Note 10    Leases

The Company leases all of its retail locations, distribution centers, certain office locations, equipment and a manufacturing facility. At contract inception, leases are evaluated and classified as either operating or finance leases.  Leases with an initial term of 12 months or less are not recorded on the balance sheet and are expensed as incurred. For operating leases, lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are expensed as incurred. The Company uses an incremental borrowing rate based on information available at the commencement date to determine the present value of future payments.

During the thirteen weeks ended May 2, 2026, the Company entered into new or amended leases that resulted in the recognition of right-of-use assets and lease obligations of $44.9 million on the condensed consolidated balance sheets. As of May 2, 2026, the Company has entered into lease commitments for eight retail locations for which the leases have not yet commenced. The Company anticipates that five leases will begin in the current fiscal year, two leases will begin in fiscal 2027 and one lease will begin in fiscal 2028. Upon commencement, right-of-use assets and lease liabilities of approximately $6.3 million will be recorded in the current fiscal year, and $1.8 million will be recorded in fiscal 2027 and 2028, respectively, on the condensed consolidated balance sheet. In addition, the Company has entered into a lease

commitment for its corporate headquarters that will begin in fiscal 2026.  Upon commencement, right-of-use assets and lease liabilities of approximately $52.0 million will be recorded.

During the thirteen weeks ended May 2, 2026 and May 3, 2025, the Company recorded asset impairment charges of $0.3 million in each period, primarily related to underperforming retail stores. Refer to Note 15 to the condensed consolidated financial statements for further discussion of impairment charges on the Company’s operating lease right-of-use assets and property and equipment in retail stores.

The components of lease expense for the thirteen weeks ended May 2, 2026 and May 3, 2025 were as follows:

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During the thirteen weeks ended May 2, 2026 and May 3, 2025, the Company paid cash for lease obligations of $45.2 million and $51.2 million, respectively.