Restructuring Activities

9 Months Ended

Aug. 25, 2024

Restructuring and Related Activities [Abstract]

In the first quarter of 2024, our Board of Directors (the "Board") approved a multi-year global productivity initiative, “Project Fuel”, designed to accelerate the execution of our Brand Led and DTC First strategies while fueling long-term profitable growth. The first phase of the global productivity initiative was completed primarily in the first half of 2024. The two-year initiative is expected to continue through the end of 2025. As this initiative progresses, the Company may incur additional restructuring charges, which could be significant to a future fiscal quarter or year.

During the three and nine months ended August 25, 2024, we recognized restructuring charges of $3.4 million and $174.7 million, respectively, related to Project Fuel, consisting primarily of severance and other post-employment benefits, based on separation benefits provided by Company policy or statutory benefit plans as well as contract termination costs. These charges were recorded in “Restructuring charges, net” in the accompanying consolidated statements of income. As of August 25, 2024, the restructuring liability was $124.7 million, with $76.1 million and $48.6 million classified as “Other accrued liabilities” and “Long-term employee related benefits and other liabilities”, respectively, within the Company’s consolidated balance sheet.

During the three and nine months ended August 25, 2024, the Company also recognized $19.0 million and $34.3 million, respectively, of restructuring related charges primarily consisting of consulting fees, which were recorded in “Selling, general and administrative expenses” in the accompanying consolidated statements of income. Additionally, the Company recognized an impairment charge of $11.1 million in the third quarter of 2024 related to capitalized internal-use software as a result of the decision to discontinue certain technology projects in connection with Project Fuel, which was recorded in “Selling, general and administrative expenses” in the accompanying consolidated statements of income.

For the three and nine months ended August 27, 2023, the Company recognized net restructuring charges of $1.5 million and $19.3 million, respectively, which primarily related to severance benefits, based on separation benefits provided by Company policy or statutory benefit plans as well as contract termination costs. These charges were recorded in “Restructuring charges, net” in the accompanying consolidated statements of income.

The following tables summarize the activities associated with restructuring liabilities for the three and nine months ended August 25, 2024. "Net Charges (Reversals)" represents the initial charge related to the restructuring activity as well as revisions of estimates related to severance and employee-related benefits and other, "Payments" consists of cash payments for severance and employee-related benefits and other, and "Foreign Currency Fluctuations" includes foreign currency fluctuations.


	Three Months Ended August 25, 2024
	Liabilities		Net Charges (Reversals)			Payments		Foreign Currency Fluctuations		Liabilities
	May 26, 2024				August 25, 2024

	(Dollars in millions)
Severance and employee-related benefits	$	133.6	$	2.5		$	(35.2)	$	1.3	$	102.2
Contract termination costs and other	20.4		0.9			(0.3)		1.5		22.5
Total	$	154.0	$	3.4		$	(35.5)	$	2.8	$	124.7


	Nine Months Ended August 25, 2024
	Liabilities		Net Charges (Reversals)(1)			Payments		Foreign Currency Fluctuations		Liabilities
	November 26, 2023				August 25, 2024

	(Dollars in millions)
Severance and employee-related benefits	$	17.8	$	148.5		$	(66.2)	$	2.1	$	102.2
Contract termination costs and other	0.2		23.4			(2.5)		1.4		22.5
Total	$	18.0	$	171.9		$	(68.7)	$	3.5	$	124.7

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(1)Excludes $2.0 million in stock compensation related charges recorded in Additional paid-in capital and $0.8 million in operating lease termination for the nine-month period ended August 25, 2024.