v3.25.2
Leases
 6 Months Ended
Jun. 28, 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 entered into long-term leases on the properties having 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 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 June 28, 2025 and December 28, 2024, the remaining unrecognized deferred gains related to these transactions were $65.3 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 June 28, 2025 and June 29, 2024, respectively, and $2.0 million and $2.0 million in the six fiscal months ended June 28, 2025 and June 29, 2024, respectively.
The following table presents the assets and liabilities related to the Company’s leases as of June 28, 2025 and December 28, 2024:
As of
Lease Assets and LiabilitiesJune 28, 2025December 28, 2024
(In thousands)
AssetsClassification
Operating lease right-of-use assetsOperating lease right-of-use assets$50,652 $47,221 
Finance lease right-of-use assets (1)
Property and equipment, net160,684 134,319 
Total lease right-of-use assets$211,336 $181,540 
Liabilities
Current portion:
Operating lease liabilitiesOperating lease liabilities - current$8,803 $8,478 
Finance lease liabilitiesFinance lease liabilities - current16,926 12,541 
Non-current portion:
Operating lease liabilitiesOperating lease liabilities - noncurrent43,424 40,114 
Finance lease liabilitiesFinance lease liabilities - noncurrent300,631 280,002 
Total lease liabilities$369,784 $341,135 
(1) Finance lease right-of-use assets are presented net of accumulated amortization of $107.9 million and $112.3 million as of June 28, 2025 and December 28, 2024, respectively.

The components of lease expense were as follows:
Three Fiscal Months EndedSix Fiscal Months Ended
Components of lease expenseJune 28, 2025June 29, 2024June 28, 2025June 29, 2024
(In thousands)
Operating lease expense:
Operating lease expense before sublease income$3,100 $2,633 $6,140 $5,079 
Sublease income(928)(887)(1,856)(1,748)
Operating lease expense$2,172 $1,746 $4,284 $3,331 
Finance lease expense:
   Amortization of right-of-use assets$4,802 $5,026 $9,426 $9,762 
   Interest on lease liabilities6,980 6,410 13,853 12,701 
Total finance lease expense$11,782 $11,436 $23,279 $22,463 

Supplemental cash flow information related to leases is as follows:
Three Fiscal Months EndedSix Fiscal Months Ended
June 28, 2025June 29, 2024June 28, 2025June 29, 2024
(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
   Operating cash flows, operating leases$3,074 $2,693 $6,007 $5,202 
   Operating cash flows, finance leases$6,980 $6,410 $13,853 $12,701 
   Financing cash flows, finance leases$3,832 $3,339 $8,101 $6,411 
Non-cash supplemental cash flow information related to leases is as follows:
Three Fiscal Months EndedSix Fiscal Months Ended
Non-cash informationJune 28, 2025June 29, 2024June 28, 2025June 29, 2024
(In thousands)
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$3,959 $8,132 $3,959 $8,132 
Finance leases$4,801 $2,973 $32,887 $11,150 
Supplemental balance sheet information related to leases is as follows:
As of
Balance Sheet InformationJune 28, 2025December 28, 2024
($ in thousands)
Finance leases
   Property and equipment$268,552$246,635
   Accumulated depreciation(107,868)(112,316)
Property and equipment, net$160,684$134,319
Weighted Average Remaining Lease Term (in years)
   Operating leases7.688.34
   Finance leases16.4117.68
Weighted Average Discount Rate
   Operating leases8.11 %8.15 %
   Finance leases8.74 %8.88 %
The major categories of the Company’s obligations under finance leases as of June 28, 2025 and December 28, 2024 were as follows:
As of
June 28, 2025December 28, 2024
Category:(In thousands)
Equipment and vehicles$75,570 $49,785 
Real estate(1)
241,987 242,758 
Total finance leases$317,557 $292,543 
(1)Amounts include $125.1 million and $125.1 million as of June 28, 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 June 28, 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 LeasesFinance Leases
(In thousands)
2025 (remainder of fiscal year)$6,555 $21,674 
202610,900 46,945 
202710,031 41,356 
20289,238 41,571 
20297,803 38,313 
Thereafter27,704 484,235 
Total lease payments$72,231 $674,094 
Less: imputed interest(20,004)(356,537)
Total$52,227 $317,557 
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 entered into long-term leases on the properties having 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 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 June 28, 2025 and December 28, 2024, the remaining unrecognized deferred gains related to these transactions were $65.3 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 June 28, 2025 and June 29, 2024, respectively, and $2.0 million and $2.0 million in the six fiscal months ended June 28, 2025 and June 29, 2024, respectively.
The following table presents the assets and liabilities related to the Company’s leases as of June 28, 2025 and December 28, 2024:
As of
Lease Assets and LiabilitiesJune 28, 2025December 28, 2024
(In thousands)
AssetsClassification
Operating lease right-of-use assetsOperating lease right-of-use assets$50,652 $47,221 
Finance lease right-of-use assets (1)
Property and equipment, net160,684 134,319 
Total lease right-of-use assets$211,336 $181,540 
Liabilities
Current portion:
Operating lease liabilitiesOperating lease liabilities - current$8,803 $8,478 
Finance lease liabilitiesFinance lease liabilities - current16,926 12,541 
Non-current portion:
Operating lease liabilitiesOperating lease liabilities - noncurrent43,424 40,114 
Finance lease liabilitiesFinance lease liabilities - noncurrent300,631 280,002 
Total lease liabilities$369,784 $341,135 
(1) Finance lease right-of-use assets are presented net of accumulated amortization of $107.9 million and $112.3 million as of June 28, 2025 and December 28, 2024, respectively.

