We currently lease the vast majority of the buildings or sites for our stores, store support center, and warehouse space under facility operating leases. These leases typically have initial terms ranging from ten to twenty-five years and include one or more options to renew. When determining the lease term, we include option periods for which renewal is reasonably certain. Most of the leases require us to pay property taxes, insurance, and maintenance of the leased assets. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating leases also include certain equipment leases that have a term in excess of one year. Certain facility leases also have provisions for additional variable contingent rentals based on revenues.

Operating lease cost, variable lease cost and short-term lease cost related primarily to our facilities are included in “Other store operating expenses” for our operating stores, “Pre-opening costs” for our stores not yet operating, or “General and administrative expenses” for our store support center and warehouse, in the Consolidated Statements of Comprehensive Income (Loss).

The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and property taxes, were as follows for the periods presented:


	Three Months Ended				Six Months Ended
	August 4, 2026		August 5, 2025		August 4, 2026		August 5, 2025
Operating lease cost	$	52.0	$	50.9	$	105.6	$	103.6
Variable lease cost	10.8		7.2		20.4		19.2
Short-term lease cost	0.3		0.9		0.8		1.9
Total	$	63.1	$	59.0	$	126.8	$	124.7

Operating lease cost in the table above includes minimum lease payments for future sites for which the leases have commenced. As of August 4, 2026, the Company had signed lease agreements with total commitments of $78.4 related to five facility leases, which had not yet commenced. Fixed minimum lease payments related to these facilities were not included in the right-of-use assets and lease liabilities on the Consolidated Balance Sheets as of August 4, 2026.

Finance leases are included within “Property and equipment”, “Accrued liabilities” and “Other long-term liabilities” in the Consolidated Balance Sheets. Finance lease payments are classified as a reduction of cash flows from financing activities related to principal and operating activities related to interest with corresponding asset amortization included in operating activities in the Consolidated Statements of Cash Flows.

In fiscal 2025, the Company entered into sale and master lease agreements (“sale-leaseback transactions”) with an unrelated third party. Under this agreement:

•The Company sold two of its open store properties and certain store properties under development, including land, buildings and certain improvements, and then leased the assets back through these sale-leaseback transactions.

•Total proceeds related to these sale and master lease agreements as of August 4, 2026 were $142.2, net of certain closing costs, $35.8 of which was received during the six months ended August 4, 2026.

•The Company sold one of its open store properties including land, buildings and certain improvements, and then leased the assets back through a sale-leaseback transaction. Total proceeds received related to this amended sale and master lease agreement were $13.1 during the six months ended August 4, 2026.

These sale-leaseback transactions were accounted for as failed sale leasebacks based on GAAP under ASC 842, Leases. As a result, the store property assets remain on the Consolidated Balance Sheets at their historical cost and are depreciated over the remaining term of the applicable master lease.

As of August 4, 2026, the current outstanding financing liability of $3.0 was included in Accrued liabilities on the Consolidated Balance Sheets and the long-term outstanding financing liability of $415.8 was included in Other long-term liabilities on the Consolidated Balance Sheets for the transactions noted above, as well as failed sale lease-back transactions entered into prior to fiscal 2025.

As of August 4, 2026, the Company had finance lease liabilities related to three properties. The current outstanding finance lease liability of $0.5 was included in Accrued liabilities on the Consolidated Balance Sheets and the long-term outstanding finance lease liability of $32.4 was included in Other long-term liabilities on the Consolidated Balance Sheets.