LEVI STRAUSS & CO

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Levi Strauss & Co. (the “Company”) is one of the world’s largest brand-name apparel companies. The Company designs, markets and sells – directly or through third parties and licensees – products that include jeans, casual and dress pants, tops, shorts, skirts, dresses, jackets, activewear, footwear and related accessories for men, women and children around the world under the Levi’s®, Levi Strauss Signature™, Denizen®, Dockers® and Beyond Yoga® brands.

Basis of Presentation and Principles of Consolidation

The interim consolidated financial statements of the Company and its wholly-owned and majority-owned foreign and domestic subsidiaries, including the notes, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim period financial statements and do not include all of the information and disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements. In the opinion of management, all adjustments necessary for a fair statement of the financial position and the results of operations for the periods presented have been included. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended November 26, 2023, included in the Company’s 2023 Annual Report on Form 10-K.

The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions have been eliminated. The results of operations for the three and nine months ended August 25, 2024 may not be indicative of the results to be expected for any other interim period or the year ending December 1, 2024.

The Company’s fiscal year ends on the Sunday that is closest to November 30 of that year, although the fiscal years of certain foreign subsidiaries end on November 30. Each quarter of both fiscal years 2024 and 2023 consists of 13 weeks, with the exception of the fourth quarter of 2024, which will consist of 14 weeks. All references to years and quarters relate to fiscal years and quarters rather than calendar years and quarters.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the related notes to the consolidated financial statements. Estimates are based upon historical factors, current circumstances and the experience and judgment of the Company’s management. Management evaluates its estimates and assumptions on an ongoing basis and may employ outside experts to assist in its evaluations. Changes in such estimates, based on more accurate future information, or different assumptions or conditions, may affect amounts reported in future periods.

Expofaro S.A.S Distributor Acquisition

In December 2023, the Company signed a purchase agreement to acquire all operating assets related to Levi’s® brands from Expofaro S.A.S, the Company’s former distributor in Colombia, for $31.9 million in cash. This includes 40 Levi’s® retail stores andone e-commerce site, distribution with the country’s multi-brand retailers, and the logistical operations within these markets. The total fair value of assets acquired was $31.9 million and include goodwill, inventory, intangible and fixed assets. The goodwill and definite-lived intangible assets recognized as a result of the acquisition were $15.9 million and $10.3 million, respectively. The transaction closed in the second quarter of 2024.

Distribution Center Conversion

On May 24, 2024, the Company entered into an agreement with a third party logistics provider to manage all aspects of the Company’s Dorsten, Germany distribution center. As of the second quarter of 2024, the Company received the first payment of $77.9 million from the provider for use of the Company’s warehouse equipment and technologies over the term of the agreement. The Company will maintain certain rights over the warehouse equipment and technologies and will retain the related equipment on the consolidated balance sheets. The upfront payment will be amortized as a reduction in the related distribution expenses over the expected term of the arrangement, which commenced in the second half of the year. The upfront payment is recognized on the consolidated balance sheets in “Other accrued liabilities” and “Long-term employee related benefits and other liabilities” and the proceeds are recorded as an operating activity in “Net change in operating assets and liabilities” on the consolidated statements of cash flows.

On June 6, 2024, the Company entered into an agreement with a third party logistics provider to replace the Company’s Canton, Mississippi distribution center with a new distribution center. The Company will maintain certain rights over the warehouse, and warehouse equipment and technologies resulting in an Operating lease right-of-use asset and lease liability of $30.6 million in “Operating lease right-of-use assets, net” and “Operating lease liabilities” balances and a Financing lease right-of-use asset and lease liability of $14.0 million in “Other non-current assets” and “Long-term employee related benefits and other liabilities” balances on the consolidated balance sheets.

Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may be impaired. Impairment losses are measured and recorded for the excess of carrying value over its fair value, estimated based on expected future cash flows and other quantitative and qualitative factors. Property, plant and equipment, net includes accumulated depreciation of $1.4 billion and $1.3 billion as of August 25, 2024 and November 26, 2023, respectively.

In the third quarter of 2024, the Company recorded $11.1 million of asset impairment charges related to technology projects discontinued in connection with Project Fuel, which were recorded in “Selling, general and administrative expenses” in the accompanying consolidated statements of income. The Company also recorded an impairment charge of $9.1 million related to the Beyond Yoga® customer relationship intangible assets, which is included in “Goodwill and other intangible asset impairment charges” in the Company’s consolidated statements of income. See Note 2 for additional information.

