XML 46 R29.htm IDEA: XBRL DOCUMENT v3.22.0.1
Business Segment Information
12 Months Ended
Jan. 01, 2022
Segment Reporting [Abstract]  
Business Segment Information Business Segment Information
The Company’s operations are managed and reported in three operating segments, each of which is a reportable segment for financial reporting purposes: Innerwear, Activewear and International. These segments are organized principally by product category and geographic location. Each segment has its own management team that is responsible for the operations of the segment’s businesses, but the segments share a common supply chain and media and marketing platforms. Other consists of the Company’s U.S.-based outlet stores, U.S. Sheer Hosiery business and certain sales from its supply chain to the European Innerwear business. In the fourth quarter of 2021, the Company reached the decision to divest its U.S. Sheer Hosiery business, including the L’eggs brand, as part of its strategy to streamline its portfolio under its Full Potential plan. See Note “Assets and Liabilities Held for Sale” for additional information.
The Company considers its chief executive officer to be the Company’s chief operating decision maker. The Company’s chief operating decision maker manages business operations, evaluates performance and allocates resources based on the segments’ net revenues and operating income. The Company reports inventories by segment as that information is used by the
chief operating decision maker in assessing segment performance. The Company does not report its other assets by segment as that information is not used by the chief operating decision maker in assessing segment performance.
The types of products and services from which each reportable segment derives its revenues are as follows:
Innerwear includes sales in the United States of basic branded apparel products that are replenishment in nature under the product categories of men’s underwear, women’s panties, children’s underwear and socks, and intimate apparel, which includes bras and shapewear. Innerwear also includes sales of PPE including products such as cloth face coverings and gowns in 2020.
Activewear includes sales in the United States of branded products that are primarily seasonal in nature to both retailers and wholesalers, as well as licensed sports apparel and licensed logo apparel.
International primarily includes sales of our innerwear and activewear products, including PPE in 2020, outside the United States, primarily in Australasia, Europe, Asia, Canada and Latin America.
The Company evaluates the operating performance of its segments based upon segment operating profit, which is defined as operating profit before general corporate expenses, restructuring and other action-related charges and amortization of intangibles. The accounting policies of the segments are consistent with those described in Note “Summary of Significant Accounting Policies.”
 
 Years Ended
 January 1,
2022
January 2,
2021
December 28,
2019
Net sales:
Innerwear$2,719,788 $2,978,009 $2,302,632 
Activewear1,679,639 1,184,413 1,854,704 
International2,066,249 1,711,432 1,930,828 
Other335,564 253,307 337,552 
Total net sales$6,801,240 $6,127,161 $6,425,716 
 
