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Income Taxes
 12 Months Ended
Oct. 03, 2025
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES:
The Company accounts for income taxes using the asset and liability method. Under this method, the Provision for Income Taxes from Continuing Operations represents income taxes payable or refundable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax bases in assets and liabilities and are adjusted for changes in tax rates and enacted tax legislation. Valuation allowances are recorded to reduce deferred tax assets ("DTAs") when it is more likely than not that a tax benefit will not be realized.
The components of Income from Continuing Operations Before Income Taxes by source of income are as follows (in thousands):
Fiscal Year Ended
October 3, 2025September 27, 2024September 29, 2023
United States(1)
$292,770 $234,926 $119,543 
Non-United States(2)
137,686 129,939 443,981 
$430,456 $364,865 $563,524 
(1)Fiscal 2024 includes gains from sale of equity investments (see Note 1).
(2)Fiscal 2023 includes gains from sale of equity investments (see Note 1).
The Provision for Income Taxes from Continuing Operations consists of the following (in thousands):
Fiscal Year Ended
October 3, 2025September 27, 2024September 29, 2023
Current:
Federal$44,903 $68,903 $(5,119)
State and local7,645 14,565 4,916 
Non-United States36,819 26,827 16,471 
89,367 110,295 16,268 
Deferred:
Federal(1)
23,574 (15,761)90,769 
State and local12,675 2,915 7,199 
Non-United States(22,030)5,523 2,190 
14,219 (7,323)100,158 
$103,586 $102,972 $116,426 
(1)
Fiscal 2023 deferred tax expense is elevated due to the utilization of tax credit carryforward assets.
Current taxes receivable of $26.8 million and $3.8 million at October 3, 2025 and September 27, 2024, respectively, are included in "Prepayments and other current assets" on the Consolidated Balance Sheets. Current income taxes payable of $19.5 million and $19.3 million at October 3, 2025 and September 27, 2024, respectively, are included in "Accrued expenses and other current liabilities" on the Consolidated Balance Sheets.
The Provision for Income Taxes from Continuing Operations varies from the amount determined by applying the United States Federal statutory rate to Income from Continuing Operations Before Income Taxes as a result of the following (all percentages are as a percentage of Income from Continuing Operations Before Income Taxes):
Fiscal Year Ended
October 3, 2025September 27, 2024September 29, 2023
United States statutory income tax rate21.0 %21.0 %21.0 %
Increase (decrease) in taxes, resulting from:
State income taxes, net of Federal tax benefit3.7 3.8 1.7 
Foreign taxes2.8 3.3 1.7 
Reduction of foreign valuation allowances(4.9)(0.7)(0.6)
Permanent book/tax differences0.3 2.6 (0.8)
Uncertain tax positions3.4 0.4 0.8 
Foreign tax credit valuation allowance0.7 0.3 (0.8)
Sale of investments(1)
— — (0.5)
Tax credits & other(2.9)(2.5)(1.8)
Effective income tax rate24.1 %28.2 %20.7 %
(1)
Includes mainly capital tax gains related to the sale of the Company's equity investment in AIM Services Co., Ltd. offset by capital tax losses in certain investments in foreign entities.
The effective tax rate is based on expected income, statutory tax rates and tax planning opportunities available to the Company in the various jurisdictions in which it operates. Judgment is required in determining the effective tax rate and in evaluating the tax return positions. Reserves are established when positions are "more likely than not" to be challenged and not sustained. Reserves are adjusted at each financial statement date to reflect the impact of audit settlements, expiration of statutes of limitation, developments in tax law and ongoing discussions with tax authorities. Accrued interest and penalties associated with uncertain tax positions are recognized as part of the income tax provision.
As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact the need for valuation allowances against DTAs. During fiscal 2025, fiscal 2024 and fiscal 2023, the Company recorded a benefit to the "Provision for Income Taxes from Continuing Operations" within the Consolidated Statements of Income of $24.8 million, $3.8 million and $3.8 million, respectively, for the reversal of valuation allowances at subsidiaries in the FSS International segment. The valuation allowance reversals were driven by the Company's ability to utilize DTAs based on future taxable income expected due to business acquisitions and sustained profitability. The Company continues to monitor operating
performance and believes that based on future reversals of deferred tax liabilities ("DTLs") and future taxable income, it is more likely than not that the remaining NOL carryforwards and DTAs will be realized, except where a valuation allowance has been established.
During fiscal 2023, the Company recorded a net expense to the "Provision for Income Taxes from Continuing Operations" on the Consolidated Statements of Income of $76.7 million, of which $98.4 million reflects the capital gain on the sale of its AIM Services Co., Ltd. equity investment, offset by $21.7 million of capital losses resulting from the restructuring of certain foreign subsidiaries.
As of October 3, 2025 and September 27, 2024, the components of Deferred Income Taxes are as follows (in thousands):
October 3, 2025September 27, 2024
Deferred tax liabilities:
Derivatives$4,235 $12,816 
Property and equipment40,493 2,023 
Other intangible assets, including goodwill605,608 580,138 
Operating Lease Right-of-use Assets53,711 46,729 
Computer software costs and other18,264 23,283 
Gross deferred tax liability722,311 664,989 
Deferred tax assets:
Investments9,148 8,721 
Inventory3,685 6,261 
Insurance16,785 14,670 
Employee compensation and benefits100,563 93,102 
Accruals and allowances15,000 17,716 
Operating lease liabilities62,182 56,532 
NOL/credit carryforwards and other198,944 193,152 
Gross deferred tax asset, before valuation allowances406,307 390,154 
Valuation allowances(62,276)(80,552)
Net deferred tax liability$378,280 $355,387 
Rollforward of the valuation allowance is as follows (in thousands):
October 3, 2025September 27, 2024
Balance, beginning of year$(80,552)$(78,194)
Additions(1)
(9,743)(5,810)
Subtractions(2)
28,019 3,452 
Balance, end of year$(62,276)$(80,552)
(1)
The Additions in fiscal 2025 are driven by valuation allowances recorded related to additional deferred tax assets recognized in the FSS International segment, while Additions in fiscal 2024 were driven by a valuation allowance recorded related to pension assets in the FSS International segment.
