0001710155-21-000052 | 10-Q | XBRL Viewer | National Vision Holdings INC

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Cover - shares	6 Months Ended
Cover - shares	Jul. 03, 2021	Jul. 30, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 03, 2021
Document Transition Report	false
Entity File Number	001-38257
Entity Registrant Name	National Vision Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-4841717
Entity Address, Address Line One	2435 Commerce Ave
Entity Address, Address Line Two	Building 2200
Entity Address, City or Town	Duluth
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30096
City Area Code	770
Local Phone Number	822‑3600
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	EYE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		81,875,123
Entity Central Index Key	0001710155
Current Fiscal Year End Date	--01-01
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Current assets:
Cash and cash equivalents	$ 408,301	$ 373,903
Accounts receivable, net	54,733	57,989
Inventories	120,863	111,274
Prepaid expenses and other current assets	24,466	23,484
Total current assets	608,363	566,650
Property and equipment, net	335,504	341,293
Other assets:
Goodwill	777,613	777,613
Trademarks and trade names	240,547	240,547
Other intangible assets, net	45,766	49,511
Right of use assets	343,708	340,141
Other assets	17,715	17,743
Total non-current assets	1,760,853	1,766,848
Total assets	2,369,216	2,333,498
Current liabilities:
Accounts payable	77,677	64,861
Other payables and accrued expenses	116,508	110,309
Unearned revenue	39,071	32,657
Deferred revenue	68,612	58,899
Current maturities of long-term debt and finance lease obligations	4,285	3,598
Current operating lease obligations	64,330	58,356
Total current liabilities	370,483	328,680
Long-term debt and finance lease obligations, less current portion and debt discount	616,160	651,763
Non-current operating lease obligations	326,478	327,371
Other non-current liabilities:
Deferred revenue	23,483	20,828
Other liabilities	14,272	17,415
Deferred income taxes, net	80,003	80,939
Total other non-current liabilities	117,758	119,182
Commitments and contingencies (See Note 9)
Stockholders’ equity:
Common stock, $0.01 par value; 200,000 shares authorized; 82,828 and 82,183 shares issued as of July 3, 2021 and January 2, 2021, respectively; 81,855 and 81,239 shares outstanding as of July 3, 2021 and January 2, 2021, respectively	828	821
Additional paid-in capital	739,380	795,697
Accumulated other comprehensive loss	(3,093)	(4,400)
Retained earnings	231,184	142,880
Treasury stock, at cost; 973 and 944 shares as of July 3, 2021 and January 2, 2021, respectively	(29,962)	(28,496)
Total stockholders’ equity	938,337	906,502
Total liabilities and stockholders’ equity	$ 2,369,216	$ 2,333,498

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jul. 03, 2021	Jan. 02, 2021
Statement of Financial Position [Abstract]
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	200,000,000	200,000,000
Common stock, issued (in shares)	82,828,000	82,183,000
Common stock, outstanding (in shares)	81,855,000	81,239,000
Treasury stock (in shares)	973,000	944,000

Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Revenue:
Total net revenue	$ 549,489	$ 260,007	$ 1,083,669	$ 729,711
Costs applicable to revenue (exclusive of depreciation and amortization):
Total costs applicable to revenue	235,946	140,780	460,636	359,334
Operating expenses:
Selling, general and administrative expenses	234,235	136,582	457,828	330,323
Depreciation and amortization	24,025	21,924	47,580	46,734
Asset impairment	519	2,411	1,478	13,766
Litigation settlement	0	0	0	4,395
Other expense (income), net	(65)	(92)	(130)	(158)
Total operating expenses	258,714	160,825	506,756	395,060
Income (loss) from operations	54,829	(41,598)	116,277	(24,683)
Interest expense, net	10,096	15,502	16,426	22,957
Debt issuance costs	92	136	92	136
Earnings (loss) before income taxes	44,641	(57,236)	99,759	(47,776)
Income tax provision (benefit)	7,040	(13,403)	18,726	(13,685)
Net income (loss)	$ 37,601	$ (43,833)	$ 81,033	$ (34,091)
Earnings (loss) per share:
Basic (in usd per share)	$ 0.46	$ (0.55)	$ 0.99	$ (0.42)
Diluted (in usd per share)	$ 0.42	$ (0.55)	$ 0.89	$ (0.42)
Weighted average shares outstanding:
Basic (in shares)	81,601	80,325	81,457	80,226
Diluted (in shares)	96,082	80,325	96,044	80,226
Comprehensive income (loss):
Net income (loss)	$ 37,601	$ (43,833)	$ 81,033	$ (34,091)
Unrealized gain (loss) on hedge instruments	2,959	4,111	4,609	(4,747)
Tax provision (benefit) of unrealized gain (loss) on hedge instruments	756	1,050	3,302	(1,206)
Comprehensive income (loss)	39,804	(40,772)	82,340	(37,632)
Products
Revenue:
Total net revenue	458,206	209,707	901,273	602,548
Costs applicable to revenue (exclusive of depreciation and amortization):
Total costs applicable to revenue	167,028	97,635	326,719	254,005
Services and plans
Revenue:
Total net revenue	91,283	50,300	182,396	127,163
Costs applicable to revenue (exclusive of depreciation and amortization):
Total costs applicable to revenue	$ 68,918	$ 43,145	$ 133,917	$ 105,329

Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Cumulative effect of change in accounting principle	Balance as adjusted	Common Stock	Common Stock Balance as adjusted	Additional Paid-In Capital	Additional Paid-In Capital Cumulative effect of change in accounting principle	Additional Paid-In Capital Balance as adjusted	Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss Balance as adjusted	Retained Earnings	Retained Earnings Cumulative effect of change in accounting principle	Retained Earnings Balance as adjusted	Treasury Stock	Treasury Stock Balance as adjusted
Beginning balance (in shares) at Dec. 28, 2019				79,678	79,678
Balance at beginning of period at Dec. 28, 2019	$ 776,437	$ (529)	$ 775,908	$ 805	$ 805	$ 700,121		$ 700,121	$ (3,814)	$ (3,814)	$ 107,132	$ (529)	$ 106,603	$ (27,807)	$ (27,807)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)				602
Issuance of common stock	5,120			$ 6		5,114
Stock based compensation	2,066					2,066
Purchase of treasury stock (in shares)				(2)
Purchase of treasury stock	(74)													(74)
Unrealized gain (loss) on hedge instruments, net of tax	(6,602)								(6,602)
Net income (loss)	9,742										9,742
Ending balance (in shares) at Mar. 28, 2020				80,278
Balance at end of period at Mar. 28, 2020	786,160			$ 811		707,301			(10,416)		116,345			(27,881)
Beginning balance (in shares) at Dec. 28, 2019				79,678	79,678
Balance at beginning of period at Dec. 28, 2019	776,437	(529)	775,908	$ 805	$ 805	700,121		700,121	(3,814)	(3,814)	107,132	(529)	106,603	(27,807)	(27,807)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(34,091)
Ending balance (in shares) at Jun. 27, 2020				80,415
Balance at end of period at Jun. 27, 2020	820,939			$ 812		782,851			(7,355)		72,512			(27,881)
Beginning balance (in shares) at Mar. 28, 2020				80,278
Balance at beginning of period at Mar. 28, 2020	786,160			$ 811		707,301			(10,416)		116,345			(27,881)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)				137
Issuance of common stock	878			$ 1		877
Stock based compensation	3,324					3,324
Conversion option related to convertible senior notes, net of allocated costs and tax	71,349					71,349
Unrealized gain (loss) on hedge instruments, net of tax	3,061								3,061
Net income (loss)	(43,833)										(43,833)
Ending balance (in shares) at Jun. 27, 2020				80,415
Balance at end of period at Jun. 27, 2020	820,939			$ 812		782,851			(7,355)		72,512			(27,881)
Beginning balance (in shares) at Jan. 02, 2021				81,239	81,239
Balance at beginning of period at Jan. 02, 2021	906,502	(64,114)	842,388	$ 821	$ 821	795,697	$ (71,385)	724,312	(4,400)	(4,400)	142,880	7,271	150,151	(28,496)	(28,496)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)				174
Issuance of common stock	1,058			$ 2		1,056
Stock based compensation	2,971					2,971
Purchase of treasury stock (in shares)				(28)
Purchase of treasury stock	(1,421)													(1,421)
Unrealized gain (loss) on hedge instruments, net of tax	(896)								(896)
Net income (loss)	43,432										43,432
Ending balance (in shares) at Apr. 03, 2021				81,385
Balance at end of period at Apr. 03, 2021	887,532			$ 823		728,339			(5,296)		193,583			(29,917)
Beginning balance (in shares) at Jan. 02, 2021				81,239	81,239
Balance at beginning of period at Jan. 02, 2021	906,502	$ (64,114)	$ 842,388	$ 821	$ 821	795,697	$ (71,385)	$ 724,312	(4,400)	$ (4,400)	142,880	$ 7,271	$ 150,151	(28,496)	$ (28,496)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	81,033
Ending balance (in shares) at Jul. 03, 2021				81,855
Balance at end of period at Jul. 03, 2021	938,337			$ 828		739,380			(3,093)		231,184			(29,962)
Beginning balance (in shares) at Apr. 03, 2021				81,385
Balance at beginning of period at Apr. 03, 2021	887,532			$ 823		728,339			(5,296)		193,583			(29,917)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)				471
Issuance of common stock	3,868			$ 5		3,863
Stock based compensation	7,178					7,178
Purchase of treasury stock (in shares)				(1)
Purchase of treasury stock	(45)													(45)
Unrealized gain (loss) on hedge instruments, net of tax	2,203								2,203
Net income (loss)	37,601										37,601
Ending balance (in shares) at Jul. 03, 2021				81,855
Balance at end of period at Jul. 03, 2021	$ 938,337			$ 828		$ 739,380			$ (3,093)		$ 231,184			$ (29,962)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020
Cash flows from operating activities:
Net income (loss)	$ 81,033	$ (34,091)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	47,580	46,734
Amortization of debt discount and deferred financing costs	2,268	2,717
Asset impairment	1,478	13,766
Deferred income tax expense (benefit)	14,582	(13,686)
Stock based compensation expense	10,201	5,445
Losses (gains) on change in fair value of derivatives	125	4,871
Inventory adjustments	619	2,883
Other	1,253	3,328
Changes in operating assets and liabilities:
Accounts receivable	2,393	(14,408)
Inventories	(10,208)	6,814
Operating lease right of use assets and lease liabilities	149	1,174
Other assets	(1,148)	2,047
Accounts payable	12,816	11,630
Deferred and unearned revenue	18,782	8,025
Other liabilities	7,885	24,171
Net cash provided by operating activities	189,808	71,420
Cash flows from investing activities:
Purchase of property and equipment	(38,812)	(25,796)
Other	22	265
Net cash used for investing activities	(38,790)	(25,531)
Cash flows from financing activities:
Borrowings on long-term debt, net of discounts	0	548,769
Repayments on long-term debt	(117,375)	(369,269)
Proceeds from exercise of stock options	5,738	5,998
Purchase of treasury stock	(1,466)	(74)
Payments of debt issuance costs	(900)	(12,400)
Payments on finance lease obligations	(2,526)	(1,587)
Net cash provided by (used for) financing activities	(116,529)	171,437
Net change in cash, cash equivalents and restricted cash	34,489	217,326
Cash, cash equivalents and restricted cash, beginning of year	375,159	40,307
Cash, cash equivalents and restricted cash, end of period	409,648	257,633
Supplemental cash flow disclosure information:
Cash paid for interest	14,640	13,810
Cash paid (received) for taxes	6,995
Cash paid (received) for taxes		(1,452)
Capital expenditures accrued at the end of the period	$ 8,827	$ 11,265

Description of Business and Basis of Presentation

6 Months Ended

Jul. 03, 2021

Accounting Policies [Abstract]

Description of Business and Basis of Presentation

Nature of Operations

National Vision Holdings, Inc. (“NVHI,” the “Company,” “we,” “our,” or “us”) is a holding company whose operating subsidiaries include its indirect wholly owned subsidiary, National Vision, Inc. (“NVI”) and NVI’s wholly owned subsidiaries. We are a leading value retailer of eyeglasses and contact lenses in the United States. We operated 1,249 and 1,205 retail optical locations in the United States and its territories as of July 3, 2021 and January 2, 2021, respectively, through our five store brands, including America’s Best Contacts and Eyeglasses (“America’s Best”), Eyeglass World, Vista Optical locations on select U.S. Army/Air Force military bases (“Military”) and within select Fred Meyer stores, and our management & services arrangement with Walmart (“Legacy”).

