BUSINESS SEGMENT INFORMATION

12 Months Ended

Jan. 31, 2026

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION

8.   BUSINESS SEGMENT INFORMATION

The Company’s reportable segments are Famous Footwear and Brand Portfolio.  The Famous Footwear segment is comprised of Famous Footwear, famousfootwear.com and famousfootwear.ca.  Famous Footwear operated 821 stores at the end of 2025, selling primarily branded footwear for the entire family.

The Brand Portfolio segment is comprised of wholesale operations selling the Company’s branded footwear, and the retail stores and e-commerce sites associated with those brands.  This segment sources, manufactures and markets branded, licensed and private-label footwear primarily to online retailers, national chains, department stores, independent retailers, mass merchandisers and franchise partners, as well as Company-owned Famous Footwear, Allen Edmonds, Sam Edelman, Stuart Weitzman and Naturalizer and e-commerce businesses.  The Brand Portfolio segment included 85 branded retail stores in North America and 103 branded retail stores in East and Southeast Asia at the end of 2025.

The accounting policies of the reportable segments are the same as those described in Note 1 to the consolidated financial statements. The Company’s Famous Footwear and Brand Portfolio reportable segments are operating units that are managed separately.  These reportable segments reflect the level at which the chief operating decision maker (CODM), the Company’s President and Chief Executive Officer, evaluates financial performance and allocates resources. The CODM uses segment operating earnings (loss), which represents gross profit, less selling and administrative expenses and restructuring and other special charges, net, to allocate resources. Intersegment sales are generally recorded at a profit, and intersegment earnings related to inventory on hand at the purchasing segment are eliminated against the earnings.  

Corporate assets, administrative expenses and other costs and recoveries that are not allocated to the operating units, as well as the elimination of intersegment sales and profit, are reported in the Eliminations and Other category.

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

	2025
		Famous		Brand		Eliminations
($ thousands)		Footwear		Portfolio		and Other		Total
Net sales (1)		$	1,500,050	$	1,315,976	$	(58,173)	$	2,757,853
Cost of goods sold			852,072		778,772		(57,769)		1,573,075
Gross profit			647,978		537,204		(404)		1,184,778
Less expenses:
Retail stores (2)			372,238		51,003		—		423,241
Information technology			31,276		30,686		3,911		65,873
Warehousing and distribution			48,699		73,521		746		122,966
Advertising and marketing			52,773		93,829		501		147,103
Restructuring and other special charges, net			273		6,550		14,068		20,891
Other expenses (3)			95,516		249,326		53,490		398,332
Operating earnings (loss)		$	47,203	$	32,289	$	(73,120)	$	6,372
Segment assets		$	808,976	$	983,528	$	173,286	$	1,965,790
Purchases of property and equipment		$	38,034	$	20,231	$	5,479	$	63,744
Capitalized software		$	178	$	126	$	3,843	$	4,147

	2024
		Famous		Brand		Eliminations
($ thousands)		Footwear		Portfolio		and Other		Total
Net sales (1)		$	1,556,456	$	1,225,963	$	(59,736)	$	2,722,683
Cost of goods sold			869,829		689,668		(58,856)		1,500,641
Gross profit			686,627		536,295		(880)		1,222,042
Less expenses:
Retail stores (2)			366,144		31,108		—		397,252
Information technology			30,843		27,631		7,881		66,355
Warehousing and distribution			50,905		70,368		3,580		124,853
Advertising and marketing			50,370		78,275		3,459		132,104
Restructuring and other special charges, net			639		6,343		185		7,167
Other expenses (3)			100,650		200,448		43,357		344,455
Operating earnings (loss)		$	87,076	$	122,122	$	(59,342)	$	149,856
Segment assets		$	817,469	$	893,460	$	183,825	$	1,894,754
Purchases of property and equipment		$	36,694	$	10,335	$	2,118	$	49,147
Capitalized software		$	618	$	44	$	1,877	$	2,539

	2023
		Famous		Brand		Eliminations
($ thousands)		Footwear		Portfolio		and Other		Total
Net sales (1)		$	1,609,396	$	1,270,853	$	(62,955)	$	2,817,294
Cost of goods sold			889,847		724,848		(60,358)		1,554,337
Gross Profit			719,549		546,005		(2,597)		1,262,957
Less expenses:
Retail stores (2)			360,102		28,793		—		388,895
Information technology			31,286		28,180		1,459		60,925
Warehousing and distribution			52,874		59,045		4,439		116,358
Advertising and marketing			52,771		70,761		3,102		126,634
Restructuring and other special charges, net			1,366		2,608		2,129		6,103
Other expenses (3)			97,312		211,159		61,116		369,587
Operating earnings (loss)		$	123,838	$	145,459	$	(74,842)	$	194,455
Segment assets		$	770,848	$	862,404	$	171,494	$	1,804,746
Purchases of property and equipment		$	31,743	$	10,515	$	2,326	$	44,584
Capitalized software		$	743	$	—	$	4,291	$	5,034

(1) Net sales includes intersegment sales from Brand Portfolio to Famous Footwear of $58.2 million, $59.7 million and $63.0 million in 2025, 2024 and 2023, respectively.

(2) Includes compensation and facilities costs associated with the Company’s North America retail stores.

(3) Primarily includes compensation costs associated with non-retail store operations, depreciation and amortization, and other overhead expenses.

Products purchased for the Famous Footwear segment from three key third-party suppliers (Nike, Skechers and adidas) represented approximately 24% of consolidated net sales for 2025, 2024, and 2023.  

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

($ thousands)	2025		2024		2023
Operating earnings	$	6,372	$	149,856	$	194,455
Interest expense, net		(18,464)		(13,957)		(19,343)
Other (expense) income, net		(130)		(741)		6,210
(Loss) earnings before income taxes	$	(12,222)	$	135,158	$	181,322

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 international operations consist of wholesale and retail operations primarily in East and Southeast Asia, Canada and Europe.

A summary of the Company’s net sales and long-lived assets, including lease right-of-use assets and property and equipment, by geographic area were as follows:

($ thousands)	2025		2024		2023
Net Sales
United States	$	2,582,127	$	2,532,717	$	2,624,474
East and Southeast Asia		54,648		111,670		130,423
Canada		64,807		58,140		48,220
Other		56,271		20,156		14,177
Total net sales	$	2,757,853	$	2,722,683	$	2,817,294
Long-Lived Assets (1)
United States	$	734,001	$	716,894	$	676,937
East and Southeast Asia		20,666		13,295		11,805
Canada		8,230		8,697		6,601
Other		2,369		657		269
Total long-lived assets	$	765,266	$	739,543	$	695,612

(1) During the year ended January 31, 2026, the Company identified and corrected an immaterial misstatement in the segment footnote disclosure related to long-lived assets by geographic area for the year ended February 1, 2025.  The disclosure misstatement had no impact to the consolidated financial statements.