Leases

6 Months Ended

Aug. 03, 2025

Leases

We have operating leases for warehouses, showrooms, manufacturing facilities, offices and equipment. Sub-lease income totaled $119,000 in the second quarter and $200,000 for the first half of fiscal 2026, compared with $18,000 and $71,000, respectively, in fiscal 2025 periods.

The components of lease cost and supplemental cash flow information for leases for the second quarters and six-months of fiscal 2026 and 2025 were:

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	August 3, 2025		July 28, 2024		August 3, 2025		July 28, 2024
Operating lease cost	$	2,515	$	2,533	$	5,056	$	5,060
Variable lease cost		74		83		163		188
Short-term lease cost		50		83		99		199
Total operating lease cost	$	2,639	$	2,699	$	5,318	$	5,447

Operating cash outflows	$	2,601	$	2,554	$	5,213	$	5,163

The right-of-use assets and lease liabilities recorded on our condensed consolidated balance sheets as of August 3, 2025 and February 2, 2025 were as follows:

	August 3, 2025		February 2, 2025
Real estate	$	40,995	$	44,640
Property and equipment		802		935
Total operating leases right-of-use assets	$	41,797	$	45,575

Current portion of operating lease liabilities	$	7,798	$	7,502
Long term operating lease liabilities		37,103		41,073
Total operating lease liabilities	$	44,901	$	48,575

The weighted-average discount rate is 5.53%. The weighted-average remaining lease term is 5.8 years.

The following table reconciles the undiscounted future lease payments for operating leases to the operating lease liabilities recorded in the condensed consolidated balance sheets on August 3, 2025:

	Undiscounted Future Operating Lease Payments
Remainder of fiscal 2026	$	5,008
2027		10,091
2028		8,426
2029		7,725
2030		7,337
2031 and thereafter		14,481
Total lease payments	$	53,068
Less: impact of discounting		(8,167	)
Present value of lease payments	$	44,901

During the fiscal 2026 second quarter, we entered into an agreement to terminate and surrender the Georgia warehouse by October 31, 2025. This amendment is expected to reduce right-of-use assets by approximately $10.1 million, lease liabilities by $10.7 million, and lease payments by $13.4 million over the remaining lease term. Since the agreement has not yet commenced, the modification is not reflected in the table above.

HOOKER FURNISHINGS Corp 10-Q