REVENUES

9 Months Ended

Oct. 31, 2020

REVENUES

REVENUES

Note 3    Revenues

Disaggregation of Revenues

The following table disaggregates revenue by segment and major source for the periods ended October 31, 2020 and November 2, 2019:

	Thirteen Weeks Ended October 31, 2020
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores (2)	$	325,501	$	14,291	$	—	$	339,792
Landed wholesale - e-commerce (1)		—		42,001		—		42,001
Landed wholesale - e-commerce - drop ship (1) (2)		—		21,256		—		21,256
Landed wholesale - other		—		136,627		(11,813)		124,814
First-cost wholesale		—		15,368		—		15,368
First-cost wholesale - e-commerce (1) (2)		—		99		—		99
E-commerce - Company websites (1) (2)		66,058		35,100		—		101,158
Licensing and royalty		—		2,809		—		2,809
Other (3)		147		36		—		183
Net sales	$	391,706	$	267,587	$	(11,813)	$	647,480

	Thirteen Weeks Ended November 2, 2019
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores (2)	$	401,943	$	40,621	$	—	$	442,564
Landed wholesale - e-commerce (1)		—		27,304		—		27,304
Landed wholesale - e-commerce - drop ship (1) (2)		—		58,653		—		58,653
Landed wholesale - other		—		177,146		(14,071)		163,075
First-cost wholesale		—		16,124		—		16,124
First-cost wholesale - e-commerce (1) (2)		—		354		—		354
E-commerce - Company websites (1) (2)		44,489		36,692		—		81,181
Licensing and royalty		—		2,908		—		2,908
Other (3)		151		61		—		212
Net sales	$	446,583	$	359,863	$	(14,071)	$	792,375

	Thirty-Nine Weeks Ended October 31, 2020
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores (2)	$	712,761	$	33,173	$	—	$	745,934
Landed wholesale - e-commerce (1)		—		91,477		—		91,477
Landed wholesale - e-commerce - drop ship (1) (2)		—		61,235		—		61,235
Landed wholesale - other		—		327,322		(39,229)		288,093
First-cost wholesale		—		39,139		—		39,139
First-cost wholesale - e-commerce (1) (2)		—		601		—		601
E-commerce - Company websites (1) (2)		203,888		108,926		—		312,814
Licensing and royalty		—		6,463		—		6,463
Other (3)		244		111		—		355
Net sales	$	916,893	$	668,447	$	(39,229)	$	1,546,111

	Thirty-Nine Weeks Ended November 2, 2019
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores (2)	$	1,108,200	$	115,819	$	—	$	1,224,019
Landed wholesale - e-commerce (1)		—		64,182		—		64,182
Landed wholesale - e-commerce - drop ship (1) (2)		—		148,745		—		148,745
Landed wholesale - other		—		549,321		(56,463)		492,858
First-cost wholesale		—		66,826		—		66,826
First-cost wholesale - e-commerce (1) (2)		—		1,528		—		1,528
E-commerce - Company websites (1) (2)		109,954		102,637		—		212,591
Licensing and royalty		—		11,234		—		11,234
Other (3)		435		196		—		631
Net sales	$	1,218,589	$	1,060,488	$	(56,463)	$	2,222,614

(1) Collectively referred to as "e-commerce" below

(2) Collectively referred to as “Direct-to-consumer”

(3) Includes breakage revenue from unredeemed gift cards

Retail stores

Traditionally, the majority of the Company’s revenue is generated from retail sales where control is transferred and revenue is recognized at the point of sale. Retail sales are recorded net of estimated returns and exclude sales tax. The Company records a returns reserve and a corresponding return asset for expected returns of merchandise.

Retail sales to members of the Company’s loyalty programs, including the Famously You Rewards program, include two performance obligations: the sale of merchandise and the delivery of points that may be redeemed for future purchases. The transaction price is allocated to the separate performance obligations based on the relative stand-alone selling price. The stand-alone selling price for the points is estimated using the retail value of the merchandise earned, adjusted for estimated breakage based upon historical redemption patterns. The revenue associated with the initial merchandise purchased is recognized immediately and the value assigned to the points is deferred until the points are redeemed, forfeited or expired.

Landed wholesale

Landed sales are wholesale sales in which the merchandise is shipped directly to the customer from the Company’s warehouses. Many landed customers arrange their own transportation of merchandise and, with limited exceptions, control is transferred at the time of shipment.

First-cost wholesale

First-cost sales are wholesale sales in which the Company purchases merchandise from an international factory that manufactures the product and subsequently sells to a customer at an overseas port. Revenue is recognized at the time the merchandise is delivered to the customer’s designated freight forwarder and control is transferred to the customer.

E-commerce

The Company also generates revenue from sales on websites maintained by the Company that are shipped from the Company’s distribution centers or retail stores directly to the consumer, picked up directly by the consumer from the Company’s stores and e-commerce sales from the Company’s wholesale customers’ websites that are fulfilled on a drop-ship or first-cost basis (collectively referred to as "e-commerce"). The Company transfers control and recognizes revenue for merchandise sold that is shipped directly to an individual consumer upon delivery to the consumer.

Licensing and royalty

The Company has license agreements with third parties allowing them to sell the Company’s branded product, or other merchandise that uses the Company’s owned or licensed brand names. These license agreements provide the licensee access to the Company’s symbolic intellectual property, and revenue is therefore recognized over the license term. For royalty contracts that do not have guaranteed minimums, the Company recognizes revenue as the licensee’s sales occur. For royalty contracts that have guaranteed minimums, revenue for the guaranteed minimum is recognized on a straight-line basis during the term, until such time that the cumulative royalties exceed the total minimum guarantee. Up-front payments are recognized over the contractual term to which the guaranteed minimum relates.

Contract Balances

Revenue is recorded at the transaction price, net of estimates for variable consideration for which reserves are established, including returns, allowances and discounts. Variable consideration is estimated using the expected value method and given the large number of contracts with similar characteristics, the portfolio approach is applied to determine the variable consideration for each revenue stream. Reserves for projected returns are based on historical patterns and current expectations.

Information about significant contract balances from contracts with customers is as follows:

($ thousands)	October 31, 2020		November 2, 2019		February 1, 2020
Customer allowances and discounts	$	22,182	$	25,762	$	26,200
Loyalty programs liability		14,634		17,274		16,405
Returns reserve		14,889		15,040		14,033
Gift card liability		4,909		4,794		5,742

Changes in contract balances with customers generally reflect differences in relative sales volume for the periods presented. In addition, during the thirty-nine weeks ended October 31, 2020, the loyalty programs liability increased $20.7 million due to points and material rights accrued for purchases and decreased $22.5 million due to expirations and redemptions. During the thirty-nine weeks ended November 2, 2019, the loyalty programs liability increased $24.2 million due to points and material rights accrued for purchases and decreased $21.6 million due to expirations and redemptions.