Income Taxes |
9 Months Ended |
|---|---|
Oct. 04, 2026 | |
| Income Taxes [Abstract] | |
| Income Taxes | Note 5. Income Taxes
Provision for taxes was $12.2 million and $13.5 million for the three-month periods ended October 4, 2026 and September 28, 2025, respectively. Benefit for taxes was $24.1 million and $4.7 million for the nine-month periods ended October 4, 2026 and September 28, 2025, respectively, primarily attributable to the litigation accrual. The effective tax rate was 23.0% for the three-month period ended October 4, 2026, as compared with 23.9% for the three-month period ended September 28, 2025.
As of October 4, 2026, the Company had approximately $6.2 million of total unrecognized income tax benefits. Included in this amount were a total of $4.6 million of unrecognized income tax benefits that, if recognized, would affect the Company’s effective tax rate. While it is expected that the amount of unrecognized tax benefits will change in the next 12 months, the Company does not expect the change to have a significant impact on the results of operations or the financial position of the Company. The Company’s accounting policy is to recognize interest and penalties accrued, relating to unrecognized income tax or benefit as part of its provision for income taxes. The Company recorded net immaterial additions during the three-month period ended October 4, 2026 and had an accrued balance of $0.8 million of interest and penalties as of October 4, 2026.
The Company operates in multiple taxing jurisdictions, both within and outside the U.S. In certain situations, a taxing authority may challenge positions that the Company has adopted in its income tax filings. The Company, with a few exceptions (none of which are material), is no longer subject to U.S. federal, state, local, and international income tax examinations by tax authorities for years prior to 2017.
On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S. It contains a broad range of tax reform provisions affecting businesses. The Company evaluated the full effects of the legislation on our annual effective tax rate and cash tax position, and it did not have a material impact on our Consolidated Financial Statements.
In December 2021, the Organization for Economic Co-operation and Development (“OECD”) released the Pillar Two Model Rules which aim to reform international corporate taxation rules, including the implementation of a global minimum tax rate. The Company began implementation of the Pillar Two Model Rules in the first quarter of 2024. The Company continues to assess the effect of the Pillar Two Model Rules in all jurisdictions and does not expect that Pillar Two will have a material impact on its Consolidated Financial Statements.
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