CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jul. 31, 2021 |
Aug. 01, 2020 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
| Preferred stock, authorized shares | 5,000,000.0 | 5,000,000.0 |
| Preferred stock, issued shares | 0 | 0 |
| Preferred stock, outstanding shares | 0 | 0 |
| Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
| Common stock, authorized shares | 100,000,000.0 | 100,000,000.0 |
| Common stock, issued shares | 57,000,000.0 | 55,300,000 |
| Common stock, outstanding shares | 56,400,000 | 54,700,000 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
12 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
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| Statement of Comprehensive Income [Abstract] | |||||||
| Net income (loss) including noncontrolling interests | $ 155 | $ (269) | $ (285) | ||||
| Other comprehensive income (loss): | |||||||
| Recognition of pension and other postretirement benefit obligations, net of tax | [1] | 153 | (83) | (33) | |||
| Recognition of interest rate swap cash flow hedges, net of tax | [2] | 42 | (46) | (61) | |||
| Foreign currency translation adjustments | 5 | (1) | (1) | ||||
| Total other comprehensive income (loss) | 200 | (130) | (95) | ||||
| Less comprehensive income attributable to noncontrolling interests | (6) | (5) | 0 | ||||
| Total comprehensive income (loss) attributable to United Natural Foods, Inc. | $ 349 | $ (404) | $ (380) | ||||
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
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| Statement of Comprehensive Income [Abstract] | |||
| Recognition of pension and other postretirement benefit obligations, tax (benefit) expense | $ 52 | $ (29) | $ (11) |
| Recognition of interest rate swap cash flow hedges, tax expense (benefit) | $ 13 | $ (16) | $ (23) |
SIGNIFICANT ACCOUNTING POLICIES |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—SIGNIFICANT ACCOUNTING POLICIES Nature of Business United Natural Foods, Inc. and its subsidiaries (the “Company”, “we”, “us”, “UNFI”, or “our”) is a leading distributor of natural, organic, specialty, produce, and conventional grocery and non-food products, and provider of support services to retailers. The Company sells its products primarily throughout the United States and Canada. Fiscal Year The Company’s fiscal years end on the Saturday closest to July 31 and contain either 52 or 53 weeks. References to fiscal 2021, fiscal 2020 and fiscal 2019, or 2021, 2020 and 2019, as presented in tabular disclosure, relate to the 52-week, 52-week and 53-week fiscal periods ended July 31, 2021, August 1, 2020 and August 3, 2019, respectively. Basis of Presentation The accompanying Consolidated Financial Statements include the accounts of the Company and its subsidiaries. The Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). All significant intercompany transactions and balances have been eliminated in consolidation, with the exception of sales transactions from continuing to discontinued operations for wholesale supply to a retail disposal group that was sold with a supply agreement in fiscal 2019 discussed further in Note 3—Revenue Recognition. Unless otherwise indicated, references to the Consolidated Statements of Operations and the Consolidated Balance Sheets in the Notes to Consolidated Financial Statements exclude all amounts related to discontinued operations. Refer to Note 18—Discontinued Operations for additional information about the Company’s discontinued operations. Discontinued Operations In the fourth quarter of fiscal 2021, the Company determined it no longer met the held for sale criterion for a probable sale to be completed within 12 months for two of the four stores that were previously included within discontinued operations, as a result of criterion met as of the SUPERVALU INC. (“Supervalu”) acquisition date. As a result, the Company revised its Consolidated Financial Statements to reclassify two Shoppers stores from discontinued operations to continuing operations. Prior periods presented in the Consolidated Financial Statements have been conformed to the current period presentation. Net Sales Our net sales consist primarily of product sales of natural, organic, specialty, produce and conventional grocery and non-food products, and support services revenue from retailers, adjusted for customer volume discounts, vendor incentives when applicable, returns and allowances, and professional services revenue. Net sales also include amounts charged by the Company to customers for shipping and handling and fuel surcharges. Vendor incentives do not reduce sales in circumstances where the vendor tenders the incentive to the customer, when the incentive is not a direct reimbursement from a vendor, when the incentive is not influenced by or negotiated in conjunction with any other incentive arrangements and when the incentive is not subject to an agency relationship with the vendor, whether expressed or implied. The Company recognizes revenue in an amount that reflects the consideration that is expected to be received for goods or services when its performance obligations are satisfied by transferring control of those promised goods or services to its customers. ASC 606 defines a five-step process to recognize revenue that requires judgment and estimates, including identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when or as the performance obligation is satisfied. Revenues from wholesale product sales are recognized when control is transferred, which typically happens upon either shipment or delivery, depending on the contract terms with the customer. Typically, shipping and customer receipt of wholesale products occur on the same business day. Discounts and allowances provided to customers are recognized as a reduction in Net sales as control of the products is transferred to customers. The Company recognizes freight revenue related to transportation of its products when control of the product is transferred, which is typically upon delivery. Revenues from Retail product sales are recognized at the point of sale upon customer check-out. Advertising income earned from our franchisees that participate in our Retail advertising program are recognized as Net sales. The Company recognizes loyalty program expense in the form of fuel rewards as a reduction of Net sales. Sales tax is excluded from Net sales. Limited rights of return exist with our customers due to the nature of the products we sell. Refer to Note 3—Revenue Recognition for additional information regarding the Company’s revenue recognition policies. Cost of Sales Cost of sales consist primarily of amounts paid to suppliers for product sold, plus transportation costs necessary to bring the product to, or move product between, the Company’s distribution facilities and retail stores, partially offset by consideration received from suppliers in connection with the purchase, transportation, or promotion of the suppliers’ products. Retail store advertising expenses are components of Cost of sales and are expensed as incurred. The Company receives allowances and credits from vendors for buying activities, such as volume incentives, promotional allowances directed by the Company to customers, cash discounts, and new product introductions (collectively referred to as “vendor funds”), which are typically based on contractual arrangements covering a period of one year or less. The Company recognizes vendor funds for merchandising activities as a reduction of Cost of sales when the related products are sold, unless it has been determined that a discrete identifiable benefit has been provided to the vendor, in which case the related amounts are recognized within Net sales. Vendor funds that have been earned as a result of completing the required performance under the terms of the underlying agreements but for which the product has not yet been sold are recognized as a reduction to the cost of inventory. When payments or rebates can be reasonably estimated and it is probable that the specified target will be met, the payment or rebate is accrued. However, when attaining the target is not probable, the payment or rebate is recognized only when and if the target is achieved. Any upfront payments received for multi-period contracts are generally deferred and amortized over the life of the contracts. The majority of the vendor fund contracts have terms of less than a year, with a small proportion of the contracts longer than one year. Shipping and Handling Fees and Costs The Company includes shipping and handling fees billed to customers in Net sales. Shipping and handling costs associated with inbound freight are recorded in Cost of sales, whereas shipping and handling costs for receiving, selecting, quality assurance, and outbound transportation are recorded in Operating expenses. Outbound shipping and handling costs, including allocated employee benefit expenses that are recorded in Operating expenses, totaled $1,513 million, $1,505 million and $1,299 million for fiscal 2021, 2020 and 2019, respectively. Operating Expenses Operating expenses include salaries and wages, employee benefits, warehousing and delivery, selling, occupancy, insurance, administrative, share-based compensation, depreciation, and amortization expense. These expenses include the departmental expenses of warehousing, delivery, purchasing, receiving, selecting and outbound transportation expenses. Restructuring, Acquisition and Integration Expenses Restructuring, acquisition and integration expenses reflect expenses resulting from restructuring activities, including severance costs, change-in-control related charges, facility closure asset impairment charges and costs, stock-based compensation acceleration charges and acquisition and integration expenses. Integration expenses include certain professional consulting expenses related to business transformation and incremental expenses related to combining facilities required to optimize our distribution network as a result of acquisitions. (Gain) Loss on Sale of Assets (Gain) loss on sale of assets includes (gain) loss on sale of assets and non-cash charges related to changes in plans of sales of discontinued operations. In fiscal 2020, the Company recorded a non-cash charge of $50 million to reduce the carrying amount of Retail’s property and equipment, and intangible assets for any depreciation and amortization expense that would have been recognized had the assets been held and used as part of continuing operations since their acquisition date through the end of fiscal 2020, which was comprised of $39 million related to property and equipment, and $11 million related to intangible assets. Interest expense, net Interest expense, net includes primarily interest expense on long-term debt, net of capitalized interest, loss on debt extinguishment, interest expense on finance lease obligations, amortization of financing costs and discounts, and interest income. Use of Estimates The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications Within the Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current year presentation. These reclassifications had no impact on reported net income, cash flows, or total assets and liabilities. Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with original maturities of three months or less. The Company’s banking arrangements allow it to fund outstanding checks when presented to the financial institution for payment. The Company funds all intraday bank balance overdrafts during the same business day. Checks outstanding in excess of bank balances create book overdrafts, which are recorded in Accounts payable in the Consolidated Balance Sheets and are reflected as an operating activity in the Consolidated Statements of Cash Flows. As of July 31, 2021 and August 1, 2020, the Company had net book overdrafts of $268 million and $268 million, respectively. Accounts Receivable, Net Accounts receivable primarily consist of trade receivables from customers and net receivable balances from suppliers. In determining the adequacy of the allowances, management analyzes customer creditworthiness, aging of receivables, payment terms, the value of the collateral, customer financial statements, historical collection experience, aging of receivables and other economic and industry factors. In instances where a reserve has been recorded for a particular customer, future sales to the customer are conducted using either cash-on-delivery terms, or the account is closely monitored so that as agreed upon payments are received, orders are released; a failure to pay results in held or canceled orders. Inventories, Net Substantially all of the Company’s inventories consist of finished goods. To value discrete inventory items at lower of cost or market before application of any last-in, first-out (“LIFO”) reserve, the Company utilizes the weighted average cost method, perpetual cost method, the retail inventory method (“RIM”) and the replacement cost method. Allowances for vendor funds received from suppliers are recorded as a reduction to Inventories, net and subsequently within Cost of sales upon the sale of the related products. Inventories are evaluated for shortages throughout each fiscal year based on actual physical counts in our distribution facilities and stores. Allowances for inventory shortages are recorded based on the results of these counts to provide for estimated shortages as of the end of each fiscal year. As of July 31, 2021 and August 1, 2020, approximately $1.8 billion of inventory was valued under the LIFO method, before the application of a LIFO reserve, and primarily included grocery, frozen food and general merchandise products, with the remaining inventory valued under the FIFO method and primarily included meat, dairy and deli products. Property and Equipment, Net Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation expense is based on the estimated useful lives of the assets using the straight-line method. Applicable interest charges incurred during the construction of new facilities are capitalized as one of the elements of cost and are amortized over the assets’ estimated useful lives if certain criteria are met. Refer to Note 5—Property and Equipment, Net for additional information. The Company reviews long-lived assets, including amortizing intangible assets, for indicators of impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Cash flows expected to be generated by the related assets are estimated over the assets’ useful lives based on updated projections. The Company groups long-lived assets with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. If the evaluation indicates that the carrying amount of an asset group may not be recoverable, the potential impairment is measured based on a fair value discounted cash flow model or a market approach method. Income Taxes The Company accounts for income taxes under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records liabilities to address uncertain tax positions we have taken in previously filed tax returns or that we expect to take in a future tax return. The determination for required liabilities is based upon an analysis of each individual tax position, taking into consideration whether it is more likely than not that our tax position, based on technical merits, will be sustained upon examination. For those positions for which we conclude it is more likely than not it will be sustained, we recognize the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the taxing authority. The difference between the amount recognized and the total tax position is recorded as a liability. The ultimate resolution of these tax positions may be greater or less than the liabilities recorded. The Company allocates tax expense among specific financial statement components using a “with-or-without” approach. Under this approach, the Company first determines the total tax expense or benefit (current and deferred) for the period. The Company then calculates the tax effect of pretax income from continuing operations only. The residual tax expense is allocated on a proportional basis to other financial statement components (i.e. discontinued operations, other comprehensive income). Goodwill and Intangible Assets, Net The Company accounts for acquired businesses using the purchase method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the acquisition date at their respective estimated fair values. Goodwill represents the excess acquisition cost over the fair value of net assets acquired in a business combination. Goodwill is assigned to the reporting units that are expected to benefit from the synergies of the business combination that generated the goodwill. Goodwill reporting units exist at one level below the operating segment level unless they are determined to be economically similar, and are evaluated for events or changes in circumstances indicating a goodwill reporting unit has changed. Relative fair value allocations are performed when components of an aggregated goodwill reporting unit become separate reporting units or move from one reporting unit to another. Goodwill is reviewed for impairment at least annually as of the first day of the fourth fiscal quarter and if events occur or circumstances change that would indicate that the value of the asset may be impaired. The Company performs qualitative assessments of goodwill for impairment. If the qualitative assessment indicates it is more likely than not that a reporting unit’s fair value is less than the carrying value, or the Company bypasses the qualitative assessment, a quantitative assessment would be performed. The Company estimates the fair values of its reporting units in a quantitative assessment by using the market approach, applying a multiple of earnings based on guidelines for publicly traded companies, and/or the income approach, discounting projected future cash flows based on management’s expectations of the current and future operating environment for each reporting unit. Refer to Note 6—Goodwill and Intangible Assets, Net for additional information regarding the Company’s goodwill impairment reviews, changes to its reporting units and other information. Indefinite-lived intangible assets include a branded product line and a Tony’s Fine Foods tradename. Indefinite-lived intangible assets are reviewed for impairment at least annually as of the first day of the fourth fiscal quarter and if events occur or circumstances change that would indicate that the value of the asset may be impaired. The Company performed qualitative reviews of its indefinite lived intangible assets in fiscal 2021 and 2020, which indicated a quantitative assessment was not required. In determining the estimated fair value for intangible assets, the Company typically utilizes the income approach, which discounts the projected future net cash flow using an appropriate discount rate that reflects the risks associated with such projected future cash flow. Refer to Note 6—Goodwill and Intangible Assets, Net for additional information on the Company’s intangible assets. Intangible assets with definite lives are amortized on a straight-line basis over the following years:
Business Dispositions The Company reviews the presentation of planned business dispositions in the Consolidated Financial Statements based on the available information and events that have occurred. The review consists of evaluating whether the business meets the definition of a component for which the operations and cash flows are clearly distinguishable from the other components of the business, and if so, whether it is anticipated that after the disposal the cash flows of the component would be eliminated from continuing operations and whether the disposition represents a strategic shift that has a major effect on operations and financial results. In addition, the Company evaluates whether the business has met the criteria as a business held for sale. In order for a planned disposition to be classified as a business held for sale, the established criteria must be met as of the reporting date, including an active program to market the business and the expected disposition of the business within one year. Planned business dispositions are presented as discontinued operations when all the criteria described above are met. Operations of the business components meeting the discontinued operations requirements are presented within Income from discontinued operations, net of tax in the Consolidated Statements of Operations, and assets and liabilities of the business component planned to be disposed of are presented as separate lines within the Consolidated Balance Sheets. See Note 18—Discontinued Operations for additional information. The carrying value of the business held for sale is reviewed for recoverability upon meeting the classification requirements. Evaluating the recoverability of the assets of a business classified as held for sale follows a defined order in which property and intangible assets subject to amortization are considered only after the recoverability of goodwill, indefinite lived intangible assets and other assets are assessed. After the valuation process is completed, the held for sale business is reported at the lower of its carrying value or fair value less cost to sell, and no additional depreciation or amortization expense is recognized. There are inherent judgments and estimates used in determining the fair value less costs to sell of a business and any impairment charges. The sale of a business can result in the recognition of a gain or loss that differs from that anticipated prior to closing. Fair Value of Financial Instruments Financial assets and liabilities measured on a recurring basis, and non-financial assets and liabilities that are recognized on a non-recurring basis, are recognized or disclosed at fair value on at least an annual basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value: •Level 1 Inputs—Unadjusted quoted prices in active markets for identical assets or liabilities. •Level 2 Inputs—Inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. •Level 3 Inputs—One or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation. The carrying amounts of the Company’s financial instruments including cash and cash equivalents, accounts receivable, accounts payable and certain accrued expenses and other assets and liabilities approximate fair value due to the short-term nature of these instruments. Share-Based Compensation Share-based compensation consists of restricted stock units, performance units, stock options and SUPERVALU INC. (“Supervalu”) replacement awards. Share-based compensation expense is measured by the fair value of the award on the date of grant. The Company recognizes share-based compensation expense on a straight-line basis over the requisite service period of the individual grants. Forfeitures are recognized as reductions to share-based compensation when they occur. The grant date closing price per share of the Company’s stock is used to determine the fair value of restricted stock units. Supervalu Replacement Awards are liability classified awards as they may ultimately be settled in cash or shares at the discretion of the employee. The Company’s executive officers and members of senior management have been granted performance units which vest, when and if earned, in accordance with the terms of the related performance unit award agreements. The Company recognizes share-based compensation expense based on the target number of shares of common stock and the Company’s stock price on the date of grant and subsequently adjusts expense based on actual and forecasted performance compared to planned targets. Share-based compensation expense is recognized within Operating expenses for ongoing employees and in certain instances is recorded within Restructuring, acquisition and integration related expenses when an employee is notified of termination and their awards become accelerated. Refer to Note 12—Share-Based Awards for additional information. Benefit Plans The Company recognizes the funded status of its Company-sponsored defined benefit plans in the Consolidated Balance Sheets and gains or losses and prior service costs or credits not yet recognized as a component of Accumulated other comprehensive loss, net of tax, in the Consolidated Balance Sheets. The Company measures its defined benefit pension and other postretirement plan obligations as of the nearest calendar month end. The Company records net periodic benefit income or expense related to interest cost, expected return on plan assets and the amortization of actuarial gains and losses, excluding service costs, in the Consolidated Statements of Operations within Net periodic benefit income, excluding service cost. Service costs are recorded in Operating expenses in the Consolidated Statements of Operations. The Company sponsors pension and other postretirement plans in various forms covering participants who meet eligibility requirements. The determination of the Company’s obligation and related income or expense for Company-sponsored pension and other postretirement benefits is dependent, in part, on management’s selection of certain actuarial assumptions in calculating these amounts. These assumptions include, among other things, the discount rate, the expected long-term rate of return on plan assets and the rates of increase in healthcare costs. These assumptions are disclosed in Note 13—Benefit Plans. Actual results that differ from the assumptions are accumulated and amortized over future periods. The Company contributes to various multiemployer pension plans under collective bargaining agreements, primarily defined benefit pension. Pension expense for these plans is recognized as contributions are funded. In addition, the Company provides postretirement health and welfare benefits for certain groups of union and non-union employees. See Note 13—Benefit Plans for additional information on participation in multiemployer plans. Earnings Per Share Basic earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adding the dilutive potential common shares to the weighted average number of common shares that were outstanding during the period. For purposes of the diluted earnings per share calculation, outstanding stock options, restricted stock units and performance-based awards, if applicable, are considered common stock equivalents, using the treasury stock method. Treasury Stock The Company records the repurchase of shares of common stock at cost based on the settlement date of the transaction. These shares are classified as treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. On October 6, 2017, the Company announced that its Board of Directors authorized a share repurchase program for up to $200 million of the Company’s outstanding common stock. The repurchase program is scheduled to expire upon the Company’s repurchase of shares of the Company’s common stock having an aggregate purchase price of $200 million. The Company did not repurchase any shares of its common stock in fiscal 2021, 2020 or 2019. As of July 31, 2021, we have $176 million remaining authorized under the share repurchase program. Additionally, our ABL Credit Facility, Term Loan Facility, and Senior Notes contain terms that limit our ability to repurchase shares of common stock above certain levels unless certain conditions and financial tests are met. Comprehensive Income (Loss) Comprehensive income (loss) is reported in the Consolidated Statements of Comprehensive Income. Comprehensive income (loss) includes all changes in stockholders’ equity during the reporting period, other than those resulting from investments by and distributions to stockholders. The Company’s comprehensive income (loss) is calculated as Net income (loss) including noncontrolling interests, plus or minus adjustments for foreign currency translation related to the translation of UNFI Canada, Inc. (“UNFI Canada”) from the functional currency of Canadian dollars to U.S. dollar reporting currency, changes in the fair value of cash flow hedges, net of tax, and changes in defined pension and other postretirement benefit plan obligations, net of tax, less comprehensive income attributable to noncontrolling interests. Accumulated other comprehensive loss represents the cumulative balance of other comprehensive income (loss), net of tax, as of the end of the reporting period and relates to foreign currency translation adjustments, and unrealized gains or losses on cash flow hedges, net of tax and changes in defined pension and other postretirement benefit plan obligations, net of tax. Derivative Financial Instruments The Company utilizes derivative financial instruments to manage its exposure to changes in interest rates, fuel costs, and with the operation of UNFI Canada, foreign currency exchange rates. All derivatives are recognized on the Company’s Consolidated Balance Sheets at fair value based on quoted market prices or estimates, and are recorded in either current or noncurrent assets or liabilities based on their maturity. Changes in the fair value of derivatives are recorded in comprehensive income or net earnings, based on whether the instrument is designated and effective as a hedge transaction and, if so, the type of hedge transaction. Gains or losses on derivative instruments are recorded in Accumulated other comprehensive loss and are reclassified to earnings in the period the hedged item affects earnings. If the hedged relationship ceases to exist, any associated amounts reported in Accumulated other comprehensive loss are reclassified to earnings at that time. The Company measures effectiveness of its hedging relationships both at hedge inception and on an ongoing basis. Self-Insurance Liabilities The Company is primarily self-insured for workers’ compensation, general and automobile liability insurance. It is the Company’s policy to record the self-insured portion of workers’ compensation, general and automobile liabilities based upon actuarial methods to estimate the future cost of claims and related expenses that have been reported but not settled, and that have been incurred but not yet reported, discounted at a risk-free interest rate. The present value of such claims was calculated using a discount rate of 2.0 percent. Changes in the Company’s self-insurance liabilities consisted of the following:
The current portion of the self-insurance liability was $32 million and $34 million as of July 31, 2021 and August 1, 2020, respectively, and is included in Accrued expenses and other current liabilities in the Consolidated Balance Sheets. The long-term portions were $71 million and $67 million as of July 31, 2021 and August 1, 2020, respectively, and are included in Other long-term liabilities in the Consolidated Balance Sheets. The self-insurance liabilities as of the end of the fiscal year are net of discounts of $10 million and $7 million as of July 31, 2021 and August 1, 2020, respectively. Amounts due from insurance companies were $17 million and $12 million as of July 31, 2021 and August 1, 2020, respectively, and are recorded in Prepaid expenses and other current assets and Other long-term assets. Leases, After ASC 842 Adoption At the inception or modification of a contract, the Company determines whether a lease exists and classifies its leases as an operating or finance lease at commencement. Subsequent to commencement, lease classification is only reassessed upon a change to the expected lease term or contract modification. Finance and operating lease assets represent the Company’s right to use an underlying asset as lessee for the lease term, and lease obligations represent the Company’s obligation to make lease payments arising from the lease. These assets and obligations are recognized at the lease commencement date based on the present value of lease payments, net of incentives, over the lease term. Incremental borrowing rates are estimated based on the Company’s borrowing rate as of the lease commencement date to determine the present value of lease payments, when lease contracts do not provide a readily determinable implicit rate. Incremental borrowing rates are determined by using the yield curve based on the Company’s credit rating adjusted for the Company’s specific debt profile and secured debt risk. The lease asset also reflects any prepaid rent, initial direct costs incurred and lease incentives received. The Company’s lease terms include optional extension periods when it is reasonably certain that those options will be exercised. Leases with an initial expected term of 12 months or less are not recorded in the Consolidated Balance Sheets and the related lease expense is recognized on a straight-line basis over the lease term. For certain classes of underlying assets, the Company has elected to not separate fixed lease components from the fixed nonlease components. The Company recognizes contractual obligations and receipts on a gross basis, such that the related lease obligation to the landlord is presented separately from the sublease created by the lease assignment to the assignee. As a result, the Company continues to recognize on its Consolidated Balance Sheets the operating lease assets and liabilities, and finance lease assets and obligations, for assigned leases. The Company records operating lease expense and income using the straight-line method within Operating expenses, and lease income on a straight-line method for leases with its customers within Net sales. Finance lease expense is recognized as amortization expense within Operating expenses, and interest expense within Interest expense, net. For operating leases with step rent provisions whereby the rental payments increase over the life of the lease, and for leases with rent-free periods, the Company recognizes expense and income on a straight-line basis over the expected lease term, based on the total minimum lease payments to be made or lease receipts expected to be received. The Company is generally obligated for property tax, insurance and maintenance expenses related to leased properties, which often represent variable lease expenses. For contractual obligations on properties where the Company remains the primary obligor upon assignment of the lease and does not obtain a release from landlords or retain the equity interests in the legal entities with the related rent contracts, the Company continues to recognize rent expense and rent income within Operating expenses. Operating and finance lease assets are reviewed for impairment based on an ongoing review of circumstances that indicate the assets may no longer be recoverable, such as closures of retail stores, distribution centers and other properties that are no longer being utilized in current operations, and other factors. The Company calculates operating and finance lease impairments using a discount rate to calculate the present value of estimated subtenant rentals that could be reasonably obtained for the property. Lease impairment charges for properties no longer used in operations are recorded as a component of Restructuring, acquisition and integration related expenses in the Consolidated Statements of Operations. The calculation of lease impairment charges requires significant judgments and estimates, including estimated subtenant rentals, discount rates and future cash flows based on the Company’s experience and knowledge of the market in which the property is located, previous efforts to dispose of similar assets and the assessment of existing market conditions. Impairments are recognized as a reduction of the carrying value of the right of use asset and finance lease assets. Refer to Note 11—Leases for additional information. Leases, Prior to Adoption of ASC 842 The Company records lease expense and income using the straight-line method within Operating expenses. For leases with step rent provisions whereby the rental payments increase over the life of the lease, and for leases where the Company receives rent-free periods, the Company recognizes expense and income based on a straight-line basis based on the total minimum lease payments to be made over the expected lease term. Deferred rent obligations are included in Other current liabilities and Other long-term liabilities in the Consolidated Balance Sheets. The Company continues to recognize contractual obligations and receipts on a gross basis, such that the related lease obligation to the landlord is presented separately from the sublease created by the lease assignment to the assignee. Lease reserve impairment charges are recorded as a component of Restructuring, acquisition and integration related expenses in the Consolidated Statements of Operations.
