INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Components of loss before income taxes

The components of loss from continuing operations before income taxes are as follows:

	Fiscal Years
	2022		2021
	(Dollars in thousands)
Loss before income taxes
U.S.	$	(41,231)	$	(143,104)
International	(3,211)		34,470
	$	(44,442)	$	(108,634)

Benefit for income taxes

The provision (benefit) for income taxes consists of:

	Fiscal Years
	2022		2021
	(Dollars in thousands)
Current:
U.S.	$	(535)	$	(620)
International	(425)		(1,421)
Deferred:
U.S.	3,130		(3,701)
International	(153)		314
	$	2,017	$	(5,428)

Benefit for income taxes, reconciliation to applicable U.S. statutory rate

The provision (benefit) for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory rate to loss from continuing operations before income taxes, as a result of the following:

	Fiscal Years
	2022		2021
U.S. statutory rate	21.0	%	21.0	%
State income taxes, net of federal income tax benefit	1.4		7.9
Valuation allowance (1)	(6.6)		(61.5)
Foreign income taxes at other than U.S. rates	3.0		9.4
Uncertain tax positions	(17.9)		0.2
Stock-based compensation	(2.8)		(0.7)
Loss on investment in Luxembourg	—		29.3
Other, net (2)	(2.6)		(0.6)
Effective tax rate	(4.5)	%	5.0	%

_______________________________________________________________________________

(1)See Note 1 to the Consolidated Financial Statements.

(2)The (2.6)% of Other, net in fiscal year 2022 includes the rate impact of the federal provision to return true-up and miscellaneous items of (2.0)% and (0.6)%, respectively. The (0.6)% of Other, net in fiscal year 2021 does not include the rate impact of any items in excess of 5% of computed tax.

Components of the net deferred tax assets and liabilities

The components of the net deferred tax assets and liabilities are as follows:

	June 30,
	2022		2021
	(Dollars in thousands)
Deferred tax assets:
Payroll and payroll related costs	$	5,267	$	8,523
Net operating loss carryforwards	153,190		145,823
Tax credit carryforwards	37,664		37,433
Capital loss carryforwards	5,338		14,179
Deferred franchise fees	8,694		10,153
Operating lease liabilities	124,905		154,255
Other (1)	17,542		12,608
Subtotal	352,600		382,974
Valuation allowance (1)	(201,731)		(192,522)
Total deferred tax assets	$	150,869	$	190,452
Deferred tax liabilities:
Goodwill and intangibles	$	(33,466)	$	(43,375)
Operating lease assets	(123,333)		(150,573)
Other	(5,049)		(7,154)
Total deferred tax liabilities	(161,848)		(201,102)
Net deferred tax liability	$	(10,979)	$	(10,650)

_______________________________________________________________________________(1)The $17.5 million of Other in fiscal year 2022 includes $5.3 million of deferred tax assets with a corresponding valuation allowance of the same amount related to discontinued operations.

Unrecognized tax benefits

A rollforward of the unrecognized tax benefits is as follows:

	Fiscal Years
	2022		2021
	(Dollars in thousands)
Balance at beginning of period	$	13,858	$	14,045
Additions based on tax positions related to the current year, primarily salon vendition activity and tax positions related to a capital loss	8,636		292
Additions based on tax positions of prior years	81		50
Reductions on tax positions related to the expiration of the statute of limitations	(402)		(529)
Balance at end of period	$	22,173	$	13,858