Leslie's, Inc. Leases Disclosure
Note 10—Leases
Leases
We lease certain locations, office, distribution, and manufacturing facilities under operating leases that expire at various dates through May 2049. We are obligated to make cash payments in connection with various lease obligations and purchase commitments. All of these obligations require cash payments to be made by us over varying periods of time. Certain leases are renewable at our option typically for periods of or more years. Certain of these arrangements are cancelable on short notice and others require payments upon early termination. Our lease expense is recorded in cost of goods sold for our store related leases and SG&A for all others.
The following table summarizes the components of lease expense (in thousands):
|
|
Year Ended |
|
|||||
|
|
October 4, 2025 |
|
|
September 28, 2024 |
|
||
Operating lease expense |
|
$ |
89,211 |
|
|
$ |
83,982 |
|
Finance lease amortization of ROU asset |
|
|
456 |
|
|
|
165 |
|
Finance lease interest on lease liability |
|
|
90 |
|
|
|
15 |
|
Total net lease expense |
|
$ |
89,757 |
|
|
$ |
84,162 |
|
As of October 4, 2025 and September 28, 2024, operating lease right-of-use assets obtained in exchange for operating lease liabilities totaled $3.9 million and $12.3 million.
As of October 4, 2025 and September 28, 2024, finance lease right-of-use assets obtained in exchange for finance lease liabilities totaled $1.3 million and $0.6 million.
During the year ended October 4, 2025 we recorded $3.1 million in impairment on right-of-use assets related to underperforming stores, which had a aggregated fair value of $2.0 million at the time of impairment. During the year ended September 28, 2024 there were no impairments.
The following table presents the weighted-average remaining lease term and discount rate for both operating and financing leases:
|
|
October 4, 2025 |
|
|
September 28, 2024 |
|
||
Weighted-average remaining operating lease term |
|
5.0 years |
|
|
5.3 years |
|
||
Weighted-average discount rate - operating leases |
|
|
6.5 |
% |
|
|
6.4 |
% |
Weighted-average remaining finance lease term |
|
5.5 years |
|
|
1.4 years |
|
||
Weighted-average discount rate - finance leases |
|
|
6.4 |
% |
|
|
5.0 |
% |
The following table summarizes the future annual minimum lease payments for both operating and financing leases as of October 4, 2025 (in thousands):
|
|
Operating |
|
|
Financing |
|
||
2026 |
|
$ |
89,454 |
|
|
$ |
315 |
|
2027 |
|
|
75,314 |
|
|
|
209 |
|
2028 |
|
|
51,615 |
|
|
|
209 |
|
2029 |
|
|
37,052 |
|
|
|
209 |
|
2030 |
|
|
19,195 |
|
|
|
209 |
|
Thereafter |
|
|
41,827 |
|
|
|
419 |
|
Total |
|
$ |
314,457 |
|
|
$ |
1,570 |
|
Less: amount of lease payments representing imputed interest |
|
|
54,661 |
|
|
|
289 |
|
Present value of future minimum lease |
|
|
259,796 |
|
|
|
1,281 |
|
Less: current lease liabilities |
|
|
74,720 |
|
|
|
243 |
|
Lease liabilities, noncurrent |
|
$ |
185,076 |
|
|
$ |
1,038 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 18, 2025 | Showing above |
| 2024 | Nov 27, 2024 | |
| 2023 | Nov 29, 2023 | |
| 2022 | Nov 30, 2022 | |
| 2021 | Dec 10, 2021 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.