STOCK-BASED COMPENSATION

3 Months Ended

May 03, 2026

Share-Based Payment Arrangement [Abstract]

The Company grants stock-based awards under its Stock Incentive Plan (the “Plan”). Awards that may be granted under the Plan include, but are not limited to (i) service-based restricted stock units (“RSUs”); (ii) contingently issuable performance share units (“PSUs”); and (iii) service-based non-qualified stock options (“stock options”). Please see Note 13, “Stock-Based Compensation,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2026 for a detailed description of the Company’s stock-based compensation awards, including information relating to vesting terms and service, performance and market conditions, and additional information.

Net income for the thirteen weeks ended May 3, 2026 and May 4, 2025 included $12.0 million and $12.1 million, respectively, of pre-tax expense related to stock-based compensation, with related recognized income tax benefits of $1.4 million and $1.5 million, respectively.

RSUs

The fair value of RSUs is equal to the closing price of the Company’s common stock on the date of grant and is expensed over the RSUs’ requisite service periods.

RSU activity for the thirteen weeks ended May 3, 2026 was as follows:


	RSUs	Weighted Average Grant Date Fair Value Per RSU
	(in thousands)
Non-vested at February 1, 2026	1,276	$	79.52
Granted	592	80.96
Vested	395	81.67
Forfeited	34	78.62
Non-vested at May 3, 2026	1,439	$	79.54

PSUs

PSU awards currently outstanding have a three-year service period. Each award is subject to performance and market conditions, with (i) 50% based on the Company’s average return on invested capital (“ROIC”) during a fiscal three-year performance period and (ii) 50% based on the Company’s total shareholder return (“TSR”) relative to a pre-established group of industry peers during a three-year period from the grant date. The final number of shares to be earned, if any, is contingent upon the Company’s achievement of goals for the applicable performance period.

For awards granted in 2023, the Company achieved performance between target and maximum levels for the ROIC portion of the award and between threshold and target levels for the TSR portion of the award, resulting in the holders of the awards earning an aggregate of 82,000 shares.

The Company records expense ratably over the three-year service period, with expense determined as follows: (i) TSR-based portion of the awards is based on the grant date fair value regardless of whether the market condition is satisfied because the awards are subject to market conditions and (ii) ROIC-based portion of the awards is based on the grant date fair value per share and the Company’s current expectations of the probable number of shares that will ultimately be issued.

The grant date fair value of the awards is established as follows: (i) TSR-based portion of the awards uses a Monte Carlo simulation model and (ii) ROIC-based portion of the awards is based on the closing price of the Company’s common stock reduced for the present value of any dividends expected to be paid on such common stock during the three-year service period, as these contingently issuable PSUs do not accrue dividends.

The following summarizes the assumptions used to estimate the fair value of PSUs subject to market conditions that were granted during the thirteen weeks ended May 3, 2026 and the resulting weighted average grant date fair value:


	5/3/26
Weighted average risk-free interest rate	3.84		%
Weighted average Company volatility	44.11		%
Expected annual dividends per share	$	0.15
Weighted average grant date fair value per PSU	$	125.02

For certain of the awards granted, the after-tax portion of the award is subject to a holding period of one year after the vesting date. For these awards, the grant date fair value was discounted 4.90% for the restriction of liquidity, which was calculated using the Finnerty model.

Total PSU activity for the thirteen weeks ended May 3, 2026 was as follows:


	PSUs	Weighted Average Grant Date Fair Value Per PSU
	(in thousands)
Non-vested at February 1, 2026	334	$	98.86
Granted	137	101.74
Increase due to market conditions achieved above target	1	79.49
Reduction due to performance conditions achieved below target	11	118.96

Vested	82	96.26
Forfeited	4	94.15
Non-vested at May 3, 2026	375	$	99.88

Stock Options

The Company estimates the fair value of stock options at the date of grant using the Black-Scholes-Merton model. The estimated fair value of the stock options granted is expensed over the stock options’ requisite service periods. There were no stock options granted during the thirteen weeks ended May 3, 2026.

Stock option activity for the thirteen weeks ended May 3, 2026 was as follows:


	Stock Options	Weighted Average Exercise Price Per Stock Option
	(in thousands)
Outstanding at February 1, 2026	411	$	93.27
Granted	—	—
Exercised	—	—
Forfeited / Expired	27	79.18
Outstanding at May 3, 2026	384	$	94.26