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Goodwill and Intangibles | 3 Months Ended
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May 31, 2025
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangibles | Note 5 - Goodwill and Intangibles We perform annual impairment testing each fiscal year and interim impairment testing, if necessary. We write down any asset deemed to be impaired to its fair value. During the first quarter of fiscal 2026, we concluded that a goodwill impairment triggering event had occurred due to a further sustained decline in our stock price, resulting in our carrying value (excluding long-term debt) exceeding the Company's total enterprise value (market capitalization plus long-term debt). Additional factors that contributed to this conclusion included downward revisions to our internal forecasts and strategic long-term plans, which reflect the tariff policies in effect and the related macroeconomic environment at the end of our first quarter of fiscal 2026, including the corresponding impact on consumer spending and retailer orders. These factors were applicable to all of our reporting units, indefinite-lived trademark licenses and trade names and definite-lived trademark licenses, trade names and certain other intangible assets. Thus, we performed quantitative impairment testing on our goodwill and intangible assets described above. We estimate the fair value of our trade names and trademark licenses using the relief from royalty method income approach which is based upon projected future discounted cash flows (“DCF Model”). We estimate the fair value of our customer relationships and lists using the distributor method income approach which is based upon a DCF Model. After adjusting the carrying values of our indefinite-lived and definite-lived intangible assets, the Company completed a quantitative impairment test for goodwill. We estimate the fair value of our reporting units using an income approach based upon projected future discounted cash flows. Based on the outcome of these assessments, we recognized asset impairment charges totaling $414.4 million and a charge of $16.5 million to tax expense to record a valuation allowance against a related deferred tax asset during the first quarter of fiscal 2026. Asset impairment charges recognized for our Home & Outdoor segment totaled $219.1 million and included charges for our Hydro Flask and Osprey businesses of $120.8 million and $98.3 million, respectively. Asset impairment charges recognized for our Beauty & Wellness segment totaled $195.3 million and included charges for our Drybar, Curlsmith, Health & Wellness and Revlon businesses of $103.7 million, $36.2 million, $35.8 million and $19.6 million, respectively. In connection with our annual budgeting and forecasting process, management reduced its forecasts for net sales revenue growth, gross margin and earnings before interest and taxes to reflect the tariff policies in effect and the related macroeconomic environment at the end of our first quarter of fiscal 2026, including the corresponding impact on consumer spending and retailer orders, as applicable. The revised forecasts also resulted in management selecting lower residual growth rates, which were also reflective of revised long-term industry growth expectations, and royalty rates, as applicable. Refer to Note 11 for additional information on our valuation method and related assumptions and estimates. For additional information regarding the testing and analysis performed, refer to “Critical Accounting Policies and Estimates” in Item 2., “Management's Discussion and Analysis of Financial Condition and Results of Operations”. The following table summarizes the changes in our goodwill by segment for the three month period ended May 31, 2025:
(in thousands) | Home & Outdoor |  | Beauty & Wellness |  | Total
Gross carrying amount as of February 28, 2025 | $ | 491,777 |  |  | $ | 729,792 |  |  | $ | 1,221,569 |
Accumulated impairment as of February 28, 2025 | — |  |  | (38,670) |  |  | (38,670) |
Net carrying amount as of February 28, 2025 | $ | 491,777 |  |  | $ | 691,122 |  |  | $ | 1,182,899 |
Acquisitions (1) | — |  |  | (4,158) |  |  | (4,158) |
Impairment charges (2) | (167,521) |  |  | (149,434) |  |  | (316,955) |
Gross carrying amount as of May 31, 2025 | $ | 491,777 |  |  | $ | 725,634 |  |  | $ | 1,217,411 |
Accumulated impairment as of May 31, 2025 | (167,521) |  |  | (188,104) |  |  | (355,625) |
