Petco Health & Wellness Company, Inc. Leases Disclosure
5. Leases
Lease assets and liabilities are reflected in the Company’s consolidated balance sheets as follows (in thousands):
Leases |
|
Balance sheet |
|
February 3, |
|
|
January 28, |
|
||
Assets |
|
|
|
|
|
|
|
|
||
Operating leases |
|
Operating lease right-of-use assets |
|
$ |
1,384,050 |
|
|
$ |
1,397,761 |
|
Finance leases |
|
|
|
19,394 |
|
|
|
24,624 |
|
|
Total lease assets |
|
|
|
$ |
1,403,444 |
|
|
$ |
1,422,385 |
|
Liabilities |
|
|
|
|
|
|
|
|
||
Current |
|
|
|
|
|
|
|
|
||
Operating leases |
|
Current portion of operating lease liabilities |
|
$ |
310,507 |
|
|
$ |
309,766 |
|
Finance leases |
|
|
|
15,962 |
|
|
|
5,794 |
|
|
Non-current |
|
|
|
|
|
|
|
|
||
Operating leases |
|
Operating lease liabilities, excluding |
|
|
1,116,615 |
|
|
|
1,148,155 |
|
Finance leases |
|
|
|
8,210 |
|
|
|
23,642 |
|
|
Total lease liabilities |
|
|
|
$ |
1,451,294 |
|
|
$ |
1,487,357 |
|
The components of total lease cost are as follows (in thousands):
|
|
Fiscal years ended |
|
|||||||||
|
|
February 3, |
|
|
January 28, |
|
|
January 29, |
|
|||
Operating lease cost |
|
$ |
429,056 |
|
|
$ |
422,792 |
|
|
$ |
422,465 |
|
Finance lease cost: |
|
|
|
|
|
|
|
|
|
|||
Amortization of right-of-use lease assets |
|
|
5,838 |
|
|
|
5,660 |
|
|
|
3,933 |
|
Interest on lease liabilities |
|
|
1,250 |
|
|
|
1,329 |
|
|
|
876 |
|
Variable lease cost |
|
|
119,361 |
|
|
|
110,335 |
|
|
|
109,723 |
|
Sublease income |
|
|
(2,241 |
) |
|
|
(2,810 |
) |
|
|
(5,091 |
) |
Total lease cost |
|
$ |
553,264 |
|
|
$ |
537,306 |
|
|
$ |
531,906 |
|
Other information for the Company’s leases is as follows (in thousands):
|
|
Fiscal years ended |
|
|||||||||
|
|
February 3, |
|
|
January 28, |
|
|
January 29, |
|
|||
Cash paid for amounts included in the measurement |
|
|
|
|
|
|
|
|
|
|||
Operating cash flows from operating leases |
|
$ |
446,981 |
|
|
$ |
386,259 |
|
|
$ |
418,210 |
|
Operating cash flows from finance leases |
|
$ |
1,267 |
|
|
$ |
1,349 |
|
|
$ |
850 |
|
Financing cash flows from finance leases |
|
$ |
5,925 |
|
|
$ |
5,083 |
|
|
$ |
3,564 |
|
Lease assets obtained in exchange for lease liabilities: |
|
|
|
|
|
|
|
|
|
|||
Operating leases |
|
$ |
298,672 |
|
|
$ |
363,311 |
|
|
$ |
308,166 |
|
Finance leases |
|
$ |
712 |
|
|
$ |
4,784 |
|
|
$ |
19,841 |
|
|
|
February 3, |
|
|
January 28, |
|
||
Weighted average remaining lease term: |
|
|
|
|
|
|
||
Operating leases |
|
6.0 years |
|
|
6.0 years |
|
||
Finance leases |
|
2.3 years |
|
|
3.2 years |
|
||
Weighted average discount rate: |
|
|
|
|
|
|
||
Operating leases |
|
|
8.2 |
% |
|
|
8.4 |
% |
Finance leases |
|
|
4.7 |
% |
|
|
4.7 |
% |
At February 3, 2024, the maturities of the Company’s operating and finance lease liabilities were as follows (in thousands):
Fiscal years |
|
Operating |
|
|
Finance |
|
||
2024 |
|
|
413,399 |
|
|
|
16,903 |
|
2025 |
|
|
325,839 |
|
|
|
3,927 |
|
2026 |
|
|
298,076 |
|
|
|
2,361 |
|
2027 |
|
|
225,451 |
|
|
|
1,206 |
|
2028 |
|
|
157,127 |
|
|
|
538 |
|
Thereafter |
|
|
383,286 |
|
|
|
1,031 |
|
Total lease payments |
|
$ |
1,803,178 |
|
|
$ |
25,966 |
|
Less imputed interest |
|
|
(376,056 |
) |
|
|
(1,794 |
) |
Present value of lease payments |
|
|
1,427,122 |
|
|
|
24,172 |
|
Less current portion |
|
|
(310,507 |
) |
|
|
(15,962 |
) |
Lease liabilities, excluding current portion |
|
$ |
1,116,615 |
|
|
$ |
8,210 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Apr 3, 2024 | Showing above |
| 2023 | Mar 28, 2023 | |
| 2022 | Mar 24, 2022 | |
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.