Annual report [Section 13 and 15(d), not S-K Item 405]

Income taxes

v3.26.1
Income taxes
 12 Months Ended
Jan. 31, 2026
Income Taxes  
Income taxes

12.   Income taxes

The provision for income taxes consists of the following:

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Fiscal Year Ended

​

​

January 31,

​

February 1,

​

February 3,

(In thousands)

  ​ ​ ​

2026

  ​ ​ ​

2025

  ​ ​ ​

2024

Current:

​

 

  ​

​

 

  ​

​

 

  ​

Federal

​

$

299,515

​

$

348,450

​

$

308,656

Foreign

​

​

3,901

​

​

—

​

​

—

State

​

​

72,089

​

​

73,826

​

​

65,415

Total current

​

​

375,505

​

​

422,276

​

​

374,071

Deferred:

​

​

  ​

​

​

  ​

​

​

  ​

Federal

​

​

2,137

​

​

(31,407)

​

​

27,391

Foreign

​

​

508

​

​

—

​

​

—

State

​

​

(4,281)

​

​

(11,921)

​

​

3,184

Total deferred

​

​

(1,636)

​

​

(43,328)

​

​

30,575

Provision for income taxes

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$

373,869

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$

378,948

​

$

404,646

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The Company adopted ASU 2023-09, Improvements to Income Tax Disclosures, prospectively for periods beginning after December 31, 2024. The following table presents a reconciliation of the U.S. federal statutory tax rate to the effective income tax rate for fiscal 2025 (after adoption of ASU 2023-09):

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  ​ ​ ​

Fiscal Year Ended

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​

January 31,

(In thousands)

  ​ ​ ​

2026

Federal statutory tax rate

​

$

320,743

​

21.0%

State and local income taxes, net of federal income tax effect (a)

 

​

50,136

​

3.3%

Foreign tax effects

​

​

2,519

​

0.2%

Effect of cross-border tax laws

​

​

—

​

0.0%

Tax credits

​

​

(8,586)

​

(0.6%)

Nontaxable or nondeductible items

​

​

5,596

​

0.4%

Changes in unrecognized tax benefits

​

​

3,432

​

0.2%

Other adjustments

​

​

29

​

0.0%

Effective tax rate

 

$

373,869

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24.5%
(a) State and local income taxes in California, Illinois, New York, and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category.

The following table provides the disclosures required before adopting ASU 2023-09 and reconciles the U.S. federal statutory tax rate to our effective income tax rate:

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Fiscal year ended

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​

February 1,

​

February 3,

​

  ​ ​ ​

2025

  ​ ​ ​

2024

Federal statutory rate

​

21.0%

​

21.0%

State effective rate, net of federal tax benefit

 

3.1%

​

3.2%

Executive compensation limitation

​

0.3%

​

0.3%

Excess deduction of stock compensation

​

(0.3%)

​

(0.4%)

Other

 

(0.1%)

​

(0.2%)

Effective tax rate

 

24.0%

​

23.9%

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On August 16, 2022, the Inflation Reduction Act of 2022 was enacted into law, which, among other things, introduced a 15% corporate alternative minimum tax on book income of certain large corporations and created a 1% excise tax on net share repurchases. The corporate alternative minimum tax was effective beginning in fiscal 2024 and did not have a

material impact on the consolidated financial statements. The excise tax applies to share repurchases made after December 31, 2022.

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On July 4, 2025, the U.S. enacted new tax legislation commonly referred to as the One Big Beautiful Bill Act ("OBBBA"), which included changes in tax laws that affect recorded deferred tax assets and deferred tax liabilities as well as the Company's effective tax rate. The Company applied the reinstatement of 100% bonus depreciation provision for assets placed in service after January 19, 2025, and restored the full expensing of qualifying domestic research and development expenditures in the Company’s income tax provision for the period ended January 31, 2026. This did not result in a material impact to the consolidated financial statements or effective tax rate.

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Significant components of deferred tax assets and liabilities are as follows:

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  ​ ​ ​

January 31,

​

February 1,

(In thousands)

  ​ ​ ​

2026

  ​ ​ ​

2025

Deferred tax assets:

 

​

  ​

 

​

  ​

Operating lease liability

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$

516,617

​

$

492,729

Accrued liabilities

​

 

62,510

​

 

49,626

Reserves not currently deductible

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​

56,296

​

​

50,362

Employee benefits

​

 

33,267

​

 

33,111

Inventory valuation

​

 

12,126

​

 

4,168

Credit carryforwards

​

 

648

​

 

390

NOL carryforwards

​

​

164

​

​

197

Other

​

​

1,800

​

​

—

Total gross deferred tax assets

​

 

683,428

​

 

630,583

Valuation allowance

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​

(3,005)

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​

—

Deferred tax assets:

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​

680,423

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​

630,583

Deferred tax liabilities:

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  ​

​

 

  ​

Operating lease asset

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​

659,202

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​

623,622

Intangibles

​

​

50,285

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​

—

Property and equipment

​

 

26,804

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8,286

Prepaid expenses

​

 

26,537

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22,299

Receivables not currently includable

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​

15,878

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​

17,895

Other

​

 

483

​

 

1,074

Deferred tax liabilities

​

 

779,189

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673,176

Net deferred tax liability

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$

(98,766)

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$

(42,593)

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At January 31, 2026, the Company had $820 of credit carryforwards for state income tax purposes that expire between 2026 and 2039. The Company had $41 of state net operating loss (NOL) carryforwards that expire by 2038 and $117 of state NOL carryforwards that do not expire. The Company also had $184 of federal NOL carryforwards that do not expire.

The Company recorded a valuation allowance of $3,005 related to Space NK operations.

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The Company accounts for uncertainty in income taxes in accordance with ASC 740-10. The reserve for uncertain tax positions was $8,983 and $5,220 at January 31, 2026 and February 1, 2025, respectively, which represents the best estimate of the potential liability. A reconciliation of unrecognized tax benefits, excluding interest and penalties, is as follows:

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  ​ ​ ​

January 31,

​

February 1,

(In thousands)

  ​ ​ ​

2026

  ​ ​ ​

2025

Beginning balance

​

$

5,220

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$

4,060

Increase due to a prior year tax position

​

 

4,065

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1,188

Decrease due to a prior year tax position

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(302)

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(28)

Ending balance

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$

8,983

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$

5,220

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Income tax-related interest was $1,113 for fiscal 2025 and insignificant for fiscal 2024.

The Company files tax returns in the U.S. federal and state jurisdictions. The Company is no longer subject to U.S. federal examinations by the Internal Revenue Service for years before 2022 and is no longer subject to examinations by state authorities before 2021.
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The following is a schedule of cash paid for income taxes:

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January 31,

(In thousands)

​

2026

Federal

​

$

311,400

State:

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California

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​

20,536

New Jersey

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​

9,902

Other

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​

35,559

Foreign

​

​

4,415

Income taxes paid, net of refunds

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$

381,812

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