In the third quarter of 2023, the Company recorded $6.1 million of impairment charges related to capitalized internal-use software as a result of the decision to discontinue certain technology projects, as well as $3.7 million of impairment related to other discontinued projects.

Supplier Finance Program

The Company adopted Accounting Standards Update No. 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligationsin the first quarter of 2024.

The Company offers a supplier financing program which enables the Company’s suppliers, at their sole discretion, to sell their receivables (i.e., the Company’s payment obligations to suppliers) to a financial institution on a non-recourse basis in order to be paid earlier than current payment terms provide.

The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by the supplier’s participation in these arrangements. The Company’s payment terms to the financial institutions, including the timing and amount of payments, are based on the original supplier invoices. Our current payment terms with a majority of our suppliers are typically 90 days. The Company has not pledged any assets and does not provide guarantees under the supplier finance program. As such, the outstanding payment obligations under the Company’s supplier finance program are included within Accounts Payable in the Consolidated Balance Sheets.

The Company’s outstanding payment obligations under this program were $139.9 million as of August 25, 2024 and $113.4 million as of November 26, 2023.

Share Repurchases

During the three and nine months ended August 25, 2024, the Company repurchased 1.0 million and 3.3 million shares for $17.8 million and $59.7 million, plus broker’s commissions, respectively, in the open market. This equates to an average repurchase price of approximately $18.35 per share for the nine months ended August 25, 2024. During the nine months ended August 27, 2023, the Company repurchased 0.5 million shares for $8.1 million, plus broker's commissions, in the open market during the first quarter. This equates to an average repurchase price of approximately $17.97 per share. There wereno shares repurchased in either the second or third quarters of 2023.

The Company accounts for share repurchases by charging entirely to retained earnings the excess of the repurchase price over the repurchased Class A common stock’s par value. All repurchased shares are retired and become authorized but unissued shares. The Company accrues for the shares purchased under the share repurchase plan based on the trade date. The Company may terminate or limit the share repurchase program at any time.

Reclassification

Certain amounts on the consolidated balance sheets, consolidated statements of income and statements of cash flows have been conformed to the August 25, 2024 presentation.

Recently Issued Accounting Standards

There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s consolidated financial statements and footnote disclosures, from those disclosed in the 2023 Annual Report on Form 10-K.

NOTE 2: GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill by business segment for the nine months ended August 25, 2024 and August 27, 2023 were as follows:

(1)Comprised of the Beyond Yoga® reporting unit goodwill only.

(2)For the nine months ended August 25, 2024 the Company recorded a Beyond Yoga® goodwill noncash impairment charge of $36.3 million.

(3)For the nine months ended August 25, 2024 the Company recorded goodwill of $15.9 million in connection with the acquisition of all operating assets related to Levi’s® brands from Expofaro S.A.S, the Company’s former distributor in Colombia.

(1)Comprised of the Beyond Yoga® reporting unit goodwill only.

(2)For the nine months ended August 27, 2023 the company recorded a Beyond Yoga® goodwill noncash impairment charge of $75.4 million.

During the third quarter of 2024, as part of the Company’s annual review of the Beyond Yoga® reporting unit, the Company elected to perform a single step quantitative impairment test on the goodwill and indefinite lived trademark intangible assigned to the Beyond Yoga® reporting unit and performed impairment tests on the related customer relationship intangible assets. The Company engaged third-party valuation specialists and used industry accepted valuation models and criteria that were reviewed and approved by various levels of management.

The Company assessed the fair value of the Beyond Yoga® reporting unit as of the test date, May 27, 2024, using the discounted cash flow method under the income approach, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows. As a result of this assessment, we concluded that the carrying value of the Beyond Yoga® reporting unit exceeded the estimated fair value by $36.3 million, which was recorded as a noncash impairment charge to goodwill.

Prior to the assessment of the reporting unit, we concluded that the carrying values of the trademark and customer relationship intangible assets exceeded their estimated fair values. The trademark fair value was determined using the relief-from-royalty method to utilize the discounted projected future cash flows. Based on this assessment, we recorded a $66.0 million noncash impairment charge related to the Beyond Yoga® trademark. The customer relationship intangible assets fair values were determined using the multi-period excess earnings and distributor methods under the income approach. Based on these assessments, we recorded a $9.1 million noncash impairment charge related to the customer relationship intangible assets.