Basis of Presentation

We prepare our unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and, therefore, do not include all information and disclosures required by U.S. GAAP for complete consolidated financial statements. The condensed consolidated balance sheet as of January 2, 2021 has been derived from the audited consolidated balance sheet for the fiscal year then ended. These condensed consolidated financial statements reflect all normal and recurring adjustments which are, in the opinion of management, necessary to present fairly the Company’s consolidated results of the interim period. Certain prior year amounts in the Condensed Consolidated Statements of Cash Flows have been reclassified to conform to the current presentation.

Certain information and disclosures normally included in our annual consolidated financial statements have been condensed or omitted; however, we believe that the disclosures included herein are sufficient for a fair presentation of the information presented. These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the fiscal year ended January 2, 2021 included in the 2020 Annual Report on Form 10-K. The Company’s significant accounting policies are set forth in Note 1 within those consolidated financial statements. We use the same accounting policies in preparing interim condensed consolidated financial information and annual consolidated financial statements. There were no changes to our significant accounting policies during the six months ended July 3, 2021, except for the adoption of Accounting Standards Update (“ASU”) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). See “Adoption of New Accounting Pronouncements” below for further discussion.

The condensed consolidated financial statements include our accounts and those of our subsidiaries, all of which are wholly-owned. All intercompany balances and transactions have been eliminated in consolidation.

Fiscal Year

Our fiscal year consists of 52 or 53 weeks ending on the Saturday closest to December 31. Fiscal year 2021 contains 52 weeks and will end on January 1, 2022. All three and six month periods presented herein contain 13 and 26 weeks, respectively. All references to years and quarters relate to fiscal periods rather than calendar periods.

Seasonality

The consolidated results of operations for the three and six months ended July 3, 2021 and June 27, 2020, are not necessarily indicative of the results to be expected for the full fiscal year due to seasonality and uncertainty of general economic conditions that may impact our key end markets. Historically, our business has realized a higher portion of net revenue, income from operations, and cash flows from operations in the first half of the year, and a lower portion of net revenue, income from operations, and cash flows from operations in the fourth fiscal quarter. The first half seasonality is attributable primarily to the timing of our customers’ personal income tax refunds and annual health insurance program start/reset periods. Seasonality related to fourth quarter holiday spending by retail customers generally does not impact our business. Our quarterly consolidated results generally may also be affected by the timing of new store openings, store closings, and certain holidays.

The COVID-19 pandemic resulted in the temporary closure of our stores for a portion of the first half of fiscal year 2020 and caused changes in fiscal year 2020 seasonality. COVID-19 may continue to cause changes to the seasonality we have historically experienced in fiscal year 2021 and beyond.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Income Taxes

Our income tax provision for the three months ended July 3, 2021 and June 27, 2020 reflected our statutory federal and state rate of 25.5%, offset by discrete benefits from stock option exercises of $4.1 million and $0.3 million, respectively. Our income tax provision for the six months ended July 3, 2021 and June 27, 2020 reflected our statutory federal and state rate of 25.5% offset by discrete benefits from stock option exercises of $4.5 million and $3.0 million, respectively, and a stranded tax effect of $2.1 million associated with our matured interest rate swaps during the six months ended July 3, 2021.

Adoption of New Accounting Pronouncements

Convertible Instruments and Contracts in an Entity’s Own Equity. In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06. This new guidance simplifies and adds disclosure requirements for the accounting and measurement of convertible instruments and the settlement assessment for contracts in an entity’s own equity. The guidance also requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share. ASU 2020-06 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021. The company early adopted the guidance in the first quarter of 2021 using the modified retrospective approach and recognized a cumulative effect of the change of $7.3 million as an adjustment to the opening balance of retained earnings. Upon adoption of ASU 2020-06 the Company eliminated the equity components related to its convertible debt and increased the related liability components by $82.9 million. In addition, as a result of the adoption, our deferred tax liabilities decreased by $18.8 million and additional paid-in capital decreased by $71.4 million. The adoption did not have an impact on the calculated weighted average shares outstanding used in the calculation of diluted EPS since the Company was using the if-converted method prior to the adoption of ASU 2020-06. Refer to Note 11. “Earnings per Share” for more information.

The following tables summarize the impact of adoption on the Company’s condensed consolidated statement of operations for the three and six months ended July 3, 2021:


	Three Months Ended July 3, 2021
In thousands (except earnings per share)	With ASU 2020-06 Adoption		Without ASU 2020-06 Adoption		Impact of Adoption

Income from operations	$	54,829	$	54,829	$	—
Interest expense, net	10,096		14,040		(3,944)
Debt issuance costs	92		92		—
Earnings before income taxes	44,641		40,697		3,944
Income tax provision	7,040		6,144		896
Net income	$	37,601	$	34,553	$	3,048
Earnings per share:
Basic	$	0.46	$	0.42	$	0.04
Diluted	$	0.42	$	0.42	$	—
Impact of adoption on basic earnings per share is calculated using impact on net income divided by basic weighted average shares outstanding during the period.


	Six Months Ended July 3, 2021
In thousands (except earnings per share)	With ASU 2020-06 Adoption		Without ASU 2020-06 Adoption		Impact of Adoption

Income from operations	$	116,277	$	116,277	$	—
Interest expense, net	16,426		24,176		(7,750)
Debt issuance costs	92		92		—
Earnings before income taxes	99,759		92,009		7,750
Income tax provision	18,726		17,010		1,716
Net income	$	81,033	$	74,999	$	6,034
Earnings per share:
Basic	$	0.99	$	0.92	$	0.07
Diluted	$	0.89	$	0.89	$	—
Impact of adoption on basic earnings per share is calculated using impact on net income divided by basic weighted average shares outstanding during the period.

Future Adoption of Accounting Pronouncements

Reference Rate Reform. In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). This guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that may be affected by the cessation of the London Inter-bank Offered Rate (“LIBOR.”) An entity may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2022. A portion of our debt is subject to interest payments that are indexed to LIBOR; additionally, we are party to an interest rate derivative based on LIBOR. We are currently evaluating the effect of this guidance and have not applied the provisions of this guidance during the current fiscal year.

The FASB issued other accounting guidance during the period that is not currently applicable or expected to have a material impact on the Company’s condensed consolidated financial statements, and therefore, is not described above.

Details of Certain Balance Sheet Accounts

6 Months Ended

Jul. 03, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Details of Certain Balance Sheet Accounts


In thousands	As of July 3, 2021		As of January 2, 2021
Accounts receivable, net:
Trade receivables	$	28,742	$	28,405
Credit card receivables	19,830		21,557
Other receivables	6,556		8,460
Allowance for credit losses	(395)		(433)
	$	54,733	$	57,989


In thousands	As of July 3, 2021		As of January 2, 2021
Inventories:
Raw materials and work in process (1)	$	55,246	$	55,473
Finished goods	65,617		55,801
	$	120,863	$	111,274
(1)Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, the Company does not separately present raw materials and work in process.


In thousands	As of July 3, 2021		As of January 2, 2021
Other payables and accrued expenses:
Associate compensation and benefits (1)	$	53,251	$	51,081
Advertising	4,503		2,173
Self-insurance liabilities	9,634		8,650
Reserves for customer returns and remakes	9,301		8,084
Capital expenditures	8,827		8,455
Legacy management & services agreement	6,722		5,386
Fair value of derivative liabilities	4,077		5,116
Supplies and other store support expenses	2,820		3,461
Litigation settlements	1,720		1,107
Lease concessions	737		3,142
Other	14,916		13,654
	$	116,508	$	110,309
(1) Includes the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act deferred employer payroll taxes in the amount of $0.0 million and $12.8 million as of July 3, 2021 and January 2, 2021, respectively.


In thousands	As of July 3, 2021		As of January 2, 2021
Other non-current liabilities:
Fair value of derivative liabilities	$	4,217	$	7,663
Self-insurance liabilities	7,491		7,046
Other	2,564		2,706
	$	14,272	$	17,415

Fair Value Measurement	6 Months Ended
Fair Value Measurement	Jul. 03, 2021
Fair Value Disclosures [Abstract]
Fair Value Measurement	Fair Value Measurement Recurring fair value measurements Interest Rate Derivatives We recognize as assets or liabilities at fair value the estimated amounts we would receive or pay upon a termination of interest rate derivatives prior to their scheduled expiration dates. The fair value is based on information that is model-driven and whose inputs were observable (Level 2 inputs). See Note 5. “Interest Rate Derivatives” for further details. Nonrecurring fair value measurements Tangible Long-lived and Right of Use (“ROU”) Store Assets We recognized impairments of $0.5 million and $1.5 million during the three and six months ended July 3, 2021, respectively, related to our long-lived tangible store assets and ROU assets. The impairments were primarily driven by lower than projected customer sales volume in certain stores. The cash flows used in estimating fair value were discounted using a market rate of 7.5%. We consider market-based indications of prevailing rental rates for retail space, market participant discount rates, and lease incentives when estimating the fair values of ROU assets. A decrease in the estimated cash flows would lead to a lower fair value measurement, as would an increase in the discount rate. These non-recurring fair value measurements are classified as Level 3 measurements in the fair value hierarchy. The estimated remaining fair value of the assets impaired as of July 3, 2021 was $2.9 million. Substantially all of the remaining fair value of the impaired store assets in fiscal year 2021 represents the fair value of ROU assets. Additional fair value information Long-term Debt - 2025 Notes The Company has $402.5 million in aggregate principal amount of 2.50% convertible senior notes due on May 15, 2025 (the “2025 Notes”) issued and outstanding as of July 3, 2021. Refer to Note 4. “Long-term Debt” for more information on the 2025 Notes. The estimated fair value of the 2025 Notes was approximately $705.2 million and $655.3 million as of July 3, 2021 and January 2, 2021, respectively. The estimated fair value of the 2025 Notes is based on the prices the 2025 Notes have traded in the market as of July 3, 2021, as well as overall market conditions on the date of valuation, stated coupon rates, the number of coupon payments each year and the maturity date, and represents a Level 2 measurement in the fair value hierarchy.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Long-term Debt

6 Months Ended

Jul. 03, 2021

Debt Disclosure [Abstract]

Long-term Debt

Long-term debt consists of the following:


In thousands	As of July 3, 2021		As of January 2, 2021
2025 Notes, due May 15, 2025	$	402,500	$	402,500
Term loan, due July 18, 2024	200,000		317,375
Long-term debt before debt discount	602,500		719,875
Unamortized discount and issuance costs - 2025 Notes	(9,153)		(93,123)
Unamortized discount and issuance costs - term loan	(1,515)		(2,141)
Long-term debt less debt discount	591,832		624,611
Less current maturities	—		—
Long-term debt - non-current portion	591,832		624,611
Finance lease obligations	28,613		30,750
Less current maturities	(4,285)		(3,598)
Long-term debt and finance lease obligations, less current portion and debt discount	$	616,160	$	651,763

Credit Agreement

During the second quarter of 2021, the Company voluntarily prepaid $117.4 million of term loan principal and wrote off associated deferred debt issuance costs of $0.7 million. The Company also amended its credit agreement to, among other things, add customary LIBOR replacement provisions, modify the applicable margins used to calculate the rate of interest payable on the first lien term loans thereunder to a range of 1.25% to 2.00% for LIBOR Loans and a range of 0.25% to 1.00% for ABR Loans, modify certain financial covenants related to maximum leverage and minimum interest coverage and remove the LIBOR floor, such that LIBOR shall be deemed to be no less than 0.00% per annum (instead of 1.00% per annum previously in effect).