The components of lease expense were as follows:
Three Fiscal Months EndedSix Fiscal Months Ended
Components of lease expenseJune 28, 2025June 29, 2024June 28, 2025June 29, 2024
(In thousands)
Operating lease expense:
Operating lease expense before sublease income$3,100 $2,633 $6,140 $5,079 
Sublease income(928)(887)(1,856)(1,748)
Operating lease expense$2,172 $1,746 $4,284 $3,331 
Finance lease expense:
   Amortization of right-of-use assets$4,802 $5,026 $9,426 $9,762 
   Interest on lease liabilities6,980 6,410 13,853 12,701 
Total finance lease expense$11,782 $11,436 $23,279 $22,463 

Supplemental cash flow information related to leases is as follows:
Three Fiscal Months EndedSix Fiscal Months Ended
June 28, 2025June 29, 2024June 28, 2025June 29, 2024
(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
   Operating cash flows, operating leases$3,074 $2,693 $6,007 $5,202 
   Operating cash flows, finance leases$6,980 $6,410 $13,853 $12,701 
   Financing cash flows, finance leases$3,832 $3,339 $8,101 $6,411 
Non-cash supplemental cash flow information related to leases is as follows:
Three Fiscal Months EndedSix Fiscal Months Ended
Non-cash informationJune 28, 2025June 29, 2024June 28, 2025June 29, 2024
(In thousands)
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$3,959 $8,132 $3,959 $8,132 
Finance leases$4,801 $2,973 $32,887 $11,150 
Supplemental balance sheet information related to leases is as follows:
As of
Balance Sheet InformationJune 28, 2025December 28, 2024
($ in thousands)
Finance leases
   Property and equipment$268,552$246,635
   Accumulated depreciation(107,868)(112,316)
Property and equipment, net$160,684$134,319
Weighted Average Remaining Lease Term (in years)
   Operating leases7.688.34
   Finance leases16.4117.68
Weighted Average Discount Rate
   Operating leases8.11 %8.15 %
   Finance leases8.74 %8.88 %
The major categories of the Company’s obligations under finance leases as of June 28, 2025 and December 28, 2024 were as follows:
As of
June 28, 2025December 28, 2024
Category:(In thousands)
Equipment and vehicles$75,570 $49,785 
Real estate(1)
241,987 242,758 
Total finance leases$317,557 $292,543 
(1)Amounts include $125.1 million and $125.1 million as of June 28, 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 June 28, 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 LeasesFinance Leases
(In thousands)
2025 (remainder of fiscal year)$6,555 $21,674 
202610,900 46,945 
202710,031 41,356 
20289,238 41,571 
20297,803 38,313 
Thereafter27,704 484,235 
Total lease payments$72,231 $674,094 
Less: imputed interest(20,004)(356,537)
Total$52,227 $317,557