Ollie's Bargain Outlet Holdings, Inc.OLLI

Ollie's Bargain Outlet Holdings, Inc. Income Taxes Disclosure

10-KFiled Mar 26, 20252 min read
(8)
Income Taxes

The components of income tax provision (benefit) are as follows:

 
Fiscal year ended
  
   
February 1,
2025
    
February 3,
2024
    
January 28,
2023
  
    (in thousands)
  
Current:
      
Federal
  
$
43,127
    
$
45,871
    
$
20,541
  
State
    
13,678
      
13,930
      
6,099
  
     
56,805
      
59,801
      
26,640
  
Deferred:
                        
Federal
    
8,571
      
1,915
      
5,588
  
State
    
676
      
(670
)
    
(1,135
)
     
9,247
      
1,245
      
4,453
  
Income tax expense
  
$
66,052
    
$
61,046
    
$
31,093
  

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

 
Fiscal year ended
  
   
February 1,
2025
    
February 3,
2024
    
January 28,
 2023
  
Statutory federal rate
    
21.0
%
    
21.0
%
    
21.0
%
State taxes, net of federal benefit
    
4.3
      
4.3
      
2.9
  
Excess tax benefits related to stock-based compensation
    
(1.1
)
    
(0.3
)
    
(0.2
)
Other
    
0.7
      
0.2
   
(0.5
)
     
24.9
%
    
25.2
%
    
23.2
%

Deferred income taxes reflect the effect of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the carrying amounts used for income tax reporting purposes. Significant components of deferred tax assets and liabilities are as follows :

 
February 1,
2025
    
February 3,
2024
  
    (in thousands)  
Deferred tax assets:
            
Inventory reserves
  
$
999
    
$
871
  
Lease liabilities
    
141,654
      
122,006
  
Stock-based compensation
    
3,746
      
4,738
  
Deferred revenue
    
3,329
      
2,544
  
Other
    
3,548
      
4,014
  
Total deferred tax assets
    
153,276
      
134,173
  
Deferred tax liabilities:
                
Tradename
    
(57,964
)
    
(57,721
)
Depreciation
    
(36,932
)
    
(29,242
)
Operating lease right-of-use assets
    
(139,504
)
    
(119,087
)
Total deferred tax liabilities
    
(234,400
)
    
(206,050
)
Net deferred tax liabilities
  
$
(81,124
)
  
$
(71,877
)

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 not be realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income and the scheduled reversal of deferred liabilities over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences as of February 1, 2025 and February 3, 2024.
Ollie’s has no material accrual for uncertain tax positions or interest or penalties related to income taxes on the Company’s consolidated balance sheets as of February 1, 2025 or February 3, 2024, and has not recognized any material uncertain tax positions or interest or penalties related to income taxes in the consolidated statements of income for 2024, 2023 or 2022.
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Historical Timeline

Fiscal YearFiled
2025Mar 26, 2025Showing above
2023Mar 24, 2023
2021Mar 24, 2021

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.

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