Income Taxes

9 Months Ended

Nov. 02, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 16– Income Taxes

Our effective tax rates are as follows:

	Third Quarter			First Three Quarters
Fiscal 2025		12.4	%		(14.3	)%
Fiscal 2024		25.6	%		27.1	%

We determine our estimated annual effective tax rate at the end of each interim period based on full-year forecasted pre-tax income and facts known at that time. The estimated annual effective tax rate is applied to the year-to-date pre-tax income at the end of each interim period with the cumulative effect of any changes in the estimated annual effective tax rate being recorded in the fiscal quarter in which the change is determined. The tax effect of significant unusual items is reflected in the period in which they occur.

During the three months ended November 2, 2024, we recognized an income tax expense of $34,000. The effective tax rate in this period was directly impacted by the return to provision associated with our fiscal 2024 federal tax return which resulted in a $157,000 decrease to tax expense and a tax benefit of $56,000 related to the foreign return to provision differences. During the three months ended October 28, 2023, we recognized an income tax expense of $949,000. The effective tax rate in this period was directly impacted by our jurisdictional mix of earnings.

During the nine months ended November 2, 2024, we recognized an income tax benefit of $139,000. The effective tax rate in this period was directly impacted by a $281,000 tax benefit related to a previous unrecorded reduction in our future income tax payable balance that should have been discretely recognized in the fourth quarter of fiscal year 2024, netted with the tax expense related to amending our fiscal year 2023 federal tax return and the current quarter tax benefit related to the return to provision associated with our fiscal year 2024 federal tax return. Additional impacts on the effective tax rate include a $218,000 tax benefit related to foreign return to provision differences and an $88,000 tax benefit arising from windfall tax benefits related to our stock. During the nine months ended October 28, 2023, we recognized an income tax expense of $738,000. The effective tax rate in this period was directly impacted by our jurisdictional mix of earnings, a $77,000 tax benefit related to the expiration of the statute of limitations on a previously uncertain tax position, a $49,000 tax benefit arising from windfall tax benefits related to our stock, and an $18,000 tax expense related to foreign return to provision differences.