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Derivative Instruments
 6 Months Ended
Aug. 03, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS DERIVATIVE INSTRUMENTS
The Company is exposed to risks associated with changes in foreign currency exchange rates and uses derivative instruments, primarily forward contracts, to manage the financial impacts of these exposures. The Company does not use forward contracts to engage in currency speculation and does not enter into derivative financial instruments for trading purposes.

The Company uses derivative instruments, primarily foreign currency exchange forward contracts designated as cash flow hedges, to hedge the foreign currency exchange rate exposure associated with forecasted foreign-currency-denominated intercompany inventory sales to foreign subsidiaries and the related settlement of the foreign-currency-denominated intercompany receivables. Fluctuations in foreign currency exchange rates will either increase or decrease the Company’s intercompany equivalent cash flows and affect the Company’s U.S. dollar earnings. Gains or losses on the foreign currency exchange forward contracts that are used to hedge these exposures are expected to partially offset this variability. Foreign currency exchange forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed upon settlement date. These foreign currency exchange forward contracts typically have a maximum term of twelve months. The sale of the inventory to the Company’s customers will result in the reclassification of related derivative gains and losses that are reported in AOCL into earnings.

The Company also uses foreign currency exchange forward contracts to hedge certain foreign-currency-denominated net monetary assets/liabilities. Examples of monetary assets/liabilities include cash balances, receivables and payables. Fluctuations in foreign currency exchange rates result in transaction gains or losses being recorded in earnings, as GAAP requires that monetary assets/liabilities be remeasured at the spot exchange rate at quarter-end and upon settlement. The Company has chosen not to apply hedge accounting to these instruments because there are no anticipated differences in the timing of gain or loss recognition on the hedging instruments and the hedged items.

As of August 3, 2024, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge either a portion, or all, of forecasted foreign-currency-denominated intercompany transactions:
(in thousands)
Notional Amount (1)
Euro$51,655 
British pound60,046 
Canadian dollar22,045 
(1)    Amounts reported are the U.S. Dollar notional amounts outstanding as of August 3, 2024.

As of August 3, 2024, foreign currency exchange forward contracts that were entered into to hedge foreign-currency-denominated net monetary assets and liabilities were as follows:
(in thousands)
Notional Amount (1)
British pound$11,557 
(1)    Amounts reported are the U.S. Dollar notional amounts outstanding as of August 3, 2024.

The fair value of derivative instruments is determined using quoted market prices of the same or similar instruments, adjusted for counterparty risk. The following table provides the location and amounts of derivative fair values of foreign currency exchange forward contracts on the Condensed Consolidated Balance Sheets as of August 3, 2024 and February 3, 2024:
(in thousands)LocationAugust 3, 2024February 3, 2024LocationAugust 3, 2024February 3, 2024
Derivatives designated as cash flow hedging instruments
Other current assets
$357 $1,090 
Accrued expenses
$360 $539 
Derivatives not designated as hedging instruments
Other current assets
33 2 
Accrued expenses
— — 
Total
$390 $1,092 $360 $539 

The following table provides information pertaining to derivative gains or losses from foreign currency exchange forward contracts designated as cash flow hedging instruments for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023:
Thirteen Weeks EndedTwenty-Six Weeks Ended
(in thousands)August 3, 2024July 29, 2023August 3, 2024July 29, 2023
(Loss) gain recognized in AOCL (1)
$(587)$558 $442 $51 
Gain (loss) reclassified from AOCL to cost of sales, exclusive of depreciation and amortization (2)
527 (1,708)$1,010 $(2,614)
(1)Amount represents the change in fair value of derivative instruments.
(2)Amount represents gain (loss) reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) when the hedged item affects earnings, which is when merchandise is converted to cost of sales, exclusive of depreciation and amortization.

Substantially all of the unrealized gain will be recognized in costs of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Income over the next twelve months.
The following table provides additional information pertaining to derivative gains or losses from foreign currency exchange forward contracts not designated as hedging instruments for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023:
Thirteen Weeks EndedTwenty-Six Weeks Ended
(in thousands)August 3, 2024July 29, 2023August 3, 2024July 29, 2023
(Loss) gain, net recognized in other operating income, net
$(219)$(540)$443 $(1,087)