Bath Body Works Inc
For the period ended Aug 3, 2024. Filed Aug 28, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 3, 2024 · Filed Aug 28, 2024
BBWI$21.36-3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-05-04; filed 2024-06-04.
0000701985-24-000018
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-08-03; filed 2024-08-28.
0000701985-24-000027
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 108 previous paragraphs and 130 current paragraphs.
55 unchanged; 46 reworded; 23 added; 6 removed; 1 previous and 6 current paragraphs rearranged.
Tables are not compared: 16 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
In the second quarter of 2024, consolidated Net Sales were $1.526 billion, which decreased $33 million, or 2.1%, compared to the second quarter of 2023. The decrease was driven by declines of $32 million and $4 million in our North American Direct and Stores channels, respectively, partially offset by a $3 million increase in our International business. Our second quarter Operating Income was $183 million, which decreased $5 million, or 3%, compared to the second quarter of 2023, and our Operating Income rate (expressed as a percentage of Net Sales) remained flat at 12.0%.
Current report
As we look ahead to the remainder of the year, we anticipate continuing pressures given the first-half sales trends and the choppier macroeconomic environment. We are focused on executing with precision, continuing to bring newness to customers and demonstrating our strong value proposition across our product assortment. Our strategic priorities remain our core categories, supported by newness and innovation, and extending our reach through new category adjacencies, including men’s, hair, lip, and laundry, and expansion of off-mall and international locations. We are continuing to invest in product and marketing to elevate value for our customers, and in foundational tools and systems enabling new capabilities that we believe will increase customer engagement and provide a more seamless and convenient shopping experience across channels. We also continue to focus on enhancing operational excellence and efficiency through the cost optimization discussed above, which will support our strategic priorities.
Current report
(a)In the second quarter of 2024, we sold our investments in Easton Town Center and Easton Gateway, resulting in an aggregate pre-tax gain of $39 million (after-tax gain of $25 million). For additional information, see Note 1, “Description of Business and Basis of Presentation” included in Part I, Item 1. Financial Statements.
Current report
(c)In the second quarter of 2024, we recognized a $44 million tax benefit related to the release of a valuation allowance on a deferred tax asset.
Current report
Second Quarter of 2024 Compared to Second Quarter of 2023
Current report
For the second quarter of 2024, Net Sales decreased $33 million, or 2.1%, to $1.526 billion, compared to the second quarter of 2023. Direct Net Sales decreased $32 million, or 9.7%, driven by a decline in fulfilled orders, which was primarily due to our customers continuing to select our BOPIS option (which is recognized as store Net Sales) and a decline in website traffic. Stores Net Sales decreased $4 million, or 0.3%, due to a decline in total transactions as we have seen our customers become increasingly cautious in their spending. International Net Sales increased $3 million, or 2.2%, driven by increased product shipments.
Current report
Gross Profit rate increased due to the increase in the merchandise margin rate, driven by a decline in our average unit cost, due to cost saving initiatives partially offset by product reinvestments and category mix, and an increase in average unit retail, driven by category mix.
Current report
For the second quarter of 2024, our effective tax rate was 0.9% compared to 21.9% in the second quarter of 2023. The 2024 secondqu arter rate was lower than our combined estimated federal and state statutory rates primarily due to the sales of Easton investments during the quarter, which resulted in the release of a valuation allowance on a deferred tax asset. The 2023 second quarter rate was lower than our combined estimated federal and state statutory rates primarily due to the resolution of certain tax matters during the quarter.
Current report
Results of Operations
Current report
Year-to-Date 2024 Compared to Year-to-Date 2023
Current report
For year-to-date 2024, Operating Income increased $1 million to $370 million, from $369 million year-to-date 2023, and the Operating Income rate (expressed as a percentage of Net Sales) increased to 12.7% from 12.5%. The drivers of the year-to-date Operating Income results are discussed in the following sections.
Current report
Net Sales
Current report
The following table provides Net Sales for year-to-date 2024 in comparison to year-to-date 2023:
Current report
Gross Profit
Current report
For year-to-date 2024, our Gross Profit increased $15 million to $1.233 billion, and our Gross Profit rate (expressed as a percentage of Net Sales) increased to 42.4% from 41.2%. Gross Profit dollars increased primarily due to a 120 basis point increase in the merchandise margin rate and slightly lower Buying and Occupancy Expenses, partially offset by lower Net Sales.
