Segment Information

9 Months Ended

Dec. 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 e-commerce sites 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				Nine Months Ended
	December 28, 2013		December 29, 2012		December 28, 2013		December 29, 2012
	(millions)
Net revenues:
Wholesale	$	840	$	733	$	2,503	$	2,342
Retail	1,130		1,062		2,953		2,820
Licensing	45		51		127		139
Total net revenues	$	2,015	$	1,846	$	5,583	$	5,301

	Three Months Ended						Nine Months Ended
	December 28, 2013			December 29, 2012			December 28, 2013			December 29, 2012
	(millions)
Operating income:
Wholesale	$	168		$	146		$	524		$	532
Retail(a)	223			201			518			537
Licensing(b)	34			37			98			101
	425			384			1,140			1,170
Unallocated corporate expenses	(77		)	(76		)	(235		)	(222		)
Gain on acquisition of Chaps(c)	—			—			16			—
Unallocated restructuring and other charges, net(d)	(14		)	(3		)	(16		)	(3		)
Total operating income	$	334		$	305		$	905		$	945

^(a)  During the three-month and nine-month periods ended December 29, 2012, the Company recorded non-cash asset impairment charges of $10 million and $11 million, respectively, to write down certain long-lived assets within its Retail segment, primarily in connection with the Rugby Closure Plan (see Note 9).

^(b)  During the three-month and nine-month periods ended December 29, 2012, the Company recorded non-cash asset impairment charges of $1 million related to the write-off of certain intangible assets in connection with the Rugby Closure Plan (see Note 9).

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

^(d)  The fiscal periods presented included certain unallocated restructuring charges (See Note 10), which are detailed below:

	Three Months Ended						Nine Months Ended
	December 28, 2013			December 29, 2012			December 28, 2013			December 29, 2012
	(millions)
Restructuring and other charges:
Restructuring charges, net:
Retail-related	$	—		$	(2	)	$	—		$	(2	)
Corporate operations-related	(4		)	(1		)	(6		)	(1		)
Unallocated restructuring charges, net	(4		)	(3		)	(6		)	(3		)
Other charges (see Note 10)	(10		)	—			(10		)	—
Total restructuring and other charges	$	(14	)	$	(3	)	$	(16	)	$	(3	)

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

	Three Months Ended				Nine Months Ended
	December 28, 2013		December 29, 2012		December 28, 2013		December 29, 2012
	(millions)
Depreciation and amortization:
Wholesale	$	18	$	18	$	53	$	52
Retail	32		31		91		87
Licensing	—		1		—		1
Unallocated corporate expenses	17		11		49		34
Total depreciation and amortization	$	67	$	61	$	193	$	174

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

	Three Months Ended				Nine Months Ended
	December 28, 2013		December 29, 2012		December 28, 2013		December 29, 2012
	(millions)
Net revenues(a):
The Americas(b)	$	1,386	$	1,261	$	3,836	$	3,557
Europe	395		352		1,120		1,063
Asia(c)	234		233		627		681
Total net revenues	$	2,015	$	1,846	$	5,583	$	5,301

^(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 $1.320 billion and $3.656 billion during the three-month and nine-month periods endedDecember 28, 2013, respectively, and $1.204 billion and $3.410 billion during the three-month and nine-month periods endedDecember 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 December 28, 2013 included $230 million of property and equipment related 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.