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SEGMENT DATA | 12 Months Ended
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Feb. 03, 2019
Segment Reporting [Abstract] |
SEGMENT DATA | SEGMENT DATA The Company manages its operations through its operating divisions, which are presented as six reportable segments: (i) Tommy Hilfiger North America; (ii) Tommy Hilfiger International; (iii) Calvin Klein North America; (iv) Calvin Klein International; (v) Heritage Brands Wholesale; and (vi) Heritage Brands Retail. Tommy Hilfiger North America Segment - This segment consists of the Company’s Tommy Hilfiger North America division. This segment derives revenue principally from (i) marketing TOMMY HILFIGER branded apparel and related products at wholesale in the United States and Canada, primarily to department stores, warehouse clubs, and off-price and independent retailers, as well as digital commerce sites operated by the department store customers and pure play digital commerce retailers; (ii) operating retail stores, which are primarily located in premium outlet centers in the United States and Canada, and a digital commerce site in the United States, which sell TOMMY HILFIGER branded apparel, accessories and related products; and (iii) licensing and similar arrangements relating to the use by third parties of the TOMMY HILFIGER brand names for a broad array of product categories in North America. This segment also includes, since December 2016, the Company’s proportionate share of the net income or loss of its investment in its unconsolidated foreign affiliate in Mexico relating to the affiliate’s Tommy Hilfiger business. Tommy Hilfiger International Segment - This segment consists of the Company’s Tommy Hilfiger International division. This segment derives revenue principally from (i) marketing TOMMY HILFIGER branded apparel and related products at wholesale principally in Europe, China and Japan, primarily to department and specialty stores, and digital commerce sites operated by department store customers and pure play digital commerce retailers, as well as through distributors and franchisees; (ii) operating retail stores and concession locations in Europe, China and Japan and international digital commerce sites, which sell TOMMY HILFIGER branded apparel, accessories and related products; and (iii) licensing and similar arrangements relating to the use by third parties of the TOMMY HILFIGER brand names for a broad array of product categories outside of North America. This segment also includes the Company’s proportionate share of the net income or loss of its investments in its unconsolidated Tommy Hilfiger foreign affiliates in Brazil and India and its unconsolidated foreign affiliate in Australia relating to the affiliate’s Tommy Hilfiger business. This segment included the Company’s proportionate share of the net income or loss of its investment in TH China until April 13, 2016, on which date the Company began to consolidate the operations as a wholly owned subsidiary of the Company in conjunction with the TH China acquisition. Please see Note 3, “Acquisitions,” for further discussion. Calvin Klein North America Segment - This segment consists of the Company’s Calvin Klein North America division. This segment derives revenue principally from (i) marketing CALVIN KLEIN branded apparel and related products at wholesale in the United States and Canada, primarily to warehouse clubs, department and specialty stores, and off-price and independent retailers, as well as digital commerce sites operated by department store customers and pure play digital commerce retailers; (ii) operating retail stores, which are primarily located in premium outlet centers, and digital commerce sites in the United States and Canada, which sell CALVIN KLEIN branded apparel, accessories and related products; and (iii) licensing and similar arrangements relating to the use by third parties of the CALVIN KLEIN brand names for a broad array of product categories in North America. This segment also includes, since December 2016, the Company’s proportionate share of the net income or loss of its investment in its unconsolidated foreign affiliate in Mexico relating to the affiliate’s Calvin Klein business. Calvin Klein International Segment - This segment consists of the Company’s Calvin Klein International division. This segment derives revenue principally from (i) marketing CALVIN KLEIN branded apparel and related products at wholesale principally in Europe, Asia and Brazil, primarily to department and specialty stores, and digital commerce sites operated by department store customers and pure play digital commerce retailers, as well as through distributors and franchisees; (ii) operating retail stores, concession locations and digital commerce sites in Europe, Asia and Brazil, which sell CALVIN KLEIN branded apparel, accessories and related products; and (iii) licensing and similar arrangements relating to