Note 15 - Leases and Lease Guarantees

12 Months Ended

Nov. 25, 2023

Notes to Financial Statements

Lessee, Operating and Finance Leases [Text Block]

15. Leases and Lease Guarantees

Leases

See “Leases” under Note 2 for a discussion of our accounting policies and elections under Topic 842.

Supplemental balance sheet information related to our leases as of November 25, 2023 and November 26, 2022 is as follows:

	November 25, 2023		November 26, 2022
Operating leases:
Right of use assets	$	100,888	$	99,472
Lease liabilties, short-term		18,827		18,819
Lease liabilties, long-term		97,357		97,477
Finance leases:
Right of use assets (1)	$	327	$	623
Lease liabilties, short-term (2)		246		282
Lease liabilties, long-term (3)		99		360

(1) Included in property & equipment, net in our consolidated balance sheet.

(2) Included in other current liabilites and accrued expenses in our consolidated balance sheet.

(3) Included in other long-term liabilites and accrued expenses in our consolidated balance sheet.

Our right-of-use assets under operating leases by segment as of November 25, 2023 and November 26, 2022 are as follows:

	November 25, 2023		November 26, 2022
Wholesale	$	8,689	$	8,138
Retail		92,190		91,289
Corporate & other		9		45
Total right of use assets	$	100,888	$	99,472

The components of our lease cost for 2023, 2022 and 2021 were as follows:

	2023			2022			2021
Lease cost:
Operating lease cost	$	24,287		$	24,399		$	24,367
Financing lease cost:
Amortization of right-of-use assets		278			279			95
Interest on lease liabilities		22			35			15
Short-term lease cost		401			674			387
Variable lease cost (net of abatements received)		260			447			277
Sublease income		(1,093	)		(1,444	)		(1,292	)
Total lease cost	$	24,155		$	24,390		$	23,849

Supplemental lease disclosures as of November 25, 2023, November 26, 2022 and November 27, 2021 and for the fiscal years then ended are as follows:

	Operating			Financing
For the year ended November 27, 2021:
Cash paid for amounts included in the measurements of lease liabilities		26,842			103
Lease liabilities arising from new right-of-use assets		15,678			927
For the year ended November 26, 2022:
Cash paid for amounts included in the measurements of lease liabilities		26,913			302
Lease liabilities arising from new right-of-use assets		23,171			73
For the year ended November 25, 2023:
Cash paid for amounts included in the measurements of lease liabilities		26,854			301
Lease liabilities arising from new right-of-use assets		21,921			-
As of November 27, 2021:
Weighted average remaining lease terms (years)		6.3			3.2
Weighted average discount rates		5.07	%		4.63	%
As of November 26, 2022:
Weighted average remaining lease terms (years)		6.2			2.3
Weighted average discount rates		5.53	%		4.68	%
As of November 25, 2023:
Weighted average remaining lease terms (years)		5.5			1.4
Weighted average discount rates		5.78	%		4.72	%

Future payments under our leases and the present value of the obligations as of November 25, 2023 are as follows:

	Operating Leases		Financing Leases
Fiscal 2024	$	25,269	$	256
Fiscal 2025		26,003		94
Fiscal 2026		24,213		5
Fiscal 2027		20,850		2
Fiscal 2028		16,872		-
Thereafter		26,841		-
Total lease payments		140,048		357
Less: interest		23,864		12
Total lease obligations	$	116,184	$	345

We sublease a small number of our leased locations to certain of our licensees for operation as BHF network stores. The terms of these leases generally match those of the lease we have with the lessor. In addition, we sublease space in certain closed store locations that are still under lease. Minimum future lease payments due to us under these subleases are as follows:

Fiscal 2024	$	899
Fiscal 2025		899
Fiscal 2026		586
Fiscal 2027		215
Fiscal 2028		-
Thereafter		-
Total minimum future rental income	$	2,599

Guarantees

As part of the strategy for our store program, we have guaranteed certain lease obligations of licensee operators. Lease guarantees range from one to five years. We were contingently liable under licensee lease obligation guarantees in the amount of $1,845 and $1,880 at November 25, 2023 and November 26, 2022, respectively.

In the event of default by an independent dealer under the guaranteed lease, we believe that the risk of loss is mitigated through a combination of options that include, but are not limited to, arranging for a replacement dealer, liquidating the collateral, and pursuing payment under the personal guarantees of the independent dealer. The proceeds of the above options are estimated to cover the maximum amount of our future payments under the guarantee obligations, net of reserves. The fair value of lease guarantees (an estimate of the cost to the Company to perform on these guarantees) at November 25, 2023 and November 26, 2022, were not material.