Leases

6 Months Ended

Jul. 31, 2022

Note 5: Leases

We currently lease most of the buildings or sites for our stores, store support centers, and warehouse space under facility operating leases. These leases typically have initial terms ranging from ten to twenty years and include one or more options to renew. When determining the lease term, we include option periods for which renewal is reasonably certain. Most of the leases require us to pay property taxes, insurance, and maintenance of the leased assets. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating leases also includes certain equipment leases that have a term in excess of one year. Certain facility leases also have provisions for additional contingent rentals based on revenues.

During fiscal 2020 and the first half of fiscal 2021, the Company entered into rent relief agreements with our respective landlords. The Company elected to apply an available practical expedient to account for lease concessions and deferrals resulting directly from the

COVID-19

pandemic as though the enforceable rights and obligations to the deferrals existed in the respective contracts at lease inception and not account for the concessions as lease modifications unless the concession results in a substantial increase in the Company’s obligations. The majority of rent relief agreements qualified for this accounting election, and the remaining agreements were treated as lease modifications, primarily due to a significant extension of the lease term. The Company has bifurcated our current operating lease liabilities into the portion that remains subject to accretion and the portion that is accounted for as a deferral of payments. The current portion of deferred occupancy costs is included in “Accrued liabilities” and the balance, or

$4,293 and $8,434

as of July 31, 2022, and January 30, 2022, respectively, is included in “Other liabilities” in the Consolidated Balance Sheets.

Operating lease cost, variable lease cost and short-term lease cost related primarily to our facilities is included in “Other store operating expenses” for our operating stores,

“Pre-opening

costs” for our stores not yet operating, or “General and administrative expenses” for our corporate office and warehouse, in the Consolidated Statements of Comprehensive Income.

The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and property taxes, are as follows for the fiscal year ended:


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 31, 2022		August 1, 2021		July 31, 2022		August 1, 2021
Operating lease cost	$	38,824	$	33,297	$	73,606	$	66,591
Variable lease cost		9,023		7,241		18,870		14,630
Short-term lease cost		195		187		312		310
Amortization of favorable/unfavorable lease contracts, net		84		—		84		—

Total	$	48,126	$	40,725	$	92,872	$	81,531

Minimum future maturities of operating lease liabilities were as follows as of July 31, 2022, by fiscal year:



Remainder of 2022	$	87,998
2023		191,510
2024		191,626
2025		192,813
2026		194,074
Thereafter		1,786,702

Total future operating lease liability	$	2,644,723
Less: interest		(971,763	)

Present value of operating lease liabilities	$	1,672,960

Operating lease payments in the table above includes minimum lease payments for future sites for which the leases have commenced. Operating lease payments exclude approximately

102,000

of minimum lease payments for seven executed facility leases which have not yet commenced.