XML 33 R23.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Derivatives and Hedging Activities | 6 Months Ended
--- | ---
Jul. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives and Hedging Activities | Derivatives and Hedging Activities The Company is exposed to certain risks arising from both its business operations and economic conditions and principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company, on a routine basis and in the normal course of business, experiences expenses denominated in Swiss Franc ("CHF"), Canadian Dollar ("CAD") and Great British Pound ("GBP"). Such expenses expose the Company to exchange rate fluctuations between these foreign currencies and the U.S. Dollar ("USD"). The Company occasionally uses derivative financial instruments, in the form of forward contracts, to mitigate a portion of the risk associated with adverse movements in these foreign currency exchange rates during a twelve-month window. Currency forward contracts involve fixing the exchange rate for delivery of a specified amount of foreign currency on a specified date. The Company’s accounting treatment for these instruments is based on whether or not the instruments are designated as a hedging instrument. The Company is applying hedge accounting to all foreign currency derivatives and has designated these hedges as cash flow hedges. As of January 30, 2022, the Company had no outstanding foreign currency forward contracts. The Company's foreign currency forward contracts had the following outstanding balances as of July 31, 2022:
|  | Balance as of
|  | July 31, 2022 |  |
(in thousands, except number of instruments) |  | Number of Instruments |  | Sell Notional Value |  | Buy Notional Value |  |  |  |  |  |
Sell USD/Buy CAD Forward Contract |  | 6 |  | $ | 11,789 |  |  | C$ | 15,357 |  |  |  |  |  |  |
Sell USD/Buy CHF Forward Contract |  | 12 |  | $ | 7,151 |  |  | Fr. | 7,079 |  |  |  |  |  |  |
Sell USD/Buy GBP Forward Contract |  | 12 |  | $ | 4,693 |  |  | £ | 3,810 |  |  |  |  |  |  |
Total |  | 30 |  |  |  |  |  |  |  |  |  |
These contracts have been designated as cash flows hedges and the unrealized gains or losses, net of tax, are recorded as a component of "Accumulated other comprehensive income or loss" ("AOCI") in the Balance Sheets. The effective portions of the cash flow hedges are recorded in AOCI until the hedged item is recognized in "SG&A expense" in the Statements of Income once the foreign exchange contract matures, offsetting the underlying hedged expenses. Any ineffective portions of the cash flow hedges are recorded in "Non-operating income, net" in the Statements of Income. The Company presents its derivative assets and liabilities at their gross fair values in the Balance Sheets. During the first quarter of fiscal year 2021, the Company entered into an interest rate swap agreement with a three-year term to hedge the variability of interest payments on the first $150.0 million of debt outstanding under the Company's Credit Facility. Interest payments on the first $150.0 million of the Company's debt outstanding under the Credit Facility are now fixed at a rate of 1.9775%, based on the Company's current leverage ratio. The interest rate swap agreement has been designated as a cash flow hedge and unrealized gains or losses, net of income tax, are recorded as a component of "Accumulated other comprehensive income or loss" in the Balance Sheets. As the various settlements are made on a monthly basis, the realized gain or loss on the settlements are recorded in "Interest expense" in the Statements of Income. The interest rate swap agreement resulted in a realized gain of $0.2 million for the three months ended July 31, 2022, compared to a realized loss of $0.2 million for the three months ended August 1, 2021. The interest rate swap agreement resulted in a realized gain of $0.1 million for the six months ended July 31, 2022, compared to a realized loss of $0.5 million for the six months ended August 1, 2021. The fair values of the Company's derivative assets and liabilities that qualify as cash flow hedges in the Balance Sheets were as follows:
(in thousands) |  | July 31, 2022 |  | January 30, 2022
Interest rate swap agreement |  | $ | 2,152 |  |  | $ | 62 |
Foreign currency forward contracts |  | 539 |  |  | — |
Total other current assets |  | $ | 2,691 |  |  | $ | 62 |
Interest rate swap agreement |  | $ | — |  |  | $ | 167 |
Total other long-term assets |  | $ | — |  |  | $ | 167 |
Foreign currency forward contracts |  | $ | (42) |  |  | $ | — |
Total accrued liabilities |  | $ | (42) |  |  | $ | — |
During the fourth quarter of fiscal year 2021, the Company entered into an economic hedge program that uses total return swap contracts to hedge the market risk associated with the unfunded portion of the Company's deferred compensation liability. The total return swap contracts generally have a duration of one month and are rebalanced and re-hedged at the end of each monthly term. While the total returns swap contracts are treated as economic hedges, the Company has not designated them as hedges for accounting purposes. The total return swap contracts are measured at fair value and recognized in the Balance Sheets in "Accrued Liabilities" if the instruments are in a loss position and in "Other Current Assets" if the instruments are in a gain position. Unrealized gains and losses, as well as realized gains and losses for settlements, on the total return swap contracts are recognized in "Selling, general and administrative expenses" in the Statements of Income. As of July 31, 2022, the notional value of the total return swap contracts was $5.1 million and the fair value resulted in an asset of $0.4 million. As of January 30, 2022, the notional value of the total return swap contracts was $7.8 million and the fair value resulted in a liability of $0.3 million. The total return swap contracts resulted in a net gain recognized in earnings of $0.1 million for the three months ended July 31, 2022, compared to a net gain recognized in earnings of $0.6 million for the three months ended August 1, 2021. The total return swap contracts resulted in a net loss recognized in earnings of $0.4 million for the six months ended July 31, 2022, compared to a net gain recognized in earnings of $1.6 million for the six months ended August 1, 2021.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration