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Income Taxes
 12 Months Ended
Jan. 28, 2024
Income Taxes [Abstract]  
Income Taxes 9.  INCOME TAXES

The components of income tax expense were as follows:

Fiscal Year Ended

January 28, 2024

January 29, 2023

(in thousands)

Current:

Federal

$

(638)

$

1,158

State

230

953

(408)

2,111

Deferred:

Federal

(1,710)

(884)

State

(575)

(519)

(2,285)

(1,403)

Total income tax expense

$

(2,693)

$

708

The tax effects of unrealized gains and losses on securities are components of other comprehensive income and therefore excluded from deferred tax expense.

Realization of the deferred tax asset over time is dependent upon the Company generating sufficient taxable earnings in future periods. In making the determination that the realization of the deferred tax was more likely than not, the Company considered several factors including its recent earnings history, its expected earnings in the future, and appropriate tax planning

strategies. The Company believes it will be able to fully utilize its established deferred tax assets and therefore no valuation allowance has been established as of January 28, 2024 and January 29, 2023.

The reconciliation of income tax expense to the amount computed at the federal statutory rate was as follows:

Fiscal Year Ended

January 28, 2024

January 29, 2023

(in thousands)

Federal taxes at statutory rate

$

(2,524)

21.0

%

$

633

21.0

%

State and local income taxes, net of federal benefit

(390)

3.2

%

144

4.8

%

Stock compensation price difference

150

(1.2)

%

6

0.2

%

Research and development tax credits

(283)

2.4

%

(296)

(9.8)

%

Nondeductible compensation

384

(3.2)

%

182

6.0

%

Adjustments to uncertain tax positions

(164)

1.4

(10)

(0.4)

%

Other

134

(1.2)

%

49

1.7

%

Total income tax expense

$

(2,693)

22.4

%

$

708

23.5

%

Deferred income taxes reflect the net tax effects of temporary differences between U.S. GAAP and tax bases of assets and liabilities. Significant components of deferred tax assets and liabilities were as follows:

January 28, 2024

January 29, 2023

(in thousands)

Deferred tax assets:

Returns allowance

$

1,402

$

1,304

Uniform inventory capitalization

3,637

3,870

Unrealized loss on investment

144

50

Federal and state credit

426

38

Lease liability

52,642

54,648

Accruals

389

303

Stock-based compensation

491

341

Advance payments

687

751

Business Interest limitation

127

—

Unrecognized tax benefits

3

7

Charitable contributions

181

87

Research and development

1,723

1,288

Federal and state NOL

5,183

4

Total deferred tax assets

67,035

62,691

Deferred tax liabilities:

Property and equipment

12,641

8,439

Prepaid expenses

949

822

Right-of-use asset

52,006

54,475

Goodwill and intangibles

71

69

Inventory reserve

358

135

Total deferred tax liabilities

66,025

63,940

Net deferred tax assets (liabilities)

$

1,010

$

(1,249)

As of January 28, 2024, we had state net operating losses (“NOL”) of approximately $7.6 million, with deferred tax assets of $0.3 million related to these state NOLs. These state net operating loss carryforwards expire at various intervals from 2029 through 2044. The federal NOL is approximately $23.0 million, with deferred tax asset of $4.8 million related to the federal NOL.

Uncertain Tax Positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

January 28, 2024

January 29, 2023

(in thousands)

Balance beginning of year

$

287

$

297

Additions for tax positions in prior years

(74)

(2)

Additions for tax positions in current year

37

11

Statute of limitations

(131)

(19)

Balance at end of year

$

119

$

287

If recognized, $0.1 million of the Company’s unrecognized tax benefits as of January 28, 2024, would affect the Company’s effective tax rate. The Company does not anticipate that there will be a material change in the balance of the unrecognized tax benefits in the next 12 months. Any interest and penalties related to uncertain tax positions are recorded in income tax expense. There were no material amounts recorded as tax expense for interest or penalties for the years ended January 29, 2023.

The Company files income tax returns in the United States federal jurisdiction and in various state jurisdictions. Federal tax returns for tax years 2020 through 2022, and state tax returns for tax years 2019 through 2022, are open for examination.