EARNINGS PER SHARE
Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted income per share includes the effect of all potentially dilutive securities, which include dilutive stock options and awards.

The following table sets forth the calculation of earnings per share and weighted-average common shares outstanding at the dates indicated (in thousands, except per share data):
Fiscal Year Ended
January 3,
2026
December 28,
2024
December 30,
2023
Net income$165,387 $175,689 $169,885 
Weighted average common shares outstanding — basic80,558 84,935 86,717 
Effect of dilutive securities1,037 820 686 
Weighted average common shares outstanding — diluted81,595 85,755 87,403 
Earnings per share
Basic$2.05 $2.07 $1.96 
Diluted$2.03 $2.05 $1.94 

Outstanding stock-based awards representing 0.7 million, 0.1 million, and 0.2 million shares of common stock were excluded from the calculations of diluted earnings per share in 2025, 2024, and 2023, respectively, because the effect of their inclusion would have been antidilutive to those years.

Historical Timeline

Fiscal YearFiled
2026Feb 27, 2026Showing above
2024Feb 24, 2025
2023Feb 26, 2024
2022Feb 28, 2022
2021Mar 1, 2021
2019Feb 18, 2020
2018Mar 20, 2019

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.