The Company leases its retail, office and manufacturing space under operating leases which, in addition to the minimum

lease payments, may require payment of a proportionate share of the real estate taxes and certain building operating

expenses. While the Company’s local market development approach generally results in long-term participation in given

markets, the retail store leases generally provide for an initial lease term of five to ten years. The Company’s office and

manufacturing leases provide for an initial lease term of up to fifteen years. In addition, the Company’s mall-based retail

store leases may require payment of variable rent based on net sales in excess of certain thresholds. Certain leases may

contain options to extend the term of the original lease. The exercise of lease renewal options is at the Company’s sole

discretion. Lease options are included in the lease term only if exercise is reasonably certain at lease commencement.

The Company’s lease agreements do not contain any material residual value guarantees. The Company also leases

vehicles and certain equipment under operating leases with an initial lease term of three to six years.

The Company’s operating lease costs include facility, vehicle and equipment lease costs, but exclude variable lease costs.

Operating lease costs are recognized on a straight-line basis over the lease term, after consideration of rent escalations

and rent holidays. The lease term for purposes of the calculation begins on the earlier of the lease commencement date or

the date the Company takes possession of the property. During lease renewal negotiations that extend beyond the original

lease term, the Company estimates straight-line rent expense based on current market conditions. Variable lease costs

are recorded when it is probable the cost has been incurred and the amount can be reasonably estimated. Future

payments for real estate taxes and certain building operating expenses for which the Company is obligated are not

At September 27, 2025, the Company’s finance right-of-use (ROU) assets and lease liabilities were not significant.

The Company evaluates its operating lease ROU assets for impairment whenever events or changes in circumstances

indicate that the carrying amount of the assets may not be recoverable. During the three months ended September 27,

2025, certain retail locations have ceased operations or plan to cease in the near term (“go-dark stores”) but remain under

lease obligations. As a result, the Company recorded impairment charges of $19.8 million, which are included in

restructuring costs in the consolidated statements of operations and cash flows. The Company continues to monitor its

real estate footprint and may incur additional impairment charges in future periods.

(1)Includes short-term lease costs which are not significant.

(2)Variable lease costs include adjustments to percentage rent.

The maturities of operating lease liabilities for subsequent years are as follows(1) (in thousands):


2025 (excluding the nine months ended September 27, 2025)	$26,412
2026	101,086
2027	85,382
2028	71,833
2029	50,763
2030	36,733
Thereafter	52,841
Total operating lease payments(2)	425,050
Less: Interest	64,021
Present value of operating lease liabilities	$361,029

(1)Total operating lease payments exclude $3 million of legally binding minimum lease payments for leases signed but not yet commenced.

(2)Includes the current portion of $82 million for operating lease liabilities.

Other information related to operating leases was as follows:


	September 27, 2025	December 28, 2024
Weighted-average remaining lease term (in years)	5.1	5.4
Weighted-average discount rate	6.7%	6.6%


	Nine Months Ended
(in thousands)	September 27, 2025	September 28, 2024
Cash paid for amounts included in present value of operating lease liabilities	$79,535	$81,089
Right-of-use assets obtained in exchange for operating lease liabilities	$12,048	$29,390