As a result of the principal prepayments made by the Company, we have no additional mandatory principal payments on the remaining $200.0 million term loan balance until maturity on July 18, 2024.

Capitalized terms used but not defined herein shall have the meanings assigned to such terms in our credit agreement. Pursuant to our credit agreement, the Company will not permit (i) the Consolidated Total Debt to Consolidated EBITDA Ratio to be negative or greater than (x) 4.50 to 1.00 with respect to the last day of the Company’s second and third fiscal quarters of 2021 and (y) 4.25 to 1.00 from and after the last day of the Company’s fourth fiscal quarter of 2021, subject to certain step-ups after the consummation of a Material Acquisition, or (ii) the Consolidated Interest Coverage Ratio of the Company as of the last day of any fiscal quarter of the Company to be less than 3.00 to 1.00. We were in compliance with all covenants related to our long-term debt as of July 3, 2021.

2025 Notes

The Company adopted ASU 2020-06 as of January 3, 2021. ASU 2020-06 eliminates the cash conversion and the beneficial conversion feature models. Under the new convertible debt framework, the Company eliminated the equity components and increased the debt balance. Refer to Note 1. “Description of Business and Basis of Presentation” for further discussion of the adoption of ASU 2020-06. As a result of adopting ASU 2020-06, our effective interest rate decreased from 9.1% as of January 2, 2021 to 3.2% starting in the first quarter of 2021. We recognized $2.5 million and $0.5 million in interest expense for the interest coupon and amortization of issuance costs, respectively, during the three months ended July 3, 2021 and $5.0 million and $1.0 million, respectively during the six months ended July 3, 2021. As of July 3, 2021, the remaining period for the unamortized debt issuance costs balance was approximately four years.

As of July 3, 2021, the 2025 Notes can be converted by holders. The conversion rate will be subject to adjustment upon the occurrence of certain specified events including, but not limited to: issuance of stock dividends, splits and combinations; distribution of rights, options and warrants; spin-offs and other distributed property; cash dividends or distributions; tender offers or exchange offers; and certain other corporate transactions. The holders of our term loan would have preference over the holders of the 2025 Notes in the event of a liquidation.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

Interest Rate Derivatives	6 Months Ended
Interest Rate Derivatives	Jul. 03, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Interest Rate Derivatives	Interest Rate Derivatives We are party to an interest rate collar to offset the variability of cash flows in LIBOR-indexed debt interest payments. The aggregate notional amount of the interest rate collar was $375.0 million as of July 3, 2021. The fair value of our interest rate collar instrument was $8.3 million as of July 3, 2021 and is not designated as a cash flow hedge. The interest rate swaps we held at the end of fiscal year 2020 matured in the first quarter of 2021. The fair value of our interest rate derivative instruments was $12.8 million as of January 2, 2021, $1.5 million of which was designated as a cash flow hedge. See Note 3. “Fair Value Measurement” for further details. Gains (losses) on the change in fair value of the interest rate collar of approximately $(0.5) million and $1.5 million were recorded in interest expense, net during the three and six months ended July 3, 2021, respectively. Interest expense, net related to our interest rate derivatives considered to be highly effective hedges for the six months ended July 3, 2021 was $1.5 million. Cash flows related to derivatives qualifying as hedges are included in the same section of the Condensed Consolidated Statements of Cash Flows as the underlying assets and liabilities being hedged. Cash flows during the six months ended July 3, 2021 and June 27, 2020 related to derivatives not qualifying as hedges were included in the operating section of the Condensed Consolidated Statements of Cash Flows and were immaterial. During the second quarter of 2021, as a result of the partial repayment of the Company’s LIBOR based term-loan debt balances, certain forecasted hedged transactions were deemed not probable of occurring. The Company subsequently reclassified unrealized losses of $2.5 million from AOCL to interest expense on $115.0 million of interest rate collar notional, during the three and six months ended July 3, 2021. As of July 3, 2021, the Company expects to reclassify approximately $0.9 million of unrealized losses on derivative instruments, net of tax, from Accumulated other comprehensive loss (“AOCL”) into earnings in the next 12 months as the derivative instruments mature. See Note 13. “Accumulated Other Comprehensive Loss” for further details. During the second quarter of 2020, as a result of the partial repayment of the Company’s LIBOR based debt balances, certain forecasted hedged transactions were deemed not probable of occurring. The Company subsequently discontinued hedge accounting on $78.0 million of interest rate swap notional and $58.0 million of interest rate collar notional, reclassifying net unrealized losses of approximately $2.5 million from AOCL to interest expense, net during the three and six months ended June 27, 2020. Additionally, due to changes in the interest rates applicable to the Company’s term loan and revolver, the interest rate collar ceased to be a highly effective hedge. Losses on the change in fair value of the interest rate collar of approximately $2.6 million were recorded in interest expense, net during the quarter ended June 27, 2020. Interest expense, net related to derivatives considered to be highly effective hedges for the three and six months ended June 27, 2020 was $2.0 million and $3.9 million, respectively.

Stock Incentive Plans	6 Months Ended
Stock Incentive Plans	Jul. 03, 2021
Share-based Payment Arrangement [Abstract]
Stock Incentive Plans	Stock Incentive Plans During the six months ended July 3, 2021, the Company granted 107,319 stock options, 108,817 performance-based restricted stock units (“PSUs”) and 126,161 time-based restricted stock units (“RSUs”) to eligible employees under the National Vision Holdings, Inc. 2017 Omnibus Incentive Plan (the “2017 Omnibus Incentive Plan”). The time-based options granted in fiscal 2021 vest in three equal annual installments, with one-third of the total options vesting on each of the first, second, and third anniversaries of the grant date, subject to continued employment through the applicable vesting date. The PSUs granted in fiscal 2021 are settled after the end of the performance period (i.e., cliff vesting), which begins on the first day of our 2021 fiscal year and ends on the last day of our 2023 fiscal year, and are based on the Company’s achievement of certain performance targets. The RSUs granted in fiscal 2021 vest primarily in three equal installments. During the six months ended July 3, 2021, the Company granted 16,539 restricted stock awards (“RSAs”) to eligible members of the Company’s Board of Directors under the 2017 Omnibus Incentive Plan. The awards vest one year from the grant date.

Revenue From Contracts With Customers

6 Months Ended

Jul. 03, 2021

Revenue from Contract with Customer [Abstract]

Revenue From Contracts With Customers

The majority of our revenues are recognized either at the point of sale or upon delivery and customer acceptance, paid for at the time of sale in cash, credit card, or on account with managed care payors having terms generally between 14 and 120 days, with most paying within 90 days. For sales of in-store non-prescription eyewear and related accessories, and paid eye exams, we recognize revenue at the point of sale. Our point in time revenues include 1) retail sales of prescription and non-prescription eyewear, contact lenses and related accessories to retail customers (including those covered by managed care), 2) eye exams and 3) wholesale sales of inventory in which our customer is another retail entity. Revenues recognized over time primarily include product protection plans, eye care club memberships and management fees earned from our legacy partner.

The following disaggregation of revenues depicts our revenue based on the timing of revenue recognition:


	Three Months Ended				Six Months Ended
In thousands	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Revenues recognized at a point in time	$	504,969	$	229,536	$	998,407	$	663,715
Revenues recognized over time	44,520		30,471		85,262		65,996
Total net revenue	$	549,489	$	260,007	$	1,083,669	$	729,711

Refer to Note 10. “Segment Reporting” for the Company’s disaggregation of net revenue by reportable segment and product type. As the reportable segments are aligned by similar economic factors, trends and customers, the reportable segment disaggregation view best depicts how the nature, amount and uncertainty of revenue and cash flows are affected by economic factors.

We record reductions in revenue for estimated price concessions granted to managed care providers. The Company considers its revenue from managed care customers to include variable consideration and estimates such amounts associated with managed care customer revenues using the history of concessions provided and cash receipts from managed care providers; we reduced our net revenue for variable considerations of $1.6 million and an immaterial amount during the three months ended July 3, 2021 and June 27, 2020, respectively, and $4.4 million and $3.7 million during the six months ended July 3, 2021 and June 27, 2020, respectively.

Contract Assets and Liabilities

The Company’s contract assets and contract liabilities primarily result from timing differences between the performance of our obligations and the customer’s payment.

Accounts Receivable

Credit loss expense recognized on our receivables, which is presented in SG&A expenses in the Company’s condensed consolidated statements of operations, were $0.2 million for the three months ended July 3, 2021 and $0.3 million for the six months ended July 3, 2021 as compared to an immaterial amount and $0.4 million for the three and six months ended June 27, 2020, respectively.

Unsatisfied Performance Obligations (Contract Liabilities)

Our deferred revenue balance as of July 3, 2021 was $92.1 million. We expect future revenue recognition of this balance of $44.6 million, $34.0 million, $11.6 million, $1.8 million, and $0.1 million in fiscal years 2021, 2022, 2023, 2024, and 2025, respectively. We recognized $23.0 million and $37.3 million of previously deferred revenues during the three and six months ended July 3, 2021, respectively and $24.2 million and $52.2 million during the three and six months ended June 27, 2020, respectively.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Leases

6 Months Ended

Jul. 03, 2021

Leases [Abstract]

Leases

Our lease costs for the three months ended July 3, 2021 and June 27, 2020 were as follows:


	Three Months Ended				Six Months Ended
In thousands	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Operating lease cost
Fixed lease cost (a)	$	20,903	$	19,100	$	41,554	$	38,412
Variable lease cost (b)	7,515		6,356		14,918		13,166
Sublease income (c)	(919)		(292)		(1,829)		(882)

Finance lease cost
Amortization of finance lease assets	1,113		1,125		2,236		2,281

Interest expense, net:
Interest on finance lease liabilities	743		851		1,523		1,724

Net lease cost	$	29,355	$	27,140	$	58,402	$	54,701

(a) Includes short-term leases, which are immaterial.
(b) Includes costs for insurance, real estate taxes and common area maintenance expenses, which are variable, as are lease costs above minimum thresholds for Fred Meyer stores and lease costs for Military stores.
(c) Income from sub-leasing of stores includes rental income from leasing space to ophthalmologists and optometrists who are independent contractors.


