Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.5.0.2
Segment Reporting
9 Months Ended
Oct. 29, 2016
Segment Reporting  
Segment Reporting

 

14.  Segment Reporting

 

In the first quarter of 2016, we revised our segment reporting presentation to reflect changes in how we manage our business, including resource allocation and performance assessment. Specifically, we are now presenting expenses related to our shared services platform separately from the results of our operating segments to promote enhanced comparability of our operating segments. Previously, these shared service expenses were primarily included in our retail segment. Comparable prior period information has been recast to reflect our revised segment presentation.

 

Our operations are conducted in two reportable segments, retail and corporate apparel, based on the way we manage, evaluate and internally report our business activities.

 

The retail segment includes the results from our four retail merchandising brands: Men’s Wearhouse/Men’s Wearhouse and Tux, Jos. A. Bank, Moores Clothing for Men (“Moores”) and K&G.  These four brands are operating segments that have been aggregated into the retail reportable segment.  MW Cleaners is also aggregated in the retail segment as these operations have not had a significant effect on our revenues or expenses.  Specialty apparel merchandise offered by our four retail merchandising concepts include suits, suit separates, sport coats, slacks, business casual, sportswear, outerwear, dress and casual shirts, shoes and accessories for men. Ladies’ career apparel, sportswear and accessories, including shoes, as well as children’s apparel are also offered at most of our K&G stores.  Tuxedo and suit rentals are offered at our Men’s Wearhouse/Men’s Wearhouse and Tux, Jos. A. Bank and Moores retail stores and our tuxedo shops within Macy’s stores.

 

The corporate apparel segment includes the results from our corporate apparel and uniform operations conducted by Twin Hill in the U.S. and Dimensions, Alexandra, and Yaffy in the United Kingdom (“UK”), which provide clothing uniforms and workwear to workforces.  The Twin Hill and UK operations constitute one operating segment.

 

We measure segment profitability based on operating income, defined as income before interest expense, interest income, gain (loss) on extinguishment of debt, net and income taxes, before shared service expenses. Shared service expenses include costs incurred and directed primarily by our corporate offices that are not allocated to segments.

 

Additional net sales information is as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

    

October 29, 2016

    

October 31, 2015

    

October 29, 2016

    

October 31, 2015

 

Net sales:

 

 

    

 

 

    

 

 

    

 

 

    

 

MW(1)

 

$

461,806

 

$

465,396

 

$

1,386,347

 

$

1,391,782

 

Jos. A. Bank

 

 

165,992

 

 

198,936

 

 

530,482

 

 

636,704

 

K&G

 

 

70,874

 

 

72,733

 

 

252,007

 

 

257,448

 

Moores

 

 

56,520

 

 

55,862

 

 

166,203

 

 

173,281

 

MW Cleaners

 

 

8,497

 

 

8,460

 

 

25,073

 

 

25,356

 

Total retail segment

 

 

763,689

 

 

801,387

 

 

2,360,112

 

 

2,484,571

 

Total corporate apparel segment

 

 

83,245

 

 

64,059

 

 

225,328

 

 

186,038

 

Total net sales

 

$

846,934

 

$

865,446

 

$

2,585,440

 

$

2,670,609

 


(1)

MW includes Men’s Wearhouse, Men’s Wearhouse and Tux, Joseph Abboud and tuxedo shops within Macy’s.

 

The following table sets forth supplemental products and services sales information for the Company (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

    

October 29, 2016

    

October 31, 2015

    

October 29, 2016

    

October 31, 2015

 

Net sales:

 

 

    

 

 

    

 

 

    

 

 

    

 

Men's tailored clothing product

 

$

326,741

 

$

351,269

 

$

1,025,495

 

$

1,109,665

 

Men's non-tailored clothing product

 

 

230,146

 

 

245,250

 

 

718,233

 

 

756,699

 

Ladies' clothing product

 

 

15,626

 

 

16,228

 

 

55,940

 

 

56,827

 

Other

 

 

2,533

 

 

3,127

 

 

6,992

 

 

8,735

 

Total retail clothing product

 

 

575,046

 

 

615,874

 

 

1,806,660

 

 

1,931,926

 

Rental services

 

 

138,724

 

 

132,443

 

 

403,564

 

 

392,621

 

Alteration services

 

 

41,422

 

 

44,610

 

 

124,815

 

 

134,668

 

Retail dry cleaning services

 

 

8,497

 

 

8,460

 

 

25,073

 

 

25,356

 

Total alteration and other services

 

 

49,919

 

 

53,070

 

 

149,888

 

 

160,024

 

Corporate apparel clothing product

 

 

83,245

 

 

64,059

 

 

225,328

 

 

186,038

 

Total net sales

 

$

846,934

 

$

865,446

 

$

2,585,440

 

$

2,670,609

 

 

Operating income (loss) by reportable segment, shared service expense, and the reconciliation to earnings (loss) before income taxes is as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

    

October 29, 2016

    

October 31, 2015

    

October 29, 2016

    

October 31, 2015

 

Operating income (loss):

 

 

    

 

 

    

 

 

    

 

 

    

 

Retail

 

$

97,629

 

$

512

 

$

278,732

 

$

233,143

 

Corporate apparel

 

 

10,314

 

 

2,623

 

 

24,288

 

 

6,429

 

Shared service expense

 

 

(46,887)

 

 

(39,536)

 

 

(151,338)

 

 

(122,561)

 

Operating income

 

 

61,056

 

 

(36,401)

 

 

151,682

 

 

117,011

 

Interest income

 

 

52

 

 

50

 

 

102

 

 

140

 

Interest expense

 

 

(25,476)

 

 

(26,457)

 

 

(77,853)

 

 

(79,475)

 

Gain (loss) on extinguishment of debt, net

 

 

1,808

 

 

 —

 

 

1,737

 

 

(12,675)

 

Earnings (loss) before income taxes

 

$

37,440

 

$

(62,808)

 

$

75,668

 

$

25,001

 

 

As a result of our revised segment presentation, total assets for our reportable segments have changed. There were no changes to consolidated total assets. Total assets by reportable segment are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

    

October 29,

    

October 31,

 

January 30,

 

 

    

2016

    

2015

    

2016

 

Segment assets:

 

 

 

 

 

 

 

 

 

 

Retail

 

$

1,719,572

 

$

2,802,991

 

$

1,705,728

 

Corporate apparel

 

 

196,085

 

 

216,920

 

 

211,820

 

Shared services(1)

 

 

259,472

 

 

492,468

 

 

326,771

 

Total assets

 

$

2,175,129

 

$

3,512,379

 

$

2,244,319

 


(1)

Shared service assets consist primarily of cash and cash equivalents, assets related to our distribution network and tax-related assets.