Cover Page - USD ($)	12 Months Ended
Cover Page - USD ($)	Aug. 03, 2019	Sep. 27, 2019	Jan. 26, 2019
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Aug. 03, 2019
Document Transition Report	false
Entity File Number	001-38291
Entity Registrant Name	STITCH FIX, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-5026540
Entity Address, Address Line One	1 Montgomery Street
Entity Address, Address Line Two	Suite 1500
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94104
City Area Code	415
Local Phone Number	882-7765
Title of 12(b) Security	Class A common stock, par value $0.00002 per share
Trading Symbol	SFIX
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
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 Public Float			$ 1,019,019,920
Entity Central Index Key	0001576942
Current Fiscal Year End Date	--08-03
Document Fiscal Year Focus	2019
Document Fiscal Period Focus (i.e. Q1,Q2,Q3,FY)	FY
Amendment Flag	false
Common Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		55,030,361
Common Class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		46,616,240

Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 03, 2019	Jul. 28, 2018
Current assets:
Cash and cash equivalents	$ 170,932	$ 297,516
Restricted cash	0	250
Short-term investments	143,276	0
Inventory, net	118,216	85,092
Prepaid expenses and other current assets	49,980	34,148
Total current assets	482,404	417,006
Long-term investments	53,372	0
Property and equipment, net	54,888	34,169
Deferred tax assets	22,175	14,107
Restricted cash, net of current portion	0	12,600
Other long-term assets	3,227	3,703
Total assets	616,066	481,585
Current liabilities:
Accounts payable	90,883	79,782
Accrued liabilities	69,734	43,037
Gift card liability	7,233	6,814
Deferred revenue	11,997	8,870
Other current liabilities	2,784	3,729
Total current liabilities	182,631	142,232
Deferred rent, net of current portion	24,439	15,288
Other long-term liabilities	12,996	8,993
Total liabilities	220,066	166,513
Commitments and contingencies (Note 7)
Stockholders’ equity:
Additional paid-in capital	279,511	235,312
Accumulated other comprehensive income	(187)	0
Retained earnings	116,674	79,758
Total stockholders’ equity	396,000	315,072
Total liabilities and stockholders’ equity	616,066	481,585
Class A common stock
Stockholders’ equity:
Common stock	1	1
Class B common stock
Stockholders’ equity:
Common stock	$ 1	$ 1

Consolidated Balance Sheets (Parenthetical) - $ / shares	Aug. 03, 2019	Jul. 28, 2018
Class A common stock
Common stock, par value (in dollars per share)	$ 0.00002	$ 0.00002
Common stock, shares authorized (in shares)	2,000,000,000	2,000,000,000
Common stock, shares issued (in shares)	54,551,240	35,756,628
Common stock, shares outstanding (in shares)	54,551,240	35,756,628
Class B common stock
Common stock, par value (in dollars per share)	$ 0.00002	$ 0.00002
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	46,846,240	63,043,233
Common stock, shares outstanding (in shares)	46,846,240	63,043,233

Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Aug. 03, 2019	Jul. 28, 2018	Jul. 29, 2017
Income Statement [Abstract]
Revenue, net	$ 1,577,558	$ 1,226,505	$ 977,139
Cost of goods sold	874,429	690,483	542,718
Gross profit	703,129	536,022	434,421
Selling, general, and administrative expenses	679,634	492,998	402,781
Operating income	23,495	43,024	31,640
Remeasurement of preferred stock warrant liability	0	(10,685)	18,881
Interest income	(5,791)	(904)	(42)
Other income, net	(1,535)	(100)	0
Income before income taxes	30,821	54,713	12,801
Provision for income taxes	(6,060)	9,813	13,395
Net income (loss)	36,881	44,900	(594)
Other comprehensive income (loss):
Change in unrealized gain on available-for-sale securities, net of tax	391	0	0
Foreign currency translation	(578)	0	0
Total other comprehensive income (loss), net of tax	(187)	0	0
Comprehensive income (loss)	36,694	44,900	(594)
Net income (loss) attributable to common stockholders:
Basic	36,863	35,541	(594)
Diluted	$ 36,864	$ 27,285	$ (594)
Earnings (loss) per share attributable to common stockholders:
Basic (in dollars per share)	$ 0.37	$ 0.47	$ (0.02)
Diluted (in dollars per share)	$ 0.36	$ 0.34	$ (0.02)
Weighted-average shares used to compute earnings per share attributable to common stockholders:
Basic (in shares)	100,013,462	75,947,759	24,973,931
Diluted (in shares)	103,653,626	81,288,418	24,973,931

