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Leases | 12 Months Ended
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Jan. 28, 2023
Leases [Abstract] |
Leases | Leases Signet occupies certain properties and holds machinery and vehicles under operating leases. Signet determines if an arrangement is a lease at the agreement’s inception. Certain operating leases include predetermined rent increases, which are charged to store occupancy costs within cost of sales on a straight-line basis over the lease term, including any construction period or other rental holiday. Other variable amounts paid under operating leases, such as taxes and common area maintenance, are charged to cost of sales as incurred. Premiums paid to acquire short-term leasehold properties and inducements to enter into a lease are recognized on a straight-line basis over the lease term. Certain leases provide for contingent rent based on a percentage of sales in excess of a predetermined level. Certain leases provide for variable rent increases based on indexes specified within the lease agreement. The variable increases based on an index are initially measured as part of the operating lease liability using the index at the commencement date. Contingent rent and subsequent changes to variable increases based on indexes will be recognized in the variable lease cost and included in the determination of total lease cost when it is probable that the expense has been incurred and the amount is reasonably estimable. Operating leases are included in operating lease ROU assets and current and non-current operating lease liabilities in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental secured borrowing rate based on the information available at the lease commencement date, including the underlying term and currency of the lease, in measuring the present value of lease payments. Lease terms, which include the period of the lease that cannot be canceled, may also include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with an initial term of twelve months or less are not recorded on the balance sheet, and we recognize short-term lease expense for these leases on a straight-line basis over the lease term. The operating lease ROU asset may also include initial direct costs, prepaid and/or accrued lease payments and the unamortized balance of lease incentives received. ASC 842, “Leases”, allows a lessee, as an accounting policy election by class of underlying asset, to choose not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. We have elected this practical expedient as presented in ASC 842, and do not separate non-lease components for all underlying asset classes. ROU assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable in accordance with the Company’s long-lived asset impairment assessment policy. Payments arising from operating lease activity, as well as variable and short-term lease payments not included within the operating lease liability, are included as operating activities on the Company’s consolidated statement of cash flows. Expenditures made to ready an asset for its intended use (i.e. leasehold improvements) are represented within investing activities within the Company’s consolidated statements of cash flows. The weighted average lease term and discount rate for the Company’s outstanding operating leases were as follows:
|  | January 28, 2023 |  | January 29, 2022
Weighted average remaining lease term |  | 7.2 years |  | 7.1 years
Weighted average discount rate |  | 5.8 | % |  | 5.5 | %
Total lease costs consist of the following:
(in millions) |  | Fiscal 2023 |  | Fiscal 2022 |  | Fiscal 2021
Operating lease cost |  | $ | 399.1 |  |  | $ | 431.8 |  |  | $ | 436.3 |
Short-term lease cost |  | 47.4 |  |  | 11.5 |  |  | 16.3 |
Variable lease cost |  | 119.7 |  |  | 127.0 |  |  | 110.3 |
Sublease income |  | (1.5) |  |  | (1.9) |  |  | (1.8) |
Total lease cost |  | $ | 564.7 |  |  | $ | 568.4 |  |  | $ | 561.1 |
Supplemental cash flow information related to leases consist of the following:
(in millions) |  | Fiscal 2023 |  | Fiscal 2022 |  | Fiscal 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 387.5 |  |  | $ | 479.6 |  |  | $ | 400.4 |
Operating lease right-of-use assets obtained in exchange for lease obligations (1) |  | 191.5 |  |  | 168.8 |  |  | 70.8 |
Reduction in the carrying amount of ROU assets (2) |  | 331.2 |  |  | 351.7 |  |  | 348.3 |
(1) Includes $39.1 million and $56.9 million of ROU assets acquired from Blue Nile in Fiscal 2023 and Diamonds Direct in Fiscal 2022, respectively, per Note 4. (2) Excludes ROU asset impairment charges of $18.4 million net, ROU asset impairment gains of $0.1 million, and ROU asset impairment charges of $36.9 million during Fiscal 2023, Fiscal 2022, and Fiscal 2021, respectively, as further described in Note 17. The future minimum operating lease commitments for operating leases having initial or non-cancelable terms in excess of one year are as follows:
(in millions) |  | January 28, 2023
Fiscal 2024 |  | $ | 351.5 |
Fiscal 2025 |  | 277.0 |
Fiscal 2026 |  | 203.4 |
Fiscal 2027 |  | 149.2 |
Fiscal 2028 |  | 102.1 |
Thereafter |  | 433.4 |
Total minimum lease payments |  | $ | 1,516.6 |
Less: Imputed interest |  | (333.7) |
Present value of lease liabilities |  | $ | 1,182.9 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=77888251 + Details
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