Annual report [Section 13 and 15(d), not S-K Item 405]

BUSINESS SEGMENT INFORMATION

v3.25.0.1
BUSINESS SEGMENT INFORMATION
 12 Months Ended
Dec. 28, 2024
Segment Reporting [Abstract]  
BUSINESS SEGMENT INFORMATION BUSINESS SEGMENT INFORMATION
The Company has two reportable segments:
•Wrangler — Wrangler® branded denim, apparel, footwear and accessories.
•Lee — Lee® branded denim, apparel, footwear and accessories.
The Company considers its chief executive officer to be its chief operating decision maker. The chief operating decision maker allocates resources and assesses performance based on the global brand net revenues and segment profit of Wrangler® and Lee®, which are the Company's reportable segments. Segment profit is defined as income before income taxes, interest expense, interest income and corporate and other expenses. Segment net revenues and segment profit are reviewed and compared against forecasted amounts in order to guide execution of the Company's strategic goals. Segment assets and segment expenditures for long-lived assets are not regularly provided to or used by the chief operating decision maker and thus are not disclosed.
In addition, we report an "Other" category to reconcile segment revenues and segment profit to the Company's operating results, but the Other category does not meet the criteria to be considered a reportable segment. Other includes sales and licensing of Chic®, Rock & Republic®, other company-owned brands and private label apparel, and the associated costs.
Accounting policies utilized for internal management reporting at the individual segments are consistent with those included in Note 1 to the Company's financial statements in this Form 10-K. In addition, the Company has certain shared costs in each region that it allocates between the Wrangler® and Lee® segments. In addition, the Company allocates costs for certain centralized functions and programs to the Wrangler® and Lee® segments. These centralized functions and programs include, but are not limited to, information technology, human resources, supply chain, insurance and related benefit costs associated with those functions. Allocations are based on appropriate metrics such as usage or production of net revenues.
Corporate and other expenses, including certain restructuring and transformation costs, and interest income and expense are not controlled by segment management and therefore are excluded from the measurement of segment profit.
The following tables present financial information for the Company's reportable segments and income before income taxes:
Year Ended December
(In thousands) 2024 2023 2022
Wrangler
Net revenues (1)
$ 1,805,989  $ 1,754,130  $ 1,745,805 
Cost of goods sold 1,023,548  1,052,091  1,031,293 
Selling, general and administrative expenses 407,897  386,032  389,351 
Other segment items (2)
8,235  8,486  3,988 
Segment profit
 $ 366,309  $ 307,521  $ 321,173 
Lee
Net revenues (1)
$ 790,625  $ 842,520  $ 874,366 
Cost of goods sold 413,344  459,859  459,334 
Selling, general and administrative expenses 284,335  282,246  291,182 
Other segment items (2)
3,284  2,267  2,794 
Segment profit
 $ 89,662  $ 98,148  $ 121,056 
Total reportable segment profit $ 455,971  $ 405,669  $ 442,229 
Corporate and other expenses (123,240) (96,075) (88,932)
Interest expense (40,824) (40,408) (34,919)
Interest income 11,149  3,791  1,352 
Loss related to other revenues (3)
(1,633) (1,078) (594)
Income before income taxes $ 301,423  $ 271,899  $ 319,136 
(1) Refer to Note 2 to the Company's financial statements in this Form 10-K for the reconciliation of reportable segment revenues to consolidated net revenues.
(2) "Other segment items" primarily includes funding fees related to the sale of trade accounts receivable program discussed in Note 4 to the Company's financial statements in this Form 10-K. Funding fees are reflected in the Company's statements of operations within "other expense, net".
(3) "Loss related to other revenues" includes sales and licensing of Chic®, Rock & Republic®, other company-owned brands and private label apparel, and the associated costs, for purposes of reconciling "total reportable segment profit" to consolidated "income before income taxes."
The following table presents supplemental information of net revenues by geographic area based on the location of the customer:
Year Ended December
(In thousands) 2024 2023 2022
Revenues:
U.S. $ 2,087,049  $ 2,060,679  $ 2,074,599 
International 520,529  546,793  556,845 
Total $ 2,607,578  $ 2,607,472  $ 2,631,444 
Our largest customer accounted for 36% of the Company's total net revenues in 2024, 2023 and 2022. Our second-largest customer accounted for 13% of total net revenues in 2024, and 11% of total net revenues in both 2023 and 2022. Sales to these two customers are included in both the Wrangler® and Lee® reportable segments.
The following table presents "property, plant and equipment, net" recorded in the Company's balance sheets by geographic area based on physical location:
(In thousands) December 2024 December 2023
Property, plant and equipment, net:
U.S. $ 68,601  $ 66,803 
International 34,699  45,242 
Total $ 103,300  $ 112,045