XML 34 R20.htm IDEA: XBRL DOCUMENT
v3.24.1

Income Taxes | 12 Months Ended
--- | ---
Feb. 02, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 11. INCOME TAXES The Company’s income (loss) before income taxes in the United States and in foreign jurisdictions is as follows:
(in thousands) |  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
(Loss) income before income taxes |  |  |  |  |  |  |  |  |
United States |  | $ | (126,745 | ) |  | $ | 4,646 |  |  | $ | 52,963 |
Foreign |  |  | (5,072 | ) |  |  | (19,325 | ) |  |  | (6,994 | )
Total (loss) income before income taxes |  | $ | (131,817 | ) |  | $ | (14,679 | ) |  | $ | 45,969 |
Certain foreign operations are branches of Lands’ End and are subject to U.S. as well as foreign income tax. The pretax income (loss) by location and the analysis of the income tax provision by taxing jurisdiction are not directly related. The components of the provision for (benefit from) income taxes are as follows:
(in thousands) |  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
United States |  | $ | (1,482 | ) |  | $ | (3,258 | ) |  | $ | 12,215 |
Foreign |  |  | 349 |  |  |  | 1,109 |  |  |  | 385 |
Total (benefit) provision |  | $ | (1,133 | ) |  | $ | (2,149 | ) |  | $ | 12,600 |
(in thousands) |  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | (3,092 | ) |  | $ | (3,928 | ) |  | $ | 11,370 |
State |  |  | (192 | ) |  |  | (273 | ) |  |  | 1,627 |
Foreign |  |  | 338 |  |  |  | 1,125 |  |  |  | 385 |
Total current |  |  | (2,946 | ) |  |  | (3,076 | ) |  |  | 13,382 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (316 | ) |  |  | 682 |  |  |  | (1,426 | )
State |  |  | 2,118 |  |  |  | 261 |  |  |  | 644 |
Foreign |  |  | 11 |  |  |  | (16 | ) |  |  | — |
Total deferred |  |  | 1,813 |  |  |  | 927 |  |  |  | (782 | )
Total (benefit) provision |  | $ | (1,133 | ) |  | $ | (2,149 | ) |  | $ | 12,600 |
A reconciliation of the statutory federal income tax rate to the effective income tax rate is as follows:
|  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
Tax at statutory federal tax rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State income taxes, net of federal tax benefit |  |  | (1.1 | )% |  |  | 0.1 | % |  |  | 3.9 | %
Foreign differential |  |  | 2.1 | % |  |  | 27.2 | % |  |  | (5.2 | )%
Permanent differences |  |  | (0.8 | )% |  |  | (3.4 | )% |  |  | 1.9 | %
Uncertain tax benefits |  |  | 0.1 | % |  |  | 1.1 | % |  |  | 1.1 | %
Change in foreign valuation allowance |  |  | (2.2 | )% |  |  | (32.4 | )% |  |  | 4.9 | %
Goodwill impairment |  |  | (17.0 | )% |  |  | — | % |  |  | — | %
Other, net |  |  | (1.2 | )% |  |  | 1.0 | % |  |  | (0.2 | )%
Total |  |  | 0.9 | % |  |  | 14.6 | % |  |  | 27.4 | %
Deferred tax assets and liabilities consisted of the following:
(in thousands) |  | February 2, 2024 |  |  | January 27, 2023 |  |  | January 28, 2022 |
Deferred tax assets |  |  |  |  |  |  |  |  |
Deferred revenue |  | $ | 7,388 |  |  | $ | 5,946 |  |  | $ | 6,528 |
Legal accruals |  |  | 1,418 |  |  |  | 2,053 |  |  |  | 2,461 |
Deferred compensation |  |  | 6,100 |  |  |  | 10,246 |  |  |  | 18,328 |
Deferred interest |  |  | 640 |  |  |  | 10,011 |  |  |  | — |
Reserve for returns |  |  | 2,867 |  |  |  | 2,938 |  |  |  | 2,958 |
Inventory |  |  | 4,510 |  |  |  | 4,303 |  |  |  | 3,730 |
CTA investment in foreign subsidiaries |  |  | 4,271 |  |  |  | 4,525 |  |  |  | 3,361 |
Operating lease liabilities |  |  | 7,017 |  |  |  | 8,112 |  |  |  | 8,677 |
