v3.25.3
Income Taxes
 12 Months Ended
Sep. 28, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Components of earnings before income taxes (in millions):
Fiscal Year EndedSep 28, 2025Sep 29, 2024Oct 1, 2023
United States$1,850.1 $4,087.6 $4,488.6 
Foreign657.2 882.0 913.3 
Total earnings before income taxes$2,507.3 $4,969.6 $5,401.9 
Provision/(benefit) for income taxes (in millions):
Fiscal Year EndedSep 28, 2025Sep 29, 2024Oct 1, 2023
Current taxes:
U.S. federal$179.4 $681.2 $678.2 
U.S. state and local120.4 210.9 235.9 
Foreign362.5 328.8 422.4 
Total current taxes662.3 1,220.9 1,336.5 
Deferred taxes:
U.S. federal30.2 10.7 117.0 
U.S. state and local(11.3)(0.7)(0.8)
Foreign(30.6)(23.6)(175.5)
Total deferred taxes(11.7)(13.6)(59.3)
Total income tax expense$650.6 $1,207.3 $1,277.2 
Reconciliation of the statutory U.S. federal income tax rate with our effective income tax rate:
Fiscal Year EndedSep 28, 2025Sep 29, 2024Oct 1, 2023
Statutory rate21.0 %21.0 %21.0 %
State income taxes, net of federal tax benefit3.4 3.3 3.4 
Foreign rate differential0.3 0.3 0.4 
Residual tax on foreign earnings3.6 0.4 — 
Foreign derived intangible income(1.6)(0.8)(0.8)
Tax status change of foreign entity
(1.4)— — 
Other, net0.6 0.1 (0.4)
Effective tax rate25.9 %24.3 %23.6 %
During fiscal 2025, we revised our indefinite reinvestment assertions from prior years' cumulative earnings from certain foreign subsidiaries, and in the fourth quarter of fiscal 2025, we repatriated approximately $900 million of cash from foreign subsidiaries, upon which approximately $90 million in related withholding taxes were recorded and paid, as reflected in Residual tax on foreign earnings.
As of September 28, 2025, in certain foreign subsidiaries in which we are partially indefinitely reinvested, the gross taxable temporary difference between the accounting basis and tax basis was approximately $1.8 billion for which there could be up to approximately $180 million of unrecognized tax liability.
Tax effect of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities (in millions):
Sep 28, 2025Sep 29, 2024
Deferred tax assets:
Operating lease liabilities$2,646.7 $2,595.1 
Stored value card liability and deferred revenue1,593.0 1,612.5 
Intangible assets and goodwill 355.5 372.6 
Other780.9 692.2 
Total5,376.1 5,272.4 
Valuation allowance(189.2)(194.5)
Total deferred tax asset, net of valuation allowance5,186.9 5,077.9 
Deferred tax liabilities:
Operating lease, right-of-use assets(2,466.8)(2,483.7)
Property, plant and equipment(641.3)(580.8)
Other(302.3)(267.8)
Total(3,410.4)(3,332.3)
Net deferred tax asset (liability)$1,776.5 $1,745.6 
Reported as:
Deferred income tax assets$1,826.9 $1,766.7 
Deferred income tax liabilities (included in Other long-term liabilities)(50.4)(21.1)
Net deferred tax asset (liability)$1,776.5 $1,745.6 
The valuation allowances as of September 28, 2025, and September 29, 2024, were primarily related to net operating losses and other deferred tax assets of consolidated foreign subsidiaries.
As of September 28, 2025, we had federal tax credit carryforwards of $68.5 million, which will begin to expire in fiscal 2030, and foreign net operating loss carryforwards of $444.8 million, of which $104.5 million have an indefinite carryforward period and the remainder will begin to expire in fiscal 2026.
Uncertain Tax Positions
As of September 28, 2025, we had $119.9 million of gross unrecognized tax benefits, of which $76.6 million, if recognized, would affect our effective tax rate. We recognized expense of $8.4 million, $8.8 million, and $5.7 million of interest and penalties in income tax expense, prior to the benefit of the federal tax deduction, for fiscal 2025, 2024, and 2023, respectively. As of September 28, 2025, and September 29, 2024, we had accrued interest and penalties of $30.4 million and $22.5 million, respectively, on our consolidated balance sheets.
The following table summarizes the activity related to our unrecognized tax benefits (in millions):
Sep 28, 2025Sep 29, 2024Oct 1, 2023
Beginning balance$108.0 $105.0 $89.7 
Increase related to prior year tax positions3.1 7.9 1.2 
Decrease related to prior year tax positions(0.4)(6.4)(0.4)
Increase related to current year tax positions12.9 10.3 14.5 
Decreases related to settlements with taxing authorities(0.7)(8.8)— 
Decrease related to lapsing of statute of limitations(3.0)— — 
Ending balance$119.9 $108.0 $105.0 
We are currently under examination, or may be subject to examination, by various U.S. federal, state, local, and foreign tax jurisdictions for fiscal 2018 through 2024. We are no longer subject to U.S. federal, U.S. state and local, or material foreign market examinations for years prior to fiscal 2018.
It is reasonably possible that up to approximately $62 million of the Company’s gross unrecognized tax benefits may be recognized by the end of fiscal 2026 for reasons such as a lapse of the statute of limitations or resolution of examinations with tax authorities.