Current report
Gross Profit rate increased due to the increase in the merchandise margin rate, driven by a decline in our average unit cost, due to cost saving initiatives partially offset by product reinvestments and category mix, and lower transportation costs.
Current report
The following table provides detail for our General, Administrative and Store Operating Expenses for year-to-date 2024 compared to year-to-date 2023:
Current report
Other Income and Expenses
Current report
Interest Expense
Current report
Other Income
Current report
For year-to-date 2024, our Other Income was $61 million, compared to $45 million for year-to-date 2023. The increase was primarily due a $39 million pre-tax gain on sales of certain Easton investments, partially offset by the recognition of a $3 million pre-tax loss on extinguishment of debt for year-to-date 2024, compared to a $16 million pre-tax gain on the repurchase and early extinguishments of outstanding notes for year-to-date 2023.
Current report
Provision for Income Taxes
Current report
For year-to-date 2024, our effective tax rate was 12.1% compared to 24.7% for year-to-date 2023. The 2024 year-to-date rate was lower than our combined estimated federal and state statutory rates primarily due to the sales of Easton investments, which resulted in the release of a valuation allowance on a deferred tax asset. The 2023 year-to-date rate was lower than the Company’s combined estimated federal and state statutory rates primarily due to the resolution of certain tax matters during the period.
Removed paragraphs (6)
Previous report
We anticipate continuing macroeconomic pressures as well as continuing post-pandemic normalization of candles and sanitizers in fiscal 2024. We expect the normalization to moderate as we move through the year. We plan to deliver growth from our core categories, supported by newness and seasonal storytelling and continued focus on our new category adjacencies, including men’s, hair, lip, and laundry, to reach new customers. We are also focused on the acquisition of more loyal and engaged customers driven by enhanced loyalty capabilities and personalized digital experiences supported by our technology and marketing investments. We expect that our technology investments will be comparable to fiscal 2023, albeit shifting from investments that in 2023 were primarily focused on information technology (“IT”) separation to investments to enhance our omnichannel capabilities and support the growth and profitability of our business, while also enhancing the security of, and otherwise reducing risks associated with, our IT systems.
Previous report
In 2024, we expect the merchandise margin rate to improve compared to 2023, driven by anticipated modest average unit retail expansion and product cost declines. The lower product costs reflect the expected benefits of our strategic initiatives and continued deflation but are expected to be partially offset by reinvestment into product restages, reformulations and innovation. We expect Buying and Occupancy Expenses to deleverage compared to 2023, driven by continued investments into our store real estate. General, Administrative and Store Operating Expenses are expected to deleverage compared to 2023, primarily driven by the higher marketing investments as well as wage inflation, both of which we expect will be partially offset by the cost optimization initiatives discussed above.
Previous report
First Quarter of 2024 Compared to First Quarter of 2023
Previous report
(b)Results include royalties associated with franchised stores and wholesale sales.
Previous report
For the first quarter of 2024, Net Sales decreased $12 million, to $1.384 billion, compared to the first quarter of 2023. The decline was primarily due to International Net Sales, which decreased $24 million or 29.3%, driven by a decline in wholesale shipments to our franchise partners, primarily in the Middle East, as they continue to manage their inventory levels. North American Net Sales benefited by approximately 200 basis points from the shifted fiscal calendar resulting from the 53rd week in fiscal 2023, which was offset by a decrease in average dollar sale as we continue to see customers carefully manage their spending.
Previous report
For the first quarter of 2024, our effective tax rate was 26.8% compared to 27.7% in the first quarter of 2023. The 2024 and 2023 first quarter rates were higher than our combined estimated federal and state statutory rates primarily due to accrued interest expense related to unrecognized tax benefits.
Reworded paragraphs (46)
Previous wording
For additional information related to our first quarter 2024 financial performance, see “Results of Operations.”
Current wording
For additional information related to our second quarter 2024 financial performance, see “Results of Operations.”