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Retained Earnings
Convertible preferred stock, beginning balance at Jul. 30, 2016	$ 42,222
Convertible preferred stock, beginning balance (in shares) at Jul. 30, 2016	59,511,055
Convertible preferred stock, ending balance at Jul. 29, 2017	$ 42,222
Convertible preferred stock, ending balance (in shares) at Jul. 29, 2017	59,511,055
Stockholders' equity, beginning balance at Jul. 30, 2016	$ 49,947	$ 0	$ 10,938	$ 0	$ 39,009
Stockholders' equity, beginning balance (in shares) at Jul. 30, 2016		25,873,434
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Compensation expense related to certain stock sales by current and former employees	9,699		9,699
Issuance of common stock upon exercise of stock options	1,704		1,704
Issuance of common stock upon exercise of stock options, net of early exercised options (in shares)		1,462,434
Vesting of early exercised options	891	$ 1	890
Repurchase of common stock	(3,557)				(3,557)
Repurchase of common stock (in shares)		(501,333)
Stock-based compensation	3,709		3,709
Excess tax benefit related to stock-based compensation	62		62
Net income	(594)				(594)
Total other comprehensive income (loss), net of tax	0
Stockholders' equity, ending balance at Jul. 29, 2017	61,861	$ 1	27,002	0	34,858
Stockholders' equity, ending balance (in shares) at Jul. 29, 2017		26,834,535
Increase (Decrease) in Temporary Equity [Roll Forward]
Convertible preferred stock, issuance of Class B common stock upon conversion of convertible preferred stock	$ (42,222)
Convertible preferred stock, issuance of Class B common stock upon conversion of convertible preferred stock (in shares)	(59,511,055)
Convertible preferred stock, ending balance at Jul. 28, 2018	$ 0
Convertible preferred stock, ending balance (in shares) at Jul. 28, 2018	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options	$ 6,384		6,384
Issuance of common stock upon exercise of stock options, net of early exercised options (in shares)		2,192,430
Vesting of early exercised options	988		988
Repurchase of common stock	0
Repurchase of common stock (in shares)		(19,479)
Stock-based compensation	16,286		16,286
Net income	44,900				44,900
Issuance of Class A common stock upon initial public offering, net of offering costs	127,033		127,033
Issuance of Class A common stock upon initial public offering, net of offering costs (in shares)		9,175,557
Issuance of Class B common stock upon conversion of convertible preferred stock	42,222	$ 1	42,221
Issuance of Class B common stock upon conversion of convertible preferred stock (in shares)		59,511,055
Reclassification of warrant liability to additional paid-in capital upon the initial public offering	15,994		15,994
Reclassification of warrant liability to additional paid-in capital upon the initial public offering (in shares)		1,066,225
Issuance of Class A common stock upon settlement of restricted stock units, net of tax withholdings	(596)		(596)
Issuance of Class A restricted stock units, net of tax withholdings (in shares)		39,538
Total other comprehensive income (loss), net of tax	0
Stockholders' equity, ending balance at Jul. 28, 2018	315,072	$ 2	235,312	0	79,758
Stockholders' equity, ending balance (in shares) at Jul. 28, 2018		98,799,861
Convertible preferred stock, ending balance at Aug. 03, 2019	$ 0
Convertible preferred stock, ending balance (in shares) at Aug. 03, 2019	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options	$ 13,693		13,693
Issuance of common stock upon exercise of stock options, net of early exercised options (in shares)		2,200,393
Vesting of early exercised options	209		209
Stock-based compensation	37,045		37,045
Net income	36,881				36,881
Issuance of Class A common stock upon settlement of restricted stock units, net of tax withholdings	(6,748)		(6,748)	0	0
Issuance of Class A restricted stock units, net of tax withholdings (in shares)		397,226
Total other comprehensive income (loss), net of tax	(187)			(187)
Stockholders' equity, ending balance at Aug. 03, 2019	$ 396,000	$ 2	$ 279,511	$ (187)	$ 116,674
Stockholders' equity, ending balance (in shares) at Aug. 03, 2019		101,397,480

Consolidated Statements of Cash Flow - USD ($) $ in Thousands	12 Months Ended
	Aug. 03, 2019	Jul. 28, 2018	Jul. 29, 2017
Cash Flows from Operating Activities
Net income	$ 36,881	$ 44,900	$ (594)
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	(8,203)	6,588	(6,728)
Remeasurement of preferred stock warrant liability	0	(10,685)	18,881
Inventory reserves	7,974	1,916	3,591
Compensation expense related to certain stock sales by current and former employees	0	0	9,699
Stock-based compensation expense	35,256	15,403	3,545
Excess tax benefit related to stock-based compensation expense	0	0	(62)
Depreciation, amortization, and accretion	14,331	10,542	7,655
Loss on disposal of property and equipment	148	155	0
Change in operating assets and liabilities:
Inventory	(41,233)	(19,416)	(26,375)
Prepaid expenses and other assets	(16,831)	(17,307)	(7,596)
Accounts payable	10,774	35,502	7,841
Accrued liabilities	22,856	(3,595)	17,748
Deferred revenue	3,325	1,720	2,719
Gift card liability	825	1,624	1,993
Other liabilities	12,491	4,831	6,307
Net cash provided by operating activities	78,594	72,178	38,624
Cash Flows from Investing Activities
Purchases of property and equipment	(30,825)	(16,565)	(17,130)
Purchases of securities available-for-sale	(285,205)	0	0
Sales of securities available-for-sale	10,596	0	0
Maturities of securities available-for-sale	80,250	0	0
Net cash used in investing activities	(225,184)	(16,565)	(17,130)
Cash Flows from Financing Activities
Proceeds from initial public offering, net of underwriting discounts paid	0	129,046	0
Proceeds from the exercise of stock options, net	13,693	6,384	2,346
Payments for tax withholding related to vesting of restricted stock units	(6,748)	(596)	0
Excess tax benefit related to stock-based compensation expense	0	0	62
Repurchase of Class B common stock related to early exercised options	0	(39)	(3,557)
Payment of deferred offering costs	0	0	(1,879)
Net cash provided by (used in) financing activities	6,945	134,795	(3,028)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(139,645)	190,408	18,466
Effect of exchange rate changes on cash	211	0	0
Cash, cash equivalents, and restricted cash at beginning of period	310,366	119,958	101,492
Cash, cash equivalents, and restricted cash at end of period	170,932	310,366	119,958
Components of Cash, Cash Equivalents, and Restricted Cash
Total cash, cash equivalents, and restricted cash	170,932	310,366	101,492
Supplemental Disclosure
Cash paid for income taxes	966	10,071	28,023
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Purchases of property and equipment included in accounts payable and accrued liabilities	5,272	795	111
Capitalized stock-based compensation	1,789	883	164
Vesting of early exercised options	209	988	891
Conversion of preferred stock upon initial public offering	0	42,222	0
Reclassification of preferred stock warrant liability upon initial public offering	0	15,994	0
Deferred offering costs included in accrued liabilities	0	0	508
Deferred offering costs paid in prior year	$ 0	$ 1,879	$ 0

Description of Business	12 Months Ended
Description of Business	Aug. 03, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of Business Stitch Fix, Inc. (“we,” “our,” “us,” or “the Company”) delivers one-to-one personalization to our clients through the combination of data science and human judgment. Our stylists hand select items from a broad range of merchandise. Stylists pair their own judgment with our analysis of client and merchandise data to provide a personalized shipment of apparel, shoes, and accessories suited to each client’s needs. We call each of these unique shipments a Fix. After receiving a Fix, our clients purchase the items they want to keep and return the other items. We are incorporated in Delaware and have operations in the United States and the UK. Initial Public Offering On November 16, 2017, we completed an initial public offering, or IPO. In connection with the IPO, we authorized two new classes of common stock: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting, conversion and transfer rights. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into one share of Class A common stock and has no expiration date. The Class B common stock automatically converts to Class A common stock upon transfers or any sale. In the IPO, we issued and sold 8,000,000 shares of our Class A common stock at a public offering price of $15.00 per share. We received $110.4 million in net proceeds after deducting $6.2 million of underwriting discounts and $3.4 million in offering costs. Upon the closing of the IPO, all of the then-outstanding shares of common stock were reclassified into Class B common stock, all of the outstanding shares of convertible preferred stock automatically converted into 59,511,055 shares of Class B common stock, and all of the outstanding preferred stock warrants were automatically exercised into 1,066,225 shares of Class B common stock. Subsequent to the closing of the IPO, there were no shares of preferred stock or preferred stock warrants outstanding. In December 2017, we issued an additional 1,175,557 shares of Class A common stock at a price of $15.00 per share following the underwriters’ exercise of their option to purchase additional shares and received $16.7 million in net proceeds after deducting underwriting discounts and expenses.

