v3.26.1
Derivative Financial Instruments
 3 Months Ended
May 03, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
The Company currently hedges against changes in the Canadian dollar and Chinese Yuan to the U.S. dollar exchange rate and changes in the Euro and Australian dollar to the Canadian dollar exchange rate using forward currency contracts.
Net investment hedges
The Company is exposed to foreign currency exchange gains and losses which arise on translation of its international subsidiaries' balance sheets into U.S. dollars. These gains and losses are recorded as other comprehensive income (loss), net of tax in accumulated other comprehensive income or loss within stockholders' equity.
The Company holds a significant portion of its assets in Canada and enters into forward currency contracts designed to hedge a portion of the foreign currency exposure that arises on translation of a Canadian subsidiary into U.S. dollars. These forward currency contracts are designated as net investment hedges. The Company assesses hedge effectiveness based on changes in forward rates. The Company recorded no ineffectiveness from net investment hedges during the first quarter of 2026.
Derivatives not designated as hedging instruments
During the first quarter of 2026, the Company entered into certain forward currency contracts designed to economically hedge the foreign currency exchange revaluation gains and losses that are recognized by its Canadian and Chinese subsidiaries on specific monetary assets and liabilities denominated in currencies other than the functional currency of the entity. The Company has not applied hedge accounting to these instruments and the change in fair value of these derivatives is recorded within selling, general and administrative expenses.
Quantitative disclosures about derivative financial instruments
The notional amounts and fair values of forward currency contracts were as follows:
May 3, 2026February 1, 2026
Gross NotionalAssetsLiabilitiesGross NotionalAssetsLiabilities
(In thousands)
Derivatives designated as net investment hedges:
Forward currency contracts$1,282,000 $— $19,265 $1,548,000 $— $32,510 
Derivatives not designated in a hedging relationship:
Forward currency contracts1,559,294 18,581 2,046 1,832,471 30,996 3,966 
Net derivatives recognized on consolidated balance sheets:
Forward currency contracts$18,581 $21,311 $30,996 $36,476 
As of May 3, 2026, there were derivative assets of $18.6 million and derivative liabilities of $21.3 million subject to enforceable netting arrangements.
The forward currency contracts designated as net investment hedges outstanding as of May 3, 2026 mature on different dates between May 2026 and August 2026.
The forward currency contracts not designated in a hedging relationship outstanding as of May 3, 2026 mature on different dates between May 2026 and August 2026.
The pre-tax gains and losses on foreign currency exchange forward contracts recorded in accumulated other comprehensive income or loss were as follows:
First Quarter
20262025
(In thousands)
Gains (losses) recognized in net investment hedge gains (losses):
Derivatives designated as net investment hedges$1,775 $(65,223)
No gains or losses have been reclassified from accumulated other comprehensive income or loss into net income for derivative financial instruments in a net investment hedging relationship, as the Company has not sold or liquidated (or substantially liquidated) its hedged subsidiary.
The pre-tax net foreign currency exchange and derivative gains and losses recorded in the consolidated statement of operations were as follows:
First Quarter
20262025
(In thousands)
Gains (losses) recognized in selling, general and administrative expenses:
Foreign currency exchange gains (losses)$(399)$(73,277)
Derivatives not designated in a hedging relationship(7,361)63,068 
Net foreign currency exchange and derivative losses$(7,760)$(10,209)