Goodwill and Intangibles

6 Months Ended

Aug. 31, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

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 and second quarters 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 these conclusions 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 and second quarters 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 during the first and second quarters of fiscal 2026.

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 quantitative impairment testing 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 pre-tax asset impairment charges as follows:


(in thousands)	Three Months Ended August 31, 2025		Six Months Ended August 31, 2025
Home & Outdoor (1)	$	85,537	$	304,632
Beauty & Wellness (2)	240,857		436,147
Total	$	326,394	$	740,779

(1)Asset impairment charges recognized for our Home & Outdoor segment included charges for our Hydro Flask and Osprey businesses of $44.7 million and $40.8 million, respectively, for the three months ended August 31, 2025 and $165.5 million and $139.1 million, respectively, for the six months ended August 31, 2025.

(2)Asset impairment charges recognized for our Beauty & Wellness segment included charges for our Health & Wellness, Drybar, Curlsmith and Revlon businesses of $160.9 million, $47.8 million, $28.4 million and $3.9 million, respectively, for the three months ended August 31, 2025 and $196.6 million, $151.4 million, $64.6 million and $23.5 million, respectively, for the six months ended August 31, 2025.

During the first quarter of fiscal 2026, in connection with our annual budgeting and forecasting process, management reduced its forecasts for net sales revenue, 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. During the second quarter of fiscal 2026, management further reduced its forecasts for net sales revenue, 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 second quarter of fiscal 2026, including the impact on consumer spending, retailer orders and China cross border ecommerce due to a shift to localized distribution, as applicable. We did not recognize any asset impairment charges during the three and six months ended August 31, 2024. 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 six months ended August 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)	(229,058)		(380,533)		(609,591)
Gross carrying amount as of August 31, 2025	$	491,777	$	725,634	$	1,217,411
Accumulated impairment as of August 31, 2025	(229,058)		(419,203)		(648,261)
Net carrying amount as of August 31, 2025	$	262,719	$	306,431	$	569,150

(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)The Home & Outdoor segment reflects goodwill impairment charges related to our Hydro Flask and Osprey reporting units of $41.7 million and $19.8 million, respectively, for the three months ended August 31, 2025 and $115.9 million and $113.1 million, respectively, for the six months ended August 31, 2025. The Beauty & Wellness segment reflects goodwill impairment charges related to our Health & Wellness, Drybar and Curlsmith reporting units of $159.9 million, $46.8 million and $24.5 million, respectively, for the three months ended August 31, 2025 and $189.6 million, $134.1 million and

$56.8 million, respectively, for the six months ended August 31, 2025. The remaining carrying values of the Osprey, Health & Wellness, Drybar and Curlsmith reporting units’ goodwill as of August 31, 2025 were $96.6 million, $95.3 million, $0.2 million and $60.3 million, respectively. The goodwill impairment charges recognized for the Hydro Flask reporting unit reduced the carrying value of its goodwill to zero.

The following table summarizes the components of our other intangible assets as follows:


	August 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)	285,200		—		285,200		358,200		—		358,200

Definite-lived:
Trademark licenses (2)	45,700		(2,480)		43,220		75,050		(9,454)		65,596
Trade names (3)	64,150		(2,851)		61,299		89,365		(14,030)		75,335
Customer relationships and lists (4)	137,001		(113,534)		23,467		168,201		(120,932)		47,269
Other intangibles (5)	58,176		(49,737)		8,439		74,297		(61,341)		12,956
Total	$	597,627	$	(168,602)	$	429,025	$	772,513	$	(205,757)	$	566,756

(1)Balances as of August 31, 2025 reflect total impairment charges of $25.0 million and $73.0 million recognized during the three and six months ended August 31, 2025, respectively, which include $3.0 million and $40.0 million related to our Hydro Flask trade name, respectively, $21.0 million and $26.0 million related to our Osprey trade name, respectively, and $1.0 million and $7.0 million related to our PUR trade name, respectively. The remaining carrying values of the Hydro Flask, Osprey and PUR trade names as of August 31, 2025 were $19.0 million, $144.0 million and $47.0 million, respectively. These impairment charges for Hydro Flask and Osprey were recorded in the Home & Outdoor segment. The impairment charges for PUR were recorded in the Beauty & Wellness segment.

(2)Balances as of August 31, 2025 reflect impairment charges recorded during the three and six months ended August 31, 2025 in the Beauty & Wellness segment of $3.9 million and $23.5 million, respectively, related to our Revlon trademark license. The remaining carrying value of this trademark license as of August 31, 2025 was $40.7 million.

(3)Balances as of August 31, 2025 reflect total impairment charges recorded during the three and six months ended August 31, 2025 in the Beauty & Wellness segment of $4.9 million and $11.6 million, respectively, which include $3.9 million and $7.8 million related to our Curlsmith trade name, respectively, and $1.0 million and $3.8 million related to our Drybar trade name, respectively. The remaining carrying values of the Curlsmith and Drybar trade names as of August 31, 2025 were $9.8 million and $2.9 million, respectively.

(4)Balances as of August 31, 2025 reflect total impairment charges of $19.5 million recognized during the six months ended August 31, 2025, 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 which reduced the carrying values of these assets to zero. No impairment charges were recognized during the three months ended August 31, 2025 related to our customer relationships and lists.

(5)Balances as of August 31, 2025 reflect total impairment charges of $3.6 million recognized during the six months ended August 31, 2025, 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 which reduced the carrying values of these assets to zero. No impairment charges were recognized during the three months ended August 31, 2025 related to our other intangible assets.

During the three and six months ended August 31, 2025, we recorded amortization expense of $3.9 million and $8.9 million, respectively, compared to $4.5 million and $9.1 million during the same periods last year, respectively.

The following table summarizes amortization expense related to our other intangible assets as follows:


Estimated Amortization Expense (in thousands)
Fiscal 2026	$	16,412
Fiscal 2027	11,602
Fiscal 2028	8,936
Fiscal 2029	8,908
Fiscal 2030	8,609
Fiscal 2031	7,770