Segment Information

9 Months Ended

Nov. 02, 2013

Segment Reporting [Abstract]

Segment Information

3. Segment Information

The Company has determined that its reportable segments are those that are based on its method of internal reporting. As of November 2, 2013, the Company has two reportable segments, Athletic Stores and Direct-to-Customers. Sales and division results for the Company’s reportable segments for the thirteen weeks and thirty-nine weeks ended November 2, 2013 and October 27, 2012 are presented below. Division profit reflects income before income taxes, corporate expense, net interest expense, and net non-operating income.

As discussed in Note 2, Acquisition, the Company acquired Runners Point Group during the second quarter of 2013. Sales and division results for the Runners Point Group stores, including Runners Point, Sidestep and Run², are included in the Athletic Stores segment since the date of acquisition. Sales and division results for Tredex, a direct-to-customer subsidiary of Runners Point Group, are included in the Direct-to-Customers segment since the date of acquisition.

	Thirteen weeks ended				Thirty-nine weeks ended
Sales	November 2,		October 27,		November 2,		October 27,
(in millions)	2013		2012		2013		2012
Athletic Stores	$	1,444	$	1,375	$	4,228	$	4,060
Direct-to-Customers		178		149		486		409
Total sales	$	1,622	$	1,524	$	4,714	$	4,469

	Thirteen weeks ended				Thirty-nine weeks ended
Operating Results	November 2,		October 27,		November 2,		October 27,
(in millions)	2013		2012		2013		2012
Athletic Stores (1)	$	159	$	166	$	486	$	480
Direct-to-Customers		20		18		53		47
Division profit		179		184		539		527
Less: Corporate expense, net		17		28		56		76
Operating profit		162		156		483		451
Other income (2)		—		—		3		1
Interest expense, net		2		1		4		3
Income before income taxes	$	160	$	155	$	482	$	449

(1)	Included in the Athletic Stores segment for the thirty-nine weeks ended November 2, 2013 is a $2 million charge recorded in connection with the closure of all CCS stores.
(2)	Other income includes non-operating items, such as lease termination gains, royalty income, and the changes in fair value, premiums paid and realized gains associated with foreign currency option contracts.

During the second quarter of 2013 the Company closed all 22 of its CCS stores. As of November 2, 2013, 12 of these stores were converted to other store formats, 2 will be converted by the end of the year and 1 will be converted during the first quarter of 2014. The CCS store closures are not presented as part of discontinued operations as the operations and cash flows related to the majority of the closed stores are expected to continue through other store formats and the Company’s websites. The Company will continue to operate the CCS catalog and e-commerce website.

Athletic Stores sales include $64 million and $84 million for thirteen and thirty-nine week periods ended November 2, 2013, respectively, related to the Runners Point Group stores. Direct-to-Customers sales include $8 million and $10 million, respectively, related to the Tredex division of Runners Point Group.

Athletic Stores division profit includes $1 million and $3 million for thirteen and thirty-nine week periods ended November 2, 2013, respectively, related to the Runners Point Group stores. The effect on Direct-to-Customers division profit was not significant. Costs associated with the acquisition and integration of $1 million and $4 million for the thirteen and thirty-nine weeks ended November 2, 2013 are included in corporate expense.