The Company leases its retail, office and manufacturing space under operating leases which, in addition to the minimum

lease payments, may require payment of a proportionate share of the real estate taxes and certain building operating

expenses. While the Company’s local market development approach generally results in long-term participation in given

markets, the retail store leases generally provide for an initial lease term of five to ten years. The Company’s office and

manufacturing leases provide for an initial lease term of up to fifteen years. In addition, the Company’s mall-based retail

store leases may require payment of variable rent based on net sales in excess of certain thresholds. Certain leases may

contain options to extend the term of the original lease. The exercise of lease renewal options is at the Company’s sole

discretion. Lease options are included in the lease term only if exercise is reasonably certain at lease commencement.

The Company’s lease agreements do not contain any material residual value guarantees. The Company also leases

vehicles and certain equipment under operating leases with an initial lease term of three to six years.

The Company’s operating lease costs include facility, vehicle and equipment lease costs, but exclude variable lease

costs. Operating lease costs are recognized on a straight-line basis over the lease term, after consideration of rent

escalations and rent holidays. The lease term for purposes of the calculation begins on the earlier of the lease

commencement date or the date the Company takes possession of the property. During lease renewal negotiations that

extend beyond the original lease term, the Company estimates straight-line rent expense based on current market

conditions. Variable lease costs are recorded when it is probable the cost has been incurred and the amount can be

reasonably estimated. Future payments for real estate taxes and certain building operating expenses for which the

Company is obligated are not included in operating lease costs.

At March 29, 2025, the Company’s finance right-of-use assets and lease liabilities were not significant.

(1)Includes short-term lease costs which are not significant.

(2)Variable lease costs include adjustments to percentage rent.

The maturities of operating lease liabilities for subsequent years are as follows(1) (in thousands):


2025 (excluding the three months ended March 29, 2025)	$79,025
2026	96,149
2027	79,655
2028	66,229
2029	45,658
2030	31,636
Thereafter	47,078
Total operating lease payments(2)	445,430
Less: Interest	68,521
Present value of operating lease liabilities	$376,909

(1)Total operating lease payments exclude $13 million of legally binding minimum lease payments for leases signed but not yet commenced.

(2)Includes the current portion of $83 million for operating lease liabilities.

Other information related to operating leases was as follows:


	March 29, 2025	December 28, 2024
Weighted-average remaining lease term (in years)	5.3	5.4
Weighted-average discount rate	6.6%	6.6%


	Three Months Ended
(in thousands)	March 29, 2025	March 30, 2024
Cash paid for amounts included in present value of operating lease liabilities	$26,589	$27,222
Right-of-use assets obtained in exchange for operating lease liabilities	$7,711	$12,990