v3.26.1
Income Taxes
 12 Months Ended
Jan. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

(14) Income Taxes

For the fiscal years ended January 31, 2026, February 1, 2025, and February 3, 2024, the income tax provision consisted of the following:

 

 

January 31,

 

 

February 1,

 

 

February 3,

 

 

2026

 

 

2025

 

 

2024

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

(693

)

 

$

21

 

 

$

203

 

State

 

 

554

 

 

 

328

 

 

 

643

 

Total current

 

 

(139

)

 

 

349

 

 

 

846

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

 

(946

)

 

 

(809

)

 

 

(8,251

)

State

 

 

-

 

 

 

2,390

 

 

 

(1,804

)

Total deferred

 

 

(946

)

 

 

1,581

 

 

 

(10,055

)

Total income tax provision

 

$

(1,085

)

 

$

1,930

 

 

$

(9,209

)

 

The following table sets forth income reconciliations of the statutory federal income tax rate to actual rates based on income or loss before income taxes, reflecting the adoption of new accounting guidance. A subsequent table below provides the corresponding information for the prior year before the adoption of new accounting guidance and is provided for comparative purposes only.

 

 

January 31,

 

 

2026

 

 

 

(in thousands)

 

Federal income tax (benefit) at statutory rate

 

$

(10,741

)

 

 

21

%

State income tax, net of federal benefit (1)

 

 

530

 

 

 

(1.0

)

Permanent items

 

 

819

 

 

 

(1.6

)

Tax credits

 

 

(169

)

 

 

0.3

 

Change in valuation allowance

 

 

8,372

 

 

 

(16.4

)

Uncertain tax positions

 

 

(154

)

 

 

0.3

 

Other items

 

 

258

 

 

 

(0.5

)

Effective income tax rate

 

$

(1,085

)

 

 

2.1

%

(1) State taxes in Oregon made up the majority (greater than 50%) of the tax effect in this category.

 

The provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows for the following periods:

 

February 1,

 

February 3,

 

 

2025

 

 

2024

 

Federal statutory rate

 

 

21.0

%

 

 

21.0

%

State tax, net of federal benefit

 

 

(6.9

)

 

 

4.1

 

Permanent items

 

 

(2.2

)

 

 

(2.4

)

Tax credits

 

 

1.0

 

 

 

2.4

 

Valuation allowance

 

 

(18.3

)

 

 

-

 

Other items

 

 

(0.8

)

 

 

(1.0

)

Effective income tax rate

 

 

(6.2

)%

 

 

24.1

%

 

The following table presents income taxes paid (net of refunds received) for the year ended January 31, 2026, as required by ASU 2023-09:

 

 

January 31,

 

 

2026

 

Cash paid for income taxes, net of refunds

 

 

 

Federal

 

$

(607

)

State

 

 

 

Louisiana

 

 

(108

)

Oregon

 

 

596

 

Other jurisdictions

 

 

110

 

Total

 

$

(9

)

 

We paid cash for income taxes, net of refunds, of $411 as of February 1, 2025 and $1,646 as of February 3, 2024.

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at January 31, 2026 and February 1, 2025, respectively, are presented below:

 

 

January 31,

 

 

February 1,

 

 

2026

 

 

2025

 

Deferred tax assets:

 

 

 

 

 

 

Accrued liabilities

 

$

1,843

 

 

$

268

 

Operating lease liability

 

 

83,758

 

 

 

89,494

 

Gift card liability

 

 

3,482

 

 

 

3,191

 

Goodwill

 

 

343

 

 

 

425

 

Intangible asset

 

 

343

 

 

 

490

 

Inventories

 

 

3,478

 

 

 

3,021

 

Sales return reserve

 

 

194

 

 

 

214

 

Stock-based compensation

 

 

254

 

 

 

726

 

Tax credits

 

 

1,182

 

 

 

1,120

 

Net operating losses

 

 

13,268

 

 

 

11,136

 

Section 163(j) interest

 

 

7,363

 

 

 

5,910

 

Loyalty program

 

 

1,324

 

 

 

654

 

Total gross deferred tax assets

 

 

116,832

 

 

 

116,649

 

Less: Valuation allowance

 

 

(19,536

)

 

 

(10,082

)

Deferred tax assets, net of valuation allowance

 

$

97,296

 

 

$

106,567

 

Deferred tax liabilities:

 

 

 

 

 

 

Depreciation

 

$

(23,570

)

 

$

(28,676

)

ROU asset

 

 

(72,741

)

 

 

(77,701

)

Prepaid expenses

 

 

(985

)

 

 

(1,330

)

Total gross deferred tax liabilities

 

 

(97,296

)

 

 

(107,707

)

Net deferred tax (liability) asset

 

$

-

 

 

$

(1,140

)

As of January 31, 2026, the Company had a federal net operating loss (“NOL”) carryforward of $53,397 with no expiration period. In addition, the Company has federal credit carryforwards of $1,174 which begins to expire in 2044. The Company continues to evaluate the possibility of an ownership change in accordance with Internal Revenue Code Section 382, which could limit the utilization of their NOL and credit carryforwards each year. In general terms, an ownership change results from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percent over a three-year period. As of January 31, 2026, the Company is not aware of any such ownership change.

As of January 31, 2026, the Company had state NOL carryforwards of $14,399 with no expiration period and state NOL carryforwards of $27,089 which expire beginning in 2032 through 2044. In addition, the Company has state credit carryforwards of $60 which begin to expire in 2038.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company considers all available evidence, both positive and negative, to determine the realizability of deferred tax assets and includes historical information about results of operations for the current and preceding years as well as more subjective information about future years. A significant piece of objective negative evidence evaluated was a cumulative loss over the most recent 36-month period ended January 31, 2026, which was not outweighed by available positive evidence. Accordingly, as of January 31, 2026, a valuation allowance of $19,536 was provided against the net amount of deferred tax assets as compared to $10,082 as of February 1, 2025.

As of January 31, 2026, the Company had no material unrecognized tax benefits. The Company does not anticipate that unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date. Federal

tax years that remain subject to examination are the periods ended January 28, 2023 through January 31, 2026. State years that remain subject to examination are generally the periods from January 29, 2022 through January 31, 2026 in various jurisdictions.

The Company’s policy is to accrue interest expense, and penalties as appropriate, on estimated unrecognized tax benefits as a charge to interest expense in the consolidated statements of operations. No interest or penalties were accrued for fiscal years 2025, 2024 or 2023.