Segment Information

3 Months Ended

May 02, 2020

The Company’s businesses are grouped into five reportable segments for management and internal financial reporting purposes: Americas Retail, Americas Wholesale, Europe, Asia and Licensing. The Company’s Americas Retail, Americas Wholesale, Europe and Licensing reportable segments are the same as their respective operating segments. Certain components of the Company’s Asia operating segment are separate operating segments based on region, which have been aggregated into the Asia reportable segment for disclosure purposes. Management evaluates segment performance based primarily on revenues and earnings (loss) from operations before corporate performance-based compensation costs, asset impairment charges, net gains (losses) on lease terminations, restructuring charges and certain non-recurring credits (charges), if any. The Company believes this segment reporting reflects how its business segments are managed and how each segment’s performance is evaluated by the Company’s chief operating decision maker to assess performance and make resource allocation decisions. The Americas Retail segment includes the Company’s retail and e-commerce operations in the Americas. The Americas Wholesale segment includes the Company’s wholesale operations in the Americas. The Europe segment includes the Company’s retail, e-commerce and wholesale operations in Europe and the Middle East. The Asia segment includes the Company’s retail, e‑commerce and wholesale operations in Asia and the Pacific. The Licensing segment includes the worldwide licensing operations of the Company. The business segment operating results exclude corporate overhead costs, which consist of shared costs of the organization, asset impairment charges, net gains (losses) on lease terminations, restructuring charges and certain non-recurring credits (charges), if any. Corporate overhead costs are presented separately and generally include, among other things, the following unallocated corporate costs: accounting and finance, executive compensation, corporate performance-based compensation, facilities, global advertising and marketing, human resources, information technology and legal.

Net revenue and earnings (loss) from operations are summarized as follows for the three months ended May 2, 2020 and May 4, 2019 (in thousands):



	Three Months Ended
	May 2, 2020			May 4, 2019
Net revenue:
Americas Retail	$	74,584		$	176,423
Americas Wholesale	25,875			46,205
Europe	106,473			210,055
Asia	40,385			85,190
Licensing	12,934			18,818
Total net revenue	$	260,251		$	536,691
Earnings (loss) from operations:
Americas Retail	$	(36,673	)	$	(1,812	)
Americas Wholesale	1,624			7,814
Europe	(44,406		)	(16,327		)
Asia	(22,777		)	(3,203		)
Licensing	10,094			16,644
Total segment earnings (loss) from operations	(92,138		)	3,116
Corporate overhead	(16,921		)	(25,812		)
Asset impairment charges¹	(52,972		)	(1,775		)
Net losses on lease terminations²	(456		)	—
Total loss from operations	$	(162,487	)	$	(24,471	)

______________________________________________________________________

Notes:

During the three months ended May 2, 2020, the Company recognized asset impairment charges related primarily to impairment of certain operating lease right-of-use assets and impairment of property and equipment related to certain retail locations resulting from lower revenue and future cash flow projections resulting from the ongoing effects of the COVID-19 pandemic. During the three months ended May 4, 2019, the Company’s asset impairment charges related primarily to impairment of property and equipment related to certain retail locations resulting from under-performance and expected store closures. Refer to Note 2 and Note 15 for more information regarding these asset impairment charges.


²	During the three months ended May 2, 2020, the Company recorded net losses on lease terminations related primarily to the early termination of certain lease agreements.

The table below presents information regarding geographic areas in which the Company operated. Net revenue is classified primarily based on the country where the Company’s customer is located (in thousands):



	Three Months Ended
	May 2, 2020		May 4, 2019
Net revenue:
U.S.	$	69,465	$	164,371
South Korea	21,224		33,917
Italy	19,352		50,435
Canada	16,677		38,581
Spain	12,996		27,997
Other foreign countries	107,603		202,572
Total product sales	247,317		517,873
Net royalties	12,934		18,818
Net revenue	$	260,251	$	536,691

Due to the seasonal nature of the Company’s business segments, the above net revenue and operating results are not necessarily indicative of the results that may be expected for the full fiscal year.