Income Taxes (Tables)

12 Months Ended

Jan. 25, 2020

Income Taxes

Schedule of income tax provision

Our income tax provision is as follows (in thousands):

	Fiscal Year Ended
	January 25, 2020		January 26, 2019		January 27, 2018
Current income tax expense
Federal	$	16,867	$	16,620	$	23,786
State		3,058		2,607		2,885
Deferred income tax expense (benefit)
Federal		4,156		(16,343)		9,208
State		(909)		(2,901)		(2,034)
Income tax provision (benefit)	$	23,172	$	(17)	$	33,845

Schedule of tax effects of temporary differences give rise to significant components of deferred tax assets and liabilities

Tax effects of temporary differences that give rise to significant components of the deferred tax assets and liabilities are as follows (in thousands):

	January 25, 2020		January 26, 2019
Deferred tax assets
Inventory	$	12,566	$	9,283
Accruals		4,257		3,835
Deferred rent		—		11,311
Net operating losses		109		290
Deferred gains		—		33,181
Deferred compensation		7,370		16,400
Financing obligations		—		5,636
Deferred revenue		986		1,200
Prepaid rent		1,452		1,514
Operating lease liabilities		310,817		—
Intangible assets		1,338		1,184
Other, net		722		479
Total deferred tax assets		339,617		84,313
Deferred tax liabilities
Property and equipment		(33,153)		(31,420)
Operating lease right-of-use assets		(289,537)		—
Trade name		(112)		(88)
Total deferred tax liabilities		(322,802)		(31,508)
Net deferred tax asset	$	16,815	$	52,805

Schedule of reconciliation between the actual income tax provision and the income tax provision calculated at the federal statutory tax rate

The reconciliation between the actual income tax provision and the income tax provision calculated at the federal statutory tax rate is as follows (dollars in thousands):

	Fiscal Year Ended
	January 25, 2020			January 26, 2019			January 27, 2018
Income tax provision at the federal statutory rate	$	(40,165)		$	10,286		$	22,297
Permanent differences		399			340			325
Impairment charges		52,500			—			—
State income taxes, net of federal income tax effect		1,843			(112)			596
Change in unrecognized tax benefits		(249)			(495)			(130)
Change in valuation allowance		—			—			(314)
Effect of the Tax Act		—			(524)			16,694
Equity-based compensation		9,115			(9,293)			(5,826)
Tax credits		(319)			(278)			(208)
Deferred adjustment		48			59			411
Income tax provision (benefit)	$	23,172		$	(17)		$	33,845
Effective tax rate		(12.1)	%		(0.0)	%		51.5	%

Schedule of reconciliation of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	January 25, 2020		January 26, 2019
Balance, beginning of period	$	716	$	1,688
Additions based on tax positions related to the current year		102		—
Additions based on tax positions related to the prior year		249		—
Subtractions based on tax positions related to the prior year		—		(443)
Settlements		(69)		(5)
Expiration of statute of limitations		(447)		(524)
Balance, end of period	$	551	$	716