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SEGMENT INFORMATION
 12 Months Ended
Dec. 28, 2024
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
The Company reports segment information based upon a “management approach.” The management approach refers to the internal reporting that is used by management for making operating decisions and assessing the performance of the Company’s reportable segments.
The Company has identified three operating and reportable segments: U.S. Retail, U.S. Wholesale, and International. The U.S. Retail segment consists of revenue primarily from sales of products in the United States through our retail stores and eCommerce websites. Similarly, the U.S. Wholesale segment consists of revenue primarily from sales in the United States of products to our wholesale partners. The International segment consists of revenue primarily from sales of products outside the United States, largely through our retail stores and eCommerce websites in Canada and Mexico, and sales to our international wholesale customers and licensees. The Company sells similar products in each of its three segments.
The Company’s chief operating decision maker is the Chief Executive Officer. The chief operating decision maker evaluates the operating performance of the segments based upon each segment’s net sales and segment operating income. Segment operating income includes net sales, royalty income, and related cost of goods sold and selling, general, and administrative expenses attributable to each segment. Segment operating income excludes unallocated corporate expenses as well as specific charges that are not directly attributable to segment operations, including restructuring costs and impairment charges related to goodwill and indefinite-lived intangible assets.
In fiscal 2024, the Company changed its measure of segment profitability to segment operating income, which excludes the charges mentioned above, and which were included in our previous measure of segment profitability, to better align with management’s assessment of segment performance and to provide better insights into segment performance. Prior period segment operating income for the fiscal years ended December 30, 2023 and December 31, 2022 has been recast to conform to the current presentation.
The chief operating decision maker uses both net sales and segment operating income for each segment predominantly in the annual budget and quarterly forecasting process. On a quarterly basis, the chief operating decision maker considers budget-to-actual variances and a comparison of segment results for evaluating performance of each segment and making decisions about the allocation of operating and capital resources to each segment. The Company does not evaluate performance or allocate resources based on segment asset data, and therefore total segments assets are not presented.
Segment operating income include the direct costs of each segment and all other costs are allocated based upon detailed estimates and analysis of actual time and expenses incurred to support the operations of each segment or units produced or sourced to support each segment’s revenue. Certain costs, including incentive compensation for certain employees, and various other general corporate costs that are not specifically allocable to segments, are included in unallocated corporate expenses below. Intersegment sales are treated as a transfer of inventory and are not included in segment results for management reporting. The accounting policies of the segments are the same as those described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements.
Segment Performance
The tables below present certain segment information for our reportable segments for the periods indicated:
Fiscal year ended December 28, 2024
(dollars in thousands)U.S. RetailU.S. WholesaleInternationalTotal
Net sales$1,417,108 $1,021,396 $405,598 $2,844,102 
Cost of goods sold(1)
567,435 705,550 205,951 1,478,936 
Selling expenses(2)
489,481 9,591 103,566 602,638 
Distribution expenses(3)
89,368 62,875 24,607 176,850 
Other segment items(4)
137,898 26,400 32,504 196,802 
Segment operating income$132,926 $216,980 $38,970 $388,876 
(1)Refer to Note 2, Summary of Significant Accounting Policies for additional information on the components of Cost of goods sold.
(2)Selling expenses include the costs of operating our retail stores and eCommerce channels, as well as wholesale sales management costs.
(3)Distribution expenses include payments to third-party shippers and handling costs to process product through our distribution facilities, including eCommerce fulfillment costs, and delivery to our wholesale customers and to our retail stores.
(4)Other segment items include royalty income and overhead costs that are attributable to our reportable segments and include allocated accounting, finance, human resources, and information technology expenses, occupancy costs, and other benefit and compensation programs, including performance-based compensation.
