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Leases | 9 Months Ended
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Sep. 27, 2025
Leases [Abstract] |
Leases | Leases The Company has operating and finance lease agreements for certain of its distribution facilities, office space, land, mobile fleet, and equipment. Many of these lease agreements are non-cancelable and typically have a defined initial lease term, and some provide options to renew at the Company’s election for specified periods of time. The majority of these lease agreements have remaining lease terms of one to 15 years, some of which include one or more options to extend the lease agreement for typically five years. The Company’s lease agreements generally provide for fixed annual rentals. Certain lease agreements include provisions for escalating rent based on, among other things, contractually defined increases and/or changes in the Consumer Price Index (“CPI”). The known changes to lease payments are included in the lease liability at lease commencement. Unknown changes related to CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In addition, a subset of vehicle lease cost is considered variable. Some lease agreements require the Company to pay taxes, insurance, and maintenance expenses associated with the leased assets. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company determines if an arrangement is a lease at inception and assesses lease classification as either operating or finance at lease inception or modification. Operating lease right-of use (“ROU”) assets and liabilities are presented separately on the Company’s consolidated balance sheets. Finance lease ROU assets are included in property and equipment and the finance lease obligations are presented separately in the Company’s consolidated balance sheets. When a lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. The Company has also made the accounting policy election to not separate lease components from non-lease components related to the mobile fleet asset class. The Company’s finance lease liabilities consist of leases related to equipment and vehicles, and real estate. A majority of the Company’s finance leases relate to real estate. During fiscal 2017 and fiscal 2018, the Company entered into real estate financing transactions on certain of its warehouse facilities. These transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, the Company leased the properties under long-term leases with renewal options. The Company accounted for these transactions in accordance with the ASC 840, Leases, which was the lease accounting standard in effect for the Company at the inception of these arrangements. The Company recorded these transactions as finance lease liabilities (“capital lease” liabilities under legacy ASC 840) on its consolidated balance sheet. Gains on these sale-leaseback transactions were deferred and are being recognized in the Company’s earnings in each subsequent reporting period. As of September 27, 2025 and December 28, 2024, the remaining unrecognized deferred gains related to these transactions were $64.3 million and $67.2 million, respectively, and these deferred gains are being recognized in earnings on a straight-line basis. The Company recognized $1.0 million and $1.0 million of the deferred gains in the three fiscal months ended September 27, 2025 and September 28, 2024, respectively, and $3.0 million and $3.0 million in the nine fiscal months ended September 27, 2025 and September 28, 2024, respectively. The following table presents the assets and liabilities related to the Company’s leases as of September 27, 2025 and December 28, 2024:
|  | As of
Lease Assets and Liabilities | September 27, 2025 |  | December 28, 2024
|  | (In thousands)
Assets | Classification |  |  |
Operating lease right-of-use assets | Operating lease right-of-use assets | $ | 49,062 |  |  | $ | 47,221 |
Finance lease right-of-use assets (1) | Property and equipment, net | 164,077 |  |  | 134,319 |
Total lease right-of-use assets |  | $ | 213,139 |  |  | $ | 181,540 |
Liabilities |  |  |  |
Current portion: |  |  |  |
Operating lease liabilities | Operating lease liabilities - current | $ | 8,806 |  |  | $ | 8,478 |
