Segment Reporting

6 Months Ended

Jul. 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 (loss) 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				For the Six Months Ended
	July 29, 2017		July 30, 2016		July 29, 2017		July 30, 2016
Net sales:
MW(1)	$	458,751	$	482,895	$	878,818	$	924,541
Jos. A. Bank		174,325		186,040		341,553		364,490
K&G		85,811		86,374		174,494		181,133
Moores		65,312		66,454		106,125		109,683
MW Cleaners		8,799		8,418		17,313		16,576
Total retail segment		792,998		830,181		1,518,303		1,596,423
Total corporate apparel segment		57,760		79,503		115,361		142,083
Total net sales	$	850,758	$	909,684	$	1,633,664	$	1,738,506

⁽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				For the Six Months Ended
	July 29, 2017		July 30, 2016		July 29, 2017		July 30, 2016
Net sales:
Men's tailored clothing product	$	341,182	$	349,226	$	673,812	$	698,754
Men's non-tailored clothing product		234,093		246,154		462,792		488,087
Women's clothing product		18,100		18,468		37,927		40,314
Other		1,619		2,098		4,048		4,459
Total retail clothing product		594,994		615,946		1,178,579		1,231,614
Rental services		151,978		165,009		246,798		264,840
Alteration services		37,227		40,808		75,613		83,393
Retail dry cleaning services		8,799		8,418		17,313		16,576
Total alteration and other services		46,026		49,226		92,926		99,969
Corporate apparel clothing product		57,760		79,503		115,361		142,083
Total net sales	$	850,758	$	909,684	$	1,633,664	$	1,738,506

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				For the Six Months Ended
	July 29, 2017		July 30, 2016		July 29, 2017		July 30, 2016
Operating income:
Retail	$	155,221	$	101,227	$	228,646	$	181,102
Corporate apparel		2,103		11,920		4,078		13,974
Shared service expense		(48,859)		(53,515)		(93,257)		(104,450)
Operating income		108,465		59,632		139,467		90,626
Interest income		98		37		165		50
Interest expense		(25,167)		(25,876)		(50,788)		(52,377)
Gain (loss) on extinguishment of debt, net		3,281		(71)		3,996		(71)
Earnings before income taxes	$	86,677	$	33,722	$	92,840	$	38,228