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Restructuring Plan
 12 Months Ended
Feb. 29, 2024
Restructuring and Related Activities [Abstract]  
Restructuring Plan
Note 11 - Restructuring Plan

As part of our global restructuring plan, Project Pegasus, we incur severance and employee related costs, professional fees, contract termination costs and other exit and disposal costs which are recorded as “Restructuring charges” in the consolidated statements of income. Severance and employee related
costs consist primarily of salary continuation benefits, prorated annual incentive compensation (based on eligibility), outplacement services and continuation of health benefits. Severance and employee related benefits are pursuant to our severance plan and are accounted for in accordance with ASC 712, Compensation - Nonretirement Postemployment Benefits, based upon the characteristics of the termination benefits pursuant to our severance plan. Severance and employee related costs are recognized when the benefits are determined to be probable of being paid and reasonably estimable. Professional fees, contract termination costs and other exit and disposal costs are accounted for in accordance with ASC 420, Exit or Disposal Cost Obligations and are recognized as incurred. Restructuring accruals are based upon management estimates at the time and are subject to change depending upon changes in facts and circumstances subsequent to the date the original liability was recorded.

During fiscal 2023, we initiated Project Pegasus, a global restructuring plan intended to expand operating margins through initiatives designed to improve efficiency and effectiveness and reduce costs. Project Pegasus includes initiatives to further optimize our brand portfolio, streamline and simplify the organization, accelerate cost of goods savings projects, enhance the efficiency of our supply chain network, optimize our indirect spending and improve our cash flow and working capital, as well as other activities. We anticipate these initiatives will create operating efficiencies, as well as provide a platform to fund future growth investments.

During the fourth quarter of fiscal 2023, we made changes to the structure of our organization, which resulted in our previous Health & Wellness and Beauty operating segments being combined into a single reportable segment. As part of our initiative focused on streamlining and simplifying the organization, we made further changes to the structure of our organization, which included the creation of a North America Regional Market Organization (“RMO”) responsible for sales and go-to-market strategies for all categories and channels in the U.S. and Canada, and further centralization of certain functions under shared services, particularly in operations and finance to better support our business segments and RMOs. This new structure reduced the size of our global workforce by approximately 10%. We believe that these changes better focus business segment resources on brand development, consumer-centric innovation and marketing, the RMOs on sales and go-to-market strategies, and shared services on their respective areas of expertise while also creating a more efficient and effective organizational structure.

During the second quarter of fiscal 2024, we announced plans to geographically consolidate the U.S. Beauty business, currently located in El Paso, Texas, and Irvine, California, and co-locate it with our Wellness business in the Boston, Massachusetts area. This geographic consolidation and relocation is the next step in our initiative to streamline and simplify the organization and is expected to be completed during fiscal 2025. We expect these changes will enable a greater opportunity to capture synergies and enhance collaboration and innovation within the Beauty & Wellness segment.

We have updated our expectations regarding Project Pegasus charges and savings. We have lowered our total estimate of one-time pre-tax restructuring charges to approximately $50 million to $55 million over the duration of the plan. We continue to expect these charges to be completed during fiscal 2025. We previously estimated total pre-tax restructuring charges of approximately $60 million to $65 million. In addition, we now have the following expectations regarding Project Pegasus charges:
•Pre-tax restructuring charges to be comprised of approximately $15 million to $19 million of severance and employee related costs, $28 million of professional fees, $3 million to $4 million of contract termination costs, and $4 million of other exit and disposal costs.
•All of our operating segments and shared services will be impacted by the plan and pre-tax restructuring charges include approximately $16 million to $17 million in Home & Outdoor and $34 million to $38 million in Beauty & Wellness.
•Pre-tax restructuring charges represent primarily cash expenditures, which we continue to expect to be substantially paid by the end of fiscal 2025.
We have the following expectations regarding Project Pegasus savings:
•We continue to expect targeted annualized pre-tax operating profit improvements of approximately $75 million to $85 million, which began in fiscal 2024 and which we now expect to be substantially achieved by the end of fiscal 2027.
•We have updated our expectations regarding the estimated cadence of the recognition of the savings to be approximately 25% in fiscal 2024, which was achieved, approximately 35% in fiscal 2025, approximately 25% in fiscal 2026, and approximately 15% in fiscal 2027. We previously estimated recognition of the savings to be approximately 25% in fiscal 2024, approximately 50% in fiscal 2025 and approximately 25% in 2026.
•We continue to expect total profit improvements to be realized approximately 60% through reduced cost of goods sold and 40% through lower SG&A.

During fiscal 2024 and 2023, we incurred $18.7 million and $27.4 million, respectively, of pre-tax restructuring costs in connection with Project Pegasus, which were recorded as “Restructuring charges” in the consolidated statements of income. We recognized $0.4 million of pre-tax restructuring costs during fiscal 2022 under a prior restructuring plan referred to as Project Refuel, which was completed during the fourth quarter of fiscal 2022.

The following tables summarize restructuring charges recorded as a result of Project Pegasus for the periods presented:

 Fiscal Year Ended February 29, 2024Total
Incurred Since Inception
(in thousands)Home &
Outdoor		Beauty & WellnessTotal
Severance and employee related costs$1,046 $4,777 $5,823 $15,276 
Professional fees4,049 6,079 10,128 26,877 
Contract termination— 796 796 1,331 
Other (1)
49 1,916 1,965 2,590 
Total restructuring charges$5,144 $13,568 $18,712 $46,074 
(1)Includes a $1.8 million charge to write-off inventory, tooling and other production equipment as a result of abandoning a new product prior to its initial launch.

 Fiscal Year Ended February 28, 2023
(in thousands)Home &
Outdoor
Beauty &
Wellness
Total
Severance and employee related costs$1,984 $7,469 $9,453 
Professional fees6,674 10,075 16,749 
Contract termination— 535 535 
Other31 594 625 
Total restructuring charges$8,689 $18,673 $27,362 
The tables below present a rollforward of our accruals related to Project Pegasus, which are included in accounts payable and accrued expenses and other current liabilities:
(in thousands)Balance at February 28, 2023ChargesPaymentsBalance at February 29, 2024
Severance and employee related costs$3,173 $5,823 $(4,503)$4,493 
Professional fees3,201 10,128 (13,057)272 
Contract termination160 796 (956)— 
Other34 194 (228)— 
Total$6,568 $16,941 $(18,744)$4,765 

(in thousands)Balance at February 28, 2022ChargesPaymentsBalance at February 28, 2023
Severance and employee related costs$— $9,453 $(6,280)$3,173 
Professional fees— 16,749 (13,548)3,201 
Contract termination— 535 (375)160 
Other— 625 (591)34 
Total$— $27,362 $(20,794)$6,568