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 and pursuant to a partnership agreement in Singapore. The Retail segment, through the operation of Company-owned retail stores in the United States, Canada and Mexico, our joint ventures in South Africa, China and Taiwan 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,

Note O – Operating Segment Information (continued)

jewelry, watches, bedding, luggage, stationery, umbrellas, and household goods. The Licensing segment also licenses the Dolce Vita® trademark for use in connection with the manufacture, marketing and sale of women's and children’s outerwear and swimwear.



As of and for the three months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail			First Cost		Licensing		Consolidated
September 30, 2018
Net sales to external customers	$	297,266	$	91,278	$	388,544	$	69,938		$	—	$	—	$	458,482
Gross profit	103,380		29,806		133,186		42,031			—		—		175,217
Commissions and licensing fees – net	—		—		—					2,390		2,604		4,994
Income/(loss) from operations	53,286		14,001		67,287		(2,077		)	2,390		2,604		70,204
Segment assets	$	777,027	$	204,165	981,192		122,635			21,232		—		1,125,059
Capital expenditures					$	1,899	$	1,014		$	—	$	—	$	2,913
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/(loss) 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

As of and for the nine months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail			First Cost		Licensing		Consolidated
September 30, 2018
Net sales to external customers	$	824,456	$	216,648	$	1,041,104	$	202,145		$	—	$	—	$	1,243,249
Gross profit	272,624		69,466		342,090		121,634			—		—		463,724
Commissions and licensing fees – net	—		—		—		—			3,881		7,016		10,897
Income/(loss) from operations	120,579		22,927		143,506		(6,058		)	3,881		7,016		148,345
Segment assets	$	777,027	$	204,165	981,192		122,635			21,232		—		1,125,059
Capital expenditures					$	4,671	$	3,493		$	—	$	—	$	8,164
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

Note O – Operating Segment Information (continued)

Revenues by geographic area for the three and nine months ended September 30, 2018 and 2017 are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Domestic (a)	$	393,068	$	388,350	$	1,090,561	$	1,061,867
International	65,414		52,843		152,688		119,861
Total	$	458,482	$	441,193	$	1,243,249	$	1,181,728
(a) Includes revenues of $69,078 and $259,766 for the three and nine months ended September 30, 2018, respectively, and $87,662 and $258,603 for the comparable periods in 2017 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.