Leases (Notes)

3 Months Ended

Jul. 31, 2021

Leases [Abstract]

Leases of Lessee Disclosure [Text Block]

Note 8. Leases

We recognize lease assets and lease liabilities on the condensed consolidated balance sheets for substantially all lease arrangements as required by FASB ASC 842, Leases (Topic 842). Our portfolio of leases consists of operating leases comprised of operations agreements which grant us the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. We do not have finance leases or short-term leases (i.e., those with a term of twelve months or less).

We recognize a right of use ("ROU") asset and lease liability in our condensed consolidated balance sheets for leases with a term greater than twelve months. Options to extend or terminate a lease are included in the determination of the ROU asset and lease liability when it is reasonably certain that such options will be exercised. Our lease terms generally range from one year to fifteen years and a number of agreements contain minimum annual guarantees, many of which are adjusted at the start of each contract year based on the actual sales activity of the leased premises for the most recently completed contract year.

Payment terms are based on the fixed rates explicit in the lease, including minimum annual guarantees, and/or variable rates based on: i) a percentage of revenues or sales arising at the relevant premises ("variable commissions"), and/or ii)

operating expenses, such as common area charges, real estate taxes and insurance. For contracts with fixed lease payments, including those with minimum annual guarantees, we recognize lease expense on a straight-line basis over the lease term or over the contract year in order to best reflect the pattern of usage of the underlying leased asset and our minimum obligations arising from these types of leases. Our lease agreements do not contain any material residual value guarantees, material restrictions or covenants.

We used our incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable. We utilized an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later.

The following table summarizes lease expense:

	13 weeks ended
	July 31, 2021		August 1, 2020
Variable lease expense	$	11,702	$	7,407
Operating lease expense	16,373		9,796
Net lease expense	$	28,075	$	17,203

The increase in lease expense is primarily due to higher sales for contracts based on a percentage of revenue during the 13 weeks ended July 31, 2021 and the impact of the timing and reduction of minimum contractual guarantees due to temporary store closings due to the COVID pandemic during the 13 weeks ended August 1, 2020.

The following table summarizes our minimum fixed lease obligations, excluding variable commissions, as of July 31, 2021:

	As of
	July 31, 2021
Remainder of Fiscal 2022	$	128,412
Fiscal 2023	49,419
Fiscal 2024	42,392
Fiscal 2025	37,372
Fiscal 2026	28,146
Thereafter	72,676
Total lease payments	358,417
Less: imputed interest	(42,940)
Operating lease liabilities at period end	$	315,477

Future lease payment obligations related to leases that were entered into, but did not commence as of July 31, 2021, were not material.

The following summarizes additional information related to our operating leases:

	As of
	July 31, 2021			August 1, 2020
Weighted average remaining lease term (in years)	5.1 years			5.4 years
Weighted average discount rate	4.3		%	4.4		%
Supplemental cash flow information:
Cash payments for lease liabilities within operating activities	$	27,378		$	16,676
ROU assets obtained in exchange for lease liabilities from initial recognition	$	67,106		$	89,167