Document and Entity Information Document
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May 02, 2015
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May 18, 2015
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Entity Information [Line Items] | ||
Entity Registrant Name | Childrens Place, Inc. | |
Entity Central Index Key | 0001041859 | |
Current Fiscal Year End Date | --01-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | May 02, 2015 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 20,617,354 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes |
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This is focus fiscal period of the document report. For a first quarter 2006 quarterly report, which may also provide financial information from prior periods, the first fiscal quarter should be given as the fiscal period focus. Values: FY, Q1, Q2, Q3, Q4, H1, H2, M9, T1, T2, T3, M8, CY. No definition available.
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The end date of the period reflected on the cover page if a periodic report. For all other reports and registration statements containing historical data, it is the date up through which that historical data is presented. If there is no historical data in the report, use the filing date. The format of the date is CCYY-MM-DD. No definition available.
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Indicate number of shares or other units outstanding of each of registrant's classes of capital or common stock or other ownership interests, if and as stated on cover of related periodic report. Where multiple classes or units exist define each class/interest by adding class of stock items such as Common Class A [Member], Common Class B [Member] or Partnership Interest [Member] onto the Instrument [Domain] of the Entity Listings, Instrument. No definition available.
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Indicate whether the registrant is one of the following: (1) Large Accelerated Filer, (2) Accelerated Filer, (3) Non-accelerated Filer, (4) Smaller Reporting Company (Non-accelerated) or (5) Smaller Reporting Accelerated Filer. Definitions of these categories are stated in Rule 12b-2 of the Exchange Act. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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CONDENSED CONSOLIDATED BALANCE SHEETS Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
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3 Months Ended | ||
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May 02, 2015
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Jan. 31, 2015
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May 03, 2014
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Document Period End Date | May 02, 2015 | ||
Common Stock, Par or Stated Value Per Share | $ 0.10 | $ 0.10 | $ 0.10 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 20,736,000 | 21,075,000 | 22,002,000 |
Common Stock, Shares, Outstanding | 20,700,000 | 21,040,000 | 21,961,000 |
Preferred Stock, Par or Stated Value Per Share | $ 1.00 | $ 1.00 | $ 1.00 |
Preferred Stock, Shares Authorized | 1,000 | 1,000 | 1,000 |
Preferred Stock, Shares Issued | 0 | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 | 0 |
Treasury Stock, Shares | 36,000 | 35,000 | 41,000 |
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The end date of the period reflected on the cover page if a periodic report. For all other reports and registration statements containing historical data, it is the date up through which that historical data is presented. If there is no historical data in the report, use the filing date. The format of the date is CCYY-MM-DD. No definition available.
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
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May 02, 2015
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May 03, 2014
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Net income | $ 15,607 | $ 13,596 |
Foreign currency translation adjustment | 5,099 | 1,819 |
Comprehensive income | $ 20,706 | $ 15,415 |
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The component of rent expense and lease incentives amortization for the period representing the net change in the entity's deferred rent expense and lease incentives pertaining to continuing operations. No definition available.
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BASIS OF PRESENTATION
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May 02, 2015
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BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position of The Children’s Place, Inc. (the “Company”) as of May 2, 2015 and May 3, 2014 and the results of its consolidated operations and cash flows for the thirteen weeks ended May 2, 2015 and May 3, 2014. The consolidated financial position as of January 31, 2015 was derived from audited financial statements. Due to the seasonal nature of the Company’s business, the results of operations for the thirteen weeks ended May 2, 2015 and May 3, 2014 are not necessarily indicative of operating results for a full fiscal year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2015. Certain reclassifications have been made to prior period financial statements to conform to the current period presentation. Terms that are commonly used in the Company’s notes to condensed consolidated financial statements are defined as follows:
Short-term Investments Short-term investments consist of investments which the Company expects to convert into cash within one year, including time deposits, which have original maturities greater than 90 days. The Company classifies its investments in securities at the time of purchase as held-to-maturity and reevaluates such classifications on a quarterly basis. Held-to-maturity investments consist of securities that the Company has the intent and ability to retain until maturity. These securities are recorded at cost and adjusted for the amortization of premiums and discounts, which approximates fair value. Cash inflows and outflows related to the sale and purchase of investments are classified as investing activities in the Company's consolidated statements of cash flows. All of the Company's short-term investments are U.S. dollar denominated time deposits with banking institutions in Hong Kong that have six month maturity dates. Stock-based Compensation The Company generally grants time vesting stock awards ("Deferred Awards") and performance-based stock awards ("Performance Awards") to employees at management levels. The Company also grants Deferred Awards to its non-employee directors. Deferred Awards are granted in the form of restricted stock units that require each recipient