| 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 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 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 consist 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. The following segment information is presented for the three month periods indicated below: | | | | | | | | | | | | | | | Three Months Ended July 31, 2026 | | | Wholesale | | Retail | | Elimination (1) | | Total | | | | (In thousands) | Net sales | | $ | 530,827 | | $ | 39,542 | | $ | (16,276) | | $ | 554,093 | Cost of goods sold | | | 300,448 | (2) | | 19,540 | | | (16,276) | | | 303,712 | Gross profit | | | 230,379 | | | 20,002 | | | — | | | 250,381 | Selling, general and administrative expenses: | | | | | | | | | | | | | Compensation | | | 99,952 | | | 6,978 | | | — | | | 106,930 | Facility fees | | | 44,924 | | | 7,154 | | | — | | | 52,078 | Advertising | | | 18,200 | | | 3,106 | | | — | | | 21,306 | Other segment items(3) | | | 47,304 | | | 3,736 | | | — | | | 51,040 | Total selling, general and administrative expenses | | | 210,380 | | | 20,974 | | | — | | | 231,354 | Depreciation and amortization | | | 7,427 | | | 768 | | | — | | | 8,195 | Operating profit (loss) | | $ | 12,572 | | $ | (1,740) | | $ | — | | $ | 10,832 |
| | | | | | | | | | | | | | | 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(3) | | | 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 |
| | | | | | | | | | | | | | | Six Months Ended July 31, 2026 | | | Wholesale | | Retail | | Elimination (1) | | Total | | | | (In thousands) | Net sales | | $ | 1,045,629 | | $ | 80,143 | | $ | (35,717) | | $ | 1,090,055 | Cost of goods sold | | | 487,004 | (2) | | 40,641 | | | (35,717) | | | 491,928 | Gross profit | | | 558,625 | | | 39,502 | | | — | | | 598,127 | Selling, general and administrative expenses: | | | | | | | | | | | | | Compensation | | | 214,169 | | | 13,914 | | | — | | | 228,083 | Facility fees | | | 86,669 | | | 14,727 | | | — | | | 101,396 | Advertising | | | 50,313 | | | 6,263 | | | — | | | 56,576 | Other segment items(3) | | | 93,612 | | | 7,010 | | | — | | | 100,622 | Total selling, general and administrative expenses | | | 444,763 | | | 41,914 | | | — | | | 486,677 | Depreciation and amortization | | | 13,883 | | | 1,500 | | | — | | | 15,383 | Asset impairments | | | — | | | — | | | — | | | — | Operating profit (loss) | | $ | 99,979 | | $ | (3,912) | | $ | — | | $ | 96,067 |
| | | | | | | | | | | | | | | 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(3) | | | 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 |
| (1) | Represents intersegment sales to the Company’s retail operations segment. |
| (2) | The wholesale operations segment includes reductions of $6.8 million and $126.4 million in cost of goods sold during the three and six months ended July 31, 2026, respectively, resulting from the tariff refund receivable. See Note 12 — IEEPA Tariff Refund. |
| (3) | Other segment items include design and product development costs, professional fees, office expenses, freight and packaging, allowance for doubtful account charges and other selling, general and administrative expenses. Professional fees include expenses related to the Marc Jacobs transaction of $4.0 million and $7.4 million for the three and six months ended July 31, 2026, respectively. |
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, 2026 | | July 31, 2025 | | July 31, 2026 | | July 31, 2025 | | | | (In thousands) | Licensed brands | | $ | 176,953 | | $ | 246,114 | | $ | 339,914 | | $ | 445,174 | Proprietary brands | | | 353,874 | | | 342,909 | | | 705,715 | | | 706,497 | Wholesale net sales | | $ | 530,827 | | $ | 589,023 | | $ | 1,045,629 | | $ | 1,151,671 | | | | | | | | | | | | | | Proprietary brands | | $ | 39,542 | | $ | 41,060 | | $ | 80,143 | | $ | 77,435 | Retail net sales | | $ | 39,542 | | $ | 41,060 | | $ | 80,143 | | $ | 77,435 |
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, 2026 | | July 31, 2025 | | January 31, 2026 | | | | (In thousands) | Wholesale | | $ | 1,651,376 | | $ | 1,741,392 | | $ | 1,549,760 | Retail | | | 88,845 | | | 86,763 | | | 87,769 | Corporate | | | 1,011,626 | | | 862,826 | | | 973,291 | Total assets | | $ | 2,751,847 | | $ | 2,690,981 | | $ | 2,610,820 |
Capital expenditures during the six months ended July 31, 2026 for the wholesale operations segment and retail operations segment were $15.8 million and $1.7 million, respectively. 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.
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