INCOME TAXES

6 Months Ended

Jul. 29, 2023

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 across jurisdictions.

For the thirteen weeks ended July 29, 2023 and July 30, 2022, the Company’s effective tax rate was 28.6% benefit and 26.6% expense, respectively. The effective tax rate of 28.6% benefit for the thirteen weeks ended July 29, 2023 primarily reflects a $25.6 million non-cash discrete benefit due to a reversal of the majority of the valuation allowance on deferred tax assets. The 26.6% effective tax rate for the thirteen weeks ended July 30, 2022 primarily reflects the impact of losses in foreign jurisdictions on which a full valuation allowance is recorded.

For the twenty-six weeks ended July 29, 2023 and July 30, 2022, the Company’s effective tax rate was 0.4% benefit and 24.3% expense, respectively. The effective tax rate benefit of 0.4% for the twenty-six weeks ended July 29, 2023 primarily reflects a $25.6 million non-cash discrete benefit, due to a reversal of the majority of the valuation allowance on deferred tax assets and favorable share-based compensation benefit. The 24.3% effective tax rate for the twenty-six weeks ended July 30, 2022 primarily reflects a share-based compensation benefit and a reduction in future reversing deferred tax liabilities.

As of July 29, 2023, our unaudited condensed consolidated balance sheet reflected a $7.9 million income tax receivable related to the recovery of federal income taxes paid in prior years and other tax law changes as a result of the Coronavirus Aid, Relief, and Economic Security Act, or Cares Act.