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Debt and Finance Lease Obligations
 3 Months Ended
Apr. 04, 2026
Debt Disclosure [Abstract]  
Debt and Finance Lease Obligations Debt and Finance Lease Obligations
As of April 4, 2026 and January 3, 2026, debt and finance lease obligations consisted of the following:
As of
April 4, 2026January 3, 2026
(In thousands)
Senior secured notes (“2029 Notes”) (1)
$300,000 $300,000 
Revolving credit facility (2)
— — 
Unamortized debt issuance costs(1,263)(1,349)
Unamortized bond discount costs(1,863)(1,991)
296,874 296,660 
Finance lease obligations (3)
316,745 321,279 
Less: current portion of finance lease obligations21,328 22,348 
Total debt and finance leases, net of current portions$592,291 $595,591 
(1) As of April 4, 2026 and January 3, 2026, long-term debt was comprised of $300 million of senior secured notes (“2029 Notes”) issued in October 2021 and maturing November 15, 2029. These notes are presented under the Long-term debt caption of the Company’s consolidated balance sheets in the net amounts of $296.9 million and $296.7 million as of April 4, 2026 and January 3, 2026, respectively. This balance sheet presentation is net of unamortized discount of $1.9 million and $2.0 million, respectively, and unamortized debt issuance costs of $1.3 million and $1.3 million, respectively, as of April 4, 2026 and January 3, 2026. The 2029 Notes are presented in this table at their face value.

(2) No borrowings were outstanding. Available borrowing capacity under the revolving credit facility was $340.1 million as of April 4, 2026 and January 3, 2026. The available borrowing capacity reflects undrawn letters of credit.

(3) The Company’s finance lease obligations consist of leases related to equipment, vehicles, and real estate, with the majority of those finance leases related to real estate. Amounts on this line include $124.0 million and $124.1 million as of April 4, 2026 and January 3, 2026, respectively, for sale-leasebacks of real estate in fiscal 2019 and fiscal 2020 that did not qualify for sale treatment for accounting purposes. Under these sale-leaseback arrangements, the Company is not entitled to legal ownership of the assets at any time, including at expiration of the arrangements, nor is the Company entitled to purchase the assets at a bargain purchase price. For additional disclosures about the Company’s finance lease obligations, see Note 7, Leases, to the unaudited condensed consolidated financial statement.


Interest expense, net on the Company’s unaudited condensed consolidated statements of operations consisted of the following components:
Fiscal Three Months Ended
April 4, 2026March 29, 2025
(In thousands)
Interest expense$12,215 $12,053 
Less: Interest income3,068 5,473 
Interest expense, net$9,147 $6,580 

Interest expense for the reporting periods presented in the above table primarily reflects interest expense for the 2029 Notes, interest expense on finance lease obligations, certain ongoing fees for revolving credit facilities that are classified as interest expense, amortization of debt issuance costs for the 2029 Notes and revolving credit facilities, and amortization of original-issue bond discount on the 2029 Notes. Total amortization of debt issuance costs plus bond discount costs was $0.4 million and $0.3 million for the fiscal three months ended April 4, 2026 and March 29, 2025, respectively.

Interest income for the reporting periods presented in the above table primarily reflects interest earned on the Company’s cash and cash equivalents. Refunds received from U.S. Customs for certain retroactive AD/CV import duty adjustments (see Note 3, Inventory, to these unaudited condensed consolidated financial statements) resulted in additional interest income of $0.5 million for the fiscal three months ended March 29, 2025.

2029 Notes

Interest expense, excluding fees and amortization of debt issuance costs and bond discount, for the 2029 Notes is accrued by the Company in the amount of $4.5 million for each quarterly fiscal period. Interest is paid semi-annually. The 2029 Notes pay the holders interest at a fixed annual rate of 6.0% through maturity. The 2029 Notes are secured by a first-priority security interest in substantially all of the Company’s assets, other than accounts receivables, inventory, deposit accounts, securities accounts, business interruption insurance and other related assets. See Note 12, Fair Value, to these unaudited condensed consolidated financial statements for additional information about the 2029 Notes.
Revolving Credit Facility

The Company’s revolving credit facility is scheduled to mature on August 27, 2030 and initially provides for a senior secured revolving loan and letter of credit facility of up to $350 million and also includes a $35 million swing line subfacility and letters of credit in an aggregate amount of up to $30 million. Subject to certain conditions and consents, the Company’s borrowing entities have the option to increase the facility by an aggregate additional principal amount of up to $300 million which could in the future allow total borrowings of up to $650 million.

If borrowings are outstanding, interest accrues at a rate per annum equal to (i) the then-current Secured Overnight Financing Rate (“SOFR”) plus a margin ranging from 1.25% to 1.75%, with the amount of such margin determined based upon the
average of the borrowers’ excess availability (as defined) for the immediately preceding fiscal quarter or (ii) the administrative agent’s base rate plus a margin ranging from 0.25% to 0.75%, with the amount of such margin determined based upon the average of the borrowers’ excess availability (as defined) for the immediately preceding fiscal quarter as calculated by the administrative agent.

As of April 4, 2026 and January 3, 2026, there were no outstanding borrowings under the revolving credit facility. During the fiscal first quarters of 2026 and 2025, the Company incurred no interest expense for its revolving credit facilities since no borrowings were outstanding during those fiscal periods.

The revolving credit facility is a senior secured loan and letter of credit facility that is secured by a security interest in substantially all of the Company’s assets (other than real property), including inventories, accounts receivable, and proceeds from those items.
Debt Covenants

The revolving credit facility and the 2029 Notes contain various covenants and restrictions, including customary financial covenants. The Company was in compliance with all such covenants as of April 4, 2026 and January 3, 2026. The Company’s right to make draws on the revolving credit facility may be conditioned upon, among other things, compliance with these covenants. These covenants also limit the Company’s ability to, among other things: incur additional debt; grant liens on assets; make investments; repurchase stock; pay dividends and make distributions; sell or acquire assets, including certain real estate assets, outside the ordinary course of business; engage in transactions with affiliates; and make fundamental business changes.