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Income Taxes | 9 Months Ended
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Sep. 30, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes We calculate our interim income tax provision in accordance with ASC Topic 270, “Interim Reporting,” and ASC Topic 740, “Accounting for Income Taxes.” At the end of each interim period, we estimate our annual effective tax rate and apply that rate to our ordinary quarterly earnings to calculate the tax related to ordinary income. The tax effects for other items that are excluded from ordinary income are discretely calculated and recognized in the period in which they occur. We recorded an income tax benefit of $7.6 million and $19.4 million for the three months ended September 30, 2025 and 2024, respectively. As a percentage of pre-tax income, our effective tax rate was 34.2% and 84.3% for the three months ended September 30, 2025 and 2024, respectively. In the three months ended September 30, 2025, the primary difference between the statutory rate and the effective rate is due to U.S. and foreign minimum taxes on foreign earnings offset by a benefit from a favorable audit settlement at one of our foreign subsidiaries. In the three months ended September 30, 2024, the primary difference between the statutory rate and the effective rate is due to the impact of valuation allowances accrued year-to-date associated with the forecasted mix of jurisdictional earnings, as well as forecasted U.S. income tax credits for the full year. We recorded an income tax provision of $15.7 million and an income tax benefit of $24.1 million for the nine months ended September 30, 2025 and 2024, respectively. As a percentage of pre-tax income, our effective tax rate was 67.0% and (58.9)% for the nine months ended September 30, 2025 and 2024, respectively. In the nine months ended September 30, 2025, the primary difference between the statutory rate and the effective rate is due to the mix of U.S. and foreign earnings, as well as impacts associated with the sale of the Jack Wolfskin business. In the nine months ended September 30, 2024, the primary difference between the statutory rate and the effective rate is due to the impact of valuation allowances accrued year-to-date associated with the forecasted mix of jurisdictional earnings, as well as forecasted U.S. income tax credits for the full year. As of September 30, 2025, the gross liability for income taxes associated with uncertain tax positions was $19.9 million. Of this amount, $12.4 million would benefit our condensed consolidated financial statements and effective income tax rate if favorably settled. We recognize interest and penalties related to income tax matters in income tax expense. As of September 30, 2025, we have released uncertain tax positions related to transfer pricing transactions between our subsidiaries due to a favorable tax settlement in a foreign jurisdiction. We recorded a benefit of $3.8 million during the period related to the release. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. Although the OBBBA has not had a material impact on the result of operations during this period of enactment, we continue to assess its impact on our consolidated financial statements. The impact of the OBBBA on us will depend on many factors, including future regulatory and Internal Revenue Service guidance and other interpretations of the OBBBA. We will continue to analyze the effect of the OBBBA and such other guidance on our tax positions and to monitor developments.

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