Business Segment Information

12 Months Ended

Jan. 28, 2017

Segment Reporting [Abstract]

Business Segment Information

.    BUSINESS SEGMENT INFORMATION

The Company's reportable segments are Famous Footwear and Brand Portfolio.

The Famous Footwear segment is comprised of Famous Footwear and Famous.com. In addition, Shoes.com was included through December 12, 2014 (the date of sale). Famous Footwear operated 1,055 stores at the end of 2016, primarily selling branded footwear for the entire family.

The Brand Portfolio segment is comprised of our branded footwear, our branded retail stores and e-commerce sites associated with those brands. This segment sources and markets licensed, branded and private-label footwear primarily to national chains, online retailers, department stores, mass merchandisers, independent retailers and catalogs as well as Company-owned Famous Footwear, Naturalizer, Sam Edelman and Allen Edmonds stores, and e-commerce businesses. The Brand Portfolio segment included 148 branded retail stores in the United States, 85 branded retail stores in Canada and one branded retail store in Italy at the end of 2016.

The Company’s Famous Footwear and Brand Portfolio reportable segments are operating units that are managed separately. An operating segment’s performance is evaluated and resources are allocated based primarily on operating earnings (loss). Operating earnings (loss) represent gross profit, less selling and administrative expenses and restructuring and other special charges, net. The accounting policies of the reportable segments are the same as those described in Note 1 to the consolidated financial statements. Intersegment sales are generally recorded at a profit to the selling segment. All intersegment earnings related to inventory on hand at the purchasing segment are eliminated against the earnings of the selling segment.

Corporate assets, administrative expenses, and other costs and recoveries that are not allocated to the operating units are reported in the Other category.

Following is a summary of certain key financial measures for the respective periods:

($ thousands)	Famous Footwear		Brand Portfolio		Other			Total
Fiscal 2016
External sales	$	1,590,065	$	989,323	$	—		$	2,579,388
Intersegment sales	—		91,415		—			91,415
Depreciation and amortization	27,832		11,028		17,271			56,131
Operating earnings (loss)	83,735		76,248		(48,998		)	110,985
Segment assets	526,555		838,328		110,390			1,475,273
Purchases of property and equipment	37,697		8,828		3,998			50,523
Capitalized software	3,468		50		5,521			9,039
Fiscal 2015
External sales	$	1,572,665	$	1,004,765	$	—		$	2,577,430
Intersegment sales	—		100,186		—			100,186
Depreciation and amortization	25,842		9,339		16,258			51,439
Operating earnings (loss)	109,030		66,578		(40,501		)	135,107
Segment assets	542,842		534,137		226,344			1,303,323
Purchases of property and equipment	48,761		18,340		6,378			73,479
Capitalized software	2,538		—		5,197			7,735
Fiscal 2014
External sales	$	1,589,258	$	982,451	$	—		$	2,571,709
Intersegment sales	—		114,408		—			114,408
Depreciation and amortization	26,581		8,974		16,060			51,615
Operating earnings (loss)	104,581		73,403		(52,050		)	125,934
Segment assets	458,847		518,099		237,381			1,214,327
Purchases of property and equipment	33,001		6,105		5,846			44,952
Capitalized software	198		58		4,830			5,086

Following is a reconciliation of operating earnings to earnings before income taxes:

($ thousands)	2016			2015			2014
Operating earnings	$	110,985		$	135,107		$	125,934
Interest expense	(15,111		)	(16,589		)	(20,445		)
Loss on early extinguishment of debt	—			(10,651		)	(420		)
Interest income	1,380			899			379
Gain on sale of subsidiary	—			—			4,679
Earnings before income taxes	$	97,254		$	108,766		$	110,127

For geographic purposes, the domestic operations include the wholesale distribution of licensed, branded and private-label footwear to a variety of retail customers, including the Company’s Famous Footwear and Brand Portfolio stores and e-commerce businesses, as well as the Company's domestic retail operations.

The Company’s foreign operations primarily consist of wholesale and retail operations in the Far East and Canada. The Far East operations include first-cost transactions, where footwear is sold at foreign ports to customers who then import the footwear into the United States and other countries.

A summary of the Company’s net sales and long-lived assets by geographic area were as follows:

($ thousands)	2016		2015		2014
Net Sales
United States	$	2,385,111	$	2,342,590	$	2,318,530
Far East	134,430		177,654		194,296
Canada	59,847		57,186		58,883
Total net sales	$	2,579,388	$	2,577,430	$	2,571,709
Long-Lived Assets
United States	$	617,211	$	417,198	$	412,822
Canada	10,141		8,596		8,773
Latin America, Europe and other	2,362		271		248
Far East	1,814		2,193		2,336
Total long-lived assets	$	631,528	$	428,258	$	424,179

Long-lived assets consisted primarily of property and equipment, intangible assets, goodwill, prepaid pension costs and other noncurrent assets.