Lease Term and Discount Rate	As of July 3, 2021		As of January 2, 2021
Weighted average remaining lease term (months)
Operating leases	77		77
Finance leases	76		79
Weighted average discount rate (a)
Operating leases	4.7	%	4.7	%
Finance leases (b)	12.0	%	12.3	%

(a) The discount rate used to determine the lease assets and lease liabilities was derived upon considering (i) incremental borrowing rates on our term loan and revolving credit facility; (ii) fixed rates on interest rate swaps; (iii) LIBOR margins for issuers of similar credit rating; and (iv) effect of collateralization. As a majority of our leases are five-year and 10-year leases, we determined a lease discount rate for such tenors and determined this discount rate is reasonable for leases that were entered into during the period.
(b) The discount rate on finance leases is higher than operating leases because the present value of minimum lease payments was higher than the fair value of leased properties for certain leases entered into prior to adoption of ASC 842. The discount rate differential for those leases is not material to our results of operations.


In thousands	Six Months Ended July 3, 2021		Six Months Ended June 27, 2020
Other Information

Operating cash outflows - operating leases	$	43,860	$	35,548
Right of use assets acquired under finance leases	$	—	$	1,257
Right of use assets acquired under operating leases	$	44,544	$	35,870

The following table summarizes the maturity of our lease liabilities as of July 3, 2021:


In thousands	Operating Leases (a)		Finance Leases (b)
Fiscal Year
2021	$	38,606	$	3,637
2022	77,235		6,635
2023	76,376		6,252
2024	66,456		4,753
2025	61,320		4,913
Thereafter	135,804		11,400
Total lease liabilities	455,797		37,590
Less: Interest	64,989		8,977
Present value of lease liabilities (c)	$	390,808	$	28,613

(a) Operating lease payments include $54.4 million related to options to extend lease terms that are reasonably certain of being exercised.
(b) Finance lease payments include $1.7 million related to options to extend lease terms that are reasonably certain of being exercised.
(c) The present value of lease liabilities excludes $20.1 million of legally binding minimum lease payments for leases signed but not yet commenced.

Leases

Our lease costs for the three months ended July 3, 2021 and June 27, 2020 were as follows:


	Three Months Ended				Six Months Ended
In thousands	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Operating lease cost
Fixed lease cost (a)	$	20,903	$	19,100	$	41,554	$	38,412
Variable lease cost (b)	7,515		6,356		14,918		13,166
Sublease income (c)	(919)		(292)		(1,829)		(882)

Finance lease cost
Amortization of finance lease assets	1,113		1,125		2,236		2,281

Interest expense, net:
Interest on finance lease liabilities	743		851		1,523		1,724

Net lease cost	$	29,355	$	27,140	$	58,402	$	54,701

(a) Includes short-term leases, which are immaterial.
(b) Includes costs for insurance, real estate taxes and common area maintenance expenses, which are variable, as are lease costs above minimum thresholds for Fred Meyer stores and lease costs for Military stores.
(c) Income from sub-leasing of stores includes rental income from leasing space to ophthalmologists and optometrists who are independent contractors.


Lease Term and Discount Rate	As of July 3, 2021		As of January 2, 2021
Weighted average remaining lease term (months)
Operating leases	77		77
Finance leases	76		79
Weighted average discount rate (a)
Operating leases	4.7	%	4.7	%
Finance leases (b)	12.0	%	12.3	%

(a) The discount rate used to determine the lease assets and lease liabilities was derived upon considering (i) incremental borrowing rates on our term loan and revolving credit facility; (ii) fixed rates on interest rate swaps; (iii) LIBOR margins for issuers of similar credit rating; and (iv) effect of collateralization. As a majority of our leases are five-year and 10-year leases, we determined a lease discount rate for such tenors and determined this discount rate is reasonable for leases that were entered into during the period.
(b) The discount rate on finance leases is higher than operating leases because the present value of minimum lease payments was higher than the fair value of leased properties for certain leases entered into prior to adoption of ASC 842. The discount rate differential for those leases is not material to our results of operations.


In thousands	Six Months Ended July 3, 2021		Six Months Ended June 27, 2020
Other Information

Operating cash outflows - operating leases	$	43,860	$	35,548
Right of use assets acquired under finance leases	$	—	$	1,257
Right of use assets acquired under operating leases	$	44,544	$	35,870

The following table summarizes the maturity of our lease liabilities as of July 3, 2021:


In thousands	Operating Leases (a)		Finance Leases (b)
Fiscal Year
2021	$	38,606	$	3,637
2022	77,235		6,635
2023	76,376		6,252
2024	66,456		4,753
2025	61,320		4,913
Thereafter	135,804		11,400
Total lease liabilities	455,797		37,590
Less: Interest	64,989		8,977
Present value of lease liabilities (c)	$	390,808	$	28,613

(a) Operating lease payments include $54.4 million related to options to extend lease terms that are reasonably certain of being exercised.
(b) Finance lease payments include $1.7 million related to options to extend lease terms that are reasonably certain of being exercised.
(c) The present value of lease liabilities excludes $20.1 million of legally binding minimum lease payments for leases signed but not yet commenced.

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jul. 03, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Legal Proceedings From time to time, the Company is involved in various legal proceedings incidental to its business. Because of the nature and inherent uncertainties of litigation, we cannot predict with certainty the ultimate resolution of these actions and, should the outcome of these actions be unfavorable, the Company’s business, financial position, results of operations or cash flows could be materially and adversely affected. The Company reviews the status of its legal proceedings and records a provision for a liability when it is considered probable that both a liability has been incurred and the amount of the loss can be reasonably estimated. This review is updated periodically as additional information becomes available. If either or both of the criteria are not met, we reassess whether there is at least a reasonable possibility that a loss, or additional losses, may be incurred. If there is a reasonable possibility that a loss may be incurred, we disclose the estimate of the amount of the loss or range of losses, or that an estimate of loss cannot be made. The Company expenses its legal fees as incurred. We are currently and may in the future become subject to various claims and pending or threatened lawsuits in the ordinary course of our business. Our subsidiary, FirstSight Vision Services, Inc. (“FirstSight”), is a defendant in a purported class action in the U.S. District Court for the Southern District of California that alleges that FirstSight participated in arrangements that caused the illegal delivery of eye examinations and that FirstSight thereby violated, among other laws, the corporate practice of optometry and the unfair competition and false advertising laws of California. The lawsuit was filed in 2013 and FirstSight was added as a defendant in 2016. In March 2017, the court granted the motion to dismiss previously filed by FirstSight and dismissed the complaint with prejudice. The plaintiffs filed an appeal with the U.S. Court of Appeals for the Ninth Circuit in April 2017. In July 2018, the U.S. Court of Appeals for the Ninth Circuit vacated in part, and reversed in part, the district court’s dismissal and remanded for further proceedings. In October 2018, the plaintiffs filed a second amended complaint with the district court, and, in November 2018, FirstSight filed a motion to dismiss. On March 23, 2020, the district court granted FirstSight’s motion to dismiss the second amended complaint. On April 24, 2020, the plaintiffs filed a third amended complaint. FirstSight filed a motion to dismiss the third amended complaint on May 8, 2020. On February 4, 2021, the district court granted FirstSight’s motion in part and denied it in part. FirstSight’s answer to the remaining claims was filed February 18, 2021. The parties participated in mediation on July 6, 2021 and, in order to avoid the burden and expense of litigation, agreed to a settlement of all claims alleged by the named plaintiffs. In November 2019, the Company agreed to enter into a pre-litigation settlement with six former associates who asserted, on behalf of themselves and a proposed class, violations of the Fair Labor Standards Act and of California wage and hour laws. In order to avoid the burden and expense of litigation, and without admitting liability, the Company agreed to a settlement with the named claimants and all participating class members for a maximum settlement amount of $895,000. This settlement was submitted by the parties for approval through arbitration and an order granting final approval of the settlement and dismissing the action was issued by the arbitrator on July 13, 2021.

Segment Reporting

6 Months Ended

Jul. 03, 2021

Segment Reporting [Abstract]

Segment Reporting

The Company provides its principal products and services through two reportable segments: Owned & Host and Legacy. The “Corporate/Other” category includes the results of operations of our other operating segments, AC Lens and FirstSight, as well as corporate overhead support. The “Reconciliations” category represents other adjustments to reportable segment results necessary for the presentation of consolidated financial results in accordance with U.S. GAAP for the two reportable segments. Beginning in the first quarter of 2021, incremental expenses related to the COVID-19 pandemic were allocated to the reportable segments but were included in the Corporate/Other category in 2020. Changes in unearned revenue and deferred revenue recognized in the Reconciliations category reflect the effects of our stores being temporarily closed to the public for a portion of 2020.

Our reportable segment profit measure is earnings before interest, tax, depreciation and amortization (“EBITDA”), or net revenue, less costs applicable to revenue, less SG&A expenses. Depreciation and amortization, asset impairment, litigation settlement and other corporate costs that are not allocated to the reportable segments, including interest expense are excluded from segment EBITDA. There are no revenue transactions between our reportable segments. There are no differences between the measurement of our reportable segments’ assets and consolidated assets. There have been no changes from prior periods in the measurement methods used to determine reportable segment profit or loss, and there have been no asymmetrical allocations to segments.

The following is a summary of certain financial data for each of our segments. Reportable segment information is presented on the same basis as our consolidated financial statements, except for net revenue and associated costs applicable to revenue, which are presented on a cash basis, including point of sales for managed care payors and excluding the effects of unearned and deferred revenue, consistent with what the Chief Operating Decision Maker (“CODM”) regularly reviews.

Asset information is not included in the following summary since the CODM does not regularly review such information for the reportable segments.


	Three Months Ended July 3, 2021
In thousands	Owned & Host		Legacy		Corporate/Other		Reconciliations		Total
Net product services	$	361,377	$	26,855	$	61,520	$	8,454	$	458,206
Net sales of services and plans	78,780		16,745		—		(4,242)		91,283
Total net revenue	440,157		43,600		61,520		4,212		549,489
Cost of products	98,539		12,910		53,683		1,896		167,028
Cost of services and plans	62,448		6,470		—		—		68,918
Total costs applicable to revenue	160,987		19,380		53,683		1,896		235,946
SG&A	158,913		14,802		60,520		—		234,235
Asset impairment	—		—		519		—		519


Other expense (income), net	—		—		(65)		—		(65)
Debt issuance costs	—		—		92		—		92
EBITDA	$	120,257	$	9,418	$	(53,229)	$	2,316
Depreciation and amortization									24,025
Interest expense, net									10,096
Earnings before income taxes									$	44,641


	Three Months Ended June 27, 2020
In thousands	Owned & Host		Legacy		Corporate/Other		Reconciliations		Total
Net product sales	$	177,430	$	16,254	$	50,472	$	(34,449)	$	209,707
Net sales of services and plans	34,275		9,159		—		6,866		50,300
Total net revenue	211,705		25,413		50,472		(27,583)		260,007
Cost of products	54,898		9,093		42,135		(8,491)		97,635
Cost of services and plans	38,573		4,572		—		—		43,145
Total costs applicable to revenue	93,471		13,665		42,135		(8,491)		140,780
SG&A	86,704		10,561		39,317		—		136,582
Asset impairment	—		—		2,411		—		2,411
Other expense (income), net	—		—		(92)		—		(92)
Debt issuance costs	—		—		136		—		136
EBITDA	$	31,530	$	1,187	$	(33,435)	$	(19,092)
Depreciation and amortization									21,924
Interest expense, net									15,502
Earnings (loss) before income taxes									$	(57,236)


