Leases

9 Months Ended

Nov. 02, 2019

We lease retail stores, a limited amount of office space and certain equipment under operating leases expiring in various years through the fiscal year ending 2029. All of our leases have been classified as operating leases and are recognized and measured as such.

Certain operating leases provide for renewal options that are at a pre-determined period and rental value. Furthermore, certain leases provide that we may cancel the lease if our retail sales at that location fall below an established level. Within the first few years of the initial lease term, a majority of our store operating leases contain cancellation clauses that allow the leases to be terminated at our discretion, if certain minimum sales levels are not met. In the normal course of business, operating leases are typically renewed or replaced by other leases.

Escalation of operating lease payments of certain leases depend on an existing index or rate, such as the consumer price index or the market interest rate. These are considered variable lease payments and are included in lease payments when the escalation is known.

Operating lease expense was as follows:



	November 2, 2019
	Thirteen Weeks Ended		Thirty-Nine Weeks Ended
Operating lease cost ⁽¹⁾	$	62,696	$	189,939

⁽¹⁾Includes approximately $6.9 million and $20.0 million in variable lease costs for the thirteen and thirty-nine weeks ended November 2, 2019, respectively.

Supplemental balance sheet information related to operating leases was as follows:



	November 2, 2019
Right of Use Assets	$	664,052

Current lease liabilities	$	155,403
Long-term lease liabilities	578,971
Total operating lease liabilities	$	734,374

Weighted Average Remaining Lease Term (years)	4.9

Weighted Average Discount Rate ⁽¹⁾	5.7		%

⁽¹⁾ The incremental borrowing rate used by the Company is based on the rate at which the Company could borrow funds using its credit rating for a collateralized loan of similar term to the lease. The weighted average discount rate represents a weighted average of the incremental borrowing rate for each lease weighted based on the remaining fixed lease obligations.

Supplemental cash flow information related to operating leases was as follows:



	Thirty-Nine Weeks Ended
	November 2, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows	$	169,970
Right of use assets obtained in exchange for lease obligations, non-cash	22,346

Maturities of operating lease liabilities were as follows:



Fiscal Year Ending:
February 1, 2020 ⁽¹⁾	$	36,572
January 30, 2021	209,945
January 29, 2022	185,251
January 28, 2023	147,479
February 4, 2024	100,312
Thereafter	168,708
Total future minimum lease payments	$	848,267
Less imputed interest	(113,893		)
Total	$	734,374

⁽¹⁾ Represents payments due for remainder of fiscal 2019.