Segment Reporting

3 Months Ended

Apr. 29, 2017

Segment Reporting

Segment Reporting

15.  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 four retail merchandising brands: Men’s Wearhouse/Men’s Wearhouse and Tux, Jos. A. Bank, Moores Clothing for Men (“Moores”) and K&G.  These four brands are operating segments that have been aggregated into the retail reportable segment.  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 four retail merchandising concepts include suits, suit separates, sport coats, slacks, business casual, denim, sportswear, outerwear, dress shirts, shoes and accessories for men. Women’s career and casual apparel, sportswear and accessories, including shoes, and children’s apparel is offered at most of our K&G stores.  Rental product is offered at our Men’s Wearhouse/Men’s Wearhouse and Tux, Jos. A. Bank and Moores retail stores.

The corporate apparel segment includes the results from our corporate apparel and uniform operations conducted by Dimensions, Alexandra, and Yaffy in the UK and Twin Hill in the U.S., which provide corporate apparel uniforms and workwear to workforces. 

We measure segment profitability based on operating income, defined as income before interest expense, interest income, gain on extinguishment of debt, net and income taxes, before shared service expenses. Shared service expenses include costs incurred and directed primarily by our corporate offices that are not allocated to segments.

Additional net sales information is as follows (in thousands):

	For the Three Months Ended
	April 29, 2017		April 30, 2016
Net sales:
MW(1)	$	420,067	$	441,646
Jos. A. Bank		167,228		178,450
K&G		88,683		94,759
Moores		40,813		43,229
MW Cleaners		8,514		8,158
Total retail segment		725,305		766,242
Total corporate apparel segment		57,601		62,580
Total net sales	$	782,906	$	828,822

⁽¹⁾ MW includes Men’s Wearhouse, Men’s Wearhouse and Tux, tuxedo shops within Macy’s and Joseph Abboud.

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

	For the Three Months Ended
	April 29, 2017		April 30, 2016
Net sales:
Men's tailored clothing product	$	332,630	$	349,528
Men's non-tailored clothing product		228,699		241,933
Women's clothing product		19,827		21,846
Other		2,429		2,361
Total retail clothing product		583,585		615,668
Rental services		94,820		99,831
Alteration services		38,386		42,585
Retail dry cleaning services		8,514		8,158
Total alteration and other services		46,900		50,743
Corporate apparel clothing product		57,601		62,580
Total net sales	$	782,906	$	828,822

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

	For the Three Months Ended
	April 29, 2017		April 30, 2016
Operating income:
Retail	$	73,425	$	79,877
Corporate apparel		1,975		2,054
Shared service expense		(44,398)		(50,936)
Operating income		31,002		30,995
Interest income		67		13
Interest expense		(25,621)		(26,502)
Gain on extinguishment of debt, net		715		—
Earnings before income taxes	$	6,163	$	4,506