Fair Value Measurements

12 Months Ended

Dec. 28, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company utilizes fair value measurements for its financial assets and financial liabilities and fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is based upon a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

•Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•Level 2 inputs are inputs other than unadjusted quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

•Level 3 inputs are unobservable inputs for the asset or liability.

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement.

Recurring fair value measurements

The following table presents financial assets and financial liabilities that are measured at fair value on a recurring basis at December 28, 2024:

(in thousands)	Fair Value Hierarchy						Total
	Level 1		Level 2		Level 3
Assets:
Money market funds	$	57,000	$	—	$	—	$	57,000
Forward contracts	—		4,574		—		4,574
Total	$	57,000	$	4,574	$	—	$	61,574
Liabilities:
Acquisition-related contingent consideration	$	—	$	—	$	2,000	$	2,000

The following table presents financial assets and financial liabilities that are measured at fair value on a recurring basis at December 30, 2023:

(in thousands)	Fair Value Hierarchy						Total
	Level 1		Level 2		Level 3
Assets:
Money market funds	$	90,000	$	—	$	—	$	90,000
Interest rate swaps	—		10,379		—		10,379
Cross currency swap	—		20,831		—		20,831
Total	$	90,000	$	31,210	$	—	$	121,210
Liabilities:
Cross currency swaps	$	—	$	466	$	—	$	466
Forward contracts	—		384		—		384
Total	$	—	$	850	$	—	$	850

There were no transfers of financial assets or liabilities between Level 1, Level 2 or Level 3 for fiscal year 2024 or fiscal year 2023.

Money market funds, consisting of short-term deposits with an original maturity of three months or less, are valued based on quoted market prices of identical assets and are classified within Level 1. Interest rate swaps, cross currency swaps and forward contracts are fair valued using independent valuation services, and the valuations are based on observable market data. As such, the interest rate swaps, cross currency swaps and forward contracts are classified within Level 2. The Company reviews the independent valuation and obtains an understanding of the methods used in pricing the instruments.

The fair value of the acquisition-related contingent consideration liability is measured using the probability-weighted present value of the potential payment. The probability-weighted present value of the potential payment is based on significant unobservable inputs, including management estimates and assumptions. Accordingly, the fair value of the acquisition-related contingent consideration is classified as Level 3 within the fair value hierarchy.

The following table provides quantitative information regarding Level 3 inputs used in the fair value measurement of the acquisition-related contingent consideration liability as of December 28, 2024:

Acquisition-Related Contingent Consideration Liability	Valuation Technique	Unobservable Input	Range
Potential payment	Probability-weighted present value	Probability of payment	0% - 100%
		Discount rate	9.4%
		Projected years of payments	2025 - 2027

The following table provides a reconciliation of the acquisition-related contingent consideration liability measured at fair value using Level 3 significant unobservable inputs:

(in thousands)
Balance at May 6, 2024(1)	$	1,898
Change in fair value recorded in selling, general and administrative	102
Balance at December 28, 2024	$	2,000

(1)2 Peaches was acquired on May 6, 2024.

Non-recurring fair value measurements

The Company’s non-financial assets, such as goodwill, intangible assets, property and equipment, and ROU lease assets, are recorded at cost. Fair value adjustments are made to these non-financial assets in the period an impairment charge is recognized. In fiscal year 2024, the Company recognized impairment charges of $2.5 million on ROU lease assets and $1.8 million on property and equipment which are recorded in selling, general and administrative in the Consolidated Statements of Operations and Comprehensive Income. Fair value of these assets was determined using discounted cash flow models based on significant unobservable inputs, including projected store-level cash flows, discount rates and market rental data. Accordingly, the fair value of these assets are classified as Level 3 within the fair value hierarchy.

Other fair value disclosures

The fair value of the Company’s Senior Secured Notes, based on Level 1 inputs, was $467.6 million and $525.5 million at December 28, 2024 and December 30, 2023, respectively. The fair value of borrowings under the Company’s Senior Secured Credit Facilities approximate their carrying value as the current rates approximate rates on similar debt and were based on rate notices provided by the Administrative Agent (Level 2 inputs) at December 28, 2024 and December 30, 2023.