The significant assumptions used in the assessment of the fair value of the reporting unit included revenue growth rates, profit margins, operating expenses, capital expenditures, terminal value and a discount rate. The significant assumptions used in the assessment of the fair value of the trademark intangible asset included revenue growth rates, a discount rate and a royalty rate. The significant assumptions used in the assessment of the customer relationship intangible assets included revenues from existing customers and discount rates.

Total impairment charges for the nine months ended August 25, 2024 were $111.4 million and were recorded within “Goodwill and other intangible asset impairment charges” on the accompanying consolidated statements of income. During 2024, the Company appointed new Beyond Yoga® executive management and implemented a new strategic plan for growth and expansion, resulting in an adverse impact on expected cash flows.

During the first quarter of 2024, the Company recognized $5.5 million in goodwill impairment charges related to the footwear business in its Europe segment as a result of the decision to discontinue the category in connection with Project Fuel.

For the nine months ended August 27, 2023, the Company recognized impairment charges of $90.2 million related to the Beyond Yoga® acquisition including a $75.4 million impairment in goodwill and a $14.8 million impairment in the trademark intangible asset. The impairment resulted from incremental investments in the brand and team, and disciplined expansion in response to the current macroeconomic conditions, resulting in an adverse impact on expected cash flows, as well as an increase in discount rates.

Other intangible assets, net, were as follows:

(1)For the nine months ended August 25, 2024 the Company recorded a Beyond Yoga® trademark noncash impairment charge of $66.0 million based on a Level 3 fair value of $135.1 million.

For the nine months ended August 27, 2023 the Company recorded a Beyond Yoga® trademark noncash impairment charge of $14.8 million based on a Level 3 fair value of $201.1 million.

(2)For the nine months ended August 25, 2024 the Company recorded a Beyond Yoga® customer relationship intangible assets noncash impairment charge of $9.1 million based on a Level 3 fair value of $9.7 million.

NOTE 3: FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the Company’s financial instruments that are carried at fair value:

(1)Fair values estimated using Level 1 inputs are inputs that consist of quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Rabbi trust assets consist of marketable equity securities.

(2)Fair values estimated using Level 2 inputs are inputs, other than quoted prices, that are observable for the asset or liability, either directly or indirectly, and include among other things, quoted prices for similar assets or liabilities in markets that are active or inactive as well as inputs other than quoted prices that are observable. For forward foreign exchange contracts, inputs include foreign currency exchange and interest rates and, where applicable, credit default swap prices.

(3)The Company’s cash flow hedges are subject to International Swaps and Derivatives Association, Inc. master agreements. These agreements permit the net settlement of these contracts on a per-institution basis. Refer to Note 4 for more information.

The following table presents the carrying value, including related accrued interest, and estimated fair value of the Company’s financial instruments that are carried at adjusted historical cost:

(1)Fair values are estimated using Level 2 inputs and incorporate mid-market price quotes. Level 2 inputs are inputs other than quoted prices, that are observable for the liability, either directly or indirectly and include among other things, quoted prices for similar liabilities in markets that are active or inactive as well as inputs other than quoted prices that are observable.

NOTE 4: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

As of August 25, 2024, the Company had forward foreign exchange contracts derivatives to buy $595.4 million and to sell $570.5 million in various foreign currencies. These contracts are at various exchange rates and expire at various dates through February 2026.

The table below provides data about the carrying values of derivative and non-derivative instruments:

(1)Included in "Other current assets" or "Other non-current assets" on the Company’s consolidated balance sheets.

(2)Included in "Other accrued liabilities" or "Long-term employee related benefits and other liabilities" on the Company’s consolidated balance sheets.

The Company’s over-the-counter forward foreign exchange contracts are subject to International Swaps and Derivatives Association, Inc. master agreements. These agreements permit the net settlement of these contracts on a per-institution basis; however, the Company records the fair value on a gross basis on its consolidated balance sheets based on maturity dates, including those subject to master netting arrangements. The table below presents the gross and net amounts of these contracts recognized on the Company’s consolidated balance sheets by type of financial instrument:

The table below provides data about the amount of gains and losses related to derivative instruments and non-derivative instruments designated as cash flow and net investment hedges included in “Accumulated other comprehensive loss” (“AOCL”) on the Company’s consolidated balance sheets, and in “Other expense, net” in the Company’s consolidated statements of income:

(1)Amounts reclassified from AOCL were classified as net revenues or costs of goods sold on the consolidated statements of income.

(2)Prior to 2006, the Company used foreign exchange currency swaps to hedge the net investment in its foreign operations. For hedges that qualified for hedge accounting, the net gains were included in AOCL and are not reclassified to earnings until the related net investment position has been liquidated.

