SHOE CARNIVAL INC Income Taxes Disclosure
Note 12 – Income Taxes
The provision for income taxes consisted of:
(In thousands) |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Current: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
7,833 |
|
|
$ |
18,513 |
|
|
$ |
13,290 |
|
State |
|
|
1,435 |
|
|
|
3,828 |
|
|
|
2,623 |
|
Puerto Rico |
|
|
851 |
|
|
|
815 |
|
|
|
1,382 |
|
Total current |
|
|
10,119 |
|
|
|
23,156 |
|
|
|
17,295 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
|
6,656 |
|
|
|
453 |
|
|
|
4,862 |
|
State |
|
|
954 |
|
|
|
(227 |
) |
|
|
21 |
|
Total deferred |
|
|
7,610 |
|
|
|
226 |
|
|
|
4,883 |
|
Valuation allowance |
|
|
389 |
|
|
|
338 |
|
|
|
614 |
|
Total provision |
|
$ |
18,118 |
|
|
$ |
23,720 |
|
|
$ |
22,792 |
|
Reconciliation between the statutory federal income tax rate and the effective income tax rate is as follows:
Fiscal years |
|
2025 |
|
|
2024 |
|
|
2023 |
|
||||||||||||
statutory income tax rate |
|
$ |
14,781 |
|
|
21.0 |
% |
|
$ |
20,472 |
|
|
21.0 |
% |
|
$ |
20,189 |
|
|
21.0 |
% |
State and local, net of federal benefit (1) |
|
|
2,035 |
|
|
2.9 |
|
|
|
2,901 |
|
|
3.0 |
|
|
|
2,615 |
|
|
2.7 |
|
Effect of cross-border tax laws (2) |
|
|
29 |
|
|
0.0 |
|
|
|
36 |
|
|
0.0 |
|
|
|
20 |
|
|
0.0 |
|
Tax credits |
|
|
(252 |
) |
|
(0.4 |
) |
|
|
(254 |
) |
|
(0.2 |
) |
|
|
(471 |
) |
|
(0.5 |
) |
Nontaxable or nondeductible items |
|
|
1,084 |
|
|
1.5 |
|
|
|
(107 |
) |
|
(0.1 |
) |
|
|
(195 |
) |
|
(0.2 |
) |
Other adjustments |
|
|
52 |
|
|
0.1 |
|
|
|
334 |
|
|
0.3 |
|
|
|
20 |
|
|
0.0 |
|
Changes in valuation allowance (2) |
|
|
389 |
|
|
0.6 |
|
|
|
338 |
|
|
0.3 |
|
|
|
614 |
|
|
0.7 |
|
Effective income tax rate |
|
$ |
18,118 |
|
|
25.7 |
% |
|
$ |
23,720 |
|
|
24.3 |
% |
|
$ |
22,792 |
|
|
23.7 |
% |
(1) State taxes comprised the majority (greater than 50%) of the tax effect in the category as follows:
Fiscal 2025: Illinois, Wisconsin, Texas, Indiana, Florida, Alabama and Tennessee
Fiscal 2024: Illinois, Wisconsin, Indiana, Florida and Alabama
Fiscal 2023: Illinois, Indiana, Florida, Alabama, Texas and Georgia
(2) Our Puerto Rico operations, net of related tax credits, are presented in the rate reconciliation as “Effect of cross-border tax laws.” Changes in our valuation allowance represents tax credits generated by our Puerto Rico operations that are not expected to be utilized.
Deferred Income Taxes are the result of temporary differences in the recognition of revenue and expense for tax and financial reporting purposes. The sources of these differences and the tax effect of each are as follows:
(In thousands) |
|
January 31, |
|
|
February 1, |
|
||
Deferred tax assets: |
|
|
|
|
|
|
||
Lease obligations |
|
$ |
90,330 |
|
|
$ |
89,495 |
|
Accrued compensation |
|
|
6,039 |
|
|
|
6,465 |
|
Inventory reserve |
|
|
362 |
|
|
|
438 |
|
Other |
|
|
4,928 |
|
|
|
4,970 |
|
Total deferred tax assets |
|
|
101,659 |
|
|
|
101,368 |
|
Valuation allowance |
|
|
(3,977 |
) |
|
|
(3,588 |
) |
Total deferred tax assets – net of valuation |
|
|
97,682 |
|
|
|
97,780 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
||
Lease ROU assets |
|
|
86,125 |
|
|
|
84,602 |
|
Depreciation |
|
|
27,954 |
|
|
|
23,997 |
|
Other |
|
|
10,482 |
|
|
|
8,060 |
|
Total deferred tax liabilities |
|
|
124,561 |
|
|
|
116,659 |
|
Net deferred tax liability |
|
$ |
(26,879 |
) |
|
$ |
(18,879 |
) |
We have tax credit carryforwards associated with our Puerto Rico operations totaling $3.9 million at January 31, 2026 and $3.6 million at February 1, 2025. These credits expire at various times over the next nine years. We have taken a full valuation allowance against these credits given they are not expected to be utilized due to the current differential between U.S. and Puerto Rico tax rates.
As of January 31, 2026 and February 1, 2025, there were no unrecognized tax liabilities or related accrued penalties or interest.
Income taxes paid, net of refunds received, disaggregated as follows:
(In thousands) |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Federal |
|
$ |
8,522 |
|
|
$ |
16,657 |
|
|
$ |
14,010 |
|
State |
|
|
1,345 |
|
|
|
3,598 |
|
|
|
3,866 |
|
Puerto Rico |
|
|
841 |
|
|
|
939 |
|
|
|
1,356 |
|
Total taxes paid, net of refunds received |
|
|
10,708 |
|
|
|
21,194 |
|
|
|
19,232 |
|
During the years ended January 31, 2026, February 1, 2025, and February 3, 2024, no jurisdiction, other than Puerto Rico in Fiscal 2025 and Fiscal 2023, exceeded 5% of the total cash income taxes paid.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 26, 2026 | Showing above |
| 2025 | Mar 21, 2025 | |
| 2024 | Mar 22, 2024 | |
| 2023 | Mar 24, 2023 | |
| 2022 | Mar 25, 2022 | |
| 2021 | Mar 26, 2021 | |
| 2020 | Mar 31, 2020 | |
| 2019 | Apr 2, 2019 | |
| 2018 | Apr 2, 2018 | |
| 2017 | Mar 29, 2017 | |
| 2016 | Apr 4, 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.