Leases - Notes to the Financial Statements

9 Months Ended

Oct. 31, 2020

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, the Company 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
		October 31, 2020		November 2, 2019
Operating lease cost (a)	$	17,665	$	16,677
Variable lease cost (b)	$	480	$	466
ASC 840 prepaid rent expense (c)	$	-	$	39
(a) Includes right-of-use asset amortization of ($0.8) million and ($1.0) million for the three months ended October 31, 2020 and 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.

	Nine Months Ended
		October 31, 2020		November 2, 2019
Operating lease cost (a)	$	52,522	$	43,074
Variable lease cost (b)	$	999	$	1,580
ASC 840 prepaid rent expense (c)	$	-	$	6,051
(a) Includes right-of-use asset amortization of ($3.5) million and ($3.9) million for the nine months ended October 31, 2020 and 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:
	Three Months Ended
	October 31, 2020		November 2, 2019
Cash paid for amounts included in the measurement of lease liabilities	$	16,109	$	15,503
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	(1,825)	$	2,758

	Nine Months Ended
	October 31, 2020		November 2, 2019
Cash paid for amounts included in the measurement of lease liabilities	$	47,554	$	40,921
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	29,659	$	3,360

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

	As of
	October 31, 2020	November 2, 2019
Weighted-average remaining lease term	2.7 years	2.4 years
Weighted-average discount rate	4.14%	4.64%

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

Fiscal Year
2020 (a)	$	17,155
2021		57,224
2022		41,927
2023		30,536
2024		19,546
Thereafter		47,987
Total lease payments		214,375
Less: Imputed interest		21,929
Present value of lease liabilities	$	192,446
(a) Excluding the 9 months ended October 31, 2020.