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Income Taxes
 12 Months Ended
Dec. 28, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

Note 23. Income Taxes

The company’s provision for income tax expense (benefit) consists of the following for Fiscal 2024, 2023, and 2022 (amounts in thousands):

 

 

 

Fiscal 2024

 

 

Fiscal 2023

 

 

Fiscal 2022

 

Current Taxes:

 

 

 

 

 

 

 

 

 

Federal

 

$

41,406

 

 

$

63,351

 

 

$

54,462

 

State

 

 

8,466

 

 

 

13,680

 

 

 

14,409

 

 

 

 

49,872

 

 

 

77,031

 

 

 

68,871

 

Deferred Taxes:

 

 

 

 

 

 

 

 

 

Federal

 

 

24,029

 

 

 

(36,474

)

 

 

3,508

 

State

 

 

6,925

 

 

 

(6,866

)

 

 

(2,062

)

 

 

 

30,954

 

 

 

(43,340

)

 

 

1,446

 

Income tax expense

 

$

80,826

 

 

$

33,691

 

 

$

70,317

 

Income tax expense differs from the amount computed by applying the applicable U.S. federal income tax rate of 21% because of the effect of the following items for Fiscal 2024, 2023 and 2022 (amounts in thousands):

 

 

 

Fiscal 2024

 

 

Fiscal 2023

 

 

Fiscal 2022

 

Tax at U.S. federal income tax rate

 

$

69,078

 

 

$

32,992

 

 

$

62,729

 

State income taxes, net of federal income tax benefit

 

 

12,158

 

 

 

5,383

 

 

 

9,754

 

Net share-based windfalls

 

 

97

 

 

 

(1,960

)

 

 

(2,219

)

Excess executive compensation

 

 

3,175

 

 

 

1,950

 

 

 

2,218

 

Tax credits

 

 

(2,692

)

 

 

(2,655

)

 

 

(2,263

)

Other

 

 

(990

)

 

 

(2,019

)

 

 

98

 

Income tax expense

 

$

80,826

 

 

$

33,691

 

 

$

70,317

 

In Fiscal 2024, 2023 and 2022, the most significant difference in the effective rate and the statutory rate was state income taxes.

Deferred tax assets (liabilities) are comprised of the following (amounts in thousands):

 

 

 

December 28, 2024

 

 

December 30, 2023

 

Self-insurance

 

$

7,593

 

 

$

8,478

 

Compensation and employee benefits

 

 

10,844

 

 

 

10,292

 

Deferred income

 

 

1,976

 

 

 

2,643

 

Loss and credit carryforwards

 

 

13,065

 

 

 

13,111

 

Equity-based compensation

 

 

7,554

 

 

 

8,636

 

Legal accrual

 

 

5,855

 

 

 

33,407

 

Financing and operating lease right-of-use liabilities

 

 

79,868

 

 

 

72,011

 

Capitalized software and research and development costs

 

 

32,484

 

 

 

32,519

 

Other

 

 

12,579

 

 

 

9,975

 

Valuation allowance

 

 

(3,387

)

 

 

(1,586

)

Deferred tax assets

 

 

168,431

 

 

 

189,486

 

Depreciation

 

 

(72,503

)

 

 

(77,931

)

Intangibles

 

 

(132,506

)

 

 

(125,555

)

Financing and operating lease right-of-use assets

 

 

(78,723

)

 

 

(69,987

)

Hedging

 

 

(2,371

)

 

 

(322

)

Pension and postretirement benefits

 

 

(137

)

 

 

(143

)

Other

 

 

(6,424

)

 

 

(6,793

)

Deferred tax liabilities

 

 

(292,664

)

 

 

(280,731

)

Net deferred tax liability

 

$

(124,233

)

 

$

(91,245

)

 

In Fiscal 2023, the company recorded a deferred tax asset, in the amount of $33.4 million, related to an accrued legal settlement related to the repurchase of distribution rights. During Fiscal 2024, a significant portion of this deferred tax asset has been reversed, and the remaining balance is expected to reverse during Fiscal 2025. See Note 24, Commitments and Contingencies, for details of this settlement.

The company has a deferred tax asset of $1.9 million related to a federal net operating loss carryforward which we expect to fully utilize before expiration. Additionally, the company and various subsidiaries have a deferred tax asset of $3.8 million related to state net operating loss carryforwards with expiration dates from Fiscal 2025 through Fiscal 2044, and $7.4 million for credit carryforwards with expiration dates from Fiscal 2028 through Fiscal 2034. The utilization of a portion of these state carryforwards could be limited in the future; therefore, a valuation allowance of $3.4 million has been recorded. Should the company determine at a later date that certain of these losses which have been reserved for may be utilized, a benefit may be recognized in the Consolidated Statements of Income. Likewise, should the company determine at a later date that certain of these net operating losses for which a deferred tax asset has been recorded may not be utilized, a charge to the Consolidated Statements of Income may be necessary. See Note 2, Summary of Significant Accounting Policies, for the deferred tax asset valuation allowance analysis.

The company did not have any unrecognized tax benefits for fiscal years 2024, 2023 and 2022. At this time, we do not anticipate significant changes to the amount of gross unrecognized tax benefits over the next twelve months.

The company accrues interest expense and penalties related to income tax liabilities as a component of income before taxes. No accrual of penalties is reflected on the company’s balance sheet as the company believes the accrual of penalties is not necessary based upon the merits of its income tax positions. The company had no accrued interest balance at December 28, 2024 and December 30, 2023.

The company defines the federal jurisdiction as well as various state jurisdictions as “major” jurisdictions. The company is no longer subject to federal examinations for years prior to 2021, and with limited exceptions, for years prior to 2020 in state jurisdictions.