Segment Information

6 Months Ended

Aug. 01, 2020

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, asset impairment charges, net gains (losses) on lease terminations, restructuring charges and certain non-recurring credits (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, asset impairment charges, net gains (losses) on lease terminations, restructuring charges and certain non-recurring credits (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 1, 2020 and August 3, 2019 (in thousands):



	Three Months Ended						Six Months Ended
	Aug 1, 2020			Aug 3, 2019			Aug 1, 2020			Aug 3, 2019
Net revenue:
Americas Retail	$	110,065		$	198,966		$	184,649		$	375,389
Americas Wholesale	20,285			41,902			46,160			88,107
Europe	205,851			340,509			312,324			550,564
Asia	50,191			83,301			90,576			168,491
Licensing	12,147			18,542			25,081			37,360
Total net revenue	$	398,539		$	683,220		$	658,790		$	1,219,911
Earnings (loss) from operations:
Americas Retail	$	(4,704	)	$	5,957		$	(41,377	)	$	4,145
Americas Wholesale	1,688			8,422			3,312			16,236
Europe	20,795			51,594			(23,611		)	35,267
Asia	(3,367		)	(4,800		)	(26,144		)	(8,003		)
Licensing	11,511			15,547			21,605			32,191
Total segment earnings (loss) from operations	25,923			76,720			(66,215		)	79,836
Corporate overhead	(29,188		)	(29,229		)	(46,109		)	(55,041		)
Asset impairment charges¹	(11,969		)	(1,504		)	(64,941		)	(3,279		)
Net gains on lease terminations²	885			—			429			—
Total earnings (loss) from operations	$	(14,349	)	$	45,987		$	(176,836	)	$	21,516

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Notes:

During the three and six months ended August 1, 2020, the Company recognized asset impairment charges related primarily to impairment of certain operating lease ROU assets and impairment of property and equipment related to certain retail locations resulting from lower revenue and future cash flow projections from the ongoing effects of the COVID-19 pandemic. During the three and six months ended August 3, 2019, the Company’s asset impairment charges related primarily to impairment of property and equipment related to certain retail locations resulting from under-performance and expected store closures. Refer to Note 2 and Note 15 for more information regarding these asset impairment charges.


²	During the three and six months ended August 1, 2020, the Company recorded net gains on lease terminations related primarily to the early termination of certain lease agreements.

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 1, 2020		Aug 3, 2019		Aug 1, 2020		Aug 3, 2019
Net revenue:
U.S.	$	97,202	$	176,557	$	166,667	$	340,928
Italy	36,671		86,497		56,023		136,932
South Korea	29,092		32,898		50,316		66,815
Germany	33,376		31,990		44,738		50,738
Canada	24,174		44,001		40,851		82,582
Spain	20,381		39,900		33,377		67,897
Other foreign countries	145,496		252,835		241,737		436,659
Total product sales	386,392		664,678		633,709		1,182,551
Net royalties	12,147		18,542		25,081		37,360
Net revenue	$	398,539	$	683,220	$	658,790	$	1,219,911

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.