Previous wording
We are enhancing our operations and efficiency by targeting an aggregate of $250 million of planned annual cost savings across both Gross Profit and General, Administrative and Store Operating Expenses. We delivered approximately $150 million of annual cost reductions as part of this initiative in fiscal 2023, and continue to expect approximately $100 million in additional annual cost savings in fiscal 2024. Our cost optimization work delivered approximately $40 million in annual cost savings in the first quarter of 2024.
Current wording
We are enhancing our operations and efficiency by targeting an aggregate of $280 million of planned annual cost savings across both Gross Profit and General, Administrative and Store Operating Expenses, which is up $30 million from our previous expectations. We delivered approximately $150 million of annual cost reductions as part of this initiative in fiscal 2023, and now expect approximately $130 million in additional annual cost savings in fiscal 2024. Our cost optimization work delivered approximately $40 million and $80 million in cost savings in the second quarter of and year-to-date 2024, respectively.
Previous wording
In addition to our results provided in accordance with GAAP above and throughout this Quarterly Report on Form 10-Q, provided below are non-GAAP measures that present Net Income and Net Income Per Diluted Share for the first quarter of 2023 on an adjusted basis to remove a certain special item. We believe that this special item is not indicative of our operations due to its size and nature. We did not make any adjustments to our reported results in the first quarter of 2024.
Current wording
In addition to our results provided in accordance with GAAP above and throughout this Quarterly Report on Form 10-Q, provided below are non-GAAP measures that present Net Income and Net Income Per Diluted Share for the second quarters of and year-to-date 2024 and 2023 on an adjusted basis to remove certain items. We believe that these items are not indicative of our operations due to their size and nature.
Previous wording
(a)In the first quarter of 2023, we recognized a pre-tax gain of $7 million (after-tax gain of $5 million), related to the repurchase and extinguishment of outstanding notes. For additional information, see Note 7, “Long-term Debt and Borrowing Facility” included in Part I, Item 1. Financial Statements.
Current wording
(b)In the second quarter of and year-to-date 2023, we recognized pre-tax gains of $9 million (after-tax gain of $7 million) and $16 million (after-tax gain of $12 million), respectively, related to the repurchase and extinguishment of outstanding notes. For additional information, see Note 7, “Long-term Debt and Borrowing Facility” included in Part I, Item 1. Financial Statements.
Previous wording
The following table compares Company-operated U.S. store data for the first quarters of 2024 and 2023:
Current wording
The following table compares Company-operated U.S. store data for the second quarters of and year-to-date 2024 and 2023:
Previous wording
The following table represents Company-operated store data for the first quarter of 2024:
Current wording
The following table represents Company-operated store data for year-to-date 2024:
Previous wording
The following table represents Partner-operated store data for the first quarter of 2024:
Current wording
The following table represents Partner-operated store data for year-to-date 2024:
Previous wording
The following table provides Net Sales for the first quarter of 2024 in comparison to the first quarter of 2023:
Current wording
The following table provides Net Sales for the second quarter of 2024 in comparison to the second quarter of 2023:
Previous wording
For the first quarter of 2024, our Gross Profit increased $10 million to $606 million, and our Gross Profit rate (expressed as a percentage of Net Sales) increased to 43.8% from 42.7% in the first quarter of 2023. Gross Profit dollars and rate increased primarily due to an increase in merchandise margin rate, which increased approximately 110 basis points driven by a lower mix of International Net Sales and lower transportation costs, partially offset by a modest decline in average unit retails as we leveraged promotions to help drive traffic, primarily in the first half of the first quarter.
Current wording
For the second quarter of 2024, our Gross Profit increased $4 million to $626 million, and our Gross Profit rate (expressed as a percentage of Net Sales) increased to 41.0% from 39.9% in the second quarter of 2023. Gross Profit dollars increased primarily due to a 130 basis point increase in the merchandise margin rate and slightly lower Buying and Occupancy Expenses, partially offset by lower Net Sales.
