Vera Bradley, Inc.VRA
Vera Bradley, Inc. Leases Disclosure
Leases
Nature of Leases
The Company has operating leases at all of its retail stores (including storage spaces), as well as for its New York office, Asia sourcing office, and showrooms. The Company does not have residual value guarantees, restrictions, or covenants imposed by leases.
Determination of Lease Terms
Retail store leases have remaining terms of up to 9 years as of January 31, 2026. These leases generally have early termination rights when certain sales thresholds are not met for a specified measurement period. The Company's other leases generally have remaining terms of up to approximately one year as of January 31, 2026. If the lease contains a renewal period at the Company's option, the renewal period is included in the lease term if determined the option is reasonably certain to be exercised at lease commencement. The Company's lease options generally do not include termination rights other than those mentioned. The Company did not have financing leases as of January 31, 2026.
Variable Rental Payments
The Company's retail store leases contain variable rental payments based on each location's monthly gross sales, the majority of which have specified sales breakpoints. In addition, the majority of the Company's leases contain real estate taxes, common area maintenance, and similar items that are billed as pass-through charges from its landlords. These rental payments are not included in the measurement of the lease liability, but are recognized as variable lease cost in the period incurred.
Certain of the Company's leases also contain lease components with increases based upon an index or rate. These lease components are included on the Company's balance sheet at the rate as of lease commencement. Future changes in the index or rate will generally be included as variable lease cost.
Significant Judgments and Assumptions
Determination of Whether a Contract Contains a Lease
The Company determines whether a contract is or contains a lease at the inception of the contract. The contract is, or contains, a lease if the contract conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all of the economic benefits from use of the property, plant, and equipment and have the right to direct its use.
Discount Rate
The weighted-average discount rate as of January 31, 2026 and February 1, 2025, was 5.1% and 5.0%, respectively. The discount rate is not readily determinable in the lease; therefore, the Company estimated the incremental borrowing rate, at the commencement or remeasurement date of each lease, which is the rate of interest it would have to borrow on a collateralized basis over a similar term with similar payments.
Leases Not Yet Commenced
As of January 31, 2026, there were no executed leases in which the Company did not have control of the underlying asset.
Practical Expedients (Policy Elections)
The Company has elected the following practical expedients as policy elections upon the adoption of ASC Topic 842.
| Short-Term Leases | The Company elected to exclude leases with a term of 12 months or less from recognition on the balance sheet for all leases. | ||||
| Not Separating Lease and Nonlease Components | The Company elected to combine lease and nonlease components and recognize as a single lease component for all leases. | ||||
Amounts Recognized in the Consolidated Financial Statements
The following lease expense is recorded within cost of sales for the Asia sourcing office and within selling, general, and administrative expenses for all other leases, including retail store leases, in the Company's Consolidated Statements of Operations for the fiscal years ended January 31, 2026, February 1, 2025, and February 3, 2024 (in thousands):
| Fifty-Two Weeks Ended | Fifty-Two Weeks Ended | Fifty-Three Weeks Ended | |||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | |||||||||||||||
| Operating lease cost | $ | 24,660 | $ | 25,635 | $ | 24,926 | |||||||||||
| Variable lease cost | 4,186 | 4,185 | 5,117 | ||||||||||||||
| Short-term lease cost | 291 | 511 | 562 | ||||||||||||||
Less: Sublease income (1) | (412) | (420) | (420) | ||||||||||||||
| Total lease cost | $ | 28,725 | $ | 29,911 | $ | 30,185 | |||||||||||
| (1) Related to the sublease of a former Company location. | |||||||||||||||||
The weighted-average remaining lease term as of January 31, 2026 and February 1, 2025 was 4.0 years and 4.7 years, respectively.
Supplemental operating cash flow information was as follows (in thousands):
| Fifty-Two Weeks Ended | Fifty-Two Weeks Ended | Fifty-Three Weeks Ended | |||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | |||||||||||||||
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | 27,707 | $ | 29,090 | $ | 28,565 | |||||||||||
Right-of-use assets increase as a result of new and modified operating lease liabilities, net (1) | $ | 8,470 | $ | 31,771 | $ | 9,858 | |||||||||||
(1) $2.2 million of lease liabilities were recorded within accounts payable on the Company's Consolidated Balance Sheets as of January 31, 2026, and were subsequently paid in the first quarter of fiscal 2027. | |||||||||||||||||
Maturity Analysis of Operating Lease Liabilities
Maturities of the Company's operating lease liabilities (undiscounted) reconciled to its lease liability as of January 31, 2026 were as follows (in thousands):
| Operating Leases | |||||
| Fiscal 2027 | $ | 21,735 | |||
| Fiscal 2028 | 20,403 | ||||
| Fiscal 2029 | 16,205 | ||||
| Fiscal 2030 | 9,665 | ||||
| Fiscal 2031 | 4,487 | ||||
| Thereafter | 5,727 | ||||
| Total remaining obligations | 78,222 | ||||
| Less: Interest | (7,689) | ||||
| Present value of lease liabilities | $ | 70,533 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 27, 2026 | Showing above |
| 2025 | Mar 28, 2025 | |
| 2024 | Mar 29, 2024 | |
| 2023 | Mar 28, 2023 | |
| 2022 | Mar 29, 2022 | |
| 2021 | Mar 30, 2021 | |
| 2020 | Mar 31, 2020 | |
| 2019 | Apr 2, 2019 | |
| 2018 | Apr 3, 2018 | |
| 2017 | Mar 28, 2017 | |
| 2016 | Mar 29, 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.