Significant Accounting Policies

12 Months Ended

Aug. 03, 2019

Accounting Policies [Abstract]

Significant Accounting Policies

Basis of Presentation

The consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include the accounts of Stitch Fix, Inc. and our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Our fiscal year is a 52-week or 53-week period ending on the Saturday closest to July 31. The fiscal year ended August 3, 2019 (“2019”), consisted of 53 weeks, and the fiscal years ended July 28, 2018 (“2018”), and July 29, 2017 (“2017”), consisted of 52 weeks.

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

Segment Information

We have one operating segment and one reportable segment as our chief operating decision maker, who is our Chief Executive Officer, reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and accompanying footnotes. Significant estimates and assumptions are used for inventory, stock-based compensation expense, income taxes, and revenue recognition. Actual results could differ from those estimates and such differences may be material to the consolidated financial statements.

Cash and Cash Equivalents

Cash consists of bank deposits and amounts in transit from banks for client credit card and debit card transactions that will process in less than seven days. Cash equivalents consist of investments in short-term money market funds.

Restricted Cash

At July 28, 2018, restricted cash represented cash balances held in segregated accounts collateralizing letters of credit for our leased properties.

Investment Securities

The Company’s short-term and long-term investments have been classified and accounted for as available-for-sale securities. We determine the appropriate classification of our investments at the time of purchase and reevaluate the classification at each balance sheet date. Available-for-sale securities with maturities of 12 months or less are classified as short term and available-for-sale securities with maturities greater than 12 months are classified as long term. The Company’s available-for-sale securities are carried at fair value, with unrealized gains and losses, net of taxes, reported within accumulated other comprehensive income (“AOCI”) in stockholders’ equity, with the exception of unrealized losses believed to be other than temporary, which are reported in earnings in the current period, if applicable. The cost of securities sold is based upon the specific identification method.

Foreign Currency

The functional currency of our international subsidiary is the local currency. For that subsidiary, we translate assets and liabilities to U.S. dollars using period-end exchange rates, and average monthly exchange rates for revenues, costs, and expenses. We record translation gains and losses in AOCI as a component of stockholders’ equity. Net foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to functional currency are recorded in other income, net in the consolidated statements of operations and comprehensive income.

Inventory, net

Inventory consists of finished goods which are recorded at the lower of cost or net realizable value using the specific identification method. The cost of inventory consists of merchandise costs and in-bound freight costs. We establish a reserve for excess and slow-moving inventory we expect to write off based on historical trends. In addition, we estimate and accrue shrinkage as a percentage of inventory out to the client and damaged items at 100% of cost. Inventory shrinkage and damage estimates are made to reduce the inventory value for lost, stolen, or damaged items.

The inventory reserve, which reduces inventory in our consolidated balance sheets, was $25.5 million and $17.6 million as of August 3, 2019, and July 28, 2018, respectively.

Property and Equipment, net

Property and equipment, net is recorded at cost less accumulated depreciation and amortization. Depreciation and amortization is recorded on a straight-line basis over the estimated useful lives of the respective assets. Repair and maintenance costs are expensed as incurred.

The estimated useful lives of our assets are as follows:



		Estimated useful life
Computer equipment and capitalized software		3 years
Office furniture and equipment		5 years
Buildings		25 years
Leasehold improvements		Shorter of lease term or estimated useful life

We capitalize eligible costs to develop our proprietary systems, website, and mobile app. Capitalization of such costs begins when the preliminary project stage is completed and it is probable that the project will be completed and the software will be used to perform the function intended. A subsequent addition, modification, or upgrade to internal-use software is capitalized to the extent that it enhances the software’s functionality or extends its useful life. Costs related to design or maintenance are expensed as incurred.

Deferred Offering Costs

Deferred offering costs, which consist of direct incremental legal, consulting, banking, and accounting fees relating to the IPO, were capitalized and offset against proceeds upon the consummation of the IPO, which became effective on November 21, 2017.

In December 2017, we issued additional shares of Class A common stock following the underwriters’ exercise of their option to purchase additional shares. The related deferred offering costs were capitalized and offset against proceeds upon issuance of the shares.

Impairment of Long-Lived Assets

We review our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated from the use of the asset and its eventual disposition. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount exceeds the fair value of the impaired assets. Assets to be disposed of are reported at the lower of their carrying amount or fair value less cost to sell. We have not recorded an impairment of long-lived assets since inception.

Preferred Stock Warrant Liability

We recorded our preferred stock warrants as current liabilities in the consolidated balance sheets at their estimated fair value because the warrants were exercisable at any time by the holders for cash at a purchase price per share equal to the lowest price per share at which we had sold shares of a specific series of our preferred stock or a number of shares of equivalent value as determined by a specified calculation. At initial recognition, we recorded these warrants at their estimated fair value. The liability associated with these warrants was subject to remeasurement at each balance sheet date, with changes in fair value recorded as remeasurement of preferred stock warrant liability in the consolidated statements of operations. In November 2017, in connection with our IPO, the preferred stock warrants were automatically exercised into Class B common stock and the preferred stock warrant liability was reclassified to additional paid-in capital.

Revenue Recognition

We generate revenue primarily from the sale of merchandise in a Fix and, to a lesser extent, from direct purchases. Clients create an online account on our website or mobile app, complete a style profile, and order a Fix to be delivered on a specified date.

Each Fix represents an offer made by us to the client to purchase merchandise. The client is charged a nonrefundable upfront styling fee before the Fix is shipped. As an alternative to the styling fee, we offer select clients the option to purchase a Style Pass. Style Pass clients pay a nonrefundable annual fee for unlimited Fixes that is credited towards merchandise purchases. If the offer to purchase merchandise is accepted, we charge the client the order amount for the accepted merchandise, net of the upfront styling fee or Style Pass annual fee. For each Fix, acceptance occurs when the client checks out the merchandise on our website or mobile app. We offer a discount to clients who purchase all of the items in the Fix.

