Segment Information

12 Months Ended

Jan. 31, 2016

Segment Information [Abstract]

Segment Information

Note 2 — Segment Information 

Our operating and reportable segments are Company Stores, Domestic Franchise, International Franchise and KK Supply Chain.

The Company Stores segment is comprised of the stores owned and operated by us.These stores sell doughnuts and complementary products through both on-premises and CPG channels, although some stores serve only one of these distribution channels.

The Domestic Franchise and International Franchise segments consist of our franchise operations.Under the terms of franchise agreements, domestic and international franchisees pay royalties and fees to us in return for the use of the Krispy Kreme trademark and ongoing brand and operational support.Revenues and costs related to licensing certain Company-owned trademarks to domestic third parties other than franchisees also are included in the Domestic Franchise segment.Expenses for these segments include costs to recruit new franchisees, to assist in store openings, to support franchisee operations and marketing efforts, as well as allocated corporate costs.

The majority of the ingredients and materials used by Company Stores are purchased from the KK Supply Chain segment, which supplies doughnut mix, other ingredients and supplies and doughnut making equipment to both Company and franchisee-owned stores.All intercompany sales by the KK Supply Chain segment to the Company Stores segment are at prices intended to reflect an arms-length transfer price and are eliminated in consolidation.Operating income for the Company Stores segment does not include any profit earned by the KK Supply Chain segment on sales of doughnut mix and other items to the Company Stores segment; such profit is included in KK Supply Chain operating income.

The following table presents the results of operations of our operating and reportable segments for fiscal 2016, 2015 and 2014.Segment operating income is consolidated operating income before general and administrative expenses, corporate depreciation and amortization expense, impairment charges and lease termination costs, pre-opening costs related to Company Stores, gains and losses on commodity derivatives, net and gain on refranchisings, net of business acquisition charges.

	Year Ended
	January 31,			February 1,			February 2,
	2016			2015			2014
	(In thousands)
Revenues:
Company Stores	$	349,495		$	325,306		$	306,825
Domestic Franchise		15,498			13,450			11,839
International Franchise		27,736			28,598			25,607
KK Supply Chain:
Total revenues		254,540			244,688			231,229
Less – intersegment sales elimination		(128,555	)		(121,708	)		(115,169	)
External KK Supply Chain revenues		125,985			122,980			116,060
Total revenues	$	518,714		$	490,334		$	460,331
Operating income:
Company Stores	$	15,500		$	12,222		$	11,021
Domestic Franchise		9,724			8,065			6,416
International Franchise		20,354			20,026			17,977
KK Supply Chain		44,841			42,726			38,412
Total segment operating income		90,419			83,039			73,826
General and administrative expenses		(27,646	)		(28,558	)		(25,149	)
Corporate depreciation and amortization expense		(2,385	)		(1,489	)		(1,254	)
Impairment charges and lease termination costs		(4,723	)		(955	)		(1,374	)
Pre-opening costs related to Company Stores		(2,667	)		(2,530	)		(563	)
Gains and (losses) on commodity derivatives, net		(900	)		(2,124	)		(1,459	)
Gain on refranchisings, net of business acquisition charges		-			854			2,543
Consolidated operating income	$	52,098		$	48,237		$	46,570
Depreciation and amortization expense:
Company Stores	$	12,736		$	10,534		$	9,039
Domestic Franchise		65			135			119
International Franchise		-			5			7
KK Supply Chain		1,013			677			687
Corporate		2,385			1,489			1,254
Total depreciation and amortization expense	$	16,199		$	12,840		$	11,106

     Segment information for total assets and capital expenditures is not presented as such information is not used in measuring segment performance or allocating resources among segments.

     Revenues for fiscal 2016, 2015 and 2014 include approximately $49 million, $52 million and $48 million, respectively, from customers outside the United States.