Previous wording
The following table provides detail for our General, Administrative and Store Operating Expenses for the first quarter of 2024 compared to the first quarter of 2023:
Current wording
The following table provides detail for our General, Administrative and Store Operating Expenses for the second quarter of 2024 compared to the second quarter of 2023:
Previous wording
For the first quarter of 2024, our General, Administrative and Store Operating Expenses increased $4 million to $419 million, and the rate (expressed as a percentage of Net Sales) increased to 30.3% from 29.7% in the first quarter of 2023. Our Selling Expenses increased primarily due to increases in associate wages and BOPIS fees, partially offset by the benefits of our cost optimization work. Increases in marketing expenses, primarily due to additional spend to drive customer acquisition, were offset by decreases in home office expenses, primarily due to discrete corporate expenses in the prior year.
Current wording
For the second quarter of 2024, our General, Administrative and Store Operating Expenses increased $9 million to $443 million, and the rate (expressed as a percentage of Net Sales) increased to 29.1% from 27.8% in the second quarter of 2023. Our Selling Expenses increased primarily due to increases in associate wages and store count, partially offset by the benefits of our cost optimization work. Increases in Marketing Expenses, primarily due to additional spend to drive customer acquisition, were nearly offset by decreases in Home Office Expenses, primarily due to discrete corporate expenses in the prior year.
Previous wording
The General, Administrative and Store Operating Expense rate increased primarily due our investments in marketing and the increase in associate wages, partially offset by the benefits of our cost optimization work and lapping discrete corporate expenses from prior year.
Current wording
The General, Administrative and Store Operating Expense rate increased primarily due to our investments in marketing and the increase in associate wages, partially offset by the benefits of our cost optimization work and lapping discrete corporate expenses in the prior year.
Previous wording
The following table provides the average daily borrowings and average borrowing rates for the first quarters of 2024 and 2023:
Current wording
The following table provides the average daily borrowings and average borrowing rates for the second quarters of 2024 and 2023:
Previous wording
For the first quarter of 2024, our Interest Expense was $82 million, compared to $89 million in the first quarter of 2023. The decrease was due to lower average daily borrowings, which were driven by the repurchase and early extinguishment of outstanding notes.
Current wording
For the second quarter of 2024, our Interest Expense was $77 million, compared to $86 million in the second quarter of 2023. The decrease was due to lower average daily borrowings, which were driven by the repurchase and early extinguishment of outstanding notes.
Previous wording
For the first quarter of 2024, our Other Income was $13 million, compared to $20 million in the first quarter of 2023. The decrease was primarily due to the recognition of a $1 million pre-tax loss on extinguishment of debt in the first quarter of 2024 compared to a $7 million pre-tax gain on extinguishment of debt in the first quarter of 2023.
Current wording
For the second quarter of 2024, our Other Income was $47 million, compared to $25 million in the second quarter of 2023. The increase was primarily due a $39 million pre-tax gain on sales of certain Easton investments, partially offset by the recognition of a $2 million pre-tax loss on extinguishment of debt in the second quarter of 2024, compared to a $9 million pre-tax gain on the repurchase and early extinguishments of outstanding notes in the second quarter of 2023.
Previous wording
Direct Net Sales decreased $19 million, or 6.8%, due to a decline in fulfilled orders, which was partially due to our customers continuing to select our BOPIS option (which is recognized as store Net Sales). We completed our rollout of BOPIS capabilities to our U.S. stores in the first quarter of 2023. Net Sales increased in the stores channel by $31 million, or 3.0%, primarily due to new store growth, an increase in BOPIS orders, and the benefit of the shifted fiscal calendar, partially offset by the decline in average dollar sale.
Current wording
For year-to-date 2024, Net Sales decreased $45 million, or 1.5%, to $2.910 billion, compared to year-to-date 2023. Direct Net Sales decreased $51 million, or 8.4%, driven by a decline in fulfilled orders, which was primarily due to our customers continuing to select our BOPIS option (which is recognized as store Net Sales) and a decline in website traffic. We completed our rollout of BOPIS capabilities to our U.S. stores in the first quarter of 2023. International Net Sales decreased $22 million, or 13.1%, driven by a decline in wholesale shipments to our franchise partners, primarily in the Middle East, as they continue to manage their inventory levels. Stores Net Sales increased $28 million, or 1.3%, primarily due to new store growth, an increase in BOPIS fulfilled orders, and the benefit of the shifted fiscal calendar, partially offset by the decline in average dollar sale as we have seen our customers become increasingly cautious in their spending.