We recognize revenue through the following steps: (1) identification of the contract, or contracts, with the customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, we satisfy a performance obligation.

Both our styling fee and Style Pass arrangements consist of one performance obligation, which is the option to purchase merchandise. The upfront styling fee is not a performance obligation as the styling activity is not distinct within the context of the contract. Similarly, the right to receive multiple options under Style Pass does not provide the customer with material stand-alone value and therefore does not give rise to a separate performance obligation. Both the upfront styling fee and Style Pass annual fee are included in deferred revenue until the performance obligation is satisfied when the client exercises his or her option to purchase merchandise (i.e., upon checkout of a Fix) or when the option(s) to purchase merchandise expire(s).

Revenue is recognized when control of the promised goods is transferred to the client. For a Fix, control is transferred when the client accepts or rejects the offer to purchase merchandise. Upon acceptance by purchasing one or more items within the Fix at checkout, the total amount of the order, including the upfront styling fee, is recognized as revenue. If none of the items within the Fix are accepted at checkout, the upfront styling fee is recognized as revenue at that time. The Style Pass annual fee is recognized at the earlier of (i) the time at which a client accepts and applies the Style Pass fee to an offer to purchase merchandise or (ii) upon expiry of the annual period. Under Style Pass arrangements, if a client does not accept any items within the Fix, the annual fee will continue to be deferred until it is applied to a future purchase or upon expiry of the annual period. For a direct buy, control is transferred when the item is shipped to the client. If a client would like to exchange an item, we recognize revenue at the time the exchanged item is shipped, which coincides with the transfer of control to the customer.

We deduct discounts, sales tax, and estimated refunds to arrive at net revenue. Sales tax collected from clients is not considered revenue and is included in accrued liabilities until remitted to the taxing authorities. All shipping and handling costs are accounted for as fulfillment costs in cost of goods sold and as selling, general, and administrative expense (“SG&A”), respectively, and are therefore not evaluated as a separate performance obligation. Discounts are recorded as a reduction to revenue when the order is accepted. We record a refund reserve based on our historical refund patterns. Our refund reserve, which is included in accrued liabilities in the consolidated balance sheets, was $3.1 million and $2.3 million as of August 3, 2019, and July 28, 2018, respectively.

The Company has four types of contractual liabilities: (i) cash collections of upfront styling fees, which are included in deferred revenue and are recognized as revenue upon the earlier of application to a merchandise purchase or expiry of the offer, (ii) cash collections of Style Pass annual fees, which are included in deferred revenue and are recognized upon the earlier of application to a merchandise purchase or expiry of the Style Pass annual period, (iii) unredeemed gift cards, which are included in gift card liability and recognized as revenue upon usage or inclusion in gift card breakage estimates, and (iv) referral credits, which are included in other current liabilities and are recognized as revenue when used.

We sell gift cards to clients and establish a liability based upon the face value of such gift cards. We reduce the liability and recognize revenue upon usage of the gift card. We recognize estimated gift card breakage revenue proportionately to customer usage of gift cards over the expected gift card usage period, subject to requirements to remit balances to governmental agencies. All commissions paid to third parties upon issuance of gift cards are recognized in SG&A as incurred, as on average, gift cards are used within a one-year period. Similarly, referral credits that are considered incremental costs of obtaining a contract with a customer are recognized in SG&A when issued, as on average, referral credits are used within a one-year period.

Contractual liabilities included in deferred revenue, gift card liability, and other current liabilities were $12.0 million, $7.2 million, and $1.6 million, respectively, at August 3, 2019, and $8.9 million, $6.8 million, and $2.7 million, respectively, at July 28, 2018. During the fiscal year ended August 3, 2019, the Company recognized $8.6 million, $2.8 million, and $0.7 million of net revenue included in deferred revenue, gift card liability, and other current liabilities, respectively, at July 28, 2018. All amounts presented as of July 28, 2018, are accounted for under Accounting Standards Codification (“ASC”) 605. All amounts presented as of August 3, 2019, include the transition impact of adopting ASC 606. See “Recently Adopted Accounting Pronouncements” below.

Deferred revenue related to upfront styling fees totaled $9.6 million as of August 3, 2019, and $7.6 million as of July 28, 2018. Deferred revenue related to Style Pass annual fees totaled $2.3 million as of August 3, 2019, and $1.1 million as of July 28, 2018. Deferred revenue related to exchanges totaled zero as of August 3, 2019, and $0.2 million as of July 28, 2018.

The Company expects deferred revenue for upfront styling fees and Style Pass annual fees to be recognized within one year. On average, gift card liability and other current liabilities are also recognized within one year.

Cost of Goods Sold

Cost of goods sold consists of the costs of merchandise, expenses for shipping to and from clients and inbound freight, inventory write-offs and changes in our inventory reserve, payment processing fees, and packaging material costs.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses consist primarily of compensation and benefits costs, including stock-based compensation expense, for our employees including our stylist, fulfillment center operations, data analytics, merchandising, engineering, client experience, marketing, and corporate personnel. Selling, general, and administrative expenses also include marketing and advertising, third-party logistics costs, facility costs for our fulfillment centers and offices, professional services fees, information technology, and depreciation and amortization.

Advertising Expenses

Costs associated with the production of advertising, such as writing, copy, printing, and other production costs are expensed as incurred. Costs associated with communicating advertising on television and radio are expensed the first time the advertisement is run. Online advertising costs are expensed as incurred. Advertising costs totaled $152.1 million, $102.1 million, and $70.5 million for 2019, 2018, and 2017, respectively, and are included within selling, general, and administrative expenses in the consolidated statements of operations.

Marketing Programs

We have a client referral program under which we issue credits for future purchases to clients when the referral results in a new client who has ordered a Fix. We record a liability at the time of issuing the credit and reduce the liability upon application of the credit to a client’s purchase. Our liability for client referral credits amounted to $1.6 million and $2.7 million as of August 3, 2019, and July 28, 2018, respectively. We also have an affiliate program under which we make cash payments to lifestyle or fashion bloggers or others who refer clients in high volumes. Amounts related to both of these programs are included within selling, general, and administrative expenses in the consolidated statements of operations.

