Leases

3 Months Ended

Apr. 04, 2026

(12)

Leases

We determine whether an arrangement is a lease at inception. We have operating leases and previously had a finance lease for certain of our manufacturing facilities, distribution centers, warehouse and storage facilities, machinery and equipment, and office equipment. Our leases have remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to ten years, and some of which include options to terminate the lease within one year. We consider these options in determining the lease term used to establish our right-of-use assets and lease liabilities.

During the third quarter of 2025, we made the final payment related to our only finance lease. As of April 4, 2026 we do not have any finance lease right-of-use assets or finance lease liabilities remaining on our consolidated balance sheet.

Operating leases are included in the accompanying unaudited consolidated balance sheets in the following line items (in thousands):


	April 4,			January 3,
	2026			2026
Operating lease right-of-use assets		50,474			50,983

Operating lease liabilities:
Current portion of operating lease liabilities	$	15,617		$	16,697
Long-term operating lease liabilities, net of current portion		37,396			34,636
Total operating lease liabilities	$	53,013		$	51,333

During the second quarter of 2025, we entered into an operating lease agreement for our new corporate headquarters in Parsippany, New Jersey. The lease had not yet commenced as of January 3, 2026 and therefore the operating lease right-of-use assets and the operating lease liabilities were not recorded on our consolidated balance sheet as of January 3, 2026, but are recorded on our consolidated balance sheet as of April 4, 2026. This operating lease commenced during the first quarter of 2026, with a lease term of 15.67 years and total undiscounted lease payments of $27.3 million.

The following table shows supplemental information related to our leases (in thousands):


	Thirteen Weeks Ended
	April 4,			March 29,
	2026			2025
Operating cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	5,123		$	5,137
Cash paid for amounts included in the measurement of finance lease liabilities	$	—		$	275

The components of operating lease costs were as follows:
Cost of goods sold	$	3,287		$	3,240
Selling, general and administrative expenses		2,209			1,709
Total operating lease costs	$	5,496		$	4,949

The components of finance lease costs were as follows:
Depreciation of finance right-of-use assets	$	—		$	264
Interest on finance lease liabilities		—			4
Total finance lease costs	$	—		$	268

Total net lease costs	$	5,496		$	5,217

Total rent expense was $6.2 million, including the operating lease costs of $5.5 million stated above, for the first quarter of 2026. Total rent expense was $5.3 million, including the operating lease costs of $4.9 million stated above, for the first quarter of 2025.

Because our operating leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have lease agreements that contain both lease and non-lease components. With the exception of our real estate leases, we account for our leases as a single lease component.

The following table shows the weighted average lease term and weighted average discount rate for our operating lease ROU assets:


	April 4,		January 3,
	2026		2026
Weighted average remaining lease term (years)		6.5		4.5
Weighted average discount rate		5.03%		4.35%

As of April 4, 2026, the maturities of operating lease liabilities were as follows (in thousands):


	Maturities of Operating Lease Liabilities
Fiscal year:
2026 remaining	$	13,919
2027		14,828
2028		9,228
2029		4,404
2030		2,299
Thereafter		19,697
Total undiscounted future minimum lease payments		64,375
Less: Imputed interest		(11,362)
Total present value of future lease liabilities	$	53,013