Previous wording
In the first quarter of 2024, consolidated Net Sales were $1.384 billion, which decreased $12 million, or 0.9%, compared to the first quarter of 2023. The decline was primarily driven by a decline in International wholesale Net Sales. North American Net Sales benefited by approximately 200 basis points from the shifted fiscal calendar resulting from the 53rd week in fiscal 2023 offset by a decrease in average dollar sale as we continue to see customers carefully manage their spending. Our first quarter Operating Income was $187 million, which increased $6 million, or 4%, compared to the first quarter of 2023, and our Operating Income rate (expressed as a percentage of Net Sales) increased to 13.5% from 12.9%. The improvements in Operating Income were driven by improvement in the merchandise margin rate, partially offset by increases in General, Administrative and Store Operating Expense dollars and rate.
Current wording
For year-to-date 2024, total North American Net Sales benefited by approximately 100 basis points from the shifted fiscal calendar resulting from the 53rd week in fiscal 2023.
Previous wording
Liquidity, or access to cash, is an important factor in determining our financial stability. We are committed to maintaining adequate liquidity. Cash generated from our operating activities provides the primary resources to support current operations, growth initiatives, seasonal funding requirements, future common stock and debt repurchases, and capital expenditures. Our cash provided from operations is impacted by our net income and working capital changes. Our net income is impacted by, among other things, sales volume, seasonal sales patterns, success of new product introductions and product and market expansions, profit margins, income taxes and inflationary pressures. Historically, our sales are highest during the fourth quarter of the fiscal year due to seasonal and holiday-related sales patterns. Generally, our need for working capital peaks during the summer and fall months as inventory builds in anticipation of the holiday period. Our cash and cash equivalents held by foreign subsidiaries were $106 million as of May 4, 2024.
Current wording
Liquidity, or access to cash, is an important factor in determining our financial stability. We are committed to maintaining adequate liquidity. Cash generated from our operating activities provides the primary resources to support current operations, growth initiatives, seasonal funding requirements, future common stock and debt repurchases, and capital expenditures. Our cash provided from operations is impacted by our net income and working capital changes. Our net income is impacted by, among other things, sales volume, seasonal sales patterns, success of new product introductions and product and market expansions, profit margins, income taxes and inflationary pressures. Our sales are highest during the fourth quarter of the fiscal year due to seasonal and holiday-related sales patterns. Generally, our need for working capital peaks during the summer and fall months as inventory builds in anticipation of the holiday period. Our cash and cash equivalents held by foreign subsidiaries were $124 million as of August 3, 2024.
Previous wording
During the first quarter of 2024, we repurchased and extinguished $109 million principal amount of our outstanding senior notes for an aggregate price of $110 million. Additionally, we repurchased 2.171 million shares of our common stock for $99 million. We may, from time to time, repurchase, or otherwise retire, additional debt or shares of our common stock, as applicable.
Current wording
We repurchased and extinguished $200 million principal amount of our outstanding senior notes for an aggregate price of $202 million during year-to-date 2024. Additionally, we repurchased 5.763 million shares of our common stock for $249 million during year-to-date 2024. We may, from time to time, repurchase, or otherwise retire, additional debt or shares of our common stock, as applicable.
Previous wording
The following table provides a summary of our cash flow activity during the first quarters of 2024 and 2023:
Current wording
The following table provides a summary of our cash flow activity during year-to-date 2024 and 2023:
Previous wording
Net cash provided by operating activities in the first quarter of 2024 was $76 million, including net income of $87 million. Net income included depreciation of $71 million and share-based compensation expense of $12 million. Other changes in assets and liabilities represent items that had a current period cash flow impact, such as changes in working capital. The most significant items in working capital were the seasonal changes in Inventories, Accounts Receivable and Accounts Payable, Accrued Expenses and Other.
Current wording
Net cash provided by operating activities for year-to-date 2024 was $30 million, including net income of $239 million. Net income included depreciation of $142 million, impacts to deferred income taxes of $102 million, an aggregate pre-tax gain on sales of certain Easton investments of $39 million, and share-based compensation expense of $22 million. Other changes in assets and liabilities represent items that had a current period cash flow impact, such as changes in working capital. The most significant items in working capital were the seasonal changes in Inventories, Income Taxes Payable, and Accounts Receivable, and the change in Accounts Payable, Accrued Expenses and Other.
