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Income Taxes
 12 Months Ended
Feb. 02, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company's domestic and foreign income before income tax expense and current and deferred income taxes from federal, state, and foreign sources are as follows: 
202420232022
(In thousands)
Income (loss) before income tax expense
Domestic
$479,956 $458,041 $(98,764)
Foreign
2,096,121 1,717,694 1,431,335 
$2,576,077 $2,175,735 $1,332,571 
Current income tax expense
Federal
$86,851 $140,726 $34,752 
State
31,983 42,476 33,369 
Foreign
584,248 469,090 400,250 
$703,082 $652,292 $468,371 
Deferred income tax expense (recovery)
Federal
$61,386 $(14,741)$8,932 
State
14,047 (3,097)2,363 
Foreign
(17,054)(8,909)(1,895)
$58,379 $(26,747)$9,400 
Income tax expense
$761,461 $625,545 $477,771 
The Company's income tax expense for 2023 and 2022 include certain discrete tax amounts, as follows:
202420232022
(In thousands)
Impairment of goodwill and other assets, restructuring costs$— $(26,085)$(28,171)
Gain on disposal of assets— — 1,661 
Total discrete income tax expense (recovery) $— $(26,085)$(26,510)
Please refer to Note 5. Property and Equipment and Note 9. Impairment of Goodwill and Other Assets, Restructuring Costs for further information.
As of February 2, 2025, the Company's net investment in its Canadian subsidiaries was $3.7 billion, of which $1.6 billion was determined to be indefinitely reinvested. A deferred income tax liability of $107.0 million has been recognized in relation to the portion of the Company's net investment in its Canadian subsidiaries that is not indefinitely reinvested, representing the Canadian withholding taxes and U.S. state income taxes which would be due upon repatriation. This deferred tax liability has been recorded on the basis that the Company would choose to make the repatriation transactions in the most tax efficient manner. Specifically, to the extent that the Canadian subsidiaries have paid-up-capital, any such distributions would be structured as a return of capital, and therefore not subject to Canadian withholding tax. The unrecognized deferred income tax liability on the indefinitely reinvested amount is approximately $88.8 million. No deferred income tax liabilities have been recognized on any of the undistributed earnings of the Company's other foreign subsidiaries as these earnings are permanently reinvested outside of the United States. Excluding its Canadian subsidiaries, cumulative undistributed earnings of the Company's foreign subsidiaries as of February 2, 2025 were $599.1 million.
As of February 2, 2025, the Company had cash and cash equivalents of $1.3 billion outside of the United States.
A summary reconciliation of the effective tax rate is as follows:
202420232022
(Percentage)
Federal income tax at statutory rate21.0 %21.0 %21.0 %
Foreign tax rate differentials4.3 4.1 6.8 
U.S. state taxes0.9 1.0 (0.4)
Non-deductible compensation expense0.5 0.6 0.7 
Excess tax benefits from stock-based compensation(0.1)(0.4)(0.5)
Tax on unremitted foreign earnings2.6 2.6 1.4 
Impairment of goodwill and other assets, gain on disposal of assets— — 7.8 
Permanent and other0.4 (0.1)(0.9)
Effective tax rate29.6 %28.8 %35.9 %
The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities as of February 2, 2025 and January 28, 2024 are presented below: 
February 2, 2025January 28, 2024
(In thousands)
Deferred income tax assets:
Net operating loss carryforwards$2,174 $2,385 
Inventories33,801 43,157 
Accrued bonuses9,376 19,075 
Unredeemed gift card liability18,956 15,580 
Non-current lease liabilities308,796 286,528 
Research and experimental expenditures71,579 48,922 
Stock-based compensation20,883 20,057 
Other22,415 16,802 
Deferred income tax assets487,980 452,506 
Valuation allowance(7,902)(2,334)
Deferred income tax assets, net of valuation allowance$480,078 $450,172 
Deferred income tax liabilities:
Property and equipment, net$(180,664)$(162,312)
Right-of-use lease assets(269,089)(265,157)
Unremitted foreign earnings(106,986)(41,198)
Other(4,442)(1,851)
Deferred income tax liabilities(561,181)(470,518)
Net deferred income tax liabilities$(81,103)$(20,346)
Balance sheet classification:
Deferred income tax assets$17,085 $9,176 
Deferred income tax liabilities(98,188)(29,522)
Net deferred income tax liabilities$(81,103)$(20,346)
As of February 2, 2025, the Company had net operating loss carryforwards of $25.0 million. The majority of the net operating loss carryforwards expire, if unused, between fiscal 2030 and fiscal 2044.
There was a $5.6 million net increase in the valuation allowance in 2024, compared to a $1.6 million net increase in 2023, and a $2.1 million net decrease in 2022.
The Company files income tax returns in the U.S., Canada, and various foreign and state jurisdictions. The 2021 to 2023 tax years remain subject to examination by the U.S. federal and state tax authorities. The 2017 to 2023 tax years remain subject to examination by Canadian tax authorities. The 2015 to 2023 tax years remain subject to examination by the China Mainland tax authorities. The 2017 to 2023 tax years remain subject to examination by tax authorities in certain other foreign jurisdictions. The Company does not have any significant unrecognized tax benefits arising from uncertain tax positions taken, or expected to be taken, in the Company's tax returns.