AMERICAN EAGLE OUTFITTERS INC Leases Disclosure
9. Leases
The Company leases all store premises, regional distribution facilities, some of its office space and certain information technology, supply chain and office equipment under operating and finance leases.
Store leases generally provide for a combination of base rentals and contingent rent based on store sales. Additionally, most leases include lessor incentives such as construction allowances and rent holidays. The Company is typically responsible for tenant occupancy costs including maintenance costs, common area charges, real estate taxes, and certain other expenses.
Most leases include one or more options to renew. The exercise of lease renewal options is at the Company’s discretion and is not reasonably certain at lease commencement. When measuring operating lease ROU assets and operating lease liabilities the Company only includes cash flows related to options to extend or terminate leases when those options are executed.
Some leases have variable payments. However, because they are not based on an index or rate, they are not included in the measurement of operating lease ROU assets and operating lease liabilities.
When determining the present value of future payments for an operating lease that does not have a readily determinable implicit rate, the Company uses its incremental borrowing rate as of the date of initial possession of the leased asset.
For leases that qualify for the short-term lease exemption, the Company does not record an operating lease liability or operating lease ROU asset. Short-term lease payments are recognized on a straight-line basis over the lease term of 12 months or less.
Finance Lease Classification |
January 31, 2026 |
|
February 1, 2025 |
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Assets |
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|
|
|
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Finance leases |
, at cost, net of accumulated depreciation (1) |
$ |
45,454 |
|
$ |
37,979 |
|
Liabilities |
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|
|
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Current |
|
|
|
|
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Finance leases |
|
12,901 |
|
|
11,303 |
|
|
Non-current |
|
|
|
|
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Finance leases |
|
28,884 |
|
|
23,228 |
|
|
Total finance lease liabilities |
$ |
41,785 |
|
$ |
34,531 |
|
|
(1) Finance lease assets are recorded net of accumulated depreciation of $20.3 million and $13.1 million as of January 31, 2026 and February 1, 2025, respectively.
The following table summarizes expense categories and cash payments for operating and finance leases during the period. It also includes the total non-cash transaction activity for new operating and finance lease assets and related lease liabilities entered into during the period.
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Fiscal Years Ending |
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January 31, |
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February 1, |
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February 3, |
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(In thousands) |
|
2026 |
|
2025 |
|
2024 |
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Lease costs |
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|
|
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Operating lease costs |
|
|
|
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|
|
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Single lease costs |
|
$ |
412,217 |
|
$ |
387,560 |
|
$ |
335,420 |
|
Variable lease costs |
|
|
110,949 |
|
|
115,010 |
|
|
121,061 |
|
Short-term leases and other lease costs |
|
|
9,716 |
|
|
2,281 |
|
|
45,411 |
|
|
|
|
|
|
|
|
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Finance lease costs |
|
|
|
|
|
|
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Depreciation of leased assets |
|
|
10,499 |
|
|
7,016 |
|
|
1,894 |
|
Interest on lease liabilities |
|
|
819 |
|
|
112 |
|
|
91 |
|
Total lease costs |
|
$ |
544,200 |
|
$ |
511,979 |
|
$ |
503,877 |
|
|
|
|
|
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|
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Other information |
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Cash paid for amounts included in the measurement of lease liabilities |
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Operating cash flows for operating leases |
|
$ |
(423,460 |
) |
$ |
(387,560 |
) |
$ |
(403,355 |
) |
Operating cash flows for finance leases |
|
|
(819 |
) |
|
(112 |
) |
|
(91 |
) |
Financing cash flows for finance leases |
|
|
(3,857 |
) |
|
(4,073 |
) |
|
(668 |
) |
|
|
|
|
|
|
|
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New operating lease ROU assets entered into during the period |
|
|
598,390 |
|
|
559,750 |
|
|
153,236 |
|
New finance leases entered into during the period |
|
|
18,785 |
|
|
31,407 |
|
|
13,018 |
|
The following table contains the average remaining lease term and discount rate, weighted by outstanding operating and finance lease liabilities as of the end of the period:
Lease term and discount rate |
|
January 31, 2026 |
February 1, 2025 |
Weighted-average remaining lease term |
|
|
|
Operating leases |
|
7 years |
7 years |
Finance leases |
|
6 years |
3 years |
Weighted-average discount rate |
|
|
|
Operating leases |
|
5.5% |
5.2% |
Finance leases |
|
5.6% |
5.8% |
The table below is a maturity analysis of the operating and finance leases in effect as of the end of the period. Undiscounted cash flows for short-term leases are not material for the periods reported and are excluded from the table below:
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Undiscounted cash flows |
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|
January 31, 2026 |
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(In thousands) |
|
Operating Leases |
|
Finance Leases |
|
Total |
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Fiscal years: |
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|
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2026 |
|
|
370,253 |
|
|
12,716 |
|
|
382,969 |
|
2027 |
|
|
363,667 |
|
|
12,521 |
|
|
376,188 |
|
2028 |
|
|
315,024 |
|
|
11,573 |
|
|
326,597 |
|
2029 |
|
|
253,604 |
|
|
4,276 |
|
|
257,880 |
|
2030 |
|
|
184,021 |
|
|
4,274 |
|
|
188,295 |
|
Thereafter |
|
|
749,190 |
|
|
1,068 |
|
|
750,258 |
|
Total undiscounted cash flows |
|
$ |
2,235,759 |
|
$ |
46,428 |
|
$ |
2,282,187 |
|
Less: discount on lease liability |
|
|
(535,436 |
) |
|
(4,643 |
) |
|
(540,079 |
) |
Total lease liability |
|
$ |
1,700,323 |
|
$ |
41,785 |
|
$ |
1,742,108 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 30, 2026 | Showing above |
| 2025 | Mar 20, 2025 | |
| 2024 | Mar 15, 2024 | |
| 2023 | Mar 13, 2023 | |
| 2022 | Mar 14, 2022 | |
| 2021 | Mar 11, 2021 | |
| 2019 | Mar 14, 2019 | |
| 2018 | Mar 16, 2018 | |
| 2017 | Mar 10, 2017 | |
| 2016 | Mar 10, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.