	Six Months Ended July 3, 2021
In thousands	Owned & Host		Legacy		Corporate/Other		Reconciliations		Total
Net product sales	$	730,747	$	54,275	$	122,738	$	(6,487)	$	901,273
Net sales of services and plans	161,857		32,907		—		(12,368)		182,396
Total net revenue	892,604		87,182		122,738		(18,855)		1,083,669
Costs of products	195,643		25,769		106,709		(1,402)		326,719
Costs of services and plans	121,252		12,665		—		—		133,917
Total costs applicable to revenue	316,895		38,434		106,709		(1,402)		460,636
SG&A	308,876		29,095		119,857		—		457,828
Asset impairment	—		—		1,478		—		1,478
Other expense (income), net	—		—		(130)		—		(130)
Debt issuance costs	—		—		92		—		92
EBITDA	$	266,833	$	19,653	$	(105,268)	$	(17,453)
Depreciation and amortization									47,580
Interest expense, net									16,426
Earnings before income taxes									$	99,759


	Six Months Ended June 27, 2020
In thousands	Owned & Host		Legacy		Corporate/Other		Reconciliations		Total
Net product sales	$	459,343	$	40,672	$	117,044	$	(14,511)	$	602,548
Net sales of services and plans	99,589		21,198		—		6,376		127,163
Total net revenue	558,932		61,870		117,044		(8,135)		729,711
Costs of products	136,814		20,496		100,045		(3,350)		254,005
Costs of services and plans	94,167		11,162		—		—		105,329
Total costs applicable to revenue	230,981		31,658		100,045		(3,350)		359,334
SG&A	221,418		24,192		84,713		—		330,323
Asset impairment	—		—		13,766		—		13,766
Litigation settlement	—		—		4,395		—		4,395
Other expense (income), net	—		—		(158)		—		(158)
Debt issuance costs	—		—		136		—		136
EBITDA	$	106,533	$	6,020	$	(85,853)	$	(4,785)
Depreciation and amortization									46,734
Interest expense, net									22,957
Earnings (loss) before income taxes									$	(47,776)

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Earnings Per Share

6 Months Ended

Jul. 03, 2021

Earnings Per Share [Abstract]

Earnings Per Share

Diluted EPS related to the 2025 Notes in the current year is calculated using the if-converted method; the number of dilutive shares is based on the initial conversion rate associated with the 2025 Notes. Prior to the fourth quarter of the fiscal year 2020, we intended to settle the principal amount of the outstanding 2025 Notes in cash and, therefore, used the treasury stock method for calculating the potential effect of dilutive securities related to the 2025 Notes, if applicable. A reconciliation of the numerators and denominators of the basic and diluted EPS calculations is as follows:


	Three Months Ended				Six Months Ended
In thousands, except EPS	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Net income (loss)	$	37,601	$	(43,833)	$	81,033	$	(34,091)
After-tax interest expense for 2025 Notes	2,362		—		4,694		—
Numerator for diluted EPS	$	39,963	$	(43,833)	$	85,727	$	(34,091)
Weighted average shares outstanding for basic EPS	81,601		80,325		81,457		80,226
Effect of dilutive securities:
Stock options	1,215		—		1,306		—
Restricted stock	354		—		369		—
2025 Notes	12,912		—		12,912		—
Weighted average shares outstanding for diluted EPS	96,082		80,325		96,044		80,226
Basic EPS	$	0.46	$	(0.55)	$	0.99	$	(0.42)
Diluted EPS	$	0.42	$	(0.55)	$	0.89	$	(0.42)
Anti-dilutive options and RSUs outstanding excluded from EPS	110		2,458		74		2,512

Restricted Cash

6 Months Ended

Jul. 03, 2021

Cash and Cash Equivalents [Abstract]

Restricted Cash

The following table provides a reconciliation of cash and cash equivalents reported within the condensed consolidated balance sheets to the total of cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows:


	Six Months Ended
In thousands	July 3, 2021		June 27, 2020
Cash and cash equivalents	$	408,301	$	256,292
Restricted cash included in other assets	1,347		1,341
Total cash, cash equivalents and restricted cash	$	409,648	$	257,633

Accumulated Other Comprehensive Loss

6 Months Ended

Jul. 03, 2021

Equity [Abstract]

Accumulated Other Comprehensive Loss

Changes in the fair value of the Company’s cash flow hedge derivative instruments from their inception are recorded in AOCL if the instruments are deemed to be highly effective as cash flow hedges. The following table presents the changes in AOCL, net of tax during the three and six months ended July 3, 2021 and June 27, 2020, respectively:


	Three Months Ended				Six Months Ended
In thousands	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Cash flow hedging activity:
Balance at beginning of period	$	(5,296)	$	(10,416)	$	(4,400)	$	(3,814)
Other comprehensive income (loss) before reclassification	—		(360)		(10)		(11,041)
Tax effect of other comprehensive income (loss) before reclassification	—		92		3		2,813
Amount reclassified from AOCL into interest expense	2,959		4,471		4,619		6,294
Tax effect of amount reclassified from AOCL into interest expense	(756)		(1,142)		(1,180)		(1,607)
Stranded tax effect of matured interest rate swaps	—		—		(2,125)		—
Net current period other comprehensive income (loss), net of tax	2,203		3,061		1,307		(3,541)
Balance at end of period	$	(3,093)	$	(7,355)	$	(3,093)	$	(7,355)

See Note 5. “Interest Rate Derivatives” for a description of the Company’s use of cash flow hedging derivatives.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Description of Business and Basis of Presentation (Policies)

6 Months Ended

Jul. 03, 2021

Accounting Policies [Abstract]

Basis of Presentation

Fiscal Year

Use of Estimates

Income Taxes

Adoption of New Accounting Pronouncements

The following tables summarize the impact of adoption on the Company’s condensed consolidated statement of operations for the three and six months ended July 3, 2021:


	Three Months Ended July 3, 2021
In thousands (except earnings per share)	With ASU 2020-06 Adoption		Without ASU 2020-06 Adoption		Impact of Adoption

Income from operations	$	54,829	$	54,829	$	—
Interest expense, net	10,096		14,040		(3,944)
Debt issuance costs	92		92		—
Earnings before income taxes	44,641		40,697		3,944
Income tax provision	7,040		6,144		896
Net income	$	37,601	$	34,553	$	3,048
Earnings per share:
Basic	$	0.46	$	0.42	$	0.04
Diluted	$	0.42	$	0.42	$	—
Impact of adoption on basic earnings per share is calculated using impact on net income divided by basic weighted average shares outstanding during the period.


	Six Months Ended July 3, 2021
In thousands (except earnings per share)	With ASU 2020-06 Adoption		Without ASU 2020-06 Adoption		Impact of Adoption

Income from operations	$	116,277	$	116,277	$	—
Interest expense, net	16,426		24,176		(7,750)
Debt issuance costs	92		92		—
Earnings before income taxes	99,759		92,009		7,750
Income tax provision	18,726		17,010		1,716
Net income	$	81,033	$	74,999	$	6,034
Earnings per share:
Basic	$	0.99	$	0.92	$	0.07
Diluted	$	0.89	$	0.89	$	—
Impact of adoption on basic earnings per share is calculated using impact on net income divided by basic weighted average shares outstanding during the period.

Future Adoption of Accounting Pronouncements

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

+ References + Details

Description of Business and Basis of Presentation (Tables)

6 Months Ended

Jul. 03, 2021

Accounting Policies [Abstract]

Accounting Standards Update and Change in Accounting Principle

The following tables summarize the impact of adoption on the Company’s condensed consolidated statement of operations for the three and six months ended July 3, 2021:


	Three Months Ended July 3, 2021
In thousands (except earnings per share)	With ASU 2020-06 Adoption		Without ASU 2020-06 Adoption		Impact of Adoption

Income from operations	$	54,829	$	54,829	$	—
Interest expense, net	10,096		14,040		(3,944)
Debt issuance costs	92		92		—
Earnings before income taxes	44,641		40,697		3,944
Income tax provision	7,040		6,144		896
Net income	$	37,601	$	34,553	$	3,048
Earnings per share:
Basic	$	0.46	$	0.42	$	0.04
Diluted	$	0.42	$	0.42	$	—
Impact of adoption on basic earnings per share is calculated using impact on net income divided by basic weighted average shares outstanding during the period.


	Six Months Ended July 3, 2021
In thousands (except earnings per share)	With ASU 2020-06 Adoption		Without ASU 2020-06 Adoption		Impact of Adoption

Income from operations	$	116,277	$	116,277	$	—
Interest expense, net	16,426		24,176		(7,750)
Debt issuance costs	92		92		—
Earnings before income taxes	99,759		92,009		7,750
Income tax provision	18,726		17,010		1,716
Net income	$	81,033	$	74,999	$	6,034
Earnings per share:
Basic	$	0.99	$	0.92	$	0.07
Diluted	$	0.89	$	0.89	$	—
Impact of adoption on basic earnings per share is calculated using impact on net income divided by basic weighted average shares outstanding during the period.

Details of Certain Balance Sheet Accounts (Tables)

6 Months Ended

Jul. 03, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Accounts Receivable, Net


In thousands	As of July 3, 2021		As of January 2, 2021
Accounts receivable, net:
Trade receivables	$	28,742	$	28,405
Credit card receivables	19,830		21,557
Other receivables	6,556		8,460
Allowance for credit losses	(395)		(433)
	$	54,733	$	57,989

Schedule of Inventories


In thousands	As of July 3, 2021		As of January 2, 2021
Inventories:
Raw materials and work in process (1)	$	55,246	$	55,473
Finished goods	65,617		55,801
	$	120,863	$	111,274
(1)Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, the Company does not separately present raw materials and work in process.

Schedule of Other Payables and Accrued Expenses


In thousands	As of July 3, 2021		As of January 2, 2021
Other payables and accrued expenses:
Associate compensation and benefits (1)	$	53,251	$	51,081
Advertising	4,503		2,173
Self-insurance liabilities	9,634		8,650
Reserves for customer returns and remakes	9,301		8,084
Capital expenditures	8,827		8,455
Legacy management & services agreement	6,722		5,386
Fair value of derivative liabilities	4,077		5,116
Supplies and other store support expenses	2,820		3,461
Litigation settlements	1,720		1,107
Lease concessions	737		3,142
Other	14,916		13,654
	$	116,508	$	110,309
(1) Includes the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act deferred employer payroll taxes in the amount of $0.0 million and $12.8 million as of July 3, 2021 and January 2, 2021, respectively.

