Allowance for Doubtful Accounts

9 Months Ended

Oct. 31, 2022

Allowance for Doubtful Accounts [Abstract]

Allowance for Doubtful Accounts

Note 2 – Allowance for Doubtful Accounts

The Company’s financial instruments consist of trade receivables arising from revenue transactions in the ordinary course of business. The Company considers its trade receivables to consist of two portfolio segments: wholesale and retail trade receivables. Wholesale trade receivables result from credit the Company has extended to its wholesale customers based on pre-defined criteria and are generally due within 30 to 60 days. Retail trade receivables primarily relate to amounts due from third-party credit card processors for the settlement of debit and credit card transactions and are typically collected within 3 to 5 days.

The Company’s accounts receivable and allowance for doubtful accounts as of October 31, 2022, October 31, 2021 and January 31, 2022 were:

	October 31, 2022
	Wholesale		Retail		Total
	(In thousands)
Accounts receivable, gross	$	898,383	$	1,010	$	899,393
Allowance for doubtful accounts		(18,192)		(66)		(18,258)
Accounts receivable, net	$	880,191	$	944	$	881,135
	October 31, 2021
	Wholesale		Retail		Total
	(In thousands)
Accounts receivable, gross	$	860,245	$	1,586	$	861,831
Allowance for doubtful accounts		(17,412)		(37)		(17,449)
Accounts receivable, net	$	842,833	$	1,549	$	844,382
	January 31, 2022
	Wholesale		Retail		Total
	(In thousands)
Accounts receivable, gross	$	620,737	$	2,166	$	622,903
Allowance for doubtful accounts		(17,307)		(84)		(17,391)
Accounts receivable, net	$	603,430	$	2,082	$	605,512

The allowance for doubtful accounts for wholesale trade receivables is estimated based on several factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations (such as in the case of bankruptcy filings (including potential bankruptcy filings), extensive delay in payment or substantial downgrading by credit rating agencies), a specific reserve for bad debt is recorded against amounts due from that customer to reduce the net recognized receivable to the amount reasonably expected to be collected. For all other wholesale customers, an allowance for doubtful accounts is determined through analysis of the aging of accounts receivable at the end of the reporting period for financial statements, assessments of collectability based on historical trends and an evaluation of the impact of economic conditions. The Company considers both current and forecasted future economic conditions in determining the adequacy of its allowance for doubtful accounts.

The allowance for doubtful accounts for retail trade receivables is estimated at the credit card chargeback rate applied to the previous 90 days of credit card sales. In addition, the Company considers both current and forecasted future economic conditions in determining the adequacy of its allowance for doubtful accounts.

The Company had the following activity in its allowance for credit losses:

	Wholesale		Retail		Total
	(In thousands)
Balance as of January 31, 2022	$	(17,307)	$	(84)	$	(17,391)
Provision for credit losses, net		(935)		18		(917)
Accounts written off as uncollectible		50		—		50
Balance as of October 31, 2022	$	(18,192)	$	(66)	$	(18,258)
Balance as of January 31, 2021	$	(17,429)	$	(30)	$	(17,459)
Provision for credit losses, net		(54)		(7)		(61)
Accounts written off as uncollectible		71		—		71
Balance as of October 31, 2021	$	(17,412)	$	(37)	$	(17,449)
Balance as of January 31, 2021	$	(17,429)	$	(30)	$	(17,459)
Provision for credit losses, net		(103)		(54)		(157)
Accounts written off as uncollectible		225		—		225
Balance as of January 31, 2022	$	(17,307)	$	(84)	$	(17,391)