v3.26.1
INCOME TAXES
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income Before Income Taxes
The components of income before income taxes are as follows:
Year Ended June 30,202620252024
U.S.$513,009 $475,266 $467,785 
Foreign31,265 25,701 30,345 
Income before income taxes$544,274 $500,967 $498,130 
Provision for Income Taxes
The provision for income taxes consists of:
Year Ended June 30,202620252024
Current:
Federal$78,575 $87,700 $86,501 
State and local20,179 18,525 23,016 
Foreign4,731 8,116 3,925 
Total current103,485 114,341 113,442 
Deferred:
Federal20,802 (4,432)(791)
State and local3,331 (310)1,159 
Foreign2,131 (1,620)(1,442)
Total deferred26,264 (6,362)(1,074)
Provision for income taxes$129,749 $107,979 $112,368 
Effective Tax Rates
The following reconciles the U.S. federal statutory income tax rate to the Company’s effective income tax rate:
Year Ended June 30,202620252024
AmountPercentAmountPercentAmountPercent
U.S. federal statutory tax rate$114,298 21.0 %$105,203 21.0 %$104,607 21.0 %
State and local income taxes, net of federal income tax effect1,2,3
18,559 3.4 14,409 2.9 19,981 4.0 
Foreign tax effects7,966 1.5 6,939 1.4 1,307 0.4 
Effect of cross-border tax laws(1,206)(0.2)(2,822)(0.6)(3,482)(0.7)
Foreign tax credits(6,830)(1.3)(5,813)(1.2)(2,808)(0.6)
Tax credits742 0.1 (2,503)(0.5)(2,471)(0.5)
Nontaxable or nondeductible items2,033 0.4 1,631 0.4 2,459 0.5 
Share-based payments(5,762)(1.1)(5,634)(1.1)(5,909)(1.2)
Changes in unrecognized tax benefits(17)— (3,257)(0.7)(1,559)(0.3)
Other adjustments(34)— (174)— 243 — 
Effective tax rate$129,749 23.8 %$107,979 21.6 %$112,368 22.6 %
1State taxes in the following states make up more than 50% of the tax effect in this category for 2026; California, Wisconsin, Minnesota,
Illinois, Michigan, Iowa, Indiana, New York, Pennsylvania and Oregon.
2State taxes in the following states make up more than 50% of the tax effect in this category for 2025; California, Wisconsin, Minnesota,
Illinois, Michigan, Iowa, Indiana and New York.
3State taxes in the following states make up more than 50% of the tax effect in this category for 2024; California, Wisconsin, Minnesota,
Illinois, Michigan, Iowa, Indiana, New York, Pennsylvania and Oregon.
The components of income taxes paid globally are as follows:
Year ended June 30,202620252024
Federal taxes paid$77,257 $80,799 $86,000 
State taxes paid20,592 18,143 25,499 
Foreign taxes paid11,097 8,779 4,812 
Total income taxes paid$108,946 $107,721 $116,311 
Deferred Income Tax Assets and Liabilities
Significant components of the Company’s deferred income tax assets and liabilities are as follows:
June 30,20262025
Deferred tax assets:
Compensation liabilities not currently deductible$20,989 $20,331 
Other expenses and reserves not currently deductible19,558 17,430 
Leases41,697 36,054 
Foreign tax credit4,945 — 
Net operating loss carryforwards 2,774 5,388 
Capitalization of R&D costs2,538 22,284 
Other348 2,281 
Total deferred tax assets92,849 103,768 
Less: Valuation allowance51 853 
Total deferred tax assets, net of valuation allowance92,798 102,915 
Deferred tax liabilities:
Inventories(26,915)(20,376)
Goodwill and intangibles(65,715)(64,062)
Leases(41,470)(35,933)
Hedging instrument— (1,906)
Depreciation and differences in property bases(13,943)(10,530)
Total deferred tax liabilities(148,043)(132,807)
Net deferred tax liabilities$(55,245)$(29,892)
Net deferred tax liabilities are classified as follows:
Other assets$8,676 $12,263 
Other liabilities(63,921)(42,155)
Net deferred tax liabilities$(55,245)$(29,892)
As of June 30, 2026 and 2025, the Company had foreign net operating loss carryforwards of approximately $9,862 and $19,426, respectively, the tax benefit of which is approximately $2,645 and $5,289, respectively. These loss carryforwards will expire at various dates beginning in 2036. As of June 30, 2026 and 2025, the Company had state net operating loss carryforwards, the tax benefit of which is approximately $129 and $99, respectively, which will expire at various dates beginning in 2038.
