SEGMENT INFORMATION

6 Months Ended

Jul. 30, 2016

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

In accordance with the “Segment Reporting” topic of the FASB ASC, the Company reports segment data based on geography: The Children’s Place U.S. and The Children’s Place International.  Each segment includes an e-commerce business located at www.childrensplace.com.  Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico based stores and revenue from the Company's U.S. based wholesale customers. Included in The Children's Place International segment are the Company's Canadian based stores, revenue from the Company's Canadian wholesale customer and revenue from international franchisees. The Company measures its segment profitability based on operating income, defined as income before interest and taxes.  Net sales and direct costs are recorded by each segment.  Certain inventory procurement functions such as production and design as well as corporate overhead, including executive management, finance, real estate, human resources, legal, and information technology services are managed by The Children’s Place U.S. segment.  Expenses related to these functions, including depreciation and amortization, are allocated to The Children’s Place International segment based primarily on net sales.  The assets related to these functions are not allocated.  The Company periodically reviews these allocations and adjusts them based upon changes in business circumstances.  Net sales to external customers are derived from merchandise sales and the Company has no major customers that account for more than 10% of its net sales.  As of July 30, 2016, The Children’s Place U.S. operated 932 stores and The Children’s Place International operated 132 stores. As of August 1, 2015, The Children’s Place U.S. operated 953 stores and The Children’s Place International operated 133 stores.

The following tables provide segment level financial information (dollars in thousands):

	Thirteen Weeks Ended						Twenty-six Weeks Ended
	July 30, 2016			August 1, 2015			July 30, 2016			August 1, 2015
Net sales:
The Children’s Place U.S.	$	319,189		$	316,212		$	694,296		$	679,357
The Children’s Place International (1)	52,227			50,243			96,471			91,963
Total net sales	$	371,416		$	366,455		$	790,767		$	771,320
Gross profit:
The Children’s Place U.S.	$	103,735		$	95,604		$	250,226		$	232,124
The Children’s Place International	20,136			19,400			38,996			34,989
Total gross profit	$	123,871		$	115,004		$	289,222		$	267,113
Gross Margin:
The Children’s Place U.S.	32.5		%	30.2		%	36.0		%	34.2		%
The Children’s Place International	38.6		%	38.6		%	40.4		%	38.0		%
Total gross margin	33.4		%	31.4		%	36.6		%	34.6		%
Operating income (loss):
The Children’s Place U.S. (2)	$	(8,617	)	$	(23,227	)	$	25,537		$	(1,233	)
The Children’s Place International	5,677			3,109			11,133			4,319
Total operating income (loss)	$	(2,940	)	$	(20,118	)	$	36,670		$	3,086
Operating income (loss) as a percent of net sales:
The Children’s Place U.S.	(2.7		)%	(7.3		)%	3.7		%	(0.2		)%
The Children’s Place International	10.9		%	6.2		%	11.5		%	4.7		%
Total operating income (loss)	(0.8		)%	(5.5		)%	4.6		%	0.4		%
Depreciation and amortization:
The Children’s Place U.S.	$	14,889		$	13,599		$	29,532		$	26,469
The Children’s Place International	1,002			1,653			2,820			3,177
Total depreciation and amortization	$	15,891		$	15,252		$	32,352		$	29,646
Capital expenditures:
The Children’s Place U.S.	$	8,025		$	9,512		$	14,829		$	19,447
The Children’s Place International	927			574			1,207			702
Total capital expenditures	$	8,952		$	10,086		$	16,036		$	20,149

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⁽¹⁾  Net sales from The Children's Place International are primarily derived from revenues from Canadian operations.

⁽²⁾  Includes costs incurred related to asset impairment charges and costs arising out of the restructuring of certain store and corporate operations, of approximately $2.6 million and $2.1 million for the Second Quarter 2016 and Year-To-Date 2016, respectively. Includes costs incurred related to a class action wage and hour legal settlement, proxy contest costs, a sales tax audit, asset impairment charges and costs arising out of the restructuring of certain store and corporate operations, of approximately $10.5 million and $13.7 million for the Second Quarter 2015 and Year-To-Date 2015, respectively.

	July 30, 2016		January 30, 2016		August 1, 2015
Total assets:
The Children’s Place U.S.	$	768,831	$	748,975	$	815,886
The Children’s Place International	164,706		148,973		146,068
Total assets	$	933,537	$	897,948	$	961,954