Leases

We recognize rent expense over the term of the lease, starting when the property is made available for use to us by the landlord. When a lease contains a predetermined fixed rent escalation, we recognize the related rent expense on a straight-line basis and record the difference between the recognized rent expense and the amounts paid under the lease as deferred rent included in other current liabilities and deferred rent, net of current portion, on the consolidated balance sheets. We also receive tenant allowances upon entering into certain leases, which are recorded as a liability and amortized using the straight-line method as a reduction to rent expense over the term of the lease.

Income Taxes

We account for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which they are expected to be realized or settled.

We believe that it is more likely than not that forecasted income and potential income from tax planning strategies, together with future reversals of existing taxable temporary differences and results of recent operations, will be sufficient to fully recover the deferred tax assets. In the event that we determine all or part of the net deferred tax assets are not realizable in the future, we would record a valuation allowance.

We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We recognize interest and penalties related to unrecognized tax benefits, if any, as income tax expense.

Stock-Based Compensation Expense

We measure stock-based compensation expense associated with option awards made to employees and members of our board of directors based on the estimated fair values of the awards at grant date using the Black-Scholes option-pricing model. For options with service conditions only, stock-based compensation expense is recognized, net of forfeitures, over the requisite service period using the straight-line method such that an expense is only recognized for those awards that we expect to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

We have granted certain option awards that contain both service and performance conditions. The service condition for such awards is satisfied ratably over the 24-month period following the fourth anniversary of the grant date. The performance condition for such awards was satisfied if we consummated an IPO within 12 months of the grant date. Expense related to awards which contain both service and performance conditions is recognized using the accelerated attribution method. Since an IPO is not deemed probable until such event occurs, no compensation cost related to the performance condition was recognized prior to the consummation of our IPO in November 2017. Subsequently, we recorded stock-based compensation expense of $0.5 million related to periods prior to the IPO.

Comprehensive Income (Loss)

Comprehensive income (loss) represents all changes in stockholders’ equity during a period from sources other than transactions with stockholders. For 2019, comprehensive income (loss) includes the net income (loss) for the period, the gain (loss) due to foreign currency translation, and the change in unrealized gain (loss) on available-for-sale securities. Our net income (loss) was equal to our comprehensive income (loss) for 2018 and 2017.

Concentration of Credit Risks

We are subject to concentrations of credit risk principally from cash and cash equivalents and investment securities. The majority of our cash is held by three financial institutions within the United States. Our cash balances held by these institutions may exceed federally insured limits. The associated risk of concentration for cash is mitigated by banking with credit-worthy institutions. The associated risk of concentration for cash equivalents and investments is mitigated by maintaining a diversified portfolio of highly rated instruments.

No client accounted for greater than 10% of total revenue, net for 2019, 2018, and 2017.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amended the existing FASB Accounting Standards Codification. ASU 2014-09 establishes a principle for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services and also provides guidance on the recognition of costs related to obtaining and fulfilling customer contracts. The new guidance may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption (“modified retrospective method”).

We adopted the standard in the first quarter of fiscal 2019 under the modified retrospective approach. Under the new standard, we recognize estimated gift card breakage revenue proportionately to customer gift card usage over the expected gift card usage period rather than waiting until the likelihood of redemption becomes remote. Further, we recognize revenue related to exchanges upon shipment by us, rather than upon receipt by the customer. In the first quarter of 2019, the Company recorded a cumulative catch-up adjustment resulting in an increase to opening retained earnings, net of tax, of $0.4 million, comprised of the impact of $0.3 million from the change in revenue recognition related to gift cards and $0.1 million from the recognition of exchanges upon shipment. The impact to net revenue for the fiscal year ended August 3, 2019, was an increase of $1.4 million as a result of adopting the standard.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory (Topic 740) (“ASU 2016-16”), which amends existing guidance on the recognition of current and deferred income tax impacts for intra-entity asset transfers other than inventory. We adopted the standard in the first quarter of 2019 under the modified retrospective approach. As a result, a cumulative adjustment of $0.4 million, net of tax, was recorded to reduce opening retained earnings in connection with adoption of Topic 740.

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to record most leases on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. Presentation of leases within the consolidated statements of operations and comprehensive income and consolidated statements of cash flow will be generally consistent with current lease accounting guidance. However, this standard will result in a substantial increase in our long-term assets and liabilities on our consolidated balance sheet.

We will adopt this standard in the first quarter of the fiscal year ending August 1, 2020 (“2020”) on a modified retrospective basis through a cumulative-effect adjustment of zero to opening retained earnings in the period of adoption. We will also elect the package of practical expedients to leases that commenced before the effective date whereby we will elect to not reassess the following:

(i) whether any expired or existing contracts contain leases;

(ii) the lease classification for any expired or existing leases; and

(iii) initial direct costs for any existing leases.

Upon adoption of ASU 2016-02, we will not record right-of-use assets or lease liabilities for leases with an initial term of 12 months or less. Payments on those leases will be recognized on a straight-line basis through the consolidated statements of operations and comprehensive income over the lease term. We will also elect to combine lease and non-lease components on our leases into a single lease component. We expect to record approximately $130 million to $140 million in right-of-use assets and $155 million to $165 million in lease liabilities on our consolidated balance sheet upon adoption on August 4, 2019.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The standard requires entities to use a financial instrument impairment model based on expected losses, known as the current expected credit loss (“CECL”) model, rather than incurred losses. Under the new guidance, an entity recognizes an allowance for estimated credit losses upon recognition of the financial instrument. We expect to adopt this standard in our first fiscal quarter of 2021. We are currently evaluating the impact that this standard will have on our consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). Under this ASU, the accounting for awards issued to nonemployees will be similar to the accounting for employee awards. This includes allowing for the measurement of awards at the grant date and recognition of awards with performance conditions when those conditions are probable, both of which are earlier than under current guidance for nonemployee awards. We expect to adopt this standard in our first fiscal quarter of 2020. We are currently evaluating the impact that this standard will have on our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018-15”). The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard is effective beginning in our first fiscal quarter of 2021 on a prospective or retrospective basis, with early adoption permitted. We are currently evaluating the impact that this standard will have on our consolidated financial statements.

