The Company operates in foreign countries, which exposes it to market risk associated with foreign currency exchange rate fluctuations. The Company’s primary objective is to hedge the variability in forecasted cash flows due to the foreign currency risk. The Company enters into certain forward exchange currency contracts to hedge the risk of a portion of these anticipated foreign currency transactions against foreign currency rate fluctuations. The Company may also hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries.

The Company is exposed to interest rate risk on its floating-rate debt. From time to time, the Company may enter into interest rate swap agreements to effectively convert its floating-rate debt to a fixed-rate basis. The principal objective is to eliminate or reduce the variability of the cash flows in interest payments associated with the Company’s floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. In connection with the sale of the U.S. distribution center, the Company settled its interest rate swap agreement. As of May 3, 2025, there was no related net unrealized loss, net of tax, in AOCL related to this interest rate swap.


	Fair Value at May 3, 2025		Fair Value at Feb 1, 2025		Derivative Balance Sheet Location
ASSETS:
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign exchange currency contracts	$	15	$	7,456	Other current assets/Other assets

Total derivatives designated as hedging instruments	15		7,456
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	—		3,011		Other current assets
2028 Bond Hedge	5,809		11,252		Other assets
Total derivatives not designated as hedging instruments	5,809		14,263
Total	$	5,824	$	21,719
LIABILITIES:
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign exchange currency contracts	$	10,486	$	—	Accrued expenses/Other long-term liabilities

Total derivatives designated as hedging instruments	10,486		—
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	4,772		8		Accrued expenses and other current liabilities


Embedded derivative	1,270		2,460		Convertible senior notes due 2028, net
Total derivatives not designated as hedging instruments	6,042		2,468
Total	$	16,528	$	2,468

During the three months ended May 3, 2025, the Company purchased U.S. dollar forward contracts in Europe totaling $89.0 million that were designated as cash flow hedges. As of May 3, 2025, the Company had forward contracts outstanding for its European operations of $220.0 million to hedge forecasted merchandise purchases, which are expected to mature over the next 17 months.

As of May 3, 2025, AOCL related to foreign exchange currency contracts included a $8.2 million net unrealized loss, net of tax, of which $4.9 million will be recognized in cost of product sales over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current quarter-end values.

The following summarizes the gains (losses) before income taxes recognized on derivative instruments designated as cash flow hedges in other comprehensive income (loss) (“OCL”) and net earnings (loss) (in thousands):



	Gain (Loss) Recognized in OCL				Gain (Loss) Reclassified from AOCL into Earnings (Loss)				Location of Gain (Loss) Reclassified from AOCL into Earnings (Loss)
	May 3, 2025		May 4, 2024		May 3, 2025		May 4, 2024
	Three Months Ended
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	$	(16,418)	$	1,171	$	958	$	(2,045)	Cost of product sales


Interest rate swap	$	—	$	193	$	—	$	155	Interest expense


	Three Months Ended
	May 3, 2025		May 4, 2024
Beginning balance gain (loss)	$	7,300	$	(544)

Net gain (loss) from changes in cash flow hedges	(14,612)		1,145
Net (gain) loss reclassified into earnings (loss)	(853)		1,620
Ending balance gain (loss)	$	(8,165)	$	2,221

As of May 3, 2025, the Company had euro foreign exchange currency contracts to purchase $96.0 million expected to mature over the next 12 months. As of February 1, 2025, the Company had euro foreign exchange currency contracts to purchase $74.0 million.

As discussed in Note 11 - Convertible Senior Notes and Related Transactions, the Company has recognized equity-linked derivatives including the embedded derivative associated with the Additional 2028 Notes. In connection with the 2028 Notes, the Company also purchased the 2028 Bond Hedge which did not qualify for the derivative scope exception for equity-linked instruments. These derivatives are not designated as hedging instruments for accounting purposes. Changes in fair value of these derivatives are reported in net earnings (loss) as part of other income (expense).


	Location of Gain (Loss) Recognized in Earnings (Loss)	Gain (Loss) Recognized in Earnings (Loss)
		Three Months Ended
		May 3, 2025		May 4, 2024

Foreign exchange currency contracts	Other income, net	$	(7,821)	$	521
2028 Bond Hedge	Other income, net	$	(5,443)	$	45,813
Embedded derivatives	Other income, net	$	1,190	$	(7,302)