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Income Taxes
 9 Months Ended
Oct. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

Note 16– Income Taxes

Our effective tax rates are as follows:

 

 

Three Months Ended

 

 

Nine Months Ended

 

Fiscal 2026

 

 

 

(51.2

)%

 

 

28.9

%

Fiscal 2025

 

 

 

12.4

%

 

 

(14.3

)%

We determine our estimated annual effective tax rate at the end of each interim period based on full-year forecasted pre-tax income and facts known at that time. The estimated annual effective tax rate is applied to the year-to-date pre-tax income at the end of each interim period with the cumulative effect of any changes in the estimated annual effective tax rate being recorded in the fiscal quarter in which the change is determined. The tax effect of significant unusual items is reflected in the period in which they occur.

During the three months ended October 31, 2025, we recognized an income tax benefit of $128,000. The effective tax rate in this period was directly impacted by a $2,000 tax expense arising from shortfall tax expense related to our stock and a $22,000 tax expense related to federal return to provision differences. During the three months ended November 2, 2024, we recognized an income tax expense of $34,000. The effective tax rate in this period was directly impacted by the return to provision associated with our fiscal 2024 federal tax return which resulted in a $157,000 decrease to tax expense and a tax benefit of $56,000 related to the foreign return to provision differences.

During the nine months ended October 31, 2025, we recognized an income tax benefit of $506,000. The effective tax rate in this period was directly impacted by a $109,000 tax expense related to the return to provision associated with our fiscal 2023 amended state tax returns. Additional impacts on the effective tax rate included an $81,000 tax expense arising from shortfall tax expense related to our stock, a $26,000 tax benefit related to the expiration of the statute of limitations on a previously uncertain tax position and a $43,000 tax benefit related to foreign return to provision differences. During the nine months ended November 2, 2024, we recognized an income tax benefit of $139,000. The effective tax rate in this period was directly impacted by a $281,000 tax benefit related to a previous unrecorded reduction in our future income tax payable balance that should have been discretely recognized in the fourth quarter of fiscal year 2024, netted with the tax expense related to amending our fiscal year 2023 federal tax return and the current quarter tax benefit related to the return to provision associated with our fiscal year 2024 federal tax return. Additional impacts on the effective tax rate include a $218,000 tax benefit related to foreign return to provision differences and an $88,000 tax benefit arising from windfall tax benefits related to our stock

On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA”) was signed into law in the United States. The OBBBA includes a broad range of tax reform provisions for businesses, including extensions of key Tax Cuts and Jobs Act provisions, modifications to the international tax framework, and restoration of favorable tax treatment for certain business provisions. Certain provisions of the legislation will become effective in 2025, while others are effective in 2026. The OBBBA was enacted during our second fiscal quarter of 2026, and we have considered its potential effects and reflected the impact of the OBBBA on our financial position, results of operations, and cash flows. We are in the process of evaluating the impact of these provisions on future periods, but we do not expect the OBBBA to have a material impact on our consolidated financial statements.