Leases

3 Months Ended

Apr. 29, 2023

(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.

During the 13 weeks ended April 29, 2023, the Company recorded a non-cash increase of $37,888 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 for the periods presented:


	Thirteen Weeks Ended
	April 29,		April 30,
	2023		2022
Operating lease expense	$	15,588	$	14,395
Variable lease expense		5,493		4,302
Short-term lease expense		261		270
Total lease expense	$	21,342	$	18,967

In accordance with ASC 842, other information related to leases was as follows for the periods presented:


	Thirteen Weeks Ended
	April 29,			April 30,
	2023			2022
Operating cash flows from operating leases	$	(16,826	)	$	(15,520	)


	As of April 29,			As of April 30,
	2023			2022
Right-of-use assets obtained in exchange for new or remeasured operating lease liabilities	$	37,888		$	6,378
Terminated right-of-use assets and liabilities		—			—
Weighted-average remaining lease term - operating leases		5.83			5.66
Weighted-average discount rate - operating leases		7.80	%		8.21	%

In accordance with ASC 842, maturities of operating lease liabilities as of April 29, 2023 were as follows:


	Operating
Year Ending:	Leases
2023 (remainder)	$	52,950
2024		68,426
2025		61,714
2026		56,654
2027		49,103
Thereafter		168,548
Undiscounted cash flows	$	457,395
Reconciliation of lease liabilities:
Present values	$	343,271
Lease liabilities - current		46,631
Lease liabilities - noncurrent		296,640
Lease liabilities - total	$	343,271
Difference between undiscounted and discounted cash flows	$	114,124

The Company has excluded in the table above approximately $14.1 million of leases (undiscounted basis) that were entered into as of May 15, 2023. These leases will commence in 2023 with lease terms of 10 years.