Previous wording
Net cash provided by operating activities in the first quarter of 2023 was $44 million, including net income of $81 million. Net income included depreciation of $63 million, share-based compensation expense of $7 million and a pre-tax gain on extinguishment of debt of $7 million. Other changes in assets and liabilities represent items that had a current period cash flow impact, such as changes in working capital. The most significant items in working capital were the seasonal changes in Accounts Payable, Accrued Expenses and Other, Accounts Receivable and Inventories.
Current wording
Net cash provided by operating activities for year-to-date 2023 was $77 million, including net income of $180 million. Net income included depreciation of $129 million, share-based compensation expense of $18 million and pre-tax gains on extinguishment of debt of $16 million. Other changes in assets and liabilities represent items that had a current period cash flow impact, such as changes in working capital. The most significant items in working capital were the seasonal changes in Inventories, Income Taxes Payable and Accounts Receivable, and the change in Accounts Payable, Accrued Expenses and Other.
Previous wording
Net cash used for investing activities in the first quarter of 2024 was $46 million related to capital expenditures. The capital expenditures included approximately $35 million related to new, primarily off-mall, stores and remodels of existing stores.
Current wording
Net cash used for investing activities for year-to-date 2024 was $40 million primarily related to capital expenditures of $101 million, partially offset by aggregate cash proceeds of $50 million related to the sales of certain Easton investments. The capital expenditures included approximately $75 million related to new, primarily off-mall, stores and remodels of existing stores, approximately $15 million for various IT projects primarily to support the growth and profitability of our business, and approximately $10 million related to distribution and logistics capabilities.
Previous wording
Net cash used for investing activities in the first quarter of 2023 was $94 million, primarily related to capital expenditures. The capital expenditures included approximately $40 million related to new, off-mall stores and remodels of existing stores, and approximately $35 million for various IT projects primarily supporting the separation of our IT systems from Victoria’s Secret’s systems.
Current wording
Net cash used for investing activities for year-to-date 2023 was $176 million, primarily related to capital expenditures. The capital expenditures included approximately $85 million related to new, off-mall stores and remodels of existing stores, approximately $55 million for various IT projects primarily supporting the separation of our IT systems from Victoria's Secret and approximately $30 million related to distribution and logistics capabilities.
Previous wording
In 2024, our top priority remains driving sustainable, long-term, profitable growth through investments in the business. To support this, we continue to plan for a total of $300 million to $325 million in capital expenditures during the year, and our priorities remain investments in brick-and-mortar stores and in technology.
Current wording
In 2024, our top priority remains driving sustainable, long-term, profitable growth through investments in the business. To support this, we are now planning for a total of $250 million in capital expenditures during the year, and our priorities remain investments in brick-and-mortar stores and in technology. Our capital expenditures guidance is down from our previous range of $300 million to $325 million, largely driven by cost savings in our real estate build outs and timing of multiyear supply chain investments.
Previous wording
Net cash used for financing activities in the first quarter of 2024 was $259 million, primarily consisting of $110 million for open market debt repurchases, $96 million for share repurchases, dividend payments of $0.20 per share, or $45 million, and $7 million of tax payments related to share-based awards.
Current wording
Net cash used for financing activities for year-to-date 2024 was $560 million, primarily consisting of $248 million for share repurchases, $202 million for open market debt repurchases, dividend payments of $0.40 per share, or $90 million, and $15 million of tax payments related to share-based awards.
Previous wording
Net cash used for financing activities in the first quarter of 2023 was $135 million, primarily consisting of $74 million for open market debt repurchases, dividend payments of $0.20 per share, or $46 million, and $8 million of tax payments related to share-based awards.
Current wording
Net cash used for financing activities for year-to-date 2023 was $343 million, primarily consisting of $182 million for open market debt repurchases, dividend payments of $0.40 per share, or $92 million, $48 million for share repurchases and $9 million of tax payments related to share-based awards.
Previous wording
In February 2022, our Board authorized a $1.5 billion share repurchase program (the “February 2022 Program”). We did not repurchase any shares of our common stock under the February 2022 Program during the first quarter of 2023.
