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Income Taxes
 12 Months Ended
Feb. 01, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

(15) Income Taxes

For the fiscal years ended February 1, 2025, February 3, 2024, and January 28, 2023, the income tax provision consisted of the following:

 

 

February 1,

 

 

February 3,

 

 

January 28,

 

 

2025

 

 

2024

 

 

2023

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

21

 

 

$

203

 

 

$

6,853

 

State

 

 

328

 

 

 

643

 

 

 

2,737

 

Total current

 

 

349

 

 

 

846

 

 

 

9,590

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

 

(809

)

 

 

(8,251

)

 

 

3,602

 

State

 

 

2,390

 

 

 

(1,804

)

 

 

158

 

Total deferred

 

 

1,581

 

 

 

(10,055

)

 

 

3,760

 

Total income tax provision

 

$

1,930

 

 

$

(9,209

)

 

$

13,350

 

 

The provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows for the following periods:

 

February 1,

 

February 3,

 

January 28,

 

 

2025

 

 

2024

 

 

2023

 

Federal statutory rate

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

State tax, net of federal benefit

 

 

(6.9

)

 

 

4.1

 

 

 

4.1

 

Permanent items

 

 

(2.2

)

 

 

(2.4

)

 

 

1.1

 

Tax credits

 

 

1.0

 

 

 

2.4

 

 

 

(1.7

)

Valuation allowance

 

 

(18.3

)

 

 

—

 

 

 

—

 

Other items

 

 

(0.8

)

 

 

(1.0

)

 

 

0.3

 

Effective income tax rate

 

 

(6.2

)%

 

 

24.1

%

 

 

24.8

%

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at February 1, 2025 and February 3, 2024, respectively, are presented below:

 

 

February 1,

 

 

February 3,

 

 

2025

 

 

2024

 

Deferred tax assets:

 

 

 

 

 

 

Accrued liabilities

 

$

268

 

 

$

555

 

Operating lease liability

 

 

89,494

 

 

 

89,279

 

Gift card liability

 

 

3,191

 

 

 

2,622

 

Goodwill

 

 

425

 

 

 

507

 

Intangible asset

 

 

490

 

 

 

635

 

Inventories

 

 

3,021

 

 

 

3,322

 

Sales return reserve

 

 

214

 

 

 

205

 

Stock-based compensation

 

 

726

 

 

 

778

 

Tax credits

 

 

1,120

 

 

 

791

 

Net operating losses

 

 

11,136

 

 

 

15,474

 

Section 163j

 

 

5,910

 

 

 

—

 

Loyalty program

 

 

654

 

 

 

1,089

 

Total gross deferred tax assets

 

 

116,649

 

 

 

115,257

 

Less: Valuation allowance

 

 

(10,082

)

 

$

—

 

Deferred tax assets, net of valuation allowance

 

$

106,567

 

 

$

115,257

 

Deferred tax liabilities:

 

 

 

 

 

 

Depreciation

 

$

(28,676

)

 

$

(35,872

)

ROU asset

 

 

(77,701

)

 

 

(77,654

)

Prepaid expenses

 

 

(1,330

)

 

 

(1,226

)

Total gross deferred tax liabilities

 

 

(107,707

)

 

 

(114,752

)

Net deferred tax (liability) asset

 

$

(1,140

)

 

$

505

 

 

As of February 1, 2025, the Company had a federal net operating loss (“NOL”) carryforward of $42,647 with no expiration period. In addition, the Company has federal credit carryforwards of $920 which begin to expire in 2044. The Company continues to evaluate the possibility of an ownership change in accordance with Internal Revenue Code Section 382, which could limit the utilization of their NOL and credit carryforwards each year. In general terms, an ownership change results from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percent over a three-year period. As of February 1, 2025, the Company is not aware of any such ownership change.

As of February 1, 2025, the Company had state NOL carryforwards of $15,409 with no expiration period and state NOL carryforwards of $26,813 which expire beginning in 2032 through 2044. In addition, the Company has state credit carryforwards of $200 which begin to expire in 2038.

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 be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company considers all available evidence, both positive and negative, to determine the realizability of deferred tax assets and includes historical information about results of operations for the current and preceding years as well as more subjective information about future years. A significant piece of objective negative evidence evaluated was a cumulative loss over the most recent 36-month period ended February 1, 2025, which was not outweighed by available positive evidence. Accordingly, as of February 1, 2025, a valuation allowance of $10,082 was provided against the net amount of deferred tax assets as compared to zero in prior years.

As of February 1, 2025, the Company had no material unrecognized tax benefits. The Company does not anticipate that unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date. Federal tax years that remain subject to examination are the periods ended January 29, 2022 through February 3, 2024. State years that remain subject to examination are generally the periods from January 30, 2021 through February 3, 2024 in various jurisdictions.

The Company’s policy is to accrue interest expense, and penalties as appropriate, on estimated unrecognized tax benefits as a charge to interest expense in the consolidated statements of operations. No interest or penalties were accrued for fiscal years 2024, 2023 or 2022.