Note 9 - Income Taxes

3 Months Ended

May 31, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

9

.

INCOME TAXES

For the

13

weeks ended

May 31, 2020,

the Company recorded an income tax provision from continuing operations of

$728,

which included a discrete income tax provision of

$41.

For the

13

weeks ended

June 2, 2019,

the Company recorded an income tax provision from continuing operations of

$1,116.

The Company’s effective tax rate for the

13

weeks ended

May 31, 2020

was an income tax provision of

27.0%,

compared to an income tax provision of

29.1%

in the comparable prior period. The effective tax rate for the

13

weeks ended

May 31, 2020

was higher than the U.S. statutory rate of

21%

primarily due to state and local taxes, and a discrete income tax provision for the accrual of interest related to unrecognized tax benefits. The effective rate for the

13

weeks ended

June 2, 2019

was higher than the U.S. statutory rate of

21%

primarily due to state and local taxes, a discrete income tax provision for stock compensation and the accrual of interest related to unrecognized tax benefits.

Notwithstanding the U.S. taxation of the deemed repatriated earnings as a result of the mandatory

one

-time transition tax on the accumulated untaxed earnings of foreign subsidiaries of U.S. shareholders included in the

2017

Tax Cuts and Jobs Act, the Company intends to indefinitely invest approximately

$25

million of undistributed earnings outside of the U.S. If these future earnings are repatriated to the U.S., or if the Company determines such earnings will be remitted in the foreseeable future, the Company

may

be required to accrue U.S. deferred taxes.