Derivative Financial Instruments (Tables)

3 Months Ended

May 02, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of fair value of derivative instruments in the condensed consolidated balance sheets

The fair value of derivative instruments in the condensed consolidated balance sheets as of May 2, 2020 and February 1, 2020 is as follows (in thousands):

	Derivative Balance Sheet Location	Fair Value at May 2, 2020		Fair Value at Feb 1, 2020
ASSETS:
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign exchange currency contracts	Other current assets/ Other assets	$	6,331	$	3,987
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Other current assets/ Other assets	2,639		867
Total		$	8,970	$	4,854
LIABILITIES:
Derivatives designated as hedging instruments:
Cash flow hedges:
Interest rate swap	Other long-term liabilities	$	1,218	$	348
Total		$	1,218	$	348

Summary of gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net loss

The following table summarizes the gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net loss for the three months ended May 2, 2020 and May 4, 2019 (in thousands): 

	Gains (Losses) Recognized in OCI						Location of Gains (Losses) Reclassified from Accumulated OCI into Loss	Gains (Losses) Reclassified from Accumulated OCI into Loss
	Three Months Ended							Three Months Ended
	May 2, 2020			May 4, 2019				May 2, 2020			May 4, 2019
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	$	4,410		$	4,655		Cost of product sales	$	1,991		$	230
Interest rate swap	(874		)	(219		)	Interest expense	(3		)	46

Summary of net after-tax derivative activity recorded in accumulated other comprehensive income (loss)

The following table summarizes net after-tax derivative activity recorded in accumulated other comprehensive income (loss) (in thousands):

	Three Months Ended
	May 2, 2020			May 4, 2019
Beginning balance gain	$	6,300		$	2,999
Cumulative adjustment from adoption of new accounting guidance1	—			1,981
Net gains from changes in cash flow hedges	3,180			3,864
Net gains reclassified into loss	(1,769		)	(181		)
Ending balance gain	$	7,711		$	8,663

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Notes:

¹ 

During the first quarter of fiscal 2020, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss). Upon adoption of this guidance, the Company reclassified $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting.

Summary of gains before taxes recognized on the derivative instruments not designated as hedging instruments in other income (expense)

The following table summarizes the gains before taxes recognized on the derivative instruments not designated as hedging instruments in other income (expense) for the three months ended May 2, 2020 and May 4, 2019 (in thousands):

	Location of Gain Recognized in Loss	Gain Recognized in Loss
		Three Months Ended
		May 2, 2020		May 4, 2019
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Other income (expense)	$	1,088	$	575