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v3.25.1

Income Taxes | 12 Months Ended
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Mar. 29, 2025
Income Taxes [Abstract] |
Income Taxes | Note 8 – Income Taxes
(Benefit from) Provision for Income Taxes |  |  |  |  |  |  |  |  |
(thousands) |  |  | 2025 |  |  | 2024 |  |  | 2023
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | (731) |  | $ | 4,910 |  | $ | 11,174
State |  |  | (139) |  |  | 368 |  |  | 2,703
Total current |  |  | (870) |  |  | 5,278 |  |  | 13,877
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (9) |  |  | 5,649 |  |  | 1,855
State |  |  | 148 |  |  | 3,382 |  |  | 2,387
Total deferred |  |  | 139 |  |  | 9,031 |  |  | 4,242
Total (benefit from) provision for income taxes |  | $ | (731) |  | $ | 14,309 |  | $ | 18,119
Income Tax Rate Reconciliation |  | 2025 |  |  | 2024 |  |  | 2023 |
Expected U.S. federal income taxes at statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal tax benefit |  | 8.0 |  |  | 5.3 |  |  | 4.9 |
Tax adjustments (a) |  | (7.0) |  |  | 0.3 |  |  | 6.1 |
Valuation allowance |  | (7.5) |  |  | 0.3 |  |  | — |
Share-based compensation |  | (8.1) |  |  | 1.0 |  |  | 0.6 |
Tax credits |  | 9.4 |  |  | (1.1) |  |  | (0.6) |
Nondeductible items |  | (4.0) |  |  | 0.9 |  |  | 0.5 |
Other |  | 0.6 |  |  | (0.1) |  |  | (0.8) |
Effective tax rate |  | 12.4 | % |  | 27.6 | % |  | 31.7 | %
(a)The 2023 adjustments reflect expense primarily due to the sale of our wholesale tire locations and tire distribution assets as well as the revaluation of deferred tax balances due to changes in the mix of pre-tax income in various U.S. state jurisdictions because of the sale.
Net Deferred Tax Asset/(Liability) |  |  |  |  |  |
(thousands) |  |  | March 29, 2025 |  |  | March 30, 2024
Deferred tax assets: |  |  |  |  |  |
Lease liabilities |  | $ | 143,627 |  | $ | 155,158
Insurance accrual |  |  | 10,590 |  |  | 11,304
Other |  |  | 19,763 |  |  | 15,060
Total gross deferred tax assets |  |  | 173,980 |  |  | 181,522
Valuation allowance |  |  | (595) |  |  | (162)
Total deferred tax assets |  |  | 173,385 |  |  | 181,360
Deferred tax liabilities: |  |  |  |  |  |
Leased assets |  |  | (109,156) |  |  | (120,479)
Goodwill |  |  | (89,572) |  |  | (79,895)
Property and equipment |  |  | (9,259) |  |  | (16,099)
Other |  |  | (2,509) |  |  | (1,849)
Total deferred tax liabilities |  |  | (210,496) |  |  | (218,322)
Total net deferred tax liability |  | $ | (37,111) |  | $ | (36,962)
We have $1.7 million and $8.2 million of federal and state net operating loss carryforwards, respectively, available as of March 29, 2025. The federal net operating loss carryforward has an unlimited carryforward period, and the state net operating loss carryforward periods expire in varying amounts through 20 45. We evaluate the realizability of our deferred tax assets on a quarterly basis and establish valuation allowances when it is more likely than not that all or a portion of a deferred tax asset may not be realized. As of March 29, 2025, we concluded, based on the weight of all available positive and negative evidence, that most of our deferred tax assets are more likely than not to be realized, except the estimated amount of future state net operating loss assets in certain jurisdictions that will expire unutilized.
Changes in Liability for Unrecognized Tax Benefits |  |  |  |  |  |  |  |  |
(thousands) |  |  | 2025 |  |  | 2024 |  |  | 2023
Balance at beginning of period |  | $ | 2,385 |  | $ | 3,709 |  | $ | 5,006
Additions based on tax positions related to the current year |  |  | — |  |  | — |  |  | 97
Additions for tax positions of prior years |  |  | 404 |  |  | 67 |  |  | —
Reductions for tax positions of prior years |  |  | — |  |  | — |  |  | (224)
Settlements for tax positions of prior years |  |  | (675) |  |  | — |  |  | —
Lapse in statutes of limitation |  |  | (715) |  |  | (1,391) |  |  | (1,170)
Balance at end of period |  | $ | 1,399 |  | $ | 2,385 |  | $ | 3,709
The total amount of unrecognized tax benefits was $1.4 million, $2.4 million, and $3.7 million at March 29, 2025, March 30, 2024, and March 25, 2023, respectively, the majority of which, if recognized, would affect the effective tax rate. In the normal course of business, Monro provides for uncertain tax positions and the related interest and penalties and adjusts its unrecognized tax benefits and accrued interest and penalties accordingly. We did no t have any interest and penalties associated with uncertain tax benefits accrued as of March 29, 2025 or March 30, 2024. We file U.S. federal income tax returns and income tax returns in certain state jurisdictions. Our U.S. federal income tax returns for 2022 – 2024 and various state tax years remain subject to income tax examinations by tax authorities.

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