Income Taxes

9 Months Ended

Oct. 02, 2011

Income Taxes [Abstract]

Income Taxes

Note 11 — Income Taxes

The Company’s effective tax rates for the twelve week periods ended October 2, 2011 and October 3, 2010 were 31.0% and 35.9%, respectively. The Company’s effective tax rates for the forty week periods ended October 2, 2011 and October 3, 2010 were 35.1% and 31.7%, respectively. The effective rate differs from statutory rates due to adjustments to estimated tax reserves and permanent differences.

In the third quarter of 2011, the Company recorded $0.2 million in favorable return to provision adjustments and adjustments to estimated tax reserves and recognized $0.3 million in income tax credits. Excluding these adjustments, the effective rates for the twelve and forty week periods ended October 2, 2011 was 36.9% and 36.8%, respectively.

In the second quarter of 2010, the Company recorded a tax benefit of $1.4 million related to the completion a federal tax audit. Excluding the impact of the IRS audits, the effective tax rate for the forty week period ended October 3, 2010 was 36.9%.

The amount of unrecognized tax benefits was approximately $2.1 million as of October 2, 2011 and December 26, 2010, of which approximately $0.6 million, if recognized, would affect the effective income tax rate. The Company has unrecognized tax benefits of approximately $0.1 million which the Company would recognize within the next twelve months if the statute of limitations were to expire.

The Company files income tax returns in the United States and various state jurisdictions. The U.S. federal tax years 2008 through 2010 are open to audit, with 2009 currently under examination.