Chefs' Warehouse, Inc.CHEF
Chefs' Warehouse, Inc. Income Taxes Disclosure
Income Taxes
The components of the Company’s income before income taxes consist of the following:
| Fiscal Years Ended | ||||||||||||||||||||
| December 26, 2025 | December 27, 2024 | December 29, 2023 | ||||||||||||||||||
| Domestic | $ | 78,902 | $ | 59,023 | $ | 40,171 | ||||||||||||||
| Foreign | 24,640 | 20,509 | 15,298 | |||||||||||||||||
| Total | $ | 103,542 | $ | 79,532 | $ | 55,469 | ||||||||||||||
The provision for income taxes consists of the following:
| Fiscal Years Ended | ||||||||||||||||||||
| December 26, 2025 | December 27, 2024 | December 29, 2023 | ||||||||||||||||||
| Current income tax expense: | ||||||||||||||||||||
| Federal | $ | 14,787 | $ | 13,420 | $ | 9,913 | ||||||||||||||
| Foreign | 3,422 | 2,488 | 838 | |||||||||||||||||
| State | 6,439 | 6,681 | 2,014 | |||||||||||||||||
| Total current income tax expense | 24,648 | 22,589 | 12,765 | |||||||||||||||||
| Deferred income tax expense (benefit): | ||||||||||||||||||||
| Federal | 4,008 | 4,712 | 4,320 | |||||||||||||||||
| Foreign | 332 | (2,173) | (48) | |||||||||||||||||
| State | 2,193 | (1,075) | 3,842 | |||||||||||||||||
| Total deferred income tax expense | 6,533 | 1,464 | 8,114 | |||||||||||||||||
| Total income tax expense | $ | 31,181 | $ | 24,053 | $ | 20,879 | ||||||||||||||
The Organization for Economic Co-operation and Development (the “OECD”) introduced a framework under Pillar Two which includes a global corporate minimum tax rate of 15%. Some jurisdictions in which the Company operates have started to enact laws implementing Pillar Two, including Canada which enacted the rule in June 2024. The rules did not have a material impact on its consolidated financial statements in fiscal 2025 or 2024. The Company is monitoring any future developments.
As a result of a five year carryback allowed under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the Company carried back its 2020 federal income tax loss, which resulted in an income tax refund receivable of $27,140 and $25,945 as of December 26, 2025 and December 27, 2024, respectively. The receivable is reflected in prepaid expenses and other current assets on the Company’s consolidated balance sheets.
The IRS is experiencing significant processing delays driven by an increase in net operating loss carryback requests as a result of the CARES Act, along with other factors. As a result, the processing and expected receipt of the federal income tax refund receivable has been significantly delayed. The Company is currently working with IRS Taxpayer’s Advocate Services and consultants to resolve the processing issue. While progress has been made with the IRS and the Company expects to receive the refunds within one year, the exact timing of receipt is difficult to predict.
On July 4, 2025, the United States enacted tax legislation through H.R.1, also referred to as the One Big Beautiful Bill Act (“OBBBA”). OBBBA did not have a material impact on the Company’s 2025 annual effective tax rate, but impacted the split between current taxes payable and deferred taxes.
Income tax expense differed from amounts computed using the statutory federal income tax rate due to the following reasons:
| Fiscal Years Ended | ||||||||||||||||||||||||||||||||||||||
| December 26, 2025 | December 27, 2024 | December 29, 2023 | ||||||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||||
| U.S. federal statutory income tax | $ | 21,744 | 21.0 | % | $ | 16,702 | 21.0 | % | $ | 11,648 | 21.0 | % | ||||||||||||||||||||||||||
| Domestic federal reconciling items | ||||||||||||||||||||||||||||||||||||||
| Nontaxable and nondeductible items, net | ||||||||||||||||||||||||||||||||||||||
| Compensation limitation | 4,276 | 4.1 | % | 2,565 | 3.2 | % | 4,040 | 7.3 | % | |||||||||||||||||||||||||||||
| Stock compensation | (2,725) | (2.6) | % | (212) | (0.3) | % | 913 | 1.6 | % | |||||||||||||||||||||||||||||
| Charitable contributions | 1,142 | 1.1 | % | (156) | (0.2) | % | 467 | 0.8 | % | |||||||||||||||||||||||||||||
| Cross-border taxes | ||||||||||||||||||||||||||||||||||||||
| Net controlled foreign corporation tested income (“NCTI”), formerly known as Global Intangible Low-Taxed Income (“GILTI”) | 688 | 0.7 | % | 28 | — | % | 642 | 1.2 | % | |||||||||||||||||||||||||||||
