INCOME TAXES

9 Months Ended

Oct. 28, 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 October 28, 2023 and October 29, 2022, the Company’s effective tax rate was 50.3% and 19.3%, respectively. The effective tax rate of 50.3% for the thirteen weeks ended October 28, 2023 primarily reflects the impact of certain incurred and anticipated nondeductible Merger-related costs, and the Company’s projected annual pre-tax income, partially offset by a fiscal 2022 provision-to-return benefit related to federal tax credits. The 19.3% effective tax rate for the thirteen weeks ended October 29, 2022 primarily reflects the impact of a fiscal 2021 provision-to-return benefit due to the reversal of a valuation allowance related to temporary differences.

For the thirty-nine weeks ended October 28, 2023 and October 29, 2022, the Company’s effective tax rate was 4.3% and 23.2%, respectively. The effective tax rate of 4.3% for the thirty-nine weeks ended October 28, 2023 primarily reflects the non-cash benefit for the partial reversal of the valuation allowance on deferred tax assets, favorable share-based compensation benefit, and a fiscal 2022 provision-to-return benefit related to federal credits, offset by the impact of certain incurred and anticipated nondeductible Merger-related costs and the Company’s projected annual pre-tax income. The 23.2% effective tax rate for the thirty-nine weeks ended October 29, 2022 primarily reflects a provision to return benefit due to the reversal of a valuation allowance related to 2021 temporary differences and favorable share-based compensation benefit.

As of October 28, 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.