Recently Issued SEC Rules

In March 2019, the SEC amended its rules to modernize and simplify certain disclosure requirements in Regulation S-K and the related rules and forms. Among other things, the amendments (1) allow registrants to redact confidential information from most exhibits to their filings without filing a confidential treatment request; (2) allow registrants who present financial statements covering three years in their periodic reports to omit discussion of the earliest year from management's discussion and analysis if the discussion was included in a prior filing; (3) allow registrants to remove certain Properties and Risk Factors disclosures; and (4) require XBRL data tagging for items on the cover pages of certain filings, as well as the use of hyperlinks for information that is incorporated by reference and available on EDGAR. These provisions were effective and incorporated in this Annual Report on Form 10-K.

Fair Value Measurements

12 Months Ended

Aug. 03, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

We disclose and recognize the fair value of our assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes three levels of the fair value hierarchy as follows:

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2: Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

Level 3: Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

Our financial instruments consist of cash and cash equivalents, short-term and long-term investments, accounts payable, accrued liabilities, and, prior to our IPO, the preferred stock warrant liability. At August 3, 2019, and July 28, 2018, the carrying values of cash and cash equivalents, accounts payable, and accrued liabilities approximated fair value due to their short-term maturities. In November 2017, in connection with our IPO, all outstanding preferred stock warrants were automatically exercised into shares of Class B common stock. As a result, we remeasured and reclassified the preferred stock warrant liability to additional paid-in capital upon the closing of our IPO.

The following table sets forth the amortized cost, gross unrealized gains, gross unrealized losses and fair values of our short-term and long-term investments accounted for as available-for-sale securities as of August 3, 2019:



	August 3, 2019
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Financial Assets:
Investments:
U.S. Treasury securities	$	49,807	$	100	$	—	$	49,907
Commercial paper	29,761		—		—		29,761
Asset-backed securities	42,587		145		—		42,732
Corporate bonds	73,969		279		—		74,248
Total	$	196,124	$	524	$	—	$	196,648

The following table sets forth the fair value of available-for-sale securities by contractual maturity as of August 3, 2019:



	August 3, 2019
(in thousands)	One Year or Less		Over One Year Through Five Years		Over Five Years		Total
Financial Assets:
Investments:
U.S. Treasury securities	$	44,772	$	5,135	$	—	$	49,907
Commercial paper	29,761		—		—		29,761
Asset-backed securities	5,412		37,320		—		42,732
Corporate bonds	63,331		10,917		—		74,248
Total	$	143,276	$	53,372	$	—	$	196,648

The following table sets forth our cash equivalents, and short-term and long-term investments accounted for as available-for-sale securities that were measured at fair value on a recurring basis based on the fair value hierarchy as of August 3, 2019:



	August 3, 2019
(in thousands)	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	6,427	$	—	$	—	$	6,427
Commercial paper	—		11,970		—		11,970
Investments:
U.S. Treasury securities	49,907		—		—		49,907
Commercial paper	—		29,761		—		29,761
Asset-backed securities	—		42,732		—		42,732
Corporate bonds	—		74,248		—		74,248
Total	$	56,334	$	158,711	$	—	$	215,045

As of July 28, 2018, the Company did not have any financial instruments measured at fair value.

There were no transfers of financial assets or liabilities into or out of Level 1, Level 2, or Level 3 for the fiscal years ended August 3, 2019, and July 28, 2018.

The following table sets forth a summary of the changes in the fair value of the preferred stock warrant liability for the fiscal year ended July 28, 2018:



(in thousands)	For the Fiscal Year Ended July 28, 2018
Balance at July 29, 2017	$	26,679
Change in fair value	(10,685		)
Reclassification of warrant liability to additional paid-in capital upon the initial public offering	(15,994		)
Balance at July 28, 2018	$	—

The key assumptions used in the Black-Scholes option-pricing model for the valuation of the preferred stock warrant liability upon remeasurement were as follows:



	July 29, 2017
Expected term (in years)	2.0
Fair value of underlying shares	$	25.09
Volatility	43.8		%
Risk free interest rate	1.3		%
Dividend yield	—		%

Generally, increases or decreases in the fair value of the underlying convertible preferred stock would result in a directionally similar impact in the fair value measurement of the associated warrant liability.

See Note 6, Preferred Stock Warrant Liability, for more details on our preferred stock warrants.

- 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

Commitments and Contingencies

12 Months Ended

Aug. 03, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Leases

We have entered into various lease arrangements for our corporate offices and fulfillment centers. Such leases generally have original lease terms between five and eight years. We had security deposits totaling $1.2 million and $1.3 million as of August 3, 2019, and July 28, 2018, respectively. We had unsecured letters of credit totaling $13.9 million as of August 3, 2019. We had secured letters of credit totaling $12.9 million as of July 28, 2018, which were collateralized by time deposits.

A schedule of the future minimum rental commitments under our non-cancelable operating lease agreements with an initial or remaining term in excess of one year as of August 3, 2019, is as follows:



(in thousands)	August 3, 2019
2020	$	27,018
2021	27,680
2022	25,451
2023	23,258
2024	19,696
Thereafter	56,687
Total	$	179,790

At one fulfillment center, the Company recognizes contingent rent in excess of its minimum lease payments. Contingent rental amounts are determined based on additional square footage utilized in excess of the Company’s contractual minimum commitments.

Total rent expense classified within selling, general, and administrative expenses in the consolidated statements of operations was $26.9 million, $18.2 million, and $16.6 million for 2019, 2018, and 2017, respectively.

Future minimum rental commitments as of August 3, 2019, have not been reduced by sublease rental income of $1.8 million due to the Company under non-cancelable subleases through fiscal 2021.

We entered into an amendment to our fulfillment center arrangement in Dallas effective February 20, 2019 (the “Amendment”). The Amendment increases our existing square footage at this location by approximately 174,000 square feet to approximately 490,000 square feet and extends the original lease term by approximately 18 months to June 2024. The arrangement is being accounted for as an operating lease with future minimum lease payments of approximately $10.0 million through June 2024.

On October 12, 2018, we executed an agreement with a third-party logistics contractor to lease and operate a fulfillment center in Leicester, England (the “Fulfillment Center Logistics Agreement”). The agreement commits the Company to a five-year contract for logistics services at the Leicester fulfillment center that can be terminated after two years, with six months’ advance notice. The leasing component of the arrangement is being accounted for as an operating lease with future minimum lease payments over the five-year term of $11.1 million.

