v3.26.1
Fair Value Measurements
 9 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements
14.
FAIR VALUE MEASUREMENTS

The Company’s financial assets and liabilities measured at fair value are required to be grouped in one of three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are:

•
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
•
Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
•
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following table presents assets and liabilities measured at fair value on a recurring basis as of March 31, 2026:

 

Total

 

 

Quoted
prices in
active
markets
(Level 1)

 

 

Significant
other
observable
inputs
(Level 2)

 

 

Significant
unobservable
inputs
(Level 3)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

$

1,854

 

 

$

—

 

 

$

1,854

 

 

$

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

$

14,679

 

 

$

—

 

 

$

14,679

 

 

$

—

 

 

The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, 2025:

 

Total

 

 

Quoted
prices in
active
markets
(Level 1)

 

 

Significant
other
observable
inputs
(Level 2)

 

 

Significant
unobservable
inputs
(Level 3)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

$

5,835

 

 

$

—

 

 

$

5,835

 

 

$

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

$

19,706

 

 

$

—

 

 

$

19,706

 

 

$

—

 

 

There were no transfers of financial instruments between the three levels of fair value hierarchy during the nine months ended March 31, 2026 or 2025.

Derivative Instruments

The Company uses interest rate swaps to manage interest rate risk and cross-currency swaps and foreign currency exchange contracts to manage exposure to currency fluctuations. These instruments are valued using techniques like DCF analysis, which considers the contractual terms and market-based inputs such as interest rate curves and implied volatilities. The fair values of interest rate swaps are determined by netting the discounted future fixed and variable cash flows. The variable cash flows are based on expected future interest rates.

Credit valuation adjustments are made to reflect the nonperformance risk of both the Company and its counterparties. Most inputs used to value derivatives fall within Level 2 of the fair value hierarchy, but credit valuation adjustments use Level 3 inputs, such as current credit spreads. The impact of these adjustments was not significant to the overall valuation, so all derivatives as of March 31, 2026 and June 30, 2025 were classified as Level 2.

Nonrecurring Fair Value Measurements

The Company measures certain non-financial assets, such as goodwill, intangible assets, property and equipment, and right-of-use lease assets, at fair value on a nonrecurring basis. These assets are initially measured at fair value at the time of acquisition or purchase, with adjustments only for foreign currency translation. Periodically, these assets are tested for impairment by comparing their carrying values to their estimated fair values. If an asset is impaired, the Company recognizes an impairment expense equal to the excess of the carrying value over the estimated fair value.

For indefinite-lived intangible assets, fair value is determined using the relief from royalty approach, considering factors like future growth, royalty rates, discount rates, and other variables. Fair value measurements for reporting units are estimated using a blended analysis of the DCF income approach and GPCM market approach, which involve significant management judgment and Level 3 inputs, such as economic conditions and customer demand. These measurements are performed at least annually for impairment testing. The Company bases its fair value estimates on reasonable assumptions but acknowledges their unpredictability and inherent uncertainty.

During the three and nine months ended March 31, 2026, the Company recorded non-cash impairment charges of $38,495 and $112,431, respectively, associated with the U.K. reporting unit, as discussed in Note 9, Goodwill and Other Intangible Assets. As of March 31, 2026, the U.K. reporting unit goodwill balances was classified as a Level 3 asset measured at fair value on a nonrecurring basis with an estimated fair value of $227,121. During the nine months ended March 31, 2026, the Company recorded a non-cash impairment charge of $38,495 related to goodwill of the U.S. reporting unit, which was classified as a Level 3 asset based on an estimated fair value of $459,000.

During the three months ended March 31, 2026, the Company conducted an interim quantitative impairment test for its soup (Cully & Sully®, Yorkshire Provender®, and New Covent Garden® soups) and Earth’s Best® Organic indefinite-lived tradenames. During the three and nine months ended March 31, 2026, the Company recorded non-cash impairment charges of $2,038 for the Earth’s Best® Organic indefinite-lived tradename, as discussed in Note 9, Goodwill and Other Intangible Assets. As of March 31, 2025, such intangible assets were classified as Level 3 assets measured at fair value on a nonrecurring basis with estimated fair values of $23,229 and $20,000, respectively.

During the nine months ended March 31, 2026, the Company conducted an interim quantitative impairment test for its Ella’s Kitchen® baby and kids foods and Hartley’s® jelly indefinite-lived tradenames and recorded a non-cash impairment charge of $11,917 for Hartley’s® jelly indefinite-lived tradename, as discussed in Note 9, Goodwill and Other Intangible Assets. As of March 31, 2026, such intangible assets were classified as Level 3 assets measured at fair value on a nonrecurring basis with estimated fair value of $34,246 and $37,336, respectively.

During the nine months ended March 31, 2025, the Company recorded aggregate non-cash impairment charges of $201,518 related to goodwill within its North America reportable segment as discussed in Note 9, Goodwill and Other Intangible Assets.