JOANN(JOAN) - 2023 Q4 - Annual Report

Sales and Customer Insights - Sewing category represented 46% of total net sales in fiscal 2023[30] - Approximately 44% of net sales were generated by returning customers who shopped in the preceding 52 weeks[27] - E-commerce generated net sales of approximately $511 million, $299 million, and $271 million in fiscal years 2021, 2022, and 2023, respectively[26] - The company has approximately 81 million addressable customers in its database and around 20 million customers in its email database[26] - JOANN's net sales are stronger in the second half of the year, with net income peaking from September to December due to significant operating leverage[67] Store and Operational Details - The company operated 833 store locations across 49 states as of January 28, 2023, with an average size of approximately 22,500 square feet[29] - JOANN operated 833 store locations across the United States, with a total square footage of approximately 18,720 thousand[47] - Approximately 20,000 full- and part-time team members were employed as of January 28, 2023, with about 18,100 working in store locations[57] - JOANN's distribution centers shipped 91% of products to store locations, with the Hudson distribution center supplying 35% of outbound volume[40] Supply Chain and Sourcing - JOANN sourced 56% of its purchases from domestic suppliers and 44% from international sources, with over one-third of international products coming from China[38] - JOANN's top supplier accounted for 5% of total annual purchase volume, while the top 10 suppliers represented 22%[39] - 44% of the company's purchases in fiscal 2023 were sourced internationally, primarily from China and other Asian countries[278] Financial Performance and Debt - The company had $990.6 million of outstanding debt as of January 28, 2023[24] - The company employs established policies to manage exposure to interest rate changes and utilizes derivative financial instruments for risk mitigation[279] - Interest rate changes impact the company's outstanding borrowings under its First Lien Facility and ABL Facility[277] - A hypothetical 1% change in interest rates would not have had a material impact on the company's consolidated financial statements[279] Marketing and Customer Engagement - The company’s marketing efforts focus on deepening customer relationships and creating loyalty through personalized communications[32] - The company’s digital marketing strategies include online display, search marketing, social media, and affiliate marketing programs[33] - JOANN's social media presence includes over 3.6 million followers, with an organic reach of more than 82 million views on Instagram and Facebook during fiscal 2023[36] Corporate Social Responsibility - In fiscal 2023, JOANN team members and customers donated over $6 million to charitable organizations, representing an 83% year-over-year increase[36] - JOANN was recognized by Newsweek as one of America's Greatest Workplaces for Diversity and for Women[60] - The company aims to achieve zero serious injuries through ongoing investment in safety programs and injury-reduction initiatives[61] - The company maintains a commitment to diversity and inclusion through an internal council and educational programs[60] Leadership and Management - JOANN's executive team includes Wade Miquelon as President and CEO, with a diverse background in finance and retail management[69][70] - JOANN's supply chain and logistics are overseen by Mario Sampson, who has extensive experience in retail operations[75] - The company emphasizes training and development, providing tools and resources for professional growth across all team members[64] - JOANN's operational activities are coordinated by Joseph Thibault, who has been with the company since 2002 and has held multiple key roles[76] Risk Management and Financial Instruments - The company has hedging arrangements in place with two interest rate swap agreements, hedging $200 million and $250 million of principal under its First Lien Facility[279] - The company believes foreign currency exchange rate fluctuations do not pose significant market risk due to all merchandise contracts being denominated in U.S. dollars[278] - A weakening of the U.S. dollar could lead to significantly higher product costs due to increased foreign sourcing[278] - Transactions conducted in foreign currencies are not expected to materially affect the company's results of operations, financial position, or cash flows[278] - The company is indirectly exposed to foreign currency fluctuations on merchandise sourced internationally[277] - The company does not expect a direct correlation between merchandise prices and fluctuations in the exchange rate[278]