Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.25.0.1
Income Taxes
 12 Months Ended
Dec. 26, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income tax expense are as follows:
Fiscal Year Ended
in thousands
December 26,
2024		 December 28,
2023		 December 29,
2022
Current expense:
Federal
 $ 40,764  $ 29,737  $ 73,463 
State
 8,574  12,092  16,489 
Total current expense 49,338  41,829  89,952 
Deferred expense (benefit):
Federal
 1,024  24,792  (78)
State
 (2,831) (1,070) (2,447)
Total deferred (benefit) expense
 (1,807) 23,722  (2,525)
Income tax expense
 $ 47,531  $ 65,551  $ 87,427 
The following is a summary of the differences between the total income tax expense as shown on the financial statements and the income tax expense that would result from applying the federal statutory tax rate of 21% for the fiscal years ended December 26, 2024, December 28, 2023, and December 29, 2022 to income before income taxes:
Fiscal Year Ended
in thousands
December 26,
2024		 December 28,
2023		 December 29,
2022
Computed “expected” income tax expense at statutory rate
 $ 53,215  $ 65,421  $ 80,984 
State income taxes, net of federal income tax benefit (1)
4,538  8,824  11,744 
Permanent differences:
Excess tax benefit related to stock-based compensation awards (10,769) (8,748) (3,762)
Other 3,013  1,714  874 
Total permanent differences (7,756) (7,034) (2,888)
Provision to return (1,005) 578  183 
Federal tax credits (2,277) (2,019) (1,535)
Uncertain tax positions 810  —  (848)
Other, net 6  (219) (213)
Income tax expense
 $ 47,531  $ 65,551  $ 87,427 
(1)     Includes state excess tax benefits related to stock-based compensation awards for fiscal years 2024, 2023, and 2022 of $2.1 million, $1.8 million, and $0.8 million, respectively.
The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and (liabilities) are presented below:
Fiscal Year Ended
in thousands December 26,
2024		 December 28,
2023
Deferred tax assets:
Lease liabilities $ 375,909  $ 362,958 
Accruals not currently deductible for tax purposes 24,011  20,072 
Inventories 11,552  10,596 
Other intangibles 8,292  6,289 
Stock-based compensation 7,559  10,039 
Gift card liability 1,682  3,109 
Other
 1,853  2,918 
Total deferred tax assets 430,858  415,981 
Deferred tax liabilities:
Right-of-use assets (332,596) (322,033)
Fixed assets (116,400) (113,130)
Intangible assets (27,358) (27,493)
Other (5,254) (6,286)
Total deferred tax liabilities (481,608) (468,942)
Net deferred tax liabilities $ (50,750) $ (52,961)
The Company utilized no tax-effected state net operating losses in fiscal years 2024 and 2023. As of December 26, 2024, approximately $1.0 million of tax-effected state net operating losses were available to reduce future income taxes. The state net operating losses expire in various amounts beginning in fiscal 2033.
In assessing the realization of deferred tax assets, including net operating losses, management considered whether it is more likely than not that some portion or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers taxable income in prior carryback periods, future reversals of existing taxable temporary differences, tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards in making this assessment, and accordingly, has concluded that no valuation allowance is necessary as of December 26, 2024 or December 28, 2023.
The Company files income tax returns with the U.S. Federal government and various state jurisdictions. Prior tax years beginning in fiscal year 2021 remain open to examination by the Internal Revenue Service. Foreign, state, and local income tax returns are generally subject to examination for a period of three to five years after filing of the respective returns.
The following is a reconciliation of the beginning and ending balance of unrecognized tax benefits for the periods presented:
Fiscal Year Ended
in thousands December 26,
2024		 December 28,
2023		 December 29,
2022
Unrecognized tax benefits balance at beginning of fiscal year $ —  $ —  $ 1,073 
Additions based on tax positions related to the current year 334  —  — 
Additions for tax positions of prior years 476  —  — 
Reductions for tax positions of prior years —  —  (1,073)
Unrecognized tax benefits balance at end of fiscal year $ 810  $ —  $ — 
As of December 26, 2024, there were $0.8 million of unrecognized tax benefits that, if recognized, would affect the Company’s effective tax rate, while there were no such unrecognized tax benefits as of December 28, 2023. The Company’s policy is to classify interest and penalties related to unrecognized tax benefits in income tax expense. The Company did not recognize interest expense related to unrecognized tax benefits during fiscal years 2024, 2023, or 2022.