to complete a service period. Deferred Awards generally vest ratably over three years, except for those granted to non-employee directors, which generally vest over one year. Performance Awards are granted in the form of restricted stock units which have performance criteria that must be achieved for the awards to vest in addition to a service period requirement. For Performance Awards issued during fiscal 2013, each award has a defined number of shares that an employee can earn (the “Target Shares”) and, based on the adjusted operating income level achieved for the three-fiscal year period, the employee can earn from 0% to 200% of their Target Shares. The fair value of these Performance Awards and all Deferred Awards granted is based on the closing price of our common stock on the grant date. The 2013 Performance Awards cliff vest, if earned, after completion of the three year performance period. For Performance Awards issued during fiscal 2014 and 2015 (the “2014 and 2015 Performance Awards”), the employee can earn from 0% to 300% of their Target Shares based on the achievement of adjusted earnings per share for the cumulative three-fiscal year performance period and our total shareholder return (“TSR”) relative to that of companies in our peer group. The 2014 and 2015 Performance Awards cliff vest, if earned, after completion of the three year performance period. The 2014 and 2015 Performance Awards grant date fair value was estimated using a Monte Carlo simulation covering the period from the valuation date through the end of the performance period using our simulated stock price as well as the TSR of companies in our peer group. Stock-based compensation expense is recognized ratably over the related service period reduced for estimated forfeitures of those awards not expected to vest due to employee turnover. Stock-based compensation expense, as it relates to Performance Awards, is also adjusted based on the Company's estimate of adjusted operating income and adjusted earnings per share as they occur. Deferred Compensation Plan The Company has a deferred compensation plan (the “Deferred Compensation Plan”), which is a nonqualified, unfunded plan, for eligible senior level employees. Under the plan, participants may elect to defer up to 80% of his or her base salary and/or up to 100% of his or her bonus to be earned for the year following the year in which the deferral election is made. The Deferred Compensation Plan also permits members of the Board of Directors to elect to defer payment of all or a portion of their retainer and other fees to be earned for the year following the year in which a deferral election is made. In addition, eligible employees and directors of the Company may also elect to defer payment of any shares of Company stock that is earned with respect to stock-based awards. Directors may elect to have all or a certain portion of their fees earned for their service on the Board invested in shares of the Company’s common stock. Such elections are irrevocable. The Company is not required to contribute to the Deferred Compensation Plan, but at its sole discretion, can make additional contributions on behalf of the participants. Deferred amounts are not subject to forfeiture and are deemed invested among investment funds offered under the Deferred Compensation Plan, as directed by each participant. Payments of deferred amounts (as adjusted for earnings and losses) are payable following separation from service or at a date or dates elected by the participant at the time the deferral is elected. Payments of deferred amounts are generally made in either a lump sum or in annual installments over a period not exceeding 15.0 years. All deferred amounts are payable in the form in which they were made except for board fees invested in shares of the Company's common stock, which will be settled in shares of Company common stock. Earlier distributions are not permitted except in the case of an unforeseen hardship. The Company has established a rabbi trust that serves as an investment to shadow the Deferred Compensation Plan liability. The assets of the rabbi trust are general assets of the Company and as such, would be subject to the claims of creditors in the event of bankruptcy or insolvency. The investments of the rabbi trust consist of company-owned life insurance policies (“COLIs”) and Company common stock. The Deferred Compensation Plan liability, excluding Company common stock, is included in other long-term liabilities and changes in the balance, except those relating to payments, are recognized as compensation expense. The cash surrender values of the COLIs are included in other assets and related earnings and losses are recognized as investment income or loss, which is included in selling, general and administrative expenses. Company stock deferrals are included in the equity section of the Company’s consolidated balance sheet as treasury stock and as a deferred compensation liability. Deferred stock is recorded at fair market value at the time of deferral and any subsequent changes in fair market value are not recognized. The Deferred Compensation Plan liability, excluding Company stock, at fair value, was approximately $0.5 million, $0.5 million, and $0.4 million at May 2, 2015, January 31, 2015 and May 3, 2014, respectively. The cash surrender value of the COLIs, at fair value, was approximately $0.3 million, $0.3 million and $0.3 million at May 2, 2015, January 31, 2015 and May 3, 2014, respectively. Company stock was $1.7 million, $1.7 million, and $2.0 million at May 2, 2015, January 31, 2015 and May 3, 2014, respectively. Exit or Disposal Cost Obligations In accordance with the “Exit or Disposal Cost Obligations” topic of the FASB ASC, the Company records its exit and disposal costs at fair value to terminate an operating lease or contract when termination occurs before the end of its term and without future economic benefit to the Company. In cases of employee termination benefits, the Company recognizes an obligation only when all of the following criteria are met:
During the first quarter of fiscal 2012, management approved a plan to exit its distribution center in Ontario, California (the "West Coast DC") and move the operations to its distribution center in Fort Payne, Alabama (the "Southeast DC"). The Company ceased operations at the West Coast DC in May 2012. The lease of the West Coast DC expires in March 2016 and the Company has subleased this facility through March 2016. During the third quarter of fiscal 2012, management approved a plan to close the Company's distribution center in Dayton, New Jersey ("Northeast DC") and move the operations to its Southeast DC. The Company ceased operations in the Northeast DC during the fourth quarter of fiscal 2012. The lease of the Northeast DC expires in January 2021 and the Company has subleased this facility through January 2021. The following table provides details of the remaining accruals for the West Coast DC and Northeast DC as of May 2, 2015, of which approximately $0.7 million was included in accrued expenses and other current liabilities and approximately $0.6 million was included in other long-term liabilities (dollars in thousands):
