v3.25.2
Financial Instruments and Risk Management
 6 Months Ended
Jun. 28, 2025
Disclosure Financial Instruments and Risk Management [Abstract]  
Financial Instruments and Risk Management Financial Instruments and Risk Management
The Company uses forward foreign exchange contracts and has used cross-currency swap contracts to manage its exposures to movements in foreign exchange rates primarily related to the Australian dollar, Canadian dollar, and Mexican peso and uses interest rate contracts to manage its exposures to movements in interest rates.
Hedge TypeJune 28,
2025		December 28,
2024
U.S. dollar equivalent notional amount of derivative instruments:
Forward foreign exchange contractsCash Flow and
Mark to Market		$169,470 $154,310 
Interest rate contractsCash Flow$200,000 $— 
Fair Values of Derivative Instruments
The fair values of derivative instruments related to forward foreign exchange contracts and interest rate contracts recognized in the Condensed Consolidated Balance Sheets of the Company were as follows:
Balance Sheet LocationFair Value
June 28,
2025		December 28,
2024
Derivatives designated as hedging instruments:
Forward foreign exchange contractsOther current assets$235 $4,431 
Interest rate contractsOther current assets102 — 
Forward foreign exchange contractsOther noncurrent assets1 361 
Interest rate contractsOther noncurrent assets325 — 
Derivatives not designated as hedging instruments:
Forward foreign exchange contractsOther current assets398 3,941 
Total derivative assets1,061 8,733 
Derivatives designated as hedging instruments:
Forward foreign exchange contractsAccrued liabilities(1,993)(41)
Forward foreign exchange contractsOther noncurrent liabilities(193)— 
Derivatives not designated as hedging instruments:
Forward foreign exchange contractsAccrued liabilities(1,548)(20)
Total derivative liabilities(3,734)(61)
Net derivative asset (liability)$(2,673)$8,672 
Cash Flow Hedges
The Company uses forward foreign exchange contracts and has used cross-currency swap contracts to reduce the effect of fluctuating foreign currencies on foreign currency-denominated transactions, foreign currency-denominated investments and other known foreign currency exposures. Gains and losses on these contracts are intended to offset losses and gains on the hedged transaction in an effort to reduce the earnings volatility resulting from fluctuating foreign currency exchange rates. The Company also uses interest rate contracts to reduce the effect of the variability in future interest payments on variable-rate debt to lock in certainty of future cash flows.
In March 2023, the Company entered into an interest rate contract with a total notional amount of $900,000, which amortized down to $600,000 on March 31, 2025. The Company designated this interest rate contract, which matures on March 31, 2026, to hedge the variability in contractually specified interest rates above 50 basis points associated with future interest payments on a portion of the Company’s variable-rate term loans to lock in certainty of future cash flows. In October 2024, in connection with the pay down of term debt related to the Initial Closing of the sale of the global Champion business, the Company terminated the interest rate contract, which had a remaining loss in AOCI of $4,155 on the termination date that will be amortized into earnings through the original contract maturity date of March 31, 2026. In April 2025, the Company entered into two interest rate swap contacts with a total notional amount of $200,000, which will mature on April 2027. The Company designated these contracts to hedge the variability associated with future interest payment on a portion of the Company’s
variable-rate debts, which is over and above the $600,000 from unhedged interest rate contract until its original termination date of March 2026, to lock in certainty of future cash flows.
The Company expects to reclassify into earnings during the next 12 months a net loss from AOCI of approximately $1,245. The Company is hedging exposure to the variability in future foreign currency-denominated cash flows for forecasted transactions over the next 17 months and the variability in future interest payments on debt over the next 21 months. The Company also expects the amortization of AOCI related to the interest rate contract over the next 9 months.
The effect of derivative instruments designated as cash flow hedges on the Condensed Consolidated Statements of Operations and AOCI is as follows:
Amount of Gain (Loss) Recognized in AOCI on Derivative Instruments
Quarters EndedSix Months Ended
June 28,
2025		June 29,
2024		June 28,
2025		 June 29,
2024
Forward foreign exchange contracts$(3,617)$(199)$(4,174)$5,300 
Interest rate contracts621 3,337 621 13,612 
Total$(2,996)$3,138 $(3,553)$18,912 

