Quarterly report [Sections 13 or 15(d)]

Income Taxes

v3.26.1
Income Taxes
 6 Months Ended
Apr. 04, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

Note 11—Income Taxes

Our effective income tax rate was (0.8)% for the six months ended April 4, 2026, compared to 19.9% for the six months ended March 29, 2025. For the six months ended April 4, 2026, the Company’s provision for income taxes is based upon an estimated annual tax rate for the year applied to ordinary income. The differences between the statutory rate and our effective rate for the six months ended April 4, 2026 were primarily attributable to state taxes and change in valuation allowance. The difference between the statutory rate and our effective rate for the six months ended March 29, 2025 was primarily attributable to state taxes and change in valuation allowance related to our interest expense limitation. Our effective income tax rate can fluctuate due to factors including valuation allowances, changes in tax laws, federal and state audits, and the impact of other discrete items.

For the six months ended March 29, 2025, we utilized the discrete effective tax rate method, as allowed by ASC 740- 270-30-18, “Income Taxes—Interim Reporting,” to calculate our interim income tax provision. The discrete method treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis. The Company believed that the use of this discrete method was more appropriate than the annual effective tax rate method due to the sensitivity of tax adjustments to marginal pre-tax book profitability anticipated for the year.