Leases

6 Months Ended

Aug. 03, 2019

LEASES

The Company has operating leases for its retail locations, distribution center and corporate office. Many of these leases include one or more renewal options which can extend the lease for up to an additional 15 years. In the event we are reasonably certain that an option to extend a lease will be exercised, we use the expected expiration date to determine the operating lease right-of-use asset and lease liability. We also have short-term leases that can be terminated by the Company or by the landlord with notification periods as short as 30 days, which are excluded from the operating lease liability. Some of our leases provide for rental payments based solely on a percent of retail sales which are treated as variable lease expenses and not included as part of the operating lease liability. Most leases include payments for lease components such as minimum rent, non-lease components such as common area maintenance and not-lease components such as real estate taxes and insurance. Finance leases were not material as of August 3, 2019 and the three and six-month periods then ended.

For the three and six months ended August 3, 2019, the components of lease expense were as follows (in thousands):

	Three Months Ended		Six Months Ended
Fixed operating lease expense (1)	$	8,773	$	17,517
Variable operating lease expense		3,723		7,615
Total operating lease expense	$	12,496	$	25,132
(1) Includes short-term leases

The following table presents the operating lease balances within the Consolidated Balance Sheet, weighted average remaining lease term and weighted average discount rates related to the Company’s operating leases as of August 3, 2019 ($ in thousands):

Lease Assets and Liabilities	Classification
Assets:
Operating lease ROU assets	Operating lease assets	$	125,283

Liabilities:
Current:
Operating lease liabilities	Operating lease liabilities	$	30,301
Long-term:
Operating lease liabilities	Operating lease and other non-current liabilities		118,925
Total undiscounted operating lease liabilities		$	149,226

Weighted average remaining lease term		6.3 years
Weighted average discount rate			7.41	%

The following table presents the maturity of the Company’s operating lease liabilities as of August 3, 2019 (in thousands):

Remainder of Fiscal 2019	$	22,140
2020	$	36,719
2021	$	30,545
2022	$	25,229
2023	$	21,216
Thereafter	$	54,794
Total operating lease payments		190,643
Less: Imputed interest		41,417
Total operating lease liabilities	$	149,226

Supplemental cash flow information related to the Company’s operating leases for the three and six months ended August 3, 2019 (in thousands):

	Three Months Ended		Six Months Ended
Cash paid for amounts included in the measurement of operating lease liabilities	$	11,572	$	23,565
ROU assets obtained in exchange for operating lease liability		6,014		7,844