Finance lease liabilities | Finance lease liabilities - current | 19,725 |  |  | 12,541 |
Non-current portion: |  |  |  |
Operating lease liabilities | Operating lease liabilities - noncurrent | 41,834 |  |  | 40,114 |
Finance lease liabilities | Finance lease liabilities - noncurrent | 302,079 |  |  | 280,002 |
Total lease liabilities |  | $ | 372,444 |  |  | $ | 341,135 |
(1) Finance lease right-of-use assets are presented net of accumulated amortization of $111.8 million and $112.3 million as of September 27, 2025 and December 28, 2024, respectively. The compon ents of lease expense were as follows:
| Three Fiscal Months Ended |  | Nine Fiscal Months Ended
Components of lease expense | September 27, 2025 |  | September 28, 2024 |  | September 27, 2025 |  | September 28, 2024
| (In thousands)
Operating lease expense: |  |  |  |  |  |  |
Operating lease expense before sublease income | $ | 3,040 |  |  | $ | 2,886 |  |  | $ | 9,180 |  |  | $ | 7,965 |
Sublease income | (953) |  |  | (900) |  |  | (2,809) |  |  | (2,648) |
Operating lease expense | $ | 2,087 |  |  | $ | 1,986 |  |  | $ | 6,371 |  |  | $ | 5,317 |
Finance lease expense: |  |  |  |  |  |  |
Amortization of right-of-use assets | $ | 4,970 |  |  | $ | 4,716 |  |  | $ | 14,396 |  |  | $ | 14,478 |
Interest on lease liabilities | 7,004 |  |  | 6,407 |  |  | 20,857 |  |  | 19,108 |
Total finance lease expense | $ | 11,974 |  |  | $ | 11,123 |  |  | $ | 35,253 |  |  | $ | 33,586 |
Supplemental cash flow information related to leases is as follows:
| Three Fiscal Months Ended |  | Nine Fiscal Months Ended
| September 27, 2025 |  | September 28, 2024 |  | September 27, 2025 |  | September 28, 2024
| (In thousands)
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |
Operating cash flows, operating leases | $ | 3,024 |  |  | $ | 2,930 |  |  | $ | 9,031 |  |  | $ | 8,132 |
Operating cash flows, finance leases | $ | 7,004 |  |  | $ | 6,407 |  |  | $ | 20,857 |  |  | $ | 19,108 |
Financing cash flows, finance leases | $ | 4,067 |  |  | $ | 3,255 |  |  | $ | 12,168 |  |  | $ | 9,666 |
Non-cash supplemental cash flow information related to leases is as follows:
| Three Fiscal Months Ended |  | Nine Fiscal Months Ended
Non-cash information | September 27, 2025 |  | September 28, 2024 |  | September 27, 2025 |  | September 28, 2024
| (In thousands)
Right-of-use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |
Operating leases | $ | 438 |  |  | $ | 3,183 |  |  | $ | 4,397 |  |  | $ | 14,515 |
Finance leases | $ | 8,375 |  |  | $ | 5,560 |  |  | $ | 41,262 |  |  | $ | 16,710 |
Supplemental balance sheet information related to leases is as follows:
| As of
Balance Sheet Information | September 27, 2025 |  | December 28, 2024
| ($ in thousands)
Finance leases |  |  |
Property and equipment | $ | 275,891 |  | $ | 246,635
Accumulated depreciation | (111,814) |  | (112,316)
Property and equipment, net | $ | 164,077 |  | $ | 134,319
Weighted Average Remaining Lease Term (in years) |  |  |
Operating leases | 7.5 |  | 8.3
Finance leases | 16.1 |  | 17.7
Weighted Average Discount Rate |  |  |
Operating leases | 8.09 | % |  | 8.15 | %
Finance leases | 8.72 | % |  | 8.88 | %
The major categories of the Company’s obligations under finance leases as of September 27, 2025 and December 28, 2024 were as follows:
| As of
| September 27, 2025 |  | December 28, 2024
Category: | (In thousands)
Equipment and vehicles | $ | 80,264 |  |  | $ | 49,785 |
Real estate(1) | 241,540 |  |  | 242,758 |
Total finance leases | $ | 321,804 |  |  | $ | 292,543 |
(1)Amounts include $125.1 million and $125.1 million as of September 27, 2025 and December 28, 2024, respectively, for sale-leasebacks of real estate in fiscal 2019 and fiscal 2020 that did not qualify for sale treatment for accounting purposes. Below is a summary of undiscounted finance and operating lease liabilities that have initial terms in excess of one year as of September 27, 2025. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance and operating lease liabilities included in the unaudited condensed consolidated balance sheet, including options to extend lease terms that are reasonably certain of being exercised.
