Leases

3 Months Ended

Apr. 30, 2022

Leases [Abstract]

Leases

LEASES

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 2032. 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.

In April 2020, the FASB granted a practical expedient permitting an entity to choose to forgo the evaluation of the enforceable rights and obligations of the original lease contract, specifically in situations where rent concessions have been agreed to with landlords as a result of the pandemic. Instead, the entity may account for pandemic-related rent concessions, whatever their form (e.g. rent deferral, abatement or other) either: a) as if they were part of the enforceable rights and obligations of the parties under the existing lease contract; or b) as lease modifications. During the thirteen weeks ended May 1, 2021, we received concessions from certain landlords in the form of rent deferrals, rent abatements and other lease or rent modifications as a result of the ongoing impact of the pandemic. In accordance with the practical expedient allowed by the FASB, the Company elected to treat all pandemic-related rent concessions and related amendments, including pandemic-related lease amendments that extended the lease term, as lease modifications under ASC 842, Leases. In addition, the Company continued recording lease expense during deferral periods, as applicable, in accordance with its existing policies.

Operating lease expense was as follows:

	Thirteen Weeks Ended
	April 30, 2022		May 1, 2021
Operating lease cost (1)	$	53,415	$	55,406

(1) Includes approximately $9.5 million and $9.8 million in variable lease costs for the thirteen weeks ended April 30, 2022 and May 1, 2021, respectively.

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

	April 30, 2022			January 29, 2022			May 1, 2021
Right of use assets	$	439,896		$	463,077		$	554,795
Current lease liabilities	$	150,476		$	172,506		$	184,296
Long-term lease liabilities	355,851			381,081			480,537
Total operating lease liabilities	$	506,327		$	553,587		$	664,833
Weighted Average Remaining Lease Term (years)	3.9			4.0			4.3
Weighted Average Discount Rate (1)	4.4		%	4.5		%	4.8		%

(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:

	Thirteen Weeks Ended
	April 30, 2022		May 1, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows	$	67,908	$	62,111
Right of use assets obtained in exchange for lease obligations, non-cash	14,786		8,522

Maturities of operating lease liabilities as of April 30, 2022 were as follows:

Fiscal Year Ending:
January 28, 2023	$	128,276
February 4, 2024	156,454
February 1, 2025	112,490
January 31, 2026	72,465
January 30, 2027	45,256
Thereafter	43,071
Total future minimum lease payments	$	558,012
Less imputed interest	(51,685)
Total	$	506,327