Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.0.6
Income Taxes
 12 Months Ended
Jan. 28, 2012
Income taxes [Abstract]  
Income Taxes

6.    Income taxes

The provision for income taxes consists of the following:

 

 

                         
    Fiscal
2011		     Fiscal
2010		     Fiscal
2009		  

Current:

                        

Federal

   $ 53,495     $ 32,288     $ 20,296  

State

     11,022       7,070       2,744  
   

 

 

    

 

 

    

 

 

  

Total current

     64,517       39,358       23,040  

Deferred:

                        

Federal

     10,796       8,076       3,237  

State

     31       (335 )      318  
   

 

 

    

 

 

    

 

 

  

Total deferred

     10,827       7,741       3,555  
   

 

 

    

 

 

    

 

 

  

Provision for income taxes

   $ 75,344     $ 47,099     $ 26,595  
   

 

 

    

 

 

    

 

 

  

A reconciliation of the federal statutory rate to the Company’s effective tax rate is as follows:

 

 

                         
    Fiscal
2011		     Fiscal
2010		     Fiscal
2009		  

Federal statutory rate

     35.0 %      35.0 %      35.0 % 

State effective rate, net of federal tax benefit

     3.7 %      3.7 %      3.0 % 

Other

     (0.2 %)      1.2 %      2.3 % 
   

 

 

    

 

 

    

 

 

  

Effective tax rate

     38.5 %      39.9 %      40.3 % 
   

 

 

    

 

 

    

 

 

  

 

Significant components of the Company’s deferred tax assets and liabilities are as follows:

 

 

                 
    January 28,
2012		     January 29,
2011		  

Deferred tax assets:

                

Reserves not currently deductible

   $ 13,207     $ 10,433  

Employee benefits

     4,970       5,327  

Net operating loss carryforwards

     179       334  

Accrued liabilities

     3,499       3,202  

Inventory valuation

     1,570       311  
   

 

 

    

 

 

  

Total deferred tax assets

     23,425       19,607  

Deferred tax liabilities:

                

Property and equipment

     32,414       23,321  

Deferred rent obligation

     16,572       12,050  

Prepaid expenses

     6,370       5,340  
   

 

 

    

 

 

  

Total deferred tax liabilities

     55,356       40,711  
   

 

 

    

 

 

  

Net deferred tax liability

   $ (31,931 )    $ (21,104 ) 
   

 

 

    

 

 

  

At January 28, 2012, the Company had net operating loss carryforwards (NOLs) for federal income tax purposes of approximately $513, which expire between 2012 and 2014. Based on Internal Revenue Code Section 382 relating to changes in ownership of the Company, utilization of the federal NOLs is subject to an annual limitation of $440 for federal NOLs created prior to April 1, 1997.

The Company accounts for uncertainty in income taxes in accordance with the ASC rules for income taxes. The reserve for uncertain tax positions was $930 at January 29, 2011. There was no reserve for uncertain tax positions at January 28, 2012. The balance is the Company’s best estimate of the potential liability for uncertain tax positions. The decrease in the liability for income taxes associated with uncertain tax positions relates to a change in prior period position during fiscal 2011. A reconciliation of the Company’s unrecognized tax benefits, excluding interest and penalties, is as follows:

 

 

                 
    January 28,
2012		     January 29,
2011		  

Balance at beginning of the period

   $ 862     $ 5,110  

Decrease in a change to a prior period position

     (862 )      —  

Decrease attributable to audit settlements during the current period

     —       (4,248 ) 
   

 

 

    

 

 

  

Balance at the end of the period

   $ —     $ 862  
   

 

 

    

 

 

  

The Company acknowledges that the amount of unrecognized tax benefits may change in the next twelve months. However, it does not expect the change to have a significant impact on its financial statements. Income tax-related interest and penalties were insignificant for fiscal 2011, 2010 and 2009.

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 Services for the years before 2009 and, this applies to examinations by the State authorities before 2007.