There was no hedge ineffectiveness for the nine months ended August 25, 2024. Within the next 12 months, a $0.5 million loss from cash flow hedges is expected to be reclassified from AOCL into net income.

The table below presents the effects of the Company’s cash flow hedges of foreign exchange risk contracts on the consolidated statements of income:

The table below provides data about the amount of gains and losses related to derivatives instruments included in “Other expense, net” in the Company’s consolidated statements of income:

(1)Realized (losses) gains related to derivatives instruments were classified as Other, net on the Company’s consolidated statements of cash flows.

NOTE 5: OTHER ACCRUED LIABILITIES

The following table presents the Company’s other accrued liabilities:

NOTE 6: DEBT

The following table presents the Company’s debt:

Senior Revolving Credit Facility

As of August 25, 2024, the Company hadno borrowings under the Credit Facility. The Company’s unused availability under the Credit Facility was $705.8 million at August 25, 2024, as the total availability of $726.8 million was reduced by $21.0 million of letters of credit and other credit usage allocated under the Credit Facility.

Interest Rates on Borrowings

The Company’s weighted-average interest rate on average borrowings outstanding during the three and nine months ended August 25, 2024 was 3.97% and 3.98%, respectively, as compared to 4.35% and 4.24%, respectively, during the same periods of 2023.

NOTE 7: RESTRUCTURING ACTIVITIES

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

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

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

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

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

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

NOTE 8: COMMITMENTS AND CONTINGENCIES

Forward Foreign Exchange Contracts

The Company uses cash flow hedge derivative instruments to manage its exposure to foreign currencies. The Company is exposed to credit loss in the event of nonperformance by the counterparties to the forward foreign exchange contracts. However, the Company believes that its exposures are appropriately diversified across counterparties and that these counterparties are creditworthy financial institutions. See Note 4 for additional information.

Other Contingencies

Litigation. In the ordinary course of business, the Company has various claims, complaints and pending cases, including contractual matters, facility and employee-related matters, distribution matters, product liability matters, intellectual property matters, bankruptcy preference matters, and tax and administrative matters. The Company establishes loss provisions for these ordinary course claims as well as other matters in which losses are probable and can be reasonably estimated. The Company does not believe any of these pending claims, complaints and legal proceedings will have a material impact on its financial condition, results of operations or cash flows.

Customs Duty Audits. The Company imports both raw materials and finished garments into all of its geographic regions and, as such, is subject to numerous countries’ complex customs laws and regulations with respect to its import and export activity. The Company has various pending audit assessments in connection with these activities. As of August 25, 2024, the Company has recorded certain reserves for these matters which are not material. The Company does not believe any of the claims for customs duty and related charges will have a material impact on its financial condition, results of operations or cash flows.

NOTE 9: DIVIDENDS

Dividends are declared at the discretion of the Board. In January, April and July 2024, the Company declared cash dividends of $0.12, $0.12 and $0.13 per share, respectively, to holders of record of its Class A and Class B common stock. In January, April and July 2023, the Company declared cash dividends of $0.12 per share. During the three and nine months ended August 25, 2024, dividends were paid in the amount of $51.5 million and $147.1 million, respectively, compared to $47.7 million and $142.9 million, respectively, for the same prior-year periods.

The Company does not have an established dividend policy. The Board reviews the Company’s ability to pay dividends on an ongoing basis and establishes the dividend amount based on the Company’s financial condition, results of operations, capital requirements, current and projected cash flows and other factors, and any restrictions related to the terms of the Company’s debt agreements.

Subsequent to the Company’s quarter end, a cash dividend of $0.13 per share was declared to holders of record of its Class A and Class B common stock at the close of business on October 29, 2024. The cash dividend will be payable on November 14, 2024, for a total quarterly dividend of approximately $52 million.

NOTE 10: ACCUMULATED OTHER COMPREHENSIVE LOSS

The following is a summary of the components of "Accumulated other comprehensive loss," net of related income taxes:

(1)Amounts reclassified were recorded in other expense, net.

(2)Amounts reclassified were recorded within net revenues and cost of goods sold. For more information, refer to Note 4.

(1)Amounts reclassified were recorded in other expense, net.

(2)Amounts reclassified were recorded within net revenues and cost of goods sold. For more information, refer to Note 4.

NOTE 11: NET REVENUES

Disaggregated Revenue

The table below provides the Company’s revenues disaggregated by segment and channel.

