Note 9 - Income Taxes

9 Months Ended

Nov. 26, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

9.  INCOME TAXES

For the 13 weeks and 39 weeks ended November 26, 2023, the Company recorded income tax provisions from operations of $423 and $1,730, respectively, which included discrete income tax provisions of $25 and $78, respectively. For the 13 weeks and 39 weeks ended November 27, 2022, the Company recorded income tax provisions from operations of $990 and $2,362, respectively, which included discrete income tax provisions of $58 and $133, respectively.

The Company’s effective tax rates for the 13 weeks and 39 weeks ended November 26, 2023 were income tax provisions of 26.0% and 26.5%, respectively, compared to income tax provisions of 30.7% and 28.2% in the comparable prior periods. The effective tax rates for the 13 weeks and 39 weeks ended November 26, 2023 were higher than the U.S. statutory rate of 21% primarily due to state and local taxes and a discrete income tax provision for the accrual of interest related to unrecognized tax benefits. The effective rates for the 13 weeks and 39 weeks ended November 27, 2022 were higher than the U.S. statutory rate of 21% primarily due to state and local taxes and discrete income tax provisions for the accrual of interest related to unrecognized tax benefits.

Notwithstanding the U.S. taxation of the deemed repatriated earnings as a result of the mandatory one-time transition tax on the accumulated untaxed earnings of foreign subsidiaries of U.S. shareholders included in the 2017 Tax Cuts and Jobs Act, the Company intends to indefinitely invest approximately $25 million of undistributed earnings outside of the U.S. If these future earnings are repatriated to the U.S., or if the Company determines such earnings will be remitted in the foreseeable future, the Company may be required to accrue U.S. deferred taxes on such earnings.