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Segment Information
12 Months Ended
Feb. 01, 2020
Segment Information [Abstract]  
Segment Information

2. Segment Information

We have integrated all available shopping channels including stores, websites, apps, social channels, and catalogs. Store sales are primarily fulfilled from the store’s inventory but may also be shipped from our distribution centers or from a different store location if an item is not available at the original store. Direct-to-customer orders are primarily shipped to our customers through our distribution centers but may also be shipped from a store or a combination of our distribution centers and stores depending on the availability of particular items.

Our operating segments are identified according to how our business activities are managed and evaluated by our chief operating decision maker, our CEO. During 2018, we expanded into Asia and launched our digital channels across Singapore, Hong Kong, and Malaysia. During the first quarter of 2019, we changed our organizational and internal reporting structure to support an accelerated growth strategy for the region. We opened an Asian headquarters in Singapore and realigned our organization into three distinct geographic regions: North America Europe, Middle East and Africa (“EMEA”), and Asia Pacific.

Accordingly, in the first quarter of 2019 we re-evaluated our operating segments. We determined that we have three operating segments, North America, EMEA, and Asia Pacific. Our North America operating segment includes the results of the following banners operating in the U.S. and Canada: Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, and Footaction, including each of their related e-commerce businesses, as well as our Eastbay business that includes internet, catalog, and team sales. Our EMEA operating segment includes the results of the following banners operating in Europe: Foot Locker, Runners Point, Sidestep, and Kids Foot Locker, including each of their related e-commerce businesses. Our Asia Pacific operating segment includes the results of Foot Locker and Kids Foot Locker operating in Australia, New Zealand, and Asia as well as the related e-commerce businesses operating in Australia and Asia. We further aggregated these operating segments into one reportable segment based upon their shared customer base and similar economic characteristics.

We evaluate performance based on several factors, of which the primary financial measure is the banner’s financial results referred to as division profit. Division profit reflects income before income taxes, other charges, corporate expense, non-operating income, and net interest income.

The following table summarizes our results:

    

2019

    

2018

2017

($ in millions)

Division profit (1)

$

738

$

789

$

810

Less: Other charges (2)

 

15

 

18

 

191

Less: Corporate expense (3)

 

74

 

72

 

48

Income from operations

 

649

 

699

 

571

Interest income, net

 

11

 

9

 

2

Other income, net

 

12

 

5

 

5

Income before income taxes

$

672

$

713

$

578

(1)Included in the results for 2019, 2018, and 2017, are impairment charges of $50 million, $19 million, and $20 million, respectively. See Note 3, Impairment and Other Charges for additional information.
(2)Included in the 2019, 2018 and 2017 amounts are pre-tax charges of $4 million, $18 million and $178 million, respectively, relating to a pension litigation matter. Also included in 2019 are charges totaling $11 million related to impairments of our minority investments. See Note 3, Impairment and Other Charges for additional information. During 2017, we recorded a charge of $13 million pre-tax representing reorganization costs related to the reduction and reorganization of division and corporate staff.
(3)Corporate expense for all years presented reflects the reallocation of expense between corporate and the operating divisions. Based upon annual internal studies of corporate expense, the allocation of such expenses to the operating divisions was increased by $32 million for 2019, $40 million for 2018, and $4 million for 2017, thereby reducing corporate expense.

Sales disaggregated based upon channel for the fiscal years ended February 1, 2020, February 2, 2019, and February 3, 2018 are presented in the following table.

    

2019

    

2018

    

2017

($ in millions)

Sales

Stores

$

6,720

$

6,714

$

6,673

Direct-to-customers

 

1,285

 

1,225

 

1,109

Total sales

$

8,005

$

7,939

$

7,782

Sales and long-lived asset information by geographic area as of and for the fiscal years ended February 1, 2020, February 2, 2019, and February 3, 2018 are presented in the following tables. Sales are attributed to the country in which the sales transaction is fulfilled. Long-lived assets reflect property and equipment and operating lease right-of-use assets.

    

2019

    

2018

    

2017

($ in millions)

Sales by Geography

United States

$

5,691

$

5,647

$

5,532

International

 

2,314

 

2,292

 

2,250

Total sales

$

8,005

$

7,939

$

7,782

Long-Lived Assets

United States

$

2,479

$

602

$

607

International

 

1,244

 

234

 

259

Total long-lived assets

$

3,723

$

836

$

866

For the year ended February 1, 2020, the countries that comprised the majority of the sales and long-lived assets for the international category were Canada, Italy, France, Germany, and England. No other individual country included in the international category was significant.

Depreciation and

Amortization

Capital Expenditures (1)

Total Assets

    

2019

    

2018

    

2017

    

2019

    

2018

    

2017

    

2019

    

2018

    

2017

($ in millions)

Division

$

160

$

160

$

157

$

105

$

112

$

205

$

5,523

$

2,900

$

3,132

Corporate

 

19

 

18

 

16

 

82

 

75

 

69

 

1,066

 

920

 

829

Total Company

$

179

$

178

$

173

$

187

$

187

$

274

$

6,589

$

3,820

$

3,961

(1) Represents cash capital expenditures for all years presented.