Fair Value Measurement and Financial Instruments The “Fair Value Measurements and Disclosure” topic of the FASB ASC provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. This topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the hierarchy are defined as follows:
The Company’s cash and cash equivalents, short-term investments, accounts receivable, accounts payable and credit facility are all short-term in nature. As such, their carrying amounts approximate fair value and fall within Level 1 of the fair value hierarchy. The underlying assets of the Company’s Deferred Compensation Plan, excluding Company stock, fall within Level 2 of the fair value hierarchy. The Company stock that is included in the Deferred Compensation Plan is not subject to fair value measurement. The Company’s assets measured at fair value on a nonrecurring basis include long-lived assets. The Company reviews the carrying amounts of such assets when events indicate that their carrying amounts may not be recoverable. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered to fall within Level 3 of the fair value hierarchy. Recently Adopted Accounting Standards In May 2014, the FASB issued guidance relating to revenue recognition from contracts with customers. This guidance requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. The Company is currently reviewing the potential impact of this standard. |
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STOCKHOLDERS' EQUITY
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May 02, 2015
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STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY The Company's Board of Directors has authorized the following share repurchase programs: (1) $100 million on November 26, 2012 (the "2012 Share Repurchase Program"); (2) $100 million on March 3, 2014 (the "2014 Share Repurchase Program") and (3) $100 million on January 7, 2015 (the "2015 Share Repurchase Program"). The 2012 Share Repurchase Program and the 2014 Share Repurchase Program have been completed. At May 2, 2015, there was approximately $99.6 million remaining on the 2015 Share Repurchase Program. Under the 2015 Share Repurchase Program, the Company may repurchase shares in the open market at current market prices at the time of purchase or in privately negotiated transactions. The timing and actual number of shares repurchased under the program will depend on a variety of factors including price, corporate and regulatory requirements, and other market and business conditions. The Company may suspend or discontinue the program at any time, and may thereafter reinstitute purchases, all without prior announcement. Pursuant to restrictions imposed by the Company's insider trading policy during black-out periods, the Company withholds and retires shares of vesting stock awards and makes payments to taxing authorities as required by law to satisfy the withholding tax requirements of certain recipients. The Company's payment of the withholding taxes in exchange for the retired shares constitutes a purchase of its common stock. The Company also acquires shares of its common stock in conjunction with liabilities owed under the Company's Deferred Compensation Plan, which are held in treasury. The following table summarizes the Company's share repurchases (in thousands):
In accordance with the “Equity” topic of the FASB ASC, the par value of the shares retired is charged against common stock and the remaining purchase price is allocated between additional paid-in capital and retained earnings. The portion charged against additional paid-in capital is done using a pro rata allocation based on total shares outstanding. Related to all shares retired during the First Quarter 2015 and the First Quarter 2014, approximately $34.0 million and $22.0 million, respectively, were charged to retained earnings. In the First Quarter 2014 the Company's Board of Directors first authorized a quarterly cash dividend. The First Quarter 2015 dividend of $0.15 per share was declared on February 13, 2015 and was payable to shareholders of record on the close of business on April 9, 2015 and was paid on April 30, 2015. Related to the fiscal 2015 dividends, $3.2 million was charged to retained earnings, of which $3.1 million related to cash dividends paid and $0.1 million related to dividend share equivalents on unvested Deferred Awards and Performance Awards. The Company's Board of Directors declared a quarterly cash dividend of $0.15 per share to be paid on July 9, 2015 to shareholders of record on the close of business on June 18, 2015. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Company’s Board of Directors based on a number of factors, including business and market conditions, the Company’s future financial performance and other investment priorities. |
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STOCK-BASED COMPENSATION
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The following table summarizes the Company’s stock-based compensation expense (in thousands):
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The Company recognized a tax benefit related to stock-based compensation expense of approximately $1.5 million and $1.2 million for the First Quarter 2015 and the First Quarter 2014, respectively. Awards Granted During The First Quarter 2015 The Company granted Deferred Awards and Performance Awards to various executives and members of our Board of Directors during the First Quarter 2015. Awards were also granted in connection with new hires and contractual obligations. Generally, the Deferred Awards have a three year vesting period with one third of the award vesting annually. Deferred Awards granted to the Board of Directors vest after one year. Performance Awards granted have a cumulative three-year performance period, and, if earned, vest upon completion of the three-year performance period. Depending on the final adjusted earnings per share achieved for the cumulative three-year performance period and the Company's total shareholder return ("TSR") relative to that of the Company's peer group, the percentage of Target Shares earned can be 0% and range up to 300%. Changes in the Company’s Unvested Stock Awards during The First Quarter 2015 Deferred Awards
