Derivative Instruments (Tables)

9 Months Ended

Oct. 28, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Outstanding Foreign Exchange Forward Contracts

As of October 28, 2017, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge either a portion, or all, of forecasted foreign-currency-denominated intercompany inventory sales, the resulting settlement of the foreign-currency-denominated intercompany accounts receivable, or both:



(in thousands)	Notional Amount⁽¹⁾
Euro	$	105,638
British pound	$	45,689
Canadian dollar	$	22,851
Japanese yen	$	8,476


⁽¹⁾	Amounts reported are the U.S. Dollar notional amounts outstanding as of October 28, 2017.

The Company also uses foreign currency exchange forward contracts to hedge certain foreign-currency-denominated net monetary assets/liabilities. Examples of monetary assets/liabilities include cash balances, receivables and payables. Fluctuations in foreign currency exchange rates result in transaction gains/(losses) being recorded in earnings, as U.S. GAAP requires that monetary assets/liabilities be remeasured at the spot exchange rate at quarter-end or upon settlement. The Company has chosen not to apply hedge accounting to these instruments because there are no differences in the timing of gain or loss recognition on the hedging instruments and the hedged items.

As of October 28, 2017, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge foreign-currency-denominated net monetary assets/liabilities:



(in thousands)	Notional Amount⁽¹⁾
Euro	$	23,424
British pound	$	1,313


⁽¹⁾	Amounts reported are the U.S. Dollar notional amounts outstanding as of October 28, 2017.

Location and Amounts of Derivative Fair Values on the Condensed Consolidated Balance Sheets

The location and amounts of derivative fair values on the Condensed Consolidated Balance Sheets as of October 28, 2017 and January 28, 2017 were as follows:



(in thousands)	Location	October 28, 2017		January 28, 2017		Location	October 28, 2017		January 28, 2017
Derivatives designated as hedging instruments:
Foreign currency exchange forward contracts	Other current assets	$	894	$	5,920	Accrued expenses	$	3,553	$	486
Derivatives not designated as hedging instruments:
Foreign currency exchange forward contracts	Other current assets	$	362	$	122	Accrued expenses	$	—	$	6
Total	Other current assets	$	1,256	$	6,042	Accrued expenses	$	3,553	$	492

Location and Amounts of Derivative Gains and Losses on the Condensed Consolidated Statements of Operations and Comprehensive Loss

The location and amounts of derivative gains and losses for the thirteen and thirty-nine weeks ended October 28, 2017 and October 29, 2016 on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) were as follows:

Thirteen Weeks Ended

Thirty-nine Weeks Ended

October 28, 2017

October 29, 2016

October 28, 2017

October 29, 2016

(in thousands)

Location

Gain/(Loss)

Derivatives not designated as hedging instruments:

Foreign currency exchange forward contracts

Other operating income, net

634

152

295



	Effective Portion											Ineffective Portion and Amount Excluded from Effectiveness Testing
	Amount of Gain (Loss) Recognized in AOCL on Derivative Contracts ⁽¹⁾					Location of Gain (Loss) Reclassified from AOCL into Earnings	Amount of Gain (Loss) Reclassified from AOCL into Earnings ⁽²⁾					Location of Gain Recognized in Earnings on Derivative Contracts	Amount of Gain Recognized in Earnings on Derivative Contracts ⁽³⁾
	Thirteen Weeks Ended
(in thousands)	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016			October 28, 2017		October 29, 2016
Derivatives in cash flow hedging relationships:
Foreign currency exchange forward contracts	$	1,775		$	4,986	Cost of sales, exclusive of depreciation and amortization	$	(3,544	)	$	450	Other operating income, net	$	975	$	695

	Thirty-nine Weeks Ended
(in thousands)	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016			October 28, 2017		October 29, 2016
Derivatives in cash flow hedging relationships:
Foreign currency exchange forward contracts	$	(10,627	)	$	3,026	Cost of sales, exclusive of depreciation and amortization	$	536		$	2,551	Other operating income, net	$	2,136	$	1,308


⁽¹⁾	The amount represents the change in fair value of derivative contracts due to changes in spot rates.


⁽²⁾	The amount represents the reclassification from AOCL into earnings when the hedged item affects earnings, which is when merchandise is sold to the Company’s customers.


⁽³⁾	The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and, therefore, recognized in earnings.