Express 2015 Annual Report Download - page 46

Table of Contents
historical redemption patterns and totaled $3.1 million, $2.7 million, and $3.0 million in 2015, 2014, and 2013, respectively. Gift card breakage is included
in net sales in the Consolidated Statements of Income and Comprehensive Income.

Cost of goods sold, buying and occupancy costs, include merchandise costs, freight, inventory shrinkage, and other gross margin related expenses. Buying
and occupancy expenses primarily include payroll, benefit costs, and other operating expenses for the buying departments (merchandising, design,
manufacturing, and planning and allocation), distribution, fulfillment, rent, common area maintenance, real estate taxes, utilities, maintenance, and
depreciation for stores.

Selling, general, and administrative expenses include all operating costs not included in cost of goods sold, buying and occupancy costs, with the exception
of proceeds received from insurance claims and gain/loss on disposal of assets, which are included in other operating expense, net. These costs include
payroll and other expenses related to operations at our corporate home office, store expenses other than occupancy, and marketing expenses, which include
production, mailing, and print advertising costs.

Other operating income, net primarily consists of gains/losses on disposal of assets and excess proceeds from the settlement of insurance claims.

Other expense, net primarily consists of foreign currency transaction gains/losses.

The Company defines an operating segment on the same basis that it uses to evaluate performance internally. The Company has determined that, together, its
President and Chief Executive Officer and its Chief Operating Officer are the Chief Operating Decision Maker, and that there is one operating segment.
Therefore, the Company reports results as a single segment, which includes the operation of its Express brick-and-mortar retail and outlet stores, e-commerce
operations, and franchise operations.
The following is information regarding the Company's major product and sales channels:




Apparel $ 2,062,235
$ 1,883,641
$ 1,922,868
Accessories and other 242,408
240,052
254,426
Other revenue 45,486
41,788
41,831
Total net sales $ 2,350,129
$ 2,165,481
$ 2,219,125




Stores $ 1,911,923
$ 1,769,478
$ 1,836,704
E-commerce 392,720
354,215
340,590
Other revenue 45,486
41,788
41,831
Total net sales $ 2,350,129
$ 2,165,481
$ 2,219,125
Other revenue consists primarily of sell-off revenue related to mark-out-of-stock inventory sales to third parties, shipping and handling revenue related to e-
commerce activity, and revenue from franchise agreements.
Revenues and long-lived assets relating to the Company's international operations for 2015, 2014, and 2013, and as of January 30, 2016 and January 31,
2015, respectively, were not material and, therefore, not reported separately from domestic revenues and long-lived assets.
46