Annual report [Section 13 and 15(d), not S-K Item 405]

Leases

v3.25.3
Leases
12 Months Ended
Oct. 04, 2025
Leases [Abstract]  
Leases

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 five 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 payments

 

 

259,796

 

 

 

1,281

 

Less: current lease liabilities

 

 

74,720

 

 

 

243

 

Lease liabilities, noncurrent

 

$

185,076

 

 

$

1,038