Income Taxes |
3 Months Ended |
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Apr. 05, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | INCOME TAXES The Company determines its provision for income taxes for interim periods using an estimate of its annual effective tax rate (“AETR”) and records any changes affecting the estimated AETR in the interim period in which the change occurs, including discrete tax items. During the three months ended April 5, 2026, the Company recorded a total income tax provision of $5.3 million on pre-tax income of $28.9 million resulting in an effective tax rate of 18.3%, as compared to a total income tax provision of $4.1 million on pre-tax income of $17.1 million resulting in an effective tax rate of 24.0% during the three months ended March 30, 2025. The decrease in the effective tax rate for the three months ended April 5, 2026, as compared to the three months ended March 30, 2025, was primarily due to higher excess tax benefits related to share-based compensation. On December 20, 2021, the Organization for Economic Co-operation and Development (“OECD”) published Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15%. The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax. Many non-U.S. tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years. For fiscal year 2026, we expect to meet the Transitional Country-by-Country (“CbCR”) Safe Harbor rules for most if not all jurisdictions and do not expect these provisions to have a material impact on the Company’s financial statements. We will continue to closely monitor ongoing developments and evaluate any potential impact on future periods. In 2026, the OECD issued a Side-by-Side package (“SbS”) that simplifies Pillar Two, creates new safe harbors, fully exempts U.S. parent groups from two of the three top-up taxes, and extends the CbCR Safe Harbor through fiscal year 2027. In certain jurisdictions, local legislative action is needed to effectuate the SbS agreement and cannot be considered in our accounting estimate until enactment. In the first three months of 2026, the Company increased its liability for unrecognized tax benefits by $0.2 million. As of April 5, 2026, the Company had accrued approximately $5.1 million for unrecognized tax benefits.
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