Income Taxes

9 Months Ended

Jun. 28, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense for the three and nine months ended June 28, 2025 was $4.7 million and $16.9 million, respectively, compared to $5.2 million and $13.5 million for the three and nine months ended June 29, 2024, respectively.

The effective tax rates for the three and nine months ended June 28, 2025 were 9.5% and 12.2%, respectively, compared to the effective tax rates of 17.0% and 16.1% for the three and nine months ended June 29, 2024, respectively. The effective tax rates for the three and nine months ended June 28, 2025 were lower than the effective tax rates for the three and nine months ended June 29, 2024 primarily due to an increase in discrete tax benefits of $2.9 million and $4.4 million, respectively. For the three months ended June 28, 2025, the Company released a state valuation allowance of $3.3 million due to a tax law change.

The amount of unrecognized tax benefits recorded for uncertain tax positions increased by $0.9 million for the three months ended June 28, 2025. The Company recognizes accrued interest and penalties on uncertain tax positions as a component of income tax expense. The amount of interest and penalties recorded for the three and nine months ended June 28, 2025 were $0.3 million and $0.9 million, respectively.

Within the next 12 months, it is reasonably possible that federal, state and foreign tax audit resolutions could reduce unrecognized tax benefits by approximately $6.0 million, either because the Company’s tax positions are sustained on audit, the Company agrees to their disallowance or the statute of limitations closes. The Company is currently under examination by taxing authorities in the U.S.

The Company maintains valuation allowances when it is more likely than not that all or a portion of a net deferred tax asset will not be realized. During the three months ended June 28, 2025, the Company continued to record a full valuation allowance against its net deferred tax assets in certain jurisdictions within the EMEA and APAC segments and a partial valuation against its net deferred tax assets in certain jurisdictions within the AMER segment, as it was more likely than not that these assets would not be fully realized based primarily on historical performance. The Company will continue to provide a valuation allowance against its net deferred tax assets in each of the applicable jurisdictions going forward until it determines it is more likely than not that the deferred tax assets will be realized.