Leases (Tables)

6 Months Ended

Aug. 03, 2019

Leases [Abstract]

Summary of lease costs

Lease costs—net consist of the following (in thousands):

	Three Months Ended				Six Months Ended
	August 3,		August 4,		August 3,		August 4,
	2019		2018		2019		2018
Operating lease cost (1)(2)	$	23,259	$	22,743	$	42,376	$	44,089
Finance lease costs
Amortization of leased assets (1)		9,235		6,441		18,087		12,340
Interest on lease liabilities (3)		5,672		3,319		11,186		6,411
Sublease income (4)		(1,507)		(2,261)		(4,789)		(3,271)
Total lease costs—net	$	36,659	$	30,242	$	66,860	$	59,569

(1) Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of income based on the Company’s policy. Refer to Note 3—Significant Accounting Policies in the 2018 Form 10-K.

(2) Includes short-term leases and variable lease costs.

(3) Included in interest expense—net on the condensed consolidated statements of income.

(4) Included in selling, general and administrative expenses on the condensed consolidated statements of income.

Summary of lease right-of-use assets and lease liabilities

Lease right-of-use assets and lease liabilities consist of the following (in thousands):

		August 3,		February 2,
		2019		2019
	Balance Sheet Classification
Assets
Operating leases	Operating lease right-of-use assets	$	421,001	$	440,504
Finance leases (1)(2)	Property and equipment—net		650,699		646,875
Total lease right-of-use assets			1,071,700		1,087,379
Liabilities
Current
Operating leases	Operating lease liabilities	$	57,162	$	66,249
Finance leases	Other current liabilities		8,127		9,184
Total lease liabilities—current			65,289		75,433
Non-current
Operating leases	Non-current operating lease liabilities	$	415,803	$	437,557
Finance leases	Non-current finance lease liabilities		433,591		421,245
Total lease liabilities—non-current			849,394		858,802
Total lease liabilities		$	914,683	$	934,235

(1) Finance lease right-of-use assets include capitalized amounts related to the Company’s construction activities to design and build leased assets, as well as rent payments made to landlords for which the respective Galleries are not yet opened.

(2) Finance lease right-of-use assets are recorded net of accumulated amortization of $73.3 million and $55.5 million as of August 3, 2019 and February 2, 2019, respectively.

Summary of maturities of operating lease liabilities

The maturities of lease liabilities are as follows as of August 3, 2019 (in thousands):

Fiscal year	Operating Leases		Finance Leases		Total
Remainder of fiscal 2019	$	33,456	$	14,014	$	47,470
2020		78,990		33,456		112,446
2021		65,068		33,908		98,976
2022		57,226		34,385		91,611
2023		53,867		35,153		89,020
2024		49,901		35,689		85,590
Thereafter		228,093		548,302		776,395
Total lease payments (1)		566,601		734,907		1,301,508
Less—imputed interest (2)		(93,636)		(293,189)		(386,825)
Present value of lease liabilities (3)	$	472,965	$	441,718	$	914,683

(1) Total lease payments exclude $369.1 million of legally binding payments for leases signed but not yet commenced as of August 3, 2019.

(2) Calculated using the incremental borrowing rate for each lease at lease commencement.

(3) Excludes future commitments under short-term lease agreements of $1.4 million as of August 3, 2019.

Summary of maturities of finance lease liabilities

Fiscal year	Operating Leases		Finance Leases		Total
Remainder of fiscal 2019	$	33,456	$	14,014	$	47,470
2020		78,990		33,456		112,446
2021		65,068		33,908		98,976
2022		57,226		34,385		91,611
2023		53,867		35,153		89,020
2024		49,901		35,689		85,590
Thereafter		228,093		548,302		776,395
Total lease payments (1)		566,601		734,907		1,301,508
Less—imputed interest (2)		(93,636)		(293,189)		(386,825)
Present value of lease liabilities (3)	$	472,965	$	441,718	$	914,683

(1) Total lease payments exclude $369.1 million of legally binding payments for leases signed but not yet commenced as of August 3, 2019.

(2) Calculated using the incremental borrowing rate for each lease at lease commencement.

(3) Excludes future commitments under short-term lease agreements of $1.4 million as of August 3, 2019.

Summary of supplemental information related to leases

Supplemental information related to leases consists of the following:

	Six Months Ended
	August 3,		August 4,
	2019		2018
Weighted-average remaining lease term (years)
Operating leases		8.9	9.6
Finance leases		18.9	18.4
Weighted-average discount rate
Operating leases		3.81%	3.74%
Finance leases		5.26%	4.95%

Summary of other information related to leases

Other information related to leases consists of the following (in thousands):

	Six Months Ended
	August 3,			August 4,
	2019			2018
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(53,670)	$	(54,287)
Operating cash flows from finance leases		(11,186)		(6,411)
Financing cash flows from finance leases		(4,399)		(3,567)
Total cash outflows from leases	$	(69,255)	$	(64,265)
Lease right-of-use assets obtained in exchange for lease obligations (non-cash)
Finance leases	$	17,997	$	27,874
Operating leases		13,839		15,024