Quarterly report pursuant to Section 13 or 15(d)

Note 15 - Segment Information

v3.20.4
Note 15 - Segment Information
 6 Months Ended
Dec. 31, 2020
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 December 31, 2020, the Company operated 144 design centers (our retail segment) and our independent retailers operated 158 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 79.7% of our consolidated net sales for the six months ended December 31, 2020 compared to 79.3% a year ago. Our wholesale segment net sales accounted for the remaining 20.3% during fiscal 2021.

 

Segment information is provided below (in thousands):

 

   

Three months ended

    

Six months ended

  
   

December 31,

    

December 31,

  
   

2020

    

2019

    

2020

    

2019

  

Net sales

                                

Wholesale segment

   $ 101,550     $ 91,889     $ 198,884     $ 193,218  

Retail segment

     144,818       139,101       262,899       276,367  

Elimination of intercompany sales

     (67,542 )     (56,416 )     (131,899 )     (121,090 )

Consolidated total

   $ 178,826     $ 174,574     $ 329,884     $ 348,495  
                                 

Income before income taxes

                                

Wholesale segment

   $ 12,720     $ 5,730     $ 25,858     $ 22,658  

Retail segment

     9,909       (135 )     11,892       1,429  

Elimination of intercompany profit (a)

     (74 )     3,609       (3,514 )     3,758  

Operating income

     22,555       9,204       34,236       27,845  

Other income (expense), including interest, net

     (377 )     63       (817 )     82  

Consolidated total

   $ 22,178     $ 9,267     $ 33,419     $ 27,927  
                                 

Depreciation and amortization

                                

Wholesale segment

   $ 1,643     $ 1,750     $ 3,347     $ 3,640  

Retail segment

     2,362       2,704       4,798       4,790  

Consolidated total

   $ 4,005     $ 4,454     $ 8,145     $ 8,430  
                                 

Capital expenditures

                                

Wholesale segment

   $ 2,082     $ 1,148     $ 3,124     $ 2,311  

Retail segment

     1,357       3,425       2,754       5,676  

Consolidated total

   $ 3,439     $ 4,573     $ 5,878     $ 7,987  

 

 

(a)

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

 

(in thousands)

  

December 31,

    

June 30,

  

Total Assets

  

2020

    

2020

  

Wholesale segment

   $ 263,365     $ 255,011  

Retail segment

     399,647       390,635  

Inventory profit elimination (a)

     (26,793 )     (22,857 )

Consolidated total

   $ 636,219     $ 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.