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RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS |
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| Accounting Changes and Error Corrections [Abstract] | |
| RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 2—RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASC 842”), which provided new comprehensive lease accounting guidance that supersedes previous lease guidance. The Company adopted this standard in fiscal 2020, on August 4, 2019. Adoption of this standard did not have a material impact to the Company’s Consolidated Statements of Operations, Consolidated Statements of Stockholders' Equity or Consolidated Statements of Cash Flows. In June 2016, the Financial Accounting Standards Board (“FASB”) issued accounting ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU 2019-11 (collectively, “Topic 326”). Topic 326 changed the impairment model for most financial assets and certain other instruments. For trade and other receivables, guarantees and other instruments, entities are required to use a new forward-looking expected loss model that replaces the previous incurred loss model and generally results in earlier recognition of credit losses. The Company adopted this standard in fiscal 2021, on August 2, 2020, the effective and initial application date, using a modified-retrospective basis as required by the standard by means of a cumulative-effect adjustment to the opening balance of Retained earnings in the Company’s Consolidated Statements of Stockholders' Equity. The difference between reserves and allowances recorded under the former incurred loss model and the amount determined under the current expected loss model, net of the deferred tax impact, was recorded as an adjustment to Retained earnings. Adoption of this standard did not have a material impact to the Company’s Consolidated Financial Statements. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326 Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825. This ASU clarifies the accounting treatment for the measurement of credit losses under ASC 326 and provides further clarification on previously issued updates including ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities and ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. Since the Company adopted ASU 2017-12 in the fourth quarter of fiscal 2018, the amendments in ASU 2019-04 related to clarifications on Accounting for Hedging Activities which were adopted by the Company in fiscal 2020, with no impact to Accumulated other comprehensive loss or Retained earnings for fiscal 2020, as the Company did not have separately measured ineffectiveness related to its cash flow hedges. The remaining amendments within ASU 2019-04 were adopted in fiscal 2021 with the adoption of Topic 326. Adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. ASU 2018-15 requires implementation costs incurred by customers in cloud computing arrangements (i.e. hosting arrangements) to be capitalized under the same premises as authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangements plus any optional renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The Company adopted this standard on a prospective basis in fiscal 2021. Under this standard, the Company is required to defer these costs and recognize these costs as a service expense over future periods. Adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 requires entities to disclose the weighted-average interest crediting rates used, reasons for significant gains and losses affecting benefit obligations, and an explanation of any other significant changes in the benefit obligation or plan assets. The amendment also removed certain required disclosures. The Company adopted this guidance in fiscal 2021. The provisions of the new standard do not have an impact on the Consolidated Financial Statements as this ASU only modified disclosure requirements. Refer to Note 13—Benefit Plans for disclosures presented for all periods in accordance with this amendment. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 eliminates certain exceptions to Topic 740’s general principles. The amendments also improve consistent application and simplifies its application. The Company is required to adopt this guidance in the first quarter of fiscal 2022. The Company has evaluated the impact of the standard and does not expect the adoption to have a material impact on the Company’s Consolidated Financial Statements.
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| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| REVENUE RECOGNITION | NOTE 3—REVENUE RECOGNITION Product sales The Company enters into wholesale customer distribution agreements that provide terms and conditions of our order fulfillment. The Company’s distribution agreements often specify levels of required minimum purchases in order to earn certain rebates or incentives. Certain contracts include rebates and other forms of variable consideration, including consideration payable to the customer up-front, over time or at the end of a contract term. Many of the Company’s contracts with customers outline various other promises to be performed in conjunction with the sale of product. The Company determined that these promises provided are immaterial within the overall context of the respective contract, and as such has not allocated the transaction price to these obligations. In transactions for goods or services where the Company engages third-parties to participate in its order fulfillment process, it evaluates whether it is the principal or an agent in the transaction. The Company’s analysis considers whether it controls the goods or services before they are transferred to its customer, including an evaluation of whether the Company has the ability to direct the use of, and obtain substantially all the remaining benefits from, the specified good or service before it is transferred to the customer. Agent transactions primarily reflect circumstances where the Company is not involved in order fulfillment or where it is involved in the order fulfillment but is not contractually obligated to purchase the related goods or services from vendors, and instead extends wholesale customers credit by paying vendor trade accounts payable and does not control products prior to their sale. Under ASC 606, if the Company determines that it is acting in an agent capacity, transactions are recorded on a net basis. If the Company determines that it is acting in a principal capacity, transactions are recorded on a gross basis. The Company also evaluates vendor sales incentives to determine whether they reduce the transaction price with its customers. The Company’s analysis considers which party tenders the incentive, whether the incentive reflects a direct reimbursement from a vendor, whether the incentive is influenced by or negotiated in conjunction with any other incentive arrangements and whether the incentive is subject to an agency relationship with the vendor, whether expressed or implied. Typically, when vendor incentives are offered directly by vendors to the Company’s customers, require the achievement of vendor-specified requirements to be earned by customers, and are not negotiated by the Company or in conjunction with any other incentive agreement whereby the Company does not control the direction or earning of these incentives, then Net sales are not reduced as part of the Company’s determination of the transaction price. In circumstances where the vendors provide the Company consideration to promote the sale of their goods and the Company determines the specific performance requirements for its customers to earn these incentives, Net sales are reduced for these customer incentives as part of the determination of the transaction price. Certain customer agreements provide for the right to license one or more of the Company’s tradenames, such as FESTIVAL FOODS®, SENTRY®, COUNTY MARKET®, NEWMARKET®, FOODLAND®, and SUPERVALU®. In addition, the Company enters into franchise agreements to separately charge its customers, who the Company also sells wholesale products to, for the right to use its CUB® tradename. The Company typically does not separately charge for the right to license its tradenames. The Company believes that these tradenames are capable of being distinct, but are not distinct within the context of the contracts with its customers. Accordingly, the Company does not separately recognize revenue related to tradenames utilized by its customers. The Company enters into distribution agreements with manufacturers to provide wholesale supplies to the Defense Commissary Agency (“DeCA”) and other government agency locations. DeCA contracts with manufacturers to obtain grocery products for the commissary system. The Company contracts with manufacturers to distribute products to the commissaries after being authorized by the manufacturers to be a military distributor to DeCA. The Company must adhere to DeCA’s delivery system procedures governing matters such as product identification, ordering and processing, information exchange and resolution of discrepancies. DeCA identifies the manufacturer with which an order is to be placed, determines which distributor is contracted by the manufacturer for a particular commissary or exchange location, and then places a product order with that distributor that is covered under DeCA’s master contract with the applicable manufacturer. The Company supplies product from its existing inventory, delivers it to the DeCA designated location, and bills the manufacturer for the product price plus a drayage fee. The manufacturer then bills DeCA under the terms of its master contract. The Company has determined that it controls the goods before they are transferred to the customer, and as such it is the principal in the transaction. Revenue is recognized on a gross basis when control of the product passes to the DeCA designated location. Customer incentives The Company provides incentives to its wholesale customers in various forms established under the applicable agreement, including advances, payments over time that are earned by achieving specified purchasing thresholds, and upon the passage of time. The Company typically records customer advances within Other long-term assets and Prepaid expenses and other current assets and typically recognizes customer incentive payments that are based on expected purchases over the term of the agreement as a reduction to Net sales. To the extent that the transaction price for product sales includes variable consideration, such as certain of these customer incentives, the Company estimates the amount of variable consideration that should be included in the transaction price primarily by utilizing the expected value method. Variable consideration is included in the transaction price if it is probable that a significant future reversal of cumulative revenue under the agreement will not occur. The Company believes that there will not be significant changes to its estimates of variable consideration, as the uncertainty will be resolved within a relatively short time and there is a significant amount of historical data that is used in the estimation of the amount of variable consideration to be received. Therefore, the Company has not constrained its estimates of variable consideration. Customer incentive assets are reviewed for impairment when circumstances exist for which the Company no longer expects to recover the applicable customer incentives. Professional services and equipment sales Separate from the services provided in conjunction with the sale of products described above, many of the Company’s agreements with customers also include distinct professional services and other promises to customers, in addition to the sale of the product itself, such as retail store support, advertising, store layout and design services, merchandising support, couponing, eCommerce, network and data hosting solutions, training and certifications classes, and administrative back-office solutions. These professional services may contain a single performance obligation for each respective service, in which case such services revenues are recognized when delivered. Revenue from professional services are less than one percent of total Net sales. Wholesale equipment sales are recorded as direct sales to customers when shipped or delivered, consistent with the recognition of product sales. Disaggregation of Revenues The Company records revenue to five customer channels within Net sales, which are described below: •Chains, which consists of customer accounts that typically have more than 10 operating stores and exclude stores included within the Supernatural and Other channels defined below; •Independent retailers, which include smaller size accounts and include single store and multiple store locations, and group purchasing entities, but are not classified within Chains above or Other discussed below; •Supernatural, which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of Whole Foods Market; •Retail, which reflects our Retail segment, including the Cub Foods business and the remaining Shoppers locations, excluding Shoppers locations that are held for sale within discontinued operations; and •Other, which includes international customers outside of Canada, foodservice, eCommerce, conventional military business and other sales. The following tables detail the Company’s net sales for the periods presented by customer channel for each of its segments. The Company does not record its revenues within its Wholesale reportable segment for financial reporting purposes by product group, and it is therefore impracticable for it to report them accordingly.
(1)In the first quarter of fiscal 2021, the presentation of net sales by customer channel was recast to present the Chains and Other channel exclusive of the intercompany eliminations and present total eliminations separately. There was no impact to the Consolidated Statements of Operations. The Company believes this modified basis better reflects its channel presentation, as it further aligns with segment presentation. (2)Eliminations primarily includes the net sales elimination of Wholesale’s sales to the Retail segment and the elimination of sales from segments included within Other to Wholesale. Whole Foods Market, Inc. was the Company’s largest customer in each fiscal year presented. Whole Foods Market, Inc. accounted for approximately 19%, 18% and 20% of the Company’s net sales for fiscal 2021, 2020 and 2019, respectively. There were no other customers that individually generated 10% or more of the Company’s net sales during those periods. The Company serves customers in the United States and Canada, as well as customers located in other countries. However, all of the Company’s revenue is earned in the U.S. and Canada, and international distribution occurs through freight-forwarders. The Company does not have any performance obligations on international shipments subsequent to delivery to the domestic port. Contract Balances The Company does not typically incur costs that are required to be capitalized in connection with obtaining a contract with a customer. The Company typically does not have any performance obligations to deliver products under its contracts until its customers submit a purchase order, as it stands ready to deliver product upon receipt of a purchase order under contracts with its customers. These performance obligations are generally satisfied within a very short period of time. Therefore, the Company has utilized the practical expedient that provides an exemption from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. The Company does not typically receive pre-payments from its customers. Customer payments are due when control of goods or services are transferred to the customer and are typically not conditional on anything other than payment terms, which typically are less than 30 days. Since no significant financing components exist between the period of time the Company transfers goods or services to the customer and when it receives payment for those goods or services, the Company generally does not adjust the transaction price to recognize a financing component. Customer incentives are not considered contract assets as they are not generated through the transfer of goods or services to the customers. No material contract asset or liability exists for any period reported within these Consolidated Financial Statements. Accounts and Notes Receivable Balances Accounts and notes receivable are as follows:
The allowance for uncollectible receivables, and estimated variable consideration allowed for as sales concessions consists of the following:
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| Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RESTRUCTURING, ACQUISITION AND INTEGRATION RELATED EXPENSES | NOTE 4—RESTRUCTURING, ACQUISITION AND INTEGRATION RELATED EXPENSES Restructuring, acquisition and integration related expenses were as follows:
2019 SUPERVALU INC. As part of its acquisition of Supervalu and in order to achieve synergies from this combination, the Company has taken certain actions, which began during the first quarter of fiscal 2019 to: (i) review its organizational structure and the strategic needs of the business going forward to identify and place talent with the appropriate skills, experience and qualifications to meet these needs; and (ii) dispose of and exit certain Supervalu legacy retail operations, as efficiently and economically as possible in order to focus on the Company’s core wholesale distribution business. Expenses related to this program primarily related to actions associated the Company’s core cost-structure, which resulted in headcount reductions and other costs and charges. Incremental and identifiable expenses associated with integrating the legacy companies operations and information technology systems are reflected within integration costs, and asset impairments related to retail are included in closed property charges and costs. Restructuring and Integration Costs Restructuring and integration costs for fiscal 2021 primarily relate to certain professional fees for advisory and transformational activities. Fiscal 2020 restructuring and integration costs primarily relate to expenses associated with integrating and consolidating distribution centers, certain professional fees for distribution center network and administrative integration activities. Fiscal 2019 acquisition and integration costs primarily reflect transaction expenses and professional fees related to the Supervalu acquisition. Closed Property Charges and Costs In fiscal 2021 and 2020, closed property charges relate to lease, and property and equipment asset impairments related to retail stores, lease terminations of non-operating stores and distribution center consolidation. Closed property charges recorded in fiscal 2019 primarily relate to retail stores and non-operating properties for which leases were terminated.
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY AND EQUIPMENT, NET | NOTE 5—PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following:
The Company capitalized $3 million, $5 million, and $3 million of interest during fiscal 2021, 2020 and 2019, respectively. Depreciation and amortization expense on property and equipment was $209 million, $198 million and $180 million for fiscal 2021, 2020 and 2019, respectively.
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GOODWILL AND INTANGIBLE ASSETS, NET |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GOODWILL AND INTANGIBLE ASSETS, NET | NOTE 6—GOODWILL AND INTANGIBLE ASSETS, NET The Company has five goodwill reporting units: two of which represent separate operating segments and are aggregated within the Wholesale reportable segment (U.S. Wholesale and Canada Wholesale); one separate Retail operating and reportable segment and two of which are separate operating segments (Woodstock Farms and Blue Marble Brands) that do not meet the criteria for being disclosed as separate reportable segments and are included in the Other segment. The Canada Wholesale operating segment, which is aggregated with U.S. Wholesale, would not meet the quantitative thresholds for separate reporting if it did not meet the aggregation criteria. In the fourth quarter of fiscal 2021, the Company performed its annual goodwill qualitative impairment review and determined that a quantitative impairment test was not required for any of its reporting units. Fiscal 2020 Goodwill Impairment Reviews During the first quarter of fiscal 2020, the Company changed its management structure and internal financial reporting, which resulted in the requirement to combine the Supervalu Wholesale reporting unit and the legacy Company Wholesale reporting unit into one U.S. Wholesale reporting unit, and experienced a further sustained decline in market capitalization and enterprise value. As a result of the change in reporting units and the sustained decline in market capitalization and enterprise value, the Company performed an interim quantitative impairment review of goodwill for the Wholesale reporting units, which included a determination of the fair value of all reporting units. The Company estimated the fair values of all reporting units using both the market approach, applying a multiple of earnings based on observable multiples for guideline publicly traded companies, and the income approach, discounting projected future cash flows based on management’s expectations of the current and future operating environment for each reporting unit. The calculation of the impairment charge included substantial fact-based determinations and estimates including weighted average cost of capital, future revenue, profitability, cash flows and fair values of assets and liabilities. The rates used to discount projected future cash flows under the income approach reflect a weighted average cost of capital of 8.5%, which considered observable data about guideline publicly traded companies, an estimated market participant’s expectations about capital structure and risk premiums, including those reflected in the Company’s market capitalization. The Company confirmed the reasonableness of the estimated reporting unit fair values by reconciling to its enterprise value and market capitalization. Based on this analysis, the Company determined that the carrying value of its U.S. Wholesale reporting unit exceeded its fair value by an amount that exceeded its assigned goodwill. As a result, the Company recorded a goodwill impairment charge of $422 million in the first quarter of fiscal 2020. The goodwill impairment charge is reflected in Goodwill impairment charges in the Consolidated Statements of Operations. The goodwill impairment charge reflected the impairment of all of the U.S. Wholesale reporting unit’s goodwill. In the fourth quarter of fiscal 2020, the Company performed its annual goodwill qualitative impairment review and determined that a quantitative impairment test was not required for any of its reporting units. Fiscal 2019 Goodwill Impairment Reviews During the first quarter of fiscal 2019, the Company experienced a decline in its stock price and market capitalization. During the second quarter of fiscal 2019, the stock price continued to decline, and the decline in the stock price and market capitalization became significant and sustained. Due to this sustained decline in stock price, the Company determined that it was more likely than not that the carrying value of the Supervalu Wholesale reporting unit exceeded its fair value and performed an interim quantitative impairment test of goodwill. The Company estimated the fair values of all reporting units using both the market approach, applying a multiple of earnings based on guidelines for publicly traded companies, and the income approach, discounting projected future cash flows based on management’s expectations of the current and future operating environment for each reporting unit. The calculation of the impairment charge includes substantial fact-based determinations and estimates including weighted average cost of capital, future revenue, profitability, cash flows and fair values of assets and liabilities. The rates used to discount projected future cash flows under the income approach reflect a weighted average cost of capital of 10%, which considered guidelines for publicly traded companies, capital structure and risk premiums, including those reflected in the Company’s then-current market capitalization. The Company confirmed the reasonableness of the estimated reporting unit fair values by reconciling those fair values to its enterprise value and market capitalization. Based on this analysis, the Company determined that the carrying value of its Supervalu Wholesale reporting unit exceeded its fair value by an amount that exceeded the assigned goodwill as of the acquisition date. As a result, the Company recorded a goodwill impairment charge of $293 million in fiscal 2019, which reflects the preliminary goodwill impairment charge recorded in the second quarter of fiscal 2019 and adjustments to the charge recorded in the third and fourth quarters of fiscal 2019. The goodwill impairment charge adjustments recorded in the third and fourth quarters of fiscal 2019 were attributable to changes in the preliminary fair value of net assets, most notably changes in tax assets and liabilities, intangible assets and property and equipment, which affected the initial goodwill resulting from the Supervalu acquisition. The goodwill impairment charge is reflected in Goodwill impairment charges in the Consolidated Statements of Operations. The goodwill impairment charge reflects all of Supervalu Wholesale’s reporting unit goodwill, based on preliminary acquisition date assigned fair values. The quantitative goodwill impairment review indicated that the estimated fair value of the legacy Company Wholesale and Canada Wholesale reporting units were in excess of their carrying values by over 20%. Other continuing operations reporting units were substantially in excess of their carrying value. The goodwill impairment charge recorded in fiscal 2019 was subject to change based upon the final purchase price allocation during the measurement period for estimated fair values of assets acquired and liabilities assumed from the Supervalu acquisition. There were no material increases or decreases to the recorded goodwill impairment charge based upon the final purchase price allocations. In fiscal 2019, the Company performed quarterly reviews of the composition of its reporting units. In the fourth quarter of fiscal 2019, the Company performed its annual goodwill qualitative impairment test and determined that a quantitative impairment test was not required for any of its reporting units. Goodwill and Intangible Assets Changes Changes in the carrying value of Goodwill by reportable segment that have goodwill consisted of the following:
(1) Wholesale amounts are net of accumulated goodwill impairment charges of $293 million, $717 million and $717 million for fiscal 2019, 2020 and 2021, respectively. (2) Other amounts are net of accumulated goodwill impairment charges of $9 million, $10 million and $10 million for fiscal 2019, 2020 and 2021, respectively. Identifiable intangible assets, net consisted of the following:
Amortization expense was $78 million, $91 million and $70 million for fiscal 2021, 2020 and 2019, respectively. The estimated future amortization expense for each of the next five fiscal years and thereafter on definite lived intangible assets existing as of July 31, 2021 is shown below:
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FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS |
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| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS | NOTE 7—FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS Recurring Fair Value Measurements The following tables provide the fair value hierarchy for financial assets and liabilities measured on a recurring basis:
Interest Rate Swap Contracts The fair values of interest rate swap contracts are measured using Level 2 inputs. The interest rate swap contracts are valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, LIBOR swap rates and credit default swap rates. As of July 31, 2021, a 100 basis point increase in forward LIBOR interest rates would increase the fair value of the interest rate swaps by approximately $31 million; a 100 basis point decrease in forward LIBOR interest rates would decrease the fair value of the interest rate swaps by approximately $32 million. Refer to Note 8—Derivatives for further information on interest rate swap contracts. Mutual Funds Mutual fund assets consist of balances held in investments to fund certain deferred compensation plans. The fair values of mutual fund assets are based on quoted market prices of the mutual funds held by the plan at each reporting period. Mutual funds traded in active markets are classified within Level 1 of the fair value hierarchy. Fuel Supply Agreements and Derivatives To reduce diesel price risk, the Company has entered into derivative financial instruments and/or forward purchase commitments for a portion of our projected monthly diesel fuel requirements at fixed prices. The fair values of fuel derivative agreements are measured using Level 2 inputs. Foreign Exchange Derivatives To reduce foreign exchange risk, the Company has entered into derivative financial instruments for a portion of our projected monthly foreign currency requirements at fixed prices. The fair values of foreign exchange derivatives are measured using Level 2 inputs. Fair Value Estimates For certain of the Company’s financial instruments including cash and cash equivalents, receivables, accounts payable, accrued vacation, compensation and benefits, and other current assets and liabilities the fair values approximate carrying amounts due to their short maturities. The fair value of notes receivable is estimated by using a discounted cash flow approach prior to consideration for uncollectible amounts and is calculated by applying a market rate for similar instruments using Level 3 inputs. The fair value of debt is estimated based on market quotes, where available, or market values for similar instruments, using Level 2 and 3 inputs. In the table below, the carrying value of the Company’s long-term debt is net of original issue discounts and debt issuance costs. Refer to Note 1—Significant Accounting Policies for additional information regarding the fair value hierarchy.
