XML 25 R14.htm IDEA: XBRL DOCUMENT v3.8.0.1
Segment Information
 9 Months Ended
Oct. 28, 2017
Segment Reporting [Abstract]  
Segment Information
Segment Information
The Company’s businesses are grouped into five reportable segments for management and internal financial reporting purposes: Americas Retail, Europe, Asia, Americas Wholesale and Licensing. The Company’s Americas Retail, Europe, Americas Wholesale and Licensing reportable segments are the same as their respective operating segments. Certain components of the Company’s Asia operating segment are separate operating segments based on region which have been aggregated into the Asia reportable segment for disclosure purposes. During the first quarter of fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. During the third quarter of fiscal 2018, segment results were also adjusted to exclude corporate performance-based compensation costs, net gains (losses) on lease terminations and asset impairment charges due to the fact that these items are no longer included in the segment results provided to the Company’s chief operating decision maker in order to allocate resources and assess performance. Accordingly, segment results have been adjusted for the nine months ended October 28, 2017 as well as the three and nine months ended October 29, 2016 to conform to the current period presentation. Management evaluates segment performance based primarily on revenues and earnings (loss) from operations before corporate performance-based compensation costs, net gains (losses) from lease terminations, asset impairment charges and restructuring charges, if any. The Company believes this segment reporting reflects how its business segments are managed and how each segment’s performance is evaluated by the Company’s chief operating decision maker to assess performance and make resource allocation decisions. The Americas Retail segment includes the Company’s retail and e-commerce operations in North and Central America and its retail operations in South America. The Europe segment includes the Company’s retail, e-commerce and wholesale operations in Europe and the Middle East. The Asia segment includes the Company’s retail, e-commerce and wholesale operations in Asia and the Pacific. The Americas Wholesale segment includes the Company’s wholesale operations in the Americas. The Licensing segment includes the worldwide licensing operations of the Company. The business segment operating results exclude corporate overhead costs, which consist of shared costs of the organization, net gains (losses) on lease terminations, asset impairment charges and restructuring charges. Corporate overhead costs are presented separately and generally include, among other things, the following unallocated corporate costs: accounting and finance, executive compensation, corporate performance-based compensation, facilities, global advertising and marketing, human resources, information technology and legal.
Net revenue and earnings (loss) from operations are summarized as follows for the three and nine months ended October 28, 2017 and October 29, 2016 (in thousands):    
 
Three Months Ended
 
Nine Months Ended
 
Oct 28, 2017
 
Oct 29, 2016
 
Oct 28, 2017
 
Oct 29, 2016
Net revenue:
 

 
 

 
 
 
 
Americas Retail
$
187,021

 
$
215,862

 
$
561,903

 
$
646,573

Europe (1)
221,230

 
186,289

 
641,833

 
532,847

Asia (1)
74,322

 
63,617

 
200,436

 
171,255

Americas Wholesale (1)
45,636

 
46,785

 
114,151

 
111,354

Licensing
25,929

 
23,768

 
68,088

 
68,066

Total net revenue
$
554,138

 
$
536,321

 
$
1,586,411

 
$
1,530,095

Earnings (loss) from operations:
 

 
 

 
 
 
 
Americas Retail (1)
$
(4,670
)
 
$
(10,505
)
 
$
(33,654
)
 
$
(22,279
)
Europe (1)
6,678

 
11,597

 
30,749

 
16,221

Asia (1)
2,718

 
(1,962
)
 
5,055

 
(5,251
)
Americas Wholesale (1)
8,241

 
8,142

 
20,011

 
18,211

Licensing (1)
23,532

 
20,119

 
61,019

 
60,325

Total segment earnings from operations
36,499


27,391


83,180

 
67,227

Corporate overhead (1)
(23,942
)
 
(11,466
)
 
(68,899
)
 
(58,660
)
Net gains (losses) on lease terminations (1) (2)
(11,494
)
 
—

 
(11,494
)
 
695

Asset impairment charges (1) (3)
(2,018
)
 
(802
)
 
(6,013
)
 
(1,457
)
Restructuring charges (4)
—

 
—

 
—

 
(6,083
)
Total earnings (loss) from operations
$
(955
)

$
15,123


$
(3,226
)
 
$
1,722

__________________________________
(1)
During the first quarter of fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. During the third quarter of fiscal 2018, segment results were also adjusted to exclude corporate performance-based compensation costs, net gains (losses) on lease terminations and asset impairment charges due to the fact that these items are no longer included in the segment results provided to the Company’s chief operating decision maker in order to allocate resources and assess performance. Accordingly, segment results have been adjusted for the nine months ended October 28, 2017 as well as the three and nine months ended October 29, 2016 to conform to the current period presentation.
(2)
During the three and nine months ended October 28, 2017, the Company recorded net losses on lease terminations related primarily to the modification of certain lease agreements held with a common landlord in North America. During the nine months ended October 29, 2016, the Company recorded net gains on lease terminations related primarily to the early termination of certain lease agreements in Europe. The net gains on lease terminations were recorded during the first and second quarters of fiscal 2017. Refer to Note 1 for more information regarding the net gains (losses) on lease terminations.
(3)
During each of the periods presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. Refer to Note 14 for more information regarding these asset impairment charges.
(4)
Restructuring charges incurred during the nine months ended October 29, 2016 related to plans to better align the Company’s global cost and organizational structure with its current strategic initiatives. Refer to Note 6 for more information regarding these restructuring charges.
Due to the seasonal nature of the Company’s business segments, the above net revenue and operating results are not necessarily indicative of the results that may be expected for the full fiscal year.