Leslie's, Inc. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Leases

Leases

6 Months Ended

Apr. 04, 2026

Note 10—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):


	Three Months Ended					Six Months Ended
		April 4, 2026		March 29, 2025		April 4, 2026		March 29, 2025
Operating lease expense		$	20,777	$	21,821	$	42,285	$	43,555
Finance lease amortization of ROU asset			93		115		210		222
Finance lease interest on lease liability			19		24		39		45
Total net lease expense		$	20,889	$	21,960	$	42,534	$	43,822

The three months ended April 4, 2026 includes $(1.2) million of non-cash gains due to lease terminations on stores that were closed and impaired during the first quarter of 2026. No impairment on right-of-use assets was recorded during the period. During the six months ended April 4, 2026 we recorded $4.8 million in impairment on right-of-use assets and $(1.2) million of non-cash gains due to lease terminations, all relating to the closure of 80 underperforming stores and one distribution center. No impairment was recorded during the three and six months ended March 29, 2025.

The following table includes supplemental lease information:


	Six Months Ended
Supplemental Cash Flow Information (dollars in thousands)	April 4, 2026			March 29, 2025
Cash paid for amounts included in the measurements of lease liabilities
Operating cash flow used for operating leases	$	44,754		$	43,557
Operating cash flow used for finance leases		39			45
Financing cash flow used for finance leases		215			245

Other Supplemental Information (dollars in thousands)
Right-of-use assets obtained in exchange for lease liabilities:
Operating lease	$	17,494		$	15,538
Finance lease		—			1,586

Weighted-average remaining operating lease term	5.0 years			5.1 years
Weighted-average discount rate - operating leases		6.4	%		6.3	%
Weighted-average remaining finance lease term	5.8 years			5.7 years
Weighted-average discount rate - finance leases		6.5	%		6.2	%

The following table summarizes the future annual minimum lease payments for both operating and financing leases as of April 4, 2026 (in thousands):


	Operating		Finance
Remainder of fiscal 2026	$	43,482	$	104
2027		76,936		209
2028		54,626		209
2029		41,801		209
2030		24,727		209
Thereafter		45,467		418
Total	$	287,039	$	1,358
Less: amount of lease payments representing imputed interest		49,910		250
Present value of future minimum lease payments		237,129		1,108
Less: current lease liabilities		69,817		140
Lease liabilities, noncurrent	$	167,312	$	968