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DERIVATIVES |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVES | NOTE 8—DERIVATIVES Management of Interest Rate Risk The Company enters into interest rate swap contracts from time to time to mitigate its exposure to changes in market interest rates as part of its overall strategy to manage its debt portfolio to achieve an overall desired position of notional debt amounts subject to fixed and floating interest rates. Interest rate swap contracts are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The Company’s interest rate swap contracts are designated as cash flow hedges. Interest rate swap contracts are reflected at their fair values in the Consolidated Balance Sheets. Refer to Note 7—Fair Value Measurements of Financial Instruments for further information on the fair value of interest rate swap contracts. Details of active swap contracts as of July 31, 2021, which are all pay fixed and receive floating, are as follows:
(1)The swap contract has an amortizing notional principal amount which is reduced by $1 million on a quarterly basis. (2)For these swap contracts that are indexed to LIBOR, the Company is monitoring and evaluating risks related to the expected future cessation of LIBOR. In fiscal 2021, in order to reduce its exposure to pay fixed and receive floating interest rate swap contracts due to lower levels of debt balances with floating interest rates, the Company paid $6 million to terminate certain outstanding interest rate swaps with a notional amount of $250 million. In addition, in fiscal 2021, in conjunction with the $500 million fixed rate senior unsecured notes offering described below in Note 9—Long-Term Debt, the Company paid $11 million to terminate or novate certain outstanding interest rate swaps with a notional amount of $504 million and certain forward starting interest rate swaps with a notional amount of $450 million. The payments equaled the fair value of the interest rate swaps at the time of their termination or novation. No gain or loss was recorded as a result of the swap termination and novations. Since the hedged interest payments remain probable of occurring, the unrecognized gains and losses that existed as of the early termination or novation of these interest rate swap agreements will be amortized out of Accumulated other comprehensive loss and into Interest expense, net over the remaining period of the original terminated or novated interest rate swap agreements. If any of the hedged interest payments were not probable of occurring, then a charge representing an accelerated amortization of the unrecognized gains and losses would be recorded. Cash payments resulting from the termination or novation of interest rate swaps are classified as operating activities in the Company’s Condensed Consolidated Statements of Cash Flows. The Company performs an initial quantitative assessment of hedge effectiveness using the “Hypothetical Derivative Method” in the period in which the hedging transaction is entered. Under this method, the Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. In future reporting periods, the Company performs a qualitative analysis for quarterly prospective and retrospective assessments of hedge effectiveness. The Company also monitors the risk of counterparty default on an ongoing basis and noted that the counterparties are reputable financial institutions. The entire change in the fair value of the derivative is initially reported in Other comprehensive income (outside of earnings) in the Consolidated Statements of Comprehensive Income and subsequently reclassified to earnings in Interest expense, net in the Consolidated Statements of Operations when the hedged transactions affect earnings. The location and amount of gains or losses recognized in the Consolidated Statements of Operations for interest rate swap contracts for each of the periods, presented on a pretax basis, are as follows:
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LONG-TERM DEBT |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LONG-TERM DEBT | NOTE 9—LONG-TERM DEBT The Company’s long-term debt consisted of the following:
Future maturities of long-term debt, excluding debt issuance costs and original issue and purchase accounting discounts on debt, and contractual interest payments based on the face value and applicable interest rate as of July 31, 2021, consist of the following (in millions):
Refinancing Activities On August 14, 2020, the Company executed a third amendment to its revolving credit agreement dated as of August 30, 2018, (as amended, the “ABL Loan Agreement”), which provides for, among other things, (i) adding certain assets to the Borrowing Base (as defined below), (ii) increasing the Company’s capacity to issue letters of credit under the facility, and (iii) other administrative changes. On February 11, 2021, the Company entered into an amendment to its secured term loan agreement, dated as of October 22, 2018, as amended (the “Term Loan Agreement”). The amendment provides for, among other things, (i) the reduction of the applicable margin for LIBOR loans from 4.25% to 3.50% and the applicable margin for base rate loans from 3.25% to 2.50%, (ii) the appointment of a replacement administrative and collateral agent, and (iii) other administrative changes. The amendments did not change the aggregate amounts or maturity dates of either credit facility. During fiscal 2021, the Company prepaid an aggregate of $771 million under the Term Loan Facility (defined below), including: (i) a $500 million prepayment funded primarily by the net proceeds from the issuance of the Senior Notes (defined below); (ii) voluntary prepayments of $186 million funded with incremental borrowings under the ABL Credit Facility (defined below) that reduces its interest costs; (iii) a $72 million prepayment related to the material cash flow generation in fiscal 2020, as required under the Term Loan Agreement (as described below); and (iv) $13 million of prepayments with asset sale proceeds. In connection with the prepayments, the Company incurred losses on debt extinguishment related to unamortized debt issuance costs and unamortized original issue discount of $15 million and $15 million, respectively, which were recorded within Interest expense, net in the Consolidated Statements of Operations in fiscal 2021. Senior Notes On October 22, 2020, the Company issued $500 million of unsecured 6.750% senior notes due October 15, 2028 (the “Senior Notes”). The Senior Notes are guaranteed by each of the Company’s subsidiaries that are borrowers under or that guarantee the ABL Credit Facility (defined below) or the Term Loan Facility (defined below). The net proceeds from the offering of the Senior Notes, together with borrowings under the ABL Credit Facility (defined below), were used to repay $500 million of the amounts outstanding under the Term Loan Facility (defined below) and for the payment of all financing costs related to the offering of the Senior Notes. Financing costs of $9 million were paid and capitalized in fiscal 2021. ABL Credit Facility The ABL Loan Agreement by and among the Company and United Natural Foods West, Inc. (together with the Company, the “U.S. Borrowers”) and UNFI Canada, Inc. (the “Canadian Borrower” and, together with the U.S. Borrowers, the “Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “ABL Lenders”), Bank of America, N.A. as administrative agent for the ABL Lenders, Bank of America, N.A. (acting through its Canada branch), as Canadian agent for the ABL Lenders, and the other parties thereto, provides for a secured asset-based revolving credit facility (the “ABL Credit Facility” and the loans thereunder, the “ABL Loans”), of which up to (i) $2.05 billion is available to the U.S. Borrowers and (ii) $50 million is available to the Canadian Borrower. The ABL Loan Agreement also provides for (i) a $300 million sublimit of availability for letters of credit of which there is a further $25 million sublimit for the Canadian Borrower. The ABL Credit Facility replaced the Company’s $900 million prior asset-based revolving credit facility. In addition, $1.5 billion of proceeds from the ABL Credit Facility were drawn to finance the Supervalu acquisition and related transaction costs. Under the ABL Loan Agreement, the Borrowers may, at their option, increase the aggregate amount of the ABL Credit Facility in an amount of up to $600 million without the consent of any ABL Lenders not participating in such increase, subject to certain customary conditions and applicable lenders committing to provide the increase in funding. There is no assurance that additional funding would be available. The Borrowers’ obligations under the ABL Credit Facility are guaranteed by most of the Company’s wholly-owned subsidiaries (collectively, the “Guarantors”), subject to customary exceptions and limitations. The Borrowers’ obligations under the ABL Credit Facility and the Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on all of the Borrowers’ and Guarantors’ accounts receivable, inventory and certain other assets arising therefrom or related thereto (including substantially all of their deposit accounts, collectively, the “ABL Assets”) and (ii) a second-priority lien on all of the Borrowers’ and Guarantors’ assets that do not constitute ABL Assets, in each case, subject to customary exceptions and limitations. Availability under the ABL Credit Facility is subject to a borrowing base (the “Borrowing Base”), which is based on 90% of eligible accounts receivable, plus 90% of eligible credit card receivables, plus 90% of the net orderly liquidation value of eligible inventory, plus 90% of eligible pharmacy receivables, plus certain pharmacy prescription files availability of the Borrowers, after adjusting for customary reserves, but at no time shall exceed the lesser of the aggregate commitments under the ABL Credit Facility (currently $2,100 million) or the Borrowing Base. The assets included in the Consolidated Balance Sheets securing the outstanding obligations under the ABL Credit Facility on a first-priority basis, and the unused credit and fees under the ABL Credit Facility, were as follows:
(1) The ABL Credit Facility is also secured by all of the Company’s pharmacy prescription files, which are included in Intangibles, net in the Consolidated Balance Sheets. Refer to Note 6—Goodwill and Intangible Assets, Net in Part II, Item 8 of this Annual Report on Form 10-K for additional information. As of July 31, 2021, the U.S. Borrowers’ Borrowing Base, net of $175 million of reserves, was $2,218 million, which is above the $2.05 billion limit of availability to the U.S. Borrowers under the ABL Credit Facility. As of July 31, 2021, the Canadian Borrower’s Borrowing Base, net of $5 million of reserves, was $49 million, which is below the $50 million limit of availability to the Canadian Borrower under the ABL Credit facility, resulting in total availability of $2,099 million for ABL Loans and letters of credit under the ABL Credit Facility. As of July 31, 2021, the U.S. Borrowers had $701 million of ABL Loans and the Canadian Borrower had no ABL Loans outstanding under the ABL Credit Facility, which are presented net of debt issuance costs of $8 million and are included in Long-term debt on the Consolidated Balance Sheets. As of July 31, 2021, the U.S. Borrowers had $118 million in letters of credit and the Canadian Borrower had no letters of credit outstanding under the ABL Credit Facility. The Company’s resulting remaining availability under the ABL Credit Facility was $1,280 million as of July 31, 2021.
The applicable interest rates, letter of credit fees and unutilized commitment fees under the ABL Credit Facility are variable and are dependent upon the prior fiscal quarter’s daily Average Availability (as defined in the ABL Agreement), and were as follows:
(1) The U.S. Borrowers utilize LIBOR-based loans and the Canadian Borrower utilizes bankers’ acceptance rate-based loans. The ABL Loan Agreement contains provisions for the establishment of an alternative rate of interest in the event that LIBOR is no longer available. The ABL Loan Agreement subjects the Company to a fixed charge coverage ratio (as defined in the ABL Loan Agreement) of at least 1.0 to 1.0 calculated at the end of each fiscal quarter on a rolling four quarter basis when the adjusted aggregate availability (as defined in the ABL Loan Agreement) is less than the greater of (i) $235 million and (ii) 10% of the aggregate borrowing base. The Company has not been subject to the fixed charge coverage ratio covenant under the ABL Loan Agreement, including through the filing date of this Annual Report. Term Loan Facility The Term Loan Agreement, by and among the Company and Supervalu (collectively, the “Term Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “ Term Lenders”), Credit Suisse, as administrative agent for the Lenders, and the other parties thereto, provides for senior secured first lien term loans in an aggregate principal amount of $1,950 million, primarily consisting of a $1,800 million -year tranche (the “Term Loan Facility”). The entire amount of the net proceeds from the Term Loan Facility, which included a $150 million 364-day tranche that was repaid in fiscal 2020, was used to finance the Supervalu acquisition and related transaction costs. The loans under the Term Loan Facility will be payable in full on October 22, 2025, as the extension requirement related to the Company’s distribution agreement with Whole Foods Market Distribution, Inc. was satisfied during fiscal 2021. Under the Term Loan Agreement, the Company may, at its option, increase the amount of the Term Loan Facility, add one or more additional tranches of term loans or add one or more additional tranches of revolving credit commitments, without the consent of any Term Lenders not participating in such additional borrowings, up to an aggregate amount of $656 million plus additional amounts based on satisfaction of certain leverage ratio tests, subject to certain customary conditions and applicable lenders committing to provide the additional funding. There can be no assurance that additional funding would be available. The obligations under the Term Loan Facility are guaranteed by the Guarantors, subject to customary exceptions and limitations. The Term Borrowers’ obligations under the Term Loan Facility and the Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ assets other than the ABL Assets and (ii) a second-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ ABL Assets, in each case, subject to customary exceptions and limitations, including an exception for owned real property with net book values of less than $10 million. As of July 31, 2021 and August 1, 2020, there was $676 million and $600 million, respectively, of owned real property pledged as collateral that was included in Property and equipment, net in the Consolidated Balance Sheets. The loans under the Term Loan Facility may be voluntarily prepaid, subject to certain minimum payment thresholds and the payment of breakage or other similar costs. Under the Term Loan Facility, the Company is required, subject to certain exceptions and customary reinvestment rights, to apply 100 percent of Net Cash Proceeds (as defined in the Term Loan Agreement) from certain types of asset sales to prepay the loans outstanding under the Term Loan Facility. Commencing with the fiscal year ending August 1, 2020, the Company must also prepay loans outstanding under the Term Loan Facility no later than 130 days after the fiscal year end in an aggregate principal amount equal to a specified percentage (which percentage ranges from 0 to 75 percent depending on the Consolidated First Lien Net Leverage Ratio of Excess Cash Flow (as defined in the Term Loan Agreement as of the last day of such fiscal year), minus any voluntary prepayments made during such fiscal year of the loans under the Term Loan Facility, the ABL Credit Facility (to the extent they permanently reduce commitments under the ABL Facility) and certain other indebtedness. Based on the Company’s Excess Cash Flow in fiscal 2020, a $72 million prepayment was required and paid in fiscal 2021 (as described above). Based on the Company’s Consolidated First Lien Net Leverage Ratio at the end of fiscal 2021, no prepayment from Excess Cash Flow in fiscal 2021 is required to be made in fiscal 2022. As of July 31, 2021, the borrowings under the Term Loan Facility bear interest at rates that, at the Term Borrowers’ option, can be either: (i) a base rate plus a margin of 2.50% or (ii) a LIBOR rate plus a margin of 3.50%; provided that the LIBOR rate shall never be less than 0.0%. The Term Loan Agreement contains provisions for the establishment of an alternative rate of interest in the event that LIBOR is no longer available. As of July 31, 2021, the Company had borrowings of $1,002 million outstanding under the Term Loan Facility, which are presented net of debt issuance costs of $18 million and an original issue discount on debt of $17 million. As of July 31, 2021, no amount of the Term Loan Facility was classified as current. The Company’s Senior Notes, ABL Credit Facility and Term Loan Facility contain covenants customary for debt securities and credit facilities of these types, that limit the ability of the Company and its restricted subsidiaries to, among other things, incur debt, declare or pay dividends or make other distributions to stockholders of the Company, transfer or sell assets, create liens on our assets, engage in transactions with affiliates, and merge, consolidate or sell all or substantially all of the assets of the Company and its subsidiaries on a consolidated basis. These debt securities and credit facilities also contain other customary affirmative and negative covenants, representations and warranties, and events of default. If an event of default occurs and is continuing, the Company may be required to immediately repay all amounts outstanding under these debt arrangements. The Company was in compliance with all such covenants for all periods presented, including through the filing date of this Annual Report.
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COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE 10—COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2021, fiscal 2020 and fiscal 2019 are as follows:
Items reclassified out of Accumulated other comprehensive loss had the following impact on the Consolidated Statements of Operations:
(1)Reclassification of amounts included in net periodic benefit income include reclassification of prior service benefit and reclassification of net actuarial loss as reflected in Note 13—Benefit Plans. As of July 31, 2021, the Company expects to reclassify $40 million related to unrealized derivative losses out of Accumulated other comprehensive loss and primarily into Interest expense, net during the following twelve-month period.
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LEASES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LEASES | NOTE 11—LEASES The Company leases certain of its distribution centers, retail stores, office facilities, transportation equipment, and other operating equipment from third parties. Many of these leases include renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Lease assets and liabilities, net, are as follows (in millions):
Lease assets and liabilities presented in the table above include lease contracts related to our discontinued operations, as the Company expects to remain primarily obligated under these leases. The Company’s lease cost under ASC 842 is as follows (in millions):
(1)Rent expense as presented here includes $2 million and $6 million in fiscal 2021 and 2020 of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as the Company expects to remain primarily obligated under these leases. Rent expense as presented here also includes immaterial amounts of variable lease expense of discontinued operations. (2)Includes $31 million and $36 million of lease expense in fiscal 2021 and 2020 and $(33) million and $(41) million of lease income in fiscal 2021 and 2020 that is recorded within Restructuring, acquisition and integration related expenses for assigned leases related to previously sold locations and surplus, non-operating properties for which the Company is restructuring its obligations. The Company leases certain of its distribution centers and leases most of its retail stores, and leases certain office facilities and equipment from third parties. Many of these leases include renewal options and, in certain instances, also include options to purchase. Rent expense, other operating lease expense and subtenant rentals all under operating leases included within Operating expenses, and subtenant rentals under operating leases with customers included within Net sales, consisted of the following. Rent expense as presented below under ASC 840 excludes variable lease rent that is included in total net lease cost under ASC 842 in the table above.
(1)Rent expense as presented in fiscal 2019 includes $10 million of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as we expect to remain primarily obligated under these leases. On October 23, 2018, the Company received $101 million in aggregate proceeds, excluding taxes and closing costs, for the sale and leaseback of its final distribution center of eight distribution center sale-leaseback transactions entered into by Supervalu in April 2018. On October 26, 2018, the Company received $49 million in aggregate proceeds, excluding taxes and closing costs, for the sale and leaseback of a separate distribution center under an agreement entered into by Supervalu in March 2018, as amended. Both distribution center sale-leasebacks qualified for sale accounting, with the lease-backs being classified as operating leases. No gain or loss was recognized or deferred on the sale of these facilities, as the fair value of these facilities as of the Supervalu acquisition date was determined to be equal to their contractual sale–leaseback amounts. In fiscal 2019, the Company entered into a lease for a new distribution facility in California for approximately 1.2 million square feet. The Company had identified two buildings on the same distribution center campus: one in which it was deemed the accounting owner due to construction activity and another for which it was a lessee. Upon the adoption of ASC 842, the Company continued to account for the building as if it was the accounting owner of due to ongoing construction activity. On February 24, 2020, the Company executed a purchase option to acquire the entire distribution center campus which is expected to close in fiscal 2022. Upon execution of the purchase option, the previously constructed facility accounted for as an operating lease has been re-classified as a finance lease. Upon completion of the construction in fiscal 2020, the Company did not qualify for sale accounting on the other building due to the outstanding purchase option. The Company leases certain property to third parties and receives lease and subtenant rental payments under operating leases, including assigned leases for which the Company has future minimum lease payment obligations. Future minimum lease payments (“Lease Liabilities”) include payments to be made by the Company or certain third parties in the case of assigned noncancellable operating leases and finance leases. Future minimum lease and subtenant rentals (“Lease Receipts”) include expected cash receipts from operating subleases, and in the case of assigned noncancellable leases receipts for stores sold to third parties, which they operate. As of July 31, 2021, these Lease Liabilities and Lease Receipts consisted of the following (in millions):
(1)Operating lease payments include $4 million related to extension options that are reasonably certain of being exercised and exclude $52 million of legally binding minimum lease payments for leases signed but not yet commenced. (2)This table excludes a $55 million payment related to a facility the Company is deemed the accounting owner, which is recognized as a residual obligation, and is subject to an underlying lease. (3)Calculated using the interest rate for each lease. The following tables provide other information required by ASC 842:
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| LEASES | NOTE 11—LEASES The Company leases certain of its distribution centers, retail stores, office facilities, transportation equipment, and other operating equipment from third parties. Many of these leases include renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Lease assets and liabilities, net, are as follows (in millions):
Lease assets and liabilities presented in the table above include lease contracts related to our discontinued operations, as the Company expects to remain primarily obligated under these leases. The Company’s lease cost under ASC 842 is as follows (in millions):
(1)Rent expense as presented here includes $2 million and $6 million in fiscal 2021 and 2020 of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as the Company expects to remain primarily obligated under these leases. Rent expense as presented here also includes immaterial amounts of variable lease expense of discontinued operations. (2)Includes $31 million and $36 million of lease expense in fiscal 2021 and 2020 and $(33) million and $(41) million of lease income in fiscal 2021 and 2020 that is recorded within Restructuring, acquisition and integration related expenses for assigned leases related to previously sold locations and surplus, non-operating properties for which the Company is restructuring its obligations. The Company leases certain of its distribution centers and leases most of its retail stores, and leases certain office facilities and equipment from third parties. Many of these leases include renewal options and, in certain instances, also include options to purchase. Rent expense, other operating lease expense and subtenant rentals all under operating leases included within Operating expenses, and subtenant rentals under operating leases with customers included within Net sales, consisted of the following. Rent expense as presented below under ASC 840 excludes variable lease rent that is included in total net lease cost under ASC 842 in the table above.
(1)Rent expense as presented in fiscal 2019 includes $10 million of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as we expect to remain primarily obligated under these leases. On October 23, 2018, the Company received $101 million in aggregate proceeds, excluding taxes and closing costs, for the sale and leaseback of its final distribution center of eight distribution center sale-leaseback transactions entered into by Supervalu in April 2018. On October 26, 2018, the Company received $49 million in aggregate proceeds, excluding taxes and closing costs, for the sale and leaseback of a separate distribution center under an agreement entered into by Supervalu in March 2018, as amended. Both distribution center sale-leasebacks qualified for sale accounting, with the lease-backs being classified as operating leases. No gain or loss was recognized or deferred on the sale of these facilities, as the fair value of these facilities as of the Supervalu acquisition date was determined to be equal to their contractual sale–leaseback amounts. In fiscal 2019, the Company entered into a lease for a new distribution facility in California for approximately 1.2 million square feet. The Company had identified two buildings on the same distribution center campus: one in which it was deemed the accounting owner due to construction activity and another for which it was a lessee. Upon the adoption of ASC 842, the Company continued to account for the building as if it was the accounting owner of due to ongoing construction activity. On February 24, 2020, the Company executed a purchase option to acquire the entire distribution center campus which is expected to close in fiscal 2022. Upon execution of the purchase option, the previously constructed facility accounted for as an operating lease has been re-classified as a finance lease. Upon completion of the construction in fiscal 2020, the Company did not qualify for sale accounting on the other building due to the outstanding purchase option. The Company leases certain property to third parties and receives lease and subtenant rental payments under operating leases, including assigned leases for which the Company has future minimum lease payment obligations. Future minimum lease payments (“Lease Liabilities”) include payments to be made by the Company or certain third parties in the case of assigned noncancellable operating leases and finance leases. Future minimum lease and subtenant rentals (“Lease Receipts”) include expected cash receipts from operating subleases, and in the case of assigned noncancellable leases receipts for stores sold to third parties, which they operate. As of July 31, 2021, these Lease Liabilities and Lease Receipts consisted of the following (in millions):
(1)Operating lease payments include $4 million related to extension options that are reasonably certain of being exercised and exclude $52 million of legally binding minimum lease payments for leases signed but not yet commenced. (2)This table excludes a $55 million payment related to a facility the Company is deemed the accounting owner, which is recognized as a residual obligation, and is subject to an underlying lease. (3)Calculated using the interest rate for each lease. The following tables provide other information required by ASC 842:
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| LEASES | NOTE 11—LEASES The Company leases certain of its distribution centers, retail stores, office facilities, transportation equipment, and other operating equipment from third parties. Many of these leases include renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Lease assets and liabilities, net, are as follows (in millions):
Lease assets and liabilities presented in the table above include lease contracts related to our discontinued operations, as the Company expects to remain primarily obligated under these leases. The Company’s lease cost under ASC 842 is as follows (in millions):
(1)Rent expense as presented here includes $2 million and $6 million in fiscal 2021 and 2020 of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as the Company expects to remain primarily obligated under these leases. Rent expense as presented here also includes immaterial amounts of variable lease expense of discontinued operations. (2)Includes $31 million and $36 million of lease expense in fiscal 2021 and 2020 and $(33) million and $(41) million of lease income in fiscal 2021 and 2020 that is recorded within Restructuring, acquisition and integration related expenses for assigned leases related to previously sold locations and surplus, non-operating properties for which the Company is restructuring its obligations. The Company leases certain of its distribution centers and leases most of its retail stores, and leases certain office facilities and equipment from third parties. Many of these leases include renewal options and, in certain instances, also include options to purchase. Rent expense, other operating lease expense and subtenant rentals all under operating leases included within Operating expenses, and subtenant rentals under operating leases with customers included within Net sales, consisted of the following. Rent expense as presented below under ASC 840 excludes variable lease rent that is included in total net lease cost under ASC 842 in the table above.
