Income Taxes

12 Months Ended

Aug. 29, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income before taxes consists of the following components:

Year ended	2026		2025		2024
U.S. Operations	$	137,671	$	177,041	$	178,895
Foreign Operations	4,402		18,334		10,484
Total	$	142,073	$	195,375	$	189,379

The provision for income taxes consists of the following (in thousands):

Year ended	2026		2025		2024
Current:
Federal	$	15,310	$	33,597	$	30,932
Foreign	185		1,907		1,231
State	6,223		8,667		6,007
Total current	$	21,718	$	44,171	$	38,170
Deferred:	10,865		2,933		5,735
Total provision for income taxes	$	32,583	$	47,104	$	43,905

The reconciliation of income tax expense using the statutory federal income tax rate and actual income tax expense is as follows for fiscal 2026 (in thousands):

	2026
	Amount		Percent
Income taxes at the U.S. federal statutory rate	$	29,835	21.0	%
State and local income taxes, net of federal benefit (1)	5,883		4.1	%
Foreign tax effects	399		0.3	%
Effect of cross-border tax laws	(702)		(0.5)	%
Tax Credits	(5,147)		(3.6)	%
Nontaxable or nondeductible items:	1,876		1.3	%
Changes in unrecognized tax benefits	1,496		1.1	%
Other	(1,057)		(0.7)	%
Total	$	32,583	22.9	%

(1) State taxes in California, Florida, Illinois, New York and Texas make up the majority (greater than 50%) of the tax effect in the state and local income tax category.

The following table reconciles the provision for income taxes using the statutory federal income tax rate to the actual provision for income taxes:

Year ended	2025		2024
Income taxes at the statutory federal income tax rate	21.0	%	21.0	%
State income taxes	3.9		3.6
Adjustments to tax reserve	(0.4)		(0.5)
Other	(0.4)		(0.9)
Effective income tax rate	24.1	%	23.2	%

During the fiscal year ended August 29, 2026, income taxes paid, net of any refunds, were $30.6 million, which included federal tax payments of $22.9 million, state and local tax payments of $6.1 million and foreign tax payments of $1.6 million.

The decrease in the effective tax rate for fiscal 2026 compared to the prior fiscal year was primarily due to provision-to-return adjustments associated with income tax credits recognized upon finalization of the prior-year U.S. federal income tax return. These adjustments reflect refinement of estimates used in the prior year tax provision and resulted in a tax benefit in the current period.

The components of deferred income taxes included on the Consolidated Balance Sheets are as follows (in thousands):

	August 29, 2026		August 30, 2025
Deferred tax assets:
Payroll and benefit related	$	16,195	$	16,578
Insurance reserves	14,010		14,694
Environmental reserves	7,351		7,412
Accrued expenses	5,266		7,236
Operating lease liabilities	20,144		17,911
Research and development	1,916		4,891
Transaction costs	8,333		—
Other	13,312		13,121
Total deferred tax assets	$	86,527	$	81,843
Deferred tax liabilities:
Uniform and other rental items in service	$	60,579	$	56,617
Property and equipment	59,250		57,953
Intangible and other amortizable assets	59,834		54,169
Capitalized contract costs	28,168		26,441
Operating lease right-of-use assets	19,601		17,356
Other	—		48
Total deferred tax liabilities	227,432		212,584
Net deferred tax liability	$	140,905	$	130,741

The Company regularly reviews deferred tax assets for recoverability based upon projected future taxable income and the expected timing of the reversals of existing temporary differences. Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets will be realized.

Foreign tax effect

As of August 29, 2026, unremitted foreign earnings have been retained by the Company’s foreign subsidiaries for indefinite reinvestment. If the Company were to repatriate those earnings, in the form of dividends or otherwise, the Company could be subject to immaterial withholding taxes payable to the various foreign countries.

Uncertain tax positions

As of August 29, 2026, and August 30, 2025, there were $5.6 million and $3.9 million, respectively, of unrecognized tax benefits, of which $5.2 million and $3.7 million, respectively, would favorably impact the Company’s effective tax rate, if recognized. The Company recognized interest and penalties related to uncertain tax positions as a component of income tax expense which is consistent with the recognition of these items in prior reporting periods. As of August 29, 2026, and August 30, 2025, the Company had accrued a nominal amount in interest and penalties, in its long-term accrued liabilities. For fiscal 2026, 2025 and 2024, the Company recognized a nominal expense in its Consolidated Statements of Income related to interest and penalties.

A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits (exclusive of interest and penalties) is as follows (in thousands):

Balance at August 31, 2024	$	4,638
Additions for tax positions of the current year	1,202
Additions for tax positions of prior years	—
Reduction for tax positions of prior years	(1,826)
Statute expirations	(128)
Balance at August 30, 2025	3,886
Additions for tax positions of the current year	1,775
Additions for tax positions of prior years	765
Reduction for tax positions of prior years	(27)
Statute expirations	(799)
Balance at August 29, 2026	$	5,600

The Company has a significant portion of its operations in the U.S. and Canada. The Company is required to file federal income tax returns as well as state income tax returns in most of the U.S. states and in several Canadian provinces. At times, the Company is subject to audits in these jurisdictions, which typically are complex and can take several years to resolve. The final resolution of any such tax audits could result in either a reduction in the Company’s accruals or an increase in its income tax provision, both of which could have a material impact on the consolidated results of operations in any given period.

All U.S. and Canadian federal income tax statutes have lapsed for filings up to and including fiscal years 2022 and 2018, respectively. With a few exceptions, the Company is no longer subject to state and local income tax examinations for periods prior to fiscal 2022. The Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change significantly in the next 12 months.