the use by third parties of the CALVIN KLEIN brand names for a broad array of product categories outside of North America. This segment also includes the Company’s proportionate share of the net income or loss of its investments in its unconsolidated foreign affiliate in Australia relating to the affiliate’s Calvin Klein business and its unconsolidated Calvin Klein foreign affiliate in India. Heritage Brands Wholesale Segment - This segment consists of the Company’s Heritage Brands Wholesale division. This segment derives revenue primarily from the marketing to department, chain and specialty stores, warehouse clubs, and mass market, off-price and independent retailers, as well as digital commerce sites operated by select wholesale partners and pure play digital commerce retailers in North America of (i) men’s dress shirts and neckwear under various owned and licensed brand names, including several private label brands; (ii) men’s sportswear principally under the brand names Van Heusen, IZOD, ARROW and DKNY; (iii) men’s, women’s and children’s swimwear, pool and deck footwear, and swim-related products and accessories under the Speedo trademark; and (iv) women’s intimate apparel under the Warner’s, Olga and True&Co. brands. Additionally, this segment derives revenue from Company operated digital commerce sites in the United States through SpeedoUSA.com, TrueAndCo.com, VanHeusen.com, IZOD.com and styleBureau.com. This segment also includes the Company’s proportionate share of the net income or loss of its investments in its unconsolidated foreign affiliates in Australia and, since December 2016, in Mexico relating to the affiliates’ Heritage Brands businesses. Heritage Brands Retail Segment - This segment consists of the Company’s Heritage Brands Retail division. This segment derives revenue principally from operating retail stores, primarily located in outlet centers throughout the United States and Canada, which primarily sell apparel, accessories and related products. A majority of the Company’s Heritage Brands stores offer a broad selection of Van Heusen men’s and women’s apparel, along with a limited selection of the Company’s dress shirt and neckwear offerings, and IZOD Golf, Warner’s and, to a lesser extent, Speedo products. The majority of these stores feature multiple brand names on the store signage, with the remaining stores operating under the Van Heusen name. The Company’s revenue by segment was as follows:
(In millions) |  | 2018 | (1) | 2017 | (1) | 2016 | (1)
Revenue – Tommy Hilfiger North America |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 1,574.3 |  |  | $ | 1,482.2 |  |  | $ | 1,502.4 |  |
Royalty revenue |  | 76.2 |  |  | 68.9 |  |  | 48.9 |  |
Advertising and other revenue |  | 18.7 |  |  | 16.7 |  |  | 12.0 |  |
Total |  | 1,669.2 |  |  | 1,567.8 |  |  | 1,563.3 |  |
Revenue – Tommy Hilfiger International |  |  |  |  |  |  |  |  |  |
Net sales |  | 2,599.7 |  |  | 2,268.0 |  |  | 1,899.4 |  |
Royalty revenue |  | 52.7 |  |  | 47.8 |  |  | 44.5 |  |
Advertising and other revenue |  | 22.9 |  |  | 9.6 |  |  | 3.6 |  |
Total |  | 2,675.3 |  |  | 2,325.4 |  |  | 1,947.5 |  |
Revenue – Calvin Klein North America |  |  |  |  |  |  |
Net sales |  | 1,599.9 |  |  | 1,511.3 |  |  | 1,513.0 |  |
Royalty revenue |  | 143.6 |  |  | 146.4 |  |  | 131.7 |  |
Advertising and other revenue |  | 49.8 |  |  | 50.1 |  |  | 45.2 |  |
Total |  | 1,793.3 |  |  | 1,707.8 |  |  | 1,689.9 |  |
Revenue – Calvin Klein International |  |  |  |  |  |  |  |  |  |
Net sales |  | 1,827.9 |  |  | 1,645.0 |  |  | 1,346.2 |  |
Royalty revenue |  | 78.9 |  |  | 80.0 |  |  | 72.9 |  |
Advertising and other revenue |  | 31.1 |  |  | 28.8 |  |  | 26.2 |  |
Total |  | 1,937.9 |  |  | 1,753.8 |  |  | 1,445.3 |  |
Revenue – Heritage Brands Wholesale |  |  |  |  |  |  |  |  |  |
Net sales |  | 1,293.2 |  |  | 1,274.4 |  |  | 1,271.6 |  |
Royalty revenue |  | 20.5 |  |  | 19.5 |  |  | 20.3 |  |
Advertising and other revenue |  | 3.7 |  |  | 3.5 |  |  | 3.9 |  |
Total |  | 1,317.4 |  |  | 1,297.4 |  |  | 1,295.8 |  |
Revenue – Heritage Brands Retail |  |  |  |  |  |  |  |  |  |
Net sales |  | 259.2 |  |  | 258.5 |  |  | 258.8 |  |
Royalty revenue |  | 4.0 |  |  | 3.7 |  |  | 2.3 |  |
Advertising and other revenue |  | 0.5 |  |  | 0.4 |  |  | 0.2 |  |
Total |  | 263.7 |  |  | 262.6 |  |  | 261.3 |  |
Total Revenue |  |  |  |  |  |  |  |  |  |
Net sales |  | 9,154.2 |  |  | 8,439.4 |  |  | 7,791.4 |  |
Royalty revenue |  | 375.9 |  |  | 366.3 |  |  | 320.6 |  |
Advertising and other revenue |  | 126.7 |  |  | 109.1 |  |  | 91.1 |  |
Total(2) |  | $ | 9,656.8 |  |  | $ | 8,914.8 |  |  | $ | 8,203.1 |  |
(1) | Revenue was impacted by fluctuations of the United States dollar against foreign currencies in which the Company transacts significant levels of business. Please see section entitled “Results of Operations” in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 of this report for further discussion.
