(4)

Income Taxes

The Tax Cuts and Jobs Act (the “Tax Reform Act”) permanently reduced the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. The provisions for income taxes for the 2018 and 2017 twenty-six-week periods were based on estimated annual effective income tax rates of 24.5% and 38.2%, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards. The applicable effective income tax rates for the 2018 and 2017 twenty-six-week periods were 23.6% and 37.3%, respectively, which were higher than the applicable statutory federal income tax rates of 21% and 35%, respectively. The increase as compared to the statutory federal income tax rate for the 2018 twenty-six-week period was primarily attributable to state taxes, the elimination of the performance-based exception under Section 162(m) included in the Tax Reform Act and the meals and entertainment exclusion, partially offset by excess tax benefits realized on stock based awards. The increase as compared to the statutory federal income tax rate for the 2017 twenty-six-week period was primarily attributable to state taxes, the meals and entertainment exclusion and non-deductible stock-based compensation, partially offset by excess tax benefits realized on stock based awards and income tax benefits recognized on disqualifying dispositions on the Company’s common stock.