Stock-Based Compensation

3 Months Ended

May 02, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-based compensation. For the three month periods ended May 2, 2020 and May 4, 2019, the Company recognized stock-based compensation expense as follows:


	Three Months Ended
($000)	May 2, 2020		May 4, 2019
Restricted stock	$	16,482	$	9,449
Performance awards	7,296		9,304
Employee stock purchase plan	961		936
Total	$	24,739	$	19,689

Total stock-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Operations for the three month periods ended May 2, 2020 and May 4, 2019, is as follows:


	Three Months Ended
Statements of Operations Classification ($000)	May 2, 2020		May 4, 2019
Cost of goods sold	$	12,666	$	13,122
Selling, general and administrative	12,073		6,567
Total	$	24,739	$	19,689

The tax benefits related to stock-based compensation expense for the three month periods ended May 2, 2020 and May 4, 2019 were $5.4 million and $3.7 million, respectively.

Restricted stock awards. The Company grants shares of restricted stock to directors, officers, and key employees. The market value of shares of restricted stock at the date of grant is amortized to expense over the vesting period of generally three to five years.

During the three month periods ended May 2, 2020 and May 4, 2019, shares purchased by the Company for tax withholding totaled 349,513 and 555,997, respectively, and are considered treasury shares which are available for reissuance.

Performance share awards. The Company has a performance share award program for senior executives. A performance share award represents a right to receive shares of restricted stock on a specified settlement date based on the Company’s attainment of a profitability-based performance goal during the performance period, which is the Company’s fiscal year. If attained, the restricted stock then vests over a service period, generally two to three years from the date the performance award was granted.

As of May 2, 2020, shares related to unvested restricted stock and performance share awards totaled 4.1 million shares. A summary of restricted stock and performance share award activity for the three month period ended May 2, 2020, is presented below:


(000, except per share data)	Number of shares	Weighted-average grant date fair value
Unvested at February 1, 2020	4,394	$	76.20
Awarded	592	97.85
Released	(891)	61.03
Forfeited	(7)	79.37
Unvested at May 2, 2020	4,088	$	82.63

The unamortized compensation expense at May 2, 2020, was $209.5 million, which is expected to be recognized over a weighted-average remaining period of 2.4 years. The unamortized compensation expense at May 4, 2019, was $178.7 million, which was expected to be recognized over a weighted-average remaining period of 2.5 years.

Employee stock purchase plan. Under the Employee Stock Purchase Plan (“ESPP”), eligible employees participating in the quarterly offering period can choose to have up to the lesser of 10% of their annual base earnings or the IRS annual share purchase limit of $25,000 in aggregate market value to purchase the Company’s common stock. The purchase price of the stock is 85% of the closing market price on the date of purchase. Purchases occur on a quarterly basis (on the last trading day of each calendar quarter). The Company recognizes expense for ESPP purchase rights equal to the value of the 15% discount given on the purchase date.