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

14. Income Taxes

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States (“U.S.”). The OBBBA includes significant tax provisions, such as accelerated cost recovery of qualified property and the immediate expensing of U.S.-based research and development costs. The OBBBA has multiple effective dates, with most business provisions effective in tax years beginning after either December 31, 2024 or December 31, 2025. The estimated impact of these immaterial changes have been recognized during Fiscal year ended January 31, 2026.

The provision for income taxes for the Fiscal Years 2025, 2024, and 2023 consists of the following (in thousands):

 

 

 

For the Fiscal Year Ended

 

 

 

January 31, 2026

 

 

February 1, 2025

 

 

February 3, 2024

 

Current

 

 

 

 

 

 

 

 

 

U.S. Federal

 

$

4,468

 

 

$

12,668

 

 

$

9,148

 

State and local

 

 

1,680

 

 

 

3,408

 

 

 

3,108

 

Total current

 

 

6,148

 

 

 

16,076

 

 

 

12,256

 

Deferred tax (benefit) expense

 

 

 

 

 

 

 

 

 

U.S. Federal

 

 

3,877

 

 

 

(1,502

)

 

 

1,971

 

State and local

 

 

1,137

 

 

 

(76

)

 

 

(1,063

)

Total deferred tax (benefit) expense

 

 

5,014

 

 

 

(1,578

)

 

 

908

 

Total income tax provision

 

$

11,162

 

 

$

14,498

 

 

$

13,164

 

 

We adopted ASU 2023-09 on a prospective basis beginning with the year ended January 31, 2026. A reconciliation of the

Company’s effective income tax rate to the 21% U.S. federal statutory income tax rate for the year ended January 31, 2026,

reflecting the adoption of ASU 2023-09, is presented below (in thousands):

 

 

 

For the Fiscal Year Ended

 

 

 

January 31, 2026

 

U.S. federal statutory income tax

 

$

8,201

 

 

 

21.0

%

State and local income taxes, net of federal benefit(1)

 

 

2,289

 

 

 

5.9

%

Non-taxable or non-deductible items:

 

 

 

 

 

 

          Disallowed officer compensation

 

 

1,134

 

 

 

2.9

%

Changes in unrecognized tax benefits

 

 

(211

)

 

 

(0.6

)%

Other adjustments

 

 

(251

)

 

 

(0.6

)%

Effective tax rate

 

$

11,162

 

 

 

28.6

%

(1) State and local taxes in California, Massachusetts, Minnesota, New Hampshire, New Jersey, New York, Texas, and Pennsylvania, and comprise the majority of this category.

The effective tax rate for the fiscal year ended January 31, 2026 differs from the federal statutory rate of 21% primarily due to the impact of state and local income taxes and the impact of executive compensation limitations.

A reconciliation of the Company’s effective income tax rate to the 21% U.S. federal statutory income tax rate for the years prior to the adoption of ASU 2023-09, is presented below:

 

 

For the Fiscal Year Ended

 

 

 

February 1, 2025

 

 

February 3, 2024

 

Federal statutory income tax rate

 

 

21.0

%

 

 

21.0

%

State income taxes, net of federal tax effect

 

 

4.9

%

 

 

6.0

%

Disallowed Interest

 

 

—

 

 

 

1.8

%

Disallowed officer compensation

 

 

2.5

%

 

 

2.5

%

Valuation allowance

 

 

—

 

 

 

(2.7

)%

Equity-based compensation expense

 

 

(1.5

)%

 

 

(1.6

)%

Charitable contributions

 

 

(0.2

)%

 

 

(0.2

)%

Tax return to provision adjustments

 

 

—

 

 

 

0.1

%

Other

 

 

0.2

%

 

 

(0.2

)%

     Effective Tax Rate

 

 

26.9

%

 

 

26.7

%

For the fiscal year ended January 31, 2026, the Company paid income taxes (net of refunds) entirely from domestic operations. Income taxes paid (net of refunds) were as follows (in thousands):

 

 

For the Fiscal Year Ended

 

 

 

January 31, 2026

 

Federal

 

$

8,200

 

State

 

 

2,617

 

Total

 

$

10,817

 

 

 

The components of deferred tax assets (liabilities) were as follows (in thousands):

 

 

 

 

 

 

 

January 31, 2026

 

 

February 1, 2025

 

Deferred tax assets

 

 

 

 

 

 

Lease Liability

 

$

38,624

 

 

$

35,346

 

NOL and Interest Carryforwards

 

 

306

 

 

 

320

 

Start-Up Costs

 

 

238

 

 

 

294

 

Accrued expenses and other

 

 

3,470

 

 

 

4,286

 

Tax OID & Voluntary Paydown

 

 

—

 

 

 

1,741

 

Total deferred tax assets, gross

 

 

42,638

 

 

 

41,987

 

Deferred tax liabilities

 

 

 

 

 

 

Right of use assets

 

 

(33,164

)

 

 

(28,893

)

Inventory Retail Method Adjustment

 

 

(971

)

 

 

(750

)

Fixed Asset Depreciation

 

 

(7,781

)

 

 

(5,523

)

Intangibles Amortization

 

 

(14,420

)

 

 

(15,628

)

Prepaid and Other Accruals

 

 

(705

)

 

 

(582

)

Total deferred tax liabilities

 

 

(57,041

)

 

 

(51,376

)

Net deferred tax liabilities

 

$

(14,403

)

 

$

(9,389

)

Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax bases of assets and liabilities using statutory rates. The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets on a quarterly basis. The Company has assessed, on a jurisdictional basis, the available means of recovering deferred tax assets, including the ability to carry-back net operating losses, the existence of reversing temporary differences, the availability of tax planning strategies and available sources of future taxable income. It has also considered the ability to implement certain strategies that would, if necessary, be implemented to accelerate taxable income and use expiring deferred tax assets. The Company has concluded future taxable income can be considered a source of income to realize a benefit for deferred tax assets in certain jurisdictions. The Company believes it is able to support the deferred tax assets recognized as of the end of the year based on all of the available evidence.

As of January 31, 2026, the Company does not have a federal net operating loss carryforward. As of January 31, 2026 and February 1, 2025, the Company had $0.3 million and $0.3 million of state net operating loss carryforwards, respectively, that would expire if unutilized by the tax year 2040. The Company does not have federal or state tax credit carryforwards as of January 31, 2026. The Company had $0.1 million and $0.1 million of state business interest carryforwards, available to offset future taxable income as of January 31, 2026 and February 1, 2025, respectively. This carryforward can be carried forward indefinitely for state tax purposes.

The following table summarizes the changes in the Company’s unrecognized income tax benefits for Fiscal Years 2025, 2024 and 2023 (in thousands):

 

 

 

For the Fiscal Year Ended

 

 

 

January 31, 2026

 

 

February 1, 2025

 

 

February 3, 2024

 

Balance at the beginning of the period

 

$

127

 

 

$

127

 

 

$

425

 

(Decreases) Increases for tax positions related to prior periods

 

 

(127

)

 

 

—

 

 

 

(298

)

Balance at the end of the period

 

$

—

 

 

$

127

 

 

$

127

 

The Company did not have gross unrecognized tax benefits as of January 31, 2026. The Company had gross unrecognized tax benefits of $0.1 million as of February 1, 2025 and February 3, 2024, recorded in Other liabilities in the consolidated balance sheets. The Company will recognize interest and penalties, if any, related to uncertain tax positions in Income tax expense. As of January 31, 2026, no significant amount of penalties or interest have been accrued.

For federal and state income tax purposes, the Company’s tax years remain open under statute for Fiscal Year 2022 to present.