Business Segment Information

12 Months Ended

Feb. 03, 2018

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. Famous Footwear operated 1,026 stores at the end of 2017, 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, Allen Edmonds, Naturalizer and Sam Edelman stores, and e-commerce businesses. The Brand Portfolio segment included 151 branded retail stores in the United States, 84 branded retail stores in Canada, and one branded retail store in Italy at the end of 2017.

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 2017
External sales	$	1,637,627	$	1,147,957	$	—		$	2,785,584
Intersegment sales	—		85,124		—			85,124
Depreciation and amortization	29,990		16,873		17,207			64,070
Operating earnings (loss)	92,230		80,212		(32,411		)	140,031
Segment assets	500,862		814,508		174,045			1,489,415
Purchases of property and equipment	22,920		15,865		5,935			44,720
Capitalized software	483		232		5,743			6,458
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

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

($ thousands)	2017			2016			2015
Operating earnings	$	140,031		$	110,985		$	135,107
Interest expense	(18,089		)	(15,111		)	(16,589		)
Loss on early extinguishment of debt	—			—			(10,651		)
Interest income	764			1,380			899
Earnings before income taxes	$	122,706		$	97,254		$	108,766

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

The Company’s foreign operations primarily consist of wholesale and retail operations in the Far East, Canada and Italy. 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)	2017		2016		2015
Net Sales
United States	$	2,603,725	$	2,385,111	$	2,342,590
Far East	98,287		134,430		177,654
Canada	75,764		59,847		57,186
Latin America and other	7,808		—		—
Total net sales	$	2,785,584	$	2,579,388	$	2,577,430
Long-Lived Assets
United States	$	450,323	$	617,211	$	417,198
Europe	177,755		286		271
Canada	10,878		10,141		8,596
Far East	1,686		1,814		2,193
Other	1,984		2,076		—
Total long-lived assets	$	642,626	$	631,528	$	428,258

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