SEGMENT INFORMATION

12 Months Ended

Feb. 01, 2020

In accordance with FASB ASC 280---Segment Reporting, 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 business. Included in The Children’s Place International segment are the Company’s Canadian-based stores, revenue from the Company’s Canadian wholesale business, 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 from 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 February 1, 2020, The Children’s Place U.S. owned and operated 803 stores and The Children’s Place International owned and

operated 121 stores. As of February 2, 2019, The Children’s Place U.S. owned and operated 850 stores and The Children’s Place International owned and operated 122 stores.

The following tables provide segment level financial information for Fiscal 2019, Fiscal 2018, and Fiscal 2017:



	Fiscal Year Ended
	February 1, 2020		February 2, 2019		February 3, 2018
	(In thousands)
Net sales:
The Children’s Place U.S.	$	1,671,165	$	1,727,907	$	1,650,620
The Children’s Place International⁽¹⁾	199,502		210,177		219,655
Total net sales	$	1,870,667	$	1,938,084	$	1,870,275
Operating income:
The Children’s Place U.S.	$	77,989	$	86,983	$	132,152
The Children’s Place International	18,369		24,345		29,358
Total operating income	$	96,358	$	111,328	$	161,510



Operating income as a percent of net sales:
The Children’s Place U.S.	4.7		%	5.0		%	8.0		%
The Children’s Place International	9.2		%	11.6		%	13.4		%
Total operating income	5.2		%	5.7		%	8.6		%
Depreciation and amortization:
The Children’s Place U.S.	$	67,416		$	61,487		$	60,732
The Children’s Place International	7,372			7,397			7,427
Total depreciation and amortization	$	74,788		$	68,884		$	68,159
Capital expenditures:
The Children’s Place U.S.	$	56,598		$	67,476		$	57,360
The Children’s Place International	904			3,638			1,297
Total capital expenditures	$	57,502		$	71,114		$	58,657


(1)	Net sales from The Children’s Place International are primarily derived from revenues from Canadian operations. Our foreign subsidiaries, primarily in Canada, have operating results based in foreign currencies and are thus subject to the fluctuations of the corresponding translation rates into U.S. dollars.



	February 1, 2020		February 2, 2019
	(In thousands)
Total assets:
The Children’s Place U.S.	$	1,080,665	$	651,728
The Children’s Place International	100,732		75,318
Total assets	$	1,181,397	$	727,046

Geographic Information

The Company’s long-lived assets are located in the following countries:



	February 1, 2020		February 2, 2019
	(In thousands)
Long-lived assets⁽¹⁾:
United States	$	673,432	$	261,932
Canada	44,236		10,718
Asia	908		1,251
Total long-lived assets	$	718,576	$	273,901

____________________________________________

(1)

The Company’s long-lived assets are comprised of net property and equipment, ROU assets, tradenames, and other assets.