Segment Information

9 Months Ended

Oct. 31, 2020

Segment InformationThe 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 modifications, 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 modifications, 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 nine months ended October 31, 2020 and November 2, 2019 (in thousands):


	Three Months Ended				Nine Months Ended
	Oct 31, 2020		Nov 2, 2019		Oct 31, 2020		Nov 2, 2019
Net revenue:
Americas Retail	$	130,328	$	177,824	$	314,977	$	553,213
Americas Wholesale	35,971		56,398		82,131		144,505
Europe	321,574		277,253		633,898		827,817
Asia	61,978		82,261		152,554		250,752
Licensing	19,433		22,208		44,514		59,568
Total net revenue	$	569,284	$	615,944	$	1,228,074	$	1,835,855
Earnings (loss) from operations:
Americas Retail	$	473	$	1,601	$	(40,904)	$	5,746
Americas Wholesale	8,247		11,216		11,559		27,452
Europe	51,476		19,475		27,865		54,742
Asia	1,415		(2,432)		(24,729)		(10,435)
Licensing	18,228		19,372		39,833		51,563
Total segment earnings from operations	79,839		49,232		13,624		129,068
Corporate overhead	(25,058)		(24,736)		(71,167)		(79,777)

Asset impairment charges1	(10,335)		(1,847)		(75,276)		(5,126)
Net gains on lease modifications2	21		—		450		—

Total earnings (loss) from operations	$	44,467	$	22,649	$	(132,369)	$	44,165

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Notes:

1During the three and nine months ended October 31, 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 nine months ended November 2, 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.

2During the three and nine months ended October 31, 2020, the Company recorded net gains on lease modifications related primarily to the early termination of lease agreements for certain of the Company’s retail locations.

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				Nine Months Ended
	Oct 31, 2020		Nov 2, 2019		Oct 31, 2020		Nov 2, 2019
Net revenue:
U.S.	$	116,205	$	164,807	$	282,872	$	505,735
Italy	77,050		61,952		133,073		198,884
Germany	43,321		32,619		88,059		83,357
South Korea	32,681		38,596		82,997		105,411
Canada	31,691		47,042		72,542		129,624
Spain	30,217		33,511		63,594		101,408
France	31,836		28,478		61,291		85,373
Other foreign countries	186,850		186,731		399,132		566,495
Total product sales	549,851		593,736		1,183,560		1,776,287
Net royalties	19,433		22,208		44,514		59,568
Net revenue	$	569,284	$	615,944	$	1,228,074	$	1,835,855

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.