(1)Rent expense as presented in fiscal 2019 includes $10 million of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as we expect to remain primarily obligated under these leases. On October 23, 2018, the Company received $101 million in aggregate proceeds, excluding taxes and closing costs, for the sale and leaseback of its final distribution center of eight distribution center sale-leaseback transactions entered into by Supervalu in April 2018. On October 26, 2018, the Company received $49 million in aggregate proceeds, excluding taxes and closing costs, for the sale and leaseback of a separate distribution center under an agreement entered into by Supervalu in March 2018, as amended. Both distribution center sale-leasebacks qualified for sale accounting, with the lease-backs being classified as operating leases. No gain or loss was recognized or deferred on the sale of these facilities, as the fair value of these facilities as of the Supervalu acquisition date was determined to be equal to their contractual sale–leaseback amounts. In fiscal 2019, the Company entered into a lease for a new distribution facility in California for approximately 1.2 million square feet. The Company had identified two buildings on the same distribution center campus: one in which it was deemed the accounting owner due to construction activity and another for which it was a lessee. Upon the adoption of ASC 842, the Company continued to account for the building as if it was the accounting owner of due to ongoing construction activity. On February 24, 2020, the Company executed a purchase option to acquire the entire distribution center campus which is expected to close in fiscal 2022. Upon execution of the purchase option, the previously constructed facility accounted for as an operating lease has been re-classified as a finance lease. Upon completion of the construction in fiscal 2020, the Company did not qualify for sale accounting on the other building due to the outstanding purchase option. The Company leases certain property to third parties and receives lease and subtenant rental payments under operating leases, including assigned leases for which the Company has future minimum lease payment obligations. Future minimum lease payments (“Lease Liabilities”) include payments to be made by the Company or certain third parties in the case of assigned noncancellable operating leases and finance leases. Future minimum lease and subtenant rentals (“Lease Receipts”) include expected cash receipts from operating subleases, and in the case of assigned noncancellable leases receipts for stores sold to third parties, which they operate. As of July 31, 2021, these Lease Liabilities and Lease Receipts consisted of the following (in millions):
(1)Operating lease payments include $4 million related to extension options that are reasonably certain of being exercised and exclude $52 million of legally binding minimum lease payments for leases signed but not yet commenced. (2)This table excludes a $55 million payment related to a facility the Company is deemed the accounting owner, which is recognized as a residual obligation, and is subject to an underlying lease. (3)Calculated using the interest rate for each lease. The following tables provide other information required by ASC 842:
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| Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHARE-BASED AWARDS | NOTE 12—SHARE-BASED AWARDS As of July 31, 2021, the Company has restricted stock awards and performance share units and stock options under four equity incentive plans: the 2002 Stock Incentive Plan; the 2004 Equity Incentive Plan, as amended; the 2012 Equity Incentive Plan, as amended and restated; and the Amended and Restated 2020 Equity Incentive Plan. The terms of each stock-based award will be determined by the Board of Directors or the Compensation Committee thereof. During fiscal 2021, the Company authorized for issuance and registered an additional 3.6 million shares of common stock under the Amended and Restated 2020 Equity Incentive Plan. As of July 31, 2021, the Company has 3.9 million shares authorized and available for grant under the Amended and Restated 2020 Equity Incentive Plan. The authorization for new grants under the 2002 Plan, 2004 Plan and 2012 Equity Incentive Plan has expired. Share-Based Compensation Expense The following table presents information regarding share-based compensation expenses and the related tax impacts:
(1)Amounts are derived primarily from liability classified awards. (2)Includes equity classified awards of $1 million for fiscal 2021, liability classified awards of $1 million for fiscal 2020, and liability classified awards of $32 million and equity classified awards of $1 million for fiscal 2019. Vesting requirements for awards are generally at the discretion of the Company’s Board of Directors, or the Compensation Committee thereof. Time-based vesting awards for employees typically vest in three or four equal installments. The Board of Directors has adopted a policy in connection with the 2020 Equity Incentive Plan that sets forth grant, vesting and settlement dates for equity awards, a one-year vesting period for awards issued to non-employee directors, and a three-year equal installment vesting period for designated employee restricted stock awards. Performance awards have a three-year cliff vest, subject to achievement of the performance objective. As of July 31, 2021, there was $41 million of total unrecognized compensation cost related to outstanding share-based compensation arrangements (including stock options, restricted stock units, Supervalu replacement awards and performance-based restricted stock units). Unrecognized compensation cost related to Replacement Options is de minimis. This cost is expected to be recognized over a weighted-average period of 1.8 years. Restricted Stock Awards The fair value of restricted stock units and performance share units are determined based on the number of units granted and the quoted price of the Company’s common stock as of the grant date. The following summary presents information regarding restricted stock units, Supervalu replacement awards and performance stock units:
Performance-Based Share Awards During fiscal 2021, the Company granted 0.5 million performance share units to its executives (subject to the issuance of up to 0.3 million additional shares if the Company’s performance exceeds specified targeted levels) with a weighted average grant-date fair value of $18.19. These performance units are tied to fiscal 2021, 2022 and 2023 performance metrics, including adjusted EPS growth, adjusted return on invested capital (“ROIC”) and adjusted EBITDA leverage. No performance share units granted in fiscal 2021 were forfeited during the current year. During fiscal 2020, the Company granted 1.0 million performance share units to its executives (subject to the issuance of up to 1.0 million additional shares if the Company’s performance exceeds specified targeted levels) with a weighted average grant-date fair value of $8.07. These performance units are tied to fiscal 2020, 2021 and 2022 performance metrics, including adjusted EPS growth, ROIC and adjusted EBITDA leverage. No performance share units granted in fiscal 2020 were forfeited during the current year. During fiscal 2019, the Company granted 0.3 million performance share units to its executives (subject to the issuance of up to 0.3 million additional shares if the Company’s performance exceeds specified targeted levels) with a weighted average grant-date fair value of $22.56. These performance units were tied to fiscal 2020 performance metrics, including adjusted EBITDA and ROIC. During fiscal 2020, 0.3 million of performance share units expired, and as of August 1, 2020, 0.1 million performance share units have been earned and were issued in fiscal 2021. Stock Options The Company did not grant stock options in fiscal 2021, 2020 or 2019. The following summary presents information regarding outstanding stock options as of July 31, 2021 and changes during the fiscal year then ended:
The aggregate intrinsic value of options exercised during fiscal 2021, 2020 and 2019 was $1 million, $— million and $— million, respectively. Supervalu Replacement Awards Pursuant to the Merger Agreement, dated as of July 25, 2018, as amended, each outstanding Supervalu stock option, whether vested or unvested, that was unexercised immediately prior to the effective time of the Merger (“SVU Option”) was converted, effective as of the effective time of the Merger, into a stock option exercisable for shares of common stock of the Company (“Replacement Option”) in accordance with the adjustment provisions of the Supervalu stock. In addition, each outstanding Supervalu restricted share award, restricted stock unit award, deferred share unit award and performance share unit award (“SVU Equity Award”) was converted, effective as of the effective time of the Merger, into time-vesting awards (“Replacement Award”) with a settlement value equal to the merger consideration of $32.50 per share multiplied by the number of shares of Supervalu common stock subject to such SVU Equity Award. The Merger Agreement originally provided that the Replacement Awards were payable in cash, however, the Merger Agreement was amended on October 10, 2018, to provide that the Replacement Awards could be settled in cash and/or an equal value in shares of common stock of the Company. The Replacement Awards are liability classified awards as they were ultimately settled in cash or shares at the discretion of the employee. The Replacement Awards liabilities are expensed over the service period based on the fixed value of $32.50 per share. On October 22, 2018, the Company authorized for issuance and registered on a Registration Statement on Form S-8 filed with the Securities and Exchange Commission 5 million shares of common stock for issuance in order to satisfy the Replacement Options and Replacement Awards. During fiscal 2019, the Company issued 2.0 million shares of common stock at an average price of $12.00 per share for $24 million of cash. During fiscal 2020, the Company issued 1.3 million shares of common stock at an average price of $10.66 per share for $14 million of cash.
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| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BENEFIT PLANS | NOTE 13—BENEFIT PLANS The Company’s employees who participate are covered by various contributory and non-contributory pension, 401(k) plans, and other health and welfare benefits. The Company’s primary defined benefit pension plans are the SUPERVALU INC. Retirement Plan, Unified Grocers, Inc. Cash Balance Plan and certain supplemental executive retirement plans. These plans were closed to new participants and service crediting ended for all participants as of December 31, 2007. Pay increases were reflected in the amount of benefits accrued in these plans until December 31, 2012. Approximately 62% of the union employees participate in multiemployer defined benefit pension plans under collective bargaining agreements. The remaining either participate in plans sponsored by the Company or are not currently eligible to participate in a retirement plan. In addition to sponsoring both defined benefit and defined contribution pension plans, the Company provides healthcare and life insurance benefits for eligible retired employees under postretirement benefit plans. The Company also provides certain health and welfare benefits, including short-term and long-term disability benefits, to inactive disabled employees prior to retirement. The terms of the postretirement benefit plans vary based on employment history, age and date of retirement. For many retirees, the Company provides a fixed dollar contribution and retirees pay contributions to fund the remaining cost. Defined Benefit Pension and Other Postretirement Benefit Plans For the defined benefit pension plans, the accumulated benefit obligation is equal to the projected benefit obligation. The benefit obligation, fair value of plan assets and funded status of our defined benefit pension plans and other postretirement benefit plans consisted of the following:
The actuarial gain on projected pension benefit obligations in fiscal 2021 was primarily the result of a 35 basis points increase in the discount rate on the SUPERVALU INC. Retirement Plan and updated mortality assumptions. The actuarial loss on projected pension benefit obligations in fiscal 2020 was primarily the result of a 113 basis points decrease in the discount rate on the SUPERVALU INC. Retirement Plan, and updated assumptions from lump sum settlements and mortality. The funded status of our pension benefits contains plans with individually funded and underfunded statuses. Our other postretirement benefits consist of one plan as shown above. The following table provides the funded status of individual projected pension benefit plan obligations and the fair value of plan assets for these plans:
Net periodic benefit (income) cost and other changes in plan assets and benefit obligations recognized consist of the following:
On August 1, 2019, the Company amended the SUPERVALU INC. Retirement Plan to provide for a lump sum settlement window. On August 2, 2019, the Company sent plan participants lump sum settlement election offerings that committed the plan to pay certain deferred vested pension plan participants and retirees, who make such an election, a lump sum payment in exchange for their rights to receive ongoing payments from the plan. The lump sum payment amounts are equal to the present value of the participant’s pension benefits, and were made to certain former (i) retired associates and beneficiaries who are receiving their monthly pension benefit payment and (ii) terminated associates who are deferred vested in the plan, had not yet begun receiving monthly pension benefit payments and who are not eligible for any prior lump sum offerings under the plan. Benefit obligations associated with the lump sum offering have been incorporated into the funded status utilizing the actuarially determined lump sum payments based on offer acceptances. As disclosed in the preceding two tables, in fiscal 2020, the plan made aggregate lump sum settlement payments, which resulted in a non-cash pension settlement charges from the acceleration of a portion of the accumulated unrecognized actuarial loss, which was based on the fair value of SUPERVALU INC. Retirement Plan assets and remeasured liabilities. As a result of the settlement payments reported in the second quarter of fiscal 2020, SUPERVALU INC. Retirement Plan obligations were remeasured using a discount rate of 3.1 percent and the MP-2019 mortality improvement scale. This remeasurement resulted in a $2 million decrease to Accumulated other comprehensive loss. Amounts recognized in the Consolidated Balance Sheets as of July 31, 2021 and August 1, 2020 consist of the following:
Benefit Plan Assumptions Weighted average assumptions used to determine benefit obligations and net periodic benefit cost consisted of the following:
(1) Expected return on plan assets is estimated by utilizing forward-looking, long-term return, risk and correlation assumptions developed and updated annually by the Company. These assumptions are weighted by the actual or target allocation to each underlying asset class represented in the pension plan master trust. The Company also assess the expected long-term return on plan assets assumption by comparison to long-term historical performance on an asset class to ensure the assumption is reasonable. Long-term trends are also evaluated relative to market factors such as inflation, interest rates, and fiscal and monetary policies in order to assess the capital market assumptions. The Company reviews and selects the discount rate to be used in connection with measuring our pension and other postretirement benefit obligations annually. In determining the discount rate, the Company uses the yield on corporate bonds (rated AA or better) that coincides with the cash flows of the plans’ estimated benefit payouts. The model uses a yield curve approach to discount each cash flow of the liability stream at an interest rate specifically applicable to the timing of each respective cash flow. The model totals the present values of all cash flows and calculates the equivalent weighted average discount rate by imputing the singular interest rate that equates the total present value with the stream of future cash flows. This resulting weighted average discount rate is then used in evaluating the final discount rate to be used. For those retirees whose health plans provide for variable employer contributions, the assumed healthcare cost trend rate used in measuring the accumulated postretirement benefit obligation before age 65 was 8.10 percent as of July 31, 2021. The assumed healthcare cost trend rate for retirees before age 65 will decrease each year through fiscal 2030, until it reaches the ultimate trend rate of 4.50 percent. For those retirees whose health plans provide for variable employer contributions, the assumed healthcare cost trend rate used in measuring the accumulated postretirement benefit obligation after age 65 was 5.40 percent as of July 31, 2021. Pension Plan Assets Pension plan assets are held in a master trust and invested in separately managed accounts and other commingled investment vehicles holding fixed income securities, domestic equity securities, private equity securities, international equity securities, and real estate securities. The Company employs a liability hedging approach whereby the target asset allocation adjusts based on the funded nature of the plans, targeting a level of risk commensurate with keeping pace with the growth of plan liabilities. Risk is managed through diversification across asset classes, multiple investment manager portfolios and both general and portfolio-specific investment guidelines. Risk tolerance is established through careful consideration of the plan liabilities, plan funded status and the Company’s financial condition. This asset allocation policy mix is reviewed annually and actual versus target allocations are monitored regularly and rebalanced on an as-needed basis. Plan assets are invested using a combination of active and passive investment strategies. Passive, or “indexed” strategies, attempt to mimic rather than exceed the investment performance of a market benchmark. The plan’s active investment strategies employ multiple investment management firms. Managers within each asset class cover a range of investment styles and approaches and are combined in a way that controls for capitalization, and style biases (equities) and interest rate exposures (fixed income) versus benchmark indices. Monitoring activities to evaluate performance against targets and measure investment risk take place on an ongoing basis through annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews. The asset allocation targets and the actual allocation of pension plan assets are as follows:
The following is a description of the valuation methodologies used for investments measured at fair value: Common stock - Valued at the closing price reported in the active market in which the individual securities are traded. Common collective trusts - Investments in common/collective trust funds are stated at net asset value (“NAV”) as determined by the issuer of the common/collective trust funds and is based on the fair value of the underlying investments held by the fund less its liabilities. The majority of the common/collective trust funds have a readily determinable fair value and are classified as Level 2. Other investments in common/collective trust funds determine NAV on a less frequent basis and/or have redemption restrictions. For these investments, NAV is used as a practical expedient to estimate fair value. Corporate bonds - Valued based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar bonds, the fair value is based upon an industry valuation model, which maximizes observable inputs. Government securities - Certain government securities are valued at the closing price reported in the active market in which the security is traded. Other government securities are valued based on yields currently available on comparable securities of issuers with similar credit ratings. Mortgage backed securities - Valued based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar securities, the fair value is based upon an industry valuation model, which maximizes observable inputs. Mutual funds - Mutual funds are valued at the closing price reported in the active market in which the individual securities are traded. Private equity and real estate partnerships - Valued based on NAV provided by the investment manager, updated for any subsequent partnership interests’ cash flows or expected changes in fair value. The NAV is used as a practical expedient to estimate fair value. Other - Consists primarily of options, futures, and money market investments priced at $1 per unit. The valuation methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement. The fair value of assets held in master trusts for defined benefit pension plans as of July 31, 2021, by asset category, consisted of the following (in millions):
The fair value of assets held in master trusts for defined benefit pension plans as of August 1, 2020, by asset category, consisted of the following (in millions):
Contributions No minimum pension contributions were required to be made under either the SUPERVALU INC. Retirement Plan or the Unified Grocers, Inc. Cash Balance Plan under the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) in fiscal 2021. The Company expects to contribute approximately $2 million to $3 million to its other defined benefit pension plans and postretirement benefit plans in fiscal 2022. The Company funds its defined benefit pension plans based on the minimum contribution required under the Code, ERISA the Pension Protection Act of 2006 and other applicable laws, as determined by our external actuarial consultant, and additional contributions made at its discretion. The Company may accelerate contributions or undertake contributions in excess of the minimum requirements from time to time subject to the availability of cash in excess of operating and financing needs or other factors as may be applicable. The Company assesses the relative attractiveness of the use of cash including such factors as expected return on assets, discount rates, cost of debt, reducing or eliminating required Pension Benefit Guaranty Corporation variable rate premiums or the ability to achieve exemption from participant notices of underfunding. Estimated Future Benefit Payments The estimated future benefit payments to be made from our defined benefit pension and other postretirement benefit plans, which reflect expected future service, are as follows (in millions):
Defined Contribution Plans The Company sponsors defined contribution and profit sharing plans pursuant to Section 401(k) of the Internal Revenue Code. Employees may contribute a portion of their eligible compensation to the plans on a pre-tax basis. We match a portion of certain employee contributions by contributing cash into the investment options selected by the employees. The total amount contributed by us to the plans is determined by plan provisions or at the Company’s discretion. Total employer contribution expenses for these plans were $27 million, $21 million and $21 million for fiscal 2021, 2020 and 2019, respectively. Post-Employment Benefits The Company recognizes an obligation for benefits provided to former or inactive employees. The Company is self-insured for certain disability plan programs, which comprise the primary benefits paid to inactive employees prior to retirement. Amounts recognized in the Consolidated Balance Sheets consisted of $2 million of Accrued compensation and benefits and $5 million of Other long-term liabilities as of July 31, 2021 and August 1, 2020. Multiemployer Pension Plans The Company contributes to various multiemployer pension plans under collective bargaining agreements, primarily defined benefit pension plans. These multiemployer plans generally provide retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Plan trustees typically are responsible for determining the level of benefits to be provided to participants as well as the investment of the assets and plan administration. Trustees are appointed in equal number by employers and the unions that are parties to the relevant collective bargaining agreements. Expense is recognized in connection with these plans as contributions are funded, in accordance with GAAP. The risks of participating in these multiemployer plans are different from the risks associated with single-employer plans in the following respects: a.Assets contributed to the multiemployer plan by one employer are held in trust and may be used to provide benefits to employees of other participating employers. b.If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. c.If we choose to stop participating in some multiemployer plans, or make market exits or closures or otherwise have participation in the plan drop below certain levels, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The Company’s participation in these plans is outlined in the table below. The EIN-Pension Plan Number column provides the Employer Identification Number (“EIN”) and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act (“PPA”) zone status available in 2020 relates to the plans’ most recent fiscal year-end. The zone status is based on information that we received from the plan and is annually certified by each plan’s actuary. Among other factors, red zone status plans are generally less than 65 percent funded and are considered in critical status, plans in yellow zone status are less than 80 percent funded and are considered in endangered or seriously endangered status, and green zone plans are at least 80 percent funded. The Multiemployer Pension Reform Act of 2014 (“MPRA”) created a new zone status called “critical and declining” or “Deep Red”. Plans are generally considered Deep Red if they are projected to become insolvent within 15 years. The FIP/RP Status Pending/Implemented column indicates plans for which a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented by the trustees of each plan. Certain plans have been aggregated in the All Other Multiemployer Pension Plans line in the following table, as the contributions to each of these plans are not individually material. None of our collective bargaining agreements require that a minimum contribution be made to these plans. At the date the financial statements were issued, Form 5500 for these plans were generally not available for the plan years ending in 2020. The following table contains information about the Company’s significant multiemployer plans (in millions):
(1) PPA surcharges are 5 percent or 10 percent of eligible contributions and may not apply to all collective bargaining agreements or total contributions to each plan. (2) This multiemployer pension plan is associated with continued and discontinued operations. (3) All Other Multiemployer Pension Plans includes 9 plans, none of which are individually significant when considering contributions to the plan, severity of the underfunded status or other factors. As of the fourth quarter of fiscal 2021, the Company withdrew from 2 of these 9 plans. Fiscal 2021 contributions to these plans are included in the total contributions above. (4) As of the fourth quarter of fiscal 2021, the Company withdrew from this plan. The plan is still relevant for the table above as contributions were made in fiscal 2021 prior to the withdrawal. The following table describes the expiration of the Company’s collective bargaining agreements associated with the significant multiemployer plans in which we participate:
(1) Company participating employees in the most significant collective bargaining agreement as a percent of all Company employees represented under the applicable collective bargaining agreements. (2) This multiemployer pension plan is associated with continued and discontinued operations. (3) This collective bargaining agreement has been extended. In fiscal 2021, the Company withdrew from participating in three Retail multiemployer pension plans, resulting in a $63 million withdrawal charge, which is recorded within Operating expenses within our Consolidated Statements of Operations, Other long-term liabilities on the Consolidated Balance Sheets and within changes in operating assets and liabilities within Accrued expenses and other liabilities in the Consolidated Statements of Cash Flows. In fiscal 2020, in connection with the Company’s consolidation of distribution centers in the Pacific Northwest, the Company recorded an $11 million multiemployer pension plan withdrawal liability. Accrued multiemployer pension plan withdrawal liabilities included in Other-long-term liabilities were $110 million and $52 million, in fiscal 2021 and 2020, respectively, for 13 multiemployer plans. Payments associated with these liabilities are required to be made over varying time periods, but principally over the next 20 years. Multiemployer Benefit Plans Other than Pensions The Company also makes contributions to multiemployer health and welfare plans in amounts set forth in the related collective bargaining agreements. These plans provide medical, dental, pharmacy, vision and other ancillary benefits to active employees and retirees as determined by the trustees of each plan. The vast majority of the Company’s contributions benefit active employees and as such, may not constitute contributions to a postretirement benefit plan. However, the Company is unable to separate contribution amounts to postretirement benefit plans from contribution amounts paid to benefit active employees. The Company contributed $78 million, $89 million and $73 million in fiscal 2021, fiscal 2020 and fiscal 2019, respectively, to multiemployer health and welfare plans. If healthcare provisions within these plans cannot be renegotiated in a manner that reduces the prospective healthcare cost as we intend, our Operating expenses could increase in the future. Collective Bargaining Agreements As of July 31, 2021, we had approximately 28,300 employees. Approximately 11,000 employees are covered by 48 collective bargaining agreements. During fiscal 2021, 20 collective bargaining agreements covering approximately 1,700 employees were renegotiated and 4 collective bargaining agreements covering approximately 1,500 employees expired without their terms being renegotiated. Negotiations are expected to continue with the bargaining units representing the employees subject to those agreements. During fiscal 2022, 10 collective bargaining agreements covering approximately 3,300 employees are scheduled to expire.