Total unrecognized stock-based compensation expense related to unvested Deferred Awards approximated $13.5 million as of May 2, 2015, which will be recognized over a weighted average period of approximately 2.0 years. Performance Awards
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For those awards in which the performance period is not yet complete, the cumulative expense recognized reflects changes in estimated adjusted operating income and adjusted earnings per share as they occur. Total unrecognized stock-based compensation expense related to unvested Performance Awards approximated $12.6 million as of May 2, 2015, which will be recognized over a weighted average period of approximately 2.4 years. Stock Options At May 2, 2015, there were no unvested stock options. Outstanding Stock Options Changes in the Company’s outstanding stock options for the First Quarter 2015 were as follows:
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NET INCOME (LOSS) PER COMMON SHARE
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May 02, 2015
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NET INCOME (LOSS) PER COMMON SHARE | NET INCOME PER COMMON SHARE The following table reconciles net income and share amounts utilized to calculate basic and diluted net income per common share (in thousands):
Antidilutive stock awards (stock options, Deferred Awards and Performance Awards) represent those awards that are excluded from the earnings per share calculation as a result of their antidilutive effect in the application of the treasury stock method in accordance with the “Earnings per Share” topic of the FASB ASC. |
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PROPERTY AND EQUIPMENT
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May 02, 2015
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PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consist of the following (in thousands):
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At May 2, 2015, the Company performed impairment testing on 1,051 stores with a total net book value of approximately $130.0 million. At May 3, 2014, the Company performed impairment testing on 1,040 stores with a total net book value of approximately $146.8 million. During each of the First Quarter 2015 and First Quarter 2014, the Company did not incur any asset impairment charges. As of May 2, 2015, January 31, 2015 and May 3, 2014, the Company had approximately $3.2 million, $6.6 million and $7.6 million, respectively, in property and equipment for which payment had not yet been made. These amounts are included in accounts payable and accrued expenses and other current liabilities. |
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CREDIT FACILITY
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CREDIT FACILITY | CREDIT FACILITY The Company and certain of its domestic subsidiaries maintain a credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”), Bank of America, N.A., HSBC Business Credit (USA) Inc., and JPMorgan Chase Bank, N.A. as lenders (collectively, the “Lenders”) and Wells Fargo, as Administrative Agent, Collateral Agent and Swing Line Lender (the “Credit Agreement”). The Credit Agreement was amended and restated on March 4, 2014 to incorporate all prior amendments, and the provisions below reflect the amended and restated Credit Agreement. The Credit Agreement, which expires in August 2018, consists of a $200 million asset based revolving credit facility, with a $50 million sublimit for standby and documentary letters of credit and an uncommitted accordion feature that could provide up to $25 million of additional availability. Revolving credit loans outstanding under the Credit Agreement bear interest, at the Company’s option, at:
The Company is charged an unused line fee of 0.25% on the unused portion of the commitments. Letter of credit fees range from 0.75% to 0.875% for commercial letters of credit and range from 1.00% to 1.25% for standby letters of credit. Letter of credit fees are determined based on the amount of the Company's average excess availability under the facility. The amount available for loans and letters of credit under the Credit Agreement is determined by a borrowing base consisting of certain credit card receivables, certain inventory and the fair market value of certain real estate, subject to certain reserves. The outstanding obligations under the Credit Agreement may be accelerated upon the occurrence of certain events, including, among others, non-payment, breach of covenants, the institution of insolvency proceedings, defaults under other material indebtedness and a change of control, subject, in the case of certain defaults, to the expiration of applicable grace periods. The Company is not subject to any early termination fees. The Credit Agreement contains covenants, which include conditions on stock buybacks and the payment of cash dividends or similar payments. Credit extended under the Credit Agreement is secured by a first priority security interest in substantially all of the Company’s U.S. assets excluding intellectual property, software, equipment and fixtures. As of May 2, 2015, the Company has capitalized an aggregate of approximately $4.0 million in deferred financing costs related to the Credit Agreement. The unamortized balance of deferred financing costs at May 2, 2015 was approximately $1.1 million. Unamortized deferred financing costs are amortized over the remaining term of the Credit Agreement. The table below presents the components (in millions) of the Company’s credit facility:
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LEGAL AND REGULATORY MATTERS
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May 02, 2015
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LEGAL AND REGULATORY MATTERS [Abstract] | |
Legal Matters and Contingencies [Text Block] | LEGAL AND REGULATORY MATTERS During the First Quarter 2015, neither the Company nor any of its subsidiaries became a party to, nor did any of their property become the subject of, any material legal proceedings, and there were no material developments to any legal proceedings previously reported in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2015. The Company is also involved in various legal proceedings arising in the normal course of business. In the opinion of management, any ultimate liability arising out of these proceedings will not have a material adverse effect on the Company's financial position, results of operations or cash flows. |
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INCOME TAXES
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May 02, 2015
