Provision for Income Taxes (Tables)

12 Months Ended

Jan. 02, 2026

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

Our income before income taxes is derived solely from within the U.S. Our provision for income taxes was as follows (in thousands):

	Year Ended December 31,
	2025		2024		2023
Current:
Federal	$	16,230	$	201,890	$	167,954
State	16,169		17,941		15,011
Total current tax expense	$	32,399	$	219,831	$	182,965
Deferred:
Federal	$	128,463	$	(52,433)	$	(123,486)
State	(2,226)		(7,025)		(9,723)
Total deferred tax expense	126,237		(59,458)		(133,209)
Provision for income taxes	$	158,636	$	160,373	$	49,756

Schedule of Reconciliation of Income Taxes at the Statutory Federal Income Tax Rate to Net Income Taxes

The reconciliation of the U.S. federal income tax provision at the statutory federal income tax rate of 21% for the year ended December 31, 2025, to our provision for income taxes was as follows (dollars in thousands):

The table reflects the ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which was adopted prospectively for the year ended December 31, 2025. See “Note 1. Organization and Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements” for additional information on the adoption of ASU 2023-09.

	Year Ended December 31,
	2025
	Amount		Percent
U.S. federal statutory tax rate	$	197,653	21.0	%
State and local income taxes, net of federal income tax effect	11,015		1.2	%
Effects of cross-border tax laws:
Foreign-derived intangible income	(28,011)		-3.0	%
Tax credits:
Research and development tax credits	(23,941)		-2.5	%
Nontaxable or nondeductible items:
Non-deductible executive compensation	14,220		1.5	%
Branded prescription drug fee	5,100		0.5	%
Stock-based compensation	(23,029)		-2.4	%
Changes in unrecognized tax benefits	3,933		0.4	%
Other	1,696		0.2	%
Provision for income taxes and effective income tax rate	$	158,636	16.9	%

The states that contribute to the majority (greater than 50%) of the tax effect in the state and local income taxes, net of federal income tax effect category include Kentucky, Illinois and New Jersey for 2025.

The reconciliation of the U.S. federal income tax provision at the statutory federal income tax rate of 21% for each of the years ended December 31, 2024 and 2023, respectively, to our provision for income taxes, as previously disclosed, prior to the adoption of ASU 2023-09, were as follows (in thousands):

	Year Ended December 31,
	2024		2023
U.S. federal statutory tax rate	$	143,144	$	54,080
State and local income taxes, net of federal income tax effect	12,240		(1,487)
Research and development tax credits	(10,997)		(23,714)
Non-deductible executive compensation	7,094		7,019
Branded prescription drug fee	4,633		4,968
Stock-based compensation	665		1,066
Change in valuation allowance	(3,617)		5,770
Other	7,211		2,054
Provision for income taxes	$	160,373	$	49,756

Schedule of Income Taxes Paid, Net of Refunds Received

The amounts of income taxes paid, net of refunds received, for the year ended December 31, 2025, were as follows (in thousands):

	Amount
Federal	$	135,555
State
Kentucky	10,633
All other states	9,108
Total net cash paid for income taxes	$	155,296

Schedule of Deferred Assets and Liabilities

Our deferred tax assets and liabilities were as follows (in thousands):

	December 31,
	2025		2024
Deferred tax assets:
Net operating loss and capital loss carryforwards	$	39,911	$	39,877
Tax credit carryforwards	39,700		39,572
Depreciation and amortization	228,863		349,058
Stock-based compensation	20,243		17,791
Lease liabilities	46,092		49,137
Accruals and reserves not currently deductible	35,919		40,858
Other assets	7,141		9,049
Total deferred tax assets	417,869		545,342
Valuation allowance	(87,678)		(86,029)
Net deferred tax assets	330,191		459,313
Deferred tax liabilities:
Lease right-of-use assets	(36,483)		(39,286)
Other liabilities	(1,126)		—
Total deferred tax liabilities	(37,609)		(39,286)
Net deferred taxes	$	292,582	$	420,027

Schedule of Unrecognized Tax Benefits

The following table summarizes the activity related to our unrecognized tax benefits (in thousands):

	Year Ended December 31,
	2025		2024		2023
Beginning balance	$	127,500	$	115,766	$	87,706
Change relating to prior year provision	(11,510)		(1,994)		631
Change relating to current year provision	7,534		13,796		32,137
Reductions based on the lapse of the applicable statutes of limitations	(11,629)		(68)		(4,708)
Ending balance	$	111,895	$	127,500	$	115,766