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Fair Value
 6 Months Ended
Jul. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value

4. Fair Value

The Company utilizes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach that relate to its financial assets and financial liabilities). The levels of the hierarchy are described as follows:

•
Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.
•
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
•
Level 3: Unobservable inputs that reflect the Company’s own assumptions.

Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and liabilities and their placement within the fair value hierarchy. The Company’s financial assets that are accounted for at fair value on a recurring basis are presented in the tables below:

 

 

Marketable Securities Fair Value as of

 

 

 

July 31, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

—

 

 

$

258,930

 

 

$

—

 

 

$

258,930

 

Federal government agencies

 

 

—

 

 

 

109,279

 

 

 

—

 

 

 

109,279

 

US Treasury securities

 

 

—

 

 

 

79,197

 

 

 

—

 

 

 

79,197

 

Municipal and pre-refunded municipal bonds

 

 

—

 

 

 

72,326

 

 

 

—

 

 

 

72,326

 

Certificates of deposit

 

 

—

 

 

 

21,499

 

 

 

—

 

 

 

21,499

 

Mutual funds, held in rabbi trust

 

 

17,693

 

 

 

—

 

 

 

—

 

 

 

17,693

 

Commercial paper

 

 

—

 

 

 

2,905

 

 

 

—

 

 

 

2,905

 

 

$

17,693

 

 

$

544,136

 

 

$

—

 

 

$

561,829

 

 

 

Marketable Securities Fair Value as of

 

 

 

January 31, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

—

 

 

$

270,539

 

 

$

—

 

 

$

270,539

 

Federal government agencies

 

 

—

 

 

 

134,413

 

 

 

—

 

 

 

134,413

 

US Treasury securities

 

 

—

 

 

 

61,942

 

 

 

—

 

 

 

61,942

 

Municipal and pre-refunded municipal bonds

 

 

—

 

 

 

86,878

 

 

 

—

 

 

 

86,878

 

Certificates of deposit

 

 

—

 

 

 

21,499

 

 

 

—

 

 

 

21,499

 

Mutual funds, held in rabbi trust

 

 

15,068

 

 

 

—

 

 

 

—

 

 

 

15,068

 

Commercial paper

 

 

—

 

 

 

10,557

 

 

 

—

 

 

 

10,557

 

 

 

$

15,068

 

 

$

585,828

 

 

$

—

 

 

$

600,896

 

 

 

Marketable Securities Fair Value as of

 

 

 

July 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

—

 

 

$

141,754

 

 

$

—

 

 

$

141,754

 

Federal government agencies

 

 

—

 

 

 

91,574

 

 

 

—

 

 

 

91,574

 

US Treasury securities

 

 

—

 

 

 

21,553

 

 

 

—

 

 

 

21,553

 

Municipal and pre-refunded municipal bonds

 

 

—

 

 

 

61,191

 

 

 

—

 

 

 

61,191

 

Certificates of deposit

 

 

—

 

 

 

1,499

 

 

 

—

 

 

 

1,499

 

Mutual funds, held in rabbi trust

 

 

13,898

 

 

 

—

 

 

 

—

 

 

 

13,898

 

Commercial paper

 

 

—

 

 

 

41,719

 

 

 

—

 

 

 

41,719

 

 

 

$

13,898

 

 

$

359,290

 

 

$

—

 

 

$

373,188

 

Financial assets

Level 1 assets consist of financial instruments whose value has been based on inputs that use, as their basis, readily observable market data that are actively quoted and are validated through external sources, including third-party pricing services and brokers.

Level 2 assets consist of financial instruments whose value has been based on quoted prices for similar assets and liabilities in active markets as well as quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3 assets consist of financial instruments where there has been no active market. The Company held no Level 3 financial instruments as of July 31, 2024, January 31, 2024 and July 31, 2023.

The fair value of cash and cash equivalents (Level 1) approximates carrying value since cash and cash equivalents consist of short-term highly liquid investments with maturities of less than three months at the time of purchase. As of July 31, 2024, January 31, 2024 and July 31, 2023, cash and cash equivalents included cash on hand, cash in banks, money market accounts and marketable securities with maturities of less than three months at the time of purchase.

Non-financial assets

The Company’s non-financial assets, primarily consisting of property and equipment and lease-related right-of-use assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

The fair value of property and equipment was determined using a discounted cash-flow model that utilized Level 3 inputs. The Company’s retail locations are reviewed for impairment at the retail location level, which is the lowest level at which individual cash flows can be identified. In calculating future cash flows, the Company makes estimates regarding future operating results based on its experience and knowledge of market factors in its retail locations. Right-of-use assets are tested for impairment in the same manner as property and equipment. For lease right-of-use assets, the Company determines the estimated fair value of the assets by comparing the discounted contractual rent payments to estimated market rent using an acceptable valuation methodology. During the three months ended April 30, 2024, the Company determined that certain long-lived assets at the Company's retail locations were unable to recover their carrying values and were written down to their fair values. During the three months ended April 30, 2024, the Company recorded impairment charges of $815 for one retail location, with a carrying value after impairment of $1,500 related to the right-of-use asset. Additionally, during the fourth quarter of fiscal 2024, the Company committed to a cease-use date of February 29, 2024 at one retail location for which the lease was not terminated, resulting in lease abandonment charges of $3,786 during the three months ended April 30, 2024. During the three months ended July 31, 2024, and six months ended July 31, 2023, impairment charges were zero.