Segment Information

6 Months Ended

Jun. 29, 2014

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

The Company has two reportable segments: North America and United Kingdom ("U.K.") The Company’s reportable segments have been identified based on how the Company’s chief operating decision maker manages the Company’s businesses, makes operating decisions, and evaluates operating performance. The Company’s chief operating decision maker is its chief executive officer. The Company evaluates the performance of its reportable segments based on net sales and income from operations. Income from operations represents net income before interest income (expense), net, other income (expense), net and provision for income taxes. Management does not evaluate the performance of its reportable segments using asset measures.

North America—The North America segment consists of amounts earned from retail and services sales through the Company’s North America-focused sites, including sales from the sites to customers in the United States, Canada and other foreign countries fulfilled through a third-party service provider.

U.K.—The U.K. segment consists of amounts earned from retail and services sales through the Company’s U.K.-focused sites, including sales from the sites to customers in the United Kingdom and throughout Europe.

Certain North America corporate-level activities are not allocated to the U.K. segment, including costs of marketing, human resources, legal, finance and technology.

The Company accounts for intersegment sales in accordance with the underlying transfer pricing agreement between zulily, inc. and Zulily UK Ltd.

Information on reportable segments and reconciliation to consolidated net income before provision for income taxes is as follows:

	Three Months Ended						Six Months Ended
	June 29, 2014			June 30, 2013			June 29, 2014			June 30, 2013
	(in thousands)
North America
Net sales	$	280,276		$	141,842		$	514,636		$	266,166
Operating income	9,470			4,749			7,679			4,812
Intersegment expense	(1,908		)	(759		)	(3,065		)	(2,468		)
Total segment operating income	7,562			3,990			4,614			2,344
United Kingdom
Net sales	4,737			3,167			8,258			5,855
Intersegment sales	1,908			759			3,065			2,468
Total net sales	6,645			3,926			11,323			8,323
Segment operating income	$	113		$	13		$	111		$	46
Consolidated
Net sales
Total sales for reportable segments	$	286,921		$	145,768		$	525,959		$	274,489
Elimination of intersegment sales	(1,908		)	(759		)	(3,065		)	(2,468		)
Total consolidated net sales	$	285,013		$	145,009		$	522,894		$	272,021
Net income before provision for income taxes
Total operating income for reportable segments	$	7,675		$	4,003		$	4,725		$	2,390
Interest income (expense)—net	92			32			145			64
Other income (expense)—net	(11		)	(34		)	(64		)	(48		)
Net income before provision for income taxes	$	7,756		$	4,001		$	4,806		$	2,406

The Company’s assets are primarily located in the United States. We sell similar products and services in each of our segments, and revenue from external customers for each group of similar products and services are not reported to the Company’s chief operating decision maker.