The Company accounts for its leases in accordance with ASU 842, Leases. ASC 842 requires lessees to (i) recognize a right-of-use asset (“ROU asset”) and a lease liability that is measured at the present value of the remaining lease payments on the Consolidated Balance Sheets, (ii) recognize a single lease cost, calculated over the lease term on a straight-line basis and (iii) classify lease-related cash payments within operating and financing activities. The Company made an accounting policy election to not recognize short-term leases on the Consolidated Balance Sheets and all non-lease components, such as common area maintenance, were excluded. At any given time during the lease term, the lease liability represents the present value of the remaining lease payments, and the ROU asset is measured as the amount of the lease liability, adjusted for pre-paid rent, unamortized initial direct costs, the remaining balance of lease incentives received, and any impairment. Both the lease ROU asset and lease liability are reduced to zero at the end of the lease term.

The Company leases distribution centers and warehouses, manufacturing facilities, showrooms, and office space. At the lease inception date, the Company determines if an arrangement is, or contains, a lease. Some of the Company’s leases include options to renew at similar terms. The Company assesses these options to determine if the Company is reasonably certain of exercising these options based on relevant economic and financial factors. Options that meet these criteria are included in the lease term at the lease commencement date.

For purposes of measuring the Company’s ROU asset and lease liability, the discount rate utilized by the Company was based on the average interest rates effective for the Company’s line of credit. Some of the Company’s leases contain variable rent payments, including common area maintenance and utilities. Due to the variable nature of these costs, they are not included in the measurement of the ROU asset and lease liability.

The components of the Company’s leases excluding the impact of sublease income reflected on the Company’s Consolidated Statements of Income were as follows:


	Three Months Ended
	September 30,
(in thousands)	2025		2024
Operating lease expense	$	2,098	$	2,478
Variable lease expense		413		519
Total lease expense	$	2,511	$	2,997

Other information related to leases and future minimum lease payments under non-cancelable operating leases were as follows:


	Three Months Ended
	September 30,
(in thousands)	2025			2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	2,493		$	2,441

Cash received from subleasing of operating lease:
Operating cash flows received from subleasing of operating lease	$	—		$	594

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	456		$	—

Weighted-average remaining lease term (in years):
Operating leases		6.9			7.9

Weighted-average discount rate:
Operating leases		3.9	%		3.1	%

Future minimum lease payments under non-cancelable operating leases were as follows:


	September 30, 2025
Remaining payments in FY2026	$	7,544
FY2027		10,255
FY2028		10,025
FY2029		8,949
FY2030		8,713
Thereafter		20,400
Total future minimum lease payments	$	65,886
Less imputed interest		8,073
Lease liability	$	57,813