LANDS' END, INC. Fair Value Disclosure
NOTE 8. FAIR VALUE MEASUREMENTS OF FINANCIAL ASSETS AND LIABILITIES
Cash and cash equivalents and restricted cash is reflected on the Consolidated Balance Sheets at fair value based on Level 1 inputs. Cash and cash equivalents and restricted cash amounts are valued based upon statements received from financial institutions. The fair value of restricted cash was $0.6 million and $2.6 million as of January 30, 2026 and January 31, 2025, respectively.
Carrying amounts and fair values of long-term debt, including current portion, in the Consolidated Balance Sheets are as follows:
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January 30, 2026 |
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January 31, 2025 |
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(in thousands) |
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Carrying |
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Fair |
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Carrying |
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Fair |
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Long-term debt, including current portion |
|
$ |
234,000 |
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|
$ |
235,780 |
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|
$ |
247,000 |
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|
$ |
251,690 |
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The Company’s valuation of long-term debt, including current portion, at fair value is considered a Level 3 instrument under the fair value hierarchy. The Company’s valuation techniques include the Black-Derman-Toy (“BDT”) model as well as market inputs from management. The BDT modeling approach is particularly relevant given the Term Loan Facility’s features, including the optional redemption provision. There were no nonfinancial assets or nonfinancial liabilities recognized at fair value on a nonrecurring basis as of January 30, 2026 and January 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 26, 2026 | Showing above |
| 2025 | Mar 27, 2025 | |
| 2024 | Apr 3, 2024 | |
| 2023 | Apr 10, 2023 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.