LEASES

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

LEASES

LEASES

The Company is party to operating lease agreements for warehouses, office space, vehicle maintenance facilities and livestock growing farms in the U.S., distribution centers, hatcheries and office space in Mexico and farms, processing facilities and office space in the U.K. and Europe. Additionally, the Company leases equipment, over-the-road transportation vehicles and other assets in all three reportable segments. The Company is also party to a limited number of finance lease agreements in the U.S.

The Company’s leases have remaining lease terms of less than one year to 17 years, some of which may include options to extend the lease for up to five years and some of which may include options to terminate the lease within one year. The exercise of options to extend lease terms is at the Company’s sole discretion. Certain leases also include options to purchase the leased property.

Certain lease agreements include rental payment increases over the lease term that can be either fixed or variable. Fixed payment increases and variable payment increases based on an index or rate are included in the initial lease liability using the index or rate at commencement date. Variable payment increases not based on an index are recognized as incurred. Certain lease agreements contain residual value guarantees, primarily vehicle and transportation equipment leases.

The following table presents components of lease expense (in thousands). Operating lease cost, finance lease amortization and finance lease interest are respectively included in Cost of sales, SG&A expense and Interest expense, net of capitalized interest in the Consolidated Statements of Income.

	For the Year Ended
	December 31, 2023		December 25, 2022
Operating lease cost(a)	$	92,877	$	98,353
Amortization of finance lease assets	921		472
Interest on finance leases	95		132
Short-term lease cost	93,739		77,100
Variable lease cost	2,751		4,102
Net lease cost	$	190,383	$	180,159

(a)Sublease income is immaterial and not included in operating lease costs.

The weighted-average remaining lease term and discount rate for lease liabilities included in our Consolidated Balance Sheets are as follows:

	December 31, 2023		December 25, 2022
Weighted-average remaining lease term:
Operating leases	5.73 years		5.80 years
Finance leases	4.34 years		4.52 years
Weighted-average discount rate:
Operating leases	4.24	%	4.00	%
Finance leases	2.81	%	3.19	%

Supplemental cash flow information related to leases is as follows (in thousands):

	Year Ended
	December 31, 2023		December 25, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	94,087	$	69,349
Operating cash flows - finance leases	96		132
Financing cash flows - finance leases	979		924
Operating lease assets obtained in exchange for operating lease liabilities	36,967		56,988

Future minimum lease payments under noncancelable leases as of December 31, 2023 are as follows (in thousands):

	Operating Leases		Finance Leases
For the fiscal years ending December:
2024	$	77,745	$	742
2025	57,462		587
2026	51,548		554
2027	37,909		526
2028	24,907		219
Thereafter	55,859		—
Total future minimum lease payments	305,430		2,628
Less: imputed interest	(34,642)		(142)
Present value of lease liabilities	$	270,788	$	2,486

Lease liabilities are included in our Consolidated Balance Sheets as follows (in thousands):

	December 31, 2023				December 25, 2022
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Accrued expenses and other current liabilities	$	67,440	$	—	$	79,222	$	—
Current maturities of long-term debt	—		674		—		966
Noncurrent operating lease liability, less current maturities	203,348		—		230,701		—
Long-term debt, less current maturities	—		1,812		—		2,658
Total lease liabilities	$	270,788	$	2,486	$	309,923	$	3,624

LEASES

LEASES

The Company is party to operating lease agreements for warehouses, office space, vehicle maintenance facilities and livestock growing farms in the U.S., distribution centers, hatcheries and office space in Mexico and farms, processing facilities and office space in the U.K. and Europe. Additionally, the Company leases equipment, over-the-road transportation vehicles and other assets in all three reportable segments. The Company is also party to a limited number of finance lease agreements in the U.S.

The Company’s leases have remaining lease terms of less than one year to 17 years, some of which may include options to extend the lease for up to five years and some of which may include options to terminate the lease within one year. The exercise of options to extend lease terms is at the Company’s sole discretion. Certain leases also include options to purchase the leased property.

Certain lease agreements include rental payment increases over the lease term that can be either fixed or variable. Fixed payment increases and variable payment increases based on an index or rate are included in the initial lease liability using the index or rate at commencement date. Variable payment increases not based on an index are recognized as incurred. Certain lease agreements contain residual value guarantees, primarily vehicle and transportation equipment leases.

The following table presents components of lease expense (in thousands). Operating lease cost, finance lease amortization and finance lease interest are respectively included in Cost of sales, SG&A expense and Interest expense, net of capitalized interest in the Consolidated Statements of Income.

	For the Year Ended
	December 31, 2023		December 25, 2022
Operating lease cost(a)	$	92,877	$	98,353
Amortization of finance lease assets	921		472
Interest on finance leases	95		132
Short-term lease cost	93,739		77,100
Variable lease cost	2,751		4,102
Net lease cost	$	190,383	$	180,159

(a)Sublease income is immaterial and not included in operating lease costs.

The weighted-average remaining lease term and discount rate for lease liabilities included in our Consolidated Balance Sheets are as follows:

	December 31, 2023		December 25, 2022
Weighted-average remaining lease term:
Operating leases	5.73 years		5.80 years
Finance leases	4.34 years		4.52 years
Weighted-average discount rate:
Operating leases	4.24	%	4.00	%
Finance leases	2.81	%	3.19	%

Supplemental cash flow information related to leases is as follows (in thousands):

	Year Ended
	December 31, 2023		December 25, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	94,087	$	69,349
Operating cash flows - finance leases	96		132
Financing cash flows - finance leases	979		924
Operating lease assets obtained in exchange for operating lease liabilities	36,967		56,988

Future minimum lease payments under noncancelable leases as of December 31, 2023 are as follows (in thousands):

	Operating Leases		Finance Leases
For the fiscal years ending December:
2024	$	77,745	$	742
2025	57,462		587
2026	51,548		554
2027	37,909		526
2028	24,907		219
Thereafter	55,859		—
Total future minimum lease payments	305,430		2,628
Less: imputed interest	(34,642)		(142)
Present value of lease liabilities	$	270,788	$	2,486

Lease liabilities are included in our Consolidated Balance Sheets as follows (in thousands):

	December 31, 2023				December 25, 2022
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Accrued expenses and other current liabilities	$	67,440	$	—	$	79,222	$	—
Current maturities of long-term debt	—		674		—		966
Noncurrent operating lease liability, less current maturities	203,348		—		230,701		—
Long-term debt, less current maturities	—		1,812		—		2,658
Total lease liabilities	$	270,788	$	2,486	$	309,923	$	3,624