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Stock-Based Compensation | 3 Months Ended
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Apr. 29, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Share-Based Compensation The Tilly's, Inc. 2012 Second Amended and Restated Equity and Incentive Plan, as amended in June 2020 (the "2012 Plan"), authorizes up to 6,613,900 shares for issuance of options, shares or rights to acquire our Class A common stock and allows for, among other things, operating income and comparable store sales growth targets as additional performance goals that may be used in connection with performance-based awards granted under the 2012 Plan. As of April 29, 2023, there were 1,899,720 shares available for future issuance under the 2012 Plan. Stock Options We grant stock options to certain employees that give them the right to acquire our Class A common stock under the 2012 Plan. The exercise price of options granted is equal to the closing price per share of our stock at the date of grant. The non-qualified options vest at a rate of 25% on each of the first four anniversaries of the grant date provided that the award recipient continues to be employed by us through each of those vesting dates and expire ten years from the date of grant. The following table summarizes stock option activity for the thirteen weeks ended April 29, 2023 (aggregate intrinsic value in thousands):
| Stock Options |  | Grant Date Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (in Years) |  | Aggregate Intrinsic Value (1)
Outstanding at January 28, 2023 (2) | 1,868,243 |  |  | $ | 8.99 |  |  |  |  |
Granted | 2,500 |  |  | $ | 7.18 |  |  |  |  |
Exercised | (11,000) |  |  | $ | 4.86 |  |  |  |  |
Forfeited | (12,125) |  |  | $ | 8.89 |  |  |  |  |
Expired | (19,000) |  |  | $ | 11.45 |  |  |  |  |
Outstanding at April 29, 2023 | 1,828,618 |  |  | $ | 8.98 |  |  | 7.0 |  | $ | 1,403 |
Exercisable at April 29, 2023 | 1,136,768 |  |  | $ | 9.23 |  |  | 6.1 |  | $ | 930 |
(1)Intrinsic value for stock options is defined as the difference between the market price of our Class A common stock on the last business day of the fiscal period and the weighted average exercise price of in-the-money stock options outstanding at the end of the fiscal period. The market value per share was $7.51 at April 29, 2023. (2)Reflects the removal of 5,000 stock options held by a former employee that expired during fiscal 2022, which we identified during the first quarter of fiscal 2023. The stock option awards were measured at fair value on the grant date using the Black-Scholes option valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, expected volatility of our stock over the option’s expected term, the risk-free interest rate over the option’s expected term and our expected annual dividend yield, if any. We account for forfeitures as they occur. We issue shares of Class A common stock when stock option awards are exercised. The fair values of stock options granted during the thirteen weeks ended April 29, 2023 and April 30, 2022 were estimated on the grant date using the following assumptions:
| Thirteen Weeks Ended |  |
| April 29, 2023 |  | April 30, 2022 |  |  |  |
Weighted average grant-date fair value per option granted | $3.90 |  | $4.98 |  |  |  |
Expected option term (1) | 5.2 years |  | 5.2 years |  |  |  |
Weighted average expected volatility factor (2) | 58.6% |  | 58.6% |  |  |  |
Weighted average risk-free interest rate (3) | 3.6% |  | 2.3% |  |  |  |
Expected annual dividend yield (4) | —% |  | —% |  |  |  |
(1)The expected option term of the awards represents the estimated time that options are expected to be outstanding based upon historical option data. (2)Stock volatility for each grant is measured using the historical daily price changes of our common stock over the most recent period equal to the expected option term of the awards. (3)The risk-free interest rate is determined using the rate on treasury securities with the same term as the expected life of the stock option as of the grant date. (4)We do not currently have a dividend policy and we do not anticipate paying any additional cash dividends on our common stock. In compliance with our new Credit Agreement, we are prohibited from declaring or paying any cash dividends prior to April 27, 2024. Restricted Stock Awards Restricted stock awards ("RSAs") represent restricted shares issued upon the date of grant in which the recipient's rights in the stock are restricted until the shares are vested, whereas restricted stock units ("RSUs") represent shares issuable in the future upon vesting. Under the 2012 Plan, we grant RSAs to independent members of our Board of Directors and RSUs to certain employees. RSAs granted to Board members vest at a rate of 50% on each of the first two anniversaries of the grant date provided that the respective award recipient continues to serve on our Board of Directors through each of those vesting dates. The RSUs granted to certain employees vest at a rate of 25% on each of the first four anniversaries of the grant date provided that the respective recipient continues to be employed by us through each of those vesting dates. We determine the fair value of restricted stock underlying the RSAs and RSUs based upon the closing price of our Class A common stock on the date of grant. The following table summarizes the status of non-vested restricted stock as of April 29, 2023, and the changes since January 28, 2023:
| Restricted Stock |  | Weighted Average Grant-Date Fair Value
Nonvested at January 28, 2023 | 73,484 |  |  | $ | 8.71 |
Granted | — |  |  | — |
Vested | — |  |  | — |
Nonvested at April 29, 2023 | 73,484 |  |  | $ | 8.71 |
Share-based compensation expense associated with stock options and restricted stock is recognized on a straight-line basis over the requisite service period. The following table summarizes share-based compensation expense recorded in the Consolidated Statements of Operations (in thousands):
| Thirteen Weeks Ended |  |
| April 29, 2023 |  | April 30, 2022 |  |  |  |
Cost of goods sold | $ | 57 |  |  | $ | 89 |  |  |  |  |
Selling, general, and administrative | 465 |  |  | 474 |  |  |  |  |
Total share-based compensation | $ | 522 |  |  | $ | 563 |  |  |  |  |
At April 29, 2023, there was $3.4 million of total unrecognized share-based compensation expense related to unvested stock options and restricted stock. This cost has a weighted average remaining recognition period of 2.3 years.

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