GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Nov. 03, 2024

The changes in the carrying amount of goodwill for the thirty-nine weeks ended November 3, 2024, by segment (please see Note 16, “Segment Data,” for further discussion of the Company’s reportable segments), were as follows:


(In millions)	Calvin Klein North America		Calvin Klein International		Tommy Hilfiger North America		Tommy Hilfiger International		Total
Balance as of February 4, 2024
Goodwill, gross	$	781.8	$	877.4	$	203.0	$	1,558.3	$	3,420.5
Accumulated impairment losses	(449.9)		(471.3)		(177.2)		—		(1,098.4)
Goodwill, net	331.9		406.1		25.8		1,558.3		2,322.1

Currency translation	—		(2.8)		—		7.7		4.9
Balance as of November 3, 2024
Goodwill, gross	781.8		874.6		203.0		1,566.0		3,425.4
Accumulated impairment losses	(449.9)		(471.3)		(177.2)		—		(1,098.4)
Goodwill, net	$	331.9	$	403.3	$	25.8	$	1,566.0	$	2,327.0

The Company performed its annual impairment assessment for goodwill, which is done at the reporting unit level, and indefinite-lived intangible assets as of the beginning of the third quarter of 2024. Intangible assets with finite lives are amortized over their estimated useful life and are tested for impairment, along with other long-lived assets, when events and circumstances indicate that the assets might be impaired. Please see Note 1, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended February 4, 2024 for discussion of the Company’s goodwill and other intangible assets impairment testing process.

The Company’s annual goodwill impairment test for 2024 yielded estimated fair values in excess of the carrying amounts for all of the Company’s reporting units with assigned goodwill and therefore no impairment of goodwill was identified.

The Tommy Hilfiger International reporting unit had an estimated fair value that exceeded its carrying amount of $2,874.5 million by approximately 10%. The carrying amount of goodwill allocated to this reporting unit as of the date of the test was $1,556.1 million. The fair value of the Tommy Hilfiger International reporting unit was determined using an income approach based on discounted projected future (debt-free) cash flows. The discount rate applied to these cash flows was based on the weighted average cost of capital for the reporting unit, which takes market participant assumptions into consideration. Estimated future operating cash flows were discounted at a rate of 13% to account for the relative risks of the estimated future cash flows. Holding all other assumptions constant, a 100 basis point change in the annual revenue growth rate assumption for this business would result in a change to the estimated fair value of the reporting unit of approximately $161 million. Likewise, a 100 basis point change in the weighted average cost of capital would result in a change to the estimated fair value of the reporting unit of approximately $281 million. While the Tommy Hilfiger International reporting unit was not determined to be impaired, it may be at risk of future impairment if the related business does not perform as projected, or if market factors utilized in the impairment analysis deteriorate, including an unfavorable change in the long-term growth rate or the weighted average cost of capital.

Additionally, no impairment of indefinite-lived intangible assets was identified as a result of the Company’s annual indefinite-lived intangible asset impairment test for 2024. The indefinite-lived intangible asset with the least excess fair value had an estimated fair value that exceeded its carrying amount by 19%.