Quarterly report pursuant to Section 13 or 15(d)

Business Segments and Sales by Product Group

v3.21.2
Business Segments and Sales by Product Group
6 Months Ended
Jul. 31, 2021
Segment Reporting [Abstract]  
Business Segments and Sales by Product Group

(10)   Business Segments and Sales by Product Group

During fiscal year 2019, the Company changed its reportable segments into two reporting segments: “ShopHQ” and “Emerging Business.” In light of 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 Business segment separately from its core business, ShopHQ. The chief operating decision maker is the Company’s Chief Executive 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 the Company’s sales are made to customers residing in the United States.

The Company does not allocate assets between the segments for its internal management purposes, and as such, they are not presented here. There were no significant inter-segment sales or transfers during the first six months of fiscal 2021 and fiscal 2020. The Company allocates corporate support costs (such as finance, human resources, warehouse management and legal) to its operating segments based on their estimated usage and based on how the Company manages the business.

ShopHQ Reporting Segment

The ShopHQ segment encompasses the Company’s flagship nationally distributed shopping entertainment television network. ShopHQ informs, promotes, demonstrates and sells its products to consumers using interactive video across multiple sales channels including linear television, online streaming, mobile and social platforms, brick and mortar retail, and OTT and CTV platforms such as Roku, AppleTV and Samsung connected televisions.

Emerging Business Reporting Segment

The Emerging Business segment consists of the Company’s early developing brands and business models. This segment includes the Company’s owned and operated consumer brands that include J.W. Hulme, Cooking with Shaquille O’Neal, Kate & Mallory, Live Fit MD, Christopher & Banks and TheCloseout.com and the Company’s digital services brand iMedia digital services and niche television networks ShopBulldogTV and ShopHealthHQ.

Net Sales by Segment and Significant Product Groups

Three-Month Periods Ended

Six-Month Periods Ended

    

July 31,

    

August 1,

    

July 31,

    

August 1,

    

2021

2020

2021

2020

(in thousands)

ShopHQ

Net merchandise sales by category:

 

  

 

  

 

  

 

  

 

Jewelry & Watches

$

41,045

$

39,058

$

84,299

$

78,460

Home

 

14,359

 

12,375

 

27,545

 

25,142

Beauty & Health

 

16,659

 

46,571

 

35,905

 

67,434

Fashion & Accessories

 

12,111

 

10,951

 

25,691

 

23,675

All other (primarily shipping & handling revenue)

 

9,936

 

11,715

 

20,531

 

19,758

Total ShopHQ

 

94,110

 

120,670

 

193,971

 

214,469

Emerging Business

 

19,332

 

3,845

 

32,673

 

5,880

Consolidated net sales

$

113,442

$

124,515

$

226,644

$

220,349

Performance Measures by Segment

Three-Month Periods Ended

Six-Month Periods Ended

    

July 31,

    

August 1,

    

July 31,

    

August 1,

    

2021

2020

2021

2020

(in thousands)

Gross profit

  

  

ShopHQ

$

39,690

$

44,731

$

80,006

$

79,686

Emerging Business

8,296

1,561

$

13,987

$

2,163

Consolidated gross profit

$

47,986

$

46,292

$

93,993

$

81,849

Operating income (loss)

 

  

 

  

 

  

 

  

ShopHQ

$

(2,775)

$

3,748

$

(4,666)

$

(55)

Emerging Business

 

405

 

(1,277)

 

246

 

(3,109)

Consolidated operating income (loss)

$

(2,370)

$

2,471

$

(4,420)

$

(3,164)

Depreciation and amortization

 

  

 

  

 

  

 

  

ShopHQ (a)

$

8,377

$

7,678

$

16,235

$

10,418

Emerging Business

 

185

 

162

 

653

 

327

Consolidated depreciation and amortization

$

8,562

$

7,840

$

16,888

$

10,745

(a) Includes distribution facility depreciation of $951,000 and $998,000 for the three-month periods ended July 31, 2021 and August 1, 2020 and $1,902,000 and $2,021,000 for six-month periods ended July 31, 2021 and August 1, 2020. Distribution facility depreciation is included as a component of cost of sales within the accompanying condensed consolidated statements of operations.