(2) | No single customer accounted for more than 10% of the Company’s revenue in 2018, 2017 or 2016.
The Company’s revenue by distribution channel was as follows:
(In millions) | 2018 |  | 2017 |  | 2016
Wholesale net sales | $ | 4,969.6 |  |  | $ | 4,504.3 |  |  | $ | 4,195.9 |
Retail net sales | 4,184.6 |  |  | 3,935.1 |  |  | 3,595.5 |
Net sales | 9,154.2 |  |  | 8,439.4 |  |  | 7,791.4 |
Royalty revenue | 375.9 |  |  | 366.3 |  |  | 320.6 |
Advertising and other revenue | 126.7 |  |  | 109.1 |  |  | 91.1 |
Total | $ | 9,656.8 |  |  | $ | 8,914.8 |  |  | $ | 8,203.1 |
The Company has not disclosed net sales by product category as it is impracticable to do so. The Company’s income before interest and taxes by segment was as follows:
(In millions) | 2018 |  | (1) |  | 2017 |  | (1) |  | 2016 |  | (1)
Income before interest and taxes – Tommy Hilfiger North America | $ | 233.8 |  |  |  |  | $ | 97.0 |  |  | (5)(6)(7) |  | $ | 135.8 |  |  | (11)
Income before interest and taxes – Tommy Hilfiger International | 377.1 |  |  | (3) |  | 221.5 |  |  | (3)(5)(6) |  | 328.3 |  |  | (12)(13)
Income before interest and taxes – Calvin Klein North America | 166.7 |  |  | (4) |  | 184.0 |  |  |  |  | 123.9 |  |  | (14)
Income before interest and taxes – Calvin Klein International | 211.5 |  |  | (4) |  | 226.5 |  |  |  |  | 209.6 |  |  |
Income before interest and taxes – Heritage Brands Wholesale | 83.3 |  |  |  |  | 96.7 |  |  |  |  | 90.2 |  |  |
Income before interest and taxes – Heritage Brands Retail | 7.4 |  |  |  |  | 7.6 |  |  |  |  | 8.8 |  |  |
Loss before interest and taxes – Corporate(2) | (188.1 | ) |  |  |  | (200.9 | ) |  | (8)(9)(10) |  | (107.4 | ) |  | (15)
Income before interest and taxes | $ | 891.7 |  |  |  |  | $ | 632.4 |  |  |  |  | $ | 789.2 |  |  |
(1) | Income (loss) before interest and taxes was impacted by fluctuations of the United States dollar against foreign currencies in which the Company transacts significant levels of business. Please see section entitled “Results of Operations” in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 of this report for further discussion.
(2) | Includes corporate expenses not allocated to any reportable segments, the Company’s proportionate share of the net income or loss of its investments in Gazal and Karl Lagerfeld and the results of PVH Ethiopia. Corporate expenses represent overhead operating expenses and include expenses for senior corporate management, corporate finance, information technology related to corporate infrastructure, certain digital investments, actuarial gains and losses on the Company’s Pension Plans, SERP Plans and Postretirement Plans and gains and losses from changes in the fair value of foreign currency option contracts. Actuarial (losses) gains on the Company’s Pension Plans, SERP Plans and Postretirement Plans totaled $(15.0) million, $(2.5) million and $39.1 million in 2018, 2017 and 2016, respectively.
(3) | Income before interest and taxes for 2018 and 2017 included costs of $23.6 million and $26.9 million, respectively, associated with the TH China acquisition, primarily consisting of noncash amortization of short-lived assets. Please see Note 3, “Acquisitions,” for further discussion.
(4) | Income before interest and taxes for 2018 included costs of $40.7 million incurred in connection with the Calvin Klein restructuring. Such costs were included in the Company’s segments as follows: $18.9 million in Calvin Klein North America and $21.8 million in Calvin Klein International. Please see Note 17, “Exit Activity Costs,” for further discussion.
(5) | Income before interest and taxes for 2017 included costs of $82.9 million incurred in connection with an amendment to Mr. Tommy Hilfiger’s employment agreement pursuant to which the Company made a cash buyout of a portion of the future payments to Mr. Hilfiger (the “Mr. Hilfiger amendment”). Such costs were included in the Company’s segments as follows: $34.7 million in Tommy Hilfiger North America and $48.2 million in Tommy Hilfiger International.
