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Income Taxes
 3 Months Ended
Oct. 02, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

6.  Income Taxes

The provision for income taxes and effective tax rate were as follows:

 

 

 

For the Three Months Ended

 

 

 

October 2, 2022

 

 

September 26, 2021

 

Provision for income taxes

 

$

2,734

 

 

$

4,413

 

Effective tax rate

 

 

(53.6

)%

 

 

33.7

%

Income Tax Expense

 

UNIFI’s provision for income taxes for the three months ended October 2, 2022 and September 26, 2021 was calculated by applying the estimated annual effective tax rate to year-to-date pre-tax book income and adjusting for discrete items that occurred during the period.

The effective tax rate for the three months ended October 2, 2022 was lower than the U.S. federal statutory rate primarily due to an increase in the valuation allowance for deferred tax assets and current U.S. tax on global intangible low-tax income (“GILTI”).    

The effective tax rate for the three months ended September 26, 2021 was higher than the U.S. federal statutory rate primarily due to earnings taxed at higher rates in foreign jurisdictions, deferred tax on unremitted earnings, and foreign withholding taxes.

Unrecognized Tax Benefits

UNIFI regularly assesses the outcomes of both completed and ongoing examinations to ensure that its provision for income taxes is sufficient. Certain returns that remain open to examination have utilized carryforward tax attributes generated in prior tax years, including net operating losses, which could potentially be revised upon examination.