To supplement our financial results presented in accordance with GAAP, this release includes the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: pro forma effective tax rate, pro forma net income (earnings) per share and free cash flow. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies, limiting the usefulness of the measures for comparison with other companies. Management believes providing investors with an operating view consistent with how it manages the Company provides enhanced transparency into the operating results of the Company, as described in more detail by category below.
The tables below provide reconciliations between the GAAP and non-GAAP measures.
Pro forma effective tax rate
The Company's income tax expense is periodically impacted by discrete tax items that are not reflective of income tax expense incurred as a result of current period earnings. Therefore, management believes the effective tax rate and income tax provision before the effect of certain discrete tax items are important measures to permit investors' consistent comparison between periods. In the first half 2024 and 2023 there were no such discrete tax items identified.
Pro forma net income (earnings) per share
Management believes net income (earnings) per share before the impact of foreign currency gains or losses and certain discrete income tax items, as discussed above, is an important measure to permit a consistent comparison of the Company's performance between periods.
(In thousands, except per share information) |
| 13-Weeks Ended |
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| 26-Weeks Ended |
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| June 29, |
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| July 1, |
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| June 29, |
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| July 1, |
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| 2024 |
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| 2023 |
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| 2024 |
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| 2023 |
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GAAP net income |
| $ | 300,630 |
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| $ | 287,939 |
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| $ | 576,591 |
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| $ | 490,266 |
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Foreign currency gains / losses(1) |
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| 4,828 |
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| (10,797) |
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| 2,547 |
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| (18,484) |
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Tax effect of foreign currency gains / losses(2) |
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| (862) |
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| 958 |
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| (428) |
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| 1,632 |
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Pro forma net income |
| $ | 304,596 |
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| $ | 278,100 |
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| $ | 578,710 |
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| $ | 473,414 |
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GAAP net income per share: |
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| Basic |
| $ | 1.57 |
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| $ | 1.51 |
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| $ | 3.00 |
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| $ | 2.56 |
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| Diluted |
| $ | 1.56 |
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| $ | 1.50 |
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| $ | 2.99 |
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| $ | 2.56 |
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| Pro forma net income per share: |
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| Basic |
| $ | 1.59 |
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| $ | 1.45 |
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| $ | 3.01 |
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| $ | 2.47 |
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| Diluted |
| $ | 1.58 |
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| $ | 1.45 |
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| $ | 3.00 |
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| $ | 2.47 |
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| Weighted average common shares outstanding: |
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| Basic |
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| 192,074 |
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| 191,293 |
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| 191,982 |
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| 191,395 |
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| Diluted |
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| 192,899 |
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| 191,597 |
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| 192,808 |
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| 191,741 |
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| (1) Foreign currency gains and losses for the Company are driven by movements of a number of currencies in relation to the U.S.
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| (2) The tax effect of foreign currency gains was calculated using the effective tax rate of 17.9% and 16.8% for the 13-weeks and
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