Quarterly report pursuant to Section 13 or 15(d)

Note 15 - Segment Information

v3.21.1
Note 15 - Segment Information
 9 Months Ended
Mar. 31, 2021
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 March 31, 2021, the Company operated 144 design centers (our retail segment) and our independent retailers operated 160 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 79.8% of our consolidated net sales for the nine months ended March 31, 2021, compared to 78.7% a year ago. Our wholesale segment net sales accounted for the remaining 20.2% during fiscal 2021.

 

Segment information is provided below (in thousands):

 

   

Three months ended

    

Nine months ended

  
   

March 31,

    

March 31,

  
   

2021

    

2020

    

2021

    

2020

  

Net sales

                                

Wholesale segment

   $ 107,820     $ 93,139     $ 306,704     $ 286,357  

Retail segment

     141,396       115,698       404,295       392,065  

Elimination of intercompany sales

     (72,254 )     (59,063 )     (204,153 )     (180,153 )

Consolidated total

   $ 176,962     $ 149,774     $ 506,846     $ 498,269  
                                 

Income before income taxes

                                

Wholesale segment

   $ 14,508     $ 8,936     $ 40,366     $ 31,594  

Retail segment

     4,962       (8,772 )     16,854       (7,343 )

Elimination of intercompany profit (a)

     (483 )     (918 )     (3,997 )     2,840  

Operating income

     18,987       (754 )     53,223       27,091  

Other income (expense), including interest, net

     6       213       (811 )     295  

Consolidated total

   $ 18,993     $ (541 )   $ 52,412     $ 27,386  
                                 

Depreciation and amortization

                                

Wholesale segment

   $ 1,744     $ 1,748     $ 5,091     $ 5,388  

Retail segment

     2,470       2,667       7,268       7,457  

Consolidated total

   $ 4,214     $ 4,415     $ 12,359     $ 12,845  
                                 

Capital expenditures

                                

Wholesale segment

   $ 1,491     $ 3,027     $ 4,615     $ 5,338  

Retail segment

     2,973       1,443       5,727       7,119  

Consolidated total

   $ 4,464     $ 4,470     $ 10,342     $ 12,457  

 

 

(a)

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

 

(in thousands)

  

March 31,

    

June 30,

  

Total Assets

  

2021

    

2020

  

Wholesale segment

   $ 297,946     $ 255,011  

Retail segment

     416,971       390,635  

Inventory profit elimination (a)

     (27,371 )     (22,857 )

Consolidated total

   $ 687,546     $ 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.