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Income Taxes | 12 Months Ended
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Jan. 25, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of the provision for income taxes were as follows (dollars in thousands):
| Fiscal Year Ended |
| January 25, 2025 |  | January 27, 2024 |  | January 28, 2023 |
Current: |  |  |  |  |  |
Federal | $ | 73,398 |  |  | $ | 65,540 |  |  | $ | 24,917 |  |
Foreign | — |  |  | 13 |  |  | — |  |
State | 18,369 |  |  | 18,166 |  |  | 8,460 |  |
| 91,767 |  |  | 83,719 |  |  | 33,377 |  |
Deferred: |  |  |  |  |  |
Federal | (15,411) |  |  | (10,000) |  |  | 6,094 |  |
Foreign | — |  |  | — |  |  | — |  |
State | (1,979) |  |  | (643) |  |  | (1,562) |  |
| (17,390) |  |  | (10,643) |  |  | 4,532 |  |
Provision for income taxes | $ | 74,377 |  |  | $ | 73,076 |  |  | $ | 37,909 |  |
Our effective income tax rate differs from the statutory rate primarily due to the difference in income tax rates from state to state where work was performed, non-deductible and non-taxable items, tax credits recognized, the tax effects of the vesting and exercise of share-based awards, impacts of tax filings for prior years, and changes in unrecognized tax benefits. We are currently under IRS audit for fiscal year 2020. We believe our provision for income taxes is adequate; however, any assessment may affect our results of operations and cash flows.
| Fiscal Year Ended |
| January 25, 2025 |  | January 27, 2024 |  | January 28, 2023 |
Statutory rate applied to pre-tax income | $ | 64,636 |  |  | $ | 61,320 |  |  | $ | 37,826 |  |
State taxes, net of federal tax benefit | 12,021 |  |  | 13,466 |  |  | 5,325 |  |
Change in accruals for uncertain tax positions | 3,797 |  |  | 2,331 |  |  | 3,833 |  |
Compensation limitation | 9,890 |  |  | 2,788 |  |  | 3,959 |  |
Tax filings for prior periods | — |  |  | — |  |  | (2,505) |  |
Tax credits | (6,558) |  |  | (4,453) |  |  | (5,056) |  |
Federal benefit of vesting and exercise of share-based awards | (8,410) |  |  | (2,413) |  |  | (3,515) |  |
Deferred tax remeasurements | — |  |  | — |  |  | 371 |  |
Effect of rates other than statutory | 511 |  |  | 241 |  |  | (203) |  |
Non-deductible and non-taxable items, net | 1,446 |  |  | 1,090 |  |  | 215 |  |
Change in valuation allowance | — |  |  | (546) |  |  | (376) |  |
Other items, net | (2,956) |  |  | (748) |  |  | (1,965) |  |
Provision for income taxes | $ | 74,377 |  |  | $ | 73,076 |  |  | $ | 37,909 |  |
Deferred Income Taxes The deferred tax provision represents the change in the deferred tax assets and the liabilities representing the tax consequences of changes in the amount of temporary differences and changes in tax rates during the year. The significant components of deferred tax assets and liabilities consisted of the following (dollars in thousands):
| January 25, 2025 |  | January 27, 2024
Deferred tax assets: |  |  |
Capitalized research expenditures (IRC Section 174) | $ | 65,763 |  |  | $ | 38,689 |
Insurance and other reserves | 22,251 |  |  | 25,865 |
Leases | 28,088 |  |  | 19,380 |
Stock-based compensation | 4,635 |  |  | 4,722 |
Allowance for credit losses accounts and reserves | 5,970 |  |  | 3,203 |
Net operating loss carryforwards | 114 |  |  | 238 |
Other | 4,315 |  |  | 3,686 |
Total deferred tax assets | 131,136 |  |  | 95,783 |
Valuation allowance | (77) |  |  | (79) |
Deferred tax assets, net of valuation allowance | $ | 131,059 |  |  | $ | 95,704 |
Deferred tax liabilities: |  |  |
Property and equipment | $ | 89,295 |  |  | $ | 86,105 |
Goodwill and intangibles | 39,106 |  |  | 38,381 |
Leases | 27,951 |  |  | 19,439 |
Capitalized costs | 5,843 |  |  | — |
Other | 1,036 |  |  | 1,341 |
Deferred tax liabilities | $ | 163,231 |  |  | $ | 145,266 |
Net deferred tax liabilities | $ | 32,172 |  |  | $ | 49,562 |
The valuation allowance above reduces the deferred tax asset balances to the amount that we have determined is more likely than not to be realized. The valuation allowance relates to immaterial tax attributes which are not more-likely-than-not to be realized prior to expiration, based on current objective evidence. Our tax attributes generally begin to expire in fiscal 2026. Uncertain Tax Positions As of January 25, 2025 and January 27, 2024, we had total unrecognized tax benefits of $21.6 million and $17.6 million, respectively, resulting from uncertain tax positions. Our effective tax rate will be reduced by $21.1 million during future periods if it is determined these unrecognized tax benefits are realizable. We had approximately $5.4 million and $3.7 million accrued for the payment of interest and penalties as of January 25, 2025 and January 27, 2024, respectively. Interest expense related to unrecognized tax benefits for the Company was $1.7 million during fiscal 2025 and was not material for fiscal 2024 and fiscal 2023. A summary of unrecognized tax benefits is as follows (dollars in thousands):
| Fiscal Year Ended |
| January 25, 2025 |  | January 27, 2024 |  | January 28, 2023 |
Balance at beginning of year | $ | 17,606 |  |  | $ | 15,771 |  |  | $ | 11,929 |  |
Additions based on tax positions related to the fiscal year | 2,682 |  |  | 1,884 |  |  | 2,042 |  |
Additions based on tax positions related to prior years | 1,369 |  |  | 587 |  |  | 2,957 |  |
Reductions based on tax positions related to prior years | (94) |  |  | (636) |  |  | — |  |
Reductions related to the expiration of statutes of limitation | — |  |  | — |  |  | (1,157) |  |
Balance at end of year | $ | 21,563 |  |  | $ | 17,606 |  |  | $ | 15,771 |  |

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