Quarterly report [Sections 13 or 15(d)]

ASSETS HELD-FOR-SALE AND DISCONTINUED OPERATIONS

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ASSETS HELD-FOR-SALE AND DISCONTINUED OPERATIONS
 3 Months Ended
Apr. 04, 2026
Discontinued Operations and Disposal Groups [Abstract]  
ASSETS HELD-FOR-SALE AND DISCONTINUED OPERATIONS ASSETS HELD-FOR-SALE AND DISCONTINUED OPERATIONS
The Company continuously assesses the composition of its portfolio to ensure it is aligned with its strategic objectives and positioned to maximize growth and returns to shareholders.
The Company commenced a sale process of its global Lee® brand and associated business during the first quarter of 2026, with an expectation of completing a transaction during fiscal 2026. At the end of the first quarter of 2026, the Company determined that the Lee® business met held-for-sale criteria and reported the assets and liabilities of the Lee® business as held-for-sale in the Company's balance sheets for all periods presented. Additionally, the planned sale represents a strategic shift that will have a major effect on the Company's operations and financial results. Accordingly, the Company reported the Lee® business as discontinued operations in its statements of operations and statements of cash flows for all periods presented. The results of the Lee® business were historically reported in the Lee segment. Income from discontinued operations, net of tax was $31.4 million and $32.6 million for the three months ended March 2026 and March 2025, respectively.
During the three months ended March 2026, the Company determined that the decision to pursue a sale transaction of the Lee® business was a triggering event that required impairment testing of goodwill, the indefinite-lived intangible asset and long-lived assets of the Lee reporting unit. No impairment charges were required to be recorded as a result of the testing performed. Refer to Note 11 to the Company's financial statements in this Form 10-Q for additional details regarding the impairment testing related to the Lee® business.
Certain corporate overhead costs and segment costs previously allocated to the Lee® business for segment reporting purposes did not qualify for classification within discontinued operations and have been reported in continuing operations for all periods presented. For the three months ended March 2026 and March 2025, previously allocated costs of $1.5 million and $1.0 million, respectively, were reported as cost of goods sold in our statements of operations. For the three months ended March 2026 and March 2025, previously allocated costs of $7.3 million and $7.9 million, respectively, were reported as selling, general and administrative expenses in our statements of operations. These previously allocated costs were reported within corporate and other expenses in the segment reporting reconciliation in Note 5 to the Company's financial statements in this Form 10-Q.
Summarized Discontinued Operations Financial Information
The following table summarizes the major line items for the Lee® business that are included in income from discontinued operations, net of tax, in the Company's statements of operations:
Three Months Ended March
(In thousands)
2026 2025
Net revenues $ 194,288  $ 199,900 
Cost of goods sold 91,475  96,998 
Selling, general and administrative expenses 62,854  60,972 
Interest income 98  121 
Other expense, net (267) (707)
Income from discontinued operations before income taxes $ 39,790  $ 41,344 
Income taxes (8,389) (8,711)
Income from discontinued operations, net of tax $ 31,401  $ 32,633 
The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations as of March 2026, December 2025 and March 2025:
(In thousands) March 2026 December 2025 March 2025
Cash and cash equivalents $ 30,695  $ 31,227  $ 35,920 
Accounts receivable, net 71,060  67,005  76,303 
Inventories 135,383  130,737  144,260 
Prepaid expenses and other current assets 22,197  27,512  22,366 
Total current assets of discontinued operations 259,335  256,481  278,849 
Property, plant and equipment, net 17,213  17,443  17,324 
Operating lease assets 30,246  31,249  33,484 
Intangible assets, net 4,743  4,833  4,483 
Goodwill 79,861  80,131  80,119 
Other assets 33,054  35,401  38,735 
Total other assets of discontinued operations 165,117  169,057  174,145 
Total assets of discontinued operations $ 424,452  $ 425,538  $ 452,994 
Accounts payable $ 56,910  $ 49,554  $ 41,519 
Accrued and other current liabilities 57,603  68,236  54,327 
Operating lease liabilities, current 11,295  11,245  11,245 
Total current liabilities of discontinued operations 125,808  129,035  107,091 
Operating lease liabilities, noncurrent 20,218  21,455  23,858 
Other liabilities 9,394  8,291  10,421 
Total other liabilities of discontinued operations 29,612  29,746  34,279 
Total liabilities of discontinued operations $ 155,420  $ 158,781  $ 141,370