v3.26.1
Income taxes
 12 Months Ended
Jun. 28, 2026
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
Significant components of the income tax provision are as follows:
Years Ended
June 28, 2026June 29, 2025June 30, 2024
(in thousands)
Current provision (benefit):
Federal$143 $(1,942)$11,774 
State546 1,125 161 
Foreign — 176 — 
Current income tax expense (benefit) 689 (641)11,935 
Deferred provision (benefit):
Federal(558)(12,880)(14,246)
State(135)131 2,514 
Foreign— 26 — 
Deferred income tax benefit(693)(12,723)(11,732)
Income tax (benefit) expense $(4)$(13,364)$203 
The Company adopted ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures on a prospective basis beginning with the year ended June 28, 2026. The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the U.S. federal statutory tax amount and rate to the Company’s actual effective amount and rate for the year ended June 28, 2026:

Year Ended June 28, 2026
Amount Percent
(in thousands)
U.S. federal statutory rate$(28,301)21.0 %
State and local income tax, net of federal income tax effect (1)296(0.2)
Tax Credits:
Research and development credit (1,905)1.4 
Work opportunity tax credits(329)0.2 
Changes in valuation allowances26,293 (19.5)
Non-taxable or non-deductible items:
Share-based compensation2,947 (2.2)
Executive compensation133(0.1)
Changes in unrecognized tax benefits 523(0.4)
Other adjustments 339(0.2)
Effective tax rate $(4)0.0 %

(1) State taxes in Texas and New York, and local taxes in Ohio accounted for the majority (greater than 50%) of the tax effect in this category.

The following table presents the required disclosures prior to the Company’s adoption of ASU 2023-09 and reconciles the U.S. federal statutory tax rate to the Company’s effective tax rate for the years ended June 29, 2025 and June 30, 2024 as follows:
Years Ended
June 29, 2025June 30, 2024
Tax at U.S. statutory rates21.0%21.0%
State income taxes, net of federal tax benefit3.4 (8.1)
Non-deductible impairment charge(1.4)- 
Valuation allowance change(16.8)(28.5)
Non-deductible compensation(0.1)(0.6)
Excess tax benefit/shortfalls from stock-based compensation(0.2)(11.9)
Tax credits0.3 16.9 
Enhanced deductions- 11.8 
Other, net0.1 (4.0)
Effective tax rate6.3%(3.4%)
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of the Company's deferred income tax assets (liabilities) are as follows:
June 28, 2026June 29, 2025
(in thousands)
Deferred income tax assets:
Loss and carryforwards$32,265 $17,508 
Accrued expenses and reserves7,631 2,315 
Inventory3,762 4,366 
Stock-based compensation1,102 2,613 
Deferred compensation7,986 7,242 
Operating lease liabilities28,140 29,002 
Interest limitation carryforward5,313 2,634 
Other intangibles 27,362 20,604 
Gross deferred income tax assets113,561 86,284 
Less: Valuation allowance(71,767)(40,581)
Deferred tax assets, net41,794 45,703 
Deferred income tax liabilities:
Tax in excess of book depreciation(22,067)(25,409)
Operating lease right-of-use assets(25,713)(26,973)
Deferred tax liabilities(47,780)(52,382)
Deferred tax liabilities, net$(5,986)$(6,679)
At June 28, 2026, the Company had $76.1 million of indefinite-lived federal net operating losses, $167.3 million of state net operating loss carryforwards, some of which will begin to expire in fiscal 2027 to the extent not utilized, and $5.5 million of foreign net operating loss carryforwards, which will begin to expire in fiscal 2034 if not utilized. At June 28, 2026, the Company’s federal charitable contribution carryforwards were $15.3 million, which will begin to expire in fiscal 2027 if not utilized. At June 28, 2026, the Company’s research and development and work opportunity credit carryforwards were $2.1 million and $0.4 million, respectively, which will both begin to expire in fiscal 2045 if not utilized.
The Company evaluates the realizability of its deferred tax assets on a quarterly basis and establishes valuation allowances when it is more likely than not that all or a portion of a deferred tax asset may not be realized. In completing this evaluation, the Company considers available positive and negative evidence. Such evidence includes historical operating results, the existence of cumulative earnings and losses in the most recent fiscal years, taxable income in prior carryback year(s) if permitted under the tax law, the time period over which the Company's temporary differences will reverse, the implementation of feasible and prudent tax planning strategies, and expectations for future pre-tax operating income. Estimating future taxable income is inherently uncertain and requires judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of this evidence, it is more likely than not that all or a portion of the recorded deferred tax assets will not be realized in future periods. During fiscal 2025, due to the goodwill and intangible impairment charge and the Company’s three-year cumulative loss position, the Company completed a detailed analysis of future taxable income, focused on the scheduling of temporary differences that were expected to reverse in periods where the Company anticipated taxable income. The analysis, along with no identified tax planning strategies, resulted in sufficient evidence that it is more likely than not that certain deferred tax assets would not be realized in future periods and an additional $35.9 million valuation allowance was recorded, resulting in a valuation allowance of $40.6 million as of June 29, 2025. During fiscal 2026, the valuation increased by $31.2 million resulting in a valuation allowance of $71.8 million as of June 28, 2026. The increase in valuation allowance primarily relates to the Company’s continued losses during fiscal 2026.
The below table presents the changes in the Company's valuation allowance:
Years Ended
June 28, 2026June 29, 2025
(in thousands)
Valuation allowance - beginning balance $40,581 $4,868 
        Additions charged to income tax benefit31,201 35,958 
        Allowances taken or written off (15)(245)
Valuation allowance - ending balance $71,767 $40,581 

