Segment Reporting

9 Months Ended

Oct. 28, 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				For the Nine Months Ended
	October 28, 2017		October 29, 2016		October 28, 2017		October 29, 2016
Net sales:
MW(1)	$	448,955	$	461,806	$	1,327,773	$	1,386,347
Jos. A. Bank		162,685		165,992		504,238		530,482
K&G		69,604		70,874		244,098		252,007
Moores		57,607		56,520		163,732		166,203
MW Cleaners		8,671		8,497		25,984		25,073
Total retail segment		747,522		763,689		2,265,825		2,360,112
Total corporate apparel segment		63,296		83,245		178,657		225,328
Total net sales	$	810,818	$	846,934	$	2,444,482	$	2,585,440

⁽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 Nine Months Ended
	October 28, 2017		October 29, 2016		October 28, 2017		October 29, 2016
Net sales:
Men's tailored clothing product	$	330,618	$	326,741	$	1,004,430	$	1,025,495
Men's non-tailored clothing product		227,520		230,146		690,312		718,233
Women's clothing product		14,795		15,626		52,722		55,940
Other		2,270		2,533		6,318		6,992
Total retail clothing product		575,203		575,046		1,753,782		1,806,660
Rental services		126,410		138,724		373,208		403,564
Alteration services		37,238		41,422		112,851		124,815
Retail dry cleaning services		8,671		8,497		25,984		25,073
Total alteration and other services		45,909		49,919		138,835		149,888
Corporate apparel clothing product		63,296		83,245		178,657		225,328
Total net sales	$	810,818	$	846,934	$	2,444,482	$	2,585,440

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 Nine Months Ended
	October 28, 2017		October 29, 2016		October 28, 2017		October 29, 2016
Operating income:
Retail	$	123,628	$	97,629	$	352,273	$	278,732
Corporate apparel		3,072		10,314		7,150		24,288
Shared service expense		(50,073)		(46,887)		(143,329)		(151,338)
Operating income		76,627		61,056		216,094		151,682
Interest income		159		52		324		102
Interest expense		(24,412)		(25,476)		(75,200)		(77,853)
Gain on extinguishment of debt, net		2,539		1,808		6,535		1,737
Earnings before income taxes	$	54,913	$	37,440	$	147,753	$	75,668