Derivative Instruments

6 Months Ended

Jul. 29, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

4. Derivative Instruments

The interest rate caps and collars are accounted for as cash flow hedges because they are expected to be highly effective in hedging variable rate interest payments. Changes in the fair value of the cash flow hedges are reported as a component of AOCI. As of July 29, 2023, AOCI included unrealized gains of $2.2 million ($1.7 million, net of tax). Approximately $0.5 million and $1.1 million of pre-tax losses deferred in AOCI were reclassified to interest expense during the thirteen and twenty-six week periods ended July 29, 2023, respectively. As of January 28, 2023, AOCI included unrealized losses of $2.7 million ($2.1 million, net of tax). The Company currently estimates that $3.2 million of losses related to trade date costs on its cash flow hedges that are currently deferred in AOCI will be reclassified to interest expense in the consolidated statement of operations within the next twelve months. This estimate could vary based on actual amounts as a result of changes in market conditions.

The cash flow hedges are reflected in the Company’s consolidated balance sheets as follows (in thousands):


Assets (Liabilities)	Balance sheet location	July 29, 2023			January 28, 2023
Current asset portion of cash flow hedges	Other current assets	$	4,402		$	—
Non-current asset portion of cash flow hedges	Other long-term assets		1,003			—
Current liability portion of cash flow hedges	Accrued expenses and other liabilities		—			(1,176	)
Non-current liability portion of cash flow hedges	Other long-term liabilities		(1,594	)		(1,717	)
Total cash flow hedges		$	3,811		$	(2,893	)