Current wording
In February 2022, our Board authorized a $1.5 billion share repurchase program (the “February 2022 Program”). Under the February 2022 Program, we repurchased the following shares of our common stock during year-to-date 2024 and 2023:
Previous wording
In January 2024, our Board authorized a new $500 million share repurchase program (the “January 2024 Program”). Under the January 2024 Program, we repurchased the following shares of our common stock during the first quarter of 2024:
Current wording
In January 2024, our Board authorized a new $500 million share repurchase program (the “January 2024 Program”). Under the January 2024 Program, we repurchased the following shares of our common stock during year-to-date 2024:
Previous wording
The January 2024 Program had $440 million of remaining authority as of May 4, 2024. There were share repurchases of $5 million reflected in Accounts Payable on the May 4, 2024 Consolidated Balance Sheet.
Current wording
The January 2024 Program had $290 million of remaining authority as of August 3, 2024. There were share repurchases of $2 million reflected in Accounts Payable on the August 3, 2024 Consolidated Balance Sheet.
Previous wording
We paid the following dividends during the first quarters of 2024 and 2023:
Current wording
We paid the following dividends during the first and second quarters of 2024 and 2023:
Previous wording
In May 2024, we declared our second quarter 2024 ordinary dividend of $0.20 per share payable on June 21, 2024 to stockholders of record at the close of business on June 7, 2024.
Current wording
In August 2024, we declared our third quarter 2024 ordinary dividend of $0.20 per share payable on September 6, 2024 to stockholders of record at the close of business on August 23, 2024.
Previous wording
The following table provides our outstanding Long-term Debt balance, net of unamortized debt issuance costs and discounts, as of May 4, 2024, February 3, 2024 and April 29, 2023:
Current wording
The following table provides our outstanding debt balances, net of unamortized debt issuance costs and discounts, as of August 3, 2024, February 3, 2024 and July 29, 2023:
Previous wording
During the first quarter of 2023, we repurchased in the open market and extinguished $84 million principal amount of our outstanding senior notes. The aggregate repurchase price for these notes was $76 million, resulting in a pre-tax gain of $7 million, including the write-off of unamortized issuance costs. This gain is included in Other Income in the first quarter of 2023 Consolidated Statement of Income. There were $2 million of repurchases reflected in Accounts Payable on the April 29, 2023 Consolidated Balance Sheet.
Current wording
During the second quarter of and year-to-date 2024, we repurchased in the open market and extinguished $91 million and $200 million principal amounts of our outstanding senior notes, respectively. The aggregate repurchase price for these notes were $92 million and $202 million for the second quarter of and year-to-date 2024, respectively, resulting in pre-tax losses of $2 million and $3 million, including the write-off of unamortized issuance costs, during the second quarter of and year-to-date 2024, respectively. These losses are included in Other Income in the 2024 Consolidated Statements of Income.
Previous wording
During the first quarter of 2024, we repurchased in the open market and extinguished $109 million principal amount of our outstanding senior notes. The aggregate repurchase price for these notes was $110 million, resulting in a pre-tax loss of $1 million, including the write-off of unamortized issuance costs. This loss is included in Other Income in the first quarter of 2024 Consolidated Statement of Income.
Current wording
During the second quarter of and year-to-date 2023, we repurchased in the open market and extinguished $115 million and $199 million principal amounts of our outstanding senior notes, respectively. The aggregate repurchase price for these notes were $106 million and $182 million for the second quarter of and year-to-date 2023, respectively, resulting in pre-tax gains of $9 million and $16 million, including the write-off of unamortized issuance costs, during the second quarter of and year-to-date 2023, respectively. These gains are included in Other Income in the 2023 Consolidated Statements of Income.
Previous wording
The following table provides details of the outstanding principal amount of senior notes repurchased and extinguished during the first quarters of 2024 and 2023:
Current wording
The following table provides details of the outstanding principal amounts of senior notes repurchased and extinguished during the second quarters of and year-to-date 2024 and 2023:
Previous wording
We and certain of our 100% owned subsidiaries guarantee and pledge collateral to secure the ABL Facility. The ABL Facility, which allows borrowings and letters of credit in U.S. dollars or Canadian dollars, has aggregate commitments of $750 million and an expiration date in August 2026.
