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”). Each award granted under the Plan is subject to an award agreement that incorporates, as applicable, the exercise price, the term of the award, the periods of restriction, the number of shares to which the award pertains, performance periods and performance measures, and such other terms and conditions as the plan committee determines. Awards granted under the Plan are classified as equity awards, which are recorded in stockholders’ equity in the Company’s Consolidated Balance Sheets. When estimating the grant date fair value of stock-based awards, the Company considers whether an adjustment is required to the closing price or the expected volatility of its common stock on the date of grant when the Company is in possession of material nonpublic information. No such adjustments were made to the grant date fair value of awards granted in any period presented. Shares issued as a result of stock-based compensation transactions generally have been funded with the issuance of new shares of the Company’s common stock.

According to the terms of the Plan, for purposes of determining the number of shares available for grant, each share underlying a stock option award reduces the number available by one share and each share underlying an RSU or PSU award reduces the number available by two shares for awards made before June 22, 2023 and by 1.6 shares for awards made on or after June 22, 2023. Total shares available for grant at February 1, 2026 amounted to 3.2 million shares.

The Company receives a tax deduction for certain transactions associated with its stock-based awards. The actual income tax benefits realized from these transactions in 2025, 2024 and 2023 were $4.5 million, $7.8 million and $8.0 million, respectively. The tax benefits realized included discrete net excess tax (deficiencies) benefits of $(1.4) million, $1.2 million and $(1.0) million recognized in the Company’s provision for income taxes during 2025, 2024 and 2023, respectively.

RSUs granted to employees generally vest in four equal annual installments commencing one year after the date of grant, although the Company does make from time to time, and currently has outstanding, RSUs with different vesting schedules. Service-based RSUs granted to non-employee directors vest in full the earlier of one year after the date of grant or the date of the Annual Meeting of Stockholders following the year of grant. The underlying RSU award agreements for employees generally provide for accelerated vesting upon the award recipient’s retirement (as defined in the Plan). 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.

The aggregate grant date fair value of RSUs granted during 2025, 2024 and 2023 was $60.7 million, $56.8 million and $54.9 million, respectively. The aggregate grant date fair value of RSUs vested during 2025, 2024 and 2023 was $38.7 million, $35.4 million and $43.4 million, respectively.

PSU awards granted to employees have a three-year service period. Each award is subject to various performance and/or market conditions. 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 2022, 50% of the award was 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, for which the Company achieved performance between the target and maximum levels. The other 50% of the award was based on the Company’s cumulative earnings before interest and taxes (“EBIT”) during the fiscal three-year performance period, for which the performance condition was not achieved. The holders of the awards earned an aggregate of 42,000 shares upon vesting of the award during the first quarter of 2025.

For awards granted in 2023, 2024, and 2025, 50% of the award is based on the Company’s TSR relative to a pre-established group of industry peers during a three-year period from the grant date and 50% is based on the Company’s average return on invested capital (“ROIC”) during a fiscal three-year performance period.

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) EBIT- and ROIC-based portion of the awards are 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) EBIT- and ROIC-based portion of the awards are 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 risk-free interest rate is based on United States Treasury yields in effect at the date of grant for the term corresponding to the three-year performance period. Company volatility is based on the historical volatility of the Company’s common stock over a period of time corresponding to the three-year performance period. Expected dividends are based on the anticipated common stock cash dividend rate for the Company at the time of grant.

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 4.50%, 4.40% and 7.40% in 2025, 2024 and 2023, respectively, for the restriction of liquidity, which was calculated using the Finnerty model.


(In thousands, except per PSU data)	PSUs	Weighted Average Grant Date Fair Value Per PSU
Non-vested at February 2, 2025	266	$	110.64
Granted	192	85.12
Increase due to market conditions achieved above target	9	102.88
Vested	42	102.88
Forfeited	91	102.97
Non-vested at February 1, 2026	334	$	98.86

The aggregate grant date fair value of PSUs granted during 2025, 2024 and 2023 was $16.3 million, $15.6 million and $12.3 million, respectively. The aggregate grant date fair value of PSUs vested during 2025, 2024 and 2023 was $4.3 million, $6.8 million and $8.6 million, respectively. PSUs in the above table that remain subject to market conditions are reflected at the target level, which is consistent with how expense will be recorded, regardless of the numbers of shares that are expected to be earned.