Restructuring and Asset Impairment

4 Months Ended

Apr. 20, 2024

Restructuring and Related Activities [Abstract]

Note 5 – Restructuring and Asset Impairment

The following table provides the activity of reserves for closed properties for the 16-week period ended April 20, 2024. Included in the liability are lease-related ancillary costs from the date of closure to the end of the remaining lease term, as well as related severance. Reserves for closed properties recorded in the condensed consolidated balance sheets are included in “Other accrued expenses” in Current liabilities and “Other long-term liabilities” in Long-term liabilities based on the timing of when the obligations are expected to be paid. Reserves for severance are recorded in “Accrued payroll and benefits”.


	Reserves for Closed Properties
(In thousands)	Lease Ancillary Costs			Severance		Total
Balance at December 30, 2023	$	2,977		$	—	$	2,977
Accretion expense		25			—		25
Payments		(169	)		—		(169	)
Balance at April 20, 2024	$	2,833		$	—	$	2,833

Restructuring and asset impairment, net in the condensed consolidated statements of earnings consisted of the following:


	16 Weeks Ended
(In thousands)	April 20, 2024			April 22, 2023
Asset impairment charges (a)	$	6,121		$	3,745
Loss (gain) on sales of assets related to closed facilities		51			(61	)
Other (income) costs associated with site closures		(254	)		314
Lease termination adjustments		(150	)		—
Changes in estimates		—			85
Total	$	5,768		$	4,083

(a) Asset impairment charges in the current year quarter were incurred on long-lived assets in the Retail segment due to changes in the competitive environment. In the prior year quarter, asset impairment charges related to two store closures within the Retail segment and impairment losses related to a distribution location that sustained significant store damage within the Wholesale segment.

Long-lived assets which are not recoverable are measured at fair value on a nonrecurring basis using Level 3 inputs under the fair value hierarchy, as further described in Note 6. In the current year, assets with a book value of $6.1 million were fully impaired. In the prior year quarter, long-lived assets with a book value of $7.4 million were measured at a fair value of $3.7 million, resulting in impairment charges of $3.7 million. The fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows, including the expected proceeds from the sale of assets and expected insurance recoveries, discounted using a risk-adjusted rate of interest. The Company estimates future cash flows based on historical results of operations, external factors expected to impact future performance, experience and knowledge of the geographic area in which the assets are located, and when necessary, uses the support of real estate brokers.