v3.25.4
Income Taxes
 12 Months Ended
Dec. 28, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

17. Income Taxes

The Company’s income before income taxes is entirely derived from domestic sources for all periods presented:

 

 

December 28,
2025

 

 

December 29,
2024

 

 

December 31,
2023

 

Domestic

 

$

91,264

 

 

$

67,538

 

 

$

32,201

 

Net income before income taxes

 

$

91,264

 

 

$

67,538

 

 

$

32,201

 

For the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, the provision for income taxes consisted of the following:

 

 

December 28,
2025

 

 

December 29,
2024

 

 

December 31,
2023

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

16,971

 

 

$

12,604

 

 

$

5,136

 

State

 

 

7,322

 

 

 

3,410

 

 

 

1,678

 

Total current income tax expense

 

 

24,293

 

 

 

16,014

 

 

 

6,814

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

 

1,303

 

 

 

(1,603

)

 

 

28

 

State

 

 

(614

)

 

 

(261

)

 

 

(207

)

Total deferred income tax expense

 

 

689

 

 

 

(1,864

)

 

 

(179

)

Provision for income taxes

 

$

24,982

 

 

$

14,150

 

 

$

6,635

 

 

For the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, the income taxes paid by the Company, net of amounts refunded are as follows:

 

 

December 28,
2025

 

 

December 29,
2024

 

 

December 31,
2023

 

Federal

 

$

18,479

 

 

$

13,298

 

 

$

4,646

 

State:

 

 

 

 

 

 

 

 

 

California

 

 

2,199

 

 

 

1,608

 

 

 

328

 

All others

 

 

3,495

 

 

 

1,559

 

 

 

1,001

 

Total income taxes paid, net of amounts refunded

 

$

24,173

 

 

$

16,465

 

 

$

5,975

 

The reconciliation of the federal statutory income tax provision to the Company’s effective income tax provision is as follows:

 

 

December 28,
2025

 

 

December 29,
2024

 

 

December 31,
2023

 

Net income before income taxes

 

$

91,264

 

 

 

 

 

$

67,538

 

 

 

 

 

$

32,201

 

 

 

 

US federal statutory rate

 

 

19,165

 

 

 

21.0

%

 

 

14,183

 

 

 

21.0

%

 

 

6,762

 

 

 

21.0

%

Current state and local income taxes, net of federal income tax effect(1)

 

 

4,301

 

 

 

4.7

%

 

 

2,552

 

 

 

3.8

%

 

 

1,117

 

 

 

3.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax credits

 

 

—

 

 

 

0.0

%

 

 

—

 

 

 

0.0

%

 

 

(238

)

 

 

(0.7

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in valuation allowance

 

 

(3

)

 

 

(0.0

%)

 

 

—

 

 

 

0.0

%

 

 

84

 

 

 

0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nontaxable or nondeductible items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nondeductible compensation

 

 

4,131

 

 

 

4.5

%

 

 

7,851

 

 

 

11.6

%

 

 

540

 

 

 

1.7

%

Share-based payment awards

 

 

(3,456

)

 

 

(3.8

%)

 

 

(10,236

)

 

 

(15.2

%)

 

 

(1,636

)

 

 

(5.1

%)

Other nontaxable costs

 

 

(76

)

 

 

(0.1

%)

 

 

(168

)

 

 

(0.2

%)

 

 

(56

)

 

 

(0.2

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in unrecognized tax benefits

 

 

1,100

 

 

 

1.2

%

 

 

(82

)

 

 

(0.1

%)

 

 

58

 

 

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other adjustments

 

 

(180

)

 

 

(0.2

%)

 

 

50

 

 

 

0.1

%

 

 

4

 

 

 

0.0

%

Provision for income taxes

 

$

24,982

 

 

 

27.4

%

 

$

14,150

 

 

 

21.0

%

 

$

6,635

 

 

 

20.6

%

(1) State taxes in California, New Jersey and Florida made up greater than 50% of the tax effect in this category for the fiscal years ended December 28, 2025 and December 31, 2023 and state taxes in California and New Jersey made up greater than 50% of the tax effect in this category for the fiscal year ended December 29, 2024.

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred income tax assets and liabilities as of December 28, 2025 and December 29, 2024 were comprised of the following:

 

 

 

December 28,
2025

 

 

December 29,
2024

 

Deferred tax assets:

 

 

 

 

 

 

Accrued expenses

 

$

5,598

 

 

$

5,226

 

Allowances and other reserves

 

 

183

 

 

 

173

 

Inventory

 

 

4,468

 

 

 

765

 

Net operating loss carryforwards

 

 

107

 

 

 

106

 

Stock-based compensation

 

 

2,236

 

 

 

1,921

 

ROU lease liability

 

 

13,641

 

 

 

4,599

 

Other

 

 

962

 

 

 

471

 

Total deferred tax assets

 

 

27,195

 

 

 

13,261

 

Less: Valuation allowance

 

 

(81

)

 

 

(84

)

Net deferred tax assets

 

$

27,114

 

 

$

13,177

 

Deferred tax liabilities:

 

 

 

 

 

 

Prepaid expenses

 

$

1,079

 

 

$

776

 

Property and equipment

 

 

11,704

 

 

 

6,216

 

Operating and finance lease ROU assets

 

 

12,953

 

 

 

4,204

 

Intangible assets

 

 

682

 

 

 

582

 

Total deferred tax liabilities

 

$

26,418

 

 

$

11,778

 

Net deferred tax assets

 

$

696

 

 

$

1,399

 

A valuation allowance is required to be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. A full review of all positive and negative evidence needs to be considered, including the Company’s current and past performance, the market environments in which the Company operates, the utilization of past tax credits, the length of carry back and carry forward periods and tax planning strategies that might be implemented. Management considered the scheduled reversal of deferred tax liabilities and projected future taxable income in making this assessment.

The activity in the Company’s deferred tax asset valuation allowance for the fiscal years ended December 28, 2025 and December 29, 2024 were as follows:

 

 

 

December 28,
2025

 

 

December 29,
2024

 

Valuation allowance as of beginning of year

 

$

84

 

 

$

84

 

Increases recorded to income tax provision

 

 

(3

)

 

 

—

 

Valuation allowance as of end of year

 

$

81

 

 

$

84

 

As of December 28, 2025, the Company had unrecognized tax benefits, which represent the aggregate tax effect of the differences between tax return positions and the benefits recognized in the Company’s financial statements. At December 28, 2025, all of the unrecognized tax benefits, if recognized, would affect the Company’s annual effective tax rate. The unrecognized tax benefits are long-term in nature and the Company does not anticipate the balance of the unrecognized tax benefits to change materially in the next 12 months.

 

 

 

December 28,
2025

 

 

December 29,
2024

 

Gross tax contingencies as of beginning of year

 

$

415

 

 

$

654

 

Increase in gross tax contingencies

 

 

933

 

 

 

—

 

Decrease in gross tax contingencies

 

 

(174

)

 

 

(239

)

Gross tax contingencies as of end of year

 

$

1,174

 

 

$

415

 

As of December 28, 2025 and December 29, 2024, the Company had uncertain tax positions of $1.7 million and $0.6 million and deferred tax liabilities of $1.1 million and $0, respectively, under the heading “Other liabilities” in the consolidated balance sheets.

The Company files a U.S. federal income tax return, as well as income tax returns in various states. Tax years 2022 and forward remain open to examination by the tax jurisdictions to which the Company is subject, with certain state taxing jurisdictions being open back to 2019.