Schedule of Other Non-current Liabilities


In thousands	As of July 3, 2021		As of January 2, 2021
Other non-current liabilities:
Fair value of derivative liabilities	$	4,217	$	7,663
Self-insurance liabilities	7,491		7,046
Other	2,564		2,706
	$	14,272	$	17,415

Long-term Debt (Tables)

6 Months Ended

Jul. 03, 2021

Debt Disclosure [Abstract]

Schedule of Long-term Debt

Long-term debt consists of the following:


In thousands	As of July 3, 2021		As of January 2, 2021
2025 Notes, due May 15, 2025	$	402,500	$	402,500
Term loan, due July 18, 2024	200,000		317,375
Long-term debt before debt discount	602,500		719,875
Unamortized discount and issuance costs - 2025 Notes	(9,153)		(93,123)
Unamortized discount and issuance costs - term loan	(1,515)		(2,141)
Long-term debt less debt discount	591,832		624,611
Less current maturities	—		—
Long-term debt - non-current portion	591,832		624,611
Finance lease obligations	28,613		30,750
Less current maturities	(4,285)		(3,598)
Long-term debt and finance lease obligations, less current portion and debt discount	$	616,160	$	651,763

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
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Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
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-Section S99
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 5: http://www.xbrl.org/2003/role/exampleRef
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI http://asc.fasb.org/extlink&oid=123599511&loc=d3e64711-112823

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
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-Topic 505
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-URI http://asc.fasb.org/extlink&oid=123467817&loc=d3e21475-112644

+ Details

Revenue From Contracts With Customers (Tables)

6 Months Ended

Jul. 03, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenues

The following disaggregation of revenues depicts our revenue based on the timing of revenue recognition:


	Three Months Ended				Six Months Ended
In thousands	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Revenues recognized at a point in time	$	504,969	$	229,536	$	998,407	$	663,715
Revenues recognized over time	44,520		30,471		85,262		65,996
Total net revenue	$	549,489	$	260,007	$	1,083,669	$	729,711

Leases (Tables)

6 Months Ended

Jul. 03, 2021

Leases [Abstract]

Schedule of Lease Cost


	Three Months Ended				Six Months Ended
In thousands	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Operating lease cost
Fixed lease cost (a)	$	20,903	$	19,100	$	41,554	$	38,412
Variable lease cost (b)	7,515		6,356		14,918		13,166
Sublease income (c)	(919)		(292)		(1,829)		(882)

Finance lease cost
Amortization of finance lease assets	1,113		1,125		2,236		2,281

Interest expense, net:
Interest on finance lease liabilities	743		851		1,523		1,724

Net lease cost	$	29,355	$	27,140	$	58,402	$	54,701

(a) Includes short-term leases, which are immaterial.
(b) Includes costs for insurance, real estate taxes and common area maintenance expenses, which are variable, as are lease costs above minimum thresholds for Fred Meyer stores and lease costs for Military stores.
(c) Income from sub-leasing of stores includes rental income from leasing space to ophthalmologists and optometrists who are independent contractors.

Schedule of Lease Terms and Discount Rate


Lease Term and Discount Rate	As of July 3, 2021		As of January 2, 2021
Weighted average remaining lease term (months)
Operating leases	77		77
Finance leases	76		79
Weighted average discount rate (a)
Operating leases	4.7	%	4.7	%
Finance leases (b)	12.0	%	12.3	%

(a) The discount rate used to determine the lease assets and lease liabilities was derived upon considering (i) incremental borrowing rates on our term loan and revolving credit facility; (ii) fixed rates on interest rate swaps; (iii) LIBOR margins for issuers of similar credit rating; and (iv) effect of collateralization. As a majority of our leases are five-year and 10-year leases, we determined a lease discount rate for such tenors and determined this discount rate is reasonable for leases that were entered into during the period.
(b) The discount rate on finance leases is higher than operating leases because the present value of minimum lease payments was higher than the fair value of leased properties for certain leases entered into prior to adoption of ASC 842. The discount rate differential for those leases is not material to our results of operations.

Schedule of Operating Lease Cash Flows


In thousands	Six Months Ended July 3, 2021		Six Months Ended June 27, 2020
Other Information

Operating cash outflows - operating leases	$	43,860	$	35,548
Right of use assets acquired under finance leases	$	—	$	1,257
Right of use assets acquired under operating leases	$	44,544	$	35,870

Schedule of Maturity for Operating Lease Liabilities

The following table summarizes the maturity of our lease liabilities as of July 3, 2021:


In thousands	Operating Leases (a)		Finance Leases (b)
Fiscal Year
2021	$	38,606	$	3,637
2022	77,235		6,635
2023	76,376		6,252
2024	66,456		4,753
2025	61,320		4,913
Thereafter	135,804		11,400
Total lease liabilities	455,797		37,590
Less: Interest	64,989		8,977
Present value of lease liabilities (c)	$	390,808	$	28,613

(a) Operating lease payments include $54.4 million related to options to extend lease terms that are reasonably certain of being exercised.
(b) Finance lease payments include $1.7 million related to options to extend lease terms that are reasonably certain of being exercised.
(c) The present value of lease liabilities excludes $20.1 million of legally binding minimum lease payments for leases signed but not yet commenced.

Schedule of Maturity for Finance Lease Liabilities

The following table summarizes the maturity of our lease liabilities as of July 3, 2021:


In thousands	Operating Leases (a)		Finance Leases (b)
Fiscal Year
2021	$	38,606	$	3,637
2022	77,235		6,635
2023	76,376		6,252
2024	66,456		4,753
2025	61,320		4,913
Thereafter	135,804		11,400
Total lease liabilities	455,797		37,590
Less: Interest	64,989		8,977
Present value of lease liabilities (c)	$	390,808	$	28,613

(a) Operating lease payments include $54.4 million related to options to extend lease terms that are reasonably certain of being exercised.
(b) Finance lease payments include $1.7 million related to options to extend lease terms that are reasonably certain of being exercised.
(c) The present value of lease liabilities excludes $20.1 million of legally binding minimum lease payments for leases signed but not yet commenced.

Segment Reporting (Tables)

6 Months Ended

Jul. 03, 2021

Segment Reporting [Abstract]

Schedule of Financial Data by Segment

Asset information is not included in the following summary since the CODM does not regularly review such information for the reportable segments.


	Three Months Ended July 3, 2021
In thousands	Owned & Host		Legacy		Corporate/Other		Reconciliations		Total
Net product services	$	361,377	$	26,855	$	61,520	$	8,454	$	458,206
Net sales of services and plans	78,780		16,745		—		(4,242)		91,283
Total net revenue	440,157		43,600		61,520		4,212		549,489
Cost of products	98,539		12,910		53,683		1,896		167,028
Cost of services and plans	62,448		6,470		—		—		68,918
Total costs applicable to revenue	160,987		19,380		53,683		1,896		235,946
SG&A	158,913		14,802		60,520		—		234,235
Asset impairment	—		—		519		—		519


Other expense (income), net	—		—		(65)		—		(65)
Debt issuance costs	—		—		92		—		92
EBITDA	$	120,257	$	9,418	$	(53,229)	$	2,316
Depreciation and amortization									24,025
Interest expense, net									10,096
Earnings before income taxes									$	44,641


	Three Months Ended June 27, 2020
In thousands	Owned & Host		Legacy		Corporate/Other		Reconciliations		Total
Net product sales	$	177,430	$	16,254	$	50,472	$	(34,449)	$	209,707
Net sales of services and plans	34,275		9,159		—		6,866		50,300
Total net revenue	211,705		25,413		50,472		(27,583)		260,007
Cost of products	54,898		9,093		42,135		(8,491)		97,635
Cost of services and plans	38,573		4,572		—		—		43,145
Total costs applicable to revenue	93,471		13,665		42,135		(8,491)		140,780
SG&A	86,704		10,561		39,317		—		136,582
Asset impairment	—		—		2,411		—		2,411
Other expense (income), net	—		—		(92)		—		(92)
Debt issuance costs	—		—		136		—		136
EBITDA	$	31,530	$	1,187	$	(33,435)	$	(19,092)
Depreciation and amortization									21,924
Interest expense, net									15,502
Earnings (loss) before income taxes									$	(57,236)


	Six Months Ended July 3, 2021
In thousands	Owned & Host		Legacy		Corporate/Other		Reconciliations		Total
Net product sales	$	730,747	$	54,275	$	122,738	$	(6,487)	$	901,273
Net sales of services and plans	161,857		32,907		—		(12,368)		182,396
Total net revenue	892,604		87,182		122,738		(18,855)		1,083,669
Costs of products	195,643		25,769		106,709		(1,402)		326,719
Costs of services and plans	121,252		12,665		—		—		133,917
Total costs applicable to revenue	316,895		38,434		106,709		(1,402)		460,636
SG&A	308,876		29,095		119,857		—		457,828
Asset impairment	—		—		1,478		—		1,478
Other expense (income), net	—		—		(130)		—		(130)
Debt issuance costs	—		—		92		—		92
EBITDA	$	266,833	$	19,653	$	(105,268)	$	(17,453)
Depreciation and amortization									47,580
Interest expense, net									16,426
Earnings before income taxes									$	99,759


	Six Months Ended June 27, 2020
In thousands	Owned & Host		Legacy		Corporate/Other		Reconciliations		Total
Net product sales	$	459,343	$	40,672	$	117,044	$	(14,511)	$	602,548
Net sales of services and plans	99,589		21,198		—		6,376		127,163
Total net revenue	558,932		61,870		117,044		(8,135)		729,711
Costs of products	136,814		20,496		100,045		(3,350)		254,005
Costs of services and plans	94,167		11,162		—		—		105,329
Total costs applicable to revenue	230,981		31,658		100,045		(3,350)		359,334
SG&A	221,418		24,192		84,713		—		330,323
Asset impairment	—		—		13,766		—		13,766
Litigation settlement	—		—		4,395		—		4,395
Other expense (income), net	—		—		(158)		—		(158)
Debt issuance costs	—		—		136		—		136
EBITDA	$	106,533	$	6,020	$	(85,853)	$	(4,785)
Depreciation and amortization									46,734
Interest expense, net									22,957
Earnings (loss) before income taxes									$	(47,776)

Earnings Per Share (Tables)

6 Months Ended

Jul. 03, 2021

Earnings Per Share [Abstract]

Schedule of Reconciliation of Basic and Diluted EPS Calculations

A reconciliation of the numerators and denominators of the basic and diluted EPS calculations is as follows:


	Three Months Ended				Six Months Ended
In thousands, except EPS	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Net income (loss)	$	37,601	$	(43,833)	$	81,033	$	(34,091)
After-tax interest expense for 2025 Notes	2,362		—		4,694		—
Numerator for diluted EPS	$	39,963	$	(43,833)	$	85,727	$	(34,091)
Weighted average shares outstanding for basic EPS	81,601		80,325		81,457		80,226
Effect of dilutive securities:
Stock options	1,215		—		1,306		—
Restricted stock	354		—		369		—
2025 Notes	12,912		—		12,912		—
Weighted average shares outstanding for diluted EPS	96,082		80,325		96,044		80,226
Basic EPS	$	0.46	$	(0.55)	$	0.99	$	(0.42)
Diluted EPS	$	0.42	$	(0.55)	$	0.89	$	(0.42)
Anti-dilutive options and RSUs outstanding excluded from EPS	110		2,458		74		2,512

Restricted Cash (Tables)

6 Months Ended

Jul. 03, 2021

Cash and Cash Equivalents [Abstract]

Schedule of Cash, Cash Equivalents, and Restricted Cash


	Six Months Ended
In thousands	July 3, 2021		June 27, 2020
Cash and cash equivalents	$	408,301	$	256,292
Restricted cash included in other assets	1,347		1,341
Total cash, cash equivalents and restricted cash	$	409,648	$	257,633

Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jul. 03, 2021

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Loss

The following table presents the changes in AOCL, net of tax during the three and six months ended July 3, 2021 and June 27, 2020, respectively:


	Three Months Ended				Six Months Ended
In thousands	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Cash flow hedging activity:
Balance at beginning of period	$	(5,296)	$	(10,416)	$	(4,400)	$	(3,814)
Other comprehensive income (loss) before reclassification	—		(360)		(10)		(11,041)
Tax effect of other comprehensive income (loss) before reclassification	—		92		3		2,813
Amount reclassified from AOCL into interest expense	2,959		4,471		4,619		6,294
Tax effect of amount reclassified from AOCL into interest expense	(756)		(1,142)		(1,180)		(1,607)
Stranded tax effect of matured interest rate swaps	—		—		(2,125)		—
Net current period other comprehensive income (loss), net of tax	2,203		3,061		1,307		(3,541)
Balance at end of period	$	(3,093)	$	(7,355)	$	(3,093)	$	(7,355)