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Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company computes income taxes using the liability method. This method requires recognition of deferred tax assets and liabilities, measured by enacted rates, attributable to temporary differences between the financial statement and income tax basis of assets and liabilities. The Company's deferred tax assets and liabilities are comprised largely of differences relating to depreciation, rent expense, inventory and various accruals and reserves. The Company’s effective tax rate for the First Quarter 2015 was 32.2% compared to 32.4% during the First Quarter 2014. The Company recognized less than $0.1 million in each of the First Quarter 2015 and First Quarter 2014, respectively, of additional interest expense related to its unrecognized tax benefits. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company is subject to tax in the United States and foreign jurisdictions, including Canada and Hong Kong. The Company, joined by its domestic subsidiaries, files a consolidated income tax return for Federal income tax purposes. The Company, with certain exceptions, is no longer subject to income tax examinations by U.S. Federal, state and local or foreign tax authorities for tax years 2010 and prior. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations; however, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company's tax audits are resolved in a manner not consistent with management's expectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs. |
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INTEREST INCOME (EXPENSE), NET
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SEGMENT INFORMATION
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SEGMENT INFORMATION | SEGMENT INFORMATION In accordance with the “Segment Reporting” topic of the FASB ASC, the Company reports segment data based on geography: The Children’s Place U.S. and The Children’s Place International. Each segment includes an e-commerce business located at www.childrensplace.com. Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico based stores and revenue from the Company's U.S. based wholesale partners. Included in The Children's Place International segment are the Company's Canadian based stores, revenue from the Company's Canadian wholesale partner and revenue from international franchisees. The Company measures its segment profitability based on operating income, defined as income before interest and taxes. Net sales and direct costs are recorded by each segment. Certain inventory procurement functions such as production and design as well as corporate overhead, including executive management, finance, real estate, human resources, legal, and information technology services are managed by The Children’s Place U.S. segment. Expenses related to these functions, including depreciation and amortization, are allocated to The Children’s Place International segment based primarily on net sales. The assets related to these functions are not allocated. The Company periodically reviews these allocations and adjusts them based upon changes in business circumstances. Net sales to external customers are derived from merchandise sales and the Company has no major customers that account for more than 10% of its net sales. As of May 2, 2015, The Children’s Place U.S. operated 959 stores and The Children’s Place International operated 133 stores. As of May 3, 2014, The Children’s Place U.S. operated 972 stores and The Children’s Place International operated 134 stores. The following tables provide segment level financial information (dollars in thousands):
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SUBSEQUENT EVENTS
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May 02, 2015
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Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS Subsequent to May 2, 2015 and through May 18, 2015, the Company repurchased 0.1 million shares for approximately $8.3 million, which brought total shares purchased under the 2015 Share Repurchase Program to approximately $8.8 million. The Company's Board of Directors declared a quarterly cash dividend of $0.15 per share to be paid on July 9, 2015 to shareholders of record on the close of business on June 18, 2015. |
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Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block] | Exit or Disposal Cost Obligations In accordance with the “Exit or Disposal Cost Obligations” topic of the FASB ASC, the Company records its exit and disposal costs at fair value to terminate an operating lease or contract when termination occurs before the end of its term and without future economic benefit to the Company. In cases of employee termination benefits, the Company recognizes an obligation only when all of the following criteria are met:
During the first quarter of fiscal 2012, management approved a plan to exit its distribution center in Ontario, California (the "West Coast DC") and move the operations to its distribution center in Fort Payne, Alabama (the "Southeast DC"). The Company ceased operations at the West Coast DC in May 2012. The lease of the West Coast DC expires in March 2016 and the Company has subleased this facility through March 2016. During the third quarter of fiscal 2012, management approved a plan to close the Company's distribution center in Dayton, New Jersey ("Northeast DC") and move the operations to its Southeast DC. The Company ceased operations in the Northeast DC during the fourth quarter of fiscal 2012. The lease of the Northeast DC expires in January 2021 and the Company has subleased this facility through January 2021. The following table provides details of the remaining accruals for the West Coast DC and Northeast DC as of May 2, 2015, of which approximately $0.7 million was included in accrued expenses and other current liabilities and approximately $0.6 million was included in other long-term liabilities (dollars in thousands):