On June 13, 2019, we entered into an amendment to our office lease in Austin, Texas. The amendment extends our existing lease for the current space through March 2025. The arrangement will continue to be accounted for as an operating lease with future minimum lease payments of approximately $6.7 million through March 2025.

On June 17, 2019, we entered into an agreement to lease approximately 925,000 square feet of space to be used as a fulfillment center in the Atlanta, Georgia, metropolitan area. The lease has a term of 86 months and will be accounted for as an operating lease with future minimum lease payments of approximately $23.5 million over the 86-month lease term.

Contingencies

We record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We also disclose material contingencies when we believe a loss is not probable but reasonably possible. Accounting for contingencies requires us to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. Although we cannot predict with assurance the outcome of any litigation or tax matters, we do not believe there are currently any such actions that, if resolved unfavorably, would have a material impact on our operating results, financial position, or cash flows.

On October 11, 2018, October 26, 2018, November 16, 2018, and December 10, 2018, four putative class action lawsuits alleging violations of the federal securities laws were filed in the U.S. District Court for the Northern District of California, naming as defendants us and certain of our officers. The four lawsuits each make the same allegations of violations of the Securities Exchange Act of 1934, as amended, by us and our officers for allegedly making materially false and misleading statements regarding our active client growth and strategy with respect to television advertising between June 2018 and October 2018. The plaintiffs seek unspecified monetary damages and other relief. The four lawsuits have been consolidated and a lead plaintiff has been appointed. The lead plaintiff filed a consolidated amended complaint on September 18, 2019. The Company disputes these claims and intends to defend the matter vigorously. On December 12, 2018, a derivative action was filed against our directors in the same court, alleging the same violations of securities laws as alleged in the four putative class action lawsuits described above and breach of fiduciary duties. The derivative action has been stayed pending the outcome of the motion to dismiss in the related class action lawsuits.

On December 29, 2017, a lawsuit was filed by a holder of shares of our Class A common stock in the Court of Chancery of the State of Delaware, naming as defendants us and certain of our directors, as well as two other public companies and certain of their directors. The lawsuit sought a court determination that Article VI, Section E of our amended and restated certificate of incorporation, purporting to limit to federal court the forum in which a stockholder could bring a claim under the Securities Act of 1933, as amended (the “Securities Act”), and similar provisions in our co-defendants’ certificates of incorporation, were invalid. On December 19, 2018, the Chancery Court of the State of Delaware issued an opinion in Sciabacucchi v. Salzberg, invalidating our federal exclusive forum provision. We have appealed this decision to the Delaware Supreme Court.

Indemnifications

In the ordinary course of business, we may provide indemnifications of varying scope and terms to vendors, directors, officers, and other parties with respect to certain matters. We have not incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to such obligations in our consolidated financial statements.

Stock-Based Compensation

12 Months Ended

Aug. 03, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

2011 Equity Incentive Plan

In 2011, we adopted the 2011 Equity Incentive Plan (the “2011 Plan”). The 2011 Plan provided for the grant of stock-based awards to employees, directors, and nonemployees under terms and provisions established by the board of directors. As of July 29, 2017, the number of shares authorized for issuance under the 2011 Plan was 23,223,374, of which 2,023,424 were available for grant.

The 2011 Plan allowed for the grant of incentive stock options or nonqualified stock options as well as restricted stock units, restricted stock and stock appreciation rights. Only incentive and nonqualified stock options were granted under the 2011 Plan. Effective upon our IPO, the 2011 Plan was replaced by the 2017 Incentive Plan.

2017 Incentive Plan

In November 2017, our board of directors and stockholders adopted our 2017 Incentive Plan (the “2017 Plan”). The remaining shares available for issuance under the 2011 Plan became reserved for issuance under the 2017 Plan. The 2017 Plan provides for the grant of incentive stock options to employees, including employees of any parent or subsidiary, and for the grant of nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards, and other forms of stock awards to employees, directors, and consultants, including employees and consultants of our subsidiaries. Under the 2017 Plan, the number of shares available for issuance may be increased annually by an amount not to exceed 5% of the outstanding shares of our common stock as of the last day of the immediately preceding fiscal year. The Board of Directors approved an increase of 5,069,874 shares available for issuance under the 2017 Plan as of August 4, 2019. The number of shares authorized for issuance under the 2017 Plan was 17,137,824 as of August 3, 2019.

Employee stock options generally vest 25% on the first anniversary of the grant date with the remaining vesting ratably over the next three years. Options generally expire after 10 years.

The following table summarizes the shares available for grant under the 2017 Plan:



	Shares Available for Grant
Balance – July 28, 2018	3,743,623
Authorized	—
Granted	(4,113,084	)
Cancelled	1,502,719
Balance – August 3, 2019	1,133,258

Stock option activity under the 2011 Plan and 2017 Plan is as follows:



	Options Outstanding
	Number of Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value (in thousands)
Balance – July 28, 2018	9,052,160		$	11.74	8.23	$	160,856
Granted	1,090,890		24.77
Exercised	(2,198,655	)	6.79
Cancelled	(874,270	)	16.15
Balance – August 3, 2019	7,070,125		$	14.48	7.72	$	73,861
Options vested and exercisable - August 3, 2019	2,263,236		$	9.48	6.77	$	35,009
Options vested and expected to vest - August 3, 2019	6,450,028		$	14.40	7.61	$	69,652

The weighted-average grant date fair value of options granted during 2019, 2018, and 2017 was $11.60, $8.40, and $9.11 per share, respectively. The total grant date fair value of options that vested during 2019, 2018, and 2017 was $13.1 million, $8.5 million, and $2.6 million, respectively. The aggregate intrinsic value of options exercised during 2019, 2018, and 2017 was $49.1 million, $59.6 million, and $17.4 million, respectively. The aggregate intrinsic value of options exercised is the difference between the fair value of the underlying common stock on the date of exercise and the exercise price for in-the-money stock options.

Employee restricted stock units are granted under the 2017 Plan and generally vest 25% on the first anniversary of the grant date with the remaining vesting ratably over the next three years.

