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INCOME TAXES
 12 Months Ended
Feb. 02, 2025
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

NOTE 17 – INCOME TAXES

 

Our provision for income taxes was as follows for the periods indicated:

 

   53 Weeks Ended   52 Weeks Ended   52 Weeks Ended 
   February 2,   January 28,   January 29, 
   2025   2024   2023 
Current expense            
Federal  $-   $6   $1,024 
Foreign   41    47    75 
State   42    -    223 
Total current expense   83    53    1,322 
                
Deferred taxes               
Federal   (3,538)   2,227    (2,617)
State   (464)   293    (542)
Total deferred taxes   (4,002)   2,520    (3,159)
Income tax (benefit)/expense  $(3,919)  $2,573   $(1,837)

 

Total tax benefit for fiscal 2025 was $4.0 million, of which $3.9 million benefit was allocated to continuing operations and $ 51,000 tax benefit was allocated to other comprehensive income. Total tax expense for fiscal 2024 was $2.6 million, of which $2.6 million expense was allocated to continuing operations and $41,000 tax benefit was allocated to other comprehensive income. Total tax benefit for fiscal 2023 was $1.5 million, of which $1.8 million benefit was allocated to continuing operations and $288,000 tax expense was allocated to other comprehensive income.

 

The effective income tax rate differed from the federal statutory tax rate as follows for the periods indicated:

 

   53 Weeks Ended   52 Weeks Ended   52 Weeks Ended 
   February 2,   January 28,   January 29, 
   2025   2024   2023 
             
Income taxes at statutory rate   21.0%   21.0%   21.0%
Increase (decrease) in tax rate resulting from:               
State taxes, net of federal benefit   2.0    1.9    4.1 
Officer’s life insurance   1.6    -1.7    4.0 
Change in valuation allowance   0.0    0.1    -0.2 
Other   -0.7    -0.6    1.0 
Effective income tax rate   23.9%   20.7%   29.9%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities for the period indicated were:

 

   February 2,   January 28, 
   2025   2024 
Assets        
Intangible assets  $5,174   $5,590 
Deferred compensation   1,956    2,494 
Allowance for bad debts   1,410    816 
Employee benefits   924    1,008 
Loss and credit carryover   11,687    6,655 
Accrued liabilities   262    238 
Deferred rent   819    716 
Total deferred tax assets   22,232    17,517 
Valuation allowance   (229)   (107)
    22,003    17,410 
Liabilities          
Property, plant and equipment   1,235    1,710 
Inventories   4,175    3,319 
Other   536    376 
Total deferred tax liabilities   5,946    5,405 
Net deferred tax assets  $16,057   $12,005 

 

At February 2, 2025 and January 28, 2024, our net deferred tax assets were $16.1 million and $12.0 million, respectively. The increase in the valuation allowance of $122,000 was due to additional foreign tax credit carryforward and a portion of state loss carryforwards. We expect to fully realize the benefit of the deferred tax assets, with the exception of a portion of the foreign tax credit carryforward, in future periods when the amounts become deductible.

 

We have federal and state net operating loss carryforwards of $41.8 million and $28.6 million, respectively, which have various expiration dates beginning in fiscal 2039 through fiscal 2045, with some having an indefinite carryforward period. We have foreign tax credit carryforwards of $188,000 which expire beginning in fiscal 2029 through fiscal 2034. We also have charitable contribution carry forwards of $4.5 million, which expire in fiscal 2028 and fiscal 2030.

 

Current accounting standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also addresses de-recognition, classification, interest and penalties, accounting in interim periods and disclosure. We do not have unrecognized tax benefits as of February 2, 2025.

 

Tax years ending January 30, 2022 through February 2, 2025 remain subject to examination by federal and state taxing authorities.