Segment Reporting

6 Months Ended

Aug. 02, 2014

Segment Reporting

Segment Reporting

14.  Segment Reporting

Our operations are conducted in two reportable segments, retail and corporate apparel, based on the way we manage, evaluate and internally report our business activities.

The retail segment includes the results from our five retail merchandising brands: Men’s Wearhouse, Men’s Wearhouse and Tux, Jos. A. Bank, Moores Clothing for Men (“Moores”) and K&G.  These five brands are operating segments that have been aggregated into the retail reportable segment based on their similar economic characteristics, products, production processes, target customers and distribution methods.  MW Cleaners is also aggregated in the retail segment as these operations have not had a significant effect on our revenues or expenses.  Specialty apparel merchandise offered by our five retail merchandising concepts include suits, suit separates, sport coats, slacks, sportswear, outerwear, dress shirts, shoes and accessories for men.  Ladies’ career apparel, sportswear and accessories, including shoes, and children’s apparel is offered at most of our K&G stores.  Tuxedo rentals are offered at our Men’s Wearhouse, Men’s Wearhouse and Tux, Jos. A. Bank and Moores retail stores and ladies’ career apparel, sportswear and accessories, including shoes, and children’s apparel is offered at most of our K&G stores.

The corporate apparel segment includes the results from our corporate apparel and uniform operations conducted by Twin Hill in the U.S. and Dimensions, Alexandra and Yaffy in the United Kingdom (“UK”).  The two corporate apparel and uniform concepts are operating segments that have been aggregated into the reportable corporate apparel segment based on their similar economic characteristics, products, production processes, target customers and distribution methods.  The corporate apparel segment provides corporate clothing uniforms and workwear to workforces.

We measure segment profitability based on operating income, defined as income before interest expense, interest income, income taxes and non-controlling interest.  Corporate expenses and assets are allocated to the retail segment.

From June 18, 2014 through August 2, 2014, Jos. A. Bank generated net sales of $113.7 million.  Net sales by brand and reportable segment are as follows (in thousands):

	For the Three Months Ended				For the Six Months Ended
	August 2, 2014		August 3, 2013		August 2, 2014		August 3, 2013
Net sales:
MW (1)	$	450,331	$	426,597	$	871,310	$	828,432
Jos. A. Bank	113,692		—		113,692		—
Moores	78,076		74,544		130,578		128,315
K&G	86,218		84,860		178,639		182,200
MW Cleaners	8,105		7,439		15,852		14,674
Total retail segment	736,422		593,440		1,310,071		1,153,621
Twin Hill	11,132		9,977		19,376		17,936
Dimensions and Alexandra (UK)	55,524		43,838		104,105		92,234
Total corporate apparel segment	66,656		53,815		123,481		110,170
Total net sales	$	803,078	$	647,255	$	1,433,552	$	1,263,791

(1) MW includes Men’s Wearhouse and Men’s Wearhouse and Tux stores.

The following table sets forth supplemental products and services sales information for us (in thousands):

	For the Three Months Ended				For the Six Months Ended
	August 2, 2014		August 3, 2013		August 2, 2014		August 3, 2013
Net sales:
Men’s tailored clothing product	$	288,239	$	226,479	$	527,675	$	461,323
Men’s non-tailored clothing product	221,407		164,305		392,513		331,078
Ladies’ clothing product	18,798		17,899		39,649		40,019
Other	2,284		—		3,915		—
Total retail clothing product	530,728		408,683		963,752		832,420
Tuxedo rental services	161,096		147,701		262,759		246,183
Alteration services	36,493		29,617		67,708		60,344
Retail dry cleaning services	8,105		7,439		15,852		14,674
Total alteration and other services	44,598		37,056		83,560		75,018
Corporate apparel clothing product	66,656		53,815		123,481		110,170
Total net sales	$	803,078	$	647,255	$	1,433,552	$	1,263,791

Operating income by reportable segment and the reconciliation to earnings before income taxes is as follows (in thousands):

	For the Three Months Ended						For the Six Months Ended
	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Retail	$	39,744		$	65,088		$	66,269		$	116,558
Corporate apparel	2,960			1,700			3,716			2,783
Operating income	42,704			66,788			69,985			119,341
Interest income	119			181			180			302
Interest expense	(13,193		)	(540		)	(14,328		)	(884		)
Loss on extinguishment of debt	(2,158		)	—			(2,158		)	—
Earnings before income taxes	$	27,472		$	66,429		$	53,679		$	118,759

As a result of the Jos. A. Bank acquisition, total assets for our retail reportable segment have materially changed since February 1, 2014.  Total assets by reportable segment are as follows (in thousands):

	August 2, 2014		August 3, 2013		February 1, 2014
Segment assets:
Retail	$	3,370,217	$	1,184,257	$	1,306,677
Corporate apparel	254,382		230,777		248,553
Total assets	$	3,624,599	$	1,414,534	$	1,555,230