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Income Taxes
 9 Months Ended
Oct. 28, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 11. INCOME TAXES

 

Provision for Income Taxes

 

At the end of each quarter, the Company estimates its effective income tax rate pursuant to ASC 740. The rate for the period consists of the tax rate expected to be applied for the full year to ordinary income adjusted for any discrete items recorded in the period.  

 

The Company recorded a tax benefit at an overall effective tax rate of 43.7% for the 13 weeks ended October 28, 2022, and a tax expense at an overall effective tax rate of 34.6% for the 13 weeks ended October 29, 2021. The Company recorded a tax benefit at an overall rate of 40.5% for the 39 weeks ended October 28, 2022, and tax expense at an overall effective tax rate of 28.9% for the 39 weeks ended October 29, 2021. The overall effective tax rates for the 13 weeks and 39 weeks ended October 28, 2022, are higher primarily due to a pretax loss in 2022 compared to a pretax income in 2021 and the tax benefits recorded as a result of LE Japan closing costs in the Third Quarter 2022.

 

On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law. Provisions of the IRA include a 15% corporate minimum tax and a 1% excise tax (“Stock Buyback Tax”) on the repurchase of corporate stock amongst others. The Company is assessing the impacts, if any, the IRA will have on its Share Repurchase Program and its consolidated financial statements.