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, South Africa and China 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. 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 outerwear and swimwear.

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
September 30, 2017
Net sales to external customers	$	300,565	$	76,365	$	376,930	$	64,263		$	—	$	—	$	441,193
Gross profit	102,891		24,877		127,768		38,123			—		—		165,891
Commissions and licensing fees – net	—		—		—		—			2,028		2,718		4,746
Income from operations	52,366		10,301		62,667		(1,970		)	2,028		2,718		65,443
Segment assets	$	790,405	$	139,852	930,257		128,198			12,948		—		1,071,403
Capital expenditures					$	1,348	$	2,690		$	—	$	—	$	4,038
September 30, 2016
Net sales to external customers	$	268,159	$	78,448	$	346,607	$	61,777		$	—	$	—	$	408,384
Gross profit	90,550		26,937		117,487		37,021			—		—		154,508
Commissions and licensing fees – net	—		—		—		—			2,370		2,934		5,304
Income from operations	41,080		15,492		56,572		1,890			2,370		2,934		63,766
Segment assets	$	646,919	$	184,622	831,541		117,604			13,244		—		962,389
Capital expenditures					$	1,693	$	2,800		$	—	$	—	$	4,493

As of and for the nine months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail			First Cost		Licensing		Consolidated
September 30, 2017
Net sales to external customers	$	799,837	$	195,804	$	995,641	$	186,087		$	—	$	—	$	1,181,728
Gross profit	263,368		62,349		325,717		112,288							438,005
Commissions and licensing fees – net	—		—		—		—			4,864		5,974		10,838
Income (loss) from operations	110,791		19,603		130,394		(3,114		)	4,864		5,974		138,118
Segment assets	$	790,405	$	139,852	930,257		128,198			12,948		—		1,071,403
Capital expenditures					$	3,800	$	7,910		$	—	$	—	$	11,710
September 30, 2016
Net sales to external customers	$	692,503	$	192,769	$	885,272	$	177,871		$	—	$	—	$	1,063,143
Gross profit	221,328		64,064		285,392		106,363							391,755
Commissions and licensing fees – net	—		—		—		—			3,832		6,427		10,259
Income from operations	90,239		25,753		115,992		3,285			3,832		6,427		129,536
Segment assets	$	646,919	$	184,622	831,541		117,604			13,244		—		962,389
Capital expenditures					$	4,296	$	8,612		$	—	$	—	$	12,908

Note O – Operating Segment Information (continued)

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



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Domestic (a)	$	388,350	$	360,400	$	1,061,867	$	956,967
International	52,843		47,984		119,861		106,176
Total	$	441,193	$	408,384	$	1,181,728	$	1,063,143
(a) Includes revenues of $87,662 and $258,603 for the three and nine months ended September 30, 2017, respectively, and $86,584 and $252,599 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.