Leases

6 Months Ended

Jun. 30, 2024

The Company leases its corporate offices, retail spaces and authentication centers under various noncancelable operating leases with terms ranging from one year to fifteen years.

The Company recorded operating lease costs of $5.3 million and $5.6 million for the three months ended June 30, 2024 and 2023, respectively, and $10.4 million and $12.8 million for the six months ended June 30, 2024 and 2023, respectively. The Company also incurred $1.4 million and $1.3 million of variable lease costs for the three months ended June 30, 2024 and 2023, respectively, and $2.9 million and $2.6 million of variable lease costs for the six months ended June 30, 2024 and 2023, respectively. The variable lease costs are comprised primarily of the Company’s proportionate share of operating expenses, property taxes and insurance.

Due to the office and store closures in the six months ended June 30, 2023, the Company reviewed its right-of-use assets for impairment. Impairment losses are measured and recorded for the excess of carrying value over its fair value, estimated based on expected future cash flows using discount rate and other quantitative and qualitative factors. As a result, the Company recorded $26.3 million related to the impairment of certain office and store right-of-use assets, for the six months ended June 30, 2023. No impairment charges were recorded during the six months ended June 30, 2024. The impairment charges are included in restructuring charges in the condensed statements of operations.

Maturities of operating lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands):


Fiscal Year	Amount
Remainder of 2024	$	14,384
2025	28,765
2026	28,508
2027	24,554
2028	21,840
Thereafter	20,210
Total future minimum payments	$	138,261
Less: Imputed interest	(19,157)
Present value of operating lease liabilities	$	119,104

Supplemental cash flow information related to the Company’s operating leases are as follows (in thousands):


	Six Months Ended June 30,
	2024		2023
Operating cash flows used for operating leases	$	13,604	$	15,623
Operating lease assets obtained in exchange for operating lease liabilities (including remeasurement of right-of-use assets and lease liabilities due to lease modifications)	$	4,047	$	(1,487)

The weighted average remaining lease term and discount rate for the Company’s operating leases are as follows:


	June 30, 2024
Weighted average remaining lease term	5.0 years
Weighted average discount rate	6.2	%

The Company has leases for certain vehicles and equipment that are classified as finance leases. The finance lease right-of-use asset and finance lease liabilities for these vehicle and equipment leases are immaterial as of June 30, 2024 and December 31, 2023.