Fiscal year ended December 30, 2023
(dollars in thousands)U.S. RetailU.S. WholesaleInternationalTotal
Net sales$1,501,780 $1,014,584 $429,230 $2,945,594 
Cost of goods sold602,152 717,936 229,571 1,549,659 
Selling expenses506,709 8,363 95,155 610,227 
Distribution expenses95,354 63,188 24,903 183,445 
Other segment items106,923 26,152 34,470 167,545 
Segment operating income$190,642 $198,945 $45,131 $434,718 
Fiscal year ended December 31, 2022
(dollars in thousands)U.S. RetailU.S. WholesaleInternationalTotal
Net sales$1,680,159 $1,080,471 $452,103 $3,212,733 
Cost of goods sold689,543 800,974 249,858 1,740,375 
Selling expenses521,516 9,402 89,452 620,370 
Distribution expenses113,455 78,079 24,653 216,187 
Other segment items102,788 24,777 28,462 156,027 
Segment operating income$252,857 $167,239 $59,678 $479,774 
The table below presents a reconciliation of reportable segment operating income to Income before income taxes:
Fiscal year ended
December 28, 2024December 30, 2023December 31, 2022
Total segment operating income$388,876 $434,718 $479,774 
Items not included in segment operating income:
Unallocated corporate expenses(1)
(102,326)(106,901)(91,603)
Organizational restructuring(2)
(1,822)(4,412)— 
OshKosh tradename impairment charge
(30,000)— — 
Skip Hop tradename impairment charge
— — (9,000)
Consolidated operating income$254,728 $323,405 $379,171 
Interest expense31,331 33,973 42,781 
Interest income(11,039)(4,776)(1,261)
Other expense (income), net3,627 (8,034)975 
Loss on extinguishment of debt— — 19,940 
Income before income taxes$230,809 $302,242 $316,736 
(1)Unallocated corporate expenses include corporate overhead expenses that are not directly attributable to one of our reportable segments and include unallocated accounting, finance, legal, human resources, and information technology expenses, occupancy costs for our corporate headquarters, and other benefit and compensation programs, including performance-based compensation.
(2)Related to charges for corporate organizational restructuring in the fiscal year ended December 28, 2024 and organizational restructuring and related corporate office lease amendment actions in the fiscal year ended December 30, 2023.
Additional Data by Segment
The tables below present additional information for our reportable segments for the periods presented:
Depreciation and amortization expense
Fiscal year ended
December 28, 2024December 30, 2023December 31, 2022
U.S. Wholesale$8,749 $10,958 $13,415 
U.S. Retail35,562 38,710 39,975 
International11,413 11,758 11,695 
Unallocated corporate2,202 2,713 191 
Total57,926 64,139 65,276 
Inventory
December 28, 2024December 30, 2023
Inventory:
U.S. Wholesale(*)
$374,610 $381,146 
U.S. Retail59,868 73,366 
International67,854 82,613 
Total inventory$502,332 $537,125 
All other assets1,930,835 1,841,488 
Total assets$2,433,167 $2,378,613 
(*)U.S. Wholesale inventories also include inventory produced and warehoused for the U.S. Retail segment.
Net Sales
The table below represents consolidated net sales by product:
Fiscal year ended
(dollars in thousands)December 28, 2024December 30, 2023December 31, 2022
Baby$1,139,129 $1,098,304 $1,103,023 
Playclothes948,602 992,726 1,125,352 
Sleepwear373,373 411,678 492,152 
Other(*)
382,998 442,886 492,206 
Total net sales$2,844,102 $2,945,594 $3,212,733 
(*)Other product offerings include bedding, outerwear, swimwear, shoes, socks, diaper bags, gift sets, toys, and hair accessories.
Geographical Data
Revenue
The Company’s international sales principally represent sales to customers in Canada. Such sales were 61.3%, 61.5%, and 64.0% of total international net sales in fiscal 2024, 2023, and 2022, respectively.
Long-Lived Assets
The following represents Property, plant, and equipment, net, and Operating lease assets by geographic area:
(dollars in thousands)December 28, 2024December 30, 2023
United States$614,751 $582,049 
International143,338 129,469 
     Total$758,089 $711,518 
Long-lived assets in the international segment primarily relate to Canada. Long-lived assets in Canada were 53.8% and 51.0% of total international long-lived assets as of December 28, 2024 and December 30, 2023, respectively.
Major Customers
Our two largest U.S. wholesale customers accounted for 10.9% and 10.1%, respectively, of consolidated net sales in fiscal 2024. Our largest U.S. wholesale customer accounted for 10.4% of consolidated net sales in fiscal 2023. Sales to these customers did not exceed 10% in fiscal 2022.