The Company did not have any material contract assets or contract liabilities recorded in the consolidated balance sheets as of August 25, 2024 and November 26, 2023.

NOTE 12: INCOME TAXES

The Company’s effective income tax rate was (4.1)% for the three months ended August 25, 2024, compared to 386.6% for the same prior-year period. The decrease in the effective tax rate in the current quarter is primarily driven by the foreign-derived intangible income deduction as a proportion to earnings before income tax compared to loss before income tax in the same prior-year period.

The Company’s effective income tax rate was (46.2)% for the nine months ended August 25, 2024, compared to 4.5% for the same prior-year period. The decrease in the effective tax rate is primarily driven by a tax benefit of $10.1 million related to favorable resolutions and finalizations of state audits.

NOTE 13: EARNINGS PER SHARE

The following table sets forth the computation of the Company’s basic and diluted earnings per share:

NOTE 14: RELATED PARTIES

Michelle Gass (President and CEO), Tracy Layney (Executive Vice President and Chief Human Resources Officer) and David Jedrzejek (Senior Vice President and General Counsel) are members of the Board of Directors of the Levi Strauss Foundation, which is not one of our consolidated entities. Mr. David Jedrzejek also serves as a Vice President of the Levi Strauss Foundation. Ms. Gass, Ms. Layney and Mr. Jedrzejek began serving on the Board of Directors of the Levi Strauss Foundation on January 24, 2024, February 3, 2022 and September 26, 2023, respectively. Charles V. Bergh, former President and Chief Executive Officer, was a member of the board of directors of the Levi Strauss Foundation until January 28, 2024. During the three and nine months ended August 25, 2024, the Company donated $0.4 million and $5.7 million, respectively, to the Levi Strauss Foundation as compared to $0.5 million and $10.8 million, respectively, for the same prior-year periods. During the three and nine months ended August 25, 2024, the Company recognized expenses related to their donation commitments of $2.2 million and $6.4 million, respectively, as compared to a reversal of expense of $0.9 million and expenses of $4.0 million, respectively, for the same prior-year periods.

NOTE 15: BUSINESS SEGMENT INFORMATION

The Company manages its business according tothree reportable segments: Americas, Europe, and Asia, collectively comprising the Company’s Levi’s Brands business, which includes Levi’s®, Levi Strauss Signature™ and Denizen® brands. The Dockers® and Beyond Yoga® businesses do not separately meet the quantitative thresholds for reportable segments and therefore are presented under the caption of “Other Brands.” Effective in the second quarter of 2024, Dockers® and Beyond Yoga® businesses are disclosed as separate lines under the caption “Other Brands” to increase transparency of performance. Prior periods were adjusted to reflect the change. Corporate expenses are comprised of selling, general and administrative expenses that management does not attribute to any of our operating segments and these expenses primarily relate to corporate administration, information and technology resources, finance and human resources functional and organizational costs.

The Company considers its chief executive officer to be the Company’s chief operating decision maker. The Company’s chief operating decision maker manages business operations, evaluates performance and allocates resources based on the segments’ net revenues and operating income.

Business segment information for the Company is as follows:

(1)Restructuring charges, net for the three and nine months ended August 25, 2024 related to Project Fuel, consisting primarily of severance and other post-employment benefit charges.

(2)For the three and nine months ended August 25, 2024, goodwill and other intangible asset impairment charges includes $36.3 million related to Beyond Yoga reporting unit goodwill, $66.0 million related to the Beyond Yoga® trademark and $9.1 million related to the Beyond Yoga® customer relationship intangible assets. Additionally, the nine months ended August 25, 2024 includes a $5.5 million goodwill impairment charge related to the footwear business.

For the three and nine months ended August 27, 2023, goodwill and other intangible asset impairment charges includes $75.4 million related to Beyond Yoga reporting unit goodwill and $14.8 million related to the Beyond Yoga® trademark.

(3)Other expense, net for the three and nine months ended August 25, 2024 includes an insurance recovery of $2.7 million and a government subsidy gain of $1.4 million. Other expense, net for the three and nine months ended August 27, 2023 primarily consists of a noncash pension settlement charge.

NOTE 16: SUBSEQUENT EVENTS

Subsequent to the end of the third quarter of 2024, the Company announced that it has initiated a formal review of strategic alternatives for the Dockers® brand, which could include a potential sale or other strategic transaction. The Company has retained Bank of America as its financial advisor. The Company has not set a deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance that this process will result in any transaction or particular outcome.