Note 15 - Leases and Lease Guarantees

12 Months Ended

Nov. 30, 2024

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 30, 2024 and November 25, 2023 is as follows:

	November 30, 2024		November 25, 2023
Operating leases:
Right of use assets	$	93,624	$	100,888
Lease liabilities, short-term		18,050		18,827
Lease liabilities, long-term		88,395		97,357
Finance leases:
Right of use assets (1)	$	263	$	327
Lease liabilities, short-term (2)		122		246
Lease liabilities, long-term (3)		153		99

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

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

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

Our right-of-use assets under operating leases by segment as of November 30, 2024 and November 25, 2023 are as follows:

	November 30, 2024		November 25, 2023
Wholesale	$	6,861	$	8,689
Retail		86,763		92,190
Corporate & other		-		9
Total right of use assets	$	93,624	$	100,888

The components of our lease cost for 2024, 2023 and 2022 were as follows:

	2024			2023			2022
Lease cost:
Operating lease cost	$	24,065		$	24,287		$	24,399
Financing lease cost:
Amortization of right-of-use assets		235			278			279
Interest on lease liabilities		20			22			35
Short-term lease cost		326			401			674
Variable lease cost (net of abatements received)		138			260			447
Sublease income		(801	)		(1,093	)		(1,444	)
Total lease cost	$	23,983		$	24,155		$	24,390

Supplemental lease disclosures as of November 30, 2024, November 25, 2023 and November 26, 2022 and for the fiscal years then ended are as follows:

	Operating			Financing
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			-
For the year ended November 30, 2024:
Cash paid for amounts included in the measurements of lease liabilities		26,558			287
Lease liabilities arising from new right-of-use assets		11,050			197
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	%
As of November 30, 2024:
Weighted average remaining lease terms (years)		5.6			3.1
Weighted average discount rates		6.28	%		6.56	%

Future payments under our leases and the present value of the obligations as of November 30, 2024 are as follows:

	Operating Leases		Financing Leases
Fiscal 2025	$	24,283	$	136
Fiscal 2026		24,840		56
Fiscal 2027		23,078		52
Fiscal 2028		19,739		44
Fiscal 2029		13,042		19
Thereafter		23,548		-
Total lease payments		128,530		307
Less: interest		22,085		32
Total lease obligations	$	106,445	$	275

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 2025	$	899
Fiscal 2026		586
Fiscal 2027		215
Fiscal 2028		-
Fiscal 2029		-
Thereafter		-
Total minimum future rental income	$	1,700

Guarantees

As part of the strategy for our store program, we have guaranteed certain lease obligations of licensee operators. The remaining term under these lease guarantees extends for six years. We were contingently liable under licensee lease obligation guarantees in the amount of $5,131 and $1,845 at November 30, 2024 and November 25, 2023, 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 30, 2024 and November 25, 2023, were not material.