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LEASES

12 Months Ended

Dec. 27, 2025

F.LEASES

We determine if an arrangement is a lease at inception. We lease certain real estate under non-cancelable operating lease agreements with typical original terms ranging from one to ten years. We are required to pay real estate taxes and other occupancy costs under certain leases, which are variable in nature and not included in the right of use asset or lease liability. Certain leases carry renewal options of five to fifteen years. We believe that future leases will likely have similar terms. We also lease motor vehicles, equipment, and an aircraft under operating lease agreements for periods of one to ten years. We do not typically enter into leases with residual value guarantees. There were no restrictions or covenants imposed by any lease agreements.

We believe finance leases have no significant impact to our consolidated balance sheet and statement of earnings as of December 27, 2025.

As of December 27, 2025, we have no leases that have not yet commenced that would significantly impact our financial position.

There were no lease transactions between related parties as of December 27, 2025.

The rates implicit in our leases are primarily not readily available. To determine the discount rate used to present value the lease payments, we utilize the 7-year treasury note rate plus a blend of rate spreads associated with our 10 to 15 year senior notes along with estimated spreads based on current market conditions. We feel the determined rate is a reasonable representation of our lease population.

Lease costs under non-cancelable operating leases on December 27, 2025 and December 28, 2024 are as follows (in thousands):



		2025		2024
Operating lease cost	$	39,197	$	39,914
Short-term lease cost		7,144		8,461
Variable lease cost		6,852		6,373
Sublease income		(1,600)		(2,468)
Total lease cost	$	51,593	$	52,280

Rent expense was approximately $53.2 million, $54.7 million, and $49.7 million in 2025, 2024, and 2023, respectively.

The amounts paid for operating leases, included in the measurement of lease liabilities, were $34.4 million in the year ended December 27, 2025 and $35.2 million in the year ended December 28, 2024. In addition, right-of-use assets obtained in exchange for new operating lease liabilities were approximately $36.8 million and $45.6 million, respectively, for the years ended December 27, 2025 and December 28, 2024.

Future minimum payments under non-cancelable operating leases on December 27, 2025 are as follows (in thousands):


		Operating
		Leases
2026		$	33,158
2027			24,742
2028			19,683
2029			13,661
2030			11,680
Thereafter			56,356
Total minimum lease payments		$	159,280
Less present value discount			(32,198)
Total lease liability		$	127,082

As of December 27, 2025 and December 28, 2024, the weighted average lease term for operating leases was 7.66 years and 6.91 years, respectively. Similarly, the weighted average discount rate for operating leases was 5.38% and 4.86%, respectively.