v3.26.3
Income Taxes
 12 Months Ended
Jul. 31, 2026
Income Taxes  
Income Taxes

14.

Income Taxes

The components of the income tax benefit for each of the three years were as follows:

​

​

​

​

​

​

​

​

​

​

​

​

  ​ ​ ​

2026

  ​ ​ ​

2025

  ​ ​ ​

2024

Current:

 

​

  ​

 

​

  ​

 

​

  ​

Federal

​

$

1,899

​

$

3,655

​

$

(10,448)

State

​

 

1,977

​

 

2,727

​

 

247

Deferred:

​

 

  ​

​

 

  ​

​

 

  ​

Federal

​

 

(15,654)

​

 

(14,275)

​

 

(3,526)

State

​

 

676

​

 

(760)

​

 

(3,017)

Total income tax benefit

​

$

(11,102)

​

$

(8,653)

​

$

(16,744)

​

​

A reconciliation of the Company’s income tax benefit and income taxes based on the statutory U.S. federal rate of 21.0% in 2026, 2025 and 2024 was as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

  ​ ​ ​

2026

  ​ ​ ​

2025

  ​ ​ ​

2024

​

​

​

Amount

​

Percent

​

​

​

Amount

​

Percent

​

​

​

Amount

​

Percent

​

Provision computed at federal statutory income tax rate

​

$

4,320

​

21.0

%

​

$

7,922

​

21.0

%

​

$

5,079

​

21.0

%

State and local income taxes, net of federal benefit

​

 

1,620

​

7.9

%

​

 

1,594

​

4.2

%

​

 

266

​

1.1

%

Tax Credits

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Employer tax credits for FICA taxes paid on employee tip income

​

 

(16,342)

​

(79.4)

%

​

 

(17,769)

​

(47.1)

%

​

 

(16,926)

​

(70.0)

%

Other employer tax credits

​

 

(2,560)

​

(12.5)

%

​

 

(3,002)

​

(8.0)

%

​

 

(3,476)

​

(14.4)

%

Nontaxable or Nondeductible Items

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Non-deductible executive compensation

​

​

938

​

4.6

%

​

​

1,879

​

5.0

%

​

​

1,254

​

5.2

%

Share-based compensation

​

​

728

​

3.5

%

​

​

599

​

1.6

%

​

​

548

​

2.3

%

Other

​

 

(8)

​

(0.1)

%

​

 

237

​

0.6

%

​

 

250

​

1.0

%

Changes in Unrecognized Tax Benefits

​

​

548

​

2.7

%

​

​

255

​

0.7

%

​

​

(2,110)

​

(8.7)

%

Other Adjustments

​

 

​

​

​

​

​

 

​

​

​

​

​

 

​

​

​

​

Carryback of federal tax credits

​

​

(22)

​

(0.1)

%

​

​

(1,040)

​

(2.7)

%

​

​

(1,545)

​

(6.4)

%

Other

​

​

(324)

​

(1.6)

%

​

​

672

​

1.8

%

​

​

(84)

​

(0.3)

%

Total income tax benefit

​

$

(11,102)

​

(54.0)

%

​

$

(8,653)

​

(22.9)

%

​

$

(16,744)

​

(69.2)

%

​

In 2026, 2025 and 2024, state and local income taxes in Texas, Illinois, Tennessee and Kentucky comprise the majority of the state and local income taxes, net of federal benefit line item above.

The Company’s income tax benefit increased in 2026 primarily due to the decrease in income before income taxes as compared to 2025. The Company’s income tax benefit decreased in 2025 primarily due to the increase in income before income taxes and fewer favorable audit settlements as compared to 2024.

Significant components of the Company’s net deferred tax liability consisted of the following at:

​

​

​

​

​

​

​

​

​

  ​ ​ ​

July 31, 2026

  ​ ​ ​

August 01, 2025

Deferred tax assets:

 

​

  ​

 

​

  ​

Compensation and employee benefits

​

$

7,875

​

$

7,054

Accrued liabilities

​

 

15,578

​

 

12,728

Operating lease liabilities

​

 

174,357

​

 

173,396

Insurance reserves

​

 

10,307

​

 

9,304

Inventory

​

 

3,904

​

 

3,816

Deferred tax credits and carryforwards

​

 

61,847

​

 

52,035

Other

​

 

8,230

​

 

5,064

Deferred tax assets

​

$

282,098

​

$

263,397

​

​

​

​

​

​

​

Deferred tax liabilities:

​

 