Net carrying amount as of May 31, 2025 | $ | 324,256 |  |  | $ | 537,530 |  |  | $ | 861,786 |
(1)Reflects a favorable post-closing adjustment to goodwill recorded in the Beauty & Wellness segment during the first quarter of fiscal 2026 in connection with the acquisition of Olive & June on December 16, 2024. For additional information see Note 4. (2)Reflects the goodwill impairment charges of $93.3 million and $74.2 million related to our Osprey and Hydro Flask reporting units, respectively, recorded in the Home & Outdoor segment and $87.3 million, $32.4 million and $29.7 million related to our Drybar, Curlsmith and Heath & Wellness reporting units, respectively, recorded in the Beauty & Wellness segment. The remaining carrying values of the Osprey, Hydro Flask, Drybar, Curlsmith and Health & Wellness reporting units' goodwill as of May 31, 2025 were $116.4 million, $41.7 million, $47.0 million, $84.7 million and $255.1 million, respectively. The following table summarizes the components of our other intangible assets as follows:
|  |  | May 31, 2025 |  | February 28, 2025
(in thousands) |  |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Indefinite-lived: |  |  |  |  |  |  |  |  |  |  |  |  |
Trademark licenses |  |  | $ | 7,400 |  |  | $ | — |  |  | $ | 7,400 |  |  | $ | 7,400 |  |  | $ | — |  |  | $ | 7,400 |
Trade names (1) |  |  | 310,200 |  |  | — |  |  | 310,200 |  |  | 358,200 |  |  | — |  |  | 358,200 |
Definite-lived: |  |  |  |  |  |  |  |  |  |  |  |  |
Trademark licenses (2) |  |  | 57,154 |  |  | (10,030) |  |  | 47,124 |  |  | 75,050 |  |  | (9,454) |  |  | 65,596 |
Trade names (3) |  |  | 82,688 |  |  | (15,321) |  |  | 67,367 |  |  | 89,365 |  |  | (14,030) |  |  | 75,335 |
Customer relationships and lists (4) |  |  | 148,700 |  |  | (123,303) |  |  | 24,397 |  |  | 168,201 |  |  | (120,932) |  |  | 47,269 |
Other intangibles (5) |  |  | 70,786 |  |  | (62,092) |  |  | 8,694 |  |  | 74,297 |  |  | (61,341) |  |  | 12,956 |
Total |  |  | $ | 676,928 |  |  | $ | (210,746) |  |  | $ | 466,182 |  |  | $ | 772,513 |  |  | $ | (205,757) |  |  | $ | 566,756 |
(1)Balances as of May 31, 2025 reflect total impairment charges of $48.0 million recognized during the first quarter of fiscal 2026, which includes $37.0 million, $5.0 million and $6.0 million related to our Hydro Flask, Osprey and PUR trade names, respectively. The remaining carrying values of the Hydro Flask, Osprey and PUR trade names as of May 31, 2025 were $22.0 million, $165.0 million and $48.0 million, respectively. These impairment charges for Hydro Flask and Osprey were recorded in the Home & Outdoor segment. The impairment charge for PUR was recorded in the Beauty & Wellness segment. (2)Balances as of May 31, 2025 reflect an impairment charge recorded during the first quarter of fiscal 2026 in the Beauty & Wellness segment of $19.6 million related to our Revlon trademark license. The remaining carrying value of this trademark license as of May 31, 2025 was $44.8 million. (3)Balances as of May 31, 2025 reflect total impairment charges recorded during the first quarter of fiscal 2026 in the Beauty & Wellness segment of $6.7 million, which includes $3.9 million and $2.8 million related to our Curlsmith and Drybar trade names, respectively. The remaining carrying values of the Curlsmith and Drybar trade names as of May 31, 2025 were $13.9 million and $4.0 million, respectively. (4)Balances as of May 31, 2025 reflect total impairment charges of $19.5 million recognized during the first quarter of fiscal 2026, which includes $10.7 million and $8.8 million recorded in the Beauty & Wellness and Home & Outdoor segments, respectively, related to our Drybar and Hydro Flask customer relationships, respectively, which reduced the carrying values of these assets to zero. (5)Balances as of May 31, 2025 reflect total impairment charges of $3.6 million recognized during the first quarter of fiscal 2026, which includes $2.8 million and $0.8 million recorded in the Beauty & Wellness and Home & Outdoor segments, respectively, related to Drybar and Hydro Flask other intangibles, respectively, which reduced the carrying values of these assets to zero. The following table summarizes amortization expense related to our other intangible assets as follows:
Estimated Amortization Expense (in thousands) |
Fiscal 2026 | $ | 16,555 |
Fiscal 2027 | 11,944 |
Fiscal 2028 | 9,277 |
Fiscal 2029 | 9,249 |
Fiscal 2030 | 8,993 |
Fiscal 2031 | 8,203 |

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