 Years Ended
 January 1,
2022
January 2,
2021
December 28,
2019
Segment operating profit:
Innerwear$573,852 $718,923 $515,991 
Activewear236,400 67,643 281,319 
International339,317 249,718 331,322 
Other30,922 (10,140)33,439 
Total segment operating profit1,180,491 1,026,144 1,162,071 
Items not included in segment operating profit:
General corporate expenses(219,984)(218,424)(219,266)
Restructuring and other action-related charges(131,710)(734,196)(62,515)
Amortization of intangibles(31,069)(30,858)(29,605)
Total operating profit797,728 42,666 850,685 
Other expenses(53,586)(20,655)(30,201)
Interest expense, net(163,067)(164,238)(176,924)
Income (loss) from continuing operations before income tax expense$581,075 $(142,227)$643,560 
The Company incurred restructuring and other action-related charges that were reported in the following lines in the Consolidated Statements of Income:
 Years Ended
January 1,
2022
January 2,
2021
December 28,
2019
Cost of sales$10,098 $670,618 $57,448 
Selling, general and administrative expenses121,612 63,578 5,067 
Total included in operating profit131,710 734,196 62,515 
Other expenses45,699 — — 
Total included in income (loss) from continuing operations before income tax expense177,409 734,196 62,515 
Income tax expense53,665 205,342 22,159 
Total restructuring and other action-related charges$123,744 $528,854 $40,356 
The components of restructuring and other action-related charges were as follows:
 Years Ended
 January 1,
2022
January 2,
2021
December 28,
2019
Full Potential plan:
Professional services$44,617 $— $— 
Loss on classification of assets held for sale38,364 — — 
Operating model23,191 — — 
Impairment of intangible assets7,302 — — 
Supply chain segmentation5,419 — — 
Technology4,617 — — 
Other8,200 — — 
Inventory SKU rationalization— 192,704 — 
PPE inventory write-off— 362,913 — 
PPE vendor commitments— 26,400 — 
Supply chain actions— 19,636 52,832 
Program exit costs— 9,854 4,616 
Other restructuring costs— 7,763 5,067 
COVID-19 related charges:
Supply chain re-startup— 48,608 — 
Bad debt— 9,418 — 
Inventory— 14,869 — 
Goodwill— 25,173 — 
Write-off of acquisition tax asset— 16,858 — 
Total included in operating profit131,710 734,196 62,515 
Early extinguishment and refinancing of debt included in other expenses45,699 — — 
Total included in income (loss) from continuing operations before income tax expense177,409 734,196 62,515 
Discrete tax benefits27,147 69,628 — 
Tax effect on actions26,518 135,714 22,159 
Total included in income tax expense (benefit)53,665 205,342 22,159 
Total restructuring and other action-related charges$123,744 $528,854 $40,356 
In 2021, restructuring and other action-related charges included $131,710 of charges related to the implementation of the Company’s Full Potential plan. In the fourth quarter of 2021, the Company determined that its U.S. Sheer Hosiery business met held-for-sale accounting criteria and recorded a non-cash charge of $38,364 to record a valuation allowance against the net assets held for sale to write down the carrying value of the disposal group to the estimated fair value less costs of disposal. In 2021, restructuring and other action-related charges also included a charge for an action to resize its U.S. corporate office
workforce through a voluntary retirement program. In the third quarter of 2021, the Company accrued $16,000 for employee termination and other benefits related to the voluntary retirement program in accordance with expected benefit payments, with the charges reflected in the “Selling, general and administrative expenses” line of the Consolidated Statements of Income and in the “Operating model” line in the restructuring and other action-related table above. During the year ended January 1, 2022, benefit payments of $312 have been made, resulting in an ending accrual of $15,688 which is included in the “Accrued liabilities and other: Other” line of the Consolidated Balance Sheets at January 1, 2022. Additionally, restructuring and other action related charges in 2021 included impairment charges of $7,302 related to the full impairment of an indefinite-lived trademark related to a specific brand within the European Innerwear business that was excluded from the disposal group as it is not being marketed for sale.
In the fourth quarter of 2021, the Company also recorded a charge of $45,699 in restructuring and other action-related charges related to the refinancing of its Senior Secured Credit Facility and the redemption of the 5.375% Senior Notes. The charge, which is reported in the “Other expenses” line in the Consolidated Statements of Income, includes a payment of $34,840 for a make-whole premium in connection with the redemption of the 5.375% Senior Notes, a non-cash charge of $8,899 for the write-off of unamortized debt issuance costs related to the redemption of the 5.375% Senior Notes and the refinancing of the Senior Secured Credit Facility and $1,960 in fees related to the refinancing. See Note “Debt”.
In the fourth quarter of 2020, the Company began the implementation of its Full Potential plan which included a number of actions to simplify its business including streamlining its portfolio and SKU rationalization. Specifically, the Company no longer viewed PPE as a future growth opportunity for the Company. Therefore, the Company recorded a charge of $362,913 to write down its entire PPE inventory balance to its estimated net realizable value and a charge of $26,400 to accrue for vendor commitments for PPE materials that were paid in 2021. Additionally, the Company commenced an initiative to reduce 20% of its SKUs in inventory in order to streamline product offerings while also implementing a formal lifecycle management process. As a result, the Company recorded a charge of $192,704 to write down inventory to its estimated net realizable value taking into account these initiatives. In the fourth quarter of 2020, the Company also recorded a charge to write off an acquisition tax asset.
In 2020, restructuring and other action-related charges included $48,608 of supply chain re-start up charges primarily related to incremental costs incurred, such as freight and sourcing premiums, to expedite product to meet customer demand following the extended shut-down of parts of the Company’s manufacturing network as a result of the COVID-19 pandemic and $49,460 of asset write-down charges recorded as a result of the ongoing effects of the COVID-19 pandemic.
Restructuring and other action-related charges in 2020 and 2019 included charges for supply chain actions to reduce overhead costs principally within the Western Hemisphere network and charges associated with exiting the C9 Champion mass program and the DKNY intimate apparel license in 2019.

January 1, 2022
InnerwearActivewearInternationalOtherUnallocatedTotal Assets
Assets:
Inventories$829,093 $447,297 $279,379 $28,246 $— $1,584,015 
Assets held for sale— — — — 327,157 327,157 
All other assets — — — — 5,160,264 5,160,264 
Total assets$7,071,436 

January 2, 2021
InnerwearActivewearInternationalOtherUnallocatedTotal Assets
Assets:
Inventories$578,822 $404,539 $308,643 $75,754 $— $1,367,758 
Assets held for sale— — — — 728,587 728,587 
All other assets— — — — 5,623,522 5,623,522 
Total assets$7,719,867 
 Years Ended
January 1,
2022
January 2,
2021
December 28,
2019
Depreciation and amortization expense:
Innerwear$25,816 $27,407 $30,408 
Activewear23,562 23,621 23,804 
International22,476 24,307 25,046 
Other4,578 5,520 6,200 
76,432 80,855 85,458 
Corporate33,698 34,112 29,605 
Total depreciation and amortization expense$110,130 $114,967 $115,063 
 
Sales to Walmart and Target were substantially in the Innerwear and Activewear segments. Sales to Walmart represented 17% of total net sales in 2021. Sales to Walmart represented 16% of total net sales in 2020. Sales to Walmart and Target represented 15% and 12% of total net sales in 2019, respectively.
Worldwide sales by product category for Innerwear and Activewear were $4,077,016 and $2,724,224, respectively, in 2021. Worldwide sales by product category for Innerwear and Activewear were $4,061,372 and $2,065,789, respectively, in 2020. Worldwide sales by product category for Innerwear and Activewear were $3,561,615 and $2,864,101, respectively, in 2019.