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INCOME TAXES |
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| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES | NOTE 14—INCOME TAXES Income Tax Expense (Benefit) Income before income taxes for fiscal 2021 consists of $175 million from U.S. continuing operations and $8 million from foreign continuing operations. Loss before income taxes for fiscal 2020 consists of $(338) million from U.S. continuing operations and $(4) million from foreign continuing operations. (Loss) income before income taxes for fiscal 2019 consists of $(348) million from U.S. continuing operations and $7 million from foreign continuing operations. The total provision (benefit) for income taxes included in the Consolidated Statements of Operations consisted of the following:
The income tax expense (benefit) in continuing operations was allocated as follows:
Total federal, state, and foreign income tax (benefit) expense in continuing operations consists of the following:
Total income tax expense (benefit) in continuing operations was different than the amounts computed by applying the statutory federal income tax rate to income before income taxes because of the following:
Uncertain Tax Positions A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
In addition, the Company has $8 million paid on deposit to various governmental agencies to cover the above liability. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. For fiscal 2021, 2020 and 2019, total accrued interest and penalties was $6 million, $7 million, and $16 million, respectively. The Company is currently under examination in several taxing jurisdictions and remains subject to examination until the statute of limitations expires for the respective taxing jurisdiction or an agreement is reached between the taxing jurisdiction and the Company. As of July 31, 2021, the Company is no longer subject to federal income tax examinations for fiscal years before 2014 and in most states is no longer subject to state income tax examinations for fiscal years before 2008 and 2015 for Supervalu and United Natural Foods, Inc., respectively. Due to the implementation of the CARES Act, NOLs were carried back into fiscal years 2014 and 2015, which extends the federal statute of limitations on those years up to the amount of the carryback claim. Based on the possibility of the closing of pending audits and appeals, or expiration of the statute of limitations, it is reasonably possible that the amount of unrecognized tax benefits will decrease by up to $7 million during the next 12 months. Deferred Tax Assets and Liabilities The tax effects of temporary differences that give rise to significant portions of the net deferred tax assets and deferred tax liabilities at July 31, 2021 and August 1, 2020 are presented below:
Tax Credits and Valuation Allowances At July 31, 2021, the Company had gross deferred tax assets of approximately $550 million. The Company regularly reviews its deferred tax assets for recoverability to evaluate whether it is more likely than not that they will be realized. In making this evaluation, the Company considers the statutory recovery periods for the assets, along with available sources of future taxable income, including reversals of existing taxable temporary differences, tax planning strategies, history of taxable income, and projections of future income. The Company gives more significance to objectively verifiable evidence, such as the existence of deferred tax liabilities that are forecast to generate taxable income within the relevant carryover periods, and a history of earnings. A valuation allowance is provided when the Company concludes, based on all available evidence, that it is more likely than not that the deferred tax assets will not be realized during the applicable recovery period. The Company has reviewed these factors in evaluating the recoverability of its deferred tax assets. As of July 31, 2021, the Company anticipates sufficient future taxable income to realize all of its deferred tax assets within the applicable recovery periods with the exception of certain foreign tax credits and state net operating losses. Accordingly, the Company has established valuation allowances against that portion of its state net operating losses and foreign tax credits that, in the Company’ s judgment, are not likely to be realized within the applicable recovery periods. At July 31, 2021, the Company had net operating loss carryforwards of approximately $2 million for federal income tax purposes that are subject to an annual limitation of approximately $1 million under Internal Revenue Code Section 382. These Section 382-limited carryforwards expire at various times between fiscal years 2022 and 2027. As of July 31, 2021, the Company anticipates sufficient future taxable income over the periods in which the net operating losses can be utilized. The Company also has the availability of future reversals of taxable temporary differences that are expected to generate taxable income in the future. Therefore, the ultimate realization of net operating losses for federal purposes appears more likely than not at July 31, 2021 and correspondingly no valuation allowance has been established. At July 31, 2021, the Company had disallowed charitable contribution carryforwards of approximately $15 million that are available for carryforward over five years. As of July 31, 2021, the Company anticipates sufficient future taxable income to fully utilize the charitable contribution carryovers within the applicable five-year carryforward period and correspondingly, no valuation allowance has been established. The retained earnings of the Company’s non-U.S. subsidiary were subject to deemed U.S. repatriation and taxation during fiscal 2017 pursuant to the Tax Cuts and Jobs Act, and existing foreign tax credits were utilized to offset the resulting liability. We have established a deferred tax asset for the remaining U.S. foreign tax credits of $1 million. Such credits are offset by a valuation allowance. Effective Tax Rate Our effective income tax rate for continuing operations was an expense rate of 18.6% on pre-tax income for fiscal 2021, respectively, and a benefit rate of 26.6% and 17.3% on pre-tax losses for fiscal 2020 and 2019, respectively. The fiscal 2020 effective tax rate was primarily driven by the impact of non-deductible goodwill impairment charges recorded in fiscal 2020, partially offset by the NOL carryback provisions of the CARES Act. For fiscal 2021, the effective tax rate was reduced by solar and employment tax credits, including the tax credit impact of a fiscal 2021 investment in an equity method partnership, the recognition of previously unrecognized tax benefits, excess tax deductions attributable to share-based compensation and inventory deductions, as well as the impact of favorable return-to-provision adjustments.
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EARNINGS PER SHARE |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EARNINGS PER SHARE | NOTE 15—EARNINGS PER SHARE The following is a reconciliation of the basic and diluted number of shares used in computing earnings per share:
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BUSINESS SEGMENTS |
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| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BUSINESS SEGMENTS | NOTE 16—BUSINESS SEGMENTS The Company has two reportable segments: Wholesale and Retail. These reportable segments are two distinct businesses, each with a different customer base, marketing strategy and management structure. The Wholesale reportable segment is the aggregation of two operating segments: U.S. Wholesale and Canada Wholesale. The U.S. Wholesale and Canada Wholesale operating segments have similar products and services, customer channels, distribution methods and economic characteristics. Reportable segments are reviewed on an annual basis, or more frequently if events or circumstances indicate a change in reportable segments has occurred. The Wholesale reportable segment is engaged in the national distribution of natural, organic, specialty, produce and conventional grocery and non-food products, and providing professional services in the United States and Canada. The Retail reportable segment derives revenues from the sale of groceries and other products at retail locations operated by the Company. The Company has additional operating segments that do not meet the quantitative thresholds for reportable segments and are therefore aggregated under the caption of Other. Other includes a manufacturing division, which engages in the importing, roasting, packaging and distributing of nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items and confections, and the Company’s natural branded product lines, primarily Blue Marble Brands. Other also includes certain corporate operating expenses that are not allocated to operating segments, which include, among other expenses, restructuring, acquisition and integration related expenses, share-based compensation, and salaries, retainers, and other related expenses of certain officers and all directors. Wholesale records revenues related to sales to Retail at gross margin rates consistent with sales to other similar wholesale customers of the acquired Supervalu business. Segment earnings include revenues and costs attributable to each of the respective business segments and allocated corporate overhead, based on the segment’s estimated consumption of corporately managed resources. The Company allocates certain corporate capital expenditures and identifiable assets to its business segments and retains certain depreciation expense related to those assets within Other. Non-operating expenses that are not allocated to the operating segments are included in the Other segment. The following table provides continuing operations net sales and Adjusted EBITDA by reportable segment and reconciles that information to Income (loss) from continuing operations before income taxes:
(1)As presented in Note 3—Revenue Recognition, for fiscal 2021, 2020 and 2019, the Company recorded $1,381 million, $1,348 million and $958 million, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale sales to its Retail segment that have been eliminated upon consolidation. For fiscal 2021, 2020 and 2019, the Company recorded $0 million, $0 million, and $12 million, respectively, within Net sales in its Wholesale reportable segment attributable to discontinued operations inter-company product purchases for certain retail banners it sold with a supply agreement. Refer to Note 3—Revenue Recognition for additional information regarding Wholesale sales to discontinued operations. Total assets of continuing operations by reportable segment were as follows:
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COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS |
12 Months Ended |
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Jul. 31, 2021 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS | NOTE 17—COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS Guarantees and Contingent Liabilities The Company has outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various retailers as of July 31, 2021. These guarantees were generally made to support the business growth of wholesale customers. The guarantees are generally for the entire terms of the leases, fixture financing loans or other debt obligations with remaining terms that range from less than one year to nine years, with a weighted average remaining term of approximately five years. For each guarantee issued, if the wholesale customer or other third-party defaults on a payment, the Company would be required to make payments under its guarantee. Generally, the guarantees are secured by indemnification agreements or personal guarantees. The Company reviews performance risk related to its guarantee obligations based on internal measures of credit performance. As of July 31, 2021, the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was $28 million ($25 million on a discounted basis). Based on the indemnification agreements, personal guarantees and results of the reviews of performance risk, as of July 31, 2021, a total estimated loss of $1 million is recorded in the Consolidated Balance Sheets. The Company is a party to a variety of contractual agreements under which it may be obligated to indemnify the other party for certain matters in the ordinary course of business, which indemnities may be secured by operation of law or otherwise. These agreements primarily relate to the Company’s commercial contracts, service agreements, contracts entered into for the purchase and sale of stock or assets, operating leases and other real estate contracts, financial agreements, agreements to provide services to the Company and agreements to indemnify officers, directors and employees in the performance of their work. While the Company’s aggregate indemnification obligations could result in a material liability, the Company is not aware of any matters that are expected to result in a material liability. No amount has been recorded in the Consolidated Balance Sheets for these contingent obligations as the fair value has been determined to be de minimis. In connection with Supervalu’s sale of New Albertson’s, Inc. (“NAI”) on March 21, 2013, the Company remains contingently liable with respect to certain self-insurance commitments and other guarantees as a result of parental guarantees issued by Supervalu with respect to the obligations of NAI that were incurred while NAI was Supervalu’s subsidiary. Based on the expected settlement of the self-insurance claims that underlie the Company’s commitments, the Company believes that such contingent liabilities will continue to decline. Subsequent to the sale of NAI, NAI collateralized most of these obligations with letters of credit and surety bonds to numerous state governmental authorities. Because NAI remains a primary obligor on these self-insurance and other obligations and has collateralized most of the self-insurance obligations for which the Company remains contingently liable, the Company believes that the likelihood that it will be required to assume a material amount of these obligations is remote. Accordingly, no amount has been recorded in the Consolidated Balance Sheets for these guarantees, as the fair value has been determined to be de minimis. Agreements with Save-A-Lot and Onex The Agreement and Plan of Merger pursuant to which Supervalu sold the Save-A-Lot business in 2016 (the “SAL Merger Agreement”) contains customary indemnification obligations of each party with respect to breaches of their respective representations, warranties and covenants, and certain other specified matters, on the terms and subject to the limitations set forth in the SAL Merger Agreement. Similarly, Supervalu entered into a Separation Agreement (the “Separation Agreement”) with Moran Foods, LLC d/b/a Save-A-Lot (“Moran Foods”), which contains indemnification obligations and covenants related to the separation of the assets and liabilities of the Save-A-Lot business from the Company. The Company also entered into a Services Agreement with Moran Foods (the “Services Agreement”), pursuant to which the Company is providing Save-A-Lot with various technical, human resources, finance and other operational services for a term of five years, subject to termination provisions that can be exercised by each party. The initial annual base charge under the Services Agreement is $30 million, subject to adjustments. The Company expects that services provided under the Services Agreement will wind down at or near the end of the initial term in December 2021. The Services Agreement generally requires each party to indemnify the other party against third-party claims arising out of the performance of or the provision or receipt of services under the Services Agreement. While the Company’s aggregate indemnification obligations to Save-A-Lot and Onex, the purchaser of Save-A-Lot, could result in a material liability, the Company is not aware of any matters that are expected to result in a material liability. The Company has recorded the fair value of the guarantee in the Consolidated Balance Sheets within Other long-term liabilities. Other Contractual Commitments In the ordinary course of business, the Company enters into supply contracts to purchase products for resale, and service contracts for fixed asset and information technology systems. These contracts typically include either volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations. As of July 31, 2021, the Company had approximately $225 million of non-cancelable future purchase obligations, most of which will be paid and utilized in the ordinary course within one year. Legal Proceedings The Company is one of dozens of companies that have been named in various lawsuits alleging that drug manufacturers, retailers and distributors contributed to the national opioid epidemic. Currently, UNFI, primarily through its subsidiary, Advantage Logistics, is named in approximately 43 suits pending in the United States District Court for the Northern District of Ohio where over 1,800 cases have been consolidated as Multi-District Litigation (“MDL”). In accordance with the Stock Purchase Agreement dated January 10, 2013, between New Albertson’s Inc. (“New Albertson’s”) and the Company (the “Stock Purchase Agreement”), New Albertson’s is defending and indemnifying UNFI in a majority of the cases under a reservation of rights as those cases relate to New Albertson’s pharmacies. In one of the MDL cases, MDL No. 2804 filed by The Blackfeet Tribe of the Blackfeet Indian Reservation, all defendants were ordered to Answer the Complaint, which UNFI did on July 26, 2019. To date, no discovery has been conducted against UNFI in any of the actions. UNFI is vigorously defending these matters, which it believes are without merit. On January 21, 2021, various health plans filed a complaint in Minnesota state court against the Company, Albertson’s Companies, LLC (“Albertson’s”) and Safeway, Inc. alleging the defendants committed fraud by improperly reporting inflated prices for prescription drugs for members of health plans. The Plaintiffs assert six causes of action against the defendants: common law fraud, fraudulent nondisclosure, negligent misrepresentation, unjust enrichment, violation of the Minnesota Uniform Deceptive Trade Practices Act and violation of the Minnesota Prevention of Consumer Fraud Act. The plaintiffs allege that between 2006 and 2016, Supervalu overcharged the health plans by not providing the health plans, as part of usual and customary prices, the benefit of discounts given to customers purchasing prescription medication who requested that Supervalu match competitor prices. Plaintiffs seek an unspecified amount of damages. Similar to the above case, for the majority of the relevant period Supervalu and Albertson’s operated as a combined company. In March 2013, Supervalu divested Albertson’s and pursuant to the Stock Purchase Agreement, Albertson’s is responsible for any claims regarding its pharmacies. On February 19, 2021, Albertson’s and Safeway removed the case to Minnesota Federal District Court and on March 22, 2021 plaintiffs’ filed a motion to remand to state court. On February 26, 2021, defendants filed a motion to dismiss. The hearing on the remand motion and motions to dismiss occurred on May 20, 2021. The Company believes these claims are without merit and intends to vigorously defend this matter. UNFI is currently subject to a qui tam action alleging violations of the False Claims Act ("FCA"). In United States ex rel. Schutte and Yarberry v. Supervalu, New Albertson's, Inc., et al, which is pending in the U.S. District Court for the Central District of Illinois, the relators allege that defendants overcharged government healthcare programs by not providing the government, as a part of usual and customary prices, the benefit of discounts given to customers purchasing prescription medication who requested that defendants match competitor prices. The complaint was originally filed under seal and amended on November 30, 2015. The government previously investigated the relators' allegations and declined to intervene. Violations of the FCA are subject to treble damages and penalties of up to a specified dollar amount per false claim. Relators elected to pursue the case on their own and have alleged FCA damages against Supervalu and New Albertson’s in excess of $100 million, not including trebling and statutory penalties. For the majority of the relevant period Supervalu and New Albertson’s operated as a combined company. In March 2013, Supervalu divested New Albertson’s (and related assets) pursuant to the Stock Purchase Agreement. Based on the claims that are currently pending and the Stock Purchase Agreement, Supervalu’s share of a potential award (at the currently claimed value by relators) would be approximately $24 million, not including trebling and statutory penalties. Both sides moved for summary judgment. On August 5, 2019, the Court granted one of the relators’ summary judgment motions finding that the defendants’ lower matched prices are the usual and customary prices and that Medicare Part D and Medicaid were entitled to those prices. On July 2, 2020 the Court granted the defendants’ summary judgment motion and denied the relators’ motion, dismissing the case. On July 9, 2020 the relators filed a notice of appeal with the 7th Circuit Court of Appeals, and on September 30, 2020 filed an appellate brief. On November 30, 2020, the Company filed its response. The hearing before the 7th Circuit Court of Appeals occurred on January 19, 2021. On August 12, 2021, the 7th Circuit affirmed the District Court’s decision granting summary judgment in defendants’ favor. On September 23, 2021, the Relators filed a petition for rehearing. From time to time, the Company receives notice of claims or potential claims or becomes involved in litigation, alternative dispute resolution such as arbitration, or other legal and regulatory proceedings that arise in the ordinary course of its business, including investigations and claims regarding employment law, including wage and hour (including class actions); pension plans; labor union disputes, including unfair labor practices, such as claims for back-pay in the context of labor contract negotiations and other matters; supplier, customer and service provider contract terms and claims including matters related to supplier or customer insolvency or general inability to pay obligations as they become due; product liability claims, including those where the supplier may be insolvent and customers and consumers are seeking recovery against the Company; real estate and environmental matters, including claims in connection with its ownership and lease of a substantial amount of real property, both retail and warehouse properties; and antitrust. Other than as described above, there are no pending material legal proceedings to which the Company is a party or to which its property is subject. Predicting the outcomes of claims and litigation and estimating related costs and exposures involves substantial uncertainties that could cause actual outcomes, costs and exposures to vary materially from current expectations. Management regularly monitors the Company’s exposure to the loss contingencies associated with these matters and may from time to time change its predictions with respect to outcomes and estimates with respect to related costs and exposures. As of July 31, 2021, no material accrued obligations, individually or in the aggregate, have been recorded for these legal proceedings. Although management believes it has made appropriate assessments of potential and contingent loss in each of these cases based on current facts and circumstances, and application of prevailing legal principles, there can be no assurance that material differences in actual outcomes from management’s current assessments, costs and exposures relative to current predictions and estimates, or material changes in such predictions or estimates will not occur. The occurrence of any of the foregoing, could have a material adverse effect on our financial condition, results of operations or cash flows.
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DISCONTINUED OPERATIONS |
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| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DISCONTINUED OPERATIONS | NOTE 18—DISCONTINUED OPERATIONS As discussed further in Note 1—Significant Accounting Policies, in the fourth quarter of fiscal 2021, the Company determined it no longer met the held for sale criterion for a probable sale to be completed within 12 months for two of the four Shoppers retail stores remaining in discontinued operations. As a result, the Company revised its Consolidated Financial Statements to reclassify two Shoppers stores from discontinued operations to continuing operations. Prior periods presented in the Consolidated Financial Statements have been conformed to the current period presentation. Subsequent to the presentation changes, discontinued operations contain the historical results of stores already disposed of and two remaining Shoppers locations that continue to be classified as operations held for sale as discontinued operations. In fiscal 2020, the Company entered into agreements to sell 13 Shoppers stores and decided to close six locations. During fiscal 2020, the Company incurred approximately $31 million in pre-tax aggregate costs and charges related to Shoppers stores that remain within discontinued operations, consisting of $25 million of operating losses, severance costs and transaction costs during the period of wind-down and $6 million of property and equipment impairment charges related to impairment reviews. In fiscal 2019, the Company closed three of its eight Shop ‘n Save East stores and sold the remaining five Shop ‘n Save East stores to GIANT Food Store, LLC, and did not incur a gain or loss on the sale of this disposal group. The Company closed the remaining Shop ‘n Save St. Louis retail stores and the distribution center that were not sold prior to the Supervalu acquisition date. In fiscal 2019, the Company completed the sale of seven of its eight Hornbacher's locations, as well as a Hornbacher’s store that was previously being developed in West Fargo, North Dakota, to Coborn's Inc. (“Coborn’s”). The Company did not incur a gain or loss on the sale of this disposal group. The Hornbacher’s store in Grand Forks, North Dakota was not included in the sale to Coborn’s and has closed pursuant to the terms of the definitive agreement. As part of the sale, Coborn's entered into a long-term agreement for the Company to serve as the primary supplier of the Hornbacher's locations and expand its existing supply arrangements for other Coborn’s locations. In addition, the Company sold the pharmacy prescription files and inventory of all Shoppers stores. Operating results of discontinued operations are summarized below:
(1) These results reflect retail operations from the Supervalu acquisition date of October 22, 2018 to August 3, 2019. The Company recorded $0 million, $0 million and $12 million within Net sales from continuing operations attributable to discontinued operations inter-company product purchases in fiscal 2021, 2020 and 2019, respectively, related to retail disposal groups, which were sold with a supply agreement and were classified within discontinued operations prior to their disposal. These amounts were recorded at gross margin rates consistent with sales to other similar wholesale customers of the acquired Supervalu business. No net sales were recorded within continuing operations for retail stores within discontinued operations that the Company disposed of and expects to dispose of without a supply agreement. These net sales have been eliminated upon consolidation within the Wholesale segment of continuing operations and amounted to $22 million, $97 million and $201 million in fiscal 2021, 2020 and 2019, respectively. The following table summarizes the carrying amounts of major classes of assets and liabilities that were classified as held-for-sale on the Consolidated Balance Sheets:
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SIGNIFICANT ACCOUNTING POLICIES (Policies) |
12 Months Ended |
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Jul. 31, 2021 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Fiscal Year | Fiscal Year The Company’s fiscal years end on the Saturday closest to July 31 and contain either 52 or 53 weeks. References to fiscal 2021, fiscal 2020 and fiscal 2019, or 2021, 2020 and 2019, as presented in tabular disclosure, relate to the 52-week, 52-week and 53-week fiscal periods ended July 31, 2021, August 1, 2020 and August 3, 2019, respectively.
