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DISCONTINUED OPERATIONS | 12 Months Ended
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Jul. 31, 2021
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | NOTE 18—DISCONTINUED OPERATIONS As discussed further in Note 1—Significant Accounting Policies, in the fourth quarter of fiscal 2021, the Company determined it no longer met the held for sale criterion for a probable sale to be completed within 12 months for two of the four Shoppers retail stores remaining in discontinued operations. As a result, the Company revised its Consolidated Financial Statements to reclassify two Shoppers stores from discontinued operations to continuing operations. Prior periods presented in the Consolidated Financial Statements have been conformed to the current period presentation. Subsequent to the presentation changes, discontinued operations contain the historical results of stores already disposed of and two remaining Shoppers locations that continue to be classified as operations held for sale as discontinued operations. In fiscal 2020, the Company entered into agreements to sell 13 Shoppers stores and decided to close six locations. During fiscal 2020, the Company incurred approximately $31 million in pre-tax aggregate costs and charges related to Shoppers stores that remain within discontinued operations, consisting of $25 million of operating losses, severance costs and transaction costs during the period of wind-down and $6 million of property and equipment impairment charges related to impairment reviews. In fiscal 2019, the Company closed three of its eight Shop ‘n Save East stores and sold the remaining five Shop ‘n Save East stores to GIANT Food Store, LLC, and did not incur a gain or loss on the sale of this disposal group. The Company closed the remaining Shop ‘n Save St. Louis retail stores and the distribution center that were not sold prior to the Supervalu acquisition date. In fiscal 2019, the Company completed the sale of seven of its eight Hornbacher's locations, as well as a Hornbacher’s store that was previously being developed in West Fargo, North Dakota, to Coborn's Inc. (“Coborn’s”). The Company did not incur a gain or loss on the sale of this disposal group. The Hornbacher’s store in Grand Forks, North Dakota was not included in the sale to Coborn’s and has closed pursuant to the terms of the definitive agreement. As part of the sale, Coborn's entered into a long-term agreement for the Company to serve as the primary supplier of the Hornbacher's locations and expand its existing supply arrangements for other Coborn’s locations. In addition, the Company sold the pharmacy prescription files and inventory of all Shoppers stores. Operating results of discontinued operations are summarized below:
(in millions) |  | 2021 |  | 2020 |  | 2019(1) (41 weeks)
Net sales |  | $ | 42 |  |  | $ | 184 |  |  | $ | 407 |
Cost of sales |  | 28 |  |  | 131 |  |  | 290 |
Gross profit |  | 14 |  |  | 53 |  |  | 117 |
Operating expenses |  | 9 |  |  | 43 |  |  | 98 |
Restructuring expenses and charges |  | — |  |  | 33 |  |  | 25 |
Operating income (loss) |  | 5 |  |  | (23) |  |  | (6) |
Other (income) expense, net |  | — |  |  | — |  |  | — |
Income (loss) from discontinued operations before income taxes |  | 5 |  |  | (23) |  |  | (6) |
Benefit for income taxes |  | (1) |  |  | (5) |  |  | (3) |
Income (loss) from discontinued operations, net of tax |  | $ | 6 |  |  | $ | (18) |  |  | $ | (3) |
(1) These results reflect retail operations from the Supervalu acquisition date of October 22, 2018 to August 3, 2019. The Company recorded $0 million, $0 million and $12 million within Net sales from continuing operations attributable to discontinued operations inter-company product purchases in fiscal 2021, 2020 and 2019, respectively, related to retail disposal groups, which were sold with a supply agreement and were classified within discontinued operations prior to their disposal. These amounts were recorded at gross margin rates consistent with sales to other similar wholesale customers of the acquired Supervalu business. No net sales were recorded within continuing operations for retail stores within discontinued operations that the Company disposed of and expects to dispose of without a supply agreement. These net sales have been eliminated upon consolidation within the Wholesale segment of continuing operations and amounted to $22 million, $97 million and $201 million in fiscal 2021, 2020 and 2019, respectively. The following table summarizes the carrying amounts of major classes of assets and liabilities that were classified as held-for-sale on the Consolidated Balance Sheets:
(in millions) |  | July 31, 2021 |  | August 1, 2020
Current assets |  |  |  |
Inventories, net |  | $ | 2 |  |  | $ | 3 |
Total current assets of discontinued operations |  | 2 |  |  | 3 |
Long-term assets |  |  |  |
Property and equipment |  | 1 |  |  | 3 |
Other long-term assets |  | 1 |  |  | 1 |
Total long-term assets of discontinued operations |  | 2 |  |  | 4 |
Total assets of discontinued operations |  | $ | 4 |  |  | $ | 7 |
Current liabilities |  |  |  |
Accounts payable |  | $ | 2 |  |  | $ | 3 |
Accrued compensation and benefits |  | 2 |  |  | 3 |
Other current liabilities |  | — |  |  | 4 |
Total current liabilities of discontinued operations |  | 4 |  |  | 10 |
Long-term liabilities |  |  |  |
Other long-term liabilities |  | — |  |  | 2 |
Total liabilities of discontinued operations |  | 4 |  |  | 12 |
Net liabilities of discontinued operations |  | $ | — |  |  | $ | (5) |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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