| Segment and Geographic Information |
(9)Segment and Geographic Information
The Company has two reportable segments, Wholesale and Direct-to-Consumer. Management evaluates segment performance based primarily on sales and gross margin. Other costs and expenses of the Company are analyzed on an aggregate basis and not allocated to the segments. The following summarizes the Company’s operations by segment and geographic area:
Segment Information
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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(in thousands) |
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2023 |
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2022 |
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2023 |
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2022 |
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Wholesale sales |
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$ |
1,174,596 |
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$ |
1,191,586 |
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$ |
3,542,172 |
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$ |
3,583,216 |
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Gross profit |
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510,043 |
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424,600 |
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1,453,593 |
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1,294,039 |
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Gross margin |
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43.4 |
% |
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35.6 |
% |
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41.0 |
% |
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36.1 |
% |
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Direct-to-Consumer sales |
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$ |
850,362 |
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$ |
686,781 |
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$ |
2,497,230 |
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$ |
1,982,549 |
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Gross profit |
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561,875 |
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459,335 |
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1,657,428 |
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1,311,638 |
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Gross margin |
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66.1 |
% |
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66.9 |
% |
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66.4 |
% |
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66.2 |
% |
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Total sales |
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$ |
2,024,958 |
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$ |
1,878,367 |
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$ |
6,039,402 |
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$ |
5,565,765 |
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Gross profit |
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1,071,918 |
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883,935 |
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3,111,021 |
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2,605,677 |
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Gross margin |
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52.9 |
% |
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47.1 |
% |
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51.5 |
% |
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46.8 |
% |
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(in thousands) |
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As of
September 30, 2023 |
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As of
December 31, 2022 |
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Identifiable assets |
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Wholesale |
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$ |
3,547,609 |
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$ |
3,682,860 |
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Direct-to-Consumer |
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3,691,655 |
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3,210,627 |
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Total |
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$ |
7,239,264 |
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$ |
6,893,487 |
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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(in thousands) |
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2023 |
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2022 |
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2023 |
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2022 |
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Additions to property, plant and equipment |
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Wholesale |
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$ |
65,667 |
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$ |
69,344 |
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$ |
173,099 |
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$ |
184,007 |
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Direct-to-Consumer |
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25,620 |
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30,776 |
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65,613 |
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79,624 |
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Total |
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$ |
91,287 |
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$ |
100,120 |
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$ |
238,712 |
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$ |
263,631 |
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Geographic Information
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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(in thousands) |
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2023 |
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2022 |
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2023 |
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2022 |
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Geographic sales |
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Domestic Wholesale |
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$ |
407,670 |
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$ |
406,594 |
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$ |
1,240,355 |
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$ |
1,466,204 |
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Domestic Direct-to-Consumer |
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386,883 |
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339,174 |
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1,096,909 |
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898,131 |
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Total domestic sales |
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794,553 |
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745,768 |
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2,337,264 |
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2,364,335 |
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International Wholesale |
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766,926 |
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784,991 |
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2,301,817 |
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2,117,011 |
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International Direct-to-Consumer |
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463,479 |
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347,608 |
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1,400,321 |
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1,084,419 |
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Total international sales |
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1,230,405 |
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1,132,599 |
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3,702,138 |
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3,201,430 |
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Total sales |
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$ |
2,024,958 |
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$ |
1,878,367 |
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$ |
6,039,402 |
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$ |
5,565,765 |
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Regional Sales |
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Americas (AMER) |
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$ |
1,017,447 |
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$ |
947,987 |
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$ |
2,990,384 |
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$ |
2,928,752 |
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Europe, Middle East & Africa (EMEA) |
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480,377 |
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469,787 |
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1,448,221 |
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1,285,554 |
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Asia Pacific (APAC) |
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527,134 |
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460,593 |
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1,600,797 |
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1,351,459 |
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Total sales |
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$ |
2,024,958 |
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$ |
1,878,367 |
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$ |
6,039,402 |
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$ |
5,565,765 |
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China sales |
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$ |
267,602 |
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$ |
226,728 |
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$ |
851,956 |
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$ |
754,676 |
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(in thousands) |
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As of
September 30, 2023 |
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As of
December 31, 2022 |
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Property, plant and equipment, net |
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Domestic |
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$ |
936,399 |
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$ |
870,924 |
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International |
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529,746 |
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474,446 |
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Total |
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$ |
1,466,145 |
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$ |
1,345,370 |
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China property plant and equipment, net |
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$ |
282,600 |
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$ |
264,422 |
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The Company’s sales to its five largest customers accounted for approximately 8.2% and 10.3% of total sales for the three months ended September 30, 2023 and 2022, and for the nine months ended September 30, 2023 and 2022 were 7.8% and 10.2%.
Assets located outside the U.S. consist primarily of cash, accounts receivable, inventory, property, plant and equipment, and other assets. Net assets held outside the U.S. were $4.9 billion and $4.4 billion at September 30, 2023 and December 31, 2022. Goodwill of $101.2 million and $93.5 million is included in the Wholesale segment as of September 30, 2023 and December 31, 2022.
The Company performs regular evaluations concerning the ability of customers to satisfy their obligations and provides for estimated doubtful accounts. Domestic accounts receivable generally do not require collateral. Foreign accounts receivable are generally collateralized by letters of credit. The Company’s additions to the provision for expected credit losses for the three months ended September 30, 2023 and 2022 were $1.0 million and $2.2 million, and for the nine months ended September 30, 2023 and 2022 were $2.1 million and $3.3 million.
The Company’s accounts receivables, excluding allowances for bad debts and chargebacks, by geography are summarized as follows:
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(in thousands) |
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As of
September 30, 2023 |
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As of
December 31, 2022 |
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Domestic Accounts Receivable |
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$ |
327,917 |
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$ |
310,138 |
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International Accounts Receivable |
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667,566 |
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597,621 |
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The Company’s top five manufacturers produced the following:
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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(percentage of total production) |
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2023 |
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2022 |
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2023 |
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2022 |
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Manufacturer #1 |
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24.7 |
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14.5 |
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21.4 |
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16.0 |
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Manufacturer #2 |
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7.6 |
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7.8 |
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6.9 |
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6.4 |
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Manufacturer #3 |
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5.9 |
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6.9 |
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6.3 |
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5.7 |
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Manufacturer #4 |
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5.6 |
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6.0 |
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5.5 |
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5.5 |
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Manufacturer #5 |
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5.1 |
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6.0 |
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4.9 |
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5.3 |
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Total |
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48.9 |
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41.2 |
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45.0 |
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38.9 |
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