Leases
Our leasing portfolio includes lease arrangements for our warehouses, distribution centers, corporate offices and equipment. We lease substantially all our facilities on varying terms which often include one or more options to renew. We include options to extend in the lease term if they are reasonably certain of being exercised. We do not have residual value guarantees associated with our leases.
The following table includes the components of our rent expense recorded in SG&A expense:
| | | | | | | | | | | | | | | | | |
| Fiscal Year | | Fiscal Year | | Fiscal Year |
| 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 129,031 | | | $ | 128,935 | | | $ | 108,644 | |
| Variable lease cost | 40,243 | | | 39,894 | | | 42,110 | |
| Short-term lease cost | 7,278 | | | 6,823 | | | 5,640 | |
| Total | $ | 176,552 | | | $ | 175,652 | | | $ | 156,394 | |
Certain leases contain variable payments, which are expensed as incurred and not included in our operating lease right-of-use assets and operating lease liabilities. These amounts primarily include payments for maintenance, utilities, taxes, and insurance on our office and fulfillment center leases. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of future minimum lease payments at lease commencement. Certain adjustments to our operating lease right-of-use assets may be required for items such as initial direct costs paid or incentives received. We calculate the present value of our leases using an estimated incremental borrowing rate, which requires judgment. Our incremental borrowing rate is based upon an estimate of our regional secured borrowing rates. The estimated secured borrowing rates used at the date of adoption for each lease varies in accordance with the term as well as geographical region of the lease.
As of December 27, 2025, annual scheduled lease payments included in the measurement of operating lease obligations were as follows:
| | | | | |
| 2026 | $ | 132,266 | |
| 2027 | 105,067 | |
| 2028 | 80,099 | |
| 2029 | 66,219 | |
| 2030 | 48,942 | |
| Thereafter | 114,161 | |
| Total lease payments | 546,754 | |
| Less: imputed interest | (87,392) | |
| Present value of lease liabilities | $ | 459,362 | |
Finance lease liabilities are recorded as accrued expenses and other current liabilities and other long-term liabilities on the Consolidated Balance Sheets. The gross amount of the balances recorded related to finance leases is immaterial to the financial statements for the periods presented.
The weighted average remaining term for our leases as of December 27, 2025 and December 28, 2024 was 5.5 years and 5.9 years, respectively. The weighted average discount rate for our leases was 6.3% as of December 27, 2025 and December 28, 2024.
Supplemental cash flow information related to our leases is as follows:
| | | | | | | | | | | | | | | | | |
| Fiscal Year | | Fiscal Year | | Fiscal Year |
| 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | 129,190 | | | $ | 128,936 | | | $ | 115,933 | |
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ | 78,817 | | | $ | 113,381 | | | $ | 154,925 | |