(6) | Income before interest and taxes for 2017 included costs of $54.2 million associated with the agreements to restructure the Company’s supply chain relationship with Li & Fung Trading Limited (“Li & Fung”), under which the Company terminated its non-exclusive buying agency agreement with Li & Fung in 2017 (the “Li & Fung termination”). Such costs were included in the Company’s segments as follows: $31.3 million in Tommy Hilfiger North America and $22.9 million in Tommy Hilfiger International.
(7) | Income before interest and taxes for 2017 included costs of $19.2 million associated with the relocation of the Tommy Hilfiger office in New York, including noncash depreciation expense.
(8) | Loss before interest and taxes for 2017 included costs of $23.9 million related to the early redemption of the Company’s $700 million 4 1/2% senior notes due 2022. Please see Note 8, “Debt,” for further discussion.
(9) | Loss before interest and taxes for 2017 included net costs of $8.0 million associated with the consolidation within the Company’s warehouse and distribution network in North America, which included a $3.1 million gain on the sale of a warehouse and distribution center.
(10) | Loss before interest and taxes for 2017 included costs of $9.4 million related to the noncash settlement of certain of the Company’s benefit obligations related to its Pension Plans as a result of an annuity purchased for certain participants, under which such obligations were transferred to an insurer. Please see Note 12, “Retirement and Benefit Plans,” for further discussion.
(11) | Income before interest and taxes for 2016 included costs of $11.0 million associated with the early termination of the previous license agreement for the Tommy Hilfiger men’s tailored clothing business in North America (the “TH men’s tailored license termination”) in order to consolidate with Peerless Clothing International, Inc. the Company’s men’s tailored businesses for all of its brands in North America.
(12) | Income before interest and taxes for 2016 included a gain of $18.1 million associated with a payment made to the Company to exit a TOMMY HILFIGER flagship store in Europe.
(13) | Income before interest and taxes for 2016 included a noncash gain of $153.1 million to write up the Company’s equity investment in TH China to fair value in connection with the TH China acquisition. Partially offsetting the gain were acquisition related costs of $76.9 million, principally consisting of valuation adjustments and amortization of short-lived assets, and a one-time cost of $5.9 million recorded on the Company’s equity investment in TH China. Please see Note 3, “Acquisitions,” for further discussion.
(14) | Income before interest and taxes for 2016 included a noncash loss of $81.8 million related to the Mexico deconsolidation, including $56.7 million related to foreign currency translation adjustment losses previously recorded in AOCL. Please see Note 5, “Investments in Unconsolidated Affiliates,” for further discussion.
(15) | Loss before interest and taxes for 2016 included costs of $15.8 million related to the Company’s amendment of its 2014 facilities. Please see Note 8, “Debt,” for further discussion.
Intersegment transactions primarily consist of transfers of inventory principally from the Heritage Brands Wholesale segment to the Heritage Brands Retail segment, the Tommy Hilfiger North America segment and the Calvin Klein North America segment. These transfers are recorded at cost plus a standard markup percentage. Such markup percentage on ending inventory is eliminated principally in the Heritage Brands Retail segment, the Tommy Hilfiger North America segment and the Calvin Klein North America Segment. The Company’s identifiable assets by segment were as follows:
(In millions) |  | 2018 |  | 2017 |  | 2016 |
Identifiable Assets(1) |  |  |  |  |  |  |
Tommy Hilfiger North America |  | $ | 1,330.5 |  |  | $ | 1,276.5 |  |  | $ | 1,229.8 |  |
Tommy Hilfiger International |  | 3,949.3 |  |  | 4,047.3 |  |  | 3,481.3 |  |
Calvin Klein North America |  | 1,817.9 |  |  | 1,836.9 |  |  | 1,752.1 |  |
