Business Segments

The Company operates in two reportable segments: the operation of retail department stores (“retail operations”) and a general contracting construction company (“construction”).

For the Company’s retail operations, the Company determined its operating segments on a store by store basis. Each store’s operating performance has been aggregated into one reportable segment. The Company’s operating segments are aggregated for financial reporting purposes because they are similar in each of the following areas: economic characteristics, class of consumer, nature of products and distribution methods. Revenues from external customers are derived from merchandise sales, and the Company does not rely on any major customers as a source of revenue. Across all stores, the Company operates one store format under the Dillard’s name where each store offers the same general mix of merchandise with similar categories and similar customers. The Company believes that disaggregating its operating segments would not provide meaningful additional information.

The following table summarizes the percentage of net sales by segment and major product line:



	Three Months Ended				Nine Months Ended
	November 3, 2018		October 28, 2017		November 3, 2018		October 28, 2017
Retail operations segment
Cosmetics	13	%	14	%	14	%	14	%
Ladies’ apparel	23		24		24		24
Ladies’ accessories and lingerie	13		13		14		14
Juniors’ and children’s apparel	10		10		9		9
Men’s apparel and accessories	17		17		17		17
Shoes	16		16		15		16
Home and furniture	3		3		3		3
	95		97		96		97
Construction segment	5		3		4		3
Total	100	%	100	%	100	%	100	%

The following tables summarize certain segment information, including the reconciliation of those items to the Company’s consolidated operations:



(in thousands of dollars)	Retail Operations		Construction			Consolidated
Three Months Ended November 3, 2018:
Net sales from external customers	$	1,341,845	$	77,368		$	1,419,213
Gross profit	461,476		2,800			464,276
Depreciation and amortization	55,605		157			55,762
Interest and debt expense (income), net	12,117		(13		)	12,104
Income before income taxes and income on and equity in earnings of joint ventures	3,463		1,312			4,775
Total assets	3,918,065		68,536			3,986,601

Three Months Ended October 28, 2017:
Net sales from external customers	$	1,313,194	$	41,770		$	1,354,964
Gross profit	463,078		1,810			464,888
Depreciation and amortization	56,878		162			57,040
Interest and debt expense (income), net	14,988		(8		)	14,980
Income before income taxes and income on and equity in earnings of joint ventures	21,073		239			21,312
Income on and equity in earnings of joint ventures	12		—			12
Total assets	4,107,477		37,949			4,145,426

Nine Months Ended November 3, 2018:
Net sales from external customers	$	4,161,992	$	183,506		$	4,345,498
Gross profit	1,463,251		6,392			1,469,643
Depreciation and amortization	167,513		473			167,986
Interest and debt expense (income), net	40,480		(33		)	40,447
Income before income taxes and income on and equity in earnings of joint ventures	102,385		1,800			104,185
Total assets	3,918,065		68,536			3,986,601

Nine Months Ended October 28, 2017:
Net sales from external customers	$	4,083,686	$	117,018		$	4,200,704
Gross profit	1,428,488		5,001			1,433,489
Depreciation and amortization	176,422		497			176,919
Interest and debt expense (income), net	46,508		(48		)	46,460
Income before income taxes and income on and equity in earnings of joint ventures	95,750		982			96,732
Income on and equity in earnings of joint ventures	34		—			34
Total assets	4,107,477		37,949			4,145,426

Intersegment construction revenues of $9.3 million and $14.0 million for the three months ended November 3. 2018 and October 28, 2017, respectively, and $21.4 million and $35.6 million for the nine months ended November 3, 2018 and October 28, 2017, respectively, were eliminated during consolidation and have been excluded from net sales for the respective periods.