Income taxes

3 Months Ended

Apr. 29, 2023

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

	13 weeks ended
	April 29, 2023		April 30, 2022
Estimated annual effective tax rate before discrete items	18.6	%	20.6	%
Discrete items recognized	(9.7)	%	19.2	%
Effective tax rate recognized in statements of operations	8.9	%	39.8	%

During the 13 weeks ended April 29, 2023, the Company’s effective tax rate was lower than the US federal income tax rate, primarily as a result of the favorable impact of foreign rate differences and benefits from global reinsurance arrangements, as well as the discrete tax benefits recognized in the 13 weeks ended April 29, 2023. The discrete tax benefits relate to the reclassification of remaining taxes on the pension settlement out of AOCI of $4.1 million and the excess tax benefit for share-based compensation which vested during the quarter of $7.6 million.

The Company’s effective tax rate for the same period during the prior year was higher than the US federal income tax rate primarily due to the discrete tax benefits related to litigation charges of $47.7 million, the reclassification of the pension settlement loss out of AOCI of $25.0 million and the excess tax benefit for share-based compensation which vested during the first quarter of $13.0 million.

As of April 29, 2023, there has been no material change in the amounts of unrecognized tax benefits, or the related accrued interest and penalties (where appropriate), in respect of uncertain tax positions identified and recorded as of January 28, 2023.