

Note 13	Income Taxes

The Company’s effective tax rate can vary considerably from period to period, depending on a number of factors. The Company’s consolidated effective tax rates were 26.5% and 31.4% for the thirteen weeks and 26.2% and 32.7% for the twenty-six weeks ended August 1, 2015 and August 2, 2014, respectively.

The Company recognized discrete tax benefits of $1.3 million during the thirteen weeks ended August 1, 2015. Of the $1.3 million of discrete tax benefits recognized, $1.2 million related to the 2014 disposition of Shoes.com, as further discussed in Note 3 to the condensed consolidated financial statements. The allocation of consideration received for tax purposes was finalized with the Purchaser during the second quarter, resulting in higher anticipated utilization of certain capital loss carryforwards that were previously fully reserved. If these discrete tax benefits had not been recognized during the thirteen weeks ended August 1, 2015, the Company's effective tax rate would have been 32.0%.

The Company recognized discrete tax benefits of $2.9 million during the twenty-six weeks ended August 1, 2015. In addition to the items described above, during the first quarter of 2015, the Company recognized discrete tax benefits of $1.6 million, following the conversion of one of its primary operating subsidiaries to a limited liability company. If these discrete tax benefits had not been recognized during the twenty-six weeks ended August 1, 2015, the Company's effective tax rate would have been 32.1%.