v3.26.1
INCOME TAXES (Tables)
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Schedule of Components of Income from Continuing Operations Before Income Taxes
The components of income from continuing operations before income taxes are as follows:
Fiscal Years
202620252024
(Dollars in thousands)
Income (loss) before income taxes
U.S. $6,801 $2,709 $91,279 
International(930)(1,173)(1,343)
$5,871 $1,536 $89,936 
Schedule of (Benefit) Provision for Income Taxes Rate to Income from Continuing Operations Before Income Taxes The (benefit) provision for income taxes for the fiscal year ended 2026 differs from the amount of income tax determined by applying the applicable U.S. statutory rate to income from continuing operations before income taxes, as a result of the following:
Tax Rate ReconciliationAmountPercentage
(Dollars in thousands)
U.S. federal statutory rate$1,233 21.0 %
State income taxes, net of federal income tax benefit (1)(79)(1.4)
Foreign tax effects
Canada
Changes in valuation allowance1,288 21.9 
Return to provision true-up(178)(3.0)
Other(26)(0.4)
United Kingdom6 0.1 
Tax Credits
FICA tip credit(911)(15.5)
Other tax credits(26)(0.5)
Changes in valuation allowances(3,136)(53.4)
Nontaxable or nondeductible items
Stock-based compensation529 9.0 
FICA tip credit191 3.2 
Gain on earn-out liability(210)(3.6)
Other38 0.7 
Changes in unrecognized tax benefits(175)(3.0)
Other reconciling items
Federal return to provision true-up333 5.7 
Other items51 0.9 
Effective tax rate$(1,072)(18.3)%
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(1)State taxes in Illinois, Florida, Michigan, Pennsylvania, and Minnesota contributed to the majority of the tax effect in this category.
The (benefit) provision for income taxes for the years prior to the adoption of ASU 2023-09 differs from the amount of income tax determined by applying the applicable U.S. statutory rate to income from continuing operations before income taxes, as a result of the following:
20252024
U.S. statutory rate21.0 %21.0 %
State income taxes, net of federal income tax benefit(16.5)2.3 
Valuation allowance (1)(7,897.3)(21.9)
Foreign income taxes at other than U.S. rates(18.5)(0.2)
Uncertain tax positions0.7 (0.1)
Stock-based compensation24.9 0.2 
Deferred tax rate remeasurement(78.4)— 
Executive compensation limitation10.0 — 
Acquired deferred taxes(2.3)— 
Tax attribute expiration (2)428.4 — 
Other, net (3)8.7 (0.3)
Effective tax rate(7,519.3)%1.0 %
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(1)The change in valuation allowance for fiscal year 2025 primarily relates to a release of a majority of the U.S. prior year valuation allowance and a release of a portion of the Canadian prior year valuation allowance.
(2)The tax attribute expiration primarily relates to the expiration of a capital loss generated in fiscal year 2020, which was not offset by subsequent capital gains and is subject to a five-year carryforward period.
(3)The 8.7% of other, net in fiscal year 2025 includes the rate impact of the federal provision to return true-up and permanent adjustments of 6.2% and 2.5%, respectively. The (0.3)% of other, net in fiscal year 2024 does not include the rate impact of any items in excess of 5% of computed tax.
Schedule of Income Tax (Benefit) Expense
Income tax (benefit) expense was comprised of the following:
Fiscal Years
202620252024
(Dollars in thousands)
Current:
U.S. Federal$37 $— $— 
U.S. State(82)252 427 
International— — (77)
Deferred (1):
U.S. Federal(1,877)(102,079)294 
U.S. State(45)(7,807)237 
International895 (5,862)(12)
Income tax (benefit) expense$(1,072)$(115,496)$869 
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(1)The deferred income tax benefit in fiscal year 2025 is primarily due to the release of a prior year valuation allowance in the U.S. of $110.2 million and Canada of $6.1 million.
Schedule of Income Taxes Paid, Net of Refunds
The following provides supplemental disclosures of cash flow activity:
Fiscal Years
202620252024
(Dollars in thousands)
Cash paid (received) for:
Interest$11,327 $11,539 $18,978 
Taxes and penalties, net251 463 (893)
Non-cash investing activities:
Stock issued in connection with Alline Acquisition— 3,000 — 
Income taxes paid, net of refunds, for fiscal year 2026 were as follows (Dollars in thousands):

Federal
$— 
State and local taxes
Louisiana17 
Pennsylvania96 
Texas18 
Other61 
Foreign
37 
Total income taxes paid
$229 
Schedule of Components of the Net Deferred Tax Assets and Liabilities
The components of the net deferred tax assets and liabilities are as follows:
June 30,
20262025
(Dollars in thousands)
Deferred tax assets:
Payroll and payroll related costs$4,163 $4,929 
Net operating loss carryforwards133,601 136,471 
Tax credit carryforwards38,357 37,443 
Capital loss carryforwards1,005 1,027 
Deferred franchise fees2,334 3,395 
Operating lease liabilities44,800 57,492 
Interest expense carryforward 15,572 13,289 
Other2,551 2,580 
Subtotal242,383 256,626 
Valuation allowance(57,710)(60,460)
Total deferred tax assets$184,673 $196,166 
Deferred tax liabilities:
Goodwill and intangibles$(34,507)$(34,087)
Operating lease assets(44,493)(57,149)
Other(2,271)(2,426)
Total deferred tax liabilities(81,271)(93,662)
Net deferred tax asset$103,402 $102,504 
Schedule of Unrecognized Tax Benefits Roll Forward
A rollforward of the unrecognized tax benefits is as follows:
Fiscal Years
20262025
(Dollars in thousands)
Balance at beginning of period$21,194 $21,232 
Additions based on tax positions related to the current year3 3 
Additions based on tax positions of prior years1 8 
Reductions on tax positions related to the expiration of the statute of limitations(179)(49)
Balance at end of period$21,019 $21,194