Income Taxes |
3 Months Ended |
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Aug. 02, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The provision for income taxes during interim reporting periods is calculated by applying an estimate of the annual effective tax rate to “ordinary” income or loss for the reporting period, adjusted for discrete items. Due to various factors, including our estimate of annual income, our effective tax rate is subject to fluctuation. Our effective tax rates for the three months ended August 2, 2025 was 25.9 percent. The tax rate was primarily driven by permanent tax adjustments and valuation allowances in proportion to estimated pre-tax earnings for fiscal 2026. The effective tax rate for the three months ended July 27, 2024 was skewed due to the impact of the fair value in the Convertible Note in proportion to the period's small pre-tax income. We operate both domestically and internationally and, as of August 2, 2025, the undistributed earnings of our foreign subsidiaries were considered to be reinvested indefinitely. Additionally, as of August 2, 2025, we had $557 of unrecognized tax benefits which would reduce our effective tax rate if recognized. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant tax related provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates with the earliest provisions taking effect in fiscal 2026 and others beginning in fiscal 2027 and beyond. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws affecting current taxes to be reflected in the estimated annual effective tax rate going forward, and adjustments to existing deferred taxes to be recognized on deferred tax balances to be recognized in the period in which the legislation is enacted. We note that as of August 2, 2025 there were no material impacts to the financial statements. We will continue to evaluate the future tax and other provisions of the OBBBA and the potential effects on our financial position, results of operations, and cash flows.
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