Leases

3 Months Ended

May 04, 2024

(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 May 4, 2024, the Company recorded a non-cash increase of $7,052 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
	May 4,		April 29,
	2024		2023
Operating lease expense	$	17,036	$	15,588
Variable lease expense		6,228		5,493
Short-term lease expense		134		261
Total lease expense	$	23,398	$	21,342

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


	Thirteen Weeks Ended
	May 4,			April 29,
	2024			2023
Operating cash flows from operating leases	$	(18,518	)	$	(16,826	)


	As of May 4,			As of April 29,
	2024			2023
Right-of-use assets obtained in exchange for new or remeasured operating lease liabilities	$	7,052		$	37,888
Terminated right-of-use assets and liabilities		—			—
Weighted-average remaining lease term - operating leases		6.00			5.83
Weighted-average discount rate - operating leases		7.68	%		7.80	%

In accordance with ASC 842, maturities of operating lease liabilities as of May 4, 2024 were as follows:


	Operating
Fiscal Year Ending:	Leases
2024 (remainder)	$	56,112
2025		71,875
2026		67,508
2027		60,421
2028		53,408
Thereafter		168,269


Undiscounted cash flows	$	477,593
Reconciliation of lease liabilities:
Present values	$	364,242
Lease liabilities - current		49,351
Lease liabilities - noncurrent		314,891
Lease liabilities - total	$	364,242
Difference between undiscounted and discounted cash flows	$	113,351

The Company has excluded in the table above approximately $13.8 million of leases (undiscounted basis) that were entered into as of June 5, 2024. These leases will commence in 2025 with lease terms of up to 12 years.