BUSINESS SEGMENTS

12 Months Ended

Aug. 01, 2020

Segment Reporting [Abstract]

BUSINESS SEGMENTS

NOTE 17—BUSINESS SEGMENTS

The Company has two reportable segments: Wholesale and Retail. These reportable segments are two distinct businesses, each with a different customer base, marketing strategy and management structure. The Wholesale reportable segment is the aggregation of two operating segments: U.S. Wholesale and Canada Wholesale. The U.S. Wholesale and Canada Wholesale operating segments have similar products and services, customer channels, distribution methods and economic characteristics. Reportable segments are reviewed on an annual basis, or more frequently if events or circumstances indicate a change in reportable segments has occurred.

The Wholesale reportable segment is engaged in the national distribution of natural, organic, specialty, produce, and conventional grocery and non-food products, and providing retail services in the United States and Canada. The Retail reportable segment derives revenues from the sale of groceries and other products at retail locations operated by the Company. The Company has additional operating segments that do not meet the quantitative thresholds for reportable segments and are therefore aggregated under the caption of Other. Other includes a manufacturing division, which engages in the importing, roasting, packaging, and distributing of nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items and confections, and the Company’s branded product lines. Other also includes certain corporate operating expenses that are not allocated to operating segments, which include, among other expenses, restructuring, acquisition and integration related expenses, share-based compensation, and salaries, retainers, and other related expenses of certain officers and all directors. Wholesale records revenues related to sales to Retail at gross margin rates consistent with sales to other similar wholesale customers of the acquired Supervalu business.

Segment earnings include revenues and costs attributable to each of the respective business segments and allocated corporate overhead, based on the segment’s estimated consumption of corporately managed resources. The Company allocates certain corporate capital expenditures and identifiable assets to its business segments and retains certain depreciation expense related to those assets within Other. In fiscal 2020, the Company changed its measurement of segment profit, which resulted in additional corporate expenses that were previously included in Other now being attributed to the Wholesale segment, and updated its segment profit measure to Adjusted EBITDA. Prior period amounts have been recast to reflect these changes in segment profit. Non-operating expenses that are not allocated to the operating segments are under the caption of Unallocated (Income)/Expenses.

The following table provides continuing operations net sales and Adjusted EBITDA by reportable segment and reconciles that information to (Loss) income from continuing operations before income taxes:

(in thousands)	2020			2019			2018
Net sales:
Wholesale(1)	$	25,496,597		$	21,530,183		$	10,169,840
Retail	2,330,694			1,653,596			—
Other	227,984			234,838			228,465
Eliminations	(1,541,008		)	(1,111,161		)	(171,622		)
Total Net sales	$	26,514,267		$	22,307,456		$	10,226,683
Continuing operations Adjusted EBITDA:
Wholesale	591,028			462,996			343,104
Retail	86,401			34,149			—
Other	(15,903		)	41,918			12,337
Eliminations	(2,464		)	(1,162		)	3,425
Adjustments:
Net income attributable to noncontrolling interests	4,929			107			—
Total other expense, net	(148,839		)	(144,685		)	(14,480		)
Depreciation and amortization	(281,535		)	(247,746		)	(87,631		)
Share-based compensation	(33,689		)	(40,495		)	(25,783		)
Restructuring, impairment, acquisition, and integration related expenses	(86,383		)	(148,195		)	(9,738		)
Goodwill and asset impairment	(425,405		)	(292,770		)	(11,242		)
(Loss) gain on sale of assets	(17,132		)	499			—
Note receivable and lost customer bankruptcy charge	(12,516		)	—			—
Inventory fair value adjustment	—			(10,463		)	—
Legal reserve charge	(1,196		)	1,390			—
Other retail expense	(1,750		)	—			—
(Loss) income from continuing operations before income taxes	$	(344,454	)	$	(344,457	)	$	209,992
Depreciation and amortization:
Wholesale	$	267,236		$	227,946		$	84,971
Retail	3,493			6,430			—
Other	10,806			13,370			2,660
Total depreciation and amortization	$	281,535		$	247,746		$	87,631
Capital expenditures:
Wholesale	$	159,758		$	206,812		$	43,402
Retail	12,344			20,660			—
Other	466			1,005			1,206
Total capital expenditures	$	172,568		$	228,477		$	44,608

(1) As presented in Note 3—Revenue Recognition, for fiscal 2020 and 2019, the Company recorded $1,319 million and $937 million, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale sales to its Retail segment that have been eliminated upon consolidation. For fiscal 2020 and 2019, the Company recorded $0.0 million and $12.4 million, respectively, within Net sales in its Wholesale reportable segment attributable to discontinued operations inter-company product purchases for certain retail banners it sold with a supply agreement.

Total assets of continuing operations by reportable segment were as follows:

(in thousands)	August 1, 2020			August 3, 2019
Assets:
Wholesale	$	6,588,836		$	6,246,306
Retail	542,470			545,050
Other	501,468			362,100
Eliminations	(54,784		)	(45,072		)
Total assets of continuing operations	$	7,577,990		$	7,108,384