Reportable Segment Information - Notes to Financial Statements

12 Months Ended

Feb. 03, 2018

Reportable Segment Information [Abstract]

14. Reportable Segment Information

The Company has determined that it has four operating segments, as defined under ASC 280-10, including Cato, It’s Fashion, Versona and Credit. As outlined in ASC 280-10, the Company has two reportable segments: Retail and Credit. The Company has aggregated its three retail operating segments, including e-commerce, based on the aggregation criteria outlined in ASC 280-10, which states that two or more operating segments may be aggregated into a single reportable segment if aggregation is consistent with the objective and basic principles of ASC 280-10, which require the segments have similar economic characteristics, products, production processes, clients and methods of distribution.

The Company’s retail operating segments have similar economic characteristics and similar operating, financial and competitive risks. They are similar in terms of product offered, as they all offer women’s apparel, shoes and accessories. Merchandise inventory of the Company’s retail operating segments is sourced from the same countries and some of the same vendors, using similar production processes. Merchandise for the Company’s retail operating segments is distributed to retail stores in a similar manner through the Company’s single distribution center and is subsequently distributed to clients in a similar manner.

The Company operates its women’s fashion specialty retail stores in 33 states as of February 3, 2018, principally in the southeastern United States. The Company offers its own credit card to its customers and all credit authorizations, payment processing, and collection efforts are performed by a separate subsidiary of the Company.

The following schedule summarizes certain segment information (in thousands):


Fiscal 2017		Retail		Credit		Total

Revenues	$	845,759	$	4,222	$	849,981
Depreciation		19,604		39		19,643
Interest and other income		5,111		-		5,111
Income before taxes		14,762		1,211		15,973
Capital expenditures		11,047		49		11,096


Fiscal 2016		Retail		Credit		Total

Revenues	$	951,663	$	4,906	$	956,569
Depreciation		22,667		49		22,716
Interest and other income		7,041		-		7,041
Income before taxes		47,447		1,667		49,114
Capital expenditures		27,248		49		27,297


Fiscal 2015		Retail		Credit		Total

Revenues	$	1,005,708	$	5,383	$	1,011,091
Depreciation		22,914		49		22,963
Interest and other income		3,456		-		3,456
Income before taxes		97,119		2,008		99,127
Capital expenditures		26,534		-		26,534

		Retail		Credit		Total

Total assets as of February 3, 2018	$	469,652	$	46,424	$	516,076
Total assets as of January 28, 2017		554,716		51,608		606,324

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies in Note 1. The Company evaluates performance based on profit or loss from operations before income taxes. The Company does not allocate certain corporate expenses to the credit segment.

The following schedule summarizes the direct expenses of the credit segment which are reflected in selling, general and administrative expenses (in thousands):


		February 3, 2018		January 28, 2017		January 30, 2016

Bad debt expense	$	690	$	832	$	873
Payroll		861		865		862
Postage		546		635		712
Other expenses		875		858		879
Total expenses	$	2,972	$	3,190	$	3,326