The following table summarizes the restricted stock unit (“RSU”) award activity under the 2017 Plan:



	Unvested RSUs
	Class A Common Stock		Weighted- Average Grant Date Fair Value
Unvested at July 28, 2018	2,432,326		$	21.58
Granted	3,022,194		30.25
Vested	(397,226	)	20.67
Forfeited	(628,449	)	23.50
Unvested at August 3, 2019	4,428,845		$	27.30

Stock-Based Compensation Expense

Stock-based compensation expense for options granted to employees was $35.2 million, $15.4 million, and $3.4 million for 2019, 2018, and 2017, respectively. Stock-based compensation expense for options granted to non-employees was less than $0.1 million in 2019 and 2018, and $0.2 million for 2017. The income tax benefit related to stock-based compensation was $8.9 million, $4.7 million, and $1.3 million for 2019, 2018, and 2017, respectively. Stock-based compensation expense is included in selling, general, and administrative expenses in our consolidated statements of operations.

As of August 3, 2019, the total unrecognized compensation expense related to unvested options and RSUs, net of estimated forfeitures, was $147.9 million, which we expect to recognize over an estimated weighted average period of 3.0 years.

In determining the fair value of the stock-based awards, we use the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment.

Fair Value of Common Stock - As of August 3, 2019, the fair value of the shares of common stock underlying our stock options has been determined based on market prices. Prior to our IPO on November 16, 2017, the fair value of the shares of common stock underlying our stock options was determined by the board of directors. As there was no public market for our common stock, the board of directors determined the fair value of the common stock on the stock option grant date by considering a number of objective and subjective factors, including third-party valuations of our common stock, sales of our common stock, operating and financial performance, the lack of marketability of our common stock and general macroeconomic conditions.

Expected Term - The expected term represents the period that our stock options are expected to be outstanding and is determined using the simplified method (generally calculated as the mid-point between the vesting date and the end of the contractual term).

Expected Volatility - The expected volatility was estimated based on the average volatility for publicly traded companies that we considered comparable, over a period equal to the expected term of the stock option grants.

Risk-Free Interest Rate - The risk-free interest rate is based on the U.S. Treasury zero coupon notes in effect at the time of grant for periods corresponding with the expected term of the option.

Expected Dividend - We have not paid dividends on our common stock and do not anticipate paying dividends on our common stock; therefore, we use an expected dividend yield of zero.

The fair value of stock options granted to employees was estimated at the grant date using the Black-Scholes option-pricing model with the following assumptions:



	For the Fiscal Year Ended
	August 3, 2019		July 28, 2018		July 29, 2017
Expected term (in years)	5.1 - 6.5		5.4 - 6.6		5.1 - 7.7
Volatility	41.7 - 52.2%		41.4 - 43.5%		42.6 - 46.0%
Risk free interest rate	2.3 - 3.0%		1.9 - 3.0%		1.3 -2.3%
Dividend yield	—	%	—	%	—	%

In July 2017, options to purchase an aggregate of 1,097,463 shares of common stock which had both a service-based condition and a liquidity event-related performance condition were granted to certain members of our executive management team. Such options vest ratably over the 24-month period following the fourth anniversary of the grant date, subject to an IPO occurring within 12 months of the grant date and the option holder’s continuous service through each vesting date. The aggregate grant-date fair value of such option awards was $14.0 million. Since an IPO is not deemed probable until such event occurs, no compensation cost related to the performance condition was recognized prior to the consummation of our IPO in November 2017. Subsequently, we recorded stock-based compensation expense of $0.5 million related to periods prior to the IPO.

Early Exercise of Employee Options

We allow certain employees to exercise options granted under the 2011 Plan prior to vesting in exchange for shares of restricted common stock subject to a right of repurchase that lapses according to the original option vesting schedule. The proceeds from the exercise of options are recorded in other current liabilities and other long-term liabilities in our consolidated balance sheets at the time the options are exercised and reclassified to common stock and additional paid-in capital as our repurchase right lapses. Upon termination of employment, any unvested shares are subject to repurchase by us at the original purchase price.

We did not issue any shares upon exercise of unvested stock options during 2019 and 2018. We issued 111,557 shares of common stock during 2017 upon exercise of unvested stock options. As of August 3, 2019, there were no shares of common stock subject to repurchase. As of July 28, 2018, and July 29, 2017 there were 160,417, and 702,144 shares of common stock, respectively, held by employees subject to repurchase at an aggregate price of $0.2 million, and $1.2 million, respectively.

Sales of Our Stock

In November 2016, we initiated a cash tender offer which was completed in December 2016 for the purchase of our common stock, including shares underlying then-unexercised vested options, at a purchase price of $22.61 per share. To be eligible to participate in the tender offer, employees must have received equity grants with vesting start dates on or before October 31, 2014. Such employees could elect to sell up to 10% of their total vested holdings. The total number of tendered shares was 526,620 for total cash consideration of $11.9 million. The purchase price per share in the tender offer was in excess of the fair value of our common stock at the time of the transaction. As a result, during 2017, we recorded the excess of the purchase price above fair value of $8.3 million as compensation expense.

In January 2017, two of our former employees sold 554,799 shares of our common stock for a total of $12.5 million to existing investors. In addition, an employee sold 85,000 shares of our Series C convertible preferred stock for a total purchase price of $1.9 million to an existing investor. The purchase price was in excess of the fair value of such shares. During 2017, we recorded $13.0 million as compensation expense related to these transactions.

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Parenthetical) $ in Thousands	12 Months Ended
	Jul. 29, 2017 USD ($)
Statement of Stockholders' Equity [Abstract]
Issuance of common stock upon early exercise of stock options	$ 642

Preferred Stock Warrant Liability	12 Months Ended
Preferred Stock Warrant Liability	Aug. 03, 2019
Equity [Abstract]
Preferred Stock Warrant Liability	Preferred Stock Warrant Liability In 2012 and 2013, in connection with financing arrangements, we issued warrants to purchase shares of our convertible preferred stock. For one of the financing arrangements, we issued warrants to purchase 375,230 shares of Series Seed convertible preferred stock at an exercise price of $0.1066 per share and 66,265 shares of Series A convertible preferred stock at an exercise price of $0.22636 per share. For the second financing arrangement, we issued warrants for the purchase of, at the warrant holder’s option, either (a) 624,730 shares of Series A-1 convertible preferred stock at an exercise price of $0.2401 per share or (b) 308,315 shares of Series B convertible preferred stock at an exercise price of $0.486516 per share. Prior to their automatic exercise in connection with the IPO, the warrants were exercisable for and expired ten years from the date of issuance. In November 2017, in connection with our IPO, the preferred stock warrants were automatically exercised into shares of Class B common stock and the preferred stock warrant liability was reclassified to additional paid-in capital.