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LEASES

12 Months Ended

Feb. 01, 2025

12. LEASES

The Company leases all of its retail locations, a manufacturing facility, and certain office locations, distribution centers and equipment. At contract inception, leases are evaluated and classified as either operating or finance leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

Lease right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. The majority of the Company’s leases do not provide an implicit rate and therefore, the Company uses an incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. For operating leases, lease expense for the minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are expensed as incurred.

The Company regularly analyzes the results of all of its stores and assesses the viability of underperforming stores to determine whether events or circumstances exist that indicate the stores should be closed or whether the carrying amount of their long-lived assets may not be recoverable. After allowing for an appropriate start-up period and consideration of any unusual nonrecurring events, property and equipment at stores and the lease right-of-use assets indicated as impaired are written down to fair value as calculated using a discounted cash flow method. The fair value of the lease right-of-use assets and property and equipment is determined utilizing projected cash flows for each store location, discounted using a risk-adjusted discount rate, subject to a market floor based on current market lease rates. Refer to Note 13 to the consolidated financial statements for further discussion of impairment charges on the Company’s operating lease right-of-use assets and property and equipment in its retail stores.

The weighted-average lease term and discount rate as of February 1, 2025 and February 3, 2024 were as follows:


	February 1, 2025		February 3, 2024
Weighted-average remaining lease term (in years)	6.1		5.7
Weighted-average discount rate	5.2	%	4.9	%

During 2024, the Company entered into new or amended leases that resulted in the recognition of right-of-use assets and lease obligations of $182.1 million on the consolidated balance sheets. As of February 1, 2025, the Company has entered into lease commitments for six retail locations for which the leases have not yet commenced. The Company anticipates that the leases for four of the new retail locations will begin in the next fiscal year and two will begin in fiscal year 2026. Upon commencement, right-of-use assets and lease liabilities of approximately $4.1 million and $3.2 million will be recorded on the consolidated balance sheets in 2025 and 2026, respectively.

The components of lease expense for 2024, 2023 and 2022 were as follows:


($ thousands)	2024		2023		2022
Operating lease expense	$	160,832	$	156,849	$	148,299
Variable lease expense		46,672		42,983		40,233
Short-term lease expense		1,149		2,757		4,059
Sublease income		—		—		(59)
Total lease expense	$	208,653	$	202,589	$	192,532

The aggregate future annual lease payments at February 1, 2025 were as follows:


($ thousands)
2025	$	188,415
2026		141,915
2027		109,694
2028		76,703
2029		52,979
Thereafter		130,861
Total minimum operating lease payments	$	700,567
Less imputed interest		(93,522)
Present value of lease obligations	$	607,045

Supplemental cash flow information related to leases is as follows:


($ thousands)	2024		2023		2022
Cash paid for lease obligations	$	158,156	$	181,420	$	167,163
Cash received from sublease income		—		—		59