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Income Tax (Tables)

12 Months Ended

Jan. 01, 2022

Income Tax Disclosure [Abstract]

Summary of Income Tax Provision for Continuing Operations

The income tax provision for continuing operations is made up of the following components:

	2021					2020					2019
(In thousands)	(52 Weeks)					(53 Weeks)					(52 Weeks)
Current income tax expense (benefit):
Federal	$		5,436			$		1,844			$		(899	)
State			1,867					5,149					817
Total current income tax expense (benefit)			7,303					6,993					(82	)
Deferred income tax expense (benefit):
Federal			14,877					5,637					126
State			2,726					(3,180	)				(2,386	)
Total deferred income tax expense (benefit)			17,603					2,457					(2,260	)
Total income tax expense (benefit)	$		24,906			$		9,450			$		(2,342	)

Reconciliation of Statutory Federal Rate to Effective Rate

A reconciliation of the statutory federal rate to the effective rate is as follows:

	2021					2020					2019
	(52 Weeks)					(53 Weeks)					(52 Weeks)
Federal statutory income tax rate		21.0		%			21.0		%			21.0		%
Stock compensation		0.0					0.7					7.2
Non-deductible expenses		1.7					1.9					0.8
Change in tax contingencies		0.0					0.9					—
Charitable product donations		(0.1	)				(0.2	)				(5.6	)
Other, net		(0.3	)				(1.0	)				(2.4	)
Federal loss carryback (a)		—					(11.9	)				—
State taxes, net of federal income tax benefit		3.8					1.7					(36.1	)
Tax credits		(0.9	)				(2.0	)				(50.4	)
Effective income tax rate		25.2		%			11.1		%			(65.5	)	%

(a) On March 27, 2020, the U.S. government enacted tax legislation to provide economic stimulus and support businesses and individuals during the COVID-19 pandemic, referred to as the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. In connection with the CARES Act, the Company recorded net discrete income tax benefits of $10.1 million in 2020 associated with the additional deductibility of certain expenses combined with provisions which enable companies to carry back tax losses to years prior to the enactment of the Tax Cuts and Jobs Act (“Tax Reform”), where the federal statutory income tax rate was 35%. As a result of carrying back losses to previous tax years, the Company recorded $0.8 million in expense to reinstate tax contingencies which had previously expired, included in the “Change in tax contingencies” line in the table above.

Summary of Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities resulting from temporary differences as of January 1, 2022 and January 2, 2021 are as follows:

	January 1,					January 2,
(In thousands)	2022					2021
Deferred tax assets:
Employee benefits	$		25,358			$		33,115
Accrued workers' compensation			1,943					1,834
Allowance for doubtful accounts			1,317					1,688
Intangible assets			—					2,203
Restructuring			333					377
Deferred revenue			2,083					1,679
Stock warrant			1,258					1,896
Lease liabilities			85,781					87,606
Accrued insurance			893					964
State net operating loss carryforwards (a)			6,576					6,175
All other			2,338					2,481
Total deferred tax assets			127,880					140,018
Deferred tax liabilities:
Property and equipment			47,240					47,472
Lease assets			76,589					77,673
Inventory			35,382					33,531
Goodwill			30,044					26,025
Intangible assets			187					—
All other			2,130					1,045
Total deferred tax liabilities			191,572					185,746
Net deferred tax liability	$		63,692			$		45,728

(a) As of January 1, 2022, the Company’s state net operating loss carryforwards in various taxing jurisdictions expire in tax years 2022 through 2041 if not utilized.

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(In thousands)	2021					2020
Balance at beginning of year	$		1,317			$		1,425
Gross increases - tax positions taken in prior years			84					910
Gross decreases - tax positions taken in prior years			(11	)				(1,000	)
Lapsed statutes of limitations			(170	)				(18	)
Balance at end of year	$		1,220			$		1,317

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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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.

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