
$
|
47,542
|
|
|
$
|
38,321
|
|
|
$
|
(20,156
|
)
|
|
$
|
(1,500
|
)
|
|
$
|
(16,665
|
)
|
|
$
|
47,542
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Cash flows provided by (used in) operating activities:
|
|
$
|
—
|
|
|
$
|
63,298
|
|
|
$
|
(19,112
|
)
|
|
$
|
19,921
|
|
|
$
|
—
|
|
|
$
|
64,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
—
|
|
|
(4,698
|
)
|
|
(7,569
|
)
|
|
(2,477
|
)
|
|
—
|
|
|
(14,744
|
)
|
||||||
Intercompany investing activity
|
|
48,253
|
|
|
(4,829
|
)
|
|
2,991
|
|
|
24
|
|
|
(46,439
|
)
|
|
—
|
|
||||||
Disposals and recoveries from property, plant, and equipment
|
|
—
|
|
|
—
|
|
|
369
|
|
|
4
|
|
|
—
|
|
|
373
|
|
||||||
Net cash provided by (used in) investing activities
|
|
48,253
|
|
|
(9,527
|
)
|
|
(4,209
|
)
|
|
(2,449
|
)
|
|
(46,439
|
)
|
|
(14,371
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intercompany financing activity
|
|
—
|
|
|
(98,668
|
)
|
|
42,029
|
|
|
10,200
|
|
|
46,439
|
|
|
—
|
|
||||||
Borrowings under secured revolving credit facility
|
|
—
|
|
|
50,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
||||||
Payments on secured revolving credit facility
|
|
—
|
|
|
(50,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,000
|
)
|
||||||
Dividends paid
|
|
(21,244
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,244
|
)
|
||||||
Repurchases of common stock
|
|
(25,195
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,195
|
)
|
||||||
Withholdings from vestings of restricted stock
|
|
(6,583
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,583
|
)
|
||||||
Proceeds from exercises of stock options
|
|
4,769
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,769
|
|
||||||
Net cash (used in) provided by financing activities
|
|
(48,253
|
)
|
|
(98,668
|
)
|
|
42,029
|
|
|
10,200
|
|
|
46,439
|
|
|
(48,253
|
)
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
279
|
|
|
—
|
|
|
279
|
|
||||||
Net (decrease) increase in cash and cash equivalents
|
|
—
|
|
|
(44,897
|
)
|
|
18,708
|
|
|
27,951
|
|
|
—
|
|
|
1,762
|
|
||||||
Cash and cash equivalents, beginning of period
|
|
—
|
|
|
129,463
|
|
|
10,030
|
|
|
39,001
|
|
|
—
|
|
|
178,494
|
|
||||||
Cash and cash equivalents, end of period
|
|
$
|
—
|
|
|
$
|
84,566
|
|
|
$
|
28,738
|
|
|
$
|
66,952
|
|
|
$
|
—
|
|
|
$
|
180,256
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Cash flows provided by (used in) operating activities:
|
|
$
|
—
|
|
|
$
|
101,915
|
|
|
$
|
(13,680
|
)
|
|
$
|
(4,055
|
)
|
|
$
|
—
|
|
|
$
|
84,180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
—
|
|
|
(6,503
|
)
|
|
(9,548
|
)
|
|
(1,940
|
)
|
|
—
|
|
|
(17,991
|
)
|
||||||
Intercompany investing activity
|
|
68,551
|
|
|
(3,926
|
)
|
|
—
|
|
|
—
|
|
|
(64,625
|
)
|
|
—
|
|
||||||
Acquisitions of businesses, net of cash acquired
|
|
—
|
|
|
(144,520
|
)
|
|
746
|
|
|
70
|
|
|
—
|
|
|
(143,704
|
)
|
||||||
Net cash provided by (used in) investing activities
|
|
68,551
|
|
|
(154,949
|
)
|
|
(8,802
|
)
|
|
(1,870
|
)
|
|
(64,625
|
)
|
|
(161,695
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intercompany financing activity
|
|
—
|
|
|
(87,078
|
)
|
|
23,657
|
|
|
(1,204
|
)
|
|
64,625
|
|
|
—
|
|
||||||
Borrowings under secured revolving credit facility
|
|
—
|
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
||||||
Payment on secured revolving credit facility
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,965
|
)
|
|
—
|
|
|
(18,965
|
)
|
||||||
Dividends Paid
|
|
(17,998
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,998
|
)
|
||||||
Repurchases of common stock
|
|
(46,627
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,627
|
)
|
||||||
Withholdings from vestings of restricted stock
|
|
(5,552
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,552
|
)
|
||||||
Proceeds from exercises of stock options
|
|
1,626
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,626
