SEGMENTS

6 Months Ended

Jul. 31, 2025

SEGMENTS

SEGMENTS

NOTE 10 – 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 Karl Lagerfeld and Vilebrequin businesses, including from retail stores operated by Karl Lagerfeld and Vilebrequin, other than sales of product under the Karl Lagerfeld Paris brand generated by the Company’s retail stores and digital platforms. Wholesale revenues also include revenues from license agreements related to trademarks associated with the Company’s owned brands. 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 in North America.

The Company determines its operating segments based on how the chief operating decision maker (“CODM”) views and analyzes each segment’s operations and performance. The Company’s CODM is its Chief Executive Officer. The CODM utilizes operating profit or loss as the measure of segment profit or loss. The CODM uses operating profit or loss to determine resource allocation and operational decisions for matters including, but not limited to, compensation, advertising and facilities needs.

All historical financial segment information has been recast to conform to the new disclosure requirements under Accounting Standard Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.”

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

	Three Months Ended July 31, 2025
	Wholesale		Retail		Elimination (1)		Total
	(In thousands)
Net sales	$	589,023	$	41,060	$	(16,817)	$	613,266
Cost of goods sold		360,047		19,565		(16,817)		362,795
Gross profit		228,976		21,495		—		250,471
Selling, general and administrative expenses:
Compensation		94,823		7,023		—		101,846
Facility fees		50,426		7,337		—		57,763
Advertising		21,039		3,094		—		24,133
Other segment items(2)		39,620		3,483		—		43,103
Total selling, general and administrative expenses		205,908		20,937		—		226,845
Depreciation and amortization		6,471		855		—		7,326
Operating profit (loss)	$	16,597	$	(297)	$	—	$	16,300

	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:
Compensation		101,828		7,752		—		109,580
Facility fees		46,740		8,236		—		54,976
Advertising		22,524		2,209		—		24,733
Other segment items(2)		36,350		3,391		—		39,741
Total 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

	Six Months Ended July 31, 2025
	Wholesale		Retail		Elimination (1)		Total
	(In thousands)
Net sales	$	1,151,671	$	77,435	$	(32,231)	$	1,196,875
Cost of goods sold		695,611		36,480		(32,231)		699,860
Gross profit		456,060		40,955		—		497,015
Selling, general and administrative expenses:
Compensation		191,696		14,292		—		205,988
Facility fees		95,912		14,724		—		110,636
Advertising		49,210		6,527		—		55,737
Other segment items(2)		78,801		7,178		—		85,979
Total selling, general and administrative expenses		415,619		42,721		—		458,340
Depreciation and amortization		12,163		1,736		—		13,899
Operating profit (loss)	$	28,278	$	(3,502)	$	—	$	24,776

	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:
Compensation		202,060		15,266		—		217,326
Facility fees		92,732		16,419		—		109,151
Advertising		56,490		4,475		—		60,965
Other segment items(2)		71,735		6,474		—		78,209
Total 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

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

(2)Other segment items include design and product development costs, professional fees, office expenses, freight and packaging and other selling, general and administrative expenses.

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, 2025		July 31, 2024		July 31, 2025		July 31, 2024
	(In thousands)
Licensed brands	$	246,114	$	286,898	$	445,174	$	548,765
Proprietary brands		342,909		333,413		706,497		669,310
Wholesale net sales	$	589,023	$	620,311	$	1,151,671	$	1,218,075
Licensed brands	$	—	$	—	$	—	$	—
Proprietary brands		41,060		37,198		77,435		67,727
Retail net sales	$	41,060	$	37,198	$	77,435	$	67,727

The Company allocates overhead to its business segments on various bases, which include units shipped, space utilization, inventory levels and relative sales levels, among other factors. The method of allocation has been applied consistently on a period-to-period basis.

The total assets for each of the Company’s reportable segments, as well as assets not allocated to a segment, are as follows:

	July 31, 2025		July 31, 2024		January 31, 2025
	(In thousands)
Wholesale	$	1,741,392	$	1,719,733	$	1,508,111
Retail		86,763		116,831		97,226
Corporate		862,826		859,723		877,897
Total assets	$	2,690,981	$	2,696,287	$	2,483,234

Capital expenditures during the six months ended July 31, 2025 for the wholesale operations segment and retail operations segment were $17.2 million and $1.2 million, respectively.