Leases

12 Months Ended

Feb. 03, 2024

Note 10 – Leases

We lease all of our physical stores, our Evansville distribution center, which has a current lease term expiring in 2034, and office space for our Southern office. We also enter into leases of equipment, copiers and billboards. We do not have any leases with related parties. In addition, we do not have any sublease arrangements with any related party or third party. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Our real estate leases typically include options to extend the lease or to terminate the lease at our sole discretion. Options to extend real estate leases typically include one or more options to renew, with renewal terms that typically extend the lease term for five years or more. Many of our leases also contain “co-tenancy” provisions, including the required presence and continued operation of certain anchor tenants in the adjoining retail space. If a co-tenancy violation occurs, we have the right to a reduction of rent for a defined period after which we have the option to terminate the lease if the violation is not cured. In addition to co-tenancy provisions, certain leases contain “go-dark” provisions that allow us to cease operations while continuing to pay rent through the end of the lease term. When determining the lease term, we include options that are reasonably certain to be exercised.

Our leases typically provide for fixed minimum rental payments, and certain leases provide for contingent rental payments based upon various specified percentages of sales above minimum levels. In addition to rental payments, we are required to pay certain non-lease components, such as real estate taxes, insurance and common area maintenance, on most of our real estate leases. Such non-lease components are typically variable in nature. Certain real estate leases also contain escalation clauses for increases in minimum rentals, operating costs and taxes.

Lease-related costs reported in our Consolidated Statements of Income were as follows:


(In thousands)	2023		2022		2021
Operating lease cost	$	65,244	$	60,777	$	54,417
Variable lease cost
Occupancy costs		21,243		19,001		18,914
Percentage rent and other variable lease costs		1,257		1,231		2,723
Total	$	87,744	$	81,009	$	76,054

Other information related to leases, including supplemental cash flow information, consists of:


(In thousands)	2023			2022			2021
Cash paid for amounts included in the measurement of operating lease liabilities	$	59,129		$	48,991		$	46,562
ROU assets obtained in exchange for operating lease liabilities1	$	72,772		$	146,996		$	64,058

	As of			As of			As of
	February 3, 2024			January 28, 2023			January 29, 2022
Weighted-average remaining lease term for operating leases (in years)	7.6				7.3			6.0
Weighted-average discount rate for operating leases		4.2	%		4.2	%		5.2	%

1) Includes ROU assets added as part of the Shoe Station acquisition described in Note 3 - "Acquisition of Shoe Station"

The following table reconciles the undiscounted cash flows for each of the next five years and the total of the remaining years to our operating lease liabilities as of February 3, 2024:


(In thousands)	Operating Leases
2024	$	68,151
2025		60,646
2026		62,185
2027		55,910
2028		51,418
Thereafter to 2034		136,912
Total undiscounted lease payments		435,222
Less: Imputed interest		80,886
Total operating lease liabilities		354,336
Less: Current portion of operating lease liabilities		52,981
Long-term portion of operating lease liabilities	$	301,355