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

BUSINESS SEGMENT INFORMATION

v3.25.4
BUSINESS SEGMENT INFORMATION
 12 Months Ended
Jan. 03, 2026
Segment Reporting [Abstract]  
BUSINESS SEGMENT INFORMATION BUSINESS SEGMENT INFORMATION
The Company has three reportable segments:
•Wrangler — Wrangler® branded denim, apparel, footwear and accessories.
•Lee — Lee® branded denim, apparel, footwear and accessories.
•Helly Hansen — Helly Hansen® branded outdoor and workwear 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®, Lee® and Helly Hansen®, 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 the Company's segment revenues to total revenues and segment profit to income before income taxes. Other includes sales and licensing of the Musto®, Chic® and Rock & Republic® brands, as well as other Company-owned brands and private label apparel, and the associated costs. Results of the Musto® brand have been included in the Company's consolidated financial statements since the Helly Hansen acquisition on May 31, 2025. The businesses within the Other category, either individually or in the aggregate, do not meet the criteria to be considered reportable segments.
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 its segments. In addition, the Company allocates costs for certain centralized functions and programs to the Wrangler®, Lee® and Helly Hansen® 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 acquisition and integration-related costs and restructuring and transformation costs, as well as interest expense and interest income, are not controlled by segment management and therefore are excluded from the measurement of segment profit.
The following table presents financial information for the Company's reportable segments and income before income taxes:
Year Ended December
(In thousands) 2025 2024 2023
Wrangler
Net revenues (1)
$ 1,914,622  $ 1,805,989  $ 1,754,130 
Cost of goods sold 1,030,793  1,023,548  1,052,091 
Selling, general and administrative expenses 436,875  407,897  386,032 
Other segment items (2)
6,984  8,235  8,486 
Segment profit
 $ 439,970  $ 366,309  $ 307,521 
Lee
Net revenues (1)
$ 750,368  $ 790,625  $ 842,520 
Cost of goods sold 403,224  413,344  459,859 
Selling, general and administrative expenses 275,481  284,335  282,246 
Other segment items (2)
2,722  3,284  2,267 
Segment profit
 $ 68,941  $ 89,662  $ 98,148 
Helly Hansen
Net revenues (1)
$ 459,716  $ —  $ — 
Cost of goods sold 241,512  —  — 
Selling, general and administrative expenses 182,588  —  — 
Other segment items 3,821  —  — 
Segment profit $ 31,795  $ —  $ — 
Total reportable segment profit $ 540,706  $ 455,971  $ 405,669 
Corporate and other expenses (3)
(196,390) (123,240) (96,075)
Interest expense (62,162) (40,824) (40,408)
Interest income 7,299  11,149  3,791 
Profit (loss) related to other revenues (4)
3,808  (1,633) (1,078)
Income before income taxes $ 293,261  $ 301,423  $ 271,899 
(1) Refer to Note 3 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" for the Wrangler® and Lee® segments primarily includes funding fees related to the sale of trade accounts receivable program discussed in Note 5 to the Company's financial statements in this Form 10-K. Funding fees are reflected in the Company's statements of operations within "other income (expense), net".
(3) "Corporate and other expenses" includes a gain of $24.1 million for the twelve months ended December 2025 related to the foreign currency exchange contracts to hedge the purchase price of the Acquisition. Additionally, the Company recorded $43.5 million of restructuring and transformation charges related to the closure of a portion of our manufacturing facilities, $50.8 million of acquisition and integration-related costs and $34.3 million of business optimization activities associated with the continued execution of Project Jeanius during the twelve months ended December 2025.
(4) "Profit (loss) related to other revenues" includes sales and licensing of the Musto®, Chic® and Rock & Republic® brands, as well as 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) 2025 2024 2023
Revenues:
U.S. $ 2,287,269  $ 2,087,049  $ 2,060,679 
International 865,187  520,529  546,793 
Total $ 3,152,456  $ 2,607,578  $ 2,607,472 
Our largest customer accounted for 30% of the Company's total net revenues in 2025, and 36% in both 2024 and 2023. Sales to this customer are included in both the Wrangler® and Lee® reportable segments. Our second-largest customer accounted for 12%, 13%, and 11% of total net revenues in 2025, 2024, and 2023, respectively. Sales to this customer are included in the Wrangler®, Lee® and Helly Hansen® 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 2025 December 2024
Property, plant and equipment, net:
U.S. $ 84,446  $ 68,601 
International 46,282  34,699 
Total $ 130,728  $ 103,300