Income Taxes

6 Months Ended

Mar. 02, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

During the twenty-six-week period ended March 2, 2024, there were no material changes in unrecognized tax benefits.

During fiscal year 2023, the Company received funds related to Employee Retention Credit (“ERC”) claims previously submitted. As there is no authoritative guidance under accounting principles generally accepted in the United States of America on accounting for government assistance to for-profit business entities, the Company accounts for the ERC by analogy to International Accounting Standard 20, Accounting for Government Grants and Disclosure of Government Assistance. Management determined the probability threshold has not been met for $5,129 of the funds received in fiscal year 2023, and, as such, that portion of the funds remains in accrued expenses and other current liabilities in the unaudited Condensed Consolidated Balance Sheet as of March 2, 2024. This amount will be recognized in the unaudited Condensed Consolidated Statement of Income when the probability threshold has been met, which the Company has determined to be the earlier of a completed audit or the lapse of the relevant statute of limitations.

The Company’s effective tax rate was 23.7% for the twenty-six-week period ended March 2, 2024, as compared to 25.0% for the twenty-six-week period ended March 4, 2023. The decrease in the effective tax rate was primarily due to a higher tax benefit from stock-based compensation. The effective tax rate is higher than the federal statutory tax rate primarily due to state taxes.