v3.26.1
Income Taxes
 6 Months Ended
Aug. 01, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

7. Income Taxes

Income tax expense was $57.8 million during the second quarter of Fiscal 2026 compared with $33.1 million during the second quarter of Fiscal 2025. The effective tax rate for the second quarter of Fiscal 2026 was 23.9% compared with 26.0% during the second quarter of Fiscal 2025. The increase in income tax expense is due to higher pre-tax income. The lower effective tax rate is primarily driven by the purchase of federal energy tax credits.

Income tax expense was $85.7 million during the six month period ended August 1, 2026 compared with $65.2 million during the six month period ended August 2, 2025. The effective tax rate for the six month period ended August 1, 2026 was 22.3% compared with 25.0% during the six month period ended August 2, 2025. The increase in income tax expense is due to higher pre-tax income. The lower effective tax rate is mainly driven by the tax benefit from stock-based compensation and purchase of federal energy tax credits.

Net deferred taxes are as follows:

 

 

(in thousands)

 

 

 

August 1,

 

 

January 31,

 

 

August 2,

 

 

 

2026

 

 

2026

 

 

2025

 

Deferred tax asset

 

$

2,139

 

 

$

2,139

 

 

$

2,248

 

Deferred tax liability

 

 

319,657

 

 

 

277,771

 

 

 

265,603

 

Net deferred tax liability

 

$

317,518

 

 

$

275,632

 

 

$

263,355

 

 

Net deferred tax assets relate to Puerto Rico deferred balances that have a future net benefit for tax purposes. Net deferred tax liabilities primarily relate to intangible assets and depreciation expense where the Company has a future obligation for tax purposes.

 

As of August 1, 2026, the Company had a $3.0 million deferred tax asset related to net operating losses, which relates to state net operating losses that expire at various dates between 2036 and 2040.

 

As of August 1, 2026, the Company has tax credit carry-forwards totaling $10.9 million, inclusive of $10.6 million in foreign tax credits which will begin to expire in Fiscal 2033 and $0.3 million of state tax credit carry-forwards that have an indefinite life.

 

As of August 1, 2026, January 31, 2026 and August 2, 2025, valuation allowances totaled $10.7 million, $8.4 million and $9.8 million, respectively. These valuation allowances relate to foreign tax credit carry-forwards and state tax credit carry-forwards. The Company believes it is more likely than not that this portion of the deferred tax assets will not be realized.