  ​

​

 

  ​

Property and equipment

​

$

102,847

​

$

95,793

Inventory

​

 

6,547

​

 

6,502

Operating lease right-of-use asset

​

 

199,549

​

 

201,118

Other

​

 

6,768

​

 

8,575

Deferred tax liabilities

​

 

315,711

​

 

311,988

Net deferred tax liability

​

$

33,613

​

$

48,591

​

The Company has a deferred tax asset of $46,963 reflecting federal income tax credit carryforwards that expire beginning in 2045. The Company has state income tax net operating loss carryforwards (“NOL”) of $102,745 and has recorded a deferred tax asset of $5,806 reflecting this benefit. These state NOLs generally expire in years beginning 2037 and after.

The Company believes that adequate amounts of tax, interest and penalties have been provided for potential tax uncertainties; these amounts are included in other long-term liabilities in the Consolidated Balance Sheets. As of July 31, 2026 and August 01, 2025, the Company’s gross liability for uncertain tax positions, exclusive of interest and penalties, was $6,321 and $6,703, respectively.

Summarized below is a tabular reconciliation of the beginning and ending balance of the Company’s total gross liability for uncertain tax positions exclusive of interest and penalties:

​

​

​

​

​

​

​

​

​

​

​

​

  ​ ​ ​

July 31, 2026

  ​ ​ ​

August 01, 2025

  ​ ​ ​

August 02, 2024

Balance at beginning of year

​

$

6,703

​

$

7,404

​

$

9,675

Tax positions related to the current year:

​

 

​

​

​

​

​

​

​

Additions

​

​

232

​

 

470

​

 

276

Reductions

​

 

—

​

 

—

​

 

—

Tax positions related to the prior year:

​

 

​

​

​

​

​

​

​

Additions

​

​

16

​

 

19

​

 

43

Reductions

​

 

(177)

​

 

(40)

​

 

(674)

Settlements

​

 

—

​

 

(580)

​

 

(1,433)

Expiration of statute of limitations

​

 

(453)

​

 

(570)

​

 

(483)

Balance at end of year

​

$

6,321

​

$

6,703

​

$

7,404

​

If the Company were to prevail on all uncertain tax positions, the reversal of this accrual would be a tax benefit to the Company and impact the effective tax rate. The following table highlights the amount of uncertain tax positions, exclusive of interest and penalties, which, if recognized, would affect the effective tax rate for each of the three years:

​

​

​

​

​

​

​

​

​

​

​

​

  ​ ​ ​

2026

  ​ ​ ​

2025

  ​ ​ ​

2024

Uncertain tax positions

​

$

4,994

​

$

5,296

​

$

5,849

​

The Company had $9,980, $8,672, and $7,913 in interest and penalties accrued as of July 31, 2026, August 01, 2025, and August 02, 2024, respectively.

The Company recognized accrued interest and penalties related to unrecognized tax benefits of $1,307, $760 and $17 in its income tax benefit for the years ended on July 31, 2026, August 01, 2025 and August 02, 2024, respectively.

At July 31, 2026, the Company was subject to income tax examinations for its U.S. federal income taxes after 2020 and for state and local income taxes generally after 2020.

H.R.1., also known as the One Big Beautiful Bill Act (OBBBA), was enacted on July 4, 2025. The OBBBA includes significant tax law changes with effective dates in 2025 and continuing through 2027. As a result of accelerating deductions for qualified depreciable property, research and development expenses and interest expense, our cash tax payments for 2026 were significantly reduced.

​

Income taxes paid (net of refunds) for each of the three years were as follows:

​

​

​

​

​

​

​

​

​

​

​

​

  ​ ​ ​

​

2026

​

2025

​

2024

U.S. federal

​

$

(17,021)

​

$

7,100

​

$

3,500

U.S. state and local

​

 

​

​

​

​

​

​

​

Illinois

​

​

*

​

 

490

​

 

381

Louisiana

​

 

*

​

 

*

​

 

1,407

New Jersey

​

 

*

​

​

697

​

​

*

North Carolina

​

​

*

​

 

*

​

 

(1,419)

Tennessee

​

 

*

​

 

*

​

 

502

Texas

​

 

*

​

 

649

​

 

579

Other

​

 

563

​

 

317

​

 

890

​

​

​

563

​

​

2,153

​

​

2,340

Total

​

$

(16,458)

​

$

9,253

​

$

5,840

​

​

*The amount of the income taxes paid during the year does not meet the 5% disaggregation threshold.