Income Taxes

9 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

6. Income Taxes

The provision for income taxes and effective tax rate were as follows:

	For the Three Months Ended						For the Nine Months Ended
	March 31, 2024			April 2, 2023			March 31, 2024			April 2, 2023
Provision for income taxes	$	790		$	1,145		$	707		$	809
Effective tax rate		(8.3	)%		(28.3	)%		(1.7	)%		(2.7	)%

Income Tax Expense

UNIFI’s provision for income taxes for the nine months ended March 31, 2024 and April 2, 2023 was calculated by applying the estimated annual effective tax rate to year-to-date pre-tax book income and adjusting for discrete items that occurred during the period.

The effective tax rate for the three and nine months ended March 31, 2024 varied from the U.S. federal statutory rate primarily due to the U.S. generated losses for which UNIFI does not expect to realize a future tax benefit.

During the nine months ended March 31, 2024, the Internal Revenue Service (the “IRS”) audit of fiscal 2014 through 2019 was concluded with a refund of $1,275, which has been received along with $457 of interest on the overpayments. The impact from the IRS audit adjustments to the prior periods was insignificant.

The effective tax rates for the three and nine months ended April 2, 2023 varied from the U.S. federal statutory rate primarily due to the U.S. generated losses for which UNIFI does not expect to realize a future tax benefit and a discrete tax benefit related to the recovery of certain Brazilian income taxes paid in prior years.

Unrecognized Tax Benefits

UNIFI regularly assesses the outcomes of both completed and ongoing examinations to ensure that its provision for income taxes is sufficient.

Following the conclusion of the IRS audit, UNIFI adjusted the uncertain tax positions for fiscal 2014 through 2019 that were effectively settled. The impact from releasing the netted uncertain tax position liabilities was insignificant.