XML 29 R19.htm IDEA: XBRL DOCUMENT

Leases

3 Months Ended

Jun. 03, 2023

11. Leases

The Company leases most of its retail stores and certain distribution facilities under noncancelable operating and finance leases, most of which have initial lease terms ranging from 5 to 22 years. The Company also leases certain of

its equipment and other assets under noncancelable operating leases with initial terms ranging from 3 to 10 years. In addition to minimum rental payments, certain store leases require additional payments based on sales volume, as well as reimbursements for taxes, maintenance and insurance. Most leases contain renewal options, certain of which involve rent increases.

The following table is a summary of the Company’s components of net lease cost for the thirteen week periods ended June 3, 2023 and May 28, 2022:


	Thirteen Week Period Ended
	June 3, 2023		May 28, 2022
Operating lease cost	$	152,672	$	159,845
Financing lease cost:
Amortization of right-of-use asset		819		809
Interest on long-term finance lease liabilities		467		501
Total finance lease costs	$	1,286	$	1,310
Short-term lease costs		(776)		457
Variable lease costs		46,233		42,645
Less: sublease income		(2,737)		(3,223)
Net lease cost	$	196,678	$	201,034

Supplemental cash flow information related to leases for the thirteen week periods ended June 3, 2023 and May 28, 2022:


	Thirteen Week Period Ended
	June 3, 2023		May 28, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	160,367	$	175,414
Operating cash flows paid for interest portion of finance leases		467		501
Financing cash flows paid for principal portion of finance leases		996		945
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		77,412		57,986
Finance leases		—		—

Supplemental balance sheet information related to leases as of June 3, 2023 and March 4, 2023 (in thousands, except lease term and discount rate):


	June 3,			March 4,
	2023			2023
Operating leases:
Operating lease right-of-use asset	$	2,457,110		$	2,497,206

Short-term operating lease liabilities	$	488,712		$	502,403
Long-term operating lease liabilities		2,345,277			2,372,943
Total operating lease liabilities	$	2,833,989		$	2,875,346

Finance leases:
Property, plant and equipment, net	$	13,064		$	13,576

Current maturities of long-term debt and lease financing obligations	$	6,060		$	6,332
Lease financing obligations, less current maturities		12,151			12,580
Total finance lease liabilities	$	18,211		$	18,912
Weighted average remaining lease term
Operating leases		7.4			7.5
Finance leases		8.3			8.0

Weighted average discount rate
Operating leases		7.0	%		6.5	%
Finance leases		10.6	%		9.0	%

The following table summarizes the maturity of lease liabilities under finance and operating leases as of June 3, 2023:


	June 3, 2023
	Finance		Operating
Fiscal year	Leases		Leases⁽¹⁾		Total
2024 (remaining thirty-nine weeks)	$	6,506	$	502,374	$	508,880
2025		4,003		602,909		606,912
2026		2,198		479,513		481,711
2027		1,500		446,677		448,177
2028		1,500		373,347		374,847
Thereafter		10,548		1,211,362		1,221,910
Total lease payments		26,255		3,616,182		3,642,437
Less: imputed interest		(8,044)		(782,193)		(790,237)
Total lease liabilities	$	18,211	$	2,833,989	$	2,852,200

(1)	– Future operating lease payments have not been reduced by minimum sublease rentals of $22 million due in the future under noncancelable leases.

During the thirteen week periods ended June 3, 2023 and May 28, 2022, the Company did not enter into any sale-leaseback transactions.

The Company has additional capacity under its outstanding debt agreements to enter into additional sale-leaseback transactions.