Note L - Income Taxes

3 Months Ended

Jun. 28, 2026

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE L – INCOME TAXES

The effective income tax rates for the thirteen weeks ended June 28, 2026 and June 29, 2025 were 27.4% and 27.2%, respectively. The effective income tax rate for the thirteen weeks ended June 28, 2026 reflected $3,334 of income tax expense recorded on $12,163 of pre-tax income. The effective income tax rate for the thirteen weeks ended June 29, 2025 reflected $3,329 of income tax expense recorded on $12,257 of pre-tax income. The effective tax rates are higher than the United States Federal statutory rates primarily due to state and local taxes, as well as non-deductible compensation under the Internal Revenue Code Section 162(m). The effective income tax rate for the thirteen weeks ended June 28, 2026 included an unfavorable discrete tax adjustment of 0.6% for non-deductible transaction costs offset, in part, by a favorable discrete tax adjustment of 0.4% for stock compensation activity.

The amount of unrecognized tax benefits included in Other liabilities at June 28, 2026 and March 29, 2026 was $375 and $362, respectively, all of which would impact the Company’s effective rate, if recognized. As of June 28, 2026 and March 29, 2026, the Company had approximately $372 and $355, respectively, of accrued interest and penalties in connection with unrecognized tax benefits.

The American Rescue Plan Act (“ARPA”), among other things, includes provisions to expand the IRC Section 162(m) disallowance for deduction of certain compensation paid by publicly held corporations. Effective tax years starting after December 31, 2026 (March 29, 2027 for the Company), ARPA expands the limitation to cover the next five most highly compensated employees. We continue to evaluate the potential impact ARPA may have on our operations and consolidated financial statements in future periods.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, and the business interest expense limitation. The OBBBA did not have a material impact to our provision for income taxes for the thirteen weeks ended June 28, 2026. The Company is continuing to evaluate the full year impact of the OBBBA and, based on our preliminary analysis, we do not anticipate a material effect on our consolidated financial statements for the fiscal year ending March 28, 2027.