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Derivative Financial Instruments
 3 Months Ended
Apr. 04, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
As a result of its operating and financing activities, the Company is exposed to market risks from changes in foreign currency exchange rates and interest rates. These market risks may adversely affect the Company’s operating results, cash flows and financial position. The Company seeks to manage risk from changes in foreign currency exchange rates through the use of forward contracts, cross currency swaps or both, and uses interest rate swaps to manage the risk of changes in interest rates. The Company’s derivative contracts are not collateralized and are entered into with large, reputable financial institutions that are monitored for counterparty risk. We maintain master netting arrangements that allow for the non-conditional offsetting of amounts receivable and payable with counterparties to help manage our risks and record derivative positions on a net basis. Refer to Note 4. Fair Value Measurements for information on the fair value of our derivative financial instruments.
Foreign currency contracts
The Company operates in foreign countries, which exposes it to market risk associated with foreign currency exchange rate fluctuations. The Company uses forward contracts and cross currency swaps to manage its exposure to fluctuations in the U.S. dollar (“USD”) – Canadian dollar (“CAD”) exchange rate. Forward contracts and cross currency swaps lock in the exchange rate for a portion of the estimated cash flows of the Company’s Canadian operations. As of April 4, 2026 and January 3, 2026, the Company’s forward contracts had USD equivalent notional amounts of $74.9 million and $102.4 million, respectively. In September 2025, the Company entered into cross currency swaps with USD notional amounts of $200.0 million as of April 4, 2026 and January 3, 2026. Cross currency swaps and forward contracts were not designated in hedging relationships.
Interest rate swap contracts
The Company’s market risk is affected by changes in interest rates. The Company’s 2025 Senior Secured Credit Facilities bear interest based on market rates plus an applicable margin. Because the interest rate on the Company’s floating-rate debt is tied to market rates, the Company manages its exposure to interest rate movements by effectively converting a portion of its floating-rate debt to fixed-rate debt using interest rate swaps. Interest rate swaps, as used by the Company, involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreement without exchange of the underlying notional amount. In September 2025, the Company entered into interest rate swaps with USD notional amounts of $570.5 million and $600.0 million as of April 4, 2026 and January 3, 2026, respectively. All interest rate swaps were designated as cash flow hedging instruments.
The fair value of derivative financial instruments were as follows:
April 4, 2026
(in thousands)Balance Sheet LocationDerivatives in an Asset PositionDerivatives in a Liability Position
Derivatives not designated as hedging instruments:
Forward contracts
Prepaid expenses and other current assets(1)
$204 $(123)
Forward contracts
Accounts payable and accrued liabilities(1)
129 (146)
Cross currency swapsPrepaid expenses and other current assets1,504 — 
Cross currency swapsOther liabilities— (4,796)
Total
$1,837 $(5,065)
Derivatives designated as hedging instruments:
Interest rate swapsPrepaid expenses and other current assets$1,558 $— 
Interest rate swapsOther assets1,683 — 
Total
$3,241 $— 
Total deferred gain on interest rate swaps(2)
Accumulated other comprehensive income$3,163 $— 
(1)Derivatives subject to master netting agreements are presented net on the unaudited interim Condensed Consolidated Balance Sheets.
(2)Presented gross of immaterial income taxes.
January 3, 2026
(in thousands)Balance Sheet LocationDerivatives in an Asset PositionDerivatives in a Liability Position
Derivatives not designated as hedging instruments:
Forward contracts
Accounts payable and accrued liabilities(1)
$339 $(688)
Cross currency swapsPrepaid expenses and other current assets1,617 — 
Cross currency swapsOther liabilities— (2,363)
Total
$1,956 $(3,051)
Derivatives designated as hedging instruments:
Interest rate swapsPrepaid expenses and other current assets$42 $— 
Interest rate swaps
Accounts payable and accrued liabilities(1)
29 — 
Interest rate swapsOther liabilities— (1,210)
Total
$71 $(1,210)
Total deferred loss on interest rate swaps(2)
Accumulated other comprehensive income$— $(1,221)
(1)Derivatives subject to master netting agreements are presented net on the unaudited interim Condensed Consolidated Balance Sheets.
(2)Presented gross of immaterial income taxes.
The impact of derivative financial instruments on the unaudited interim Condensed Consolidated Statements of Operations and Comprehensive Loss was as follows:
Thirteen Weeks Ended
(in thousands)April 4, 2026March 29, 2025
Loss on forward contracts recognized in loss (gain) on foreign currency, net$186 $345 
Loss on cross currency swaps recognized in loss (gain) on foreign currency, net$2,190 $— 
Gain on interest rate swaps recognized in interest expense, net$(428)$(2,636)
The table below presents the effect of cash flow hedge accounting on comprehensive loss:
Thirteen Weeks Ended
(in thousands, gross of immaterial income taxes)April 4, 2026March 29, 2025
Gain recognized in other comprehensive loss$4,812 $— 
Gain reclassified from accumulated other comprehensive income into net loss$428 $2,636 
Amounts reclassified from accumulated other comprehensive income into net loss are recognized in interest expense, net in the unaudited interim Condensed Consolidated Statements of Operations and Comprehensive Loss. Within the next twelve months, the Company estimates that $1.5 million of gains currently recognized within accumulated other comprehensive income will be reclassified as a decrease in interest expense, net.