Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.19.2
Segment Reporting
3 Months Ended
May 04, 2019
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 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

 

 

    

May 4, 2019

    

May 5, 2018

 

Net sales:

 

 

    

 

 

    

 

Men's Wearhouse(1)

 

$

427,772

 

$

447,809

 

Jos. A. Bank

 

 

166,886

 

 

169,076

 

K&G

 

 

87,697

 

 

89,280

 

Moores

 

 

42,307

 

 

46,127

 

MW Cleaners(2)

 

 

 —

 

 

2,551

 

Total retail segment

 

 

724,662

 

 

754,843

 

Total corporate apparel segment

 

 

56,725

 

 

63,121

 

Total net sales

 

$

781,387

 

$

817,964

 


(1)

Consists of Men's Wearhouse, Men's Wearhouse and Tux 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 by reportable segment, shared service expense, and the reconciliation to earnings before income taxes is as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

    

May 4, 2019

    

May 5, 2018

 

Operating income:

 

 

    

 

 

    

 

Retail

 

$

78,191

 

$

98,721

 

Corporate apparel

 

 

580

 

 

1,583

 

Shared service expense

 

 

(48,469)

 

 

(47,407)

 

Operating income

 

 

30,302

 

 

52,897

 

Interest income

 

 

96

 

 

85

 

Interest expense

 

 

(18,663)

 

 

(21,981)

 

Loss on extinguishment of debt, net

 

 

 —

 

 

(12,711)

 

Earnings before income taxes

 

$

11,735

 

$

18,290

 

 

Total assets by reportable segment and shared services are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

    

May 4,

    

May 5,

 

February 2,

 

 

    

2019

    

2018

    

2019

 

Segment assets:

 

 

 

 

 

 

 

 

 

 

Retail

 

$

2,253,710

 

$

1,423,995

 

$

1,375,902

 

Corporate apparel

 

 

187,775

 

 

205,715

 

 

175,488

 

Shared services (1)

 

 

323,968

 

 

316,112

 

 

269,100

 

Total assets (2)

 

$

2,765,453

 

$

1,945,822

 

$

1,820,490

 


(1)

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

(2)

The increase in total assets, as of May 4, 2019, is related to the recognition of operating lease right-of-use assets resulting from the adoption of ASC 842, effective February 3, 2019.  Please see Note 12 for additional information.