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Income Taxes
 12 Months Ended
Jan. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following table provides the components of the Company’s Provision for Income Taxes for 2025, 2024 and 2023:
202520242023
 (in millions)
Current:
U.S. Federal$26 $46 $19 
U.S. State13 17 10 
Non-U.S.29 18 18 
Total68 81 47 
Deferred:
U.S. Federal(22)(26)(14)
U.S. State(6)(6)(2)
Non-U.S.(21)3 — 
Total(49)(29)(16)
Provision for Income Taxes$19 $52 $31 
The following table provides the components of Income Before Income Taxes for 2025, 2024 and 2023:
202520242023
(in millions)
U.S.$65 $129 $35 
Non-U.S.14392112
Income Before Income Taxes$208 $221 $147 
The following table provides the reconciliation between the statutory federal income tax rate and the effective tax rate for 2025, 2024 and 2023:
202520242023
(in millions)
AmountPercentAmountPercentAmountPercent
U.S. Federal Statutory Tax Rate$44 21.0%$46 21.0%$31 21.0%
State and Local Income Taxes, Net of Federal (1)
83.7%83.7%64.1%
Foreign Tax Effects
China
Valuation Allowance Adjustments(31)(15.1%)(1)(0.4%)(2)(1.5%)
Withholding Taxes and Other (2)
41.8%21.0%21.1%
Hong Kong
Foreign Rate Differential(3)(1.2%)(3)(1.3%)(3)(2.3%)
Nontaxable or Nondeductible Items(6)(2.6%)(8)(3.6%)(10)(6.8%)
Minimum Tax52.5%——%——%
India
Withholding Taxes and Other (2)
41.8%31.0%10.5%
Malta
Foreign Rate Differential52.4%——%——%
Nontaxable or Nondeductible Items(11)(5.1%)——%——%
Tax Credit(1)(0.7%)——%——%
Puerto Rico
Withholding Taxes and Other (2)
10.6%10.6%21.4%
Other Foreign Jurisdictions
Withholding Taxes and Other (2)
83.7%83.4%63.9%
Effect of Cross-Border Tax Laws
Net Controlled Foreign Corporation Income41.8%20.9%42.4%
Foreign-Derived Deduction Eligible Income(4)(1.7%)(3)(1.2%)(2)(1.2%)
Tax Credits
Jobs Tax Credit(2)(0.7%)(2)(0.7%)(2)(1.1%)
Foreign Tax Credit(12)(5.7%)(10)(4.7%)(9)(5.7%)
Valuation Allowances(3)(1.5%)10.4%(2)(1.1%)
Nontaxable or Nondeductible Items
Share-based Compensation10.6%31.4%10.8%
Compensation, Other than Share-based62.7%73.0%85.5%
Income from Unconsolidated Affiliate(1)(0.6%)(2)(0.9%)(2)(1.1%)
Other21.0%——%10.6%
Changes in Unrecognized Tax Benefits10.5%——%10.9%
Effective Tax Rate$19 9.2%$52 23.6%$31 21.4%
(1) California, New York, Texas, Florida and New Jersey comprise the majority (more than 50%) of state and local income taxes in this category, net of federal income tax effects.
(2) Includes withholding taxes and other taxes which are not material to the effective tax rate reconciliation.
Deferred Taxes
The following table provides the effect of temporary differences that cause deferred income taxes as of January 31, 2026 and February 1, 2025. Deferred tax assets and liabilities represent the future effects on income taxes resulting from temporary differences and carryforwards at the end of the respective year.
 January 31, 2026February 1, 2025
AssetsLiabilitiesTotalAssetsLiabilitiesTotal
(in millions)
Loss Carryforwards$113 $— $113 $120 $— $120 
Leases471 (432)39 443 (402)41 
Deferred Revenue42 — 42 47 — 47 
Accrued Expenses44 — 44 37 — 37 
Share-based Compensation13 — 13 14 — 14 
Trade Name and Other Intangibles— (57)(57)— (91)(91)
Property and Equipment— (53)(53)— (42)(42)
Other39 (13)26 31 (10)21 
Valuation Allowance(107)— (107)(136)— (136)
Total Deferred Income Taxes$615 $(555)$60 $556 $(545)$11 
As of January 31, 2026, the Company had loss carryforwards of $113 million, of which $32 million has an indefinite carryforward. The remainder of the non-U.S. carryforwards, if unused, will expire at various dates from 2026 through 2042. For certain jurisdictions where the Company has determined that it is more likely than not that the loss carryforwards will not be realized, a valuation allowance has been provided on those loss carryforwards as well as other net deferred tax assets.
The valuation allowances were $107 million and $136 million in 2025 and 2024, respectively. In 2025, the Company released a $24 million valuation allowance on deferred tax assets associated with the Company’s consolidated joint venture in China due to the financial performance of the joint venture over the past three years and the expectation that the Company will be able to realize the deferred tax assets in future periods.
The following table provides income taxes paid by jurisdiction for 2025, 2024 and 2023:
202520242023
 (in millions)
Federal$58 $26 $36 
State91212
Foreign
Hong Kong3 2 11
Other171415
Total Income Tax Payments$87 $54 $74 
Uncertain Tax Positions
The following table summarizes the activity related to the Company’s unrecognized tax benefits for U.S. federal, state and non-U.S. tax jurisdictions for 2025, 2024 and 2023, without interest and penalties:
202520242023
(in millions)
Gross Unrecognized Tax Benefits, as of the Beginning of the Fiscal Year$43 $38 $31 
Increases to Unrecognized Tax Benefits as a Result of Current Year Activity2 9 9 
Increases to Unrecognized Tax Benefits for Prior Years, Including Acquisitions2 — 13 
Decreases to Unrecognized Tax Benefits for Prior Years(3)(4)(15)
Decreases to Unrecognized Tax Benefits Relating to Settlements with Taxing Authorities(29)— — 
Decreases to Unrecognized Tax Benefits due to Lapse of Statute of Limitations(4)— — 
Gross Unrecognized Tax Benefits, as of the End of the Fiscal Year$11 $43 $38 
Of the total gross unrecognized tax benefits, approximately $10 million, $40 million and $35 million at January 31, 2026, February 1, 2025, and February 3, 2024, respectively, represent the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. These amounts are net of the offsetting tax effects from other tax jurisdictions.
The Company recognizes interest and penalties related to unrecognized tax benefits as components of income tax expense. The Company recognized interest and penalties expense of less than $1 million in 2025 and $2 million in 2024 and 2023. The Company has accrued approximately $5 million for the payment of interest and penalties as of January 31, 2026 and February 1, 2025. Accrued interest and penalties are included within Other Long-term Liabilities on the Consolidated Balance Sheets.
The Company files income tax returns with the U.S. and various state, local, and non-U.S. jurisdictions. The Company participates in the Compliance Assurance Process (“CAP”) of the Internal Revenue Service. As part of CAP, tax years are examined on a contemporaneous basis. The Company is not subject to U.S. federal examination for years prior to fiscal year 2020. The Company is currently under examination, or may be subject to examination, by various state and local tax jurisdictions for fiscal year 2017 through 2024, and non-U.S. tax jurisdictions for fiscal year 2015 through 2024. In some situations, the Company determines that it does not have a filing requirement in a particular tax jurisdiction. Where no return has been filed, no statute of limitations applies. Accordingly, if a tax jurisdiction reaches a conclusion that a filing requirement does exist, additional years may be reviewed by the tax authority. The Company believes it has appropriately accounted for uncertainties related to this issue.