Leases

12 Months Ended

Dec. 28, 2024

Note 11 – Leases

A portion of the Company’s retail stores and warehouses operate in leased facilities. The Company also leases the majority of the tractors and trailers within its fleet and certain other assets. Most of the property leases contain multiple renewal options, which generally range from one to ten years in length. In those locations in which it is economically feasible to continue to operate, management expects that renewal options will be exercised as they come due. The terms of certain leases contain provisions requiring payment of variable rent based on sales and payment of executory costs such as property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premises or, in the case of transportation equipment, provisions requiring payment of variable rent based upon miles driven. Certain properties or portions thereof are subleased to others. As most of the Company’s leases do not reference an implicit discount rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The components of lease cost were as follows:


(In thousands)	2024			2023			2022
Operating lease cost	$	56,704		$	55,807		$	57,876
Short-term lease cost		8,965			8,367			7,576
Finance lease cost
Amortization of assets		10,281			8,244			6,134
Interest on lease liabilities		5,417			4,454			3,369
Variable rent		217			348			236
Sublease income		(3,428	)		(3,845	)		(3,907	)
Total net lease cost	$	78,156		$	73,375		$	71,284

Supplemental balance sheet information related to leases was as follows:


	December 28,			December 30,
(In thousands)	2024			2023
Operating leases:
Operating lease assets	$	327,211		$	242,146

Current portion of operating lease liabilities	$	49,562		$	41,979
Noncurrent operating lease liabilities		305,051			226,118
Total operating lease liabilities	$	354,613		$	268,097
Finance leases:
Property and equipment, at cost	$	152,043		$	92,598
Accumulated amortization		(34,589	)		(25,472	)
Property and equipment, net	$	117,454		$	67,126

Current portion of finance lease liabilities	$	12,141		$	7,739
Noncurrent finance lease liabilities		113,637			66,900
Total finance lease liabilities	$	125,778		$	74,639

Weighted average remaining lease term (in years):
Operating leases		8.8			7.6
Finance leases		9.8			9.0

Weighted average discount rate:
Operating leases		6.2	%		5.9	%
Finance leases		6.5	%		6.8	%

Supplemental cash flow and other information related to leases was as follows:


(In thousands)	2024		2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	58,828	$	58,251	$	61,103
Operating cash flows used for finance leases		5,413		4,450		3,372
Financing cash flows used for finance leases		8,787		6,897		6,045

Lease assets obtained in exchange for lease liabilities:
Total operating lease liabilities	$	131,035	$	39,018	$	23,027
Total finance lease liabilities		60,567		17,833		21,032

The Company’s total future lease commitments under operating and finance leases in effect at December 28, 2024 are as follows:


	Operating		Finance
(In thousands)	Leases		Leases		Total
2025	$	69,639	$	19,887	$	89,526
2026		64,012		19,109		83,121
2027		57,479		18,113		75,592
2028		48,632		17,529		66,161
2029		40,269		16,573		56,842
Thereafter		186,836		79,073		265,909
Total		466,867		170,284		637,151
Less interest		112,254		44,506		156,760
Present value of lease liabilities		354,613		125,778		480,391
Less current portion		49,562		12,141		61,703
Long-term lease liabilities	$	305,051	$	113,637	$	418,688

Certain retail store facilities, either owned or obtained through leasing arrangements, are leased to others. A majority of the leases provide for minimum rent obligations and contain renewal options. Certain of the leases contain escalation clauses and contingent rentals based upon stipulated sales volumes.

Owned assets, included in property and equipment, which are leased to others are as follows:


	December 28,		December 30,
(In thousands)	2024		2023
Land and improvements	$	6,373	$	7,147
Buildings		26,659		27,227
Owned assets leased to others		33,032		34,374
Less accumulated amortization and depreciation		12,816		12,369
Net owned assets leased to others	$	20,216	$	22,005

Future minimum rentals to be received under leases in effect at December 28, 2024 are as follows:


(In thousands)	2025		2026		2027		2028		2029		Thereafter		Total
Owned property	$	5,022	$	5,015	$	4,821	$	4,717	$	3,181	$	12,029	$	34,785
Leased property		2,886		2,124		1,533		866		656		457		8,522
Total	$	7,908	$	7,139	$	6,354	$	5,583	$	3,837	$	12,486	$	43,307