SEGMENTS

6 Months Ended

Jul. 31, 2024

SEGMENTS

SEGMENTS

NOTE 9 – SEGMENTS

The Company’s reportable segments are business units that offer products through different channels of distribution. The Company has two reportable segments: wholesale operations and retail operations. The wholesale operations segment includes sales of products to retailers under owned, licensed and private label brands, as well as sales related to the Vilebrequin and Karl Lagerfeld businesses, including from retail stores operated by Vilebrequin and Karl Lagerfeld, other than sales of product under the Karl Lagerfeld Paris brand generated by the Company’s retail stores and digital outlets. Wholesale revenues also include royalty revenues from license agreements related to the DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, G.H. Bass, Andrew Marc and Sonia Rykiel trademarks owned by the Company. The retail operations segment consists primarily of direct sales to consumers through Company-operated stores, which consists primarily of DKNY and Karl Lagerfeld Paris stores, as well as the digital channels for DKNY, Donna Karan, Karl Lagerfeld Paris, G.H. Bass and Wilsons Leather. Substantially all DKNY and Karl Lagerfeld Paris stores are operated as outlet stores.

The following segment information is presented for the three and six month periods indicated below:

	Three Months Ended July 31, 2024
	Wholesale		Retail		Elimination (1)		Total
	(In thousands)
Net sales	$	620,311	$	37,198	$	(12,754)	$	644,755
Cost of goods sold		364,658		16,977		(12,754)		368,881
Gross profit		255,653		20,221		—		275,874
Selling, general and administrative expenses		207,442		21,588		—		229,030
Depreciation and amortization		4,424		956		—		5,380
Operating profit (loss)	$	43,787	$	(2,323)	$	—	$	41,464

	Three Months Ended July 31, 2023
	Wholesale		Retail		Elimination (1)		Total
	(In thousands)
Net sales	$	639,184	$	34,341	$	(13,764)	$	659,761
Cost of goods sold		379,884		16,988		(13,764)		383,108
Gross profit		259,300		17,353		—		276,653
Selling, general and administrative expenses		216,489		22,718		—		239,207
Depreciation and amortization		5,027		932		—		5,959
Operating profit (loss)	$	37,784	$	(6,297)	$	—	$	31,487

	Six Months Ended July 31, 2024
	Wholesale		Retail		Elimination (1)		Total
	(In thousands)
Net sales	$	1,218,075	$	67,727	$	(31,300)	$	1,254,502
Cost of goods sold		717,885		33,150		(31,300)		719,735
Gross profit		500,190		34,577		—		534,767
Selling, general and administrative expenses		423,017		42,634		—		465,651
Depreciation and amortization		11,438		2,710		—		14,148
Operating profit (loss)	$	65,735	$	(10,767)	$	—	$	54,968

	Six Months Ended July 31, 2023
	Wholesale		Retail		Elimination (1)		Total
	(In thousands)
Net sales	$	1,226,086	$	64,558	$	(24,294)	$	1,266,350
Cost of goods sold		732,354		31,837		(24,294)		739,897
Gross profit		493,732		32,721		—		526,453
Selling, general and administrative expenses		420,578		46,590		—		467,168
Depreciation and amortization		10,772		1,763		—		12,535
Operating profit (loss)	$	62,382	$	(15,632)	$	—	$	46,750

(1)Represents intersegment sales to the Company’s retail operations segment.

The total net sales by licensed and proprietary product sales for each of the Company’s reportable segments are as follows:

	Three Months Ended				Six Months Ended
	July 31, 2024		July 31, 2023		July 31, 2024		July 31, 2023
	(In thousands)
Licensed brands	$	286,898	$	338,656	$	548,765	$	636,661
Proprietary brands		333,413		300,528		669,310		589,425
Wholesale net sales	$	620,311	$	639,184	$	1,218,075	$	1,226,086
Licensed brands	$	—	$	—	$	—	$	—
Proprietary brands		37,198		34,341		67,727		64,558
Retail net sales	$	37,198	$	34,341	$	67,727	$	64,558