XML 30 R18.htm IDEA: XBRL DOCUMENT v3.26.1
Income Taxes
3 Months Ended
Mar. 29, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company’s effective tax rate was approximately 28.9% for the three months ended March 29, 2026 and approximately 25.5% for the three months ended March 30, 2025. The change in the effective rate was primarily due to an increase in the amount of excess tax benefits from stock-based compensation recognized as a component of Income tax benefit in the Company’s Consolidated Statements of Operations. The Company recognized excess tax benefits of $0.2 million for the three months ended March 29, 2026, and tax deficiencies of $0.3 million for the three months ended March 30, 2025. The Company’s effective tax rate differs from its statutory rate based on a variety of factors, including overall profitability, the geographical mix of income taxes, and the related tax rates in the jurisdictions in which it operates.

The Company provides a valuation allowance against deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The assessment considers all available positive and negative evidence and is measured quarterly. The Company maintains a valuation allowance against certain state deferred tax assets where sufficient negative evidence exists to require a valuation allowance. During the three months ended March 29, 2026 and March 30, 2025, the Company recorded no material increases or decreases to the valuation allowance against deferred tax assets.

Tax Equity Investments:

In November 2025 and 2024, the Company entered into agreements to become a limited partner in a tax-advantaged limited partnership investing in approved qualified renewable energy projects. The Company’s tax equity investments qualified for application of the proportional amortization method. During the years ended December 28, 2025 and December 29, 2024, the Company amortized the initial cost of the investments, inclusive of the delayed equity contributions, in proportion to the income tax credits and other income tax benefits that were allocated to the Company. As of March 29, 2026 and December 28, 2025, the carrying values of the tax equity investments were $3.0 million and $3.0 million, respectively, and were recorded in Other assets on the Consolidated Balance Sheets. There was no impairment of the Company’s tax equity investments during the three months ended March 29, 2026 and March 30, 2025.