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Fair Value Measurements
 6 Months Ended
Aug. 03, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements

4. Fair Value Measurements

ASC 820, Fair Value Measurement Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date.

Financial Instruments

Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. In addition, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

•
Level 1 — Quoted prices in active markets.
•
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly.
•
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s cash equivalents and short-term investments are Level 1 financial assets and are measured at fair value on a recurring basis, for all periods presented. Refer to Note 3 to the Consolidated Financial Statements for additional information regarding cash equivalents and short-term investments.

 

 

 

Fair Value Measurements at August 3, 2024

 

(In thousands)

 

Carrying Amount

 

 

Quoted Market Prices
in Active Markets for
Identical Assets
(Level 1)

 

 

Significant Other
Observable Inputs
(Level 2)

 

 

Significant
Unobservable Inputs
(Level 3)

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

187,592

 

 

$

187,592

 

 

$

-

 

 

$

-

 

Interest bearing deposits

 

 

4,245

 

 

 

4,245

 

 

 

-

 

 

 

-

 

Total cash and cash equivalents

 

$

191,837

 

 

$

191,837

 

 

$

-

 

 

$

-

 

Long-Term Debt

As of August 3, 2024, there were no outstanding borrowings under the Company's Credit Facility. As of July 29, 2023, the fair value of the Company's $3.0 million in outstanding borrowings under its Credit Facility approximated the carrying value.

Refer to Note 8 to the Consolidated Financial Statements for additional information regarding long-term debt and other credit arrangements.

Non-Financial Assets

The Company’s non-financial assets, which include intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur and the Company is required to evaluate the non-financial asset for impairment, a resulting impairment would require that the non-financial asset be recorded at the estimated fair value. The fair value is determined by estimating the amount and timing of net future cash flows and discounting them using a risk-adjusted rate of interest. The Company estimates future cash flows based on its experience and knowledge of the market in which the store is located. There were no long-lived asset impairment charges recorded during the 13 and 26 weeks ended August 3, 2024 or during the 13 weeks ended July 29, 2023. During the 26 weeks ended July 29, 2023, the Company recorded impairment of property and equipment of $10.8 million. Refer to Note 13 to the Consolidated Financial Statements for additional information on impairment, restructuring and other charges.

The fair value of the Company's ROU assets was based upon market rent assumptions.

The Company evaluates goodwill for possible impairment at least annually as of the last day of the fiscal year and upon occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of a reporting unit may be below its carrying value. The Company last performed an annual goodwill impairment test using Level 3 inputs as defined in ASC 820 as of February 3, 2024.

No indicators of goodwill impairment were present during the 13 and 26 weeks ended August 3, 2024 and July 29, 2023.