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

Quarterly report [Sections 13 or 15(d)]

Leases

Leases

9 Months Ended

Jul. 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					Nine Months Ended
		July 4, 2026		June 28, 2025		July 4, 2026		June 28, 2025
Operating lease expense		$	20,491	$	21,880	$	62,776	$	65,435
Finance lease amortization of ROU asset			47		117		257		339
Finance lease interest on lease liability			18		23		57		68
Total net lease expense		$	20,556	$	22,020	$	63,090	$	65,842

The three months ended July 4, 2026 includes $(0.7) 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 nine months ended July 4, 2026 we recorded $4.8 million in impairment on right-of-use assets and $(1.9) 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 nine months ended June 28, 2025.

The following table includes supplemental lease information:


	Nine Months Ended
Supplemental Cash Flow Information (dollars in thousands)	July 4, 2026			June 28, 2025
Cash paid for amounts included in the measurements of lease liabilities
Operating cash flow used for operating leases	$	66,132		$	65,236
Operating cash flow used for finance leases		57			68
Financing cash flow used for finance leases		267			392

Other Supplemental Information (dollars in thousands)
Right-of-use assets obtained in exchange for lease liabilities:
Operating lease	$	37,439		$	43,341
Finance lease		—			1,586

Weighted-average remaining operating lease term	5.1 years			5.1 years
Weighted-average discount rate - operating leases		6.4	%		6.3	%
Weighted-average remaining finance lease term	5.6 years			5.8 years
Weighted-average discount rate - finance leases		6.5	%		6.3	%

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


	Operating		Finance
Remainder of fiscal 2026	$	21,648	$	51
2027		81,359		209
2028		60,232		209
2029		48,039		209
2030		31,168		209
Thereafter		53,444		419
Total	$	295,890	$	1,306
Less: amount of lease payments representing imputed interest		57,795		233
Present value of future minimum lease payments		238,095		1,073
Less: current lease liabilities		69,150		142
Lease liabilities, noncurrent	$	168,945	$	931