INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Components of loss before income taxes

The components of loss from continuing operations before income taxes are as follows:

	Fiscal Years
	2020		2019		2018
	(Dollars in thousands)
Loss before income taxes
U.S.	$	(165,260)	$	(17,513)	$	(16,604)
International	(11,553)		(4,754)		6,413
	$	(176,813)	$	(22,267)	$	(10,191)

Benefit for income taxes

The benefit for income taxes consists of:

	Fiscal Years
	2020		2019		2018
	(Dollars in thousands)
Current:
U.S.	$	(925)	$	(519)	$	2,151
International	238		1,069		1,894
Deferred:
U.S.	(3,353)		(2,303)		(73,728)
International	(579)		(392)		(129)
	$	(4,619)	$	(2,145)	$	(69,812)

Provision for income taxes, reconciliation to applicable U.S. statutory rate

The benefit for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory rate to earnings (loss) before income taxes, as a result of the following:

	Fiscal Years
	2020		2019		2018
U.S. statutory rate	21.0	%	21.0	%	28.0	%
State income taxes, net of federal income tax benefit	4.0		0.5		14.8
Valuation allowance (1)	(29.4)		(14.5)		560.8
Foreign income taxes at other than U.S. rates	(0.6)		0.9		(0.5)
Work opportunity tax credits	0.4		7.2		15.2
Deferred tax rate remeasurement	—		—		99.0
Uncertain tax positions	(6.2)		1.0		(15.9)
Stock-based compensation	0.1		2.2		(15.8)
Capital loss	15.0		—		—
Other, net (2)	(1.7)		(8.7)		(0.6)
	2.6	%	9.6	%	685.0	%

_______________________________________________________________________________

(1)See Note 1 to the Consolidated Financial Statements.

(2)The (1.7)% of Other, net in fiscal year 2020 includes the rate impact of goodwill derecognition and impairment and miscellaneous items of (1.2)% and (0.6)%, respectively. Miscellaneous items do not include the rate impact of any items in excess of 5% of computed tax. The (8.7)% of Other, net in fiscal year 2019 includes the rate impact of goodwill derecognition and miscellaneous items of (5.9)% and (2.8)%, respectively. Miscellaneous items do not include any items in excess of 5% of computed tax. The (0.6)% of Other, net in fiscal year 2018 does not include the rate impact of any items in excess of 5% of computed tax.

Components of the net deferred tax assets and liabilities

The components of the net deferred tax assets and liabilities are as follows:

	June 30,
	2020		2019
	(Dollars in thousands)
Deferred tax assets:
Deferred rent	$	—	$	3,816
Payroll and payroll related costs	9,903		11,696
Net operating loss carryforwards	64,402		48,208
Tax credit carryforwards	37,072		36,966
Capital loss carryforwards	14,978		—
Deferred franchise fees	9,342		7,508
Operating lease liabilities	202,940		—
Financing lease liabilities	7,157		7,387
Other	8,214		8,709
Subtotal	$	354,008	$	124,290
Valuation allowance	(122,447)		(70,707)
Total deferred tax assets	$	231,561	$	53,583
Deferred tax liabilities:
Goodwill and intangibles	$	(40,904)	$	(62,378)
Operating lease assets	(197,304)		—
Other	(7,269)		(9,129)
Total deferred tax liabilities	$	(245,477)	$	(71,507)
Net deferred tax liability	$	(13,916)	$	(17,924)

Unrecognized tax benefits

A rollforward of the unrecognized tax benefits is as follows:

	Fiscal Years
	2020		2019		2018
	(Dollars in thousands)
Balance at beginning of period	$	2,763	$	3,027	$	1,388
Additions based on tax positions related to the current year, primarily salon vendition activity and tax positions related to a capital loss	11,985		287		553
(Reductions)/additions based on tax positions of prior years	(223)		(154)		1,608
Reductions on tax positions related to the expiration of the statute of limitations	(480)		(397)		(177)
Settlements	—		—		(345)
Balance at end of period	$	14,045	$	2,763	$	3,027