Income Taxes

12 Months Ended

Feb. 02, 2019

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

The components of earnings before income taxes are (in thousands):

	Fiscal Year Ended
	February 2, 2019			February 3, 2018			January 28, 2017
United States	$	68,276		$	54,397		$	35,456
Foreign		(5,946	)		(5,994	)		4,768
Total earnings before income taxes	$	62,330		$	48,403		$	40,224

The components of the provision for income taxes are (in thousands):

	Fiscal Year Ended
	February 2, 2019			February 3, 2018		January 28, 2017
Current:
Federal	$	14,374		$	14,514	$	13,350
State and local		3,481			2,477		2,338
Foreign		1,079			1,328		1,187
Total current		18,934			18,319		16,875
Deferred:
Federal		(1,186	)		2,598		(1,855	)
State and local		(443	)		237		(266	)
Foreign		(180	)		447		(434	)
Total deferred		(1,809	)		3,282		(2,555	)
Provision for income taxes	$	17,125		$	21,601	$	14,320

The reconciliation of the income tax provision at the U.S. federal statutory rate to our effective income tax rate is as follows:

	Fiscal Year Ended
	February 2, 2019			February 3, 2018			January 28, 2017
U.S. federal statutory tax rate		21.0	%		33.7	%		35.0	%
State and local income taxes, net of federal effect		4.1			3.9			3.1
Change in valuation allowance		3.0			7.0			—
Foreign earnings, net		(0.3	)		0.6			(2.3	)
Other		(0.3	)		(0.6	)		(0.2	)
Effective tax rate		27.5	%		44.6	%		35.6	%

On December 22, 2017, the U.S. Tax Cuts and Jobs Act, a significant modification of existing U.S. federal tax legislation, was enacted which reduced our U.S. federal tax rate from 35.0% to 21.0%, effective January 1, 2018. The statutory tax rate for fiscal 2018 and fiscal 2017 reflects the change in tax rate. The decrease in rate resulted in a decrease in our provision for income taxes of $8.7 million and $0.5 million for fiscal years ended February 2, 2019, February 3, 2018, respectively.

The components of deferred income taxes are (in thousands):

	February 2, 2019			February 3, 2018
Deferred tax assets:
Deferred rent	$	11,037		$	11,968
Net operating losses		11,480			9,809
Employee benefits, including stock-based compensation		2,050			1,757
Accrued liabilities		1,341			1,586
Inventory		1,148			981
Other		1,130			721
Total deferred tax assets		28,186			26,822
Deferred tax liabilities:
Property and equipment		(8,328	)		(9,813	)
Goodwill and other intangibles		(8,706	)		(8,355	)
Other		(708	)		(903	)
Total deferred tax liabilities		(17,742	)		(19,071	)
Net valuation allowances		(5,185	)		(3,577	)
Net deferred tax assets	$	5,259		$	4,174

At February 2, 2019 and February 3, 2018, we had foreign net operating loss carryovers that could be utilized to reduce future years’ tax liabilities of $46.1 million and $39.1 million, respectively. The tax-effected foreign net operating loss carryovers were $11.5 million and $9.8 million at February 2, 2019 and February 3, 2018, respectively.  The net operating loss carryovers have an indefinite carryfoward period and currently will not expire.

At February 2, 2019 and February 3, 2018, we had valuation allowances on our deferred tax assets of $5.2 million and $3.6 million, respectively, due to the uncertainty of the realization of certain deferred tax assets related to foreign net operating loss carryovers.

We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions.  Our U.S. federal income tax returns are no longer subject to examination for years before fiscal 2017 and with few exceptions, we are no longer subject to U.S. state examinations for years before fiscal 2014. We are no longer subject to examination for all foreign income tax returns before fiscal 2013.