Leases
Lease cost includes both the fixed and variable expenses recorded for leases. The components of lease cost are as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended |
| Classification | | December 28, 2025 | | December 29, 2024 | | December 31, 2023 |
| Operating lease cost: | | | | | | | |
| Open locations | Selling, general and administrative expenses (1) | | $ | 270,171 | | | $ | 247,312 | | | $ | 232,745 | |
| Closed locations | Store closure and other costs, net | | 1,111 | | | 7,122 | | | 4,029 | |
| Finance lease cost: | | | | | | | |
| Amortization of Property and Equipment | Depreciation and amortization | | 1,499 | | | 1,128 | | | 1,062 | |
| Interest on lease liabilities | Interest expense | | 943 | | | 747 | | | 816 | |
| Variable lease cost: | | | | | | | |
| Open locations | Selling, general and administrative expenses (1) | | 81,898 | | | 75,646 | | | 70,197 | |
| Closed locations | Store closure and other costs, net | | 775 | | | 2,138 | | | 2,302 | |
| Sublease income: | | | | | | | |
| Open locations | Selling, general and administrative expenses | | (586) | | | (831) | | | (832) | |
| Closed locations | Store closure and other costs, net | | (241) | | | (71) | | | — | |
| Total net lease cost | | | $ | 355,570 | | | $ | 333,191 | | | $ | 310,319 | |
(1)Supply chain-related amounts of $20.8 million, $20.3 million and $18.2 million were included in cost of sales for 2025, 2024 and 2023, respectively.
Supplemental balance sheet information related to leases is as follows:
| | | | | | | | | | | | | | | | | |
| | | As Of |
| Classification | | December 28, 2025 | | December 29, 2024 |
| Assets | | | | | |
| Operating | Operating lease assets | | $ | 1,652,732 | | | $ | 1,466,903 | |
| Finance | Property and equipment, net | | 10,680 | | | 6,161 | |
| Total lease assets | | | $ | 1,663,412 | | | $ | 1,473,064 | |
| Liabilities | | | | | |
| Current: | | | | | |
| Operating | Current portion of operating lease liabilities | | $ | 177,263 | | | $ | 150,400 | |
| Finance | Current portion of finance lease liabilities | | 1,653 | | | 1,321 | |
| Noncurrent: | | | | | |
| Operating | Long-term operating lease liabilities | | 1,682,425 | | | 1,520,272 | |
| Finance | Long-term debt and other finance obligations | | 12,165 | | | 7,248 | |
| Total lease liabilities | | | $ | 1,873,506 | | | $ | 1,679,241 | |
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Weighted average remaining lease term (years): | | | | | |
| Operating leases | 10.3 | | 10.1 | | 10.0 |
| Finance leases | 7.6 | | 5.8 | | 6.7 |
| Weighted average discount rate: | | | | | |
| Operating leases | 7.0 | % | | 7.0 | % | | 7.2 | % |
| Finance leases | 7.6 | % | | 8.4 | % | | 8.3 | % |
Supplemental cash flow and other information related to leases is as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended |
| December 28, 2025 | | December 29, 2024 | | December 31, 2023 |
| Cash paid for amounts included in measurement of lease liabilities: | | | | | |
| Operating cash flows for operating leases | $ | 259,976 | | | $ | 249,862 | | | $ | 228,411 | |
| Operating cash flows for finance leases | 943 | | | 747 | | | 816 | |
| | | | | |
| Lease assets obtained in exchange for lease liabilities: | | | | | |
| Finance leases | $ | 6,266 | | | $ | — | | | $ | 809 | |
| Operating leases | 332,427 | | | 278,230 | | | 364,997 | |
A summary of maturities of lease liabilities is as follows:
| | | | | | | | | | | | | | | | | |
| Operating Leases(1), (2) | | Finance Leases | | Total |
| 2026 | $ | 286,062 | | | $ | 2,253 | | | $ | 288,315 | |
| 2027 | 285,295 | | | 2,875 | | | 288,170 | |
| 2028 | 251,238 | | | 2,634 | | | 253,872 | |
| 2029 | 261,792 | | | 2,175 | | | 263,967 | |
| 2030 | 263,586 | | | 1,832 | | | 265,418 | |
| Thereafter | 1,302,788 | | | 6,817 | | | 1,309,605 | |
| Total lease payments | 2,650,761 | | | 18,586 | | | 2,669,347 | |
| Less: Imputed interest | (791,073) | | | (4,768) | | | (795,841) | |
| Total lease liabilities | 1,859,688 | | | 13,818 | | | 1,873,506 | |
| Less: Current portion | (177,263) | | | (1,653) | | | (178,916) | |
| Long-term lease liabilities | $ | 1,682,425 | | | $ | 12,165 | | | $ | 1,694,590 | |
(1)Operating lease payments include $94.6 million related to periods covered by options to extend lease terms that are reasonably certain of being exercised and exclude $1,175.9 million of legally binding minimum lease payments for leases executed but not yet commenced.
(2)These amounts include rental income related to subtenant agreements under which we will receive $1.1 million in 2026, $1.2 million in 2027, $0.9 million in 2028, $0.8 million in 2029, $0.6 million in 2030 and $0.2 million thereafter.
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.