Fair Value of Financial Instruments (Tables)

9 Months Ended

Nov. 02, 2024

Schedule of Fair Value of Financial Instruments

The following table provides a summary of the principal value and estimated fair value of the Company's outstanding debt as of November 2, 2024, February 3, 2024 and October 28, 2023:


	November 2, 2024		February 3, 2024		October 28, 2023
	(in millions)
Principal Value	$	988	$	991	$	992
Fair Value, Estimated (a)	916		897		830

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(a)The estimated fair value of the Company’s publicly traded debt is based on reported transaction prices which are considered Level 2 inputs in accordance with ASC 820, Fair Value Measurement. The estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

Fair Value, Liabilities Measured on Recurring Basis

The following tables provide a summary of the Company's contingent consideration recognized at fair value related to the Adore Me acquisition as of November 2, 2024, February 3, 2024, October 28, 2023 and January 28, 2023 (in millions):


Balance Sheet Location	Measurement Level	November 2, 2024		February 3, 2024		October 28, 2023		January 28, 2023
Accrued Expenses and Other	Level 3	$	64	$	74	$	16	$	30
Other Long-term Liabilities	Level 3	—		18		71		70

The estimated fair value of the contingent consideration is valued using a Scenario-Based method and a Monte Carlo simulation which utilize inputs including discount rates, estimated probability of achievement of certain milestones, forecasted revenues, forecasted EBITDA and volatility rates. These are considered Level 3 inputs in accordance with ASC 820, Fair Value Measurement. Changes in the fair value of the contingent consideration are recorded within General, Administrative and Store Operating Expenses on the Consolidated Statements of Loss. For additional information regarding the contingent consideration, see Note 2, “Acquisition.”