GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Feb. 03, 2024

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

2. GOODWILL AND INTANGIBLE ASSETS

The following table summarizes the changes in the Company’s net goodwill balance through February 3, 2024:

	2023		2022
Balance beginning of year
Goodwill	$	5,737	$	5,737
Accumulated impairment losses		(2,821)		(2,661)
Subtotal		2,916		3,076
Activity during the year
Impairment charge related to Vitacost.com		—		(160)
Balance end of year
Goodwill		5,737		5,737
Accumulated impairment losses		(2,821)		(2,821)
Total Goodwill	$	2,916	$	2,916

Testing for impairment is performed annually, or on an interim basis upon the occurrence of a triggering event or a change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The annual evaluation of goodwill and indefinite-lived intangible assets was performed during the fourth quarter of 2023, 2022 and 2021. The evaluation did not result in impairment in 2023 or 2021. The evaluation resulted in an impairment in 2022.

Based on the results of the Company’s impairment assessment in the fourth quarter of 2022, Vitacost.com recorded a $160 goodwill impairment.  In the fourth quarter of 2022, as the Company’s digital strategy evolved, the Company’s primary focus was to effectively utilize its Pickup and Delivery capabilities.  This reprioritization resulted in reduced long-term profitability expectations and a decline in the market value for one underlying channel of business and led to the pre-tax and after-tax impairment charge of $160.  The pre-impairment goodwill balance for Vitacost.com was $160 as of the fourth quarter 2022.  There is no goodwill remaining for Vitacost.com as of January 28, 2023.

The following table summarizes the Company’s intangible assets balance through February 3, 2024:

	2023				2022
	Gross carrying		Accumulated		Gross carrying		Accumulated
	amount		amortization(1)		amount		amortization(1)
Definite-lived pharmacy prescription files	$	360	$	(259)	$	325	$	(230)
Definite-lived customer relationships		186		(179)		186		(173)
Definite-lived other		118		(103)		112		(96)
Indefinite-lived trade name		685		—		685		—
Indefinite-lived liquor licenses		91		—		90		—
Total	$	1,440	$	(541)	$	1,398	$	(499)

(1) Pharmacy prescription files are amortized to merchandise costs, customer relationships are amortized to depreciation and amortization expense and other intangibles are amortized to OG&A expense and depreciation and amortization expense.

Amortization expense associated with intangible assets totaled approximately $42, $52 and $59, during fiscal years 2023, 2022 and 2021, respectively. Future amortization expense associated with the net carrying amount of definite-lived intangible assets for the years subsequent to 2023 is estimated to be approximately:

2024	$	42
2025		38
2026		17
2027		8
2028		8
Thereafter		10
Total future estimated amortization associated with definite-lived intangible assets	$	123