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Leases

6 Months Ended

Jul. 30, 2022

(6) Leases

At the inception of the lease, the Company’s operating leases have remaining certain lease terms of up to 15 years, which typically includes multiple options for the Company to extend the lease which are not reasonably certain.

The Company determines whether a contract is or contains a lease at contract inception. As the rate implicit in the lease is not readily determinable in most of the Company’s leases, the Company uses its incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The operating lease asset also includes any fixed lease payments made and includes lease incentives and incurred initial direct costs. Operating lease expense for fixed lease payments is recognized on a straight-line basis over the lease term. The Company’s lease terms may include options to extend or terminate the lease. Additionally, the Company’s leases do not contain any material residual guarantees or material restrictive covenants.

In the 13 and 26 weeks ended July 30, 2022, the Company recorded a non-cash increase of $17,594 and $23,972 to the right of use assets and operating lease liabilities resulting from lease remeasurements from the exercise of lease extension options, acquired leases, and new leases added.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

In accordance with ASC 842, total lease expense was comprised of the following:



	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 30,		July 31,		July 30,		July 31,
	2022		2021		2022		2021
Operating lease expense	$	14,550	$	13,836	$	28,945	$	27,702
Variable lease expense		4,760		4,282		9,062		8,557
Short-term lease expense		314		223		584		480
Total lease expense	$	19,624	$	18,341	$	38,591	$	36,739

In accordance with ASC 842, other information related to leases was as follows:


	Twenty-Six Weeks Ended
	July 30,		July 31,
	2022		2021
Operating cash flows from operating leases	$	(31,351)	$	(29,209)
Cash paid for lease liabilities - operating leases		(31,351)		(29,209)

	As of July 30,		As of July 31,
	2022		2021

Right-of-use assets obtained in exchange for new or remeasured operating lease liabilities	$	23,972	$	24,443
Terminated right-of-use assets and liabilities		—		—
Weighted-average remaining lease term - operating leases		5.75		6
Weighted-average discount rate - operating leases		8.16%		8.33%

In accordance with ASC 842, maturities of operating lease liabilities as of July 30, 2022 were as follows:


	Operating
Year Endings:	Leases
2022 (remainder)		32,389
2023		62,579
2024		54,350
2025		47,790
2026		42,625
Thereafter		151,658
Undiscounted cash flows	$	391,391
Reconciliation of lease liabilities:
Present values	$	285,791
Lease liabilities - current		42,195
Lease liabilities - noncurrent		243,596
Lease liabilities - total	$	285,791
Difference between undiscounted and discounted cash flows	$	105,600

The Company has excluded in the table above approximately $29.1 million of leases (undiscounted basis) that were entered into as of September 2, 2022. These leases will commence in 2022 and 2023 with lease terms of 10 years.