Annual report pursuant to Section 13 and 15(d)

REVENUE RECOGNITION

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REVENUE RECOGNITION
12 Months Ended
Feb. 02, 2019
REVENUE RECOGNITION  
REVENUE RECOGNITION

2. 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. 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. Historically, the sales returns reserve was presented net of cost of sales in other current liabilities in the consolidated balance sheets. As a result of adopting ASU 2014-09, 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. The change did not have a material impact on our consolidated balance sheet as of February 2, 2019.  

 

Customer Receivables

 

As of February 2, 2019 and February 3, 2018, receivables from customers, which consist primarily of trade receivables related to our international wholesale business, were approximately $32.1 million and $19.2 million, respectively, and are included in accounts receivable, net in the consolidated balance sheets.

 

Gift Cards

 

The following table includes activity related to gift cards (in thousands):

 

 

 

 

 

 

 

 

 

    

Fiscal Years

 

 

2018

 

2017

Balance at beginning of period

 

$

56,729

 

$

49,869

Issuance of gift cards

 

 

76,854

 

 

76,860

Revenue recognized (1)

 

 

(67,912)

 

 

(68,284)

Gift card breakage

 

 

(4,600)

 

 

(1,716)

Balance at end of period

 

$

61,071

 

$

56,729


(1)

Revenue recognized from the beginning liability during fiscal 2018 and fiscal 2017 totaled $24.0 million and $24.5 million, respectively.