Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.20.2
Leases
6 Months Ended
Aug. 01, 2020
Leases  
Leases

6.Leases

The Company leases retail stores, distribution and fast fulfillment centers, corporate offices, and certain equipment under non-cancellable operating leases with various expiration dates through 2033. Leases generally have an initial lease term of 10 years and 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.

All retail store, distribution and fast fulfillment center, and corporate office leases are classified as operating leases. The Company does not have any finance leases.

Lease cost

The majority of operating lease cost relates to retail stores and distribution and fast fulfillment centers and is classified within cost of sales. Operating lease cost for corporate offices is classified within selling, general and administrative expenses. Operating lease cost from the control date through store opening date is classified within pre-opening expenses. Operating lease cost was $75,699 and $71,579 for the 13 weeks ended August 1, 2020 and August 3, 2019, respectively. Operating lease cost was $153,232 and $142,921 for the 26 weeks ended August 1, 2020 and August 3, 2019, respectively.

Other information

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

26 Weeks Ended

(In thousands)

August 1, 2020

August 3, 2019

Cash paid for operating lease liabilities (1)

$

175,881

$

165,882

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

162,603

190,824

(1) Excludes cash received for tenant incentives of $18,149 and $36,445 for the 26 weeks ended August 1, 2020 and August 3, 2019, respectively.