| Impact of foreign branches taxed in the U.S. | (161) | (0.2) | % | 1,776 | 2.2 | % | 277 | 0.5 | % | |||||||||||||||||||||||||||||
| Other | 830 | 0.8 | % | 1,320 | 1.7 | % | 559 | 1.0 | % | |||||||||||||||||||||||||||||
Domestic state and local income taxes, net of federal effect (1) | 6,807 | 6.5 | % | 6,022 | 7.6 | % | 4,755 | 8.6 | % | |||||||||||||||||||||||||||||
| Foreign reconciling items | ||||||||||||||||||||||||||||||||||||||
| United Arab Emirates | ||||||||||||||||||||||||||||||||||||||
| Rate differential | (1,380) | (1.3) | % | (1,261) | (1.6) | % | (1,812) | (3.3) | % | |||||||||||||||||||||||||||||
| Other | 459 | 0.4 | % | (31) | — | % | 109 | 0.2 | % | |||||||||||||||||||||||||||||
| Canada | ||||||||||||||||||||||||||||||||||||||
| Rate change | — | — | % | — | — | % | (869) | (1.6) | % | |||||||||||||||||||||||||||||
| Change in valuation allowance | — | — | % | (2,045) | (2.6) | % | 729 | 1.3 | % | |||||||||||||||||||||||||||||
| Other | 162 | 0.2 | % | 79 | 0.1 | % | (137) | (0.2) | % | |||||||||||||||||||||||||||||
| Other foreign jurisdictions | (661) | (0.6) | % | (734) | (0.9) | % | (442) | (0.8) | % | |||||||||||||||||||||||||||||
| Income tax expense | $ | 31,181 | 30.1 | % | $ | 24,053 | 30.2 | % | $ | 20,879 | 37.6 | % | ||||||||||||||||||||||||||
(1)The states and local jurisdictions that contribute more than 50% of the tax effect in this category include New York State and New York City, California for fiscal 2025 and 2024 and Massachusetts for fiscal 2023.
Deferred tax assets and liabilities at December 26, 2025 and December 27, 2024 consist of the following:
| December 26, 2025 | December 27, 2024 | |||||||||||||
| Deferred tax assets: | ||||||||||||||
| Receivables and inventory | $ | 13,311 | $ | 11,753 | ||||||||||
| Self-insurance reserves | 6,267 | 4,819 | ||||||||||||
| Net operating loss carryforwards | 2,186 | 3,171 | ||||||||||||
| Interest expense carryforward | 11,066 | 16,955 | ||||||||||||
| Stock compensation | 5,693 | 4,416 | ||||||||||||
| Intangible assets | 6,059 | 4,006 | ||||||||||||
| Operating lease liabilities | 59,829 | 54,272 | ||||||||||||
| Other | 1,153 | 329 | ||||||||||||
| Total deferred tax assets | 105,564 | 99,721 | ||||||||||||
| Deferred tax liabilities: | ||||||||||||||
| Property & equipment | (27,504) | (23,627) | ||||||||||||
| Goodwill | (39,127) | (34,861) | ||||||||||||
| Intangible assets | (2,621) | (2,956) | ||||||||||||
| Prepaid expenses and other | (4,484) | (4,647) | ||||||||||||
| Operating lease right-of-use assets | (54,252) | (49,521) | ||||||||||||
| Total deferred tax liabilities | (127,988) | (115,612) | ||||||||||||
| Valuation allowance | — | — | ||||||||||||
| Total net deferred tax liability | $ | (22,424) | $ | (15,891) | ||||||||||
The deferred tax provision results from the effects of net changes during the year in deferred tax assets and liabilities arising from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company files Federal and various state and local income tax returns in the U.S and various foreign jurisdictions. For Federal income tax purposes, the 2022 through 2025 tax years remain open for examination. For state tax purposes, the 2021 through 2025 tax years remain open for examination. For foreign income tax purposes, the 2015 through 2025 tax years remain open for examination. The Company records interest and penalties, if any, in income tax expense.
The Company’s Canada tax-effected net operating loss carryforward of $1,163 expires at various dates between fiscal 2037 and 2043. The Company’s state tax-effected net operating loss carryforward of $1,023 expires at various dates, the earliest of which expire in fiscal 2028, while others are indefinite-lived.
The Company is permanently reinvesting the earnings of its foreign operations. The accumulated undistributed earnings of its foreign subsidiaries are immaterial, as a majority of such earnings have been taxed in the U.S.
As of December 26, 2025 and December 27, 2024, the Company did not have any material uncertain tax positions.
See Note 14 - Supplemental Disclosures of Cash Flow Information for income taxes paid.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 9, 2018 | |
| 2016 | Mar 10, 2017 | |
| 2015 | Mar 4, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.