The Company has operating leases for retail stores, distribution centers, corporate offices, data centers, and certain equipment. The Company’s leases generally have initial terms ranging from 3 years to 10 years, some of which may include options to extend the leases for up to 5 years or to terminate the lease early.

For the periods presented, the Company’s finance leases were not material to the Company’s consolidated financial statements.

The following components of lease expense were recognized primarily in Selling, general, and administrative expenses, with immaterial amounts recognized in Cost of goods sold, on the Company’s consolidated statements of operations for the fiscal periods indicated:


	Fiscal year ended
	January 3, 2026		December 28, 2024		December 30, 2023
(dollars in thousands)	(53 weeks)		(52 weeks)		(52 weeks)
Operating lease cost	$	182,495	$	177,034	$	171,072

Variable lease cost(*)	65,864		57,992		56,089
Net lease cost	$	248,359	$	235,026	$	227,161

(*)Includes short-term leases, which are not material, and any operating lease impairment charges.

Supplemental balance sheet information related to leases was as follows:



	January 3, 2026	December 28, 2024
Weighted average remaining operating lease term (years)	5.7	5.9
Weighted average discount rate for operating leases	5.1%	5.0%

Cash paid for amounts included in the measurement of operating lease liabilities in fiscal 2025 and fiscal 2024 was $181.9 million and $175.0 million, respectively.

Operating lease assets obtained in exchange for operating lease liabilities in fiscal 2025 and fiscal 2024 were $163.5 million and $196.3 million, respectively. Operating lease assets obtained primarily consist of new or modified leases.

As of January 3, 2026, the maturities of lease liabilities were as follows:


(dollars in thousands)	Operating leases
2026	$	159,579
2027	155,235
2028	121,733
2029	91,022
2030	55,398
After 2030	173,485
Total lease payments	$	756,452
Less: Interest	(111,503)
Present value of lease liabilities(*)	$	644,949

(*)As the rate implicit in the majority of the Company’s leases is not readily determinable, the Company uses the incremental borrowing rate based on the information available at the commencement date, including the lease term and currency, to determine the present value of lease payments.