|
|
||||||
Net cash (used in) provided by financing activities
|
|
(68,551
|
)
|
|
(67,078
|
)
|
|
23,657
|
|
|
(20,169
|
)
|
|
64,625
|
|
|
(67,516
|
)
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
(49
|
)
|
||||||
Net (decrease) increase in cash and cash equivalents
|
|
—
|
|
|
(120,112
|
)
|
|
1,175
|
|
|
(26,143
|
)
|
|
—
|
|
|
(145,080
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
|
—
|
|
|
229,056
|
|
|
11,817
|
|
|
58,485
|
|
|
—
|
|
|
299,358
|
|
||||||
Cash and cash equivalents, end of period
|
|
$
|
—
|
|
|
$
|
108,944
|
|
|
$
|
12,992
|
|
|
$
|
32,342
|
|
|
$
|
—
|
|
|
$
|
154,278
|
|
|
Fiscal quarter ended
|
||||
|
March 31,
2018 |
|
April 1,
2017 |
||
|
|
|
|
||
Net sales
|
|
|
|
||
U.S. Retail
|
50.8
|
%
|
|
49.7
|
%
|
U.S. Wholesale
|
37.2
|
%
|
|
39.9
|
%
|
International
|
12.1
|
%
|
|
10.4
|
%
|
|
|
|
|
||
Consolidated net sales
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
56.0
|
%
|
|
56.9
|
%
|
|
|
|
|
||
Gross margin
|
44.0
|
%
|
|
43.1
|
%
|
Royalty income
|
1.1
|
%
|
|
1.4
|
%
|
Selling, general, and administrative expenses
|
37.1
|
%
|
|
33.8
|
%
|
|
|
|
|
||
Operating income
|
8.0
|
%
|
|
10.7
|
%
|
Interest expense
|
1.1
|
%
|
|
0.9
|
%
|
Interest income
|
n/m
|
|
|
n/m
|
|
Other income, net
|
(0.1
|
)%
|
|
n/m
|
|
|
|
|
|
||
Income before income taxes
|
7.0
|
%
|
|
9.8
|
%
|
Provision for income taxes
|
1.4
|
%
|
|
3.4
|
%
|
Net income
|
5.6
|
%
|
|
6.4
|
%
|
|
Fiscal quarter ended
|
||||||||||||
(dollars in thousands)
|
March 31, 2018
|
|
% of
Total |
|
April 1, 2017
|
|
% of
Total |
||||||
|
|
|
|
|
|
|
|
||||||
Net sales:
|
|
|
|
|
|
|
|
||||||
U.S. Retail
|
$
|
383,742
|
|
|
50.8
|
%
|
|
$
|
363,843
|
|
|
49.7
|
%
|
U.S. Wholesale
|
280,832
|
|
|
37.1
|
%
|
|
292,555
|
|
|
39.9
|
%
|
||
International
|
91,212
|
|
|
12.1
|
%
|
|
76,429
|
|
|
10.4
|
%
|
||
Total net sales
|
$
|
755,786
|
|
|
100.0
|
%
|
|
$
|
732,827
|
|
|
100.0
|
%
|
|
|
U.S. Retail Stores
|
|
|
|
|
|
Store count at December 30, 2017
|
|
830
|
|
Openings during first quarter fiscal 2018
|
|
9
|
|
Closings during first quarter fiscal 2018
|
|
(21
|
)
|
Store count at March 31, 2018
|
|
818
|
|
|
|
|
|
Approximate store projections for all of fiscal 2018:
|
|
|
|
Openings
|
|
53
|
|
Closings
|
|
(39
|
)
|
Net increase projected
|
|
14
|
|
•
|
Increase of
$15.9 million
from new stores that are not yet comparable;
|
•
|
Increase of
$12.0 million
from comparable eCommerce sales, including
Skip Hop
branded products;
|
•
|
Decrease of
$6.9 million
due to the effect of store closings; and
|
•
|
Decrease of
$0.9 million
in comparable store sales.
|
•
|
Increase of
$11.5 million
related to business acquisitions;
|
•
|
Increase of
$5.2 million
from our company-operated retail stores in Canada; and
|
•
|
Decrease of
$1.5 million
from international wholesale customers across various markets.
|
|
|
Canada Retail Stores
|
|
Mexico Retail Stores
|
||
|
|
|
|
|
||
Store count at December 31, 2017
|
|
179
|
|
|
41
|
|
Openings in first quarter fiscal 2018
|
|
—
|
|
|
1
|
|
Store count at March 31, 2018
|
|
179
|
|
|
42
|
|
|
|
|
|
|
||
Approximate new store projections for all of fiscal 2018:
|
|
|
|
|
||
Openings
|
|
11
|
|
|
7
|
|
Net increase projected
|
|
11
|
|
|
7
|
|
•
|
$12.8 million
in expenses related to a customer bankruptcy in the first quarter of fiscal 2018;
|
•
|
$4.9 million
increase in expenses related to eCommerce operations;
|
•
|
$4.4 million
increase in expenses related to acquired businesses;
|
•
|
$3.8 million
increase in expenses related to retail store operations;
|
•
|
$3.3 million
increase in expenses related to freight and distribution expenses;
|
•
|
$3.3 million
increase in expenses related to marketing and brand management;
|
•
|
$2.0 million
increase in other general and administrative expenses; and
|
•
|
$1.6 million
decrease in professional fees related to business acquisitions.
