The U.S. Dollar is the functional currency for the Company and all of its subsidiaries and is also the reporting currency for the Company. By operating internationally, we are subject to foreign currency risk from transactions denominated in currencies other than the U.S. Dollar (“foreign currencies”). Such transactions include sales and operating expenses. As a result of such transactions, portions of our cash, accounts receivable and accounts payable are denominated in foreign currencies. Approximately 14% of our net sales revenue was denominated in foreign currencies during both fiscal 2025 and 2024 and 13% during fiscal 2023. These sales were primarily denominated in Euros, British Pounds and Canadian Dollars. We make most of our inventory purchases from manufacturers in Asia and primarily use the U.S. Dollar for such purchases.

In our consolidated statements of income, foreign currency exchange rate gains and losses resulting from the remeasurement of foreign income tax receivables and payables, and deferred income tax assets and liabilities are recognized in income tax (benefit) expense, and all other foreign currency exchange rate gains and losses are recognized in SG&A. We recorded in income tax (benefit) expense a foreign currency exchange rate net loss of $0.7 million during fiscal 2025, a net gain of $0.3 million during fiscal 2024 and a net loss of $0.4 million during fiscal 2023. We recorded in SG&A foreign currency exchange rate net losses of $1.5 million, $0.5 million and $1.7 million during fiscal 2025, 2024 and 2023, respectively. We mitigate certain foreign currency exchange rate risk by using forward contracts to protect against the foreign currency exchange rate risk inherent in our transactions denominated in foreign currencies. We do not enter into any derivatives or similar instruments for trading or other speculative purposes. Certain of our forward contracts are designated as cash flow hedges (“foreign currency contracts”). Foreign currency derivatives for which we have not elected hedge accounting consist of certain forward contracts. These undesignated derivatives are used to hedge monetary net asset and liability positions. We evaluate our derivatives designated as cash flow hedges each quarter to assess hedge effectiveness. For additional information on our accounting for derivatives see Note 1.

Interest on our outstanding debt as of February 28, 2025 and February 29, 2024 is based on floating interest rates. If short-term interest rates increase, we will incur higher interest expense on any future outstanding balances of floating rate debt. Floating interest rates are hedged with interest rate swaps to effectively fix interest rates on a portion of our outstanding principal balance under the Credit Agreement, which totaled $921.9 million and $672.0 million as of February 28, 2025 and February 29, 2024, respectively. As of February 28, 2025 and February 29, 2024, $550 million and $500 million of the outstanding principal balance under the Credit Agreement, respectively, was hedged with interest rate swaps to fix the interest rate we pay. Our interest rate swaps are designated as cash flow hedges, and


(in thousands)	February 28, 2025
Derivatives designated as hedging instruments	Hedge Type	Final Settlement Date	Notional Amount		Prepaid Expenses and Other Current Assets		Other Assets		Accrued Expenses and Other Current Liabilities		Other Liabilities, Non-Current

Forward contracts - sell Euro	Cash flow	2/2026	€35,000		$	1,266	$	—	$	—	$	—
Forward contracts - sell Canadian Dollars	Cash flow	2/2026	$8,000		38		—		—		—

Forward contracts - sell Pounds	Cash flow	2/2026	£24,950		788		—		99		—


Forward contracts - sell Norwegian Kroner	Cash flow	8/2025	kr	10,000	71		—		—		—
Interest rate swaps	Cash flow	8/2026	$550,000		763		302		221		—
Subtotal					2,926		302		320		—

Derivatives not designated under hedge accounting
Forward contracts - sell Euro	(1)	3/2025	€680		—		—		2		—
Forward contracts - sell Pounds	(1)	3/2025	£1,280		—		—		18		—
Subtotal					—		—		20		—
Total fair value					$	2,926	$	302	$	340	$	—


(in thousands)	February 29, 2024
Derivatives designated as hedging instruments	Hedge Type	Final Settlement Date	Notional Amount		Prepaid Expenses and Other Current Assets		Other Assets		Accrued Expenses and Other Current Liabilities		Other Liabilities, Non-Current

Forward contracts - sell Euro	Cash flow	2/2025	€36,500		$	377	$	—	$	90	$	—
Forward contracts - sell Canadian Dollars	Cash flow	2/2025	$20,750		151		—		57		—

Forward contracts - sell Pounds	Cash flow	2/2025	£20,250		59		—		234		—


Forward contracts - sell Norwegian Kroner	Cash flow	8/2024	kr	5,000	5		—		—		—
Interest rate swaps	Cash flow	2/2026	$500,000		1,314		1,190		—		—
Subtotal					1,906		1,190		381		—

Derivatives not designated under hedge accounting
Forward contracts - sell Euro	(1)	3/2024	€430		—		—		3		—
Forward contracts - sell Pounds	(1)	3/2024	£735		—		—		2		—
Subtotal					—		—		5		—
Total fair value					$	1,906	$	1,190	$	386	$	—


	Fiscal Years Ended Last Day of February,
	Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income
(in thousands)	2025			2024		Location	2025		2024
Foreign currency contracts - cash flow hedges	$	3,294		$	(502)	Sales revenue, net	$	1,441	$	(9)
Interest rate swaps - cash flow hedges	2,401			4,373		Interest expense	4,061		7,615
Total	$	5,695		$	3,871		$	5,502	$	7,606

We expect a net gain of $2.6 million associated with foreign currency contracts and interest rate swaps currently recorded in AOCI to be reclassified into income over the next twelve months. The amount ultimately realized, however, will differ as exchange rates and interest rates change and the underlying contracts settle. See Notes 1, 14 and 16 for more information.

Financial instruments, including foreign currency contracts, forward contracts and interest rate swaps, expose us to counterparty credit risk for non-performance. We manage our exposure to counterparty credit risk by only dealing with counterparties who are substantial international financial institutions with significant experience using such derivative instruments. We believe that the risk of incurring credit losses is remote.