Description of Business and Basis of Presentation - Nature of Operations (Details)	Jul. 03, 2021 store store_brand	Jan. 02, 2021 store
Accounting Policies [Abstract]
Number of retail optical locations \| store	1,249	1,205
Number of store brands \| store_brand	5

Description of Business and Basis of Presentation - Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Accounting Policies [Abstract]
Effective income tax rate (percent)	25.50%	25.50%	25.50%	25.50%
Tax benefit related to exercise of stock options	$ 4.1	$ 0.3	$ 4.5	$ 3.0
Tax benefit related to stranded tax effect of interest rate swaps			$ 2.1

Description of Business and Basis of Presentation - Adoption of New Accounting Pronouncements (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Apr. 03, 2021	Jan. 02, 2021	Jun. 27, 2020	Mar. 28, 2020	Dec. 28, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Impact on equity	$ 938,337	$ 887,532	$ 906,502	$ 820,939	$ 786,160	$ 776,437
Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Impact on equity	231,184	193,583	142,880	72,512	116,345	107,132
Additional Paid-In Capital
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Impact on equity	$ 739,380	$ 728,339	795,697	$ 782,851	$ 707,301	700,121
Cumulative effect of change in accounting principle
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Impact on equity			(64,114)			(529)
Cumulative effect of change in accounting principle \| ASU 2020-06
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Decrease to deferred tax liability			18,800
Cumulative effect of change in accounting principle \| ASU 2020-06 \| 2025 Notes
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Increase liability component through unamortized discount			82,900
Cumulative effect of change in accounting principle \| Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Impact on equity			7,271			$ (529)
Cumulative effect of change in accounting principle \| Retained Earnings \| ASU 2020-06
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Impact on equity			7,300
Cumulative effect of change in accounting principle \| Additional Paid-In Capital
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Impact on equity			(71,385)
Cumulative effect of change in accounting principle \| Additional Paid-In Capital \| ASU 2020-06
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Impact on equity			$ (71,400)

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 852
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-Section 55
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-URI http://asc.fasb.org/extlink&oid=84165509&loc=d3e56426-112766

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-Name Accounting Standards Codification
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(29))
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(30))
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
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-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123596393&loc=d3e14064-108612

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

+ Details

Description of Business and Basis of Presentation - Summary of Adoption on Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 03, 2021	Apr. 03, 2021	Jun. 27, 2020	Mar. 28, 2020	Jul. 03, 2021	Jun. 27, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Income from operations	$ 54,829		$ (41,598)		$ 116,277	$ (24,683)
Interest expense, net	10,096		15,502		16,426	22,957
Debt issuance costs	92		136		92	136
Earnings (loss) before income taxes	44,641		(57,236)		99,759	(47,776)
Income tax provision	7,040		(13,403)		18,726	(13,685)
Net income (loss)	$ 37,601	$ 43,432	$ (43,833)	$ 9,742	$ 81,033	$ (34,091)
Earnings (loss) per share:
Basic (in usd per share)	$ 0.46		$ (0.55)		$ 0.99	$ (0.42)
Diluted (in usd per share)	$ 0.42		$ (0.55)		$ 0.89	$ (0.42)
ASU 2020-06 \| Without ASU 2020-06 Adoption
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Income from operations	$ 54,829				$ 116,277
Interest expense, net	14,040				24,176
Debt issuance costs	92				92
Earnings (loss) before income taxes	40,697				92,009
Income tax provision	6,144				17,010
Net income (loss)	$ 34,553				$ 74,999
Earnings (loss) per share:
Basic (in usd per share)	$ 0.42				$ 0.92
Diluted (in usd per share)	$ 0.42				$ 0.89
ASU 2020-06 \| Impact of Adoption
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Income from operations	$ 0				$ 0
Interest expense, net	(3,944)				(7,750)
Debt issuance costs	0				0
Earnings (loss) before income taxes	3,944				7,750
Income tax provision	896				1,716
Net income (loss)	$ 3,048				$ 6,034
Earnings (loss) per share:
Basic (in usd per share)	$ 0.04				$ 0.07
Diluted (in usd per share)	$ 0				$ 0

Details of Certain Balance Sheet Accounts - Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Accounts receivable, net:
Allowance for credit losses	$ (395)	$ (433)
Accounts receivable, net of allowance	54,733	57,989
Trade receivables
Accounts receivable, net:
Accounts receivable, gross	28,742	28,405
Credit card receivables
Accounts receivable, net:
Accounts receivable, gross	19,830	21,557
Other receivables
Accounts receivable, net:
Accounts receivable, gross	$ 6,556	$ 8,460

Details of Certain Balance Sheet Accounts - Inventories (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Inventories:
Raw materials and work in process	$ 55,246	$ 55,473
Finished goods	65,617	55,801
Inventories	$ 120,863	$ 111,274

Details of Certain Balance Sheet Accounts - Other Payables and Accrued Expenses (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Other payables and accrued expenses:
Associate compensation and benefits	$ 53,251	$ 51,081
Advertising	4,503	2,173
Self-insurance liabilities	9,634	8,650
Reserves for customer returns and remakes	9,301	8,084
Capital expenditures	8,827	8,455
Legacy management & services agreement	6,722	5,386
Fair value of derivative liabilities	4,077	5,116
Supplies and other store support expenses	2,820	3,461
Litigation settlements	1,720	1,107
Lease concessions	737	3,142
Other	14,916	13,654
Total other payables and accrued expenses	116,508	110,309
Deferred employer payroll taxes, CARES Act, included in associate compensation and benefits	$ 0	$ 12,800

Details of Certain Balance Sheet Accounts - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Other non-current liabilities:
Fair value of derivative liabilities	$ 4,217	$ 7,663
Self-insurance liabilities	7,491	7,046
Other	2,564	2,706
Total other non-current liabilities	$ 14,272	$ 17,415

Fair Value Measurement (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
Fair Value Measurement (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jul. 03, 2021	Jan. 02, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impairments of long-lived tangible store assets and ROU assets	$ 500	$ 1,500
Discount rate used in impairment analysis (percent)		7.50%
Estimated fair value of impaired assets	2,900	$ 2,900
Aggregate principal amount	602,500	602,500	$ 719,875
Convertible senior notes \| 2025 Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Aggregate principal amount	$ 402,500	$ 402,500	402,500
Stated interest rate (percent)	2.50%	2.50%
Estimated fair value \| Level 2 \| Convertible senior notes \| 2025 Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value of convertible notes	$ 705,200	$ 705,200	$ 655,300

Long-term Debt - Summary of Long-term Debt (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Debt Instrument [Line Items]
Long-term debt before debt discount	$ 602,500	$ 719,875
Long-term debt less debt discount	591,832	624,611
Less current maturities	0	0
Long-term debt - non-current portion	591,832	624,611
Finance lease obligations	28,613	30,750
Less current maturities	(4,285)	(3,598)
Long-term debt and finance lease obligations, less current portion and debt discount	616,160	651,763
2025 Notes \| Convertible senior notes
Debt Instrument [Line Items]
Long-term debt before debt discount	402,500	402,500
Unamortized discount and issuance cost	(9,153)	(93,123)
Term loan, due July 18, 2024 \| Term loan
Debt Instrument [Line Items]
Long-term debt before debt discount	200,000	317,375
Unamortized discount and issuance cost	$ (1,515)	$ (2,141)

Long-term Debt - Narrative (Details) $ in Thousands		3 Months Ended		6 Months Ended
Long-term Debt - Narrative (Details) $ in Thousands	Jul. 03, 2021 USD ($)	Jan. 01, 2022	Jul. 03, 2021 USD ($)	Oct. 02, 2021	Jul. 03, 2021 USD ($)	Jun. 27, 2020 USD ($)	Apr. 03, 2021	Jan. 02, 2021 USD ($)
Debt Instrument [Line Items]
Repayments on long-term debt					$ 117,375	$ 369,269
Amount outstanding	$ 602,500		$ 602,500		$ 602,500			$ 719,875
Term loan \| Term loan, due July 18, 2024
Debt Instrument [Line Items]
Repayments on long-term debt			117,400
Write off of deferred debt issuance costs			$ 700
LIBOR floor	0.00%		0.00%		0.00%		1.00%
Amount outstanding	$ 200,000		$ 200,000		$ 200,000			317,375
Term loan \| Term loan, due July 18, 2024 \| LIBOR \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate (percent)			1.25%
Term loan \| Term loan, due July 18, 2024 \| LIBOR \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate (percent)			2.00%
Term loan \| Term loan, due July 18, 2024 \| ABR \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate (percent)			0.25%
Term loan \| Term loan, due July 18, 2024 \| ABR \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate (percent)			1.00%
Credit facility \| Credit Agreement
Debt Instrument [Line Items]
Consolidated Interest Coverage Ratio minimum			3.00
Credit facility \| Credit Agreement \| Forecast
Debt Instrument [Line Items]
Consolidated Total Debt to Consolidated EBITDA Ratio maximum		4.25		4.50
Convertible senior notes \| 2025 Notes
Debt Instrument [Line Items]
Amount outstanding	$ 402,500		$ 402,500		402,500			$ 402,500
Effective interest rate (percent)							3.20%	9.10%
Interest expense for the interest coupon			2,500		5,000
Amortization of issuance costs			$ 500		$ 1,000
Remaining period for amortization of debt issuance costs	4 years

Interest Rate Derivatives (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Interest Rate Derivatives (Details) - USD ($) $ in Millions	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020	Jan. 02, 2021
Derivative [Line Items]
Interest expense on highly effective hedges		$ 2.0		$ 3.9
Interest rate derivatives
Derivative [Line Items]
Fair value of derivative liabilities					$ 12.8
Interest rate derivatives \| Interest expense, net
Derivative [Line Items]
Reclassification of net unrealized losses on discontinuance of hedge accounting		2.5		2.5
Interest rate collar
Derivative [Line Items]
Notional amount	$ 375.0		$ 375.0
Loss on change in fair value	(0.5)
Gain on change in fair value			1.5
Interest expense on highly effective hedges			1.5
Reclassification of unrealized losses from AOCL to interest expense	2.5
Estimated reclassification from AOCL to earnings in next 12 months	0.9		0.9
Interest rate collar \| Interest expense, net
Derivative [Line Items]
Loss on change in fair value		(2.6)
Interest rate collar \| Not designated as hedge
Derivative [Line Items]
Notional amount		58.0		58.0
Fair value of derivative liabilities	8.3		8.3
Interest rate swap \| Not designated as hedge
Derivative [Line Items]
Notional amount		$ 78.0		$ 78.0
Interest rate swap \| Designated as hedge \| Cash flow hedge
Derivative [Line Items]
Fair value of derivative liabilities					$ 1.5
Interest rate collar basis for reclass
Derivative [Line Items]
Notional amount	$ 115.0		$ 115.0

Stock Incentive Plans (Details)	6 Months Ended
Stock Incentive Plans (Details)	Jul. 03, 2021 installment shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted (in shares)	107,319
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)	108,817
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)	126,161
Number of equal vesting installments \| installment	3
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equal vesting installments \| installment	3
RSAs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)	16,539
Vesting period (in years)	1 year

