Income taxes

9 Months Ended

Mar. 29, 2025

Income taxes

Income taxes

7. Income taxes

The below discussion of the effective tax rate for the periods presented in the consolidated statements of operations is in comparison to the 21% U.S. statutory federal income tax rate.

The Company’s effective tax rate on its income before taxes was a benefit of 12.5% in the third quarter of fiscal 2025. During the third quarter of fiscal 2025, the Company’s effective tax rate was favorably impacted primarily by (i) increases in tax attribute carryforwards and (ii) the mix of income in jurisdictions.

During the third quarter of fiscal 2024, the Company’s effective tax rate on its income before taxes was 12.9%. During the third quarter of fiscal 2024, the Company’s effective tax rate was favorably impacted primarily by (i) decreases to unrecognized tax benefit reserves net of settlements and (ii) the mix of income in lower tax foreign jurisdictions.

For the first nine months of fiscal 2025, the Company’s effective tax rate on its income before taxes was 3.7%. The effective tax rate for the first nine months of fiscal 2025 was favorably impacted primarily by increases in tax attribute carryforwards that are partially offset by increases to valuation allowances.

During the first nine months of fiscal 2024, the Company’s effective tax rate on its income before taxes was 21.6%. The effective tax rate for the first nine months of fiscal 2024 was unfavorably impacted primarily by (i) the impact of U.S. state taxes, partially offset by (ii) decreases to valuation allowances.

The Pillar Two rules published by the Organization for Economic Co-operation and Development (OECD) are effective for the Company in fiscal year 2025. The Company does not expect Pillar Two taxes to have a significant impact on its income tax expense and is closely monitoring the potential impacts of further legislation, regulatory guidance, and regulations issued in the countries in which the Company does business.