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Stock-based Compensation | Stock-based Compensation The Company generally grants time vesting stock awards ("Deferred Awards") and performance-based stock awards ("Performance Awards") to employees at management levels. The Company also grants Deferred Awards to its non-employee directors. Deferred Awards are granted in the form of restricted stock units that require each recipient to complete a service period. Deferred Awards generally vest ratably over three years, except for those granted to non-employee directors, which generally vest over one year. Performance Awards are granted in the form of restricted stock units which have performance criteria that must be achieved for the awards to vest in addition to a service period requirement. For Performance Awards issued during fiscal 2013, each award has a defined number of shares that an employee can earn (the “Target Shares”) and, based on the adjusted operating income level achieved for the three-fiscal year period, the employee can earn from 0% to 200% of their Target Shares. The fair value of these Performance Awards and all Deferred Awards granted is based on the closing price of our common stock on the grant date. The 2013 Performance Awards cliff vest, if earned, after completion of the three year performance period. For Performance Awards issued during fiscal 2014 and 2015 (the “2014 and 2015 Performance Awards”), the employee can earn from 0% to 300% of their Target Shares based on the achievement of adjusted earnings per share for the cumulative three-fiscal year performance period and our total shareholder return (“TSR”) relative to that of companies in our peer group. The 2014 and 2015 Performance Awards cliff vest, if earned, after completion of the three year performance period. The 2014 and 2015 Performance Awards grant date fair value was estimated using a Monte Carlo simulation covering the period from the valuation date through the end of the performance period using our simulated stock price as well as the TSR of companies in our peer group. Stock-based compensation expense is recognized ratably over the related service period reduced for estimated forfeitures of those awards not expected to vest due to employee turnover. Stock-based compensation expense, as it relates to Performance Awards, is also adjusted based on the Company's estimate of adjusted operating income and adjusted earnings per share as they occur. |
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Deferred Compensation Plan | Deferred Compensation Plan The Company has a deferred compensation plan (the “Deferred Compensation Plan”), which is a nonqualified, unfunded plan, for eligible senior level employees. Under the plan, participants may elect to defer up to 80% of his or her base salary and/or up to 100% of his or her bonus to be earned for the year following the year in which the deferral election is made. The Deferred Compensation Plan also permits members of the Board of Directors to elect to defer payment of all or a portion of their retainer and other fees to be earned for the year following the year in which a deferral election is made. In addition, eligible employees and directors of the Company may also elect to defer payment of any shares of Company stock that is earned with respect to stock-based awards. Directors may elect to have all or a certain portion of their fees earned for their service on the Board invested in shares of the Company’s common stock. Such elections are irrevocable. The Company is not required to contribute to the Deferred Compensation Plan, but at its sole discretion, can make additional contributions on behalf of the participants. Deferred amounts are not subject to forfeiture and are deemed invested among investment funds offered under the Deferred Compensation Plan, as directed by each participant. Payments of deferred amounts (as adjusted for earnings and losses) are payable following separation from service or at a date or dates elected by the participant at the time the deferral is elected. Payments of deferred amounts are generally made in either a lump sum or in annual installments over a period not exceeding 15.0 years. All deferred amounts are payable in the form in which they were made except for board fees invested in shares of the Company's common stock, which will be settled in shares of Company common stock. Earlier distributions are not permitted except in the case of an unforeseen hardship. The Company has established a rabbi trust that serves as an investment to shadow the Deferred Compensation Plan liability. The assets of the rabbi trust are general assets of the Company and as such, would be subject to the claims of creditors in the event of bankruptcy or insolvency. The investments of the rabbi trust consist of company-owned life insurance policies (“COLIs”) and Company common stock. The Deferred Compensation Plan liability, excluding Company common stock, is included in other long-term liabilities and changes in the balance, except those relating to payments, are recognized as compensation expense. The cash surrender values of the COLIs are included in other assets and related earnings and losses are recognized as investment income or loss, which is included in selling, general and administrative expenses. Company stock deferrals are included in the equity section of the Company’s consolidated balance sheet as treasury stock and as a deferred compensation liability. Deferred stock is recorded at fair market value at the time of deferral and any subsequent changes in fair market value are not recognized. The Deferred Compensation Plan liability, excluding Company stock, at fair value, was approximately $0.5 million, $0.5 million, and $0.4 million at May 2, 2015, January 31, 2015 and May 3, 2014, respectively. The cash surrender value of the COLIs, at fair value, was approximately $0.3 million, $0.3 million and $0.3 million at May 2, 2015, January 31, 2015 and May 3, 2014, respectively. Company stock was $1.7 million, $1.7 million, and $2.0 million at May 2, 2015, January 31, 2015 and May 3, 2014, respectively |
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Fair Value Measurement and Financial Instruments | Fair Value Measurement and Financial Instruments The “Fair Value Measurements and Disclosure” topic of the FASB ASC provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. This topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the hierarchy are defined as follows:
The Company’s cash and cash equivalents, short-term investments, accounts receivable, accounts payable and credit facility are all short-term in nature. As such, their carrying amounts approximate fair value and fall within Level 1 of the fair value hierarchy. The underlying assets of the Company’s Deferred Compensation Plan, excluding Company stock, fall within Level 2 of the fair value hierarchy. The Company stock that is included in the Deferred Compensation Plan is not subject to fair value measurement. The Company’s assets measured at fair value on a nonrecurring basis include long-lived assets. The Company reviews the carrying amounts of such assets when events indicate that their carrying amounts may not be recoverable. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered to fall within Level 3 of the fair value hierarchy. |
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Disclosure of accounting policy for deferred compensation plans. No definition available.