Revenue From Contracts With Customers - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Disaggregation of Revenue [Line Items]
Time frame for majority of payments on health care plans and programs accounts (in days)			90 days
Reductions in revenue for estimated price concessions granted to managed care providers	$ 1.6		$ 4.4	$ 3.7
Credit loss expense	0.2		0.3	0.4
Deferred revenue	92.1		92.1
Previously deferred revenue recognized	$ 23.0	$ 24.2	$ 37.3	$ 52.2
Minimum
Disaggregation of Revenue [Line Items]
General payment terms for accounts on health care plans and programs (in days)			14 days
Maximum
Disaggregation of Revenue [Line Items]
General payment terms for accounts on health care plans and programs (in days)			120 days

Revenue From Contracts With Customers - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Disaggregation of Revenue [Line Items]
Total net revenue	$ 549,489	$ 260,007	$ 1,083,669	$ 729,711
Revenues recognized at a point in time
Disaggregation of Revenue [Line Items]
Total net revenue	504,969	229,536	998,407	663,715
Revenues recognized over time
Disaggregation of Revenue [Line Items]
Total net revenue	$ 44,520	$ 30,471	$ 85,262	$ 65,996

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
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-Subparagraph (a)
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Revenue From Contracts With Customers - Unsatisfied Performance Obligations (Details) $ in Millions	Jul. 03, 2021 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-04
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied	$ 44.6
Performance obligations expected to be satisfied, expected timing	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-02
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied	$ 34.0
Performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied	$ 11.6
Performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-12-31
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied	$ 1.8
Performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied	$ 0.1
Performance obligations expected to be satisfied, expected timing	1 year

Leases - Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Leases - Lease Costs (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Lease cost
Fixed lease cost	$ 20,903	$ 19,100	$ 41,554	$ 38,412
Variable lease cost	7,515	6,356	14,918	13,166
Sublease income	(919)	(292)	(1,829)	(882)
Amortization of finance lease assets	1,113	1,125	2,236	2,281
Interest on finance lease liabilities	743	851	1,523	1,724
Net lease cost	$ 29,355	$ 27,140	$ 58,402	$ 54,701

Leases - Lease Term and Discount Rate (Details)	Jul. 03, 2021	Jan. 02, 2021
Lessee, Lease, Description [Line Items]
Operating leases, weighted average remaining lease term (months)	77 months	77 months
Finance leases, weighted average remaining lease term (months)	76 months	79 months
Operating leases, weighted average discount rate (percent)	4.70%	4.70%
Finance leases, weighted average discount rate (percent)	12.00%	12.30%
Minimum
Lessee, Lease, Description [Line Items]
Operating leases term (in years)	5 years
Finance leases term (in years)	5 years
Maximum
Lessee, Lease, Description [Line Items]
Operating leases term (in years)	10 years
Finance leases term (in years)	10 years

Leases - Other Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020
Leases [Abstract]
Operating cash outflows - operating leases	$ 43,860	$ 35,548
Right of use assets acquired under finance leases	0	1,257
Right of use assets acquired under operating leases	$ 44,544	$ 35,870

Leases - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Operating Leases
2021	$ 38,606
2022	77,235
2023	76,376
2024	66,456
2025	61,320
Thereafter	135,804
Total lease liabilities	455,797
Less: Interest	64,989
Present value of lease liabilities	390,808
Finance Leases
2021	3,637
2022	6,635
2023	6,252
2024	4,753
2025	4,913
Thereafter	11,400
Total lease liabilities	37,590
Less: Interest	8,977
Finance lease obligations	28,613	$ 30,750
Operating lease payments related to reasonably certain option extensions included in total lease payments	54,400
Finance lease payments related to reasonably certain option extensions included in total lease payments	1,700
Minimum lease payments for leases signed but not yet commenced excluded from lease liability	$ 20,100

Commitments and Contingencies (Details) - Fair Labor Standards Act $ in Thousands	1 Months Ended
	Nov. 30, 2019 USD ($) plaintiff
Loss Contingencies [Line Items]
Number of former associates \| plaintiff	6
Maximum
Loss Contingencies [Line Items]
Maximum amount of litigation settlement \| $	$ 895

Segment Reporting - Narrative (Details)	6 Months Ended
Segment Reporting - Narrative (Details)	Jul. 03, 2021 segment
Segment Reporting [Abstract]
Number of reportable segments	2

Segment Reporting - Financial Data by Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Segment Reporting Information [Line Items]
Total net revenue	$ 549,489	$ 260,007	$ 1,083,669	$ 729,711
Total costs applicable to revenue	235,946	140,780	460,636	359,334
SG&A	234,235	136,582	457,828	330,323
Asset impairment	519	2,411	1,478	13,766
Litigation settlement	0	0	0	4,395
Other expense (income), net	(65)	(92)	(130)	(158)
Debt issuance costs	92	136	92	136
Depreciation and amortization	24,025	21,924	47,580	46,734
Interest expense, net	10,096	15,502	16,426	22,957
Earnings before income taxes	44,641	(57,236)	99,759	(47,776)
Products
Segment Reporting Information [Line Items]
Total net revenue	458,206	209,707	901,273	602,548
Total costs applicable to revenue	167,028	97,635	326,719	254,005
Services and plans
Segment Reporting Information [Line Items]
Total net revenue	91,283	50,300	182,396	127,163
Total costs applicable to revenue	68,918	43,145	133,917	105,329
Operating Segments \| Owned & Host
Segment Reporting Information [Line Items]
Total net revenue	440,157	211,705	892,604	558,932
Total costs applicable to revenue	160,987	93,471	316,895	230,981
SG&A	158,913	86,704	308,876	221,418
Asset impairment	0	0	0	0
Litigation settlement				0
Other expense (income), net	0	0	0	0
Debt issuance costs	0	0	0	0
EBITDA	120,257	31,530	266,833	106,533
Operating Segments \| Owned & Host \| Products
Segment Reporting Information [Line Items]
Total net revenue	361,377	177,430	730,747	459,343
Total costs applicable to revenue	98,539	54,898	195,643	136,814
Operating Segments \| Owned & Host \| Services and plans
Segment Reporting Information [Line Items]
Total net revenue	78,780	34,275	161,857	99,589
Total costs applicable to revenue	62,448	38,573	121,252	94,167
Operating Segments \| Legacy
Segment Reporting Information [Line Items]
Total net revenue	43,600	25,413	87,182	61,870
Total costs applicable to revenue	19,380	13,665	38,434	31,658
SG&A	14,802	10,561	29,095	24,192
Asset impairment	0	0	0	0
Litigation settlement				0
Other expense (income), net	0	0	0	0
Debt issuance costs	0	0	0	0
EBITDA	9,418	1,187	19,653	6,020
Operating Segments \| Legacy \| Products
Segment Reporting Information [Line Items]
Total net revenue	26,855	16,254	54,275	40,672
Total costs applicable to revenue	12,910	9,093	25,769	20,496
Operating Segments \| Legacy \| Services and plans
Segment Reporting Information [Line Items]
Total net revenue	16,745	9,159	32,907	21,198
Total costs applicable to revenue	6,470	4,572	12,665	11,162
Operating Segments \| Corporate/Other
Segment Reporting Information [Line Items]
Total net revenue	61,520	50,472	122,738	117,044
Total costs applicable to revenue	53,683	42,135	106,709	100,045
SG&A	60,520	39,317	119,857	84,713
Asset impairment	519	2,411	1,478	13,766
Litigation settlement				4,395
Other expense (income), net	(65)	(92)	(130)	(158)
Debt issuance costs	92	136	92	136
EBITDA	(53,229)	(33,435)	(105,268)	(85,853)
Operating Segments \| Corporate/Other \| Products
Segment Reporting Information [Line Items]
Total net revenue	61,520	50,472	122,738	117,044
Total costs applicable to revenue	53,683	42,135	106,709	100,045
Operating Segments \| Corporate/Other \| Services and plans
Segment Reporting Information [Line Items]
Total net revenue	0	0	0	0
Total costs applicable to revenue	0	0	0	0
Reconciliations
Segment Reporting Information [Line Items]
Total net revenue	4,212	(27,583)	(18,855)	(8,135)
Total costs applicable to revenue	1,896	(8,491)	(1,402)	(3,350)
SG&A	0	0	0	0
Asset impairment	0	0	0	0
Litigation settlement				0
Other expense (income), net	0	0	0	0
Debt issuance costs	0	0	0	0
EBITDA	2,316	(19,092)	(17,453)	(4,785)
Reconciliations \| Products
Segment Reporting Information [Line Items]
Total net revenue	8,454	(34,449)	(6,487)	(14,511)
Total costs applicable to revenue	1,896	(8,491)	(1,402)	(3,350)
Reconciliations \| Services and plans
Segment Reporting Information [Line Items]
Total net revenue	(4,242)	6,866	(12,368)	6,376
Total costs applicable to revenue	$ 0	$ 0	$ 0	$ 0

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 03, 2021	Apr. 03, 2021	Jun. 27, 2020	Mar. 28, 2020	Jul. 03, 2021	Jun. 27, 2020
Earnings Per Share [Abstract]
Net income (loss)	$ 37,601	$ 43,432	$ (43,833)	$ 9,742	$ 81,033	$ (34,091)
After-tax interest expense for 2025 Notes	2,362		0		4,694	0
Numerator for diluted EPS	$ 39,963		$ (43,833)		$ 85,727	$ (34,091)
Weighted average shares outstanding for basic EPS (in shares)	81,601		80,325		81,457	80,226
Effect of dilutive securities:
Stock options	1,215		0		1,306	0
Restricted stock	354		0		369	0
2025 Notes	12,912		0		12,912	0
Weighted average shares outstanding for diluted EPS	96,082		80,325		96,044	80,226
Basic EPS (in usd per share)	$ 0.46		$ (0.55)		$ 0.99	$ (0.42)
Diluted EPS (in usd per share)	$ 0.42		$ (0.55)		$ 0.89	$ (0.42)
Options and RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive options, RSUs outstanding excluded from EPS (shares)	110		2,458		74	2,512

Restricted Cash (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021	Jun. 27, 2020	Dec. 28, 2019
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents	$ 408,301	$ 373,903	$ 256,292
Restricted cash included in other assets	1,347		1,341
Total cash, cash equivalents and restricted cash	$ 409,648	$ 375,159	$ 257,633	$ 40,307

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Accumulated Other Comprehensive Loss, Net of Tax [Roll Forward]
Balance at beginning of period	$ 887,532	$ 786,160	$ 906,502	$ 776,437
Balance at end of period	938,337	820,939	938,337	820,939
Cash flow hedges
Accumulated Other Comprehensive Loss, Net of Tax [Roll Forward]
Balance at beginning of period	(5,296)	(10,416)	(4,400)	(3,814)
Other comprehensive income (loss) before reclassification	0	(360)	(10)	(11,041)
Tax effect of other comprehensive income (loss) before reclassification	0	92	3	2,813
Amount reclassified from AOCL into interest expense	2,959	4,471	4,619	6,294
Tax effect of amount reclassified from AOCL into interest expense	(756)	(1,142)	(1,180)	(1,607)
Stranded tax effect of matured interest rate swaps	0	0	(2,125)	0
Net current period other comprehensive income (loss), net of tax	2,203	3,061	1,307	(3,541)
Balance at end of period	$ (3,093)	$ (7,355)	$ (3,093)	$ (7,355)

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