The Company operates in foreign countries, which exposes it to market risk associated with foreign currency exchange rate fluctuations. The Company has entered into certain forward contracts to hedge the risk of foreign currency rate fluctuations. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these hedges.

The Company’s primary objective is to hedge the variability in forecasted cash flows due to the foreign currency risk. Various transactions that occur primarily in Europe, Canada, South Korea, China, Hong Kong and Mexico are denominated in U.S. dollars, British pounds and Russian roubles and thus are exposed to earnings risk as a result of exchange rate fluctuations when converted to their functional currencies. These

types of transactions include U.S. dollar-denominated purchases of merchandise and U.S. dollar- and British pound-denominated intercompany liabilities. In addition, certain operating expenses, tax liabilities and pension-related liabilities are denominated in Swiss francs and are exposed to earnings risk as a result of exchange rate fluctuations when converted to the functional currency. Further, there are certain real estate leases that are denominated in a currency other than the functional currency of the respective entity that entered into the agreement (primarily Swiss francs, Russian roubles and Polish zloty). As a result, the Company may be exposed to volatility related to unrealized gains or losses on the translation of present value of future lease payment obligations when translated at the exchange rate as of a reporting period-end. The Company enters into derivative financial instruments, including forward exchange currency contracts, to offset some, but not all, of the exchange risk on certain of these anticipated foreign currency transactions.

The Company is exposed to interest rate risk on its floating-rate debt. The Company has entered into interest rate swap agreements for certain of these agreements to effectively convert its floating-rate debt to a fixed-rate basis. The principal objective of these contracts is to eliminate or reduce the variability of the cash flows in interest payments associated with the Company’s floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these contracts. Refer to Note 9 for further information.

The impact of the credit risk of the counterparties to the derivative contracts is considered in determining the fair value of the foreign exchange currency contracts and interest rate swap agreements. As of October 29, 2022, credit risk has not had a significant effect on the fair value of the Company’s foreign exchange currency contracts and interest rate swap agreements.

U.S. dollar forward contracts are used to hedge forecasted merchandise purchases over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as cash flow hedges, are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are recognized in cost of product sales in the period that approximates the time the hedged merchandise inventory is sold.

The Company has also used U.S. dollar forward contracts to hedge the net investments of certain of the Company’s international subsidiaries over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as net investment hedges, are recorded in foreign currency translation adjustment as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are not recognized in earnings (loss) until the sale or liquidation of the hedged net investment.

The Company also has foreign exchange currency contracts that are not designated as hedging instruments for accounting purposes. Changes in fair value of foreign exchange currency contracts not designated as hedging instruments are reported in net earnings (loss) as part of other income (expense).

Interest rate swap agreements are used to hedge the variability of the cash flows in interest payments associated with the Company’s floating-rate debt. Changes in the fair value of interest rate swap agreements designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are amortized to interest expense over the term of the related debt.

Periodically, the Company may also enter into interest rate swap agreements that are not designated as hedging instruments for accounting purposes. Changes in the fair value of interest rate swap agreements not designated as hedging instruments are reported in net earnings (loss) as part of other income (expense).


	Fair Value at Oct 29, 2022		Fair Value at Jan 29, 2022		Derivative Balance Sheet Location
ASSETS:
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign exchange currency contracts	$	13,207	$	5,999	Other current assets/ Other assets
Interest rate swap	1,317		—		Other assets
Total derivatives designated as hedging instruments	14,524		5,999
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	2,168		1,134		Other current assets
Total	$	16,692	$	7,133
LIABILITIES:
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign exchange currency contracts	$	1,155	$	—	Accrued expenses/ Other long-term liabilities
Interest rate swap	—		74		Other long-term liabilities
Total derivatives designated as hedging instruments	1,155		74
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	52		—		Accrued expenses and other current liabilities


Total	$	1,207	$	74

During the nine months ended October 29, 2022, the Company purchased U.S. dollar forward contracts in Europe totaling US$256.0 million that were designated as cash flow hedges. As of October 29, 2022, the Company had forward contracts outstanding for its European operations of US$275.0 million to hedge forecasted merchandise purchases, which are expected to mature over the next 18 months.

As of October 29, 2022, accumulated other comprehensive income (loss) related to foreign exchange currency contracts included a $15.7 million net unrealized gain, net of tax, of which $13.9 million will be recognized in cost of product sales over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current quarter-end values.

As of October 29, 2022, accumulated other comprehensive income (loss) related to the interest rate swap agreement included a net unrealized gain of $1.0 million, net of tax, which will be recognized in interest expense over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current quarter-end values.


	Gains Recognized in OCI				Location of Gains (Losses) Reclassified from Accumulated OCI into Earnings	Gains (Losses) Reclassified from Accumulated OCI into Earnings

	Oct 29, 2022		Oct 30, 2021			Oct 29, 2022		Oct 30, 2021
	Three Months Ended
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	$	6,234	$	2,797	Cost of product sales	$	4,141	$	(1,270)


Interest rate swap	764		275		Interest expense	30		(72)


	Three Months Ended				Nine Months Ended
	Oct 29, 2022		Oct 30, 2021		Oct 29, 2022		Oct 30, 2021
Beginning balance gain (loss)	$	14,240	$	(602)	$	7,280	$	(4,876)

Net gains from changes in cash flow hedges	6,136		2,701		15,578		5,725
Net (gains) losses reclassified into earnings	(3,709)		1,185		(6,191)		2,435
Ending balance gain	$	16,667	$	3,284	$	16,667	$	3,284

As of October 29, 2022, the Company had euro foreign exchange currency contracts to purchase US$49.5 million expected to mature over the next 14 months. As of January 29, 2022, the Company had euro foreign exchange currency contracts to purchase US$19.0 million.


	Location of Gains Recognized in Earnings	Gains Recognized in Earnings
		Three Months Ended				Nine Months Ended
		Oct 29, 2022		Oct 30, 2021		Oct 29, 2022		Oct 30, 2021

Foreign exchange currency contracts	Other expense	$	1,153	$	360	$	4,294	$	916