Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

Income Taxes
6 Months Ended
Jul. 02, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

Note 14: Income Taxes

The Company’s overall effective tax rate was 0.05% for the 26 weeks ended July 2, 2022, and a tax provision expense of $6,500 was recorded against pre-provision income of approximately $11.9 million. The Company's overall effective tax rate was 4.7% for the 26 weeks ended July 3, 2021, and it had a tax provision expense of approximately $203,000 against a pre-provision loss of approximately $4.3 million. The effective tax rates and related provisional tax amounts vary from the U.S. federal statutory rate due to state taxes, foreign taxes, share-based compensation, valuation allowance, and certain non-deductible expenses.

The Company regularly evaluates both positive and negative evidence related to retaining a valuation allowance against certain deferred tax assets. The realization of deferred tax assets is dependent upon sufficient future taxable income during the periods when deductible temporary differences and carryforwards are expected to be available to reduce taxable income. The Company has concluded, based on the weight of evidence, that a valuation allowance should be maintained against deferred tax assets that are not expected to be utilized in the near future. The Company continues to recognize a full valuation allowance against its Canadian operations.