Segment Reporting

12 Months Ended

Feb. 01, 2014

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

The Company determines its segments on the same basis that it uses to allocate resources and assess performance. All of the Company’s segments sell a similar group of products—casual sportswear apparel, personal care products and accessories for men, women and kids and bras, underwear and sleepwear for girls. The Company has three reportable segments: U.S. Stores, International Stores, and Direct-to-Consumer. Corporate functions, interest income and expense, and other income and expense are evaluated on a consolidated basis and are not allocated to the Company’s segments, and therefore are included in Other.

The U.S. Stores reportable segment includes the results of store operations in the United States and Puerto Rico. The International Stores reportable segment includes the results of store operations in Canada, Europe, and Asia. Asia includes the Middle East and Australia. The Direct-to-Consumer reportable segment includes the results of operations directly associated with on-line operations, both U.S. and international.

Operating income is the primary measure of profit the Company uses to make decisions regarding the allocation of resources to its segments. For the U.S. Stores and International Stores reportable segments, operating income is defined as aggregate income directly attributable to individual stores on a four-wall basis plus sell-off of excess merchandise to authorized third-party resellers. Four-wall operating income includes: net sales, cost of merchandise, selling payroll and related costs, rent, utilities, depreciation, repairs and maintenance, supplies and packaging and other store sales-related expenses including credit card and bank fees and indirect taxes. Operating income also reflects pre-opening charges related to stores not yet in operation. For the Direct-to-Consumer reportable segment, operating income is defined as aggregate income attributable to the direct-to-consumer business: net sales, shipping and handling revenue, call center costs, fulfillment and shipping expense, charge card fees and direct-to-consumer operations management and support expenses. The U.S. Stores, International Stores and Direct-to-Consumer reportable segments exclude marketing, general and administrative expense, store management and support functions such as regional and district management and other functions not dedicated to an individual store, as well as distribution center costs. All costs excluded from the three reportable segments are included in Other.

Reportable segment assets include those used directly in or resulting from the operations of each reportable segment. Total assets for the U.S. Stores and International Stores reportable segments primarily consist of store cash, credit card receivables, prepaid rent, store packaging and supplies, lease deposits, merchandise inventory, leasehold acquisition costs, restricted cash and the net book value of store long-lived assets. Total assets for the International Stores reportable segment also include VAT receivables. Total assets for the Direct-to-Consumer reportable segment primarily consist of credit card receivables, merchandise inventory, and the net book value of long-lived assets. Total assets for Other include cash, investments, distribution center inventory, the net book value of home office and distribution center long-lived assets, foreign currency hedge assets and tax-related assets. Reportable segment capital expenditures are direct purchases of property and equipment for that segment.

The following table provides the Company’s segment information as of, and for the fiscal years ended February 1, 2014, February 2, 2013 and January 28, 2012.

	U.S. Stores		International Stores		Direct-to- Consumer Operations		Segment Total		Other(1)		Total
	(in thousands):
February 1, 2014
Net Sales	$	2,161,183	$	1,178,798	$	776,916	$	4,116,897	—		$	4,116,897
Depreciation and Amortization	75,297		92,474		7,850		175,621		59,619		235,240
Operating Income(2)	194,582		249,331		294,951		738,864		(658,041	)	80,823
Total Assets	414,463		805,257		122,381		1,342,101		1,508,896		2,850,997
Capital Expenditures	18,599		82,805		15,633		117,037		46,887		163,924
February 2, 2013
Net Sales	2,615,138		1,195,016		700,651		4,510,805		—		4,510,805
Depreciation and Amortization	94,367		67,972		5,198		167,537		56,708		224,245
Operating Income(3)	432,040		350,871		269,479		1,052,390		(678,157	)	374,233
Total Assets	587,334		840,317		63,063		1,490,714		1,496,687		2,987,401
Capital Expenditures	3,016		218,933		22,567		244,516		95,346		339,862
January 28, 2012
Net Sales	2,710,842		894,616		552,600		4,158,058		—		4,158,058
Depreciation and Amortization	125,827		35,844		2,876		164,547		68,409		232,956
Operating Income(4)	362,760		282,462		224,759		869,981		(648,597	)	221,384
Total Assets	755,330		661,680		90,922		1,507,932		1,609,100		3,117,032
Capital Expenditures	1,105		229,959		8,367		239,431		79,167		318,598

⁽¹⁾  Includes corporate functions such as Design, Merchandising, Sourcing, Planning, Allocation, Store Management and Support, Marketing, Distribution Center Operations, Information Technology, Real Estate, Finance, Legal, Human Resources and other corporate overhead. Operating Income includes: marketing, general and administrative expense; store management and support functions such as regional and district management and other functions not dedicated to an individual store; as well as distribution center costs.

⁽²⁾  Includes charges for store-related asset impairment, charges related to restructuring plans for the Gilly Hicks brand and charges related to the Company's profit improvement initiative of $94.9 million for U.S. Stores, $33.3 million for International Stores and $13.8 million for Other.

⁽³⁾  Includes charges for asset impairments of $7.4 million for U.S. Stores.

⁽⁴⁾  Includes charges for asset impairments, write-down of store-related long-lived assets and store closure charges of $52.1 million for U.S. Stores and $15.9 million for International Stores.

Net Sales:

Net sales includes net merchandise sales through stores and direct-to-consumer operations, including shipping and handling revenue. Net sales are reported by geographic area based on the location of the customer.

Brand Information

Financial information relating to the Company’s operations by brand is as follows:

	Fiscal 2013		Fiscal 2012		Fiscal 2011
	(in thousands):
Abercrombie & Fitch	$	1,547,216	$	1,704,190	$	1,665,135
abercrombie	346,739		382,509		397,904
Hollister	2,127,816		2,314,462		2,022,002
Gilly Hicks	95,126		109,644		73,017
	$	4,116,897	$	4,510,805	$	4,158,058

Geographic Information

Financial information relating to the Company’s operations by geographic area is as follows:

	Fiscal 2013		Fiscal 2012		Fiscal 2011
	(in thousands):
United States	$	2,659,089	$	3,087,205	$	3,108,380
Europe	1,116,781		1,137,664		822,473
Other International	341,027		285,936		227,205
Total	$	4,116,897	$	4,510,805	$	4,158,058

Long-Lived Assets:

	February 1, 2014		February 2, 2013
	(in thousands):
United States	$	606,758	$	742,926
Europe	438,931		496,960
Other International	191,312		177,780
Total	$	1,237,001	$	1,417,666

Long-lived assets included in the table above include primarily property and equipment (net), store supplies and lease deposits.