Leases

9 Months Ended

Oct. 29, 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 39 weeks ended October 29, 2022, the Company recorded a non-cash increase of $22,078 and $46,050 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				Thirty-Nine Weeks Ended
	October 29,		October 30,		October 29,		October 30,
	2022		2021		2022		2021
Operating lease expense	$	14,729	$	14,365	$	43,674	$	42,067
Variable lease expense		4,635		4,173		13,697		12,730
Short-term lease expense		337		398		921		878
Total lease expense	$	19,701	$	18,936	$	58,292	$	55,675

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


	Thirty-Nine Weeks Ended
	October 29,			October 30,
	2022			2021
Operating cash flows from operating leases	$	(47,402	)	$	(44,094	)


	As of October 29,			As of October 30,
	2022			2021
Right-of-use assets obtained in exchange for new or remeasured operating lease liabilities	$	46,050		$	27,979
Terminated right-of-use assets and liabilities		—			—
Weighted-average remaining lease term - operating leases		5.83			5.83
Weighted-average discount rate - operating leases		8.06	%		8.29	%

In accordance with ASC 842, maturities of operating lease liabilities as of October 29, 2022 were as follows:


	Operating
Year Endings:	Leases
2022 (remainder)	$	16,359
2023		66,188
2024		58,391
2025		51,831
2026		46,666
Thereafter		174,520
Undiscounted cash flows	$	413,955
Reconciliation of lease liabilities:
Present values	$	304,535
Lease liabilities - current		43,440
Lease liabilities - noncurrent		261,095
Lease liabilities - total	$	304,535
Difference between undiscounted and discounted cash flows	$	109,420

The Company has excluded in the table above approximately $41.8 million of leases (undiscounted basis) that were entered into as of December 8, 2022. These leases will commence in 2023 with lease terms of 10 years.