Leases

12 Months Ended

Jan. 31, 2026

The Company has operating and finance leases for certain of the Company's clubs, transportation vehicles, and equipment; and operating leases for certain distribution centers, stand-alone gas stations, and the Club Support Center.

The initial primary term of the Company’s operating leases ranges from 2 years to 44 years, with most of these leases having an initial term of 20 years. The initial primary term of the Company’s finance leases ranges from 3 years to 20 years, with most of these leases having an initial term of 7 years.

The following table summarizes the Company’s finance and operating lease assets and lease liabilities as of January 31, 2026 and February 1, 2025 (in thousands):


	January 31, 2026		February 1, 2025		Consolidated Balance Sheet Classification
Assets:
Operating lease assets	$	1,976,013	$	2,100,257	Operating lease right-of-use assets, net
Finance lease assets	77,245		45,550		Property and equipment, net
Less: finance lease amortization	(27,330)		(17,422)		Property and equipment, net
Total lease assets	$	2,025,928	$	2,128,385
Liabilities:
Current:
Operating lease liabilities	$	209,249	$	192,528	Current portion of operating lease liabilities
Finance lease liabilities	12,291		8,288		Accrued expenses and other current liabilities
Long-term:
Operating lease liabilities	1,880,383		2,013,962		Long-term operating lease liabilities
Finance lease liabilities	37,748		19,916		Other non-current liabilities
Total lease liabilities	$	2,139,671	$	2,234,694

The following table is a summary of the components of net lease costs for fiscal years 2025, 2024, and 2023 (in thousands):


	Fiscal Year Ended
	January 31, 2026		February 1, 2025		February 3, 2024
Finance lease cost:
Amortization of lease assets (a)	$	9,908	$	8,156	$	4,350
Interest on lease liabilities (b)	3,615		3,692		3,206
Total finance lease costs	13,523		11,848		7,556
Operating lease cost (a)	370,659		370,727		360,369
Variable lease cost (a)	15,299		11,136		6,775
Sublease income (a)	(884)		(1,244)		(2,104)
Net lease costs	$	398,597	$	392,467	$	372,596

(a) Amortization of finance lease assets, operating lease cost, variable lease cost, and sublease income are primarily included in SG&A expenses in the consolidated statements of operations and comprehensive income. Variable lease cost primarily consists of increases in rental payments based on an index, as well as the cost of leases with an initial term of twelve months or less.

(b) Interest recognized on finance lease liabilities is included in interest expense, net in the consolidated statements of operations and comprehensive income.

The weighted-average remaining lease term and weighted-average discount rate for operating and finance leases as of January 31, 2026 and February 1, 2025 were as follows:


	January 31, 2026		February 1, 2025
Weighted-average remaining lease term (in years) - operating leases	11.1		11.5
Weighted-average remaining lease term (in years) - finance leases	5.8		7.4
Weighted-average discount rate - operating leases	7.9	%	8.0	%
Weighted-average discount rate - finance leases	9.5	%	13.0	%

Cash paid for amounts included in the measurement of lease liabilities were as follows (in thousands):


	Fiscal Year Ended
	January 31, 2026		February 1, 2025		February 3, 2024
Operating cash flows paid for operating leases	$	358,987	$	328,239	$	380,340
Operating cash flows paid for interest portion of finance leases	3,615		3,692		3,206
Financing cash flows paid for principal portion of finance leases	9,408		7,242		3,061

Supplemental cash flow information related to lease assets and lease liabilities were as follows (in thousands):


	Fiscal Year Ended
	January 31, 2026		February 1, 2025		February 3, 2024
Operating lease liabilities arising from obtaining right-of-use assets and other non-cash lease-related operating items	$	75,375	$	150,035	$	177,187
Financing lease liabilities arising from obtaining right-of-use assets	31,203		758		22,135

Future lease commitments to be paid by the Company as of January 31, 2026 were as follows (in thousands):


Fiscal Year	Operating Leases		Finance Leases
2026	$	359,433	$	16,168
2027	355,907		16,047
2028	340,436		8,281
2029	324,130		6,730
2030	292,679		6,093
Thereafter	1,557,747		11,536
Total future minimum lease payments	3,230,332		64,855
Less: imputed interest	(1,140,700)		(14,816)
Present value of lease liabilities	$	2,089,632	$	50,039

As of January 31, 2026, the Company had certain executed real estate and gas station leases that have not yet commenced and therefore are not reflected in the tables above. These leases are expected to commence primarily in fiscal year 2026 with lease terms ranging from 5 years to 25 years years. We estimate future lease commitments for these leases to be approximately $561.0 million.

Sale-leaseback Transactions

During fiscal years 2025 and 2023, the Company completed one and two sale-leaseback transactions for buildings constructed by the Company on land owned by the buyer-lessors, respectively. In connection with these transactions, the Company sold assets with total fair values of $12.7 million and $26.2 million, and received proceeds of $9.0 million and $18.5 million for fiscal years 2025 and 2023, respectively. Cash received in connection with these transactions is included in proceeds from sale-leaseback transactions in the consolidated statements of cash flows and totaled $3.0 million and $12.3 million in fiscal years 2025 and 2023, respectively, while the remainder of the cash consideration was received in prior periods. The difference between the fair value of assets sold and proceeds received was deemed prepaid rent and included in the operating lease asset at lease commencement. There were no sale-leaseback transactions completed during fiscal year 2024.

Failed Sale-leaseback Transactions

During fiscal years 2025, 2024, and 2023, the Company constructed four, one, and three buildings, respectively, on land owned by certain of the Company’s lessors. The associated leases, which each have an initial term of 20 years, were deemed to be financing leases, resulting in the Company accounting for the transactions as failed sale-leasebacks.

The net book value of the associated building assets is included in property and equipment, net in the consolidated balance sheets. The current portion of the financing obligations is included in accrued expenses and other current liabilities, while the long-term portion is included in other non-current liabilities in the consolidated balance sheets. Cash received in connection with the transactions is included in proceeds from financing obligations in the consolidated statements of cash flows. Interest expense incurred as a result of the financing obligations is included in interest expense, net in the consolidated statements of operations and comprehensive income.

In connection with the fiscal year 2025 transactions, the Company recorded financing obligations totaling $36.3 million, which represented total cash received, of which $20.7 million was received during fiscal year 2025 and the remainder of which was received in prior periods.

In connection with the fiscal year 2024 transactions, the Company recorded a financing obligation totaling $9.3 million, which represented total cash received, of which $3.1 million was received during fiscal year 2024 and the remainder of which was received in prior periods.

In connection with the fiscal year 2023 transactions, the Company recorded financing obligations totaling $26.4 million, which represented cash received of $20.6 million and receivables of $5.8 million as of February 3, 2024. The receivables were collected during fiscal year 2024.

Operating cash flows paid for the interest portion of failed sale-leasebacks totaled $5.9 million, $3.1 million, and $0.9 million for fiscal years 2025, 2024, and 2023, respectively.

BJ's Wholesale Club Holdings, Inc. 10-K