FAIR VALUE MEASUREMENTSRecurring Fair Value Measurements
The following table sets forth financial assets and liabilities measured at fair value in the consolidated balance sheets and the respective pricing levels to which the fair value measurements are classified within the fair value hierarchy.
| | | | | | | | | | | |
| | Fair Value Measurements |
| Quoted Prices With Other Observable Inputs (Level 2) |
| (In millions) | January 3, 2026 | | December 28, 2024 |
| Financial assets: | | | |
| Derivatives | $ | 0.1 | | | $ | 9.3 | |
| Financial liabilities: | | | |
| Derivatives | $ | (6.0) | | | $ | (0.7) | |
The fair value of foreign currency forward exchange contracts represents the estimated receipts or payments necessary to terminate the contracts.
Nonrecurring Fair Value Measurements
Indefinite-lived intangible assets and goodwill are tested annually, or if a triggering event occurs that indicates an impairment loss may have been incurred, using fair value measurements with unobservable inputs (Level 3). In the third quarter of 2023, based on the results of the impairment testing, the Company recognized impairment charges of $38.3 million to the Sperry®
trade name. Refer to Note 4, “Goodwill and Other Intangible Assets” for additional discussion on the Sperry® trade name impairment.
Fair Value Disclosures
The Company’s financial instruments that are not recorded at fair value consist of cash and cash equivalents, accounts and notes receivable, accounts payable, borrowings under revolving credit agreements and other short-term and long-term debt. The carrying amount of these financial instruments is historical cost, which approximates fair value, except for the debt. The carrying value and the fair value of the Company’s debt are as follows:
| | | | | | | | | | | |
| (In millions) | January 3, 2026 | | December 28, 2024 |
| Carrying value | $ | 621.7 | | | $ | 648.0 | |
| Fair value | 583.7 | | | 587.0 | |
The fair value of the fixed rate debt was based on third-party quotes (Level 2). The fair value of the variable rate debt was calculated by discounting the future cash flows to its present value using a discount rate based on the risk-free rate of the same maturity (Level 3).