YETI Holdings, Inc.YETI
YETI Holdings, Inc. Income Taxes Disclosure
INCOME TAXES
The components of income before income taxes were as follows for the periods indicated (in thousands):
Fiscal Year Ended | |||||||||||||||||
| January 3, 2026 | December 28, 2024 | December 30, 2023 | |||||||||||||||
Domestic | $ | 204,410 | $ | 219,941 | $ | 215,490 | |||||||||||
Foreign | 15,871 | 12,907 | 10,456 | ||||||||||||||
Income before income taxes | $ | 220,281 | $ | 232,848 | $ | 225,946 | |||||||||||
The components of income tax expense were as follows for the periods indicated (in thousands):
Fiscal Year Ended | |||||||||||||||||
| January 3, 2026 | December 28, 2024 | December 30, 2023 | |||||||||||||||
Current tax expense: | |||||||||||||||||
U.S. federal | $ | 15,381 | $ | 51,532 | $ | 21,139 | |||||||||||
State | 6,995 | 12,976 | 7,659 | ||||||||||||||
Foreign | 4,820 | 3,844 | 1,936 | ||||||||||||||
Total current tax expense | 27,196 | 68,352 | 30,734 | ||||||||||||||
Deferred tax expense (benefit): | |||||||||||||||||
U.S. federal | 26,599 | (9,700) | 20,136 | ||||||||||||||
State | 1,669 | (1,333) | 4,230 | ||||||||||||||
Foreign | (570) | (160) | 961 | ||||||||||||||
| Total deferred tax expense (benefit) | 27,698 | (11,193) | 25,327 | ||||||||||||||
Total income tax expense | $ | 54,894 | $ | 57,159 | $ | 56,061 | |||||||||||
A reconciliation of income taxes computed at the federal statutory income tax rate of 21% to the effective income tax rate is as follows for the periods indicated (in thousands):
Fiscal Year Ended | |||||||||||||||||||||||||||||||||||
| January 3, 2026 | December 28, 2024 | December 30, 2023 | |||||||||||||||||||||||||||||||||
| U.S. Federal Statutory Tax Rate | $ | 46,259 | 21.0 | % | $ | 48,898 | 21.0 | % | $ | 47,449 | 21.0 | % | |||||||||||||||||||||||
State & local income taxes, net of federal income tax effect(1) | 6,490 | 2.9 | % | 7,404 | 3.2 | % | 7,359 | 3.3 | % | ||||||||||||||||||||||||||
| Foreign tax effects | 917 | 0.4 | % | 973 | 0.4 | % | 701 | 0.3 | % | ||||||||||||||||||||||||||
| Effect of cross-border tax laws | |||||||||||||||||||||||||||||||||||
| Foreign-derived intangible income | (2,993) | (1.4) | % | (4,166) | (1.8) | % | (3,192) | (1.4) | % | ||||||||||||||||||||||||||
| Other | (74) | — | % | (437) | (0.2) | % | 400 | 0.2 | % | ||||||||||||||||||||||||||
| Tax credits | (1,855) | (0.8) | % | (1,834) | (0.8) | % | (1,497) | (0.7) | % | ||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Non-deductible portion of executive compensation | 3,209 | 1.4 | % | 2,235 | 1.0 | % | 939 | 0.4 | % | ||||||||||||||||||||||||||
| Other | 1,710 | 0.8 | % | 1,373 | 0.6 | % | 872 | 0.4 | % | ||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | 1,227 | 0.6 | % | 3,340 | 1.4 | % | 3,030 | 1.3 | % | ||||||||||||||||||||||||||
| Other adjustments | 4 | — | % | (627) | (0.3) | % | — | — | % | ||||||||||||||||||||||||||
| Effective income tax rate | $ | 54,894 | 24.9 | % | $ | 57,159 | 24.5 | % | $ | 56,061 | 24.8 | % | |||||||||||||||||||||||
_________________________
(1)The states that contribute to the majority (greater than 50%) of the tax effect in this category include California, Georgia, New York, Pennsylvania, and Wisconsin for 2025, California, Illinois, New Jersey, New York, Pennsylvania, and Wisconsin for 2024, and California, Illinois, New York, Pennsylvania, Tennessee, and Wisconsin for 2023.
The amount of income tax paid, net of refunds, are as follows (in thousands):
_________________________
Fiscal Year Ended | |||||||||||||||||
| January 3, 2026 | December 28, 2024 | December 30, 2023 | |||||||||||||||
Federal | $ | 34,000 | $ | 54,000 | $ | 4,000 | |||||||||||
State | |||||||||||||||||
| New York | — | — | 929 | ||||||||||||||
| Pennsylvania | — | — | 1,720 | ||||||||||||||
All states representing less than five percent of total | 9,815 | 8,377 | 3,668 | ||||||||||||||
Foreign | |||||||||||||||||
| Australia | — | — | 1,871 | ||||||||||||||
| Canada | — | — | 1,564 | ||||||||||||||
All foreign jurisdictions representing less than five percent of total | 4,233 | 2,827 | 379 | ||||||||||||||
Total income taxes paid, net of refunds(1) | $ | 48,048 | $ | 65,204 | $ | 14,131 | |||||||||||
(1)All jurisdictions in which income taxes paid (net of refunds received) were equal to or greater than five percent of total income taxes paid are included above. If the noted jurisdiction did not meet the five percent threshold for a particular year, the amount for that year is not separately stated.
