Income Taxes

6 Months Ended

Aug. 02, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes is based on the current estimate of the annual effective tax rate and is adjusted as necessary for quarterly events.

For the second quarter of 2025, the Company’s effective tax rate was 25.7% compared to 22.4% in the second quarter of 2024. The second quarter of 2025 rate was consistent with the Company’s combined estimated federal and state statutory rate. The second quarter of 2024 rate differed from the Company’s combined estimated federal and state statutory rate primarily due to foreign earnings taxed at a lower rate than the Company’s combined estimated federal and state statutory rate.

For year-to-date 2025, the Company’s effective tax rate was 30.5% compared to 35.9% for year-to-date 2024. The difference between the Company’s effective tax rate for both years and the combined estimated federal and state statutory rate was primarily due to additional tax expense from share-based compensation awards that vested in the periods.

The Company paid income taxes in the amount of $42 million and $31 million for the second quarter of 2025 and 2024, respectively, and $46 million and $37 million for year-to-date 2025 and 2024, respectively.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law which includes a broad range of tax reform provisions with multiple effective dates. The Company has evaluated OBBBA and does not believe it will have a material impact on its provision for income taxes for fiscal year 2025.