Valuation allowances are provided against deferred tax assets where it is considered more-likely-than-not that the Company will not realize the benefit of such assets. The remaining net deferred tax asset is the amount management believes is more-likely-than-not of being realized. The realization of these deferred tax assets can be impacted by changes to tax laws, statutory tax rates, and future income levels. The Company evaluates the realization of its deferred tax assets each quarter throughout the year. During 2026 and 2025, the Company recorded a net tax (benefit) expense related to the change in valuation allowances of $(802) and $695, respectively. The total valuation allowance provided against the deferred tax assets is $51 and $853 as of June 30, 2026 and 2025, respectively.
As of June 30, 2026, the Company had accumulated undistributed earnings of non-U.S. subsidiaries of approximately $103,672. The vast majority of such earnings have previously been subjected to the one-time transition tax or the Global Intangible Low Taxed Income ("GILTI") inclusion. Therefore, any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of our foreign investments would generally be limited to foreign withholding and state income taxes. In addition, we expect foreign tax credits would be available to either offset or partially reduce the tax cost in the event of a distribution.
During 2026, the Company removed its permanent reinvestment assertion related to two of its non-U.S. entities. The tax cost associated with this change was not significant. For other non-U.S. entities, we continue to intend to indefinitely reinvest earnings generated by these entities and expect future cash generation in the United States to be sufficient to meet future cash needs.
Unrecognized Income Tax Benefits
The Company and its subsidiaries file income tax returns in the U.S. federal, various state, local, and foreign jurisdictions. The following table sets forth the changes in the amount of unrecognized tax benefits for 2026, 2025, and 2024:
Year Ended June 30,202620252024
Unrecognized Income Tax Benefits at beginning of the year$918 $3,048 $4,821 
Current year tax positions85 85 105 
Prior year tax positions400 57 (412)
Expirations of statutes of limitations(487)(2,272)(1,466)
Unrecognized Income Tax Benefits at end of year$916 $918 $3,048 
The Company recognizes interest and penalties related to uncertain tax positions in the provision for income taxes. During 2026, 2025, and 2024, the Company recognized $(15), $(1,060), and $296 of (income) expense, respectively, for interest and penalties related to unrecognized income tax benefits in its statements of consolidated income. The Company had a liability for penalties and interest of $336, $351, and $1,411 as of June 30, 2026, 2025, and 2024, respectively. The Company anticipates a decrease to unrecognized income tax benefits within the next twelve months of approximately $472, of which all would affect the effective income tax rate. Included in the balance of unrecognized income tax benefits at June 30, 2026, 2025, and 2024 are $808, $809, and $2,946 respectively, of income tax benefits that, if recognized, would affect the effective income tax rate.
The Company is subject to U.S. federal income tax examinations for the tax years 2023 through 2025 and to state and local income tax examinations for the tax years 2020 through 2025. In addition, the Company is subject to foreign income tax examinations for the tax years 2019 through 2025.
The Company’s unrecognized income tax benefits are included in other liabilities in the consolidated balance sheets since payment of cash is not expected within one year, or as a reduction of a deferred tax asset.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017, as amended, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. The Company is required to recognize the effects of changes in tax rates and laws on deferred tax balances in the period in which the legislation is enacted. As of June 30, 2026, the Company completed its evaluation and as a result, did not have any material adjustments to its financial statements resulting from the enactment of the OBBBA.