XML 30 R18.htm IDEA: XBRL DOCUMENT
v3.25.1

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended
--- | ---
Mar. 29, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Summary of Derivative Financial Instruments The Company enters into derivative contracts with external counterparties on a recurring basis to hedge certain foreign currency transactions. The notional amount of these outstanding foreign currency exchange contracts was $283.1 million at March 2025, $303.0 million at December 2024 and $340.8 million at March 2024, consisting primarily of contracts hedging exposures to the euro, Mexican peso, Canadian dollar, British pound, Polish zloty and Swedish krona. Foreign currency exchange contracts have maturities up to 20 months. The Company periodically enters into "floating to fixed" interest rate swap agreements to mitigate exposure to volatility in reference rates on the Company's future interest payments on indebtedness. Because these swap agreements meet the criteria for hedge accounting, all related gains and losses are deferred within accumulated other comprehensive loss ("AOCL") and are amortized through the swap maturity dates. During 2019, the Company entered into "floating to fixed" interest rate swap agreements that had a notional amount of $300.0 million at March 2024, which matured on April 18, 2024. On September 9, 2024, the Company entered into new "floating to fixed" interest rate swap agreements (the "2024 Swap Agreements") that mature on August 18, 2029. The notional amount of the 2024 Swap Agreements was $150.0 million at March 2025 and December 2024. In April 2025, the Company entered into new "floating to fixed" interest rate swap agreements for a notional amount of $550.0 million that mature on March 18, 2027 and April 18, 2027. The Company's outstanding derivative financial instruments entered into on a recurring basis met the criteria for hedge accounting at the inception of the hedging relationship. At each reporting period, the Company assesses whether the hedging relationships continue to be highly effective in offsetting changes in cash flows of hedged items. If the Company determines that a specific hedging relationship has ceased to be highly effective, it discontinues hedge accounting. All designated hedging relationships were determined to be highly effective as of March 2025. On February 19, 2025, the Company entered into foreign currency exchange contracts totaling $1.275 billion CAD to hedge the purchase price of the Helly Hansen Acquisition. These contracts were not designated as hedges, and were recorded at fair value in the Company's balance sheets. Refer to Note 2 to the Company's financial statements in this Form 10-Q for additional information related to the Helly Hansen Acquisition. The following table presents the fair value of outstanding derivatives on an individual contract basis:
|  | Fair Value of Derivatives with Unrealized Gains |  |  | Fair Value of Derivatives with Unrealized Losses
|  | March |  |  | December |  | March |  |  | March |  |  | December |  | March
(In thousands) |  | 2025 |  |  | 2024 |  | 2024 |  |  | 2025 |  |  | 2024 |  | 2024
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts |  | $ | 3,045 |  |  |  | $ | 7,720 |  |  | $ | 18,553 |  |  |  | $ | (9,557) |  |  |  | $ | (11,620) |  |  | $ | (1,710) |
Interest rate swap agreements |  | 2,508 |  |  |  | 5,390 |  |  | 596 |  |  |  | — |  |  |  | — |  |  | — |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts |  | 15 |  |  |  | — |  |  | — |  |  |  | (8,865) |  |  |  | — |  |  | (72) |
Total derivatives |  | $ | 5,568 |  |  |  | $ | 13,110 |  |  | $ | 19,149 |  |  |  | $ | (18,422) |  |  |  | $ | (11,620) |  |  | $ | (1,782) |
The Company records and presents the fair value of all derivative assets and liabilities in the Company's balance sheets on a gross basis, even though certain derivative contracts are subject to master netting agreements. If the Company were to offset and record the asset and liability balances of its derivative contracts on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Company's balance sheets would be adjusted from the current gross presentation to the net amounts. The following table presents a reconciliation of gross to net amounts for derivative asset and liability balances:
|  | March 2025 |  |  | December 2024 |  | March 2024
(In thousands) |  | Derivative Asset |  | Derivative Liability |  |  | Derivative Asset |  | Derivative Liability |  | Derivative Asset |  | Derivative Liability
Gross amounts presented in the balance sheet |  | $ | 5,568 |  |  | $ | (18,422) |  |  |  | $ | 13,110 |  |  | $ | (11,620) |  |  | $ | 19,149 |  |  | $ | (1,782) |
Gross amounts not offset in the balance sheet |  | (2,827) |  |  | 2,827 |  |  |  | (3,468) |  |  | 3,468 |  |  | (1,417) |  |  | 1,417 |
Net amounts |  | $ | 2,741 |  |  | $ | (15,595) |  |  |  | $ | 9,642 |  |  | $ | (8,152) |  |  | $ | 17,732 |  |  | $ | (365) |
The following table presents the location of derivatives in the Company's balance sheets, with current or noncurrent classification based on maturity dates:
(In thousands) |  | March 2025 |  |  | December 2024 |  | March 2024
Prepaid expenses and other current assets |  | $ | 2,567 |  |  |  | $ | 5,845 |  |  | $ | 17,016 |
Accrued and other current liabilities |  | (17,305) |  |  |  | (10,659) |  |  | (1,638) |
Other assets |  | 3,001 |  |  |  | 7,265 |  |  | 2,133 |
Other liabilities |  | (1,117) |  |  |  | (961) |  |  | (144) |
Cash Flow Hedges The following tables present the pre-tax effects of cash flow hedges included in the Company's statements of operations and statements of comprehensive income:
|  | Gain (Loss) on Derivatives Recognized in AOCL
(In thousands) |  | Three Months Ended March |  |  |
Cash Flow Hedging Relationships |  | 2025 |  |  | 2024 |  |  |  |  |  |
Foreign currency exchange contracts |  | $ | (3,751) |  |  |  | $ | 10,146 |  |  |  |  |  |  |
Interest rate swap agreements |  | (2,464) |  |  |  | 74 |  |  |  |  |  |  |
Total |  | $ | (6,215) |  |  |  | $ | 10,220 |  |  |  |  |  |  |
|  | Gain (Loss) Reclassified from AOCL into Income
(In thousands) |  | Three Months Ended March |  |  |
Location of Gain (Loss) |  | 2025 |  |  | 2024 |  |  |  |  |  |
Net revenues |  | $ | (811) |  |  |  | $ | 53 |  |  |  |  |  |  |
Cost of goods sold |  | (489) |  |  |  | 5,291 |  |  |  |  |  |  |
Other expense, net |  | 176 |  |  |  | 82 |  |  |  |  |  |  |
Interest expense |  | 419 |  |  |  | 2,731 |  |  |  |  |  |  |
Total |  | $ | (705) |  |  |  | $ | 8,157 |  |  |  |  |  |  |
Derivative Contracts Not Designated as Hedges Any derivative contracts that are not designated as hedges are recorded at fair value in the Company's balance sheets, and changes in the fair values of these contracts are recognized directly in earnings. Derivative contracts not designated as hedges include the $1.275 billion CAD hedges associated with the Helly Hansen Acquisition and a limited number of cash flow hedges that were deemed ineffective and de-designated during the three months ended March 2025 and March 2024. The following table presents a summary of derivatives not designated as hedges included in the Company's statements of operations:
(In thousands) |  | Location of Gain (Loss) on Derivatives Recognized in Income |  |  | Gain (Loss) on Derivatives Recognized in Income |  |  |  |  |  |
|  |  | Three Months Ended March |  |
Derivatives Not Designated as Hedges |  |  |  |
|  |  | 2025 |  |  | 2024 |  |  |  |  |  |
Foreign currency exchange contracts |  | Other expense, net |  |  | $ | (8,868) |  |  |  | $ | 23 |  |  |  |  |  |  |
Total |  |  |  |  | $ | (8,868) |  |  |  | $ | 23 |  |  |  |  |  |  |
Other Derivative Information There were no significant amounts recognized in earnings for the ineffective portion of any hedging relationships during the three months ended March 2025 and March 2024. At March 2025, AOCL included $5.1 million of pre-tax net deferred losses for foreign currency exchange contracts and interest rate swap agreements that are expected to be reclassified to earnings during the next 12 months. The amounts ultimately reclassified to earnings will depend on rates in effect when outstanding derivative contracts are settled.

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://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration