Quarterly report [Sections 13 or 15(d)]

Income Taxes

v3.25.2
Income Taxes
 6 Months Ended
Jun. 29, 2025
Income Taxes  
Income Taxes

Note 8 – Income Taxes

For the six periods ended June 29, 2025, the Company has computed its interim tax provision using the estimated annual effective tax rate method. For the six months ended June 30, 2024, the Company elected to compute its interim tax provision using the actual year-to-date effective tax rate method as small changes in projected income could have produced large variations in the Company’s estimated annual effective tax rate. The Company recorded a tax expense of $1.0 million for the six periods ended June 29, 2025 compared to an income tax benefit of $3.7 million for the six months ended June 30, 2024.

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The Company’s effective income tax rate was (11.3)% for the six periods ended June 29, 2025 compared to 27.1% for the six months ended June 30, 2024. The Company’s effective tax rate differs from the statutory U.S. tax rate of 21% primarily due to the following: (i) tax credits for FICA taxes on certain employees’ tips (ii) taxes owed in foreign jurisdictions with tax rates that differ from the U.S. statutory rate; (iii) taxes owed in state and local jurisdictions; and (iv) the tax effect of non-deductible compensation. Transaction costs associated with the Benihana Acquisition also caused a difference from the Company’s effective tax rate and the statutory U.S. tax rate for the six months ended June 30, 2024. The income tax amounts recorded for the six periods ended June 29, 2025 and the six months ended June 30, 2024 included the discrete period tax benefits resulting from the vesting of restricted stock units.

The Company is subject to U.S. federal, state, local and various foreign income taxes for the jurisdictions in which it operates. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant

judgment to apply. In the normal course of business, the Company is subject to examination by federal, state, local and foreign taxing authorities.