Goodwill and Other Intangibles (Notes)

12 Months Ended

Dec. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill are as follows:

	Fiscal Year
(In millions)	2023		2022
Goodwill balance at beginning of the year	$	485.0	$	556.6
Sale of a business (see Note 20)	(20.4)		—
Impairment	—		(48.4)
Reclassified to assets held for sale (1)	(43.0)		—
Foreign currency translation effects	5.5		(23.2)
Goodwill balance at end of the year	$	427.1	$	485.0

(1)Represents goodwill associated with the Sperry® business classified as held for sale as of fiscal 2023, refer to Note 20.

The Company performs its annual testing for goodwill and indefinite-lived intangible asset impairment at the beginning of the fourth quarter of the fiscal year for all reporting units. In the fourth quarter of 2022, after completion of the annual impairment testing, the Company recorded a $48.4 million impairment charge for Sweaty Betty® goodwill. The Company did not recognize

any impairment charges for goodwill during 2023 and 2021. For the Sweaty Betty® reporting unit included in the fiscal 2023 annual impairment test, the estimated fair value of the reporting unit exceeded the carrying value of by 5%.

The Company’s indefinite-lived intangible assets, which comprise trade names and trademarks, totaled $174.1 million and $274.0 million as of December 30, 2023 and December 31, 2022, respectively. In the third quarter of 2023, due to the continued lower current year performance of the Sperry® brand, the Company determined that a triggering event had occurred requiring impairment testing of the Sperry® trade name. Based on the results of the impairment testing, the Company recognized impairment charges of $38.3 million to the Sperry® trade name. The impairment charge was due to reductions in future cash flow assumptions mainly due to decreases in anticipated future performance and an increase in the discount rate used in the valuation. In the fourth quarter of fiscal 2022, after the completion of the annual impairment testing, the Company recognized impairment charges of $191.0 million and $189.3 million to the Sperry® and Sweaty Betty® trade names, respectively.

The Sperry® and Sweaty Betty® trade names were valued using the income approach, specifically the multi-period excess earnings method. The key assumptions used in the valuation being revenue growth, EBITDA margin, and the discount rate. Although the Company believes the estimates and assumptions used in the valuation were appropriate, it is possible assumptions could change in future periods. The risk of future impairment to the Sweaty Betty® trade name and Sweaty Betty® goodwill depend on key assumptions used in the determination of the trade name's and reporting unit's fair value, such as revenue growth, earnings before interest, taxes, depreciation and amortization margin, discount rate, and assumed tax rate, or if macroeconomic conditions deteriorate and adversely affect the values of the Company's Sweaty Betty® trade name and the Sweaty Betty® reporting unit. A future impairment charge of the Sweaty Betty® trade name and the Sweaty Betty® reporting unit goodwill could have an adverse material effect on the Company's consolidated financial results The carrying value of the Company’s Sweaty Betty® trade name indefinite-lived intangible asset and the Sweaty Betty® reporting unit goodwill were $99.5 million and $53.0 million, respectively, as of December 30, 2023.

Amortizable intangible assets are amortized using the straight-line method over their estimated useful lives. The combined gross carrying values and accumulated amortization for these amortizable intangibles are as follows:

	December 30, 2023
(In millions)	Gross carrying value		Accumulated amortization		Net		Average remaining life (years)
Customer relationships	$	59.6	$	28.1	$	31.5	9
Other	21.3		17.9		3.4		3
Total	$	80.9	$	46.0	$	34.9

	December 31, 2022
(In millions)	Gross carrying value		Accumulated amortization		Net		Average remaining life (years)
Customer relationships	$	118.4	$	55.2	$	63.2	10
Other	22.2		18.0		4.2		3
Total	$	140.6	$	73.2	$	67.4

Amortization expense for these amortizable intangible assets was $7.2 million, $7.9 million and $8.4 million for fiscal years 2023, 2022 and 2021, respectively. Estimated aggregate amortization expense for such intangibles for the fiscal years subsequent to December 30, 2023 is as follows:

(In millions)	2024		2025		2026		2027		2028
Amortization expense	$	4.6	$	4.3	$	4.0	$	3.7	$	3.4