Segment Information

6 Months Ended

Sep. 28, 2013

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company has three reportable segments based on its business activities and organization: Wholesale, Retail, and Licensing. These segments offer a variety of products through different channels of distribution. The Wholesale segment consists of women’s, men’s, and children’s apparel, accessories, home furnishings, and related products which are sold to major department stores, specialty stores, golf and pro shops, and the Company’s owned, licensed, and franchised retail stores in the U.S. and overseas. The Retail segment consists of the Company’s integrated worldwide retail operations, which sell products through its retail stores, its concession-based shop-within-shops, and its e-commerce sites. The stores, concession-based shop-within-shops, and websites sell products purchased from the Company’s licensees, suppliers, and Wholesale segment. The Licensing segment generates revenues from royalties earned on the sale of the Company’s apparel, home, and other products internationally and domestically through licensing alliances. The licensing agreements grant the licensees rights to use the Company’s various trademarks in connection with the manufacture and sale of designated products in specified geographic areas for specified periods.

The accounting policies of the Company’s segments are consistent with those described in Notes 2 and 3 to the Company’s consolidated financial statements included in the Fiscal 2013 10-K. Sales and transfers between segments are generally recorded at cost and treated as transfers of inventory. All intercompany revenues, including such sales between segments, are eliminated in consolidation and are not reviewed when evaluating segment performance. Each segment’s performance is evaluated based upon operating income before restructuring charges and certain other one-time items, such as legal charges, if any. Corporate overhead expenses (exclusive of certain expenses for senior management, overall brand-related expenses, and certain other corporate-related expenses) are allocated to the segments based upon specific usage or other allocation methods, as appropriate.

Net revenues and operating income for each of the Company’s segments are as follows:

	Three Months Ended				Six Months Ended
	September 28, 2013		September 29, 2012		September 28, 2013		September 29, 2012
	(millions)
Net revenues:
Wholesale	$	928	$	915	$	1,663	$	1,609
Retail	944		901		1,823		1,758
Licensing	43		46		82		88
Total net revenues	$	1,915	$	1,862	$	3,568	$	3,455

	Three Months Ended						Six Months Ended
	September 28, 2013			September 29, 2012			September 28, 2013			September 29, 2012
	(millions)
Operating income:
Wholesale	$	202		$	232		$	356		$	386
Retail	135			157			295			336
Licensing	35			35			64			64
	372			424			715			786
Unallocated corporate expenses	(77		)	(76		)	(160		)	(146		)
Gain on acquisition of Chaps(a)	—			—			16			—
Total operating income	$	295		$	348		$	571		$	640

^(a)  See Note 5 for further discussion of the gain on acquisition of Chaps.

Depreciation and amortization expense for the Company’s segments is as follows:

	Three Months Ended				Six Months Ended
	September 28, 2013		September 29, 2012		September 28, 2013		September 29, 2012
	(millions)
Depreciation and amortization:
Wholesale	$	18	$	17	$	35	$	34
Retail	31		29		59		56
Unallocated corporate expenses	17		11		32		23
Total depreciation and amortization	$	66	$	57	$	126	$	113

Net revenues by geographic location of the reporting subsidiary are as follows:

	Three Months Ended				Six Months Ended
	September 28, 2013		September 29, 2012		September 28, 2013		September 29, 2012
	(millions)
Net revenues(a):
The Americas(b)	$	1,296	$	1,221	$	2,450	$	2,296
Europe	415		411		725		711
Asia(c)	204		230		393		448
Total net revenues	$	1,915	$	1,862	$	3,568	$	3,455

^(a)  Net revenues for certain of the Company’s licensed operations are included within the geographic location of the reporting subsidiary which holds the respective license.

^(b)  Includes net revenues earned in the U.S., Canada, and Latin America. Net revenues earned in the U.S. were $1.231 billion and $2.336 billion during the three-month and six-month periods endedSeptember 28, 2013, respectively, and $1.169 billion and $2.206 billion during the three-month and six-month periods endedSeptember 29, 2012, respectively.

^(c)  Includes net revenues earned in South Korea, Japan, China, Hong Kong, Macau, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Vietnam, Australia, and New Zealand.

The Company's total assets as of September 28, 2013 included $230 million recorded within property and equipment, relating to a lease for a new flagship store on Fifth Avenue in New York City, recorded within the Company's Retail segment. The Company's assets are also subject to seasonal fluctuations in the normal course of business.