Income Taxes |
3 Months Ended |
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Aug. 01, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The provision for income taxes during interim reporting periods is calculated by applying an estimate of the annual effective tax rate to “ordinary” income or loss for the reporting period, adjusted for discrete items. Due to various factors, including our estimate of annual income, our effective tax rate is subject to fluctuation. Our effective tax rate for the three months ended August 1, 2026 was 24.3 percent. The tax rate was primarily attributable to nontaxable and nondeductible items, State and Local income taxes, and tax credits in proportion to estimated pre-tax earnings for fiscal 2027. The effective tax rate for the three months ended August 2, 2025 of 25.9 percent was driven by nontaxable and nondeductible items and valuation allowances in proportion to estimated pre-tax earnings for fiscal 2026. As of August 1, 2026, we had $579 of unrecognized tax benefits which would reduce our effective tax rate if recognized. In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant tax related provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates with the earliest provisions taking effect in fiscal 2026 and others beginning in fiscal 2027 and beyond. ASC 740, “Income Taxes,” requires the effects of changes in tax rates and laws affecting current taxes to be reflected in the estimated annual effective tax rate going forward, and adjustments to existing deferred taxes to be recognized on deferred tax balances to be recognized in the period in which the legislation is enacted. We note that as of August 1, 2026, there were no material impacts to the Company’s financial statements. We will continue to evaluate the future tax and other provisions of the OBBBA and the potential effects on our financial position, results of operations, and cash flows. In October 2021, the Organization for Economic Co-Operation and Development (“OECD”) introduced a 15% global minimum tax under the Pillar Two GloBE model rules for multinational enterprises with annual global revenue exceeding €750 million. In January 2026, the OECD announced a “side-by-side” system under which U.S.-parented groups would be able to elect to be exempt from certain Pillar Two provisions. Additional guidance on the “side-by-side” system and implementation of such system remain subject to further discussions and clarifications from the OECD and local implementation by each OECD member country. We will be subject to Pillar Two compliance and reporting in fiscal 2027, but Pillar Two has not had a material impact on our provision for income taxes; however, we will continue to monitor as additional guidance is released by the OECD, OECD member countries based on their enacted law changes, and other standard-setting bodies.
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