XML 20 R10.htm IDEA: XBRL DOCUMENT
v3.23.3

Lease Accounting | 9 Months Ended
--- | ---
Oct. 28, 2023
Leases [Abstract] |
Lease Accounting | Lease Accounting The Company primarily leases its showrooms, advertising, licensing, sales and merchandising offices, remote distribution and warehousing facilities and retail and factory outlet store locations under operating lease agreements expiring on various dates through January 2039. The Company also leases some of its equipment, as well as computer hardware and software, under operating and finance lease agreements expiring on various dates through October 2028. The Company’s lease agreements primarily provide for lease payments based on a minimum annual rental amount, a percentage of annual sales volume, periodic adjustments related to inflation or a combination of such lease payments. Certain retail store leases provide for lease payments based upon the minimum annual rental amount and a percentage of annual sales volume, generally ranging from 3% to 28%, when specific sales volumes are exceeded. The Company’s retail concession leases also provide for lease payments primarily based upon a percentage of annual sales volume, which averages approximately 25%. In addition to the amounts as disclosed below, the Company has estimated additional operating lease commitments of approximately $19.3 million for leases where the Company has not yet taken possession of the underlying asset as of October 28, 2023. As such, the related operating lease ROU assets and operating lease liabilities have not been recognized in the Company’s condensed consolidated balance sheet as of October 28, 2023. The components of leases are (in thousands):
|  | Oct 28, 2023 |  | Jan 28, 2023 |  |
Assets | Balance Sheet Location |  |  |  |  |
Operating | Operating lease right-of-use assets | $ | 657,363 |  |  | $ | 636,148 |  |  |
Finance | Property and equipment, net | 16,536 |  |  | 19,055 |  |  |
Total lease assets | $ | 673,899 |  |  | $ | 655,203 |  |  |
Liabilities | Balance Sheet Location |  |  |  |  |
Current: |  |  |  |  |  |
Operating | Current portion of operating lease liabilities | $ | 165,420 |  |  | $ | 170,192 |  |  |
Finance | Current portion of borrowings and finance lease obligations | 6,999 |  |  | 6,684 |  |  |
Noncurrent: |  |  |  |  |  |
Operating | Long-term operating lease liabilities | 538,731 |  |  | 528,236 |  |  |
Finance | Long-term debt and finance lease obligations | 10,793 |  |  | 13,181 |  |  |
Total lease liabilities | $ | 721,943 |  |  | $ | 718,293 |  |  |
The components of lease costs are (in thousands):
|  | Three Months Ended |  | Nine Months Ended
| Income Statement Location | Oct 28, 2023 |  | Oct 29, 2022 |  | Oct 28, 2023 |  | Oct 29, 2022
Operating lease costs | Cost of product sales | $ | 44,964 |  |  | $ | 43,361 |  |  | $ | 136,367 |  |  | $ | 131,450 |
Operating lease costs | Selling, general and administrative expenses | 6,744 |  |  | 6,000 |  |  | 19,941 |  |  | 18,582 |
Operating lease costs 1 | Net (gains) losses on lease modifications | 537 |  |  | (146) |  |  | (1,894) |  |  | (1,654) |
Finance lease costs |  |  |  |  |  |  |  |
Amortization of leased assets | Cost of product sales | 9 |  |  | 21 |  |  | 61 |  |  | 60 |
Amortization of leased assets | Selling, general and administrative expenses | 1,635 |  |  | 1,510 |  |  | 4,747 |  |  | 4,585 |
Interest on lease liabilities | Interest expense | 179 |  |  | 209 |  |  | 577 |  |  | 747 |
Variable lease costs 2 | Cost of product sales | 23,400 |  |  | 21,682 |  |  | 71,551 |  |  | 64,462 |
Variable lease costs 2 | Selling, general and administrative expenses | 804 |  |  | 669 |  |  | 2,551 |  |  | 2,438 |
Short-term lease costs | Cost of product sales | 92 |  |  | 87 |  |  | 241 |  |  | 273 |
Short-term lease costs | Selling, general and administrative expenses | 2,015 |  |  | 1,722 |  |  | 4,306 |  |  | 4,600 |
Total lease costs | $ | 80,379 |  |  | $ | 75,115 |  |  | $ | 238,448 |  |  | $ | 225,543 |
______________________________________________________________________ Notes: 1 During the three and nine months ended October 28, 2023 and October 29, 2022, net (gains) losses on lease modifications related primarily to the early termination of certain lease agreements. Operating lease costs for these locations prior to the early termination were included in cost of product sales. 2 During the three and nine months ended October 28, 2023, variable lease costs included certain rent concessions of approximately $0.4 million and $1.4 million, respectively, received by the Company, primarily in Europe. During the three and nine months ended October 29, 2022, variable lease costs included certain rent concessions of approximately $1.1 million and $4.6 million, respectively, received by the Company, primarily in Europe, related to the COVID-19 pandemic. Maturities of the Company’s operating and finance lease liabilities as of October 28, 2023 are (in thousands):
| Operating Leases |  |  |  |  |  |
