Leases

9 Months Ended

Dec. 31, 2024

The Company enters into operating leases domestically and internationally to lease certain warehouse space, office facilities, space for its Brand and Factory House stores, and certain equipment under non-cancelable operating leases. The leases expire at various dates through 2038. Short-term lease payments were not material for the periods presented.

Lease Costs and Other Information

The Company recognizes lease expense on a straight-line basis over the lease term. There are no residual value guarantees that exist, and there are no restrictions or covenants imposed by leases. The following table illustrates operating and variable lease costs, included in selling, general and administrative expenses and certain costs relating to lease assets held solely for sublet purposes, included in other income (expense), net within the Company's Condensed Consolidated Statements of Operations, for the periods indicated:


	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2023		2024		2023
Operating lease costs	$	37,580	$	37,535	$	113,040	$	112,845
Variable lease costs	$	27,400	$	22,290	$	76,940	$	64,452

As previously disclosed, historically, variable lease costs primarily consisted of lease payments dependent on sales in Brand and Factory House stores. Prior period amounts, included in the table above, have been revised to also include other non-lease components payable to the lessor. Additionally, certain amounts previously disclosed as operating lease costs in error have been corrected to be classified as variable lease costs. This presentation change did not affect total lease related costs recorded within the Company's Condensed Consolidated Statements of Operations.

The Company subleases certain excess office facilities, retail space and warehouse space to third parties. Sublease income for the three and nine months ended December 31, 2024 was $3.3 million and $6.1 million, respectively. Sublease income for the three and nine months ended December 31, 2023 was not material.

The weighted average remaining lease term and discount rate for the periods indicated below were as follows:


	As of December 31, 2024		As of March 31, 2024
Weighted average remaining lease term (in years)	7.33		7.62
Weighted average discount rate	4.92	%	4.95	%

Supplemental Cash Flow Information

The following table presents supplemental information relating to cash flow arising from lease transactions:


	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2023		2024		2023
Operating cash outflows from operating leases	$	46,243	$	44,941	$	139,089	$	133,259
Leased assets obtained in exchange for new operating lease liabilities	$	13,840	$	29,239	$	50,156	$	50,698

Maturity of Lease Liabilities

The following table presents the future minimum lease payments under the Company's operating lease liabilities as of December 31, 2024:


Fiscal year ending March 31,
2025 (three months ending)	$	40,712
2026	155,201
2027	133,576
2028	113,941
2029	76,380
2030 and thereafter	321,524
Total lease payments	$	841,334
Less: Interest	131,384
Total present value of lease liabilities	$	709,950

As of December 31, 2024, the Company has additional operating lease obligations that have not yet commenced of approximately $70.2 million, which are not reflected in the table above. This amount includes approximately $56.6 million relating to an agreement with a third-party logistics provider to operate a distribution center in the Netherlands. This agreement has been assessed as containing a lease and is scheduled to commence in February 2026.