Company: JOUT
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001140361-25-017047
Chunk: 13

Company: JOHNSON OUTDOORS INC
Filing Date: 2025-05-02
Form: 10-Q
Item: Item 8
Chunk 13
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 28, 2025 and March 29, 2024, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows: Three Months EndedSix Months Ended (thousands, except tax rate data)March 28, 2025March 29, 2024March 28, 2025March 29, 2024Profit (loss) before income taxes$4,158 $3,012 $(14,769)$8,911 Income tax (benefit) expense1,854 856 (1,783)2,800 Effective income tax rate44.6 %28.4 %12.1 %31.4 % The change in the effective tax rate for the three and six months ended March 28, 2025 compared to the three and six months ended March 29, 2024 was primarily due to the recording of an unrecognized tax benefit and the change in the geographic mix of profits or losses from a tax perspective in the current year.  The Company's effective tax rate is impacted by valuation allowances in certain foreign tax jurisdictions and, as a result, changes in the geographic source of Company profits or losses between periods can, in certain instances, have varying impacts on the Company's effective tax rate during a particular period. The Company maintains valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, the Company considers such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods, and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. Due to recent operating losses in the U.S., the Company has evaluated the realizability of U.S. net deferred tax assets. The evaluation concluded that the Company's U.S. deferred tax assets are realizable.  The Company will continue to monitor the need for a valuation allowance on its U.S. deferred tax assets.  The impact of the Company’s operations in jurisdictions where a valuation allowance is assessed is removed from the overall effective tax rate methodology and recorded directly based on year to date results for the year for which no tax expense or benefit can be recognized.  The significant tax jurisdictions that have a valuation allowance for the periods ended March 28, 2025 and March 29, 2024 were