Segment Information

3 Months Ended

Jun. 27, 2015

Segment Information

13. Segment Information

The Company operates its business through three operating segments—Retail, Wholesale and Licensing—which are based on its business activities and organization. The operating segments are segments of the Company for which separate financial information is available and for which operating results are evaluated regularly by executive management in deciding how to allocate resources, as well as in assessing performance. The primary key performance indicators are net sales or revenue (in the case of Licensing) and operating income for each segment. The Company’s reportable segments represent channels of distribution that offer similar merchandise, customer experience and sales/marketing strategies. The Company’s Retail segment includes sales through the Company owned stores, including “Collection,” “Lifestyle” including “concessions,” and outlet stores located throughout North America, Europe, and Japan, as well as the Company’s e-commerce sales. Products sold through the Retail segment include women’s apparel, accessories (which include handbags and small leather goods such as wallets), footwear and licensed products, such as watches, jewelry, fragrances and beauty, and eyewear. The Wholesale segment includes sales primarily to major department stores and specialty shops throughout North America, Europe and Asia. Products sold through the Wholesale segment include accessories (which include handbags and small leather goods such as wallets), footwear and women’s and men’s apparel. We also have wholesale arrangements pursuant to which we sell products to certain of our licensees, including our licensees in Asia (which were previously reported within our North American wholesale operations). The Licensing segment includes royalties earned on licensed products and use of the Company’s trademarks, and rights granted to third parties for the right to sell the Company’s products in certain geographic regions such as the Middle East, Eastern Europe, Latin America and the Caribbean, throughout all of Asia (excluding Japan), as well as Australia. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. Corporate overhead expenses are allocated to the segments based upon specific usage or other allocation methods.

The Company has allocated $12.1 million and $1.9 million of its recorded goodwill to its Wholesale and Licensing segments, respectively. The Company does not have identifiable assets separated by segment. The following table presents the key performance information of the Company’s reportable segments (in thousands):

	Three Months Ended
	June 27, 2015		June 28, 2014
Revenue:
Net sales: Retail	$	523,300	$	480,242
Wholesale		423,959		406,795
Licensing		38,716		32,117
Total revenue	$	985,975	$	919,154
Income from operations:
Retail	$	120,874	$	142,689
Wholesale		106,310		117,652
Licensing		21,439		16,430
Income from operations	$	248,623	$	276,771

Depreciation and amortization expense for each segment are as follows (in thousands):

	Three Months Ended
	June 27, 2015		June 28, 2014
Depreciation and amortization:
Retail	$	25,091	$	17,965
Wholesale		16,102		10,775
Licensing		360		258
Total depreciation and amortization	$	41,553	$	28,998

Total revenue (as recognized based on country of origin), and long-lived assets by geographic location of the consolidated Company are as follows (in thousands):

	Three Months Ended
	June 27, 2015		June 28, 2014
Revenues:
North America (U.S. and Canada)(1)	$	727,295	$	718,889
Europe		216,813		185,497
Other regions		41,867		14,768
Total revenues	$	985,975	$	919,154

	As of
	June 27, 2015		March 28, 2015
Long-lived assets:
North America (U.S. and Canada)(1)	$	468,355	$	443,816
Europe		208,348		169,243
Other regions		16,390		11,416
Total Long-lived assets	$	693,093	$	624,475

⁽¹⁾  Net revenues earned in the U.S. during the three months ended June 27, 2015 and June 28, 2014 were $684.8 million and $674.3 million, respectively. Long-lived assets located in the U.S. as of June 27, 2015 and March 28, 2015 were $441.9 million and $418.8 million, respectively.