Segment Information

6 Months Ended

Aug. 03, 2019

The Company’s businesses are grouped into five reportable segments for management and internal financial reporting purposes: Americas Retail, Americas Wholesale, Europe, Asia and Licensing. The Company’s Americas Retail, Americas Wholesale, Europe 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. Management evaluates segment performance based primarily on revenues and earnings (loss) from operations before corporate performance-based compensation costs, net gains (losses) on lease terminations, asset impairment charges, restructuring charges, and certain non-recurring 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 the Americas. The Americas

Wholesale segment includes the Company’s wholesale operations in the Americas. 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 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 and certain non-recurring charges, if any. 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 six months ended August 3, 2019 and August 4, 2018 (in thousands):



	Three Months Ended						Six Months Ended
	Aug 3, 2019			Aug 4, 2018			Aug 3, 2019			Aug 4, 2018
Net revenue:
Americas Retail	$	198,966		$	197,125		$	375,389		$	368,465
Americas Wholesale	41,902			34,253			88,107			74,932
Europe	340,509			311,998			550,564			517,433
Asia	83,301			82,786			168,491			166,837
Licensing	18,542			19,709			37,360			39,493
Total net revenue	$	683,220		$	645,871		$	1,219,911		$	1,167,160
Earnings (loss) from operations:
Americas Retail	$	5,957		$	5,582		$	4,145		$	(98	)
Americas Wholesale	8,422			5,325			16,236			11,351
Europe	51,594			30,531			35,267			10,198
Asia	(4,800		)	1,634			(8,003		)	5,699
Licensing	15,547			17,437			32,191			34,923
Total segment earnings from operations	76,720			60,509			79,836			62,073
Corporate overhead	(29,229		)	(25,647		)	(55,041		)	(51,492		)
Asset impairment charges¹	(1,504		)	(2,981		)	(3,279		)	(3,740		)
Net gains on lease terminations²	—			—			—			152
Total earnings from operations	$	45,987		$	31,881		$	21,516		$	6,993

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Notes:


¹	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 15 for more information regarding these asset impairment charges.


²	During the six months ended August 4, 2018, the Company recorded net gains on lease terminations related primarily to the early termination of certain lease agreements in North America. The net gains on lease terminations were recorded during the three months ended May 5, 2018.

The table below presents information regarding geographic areas in which the Company operated. Net revenue is classified primarily based on the country where the Company’s customer is located (in thousands):



	Three Months Ended				Six Months Ended
	Aug 3, 2019		Aug 4, 2018		Aug 3, 2019		Aug 4, 2018
Net revenue:
U.S.	$	176,557	$	171,802	$	340,928	$	325,112
Italy	86,497		84,663		136,932		142,334
Canada	44,001		45,059		82,582		84,579
Spain	39,900		39,954		67,897		66,351
South Korea	32,898		35,624		66,815		73,256
Other foreign countries	284,825		249,060		487,397		436,035
Total product sales	664,678		626,162		1,182,551		1,127,667
Net royalties	18,542		19,709		37,360		39,493
Net revenue	$	683,220	$	645,871	$	1,219,911	$	1,167,160

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.