4.Leases

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As of July 31, 2026, the Company’s primary leasing activities were real estate leases for most of its retail store locations and certain of its distribution facilities. Substantially all of the Company’s leases are classified as operating leases, and the associated assets and liabilities are presented as separate captions in the consolidated balance sheets. Finance lease assets are included in net property and equipment, and finance lease liabilities are included in long-term obligations, in the consolidated balance sheets. At July 31, 2026, the weighted-average remaining lease term for the Company’s operating leases was 9.0 years, and the weighted average discount rate for such leases was 4.7%. Operating lease costs are reflected as selling, general and administrative costs in the consolidated statements of income. For the 26-week periods ended July 31, 2026 and August 1, 2025, such costs were $1.02 billion and $0.98 billion, respectively. Cash paid for amounts included in the measurement of operating lease liabilities of $1.03 billion and $0.99 billion, respectively, were reflected in cash flows from operating activities in the consolidated statements of cash flows for the 26-week periods ended July 31, 2026 and August 1, 2025.