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| Basis of Presentation | Basis of PresentationThe accompanying Consolidated Financial Statements include the accounts of the Company and its subsidiaries. The Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). All significant intercompany transactions and balances have been eliminated in consolidation, with the exception of sales transactions from continuing to discontinued operations for wholesale supply to a retail disposal group that was sold with a supply agreement in fiscal 2019 discussed further in Note 3—Revenue Recognition. Unless otherwise indicated, references to the Consolidated Statements of Operations and the Consolidated Balance Sheets in the Notes to Consolidated Financial Statements exclude all amounts related to discontinued operations. |
| Net Sales and Revenue Recognition | Net Sales Our net sales consist primarily of product sales of natural, organic, specialty, produce and conventional grocery and non-food products, and support services revenue from retailers, adjusted for customer volume discounts, vendor incentives when applicable, returns and allowances, and professional services revenue. Net sales also include amounts charged by the Company to customers for shipping and handling and fuel surcharges. Vendor incentives do not reduce sales in circumstances where the vendor tenders the incentive to the customer, when the incentive is not a direct reimbursement from a vendor, when the incentive is not influenced by or negotiated in conjunction with any other incentive arrangements and when the incentive is not subject to an agency relationship with the vendor, whether expressed or implied. The Company recognizes revenue in an amount that reflects the consideration that is expected to be received for goods or services when its performance obligations are satisfied by transferring control of those promised goods or services to its customers. ASC 606 defines a five-step process to recognize revenue that requires judgment and estimates, including identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when or as the performance obligation is satisfied. Revenues from wholesale product sales are recognized when control is transferred, which typically happens upon either shipment or delivery, depending on the contract terms with the customer. Typically, shipping and customer receipt of wholesale products occur on the same business day. Discounts and allowances provided to customers are recognized as a reduction in Net sales as control of the products is transferred to customers. The Company recognizes freight revenue related to transportation of its products when control of the product is transferred, which is typically upon delivery. Revenues from Retail product sales are recognized at the point of sale upon customer check-out. Advertising income earned from our franchisees that participate in our Retail advertising program are recognized as Net sales. The Company recognizes loyalty program expense in the form of fuel rewards as a reduction of Net sales. Sales tax is excluded from Net sales. Limited rights of return exist with our customers due to the nature of the products we sell.Product sales The Company enters into wholesale customer distribution agreements that provide terms and conditions of our order fulfillment. The Company’s distribution agreements often specify levels of required minimum purchases in order to earn certain rebates or incentives. Certain contracts include rebates and other forms of variable consideration, including consideration payable to the customer up-front, over time or at the end of a contract term. Many of the Company’s contracts with customers outline various other promises to be performed in conjunction with the sale of product. The Company determined that these promises provided are immaterial within the overall context of the respective contract, and as such has not allocated the transaction price to these obligations. In transactions for goods or services where the Company engages third-parties to participate in its order fulfillment process, it evaluates whether it is the principal or an agent in the transaction. The Company’s analysis considers whether it controls the goods or services before they are transferred to its customer, including an evaluation of whether the Company has the ability to direct the use of, and obtain substantially all the remaining benefits from, the specified good or service before it is transferred to the customer. Agent transactions primarily reflect circumstances where the Company is not involved in order fulfillment or where it is involved in the order fulfillment but is not contractually obligated to purchase the related goods or services from vendors, and instead extends wholesale customers credit by paying vendor trade accounts payable and does not control products prior to their sale. Under ASC 606, if the Company determines that it is acting in an agent capacity, transactions are recorded on a net basis. If the Company determines that it is acting in a principal capacity, transactions are recorded on a gross basis. The Company also evaluates vendor sales incentives to determine whether they reduce the transaction price with its customers. The Company’s analysis considers which party tenders the incentive, whether the incentive reflects a direct reimbursement from a vendor, whether the incentive is influenced by or negotiated in conjunction with any other incentive arrangements and whether the incentive is subject to an agency relationship with the vendor, whether expressed or implied. Typically, when vendor incentives are offered directly by vendors to the Company’s customers, require the achievement of vendor-specified requirements to be earned by customers, and are not negotiated by the Company or in conjunction with any other incentive agreement whereby the Company does not control the direction or earning of these incentives, then Net sales are not reduced as part of the Company’s determination of the transaction price. In circumstances where the vendors provide the Company consideration to promote the sale of their goods and the Company determines the specific performance requirements for its customers to earn these incentives, Net sales are reduced for these customer incentives as part of the determination of the transaction price. Certain customer agreements provide for the right to license one or more of the Company’s tradenames, such as FESTIVAL FOODS®, SENTRY®, COUNTY MARKET®, NEWMARKET®, FOODLAND®, and SUPERVALU®. In addition, the Company enters into franchise agreements to separately charge its customers, who the Company also sells wholesale products to, for the right to use its CUB® tradename. The Company typically does not separately charge for the right to license its tradenames. The Company believes that these tradenames are capable of being distinct, but are not distinct within the context of the contracts with its customers. Accordingly, the Company does not separately recognize revenue related to tradenames utilized by its customers. The Company enters into distribution agreements with manufacturers to provide wholesale supplies to the Defense Commissary Agency (“DeCA”) and other government agency locations. DeCA contracts with manufacturers to obtain grocery products for the commissary system. The Company contracts with manufacturers to distribute products to the commissaries after being authorized by the manufacturers to be a military distributor to DeCA. The Company must adhere to DeCA’s delivery system procedures governing matters such as product identification, ordering and processing, information exchange and resolution of discrepancies. DeCA identifies the manufacturer with which an order is to be placed, determines which distributor is contracted by the manufacturer for a particular commissary or exchange location, and then places a product order with that distributor that is covered under DeCA’s master contract with the applicable manufacturer. The Company supplies product from its existing inventory, delivers it to the DeCA designated location, and bills the manufacturer for the product price plus a drayage fee. The manufacturer then bills DeCA under the terms of its master contract. The Company has determined that it controls the goods before they are transferred to the customer, and as such it is the principal in the transaction. Revenue is recognized on a gross basis when control of the product passes to the DeCA designated location.
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| Cost of Sales, Shipping and Handling Fees and Costs | Cost of Sales Cost of sales consist primarily of amounts paid to suppliers for product sold, plus transportation costs necessary to bring the product to, or move product between, the Company’s distribution facilities and retail stores, partially offset by consideration received from suppliers in connection with the purchase, transportation, or promotion of the suppliers’ products. Retail store advertising expenses are components of Cost of sales and are expensed as incurred. The Company receives allowances and credits from vendors for buying activities, such as volume incentives, promotional allowances directed by the Company to customers, cash discounts, and new product introductions (collectively referred to as “vendor funds”), which are typically based on contractual arrangements covering a period of one year or less. The Company recognizes vendor funds for merchandising activities as a reduction of Cost of sales when the related products are sold, unless it has been determined that a discrete identifiable benefit has been provided to the vendor, in which case the related amounts are recognized within Net sales. Vendor funds that have been earned as a result of completing the required performance under the terms of the underlying agreements but for which the product has not yet been sold are recognized as a reduction to the cost of inventory. When payments or rebates can be reasonably estimated and it is probable that the specified target will be met, the payment or rebate is accrued. However, when attaining the target is not probable, the payment or rebate is recognized only when and if the target is achieved. Any upfront payments received for multi-period contracts are generally deferred and amortized over the life of the contracts. The majority of the vendor fund contracts have terms of less than a year, with a small proportion of the contracts longer than one year. Shipping and Handling Fees and Costs The Company includes shipping and handling fees billed to customers in Net sales. Shipping and handling costs associated with inbound freight are recorded in Cost of sales, whereas shipping and handling costs for receiving, selecting, quality assurance, and outbound transportation are recorded in Operating expenses.
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| Operating Expenses | Operating ExpensesOperating expenses include salaries and wages, employee benefits, warehousing and delivery, selling, occupancy, insurance, administrative, share-based compensation, depreciation, and amortization expense. These expenses include the departmental expenses of warehousing, delivery, purchasing, receiving, selecting and outbound transportation expenses. |
| Restructuring, Acquisition and Integration Expenses | Restructuring, Acquisition and Integration ExpensesRestructuring, acquisition and integration expenses reflect expenses resulting from restructuring activities, including severance costs, change-in-control related charges, facility closure asset impairment charges and costs, stock-based compensation acceleration charges and acquisition and integration expenses. Integration expenses include certain professional consulting expenses related to business transformation and incremental expenses related to combining facilities required to optimize our distribution network as a result of acquisitions. |
| (Gain) Loss on Sale of Assets | (Gain) Loss on Sale of Assets(Gain) loss on sale of assets includes (gain) loss on sale of assets and non-cash charges related to changes in plans of sales of discontinued operations. |
| Interest expense, net | Interest expense, netInterest expense, net includes primarily interest expense on long-term debt, net of capitalized interest, loss on debt extinguishment, interest expense on finance lease obligations, amortization of financing costs and discounts, and interest income. |
| Use of Estimates | Use of Estimates The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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| Reclassifications | Reclassifications Within the Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current year presentation. These reclassifications had no impact on reported net income, cash flows, or total assets and liabilities.
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| Cash and Cash Equivalents | Cash and Cash EquivalentsCash equivalents consist of highly liquid investments with original maturities of three months or less. The Company’s banking arrangements allow it to fund outstanding checks when presented to the financial institution for payment. The Company funds all intraday bank balance overdrafts during the same business day. Checks outstanding in excess of bank balances create book overdrafts, which are recorded in Accounts payable in the Consolidated Balance Sheets and are reflected as an operating activity in the Consolidated Statements of Cash Flows. |
| Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable primarily consist of trade receivables from customers and net receivable balances from suppliers. In determining the adequacy of the allowances, management analyzes customer creditworthiness, aging of receivables, payment terms, the value of the collateral, customer financial statements, historical collection experience, aging of receivables and other economic and industry factors. In instances where a reserve has been recorded for a particular customer, future sales to the customer are conducted using either cash-on-delivery terms, or the account is closely monitored so that as agreed upon payments are received, orders are released; a failure to pay results in held or canceled orders.
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| Inventories, Net | Inventories, NetSubstantially all of the Company’s inventories consist of finished goods. To value discrete inventory items at lower of cost or market before application of any last-in, first-out (“LIFO”) reserve, the Company utilizes the weighted average cost method, perpetual cost method, the retail inventory method (“RIM”) and the replacement cost method. Allowances for vendor funds received from suppliers are recorded as a reduction to Inventories, net and subsequently within Cost of sales upon the sale of the related products. Inventories are evaluated for shortages throughout each fiscal year based on actual physical counts in our distribution facilities and stores. Allowances for inventory shortages are recorded based on the results of these counts to provide for estimated shortages as of the end of each fiscal year. |
| Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation expense is based on the estimated useful lives of the assets using the straight-line method. Applicable interest charges incurred during the construction of new facilities are capitalized as one of the elements of cost and are amortized over the assets’ estimated useful lives if certain criteria are met. Refer to Note 5—Property and Equipment, Net for additional information. The Company reviews long-lived assets, including amortizing intangible assets, for indicators of impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Cash flows expected to be generated by the related assets are estimated over the assets’ useful lives based on updated projections. The Company groups long-lived assets with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. If the evaluation indicates that the carrying amount of an asset group may not be recoverable, the potential impairment is measured based on a fair value discounted cash flow model or a market approach method.
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| Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records liabilities to address uncertain tax positions we have taken in previously filed tax returns or that we expect to take in a future tax return. The determination for required liabilities is based upon an analysis of each individual tax position, taking into consideration whether it is more likely than not that our tax position, based on technical merits, will be sustained upon examination. For those positions for which we conclude it is more likely than not it will be sustained, we recognize the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the taxing authority. The difference between the amount recognized and the total tax position is recorded as a liability. The ultimate resolution of these tax positions may be greater or less than the liabilities recorded. The Company allocates tax expense among specific financial statement components using a “with-or-without” approach. Under this approach, the Company first determines the total tax expense or benefit (current and deferred) for the period. The Company then calculates the tax effect of pretax income from continuing operations only. The residual tax expense is allocated on a proportional basis to other financial statement components (i.e. discontinued operations, other comprehensive income).
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| Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net The Company accounts for acquired businesses using the purchase method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the acquisition date at their respective estimated fair values. Goodwill represents the excess acquisition cost over the fair value of net assets acquired in a business combination. Goodwill is assigned to the reporting units that are expected to benefit from the synergies of the business combination that generated the goodwill. Goodwill reporting units exist at one level below the operating segment level unless they are determined to be economically similar, and are evaluated for events or changes in circumstances indicating a goodwill reporting unit has changed. Relative fair value allocations are performed when components of an aggregated goodwill reporting unit become separate reporting units or move from one reporting unit to another. Goodwill is reviewed for impairment at least annually as of the first day of the fourth fiscal quarter and if events occur or circumstances change that would indicate that the value of the asset may be impaired. The Company performs qualitative assessments of goodwill for impairment. If the qualitative assessment indicates it is more likely than not that a reporting unit’s fair value is less than the carrying value, or the Company bypasses the qualitative assessment, a quantitative assessment would be performed. The Company estimates the fair values of its reporting units in a quantitative assessment by using the market approach, applying a multiple of earnings based on guidelines for publicly traded companies, and/or the income approach, discounting projected future cash flows based on management’s expectations of the current and future operating environment for each reporting unit. Refer to Note 6—Goodwill and Intangible Assets, Net for additional information regarding the Company’s goodwill impairment reviews, changes to its reporting units and other information. Indefinite-lived intangible assets include a branded product line and a Tony’s Fine Foods tradename. Indefinite-lived intangible assets are reviewed for impairment at least annually as of the first day of the fourth fiscal quarter and if events occur or circumstances change that would indicate that the value of the asset may be impaired. The Company performed qualitative reviews of its indefinite lived intangible assets in fiscal 2021 and 2020, which indicated a quantitative assessment was not required. In determining the estimated fair value for intangible assets, the Company typically utilizes the income approach, which discounts the projected future net cash flow using an appropriate discount rate that reflects the risks associated with such projected future cash flow. Refer to Note 6—Goodwill and Intangible Assets, Net for additional information on the Company’s intangible assets.
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| Business Dispositions | Business Dispositions The Company reviews the presentation of planned business dispositions in the Consolidated Financial Statements based on the available information and events that have occurred. The review consists of evaluating whether the business meets the definition of a component for which the operations and cash flows are clearly distinguishable from the other components of the business, and if so, whether it is anticipated that after the disposal the cash flows of the component would be eliminated from continuing operations and whether the disposition represents a strategic shift that has a major effect on operations and financial results. In addition, the Company evaluates whether the business has met the criteria as a business held for sale. In order for a planned disposition to be classified as a business held for sale, the established criteria must be met as of the reporting date, including an active program to market the business and the expected disposition of the business within one year. Planned business dispositions are presented as discontinued operations when all the criteria described above are met. Operations of the business components meeting the discontinued operations requirements are presented within Income from discontinued operations, net of tax in the Consolidated Statements of Operations, and assets and liabilities of the business component planned to be disposed of are presented as separate lines within the Consolidated Balance Sheets. See Note 18—Discontinued Operations for additional information. The carrying value of the business held for sale is reviewed for recoverability upon meeting the classification requirements. Evaluating the recoverability of the assets of a business classified as held for sale follows a defined order in which property and intangible assets subject to amortization are considered only after the recoverability of goodwill, indefinite lived intangible assets and other assets are assessed. After the valuation process is completed, the held for sale business is reported at the lower of its carrying value or fair value less cost to sell, and no additional depreciation or amortization expense is recognized. There are inherent judgments and estimates used in determining the fair value less costs to sell of a business and any impairment charges. The sale of a business can result in the recognition of a gain or loss that differs from that anticipated prior to closing.
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial assets and liabilities measured on a recurring basis, and non-financial assets and liabilities that are recognized on a non-recurring basis, are recognized or disclosed at fair value on at least an annual basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value: •Level 1 Inputs—Unadjusted quoted prices in active markets for identical assets or liabilities. •Level 2 Inputs—Inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. •Level 3 Inputs—One or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation. The carrying amounts of the Company’s financial instruments including cash and cash equivalents, accounts receivable, accounts payable and certain accrued expenses and other assets and liabilities approximate fair value due to the short-term nature of these instruments.
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| Share-Based Compensation | Share-Based CompensationShare-based compensation consists of restricted stock units, performance units, stock options and SUPERVALU INC. (“Supervalu”) replacement awards. Share-based compensation expense is measured by the fair value of the award on the date of grant. The Company recognizes share-based compensation expense on a straight-line basis over the requisite service period of the individual grants. Forfeitures are recognized as reductions to share-based compensation when they occur. The grant date closing price per share of the Company’s stock is used to determine the fair value of restricted stock units. Supervalu Replacement Awards are liability classified awards as they may ultimately be settled in cash or shares at the discretion of the employee. The Company’s executive officers and members of senior management have been granted performance units which vest, when and if earned, in accordance with the terms of the related performance unit award agreements. The Company recognizes share-based compensation expense based on the target number of shares of common stock and the Company’s stock price on the date of grant and subsequently adjusts expense based on actual and forecasted performance compared to planned targets. Share-based compensation expense is recognized within Operating expenses for ongoing employees and in certain instances is recorded within Restructuring, acquisition and integration related expenses when an employee is notified of termination and their awards become accelerated. |
| Benefit Plans | Benefit Plans The Company recognizes the funded status of its Company-sponsored defined benefit plans in the Consolidated Balance Sheets and gains or losses and prior service costs or credits not yet recognized as a component of Accumulated other comprehensive loss, net of tax, in the Consolidated Balance Sheets. The Company measures its defined benefit pension and other postretirement plan obligations as of the nearest calendar month end. The Company records net periodic benefit income or expense related to interest cost, expected return on plan assets and the amortization of actuarial gains and losses, excluding service costs, in the Consolidated Statements of Operations within Net periodic benefit income, excluding service cost. Service costs are recorded in Operating expenses in the Consolidated Statements of Operations. The Company sponsors pension and other postretirement plans in various forms covering participants who meet eligibility requirements. The determination of the Company’s obligation and related income or expense for Company-sponsored pension and other postretirement benefits is dependent, in part, on management’s selection of certain actuarial assumptions in calculating these amounts. These assumptions include, among other things, the discount rate, the expected long-term rate of return on plan assets and the rates of increase in healthcare costs. These assumptions are disclosed in Note 13—Benefit Plans. Actual results that differ from the assumptions are accumulated and amortized over future periods. The Company contributes to various multiemployer pension plans under collective bargaining agreements, primarily defined benefit pension. Pension expense for these plans is recognized as contributions are funded. In addition, the Company provides postretirement health and welfare benefits for certain groups of union and non-union employees.
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| Earnings Per Share | Earnings Per ShareBasic earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adding the dilutive potential common shares to the weighted average number of common shares that were outstanding during the period. For purposes of the diluted earnings per share calculation, outstanding stock options, restricted stock units and performance-based awards, if applicable, are considered common stock equivalents, using the treasury stock method. |
| Treasury Stock | Treasury StockThe Company records the repurchase of shares of common stock at cost based on the settlement date of the transaction. These shares are classified as treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. |
| Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is reported in the Consolidated Statements of Comprehensive Income. Comprehensive income (loss) includes all changes in stockholders’ equity during the reporting period, other than those resulting from investments by and distributions to stockholders. The Company’s comprehensive income (loss) is calculated as Net income (loss) including noncontrolling interests, plus or minus adjustments for foreign currency translation related to the translation of UNFI Canada, Inc. (“UNFI Canada”) from the functional currency of Canadian dollars to U.S. dollar reporting currency, changes in the fair value of cash flow hedges, net of tax, and changes in defined pension and other postretirement benefit plan obligations, net of tax, less comprehensive income attributable to noncontrolling interests. Accumulated other comprehensive loss represents the cumulative balance of other comprehensive income (loss), net of tax, as of the end of the reporting period and relates to foreign currency translation adjustments, and unrealized gains or losses on cash flow hedges, net of tax and changes in defined pension and other postretirement benefit plan obligations, net of tax.
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| Derivative Financial Instruments | Derivative Financial Instruments The Company utilizes derivative financial instruments to manage its exposure to changes in interest rates, fuel costs, and with the operation of UNFI Canada, foreign currency exchange rates. All derivatives are recognized on the Company’s Consolidated Balance Sheets at fair value based on quoted market prices or estimates, and are recorded in either current or noncurrent assets or liabilities based on their maturity. Changes in the fair value of derivatives are recorded in comprehensive income or net earnings, based on whether the instrument is designated and effective as a hedge transaction and, if so, the type of hedge transaction. Gains or losses on derivative instruments are recorded in Accumulated other comprehensive loss and are reclassified to earnings in the period the hedged item affects earnings. If the hedged relationship ceases to exist, any associated amounts reported in Accumulated other comprehensive loss are reclassified to earnings at that time. The Company measures effectiveness of its hedging relationships both at hedge inception and on an ongoing basis.
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| Self-Insurance Liabilities | Self-Insurance Liabilities The Company is primarily self-insured for workers’ compensation, general and automobile liability insurance. It is the Company’s policy to record the self-insured portion of workers’ compensation, general and automobile liabilities based upon actuarial methods to estimate the future cost of claims and related expenses that have been reported but not settled, and that have been incurred but not yet reported, discounted at a risk-free interest rate. The present value of such claims was calculated using a discount rate of 2.0 percent.
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| Leases | Leases, After ASC 842 Adoption At the inception or modification of a contract, the Company determines whether a lease exists and classifies its leases as an operating or finance lease at commencement. Subsequent to commencement, lease classification is only reassessed upon a change to the expected lease term or contract modification. Finance and operating lease assets represent the Company’s right to use an underlying asset as lessee for the lease term, and lease obligations represent the Company’s obligation to make lease payments arising from the lease. These assets and obligations are recognized at the lease commencement date based on the present value of lease payments, net of incentives, over the lease term. Incremental borrowing rates are estimated based on the Company’s borrowing rate as of the lease commencement date to determine the present value of lease payments, when lease contracts do not provide a readily determinable implicit rate. Incremental borrowing rates are determined by using the yield curve based on the Company’s credit rating adjusted for the Company’s specific debt profile and secured debt risk. The lease asset also reflects any prepaid rent, initial direct costs incurred and lease incentives received. The Company’s lease terms include optional extension periods when it is reasonably certain that those options will be exercised. Leases with an initial expected term of 12 months or less are not recorded in the Consolidated Balance Sheets and the related lease expense is recognized on a straight-line basis over the lease term. For certain classes of underlying assets, the Company has elected to not separate fixed lease components from the fixed nonlease components. The Company recognizes contractual obligations and receipts on a gross basis, such that the related lease obligation to the landlord is presented separately from the sublease created by the lease assignment to the assignee. As a result, the Company continues to recognize on its Consolidated Balance Sheets the operating lease assets and liabilities, and finance lease assets and obligations, for assigned leases. The Company records operating lease expense and income using the straight-line method within Operating expenses, and lease income on a straight-line method for leases with its customers within Net sales. Finance lease expense is recognized as amortization expense within Operating expenses, and interest expense within Interest expense, net. For operating leases with step rent provisions whereby the rental payments increase over the life of the lease, and for leases with rent-free periods, the Company recognizes expense and income on a straight-line basis over the expected lease term, based on the total minimum lease payments to be made or lease receipts expected to be received. The Company is generally obligated for property tax, insurance and maintenance expenses related to leased properties, which often represent variable lease expenses. For contractual obligations on properties where the Company remains the primary obligor upon assignment of the lease and does not obtain a release from landlords or retain the equity interests in the legal entities with the related rent contracts, the Company continues to recognize rent expense and rent income within Operating expenses. Operating and finance lease assets are reviewed for impairment based on an ongoing review of circumstances that indicate the assets may no longer be recoverable, such as closures of retail stores, distribution centers and other properties that are no longer being utilized in current operations, and other factors. The Company calculates operating and finance lease impairments using a discount rate to calculate the present value of estimated subtenant rentals that could be reasonably obtained for the property. Lease impairment charges for properties no longer used in operations are recorded as a component of Restructuring, acquisition and integration related expenses in the Consolidated Statements of Operations. The calculation of lease impairment charges requires significant judgments and estimates, including estimated subtenant rentals, discount rates and future cash flows based on the Company’s experience and knowledge of the market in which the property is located, previous efforts to dispose of similar assets and the assessment of existing market conditions. Impairments are recognized as a reduction of the carrying value of the right of use asset and finance lease assets. Refer to Note 11—Leases for additional information. Leases, Prior to Adoption of ASC 842 The Company records lease expense and income using the straight-line method within Operating expenses. For leases with step rent provisions whereby the rental payments increase over the life of the lease, and for leases where the Company receives rent-free periods, the Company recognizes expense and income based on a straight-line basis based on the total minimum lease payments to be made over the expected lease term. Deferred rent obligations are included in Other current liabilities and Other long-term liabilities in the Consolidated Balance Sheets. The Company continues to recognize contractual obligations and receipts on a gross basis, such that the related lease obligation to the landlord is presented separately from the sublease created by the lease assignment to the assignee. Lease reserve impairment charges are recorded as a component of Restructuring, acquisition and integration related expenses in the Consolidated Statements of Operations.