Deferred tax assets and liabilities consisted of the following for the periods indicated (in thousands):
Fiscal Year Ended | |||||||||||
| January 3, 2026 | December 28, 2024 | ||||||||||
Deferred tax assets: | |||||||||||
Accrued liabilities | $ | 5,204 | $ | 8,986 | |||||||
Allowances and other reserves | 3,626 | 3,819 | |||||||||
Inventory | 3,953 | 3,563 | |||||||||
Stock-based compensation | 7,071 | 6,929 | |||||||||
| Operating lease liabilities | 37,751 | 22,704 | |||||||||
| Capitalized research and development expenditures | 2,898 | 13,407 | |||||||||
Other | 4,161 | 4,916 | |||||||||
Total deferred tax assets | $ | 64,664 | $ | 64,324 | |||||||
Deferred tax liabilities: | |||||||||||
| Operating lease assets | $ | (31,979) | $ | (19,022) | |||||||
Prepaid expenses | (83) | (32) | |||||||||
Property and equipment | (19,328) | (8,227) | |||||||||
Intangible assets | (32,515) | (28,249) | |||||||||
Other | (19) | (40) | |||||||||
Total deferred tax liabilities | (83,924) | (55,570) | |||||||||
Net deferred tax (liabilities) assets | $ | (19,260) | $ | 8,754 | |||||||
| Amounts included in the Consolidated Balance Sheets: | |||||||||||
| Deferred income taxes | $ | 3,035 | $ | 9,060 | |||||||
| Other liabilities | (22,295) | (306) | |||||||||
Net deferred income tax (liabilities) assets | $ | (19,260) | $ | 8,754 | |||||||
We consider the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes have been recognized on such earnings except for the transition tax recognized as part of the Tax Cuts and Jobs Act (“the Tax Act”) during 2017. We continue to evaluate our plans for reinvestment or repatriation of unremitted foreign earnings. If we determine that all or a portion of our foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes. We believe it is not practicable to estimate the amount of additional taxes, which may be payable upon distribution of these earnings. At January 3, 2026, we had unremitted earnings of foreign subsidiaries of $62.3 million.
The Tax Act introduced new provisions for U.S. taxation of certain global intangible low-taxed income (“GILTI”). We elected to account for the tax on GILTI as a period cost and therefore have not recorded deferred taxes related to GILTI on our foreign subsidiaries.
As of January 3, 2026, we had research and development tax credit carryforwards from the state of Texas of approximately $3.1 million, which if not utilized will expire beginning in 2040.
The following table summarizes the activity related to our unrecognized tax benefits for the periods indicated (excluding interest and penalties) (in thousands):
Fiscal Year Ended | |||||||||||
| January 3, 2026 | December 28, 2024 | ||||||||||
Balance, beginning of year | $ | 16,857 | $ | 14,336 | |||||||
| Gross increases related to current year tax positions | 1,453 | 2,924 | |||||||||
| Gross increases related to prior year tax positions | 274 | 896 | |||||||||
| Gross decreases related to prior year tax positions | (390) | (17) | |||||||||
| Decreases as a result of settlements during the current period | — | (9) | |||||||||
| Lapse of statute of limitations | (1,298) | (1,273) | |||||||||
Balance, end of year | $ | 16,896 | $ | 16,857 | |||||||
If our positions are sustained by the relevant taxing authorities, approximately $16.9 million (excluding interest and penalties) of uncertain tax position liabilities as of January 3, 2026 would favorably impact our effective tax rate in future periods.
We include interest and penalties related to unrecognized tax benefits in our current provision for income taxes in the accompanying consolidated statements of operations. As of January 3, 2026, we had recognized a liability of $5.2 million for interest and penalties related to unrecognized tax benefits.
We file income tax returns in the United States and various state and foreign jurisdictions. The tax years 2022 through 2025 remain open to examination in the United States, and the tax years 2016 through 2025 remain open to examination in Texas. The tax years 2021 through 2025 remain open to examination in most other state and foreign jurisdictions.
The Organization for Economic Co-operation and Development enacted model rules for a new global minimum tax framework, also known as Pillar Two, and certain governments globally have enacted, or are in the process of enacting, legislation to address Pillar Two. As of January 3, 2026, the impact of Pillar Two on our consolidated financial statements was not material.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The effects of the OBBBA were incorporated into our income tax provision and we recognized domestic cash tax savings and an immaterial impact to our income tax expense in 2025. We will continue to evaluate the OBBBA and do not expect the OBBBA to have a material impact on our consolidated financial statements.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Feb 27, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 28, 2022 | |
| 2021 | Mar 1, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Mar 20, 2019 | |
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.