Quarterly report pursuant to Section 13 or 15(d)

Business Segments and Sales by Product Group

v3.20.2
Business Segments and Sales by Product Group
6 Months Ended
Aug. 01, 2020
Segment Reporting [Abstract]  
Business Segments and Sales by Product Group
Business Segments and Sales by Product Group
During the fourth quarter of fiscal 2019, the Company changed its reportable segments into two reporting segments: “ShopHQ” and “Emerging.” In light of recent strategic shifts in the Company's emerging businesses, the Company's Chief Executive Officer, the chief operating decision maker, began reviewing operating results of the Emerging segment separately from our core business, ShopHQ. The chief operating decision maker is our Chief Executive Officer and Interim Chief Financial Officer. These segments reflect the way the Company's chief operating decision maker evaluates the Company's business performance and manages its operations. All of Company's sales are made to customers residing in the United States.
The Company does not allocate assets between the segments for our internal management purposes, and as such, they are not presented here. There were no significant inter-segment sales or transfers during the second quarters and first six months of fiscal 2020 and fiscal 2019. The Company allocates corporate support costs (such as finance, human resources, warehouse management and legal) to our operating segments based on their estimated usage and based on how the Company manages the business. The Company has recast its segment results for all periods presented to conform to the new segment structure.
ShopHQ
The ShopHQ segment encompasses the Company's nationally distributed shopping entertainment network. ShopHQ sells and distributes its products to consumers through its video commerce television, online website and mobile platforms.
Emerging
The Emerging segment consists of the Company's developing business models. This segment includes the Company's Media Commerce Services, which includes creative and interactive services and third-party logistics services. The Emerging segment also encompasses the Bulldog Shopping Network and recently acquired businesses, J.W. Hulme and Float Left. Bulldog Shopping Network is a niche television shopping network geared towards male consumers. J.W. Hulme is a business specializing in artisan-crafted leather products, including handbags and luggage. J.W. Hulme products are distributed primarily through jwhulme.com, retails stores, and programming on ShopHQ. Float Left is a business comprised of connected TVs, video-based content, application development and distribution, including technical consulting services, software development and maintenance related to video distribution.
Net Sales by Segment and Significant Product Groups
 
 
Three-Month Periods Ended
 
Six-Month Periods Ended
 
 
August 1,
2020
 
August 3,
2019
 
August 1,
2020
 
August 3,
2019
 
 
(in thousands)
ShopHQ
 
 
 
 
 
 
 
 
Net merchandise sales by category:
 
 
 
 
 
 
 
 
Jewelry & Watches
 
$
39,058

 
$
57,440

 
$
78,460

 
$
108,868

Home & Consumer Electronics
 
12,375

 
22,540

 
25,142

 
46,567

Beauty & Wellness
 
46,571

 
22,981

 
67,434

 
44,962

Fashion & Accessories
 
10,951

 
16,100

 
23,675

 
38,454

All other (primarily shipping & handling revenue)
 
11,715

 
11,687

 
19,758

 
22,696

Total ShopHQ
 
120,670

 
130,748

 
214,469

 
261,547

Emerging
 
3,845

 
755

 
5,880

 
1,477

Consolidated net sales
 
$
124,515

 
$
131,503

 
$
220,349

 
$
263,024


Performance Measures by Segment
 
 
Three-Month Periods Ended
 
Six-Month Periods Ended
 
 
August 1,
2020
 
August 3,
2019
 
August 1,
2020
 
August 3,
2019
 
 
(in thousands)
Gross profit
 
 
 
 
 
 
 
 
ShopHQ
 
$
44,731

 
$
47,669

 
$
79,686

 
$
84,848

Emerging
 
1,561

 
57

 
$
2,163

 
$
171

Consolidated gross profit
 
$
46,292

 
$
47,726

 
$
81,849

 
$
85,019

 
 
 
 
 
 
 
 
 
Operating income (loss)
 
 
 
 
 
 
 
 
ShopHQ
 
$
3,748

 
$
(7,778
)
 
$
(55
)
 
$
(27,042
)
Emerging
 
(1,277
)
 
(1,526
)
 
(3,109
)
 
(2,412
)
Consolidated operating income (loss)
 
$
2,471

 
$
(9,304
)
 
$
(3,164
)
 
$
(29,454
)
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
 
 
 
 
 
 
ShopHQ
 
$
7,678

 
$
2,683

 
$
10,418

 
$
5,285

Emerging
 
162

 
828

 
327

 
855

Consolidated depreciation and amortization
 
$
7,840

 
$
3,511

 
$
10,745

 
$
6,140