Income Taxes

6 Months Ended

Jun. 27, 2025

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company’s effective tax rates of 35.1% and 36.3% for the three and six months ended June 27, 2025, respectively, differ from the U.S. federal statutory rate of 21.0% primarily due to a shift in the geographical mix of earnings and the relative impact of a valuation allowance against certain U.S. interest carryforwards. The Company’s effective tax rates of 1.2% and 0.2% for the three and six months ended June 28, 2024, respectively, differ from the U.S. federal statutory rate of 21.0% primarily due to the impact of nondeductible impairment charges for goodwill and intangible assets and the impact of a valuation allowance against certain U.S. interest carryforwards.

The Company establishes valuation allowances for its deferred tax assets if it is more likely than not that some or all of its deferred tax assets will not be realized. In assessing whether it is more likely than not that deferred tax assets will be realized, the Company considers all available evidence, both positive and negative, including its recent cumulative earnings experience and expectations of future taxable income of the appropriate character by taxing jurisdiction, tax attribute carryback and carryforward periods, reversal patterns of existing deferred tax liabilities, and prudent and feasible tax planning strategies, however, there can be no assurance that the Company’s deferred tax assets will be fully realized. At June 27, 2025, the Company maintains valuation allowances primarily against certain net operating losses and the portion of its U.S. nondeductible interest expense carryforward that it believes it will more likely than not be unable to realize.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company is currently assessing the impact on its consolidated financial statements.