v3.26.1
INCOME TAXES
 12 Months Ended
Feb. 01, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The domestic and foreign components of income before income taxes were as follows:
(In millions)202520242023
Domestic$(239.6)$61.6 $90.9 
Foreign390.9 644.1 750.1 
Total$151.3 $705.7 $841.0 
    
The income before income taxes in 2025 includes $479.5 million of noncash goodwill and other intangible asset impairment charges recorded during the first quarter of 2025.

The provision for income taxes attributable to income consisted of the following:
(In millions)202520242023
Federal:   
   Current$— $(0.2)$0.1 
   Deferred(22.6)(24.3)(18.2)
State and local:   
   Current9.5 5.4 5.3 
   Deferred(1.6)0.1 0.2 
Foreign:   
   Current160.7 127.6 186.4 
   Deferred(20.0)(1.4)3.6 
Total$126.0 $107.2 $177.4 
The reconciliation of the U.S. federal statutory tax rate to the Company’s worldwide effective income tax rate for 2025 after the adoption of ASU 2023-09 was as follows:
2025
(Dollars in millions)AmountPercent
U.S. federal statutory tax rate$31.8 21.0 %
State and local income taxes, net of federal income tax effect (1)
4.7 3.1 %
Foreign tax effects (by jurisdiction):
   Australia
     Statutory tax rate difference between Australia and United States(7.0)(4.6)%
     Nondeductible impairment of goodwill16.3 10.8 %
     Other1.1 0.7 %
   China
     Foreign withholding taxes7.8 5.2 %
     Nondeductible impairment of goodwill48.3 31.9 %
     Other(6.0)(4.0)%
   Hong Kong
     Nondeductible impairment of goodwill11.9 7.9 %
     Other(1.9)(1.3)%
   Netherlands
     Statutory tax rate difference between Netherlands and United States11.2 7.4 %
     Foreign currency remeasurement7.8 5.2 %
     Other(0.2)(0.1)%
   South Korea
     Nondeductible impairment of goodwill6.3 4.2 %
     Other3.0 2.0 %
   Other foreign jurisdictions20.2 13.3 %
Effect of cross-border tax laws:
   Foreign-derived intangible income deduction (FDII)(13.4)(8.9)%
Tax credits:
   Foreign tax credits(9.6)(6.3)%
Changes in valuation allowances0.6 0.4 %
Nontaxable or nondeductible items8.7 5.7 %
Changes in unrecognized tax benefits(15.6)(10.3)%
Effective income tax rate$126.0 83.3 %

(1) State taxes in California, New Jersey and Florida represent the majority (greater than 50 percent) of the tax effect in this category.
The reconciliations of the U.S. federal statutory tax rate to the Company’s worldwide effective income tax rate for the years prior to the adoption of ASU 2023-09 were as follows:
 20242023
Statutory federal income tax rate21.0 %21.0 %
State and local income taxes, net of federal income tax benefit0.7 %0.8 %
Effects of international jurisdictions, including foreign tax credits3.0 %1.9 %
Change in estimates for uncertain tax positions(7.6)%(1)(1.6)%
Change in valuation allowance(1.8)%0.3 %
Tax on foreign earnings (GILTI and FDII)(0.5)%(1.9)%
Excess tax (benefit) expense related to stock-based compensation(0.1)%0.1 %
Other, net0.5 %0.5 %
Effective income tax rate15.2 %21.1 %

(1) Includes a benefit of 4.7% from the settlement of a multi-year audit in an international jurisdiction.

The Company’s tax rate is influenced by several factors, including the mix of international and domestic pre-tax earnings, specific discrete transactions and events, new regulations, audits by tax authorities, and new information received. These elements may lead to adjustments in both the Company’s estimates for uncertain tax positions and the overall effective tax rate.

On July 4, 2025, the One Big Beautiful Bill Act was enacted into law, introducing a broad range of tax reform provisions. The enacted changes did not have a material impact on the 2025 effective tax rate.

The Organization for Economic Cooperation and Development released the Pillar Two framework which includes transition and safe harbor guidelines around the implementation of a global minimum effective tax rate of 15%. Pillar Two legislation was enacted in certain jurisdictions where the Company operates and was effective in 2024. The global minimum effective tax rate did not have a material impact on the 2025 and 2024 effective tax rates.

Deferred Income Taxes

The components of deferred income tax assets and liabilities were as follows:
(In millions)20252024
Gross deferred tax assets
   Tax loss and credit carryforwards$183.7 $170.5 
   Operating lease liabilities503.0 331.4 
   Employee compensation and benefits48.9 52.7 
   Inventories48.5 44.6 
Property, plant and equipment268.4 242.6 
   Derivative financial instruments 24.8 — 
   Other56.6 50.8 
      Subtotal1,133.9 892.6 
   Valuation allowances(60.7)(60.0)
Total gross deferred tax assets, net of valuation allowances$1,073.2 $832.6 
Gross deferred tax liabilities
   Intangibles$(771.0)$(754.7)
   Operating lease right-of-use assets(483.6)(304.8)
   Derivative financial instruments— (44.1)
   Other(26.9)(25.5)
Total gross deferred tax liabilities$(1,281.5)$(1,129.1)
Net deferred tax liability$(208.3)$(296.5)
At the end of 2025, the Company had approximately $190.1 million of net operating loss and tax credit carryforwards on a tax-effected basis available to offset future taxable income in various jurisdictions. The carryforwards expire principally between 2026 and 2045.

The Company’s intent is to reinvest indefinitely substantially all of its historical earnings in foreign subsidiaries outside of the United States in jurisdictions which it would expect to incur material tax costs upon the distribution of such amounts. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation.

Income Taxes Paid

Income taxes paid, net of refunds received, in 2025 were as follows:
(In millions)2025
Federal$— 
State3.8 
Foreign (by jurisdiction):
   China14.1 
   Germany11.4 
   Hong Kong13.1 
   Netherlands77.8 
   Other62.0 
Total$182.2 

Income taxes paid, net of refunds received were $165.6 million and $209.8 million in 2024 and 2023, respectively.

Uncertain Tax Positions

The summary of the activity related to our gross unrecognized tax benefits for each of the last three years was as follows:
(In millions)202520242023
Balance at beginning of year$59.4 $99.6 $114.7 
Increases related to prior year tax positions0.7 3.2 0.6 
Decreases related to prior year tax positions(11.6)(35.4)(11.0)
Increases related to current year tax positions5.2 5.0 2.9 
Lapses in statute of limitations(9.0)(12.0)(6.4)
Effects of foreign currency translation2.5 (1.0)(1.2)
Balance at end of year$47.2 $59.4 $99.6 
    
The entire amount of uncertain tax positions as of February 1, 2026, if recognized, would reduce the future effective tax rate under current accounting guidance.

Interest and penalties related to uncertain tax positions are recorded in the Company’s income tax provision. Interest and penalties recognized in the Company’s Consolidated Statements of Operations for 2025, 2024 and 2023 totaled a benefit of $0.8 million, a benefit of $9.2 million and an expense of $1.3 million, respectively. Interest and penalties accrued in the Company’s Consolidated Balance Sheets as of February 1, 2026 and February 2, 2025 totaled $11.4 million and $11.7 million, respectively. The Company recorded its liabilities for uncertain tax positions principally in accrued expenses and other liabilities in its Consolidated Balance Sheets.

The Company files income tax returns in the United States, various state and local jurisdictions and in over 40 international jurisdictions each year. Most tax audit examinations by taxing authorities have been completed, or the statute of limitations has expired, for the Company’s United States federal, foreign, state and local income tax returns filed through 2015.