XML 28 R14.htm IDEA: XBRL DOCUMENT v3.26.1
Acquisition of Olive & June
 12 Months Ended
Feb. 28, 2026
Business Combination [Abstract]  
Acquisition of Olive & June
Note 6 - Acquisition of Olive & June

On December 16, 2024, we completed the acquisition of 100% of the membership interests of Olive & June, an innovative, omni-channel nail care brand. Olive & June products deliver a salon-quality experience at home and include nail polish, press-on nails, manicure and pedicure systems, grooming tools and nail care essentials. The acquisition of Olive & June complements and broadens our existing Beauty portfolio beyond the hair care category. The Olive & June brand and products were added to the Beauty & Wellness segment. The total purchase consideration consists of initial cash consideration of $224.7 million, which is net of cash acquired and a favorable post-closing adjustment of $3.9 million, and contingent cash consideration of up to $15.0 million subject to Olive & June’s performance during calendar years 2025, 2026, and 2027, payable annually. The acquisition was funded with cash on hand and borrowings under our existing revolving credit facility. We incurred pre-tax acquisition-related expenses of $3.0 million during fiscal 2025, which were recognized in SG&A within our consolidated statement of income.

The contingent cash consideration of up to $15.0 million is payable annually in three equal installments subject to Olive & June achieving certain annual adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) targets during calendar years 2025, 2026 and 2027. If the annual adjusted
EBITDA target is not met, no payment is required. As of the acquisition date, we recorded a liability for the estimated fair value of the contingent consideration of $4.1 million, of which $1.8 million and $2.3 million was included within accrued expenses and other current liabilities and other liabilities, non-current, respectively, in our consolidated balance sheet. This contingent consideration liability is remeasured at fair value each reporting period until the contingency is resolved, with changes in fair value recognized in SG&A. We made a contingent consideration payment of $5.0 million in April 2026 based upon Olive & June’s achievement of the adjusted EBITDA target for calendar year 2025. See Note 14 for additional information regarding the estimated fair value of our contingent consideration liability.

We accounted for the acquisition as a purchase of a business and recorded the excess of the purchase price over the estimated fair value of the assets acquired and liabilities assumed as goodwill. The goodwill recognized is attributable primarily to expected synergies including leveraging our operational scale, existing customer relationships and distribution capabilities. The goodwill is deductible for income tax purposes and subject to valuation allowance analysis. We have determined the appropriate fair values of the acquired intangible assets and completed our analysis of the economic lives of the assets acquired. We assigned $51.0 million to trade names and are amortizing over a 15 year expected life. We assigned $8.0 million to customer relationships and are amortizing over a 8.5 year expected life, based on historical attrition rates. We assigned $1.6 million to non-compete agreements and are amortizing over a 5 year expected life.

During the first quarter of fiscal 2026, we made adjustments to provisional asset and liability balances, which resulted in a corresponding net decrease to goodwill of $0.3 million. We also finalized the net working capital adjustment during the first quarter of fiscal 2026, which resulted in a $3.9 million reduction to the total purchase consideration and goodwill. During the third quarter of fiscal 2026, we made adjustments to a provisional current liability balance, which resulted in a corresponding de minimis increase to goodwill.

The following table presents the estimated fair values of assets acquired and liabilities assumed at the acquisition date:
(in thousands)
Assets: 
Receivables$13,182 
Inventory15,121 
Prepaid expenses and other current assets3,920 
Property and equipment1,490 
Goodwill150,726 
Trade names - definite51,000 
Customer relationships - definite
8,000 
Other intangible assets - definite
1,600 
Other assets
275 
Total assets245,314 
Liabilities:
Accounts payable5,614 
Accrued expenses and other current liabilities12,731 
Other liabilities, non-current
2,300 
Total liabilities20,645 
Net assets recorded$224,669 
The impact of the acquisition of Olive & June on our consolidated statement of income for fiscal 2025 was as follows:
December 16, 2024 (acquisition date) through February 28, 2025
(in thousands, except loss per share data)
Fiscal Year Ended February 28, 2025 (1)
Sales revenue, net$23,010 
Net loss
(1,755)
Loss per share:
Basic$(0.08)
Diluted(0.08)
(1)Represents approximately eleven weeks of operating results from Olive & June, acquired December 16, 2024. Net loss and loss per share amounts include acquisition-related expenses, share-based compensation expense, amortization expense, interest expense and income tax expense.

The following supplemental unaudited pro forma information presents our financial results as if the acquisition of Olive & June had occurred on March 1, 2023. This supplemental pro forma information has been prepared for comparative purposes and does not necessarily indicate what may have occurred if the acquisition had been completed on March 1, 2023, and this information is not intended to be indicative of future results:
Fiscal Years Ended the Last Day of February,
(in thousands, except earnings per share data)
2025 (1)
2024
Sales revenue, net$1,980,423 $2,080,566 
Net income123,883 176,893 
Earnings per share:
Basic$5.38 $7.41 
Diluted5.37 7.38 
(1)Pro forma net income and earnings per share amounts for fiscal 2025 include acquisition-related expenses incurred by Olive & June and the Company of $8.9 million and $3.0 million, respectively, amortization expense of $4.7 million, and interest expense of $2.4 million.

These amounts have been calculated after adjusting the results of Olive & June to reflect the effect of income taxes and amortization expense for definite-lived intangible assets recognized as part of the business combination as if the acquisition had occurred on March 1, 2023.