Fiscal Year: | Operating Leases |  | Finance Leases
| (In thousands)
2025 (remainder of fiscal year) | $ | 3,711 |  |  | $ | 11,173 |
2026 | 11,173 |  |  | 48,540 |
2027 | 10,031 |  |  | 42,951 |
2028 | 9,238 |  |  | 43,166 |
2029 | 7,803 |  |  | 39,911 |
Thereafter | 27,704 |  |  | 487,736 |
Total lease payments | $ | 69,660 |  |  | $ | 673,477 |
Less: imputed interest | (19,020) |  |  | (351,673) |
Total | $ | 50,640 |  |  | $ | 321,804 |
Leases | Leases The Company has operating and finance lease agreements for certain of its distribution facilities, office space, land, mobile fleet, and equipment. Many of these lease agreements are non-cancelable and typically have a defined initial lease term, and some provide options to renew at the Company’s election for specified periods of time. The majority of these lease agreements have remaining lease terms of one to 15 years, some of which include one or more options to extend the lease agreement for typically five years. The Company’s lease agreements generally provide for fixed annual rentals. Certain lease agreements include provisions for escalating rent based on, among other things, contractually defined increases and/or changes in the Consumer Price Index (“CPI”). The known changes to lease payments are included in the lease liability at lease commencement. Unknown changes related to CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In addition, a subset of vehicle lease cost is considered variable. Some lease agreements require the Company to pay taxes, insurance, and maintenance expenses associated with the leased assets. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company determines if an arrangement is a lease at inception and assesses lease classification as either operating or finance at lease inception or modification. Operating lease right-of use (“ROU”) assets and liabilities are presented separately on the Company’s consolidated balance sheets. Finance lease ROU assets are included in property and equipment and the finance lease obligations are presented separately in the Company’s consolidated balance sheets. When a lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. The Company has also made the accounting policy election to not separate lease components from non-lease components related to the mobile fleet asset class. The Company’s finance lease liabilities consist of leases related to equipment and vehicles, and real estate. A majority of the Company’s finance leases relate to real estate. During fiscal 2017 and fiscal 2018, the Company entered into real estate financing transactions on certain of its warehouse facilities. These transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, the Company leased the properties under long-term leases with renewal options. The Company accounted for these transactions in accordance with the ASC 840, Leases, which was the lease accounting standard in effect for the Company at the inception of these arrangements. The Company recorded these transactions as finance lease liabilities (“capital lease” liabilities under legacy ASC 840) on its consolidated balance sheet. Gains on these sale-leaseback transactions were deferred and are being recognized in the Company’s earnings in each subsequent reporting period. As of September 27, 2025 and December 28, 2024, the remaining unrecognized deferred gains related to these transactions were $64.3 million and $67.2 million, respectively, and these deferred gains are being recognized in earnings on a straight-line basis. The Company recognized $1.0 million and $1.0 million of the deferred gains in the three fiscal months ended September 27, 2025 and September 28, 2024, respectively, and $3.0 million and $3.0 million in the nine fiscal months ended September 27, 2025 and September 28, 2024, respectively. The following table presents the assets and liabilities related to the Company’s leases as of September 27, 2025 and December 28, 2024:
|  | As of
Lease Assets and Liabilities | September 27, 2025 |  | December 28, 2024
|  | (In thousands)
Assets | Classification |  |  |
Operating lease right-of-use assets | Operating lease right-of-use assets | $ | 49,062 |  |  | $ | 47,221 |
Finance lease right-of-use assets (1) | Property and equipment, net | 164,077 |  |  | 134,319 |
Total lease right-of-use assets |  | $ | 213,139 |  |  | $ | 181,540 |
Liabilities |  |  |  |
Current portion: |  |  |  |
Operating lease liabilities | Operating lease liabilities - current | $ | 8,806 |  |  | $ | 8,478 |
Finance lease liabilities | Finance lease liabilities - current | 19,725 |  |  | 12,541 |
