Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.10.0.1
Segment Reporting
9 Months Ended
Nov. 03, 2018
Segment Reporting  
Segment Reporting

16.  Segment Reporting

 

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.  Prior to its divestiture, MW Cleaners was also aggregated in the retail segment as its operations did not have 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, formalwear, business casual, denim, sportswear, outerwear, dress shirts, shoes and accessories for men. Women's career and casual apparel, sportswear and accessories, including shoes, and children's apparel is offered at most of our K&G stores.  Rental product is offered at our Men's Wearhouse/Men's Wearhouse and Tux, Jos. A. Bank and Moores retail stores.

 

The corporate apparel segment includes the results from our corporate apparel and uniform operations conducted by Dimensions, Alexandra, and Yaffy in the UK and Twin Hill in the U.S., which provide corporate apparel uniforms and workwear to workforces. 

 

We measure segment profitability based on operating income, defined as income before interest expense, interest income, (loss) gain 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

 

 

    

November 3, 2018

    

October 28, 2017

    

November 3, 2018

    

October 28, 2017

 

Net sales:

 

 

    

 

 

    

 

 

    

 

 

    

 

Men's Wearhouse(1)

 

$

454,927

 

$

448,955

 

$

1,347,933

 

$

1,327,773

 

Jos. A. Bank

 

 

169,318

 

 

162,685

 

 

510,821

 

 

504,238

 

K&G

 

 

72,610

 

 

69,604

 

 

245,535

 

 

244,098

 

Moores

 

 

54,886

 

 

57,607

 

 

167,658

 

 

163,732

 

MW Cleaners(2)

 

 

 —

 

 

8,671

 

 

2,551

 

 

25,984

 

Total retail segment

 

 

751,741

 

 

747,522

 

 

2,274,498

 

 

2,265,825

 

Total corporate apparel segment

 

 

61,006

 

 

63,296

 

 

179,643

 

 

178,657

 

Total net sales

 

$

812,747

 

$

810,818

 

$

2,454,141

 

$

2,444,482

 


(1)

Consists of Men's Wearhouse, Men's Wearhouse and Tux, tuxedo shops within Macy's (all 170 of which were closed during the second quarter of 2017) and Joseph Abboud.

(2)

On March 3, 2018, we completed the divestiture of our MW Cleaners business.  Please see Note 2 for additional information.

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

    

November 3, 2018

    

October 28, 2017

    

November 3, 2018

    

October 28, 2017

 

Operating income:

 

 

    

 

 

    

 

 

    

 

 

    

 

Retail

 

$

127,621

 

$

123,628

 

$

360,484

 

$

352,273

 

Corporate apparel

 

 

(20,879)

 

 

3,072

 

 

(18,127)

 

 

7,150

 

Shared service expense

 

 

(51,641)

 

 

(50,073)

 

 

(146,373)

 

 

(143,329)

 

Operating income

 

 

55,101

 

 

76,627

 

 

195,984

 

 

216,094

 

Interest income

 

 

207

 

 

159

 

 

414

 

 

324

 

Interest expense

 

 

(18,757)

 

 

(24,412)

 

 

(61,602)

 

 

(75,200)

 

(Loss) gain on extinguishment of debt, net

 

 

(9,420)

 

 

2,539

 

 

(30,253)

 

 

6,535

 

Earnings before income taxes

 

$

27,131

 

$

54,913

 

$

104,543

 

$

147,753

 

 

The results of the corporate apparel reportable segment were materially impacted by a non-cash goodwill impairment charge of $24.0 million.  Please see Note 13 for additional information.


Since February 3, 2018, total assets for our reportable segments have materially changed primarily as a result of the goodwill impairment charge for the corporate apparel business.  Total assets by reportable segment and shared services are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

    

November 3,

    

October 28,

 

February 3,

 

 

    

2018

    

2017

    

2018

 

Segment assets:

 

 

 

 

 

 

 

 

 

 

Retail

 

$

1,424,320

 

$

1,559,247

 

$

1,434,992

 

Corporate apparel

 

 

180,046

 

 

216,391

 

 

222,872

 

Shared services(1)

 

 

285,174

 

 

335,663

 

 

342,091

 

Total assets

 

$

1,889,540

 

$

2,111,301

 

$

1,999,955

 


(1)

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