v3.26.1
Leases
 12 Months Ended
Feb. 28, 2026
Leases [Abstract]  
Leases of Lessee Disclosure LEASE COMMITMENTS
Our leases primarily consist of operating and finance leases related to retail stores, office space, land and equipment. We also have stores subject to sale-leaseback transactions that do not qualify for sale accounting and are accounted for as financing obligations. For more information on these financing obligations see Note 12.
The initial term for real property leases is typically 5 to 20 years. For equipment leases, the initial term generally ranges from 3 to 8 years. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 20 years or more. We include options to renew (or terminate) in our lease term, and as part of our right-of-use (“ROU”) assets and lease liabilities, when it is reasonably certain that we will exercise that option.
ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our collateralized incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. We include variable
lease payments in the initial measurement of ROU assets and lease liabilities only to the extent they depend on an index or rate. Changes in such indices or rates are accounted for in the period the change occurs, and do not result in the remeasurement of the ROU asset or liability. We are also responsible for payment of certain real estate taxes, insurance and other expenses on our leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU asset and lease liability. We generally account for non-lease components, such as maintenance, separately from lease components. For certain equipment leases, we apply a portfolio approach to account for the lease assets and liabilities.
Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with a term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.
Effective February 28, 2026, we ceased use of the first and third floors of the Edmunds headquarters and accounted for the right-of-use asset and related leasehold improvements as abandoned. As a result, we recorded a combined charge of $23.1 million related to the abandonment in fiscal 2026, $19.0 million of which was recognized in operating lease expense. In fiscal 2025, we recorded a lease impairment charge of $12.3 million related to the second floor of the Edmunds headquarters that we subleased. There were no lease abandonment or impairment charges in fiscal 2024.
The components of lease expense were as follows:
Years Ended February 28 or 29
(In thousands)202620252024
Operating lease cost (1)
$116,490 $92,630 $89,801 
Finance lease cost:
Depreciation of lease assets18,381 20,543 20,010 
Interest on lease liabilities24,378 26,404 25,724 
Total finance lease cost42,759 46,947 45,734 
Total lease cost$159,249 $139,577 $135,535 

(1)    Includes short-term leases and variable lease costs, which are immaterial.

Supplemental balance sheet information related to leases was as follows:
As of February 28
(In thousands)Classification20262025
Assets:
Operating lease assetsOperating lease assets$459,514 $493,355 
Finance lease assets
Property and equipment, net (1)
145,179 160,535 
Total lease assets$604,693 $653,890 
Liabilities:
Current:
Operating leasesCurrent portion of operating lease liabilities$57,341 $59,335 
Finance leasesAccrued expenses and other current liabilities16,779 15,015 
Long-term:
Operating leasesOperating lease liabilities, excluding current portion464,696 481,963 
Finance leasesOther liabilities175,548 189,216 
Total lease liabilities$714,364 $745,529 

(1)    Finance lease assets are recorded net of accumulated depreciation of $74.6 million as of February 28, 2026 and $67.6 million as of February 28, 2025.
Lease term and discount rate information related to leases was as follows:
As of February 28
Lease Term and Discount Rate20262025
Weighted Average Remaining Lease Term (in years)
Operating leases15.5615.49
Finance leases13.9914.31
Weighted Average Discount Rate
Operating leases5.37 %5.21 %
Finance leases16.44 %16.78 %

Supplemental cash flow information related to leases was as follows:
Years Ended February 28 or 29
(In thousands)202620252024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$102,391 $95,638 $88,704 
Operating cash flows from finance leases$23,788 $24,141 $24,782 
Financing cash flows from finance leases$15,044 $16,536 $16,674 
Lease assets obtained in exchange for lease obligations:
Operating leases$39,696 $43,161 $30,746 
Finance leases$3,026 $7,459 $51,660 

Maturities of lease liabilities were as follows:

As of February 28, 2026
(In thousands)Operating Leases Finance Leases
Fiscal 2027$83,637 $38,941 
Fiscal 202880,014 35,599 
Fiscal 202958,194 38,840 
Fiscal 203048,368 28,462 
Fiscal 203141,318 25,161 
Thereafter496,723 227,737 
Total lease payments808,254 394,740 
Less: interest(286,217)(202,413)
Present value of lease liabilities$522,037 $192,327