INCOME TAXES |
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May 02, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| INCOME TAXES | NOTE 10—INCOME TAXES Our income tax expense (benefit) and effective tax rates were as follows:
The increase in our effective tax rate for the three months ended May 2, 2026 compared to the three months ended May 3, 2025 is primarily attributable to the net loss in the current period, as well as the discrete tax impact of the favorable legal settlement associated with credit card interchange fees and net excess tax windfalls from stock-based compensation in the three months ended May 2, 2026 as compared to net tax shortfalls in the three months ended May 3, 2025. On July 4, 2025, the United States enacted tax legislation through the H.R.1 Reconciliation Act, commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”), which implemented several corporate tax law changes taking effect in fiscal 2025 and others through fiscal 2027. The impacts of the OBBBA are reflected in our results for the quarter ended May 2, 2026. We will continue to monitor any future changes in our business or interpretations of the new tax law that could affect our tax position in subsequent periods. |
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