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| Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASC 842”), which provided new comprehensive lease accounting guidance that supersedes previous lease guidance. The Company adopted this standard in fiscal 2020, on August 4, 2019. Adoption of this standard did not have a material impact to the Company’s Consolidated Statements of Operations, Consolidated Statements of Stockholders' Equity or Consolidated Statements of Cash Flows. In June 2016, the Financial Accounting Standards Board (“FASB”) issued accounting ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU 2019-11 (collectively, “Topic 326”). Topic 326 changed the impairment model for most financial assets and certain other instruments. For trade and other receivables, guarantees and other instruments, entities are required to use a new forward-looking expected loss model that replaces the previous incurred loss model and generally results in earlier recognition of credit losses. The Company adopted this standard in fiscal 2021, on August 2, 2020, the effective and initial application date, using a modified-retrospective basis as required by the standard by means of a cumulative-effect adjustment to the opening balance of Retained earnings in the Company’s Consolidated Statements of Stockholders' Equity. The difference between reserves and allowances recorded under the former incurred loss model and the amount determined under the current expected loss model, net of the deferred tax impact, was recorded as an adjustment to Retained earnings. Adoption of this standard did not have a material impact to the Company’s Consolidated Financial Statements. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326 Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825. This ASU clarifies the accounting treatment for the measurement of credit losses under ASC 326 and provides further clarification on previously issued updates including ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities and ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. Since the Company adopted ASU 2017-12 in the fourth quarter of fiscal 2018, the amendments in ASU 2019-04 related to clarifications on Accounting for Hedging Activities which were adopted by the Company in fiscal 2020, with no impact to Accumulated other comprehensive loss or Retained earnings for fiscal 2020, as the Company did not have separately measured ineffectiveness related to its cash flow hedges. The remaining amendments within ASU 2019-04 were adopted in fiscal 2021 with the adoption of Topic 326. Adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. ASU 2018-15 requires implementation costs incurred by customers in cloud computing arrangements (i.e. hosting arrangements) to be capitalized under the same premises as authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangements plus any optional renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The Company adopted this standard on a prospective basis in fiscal 2021. Under this standard, the Company is required to defer these costs and recognize these costs as a service expense over future periods. Adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 requires entities to disclose the weighted-average interest crediting rates used, reasons for significant gains and losses affecting benefit obligations, and an explanation of any other significant changes in the benefit obligation or plan assets. The amendment also removed certain required disclosures. The Company adopted this guidance in fiscal 2021. The provisions of the new standard do not have an impact on the Consolidated Financial Statements as this ASU only modified disclosure requirements. Refer to Note 13—Benefit Plans for disclosures presented for all periods in accordance with this amendment. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 eliminates certain exceptions to Topic 740’s general principles. The amendments also improve consistent application and simplifies its application. The Company is required to adopt this guidance in the first quarter of fiscal 2022. The Company has evaluated the impact of the standard and does not expect the adoption to have a material impact on the Company’s Consolidated Financial Statements.
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SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Jul. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Finite-lived Intangible Assets | Intangible assets with definite lives are amortized on a straight-line basis over the following years:
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| Schedule of Changes in Insurance Liabilities | Changes in the Company’s self-insurance liabilities consisted of the following:
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REVENUE RECOGNITION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disaggregation of Revenue | The following tables detail the Company’s net sales for the periods presented by customer channel for each of its segments. The Company does not record its revenues within its Wholesale reportable segment for financial reporting purposes by product group, and it is therefore impracticable for it to report them accordingly.
(1)In the first quarter of fiscal 2021, the presentation of net sales by customer channel was recast to present the Chains and Other channel exclusive of the intercompany eliminations and present total eliminations separately. There was no impact to the Consolidated Statements of Operations. The Company believes this modified basis better reflects its channel presentation, as it further aligns with segment presentation. (2)Eliminations primarily includes the net sales elimination of Wholesale’s sales to the Retail segment and the elimination of sales from segments included within Other to Wholesale.
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| Schedule of Accounts, Notes and Allowance for Uncollectible Receivables | Accounts and notes receivable are as follows:
The allowance for uncollectible receivables, and estimated variable consideration allowed for as sales concessions consists of the following:
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RESTRUCTURING, ACQUISITION AND INTEGRATION RELATED EXPENSES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring and Related Costs | Restructuring, acquisition and integration related expenses were as follows:
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PROPERTY AND EQUIPMENT, NET (Tables) |
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Jul. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property and Equipment | Property and equipment, net consisted of the following:
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GOODWILL AND INTANGIBLE ASSETS, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Goodwill | Changes in the carrying value of Goodwill by reportable segment that have goodwill consisted of the following:
(1) Wholesale amounts are net of accumulated goodwill impairment charges of $293 million, $717 million and $717 million for fiscal 2019, 2020 and 2021, respectively. (2) Other amounts are net of accumulated goodwill impairment charges of $9 million, $10 million and $10 million for fiscal 2019, 2020 and 2021, respectively.
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| Schedule of Intangible Assets and Goodwill | Identifiable intangible assets, net consisted of the following:
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| Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future amortization expense for each of the next five fiscal years and thereafter on definite lived intangible assets existing as of July 31, 2021 is shown below:
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FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables provide the fair value hierarchy for financial assets and liabilities measured on a recurring basis:
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| Fair Value, by Balance Sheet Grouping |
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DERIVATIVES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Derivative Instruments | Details of active swap contracts as of July 31, 2021, which are all pay fixed and receive floating, are as follows:
(1)The swap contract has an amortizing notional principal amount which is reduced by $1 million on a quarterly basis. (2)For these swap contracts that are indexed to LIBOR, the Company is monitoring and evaluating risks related to the expected future cessation of LIBOR.
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| Schedule of Interest Rate Derivatives | The location and amount of gains or losses recognized in the Consolidated Statements of Operations for interest rate swap contracts for each of the periods, presented on a pretax basis, are as follows:
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LONG-TERM DEBT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Long-term Debt | The Company’s long-term debt consisted of the following:
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| Schedule of Maturities of Long-term Debt | Future maturities of long-term debt, excluding debt issuance costs and original issue and purchase accounting discounts on debt, and contractual interest payments based on the face value and applicable interest rate as of July 31, 2021, consist of the following (in millions):
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| Schedule of Line of Credit Facilities | The assets included in the Consolidated Balance Sheets securing the outstanding obligations under the ABL Credit Facility on a first-priority basis, and the unused credit and fees under the ABL Credit Facility, were as follows:
The applicable interest rates, letter of credit fees and unutilized commitment fees under the ABL Credit Facility are variable and are dependent upon the prior fiscal quarter’s daily Average Availability (as defined in the ABL Agreement), and were as follows:
(1) The U.S. Borrowers utilize LIBOR-based loans and the Canadian Borrower utilizes bankers’ acceptance rate-based loans.
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COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2021, fiscal 2020 and fiscal 2019 are as follows:
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| Reclassification out of Accumulated Other Comprehensive Income (Loss) | Items reclassified out of Accumulated other comprehensive loss had the following impact on the Consolidated Statements of Operations:
(1)Reclassification of amounts included in net periodic benefit income include reclassification of prior service benefit and reclassification of net actuarial loss as reflected in Note 13—Benefit Plans.
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LEASES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Lease Assets and Liabilities | Lease assets and liabilities, net, are as follows (in millions):
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| Schedule of Lease Costs and Other Information | The Company’s lease cost under ASC 842 is as follows (in millions):
(1)Rent expense as presented here includes $2 million and $6 million in fiscal 2021 and 2020 of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as the Company expects to remain primarily obligated under these leases. Rent expense as presented here also includes immaterial amounts of variable lease expense of discontinued operations. (2)Includes $31 million and $36 million of lease expense in fiscal 2021 and 2020 and $(33) million and $(41) million of lease income in fiscal 2021 and 2020 that is recorded within Restructuring, acquisition and integration related expenses for assigned leases related to previously sold locations and surplus, non-operating properties for which the Company is restructuring its obligations. The following tables provide other information required by ASC 842:
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| Schedule of Rent Expense | Rent expense as presented below under ASC 840 excludes variable lease rent that is included in total net lease cost under ASC 842 in the table above.
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| Schedule of Lease Liabilities and Receipts | As of July 31, 2021, these Lease Liabilities and Lease Receipts consisted of the following (in millions):
(1)Operating lease payments include $4 million related to extension options that are reasonably certain of being exercised and exclude $52 million of legally binding minimum lease payments for leases signed but not yet commenced. (2)This table excludes a $55 million payment related to a facility the Company is deemed the accounting owner, which is recognized as a residual obligation, and is subject to an underlying lease. (3)Calculated using the interest rate for each lease.
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| Schedule of Lease Liabilities and Receipts | As of July 31, 2021, these Lease Liabilities and Lease Receipts consisted of the following (in millions):
(1)Operating lease payments include $4 million related to extension options that are reasonably certain of being exercised and exclude $52 million of legally binding minimum lease payments for leases signed but not yet commenced. (2)This table excludes a $55 million payment related to a facility the Company is deemed the accounting owner, which is recognized as a residual obligation, and is subject to an underlying lease. (3)Calculated using the interest rate for each lease.
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SHARE-BASED AWARDS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table presents information regarding share-based compensation expenses and the related tax impacts:
(1)Amounts are derived primarily from liability classified awards. (2)Includes equity classified awards of $1 million for fiscal 2021, liability classified awards of $1 million for fiscal 2020, and liability classified awards of $32 million and equity classified awards of $1 million for fiscal 2019.
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| Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The fair value of restricted stock units and performance share units are determined based on the number of units granted and the quoted price of the Company’s common stock as of the grant date. The following summary presents information regarding restricted stock units, Supervalu replacement awards and performance stock units:
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| Share-based Compensation, Stock Options, Activity | The following summary presents information regarding outstanding stock options as of July 31, 2021 and changes during the fiscal year then ended:
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BENEFIT PLANS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | The benefit obligation, fair value of plan assets and funded status of our defined benefit pension plans and other postretirement benefit plans consisted of the following:
The actuarial gain on projected pension benefit obligations in fiscal 2021 was primarily the result of a 35 basis points increase in the discount rate on the SUPERVALU INC. Retirement Plan and updated mortality assumptions. The actuarial loss on projected pension benefit obligations in fiscal 2020 was primarily the result of a 113 basis points decrease in the discount rate on the SUPERVALU INC. Retirement Plan, and updated assumptions from lump sum settlements and mortality. The funded status of our pension benefits contains plans with individually funded and underfunded statuses. Our other postretirement benefits consist of one plan as shown above. The following table provides the funded status of individual projected pension benefit plan obligations and the fair value of plan assets for these plans:
Net periodic benefit (income) cost and other changes in plan assets and benefit obligations recognized consist of the following:
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| Schedule of Amounts Recognized in Balance Sheet | Amounts recognized in the Consolidated Balance Sheets as of July 31, 2021 and August 1, 2020 consist of the following:
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| Schedule of Assumptions Used | Weighted average assumptions used to determine benefit obligations and net periodic benefit cost consisted of the following:
(1) Expected return on plan assets is estimated by utilizing forward-looking, long-term return, risk and correlation assumptions developed and updated annually by the Company. These assumptions are weighted by the actual or target allocation to each underlying asset class represented in the pension plan master trust. The Company also assess the expected long-term return on plan assets assumption by comparison to long-term historical performance on an asset class to ensure the assumption is reasonable. Long-term trends are also evaluated relative to market factors such as inflation, interest rates, and fiscal and monetary policies in order to assess the capital market assumptions.
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| Schedule of Allocation of Plan Assets | The asset allocation targets and the actual allocation of pension plan assets are as follows:
The fair value of assets held in master trusts for defined benefit pension plans as of July 31, 2021, by asset category, consisted of the following (in millions):
The fair value of assets held in master trusts for defined benefit pension plans as of August 1, 2020, by asset category, consisted of the following (in millions):
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| Schedule of Expected Benefit Payments | The estimated future benefit payments to be made from our defined benefit pension and other postretirement benefit plans, which reflect expected future service, are as follows (in millions):
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| Schedule of Multiemployer Plans | The following table contains information about the Company’s significant multiemployer plans (in millions):
(1) PPA surcharges are 5 percent or 10 percent of eligible contributions and may not apply to all collective bargaining agreements or total contributions to each plan. (2) This multiemployer pension plan is associated with continued and discontinued operations. (3) All Other Multiemployer Pension Plans includes 9 plans, none of which are individually significant when considering contributions to the plan, severity of the underfunded status or other factors. As of the fourth quarter of fiscal 2021, the Company withdrew from 2 of these 9 plans. Fiscal 2021 contributions to these plans are included in the total contributions above. (4) As of the fourth quarter of fiscal 2021, the Company withdrew from this plan. The plan is still relevant for the table above as contributions were made in fiscal 2021 prior to the withdrawal.
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| Schedule Of Collective Bargaining Agreement Dates And Contributions To Each Plan Table | The following table describes the expiration of the Company’s collective bargaining agreements associated with the significant multiemployer plans in which we participate:
(1) Company participating employees in the most significant collective bargaining agreement as a percent of all Company employees represented under the applicable collective bargaining agreements. (2) This multiemployer pension plan is associated with continued and discontinued operations. (3) This collective bargaining agreement has been extended.
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Components of Income Tax Expense (Benefit) | The total provision (benefit) for income taxes included in the Consolidated Statements of Operations consisted of the following:
The income tax expense (benefit) in continuing operations was allocated as follows:
Total federal, state, and foreign income tax (benefit) expense in continuing operations consists of the following:
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| Schedule of Effective Income Tax Rate Reconciliation | Total income tax expense (benefit) in continuing operations was different than the amounts computed by applying the statutory federal income tax rate to income before income taxes because of the following:
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| Summary of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
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| Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the net deferred tax assets and deferred tax liabilities at July 31, 2021 and August 1, 2020 are presented below:
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EARNING PER SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Earnings Per Share, Basic and Diluted | The following is a reconciliation of the basic and diluted number of shares used in computing earnings per share:
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BUSINESS SEGMENTS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Segment Reporting Information, by Segment | The following table provides continuing operations net sales and Adjusted EBITDA by reportable segment and reconciles that information to Income (loss) from continuing operations before income taxes:
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| Reconciliation of Assets from Segment to Consolidated | Total assets of continuing operations by reportable segment were as follows:
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DISCONTINUED OPERATIONS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disposal Groups, Including Discontinued Operations | Operating results of discontinued operations are summarized below:
(1) These results reflect retail operations from the Supervalu acquisition date of October 22, 2018 to August 3, 2019. The following table summarizes the carrying amounts of major classes of assets and liabilities that were classified as held-for-sale on the Consolidated Balance Sheets:
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SIGNIFICANT ACCOUNTING POLICIES - Discontinued Operations (Details) - store |
3 Months Ended | |
|---|---|---|
Jul. 31, 2021 |
May 01, 2021 |
|
| Accounting Policies [Abstract] | ||
| Number of stores reclassified to continuing operations | 2 | |
| Number of stores held for sale | 4 |
SIGNIFICANT ACCOUNTING POLICIES - Cost of Sales (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Shipping and Handling | |||
| Disaggregation of Revenue [Line Items] | |||
| Shipping, handling and transportation costs | $ 1,513 | $ 1,505 | $ 1,299 |
SIGNIFICANT ACCOUNTING POLICIES - (Gain) Loss on Sale of Assets (Details) - Loss gain on sale of assets $ in Millions |
12 Months Ended |
|---|---|
|
Aug. 01, 2020
USD ($)
| |
| Property, Plant and Equipment [Line Items] | |
| Gain (loss) on sale of assets | $ 50 |
| Finite-Lived Intangible Assets | |
| Property, Plant and Equipment [Line Items] | |
| Gain (loss) on sale of assets | 11 |
| Property, Plant and Equipment | |
| Property, Plant and Equipment [Line Items] | |
| Gain (loss) on sale of assets | $ 39 |
SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents (Details) - USD ($) $ in Millions |
Jul. 31, 2021 |
Aug. 01, 2020 |
|---|---|---|
| Accounting Policies [Abstract] | ||
| Bank overdrafts | $ 268 | $ 268 |
SIGNIFICANT ACCOUNTING POLICIES - Inventories, Net (Details) - USD ($) $ in Billions |
Jul. 31, 2021 |
Aug. 01, 2020 |
|---|---|---|
| Accounting Policies [Abstract] | ||
| LIFO inventory amount | $ 1.8 | $ 1.8 |
SIGNIFICANT ACCOUNTING POLICIES - Treasury Stock (Details) - USD ($) shares in Millions, $ in Millions |
12 Months Ended | |||
|---|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
Oct. 06, 2017 |
|
| Accounting Policies [Abstract] | ||||
| Stock repurchase program, authorized amount | $ 200 | |||
| Number of shares repurchased | 0 | 0 | 0 | |
| Remaining authorized repurchase amount | $ 176 | |||
SIGNIFICANT ACCOUNTING POLICIES - Self Insurance Liabilities, Narrative (Details) - USD ($) $ in Millions |
Jul. 31, 2021 |
Aug. 01, 2020 |
|---|---|---|
| Loss Contingencies [Line Items] | ||
| Present value of claims, discount rate | 2.00% | |
| Insurance liabilities, discount | $ 10 | $ 7 |
| Due from insurance companies | 17 | 12 |
| Accrued expenses and other current liabilities | ||
| Loss Contingencies [Line Items] | ||
| Self-insurance liability, current | 32 | 34 |
| Other Long-Term Liabilities | ||
| Loss Contingencies [Line Items] | ||
| Self-insurance liability, long-term | $ 71 | $ 67 |
SIGNIFICANT ACCOUNTING POLICIES - Changes in Insurance Liabilities (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Self Insurance Reserve Rollforward Abstract [Roll Forward] | |||
| Beginning balance | $ 101 | $ 89 | $ 25 |
| Assumed liabilities from the Supervalu acquisition | 0 | 0 | 55 |
| Expense | 48 | 44 | 43 |
| Claim payments | (48) | (36) | (33) |
| Reclassifications | 2 | 4 | (1) |
| Ending balance | $ 103 | $ 101 | $ 89 |
REVENUE RECOGNITION - Narrative (Details) - Net Sales |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Product Concentration Risk | Professional Services | |||
| Revenue from External Customer [Line Items] | |||
| Concentration risk, percentage | 1.00% | ||
| Customer Concentration Risk | Whole Foods Market | |||
| Revenue from External Customer [Line Items] | |||
| Concentration risk, percentage | 19.00% | 18.00% | 20.00% |
REVENUE RECOGNITION - Accounts and Notes Receivable (Details) - USD ($) $ in Millions |
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
Jul. 28, 2018 |
|---|---|---|---|---|
| Revenue from Contract with Customer [Abstract] | ||||
| Customer accounts receivable | $ 1,115 | $ 1,157 | ||
| Allowance for uncollectible receivables | (28) | (56) | $ (21) | $ (16) |
| Other receivables, net | 16 | 19 | ||
| Accounts receivable, net | 1,103 | 1,120 | ||
| Notes receivable, net, included within Prepaid expenses and other current assets | 7 | 49 | ||
| Long-term notes receivable, net, included within Other long-term assets | $ 15 | $ 26 |
REVENUE RECOGNITION - Allowance for Uncollectible Receivables (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
| Balance at beginning of year | $ 56 | $ 21 | $ 16 |
