v3.25.1
Lease Accounting
 3 Months Ended
May 03, 2025
Leases [Abstract]  
Lease Accounting Lease Accounting
The Company primarily leases its showrooms, advertising, licensing, sales and merchandising offices, remote distribution and warehousing facilities and retail and factory outlet store locations under operating lease agreements expiring on various dates through August 2044. The Company also leases some of its equipment, as well as computer hardware and software, under operating and finance lease agreements expiring on various dates through December 2029.
The Company’s lease agreements primarily provide for lease payments based on a minimum annual rental amount, a percentage of annual sales volume, periodic adjustments related to inflation or a combination of such lease payments. Certain retail store leases provide for lease payments based upon the minimum annual rental amount and a percentage of annual sales volume, generally ranging from 3% to 26%, when specific sales volumes are exceeded. The Company’s retail concession leases also provide for lease payments primarily based upon a percentage of annual sales volume, which averages approximately 24%.
In addition to the amounts as disclosed below, the Company has estimated additional operating lease commitments of approximately $44.0 million for leases where the Company has not yet taken possession of the underlying asset as of May 3, 2025. As such, the related operating lease ROU assets and operating lease liabilities have not been recognized in the Company’s condensed consolidated balance sheet as of May 3, 2025.
The components of leases are (in thousands):
May 3, 2025Feb 1, 2025
AssetsBalance Sheet Location
Operating$931,620 $839,879 Operating lease right-of-use assets
Finance6,399 7,042 Property and equipment, net
Total lease assets$938,019 $846,921 
Liabilities
Current:
Operating$189,517 $176,972 Current portion of operating lease liabilities
Finance5,563 5,236 Current portion of borrowings and finance lease obligations
Noncurrent:
Operating791,178 715,755 Long-term operating lease liabilities
Finance3,815 4,597 Long-term debt and finance lease obligations
Total lease liabilities$990,073 $902,560 
The components of lease costs are (in thousands):
Three Months Ended
May 3, 2025May 4, 2024Income Statement Location
Operating lease costs$54,380 $48,450 Cost of product sales
Operating lease costs9,020 7,832 Selling, general and administrative expenses
Operating lease costs1
(236)— Net gains on lease modifications
Finance lease costs
Amortization of leased assets8 4 Cost of product sales
Amortization of leased assets970 1,540 Selling, general and administrative expenses
Interest on lease liabilities175 188 Interest expense
Variable lease costs2
24,123 24,571 Cost of product sales
Variable lease costs1,003 1,099 Selling, general and administrative expenses
Short-term lease costs183 123 Cost of product sales
Short-term lease costs2,573 2,060 Selling, general and administrative expenses
Total lease costs$92,199 $85,867 
______________________________________________________________________
Notes:
1During the three months ended May 3, 2025, net gains on lease modifications related primarily to the early termination of certain lease agreements. Operating lease costs for these retail locations prior to such early termination were included in cost of product sales.
2During each of the three months ended May 3, 2025 and May 4, 2024, variable lease costs included certain rent concessions of approximately $0.2 million received by the Company, primarily in Europe.
Maturities of the Company’s operating and finance lease liabilities as of May 3, 2025 are (in thousands):
Operating Leases
Maturity of Lease Liabilities Non-Related PartiesRelated PartiesFinance LeasesTotal
Fiscal 2026$160,917 $6,767 $4,748 $172,432 
Fiscal 2027195,528 9,740 3,307 208,575 
Fiscal 2028165,954 9,656 1,413 177,023 
Fiscal 2029146,524 10,532 324 157,380 
Fiscal 2030110,245 10,003 23 120,271 
After fiscal 2030276,745 73,596 — 350,341 
Total lease payments1,055,913 120,294 9,815 1,186,022 
Less: Interest159,574 35,938 437 195,949 
Present value of lease liabilities$896,339 $84,356 $9,378 $990,073 
Other supplemental information is (in thousands):
Lease Term and Discount RateMay 3, 2025
Weighted-average remaining lease term
Operating leases6.9 years
Finance leases2.2 years
Weighted-average discount rate
Operating leases5.3%
Finance leases4.1%
Three Months Ended
Supplemental Cash Flow InformationMay 3, 2025May 4, 2024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$63,563 $51,173 
New operating ROU assets obtained in exchange for lease liabilities$92,537 $46,567 
Lease Accounting Lease Accounting
The Company primarily leases its showrooms, advertising, licensing, sales and merchandising offices, remote distribution and warehousing facilities and retail and factory outlet store locations under operating lease agreements expiring on various dates through August 2044. The Company also leases some of its equipment, as well as computer hardware and software, under operating and finance lease agreements expiring on various dates through December 2029.
