XML 29 R14.htm IDEA: XBRL DOCUMENT v3.24.1
Income Taxes
 12 Months Ended
Jan. 28, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of earnings before income taxes, by tax jurisdiction, are as follows:
For the Fiscal Year Ended
(In thousands)January 28,
2024		January 29,
2023		January 30,
2022
United States
$1,154,160 $1,331,492 $1,280,438 
Foreign
119,195 169,190 170,813 
Total
$1,273,355 $1,500,682 $1,451,251 
The provision for income taxes consists of the following:
For the Fiscal Year Ended
(In thousands)January 28,
2024		January 29,
2023		January 30,
2022
Current
Federal
$275,734 $299,015 $234,638 
State
54,903 71,120 61,056 
Foreign
22,041 26,466 26,685 
Total current$352,678 $396,601 $322,379 
Deferred
Federal
$(30,632)$(17,293)$5,896 
State
686 (3,292)(741)
Foreign
861 (3,238)(2,620)
Total deferred$(29,085)$(23,823)$2,535 
Total provision
$323,593 $372,778 $324,914 
The Inflation Reduction Act, enacted on August 16, 2022, includes a new 15% minimum tax on “adjusted financial statement income” effective for tax years beginning after December 31, 2022. The company was not subject to the minimum tax for fiscal 2023.
In addition to U.S. tax law changes, a number of countries have begun to enact legislation to implement the Organization for Economic Cooperation and Development (“OECD”) international tax framework, including the Pillar Two minimum tax regime. The OECD continues to release additional guidance on these rules and the Framework calls for law enactment by OECD and G20 members to take effect in 2024 or 2025. Pillar Two minimum tax will be treated as a period cost in future years and did not impact our results of operations for fiscal 2023. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, and monitoring legislative developments by other countries, especially in the regions that we operate.
A reconciliation of income taxes at the federal statutory corporate rate to the effective rate is as follows:
For the Fiscal Year Ended
(In thousands)January 28,
2024		January 29,
2023		January 30,
2022
Federal income taxes at the statutory rate21.0 %21.0 %21.0 %
State income tax rate4.4 4.2 4.1 
Officer’s compensation under Sec.162(m)0.9 1.4 2.0 
Deferred true up0.2 0.1 (0.1)
Change in uncertain tax positions(0.5)0.3 (0.5)
Rate differential(0.3)(0.7)(0.6)
Stock-based compensation(0.3)(1.7)(2.9)
Credits— (0.2)(0.2)
Other— 0.4 (0.4)
Total25.4 %24.8 %22.4 %

Significant components of our deferred income tax accounts are as follows:
As of
(In thousands)January 28, 2024January 29, 2023
Deferred tax assets (liabilities)
Operating lease liabilities$357,266 $359,001 
 Merchandise inventories37,828 32,338 
Compensation25,658 18,960 
Gift cards23,929 24,632 
Accrued liabilities20,178 22,356 
Executive deferred compensation11,061 9,605 
Stock-based compensation10,593 14,308 
State taxes7,492 8,084 
Loyalty rewards3,232 3,734 
State net operating loss1,153 2,446 
Operating lease right-of-use assets(310,299)(321,646)
Property and equipment(44,622)(65,039)
Deferred lease incentives(29,638)(22,400)
Other(5,003)(4,756)
Valuation allowance
(1,346)(2,635)
Total deferred tax assets, net
$107,482 $78,988 
We had net state operating loss carry-forwards as of January 28, 2024. A valuation allowance has been provided against certain state net operating loss carry-forwards, as we do not expect to fully utilize the losses in future years.
The following table summarizes the activity related to our gross unrecognized tax benefits:
For the Fiscal Year Ended
(In thousands)January 28,
2024		January 29,
2023		January 30,
2022
Beginning balance$37,068 $33,612 $38,696 
Increases related to current year tax positions
4,966 8,169 8,573 
Increases for tax positions for prior years
194 807 1,738 
Decrease for tax positions for prior years
(1,170)(2,237)(82)
Lapse in statute of limitations
(9,476)(3,283)(15,313)
Ending balance$31,582 $37,068 $33,612 
As of January 28, 2024, we had $31.6 million of gross unrecognized tax benefits, of which $25.8 million would, if recognized, affect the effective tax rate.
We accrue interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of January 28, 2024 and January 29, 2023, our accruals for the payment of interest and penalties totaled $5.3 million and $6.1 million, respectively.
Due to the potential resolution of tax issues, it is reasonably possible that the balance of our gross unrecognized tax benefits could decrease within the next twelve months by a range of $0 to $5.8 million.
We file income tax returns in the U.S. and foreign jurisdictions. We are subject to examination by the tax authorities in these jurisdictions. Our U.S. federal taxable years for which the statute of limitations has not expired are fiscal years 2020 to 2023. Substantially all material state, local and foreign jurisdictions’ statutes of limitations are closed for taxable years prior to 2019.