Leases

3 Months Ended

Sep. 28, 2025

The Company currently leases plants, warehouses, offices, store facilities, and equipment under various leases through fiscal 2036. Most lease agreements are of a long-term nature (over a year), although the Company also enters into short-term leases, primarily for seasonal needs. Lease agreements may contain renewal options and rent escalation clauses and require the Company to pay real estate taxes, insurance, common area maintenance and operating expenses applicable to the leased properties. The Company accounts for its leases in accordance with Accounting Standards Codification ("ASC") 842.

At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time, by assessing whether the Company has the right to obtain substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset.

At the lease commencement date, the Company determines if a lease should be classified as an operating or a finance lease (the Company currently has no finance leases) and recognizes a corresponding lease liability and a right-of-use asset on its consolidated balance sheet. The lease liability is initially and subsequently measured as the present value of the remaining fixed minimum rental payments (including base rent and fixed common area maintenance) using discount rates as of the commencement date. Variable payments (including most utilities, real estate taxes, insurance and variable common area maintenance) are expensed as incurred. Further, the Company elected a short-term lease exception policy, permitting it not to apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets. The right-of-use asset is initially and subsequently measured at the carrying amount of the lease liability adjusted for any prepaid or accrued lease payments, remaining balance of lease incentives received, unamortized initial direct costs, or impairment charges relating to the right-of-use asset. Right-of-use assets are assessed for impairment using the long-lived assets impairment guidance. The discount rate used to determine the present value of lease payments is the Company’s estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the Company generally cannot determine the interest rate implicit in the lease.

The Company recognizes expense for its operating leases on a straight-line basis over the lease term. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Renewal option periods are included in the measurement of lease liability, where the exercise is reasonably certain to occur. Key estimates and judgments in accounting for leases include how the Company determines: (1) lease payments, (2) lease term, and (3) the discount rate used in calculating the lease liability.

Additional information related to the Company's leases is as follows:


	Three Months Ended
			September 28, 2025		September 29, 2024

		(in thousands)
Lease costs:
Operating lease costs			$	5,856	$	6,004
Variable lease costs			7,139		6,527
Short-term lease cost			716		755
Sublease income			(170)		(230)
Total lease costs			$	13,541	$	13,056

Cash paid for amounts included in measurement of operating lease liabilities			$	5,971	$	6,148
Right-of-use assets obtained in exchange for new operating lease liabilities			$	745	$	3,673


	September 28, 2025

Weighted-average remaining lease term - operating leases (in years)	7.2
Weighted-discount rate - operating leases	4.7	%

Maturities of lease liabilities in accordance with ASC 842 as of September 28, 2025 and reconciliation to the consolidated balance sheet are as follows (in thousands):


Fiscal Year:
Remainder of 2026	$	15,005
2027	20,098
2028	19,111
2029	18,133
2030	15,068
Thereafter	44,982
Total future minimum lease payments	132,397
Less: Imputed remaining interest	20,717
Total operating lease liabilities	111,680
Less: Current portion of long-term operating lease liabilities	15,277
Long-term operating lease liabilities	$	96,403