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BASIS OF PRESENTATION Exit Costs (Tables)
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May 02, 2015
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Schedule of Restructuring and Related Costs [Table Text Block] | The following table provides details of the remaining accruals for the West Coast DC and Northeast DC as of May 2, 2015, of which approximately $0.7 million was included in accrued expenses and other current liabilities and approximately $0.6 million was included in other long-term liabilities (dollars in thousands):
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STOCKHOLDERS' EQUITY Share Repurchase (Tables)
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May 02, 2015
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Stockholders' Equity Attributable to Parent [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Repurchase Agreements [Table Text Block] | The following table summarizes the Company's share repurchases (in thousands):
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STOCK-BASED COMPENSATION (Tables)
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May 02, 2015
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock-based compensation expense |
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Schedule of changes in unvested deferred awards |
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Schedule of unvested performance awards |
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Schedule of stock option activity |
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NET INCOME (LOSS) PER COMMON SHARE (Tables)
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May 02, 2015
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciles net income (loss) and share amounts utilized to calculate basic and diluted net income (loss) per common share |
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PROPERTY AND EQUIPMENT (Tables)
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May 02, 2015
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment |
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CREDIT FACILITY (Tables)
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May 02, 2015
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of credit facility |
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INTEREST INCOME (EXPENSE), NET (Tables)
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May 02, 2015
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of interest income (expense) | The following table presents the components of the Company’s interest expense, net (in thousands):
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SEGMENT INFORMATION (Tables)
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May 02, 2015
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment level financial information |
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BASIS OF PRESENTATION (Details) (USD $)
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May 02, 2015
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May 03, 2014
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Jan. 31, 2015
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Accounting Policies [Abstract] | |||
Vesting period (in years) | 1 year | 3 years | |
Deferred Compensation Plan | |||
Maximum percentage of base salary elected to be deferred (as a percent) | 80.00% | ||
Maximum percentage of bonus elected to be deferred (as a percent) | 100.00% | ||
Maximum period over which annual installments of deferred payments are made (in years) | 15 years 0 months 12 days | ||
Deferred compensation plan liability | $ 500,000 | $ 400,000 | $ 500,000 |
Cash Surrender Value of Life Insurance | 300,000 | 300,000 | |
Deferred compensation - Company stock | (1,748,000) | (1,992,000) | (1,682,000) |
Business Exit Costs | $ (3,000) | $ 231,000 |
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The maximum percentage of base salary that may be deferred by election under the terms of a deferred compensation plan. No definition available.
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- Definition
The maximum percentage of bonus earned during the year that may be deferred by election under the terms of a deferred compensation plan. No definition available.
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No authoritative reference available. No definition available.
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- Definition
Accrued exit costs--additions. No definition available.
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- Definition
Accrued exit costs--lease exit costs. No definition available.
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- Definition
Accrued exit costs--one time benefits. No definition available.
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- Definition
The maximum percentage of base salary that may be deferred by election under the terms of a deferred compensation plan. No definition available.
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- Definition
The maximum percentage of bonus earned during the year that may be deferred by election under the terms of a deferred compensation plan. No definition available.
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- Definition
Payments and reductions related to exit costs. No definition available.
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Total accrual related to exit costs. No definition available.
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No authoritative reference available. No definition available.
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No authoritative reference available. No definition available.
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No authoritative reference available. No definition available.
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- Definition
No authoritative reference available. No definition available.
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- Definition
Dividend share equivalents on unvested shares. No definition available.
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No authoritative reference available. No definition available.
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No authoritative reference available. No definition available.
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No authoritative reference available. No definition available.
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No authoritative reference available. No definition available.
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No authoritative reference available. No definition available.
