v3.26.3
Income Taxes
 3 Months Ended
Sep. 27, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

6. Income Taxes

The provision for income taxes and effective tax rate were as follows:

 

 

For the Three Months Ended

 

 

 

September 27, 2026

 

 

September 28, 2025

 

Provision for income taxes

 

$

1,037

 

 

$

196

 

Effective tax rate

 

 

(105.5

)%

 

 

(1.8

)%

Income Tax Expense

UNIFI’s provision for income taxes for the three months ended September 27, 2026 and September 28, 2025 was calculated by applying the estimated annual effective tax rate to year-to-date pre-tax book income and adjusting for discrete items that occurred during the period.

The effective tax rate for the three months ended September 27, 2026 varied from the U.S. federal statutory rate primarily due to (i) U.S. tax on Net CFC Tested Income (“NCTI”) and (ii) taxes associated with the repatriation of foreign earnings, including withholding taxes. The impact of these items on the effective tax rate was amplified by UNIFI's relatively low level of consolidated pre-tax loss.

The effective tax rate for the three months ended September 28, 2025 varied from the U.S. federal statutory rate primarily due to the U.S. generated losses for which UNIFI does not expect to realize a future tax benefit.

Certain returns that remain open to examination have utilized carryforward tax attributes generated in prior tax years, including net operating losses, which could potentially be revised upon examination. UNIFI regularly assesses the outcomes of both completed and ongoing examinations to ensure that its provision for income taxes is sufficient.

In July 2026, UNIFI received a notice from the Department of the Treasury, Internal Revenue Service (“IRS”) that its federal income tax return for the fiscal 2024 tax year had been selected for a routine examination by the Large Business and International (“LB&I”) Division. There have been no changes to reserves as a result of this examination notice.