| SEGMENT REPORTING | NOTE E. SEGMENT REPORTING
We have two reportable segments, e-commerce e-commerce e-commerce e-commerce e-commerce.
These reportable segments are strategic business units that offer
similar products for the home. They are managed separately because
the business units utilize two distinct distribution and marketing
strategies. Based on management’s best estimate, our
operating segments include allocations of certain expenses,
including advertising and employment costs, to the extent they have
been determined to benefit both channels. These operating segments
are aggregated at the channel level for reporting purposes due to
the fact that our brands are interdependent for economies of scale
and we do not maintain fully allocated income statements at the
brand level. As a result, material financial decisions related to
the brands are made at the channel level. Furthermore, it is not
practicable for us to report revenue by product group.
We use operating income to evaluate segment profitability.
Operating income is defined as earnings (loss) before net interest
income (expense) and income taxes. Unallocated costs before
interest and income taxes include corporate employee-related costs,
occupancy expenses (including depreciation expense), administrative
costs and third-party service costs, primarily in our corporate
administrative and systems departments. Unallocated assets include
corporate cash and cash equivalents, prepaid expenses, the net book
value of corporate facilities and related information systems,
deferred income taxes and other corporate long-lived assets.
Income taxes are calculated at an entity level and are not
allocated to our reportable segments.
Segment Information
In
thousands
E-commerce
Retail
Unallocated
Total
Thirteen weeks ended October 29, 2017
Net revenues 1 $ 690,045 $ 609,291 $
— $ 1,299,336
Depreciation and amortization expense 6,870 22,555 16,000 45,425
Operating income (loss) 142,865 42,804 (74,856 ) 110,813
Capital expenditures
13,184
22,066
17,844
53,094
Thirteen weeks ended October 30, 2016
Net revenues 1 $ 648,743 $ 596,642 $
— $ 1,245,385
Depreciation and amortization expense 7,812 21,676 14,888 44,376
Operating income (loss) 2 150,164 47,080 (87,265 ) 109,979
Capital expenditures
5,231
25,820
18,241
49,292
Thirty-nine weeks ended October 29, 2017
Net revenues 1 $ 1,901,348 $ 1,711,101 $ — $ 3,612,449
Depreciation and amortization expense 20,625 67,282 47,566 135,473
Operating income (loss) 2 410,008 99,110 (254,247 ) 254,871
Assets 3 732,842 1,156,117 691,425 2,580,384
Capital expenditures
24,173
61,851
49,797
135,821
Thirty-nine weeks ended October 30, 2016
Net revenues 1 $ 1,824,660 $ 1,677,571 $
— $ 3,502,231
Depreciation and amortization expense 23,415 63,764 40,566 127,745
Operating income (loss) 2 414,442 110,422 (268,084 ) 256,780
Assets 3 664,105 1,118,913 670,314 2,453,332
Capital expenditures
13,673
64,699
48,797
127,169
1 Includes net revenues related to
our international operations (including our operations in Canada,
Australia, the United Kingdom and our franchise businesses) of
approximately $84.1 million and $82.8 million for the
thirteen weeks ended October 29, 2017 and October 30,
2016, respectively, and $234.1 million and $232.5 million
for the thirty-nine weeks ended October 29, 2017 and
October 30, 2016, respectively.
2 Includes $5.7 million of
severance-related charges for the thirty-nine weeks ended
October 29, 2017 and $1.2 million and $14.4 million
of severance-related charges for the thirteen and thirty-nine weeks
ended October 30, 2016, respectively, primarily in our
corporate functions, which is recorded in selling, general and
administrative expenses within the unallocated segment.
3 Includes long-term assets related
to our international operations of approximately $58.5 million
and $59.2 million as of October 29, 2017 and
October 30, 2016, respectively. |
