Operating Segment Information

The Company operates the following business segments: Wholesale Footwear, Wholesale Accessories, Retail, First Cost and Licensing. The Wholesale Footwear segment, through sales to department stores, mid-tier retailers, mass market merchants, online retailers and specialty stores, derives revenue, both domestically and internationally (via our International business), from sales of branded and private label women’s, men’s, girls’ and children’s footwear. The Wholesale Accessories segment, which includes branded and private label handbags, belts and small leather goods as well as cold weather and selected other fashion accessories, derives revenue, both domestically and worldwide (via our International business), from sales to department stores, mid-tier retailers, mass market merchants, online retailers and specialty stores. Our Wholesale Footwear and Wholesale Accessories segments, through our International business, derive revenue from territories within Asia, Albania, Austria, Belgium, Bulgaria, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Ireland, Kosovo, Lithuania, Latvia, Luxembourg, Mexico, the Netherlands, Norway, Poland, Romania, Russia, Slovakia, Slovenia, Sweden, Switzerland, and Tunisia and, under special distribution arrangements in various other territories within Australia, the Middle East, India, South and Central America and New Zealand. The Retail segment, through the operation of Company-owned retail stores in the United States, Canada, Mexico and South Africa and the Company’s websites, derives revenue from sales of branded women’s, men’s and children’s footwear, accessories and licensed products to consumers. The First Cost segment represents activities of a subsidiary that earns commissions and design fees for serving as a buying agent of footwear products to mass-market merchandisers, mid-tier department stores and other retailers with respect to their purchase of footwear. In the Licensing segment, the Company generates revenue by licensing its Steve Madden®, Steven by Steve Madden® and Madden Girl® trademarks and other trademark rights for use in connection with the manufacture, marketing and sale of eyewear, outerwear, hosiery, activewear, sleepwear, jewelry, watches, hair accessories, umbrellas, bedding, luggage, and men’s leather accessories. The Company licenses its Stevies® trademark for use in connection with the manufacture, marketing and sale of outerwear exclusively to Target. In addition, this segment licenses the Betsey Johnson® trademark for use in connection with the manufacture, marketing and sale of women's and children's apparel, hosiery, swimwear, outerwear, sleepwear, activewear, jewelry, watches, bedding, luggage, stationery, umbrellas, and household goods; and furthermore, licenses the Dolce Vita® trademark for use in connection with the manufacture, marketing and sale of women's and children’s apparel.

Note O – Operating Segment Information (continued)



As of and for the three months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail			First Cost		Licensing		Consolidated
June 30, 2017
Net sales to external customers	$	238,123	$	67,487	$	305,610	$	68,538		$	—	$	—	$	374,148
Gross profit	75,160		21,359		96,519		42,878			—		—		139,397
Commissions and licensing fees – net	—		—		—		—			1,303		863		2,166
Income from operations	27,701		6,932		34,633		5,098			1,303		863		41,897
Segment assets	$	782,775	$	106,484	889,259		107,244			16,161		—		1,012,664
Capital expenditures					$	2,963	$	1,416		$	—	$	—	$	4,379
June 30, 2016
Net sales to external customers	$	195,424	$	67,442	$	262,866	$	62,536		$	—	$	—	$	325,402
Gross profit	59,856		21,922		81,778		39,267			—		—		121,045
Commissions and licensing fees – net	—		—		—		—			877		1,907		2,784
Income from operations	20,229		8,347		28,576		4,530			877		1,907		35,890
Segment assets	$	620,550	$	190,752	811,302		109,022			20,863		—		941,187
Capital expenditures					$	1,173	$	2,845		$	—	$	—	$	4,018

As of and for the six months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail			First Cost		Licensing		Consolidated
June 30, 2017
Net sales to external customers	$	499,272	$	119,439	$	618,711	$	121,824		$	—	$	—	$	740,535
Gross profit	160,478		37,472		197,950		74,165							272,115
Commissions and licensing fees – net	—		—		—		—			2,836		3,256		6,092
Income (loss) from operations	58,426		9,302		67,728		(1,144		)	2,836		3,256		72,676
Segment assets	$	782,775	$	106,484	889,259		107,244			16,161		—		1,012,664
Capital expenditures					$	4,865	$	2,807		$	—	$	—	$	7,672
June 30, 2016
Net sales to external customers	$	424,344	$	114,321	$	538,665	$	116,094		$	—	$	—	$	654,759
Gross profit	130,778		37,127		167,905		69,342							237,247
Commissions and licensing fees – net	—		—		—		—			1,462		3,493		4,955
Income from operations	49,159		10,261		59,420		1,395			1,462		3,493		65,770
Segment assets	$	620,550	$	190,752	811,302		109,022			20,863		—		941,187
Capital expenditures					$	2,590	$	5,812		$	—	$	—	$	8,402

Note O – Operating Segment Information (continued)

Revenues by geographic area for the three and six months ended June 30, 2017 and 2016 are as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Domestic (a)	$	342,473	$	297,279	$	673,869	$	596,567
International	31,675		28,123		66,666		58,192
Total	$	374,148	$	325,402	$	740,535	$	654,759
(a) Includes revenues of $86,891 and $170,941 for the three and six months ended June 30, 2017, respectively, and $74,379 and $166,015 for the comparable periods in 2016 related to sales to U.S. customers where the title is transferred outside the U.S. and the sale is recorded by our international business.