Leases

6 Months Ended

Aug. 03, 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 and 26 weeks ended August 3, 2024, the Company recorded non-cash increases of $5,629 and $12,681, respectively, 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				Twenty-Six Weeks Ended
	August 3,		July 29,		August 3,		July 29,
	2024		2023		2024		2023
Operating lease expense	$	17,123	$	16,129	$	34,159	$	31,717
Variable lease expense		6,129		5,735		12,357		11,228
Short-term lease expense		100		348		234		609
Total lease expense	$	23,352	$	22,212	$	46,750	$	43,554

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


	Twenty-Six Weeks Ended
	August 3,		July 29,
	2024		2023
Operating cash flows from operating leases	$	37,226	$	33,984


	As of August 3,			As of July 29,
	2024			2023
Right-of-use assets obtained in exchange for new or remeasured operating lease liabilities	$	12,681		$	46,081
Terminated right-of-use assets and liabilities		—			—
Weighted-average remaining lease term - operating leases		6.00			5.83
Weighted-average discount rate - operating leases		7.63	%		7.78	%

In accordance with ASC 842, maturities of operating lease liabilities as of August 3, 2024 were as follows:


	Operating
Fiscal Year Ending:	Leases
2024 (remainder)	$	37,406
2025		72,726
2026		70,213
2027		63,604
2028		56,593
Thereafter		180,120
Undiscounted cash flows	$	480,662
Reconciliation of lease liabilities:
Present values	$	368,151
Lease liabilities - current		49,129
Lease liabilities - noncurrent		319,022
Lease liabilities - total	$	368,151
Difference between undiscounted and discounted cash flows	$	112,511

The Company has excluded in the table above approximately $7.9 million for a lease (undiscounted basis) that was entered into as of August 30, 2024. This lease will commence in 2025 with a lease term of 12 years.