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Share-Based Compensation | 6 Months Ended
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Jul. 31, 2022
Share-based Payment Arrangement [Abstract] |
Share-Based Compensation | Share-Based Compensation 2022 Omnibus Incentive Plan In July 2022, the Company’s stockholders approved the Chewy, Inc. 2022 Omnibus Incentive Plan (the “2022 Plan”) replacing the Chewy, Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”). The 2022 Plan became effective on July 14, 2022 and allows for the issuance of up to 40.0 million shares of Class A common stock and 1.0 million shares for new grants rolled over from the 2019 Plan. No awards may be granted under the 2022 Plan after July 2032. The 2022 Plan provides for the grants of: (i) options, including incentive stock options and non-qualified stock options, (ii) restricted stock units, (iii) other share-based awards, including share appreciation rights, phantom stock, restricted shares, performance shares, deferred share units, and share-denominated performance units, (iv) cash awards, (v) substitute awards, and (vi) dividend equivalents (collectively the “awards”). The awards may be granted to (i) the Company’s employees, consultants, and non-employee directors, (ii) employees of the Company’s affiliates and subsidiaries, and (iii) consultants of the Company’s subsidiaries. Service and Performance-Based Awards The Company granted restricted stock units which vested upon satisfaction of both service-based vesting conditions and company performance-based vesting conditions (“PRSUs”), subject to the employee’s continued employment with the Company through the applicable vesting date. The Company recorded share-based compensation expense for PRSUs over the requisite service period and accounted for forfeitures as they occur. Service and Performance-Based Awards Activity The following table summarizes the activity related to the Company’s PRSUs for the twenty-six weeks ended July 31, 2022 (in thousands, except for weighted-average grant date fair value):
| Number of PRSUs |  | Weighted-Average Grant Date Fair Value
Unvested and outstanding as of January 30, 2022 | 6,573 |  |  | $ | 36.16 |
Granted | 86 |  |  | $ | 43.59 |
Vested | (2,080) |  |  | $ | 36.24 |
Forfeited | (218) |  |  | $ | 36.73 |
Unvested and outstanding as of July 31, 2022 | 4,361 |  |  | $ | 36.24 |
The total fair value of PRSUs that vested during the twenty-six weeks ended July 31, 2022 was $58.5 million. As of July 31, 2022, total unrecognized compensation expense related to unvested PRSUs was $13.2 million and is expected to be recognized over a weighted-average expected performance period of 1.2 years. During the twenty-six weeks ended July 31, 2022 and August 1, 2021, vesting occurred for 93,309 PRSUs, respectively, previously granted to an employee of PetSmart. For accounting purposes, the issuance of Class A common stock upon vesting of these PRSUs is treated as a distribution to a parent entity because both the Company and PetSmart are controlled by affiliates of BC Partners.
The fair value for PRSUs with a Company performance-based vesting condition is established based on the market price of the Company’s Class A common stock on the date of grant. Service-Based Awards The Company granted restricted stock units with service-based vesting conditions (“RSUs”) which vested subject to the employee’s continued employment with the Company through the applicable vesting date. The Company recorded share-based compensation expense for RSUs on a straight-line basis over the requisite service period and accounted for forfeitures as they occur. Service-Based Awards Activity The following table summarizes the activity related to the Company’s RSUs for the twenty-six weeks ended July 31, 2022 (in thousands, except for weighted-average grant date fair value):
| Number of RSUs |  | Weighted-Average Grant Date Fair Value
Unvested and outstanding as of January 30, 2022 | 3,207 |  |  | $ | 68.96 |
Granted | 7,487 |  |  | $ | 42.79 |
Vested | (516) |  |  | $ | 73.90 |
Forfeited | (883) |  |  | $ | 55.01 |
Unvested and outstanding as of July 31, 2022 | 9,295 |  |  | $ | 48.93 |
The total fair value of RSUs that vested during the twenty-six weeks ended July 31, 2022 was $22.3 million. As of July 31, 2022, total unrecognized compensation expense related to unvested RSUs was $391.5 million and is expected to be recognized over a weighted-average expected performance period of 3.1 years. The fair value for RSUs is established based on the market price of the Company’s Class A common stock on the date of grant. As of July 31, 2022, there were 39.9 million additional shares of Class A common stock reserved for future issuance under the 2022 Plan. Share-Based Compensation Expense Share-based compensation expense is included within selling, general and administrative expenses in the condensed consolidated statements of operations. The Company recognized share-based compensation expense as follows (in thousands):
| 13 Weeks Ended |  | 26 Weeks Ended
| July 31, 2022 |  | August 1, 2021 |  | July 31, 2022 |  | August 1, 2021
PRSUs | $ | 3,559 |  |  | $ | 10,037 |  |  | $ | 8,198 |  |  | $ | 24,149 |
RSUs | 34,818 |  |  | 11,741 |  |  | 55,973 |  |  | 20,735 |
Total share-based compensation expense | $ | 38,377 |  |  | $ | 21,778 |  |  | $ | 64,171 |  |  | $ | 44,884 |

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