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v3.23.3

Leases | 8 Months Ended
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Sep. 10, 2023
Leases [Abstract] |
Leases | 7. Leases The Company leases certain retail store and supply chain center locations, vehicles, equipment and its corporate headquarters with expiration dates through 2041. The components of operating and finance lease cost for the third quarter and three fiscal quarters of 2023 and the third quarter and three fiscal quarters of 2022 were as follows:
|  | Fiscal Quarter Ended |  |  | Three Fiscal Quarters Ended |
|  | September 10, |  |  | September 11, |  |  | September 10, |  |  | September 11, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Operating lease cost |  | $ | 11,058 |  |  | $ | 11,302 |  |  | $ | 32,734 |  |  | $ | 32,366 |
Finance lease cost: |  |  |  |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets |  |  | 1,282 |  |  |  | 1,228 |  |  |  | 3,794 |  |  |  | 3,631 |
Interest on lease liabilities |  |  | 1,010 |  |  |  | 1,086 |  |  |  | 3,008 |  |  |  | 2,922 |
Total finance lease cost |  | $ | 2,292 |  |  | $ | 2,314 |  |  | $ | 6,802 |  |  | $ | 6,553 |
Rent expense totaled $19.7 million and $58.8 million in the third quarter and three fiscal quarters of 2023, respectively. Rent expense totaled $17.5 million and $55.4 million in the third quarter and three fiscal quarters of 2022, respectively. Rent expense includes operating lease cost, as well as expense for non-lease components including common area maintenance, real estate taxes and insurance for the Company’s real estate leases. Rent expense also includes the variable rate per mile driven and fixed maintenance charges for the Company’s supply chain center tractors and trailers and expense for short-term rentals. Rent expense for certain short-term supply chain center tractor and trailer rentals was $1.4 million and $4.1 million in the third quarter and three fiscal quarters of 2023, respectively. Rent expense for certain short-term supply chain center tractor and trailer rentals was $1.3 million and $5.1 million in the third quarter and three fiscal quarters of 2022, respectively. Variable rent expense and rent expense for other short-term leases were immaterial in both the third quarter and three fiscal quarters of 2023 and 2022. Supplemental balance sheet information related to the Company’s finance leases as of September 10, 2023 and January 1, 2023 was as follows:
|  | September 10, |  |  | January 1, |
|  | 2023 |  |  | 2023 |
Land and buildings |  | $ | 83,854 |  |  | $ | 83,902 |
Equipment |  |  | 3,941 |  |  |  | 1,606 |
Finance lease assets |  |  | 87,795 |  |  |  | 85,508 |
Accumulated depreciation and amortization |  |  | (22,382 | ) |  |  | (19,405 | )
Finance lease assets, net |  | $ | 65,413 |  |  | $ | 66,103 |
Current portion of long-term debt |  | $ | 4,347 |  |  | $ | 3,313 |
Long-term debt, less current portion |  |  | 70,157 |  |  |  | 70,886 |
Total principal payable on finance leases |  | $ | 74,504 |  |  | $ | 74,199 |
As of September 10, 2023 and January 1, 2023, the weighted average remaining lease term and weighted average discount rate for the Company’s operating and finance leases were as follows:
|  | September 10, 2023 |  | January 1, 2023
|  | Operating |  | Finance |  | Operating |  | Finance
|  | Leases |  | Leases |  | Leases |  | Leases
Weighted average remaining lease term |  | 7 years |  | 13 years |  | 7 years |  | 14 years
Weighted average discount rate |  | 4.0% |  | 6.0% |  | 3.9% |  | 6.0%
Supplemental cash flow information related to leases for the third quarter and three fiscal quarters of 2023 and the third quarter and three fiscal quarters of 2022 were as follows:
|  | Fiscal Quarter Ended |  |  | Three Fiscal Quarters Ended |
|  | September 10, |  |  | September 11, |  |  | September 10, |  |  | September 11, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 11,798 |  |  | $ | 11,581 |  |  | $ | 31,889 |  |  | $ | 30,076 |
Operating cash flows from finance leases |  |  | 1,010 |  |  |  | 1,086 |  |  |  | 3,008 |  |  |  | 2,922 |
Financing cash flows from finance leases |  |  | 1,288 |  |  |  | 1,038 |  |  |  | 2,724 |  |  |  | 2,816 |
Right-of-use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |  |  |  |  |
Operating leases |  |  | 5,230 |  |  |  | 4,241 |  |  |  | 17,405 |  |  |  | 35,405 |
Finance leases |  |  | 398 |  |  |  | 453 |  |  |  | 3,452 |  |  |  | 453 |
Maturities of lease liabilities as of September 10, 2023 were as follows:
|  | Operating |  |  | Finance |
|  | Leases |  |  | Leases |
2023 |  | $ | 15,320 |  |  | $ | 2,499 |
2024 |  |  | 45,493 |  |  |  | 8,738 |
2025 |  |  | 41,006 |  |  |  | 8,816 |
2026 |  |  | 38,893 |  |  |  | 9,425 |
2027 |  |  | 31,281 |  |  |  | 8,239 |
Thereafter |  |  | 86,761 |  |  |  | 68,448 |
Total future minimum rental commitments |  |  | 258,754 |  |  |  | 106,165 |
Less, amounts representing interest |  |  | (37,078 | ) |  |  | (31,661 | )
Total lease liabilities |  | $ | 221,676 |  |  | $ | 74,504 |
As of September 10, 2023, the Company had additional leases for certain supply chain real estate and certain supply chain and U.S. Company-owned store vehicles that had not yet commenced with estimated future minimum rental commitments of $40.5 million. These leases are expected to commence in 2023 and 2024 with lease terms of up to 11 years. These undiscounted amounts are not included in the table above. The Company has guaranteed lease payments related to certain franchisees’ lease arrangements. The maximum amount of potential future payments under these guarantees was $20.0 million and $24.5 million as of September 10, 2023 and January 1, 2023, respectively. The Company does not believe these arrangements have or are likely to have a material effect on its results of operations, financial condition, revenues, expenses or liquidity.

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