Goodwill and Indefinite-Lived Intangibles (Notes)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Indefinite-Lived Intangibles

GOODWILL AND INDEFINITE-LIVED INTANGIBLES

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

	Year-To-Date Ended
(In millions)	September 30, 2023		October 1, 2022
Goodwill balance at beginning of the year	$	485.0	$	556.6
Sale of business (see Note 18)	(20.4)		—
Foreign currency translation effects	0.8		(30.1)
Goodwill balance at end of the quarter	$	465.4	$	526.5

The Company’s indefinite-lived intangible assets, which comprise trade names and trademarks, totaled $237.0 million, $274.0 million, and $658.6 million as of September 30, 2023, December 31, 2022, and October 1, 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 conjunction with the Sperry® trade name impairment trigger identified, the Company performed a quantitative impairment analysis of the Lifestyle reporting unit and concluded the reporting unit was not impaired. The estimated fair value of the Lifestyle reporting unit exceeded the carrying value by 30%.

In the fourth quarter of 2022, the Company recognized impairment charges of $191.0 million and $189.3 million related to the Sperry® and Sweaty Betty® trade names, respectively, and recognized a $48.4 million goodwill impairment charge related to the Sweaty Betty® reporting unit.

The risk of future non-cash impairment of the Sperry® and Sweaty Betty® trade names and Sweaty Betty® goodwill is dependent on whether actual results differ from the key assumptions used in the determination of each trade name's fair value and the Sweaty Betty® 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 Sperry® and Sweaty Betty® trade names and the Sweaty Betty® reporting unit. A future impairment charge of the Sperry® trade name or 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 values of the Company’s Sperry® and Sweaty Betty® trade names indefinite-lived assets were $67.0 million and $95.3 million, respectively, as of September 30, 2023.