Income Taxes

12 Months Ended

Feb. 01, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of earnings before income taxes, by tax jurisdiction, are as follows:

	For the Fiscal Year Ended
(In thousands)	February 1, 2026		February 2, 2025		January 28, 2024
United States	$	1,253,410	$	1,301,017	$	1,154,160
Foreign	199,150		184,715		119,195
Total	$	1,452,560	$	1,485,732	$	1,273,355

The provision for income taxes consists of the following:

	For the Fiscal Year Ended
(In thousands)	February 1, 2026		February 2, 2025		January 28, 2024
Current
Federal	$	242,980	$	276,201	$	275,734
State	65,877		64,834		54,903
Foreign	34,951		29,187		22,041
Total current	$	343,808	$	370,222	$	352,678
Deferred
Federal	$	22,799	$	(7,608)	$	(30,632)
State	(2,024)		(1,925)		686
Foreign	(460)		(208)		861
Total deferred	$	20,315	$	(9,741)	$	(29,085)
Total provision	$	364,123	$	360,481	$	323,593

On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was signed into law in the United States. The OBBB includes a broad range of tax reform provisions, including permanently extending and modifying certain expiring provisions of the 2017 Tax Cuts and Jobs Act. The legislation has multiple effective dates, with certain provisions becoming effective in fiscal 2025 and the majority taking effect in future years. The OBBB had a minimal impact on the effective tax rate but resulted in favorable cash tax impacts in fiscal 2025 as a result of certain accelerated tax deductions.

Since the Organization for Economic Co-operation and Development (“OECD”) announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (“Framework”) in 2021, a number of countries have begun to enact legislation to implement the Framework, including the Pillar Two minimum tax. Our subsidiaries were not subject to Pillar Two minimum tax in fiscal 2025. Pillar Two minimum tax will be treated as a period cost in future periods when it is applicable. We are continuing to evaluate the potential impact of the Framework on future periods and monitoring legislative developments by other countries, especially in the regions in which we operate.

For fiscal 2025, ASU 2023-09 requires an expanded view of the rate reconciliation as well as a summary of income taxes paid for material jurisdictions. We have elected a prospective presentation. The tables below represent the new standard for fiscal 2025 and revert to prior guidance for comparable years.

A reconciliation of income taxes at the federal statutory corporate rate to the effective rate is as follows:

	For the Fiscal Year Ended
	February 1, 2026
(In thousands)	$		%
United States federal statutory tax rate	$	305,038	21.0	%
State and local income taxes, net of federal income tax effect 1	59,484		4.1
Foreign tax effects	(3,667)		(0.3)
Effect of changes in tax laws or rates enacted in the current period	—		—
Effect of cross-border tax laws	69		—
Tax credits	(397)		—
Changes in valuation allowance	—		—
Nontaxable or nondeductible items	6,818		0.5
Changes in unrecognized tax benefits	(1,907)		(0.1)
Other adjustments	(1,315)		(0.1)
Effective tax rate	$	364,123	25.1	%

1State taxes in California, New York, New Jersey and Illinois make up the majority of the tax effect in this category.

A reconciliation of income taxes at the federal statutory corporate rate to the effective rate for prior fiscal years is as follows:

	For the Fiscal Year Ended
	February 2, 2025		January 28, 2024
Federal income taxes at the statutory rate	21.0	%	21.0	%
State income tax rate	4.1		4.4
Officer’s compensation under Sec.162(m)	0.9		0.9
Change in uncertain tax positions	0.2		(0.5)
Deferred true up	—		0.2
Stock-based compensation	(1.1)		(0.3)
Foreign rate differential	(0.5)		(0.3)
Credits	(0.1)		—
Other	(0.2)		—
Total	24.3	%	25.4	%

The company’s income taxes paid (net of refunds received), are as follows:

	For the Fiscal Year Ended
(In thousands)	February 1, 2026
Federal	$	226,000
State:
California	20,861
Other	53,227
Total State	74,088
Foreign	30,216
Total	$	330,304

Significant components of our deferred income tax accounts are as follows:

	As of
(In thousands)	February 1, 2026		February 2, 2025
Deferred tax assets (liabilities)
Operating lease liabilities	$	367,263	$	332,146
Merchandise inventories	38,056		36,935
Compensation	34,037		28,832
Gift cards	26,549		24,515
Accrued liabilities	15,845		16,879
Executive deferred compensation	13,472		12,204
Stock-based compensation	12,752		13,822
State taxes	9,298		7,956
Loyalty rewards	2,694		2,972
State net operating loss	929		977
Operating lease right-of-use assets	(318,480)		(294,216)
Property and equipment	(74,947)		(34,254)
Deferred lease incentives	(23,803)		(23,452)
Other	(5,403)		(7,587)
Valuation allowance	(743)		(1,198)
Total deferred tax assets, net	$	97,519	$	116,531

We had net state operating loss carry-forwards as of February 1, 2026. A valuation allowance has been provided against certain state net operating loss carry-forwards, as we do not expect to fully utilize the losses in future years.

The following table summarizes the activity related to gross unrecognized tax benefits:

	For the Fiscal Year Ended
(In thousands)	February 1, 2026		February 2, 2025		January 28, 2024
Beginning balance	$	32,373	$	31,582	$	37,068
Increases related to current year tax positions	6,059		5,119		4,966
Increases for tax positions for prior years	276		271		194
Decrease for tax positions for prior years	(245)		(558)		(1,170)
Settlements	—		(370)		—
Lapse in statute of limitations	(3,415)		(3,671)		(9,476)
Ending balance	$	35,048	$	32,373	$	31,582

As of February 1, 2026, we had $35.0 million of gross unrecognized tax benefits, of which $28.1 million would, if recognized, affect the effective tax rate.

We accrue interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of February 1, 2026 and February 2, 2025, accruals for the payment of interest and penalties totaled $8.2 million and $6.7 million, respectively.

We file income tax returns in the U.S. and foreign jurisdictions. We are subject to examination by the tax authorities in these jurisdictions. U.S. federal taxable years for which the statute of limitations has not expired are fiscal years 2022 to 2025. Substantially all material state, local and foreign jurisdictions’ statutes of limitations are closed for taxable years prior to 2021.