AMERICAN EAGLE OUTFITTERS INC

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.

(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.

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:

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: