CALERES INC Income Taxes Disclosure
7. INCOME TAXES
The components of (loss) earnings before income taxes consisted of domestic loss before income taxes of $39.3 million in 2025 and earnings before income taxes of $84.8 million and $132.5 million in 2024 and 2023, respectively. The Company’s international earnings before income taxes were $27.1 million, $50.4 million and $48.8 million in 2025, 2024 and 2023, respectively.
The components of income tax (benefit) provision on earnings were as follows:
($ thousands) | | 2025 | | 2024 | | 2023 | |||
Federal |
| |
| |
| | |||
Current | $ | (3,964) | $ | 3,818 | $ | 10,849 | |||
Deferred |
| (4,820) |
| 13,710 |
| 5,138 | |||
Total federal income tax (benefit) provision |
| (8,784) |
| 17,528 |
| 15,987 | |||
State |
| |
| |
| | |||
Current |
| 506 |
| 1,876 |
| 2,423 | |||
Deferred |
| (1,540) |
| 4,775 |
| (9,819) | |||
Total state income tax (benefit) provision |
| (1,034) |
| 6,651 |
| (7,396) | |||
International | |||||||||
Current | 7,279 | 5,289 | 4,879 | ||||||
Deferred |
| 194 |
| (407) |
| (3,980) | |||
Total international income tax provision |
| 7,473 |
| 4,882 |
| 899 | |||
Total income tax (benefit) provision | $ | (2,345) | $ | 29,061 | $ | 9,490 | |||
ASU 2023-09 was adopted on a prospective basis for the year ended January 31, 2026. A reconciliation of the U.S. federal statutory income tax rate to the effective tax rate is as follows:
2025 | ||||||
($ thousands) | Amount | Rate | ||||
U.S. Federal Statutory Rate | $ | (2,567) | 21.00% | |||
Effect of cross-border tax laws | ||||||
Transition tax | (2,464) | 20.16% | ||||
Other | 339 | (2.77)% | ||||
Nontaxable or nondeductible items | ||||||
Excess officer compensation | 933 | (7.63)% | ||||
Other | (241) | 1.97% | ||||
Other | ||||||
Stock compensation | 796 | (6.51)% | ||||
Other | (100) | 0.82% | ||||
State and local income taxes, net of federal income tax effect(1) | (816) | 6.67% | ||||
Foreign tax effect | ||||||
China | ||||||
Valuation allowance | 5,001 | (40.92)% | ||||
Other | (887) | 7.26% | ||||
Macau | ||||||
Foreign rate differential | (2,997) | 24.53% | ||||
Other | (174) | 1.42% | ||||
United Kingdom | . | |||||
Valuation allowance | (1,904) | 15.58% | ||||
Other | (1) | 0.01% | ||||
Other foreign jurisdictions | 2,737 | (22.40)% | ||||
$ | (2,345) | 19.19% | ||||
| (1) | During the year ended January 31, 2026, comprised greater than 50% of the tax effect in this category. |
A reconciliation of the U.S. federal statutory income tax rate to the effective tax rate for years prior to adoption of ASU 2023-09 were as follows:
($ thousands) | | | 2024 | | 2023 | ||
Income taxes at statutory rate | $ | 28,383 | $ | 38,078 | |||
State income taxes, net of federal tax benefit |
| 4,514 |
| 5,710 | |||
International earnings taxed at differing rates from U.S. statutory |
| (3,584) |
| (5,367) | |||
Share-based compensation |
| (2,647) |
| (3,106) | |||
Valuation allowances, net |
| (2,204) |
| (30,054) | |||
Non-deductibility of 162(m) limitations | 3,401 | 4,373 | |||||
GILTI, BEAT and FDII provisions |
| 1,307 |
| 427 | |||
Other (1) |
| (109) |
| (571) | |||
Total income tax provision | $ | 29,061 | $ | 9,490 | |||
| (1) | The other category of income tax provision principally represents the impact of expenses that are not deductible or partially deductible for federal income tax purposes and the impact of any return-to-provision adjustments. |
Significant components of the Company’s deferred income tax assets and liabilities were as follows:
($ thousands) | | January 31, 2026 | | February 1, 2025 | ||
Deferred Tax Assets |
| |
| | ||
Lease obligations | $ | 158,457 | $ | 158,310 | ||
Goodwill | 26,914 | 30,308 | ||||
Net operating loss carryforward/carryback |
| 10,683 |
| 6,551 | ||
Accrued expenses |
| 19,159 |
| 14,053 | ||
Employee benefits, compensation and insurance | 13,219 | 10,954 | ||||
Accounts receivable |
| 7,484 |
| 4,043 | ||
Inventory capitalization and inventory reserves |
| 8,125 |
| 6,532 | ||
Impairment of investment in nonconsolidated affiliate |
| 45 |
| 1,418 | ||
Postretirement and postemployment benefit plans |
| 197 |
| 201 | ||
Other |
| 1,378 |
| 3,444 | ||
Total deferred tax assets, before valuation allowance |
| 245,661 |
| 235,814 | ||
Valuation allowance |
| (8,725) |
| (3,406) | ||
Total deferred tax assets, net of valuation allowance | $ | 236,936 | $ | 232,408 | ||
| |
| | |||
Deferred Tax Liabilities |
| |
| | ||
Lease right-of-use assets | $ | (149,254) | $ | (149,414) | ||
Intangible assets | (17,270) | (15,472) | ||||
LIFO inventory valuation |
| (53,058) |
| (54,808) | ||
Retirement plans |
| (21,235) |
| (18,184) | ||
Capitalized software |
| (1,801) |
| (1,797) | ||
Depreciation |
| (14,220) |
| (17,100) | ||
Other |
| (2,404) |
| (2,579) | ||
Total deferred tax liabilities |
| (259,242) |
| (259,354) | ||
Net deferred tax liability | $ | (22,306) | $ | (26,946) | ||
As of January 31, 2026, the Company had various state and international net operation loss (“NOL”) carryforwards with tax values totaling $10.7 million. The state NOLs totaling $2.8 million have carryforward periods ranging from to 20 years. The Company has NOLs in the United Kingdom, China and Hong Kong of $1.9 million, $5.2 million and $0.8 million, respectively. The China NOLs have a carryforward period of five years while the United Kingdom and Hong Kong NOLs have no expiration.
As of January 31, 2026, no deferred taxes have been provided on the accumulated unremitted earnings of the Company’s international subsidiaries that are not subject to United States income tax. The Company periodically evaluates its international investment opportunities and plans, as well as its international working capital needs, to determine the level of investment required and, accordingly, determines the level of international earnings that is considered indefinitely reinvested. Based upon the evaluation, earnings of the Company’s international subsidiaries that are not otherwise subject to United States taxation are considered to be indefinitely reinvested, and accordingly, deferred taxes have not been provided. If changes occur in future investment opportunities and plans, those changes will be reflected when known and may result in providing residual United States deferred taxes on unremitted international earnings. If the Company’s unremitted international earnings were not considered indefinitely reinvested as of January 31, 2026, an immaterial amount of additional deferred taxes would have been provided.
Income taxes paid, net of refunds received, for the year ended January 31, 2026 are as follows:
($ thousands) | 2025 | ||||
Federal taxes | $ | (9,000) | |||
State taxes | (626) | ||||
Foreign taxes | |||||
Macau | 5,071 | ||||
Ireland | 1,397 | ||||
Canada | 166 | ||||
Guam | 172 | ||||
Other foreign jurisdictions | 201 | ||||
Income tax refunds received, net | $ | (2,619) | |||
Cash income taxes paid, net of refunds received, were $15.8 and $19.8 for the years ended February 1, 2025 and February 3, 2024, respectively.
Uncertain Tax Positions
ASC 740, Income Taxes, establishes a single model to address accounting for uncertain tax positions. The standard clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. The standard also provides guidance on derecognition, measurement classification, interest and penalties, accounting in interim periods, disclosure and transition. As of January 31, 2026 and February 1, 2025, the Company had no unrecognized tax benefits.
For federal purposes, the Company’s tax filings for fiscal years 2022 to 2024 remain open to examination but are not currently being examined. The Company also files tax returns in various international jurisdictions and numerous states for which various tax years are subject to examination and currently involved in audits.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Apr 2, 2026 | Showing above |
| 2025 | Apr 1, 2025 | |
| 2024 | Apr 2, 2024 | |
| 2023 | Mar 28, 2023 | |
| 2022 | Mar 28, 2022 | |
| 2021 | Mar 30, 2021 | |
| 2020 | Mar 31, 2020 | |
| 2019 | Apr 3, 2019 | |
| 2018 | Apr 4, 2018 | |
| 2017 | Mar 28, 2017 | |
| 2016 | Mar 29, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.