Leases

12 Months Ended

Feb. 03, 2024

Leases

Leases

8. Leases

The Company leases its retail store locations, its distribution centers and certain office space and equipment. Leases for store locations are typically for a term of five years with options to extend for one or more five-year periods. In fiscal 2022, the Company completed sale-leasebacks of its distribution centers. The Darlington, South Carolina distribution center lease has a 20-year lease term with the option to extend for six additional periods of five years each. The Roland, Oklahoma distribution center has a 15-year lease term with the option to extend for six additional periods of five years each. The sale-leaseback transactions resulted in a gain of approximately $64.1 million in the Statement of Operations for the year ended January 28, 2023.

The Company analyzes all leases at inception to determine if a right-of-use asset and lease liability should be recognized. Leases with an initial term of 12 months or less and leases with mutual termination clauses are not included on the consolidated balance sheets. The lease liability is measured at the present value of future lease payments as of the lease commencement date.

Total lease cost is comprised of operating lease costs, short-term lease costs and variable lease costs, which include rent paid as a percentage of sales, common area maintenance, real estate taxes and insurance for the Company’s real estate leases. Lease costs consisted of the following (in thousands):

	Fiscal Year
	2023		2022		2021
Operating lease cost	$	62,163	$	60,167	$	52,737
Variable lease cost		11,070		9,911		10,938
Short term lease cost		1,598		1,395		1,091
Total lease cost	$	74,831	$	71,473	$	64,766

Future minimum lease payments as of February 3, 2024 are as follows (in thousands):

Fiscal Year	Lease Costs
2024	$	57,012
2025		52,638
2026		41,363
2027		30,650
2028		22,674
Thereafter		102,932
Total future minimum lease payments		307,269
Less: imputed interest		(72,617)	(1)
Total present value of lease liabilities	$	234,652	(2)

(1) Calculated using the discount rate for each lease.

(2) Includes short-term and long-term portions of operating leases.

Certain operating leases provide for fixed monthly rents, while others provide for contingent rents computed as a percentage of net sales and others provide for a combination of both fixed monthly rents and contingent rents computed as a percentage of net sales.

Supplemental cash flow and other information related to operating leases are as follows (in thousands, except for weighted average amounts):

	Fiscal Year
	2023		2022		2021
Cash paid for operating leases	$	68,371	$	56,053	$	56,932
Right of use assets obtained in exchange for new operating lease liabilities	$	27,836	$	101,241	$	75,359
Weighted average remaining lease term (years) - operating leases		7.54		7.83		5.32
Weighted average discount rate - operating leases		5.04%		4.49%		2.86%