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LEASES
 12 Months Ended
Jan. 03, 2026
Leases [Abstract]  
LEASES LEASES
We determine if an arrangement is or contains a lease at contract inception and determine its classification as an operating or finance lease at lease commencement. We lease certain retail locations, office space, distribution facilities, manufacturing space, and machinery and equipment. While the substantial majority of these leases are operating leases, certain machinery and equipment agreements are finance leases. As of January 3, 2026, the initial lease terms of the various leases range from one to 20 years. ROU lease assets and liabilities associated with leases with an initial term of twelve months or less are not recorded on the balance sheet.

Operating lease assets represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We use our collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. Our operating leases also typically require payment of real estate taxes, common area maintenance and insurance. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. In instances where they are fixed, they are included due to our election to combine lease and non-lease components, with the exception of our distribution facilities. Operating lease assets include prepaid lease payments and initial direct costs and are reduced by lease incentives. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.

The following table presents the assets and liabilities related to operating and finance leases (in thousands):
Balance Sheet Location
January 3, 2026
December 28, 2024
Assets:
Operating lease assetsOperating lease right-of-use assets$131,531 $78,279 
Finance lease assets
Property and equipment, net
16,387 5,625 
Total lease assets$147,918 $83,904 
Liabilities:
Current
Operating lease liabilitiesOperating lease liabilities$15,044 $19,621 
Finance lease liabilitiesCurrent maturities of long-term debt953 2,256 
Non-current
Operating lease liabilitiesOperating lease liabilities, non-current139,945 73,586 
Finance lease liabilitiesLong-term debt, net of current portion237 1,190 
Total lease liabilities$156,179 $96,653 
The following table presents the components of lease costs (in thousands):
Fiscal Year Ended
January 3, 2026December 28, 2024December 30, 2023
Operating lease costs$23,944 $19,623 $14,889 
Finance lease cost - amortization of right-of-use assets2,982 2,014 1,862 
Finance lease cost - interest on lease liabilities59 109 138 
Short-term lease cost1,105 356 246 
Variable lease cost6,539 4,897 5,537 
Sublease income(7)(827)(747)
Total lease cost$34,622 $26,172 $21,925 

The following table presents lease terms and discount rates:
January 3, 2026December 28, 2024
Weighted average remaining lease term:
Operating leases8.48 years6.41 years
Finance leases2.12 years2.98 years
Weighted average discount rate:
Operating leases6.12 %5.24 %
Finance leases2.95 %2.39 %

The following table presents the minimum lease payment obligations of operating and finance lease liabilities (leases with terms in excess of one year) for the next five years and thereafter as of January 3, 2026 (in thousands):
Operating LeasesFinance LeasesTotal
2026$21,119 $973 $22,092 
202723,596 142 23,738 
202824,224 106 24,330 
202923,367 — 23,367 
203023,241 — 23,241 
Thereafter90,862 — 90,862 
Total lease payments206,409 1,221 207,630 
Less: Effect of discounting to net present value51,420 31 51,451 
Present value of lease liabilities$154,989 $1,190 $156,179 
The following table presents supplemental cash flow information related to our leases (in thousands):
January 3, 2026December 28, 2024December 30, 2023
Cash paid for amounts included in measurement of liabilities:
Operating cash flows used in operating leases$23,790 $20,038 $15,047 
Operating cash flows used in finance leases59 109 137 
Financing cash flows used in finance leases16,000 3,719 2,131 
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases(1)
78,320 16,670 35,497 
Finance leases— 1,362 625 
_________________________
(1)During the twelve months ended January 3, 2026, we extended the lease term of our headquarters in Austin, Texas and extended the term of the service agreement related to one of our distribution facilities. This resulted in an increase to right-of-use assets and corresponding lease liabilities of approximately $50.4 million.
LEASES LEASES
We determine if an arrangement is or contains a lease at contract inception and determine its classification as an operating or finance lease at lease commencement. We lease certain retail locations, office space, distribution facilities, manufacturing space, and machinery and equipment. While the substantial majority of these leases are operating leases, certain machinery and equipment agreements are finance leases. As of January 3, 2026, the initial lease terms of the various leases range from one to 20 years. ROU lease assets and liabilities associated with leases with an initial term of twelve months or less are not recorded on the balance sheet.

Operating lease assets represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We use our collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. Our operating leases also typically require payment of real estate taxes, common area maintenance and insurance. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. In instances where they are fixed, they are included due to our election to combine lease and non-lease components, with the exception of our distribution facilities. Operating lease assets include prepaid lease payments and initial direct costs and are reduced by lease incentives. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.

The following table presents the assets and liabilities related to operating and finance leases (in thousands):
Balance Sheet Location
January 3, 2026
December 28, 2024
Assets:
Operating lease assetsOperating lease right-of-use assets$131,531 $78,279 
Finance lease assets
Property and equipment, net
16,387 5,625 
Total lease assets$147,918 $83,904 
Liabilities:
Current
Operating lease liabilitiesOperating lease liabilities$15,044 $19,621 
Finance lease liabilitiesCurrent maturities of long-term debt953 2,256 
Non-current
Operating lease liabilitiesOperating lease liabilities, non-current139,945 73,586 
Finance lease liabilitiesLong-term debt, net of current portion237 1,190 
Total lease liabilities$156,179 $96,653 
The following table presents the components of lease costs (in thousands):
Fiscal Year Ended
January 3, 2026December 28, 2024December 30, 2023
Operating lease costs$23,944 $19,623 $14,889 
Finance lease cost - amortization of right-of-use assets2,982 2,014 1,862 
Finance lease cost - interest on lease liabilities59 109 138 
Short-term lease cost1,105 356 246 
Variable lease cost6,539 4,897 5,537 
Sublease income(7)(827)(747)
Total lease cost$34,622 $26,172 $21,925 

The following table presents lease terms and discount rates:
January 3, 2026December 28, 2024
Weighted average remaining lease term:
Operating leases8.48 years6.41 years
Finance leases2.12 years2.98 years
Weighted average discount rate:
Operating leases6.12 %5.24 %
Finance leases2.95 %2.39 %

The following table presents the minimum lease payment obligations of operating and finance lease liabilities (leases with terms in excess of one year) for the next five years and thereafter as of January 3, 2026 (in thousands):
Operating LeasesFinance LeasesTotal
2026$21,119 $973 $22,092 
202723,596 142 23,738 
202824,224 106 24,330 
202923,367 — 23,367 
203023,241 — 23,241 
Thereafter90,862 — 90,862 
Total lease payments206,409 1,221 207,630 
Less: Effect of discounting to net present value51,420 31 51,451 
Present value of lease liabilities$154,989 $1,190 $156,179 
The following table presents supplemental cash flow information related to our leases (in thousands):
January 3, 2026December 28, 2024December 30, 2023
Cash paid for amounts included in measurement of liabilities:
Operating cash flows used in operating leases$23,790 $20,038 $15,047 
Operating cash flows used in finance leases59 109 137 
Financing cash flows used in finance leases16,000 3,719 2,131 
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases(1)
78,320 16,670 35,497 
Finance leases— 1,362 625 
_________________________
(1)During the twelve months ended January 3, 2026, we extended the lease term of our headquarters in Austin, Texas and extended the term of the service agreement related to one of our distribution facilities. This resulted in an increase to right-of-use assets and corresponding lease liabilities of approximately $50.4 million.