Quarterly report pursuant to Section 13 or 15(d)


9 Months Ended
Sep. 26, 2020
Segment Reporting [Abstract]  
The Company has two reportable segments:
Wrangler — Wrangler® branded denim, apparel and accessories.
Lee — Lee® branded denim, apparel and accessories.
The chief operating decision maker allocates resources and assesses performance based on a global brand view which determines the Company's operating segments. Operating segments are the basis for the Company's reportable segments.
In addition, we report an "Other" category in order to reconcile segment revenues and segment profit to the Company's operating results, but the Other category is not considered a reportable segment based on evaluation of aggregation criteria. Other includes sales of third-party branded merchandise at VF Outlet™ stores, sales and licensing of Rock & Republic® branded apparel, and sales of products manufactured for third parties. Sales of Wrangler® and Lee® branded products at VF Outlet™ stores are not included in Other and are reported in the respective segments discussed above. Prior to 2020, the Other category also included transactions with VF for pre-Separation activities, none of which continued in 2020. These transactions included sales of VF-branded products at VF Outlet™ stores, as well as sales to VF for products manufactured in our plants, use of our transportation fleet and fulfillment of a transition services agreement related to VF’s sale of its Nautica® brand business in mid-2018.
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 included in the Company's 2019 Annual Report on Form 10-K, except as noted below.
After the Separation, as a standalone public company, the Company has allocated costs for certain centralized functions and programs to the Lee® and Wrangler® segments based on appropriate metrics such as usage or production of net revenues. 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.
Through the Separation date, the Company's statement of operations included costs for certain centralized functions and programs provided and administered by VF that were charged directly to VF's businesses, including the Company. These centralized functions and programs included, but were not limited to, information technology, human resources, accounting shared services, supply chain, insurance and related benefits associated with those functions. These historical allocations were included in the measurement of segment profit below. In addition, for purposes of preparing these financial statements on a carve-out basis, a portion of VF's total corporate expenses were allocated to the Company. These expense allocations included the cost of corporate functions and resources provided by or administered by VF including, but not limited to, executive management, finance, accounting, legal, human resources and related benefit costs associated with such functions. Allocations also included the cost of operating VF's corporate headquarters located in Greensboro, North Carolina. These additional allocations were reported as "corporate and other expenses" in the table below.
Corporate and other expenses, impairment charges, and interest income and expense 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:
  Three Months Ended September Nine Months Ended September
(In thousands) 2020 2019 2020 2019
Segment revenues:
Wrangler $ 346,629  $ 367,206  $ 901,670  $ 1,101,133 
Lee 214,440  232,221  483,162  680,660 
Total reportable segment revenues 561,069  599,427  1,384,832  1,781,793 
Other revenues 22,153  38,711  52,142  114,435 
Total net revenues $ 583,222  $ 638,138  $ 1,436,974  $ 1,896,228 
Segment profit:
Wrangler $ 76,908  $ 61,070  $ 139,709  $ 141,715 
Lee 40,968  30,156  23,524  61,536 
Total reportable segment profit $ 117,876  $ 91,226  $ 163,233  $ 203,251 
Non-cash impairment of intangible asset (1)
—  (32,636) —  (32,636)
Corporate and other expenses (31,347) (29,861) (90,917) (64,232)
Interest income from former parent, net —  —  —  3,762 
Interest expense (13,249) (14,140) (37,308) (21,876)
Interest income 283  712  1,255  3,543 
(Loss) profit related to other revenues (4,416) 843  (13,121) (437)
Income before income taxes $ 69,147  $ 16,144  $ 23,142  $ 91,375 
(1) Represents an impairment charge recorded during the third quarter of 2019 related to the Rock & Republic® trademark. See Note 7 to the Company's financial statements.