Segment Reporting

6 Months Ended

Aug. 01, 2015

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company has two operating segments, which are also its reportable segments: Direct and Indirect. These operating segments are components of the Company for which separate financial information is available and for which operating results are evaluated on a regular basis by the chief operating decision maker in deciding how to allocate resources and in assessing the performance of the segments.

The Direct segment includes the Company’s full-line and factory outlet stores, the Company’s website, verabradley.com, direct-to-consumer eBay sales, and the annual outlet sale. Revenues generated through this segment are driven through the sale of Company-branded products from Vera Bradley to end consumers. The Company exited its direct Japan operations in the third quarter of fiscal 2015. Direct segment results for the current and prior periods presented are reported on a continuing operations basis unless otherwise stated. Discontinued operations are detailed in Note 10 Discontinued Operations of this Quarterly Report on Form 10-Q.

The Indirect segment represents revenues generated through the distribution of Company-branded products to specialty retailers representing approximately 2,700 locations, substantially all of which are located in the United States, as well as key accounts, which include department stores, national accounts, third-party e-commerce sites, the Company's wholesale business in Japan, and third-party inventory liquidation.

Corporate costs represent the Company’s administrative expenses, which include, but are not limited to: human resources, legal, finance, information technology, design, merchandising, and various other corporate-level-activity-related expenses. All intercompany-related activities are eliminated in consolidation and are excluded from the segment reporting.

Company management evaluates segment operating results based on several indicators. The primary or key performance indicators for each segment are net revenues and operating income. Net revenues and operating income information for the Company’s reportable segments during the thirteen and twenty-six weeks ended August 1, 2015 and August 2, 2014, respectively, consisted of the following (in thousands):

	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	August 1, 2015			August 2, 2014			August 1, 2015			August 2, 2014
Segment net revenues:
Direct	$	83,775		$	77,777		$	154,208		$	149,961
Indirect	36,949			41,183			67,620			81,196
Total	$	120,724		$	118,960		$	221,828		$	231,157
Segment operating income:
Direct	$	16,557		$	17,122		$	24,584		$	30,880
Indirect	14,788			15,947			24,692			31,386
Total	$	31,345		$	33,069		$	49,276		$	62,266
Reconciliation:
Segment operating income	$	31,345		$	33,069		$	49,276		$	62,266
Less:
Unallocated corporate expenses	(21,859		)	(19,823		)	(44,761		)	(37,733		)
Operating income	$	9,486		$	13,246		$	4,515		$	24,533