Note 14 - Income Taxes |
6 Months Ended | ||
|---|---|---|---|
Jul. 04, 2026 | |||
| Notes to Financial Statements | |||
| Income Tax Disclosure [Text Block] |
The Company recognized $3.9 million of income tax expense for the twenty-six weeks ended July 4, 2026 as compared to $3.6 million for the comparable prior-year period. The consolidated effective income tax rate for the twenty-six weeks ended July 4, 2026 was 30.6% as compared to 31.0% for the comparable prior-year period. The effective income tax rates for the twenty-six weeks ended July 4, 2026, were approximately 31.1%, 26.5%, 22.7%, and 25.0% in the United States/Puerto Rico, Canada, Europe, and the Philippines, respectively. The relative income or loss generated in each jurisdiction can materially impact the overall effective income tax rate of the Company, particularly the ratio of Canadian and European pretax income versus U.S. pretax income. The effective income tax rate can also be impacted by discrete permanent differences affecting any period presented. The comparable prior-year period estimated income tax rates were 31.7%, 25.1%, and 11.8% in the United States/Puerto Rico, Canada, and Europe, respectively. The primary reason for the decrease in the consolidated and United States effective rates in the current period was due to decreases in permanent tax differences in the United States. The low effective tax rate in Europe during the prior-year period was due to a fixed tax benefit relative to a small pretax loss.
Differences between the effective tax rate and the applicable U.S. federal statutory rate may arise, primarily from the effect of state and local income taxes, share-based compensation, and potential tax credits available to the Company. The actual 2026 effective tax rate may vary from the estimate depending on the actual operating income earned in various jurisdictions, the potential availability of tax credits, the vesting of share-based awards, and the amount of any permanent book-to-tax differences.
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