INCOME TAXES (Tables)

12 Months Ended

Feb. 03, 2024

Schedule of Income before Income Tax, Domestic and Foreign

Components of Income Taxes

Income before income taxes consisted of:


(in thousands)	Fiscal 2023		Fiscal 2022		Fiscal 2021
Domestic (1)	$	526,967	$	152,608	$	283,793
Foreign	(42,668)		(85,592)		25,181
Income before income taxes	$	484,299	$	67,016	$	308,974

(1) Includes intercompany charges to foreign affiliates for management fees, cost-sharing, royalties and interest and excludes a portion of foreign income that is currently includable on the U.S. federal income tax return.

Schedule of Components of Income Tax Expense (Benefit)

Income tax expense consisted of:


(in thousands)	Fiscal 2023		Fiscal 2022		Fiscal 2021
Current:
Federal	$	113,765	$	25,577	$	51,321
State	32,299		10,371		14,061
Foreign	7,565		9,183		5,448
Total current	$	153,629	$	45,131	$	70,830

Deferred:
Federal	$	(9,160)	$	4,586	$	(15,401)
State	(1,196)		122		(8,995)
Foreign	5,613		6,792		(7,526)
Total deferred	(4,743)		11,500		(31,922)
Income tax expense	$	148,886	$	56,631	$	38,908

Schedule of Effective Income Tax Rate Reconciliation

Reconciliation between the statutory federal income tax rate and the effective tax rate is as follows:


	Fiscal 2023		Fiscal 2022		Fiscal 2021
U.S. Federal income tax rate	21.0	%	21.0	%	21.0	%
State income tax, net of U.S. federal income tax effect	4.9		12.4		4.4
Net change in valuation allowances	3.4		30.7		(19.7)
Foreign taxation of non-U.S. operations (1)	1.4		16.2		3.5
Internal Revenue Code Section 162(m)	1.4		4.6		1.6
Additional U.S. taxation of non-U.S.operations	0.1		1.3		0.6
Audit and other adjustments to prior years' accruals, net	(0.2)		5.9		4.7
Net income attributable to noncontrolling interests	(0.3)		(2.4)		(0.5)
Credit for increasing research activities	(0.5)		(2.5)		(0.6)
Tax benefit recognized on share-based compensation expense (2)	(0.5)		(2.6)		(1.3)
Other items, net	—		(0.1)		0.1
Other statutory tax rate and law changes	—		—		(1.2)







Total	30.7	%	84.5	%	12.6	%

(1)U.S. branch operations in Puerto Rico were subject to tax at the full U.S. tax rates. As a result, income from these operations do not create reconciling items.

(2)Refer to Note 13, “SHARE-BASED COMPENSATION,” for details on discrete income tax benefits and charges related to share-based compensation awards during Fiscal 2023, Fiscal 2022, and Fiscal 2021.

Schedule of Deferred Tax Assets and Liabilities

The effect of temporary differences which gives rise to deferred income tax assets (liabilities) were as follows:


(in thousands)	February 3, 2024		January 28, 2023
Deferred income tax assets:
Operating lease liabilities	$	211,863	$	237,699
Intangibles, foreign step-up in basis	62,464		61,030
Net operating losses (NOL), tax credit and other carryforwards	84,872		68,874
Accrued expenses and reserves	35,866		27,435

Deferred compensation	15,717		16,023
Inventory	5,518		5,475
Rent	1,874		1,502


Other	1,683		946
Valuation allowances	(146,973)		(130,622)
Total deferred income tax assets	$	272,884	$	288,362

Deferred income tax liabilities:
Operating lease right-of-use assets	$	(192,020)	$	(205,827)
Property and equipment and intangibles	(7,472)		(14,273)
Prepaid expenses	(1,832)		(1,634)
Store supplies	(2,100)		(1,933)
Undistributed profits of non-U.S. subsidiaries	(1,271)		(1,111)



U.S. offset to foreign deferred tax assets, excluding intangibles, foreign step-up in basis (1)	(187)		(175)

Other	(781)		(428)
Total deferred income tax liabilities	$	(205,663)	$	(225,381)
Net deferred income tax assets (1)	$	67,221	$	62,981

Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible

The amount of uncertain tax positions as of February 3, 2024, January 28, 2023 and January 29, 2022, which would impact the Company’s effective tax rate if recognized and a reconciliation of the beginning and ending amounts of uncertain tax positions, excluding accrued interest and penalties, are as follows:


(in thousands)	Fiscal 2023		Fiscal 2022		Fiscal 2021
Uncertain tax positions, beginning of the year	$	2,293	$	1,114	$	995
Gross addition for tax positions of the current year	572		339		490
Gross addition (reduction) for tax positions of prior years	75		907		(136)
Reductions of tax positions of prior years for:
Lapses of applicable statutes of limitations	(70)		(66)		(81)
Settlements during the period	(119)		(1)		(154)

Uncertain tax positions, end of year	$	2,751	$	2,293	$	1,114