Income Taxes

9 Months Ended

Sep. 26, 2025

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company’s effective tax rate for the three and nine months ended September 26, 2025 was 24.4% and 23.2%, respectively, as compared to 18.3% and 18.6% for the three and nine months ended September 27, 2024, respectively. The increase in the effective tax rate for the three months ended September 26, 2025 as compared to the comparable period in the prior year was primarily due to an increase in foreign earnings taxed at higher rates than the U.S. federal statutory rate and favorable changes in uncertain tax position reserves during the three months ended September 27, 2024. The increase in the effective tax rate for the nine months ended September 26, 2025 as compared to the comparable period in the prior year was primarily due to favorable impacts related to uncertain tax position reserves and business reorganizations and divestitures during the nine months ended September 27, 2024.

The Company’s effective tax rate for the three and nine months ended September 26, 2025 differs from the U.S. federal statutory rate of 21% primarily due to the effect of state taxes, non-U.S. income taxed at different rates than the U.S. federal statutory rate, foreign derived intangible income, and tax credits. The Company’s effective tax rate for the three and nine months ended September 27, 2024 differs from the U.S. federal statutory rate of 21% primarily due to the effect of state taxes, tax credits, changes in uncertain tax position reserves and the impact of the divestiture of the Coats business.

One Big Beautiful Bill

On July 4, 2025, the One Big Beautiful Bill (“OBBB”) was signed into law. The OBBB includes several changes to corporate taxation, notably modifications to capitalization of research and development expenses and accelerated depreciation of fixed assets. The Company has reflected the impact of the enacted changes in its financial statements for the three and nine months ended September 26, 2025. The Company currently expects a $60.0 million reduction in cash tax payments due to the accelerated deduction of previously capitalized research and development expenses that can now be deducted under the OBBB. The other provisions within the OBBB are not expected to have a material impact.