Income Taxes

3 Months Ended

Mar. 29, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision/(benefit) for income taxes and the effective income tax rate are as follows ($ in millions):

	Three Months Ended
	March 29, 2026			March 30, 2025
Federal, state and foreign income tax expense/(benefit)	$	(2.1)		$	0.9
Effective income tax rate	(21.72)		%	17.26		%

The Company’s effective tax rate for the three months ended March 29, 2026 decreased to a benefit of 21.72% from a provision of 17.26% in the prior year period principally due to increased tax benefits related to stock-based compensation. The provision for income taxes for the three months ended March 29, 2026 and the three months ended March 30, 2025 included a benefit of $7.3 million and $1.6 million, respectively, for stock compensation related items.

The Company calculates its interim income tax provision in accordance with ASC Topic 270, “Interim Reporting,” and ASC Topic 740, “Accounting for Income Taxes.” The Company calculated the provision for income taxes during the interim reporting period by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period.

As of March 29, 2026, the Company had $28.8 million of unrecognized tax benefits. Included in the balance of unrecognized tax benefits at March 29, 2026 are $23.6 million that, if recognized, would impact the Company’s effective income tax rate.

The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. For the three months ended March 29, 2026 and March 30, 2025, the Company recorded no material expense related to the increase in interest and penalties. For the three months ended March 29, 2026 and March 30, 2025, there was no material benefit recorded related to the removal of interest and penalties.

The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenue and profits above certain thresholds (referred to as Pillar 2). Although the U.S. has not enacted legislation to implement Pillar 2, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2. The OECD issued new administrative guidance on January 5, 2026, with respect to Pillar 2 which modifies key aspects of the framework for countries to enact in their own laws. This new guidance reaffirms we do not expect Pillar 2 to have a material impact on our effective tax rate or our financial results or cash flows.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted. Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of U.S. based research and development expenditures under Internal Revenue Code (IRC) Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes. The Company recognized the income tax effects of the OBBBA in the quarter it was enacted, and continues to recognize the tax effects, which were not material, in its quarter ended March 29, 2026.