v3.26.1
Income Taxes
 6 Months Ended
Jun. 28, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
THIRTEEN WEEKS ENDEDTWENTY-SIX WEEKS ENDED
(in thousands)JUNE 28, 2026JUNE 29, 2025JUNE 28, 2026JUNE 29, 2025
Income (loss) before income taxes$3,368 $3,576 $(66)$2,039 
Income tax expense$(1,029)$(1,470)$(280)$(762)
Effective income tax rate30.6 %41.1 %*37.4 %
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*The effective income tax rate for the twenty-six weeks ended June 28, 2026 is not meaningful as a result of the low level of loss before income taxes in the period.
Management accounts for income taxes in interim periods using an estimated annual effective tax rate, adjusted for discrete items recognized during the period. For the thirteen and twenty-six weeks ended June 28, 2026, the Company recorded income tax expense. The income tax expense reflects the application of the estimated annual effective income tax rate to the Company’s actual earnings for the periods, partially offset by discrete tax items, which include the impact of stock-based compensation.
The effective income tax rate for the thirteen weeks ended June 28, 2026 decreased compared to the prior year period primarily due to changes in (i) the benefit of federal tax credits received by the Company for FICA taxes paid on certain employee tips, (ii) state income taxes and (iii) stock-based compensation tax impacts.

Valuation allowance
Management routinely assesses the realizability of deferred tax assets, and may record a valuation allowance if, based on all available positive and negative evidence, the determination is reached that some portion of the deferred tax assets may not be realized prior to expiration. If Management determines that the Company may be able to realize the deferred tax
assets in the future, the Company would make an adjustment to the deferred tax assets valuation allowance, which would reduce the provision for income taxes during the period in which the determination was made. As of the period ended June 28, 2026 based upon all available evidence, Management has maintained a valuation allowance against a portion of the deferred tax assets.
As the Company’s future taxable earnings increase and the deferred tax assets are utilized, it is possible that a portion of the valuation allowance will no longer be needed. Release of any valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense in the period of the release. The timing and amount of any release related to future taxable income is currently indeterminable.