Derivative Financial Instruments

9 Months Ended

Dec. 26, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

The Company uses forward foreign currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain of its transactions. The Company in its normal course of business enters into transactions with foreign suppliers and seeks to minimize risks related to certain forecasted inventory purchases by using forward foreign currency exchange contracts. The Company only enters into derivative instruments with highly credit-rated counterparties. The Company’s derivative financial instruments are not currently subject to master netting arrangements. The Company does not enter into derivative contracts for trading or speculative purposes.

The following table details the fair value of the Company’s derivative contracts, which are recorded on a gross basis in the consolidated balance sheets as of December 26, 2015 and March 28, 2015 (in thousands):

					Fair Values
	Notional Amounts				Current Assets (1)				Current Liabilities (2)
	December 26, 2015		March 28, 2015		December 26, 2015		March 28, 2015		December 26, 2015		March 28, 2015
Designated forward currency exchange contracts	$	244,895	$	226,090	$	3,408	$	23,590	$	1,261	$	522
Undesignated forward currency exchange contracts	—		25,788		—		1,414		—		78
Total	$	244,895	$	251,878	$	3,408	$	25,004	$	1,261	$	600

⁽¹⁾  Recorded within prepaid expenses and other current assets in the Company’s consolidated balance sheets.

⁽²⁾  Recorded within accrued expenses and other current liabilities in the Company’s consolidated balance sheets.

Changes in the fair value of the effective portion of the Company’s forward foreign currency exchange contracts that are designated as accounting hedges are recorded in equity as a component of accumulated other comprehensive income, and are reclassified from accumulated other comprehensive income into earnings when the items underlying the hedged transactions are recognized into earnings, as a component of cost of sales within the Company’s consolidated statements of operations. The following tables summarize the impact of the effective portion of gains and losses of the forward contracts designated as hedges for the three month and nine month periods ended December 26, 2015 and December 27, 2014 (in thousands):

	Three Months Ended
	December 26, 2015				December 27, 2014
	Pre-Tax Gain Recognized in OCI (Effective Portion)		Less: Pre-Tax Gain Reclassified from Accumulated OCI into Earnings (Effective Portion)		Pre-Tax Gain Recognized in OCI (Effective Portion)		Less: Pre-Tax Gain Reclassified from Accumulated OCI into Earnings (Effective Portion)
Forward currency exchange contracts	$	542	$	5,792	$	5,095	$	1,956

	Nine Months Ended
	December 26, 2015					December 27, 2014
	Pre-Tax Loss Recognized in OCI (Effective Portion)			Less: Pre-Tax Gain Reclassified from Accumulated OCI into Earnings (Effective Portion)		Pre-Tax Gain Recognized in OCI (Effective Portion)		Less: Pre-Tax Gain Reclassified from Accumulated OCI into Earnings (Effective Portion)
Forward currency exchange contracts	$	(17,770	)	$	8,174	$	15,607	$	573

Amounts related to ineffectiveness were not material during all periods presented. The Company expects that substantially all of the amounts currently recorded in accumulated other comprehensive loss will be reclassified into earnings during the next twelve months, based upon the timing of inventory purchases and turns. These amounts are subject to fluctuations in the applicable currency exchange rates.

The Company recognized net losses related to changes in the fair value of undesignated forward foreign currency exchange contracts of $0.1 million and $1.5 million, respectively, during the three months and nine months ended December 26, 2015, and net gains of less than $0.1 million and $0.2 million, respectively, during the three months and nine months ended December 27, 2014, within foreign currency gains (losses) in the Company’s consolidated statement of operations.