Leases

12 Months Ended

Jan. 30, 2021

Note 5 — Leases

The Company leases retail store facilities, corporate office space, warehouse facilities and certain vehicles and equipment under operating leases with terms generally ranging up to 10 years and expiring at various dates through 2030. Most of the retail store agreements include an initial term with renewal options and provide for minimum fixed rental payments. The Company does not include lease renewal options in the lease term for calculations of its right-of-use assets and liabilities until it is reasonably certain that the Company plans to renew these leases. A few retail store lease agreements have only variable lease payments based on a percentage of sales, while other store leases contain contingent rentals based on sales performance in excess of specified minimums in addition to minimum fixed rentals.

The majority of the Company’s leases have monthly fixed rent with additional costs that are not components of the lease (e.g., real estate taxes and insurance costs) and non-lease components (e.g., common area maintenance) either of which can be variable or fixed. These additional components are excluded from the calculation of the lease liability and right-of-use asset. The Company’s leases do not provide an implicit rate, so the incremental borrowing rate, based on the information available at commencement or modification date, is used in determining the present value of lease payments. For operating leases that commenced prior to the date of adoption of the new lease accounting guidance, the Company used the incremental borrowing rate that corresponded to the remaining lease term as of the date of adoption.

The Company's classification of lease cost on the Company's condensed consolidated statements of operations is as follows (in thousands):

	52 Week Period Ended ₍₁₎		52 Week Period Ended ₍₁₎
	January 30, 2021		February 1, 2020
Cost of sales ⁽²⁾
Operating lease cost	$	43,753	$	53,382
Short-term lease cost		755		1,469
Variable lease cost		1,554		1,329
Total lease cost in cost of sales		46,062		56,180
Other operating expenses
Operating lease cost		1,862		2,824
Short-term lease cost		60		382
Total lease cost in other operating expenses		1,922		3,206
Total lease cost	$	47,984	$	59,386

(1)	Total lease cost excludes expense for non-lease components including common area maintenance and excludes costs that are not a component of the lease including real estate taxes, insurance, sales taxes and utilities for the Company’s leases.

(2)	Cost of sales includes all distribution center lease costs and store occupancy-related lease costs.

As of January 30, 2021, future minimum payments, by year and in the aggregate, under all operating leases with initial terms of one year or more consist of the following (in thousands):

	Operating Leases
2021	$	60,159
2022		48,140
2023		37,330
2024		30,395
2025		23,726
Thereafter		32,230
Total lease payments⁽¹⁾		231,980
Less: interest		(38,031	)
Present value of lease liabilities	$	193,949

(1)	Operating lease payments exclude $485,000 of legally binding minimum lease payments for a lease signed but not yet commenced for one new store.

The Company’s lease term and discount rate is as follows:

	January 30, 2021
Weighted-average remaining lease term (years)		5.2
Weighted-average discount rate		7.4	%

Cash paid for amounts included in the measurement of lease liabilities is as follows (in thousands):

52 Weeks Ended

January 30, 2021

52 Weeks Ended

February 1, 2020

Operating cash flows from operating leases

57,310

64,654