Leases

9 Months Ended

Nov. 02, 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 39 weeks ended November 2, 2024, the Company recorded non-cash increases of $1,939 and $14,620, 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				Thirty-Nine Weeks Ended
	November 2,		October 28,		November 2,		October 28,
	2024		2023		2024		2023
Operating lease expense	$	17,226	$	16,448	$	51,385	$	48,165
Variable lease expense		5,926		5,474		18,283		16,702
Short-term lease expense		93		385		327		994
Total lease expense	$	23,245	$	22,307	$	69,995	$	65,861

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


	Thirty-Nine Weeks Ended
	November 2,		October 28,
	2024		2023
Operating cash flows from operating leases	$	55,885	$	51,849


	As of November 2,			As of October 28,
	2024			2023
Right-of-use assets obtained in exchange for new or remeasured operating lease liabilities	$	14,620		$	52,314
Terminated right-of-use assets and liabilities		—			—
Weighted-average remaining lease term - operating leases		5.92			5.83
Weighted-average discount rate - operating leases		7.61	%		7.76	%

In accordance with ASC 842, maturities of operating lease liabilities as of November 2, 2024 were as follows:


	Operating
Fiscal Year Ending:	Leases
2024 (remainder)	$	18,699
2025		72,751
2026		70,380
2027		63,761
2028		57,501
Thereafter		188,195
Undiscounted cash flows	$	471,287
Reconciliation of lease liabilities:
Present values	$	362,320
Lease liabilities - current		48,866
Lease liabilities - noncurrent		313,454
Lease liabilities - total	$	362,320
Difference between undiscounted and discounted cash flows	$	108,967

The Company has excluded in the table above approximately $7.9 million for a lease (undiscounted basis) that was entered into as of December 6, 2024. This lease will commence in 2025 with a lease term of 12 years.