|
(dollars in thousands)
|
|
U.S. Wholesale
|
|
U.S. Retail
|
|
International
|
|
Unallocated Corporate Expenses
|
|
Total
|
||||||||||
Operating income (loss) for first quarter of fiscal 2017
|
|
$
|
69,695
|
|
|
$
|
29,790
|
|
|
$
|
3,685
|
|
|
$
|
(24,714
|
)
|
|
$
|
78,456
|
|
Favorable (unfavorable) change in the first quarter of fiscal 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit
|
|
(3,634
|
)
|
|
13,012
|
|
|
7,398
|
|
|
9
|
|
|
16,785
|
|
|||||
Royalty income
|
|
(519
|
)
|
|
(1,683
|
)
|
|
(362
|
)
|
|
—
|
|
|
(2,564
|
)
|
|||||
SG&A expenses
|
|
(15,270
|
)
|
|
(11,601
|
)
|
|
(6,959
|
)
|
|
1,462
|
|
|
(32,368
|
)
|
|||||
Operating income (loss) for first quarter of fiscal 2018
|
|
$
|
50,272
|
|
|
$
|
29,518
|
|
|
$
|
3,762
|
|
|
$
|
(23,243
|
)
|
|
$
|
60,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Wholesale
|
|
U.S.
Retail
|
|
International
|
|||
Operating margin for the first quarter of fiscal 2017
|
|
23.8
|
%
|
|
8.2
|
%
|
|
4.8
|
%
|
Favorable (unfavorable) bps change in the first quarter of fiscal 2018
|
|
|
|
|
|
|
|||
Gross profit
|
|
—
|
|
|
60 bps
|
|
|
120 bps
|
|
Royalty income
|
|
(10) bps
|
|
|
(50) bps
|
|
|
(60) bps
|
|
SG&A expenses
|
|
(580) bps
|
|
|
(60) bps
|
|
|
(130) bps
|
|
Operating margin for the first quarter of fiscal 2018
|
|
17.9
|
%
|
|
7.7
|
%
|
|
4.1
|
%
|
|
|
(a)
|
|
(b)
|
|
(c)
|
•
|
580 bps increase in SG&A expenses, primarily due to a:
|
•
|
470 bps increase in provision for accounts receivable due to a customer bankruptcy;
|
•
|
40 bps increase in distribution and freight expenses; and
|
•
|
20 bps increase in marketing and brand management expenses.
|
•
|
60 bps increase in gross profit, primarily due to growth in higher-margin eCommerce business and lower product costs;
|
•
|
50 bps decrease in royalty income due to a reduction in the number of licensees;
|
•
|
60 bps increase in SG&A expenses, primarily due to a:
|
•
|
120 bps increase in expenses related to eCommerce initiatives;
|
•
|
50 bps increase in marketing and brand management expenses; and
|
•
|
80 bps decrease in expenses associated with retail stores.
|
•
|
120 bps increase in gross profit primarily due to contribution from Carter's Mexico, partially offset by unfavorable channel mix;
|
•
|
120 bps increase in SG&A expenses, primarily due to a:
|
•
|
200 bps increase in selling, general and administrative expenses;
|
•
|
110 bps increase in distribution and freight expenses;
|
•
|
140 bps decrease in expenses associated with eCommerce;
|
•
|
60 bps decrease in expenses associated with retail stores; and
|
•
|
60 bps decrease in royalty income due to a reduction in the number of licensees that pay royalties, including the acquisition of our former licensee in Mexico.
|
Period
|
|
Total number
of shares
purchased
(1)
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs (2)
|
|
Approximate
dollar value of shares that may
yet be
purchased
under the plans
or programs (3)
|
|
|
|
|
|
|
|
|
|
December 31, 2017 through January 27, 2018
|
|
45,584
|
|
$118.45
|
|
45,584
|
|
$580,241,620
|
|
|
|
|
|
|
|
|
|
January 28, 2018 through February 24, 2018
|
|
79,589
|
|
$120.09
|
|
47,449
|
|
$574,544,506
|
|
|
|
|
|
|
|
|
|
February 25, 2018 through March 31, 2018
|
|
151,304
|
|
$112.37
|
|
128,280
|
|
$560,446,687
|
|
|
|
|
|
|
|
|
|
Total
|
|
276,477
|
|
|
|
221,313
|
|
|
(1)
|
Includes shares of our common stock surrendered by our employees to satisfy required tax withholding upon the vesting of restricted stock awards. There were
55,164
shares surrendered between
December 31, 2017
and
March 31, 2018
.
|
(2)
|
Share purchases during the
first
quarter of fiscal 2018 were made in compliance with all applicable rules and regulations and in accordance with the share repurchase authorizations described in Note 7,
Common Stock
, to our accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.
|
(3)
|
Under share repurchase authorizations approved by our Board of Directors.
|
Exhibit Number
|
Description of Exhibits
|
|
|
3.1
|
|
3.2
|
|
31.1
|
|
31.2
|
|
32
|
|
101
|
Interactive Data File.
|
April 26, 2018
|
/s/ MICHAEL D. CASEY
|
|
Michael D. Casey
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
April 26, 2018
|
/s/ RICHARD F. WESTENBERGER
|
|
Richard F. Westenberger
|
|
Executive Vice President and
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
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