Location of Gain (Loss)
Reclassified from AOCI		Amount of Gain (Loss) Reclassified from AOCI into Net Income (Loss)
Quarters EndedSix Months Ended
June 28,
2025		June 29,
2024		June 28,
2025		June 29,
2024
Forward foreign exchange contracts(1)
Cost of sales$2,545 $277 $2,896 $1,866 
Forward foreign exchange contracts(1)
Loss from discontinued operations, net of tax— 186 22 1,140 
Interest rate contractsInterest expense, net(427)2,062 (1,150)4,158 
Total$2,118 $2,525 $1,768 $7,164 
(1)The Company does not exclude amounts from effectiveness testing for cash flow hedges that would require recognition into earnings based on changes in fair value.
The following table presents the amounts in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded:
  
Quarters EndedSix Months Ended
  
June 28,
2025		June 29,
2024		June 28,
2025		June 29,
2024
Cost of sales$579,400 $675,584 $1,022,848 $1,122,826 
Selling, general and administrative expenses$257,267 $361,546 $494,059 $623,565 
Interest expense, net$47,536 $50,279 $90,855 $100,862 
Loss from discontinued operations, net of tax$(3,882)$(162,797)$(27,484)$(169,117)
Net Investment Hedges
In July 2019, the Company entered into two pay-fixed rate, receive-fixed rate cross-currency swap contracts with a total notional amount of €300,000 that were designated as hedges of a portion of the beginning balance of the Company’s net investment in its European subsidiaries. These cross-currency swap contracts, which had an original maturity date of May 15, 2024, swapped U.S. dollar-denominated interest payments for Euro-denominated interest payments, thereby economically converting a portion of the Company’s fixed-rate 4.625% Senior Notes to a fixed-rate 2.3215% Euro-denominated obligation.
In July 2019, the Company also designated the full amount of its 3.5% Senior Notes with a carrying value of €500,000, which was a nonderivative financial instrument, as a hedge of a portion of the beginning balance of the Company’s European net investment. As of April 1, 2021, the Company reduced the amount of its 3.5% Senior Notes designated in the European net investment hedge from €500,000 to €200,000. In February 2023, in connection with the redemption of the 3.5% Senior Notes, the Company de-designated the remainder of the 3.5% Senior Notes in the European net investment hedge and unwound these cross-currency swap contracts. Upon settlement, there was a cumulative gain of $5,525 from the designated portion of the 3.5% Senior Notes and a cumulative gain of $19,001 from the cross-currency swap contracts that has remained in cumulative translation adjustment, a component of AOCI. Both have been released into earnings at the completion of the Initial Closing of the global Champion business in the fourth quarter of 2024. The Company had no derivative or nonderivative financial instruments designated as net investment hedges as of June 28, 2025 or December 28, 2024.
Mark to Market Hedges
Derivatives used in mark to market hedges are not designated as hedges under the accounting standards. The Company uses forward foreign exchange derivative contracts as hedges against the impact of foreign exchange fluctuations on existing accounts receivable and payable balances and intercompany lending transactions denominated in foreign currencies. Forward foreign exchange derivative contracts are recorded as mark to market hedges when the hedged item is a recorded asset or liability that is revalued in each accounting period. Any gains or losses resulting from changes in fair value are recognized directly into earnings. Gains or losses on these contracts largely offset the net remeasurement gains or losses on the related assets and liabilities.
The effect of derivative instruments not designated as hedges on the Condensed Consolidated Statements of Operations is as follows:
Location of Gain (Loss)Amount of Gain (Loss) Recognized in Net Income (Loss)
Quarters EndedSix Months Ended
June 28,
2025		June 29,
2024		June 28,
2025		June 29,
2024
Forward foreign exchange contractsCost of sales$(3,302)$(827)$(7,509)$728 
Forward foreign exchange contractsLoss from discontinued operations, net of tax— 67 — 2,533 
Total$(3,302)$(760)$(7,509)$3,261