Income Taxes

6 Months Ended

Jun. 28, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate for the three and six months ended June 28, 2025 was 26.7% and 27.0%, respectively, compared to the effective tax rate for the three and six months ended June 29, 2024 of 25.6% and 19.6%, respectively. The effective tax rate for 2025 was higher than the effective tax rate for the comparable 2024 periods primarily due to increases in foreign exchange losses and losses in non-U.S. jurisdictions with no related tax benefit, as compared to 2024. The 2024 periods also recognized more favorable tax rate benefits due to lapses in the statute of limitations for previously unrecognized tax benefits, as compared to the 2025 periods.

The effective tax rates for three and six months ended June 28, 2025 were higher than the statutory tax rate primarily due to foreign exchange losses and losses in non-U.S. jurisdictions with no related tax benefit. The effective tax rate for the three months ended June 29, 2024 was higher than the statutory tax rate primarily due to the proportion of pre-tax income that is earned in higher tax jurisdictions. The effective tax rate for the six months ended June 29, 2024 was lower than the statutory tax rate primarily due to the lapse in the statute of limitations for previously unrecognized tax benefits recognized in the first quarter.

On July 4, 2025, the United States has enacted into law the legislation formally titled “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14”, and commonly referred to as the One Big Beautiful Bill Act (“OBBB”). The OBBB contains multiple business tax provisions, including the permanent extension of several expiring provisions of the Tax Cuts and Jobs Act and multiple modifications to the international tax framework, for which the Company is currently evaluating the impact on its Condensed Consolidated Financial Statements. The legislation has multiple effective dates with certain provisions soon to be effective in 2025 and others to be implemented in future years, and the Company will continue to monitor future administrative guidance and regulations that clarify the legislative text of the OBBB and the bill’s potential effect on the Company’s income taxes.