Leases

12 Months Ended

Feb. 01, 2025

E. LEASES

The Company leases all of its store locations and its corporate headquarters, which also includes its distribution center, under operating leases. The store leases typically have initial terms of 10 years, with options that usually permit renewal for additional five-year periods. The initial term of the lease for the corporate headquarters is 20 years, with the opportunity to extend for six additional consecutive periods of five years, beginning in fiscal 2026. The Company also leases certain equipment and other assets under operating leases, typically with initial terms of 3 to 5 years. The Company is generally obligated for the cost of property taxes, insurance and common area maintenance fees relating to its leases, which are considered variable lease costs and are expensed as incurred.

ASC 842 requires the assessment of any lease modification to determine if the modification should be treated as a separate lease and if not, modification accounting would be applied. Lease modification accounting requires the recalculation of the ROU asset, lease liability and lease expense over the respective lease term. As of February 1, 2025, the Company’s operating leases liabilities represent the present value of the remaining future minimum lease payments updated based on concessions and lease modifications, as applicable.

Lease costs related to store locations are included in cost of goods sold including occupancy costs on the Consolidated Statements of Operations, and expenses and lease costs related to the corporate headquarters and equipment leases are included in selling, general and administrative expenses on the Consolidated Statements of Operations.

The following table is a summary of the Company’s components of lease costs for fiscal 2024, fiscal 2023 and fiscal 2022:


	Fiscal 2024		Fiscal 2023		Fiscal 2022
(in thousands)
Operating lease cost	$	48,838	$	45,018	$	44,297
Variable lease costs(1)		13,288		12,849		12,885
Total lease costs	$	62,126	$	57,867	$	57,182

(1)

Variable lease costs include the cost of property taxes, insurance and common area maintenance fees related to its leases.

Supplemental cash flow and balance sheet information related to leases for fiscal 2024, fiscal 2023 and fiscal 2022 are as follows:


(in thousands)	Fiscal 2024			Fiscal 2023			Fiscal 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	52,723		$	51,411		$	55,068
Non-cash operating activities:
Right-of-use assets obtained in exchange for operating lease liabilities	$	69,576		$	46,960		$	26,239

Weighted average remaining lease term	5.4 yrs.			4.9 yrs.			4.3 yrs.
Weighted average discount rate		6.33	%		6.52	%		6.39	%

The table below reconciles the undiscounted cash flows for each of the next five years and thereafter to the operating lease liabilities recorded on the Consolidated Balance Sheet as of February 1, 2025:


(in thousands)
2025	$	46,489
2026		45,014
2027		38,027
2028		29,520
2029		21,757
Thereafter		39,175
Total minimum lease payments	$	219,982
Less: amount of lease payments representing interest		35,367
Present value of future minimum lease payments	$	184,615
Less: current obligations under leases		35,920
Noncurrent lease obligations	$	148,695

As of February 1, 2025, the Company had entered into eight 10-year store leases that have not yet commenced with aggregated estimated future lease payments of approximately $10.2 million, which are not included in the above table. The leases are expected to commence in the first half of fiscal 2025.