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No authoritative reference available. No definition available.
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No authoritative reference available. No definition available.
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No authoritative reference available. No definition available.
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No authoritative reference available. No definition available.
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No authoritative reference available. No definition available.
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- Definition
The percentage payout if final operating income below threshold. No definition available.
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No authoritative reference available. No definition available.
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NET INCOME (LOSS) PER COMMON SHARE (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
May 02, 2015
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May 03, 2014
|
|
Basic and diluted net income per common share | ||
Net income | $ 15,607 | $ 13,596 |
Basic weighted average common shares (in shares) | 21,012 | 22,150 |
Dilutive effect of stock awards (in shares) | 354 | 269 |
Diluted weighted average common shares (in shares) | 21,366 | 22,419 |
Antidilutive stock awards (in shares) | 1 | 1 |
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- Definition
No authoritative reference available. No definition available.
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- Definition
net book value No definition available.
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- Definition
Represents the high end of the range of percentage points added to the base rate to compute the variable rate on debt instrument. No definition available.
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- Definition
Represents the low end of the range of percentage points added to the base rate to compute the variable rate on debt instrument. No definition available.
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- Definition
The high end of the range of the commitment fee for a letter of credit facility. No definition available.
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- Definition
The low end of the range of the commitment fee for a letter of credit facility. No definition available.
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- Definition
The maximum amount available under a line of credit facility for standby and documentary letters of credit. No definition available.
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- Definition
Borrowing capacity under the credit facility attributable to the accordion feature, which is at the discretion of the lending group. This capacity is included in the maximum borrowing capacity under the credit facility (without consideration of any current restrictions on the amount that could be borrowed or the amounts currently outstanding under the facility). No definition available.
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- Definition
Amount borrowed under the credit facility, excluding letters of credit as of the balance sheet date. No definition available.
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- Definition
Amount of borrowing capacity currently available under the credit facility (lesser of sublimit availability or borrowing base capacity less the amount of borrowings outstanding). No definition available.
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- Definition
No authoritative reference available. No definition available.
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- Definition
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- Definition
No authoritative reference available. No definition available.
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- Definition
No authoritative reference available. No definition available.
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INCOME TAXES (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
May 02, 2015
|
May 03, 2014
|
|
Income Tax Disclosure [Abstract] | ||
Effective tax rate from continuing operations (as a percent) | 32.20% | 32.40% |
Statement [Line Items] | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 0.1 |
X | ||||||||||
- Definition
No authoritative reference available. No definition available.
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- Definition
No authoritative reference available. No definition available.
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INTEREST INCOME (EXPENSE), NET (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
May 02, 2015
|
May 03, 2014
|
|
Components of interest income (expense), net | ||
Interest income | $ 255 | $ 290 |
Less: | ||
Interest expense - credit facilities | 21 | 38 |
Unused line fee | 106 | 109 |
Amortization of deferred financing costs | 88 | 88 |
Other interest and fees | 20 | 36 |
Total interest expense | 431 | 271 |
Interest (expense), net | (176) | 19 |
interestrevolvingloan [Member]
|
||
Less: | ||
Interest expense - credit facilities | $ 196 | $ 0 |
X | ||||||||||
- Definition
This element represents nonoperating interest income exclusive of tax-exempt interest income. No definition available.
|
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- Definition
Interest expense and fees on all other items not previously classified. No definition available.
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- Definition
No authoritative reference available. No definition available.
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- Definition
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- Definition
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- Details
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- Definition
The percentage of gross profit to net sales. No definition available.
|
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- Definition
Represents the percentage of operating income (loss) on net sales. No definition available.
|
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- Details
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- Definition
Minimum Percentage of Entity-Wide Sales that Qualifies the Purchaser as a Major Customer No definition available.
|
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- Definition
No authoritative reference available. No definition available.
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SUBSEQUENT EVENTS (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
0 Months Ended | 3 Months Ended | 11 Months Ended | 1 Months Ended | ||
---|---|---|---|---|---|---|
Jul. 17, 2014
|
May 02, 2015
|
May 03, 2014
|
May 02, 2015
2015 Share Repurchase Program [Member] [Domain] [Domain]
|
Dec. 02, 2014
2015 Share Repurchase Program [Member] [Domain] [Domain]
|
Aug. 29, 2013
2012 Share Repurchase Program
|
|
Subsequent Events | ||||||
Number of additional shares repurchased (in shares) | 100,000 | 100,000 | ||||
Value of shares repurchased | $ 8,300 | $ 8,800 | $ 8,300 | |||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.15 | $ 0.15 | $ 0.1325 |
X | ||||||||||
- Definition
No authoritative reference available. No definition available.
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- Definition
No authoritative reference available. No definition available.
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- Definition
No authoritative reference available. No definition available.
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- Details
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