Income Taxes

6 Months Ended

Nov. 02, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, excluding zero rate jurisdictions, and adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company’s quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in accurately predicting its pre-tax income or loss and the mix of jurisdictions to which they relate, intercompany transactions, changes in tax laws, the applicability of special tax regimes, changes in how we do business, and discrete items.

Provision (benefit) for income taxes for the three and six months ended November 2, 2024 and October 28, 2023 was as follows (in thousands except percentages):

	Three Months Ended						Six Months Ended
	November 2, 2024		October 28, 2023		% Change		November 2, 2024			October 28, 2023			% Change
Provision (benefit) for income taxes	292		450		(35.1)	%	$	914		$	(87)		(1,050.5)	%
Effective tax rate	(7)	%	(7)	%			(7)		%	4		%

The Company’s effective tax rate for the three months ended November 2, 2024 remains consistent with the same period in the prior fiscal year.

The Company’s effective tax rate for the six months ended November 2, 2024 differs from the same period in the prior fiscal year primarily due to the tax benefit of share-based compensation expense being offset by a full valuation allowance on deferred tax assets in the U.S. entity in fiscal year 2025.

During the three and six months ended November 2, 2024, there were no material changes to the total amount of unrecognized tax benefits and the Company does not expect any significant changes in the next 12 months.