Restructuring, Integration, and Other

3 Months Ended

Mar. 29, 2025

Restructuring, Integration, and Other

Restructuring, Integration, and Other

Note I – Restructuring, Integration, and Other

The following table presents the components of the restructuring, integration, and other charges:

	Quarter Ended
	March 29,		March 30,
(thousands)	2025		2024
Restructuring, integration and related costs
Operating Expense Efficiency Plan costs (a)	$	8,685	$	—
Other plans		1,301		(364)
Other expenses
Operating expense reduction costs not related to restructuring initiatives (b)		3,749		42,763
Early lease termination costs		1,255		3,318
Other charges		2,323		1,139
	$	17,313	$	46,856

(a) See details related to the Operating Expense Efficiency Plan discussed below.

(b) These costs are primarily related to employee severance and benefit costs. As of March 29, 2025, the accrued liabilities related to these costs totaled $6.8 million and substantially all accrued amounts are expected to be spent in cash within one year.

Operating Expense Efficiency Plan

On October 31, 2024, in response to evolving business needs and as part of an initiative to optimize operating expenses, the company announced a multi-year restructuring plan (the “Operating Expense Efficiency Plan” or “the Plan”). The Plan is designed to improve operational efficiency through the following measures: (i) reorganizing and consolidating certain areas of the company’s operations to centralize functions and streamline resources, with a focus on more cost-efficient regions; (ii) enhancing warehouse and logistics operations; (iii) investing in information technology to support automation and process improvements; (iv) consolidating the company’s global real estate footprint; (v) reducing third-party spending; and (vi) winding down certain non-core businesses that are not aligned with the company’s strategic objectives. The company expects to substantially complete the Plan by the end of fiscal year 2026, subject to, among other things, local legal and consultation requirements.

Under the Plan, the company anticipates to incur pre-tax restructuring charges of no more than $185.0 million. While the composition of these costs will continue to evolve over time, the company currently expects to incur approximately $90.0 million of employee severance and other personnel cash expenditures; approximately $70.0 million of non-cash asset impairments, inventory write-downs and foreign currency translation adjustment write-offs related to the wind-down of certain business operations; and approximately $25.0 million of other related cash expenditures. As a result of the company’s philosophy of maximizing operating efficiencies through the centralization of certain functions, restructuring, integration, and related costs are included in the corporate line item for management and segment reporting as they are not attributable to the individual reportable segments.

The following table presents the costs related to the Operating Expense Efficiency Plan:

(thousands)	Income Statement Line		Quarter Ended March 29, 2025		Total Cost Incurred to Date
Employee severance and benefit costs		Restructuring, integration, and other	$	6,754	$	8,102
Inventory (recoveries) write-downs		Cost of sales		(2,467)		47,877
Asset impairments		Restructuring, integration, and other		-		1,416
Other costs (a)		Restructuring, integration, and other		1,931		9,446
			$	6,218	$	66,841

(a) Other costs consist primarily of consulting and other professional fees and lease terminations.

The following table presents the activity in the restructuring and integration accruals related to the Operating Expense Efficiency Plan:

(thousands)	Employee Severance and Benefit Costs		Inventory Recoveries		Other Costs		Total
Balance at December 31, 2024	$	384	$	-	$	202	$	586
Restructuring related charges		6,754		(2,467)		1,931		6,218
Cash (payments) receipts		(3,146)		2,467		(866)		(1,545)
Foreign currency translations		141		-		61		202
Balance at March 29, 2025	$	4,133	$	-	$	1,328	$	5,461

Substantially all amounts accrued at March 29, 2025 related to the Operating Expense Efficiency Plan are expected to be paid in cash within one year.