Intangible Assets

12 Months Ended

Feb. 03, 2024

Goodwill, Trade Names and Other Intangible Assets, Net [Abstract]

Goodwill

The Company's goodwill was established as a result of the acquisition of Adore Me on December 30, 2022. For additional information, see Note 2, “Acquisition.” Prior to the acquisition of Adore Me, the Company did not have any goodwill.

The Company elected to perform its annual goodwill impairment assessment in the fourth quarter of 2023 using the quantitative approach, based on a weighted average of the market and income approaches. The market approach is based on earnings multiples of selected guideline public companies, while the income approach is based on estimated discounted future cash flows. The Company compared the total fair values of its reporting units to the Company's market capitalization to determine if the fair values are reasonable compared to external market indicators. The Company believes the use of significant assumptions within the valuation models are reasonable estimates of likely future events. The estimated fair value of each reporting unit was in excess of each of its respective carrying value, which resulted in a conclusion that no impairment existed as of February 3, 2024. Subsequent to this annual impairment test, no additional indications of an impairment were identified.

The following table shows the change in the carrying value of Goodwill:


	(in millions)
Balance as of January 28, 2023	$	365
Adjustments (a)	2
Balance as of February 3, 2024	$	367

________________

(a)Includes measurement period adjustments related to the acquisition of Adore Me. For additional information, see Note 2, “Acquisition.”

Trade Name - Indefinite-Lived

The Victoria's Secret trade name, an indefinite-lived intangible asset, was $246 million as of February 3, 2024 and January 28, 2023.

As of the end of 2023 and 2022, the Company performed its annual impairment assessment of the Victoria's Secret trade name. To estimate the fair value of the trade name, the Company used the relief from royalty method under the income approach. The assessments concluded that the fair value of the trade name was in excess of its carrying value.

Definite-Lived Intangible Assets

The Company's definite-lived intangible assets were established as a result of the acquisition of Adore Me. Prior to the acquisition of Adore Me on December 30, 2022, the Company did not have any definite-lived intangible assets.

The following table provides details of the gross carrying amount and accumulated amortization of the Company's definite-lived intangible assets as of February 3, 2024 and January 28, 2023:


	February 3, 2024		January 28, 2023
	(in millions)
Gross Definite-Lived Intangible Assets
Customer Relationships	$	81	$	81
Developed Technology	56		56
Adore Me Trade Name	43		43
Total Gross Definite-Lived Intangible Assets	$	180	$	180

Accumulated Amortization
Customer Relationships	$	(12)	$	—
Developed Technology	(9)		—
Adore Me Trade Name	(4)		—
Total Accumulated Amortization	(25)		—
Total Definite-Lived Intangible Assets	$	155	$	180

Amortization expense for intangible assets was $25 million for 2023. Due to the timing of the acquisition date and the Company consolidating Adore Me's financial information on an approximate one-month reporting lag, there was no amortization expense recorded related to these definite-lived intangible assets prior to 2023.

Definite-lived intangible assets are evaluated for impairment whenever events or circumstances indicate that a certain asset or asset group may be impaired. No impairment has been recorded for these definite-lived intangible assets.

The estimated future annual amortization expense is $25 million for each of the next five fiscal years for definite-lived intangible assets recorded as of February 3, 2024.