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Income Taxes
 3 Months Ended
May 03, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

7. Income Taxes

Income tax expense was $32.0 million during the first quarter of Fiscal 2025 compared with $31.1 million during the first quarter of Fiscal 2024. The effective tax rate for the first quarter of Fiscal 2025 was 24.1% compared with 28.4% during the first

quarter of Fiscal 2024. The increase in income tax expense is primarily driven by higher pre-tax income, while the decrease in the effective tax rate is mainly attributable to the tax benefit from stock-based compensation.

Net deferred taxes are as follows:

 

 

(in thousands)

 

 

 

May 3,

 

 

February 1,

 

 

May 4,

 

 

 

2025

 

 

2025

 

 

2024

 

Deferred tax asset

 

$

2,248

 

 

$

2,248

 

 

$

2,313

 

Deferred tax liability

 

 

249,756

 

 

 

259,261

 

 

 

240,609

 

Net deferred tax liability

 

$

247,508

 

 

$

257,013

 

 

$

238,296

 

Net deferred tax assets relate to Puerto Rico deferred balances that have a future net benefit for tax purposes. Net deferred tax liabilities primarily relate to intangible assets and depreciation expense where the Company has a future obligation for tax purposes.

 

As of May 3, 2025, the Company has a deferred tax asset related to net operating losses of $4.5 million, inclusive of $4.1 million of state net operating losses which will expire at various dates between fiscal 2026 and fiscal 2040 and $0.4 million from Puerto Rico net operating losses set to expire by the end of fiscal 2025 if not utilized.

 

As of May 3, 2025, the Company had tax credit carry-forwards totaling $8.7 million, inclusive of $6.0 million in foreign tax credits, which will begin to expire in fiscal 2033 and $2.7 million in state tax credit carry-forwards, set to expire by the end of fiscal 2025 if not utilized.

As of May 3, 2025, February 1, 2025 and May 4, 2024, valuation allowances totaled $9.3 million, $8.9 million, and $10.0 million, respectively. These allowances relate to state and Puerto Rico net operating losses, as well as state and foreign tax credit carry-forwards. The Company believes it is more likely than not that this portion of the deferred tax assets will not be realized.