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Income Taxes
 12 Months Ended
Jan. 28, 2017
Income Tax Disclosure [Abstract]  
Income Taxes

Note 8 – Income Taxes

 

The provision for income taxes consisted of:

 

(In thousands)  2016  2015  2014
          
Current:               
Federal  $13,366   $18,366   $14,575 
State   1,997    2,267    1,800 
Puerto Rico   250    249    350 
Total current   15,613    20,882    16,725 
                
Deferred:               
Federal   (153)   (3,000)   (1,229)
State   (1,228)   (145)   (115)
Puerto Rico   (1,494)   (318)   (1,149)
Total deferred   (2,875)   (3,463)   (2,493)
Valuation allowance   1,494    318    1,943 
Total provision  $14,232   $17,737   $16,175 

 

We realized a tax benefit of $2,900, $120,000 and $68,000 in fiscal years 2016, 2015 and 2014, respectively, as a result of the exercise of stock options and the vesting of restricted stock, which is recorded in shareholders’ equity.

 

Reconciliation between the statutory federal income tax rate and the effective income tax rate is as follows:

 

Fiscal years    2016    2015    2014
          
U.S. Federal statutory tax rate   35.0%   35.0%   35.0%
State and local income taxes, net of federal tax benefit   2.1    2.7    3.1 
Puerto Rico   0.2    0.3    0.2 
Valuation allowance   4.0    0.7    4.7 
Tax benefit of foreign losses   (3.6)   (0.6)   (4.3)
    0.0    0.0    0.1 
Effective income tax rate   37.7%   38.1%   38.8%

 

We recorded $224,000, $327,000 and $300,000 in federal employment related tax credits in fiscal 2016, 2015 and 2014, respectively.

 

Deferred income taxes are the result of temporary differences in the recognition of revenue and expense for tax and financial reporting purposes. The sources of these differences and the tax effect of each are as follows:

 

(In thousands)  January 28,
2017		  January 30,
2016
Deferred tax assets:          
Accrued rent  $4,333   $4,321 
Accrued compensation   8,552    6,911 
Accrued employee benefits   555    532 
Inventory   1,125    737 
Self-insurance reserves   758    641 
Lease incentives   11,996    12,522 
Net operating loss carry forward   3,719    2,261 
Other   638    411 
Total deferred tax assets   31,676    28,336 
Valuation allowance   (3,717)   (2,261)
Total deferred tax assets – net of valuation allowance   27,959    26,075 
           
Deferred tax liabilities:          
Property and equipment   17,256    16,671 
Capitalized costs   1,103    1,153 
Other   0    32 
Total deferred tax liabilities   18,359    17,856 
Net deferred tax asset   9,600    8,219 
Less current deferred income tax benefit   0    (1,061)
Long-term deferred income taxes  $9,600   $7,158 

 

At the end of fiscal 2016, we estimated foreign net operating loss carry forwards of $9.8 million, which expire between fiscal 2023 and fiscal 2026. At January 28, 2017, we had a valuation allowance of $3.7 million against these net operating losses that would be realizable only upon the generation of future taxable income in the jurisdiction in which the losses were incurred.

 

Our unrecognized tax liabilities relate to tax years encompassing our fiscal years 1999 through 2016 for the tax years that remain subject to examination by major tax jurisdictions as of January 28, 2017. At January 28, 2017, January 30, 2016 and January 31, 2015, there were no unrecognized tax liabilities or related accrued penalties or interest in Other liabilities on the Consolidated Balance Sheets.