The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and various foreign countries. Fiscal 2023, fiscal 2024, and fiscal 2025 remain subject to U.S. federal examination. Due to nonconformity with the U.S. federal statute of limitations for assessment, certain states remain open from fiscal 2022. The Company's foreign income tax filings from fiscal 2019 forward are open for examination by its respective foreign tax authorities, mainly Canada and Brazil. The Company is not currently under examination by federal or foreign taxing jurisdictions. The Company is currently under examination in the states of Florida and Illinois for fiscal years 2022 through 2024 and fiscal years 2023 and 2024, respectively.
The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. At June 28, 2026, the Company has an unrecognized tax benefit, including accrued interest and penalties of approximately $4.1 million, which is included within the "Other liabilities" line item in the consolidated balance sheet. To the extent these unrecognized tax benefits are ultimately recognized, approximately $3.5 million will impact the Company’s effective tax rate and $0.6 million will be offset by a valuation allowance in future periods.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Years Ended
June 28, 2026June 29, 2025June 30, 2024
(in thousands)
Beginning balance$2,760 $2,780 $1,724 
Increases on tax positions for prior years280 72 1,100 
Increases on tax positions for current year472 209 387 
Settlements- (166)- 
Statute of limitation expirations(210)(135)(431)
Ending balance$3,302 $2,760 $2,780 
A reconciliation of cash paid for income taxes, net of refunds received, is as follows:
Year Ended
June 28, 2026
(in thousands)
U.S. federal$(2,421)
U.S. state and local
    California (1)(135)
    Illinois (1)(176)
    Texas (1) 144 
    Other12 
Income taxes paid, net of refunds$(2,576)
(1) Income taxes paid (received) in this jurisdiction exceeded 5% of the total income taxes paid (received), net of refunds received.
The One Big Beautiful Bill Act (“OBBBA”), which was signed into law on July 4, 2025, included various tax law changes, and made permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others phased in through 2027. These provisions and modifications have not had a material impact on the Company’s consolidated financial statements. The Company will continue to evaluate the impact of the new legislation on its consolidated financial statements as additional guidance is issued.