Income Taxes

3 Months Ended

Apr. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

10. Income Taxes

The provision for income taxes is based on the current estimate of the annual effective income tax rate and is adjusted as necessary for discrete quarterly events. The effective income tax rate for the 13 weeks ended April 30, 2022 was 24.0% compared to 24.7% for the 13 weeks ended May 1, 2021. The change in the effective tax rate, as compared to the prior period, is primarily due to the decrease in non-deductible executive compensation offset by lower excess tax benefits on share-based payments.

The Company records accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company recognizes income tax liabilities related to unrecognized tax benefits in accordance with ASC 740 and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available.

Unrecognized tax benefits did not change significantly during the 13 weeks ended April 30, 2022. Over the next twelve months, the Company believes that it is reasonably possible that unrecognized tax benefits may decrease by approximately $1.0 million due to settlements, expiration of statute of limitations, or other changes in unrecognized tax benefits.