v3.26.1
Leases
 6 Months Ended
Jun. 30, 2026
Leases [Abstract]  
Leases Leases
The Company leases real estate and equipment under operating and finance leases, some of which are from related parties as discussed in Note 10 — Related Party Transactions. The most significant obligations under these lease agreements require the payments of periodic rentals, real estate taxes, insurance and maintenance costs. Depending on particular Showroom leases, the Company can also owe a percentage rent payment if particular Showrooms meet certain sales figures.
The following table summarizes the amounts recognized within our condensed consolidated balance sheets related to leases (amounts in thousands):
Condensed Consolidated Balance Sheet ClassificationJune 30,
2026		December 31,
2025
Assets
Operating lease assetsOperating right-of-use assets$415,884 $391,274 
Finance lease assetsFinancing right-of-use assets32,184 33,275 
Total leased assets$448,068 $424,549 
Liabilities
Current operating leasesCurrent portion of operating lease liabilities$62,156 $60,115 
Non-current operating leasesOperating lease liabilities, long-term494,179 467,226 
Total operating lease liabilities556,335 527,341 
Current finance leasesCurrent portion of financing lease liabilities970 862 
Non-current finance leasesFinancing lease liabilities, long-term51,931 52,374 
Total finance lease liabilities52,901 53,236 
Total lease liabilities$609,236 $580,577 
The components of lease cost recognized within our condensed consolidated statements of comprehensive income are as follows (amounts in thousands):
Six months endedThree months ended
June 30,June 30,
2026202520262025
Lease costs:
Operating lease costs(1)
$40,024 $33,430 $20,302 $16,986 
Finance lease costs
Amortization of right-of-use assets(1)
1,101 1,140 551 538 
Interest expense on lease liabilities(2)
2,552 2,565 1,275 1,276 
Variable lease costs(3)
21,311 23,784 11,082 11,542 
Short term lease costs(4)
88 88 44 44 
Total lease costs$65,076 $61,007 $33,254 $30,386 
(1) Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of comprehensive income based on our accounting policy.
(2) Included in interest income, net on the condensed consolidated statements of comprehensive income.
(3) Represents variable lease payments under operating and finance lease agreements, primarily associated with contingent rent that is based on a percentage of retail sales over contractual levels as well as charges associated with common area maintenance, property taxes and insurance. These costs are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of comprehensive income based on our accounting policy.
(4) Represents leases with an initial term of 12 months or less which are not recorded on the balance sheet and instead expensed on a straight-line basis over the lease term, excluding expenses relating to leases with a lease term of one month or less.
We often have options to renew lease terms for Showrooms and other assets. The exercise of lease renewal options is generally at our sole discretion. In addition, certain lease agreements may be terminated prior to their original expiration date at our discretion. We evaluate each renewal and termination option at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors. The weighted average remaining lease terms are as follows:
Six months ended
June 30,
Weighted Average Remaining Lease Term (In Years)20262025
Operating leases8.628.71
Finance leases19.1419.98
When readily determinable, we use the discount rate implicit within the lease as determined at the time of lease commencement. However, the discount rate implicit within many of our leases is generally not determinable at the time of lease commencement and therefore the Company determines the discount rate based on its incremental borrowing rate (“IBR”). For leases in which the discount rate was not readily determinable, the Company utilized a market-based approach to estimate the IBR, which required significant judgment. The Company estimated the base IBR based on an analysis of (i) yields on the Company’s 2021 Credit Facility, as well as comparable companies and (ii) unsecured yields and discount rates. The Company applied adjustments to the base IBRs to account for full collateralization and lease term. The weighted average discount rates used to measure our lease liabilities are as follows:
Six months ended
June 30,
Weighted Average Discount Rate20262025
Operating leases6.03 %6.05 %
Finance leases9.69 %9.67 %
Future lease liabilities at June 30, 2026 are as follows (amounts in thousands):
Year Ending December 31,
Operating Lease Liabilities (1)
Finance Lease LiabilitiesTotal Lease Liabilities
Remainder of 2026
$44,279 $3,028 $47,307 
202792,724 6,017 98,741 
202886,567 5,711 92,278 
202984,112 5,247 89,359 
203079,064 5,233 84,297 
203173,687 5,744 79,431 
Thereafter262,561 93,750 356,311 
Total lease payments722,994 124,730 847,724 
Less: Amounts representing interest(166,659)(71,829)(238,488)
Total$556,335 $52,901 $609,236 
(1) Includes leases with related parties. See Note 10 — Related Party Transactions for amounts leased from related parties.
At June 30, 2026, the Company has entered into leases for Showrooms and equipment which have not yet commenced with expected lease terms ranging from 10 to 16 years. The aggregate minimum rental payments over the term of the leases of approximately $193.5 million are not included in the above table.
