Income Taxes

3 Months Ended

May 02, 2020

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The provision for income taxes is based on a current estimate of the annual effective tax rate and is adjusted as necessary for quarterly events. Our effective income tax rate may fluctuate from quarter to quarter as a result of a variety of factors, including changes in our assessment of certain tax contingencies, valuation allowances, changes in tax law, outcomes of administrative audits, the impact of discrete items and the mix of earnings.

For the thirteen weeks ended May 2, 2020 and May 4, 2019, the Company's effective tax rate was 30.0% and 62.7%, respectively. The effective tax rate of 30.0% for the thirteen weeks ended May 2, 2020 was primarily impacted by the benefits provided by the enactment of the Coronavirus Aid, Relief and Economic Security ("CARES") Act, which was slightly reduced by the unfavorable impact of the Company’s book goodwill impairment and share-based compensation expense. The 62.7% effective tax rate for the thirteen weeks ended May 4, 2019 included the recognition of $2.0 million related to employee share-based compensation expense. These items account for the variance between the effective tax rate for the first quarter and last year’s first quarter and the U.S. federal statutory and state blended income tax rate of approximately 25%.