Leases
The components of total lease costs, net, consisted of the following:
| | | | | | | | | | | | | | | | | |
| Fiscal Year |
| (in thousands) | 2025 | | 2024 | | 2023 |
| Operating lease costs | $ | 147,671 | | | $ | 132,173 | | | $ | 119,908 | |
| Short-term and variable lease costs | 57,808 | | | 53,191 | | | 41,559 | |
| Sublease income | (2,470) | | | (2,452) | | | (2,703) | |
| Finance lease costs: | | | | | |
| Amortization of lease assets | 3,980 | | | 1,725 | | | 1,152 | |
| Interest on lease obligations | 1,465 | | | 587 | | | 247 | |
| Total lease costs, net | $ | 208,454 | | | $ | 185,224 | | | $ | 160,163 | |
The maturities of our lease obligations at January 3, 2026 were as follows:
| | | | | | | | | | | | | | | | | |
| (in thousands) | Operating Leases | | Finance Leases | | Total |
| 2026 | $ | 141,370 | | $ | 6,316 | | $ | 147,686 |
| 2027 | 138,469 | | 5,902 | | 144,371 |
| 2028 | 115,233 | | 5,174 | | 120,407 |
| 2029 | 111,258 | | 4,822 | | 116,080 |
| 2030 | 96,040 | | 3,777 | | 99,817 |
| Thereafter | 333,995 | | 2,859 | | 336,854 |
| Total undiscounted payments | 936,365 | | 28,850 | | 965,215 |
| Less: Interest | 270,817 | | 6,126 | | 276,943 |
| Present value of lease obligations | $ | 665,548 | | $ | 22,724 | | $ | 688,272 |
Supplemental cash flow information related to leases is as follows:
| | | | | | | | | | | | | | | | | |
| Fiscal Year |
| (in thousands) | 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease obligations: | | | | | |
| Operating cash flows for operating leases | $ | 134,760 | | | $ | 123,945 | | | $ | 112,139 | |
| Operating cash flows for finance leases | $ | 1,465 | | | $ | 587 | | | $ | 247 | |
| Financing cash flows for finance leases | $ | 3,958 | | | $ | 1,615 | | | $ | 1,526 | |
| Noncash investing activities: | | | | | |
| Assets obtained in exchange for new operating lease obligations | $ | 175,579 | | | $ | 160,348 | | | $ | 145,206 | |
| Assets obtained in exchange for new finance lease obligations | $ | 18,606 | | | $ | 4,738 | | | $ | 3,517 | |
Supplemental balance sheet information related to leases is as follows:
| | | | | | | | | | | | | | | | | |
| (in thousands) | Balance Sheet Location | | January 3, 2026 | | December 28, 2024 |
| Assets: | | | | | |
| Operating lease assets | Right-of-use lease assets | | $ | 634,012 | | | $ | 552,762 | |
| Finance lease assets | Property and equipment, net(1) | | 22,690 | | | 8,465 | |
| Total leased assets | | | $ | 656,702 | | | $ | 561,227 | |
| | | | | |
| Current liabilities: | | | | | |
| Operating lease liabilities | Lease liabilities – current | | $ | 89,586 | | | $ | 89,809 | |
| Finance lease liabilities | Accounts payable and accrued liabilities | | 6,315 | | | 2,729 | |
| Long-term liabilities: | | | | | |
| Operating lease liabilities | Lease liabilities – non-current | | 575,962 | | | 472,343 | |
| Finance lease liabilities | Other liabilities | | 16,409 | | | 5,743 | |
| Total lease liabilities | | | $ | 688,272 | | | $ | 570,624 | |
| | | | | |
| Weighted average remaining lease term (years) - operating | | | 7.62 | | 7.68 |
| Weighted average remaining lease term (years) - financing | | | 5.14 | | 4.70 |
| Weighted average discount rate - operating | | | 8.36% | | 8.62% |
| Weighted average discount rate - financing | | | 8.43% | | 8.65% |
(1)Finance lease assets are net of accumulated amortization of $7.1 million and $4.8 million as of January 3, 2026 and December 28, 2024, respectively.
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.