Leases

3 Months Ended

Apr. 30, 2020

Leases [Abstract]

Leases

Note 5 – Leases

The Company leases retail stores, warehouses, distribution centers, office space and certain equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Most leases are for a term of one to ten years.  Some leases include one or more options to renew, with renewal terms that can extend the lease term from one to ten years.  Several of the Company’s retail store leases include an option to terminate the lease based on failure to achieve a specified sales volume. The exercise of lease renewal options is generally at the Company’s sole discretion. The exercise of lease termination options is generally by mutual agreement between the Company and the lessor.

Certain of the Company’s lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.

The Company’s lease assets and liabilities as of April 30, 2020, April 30, 2019 and January 31, 2020 consist of the following:

Leases	Classification	April 30, 2020		April 30, 2019		January 31, 2020
		(In thousands)
Assets
Operating	Operating lease assets	$	251,565	$	320,169	$	270,032
Total lease assets		$	251,565	$	320,169	$	270,032
Liabilities
Current operating	Current operating lease liabilities	$	63,632	$	74,761	$	63,166
Noncurrent operating	Noncurrent operating lease liabilities		231,323		286,663		249,040
Total lease liabilities		$	294,955	$	361,424	$	312,206

The Company recorded lease costs of $22.4 million and $25.0 million during the three months ended April 30, 2020 and 2019, respectively. Lease costs are recorded within selling, general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income (loss). The Company recorded variable lease costs and short-term lease costs of $3.4 million and $3.3 million for the three months ended April 30, 2020 and 2019, respectively. Short-term lease costs are immaterial.

As of April 30, 2020, the Company’s maturity of operating lease liabilities in the years ending up to January 31, 2025 and thereafter are as follows:

Year Ending January 31,	Amount
	(In thousands)
2021	$	63,890
2022		76,088
2023		66,758
2024		52,732
2025		42,709
After 2025		58,068
Total lease payments	$	360,245
Less: Interest		65,290
Present value of lease liabilities	$	294,955

As of April 30, 2020, there are no material leases that are legally binding but have not yet commenced.

As of April 30, 2020, the weighted average remaining lease term related to operating leases is 5.1 years. The weighted average discount rate related to operating leases is 7.9%.

Cash paid for amounts included in the measurement of operating lease liabilities is $23.4 million and $26.4 million during the periods ended April 30, 2020 and 2019, respectively. Right-of-use assets obtained in exchange for lease obligations were $4.6 million and $1.8 million as of April 30, 2020 and 2019, respectively.