Calvin Klein International |  | 3,114.9 |  |  | 3,138.0 |  |  | 2,821.0 |  |
Heritage Brands Wholesale |  | 1,178.1 |  |  | 1,123.5 |  |  | 1,203.5 |  |
Heritage Brands Retail |  | 86.6 |  |  | 81.6 |  |  | 75.5 |  |
Corporate(2) |  | 386.4 |  |  | 381.9 |  |  | 504.7 |  |
Total |  | $ | 11,863.7 |  |  | $ | 11,885.7 |  |  | $ | 11,067.9 |  |
Depreciation and Amortization |  |  |  |  |  |  |  |  |  |
Tommy Hilfiger North America |  | $ | 37.9 |  |  | $ | 45.1 |  |  | $ | 35.3 |  |
Tommy Hilfiger International(3) |  | 133.9 |  |  | 124.5 |  |  | 139.2 |  |
Calvin Klein North America |  | 41.5 |  |  | 43.8 |  |  | 47.6 |  |
Calvin Klein International |  | 90.6 |  |  | 83.1 |  |  | 70.5 |  |
Heritage Brands Wholesale |  | 14.9 |  |  | 14.3 |  |  | 15.6 |  |
Heritage Brands Retail |  | 5.6 |  |  | 5.3 |  |  | 5.4 |  |
Corporate |  | 10.4 |  |  | 8.8 |  |  | 8.2 |  |
Total |  | $ | 334.8 |  |  | $ | 324.9 |  |  | $ | 321.8 |  |
Identifiable Capital Expenditures(4) |  |  |  |  |  |  |  |  |  |
Tommy Hilfiger North America(5) |  | $ | 56.1 |  |  | $ | 82.0 |  |  | $ | 26.9 |  |
Tommy Hilfiger International |  | 143.9 |  |  | 126.7 |  |  | 82.0 |  |
Calvin Klein North America |  | 36.0 |  |  | 36.8 |  |  | 39.3 |  |
Calvin Klein International |  | 102.7 |  |  | 96.6 |  |  | 79.5 |  |
Heritage Brands Wholesale |  | 15.8 |  |  | 8.0 |  |  | 14.1 |  |
Heritage Brands Retail |  | 8.5 |  |  | 4.2 |  |  | 7.0 |  |
Corporate |  | 18.3 |  |  | 10.1 |  |  | 8.9 |  |
Total |  | $ | 381.3 |  |  | $ | 364.4 |  |  | $ | 257.7 |  |
(1) | Identifiable assets included the impact of changes in foreign currency exchange rates.
(2) | The changes in Corporate identifiable assets in 2017 were primarily due to changes in cash and cash equivalents.
(3) | Depreciation and amortization in 2018, 2017 and 2016 included $24.6 million, $26.8 million and $47.1 million, respectively, related to the amortization of intangible assets recorded in connection with the TH China acquisition. Please see Note 3, “Acquisitions,” for further discussion.
(4) | Capital expenditures in 2018 included $43.7 million of accruals that will not be paid until 2019. Capital expenditures in 2017 included $41.9 million of accruals that were not paid until 2018. Capital expenditures in 2016 included $35.6 million of accruals that were not paid until 2017.
(5) | The increase in Tommy Hilfiger North America capital expenditures in 2017 was primarily driven by the relocation of the Tommy Hilfiger office in New York.
Property, plant and equipment, net based on the location where such assets are held, was as follows:
(In millions) | 2018 (1) |  | 2017 (1) |  | 2016 (1)
Domestic | $ | 500.5 |  |  | $ | 449.2 |  |  | $ | 412.8 |
Canada | 28.8 |  |  | 30.0 |  |  | 31.0 |
Europe | 362.7 |  |  | 325.5 |  |  | 230.5 |
Asia | 73.4 |  |  | 73.8 |  |  | 66.8 |
Other foreign | 19.1 |  |  | 21.3 |  |  | 18.8 |
Total | $ | 984.5 |  |  | $ | 899.8 |  |  | $ | 759.9 |
(1) | Property, plant and equipment, net included the impact of changes in foreign currency exchange rates.
Revenue, based on location of origin, was as follows:
(In millions) | 2018 (1) |  | 2017 (1) |  | 2016 (1)
Domestic | $ | 4,481.3 |  |  | $ | 4,290.1 |  |  | $ | 4,226.6 |
Canada | 528.8 |  |  | 512.2 |  |  | 484.5 |
Europe | 3,362.1 |  |  | 2,907.2 |  |  | 2,372.7 |
Asia | 1,163.7 |  |  | 1,059.3 |  |  | 910.4 |
Other foreign(2) | 120.9 |  |  | 146.0 |  |  | 208.9 |
Total | $ | 9,656.8 |  |  | $ | 8,914.8 |  |  | $ | 8,203.1 |
(1) | Revenue was impacted by fluctuations of the United States dollar against foreign currencies in which the Company transacts significant levels of business. Please see section entitled “Results of Operations” in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 of this report for further discussion.
(2) | Other foreign revenue in 2017 included the revenue reduction resulting from the Mexico deconsolidation in the fourth quarter of 2016. Please see Note 5, “Investments in Unconsolidated Affiliates,” for further discussion of the Mexico deconsolidation.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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