INCOME TAXES

9 Months Ended

Nov. 03, 2019

Notes to Financial Statements [Abstract]

INCOME TAXES

INCOME TAXES

The effective income tax rates for the thirteen weeks ended November 3, 2019 and November 4, 2018 were 13.6% and 4.1%, respectively. The effective income tax rates for the thirty-nine weeks ended November 3, 2019 and November 4, 2018 were 15.1% and 12.7%, respectively.

The effective income tax rates for the thirteen and thirty-nine weeks ended November 3, 2019 were lower than the United States statutory income tax rate primarily due to (i) the benefit of certain discrete items, including the favorable impact on certain liabilities for uncertain tax positions resulting from the expiration of applicable statutes of limitation, which resulted in a benefit to the Company’s effective income tax rates of 13.7% and 4.5% for the thirteen and thirty-nine weeks ended November 3, 2019, respectively, partially offset by (ii) the tax on foreign earnings in excess of a deemed return on tangible assets of foreign corporations (known as “GILTI”) imposed by the United States Tax Cuts and Jobs Act of 2017 (the “U.S. Tax Legislation”), which more than offset the benefit of overall lower tax rates in certain international jurisdictions where the Company files tax returns. The effective income tax rate for the thirty-nine weeks ended November 3, 2019 also included the favorable impact of a tax exemption on the noncash gain recorded in the second quarter of 2019 to write up the Company’s equity investments in Gazal and PVH Australia to fair value in connection with the Australia acquisition that resulted in a 3.7% benefit to the Company’s effective tax rate.

The effective income tax rates for the thirteen and thirty-nine weeks ended November 4, 2018 were lower than the United States statutory income tax rate primarily due to (i) the benefit of certain discrete items, including the favorable impact on certain liabilities for uncertain tax positions resulting from the expiration of applicable statutes of limitation, which resulted in a benefit to the Company’s effective income tax rates of 16.6% and 5.9% for the thirteen and thirty-nine weeks ended November 4, 2018, respectively, and (ii) the benefit of overall lower tax rates in certain international jurisdictions where the Company files tax returns.

The Company files income tax returns in more than 40 international jurisdictions each year. A substantial amount of the Company’s earnings are in international jurisdictions, particularly the Netherlands and Hong Kong, where income tax rates, coupled with special rates levied on income from certain of the Company’s jurisdictional activities, are lower than the United States statutory income tax rate.