v3.25.2
Income Taxes
 12 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income Before Income Taxes
The components of income before income taxes are as follows:
Year Ended June 30,202520242023
U.S.$475,266 $467,785 $423,316 
Foreign25,701 30,345 26,495 
Income before income taxes$500,967 $498,130 $449,811 
Provision for Income Taxes
The provision for income taxes consists of:
Year Ended June 30,202520242023
Current:
Federal$87,700 $86,501 $84,294 
State and local18,525 23,016 19,026 
Foreign8,116 3,925 5,468 
Total current114,341 113,442 108,788 
Deferred:
Federal(4,432)(791)(1,881)
State and local(310)1,159 (84)
Foreign(1,620)(1,442)(3,751)
Total deferred(6,362)(1,074)(5,716)
Provision for income taxes$107,979 $112,368 $103,072 
Effective Tax Rates
The following reconciles the U.S. federal statutory income tax rate to the Company’s effective income tax rate:
Year Ended June 30,202520242023
Statutory income tax rate21.0 %21.0 %21.0 %
Effects of:
State and local taxes2.9 4.0 3.5 
Stock compensation(1.1)(1.2)(1.0)
GILTI/FDII— (0.4)(0.2)
R & D credit(0.5)(0.4)(0.4)
U.S. tax on foreign income, net(0.6)(0.1)— 
Impact of foreign operations0.3 0.3 0.2 
Non-deductibles/Deductible dividend0.7 0.9 0.6 
Interest deduction(0.2)(0.4)(0.4)
Valuation allowance0.1 (0.7)(0.6)
Other, net(1.0)(0.4)0.2 
Effective income tax rate21.6 %22.6 %22.9 %
Deferred Income Tax Assets and Liabilities
Significant components of the Company’s deferred income tax assets and liabilities are as follows:
June 30,20252024
Deferred tax assets:
Compensation liabilities not currently deductible$20,331 $18,646 
Other expenses and reserves not currently deductible17,430 15,008 
Leases36,054 34,771 
Net operating loss carryforwards 5,388 6,340 
Capitalization of R&D costs22,284 17,584 
Other2,281 300 
Total deferred tax assets$103,768 $92,649 
Less: Valuation allowance853 158 
Deferred tax assets, net of valuation allowance$102,915 $92,491 
Deferred tax liabilities:
Inventories$(20,376)$(18,086)
Goodwill and intangibles(64,062)(63,733)
Leases(35,933)(34,473)
Hedging instrument(1,906)(5,965)
Depreciation and differences in property bases(10,530)(10,506)
Total deferred tax liabilities(132,807)(132,763)
Net deferred tax liabilities$(29,892)$(40,272)
Net deferred tax liabilities are classified as follows:
Other assets$12,263 $11,306 
Other liabilities(42,155)(51,578)
Net deferred tax liabilities$(29,892)$(40,272)
As of June 30, 2025 and 2024, the Company had foreign net operating loss carryforwards of approximately $19,426 and $24,627, respectively, the tax benefit of which is approximately $5,289 and $6,146, respectively. These loss carryforwards will expire at various dates beginning in 2036. As of June 30, 2025 and 2024, the Company had state net operating loss carryforwards, the tax benefit of which is approximately $99 and $194, respectively, which will expire at various dates beginning in 2034.
Valuation allowances are provided against deferred tax assets where it is considered more-likely-than-not that the Company will not realize the benefit of such assets. The remaining net deferred tax asset is the amount management believes is more-likely-than-not of being realized. The realization of these deferred tax assets can be impacted by changes to tax laws, statutory tax rates and future income levels. The Company evaluates the realization of its deferred tax assets each quarter throughout the year. During the fiscal years ended June 30, 2025 and 2024, the Company recorded a net tax expense (benefit) related to the change in valuation allowances of $695 and $(3,283), respectively. The total valuation allowance provided against the deferred tax assets is $853 and $158 as of June 30, 2025 and 2024, respectively.
As of June 30, 2025, the Company had accumulated undistributed earnings of non-U.S. subsidiaries of approximately $185,700. The vast majority of such earnings have previously been subjected to the one-time transition tax or the Global Intangible Low Taxed Income (GILTI) inclusion. Therefore, any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of our foreign investments would generally be limited to foreign withholding and state income taxes. In addition, we expect foreign tax credits would be available to either offset or partially reduce the tax cost in the event of a distribution. We intend, however, to indefinitely reinvest these earnings and expect future U.S. cash generation to be sufficient to meet future U.S. cash needs.
Unrecognized Income Tax Benefits
The Company and its subsidiaries file income tax returns in the U.S. federal, various state, local, and foreign jurisdictions. The following table sets forth the changes in the amount of unrecognized tax benefits for the years ended June 30, 2025, 2024, and 2023:
Year Ended June 30,202520242023
Unrecognized Income Tax Benefits at beginning of the year$3,048 $4,821 $4,926 
Current year tax positions85 105 622 
Prior year tax positions57 (412)(86)
Expirations of statutes of limitations(2,272)(1,466)(641)
Unrecognized Income Tax Benefits at end of year$918 $3,048 $4,821 
The Company recognizes interest and penalties related to uncertain tax positions in the provision for income taxes. During 2025, 2024, and 2023, the Company recognized $(1,060), $296, and $239 of (income) expense, respectively, for interest and penalties related to unrecognized income tax benefits in its statements of consolidated income. The Company had a liability for penalties and interest of $351, $1,411, and $1,115 as of June 30, 2025, 2024, and 2023, respectively. The Company anticipates a decrease to unrecognized income tax benefits within the next twelve months of approximately $469, of which all would affect the effective income tax rate. Included in the balance of unrecognized income tax benefits at June 30, 2025, 2024, and 2023 are $809, $2,946, and $4,722 respectively, of income tax benefits that, if recognized, would affect the effective income tax rate.
The Company is subject to U.S. federal income tax examinations for the tax years 2022 through 2024 and to state and local income tax examinations for the tax years 2019 through 2024. In addition, the Company is subject to foreign income tax examinations for the tax years 2018 through 2024.
The Company’s unrecognized income tax benefits are included in other liabilities in the consolidated balance sheets since payment of cash is not expected within one year, or as a reduction of a deferred tax asset.
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017, as amended, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. Consequently, as of the date of enactment, and during the three months ended September 30, 2025, the Company will evaluate all deferred tax balances under the newly enacted tax law and identify any other changes required to its financial statements as a result of the OBBBA. There is no effect on the Company's fiscal 2025 results. The Company is still evaluating the impact of the OBBBA and the results of such evaluations will be reflected on the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2026.