Income Taxes

6 Months Ended

Aug. 28, 2021

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The effective income tax rate for the three months ended August 28, 2021 was 27.0% compared with 32.8% for the three months ended August 29, 2020. The effective income tax rate for the three months ended August 28, 2021 reflects the impact of charges for restructuring and transformation initiatives as well as a benefit of $0.6 million resulting from an adjustment to the estimated net operating loss incurred in fiscal 2020 that will be carried back, under the provisions of the CARES Act, to a year in which the tax rate was 35%. For the three months ended August 29, 2020, the effective tax rate included the impact of impairment charges for leasehold improvements and lease assets and other discrete tax items.

The effective income tax rate for the six months ended August 28, 2021 was 34.2% compared with 45.2% for the six months ended August 29, 2020. The effective income tax rate for the six months ended August 28, 2021 reflects the impact of charges for restructuring and transformation initiatives as well as a benefit of $16.2 million resulting from an adjustment to the estimated net operating loss incurred in fiscal 2020 which was carried back, under the provisions of the CARES Act, to a year in which the tax rate was 35%. For the six months ended August 29, 2020, the effective tax rate included the impact of impairment charges for leasehold improvements and lease assets, a $43.0 million benefit related to fiscal 2019 net operating loss carry-back under the CARES Act, and other discrete tax items.

During the three and six months ended August 28, 2021, the change in the gross amount of unrecognized tax benefits and accrued interest and penalties was not significant.

As of August 28, 2021, the Company operated in all 50 states, the District of Columbia, Puerto Rico, Canada and Mexico and files income tax returns in the United States and various state, local and international jurisdictions. The Company is currently under examination by the Internal Revenue Service for the tax year 2017. The Company is open to examination for state, foreign and local jurisdictions with varying statutes of limitations, generally ranging from 3 to 5 years.