(2)
The Subtractions in fiscal 2025 and 2024 in part are driven by the reversal of a valuation allowance at a subsidiary in the FSS International segment based on future taxable income expected due to acquisitions of businesses. Fiscal 2025 also included the reversal of a valuation allowance at a subsidiary in the FSS International segment due to sustained profitability.
DTLs of $410.9 million and $375.4 million as of October 3, 2025 and September 27, 2024, respectively, are included in "Deferred Income Taxes" on the Consolidated Balance Sheets. DTAs of $32.6 million and $20.0 million as of October 3, 2025 and September 27, 2024, respectively, are included in "Other Assets" on the Consolidated Balance Sheets.
As of October 3, 2025, certain subsidiaries have recorded DTAs of $64.7 million associated with accumulated federal, state and foreign NOL carryforwards. The Company believes it is more likely than not that the benefit from certain state and foreign NOL carryforwards will not be realized. As a result, the Company has a valuation allowance of $27.0 million on the DTAs related to these state and foreign NOL carryforwards as of October 3, 2025. State NOL carryforwards generally will begin to expire in 2026 and foreign NOL carryforwards generally have no expiration date.
As of October 3, 2025, the Company has $57.2 million of FTC carryforwards, which begin to expire in 2027, along with $2.8 million of general business credits, which begin to expire in 2045, and $39.4 million of interest restriction carryforwards, which
do not expire. The Company has a valuation allowance of $35.2 million on the DTAs related to FTC carryforwards as of October 3, 2025.
Undistributed earnings of certain foreign subsidiaries for which no DTL was recorded amounted to approximately $574.9 million and $446.7 million as of October 3, 2025 and September 27, 2024, respectively. The foreign withholding tax cost associated with remitting these earnings is $33.8 million and $26.8 million as of October 3, 2025 and September 27, 2024, respectively. Such amounts have not been accrued by the Company as it believes those foreign earnings are permanently reinvested.
The Company has $88.6 million of total gross unrecognized tax benefits as of October 3, 2025, of which $59.7 million, if recognized, would impact the effective tax rate and $28.9 million would result in an adjustment to the DTL or payable.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits follows (in thousands):
 October 3, 2025September 27, 2024
Balance, beginning of year$70,188 $69,128 
Additions based on tax positions taken in the current year— 754 
Additions for tax positions taken in prior years22,144 3,370 
Reductions for remeasurements, settlements and payments
— (1,493)
Reductions due to statute expiration(3,727)(1,571)
Balance, end of year$88,605 $70,188 
The Company has $18.4 million and $14.1 million accrued for interest and penalties as of October 3, 2025 and September 27, 2024, respectively, on the Consolidated Balance Sheets and recorded $4.3 million, $2.8 million and $1.7 million in interest and penalties during fiscal 2025, fiscal 2024 and fiscal 2023, respectively in the Consolidated Statements of Income. Interest and penalties related to unrecognized tax benefits are recorded in "Provision for Income Taxes from Continuing Operations" on the Consolidated Statements of Income. The Company has $9.6 million of FTCs that will reduce the gross unrecognized tax benefit.
Unrecognized tax benefits are not expected to significantly change within the next 12 months.
Generally, a number of years may elapse before a tax reporting year is audited and finally resolved. With few exceptions, the Company is no longer subject to United States federal, state or local examinations by tax authorities before 2015. While it is often difficult to predict the final outcome or the timing of or resolution of a particular tax matter, the Company does not anticipate any adjustments resulting from United States federal, state or foreign tax audits that would result in a material change to the financial condition or results of operations. Adequate amounts are established for any adjustments that may result from examinations for tax years after 2015. However, an unfavorable settlement of a particular issue would require use of the Company's cash and cash equivalents.
In response to the development of the global economy toward digitalization, the Organization for Economic Co-operation & Development (“OECD”) released the Pillar Two Global Anti-Base Erosion Model Rules (“Pillar Two”). Under Pillar Two, multinational companies with consolidated revenue greater than €750 million will be subject to a minimum effective tax rate of 15.0% within each respective country. Guided by the OECD framework, more than 140 countries have agreed to enact Pillar Two legislation. The Company currently operates in several countries which are subject to Pillar Two. Based on an analysis of the Pillar Two transitional safe harbors, the Company concluded that Pillar Two does not have an effect on the consolidated financial statements. The Company will continue to monitor legislative developments and evaluate financial results for changes in the expected impact.
On July 4, 2025, the One Big Beautiful Bill (“OBBB”) Act was signed into law. The OBBB Act contains a broad range of tax reform measures, including modification to limitations on deductions for interest expense, reinstatement of elective 100% first year bonus depreciation and immediate expensing of domestic research and development expenditures. The new law has a range of effective dates, with certain changes taking effect in fiscal year 2025 and others that become effective in future periods. The new law did not have a material effect on the consolidated financial statements. In regard to the future period applicable clauses, the Company expects the legislation to reduce future federal cash taxes and does not expect these provisions to have a material impact on the effective tax rate.