Fair Value Measurements

6 Months Ended

Jul. 29, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

5. Fair Value Measurements

Assets and Liabilities Measured on a Recurring Basis

The following table presents information about assets and liabilities that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands):

	July 29, 2023
	Level 1		Level 2			Level 3
Assets (liabilities):
Money market mutual funds	$	118,915	$	—		$	—
Investments of officers' life insurance	$	—	$	14,281		$	—
Non-qualified deferred compensation plan	$	—	$	(20,200	)	$	—
Interest related to Rover Group, Inc.	$	—	$	—		$	14,518

	January 28, 2023
	Level 1		Level 2			Level 3
Assets (liabilities):
Money market mutual funds	$	156,626	$	—		$	—
Investments of officers' life insurance	$	—	$	13,112		$	—
Non-qualified deferred compensation plan	$	—	$	(18,464	)	$	—
Investment in Rover Group, Inc.	$	20,152	$	—		$	—

The fair value of money market mutual funds is based on quoted market prices, such as quoted net asset values published by the fund as supported in an active market. Money market mutual funds included in the Company’s cash and cash equivalents were $117.0 million and $145.5 million as of July 29, 2023 and January 28, 2023, respectively. Also included in the Company’s money market mutual funds balances were $1.9 million and $11.1 million as of July 29, 2023 and January 28, 2023, respectively, which relate to the Company’s restricted cash, and are included in other current assets in the consolidated balance sheets.

The Company maintains a deferred compensation plan for key executives and other members of management, which is funded by investments in officers’ life insurance. The fair value of this obligation is based on participants’ elected investments, which reflect the closing market prices of similar assets.

In April 2023, the Company sold its interest in Rover Group, Inc. Class A common stock to a buyer at a price determined based on the daily volume weighted average price, in addition to a premium, over an agreed upon period. The cash proceeds were received throughout fiscal 2023, with the final payment being received in August 2023. The Company's interest in the unsettled cash proceeds were remeasured at fair value at each reporting period, and the resulting gains or losses were included in other non-operating income in the consolidated statements of operations.

Assets Measured on a Non-Recurring Basis

The Company’s non-financial assets, which primarily consist of goodwill, other intangible assets, fixed assets and equity and other investments, are reported at carrying value, or at fair value as of the date of the Company’s acquisition of Petco Holdings, Inc. LLC on January 26, 2016, and are not required to be measured at fair value on a recurring basis. However, on a periodic basis (at least annually for goodwill and indefinite-lived intangibles or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable), non-financial assets are assessed for impairment. If impaired, the carrying values of the assets are written down to fair value using Level 3 inputs.

There were no triggering events identified and no indication of impairment of the Company’s goodwill, indefinite-lived trade name, other intangible assets or equity and other investments during the thirteen or twenty-six week periods ended July 29, 2023 and July 30, 2022. During the thirteen and twenty-six week periods ended July 29, 2023, the Company recorded fixed asset and right-of-use asset impairment charges of $0.9 million and $1.1 million, respectively. During the thirteen and twenty-six week periods ended July 30, 2022, the Company recorded fixed asset and right-of-use asset impairment charges of $0.2 million and $1.0 million, respectively.