Income Taxes Income Taxes (Notes)

6 Months Ended

Oct. 28, 2023

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 12. Income Taxes

Our provision for income taxes during interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate for the full fiscal year to ordinary income (loss) (pre-tax income (loss) excluding unusual or infrequently occurring discrete items) for the reporting period. For the 26 weeks ended October 28, 2023, and in accordance with ASC 740-270-30-18 “Income Taxes - Interim Reporting - Initial Measurement,” and paragraph 82 of FASB interpretation No. 18, "Accounting for Income Taxes in Interim Periods" ("FIN 18"), we computed our provision for income taxes based on the actual effective tax rate for the year-to-date period by applying the discrete method. We determined that as small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the 26 weeks ended October 28, 2023. We believe that, at this time, the use of this discrete method represents the best estimate of our annual effective tax rate.

We recorded an income tax expense of $314 on pre-tax income of $25,168 during the 13 weeks ended October 28, 2023, which represented an effective income tax rate of 1.2% and an income tax benefit of $(383) on pre-tax income of $23,785 during the 13 weeks ended October 29, 2022, which represented an effective income tax rate of (1.6)%. We recorded an income tax expense of $303 on pre-tax loss of $(24,814) during the 26 weeks ended October 28, 2023, which represented an effective income tax rate of (1.2)% and an income tax expense of $464 on pre-tax loss of $(25,690) during the 26 weeks ended October 29, 2022, which represented an effective income tax rate of (1.8)%. The effective tax rate for the 26 weeks ended October 28, 2023 is lower than the prior year comparable period due to utilization of the discrete tax provision methodology discussed above.

In assessing the realizability of the deferred tax assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be realized. As of October 28, 2023, we determined that it was more likely than not that we would not realize all deferred tax assets and our tax rate for the current fiscal year reflects this determination. We will continue to evaluate this position.