The Company’s lease agreements primarily provide for lease payments based on a minimum annual rental amount, a percentage of annual sales volume, periodic adjustments related to inflation or a combination of such lease payments. Certain retail store leases provide for lease payments based upon the minimum annual rental amount and a percentage of annual sales volume, generally ranging from 3% to 26%, when specific sales volumes are exceeded. The Company’s retail concession leases also provide for lease payments primarily based upon a percentage of annual sales volume, which averages approximately 24%.
In addition to the amounts as disclosed below, the Company has estimated additional operating lease commitments of approximately $44.0 million for leases where the Company has not yet taken possession of the underlying asset as of May 3, 2025. As such, the related operating lease ROU assets and operating lease liabilities have not been recognized in the Company’s condensed consolidated balance sheet as of May 3, 2025.
The components of leases are (in thousands):
May 3, 2025Feb 1, 2025
AssetsBalance Sheet Location
Operating$931,620 $839,879 Operating lease right-of-use assets
Finance6,399 7,042 Property and equipment, net
Total lease assets$938,019 $846,921 
Liabilities
Current:
Operating$189,517 $176,972 Current portion of operating lease liabilities
Finance5,563 5,236 Current portion of borrowings and finance lease obligations
Noncurrent:
Operating791,178 715,755 Long-term operating lease liabilities
Finance3,815 4,597 Long-term debt and finance lease obligations
Total lease liabilities$990,073 $902,560 
The components of lease costs are (in thousands):
Three Months Ended
May 3, 2025May 4, 2024Income Statement Location
Operating lease costs$54,380 $48,450 Cost of product sales
Operating lease costs9,020 7,832 Selling, general and administrative expenses
Operating lease costs1
(236)— Net gains on lease modifications
Finance lease costs
Amortization of leased assets8 4 Cost of product sales
Amortization of leased assets970 1,540 Selling, general and administrative expenses
Interest on lease liabilities175 188 Interest expense
Variable lease costs2
24,123 24,571 Cost of product sales
Variable lease costs1,003 1,099 Selling, general and administrative expenses
Short-term lease costs183 123 Cost of product sales
Short-term lease costs2,573 2,060 Selling, general and administrative expenses
Total lease costs$92,199 $85,867 
______________________________________________________________________
Notes:
1During the three months ended May 3, 2025, net gains on lease modifications related primarily to the early termination of certain lease agreements. Operating lease costs for these retail locations prior to such early termination were included in cost of product sales.
2During each of the three months ended May 3, 2025 and May 4, 2024, variable lease costs included certain rent concessions of approximately $0.2 million received by the Company, primarily in Europe.
Maturities of the Company’s operating and finance lease liabilities as of May 3, 2025 are (in thousands):
Operating Leases
Maturity of Lease Liabilities Non-Related PartiesRelated PartiesFinance LeasesTotal
Fiscal 2026$160,917 $6,767 $4,748 $172,432 
Fiscal 2027195,528 9,740 3,307 208,575 
Fiscal 2028165,954 9,656 1,413 177,023 
Fiscal 2029146,524 10,532 324 157,380 
Fiscal 2030110,245 10,003 23 120,271 
After fiscal 2030276,745 73,596 — 350,341 
Total lease payments1,055,913 120,294 9,815 1,186,022 
Less: Interest159,574 35,938 437 195,949 
Present value of lease liabilities$896,339 $84,356 $9,378 $990,073 
Other supplemental information is (in thousands):
Lease Term and Discount RateMay 3, 2025
Weighted-average remaining lease term
Operating leases6.9 years
Finance leases2.2 years
Weighted-average discount rate
Operating leases5.3%
Finance leases4.1%
Three Months Ended
Supplemental Cash Flow InformationMay 3, 2025May 4, 2024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$63,563 $51,173 
New operating ROU assets obtained in exchange for lease liabilities$92,537 $46,567