Leases

12 Months Ended

Feb. 03, 2024

10. Leases

The Company leases all store premises, regional distribution facilities, some of its office space and certain information technology and office equipment. These leases are generally classified as operating leases.

Store leases generally provide for a combination of base rentals and contingent rent based on store sales. Additionally, most leases include lessor incentives such as construction allowances and rent holidays. The Company is typically responsible for tenant occupancy costs including maintenance costs, common area charges, real estate taxes, and certain other expenses.

Most leases include one or more options to renew. The exercise of lease renewal options is at the Company’s discretion and is not reasonably certain at lease commencement. When measuring operating lease ROU assets and operating lease liabilities after the date of adoption of ASC 842, the Company only includes cash flows related to options to extend or terminate leases when those options are executed.

Some leases have variable payments. However, because they are not based on an index or rate, they are not included in the measurement of operating lease ROU assets and operating lease liabilities.

When determining the present value of future payments for an operating lease that does not have a readily determinable implicit rate, the Company uses its incremental borrowing rate as of the date of initial possession of the leased asset.

For leases that qualify for the short-term lease exemption, the Company does not record an operating lease liability or operating lease ROU asset. Short-term lease payments are recognized on a straight-line basis over the lease term of 12 months or less.

The following table summarizes expense categories and cash payments for operating leases during the period. It also includes the total non-cash transaction activity for new operating lease ROU assets and related operating lease liabilities entered into during the period.


	Fiscal Years Ending
	February 3,			January 28,
(In thousands)	2024			2023
Lease costs
Operating lease costs	$	335,420		$	368,483
Variable lease costs		121,061			121,604
Short-term leases and other lease costs		45,411			5,357
Total lease costs	$	501,892		$	495,444

Other information
Cash paid for operating lease liability	$	(403,355	)	$	(397,059	)
New operating lease ROU assets entered into during the period	$	153,236		$	254,290

The following table contains the average remaining lease term and discount rate, weighted by outstanding operating lease liability as of the end of the period:


Lease term and discount rate		February 3, 2024
Weighted-average remaining lease term - operating leases		4.99 years
Weighted-average discount rate - operating leases		4.6%

The table below is a maturity analysis of the operating leases in effect as of the end of the period. Undiscounted cash flows for finance leases and short-term leases are not material for the periods reported and are excluded from the table below:


	Undiscounted cash flows
(In thousands)	February 3, 2024
Fiscal years:
2024		304,062
2025		284,736
2026		232,307
2027		180,886
2028		146,568
Thereafter		185,682
Total undiscounted cash flows	$	1,334,241
Less: discount on lease liability		(148,611	)
Total lease liability	$	1,185,630