Quarterly report pursuant to Section 13 or 15(d)

REVENUE RECOGNITION

v3.19.1
REVENUE RECOGNITION
3 Months Ended
May 04, 2019
REVENUE RECOGNITION  
REVENUE RECOGNITION

3. REVENUE RECOGNITION

 

Our revenue is primarily associated with sales of merchandise to customers within our stores, customers utilizing our e-commerce platforms and through our Darice wholesale business (“Darice”). Revenue from sales of our merchandise is recognized when the customer takes possession of the merchandise. Payment for our retail sales is typically due at the time of the sale.

 

Right of Return 

 

A sales return reserve is established using historical customer return behavior and reduces both revenue and cost of goods sold. The Company presents the gross sales return reserve in other current liabilities and the estimated value of the merchandise expected to be returned in prepaid expenses and other in the consolidated balance sheets.

 

Customer Receivables

 

As of May 4, 2019, February 2, 2019 and May 5, 2018, receivables from customers, which consist primarily of trade receivables related to Darice, were approximately  $22.4  million,  $32.1 million and $18.4  million, respectively, and are included in accounts receivable, net in the consolidated balance sheets.

 

Gift Cards

 

The gift card liability is included in accrued liabilities and other in the consolidated balance sheets. The following table includes activity related to gift cards (in thousands):

 

 

 

 

 

 

 

 

 

 

13 Weeks Ended

 

 

May 4,

 

May 5,

 

 

2019

 

2018

Balance at beginning of period

 

$

61,071

 

$

56,729

Issuance of gift cards

 

 

11,325

 

 

11,543

Revenue recognized (1)

 

 

(15,747)

 

 

(15,916)

Gift card breakage

 

 

(941)

 

 

(843)

Balance at end of period

 

$

55,708

 

$

51,513


(1)

Revenue recognized from the beginning liability during the first quarters of fiscal 2019 and fiscal 2018 totaled $10.7 million.