The Company’s leases primarily consist of stores, distribution facilities and office space under operating and finance leases that will expire principally during the next 30 years. The leases typically include renewal options at five-year intervals and escalation clauses. Lease renewals are only included in the lease liability to the extent that they are reasonably assured of being exercised. The Company’s leases typically provide for contingent rentals based on a percentage of gross sales. Contingent rentals are not included in the lease liability, and they are recognized as variable lease cost when incurred.

The following is a schedule of the Company’s future lease payments:


	(in thousands)
Fiscal Year	Operating Leases			Finance Leases
2026 (remainder)	$	485,272		$	2,730
2027		728,261			3,640
2028		691,342			3,447
2029		636,252			2,104
2030		560,109			2,040
Thereafter		1,981,947			16,643
Total future minimum lease payments		5,083,183			30,604
Amount representing interest		(1,128,999	)		(8,464	)
Total lease liabilities		3,954,184			22,140
Less: current portion of lease liabilities		(437,657	)		(2,495	)
Total long term lease liabilities	$	3,516,527		$	19,645

Weighted average discount rate		6.2	%		5.5	%
Weighted average remaining lease term (years)		7.9			11.5

The above schedule excludes approximately $507.6 million for 89 stores and an additional floor at the Company’s New York buying office that the Company has committed to open or relocate but has not yet taken possession of the space. The discount rates used in valuing the Company’s leases are not readily determinable, and are based on the Company’s incremental borrowing rate on a fully collateralized basis.


	(in thousands)
	Three Months Ended
	May 2, 2026			May 3, 2025

Finance lease cost:
Amortization of finance lease asset (a)	$	566		$	566
Interest on lease liabilities (b)		307			337
Operating lease cost (c)		179,785			164,805
Variable lease cost (c)		70,369			67,662
Total lease cost		251,027			233,370
Gain on sale and leaseback transaction (d)		—			(1,039	)
Less all rental income (e)		(1,180	)		(1,303	)
Total net rent expense (f)	$	249,847		$	231,028

(a)

Included in the line item “Depreciation and amortization” in the Company’s Condensed Consolidated Statements of Income.

(b)

Included in the line item “Interest expense” in the Company’s Condensed Consolidated Statements of Income.

(c)

Included in the line item “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income. Variable lease cost is primarily comprised of real estate taxes, common area maintenance, insurance and percentage rent.

(d)

Gain included in line item “Other income - net” in the Company’s Condensed Consolidated Statements of Income.

(e)

Included in the line item “Other revenue” in the Company’s Condensed Consolidated Statements of Income.

(f)

Excludes an immaterial amount of short-term lease cost.

Supplemental cash flow disclosures related to leases are as follows:


	(in thousands)
	Three Months Ended
	May 2, 2026		May 3, 2025
Cash paid for amounts included in the measurement of lease liabilities:
Cash payments arising from operating lease liabilities (a)	$	181,112	$	166,807
Cash payments for the principal portion of finance lease liabilities (b)	$	803	$	536
Cash payments for the interest portion of finance lease liabilities (a)	$	307	$	337
Supplemental non-cash information:
Operating lease liabilities arising from obtaining right-of-use assets	$	152,443	$	141,257

(a)

Included within operating activities in the Company’s Condensed Consolidated Statements of Cash Flows.

(b)

Included within financing activities in the Company’s Condensed Consolidated Statements of Cash Flows.