Annual report pursuant to Section 13 and 15(d)

Leases

v3.24.1
Leases
12 Months Ended
Feb. 03, 2024
Leases  
Leases

8. Leases

The Company leases retail stores, distribution centers, fast fulfillment centers, market fulfillment centers, corporate offices, and certain equipment under non-cancelable operating leases with various expiration dates through 2036. All leases are classified as operating leases and generally have initial lease terms of 10 years and, when determined applicable, include renewal options under substantially the same terms and conditions as the original leases. Leases do not contain any material residual value guarantees or material restrictive covenants.

The following table presents supplemental balance sheet information, the weighted-average remaining lease term, and discount rate for operating leases:

February 3,

January 28,

(In thousands)

Classification on the Balance Sheet

    

2024

2023

Right-of-use assets

Operating lease assets

$

1,574,530

$

1,561,263

Current lease liabilities

Current operating lease liabilities

$

283,821

$

283,293

Non-current lease liabilities

Non-current operating lease liabilities

1,627,271

1,619,883

Total lease liabilities

$

1,911,092

$

1,903,176

Weighted-average remaining lease term

    

6.6 years

6.7 years

Weighted-average discount rate

3.7%

3.2%


Lease cost

The following table presents the components of lease cost for operating leases:

Fiscal year ended

February 3,

    

January 28,

    

January 29,

(In thousands)

    

Classification on the Statement of Income

    

2024

    

2023

    

2022

Operating lease cost

Cost of sales (1)

$

344,600

$

322,195

$

311,546

Variable lease cost

Cost of sales

88,381

83,488

77,431

Short-term lease cost

SG&A expenses

1,451

685

408

Sublease income

Net sales

(1,672)

(1,748)

(835)

Total lease cost

$

432,760

$

404,620

$

388,550

(1) The majority of operating lease cost relates to retail stores, distribution centers, fast fulfillment centers, and market fulfillment centers and is classified within cost of sales. Operating lease cost for corporate offices is classified within the SG&A expenses. Operating lease cost from the control date through store opening date is classified within pre-opening expenses.

Other information

The following table presents supplemental disclosures of cash flow information related to operating leases:

Fiscal year ended

February 3,

January 28,

January 29,

(In thousands)

2024

2023

2022

Cash paid for operating lease liabilities (1)

$

396,573

$

383,209

$

368,498

Operating lease assets obtained in exchange for operating lease liabilities (non-cash)

346,021

380,922

253,870

(1) Excludes $39,654, $30,927, and $28,591 related to cash received for tenant incentives as of February 3, 2024, January 28, 2023, and January 29, 2022, respectively.

Maturity of lease liabilities

The following table presents maturities of operating lease liabilities:

Fiscal year

    

(In thousands)

2024

$

347,558

2025

385,859

2026

346,833

2027

297,232

2028

225,358

2029 and thereafter

564,247

Total lease payments

$

2,167,087

Less: imputed interest

(255,995)

Present value of operating lease liabilities

$

1,911,092

Operating lease payments exclude $122,203 of legally binding minimum lease payments for leases signed but not yet commenced.