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SEGMENT INFORMATION
 6 Months Ended
Jul. 05, 2014
SEGMENT INFORMATION  
SEGMENT INFORMATION

9. SEGMENT INFORMATION

 

The Company manages its business primarily on a geographic basis. The Company’s reportable operating segments are comprised of North America wholesale, Europe wholesale, Asia Pacific wholesale and Direct to consumer. The North America wholesale, Europe wholesale and Asia Pacific wholesale reportable segments do not include activities related to the Direct to consumer segment. The North America wholesale segment primarily includes sales to wholesale or distributor customers based in Canada, Mexico, the United States and countries in South America. The Europe wholesale segment primarily includes sales to wholesale or distributor customers based in European countries, the Middle East and Africa. The Asia Pacific wholesale segment primarily includes sales to wholesale or distributor customers based in Australia, China (including the Company’s assembly and procurement operations), India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea, Taiwan and Thailand. The Direct to consumer segment includes Company-owned retail stores, e-commerce activities and catalog costs. Each reportable operating segment provides similar products and services.

 

The Company evaluates the performance of its reportable segments based on net sales and operating income. Net sales for geographic segments are generally based on the location of the customers. Operating income for each segment includes net sales to third-parties, related cost of sales and operating expenses directly attributable to the segment. General corporate expenses, including certain administrative, legal, accounting, technology support costs, equity compensation costs, payroll costs attributable to executive management and amounts related to intercompany eliminations are not allocated to the various segments. Intercompany sales of products between segments are referred to as intersegment items. Intercompany profit attributable to the Company’s factory operations is included in the Asia Pacific wholesale and Europe wholesale segments in accordance with the geographic location of the factories. These intercompany factory profits are eliminated in consolidation.

 

Summary information by operating segment was as follows (in thousands):

 

 

 

For the 13 Weeks Ended

 

For the 13 Weeks Ended

 

 

 

July 5, 2014

 

June 29, 2013

 

 

 

Net Sales

 

Operating
Income

 

Net Sales

 

Operating
Income

 

 

 

 

 

 

 

 

 

 

 

North America wholesale:

 

 

 

 

 

 

 

 

 

External customers

 

$

265,223

 

$

50,912

 

$

260,692

 

$

66,321

 

Intersegment

 

42,778

 

 

 

49,016

 

 

 

Europe wholesale:

 

 

 

 

 

 

 

 

 

External customers

 

202,377

 

43,762

 

170,759

 

36,451

 

Intersegment

 

50,392

 

 

 

38,713

 

 

 

Asia Pacific wholesale:

 

 

 

 

 

 

 

 

 

External customers

 

105,731

 

31,508

 

96,187

 

30,473

 

Intersegment

 

252,137

 

 

 

252,894

 

 

 

Direct to consumer

 

200,489

 

9,746

 

178,611

 

16,105

 

Intersegment items

 

(345,307

)

 

 

(340,623

)

 

 

Corporate

 

 

 

(51,170

)

 

 

(42,402

)

Consolidated

 

$

773,820

 

$

84,758

 

$

706,249

 

$

106,948

 

 

 

 

For the 27 Weeks Ended

 

For the 26 Weeks Ended

 

 

 

July 5, 2014

 

June 29, 2013

 

 

 

Net Sales

 

Operating
Income

 

Net Sales

 

Operating
Income

 

 

 

 

 

 

 

 

 

 

 

North America wholesale:

 

 

 

 

 

 

 

 

 

External customers

 

$

538,019

 

$

103,791

 

$

515,858

 

$

126,729

 

Intersegment

 

90,969

 

 

 

94,962

 

 

 

Europe wholesale:

 

 

 

 

 

 

 

 

 

External customers

 

408,041

 

95,722

 

344,663

 

74,998

 

Intersegment

 

99,590

 

 

 

79,401

 

 

 

Asia Pacific wholesale:

 

 

 

 

 

 

 

 

 

External customers

 

209,291

 

62,628

 

182,963

 

58,023

 

Intersegment

 

496,284

 

 

 

455,090

 

 

 

Direct to consumer

 

395,014

 

26,032

 

343,664

 

23,217

 

Intersegment items

 

(686,843

)

 

 

(629,453

)

 

 

Corporate

 

 

 

(98,716

)

 

 

(81,698

)

Consolidated

 

$

1,550,365

 

$

189,457

 

$

1,387,148

 

$

201,269

 

 

The following tables reflect net sales for each class of similar products in the periods presented (in thousands, except percentage data):

 

 

 

For the 13 Weeks Ended
July 5, 2014

 

For the 13 Weeks Ended
June 29, 2013

 

 

 

Net Sales

 

Percentage of
Total

 

Net Sales

 

Percentage of
Total

 

 

 

 

 

 

 

 

 

 

 

Watches

 

$

611,208

 

79.0

%

$

547,225

 

77.5

%

Leathers

 

87,325

 

11.3

 

91,748

 

13.0

 

Jewelry

 

56,183

 

7.2

 

47,042

 

6.7

 

Other

 

19,104

 

2.5

 

20,234

 

2.8

 

Total

 

$

773,820

 

100.0

%

$

706,249

 

100.0

%

 

 

 

For the 27 Weeks Ended
July 5, 2014

 

For the 26 Weeks Ended
June 29, 2013

 

 

 

Net Sales

 

Percentage of
Total

 

Net Sales

 

Percentage of
Total

 

 

 

 

 

 

 

 

 

 

 

Watches

 

$

1,212,596

 

78.2

%

$

1,060,242

 

76.4

%

Leathers

 

187,047

 

12.1

 

194,536

 

14.0

 

Jewelry

 

112,701

 

7.3

 

89,356

 

6.5

 

Other

 

38,021

 

2.4

 

43,014

 

3.1

 

Total

 

$

1,550,365

 

100.0

%

$

1,387,148

 

100.0

%