| Provision for losses in Operating expenses | (9) | 38 | 10 |
| Reductions of Net sales | 3 | 12 | 7 |
| Write-offs charged against the allowance | (26) | (15) | (12) |
| Balance at end of year | 28 | 56 | $ 21 |
| Cumulative Effect, Period of Adoption, Adjustment | |||
| Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
| Balance at beginning of year | $ 4 | ||
| Balance at end of year | $ 4 | ||
RESTRUCTURING, ACQUISITION AND INTEGRATION RELATED EXPENSES (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Restructuring Cost and Reserve [Line Items] | |||
| Restructuring, acquisition, and integration related expenses | $ 56 | $ 87 | $ 148 |
| Restructuring and integration costs | |||
| Restructuring Cost and Reserve [Line Items] | |||
| Restructuring and integration costs | 50 | 42 | 51 |
| Closed property charges and costs | |||
| Restructuring Cost and Reserve [Line Items] | |||
| Restructuring, acquisition, and integration related expenses | 6 | 40 | 23 |
| SUPERVALU | |||
| Restructuring Cost and Reserve [Line Items] | |||
| Restructuring, acquisition, and integration related expenses | $ 0 | $ 5 | $ 74 |
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Property, Plant and Equipment [Line Items] | |||
| Interest costs capitalized | $ 3 | $ 5 | $ 3 |
| Depreciation and amortization | 285 | 282 | 248 |
| Property, Plant and Equipment | |||
| Property, Plant and Equipment [Line Items] | |||
| Depreciation and amortization | $ 209 | $ 198 | $ 180 |
GOODWILL AND INTANGIBLE ASSETS, NET - Narrative (Details) $ in Millions |
3 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
|
Nov. 02, 2019
USD ($)
|
Jul. 31, 2021
USD ($)
reportingUnit
|
Aug. 01, 2020
USD ($)
|
Aug. 03, 2019
USD ($)
|
|
| Goodwill [Line Items] | ||||
| Number of reporting units | reportingUnit | 5 | |||
| Projected future cash flows weighted average cost of capital | 8.50% | |||
| Goodwill impairment charges | $ | $ 424 | |||
| Weighted average cost of capital | 10.00% | |||
| Goodwill impairment charges | $ | $ 0 | 425 | $ 293 | |
| Amortization expense | $ | $ 78 | $ 91 | $ 70 | |
| Wholesale | ||||
| Goodwill [Line Items] | ||||
| Goodwill impairment charges | $ | $ 422 | |||
| Wholesale | ||||
| Goodwill [Line Items] | ||||
| Number of reporting units | reportingUnit | 2 | |||
| Legacy Company and Canada Wholesale Reporting Units | ||||
| Goodwill [Line Items] | ||||
| Reporting units in excess of their carrying values (as a percent) | 20.00% | |||
| Retail | ||||
| Goodwill [Line Items] | ||||
| Number of reporting units | reportingUnit | 1 | |||
| Separate Operating Segments | ||||
| Goodwill [Line Items] | ||||
| Number of reporting units | reportingUnit | 2 | |||
GOODWILL AND INTANGIBLE ASSETS, NET - Estimated Future Amortization Expense (Details) - USD ($) $ in Millions |
Jul. 31, 2021 |
Aug. 01, 2020 |
|---|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| 2022 | $ 72 | |
| 2023 | 72 | |
| 2024 | 72 | |
| 2025 | 70 | |
| 2026 | 66 | |
| Thereafter | 483 | |
| Net | $ 835 | $ 914 |
FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS - Narrative (Details) $ in Millions |
12 Months Ended |
|---|---|
|
Jul. 31, 2021
USD ($)
| |
| Fair Value Disclosures [Abstract] | |
| Effect of one percent increase on fair value of interest rate fair value hedging instruments | $ 31 |
| Effect of one percent decrease on fair value of interest rate fair value hedging instruments | $ 32 |
FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS - Fair Value Estimates (Details) - USD ($) $ in Millions |
Jul. 31, 2021 |
Aug. 01, 2020 |
|---|---|---|
| Carrying Value | ||
| Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
| Notes receivable, including current portion | $ 29 | $ 78 |
| Long-term debt, including current portion | 2,188 | 2,498 |
| Fair Value | ||
| Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
| Notes receivable, including current portion | 26 | 79 |
| Long-term debt, including current portion | $ 2,278 | $ 2,536 |
DERIVATIVES - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
|---|---|---|---|
May 01, 2021 |
Oct. 31, 2020 |
Jul. 31, 2021 |
|
| Derivative [Line Items] | |||
| Payment to terminate interest rate swaps | $ 11 | ||
| Derivative, notional value | $ 1,233 | ||
| Gain (loss) resulting from termination of interest rate swaps | 0 | ||
| 6.750% Senior Notes Due 2029 | |||
| Derivative [Line Items] | |||
| Debt instrument, face amount | 500 | ||
| Interest rate swap | |||
| Derivative [Line Items] | |||
| Payment to terminate interest rate swaps | $ 6 | ||
| Derivative, notional value | $ 250 | 504 | |
| Forward starting interest rate swap | |||
| Derivative [Line Items] | |||
| Derivative, notional value | $ 450 | ||
DERIVATIVES - Interest Rate Swap Contracts (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Derivative [Line Items] | |||
| Total amounts of expense line items presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded | $ 204 | $ 192 | $ 181 |
| (Loss) gain recognized in earnings | 0 | 0 | 0 |
| Cash flow hedges | Reclassification out of accumulated other comprehensive income (loss) | |||
| Derivative [Line Items] | |||
| Loss reclassified from comprehensive income into earnings | $ (46) | $ (25) | $ 0 |
LONG-TERM DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
|
| Debt Instrument [Line Items] | ||
| Debt issuance costs, net | $ (35) | $ (46) |
| Original issue discount on debt | (17) | (36) |
| Long-term debt, including current portion | 2,188 | 2,498 |
| Less: current portion of long-term debt | (13) | (71) |
| Long-term debt | $ 2,175 | 2,427 |
| ABL Credit Facility | ||
| Debt Instrument [Line Items] | ||
| Average Interest Rate | 1.52% | |
| Long-term debt, gross | $ 701 | 757 |
| Other secured loans | ||
| Debt Instrument [Line Items] | ||
| Average Interest Rate | 5.16% | |
| Long-term debt, gross | $ 37 | 50 |
| Secured Debt | Term Loan Facility | ||
| Debt Instrument [Line Items] | ||
| Average Interest Rate | 3.59% | |
| Long-term debt, gross | $ 1,002 | 1,773 |
| Debt issuance costs, net | (18) | |
| Original issue discount on debt | $ (17) | |
| Senior Notes | 6.750% Senior Notes Due 2029 | ||
| Debt Instrument [Line Items] | ||
| Average Interest Rate | 6.75% | |
| Long-term debt, gross | $ 500 | $ 0 |
LONG-TERM DEBT - Schedule of Maturities of Long-term Debt (Details) $ in Millions |
Jul. 31, 2021
USD ($)
|
|---|---|
| Long-term debt maturity | |
| 2022 | $ 14 |
| 2023 | 14 |
| 2024 | 709 |
| 2025 | 1 |
| 2026 | 1,002 |
| 2027 and thereafter | 500 |
| Long-term debt | 2,240 |
| Interest on long-term debt | |
| 2022 | 82 |
| 2023 | 79 |
| 2024 | 76 |
| 2025 | 70 |
| 2026 | 42 |
| 2027 and thereafter | 85 |
| Interest | $ 434 |
LONG-TERM DEBT - Senior Notes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 22, 2020 |
Jul. 31, 2021 |
Oct. 31, 2020 |
|
| 6.750% Senior Notes Due 2029 | |||
| Debt Instrument [Line Items] | |||
| Debt instrument, face amount | $ 500 | ||
| Term Loan Facility, Term B Tranche | Secured Debt | |||
| Debt Instrument [Line Items] | |||
| Prepayments | $ 500 | $ 500 | |
| Senior Notes | 6.750% Senior Notes Due 2029 | |||
| Debt Instrument [Line Items] | |||
| Debt instrument, face amount | $ 500 | ||
| Debt instrument, interest rate, stated percentage | 6.75% | ||
| Financing costs | $ 9 |
COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS - Narrative (Details) $ in Millions |
12 Months Ended |
|---|---|
|
Jul. 31, 2021
USD ($)
| |
| Equity [Abstract] | |
| Total reclassifications | $ 40 |
LEASES - Lease Assets and Liabilities (Details) - USD ($) $ in Millions |
Jul. 31, 2021 |
Aug. 01, 2020 |
|---|---|---|
| Leases [Abstract] | ||
| Operating lease assets | $ 1,064 | $ 983 |
| Finance lease assets | $ 112 | $ 129 |
| Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
| Total lease assets | $ 1,176 | $ 1,112 |
| Current portion of operating lease liabilities | 135 | 131 |
| Current portion of long-term debt and finance lease liabilities | 107 | 12 |
| Long-term operating lease liabilities | 962 | 874 |
| Long-term finance lease liabilities | 35 | 143 |
| Total lease liabilities | $ 1,239 | $ 1,160 |
LEASES - Lease Cost (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
|
| Lessee, Lease, Description [Line Items] | ||
| Net operating lease cost | $ 291 | $ 374 |
| Finance lease cost | 32 | 28 |
| Total net lease cost | 323 | 402 |
| Discontinued Operations | ||
| Lessee, Lease, Description [Line Items] | ||
| Net operating lease cost | 2 | 6 |
| Operating expenses | ||
| Lessee, Lease, Description [Line Items] | ||
| Operating lease cost | 229 | 223 |
| Short-term lease cost | 29 | 31 |
| Variable lease cost | 64 | 151 |
| Sublease income | (8) | (3) |
| Amortization of leased assets | 13 | 16 |
| Net sales | ||
| Lessee, Lease, Description [Line Items] | ||
| Sublease income | (20) | (23) |
| Interest expense, net | ||
| Lessee, Lease, Description [Line Items] | ||
| Interest on lease liabilities | 19 | 12 |
| Restructuring, acquisition and integration related expenses | ||
| Lessee, Lease, Description [Line Items] | ||
| Sublease income | (33) | (41) |
| Other sublease income, net | (3) | (5) |
| Lease expense | $ 31 | $ 36 |
LEASES - Rent Expense (Details) $ in Thousands |
12 Months Ended |
|---|---|
|
Aug. 03, 2019
USD ($)
| |
| Operating Leased Assets [Line Items] | |
| Rent expense | $ 212 |
| Total net rent expense | 181 |
| Rent expense for discontinued operations | 10,000 |
| Net sales | |
| Operating Leased Assets [Line Items] | |
| Less subtenant rentals | (17) |
| Operating expenses | |
| Operating Leased Assets [Line Items] | |
| Less subtenant rentals | $ (14) |
LEASES - Narrative (Details) ft² in Millions, $ in Millions |
Oct. 26, 2018
USD ($)
|
Oct. 23, 2018
USD ($)
property
|
Aug. 03, 2019
ft²
|
|---|---|---|---|
| Sale Leaseback Transaction [Line Items] | |||
| Sale leaseback transaction, gross proceeds | $ 49 | $ 101 | |
| Number of distribution centers | property | 8 | ||
| Gain or loss on sale of facilities | $ 0 | ||
| New Distribution Facility | |||
| Sale Leaseback Transaction [Line Items] | |||
| Area of real estate property (in square feet) | ft² | 1.2 |
LEASES - Schedule of Other Information Related to Leases (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
|
| Leases [Abstract] | ||
| Operating Lease, Weighted Average Remaining Lease Term | 10 years 8 months 12 days | 10 years 4 months 24 days |
| Finance Lease, Weighted Average Remaining Lease Term | 2 years | 3 years 1 month 6 days |
| Operating Lease, Weighted Average Discount Rate, Percent | 9.70% | 10.60% |
| Finance Lease, Weighted Average Discount Rate, Percent | 8.70% | 8.80% |
| Operating cash flows from operating leases | $ 220 | $ 231 |
| Operating cash flows from finance leases | 12 | 9 |
| Financing cash flows from finance leases | 9 | 20 |
| Lease assets obtained in exchange for new finance lease liabilities | 0 | 93 |
| Leased assets obtained in exchange for new operating lease liabilities | $ 263 | $ 195 |
SHARE-BASED AWARDS - Supervalu Replacement Awards (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | |||
|---|---|---|---|---|
Oct. 22, 2018 |
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
| Fixed value of expensed replacement award liabilities (in dollars per share) | $ 32.50 | |||
| Number of authorized additional shares | 5.0 | |||
| Number of shares of common stock issued | 1.3 | 2.0 | ||
| Average price (in dollars per share) | $ 10.66 | $ 12.00 | ||
| Proceeds from the issuance of common stock, net | $ 1 | $ 14 | $ 24 | |
| SUPERVALU | ||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
| Cash payment (in dollars per share) | $ 32.50 | |||
BENEFIT PLANS - Additional Information (Details) $ in Millions |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
|
Feb. 01, 2020
USD ($)
|
Jul. 31, 2021
USD ($)
|
Aug. 01, 2020
USD ($)
|
|
| Retirement Benefits [Abstract] | |||
| Percentage of union employees that participate in multiemployer defined benefit pension plans under collective bargaining agreements | 62.00% | ||
| Defined Benefit Plan Disclosure [Line Items] | |||
| Settlement charge (gain) | $ (12) | $ 9 | |
| Supervalu Retirement Plan | |||
| Defined Benefit Plan Disclosure [Line Items] | |||
| Settlement charge (gain) | $ (2) | ||
| Supervalu Retirement Plan | Measurement Input, Discount Rate | |||
| Defined Benefit Plan Disclosure [Line Items] | |||
| Measurement input (as a percent) | 0.031 | ||
BENEFIT PLANS - Amounts Recognized in Consolidated Balance Sheet (Details) - USD ($) $ in Millions |
Jul. 31, 2021 |
Aug. 01, 2020 |
|---|---|---|
| Pension Benefits | ||
| Defined Benefit Plan Disclosure [Line Items] | ||
| Other long-term assets | $ 64 | $ 0 |
| Pension and other postretirement benefit obligations | (38) | (267) |
| Accrued compensation and benefits | (1) | (2) |
| Total | 25 | (269) |
| Other Postretirement Benefits | ||
| Defined Benefit Plan Disclosure [Line Items] | ||
| Other long-term assets | 0 | 0 |
| Pension and other postretirement benefit obligations | (15) | (25) |
| Accrued compensation and benefits | (3) | 0 |
| Total | $ (18) | $ (25) |
BENEFIT PLANS - Benefit Plan Assumptions (Details) |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Net periodic benefit cost assumptions: | |||
| Rate of compensation increase | 0.00% | 0.00% | 0.00% |
| Interest credit | 5.00% | 5.00% | 5.00% |
| Retirement Plan, Before Age 65 | Postemployment Retirement Benefits | |||
| Net periodic benefit cost assumptions: | |||
| Assumed healthcare cost trend rate | 8.10% | ||
| Ultimate healthcare cost trend rate | 4.50% | ||
| Retirement Plan, After Age 65 | Postemployment Retirement Benefits | |||
| Net periodic benefit cost assumptions: | |||
| Assumed healthcare cost trend rate | 5.40% | ||
| Minimum | |||
| Benefit obligation assumptions: | |||
| Discount rate | 2.62% | 1.74% | 2.99% |
| Net periodic benefit cost assumptions: | |||
| Discount rate | 1.17% | 2.99% | 4.30% |
| Expected return on plan assets | 1.00% | 2.00% | 2.25% |
| Maximum | |||
| Benefit obligation assumptions: | |||
| Discount rate | 2.75% | 2.37% | 3.49% |
| Net periodic benefit cost assumptions: | |||
| Discount rate | 2.27% | 3.49% | 4.42% |
| Expected return on plan assets | 5.50% | 5.75% | 6.50% |
BENEFIT PLANS - Contributions (Details) $ in Millions |
Jul. 31, 2021
USD ($)
|
|---|---|
| Minimum | |
| Defined Benefit Plan Disclosure [Line Items] | |
| Contributions to defined benefit pension plans and postretirement benefit plans | $ 2 |
| Maximum | |
| Defined Benefit Plan Disclosure [Line Items] | |
| Contributions to defined benefit pension plans and postretirement benefit plans | $ 3 |
BENEFIT PLANS - Estimated Future Benefit Payments (Details) $ in Millions |
Jul. 31, 2021
USD ($)
|
|---|---|
| Pension Benefits | |
| Defined Benefit Plan Disclosure [Line Items] | |
| 2022 | $ 122 |
| 2023 | 114 |
| 2024 | 118 |
| 2025 | 122 |
| 2026 | 120 |
| Years 2027-2031 | 582 |
| Other Postretirement Benefits | |
| Defined Benefit Plan Disclosure [Line Items] | |
| 2022 | 3 |
| 2023 | 1 |
| 2024 | 1 |
| 2025 | 1 |
| 2026 | 1 |
| Years 2027-2031 | $ 4 |
BENEFIT PLANS - Defined Contribution Plans (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Retirement Benefits [Abstract] | |||
| Total employer contribution expenses | $ 27 | $ 21 | $ 21 |
BENEFIT PLANS - Post-Employment Benefits (Details) - Postemployment Retirement Benefits - USD ($) $ in Millions |
Jul. 31, 2021 |
Aug. 01, 2020 |
|---|---|---|
| Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
| Accrued compensation and benefits | $ 2 | $ 2 |
| Pension and other postretirement benefit obligations | $ 5 | $ 5 |
BENEFIT PLANS - Multiemployer Pension Plans, Additional Information (Details) $ in Millions |
12 Months Ended | |
|---|---|---|
|
Jul. 31, 2021
USD ($)
plan
|
Aug. 01, 2020
USD ($)
|
|
| Defined Benefit Plan Disclosure [Line Items] | ||
| Number of multiemployer plans, withdrawal | plan | 13 | |
| Multiemployer pension plan withdrawal liability | $ 11 | |
| Multiemployer pension plan, payment period | 20 years | |
| Other long-term liabilities | ||
| Defined Benefit Plan Disclosure [Line Items] | ||
| Multiemployer pension plan withdrawal liability | $ 110 | $ 52 |
| Retail Multiemployer Pension Plans | ||
| Defined Benefit Plan Disclosure [Line Items] | ||
| Number of multiemployer plans, withdrawal | plan | 3 | |
| Multi-employer pension plan withdrawal charges | $ 63 |
BENEFIT PLANS - Multiemployer Benefit Plans Other than Pensions (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Defined Benefit Plan Disclosure [Line Items] | |||
| Contributions | $ 48 | $ 52 | $ 41 |
| Other Postretirement Benefits | |||
| Defined Benefit Plan Disclosure [Line Items] | |||
| Contributions | $ 78 | $ 89 | $ 73 |
BENEFIT PLANS - Collective Bargaining Agreements (Details) |
12 Months Ended |
|---|---|
|
Jul. 31, 2021
employee
agreement
store
| |
| Retirement Benefits [Abstract] | |
| Number of employees | 28,300 |
| Number of employees covered by collective bargaining agreements | 11,000 |
| Number of collective bargaining agreements | agreement | 48 |
| Number of collective bargaining agreements renegotiated | agreement | 20 |
| Number of employees covered by renegotiated collective bargaining agreements | 1,700 |
| Number of collective bargaining agreements expired | agreement | 4 |
| Number of employees covered by expired collective bargaining agreements | 1,500 |
| Number of collective bargaining agreements scheduled to expire | store | 10 |
| Number of employees covered by collective bargaining agreements scheduled to expire | 3,300 |
INCOME TAXES - Income Tax Expense (Benefit), Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Income Tax Disclosure [Abstract] | |||
| Income (loss) from continuing operations before income taxes, domestic | $ 175 | $ (338) | $ (348) |
| Income (loss) from continuing operations before income taxes, foreign | $ 8 | $ (4) | $ 7 |
INCOME TAXES - Total (Benefit) Provision for Income Taxes (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Aug. 03, 2019 |
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Income Tax Disclosure [Abstract] | ||||
| Continuing operations | $ 34 | $ (91) | $ (59) | |
| Discontinued operations | $ (3) | (1) | (5) | (3) |
| Total | $ 33 | $ (96) | $ (62) | |
INCOME TAXES - Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Income Tax Disclosure [Abstract] | |||
| Income tax expense (benefit) | $ 34 | $ (91) | $ (59) |
| Other comprehensive income | 65 | (45) | (34) |
| Total | $ 99 | $ (136) | $ (93) |
INCOME TAXES - Federal and State Income Tax (Benefit) Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Current | |||
| U.S. Federal | $ 30 | $ (23) | $ 11 |
| State and Local | 7 | 1 | (11) |
| Foreign | 2 | 2 | 2 |
| Current income tax expense (benefit) | 39 | (20) | 2 |
| Deferred | |||
| U.S. Federal | (8) | (45) | (59) |
| State and Local | 2 | (24) | (2) |
| Foreign | 1 | (2) | 0 |
| Deferred income tax expense (benefit) | (5) | (71) | (61) |
| Total | |||
| U.S. Federal | 22 | (68) | (48) |
| State and Local | 9 | (23) | (13) |
| Foreign | 3 | 0 | 2 |
| Total income tax expense (benefit) | $ 34 | $ (91) | $ (59) |
INCOME TAXES - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Income Tax Disclosure [Abstract] | |||
| Computed “expected” tax expense | $ 39 | $ (72) | $ (71) |
| State and local income tax, net of Federal income tax benefit | 10 | (19) | (18) |
| Non-deductible expenses | 7 | 3 | 6 |
| Tax effect of share-based compensation | (3) | 2 | 0 |
| General business credits | (6) | (2) | (2) |
| Unrecognized tax benefits | (4) | (8) | (8) |
| Nondeductible goodwill impairment | 0 | 44 | 33 |
| Enhanced Inventory Donations | (3) | (2) | (1) |
| Impacts related to the CARES Act | 0 | (39) | 0 |
| Other, net | (6) | 2 | 2 |
| Total income tax expense (benefit) | $ 34 | $ (91) | $ (59) |
INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Income Tax Disclosure [Abstract] | |||
| Unrecognized tax benefits at beginning of period | $ 32 | $ 40 | $ 1 |
| Unrecognized tax benefits added during the period | 6 | 6 | 0 |
| Unrecognized tax benefits assumed in a business combination | 0 | 0 | 50 |
| Decreases in unrecognized tax benefits due to settlements | (8) | (2) | 0 |
| Decreases in unrecognized tax benefits due to settlements | (3) | (12) | (11) |
| Unrecognized tax benefits at end of period | $ 27 | $ 32 | $ 40 |
INCOME TAXES - Uncertain Tax Positions, Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Income Tax Disclosure [Abstract] | |||
| Payments to government agencies | $ 8 | ||
| Total accrued interest and penalties | 6 | $ 7 | $ 16 |
| Possible decrease in amount of unrecognized tax benefits | $ 7 |
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions |
Jul. 31, 2021 |
Aug. 01, 2020 |
|---|---|---|
| Deferred tax assets: | ||
| Inventories, principally due to additional costs inventoried for tax purposes | $ 0 | $ 0 |
| Compensation and benefits related | 54 | 103 |
| Accounts receivable, principally due to allowances for uncollectible accounts | 6 | 12 |
| Accrued expenses | 37 | 33 |
| Net operating loss carryforwards | 16 | 13 |
| Other tax carryforwards (interest, charitable contributions) | 8 | 7 |
| Foreign tax credits | 1 | 1 |
| Intangible assets | 61 | 67 |
| Lease liabilities | 336 | 339 |
| Interest rate swap agreements | 25 | 37 |
| Other deferred tax assets | 6 | 6 |
| Total gross deferred tax assets | 550 | 618 |
| Less valuation allowance | (8) | (3) |
| Net deferred tax assets | 542 | 615 |
| Deferred tax liabilities: | ||
| Plant and equipment, principally due to differences in depreciation | 125 | 164 |
| Inventories | 39 | 43 |
| Lease right of use assets | 321 | 300 |
| Total deferred tax liabilities | 485 | 507 |
| Net deferred tax assets | $ 57 | $ 108 |
INCOME TAXES - Tax Credits and Valuation Allowances (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
|
| Tax Credit Carryforward [Line Items] | ||
| Gross deferred tax assets | $ 550 | $ 618 |
| Disallowed interest expense carryforwards | 15 | |
| Foreign tax credits | 1 | $ 1 |
| Internal Revenue Service (IRS) | ||
| Tax Credit Carryforward [Line Items] | ||
| Operating loss carryforwards | 2 | |
| Operating loss carryforward limitation | $ 1 |
INCOME TAXES - Effective Tax Rate (Details) |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Income Tax Disclosure [Abstract] | |||
| Effective income tax rate for continuing operations (as a percent) | 18.60% | 26.60% | 17.30% |
EARNINGS PER SHARE (Details) - $ / shares shares in Millions |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Earnings Per Share [Abstract] | |||
| Basic weighted average shares outstanding (in shares) | 56.1 | 53.8 | 51.2 |
| Net effect of dilutive stock awards based upon the treasury stock method (in shares) | 3.9 | 0.0 | 0.0 |
| Diluted weighted average shares outstanding | 60.0 | 53.8 | 51.2 |
| Basic earnings (loss) per share: | |||
| Continuing operations (in dollars per share) | $ 2.55 | $ (4.76) | $ (5.51) |
| Discontinued operations (in dollars per share) | 0.10 | (0.34) | (0.05) |
| Basic earnings (loss) per share (in dollars per share) | 2.65 | (5.10) | (5.56) |
| Diluted earnings (loss) per share: | |||
| Continuing operations (in dollars per share) | 2.38 | (4.76) | (5.51) |
| Discontinued operations (in dollars per share) | 0.09 | (0.34) | (0.05) |
| Diluted earnings (loss) per share (in dollars per share) | $ 2.48 | $ (5.10) | $ (5.56) |
| Anti-dilutive stock-based awards excluded from the calculation of diluted earnings per share (in shares) | 0.9 | 3.6 | 3.4 |
BUSINESS SEGMENTS - Narrative (Details) |
12 Months Ended |
|---|---|
|
Jul. 31, 2021
segment
| |
| Segment Reporting [Abstract] | |
| Number of reportable segments | 2 |
| Number of operating segments | 2 |
BUSINESS SEGEMENTS - Assets by Reportable Segment (Details) - USD ($) $ in Millions |
Jul. 31, 2021 |
Aug. 01, 2020 |
|---|---|---|
| Segment Reporting Information [Line Items] | ||
| Total assets | $ 7,525 | $ 7,587 |
| Continuing Operations | ||
| Segment Reporting Information [Line Items] | ||
| Total assets | 7,521 | 7,580 |
| Continuing Operations | Eliminations | ||
| Segment Reporting Information [Line Items] | ||
| Total assets | (43) | (55) |
| Continuing Operations | Wholesale | Operating Segments | ||
| Segment Reporting Information [Line Items] | ||
| Total assets | 6,536 | 6,589 |
| Continuing Operations | Retail | Operating Segments | ||
| Segment Reporting Information [Line Items] | ||
| Total assets | 566 | 548 |
| Continuing Operations | Other | Operating Segments | ||
| Segment Reporting Information [Line Items] | ||
| Total assets | $ 462 | $ 498 |
DISCONTINUED OPERATIONS - Operating Results (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Aug. 03, 2019 |
Jul. 31, 2021 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
| Discontinued Operations and Disposal Groups [Abstract] | ||||
| Net sales | $ 407 | $ 42 | $ 184 | |
| Cost of sales | 290 | 28 | 131 | |
| Gross profit | 117 | 14 | 53 | |
| Operating expenses | 98 | 9 | 43 | |
| Restructuring expenses and charges | 25 | 0 | 33 | |
| Operating income (loss) | (6) | 5 | (23) | |
| Other (income) expense, net | 0 | 0 | 0 | |
| Income (loss) from discontinued operations before income taxes | (6) | 5 | (23) | |
| Benefit for income taxes | (3) | (1) | (5) | $ (3) |
| Income (loss) from discontinued operations, net of tax | $ (3) | $ 6 | $ (18) | $ (3) |
DISCONTINUED OPERATIONS - Balance Sheet (Details) - USD ($) $ in Millions |
Jul. 31, 2021 |
Aug. 01, 2020 |
|---|---|---|
| Current assets | ||
| Inventories, net | $ 2 | $ 3 |
| Total current assets of discontinued operations | 2 | 3 |
| Long-term assets | ||
| Property and equipment | 1 | 3 |
| Other long-term assets | 1 | 1 |
| Total long-term assets of discontinued operations | 2 | 4 |
| Total assets of discontinued operations | 4 | 7 |
| Current liabilities | ||
| Accounts payable | 2 | 3 |
| Accrued compensation and benefits | 2 | 3 |
| Other current liabilities | 0 | 4 |
| Total current liabilities of discontinued operations | 4 | 10 |
| Long-term liabilities | ||
| Other long-term liabilities | 0 | 2 |
| Total liabilities of discontinued operations | 4 | 12 |
| Net liabilities of discontinued operations | $ 0 | $ (5) |