Income taxes

9 Months Ended

Mar. 25, 2022

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

As of March 25, 2022 and June 25, 2021, the liability for uncertain tax positions including accrued interest and penalties was $1.5 million and $0.9 million, respectively. The Company expects the estimated amount of liability associated with its uncertain tax positions to increase within the next 12 months due to additional provisions on uncertain tax positions from one of its subsidiaries and interest on these positions.

The Company files income tax returns in the United States and foreign tax jurisdictions. The tax years from 2015 to 2021 remain open to examination by U.S. federal and state, and foreign tax authorities. The Company’s income tax is recognized based on the best estimate of the expected annual effective tax rate for the full financial year of each entity in the Company, adjusted for discrete items arising in that quarter. If the Company’s estimated annual effective tax rate changes, the Company makes a cumulative adjustment in that quarter.

The effective tax rate for the Company for the three months ended March 25, 2022 and March 26, 2021 was 5.4% and 4.1%, respectively, of net income. The increase was primarily due to the fact that the Company had more income subject to tax during the third quarter of fiscal year 2022 as compared to the same period in fiscal year 2021.

The effective tax rate for the Company for the nine months ended March 25, 2022 and March 26, 2021 was 3.2% and 3.8%, respectively, of net income. The decrease was primarily due to the fact that the Company had less income subject to tax during the first nine months of fiscal year 2022 as compared to the same period in fiscal year 2021.