Leases - Notes to the Financial Statements

9 Months Ended

Nov. 02, 2019

Leases [Abstract]

Operating Lease Dislcosure Leasee [Text Block]

NOTE 12 – LEASES:

The Company determines whether an arrangement is a lease at inception. The Company has operating leases for stores, offices and equipment. Its leases have remaining lease terms of one year to 10 years, some of which include options to extend the lease term for up to five years, and some of which include options to terminate the lease within one year. The Company considers these options in determining the lease term used to establish its right-of-use assets and lease liabilities. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As most of the Company’s leases do not provide an implicit rate, it uses its estimated incremental borrowing rate based on the information available at commencement date of the lease in determining the present value of lease payments.

The components of lease cost are shown below (in thousands):

	Three Months Ended		Nine Months Ended
		November 2, 2019		November 2, 2019
Operating lease cost (a)	$	16,677	$	43,074
Variable lease cost (b)	$	466	$	1,580
ASC 840 prepaid rent expense (c)	$	39	$	6,051
(a) Includes contra right-of-use asset amortization of ($1.0) million and ($3.9) million for the three months and nine months ended November 2, 2019, respectively.
(b) Primarily related to monthly percentage rent for stores not presented on the balance sheet.
(c) Related to ASC 840 rent expense due to prepaid rent on the balance sheet as of February 3, 2019.

Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands):

Operating cash flow information:
	Nine Months Ended
		November 2, 2019
Cash paid for amounts included in the measurement of lease liabilities	$	40,921
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	3,360

Weighted-average remaining lease term and discount rate for the Company’s operating leases are as follows:

	As of
	November 2, 2019
Weighted-average remaining lease term	2.4 years
Weighted-average discount rate	4.64%

Maturities of lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands):

Fiscal Year
2019 (a)	$	11,861
2020		57,694
2021		43,258
2022		27,959
2023		19,634
Thereafter		20,504
Total lease payments		180,910
Less: Imputed interest		16,426
Present value of lease liabilities	$	164,484
(a) Excluding the nine months ended November 2, 2019.

As of February 2, 2019, the minimum rental commitments under non-cancelable operating leases are (in thousands):

Fiscal Year
2019	$	69,601
2020		51,943
2021		35,196
2022		21,242
2023		12,986
Thereafter		2,643
Total minimum lease payments	$	193,611

A summary of rent expense for the fiscal years ended February 2, 2019 and February 3, 2018 was as follows (in thousands):

	Balance as of
		February 2, 2019		February 3, 2018
Rent Expense	$	69,872	$	70,971