Non-current portion: |  |  |  |
Operating lease liabilities | Operating lease liabilities - noncurrent | 41,834 |  |  | 40,114 |
Finance lease liabilities | Finance lease liabilities - noncurrent | 302,079 |  |  | 280,002 |
Total lease liabilities |  | $ | 372,444 |  |  | $ | 341,135 |
(1) Finance lease right-of-use assets are presented net of accumulated amortization of $111.8 million and $112.3 million as of September 27, 2025 and December 28, 2024, respectively. The compon ents of lease expense were as follows:
| Three Fiscal Months Ended |  | Nine Fiscal Months Ended
Components of lease expense | September 27, 2025 |  | September 28, 2024 |  | September 27, 2025 |  | September 28, 2024
| (In thousands)
Operating lease expense: |  |  |  |  |  |  |
Operating lease expense before sublease income | $ | 3,040 |  |  | $ | 2,886 |  |  | $ | 9,180 |  |  | $ | 7,965 |
Sublease income | (953) |  |  | (900) |  |  | (2,809) |  |  | (2,648) |
Operating lease expense | $ | 2,087 |  |  | $ | 1,986 |  |  | $ | 6,371 |  |  | $ | 5,317 |
Finance lease expense: |  |  |  |  |  |  |
Amortization of right-of-use assets | $ | 4,970 |  |  | $ | 4,716 |  |  | $ | 14,396 |  |  | $ | 14,478 |
Interest on lease liabilities | 7,004 |  |  | 6,407 |  |  | 20,857 |  |  | 19,108 |
Total finance lease expense | $ | 11,974 |  |  | $ | 11,123 |  |  | $ | 35,253 |  |  | $ | 33,586 |
Supplemental cash flow information related to leases is as follows:
| Three Fiscal Months Ended |  | Nine Fiscal Months Ended
| September 27, 2025 |  | September 28, 2024 |  | September 27, 2025 |  | September 28, 2024
| (In thousands)
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |
Operating cash flows, operating leases | $ | 3,024 |  |  | $ | 2,930 |  |  | $ | 9,031 |  |  | $ | 8,132 |
Operating cash flows, finance leases | $ | 7,004 |  |  | $ | 6,407 |  |  | $ | 20,857 |  |  | $ | 19,108 |
Financing cash flows, finance leases | $ | 4,067 |  |  | $ | 3,255 |  |  | $ | 12,168 |  |  | $ | 9,666 |
Non-cash supplemental cash flow information related to leases is as follows:
| Three Fiscal Months Ended |  | Nine Fiscal Months Ended
Non-cash information | September 27, 2025 |  | September 28, 2024 |  | September 27, 2025 |  | September 28, 2024
| (In thousands)
Right-of-use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |
Operating leases | $ | 438 |  |  | $ | 3,183 |  |  | $ | 4,397 |  |  | $ | 14,515 |
Finance leases | $ | 8,375 |  |  | $ | 5,560 |  |  | $ | 41,262 |  |  | $ | 16,710 |
Supplemental balance sheet information related to leases is as follows:
| As of
Balance Sheet Information | September 27, 2025 |  | December 28, 2024
| ($ in thousands)
Finance leases |  |  |
Property and equipment | $ | 275,891 |  | $ | 246,635
Accumulated depreciation | (111,814) |  | (112,316)
Property and equipment, net | $ | 164,077 |  | $ | 134,319
Weighted Average Remaining Lease Term (in years) |  |  |
Operating leases | 7.5 |  | 8.3
Finance leases | 16.1 |  | 17.7
Weighted Average Discount Rate |  |  |
Operating leases | 8.09 | % |  | 8.15 | %
Finance leases | 8.72 | % |  | 8.88 | %
The major categories of the Company’s obligations under finance leases as of September 27, 2025 and December 28, 2024 were as follows:
| As of
| September 27, 2025 |  | December 28, 2024
Category: | (In thousands)
Equipment and vehicles | $ | 80,264 |  |  | $ | 49,785 |
Real estate(1) | 241,540 |  |  | 242,758 |
Total finance leases | $ | 321,804 |  |  | $ | 292,543 |
(1)Amounts include $125.1 million and $125.1 million as of September 27, 2025 and December 28, 2024, respectively, for sale-leasebacks of real estate in fiscal 2019 and fiscal 2020 that did not qualify for sale treatment for accounting purposes. Below is a summary of undiscounted finance and operating lease liabilities that have initial terms in excess of one year as of September 27, 2025. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance and operating lease liabilities included in the unaudited condensed consolidated balance sheet, including options to extend lease terms that are reasonably certain of being exercised.
Fiscal Year: | Operating Leases |  | Finance Leases
| (In thousands)
2025 (remainder of fiscal year) | $ | 3,711 |  |  | $ | 11,173 |
2026 | 11,173 |  |  | 48,540 |
2027 | 10,031 |  |  | 42,951 |
2028 | 9,238 |  |  | 43,166 |
2029 | 7,803 |  |  | 39,911 |
Thereafter | 27,704 |  |  | 487,736 |
Total lease payments | $ | 69,660 |  |  | $ | 673,477 |
Less: imputed interest | (19,020) |  |  | (351,673) |
Total | $ | 50,640 |  |  | $ | 321,804 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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