Financial Instruments

12 Months Ended

Jan. 03, 2026

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

FINANCIAL INSTRUMENTS

Derivatives are measured at fair value and recognized as either assets or liabilities. Derivatives that do not qualify as a hedge must be adjusted to fair value in earnings. If a derivative does qualify, changes in the fair value will either be offset against the change in the fair value of the hedged assets, liabilities or firm commitments or recognized in other accumulated comprehensive income until the hedged item is recognized in earnings.

Foreign Exchange

The company periodically enters into derivative instruments, principally forward contracts to reduce exposures pertaining to fluctuations in foreign exchange rates. The notional amount of foreign currency contracts outstanding was $120.9 million and $239.3 million as of January 3, 2026 and December 28, 2024, respectively. The fair value of these forward contracts was an unrealized loss of $0.8 million at the end of the year.

Interest Rate

The company has entered into interest rate swaps to fix the interest rate applicable to certain of its variable-rate debt. Prior to July 1, 2023, the company amended the Credit Facility and the existing interest rate swap agreements to transition the interest reference rate from one-month LIBOR to one-month SOFR. The amendment was entered into because the LIBOR rate historically used was no longer published after June 30, 2023. The company utilized expedients within ASC 848 to conclude that this amendment should be treated as a non-substantial modification of the existing contract, resulting in no impact to the company's Consolidated Financial Statements. The company has designated these swaps as cash flow hedges and all changes in fair value of the swaps are recognized in accumulated other comprehensive income. The fair value of these instruments was an asset of $11.2 million and $30.0 million as of January 3, 2026 and December 28, 2024, respectively. The change in fair value of these swap agreements in 2025 was a loss of $14.3 million, net of taxes. 

The following summarizes the fair value of interest rate swaps (in thousands):

Consolidated Balance Sheets Location	Jan 3, 2026		Dec 28, 2024
Prepaid expenses and other	$	1,516	$	1,986
Other assets	9,714		27,966

The following summarizes the impact on earnings from interest rate swaps (in thousands):

	Location	2025		2024		2023
Amount of (loss)/gain recognized in other comprehensive income	Other comprehensive income/(loss)	$	(2,007)	$	14,377	$	10,015
Gain reclassified from accumulated other comprehensive income (effective portion)	Interest expense and deferred financing amortization, net	16,715		27,204		32,221

Interest rate swaps are subject to default risk to the extent the counterparty is unable to satisfy its settlement obligations under the interest rate swap agreements. The company reviews the credit profile of the financial institutions that are counterparties to such swap agreements and assesses their creditworthiness prior to entering into the interest rate swap agreements and throughout the term. The interest rate swap agreements typically contain provisions that allow the counterparty to require early settlement in the event that the company becomes insolvent or is unable to maintain compliance with its covenants under its existing debt agreement.