14. Leases

The Company leases its retail store locations and certain office space and equipment. The Company analyzes all leases at inception to determine if a right-of-use asset and lease liability should be recognized. Leases with an initial term of 12 months or less and leases with mutual termination clauses are not included on the condensed consolidated balance sheet. The lease liability is measured at the present value of future lease payments as of the lease commencement date, or as of the date of adoption of ASU 2016-02 for leases existing at the adoption date. The right-of-use asset recognized is based on the lease liability adjusted for prepaid and deferred rent and unamortized lease incentives.

Total lease cost is comprised of operating lease costs, short-term lease costs and variable lease costs, which include rent paid as a percentage of sales, common area maintenance, real estate taxes and insurance for the Company’s real estate leases. Lease expense for the twenty-six and thirteen weeks ended August 3, 2019 is as follows (in thousands):


	Twenty-Six Weeks Ended		Thirteen Weeks Ended
	August 3, 2019		August 3, 2019
Operating lease cost	$	23,858	$	12,081
Variable lease cost		4,263		1,947
Short term lease cost		515		259
Total lease cost	$	28,636	$	14,287

Future minimum lease payments as of August 3, 2019 are as follows (in thousands):


Fiscal Year	Lease Costs
Remainder of 2019	$	22,162
2020		48,848
2021		38,118
2022		26,151
2023		18,372
Thereafter		21,760
Total future minimum lease payments		175,411
Less: imputed interest		(15,333)	(1)
Total present value of lease liabilities	$	160,078	(2)

(1)

Calculated using the discount rate for each lease.

(2)

Includes short-term and long-term operating leases.

Adoption of the lease accounting standard (Topic 842) using the effective transition method requires the Company to provide relevant disclosures in accordance with ASC 840, Leases for all prior periods presented. Future minimum lease payments as of February 2, 2019 were as follows (in thousands):


Fiscal Year	Lease Costs
2019	$	47,289
2020		39,294
2021		28,228
2022		16,880
2023		9,440
Thereafter		7,836
Total future minimum lease payments	$	148,967

Certain operating leases provide for fixed monthly rents, while others provide for contingent rents computed as a percentage of net sales and others provide for a combination of both fixed monthly rents and contingent rents computed as a percentage of net sales.

Supplemental cash flow and other information related to operating leases for the twenty-six weeks ended August 3, 2019 is as follows (in thousands, except for weighted average amounts):


	Twenty-Six Weeks Ended
	August 3, 2019
Cash paid for operating leases	$	25,174
Right of use assets obtained in exchange for new operating lease liabilities	$	42,357

Weighted average remaining lease term (years) - operating leases		4.34
Weighted average discount rate - operating leases		3.75%