Supplemental cash flow information related to leases is as follows (amounts in thousands):
Six months ended
June 30,
20262025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$43,002 $39,215 
Operating cash flows for finance leases2,555 2,494 
Financing cash flows for finance leases425 365 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$48,302 $65,625 
Finance leases52 (844)
Leases Leases
The Company leases real estate and equipment under operating and finance leases, some of which are from related parties as discussed in Note 10 — Related Party Transactions. The most significant obligations under these lease agreements require the payments of periodic rentals, real estate taxes, insurance and maintenance costs. Depending on particular Showroom leases, the Company can also owe a percentage rent payment if particular Showrooms meet certain sales figures.
The following table summarizes the amounts recognized within our condensed consolidated balance sheets related to leases (amounts in thousands):
Condensed Consolidated Balance Sheet ClassificationJune 30,
2026		December 31,
2025
Assets
Operating lease assetsOperating right-of-use assets$415,884 $391,274 
Finance lease assetsFinancing right-of-use assets32,184 33,275 
Total leased assets$448,068 $424,549 
Liabilities
Current operating leasesCurrent portion of operating lease liabilities$62,156 $60,115 
Non-current operating leasesOperating lease liabilities, long-term494,179 467,226 
Total operating lease liabilities556,335 527,341 
Current finance leasesCurrent portion of financing lease liabilities970 862 
Non-current finance leasesFinancing lease liabilities, long-term51,931 52,374 
Total finance lease liabilities52,901 53,236 
Total lease liabilities$609,236 $580,577 
The components of lease cost recognized within our condensed consolidated statements of comprehensive income are as follows (amounts in thousands):
Six months endedThree months ended
June 30,June 30,
2026202520262025
Lease costs:
Operating lease costs(1)
$40,024 $33,430 $20,302 $16,986 
Finance lease costs
Amortization of right-of-use assets(1)
1,101 1,140 551 538 
Interest expense on lease liabilities(2)
2,552 2,565 1,275 1,276 
Variable lease costs(3)
21,311 23,784 11,082 11,542 
Short term lease costs(4)
88 88 44 44 
Total lease costs$65,076 $61,007 $33,254 $30,386 
(1) Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of comprehensive income based on our accounting policy.
(2) Included in interest income, net on the condensed consolidated statements of comprehensive income.
(3) Represents variable lease payments under operating and finance lease agreements, primarily associated with contingent rent that is based on a percentage of retail sales over contractual levels as well as charges associated with common area maintenance, property taxes and insurance. These costs are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of comprehensive income based on our accounting policy.
(4) Represents leases with an initial term of 12 months or less which are not recorded on the balance sheet and instead expensed on a straight-line basis over the lease term, excluding expenses relating to leases with a lease term of one month or less.
We often have options to renew lease terms for Showrooms and other assets. The exercise of lease renewal options is generally at our sole discretion. In addition, certain lease agreements may be terminated prior to their original expiration date at our discretion. We evaluate each renewal and termination option at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors. The weighted average remaining lease terms are as follows:
Six months ended
June 30,
Weighted Average Remaining Lease Term (In Years)20262025
Operating leases8.628.71
Finance leases19.1419.98
When readily determinable, we use the discount rate implicit within the lease as determined at the time of lease commencement. However, the discount rate implicit within many of our leases is generally not determinable at the time of lease commencement and therefore the Company determines the discount rate based on its incremental borrowing rate (“IBR”). For leases in which the discount rate was not readily determinable, the Company utilized a market-based approach to estimate the IBR, which required significant judgment. The Company estimated the base IBR based on an analysis of (i) yields on the Company’s 2021 Credit Facility, as well as comparable companies and (ii) unsecured yields and discount rates. The Company applied adjustments to the base IBRs to account for full collateralization and lease term. The weighted average discount rates used to measure our lease liabilities are as follows:
Six months ended
June 30,
Weighted Average Discount Rate20262025
Operating leases6.03 %6.05 %
Finance leases9.69 %9.67 %
Future lease liabilities at June 30, 2026 are as follows (amounts in thousands):
Year Ending December 31,
Operating Lease Liabilities (1)
Finance Lease LiabilitiesTotal Lease Liabilities
Remainder of 2026
$44,279 $3,028 $47,307 
202792,724 6,017 98,741 
202886,567 5,711 92,278 
202984,112 5,247 89,359 
203079,064 5,233 84,297 
203173,687 5,744 79,431 
Thereafter262,561 93,750 356,311 
Total lease payments722,994 124,730 847,724 
Less: Amounts representing interest(166,659)(71,829)(238,488)
Total$556,335 $52,901 $609,236 
(1) Includes leases with related parties. See Note 10 — Related Party Transactions for amounts leased from related parties.
At June 30, 2026, the Company has entered into leases for Showrooms and equipment which have not yet commenced with expected lease terms ranging from 10 to 16 years. The aggregate minimum rental payments over the term of the leases of approximately $193.5 million are not included in the above table.
Supplemental cash flow information related to leases is as follows (amounts in thousands):
Six months ended
June 30,
20262025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$43,002 $39,215 
Operating cash flows for finance leases2,555 2,494 
Financing cash flows for finance leases425 365 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$48,302 $65,625 
Finance leases52 (844)