Current wording
We and certain of our 100% owned subsidiaries guarantee and pledge collateral to secure the ABL Facility. The ABL Facility, which allows borrowings and letters of credit in U.S. dollars, has aggregate commitments of $750 million and an expiration date in August 2026.
Previous wording
Availability under the ABL Facility is the lesser of (i) the borrowing base, determined primarily based on our eligible U.S. and Canadian credit card receivables, accounts receivable, inventory and eligible real property, or (ii) the aggregate commitment. If at any time the outstanding amount under the ABL Facility exceeds the lesser of (i) the borrowing base and (ii) the aggregate commitment, we are required to repay the outstanding amounts under the ABL Facility to the extent of such excess. As of May 4, 2024, our borrowing base was $656 million, and we had no borrowings outstanding under the ABL Facility.
Current wording
Availability under the ABL Facility is the lesser of (i) the borrowing base, determined primarily based on our eligible U.S. and Canadian credit card receivables, accounts receivable, inventory and eligible real property, or (ii) the aggregate commitment. If at any time the outstanding amount under the ABL Facility exceeds the lesser of (i) the borrowing base and (ii) the aggregate commitment, we are required to repay the outstanding amounts under the ABL Facility to the extent of such excess. As of August 3, 2024, our borrowing base was $661 million, and we had no borrowings outstanding under the ABL Facility.
Previous wording
The ABL Facility supports our letter of credit program. We had $10 million of outstanding letters of credit as of May 4, 2024 that reduced our availability under the ABL Facility. As of May 4, 2024, our availability under the ABL Facility was $646 million.
Current wording
The ABL Facility supports our letter of credit program. We had $10 million of outstanding letters of credit as of August 3, 2024 that reduced our availability under the ABL Facility. As of August 3, 2024, our availability under the ABL Facility was $651 million.
Previous wording
As of May 4, 2024, the ABL Facility fees related to committed and unutilized amounts were 0.30% per annum, and the fees related to outstanding letters of credit were 1.25% per annum. In addition, the interest rate on outstanding U.S. dollar borrowings was the term Secured Overnight Financing Rate plus 1.25% and a credit spread adjustment of 0.10% per annum. The interest rate on Canadian dollar-denominated borrowings is presently set to the Canadian Dollar Offered Rate plus 1.25% per annum. Due to the phase-out of the Canadian Dollar Offered Rate, Canadian dollar-denominated borrowings outstanding on or after June 30, 2024 will accrue at the Canadian Prime Rate plus 0.25% per annum.
Current wording
As of August 3, 2024, the ABL Facility fees related to committed and unutilized amounts were 0.30% per annum, and the fees related to outstanding letters of credit were 1.25% per annum. In addition, the interest rate on outstanding U.S. dollar borrowings was the Term Secured Overnight Financing Rate plus 1.25% and a credit spread adjustment of 0.10% per annum.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
(a)Results include fulfilled BOPIS orders.
Current report — wording carried from elsewhere
General, Administrative and Store Operating Expenses
Current report — wording carried from elsewhere
For year-to-date 2024, our General, Administrative and Store Operating Expenses increased $14 million to $863 million, and the rate (expressed as a percentage of Net Sales) increased to 29.6% from 28.7%. Our Selling Expenses increased primarily due to increases in associate wages, BOPIS fees and store count, partially offset by the benefits of our cost optimization work. Increases in Marketing Expenses, primarily due to additional spend to drive customer acquisition, were nearly offset by decreases in Home Office Expenses, primarily due to discrete corporate expenses in the prior year.
Current report — wording carried from elsewhere
The General, Administrative and Store Operating Expense rate increased primarily due to our investments in marketing and the increase in associate wages, partially offset by the benefits of our cost optimization work and lapping discrete corporate expenses in the prior year.
Current report — wording carried from elsewhere
The following table provides the average daily borrowings and average borrowing rates for year-to-date 2024 and 2023:
Current report — wording carried from elsewhere
For year-to-date 2024, our Interest Expense was $159 million, compared to $175 million for year-to-date 2023. The decrease was due to lower average daily borrowings, which were driven by the repurchase and early extinguishment of outstanding notes.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Under the February 2022 Program, we repurchased the following shares of our common stock during the first quarter of 2024: