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INCOME TAXES | 6 Months Ended
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Aug. 04, 2018
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The Company computes income taxes using the liability method. This method requires recognition of deferred tax assets and liabilities, measured by enacted rates, attributable to temporary differences between the financial statement and income tax basis of assets and liabilities. The Company's deferred tax assets and liabilities are comprised largely of differences relating to depreciation, rent expense, inventory, stock-based compensation and various accruals and reserves. The Company’s effective tax rate for the Second Quarter 2018 was an expense of 17.5% compared to a benefit of 388.0% during the Second Quarter 2017. The effective tax rate was higher during the Second Quarter 2018 primarily as a result of excess tax benefits of approximately $0.5 million during the Second Quarter 2018 compared to approximately $12.3 million in the Second Quarter 2017 due to the timing of excess tax benefits associated with share-based compensation vestings, partially offset by the benefit of the lower U.S. tax rate due to the Tax Cuts and Jobs Act (the "Tax Act"). The Company’s effective tax rate for Year-To-Date 2018 was a benefit of 22.6%, compared to a benefit of 11.8% for Year-To-Date 2017. The effective tax rate was lower for the Year-To-Date 2018 primarily due to a higher excess tax benefit on a percentage basis during Year-To-Date 2018 when applied to pre-tax income year over year, a lower U.S. Federal tax rate in fiscal 2018 due to the reduction in rate under the Tax Act, partially offset by a reserve release of $4 million in the Second Quarter 2017. Due to the complexities of the Tax Act, the SEC staff issued SAB 118 that allows the Company to record a provisional amount for any income tax effects of the Tax Act in accordance with ASC 740--Income Taxes, to the extent that a reasonable estimate can be made. SAB 118 allows for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. We have recorded provisional amounts for any items that could be reasonably estimated at this time. This includes the one-time transition tax that we have estimated to be $37.6 million, which is based on our total accumulated post-1986 prescribed foreign earnings and profits ("E&P") estimated to be $388 million, which was previously considered to be indefinitely reinvested. The transition tax is payable over eight years. The first payment was made during the first quarter of fiscal 2018. In addition, pursuant to IRS guidance, the overpayment from the fiscal year 2017 tax return will be applied first toward the transition tax. Within our consolidated balance sheets, the remaining unpaid transition tax of $19.1 million is included in long-term liabilities. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when we finalize the calculation of accumulated post-1986 prescribed foreign E&P and finalize the amounts held in cash or other specified assets. While the Company is no longer permanently reinvested to the extent earnings were subject to the transition tax under the Tax Act, no additional income taxes have been provided on any earnings subsequent to the transition or for any additional outside basis differences inherent in these entities, as these amounts continue to be permanently reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any additional outside basis differences in these entities (i.e., basis differences in excess of that subject to the one-time transition tax) is not practicable. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in provision for income taxes. The total amount of unrecognized tax benefits as of August 4, 2018, February 3, 2018, and July 29, 2017 were $3.9 million, $4.0 million and $3.2 million, respectively, and is included within non-current liabilities. The Company recognized less than $0.1 million in each of the Second Quarter 2018 and the Second Quarter 2017, respectively, of additional interest expense related to its unrecognized tax benefits. During each of Year-To-Date 2018 and Year-To-Date 2017, the Company recognized less than $0.1 million of additional interest expense. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in provision for income taxes. The Company is subject to tax in the United States and foreign jurisdictions, including Canada and Hong Kong. The Company, joined by its domestic subsidiaries, files a consolidated income tax return for federal income tax purposes. The Company, with certain exceptions, is no longer subject to income tax examinations by U.S. federal, state and local, or foreign tax authorities for tax years 2012 and prior. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations; however, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company's tax audits are resolved in a manner not consistent with management's expectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs.

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- 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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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