Note 15 - Segment Information

3 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

(15)     Segment Information

Our operating segments are aligned with how the Company, including our chief operating decision maker, manages the business. As such, our reportable operating segments are the Wholesale segment and the Retail segment. Our wholesale and retail operating segments represent strategic business areas of our vertically integrated enterprise that operate separately and provide their own distinctive services. This vertical structure enables us to offer our complete line of home furnishings and accents more effectively while controlling quality and cost. We evaluate performance of the respective segments based upon revenues and operating income. Inter-segment transactions result, primarily, from the wholesale sale of inventory to the retail segment, including the related profit margin.

As of September 30, 2020, the Company operated 144 design centers (our retail segment) and our independent retailers operated 157 design centers. Our wholesale segment net sales include sales to our retail segment, which are eliminated in consolidation, and sales to our independent retailers and other third parties. Our retail segment net sales accounted for 78% of our consolidated net sales in the three months ended September 30, 2020. Our wholesale segment net sales accounted for the remaining 22%.

Segment information for the three months ended September 30, 2020 and 2019 is provided below (in thousands):

	Three months ended
	September 30,
	2020			2019
Net sales
Wholesale segment	$	97,334		$	101,329
Retail segment		118,081			137,266
Elimination of intercompany sales		(64,357	)		(64,674	)
Consolidated total	$	151,058		$	173,921
Income before income taxes
Wholesale segment	$	13,138		$	16,928
Retail segment		1,983			1,564
Elimination of intercompany profit (a)		(3,440	)		149
Operating income		11,681			18,641
Interest (expense), net of interest income		(440	)		19
Consolidated total	$	11,241		$	18,660
Depreciation and amortization
Wholesale segment	$	1,704		$	1,890
Retail segment		2,436			2,086
Consolidated total	$	4,140		$	3,976
Capital expenditures
Wholesale segment	$	1,042		$	1,163
Retail segment		1,397			2,251
Consolidated total	$	2,439		$	3,414

(a) Represents the change in wholesale profit contained in the retail segment inventory at the end of the period.

(in thousands)	September 30,			June 30,
Total Assets	2020			2020
Wholesale segment	$	244,572		$	255,011
Retail segment		404,705			390,635
Inventory profit elimination (a)		(26,756	)		(22,857	)
Consolidated total	$	622,521		$	622,789

(a) Represents the wholesale profit contained in the retail segment inventory that has not yet been realized. These profits are realized when the related inventory is sold.