Maturity of Lease Liabilities | Non-Related Parties |  | Related Parties |  | Finance Leases |  | Total |  |
Fiscal 2024 | $ | 62,999 |  |  | $ | 2,723 |  |  | $ | 2,806 |  |  | $ | 68,528 |  |  |
Fiscal 2025 | 160,784 |  |  | 7,626 |  |  | 6,092 |  |  | 174,502 |  |  |
Fiscal 2026 | 125,306 |  |  | 7,199 |  |  | 5,593 |  |  | 138,098 |  |  |
Fiscal 2027 | 108,543 |  |  | 7,760 |  |  | 3,129 |  |  | 119,432 |  |  |
Fiscal 2028 | 81,470 |  |  | 7,681 |  |  | 1,334 |  |  | 90,485 |  |  |
After fiscal 2028 | 222,361 |  |  | 20,755 |  |  | 287 |  |  | 243,403 |  |  |
Total lease payments | 761,463 |  |  | 53,744 |  |  | 19,241 |  |  | 834,448 |  |  |
Less: Interest | 99,732 |  |  | 11,324 |  |  | 1,449 |  |  | 112,505 |  |  |
Present value of lease liabilities | $ | 661,731 |  |  | $ | 42,420 |  |  | $ | 17,792 |  |  | $ | 721,943 |  |  |
Other supplemental information is (in thousands):
Lease Term and Discount Rate | Oct 28, 2023 |  |  |  |  |  |
Weighted-average remaining lease term |  |  |  |  |  |  |
Operating leases | 6.2 years |  |  |  |  |  |
Finance leases | 3.3 years |  |  |  |  |  |
Weighted-average discount rate |  |  |  |  |  |  |
Operating leases | 4.8% |  |  |  |  |  |
Finance leases | 5.1% |  |  |  |  |  |
| Nine Months Ended
Supplemental Cash Flow Information | Oct 28, 2023 |  | Oct 29, 2022
Cash paid for amounts included in the measurement of lease liabilities |  |  |
Operating cash flows from operating leases | $ | 155,379 |  |  | $ | 166,910 |
New operating ROU assets obtained in exchange for lease liabilities | $ | 128,756 |  |  | $ | 106,427 |
Impairment During the three and nine months ended October 28, 2023 and October 29, 2022, there were immaterial ROU asset impairment charges. Asset impairment charges are generally determined based on the excess of carrying value over the fair value of the ROU assets. The Company uses estimates of market participant rents to calculate fair value of the ROU assets. Refer to Note 15 for more information on the Company’s impairment testing.
Lease Accounting | Lease Accounting The Company primarily leases its showrooms, advertising, licensing, sales and merchandising offices, remote distribution and warehousing facilities and retail and factory outlet store locations under operating lease agreements expiring on various dates through January 2039. The Company also leases some of its equipment, as well as computer hardware and software, under operating and finance lease agreements expiring on various dates through October 2028. The Company’s lease agreements primarily provide for lease payments based on a minimum annual rental amount, a percentage of annual sales volume, periodic adjustments related to inflation or a combination of such lease payments. Certain retail store leases provide for lease payments based upon the minimum annual rental amount and a percentage of annual sales volume, generally ranging from 3% to 28%, when specific sales volumes are exceeded. The Company’s retail concession leases also provide for lease payments primarily based upon a percentage of annual sales volume, which averages approximately 25%. In addition to the amounts as disclosed below, the Company has estimated additional operating lease commitments of approximately $19.3 million for leases where the Company has not yet taken possession of the underlying asset as of October 28, 2023. As such, the related operating lease ROU assets and operating lease liabilities have not been recognized in the Company’s condensed consolidated balance sheet as of October 28, 2023. The components of leases are (in thousands):
|  | Oct 28, 2023 |  | Jan 28, 2023 |  |
Assets | Balance Sheet Location |  |  |  |  |
Operating | Operating lease right-of-use assets | $ | 657,363 |  |  | $ | 636,148 |  |  |
Finance | Property and equipment, net | 16,536 |  |  | 19,055 |  |  |
Total lease assets | $ | 673,899 |  |  | $ | 655,203 |  |  |
Liabilities | Balance Sheet Location |  |  |  |  |
Current: |  |  |  |  |  |
Operating | Current portion of operating lease liabilities | $ | 165,420 |  |  | $ | 170,192 |  |  |
Finance | Current portion of borrowings and finance lease obligations | 6,999 |  |  | 6,684 |  |  |
Noncurrent: |  |  |  |  |  |
Operating | Long-term operating lease liabilities | 538,731 |  |  | 528,236 |  |  |
Finance | Long-term debt and finance lease obligations | 10,793 |  |  | 13,181 |  |  |
Total lease liabilities | $ | 721,943 |  |  | $ | 718,293 |  |  |
