SEGMENT INFORMATION

6 Months Ended

Aug. 03, 2019

In accordance with FASB ASC 280---Segment Reporting, the Company reports segment data based on geography: The Children’s Place U.S. and The Children’s Place International. Each segment includes an e-commerce business located at www.childrensplace.com. Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico-based stores and revenue from the Company's U.S.-based wholesale business. Included in The Children's Place International segment are the Company's Canadian-based stores, revenue from the Company's Canadian wholesale business, and revenue from international franchisees. The Company measures its segment profitability based on operating income, defined as income before interest and taxes. Net sales and direct costs are recorded by each segment. Certain inventory procurement functions such as production and design as well as corporate overhead, including executive management, finance, real estate, human resources, legal, and information technology services are managed by The Children’s Place U.S. segment. Expenses related to these functions, including depreciation and amortization, are allocated to The Children’s Place International segment based primarily on net sales. The assets related to these functions are not allocated. The Company periodically reviews these allocations and adjusts them based upon changes in business circumstances. Net sales to external customers are derived from merchandise sales, and the Company has no major customers that account for more than 10% of its net sales. As of August 3, 2019, The Children’s Place U.S. owned and operated 840 stores and The Children’s Place International owned and operated 121 stores. As of August 4, 2018, The Children’s Place U.S. owned and operated 866 stores and The Children’s Place International owned and operated 126 stores.

The following tables provide segment level financial information:



	Thirteen Weeks Ended						Twenty-six Weeks Ended
	August 3, 2019			August 4, 2018			August 3, 2019			August 4, 2018
	(In thousands)
Net sales:
The Children’s Place U.S.	$	374,725		$	399,299		$	749,381		$	795,077
The Children’s Place International ⁽¹⁾	45,745			49,419			83,470			89,954
Total net sales	$	420,470		$	448,718		$	832,851		$	885,031
Operating income:
The Children’s Place U.S.	$	3,433		$	6,286		$	7,593		$	26,675
The Children’s Place International	403			3,736			1,280			6,405
Total operating income	$	3,836		$	10,022		$	8,873		$	33,080
Operating income as a percent of net sales:
The Children’s Place U.S.	0.9		%	1.6		%	1.0		%	3.4		%
The Children’s Place International	0.9		%	7.6		%	1.5		%	7.1		%
Total operating income as a percent of net sales	0.9		%	2.2		%	1.1		%	3.7		%
Depreciation and amortization:
The Children’s Place U.S.	$	16,621		$	14,863		$	33,330		$	30,404
The Children’s Place International	1,851			1,732			3,726			3,597
Total depreciation and amortization	$	18,472		$	16,595		$	37,056		$	34,001
Capital expenditures:
The Children’s Place U.S.	$	10,615		$	16,376		$	21,415		$	27,222
The Children’s Place International	216			405			425			624
Total capital expenditures	$	10,831		$	16,781		$	21,840		$	27,846

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⁽¹⁾	Net sales from The Children's Place International are primarily derived from revenues from Canadian operations.



	August 3, 2019		February 2, 2019		August 4, 2018
Total assets:	(In thousands)
The Children’s Place U.S.	$	1,195,038	$	651,728	$	781,336
The Children’s Place International	108,499		75,318		73,008
Total assets	$	1,303,537	$	727,046	$	854,344