Impairment of Assets and Restructuring Costs |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of Assets and Restructuring Costs | Impairment of Assets and Restructuring Costs During the third quarter of 2023, the Company contracted with Peloton Interactive, Inc. to be the exclusive digital fitness content provider for the lululemon Studio Mirror and decided it would no longer produce its own digital fitness content. While the Company will continue to provide services and support to existing lululemon Studio subscribers, it also decided that it would cease selling the Mirror hardware and end its digital app-only subscription. The Company ceased selling the Mirror in December 2023. During the third quarter of 2023, the Company recognized certain inventory provisions, asset impairments, and restructuring costs related to lululemon Studio. The following table summarizes the amounts recognized:
lululemon Studio obsolescence provision As a result of the decision to cease selling the lululemon Studio Mirror, the Company recognized an inventory provision of $23.7 million during the third quarter of 2023. Impairment of assets As a result of the Company's decisions to no longer produce digital fitness content and to cease the sale of the lululemon Studio Mirror, the Company identified an impairment trigger for the lululemon Studio asset group and conducted an impairment test as of October 29, 2023. The undiscounted cash flows of the lululemon Studio asset group were less than their carrying value, and therefore the Company calculated the fair value of the asset group, which was also less than its carrying value. As a result of the impairment test, the Company recognized asset impairments totaling $44.2 million during the third quarter of 2023. The fair value of long-lived assets was based on a discounted cash flow model, and is a Level 3 non-recurring fair value measurement. The key assumptions used to estimate the fair value were subscriber churn rates and operating costs. lululemon Studio is included within Other in the Company's segment disclosures. Restructuring costs The Company recorded restructuring costs of $30.3 million primarily related to contract termination costs, employee severance costs, and professional fees. The accrued costs are expected to be settled within one year.
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