The components of lease costs are (in thousands):
|  | Three Months Ended |  | Nine Months Ended
| Income Statement Location | Oct 28, 2023 |  | Oct 29, 2022 |  | Oct 28, 2023 |  | Oct 29, 2022
Operating lease costs | Cost of product sales | $ | 44,964 |  |  | $ | 43,361 |  |  | $ | 136,367 |  |  | $ | 131,450 |
Operating lease costs | Selling, general and administrative expenses | 6,744 |  |  | 6,000 |  |  | 19,941 |  |  | 18,582 |
Operating lease costs 1 | Net (gains) losses on lease modifications | 537 |  |  | (146) |  |  | (1,894) |  |  | (1,654) |
Finance lease costs |  |  |  |  |  |  |  |
Amortization of leased assets | Cost of product sales | 9 |  |  | 21 |  |  | 61 |  |  | 60 |
Amortization of leased assets | Selling, general and administrative expenses | 1,635 |  |  | 1,510 |  |  | 4,747 |  |  | 4,585 |
Interest on lease liabilities | Interest expense | 179 |  |  | 209 |  |  | 577 |  |  | 747 |
Variable lease costs 2 | Cost of product sales | 23,400 |  |  | 21,682 |  |  | 71,551 |  |  | 64,462 |
Variable lease costs 2 | Selling, general and administrative expenses | 804 |  |  | 669 |  |  | 2,551 |  |  | 2,438 |
Short-term lease costs | Cost of product sales | 92 |  |  | 87 |  |  | 241 |  |  | 273 |
Short-term lease costs | Selling, general and administrative expenses | 2,015 |  |  | 1,722 |  |  | 4,306 |  |  | 4,600 |
Total lease costs | $ | 80,379 |  |  | $ | 75,115 |  |  | $ | 238,448 |  |  | $ | 225,543 |
______________________________________________________________________ Notes: 1 During the three and nine months ended October 28, 2023 and October 29, 2022, net (gains) losses on lease modifications related primarily to the early termination of certain lease agreements. Operating lease costs for these locations prior to the early termination were included in cost of product sales. 2 During the three and nine months ended October 28, 2023, variable lease costs included certain rent concessions of approximately $0.4 million and $1.4 million, respectively, received by the Company, primarily in Europe. During the three and nine months ended October 29, 2022, variable lease costs included certain rent concessions of approximately $1.1 million and $4.6 million, respectively, received by the Company, primarily in Europe, related to the COVID-19 pandemic. Maturities of the Company’s operating and finance lease liabilities as of October 28, 2023 are (in thousands):
| Operating Leases |  |  |  |  |  |
Maturity of Lease Liabilities | Non-Related Parties |  | Related Parties |  | Finance Leases |  | Total |  |
Fiscal 2024 | $ | 62,999 |  |  | $ | 2,723 |  |  | $ | 2,806 |  |  | $ | 68,528 |  |  |
Fiscal 2025 | 160,784 |  |  | 7,626 |  |  | 6,092 |  |  | 174,502 |  |  |
Fiscal 2026 | 125,306 |  |  | 7,199 |  |  | 5,593 |  |  | 138,098 |  |  |
Fiscal 2027 | 108,543 |  |  | 7,760 |  |  | 3,129 |  |  | 119,432 |  |  |
Fiscal 2028 | 81,470 |  |  | 7,681 |  |  | 1,334 |  |  | 90,485 |  |  |
After fiscal 2028 | 222,361 |  |  | 20,755 |  |  | 287 |  |  | 243,403 |  |  |
Total lease payments | 761,463 |  |  | 53,744 |  |  | 19,241 |  |  | 834,448 |  |  |
Less: Interest | 99,732 |  |  | 11,324 |  |  | 1,449 |  |  | 112,505 |  |  |
Present value of lease liabilities | $ | 661,731 |  |  | $ | 42,420 |  |  | $ | 17,792 |  |  | $ | 721,943 |  |  |
Other supplemental information is (in thousands):
Lease Term and Discount Rate | Oct 28, 2023 |  |  |  |  |  |
Weighted-average remaining lease term |  |  |  |  |  |  |
Operating leases | 6.2 years |  |  |  |  |  |
Finance leases | 3.3 years |  |  |  |  |  |
Weighted-average discount rate |  |  |  |  |  |  |
Operating leases | 4.8% |  |  |  |  |  |
Finance leases | 5.1% |  |  |  |  |  |
| Nine Months Ended
Supplemental Cash Flow Information | Oct 28, 2023 |  | Oct 29, 2022
Cash paid for amounts included in the measurement of lease liabilities |  |  |
Operating cash flows from operating leases | $ | 155,379 |  |  | $ | 166,910 |
New operating ROU assets obtained in exchange for lease liabilities | $ | 128,756 |  |  | $ | 106,427 |
Impairment During the three and nine months ended October 28, 2023 and October 29, 2022, there were immaterial ROU asset impairment charges. Asset impairment charges are generally determined based on the excess of carrying value over the fair value of the ROU assets. The Company uses estimates of market participant rents to calculate fair value of the ROU assets. Refer to Note 15 for more information on the Company’s impairment testing.

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
Name: | us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- 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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration