Income Taxes	3 Months Ended
May 04, 2019
Income Taxes
Income Taxes	7. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. U.S. GAAP requires companies to calculate income taxes by applying their estimated full-year tax rate in each interim period unless the estimated full-year tax rate is not reliably predictable. For the thirteen weeks ended May 4, 2019 and May 5, 2018, the Company utilized this annual effective tax rate method to calculate income taxes. For the three months ended May 4, 2019, the effective income tax rate was 14.2%. This compares with a rate of 18.7% for the three months ended May 5, 2018. The decrease in the effective income tax rate was due primarily to lower pretax income compared with the prior year, along with an increase in federal and state tax credits.

7. Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

U.S. GAAP requires companies to calculate income taxes by applying their estimated full-year tax rate in each interim period unless the estimated full-year tax rate is not reliably predictable. For the thirteen weeks ended May 4, 2019 and May 5, 2018, the Company utilized this annual effective tax rate method to calculate income taxes.

For the three months ended May 4, 2019, the effective income tax rate was 14.2%. This compares with a rate of 18.7% for the three months ended May 5, 2018. The decrease in the effective income tax rate was due primarily to lower pretax income compared with the prior year, along with an increase in federal and state tax credits.