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INCOME TAXES (Tables) | 12 Months Ended
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Jun. 30, 2021
Income Tax Disclosure [Abstract] |
Components of loss before income taxes | The components of loss from continuing operations before income taxes are as follows:
|  | Fiscal Years
|  | 2021 |  | 2020 |  | 2019
|  | (Dollars in thousands)
Loss before income taxes |  |  |  |  |  |
U.S. |  | $ | (153,962) |  |  | $ | (165,260) |  |  | $ | (17,513) |
International |  | 35,203 |  |  | (11,553) |  |  | (4,754) |
|  | $ | (118,759) |  |  | $ | (176,813) |  |  | $ | (22,267) |
Benefit for income taxes | The benefit for income taxes consists of:
|  | Fiscal Years
|  | 2021 |  | 2020 |  | 2019
|  | (Dollars in thousands)
Current: |  |  |  |  |  |
U.S. |  | $ | (620) |  |  | $ | (925) |  |  | $ | (519) |
International |  | (1,421) |  |  | 238 |  |  | 1,069 |
Deferred: |  |  |  |  |  |
U.S. |  | (3,701) |  |  | (3,353) |  |  | (2,303) |
International |  | 314 |  |  | (579) |  |  | (392) |
|  | $ | (5,428) |  |  | $ | (4,619) |  |  | $ | (2,145) |
Benefit for income taxes, reconciliation to applicable U.S. statutory rate | The benefit for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory rate to loss from continuing operations before income taxes, as a result of the following:
|  | Fiscal Years
|  | 2021 |  | 2020 |  | 2019
U.S. statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal income tax benefit |  | 7.6 |  |  | 4.0 |  |  | 0.5 |
Valuation allowance (1) |  | (58.3) |  |  | (29.4) |  |  | (14.5) |
Foreign income taxes at other than U.S. rates |  | 8.5 |  |  | (0.6) |  |  | 0.9 |
Work opportunity tax credits |  | 0.2 |  |  | 0.4 |  |  | 7.2 |
Uncertain tax positions |  | 0.2 |  |  | (6.2) |  |  | 1.0 |
Stock-based compensation |  | (0.6) |  |  | 0.1 |  |  | 2.2 |
Capital loss |  | — |  |  | 15.0 |  |  | — |
Loss on investment in Luxembourg |  | 26.8 |  |  | — |  |  | — |
Other, net (2) |  | (0.8) |  |  | (1.7) |  |  | (8.7) |
Effective tax rate |  | 4.6 | % |  | 2.6 | % |  | 9.6 | %
_______________________________________________________________________________ (1)See Note 1 to the Consolidated Financial Statements. (2)The (0.8)% of Other, net in fiscal year 2021 does not include the rate impact of any items in excess of 5% of computed tax. The (1.7)% of Other, net in fiscal year 2020 includes the rate impact of goodwill derecognition and impairment and miscellaneous items of (1.2)% and (0.5)%, respectively. The (8.7)% of Other, net in fiscal year 2019 includes the rate impact of goodwill derecognition and miscellaneous items of (5.9)% and (2.8)%, respectively.
Components of the net deferred tax assets and liabilities | The components of the net deferred tax assets and liabilities are as follows:
|  | June 30,
|  | 2021 |  | 2020
|  | (Dollars in thousands)
Deferred tax assets: |  |  |  |
Payroll and payroll related costs |  | $ | 8,523 |  |  | $ | 9,903 |
Net operating loss carryforwards |  | 145,823 |  |  | 64,402 |
Tax credit carryforwards |  | 37,433 |  |  | 37,072 |
Capital loss carryforwards |  | 14,179 |  |  | 14,978 |
Deferred franchise fees |  | 10,153 |  |  | 9,342 |
Operating lease liabilities |  | 154,255 |  |  | 202,940 |
Financing lease liabilities |  | — |  |  | 7,157 |
Other |  | 12,608 |  |  | 8,214 |
Subtotal |  | 382,974 |  |  | 354,008 |
Valuation allowance |  | (192,522) |  |  | (122,447) |
Total deferred tax assets |  | $ | 190,452 |  |  | $ | 231,561 |
Deferred tax liabilities: |  |  |  |
Goodwill and intangibles |  | $ | (43,375) |  |  | $ | (40,904) |
Operating lease assets |  | (150,573) |  |  | (197,304) |
Other |  | (7,154) |  |  | (7,269) |
Total deferred tax liabilities |  | (201,102) |  |  | (245,477) |
Net deferred tax liability |  | $ | (10,650) |  |  | $ | (13,916) |
Unrecognized tax benefits | A rollforward of the unrecognized tax benefits is as follows:
|  | Fiscal Years
|  | 2021 |  | 2020 |  | 2019
|  | (Dollars in thousands)
Balance at beginning of period |  | $ | 14,045 |  |  | $ | 2,763 |  |  | $ | 3,027 |
Additions based on tax positions related to the current year, primarily salon vendition activity and tax positions related to a capital loss |  | 292 |  |  | 11,985 |  |  | 287 |
Additions/(reductions) based on tax positions of prior years |  | 50 |  |  | (223) |  |  | (154) |
Reductions on tax positions related to the expiration of the statute of limitations |  | (529) |  |  | (480) |  |  | (397) |
Balance at end of period |  | $ | 13,858 |  |  | $ | 14,045 |  |  | $ | 2,763 |

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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=121826272&loc=SL6600010-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32840-109319 + Details
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