Company: SBH
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0000950170-25-019869
Chunk: 7

Company: Sally Beauty Holdings, Inc.
Filing Date: 2025-02-13
Form: 10-Q
Item: Part I, Item 1
Chunk 7
---
        Three Months Ended December 31,

        2024

        2023

        Beginning Balance

        $
        11,493

        $
        14,038

        Loyalty points and gift cards issued but not redeemed, net of estimated breakage

        3,644

        9,494

        Revenue recognized from beginning liability

        (2,487
        )

        (7,942
        )

        Ending Balance

        $
        12,650

        $
        15,590

      See Note 12, Segment Reporting, for additional information regarding the disaggregation of our sales revenue.

4.    Fair Value MeasurementsWe measure on a recurring basis and disclose the fair value of our financial instruments under the provisions of ASC Topic 820, Fair Value Measurement, as amended (“ASC 820”). We define “fair value” as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level hierarchy for measuring fair value and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date.The three levels of that hierarchy are defined as follows:Level 1 - Quoted prices are available in active markets for identical assets or liabilities; Level 2 - Pricing inputs are other than quoted prices in active markets, included in Level 1, that are either directly or indirectly observable; andLevel 3 - Unobservable pricing inputs in which little or no market activity exists, therefore requiring an entity to develop its own model with estimates and assumptions.    Financial instruments measured at fair value on recurring basisConsistent with the fair value hierarchy, we categorized our financial assets and liabilities as follows: 

        (in thousands)
         
        Classification
         
        Fair Value Hierarchy Level
         
        December 31,2024

        September 30,2024

        Financial Assets:

        Foreign exchange contracts

        Designated cash flow hedges
         
         Other current assets
         
        Level 2
         
        $
        1,498

        $
        —

        Non-designated cash flow hedges
         
         Other current assets
         
        Level 2

        1,842

        1,207