Other |  |  | 1,369 |  |  |  | 1,980 |  |  |  | 2,402 |
Net operating loss carryforward |  |  | 26,544 |  |  |  | 11,057 |  |  |  | 5,211 |
Total deferred tax assets |  |  | 62,124 |  |  |  | 61,171 |  |  |  | 53,656 |
Less valuation allowance |  |  | (16,292 | ) |  |  | (11,207 | ) |  |  | (6,009 | )
Net deferred tax assets |  | $ | 45,832 |  |  | $ | 49,964 |  |  | $ | 47,647 |
Deferred tax liabilities |  |  |  |  |  |  |  |  |
Intangible assets |  | $ | 61,785 |  |  | $ | 61,715 |  |  | $ | 62,295 |
LIFO reserve |  |  | 19,137 |  |  |  | 21,263 |  |  |  | 18,118 |
Property and equipment |  |  | 5,662 |  |  |  | 4,461 |  |  |  | 4,396 |
Operating lease right-of-use assets |  |  | 5,709 |  |  |  | 6,670 |  |  |  | 7,089 |
Catalog advertising |  |  | 1,559 |  |  |  | 1,808 |  |  |  | 1,940 |
Total deferred tax liabilities |  |  | 93,852 |  |  |  | 95,917 |  |  |  | 93,838 |
Net deferred tax liability |  | $ | 48,020 |  |  | $ | 45,953 |  |  | $ | 46,191 |
As of February 2, 2024, the Company had $125.2 million of federal and state net operating loss (“NOL”) carryforwards (generating a $14.4 million deferred tax asset) available to offset future taxable income. The federal NOL Carryforward has an indefinite life. The state NOL carryforwards generally expire between 2024 and 2043 with certain state NOLs generated after 2017 having indefinite carryforward. The Company’s foreign subsidiaries had $41.9 million of NOL carryforwards (generating a $12.1 million deferred tax asset) available to offset future taxable income. These foreign NOLs can be carried forward indefinitely, however, a valuation allowance was established since the future utilization of these NOLs is uncertain. A reconciliation of the beginning and ending gross amount of unrecognized tax benefits (“UTBs”) is as follows:
|  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
Gross UTBs balance at beginning of period |  | $ | 1,297 |  |  | $ | 1,477 |  |  | $ | 1,012 |
Tax positions related to the prior periods - gross (decreases) increases |  |  | (156 | ) |  |  | (180 | ) |  |  | 539 |
Settlements |  |  | — |  |  |  | — |  |  |  | (74 | )
Gross UTBs balance at end of period |  | $ | 1,141 |  |  | $ | 1,297 |  |  | $ | 1,477 |
As of February 2, 2024, the Company had gross UTBs of $1.1 million. Of this amount, $1.0 million would, if recognized, impact its effective tax rate. The Company does not expect that UTBs will fluctuate significantly in the next 12 months for tax audit settlements and the expiration of the statute of limitations for certain jurisdictions. Tax years 2020 through 2023 remain open for examination by the Internal Revenue Service as well as various state and foreign jurisdictions. The Company classifies interest expense and penalties related to UTBs and interest income on tax overpayments as components of income tax expense. As of February 2, 2024, the total amount of interest expense and penalties recognized on the balance sheet was $0.6 million ($0.5 million net of federal benefit). As of January 27, 2023, the total amount of interest and penalties recognized on the balance sheet was $0.6 million ($0.5 million net of federal benefit). The total amount of net interest expense recognized in the Consolidated Statements of Operations was insignificant for all periods presented. The Company files income tax returns in both the United States and various foreign jurisdictions.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration