XML 29 R17.htm IDEA: XBRL DOCUMENT v3.24.2.u1
Income Taxes
 6 Months Ended
Aug. 03, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company had an effective tax rate of (2.1%) and (0.7%) for the three months ended August 3, 2024 and July 29, 2023, respectively, and (1.4%) and (1.1%) for the six months ended August 3, 2024 and July 29, 2023, respectively. The Company’s provision for income taxes was $1.0 million and $0.4 million for the three months ended August 3, 2024 and July 29, 2023, respectively, and $1.4 million and $1.4 million for the six months ended August 3, 2024 and July 29, 2023, respectively. The Company has incurred U.S. operating losses and has minimal profits in foreign jurisdictions.
The Company computes its tax provision for interim periods by applying the estimated annual effective tax rate to year-to-date pre-tax income from recurring operations and adjusting for discrete tax items arising in that quarter.
As of August 3, 2024 and February 3, 2024, based on all available objective evidence, including the existence of cumulative losses, the Company determined that it was not more likely than not that the net deferred tax assets were fully realizable for U.S. federal and state tax purposes. Accordingly, the Company established a full valuation allowance against its deferred tax assets for U.S. federal and state tax purposes. The Company intends to maintain a full valuation allowance on net deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance for U.S. federal and state tax purposes.
The unrecognized tax benefits as of August 3, 2024, if recognized, would not affect the effective income tax rate due to the valuation allowance that currently offsets the deferred tax assets.
During the six months ended August 3, 2024, there were no material changes to the total amount of unrecognized tax benefits and the Company does not expect any significant changes in the next 12 months.
The Company files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The statute of limitations is generally open for all fiscal years after fiscal year 2021, during which the Company is subject to examination by U.S. federal, state, and foreign authorities, where applicable.