| Leases |
Our operating and finance leases consisted of the following (in thousands):
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September 30, |
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|
|
Balance Sheet Classification |
|
2024 |
|
|
2023 |
|
Assets: |
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|
|
|
|
|
|
Operating lease (a) |
|
Operating lease assets |
|
$ |
582,573 |
|
|
$ |
570,657 |
|
Finance lease |
|
Property and equipment, net |
|
|
1,553 |
|
|
|
1,754 |
|
Total lease assets |
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|
|
$ |
584,126 |
|
|
$ |
572,411 |
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Liabilities: |
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Current: |
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|
|
|
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Operating lease |
|
Current operating lease liabilities |
|
$ |
136,068 |
|
|
$ |
150,479 |
|
Finance lease |
|
Current maturities of long-term debt |
|
|
127 |
|
|
|
173 |
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|
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|
|
|
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Long-term: |
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|
|
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Operating lease |
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Long-term operating lease liabilities |
|
|
479,616 |
|
|
|
455,071 |
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Finance lease |
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Long-term debt |
|
|
— |
|
|
|
119 |
|
Total lease liabilities |
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|
|
$ |
615,811 |
|
|
$ |
605,842 |
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(a)During fiscal year 2023, we recognized $0.6 million in impairment charges related to the Plan. See Note 17, Restructuring, for more information on the Plan. Our lease costs consisted of the following (in thousands):
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For the Year Ended September 30, |
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|
|
Statement of Earnings Classification |
|
2024 |
|
|
2023 |
|
Operating lease costs |
|
Cost of goods sold and selling, general and administrative expenses (a) |
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$ |
179,121 |
|
|
$ |
180,624 |
|
Finance lease costs: |
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|
|
|
|
|
|
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Amortization of leased assets |
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Selling, general and administrative expenses |
|
|
291 |
|
|
|
292 |
|
Interest on lease liabilities |
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Interest expense |
|
|
12 |
|
|
|
12 |
|
Variable lease costs (b) |
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Selling, general and administrative expenses |
|
|
70,146 |
|
|
|
59,996 |
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Total lease costs |
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|
|
$ |
249,570 |
|
|
$ |
240,924 |
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(a)Certain supply chain-related amounts are included in cost of goods sold. (b)Includes common area maintenance, real estate taxes and insurance related to leases As of September 30, 2024, the approximate future lease payments under our leases under ASC 842, Leases, are as follows (in thousands):
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Fiscal Year |
|
Operating leases |
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|
Finance leases |
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2025 |
|
$ |
175,266 |
|
|
$ |
137 |
|
2026 |
|
|
149,646 |
|
|
|
— |
|
2027 |
|
|
121,159 |
|
|
|
— |
|
2028 |
|
|
89,373 |
|
|
|
— |
|
2029 |
|
|
59,092 |
|
|
|
— |
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Thereafter |
|
|
109,101 |
|
|
|
— |
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Total undiscounted lease payments |
|
|
703,637 |
|
|
|
137 |
|
Less: imputed interest |
|
|
87,953 |
|
|
|
10 |
|
Present value of lease liabilities |
|
$ |
615,684 |
|
|
$ |
127 |
|
The table above does not include operating leases we have entered into of approximately $4.0 million that have not commenced, primarily related to future retail stores. Other lease information is as follows (dollars in thousands):
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For the Year Ended September 30, |
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|
|
2024 |
|
|
2023 |
|
Cash paid for amounts included in the measurement of lease liabilities: |
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|
|
|
|
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Operating cash flows – operating leases |
|
$ |
178,950 |
|
|
$ |
182,405 |
|
Operating cash flows – finance leases |
|
|
12 |
|
|
|
12 |
|
Financing cash flows – finance leases |
|
|
176 |
|
|
|
176 |
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|
|
|
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Supplemental non-cash information on lease liabilities: |
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|
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Lease assets obtained in exchange for new operating lease liabilities |
|
$ |
159,331 |
|
|
$ |
184,039 |
|
|
|
|
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September 30, |
|
|
|
2024 |
|
|
2023 |
|
Weighted-average remaining lease term (in years): |
|
|
|
|
|
|
Operating leases |
|
|
5.0 |
|
|
|
5.2 |
|
Finance leases |
|
|
0.7 |
|
|
|
1.7 |
|
Weighted-average discount rate: |
|
|
|
|
|
|
Operating leases |
|
|
5.5 |
% |
|
|
5.3 |
% |
Finance leases |
|
|
0.3 |
% |
|
|
0.3 |
% |
|