Leases (Tables)

6 Months Ended

Jul. 31, 2021

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


	THREE MONTHS ENDED				SIX MONTHS ENDED
	JULY 31,		AUGUST 1,		JULY 31,		AUGUST 1,
	2021		2020		2021		2020
Operating lease cost⁽¹⁾	$	25,590	$	20,181	$	49,157	$	40,907
Finance lease costs
Amortization of leased assets⁽¹⁾		10,796		10,125		21,714		19,713
Interest on lease liabilities⁽²⁾		6,607		5,948		12,757		11,729
Variable lease costs ⁽³⁾		7,913		3,920		16,340		7,480
Sublease income⁽⁴⁾		(1,136)		(2,119)		(2,318)		(4,694)
Total lease costs—net	$	49,770	$	38,055	$	97,650	$	75,135

(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 our accounting policy. Refer to Note 3—Significant Accounting Policies in the 2020 Form 10-K.

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

(3)

Represents variable lease payments under operating and finance lease agreements. The amounts primarily represent contingent rent based on a percentage of retail sales over contractual levels of $5.6 million and $2.2 for the three months ended July 31, 2021 and August 1, 2020, respectively, and $11.9 million and $4.2 million for the six months ended July 31, 2021 and August 1, 2020, respectively. Other variable costs, which include single lease cost related to variable lease payments based on an index or rate that were not included in the measurement of the initial lease liability and right-of-use asset, were not material in any period.

(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):


		JULY 31,		JANUARY 30,
		2021		2021
	Balance Sheet Classification
Assets
Operating leases	Operating lease right-of-use assets	$	553,834	$	456,164
Finance leases ⁽¹⁾⁽²⁾	Property and equipment—net		731,620		711,804
Total lease right-of-use assets		$	1,285,454	$	1,167,968
Liabilities
Current⁽³⁾
Operating leases	Operating lease liabilities	$	74,074	$	71,524
Finance leases	Other current liabilities		14,231		14,671
Total lease liabilities—current			88,305		86,195
Non-current
Operating leases	Non-current operating lease liabilities		542,510		448,169
Finance leases	Non-current finance lease liabilities		523,797		485,481
Total lease liabilities—non-current			1,066,307		933,650
Total lease liabilities		$	1,154,612	$	1,019,845

(1)	Finance lease right-of-use assets include capitalized amounts related to our completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement.

(2)	Finance lease right-of-use assets are recorded net of accumulated amortization of $152.3 million and $133.0 million as of July 31, 2021 and January 30, 2021, respectively.

(3)	Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months.

Summary of Maturities of Lease Liabilities

The maturities of lease liabilities are as follows as of July 31, 2021 (in thousands):


	OPERATING		FINANCE
FISCAL YEAR	LEASES		LEASES		TOTAL
Remainder of fiscal 2021	$	48,990	$	19,982	$	68,972
2022		93,163		40,356		133,519
2023		84,601		40,770		125,371
2024		78,145		41,162		119,307
2025		77,631		42,377		120,008
2026		74,864		43,156		118,020
Thereafter		292,992		673,365		966,357
Total lease payments⁽¹⁾⁽²⁾		750,386		901,168		1,651,554
Less—imputed interest ⁽³⁾		(133,802)		(363,140)		(496,942)
Present value of lease liabilities	$	616,584	$	538,028	$	1,154,612

(1)

Total lease payments include future obligations for renewal options that are reasonably certain to be exercised and are included in the measurement of the lease liability. Total lease payments exclude $656.8 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of July 31, 2021, of which $12.3 million, $32.6 million, $37.8 million, $39.3 million, $40.2 million and $38.9 million will be paid in fiscal 2021, fiscal 2022, fiscal 2023, fiscal 2024, fiscal 2025 and fiscal 2026, respectively, and $455.7 million will be paid subsequent to fiscal 2026.

(2)	Excludes future commitments under short-term lease agreements of $1.2 million as of July 31, 2021.

(3)	Calculated using the discount rate for each lease at lease commencement.

Summary of Supplemental Information Related to Leases

Supplemental information related to leases consists of the following:


	SIX MONTHS ENDED
	JULY 31,		AUGUST 1,
	2021		2020
Weighted-average remaining lease term (years)
Operating leases		9.4		9.0
Finance leases		20.0		18.8
Weighted-average discount rate
Operating leases		3.98%		3.91%
Finance leases		5.04%		5.04%

Summary of Other Information Related to Leases

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


	SIX MONTHS ENDED
	JULY 31,		AUGUST 1,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(50,914)	$	(26,413)
Operating cash flows from finance leases		(12,943)		(6,767)
Financing cash flows from finance leases		(7,108)		(4,641)
Total cash outflows from leases	$	(70,965)	$	(37,821)
Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash)
Operating leases	$	134,763	$	27,880
Finance leases		44,432		57,286