Torrid Holdings Inc.CURV
Torrid Holdings Inc. Stock Compensation Disclosure
Note 17. Share-Based Compensation
Our share-based compensation expense, by award type, consists of the following (in thousands):
| Fiscal Year Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | |||||||||||||||
| Restricted stock units | $ | 2,473 | $ | 2,391 | $ | 2,405 | |||||||||||
| Restricted stock awards | — | 128 | 2,018 | ||||||||||||||
| Performance-based restricted stock units | 21 | 124 | 711 | ||||||||||||||
| Stock options | 2,246 | 1,787 | 1,537 | ||||||||||||||
| Restricted cash units | 277 | 3,009 | 1,209 | ||||||||||||||
| Employee stock purchase plan | 191 | 195 | 162 | ||||||||||||||
| Total share-based compensation expense | $ | 5,208 | $ | 7,634 | $ | 8,042 | |||||||||||
| Income tax benefit | $ | 414 | $ | 1,831 | $ | 923 | |||||||||||
On June 22, 2021, our Board adopted, and our stockholders approved, the Torrid Holdings Inc. 2021 Long-Term Incentive Plan (the “2021 LTIP”), effective on its adoption date, for employees, consultants and directors. The 2021 LTIP provides for the grant of non-qualified stock options, stock appreciation rights, RSAs, RSUs including performance-based restricted stock units (“PSUs”), stock awards, dividend equivalents, other stock-based awards, cash awards and substitute awards intended to align the interests of service providers, with those of our shareholders. The 2021 LTIP provides that the initial aggregate number of shares reserved and available for issuance is 8,550,000 plus an increase on January 1 of each calendar year during the term of the LTIP, beginning on January 1, 2022, by a number equal to the lesser of (a) 2% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as is determined by our Board. Since January 1, 2022, the aggregate number of shares of common stock reserved and available for issuance under the 2021 LTIP has increased by a total of 10,413,581 pursuant to the annual increase provision under the 2021 LTIP. As of the end of fiscal year 2025, 12,315,462 authorized shares remain available for issuance under the 2021 LTIP.
On June 22, 2021, our Board adopted, and our stockholders approved, the Torrid Holdings Inc. 2021 Employee Stock Purchase Plan (the “ESPP”), effective on its adoption date, intended to qualify under Section 423 of the U.S. Internal Revenue Code of 1986, as amended, in order to provide all of our eligible employees with a further incentive towards ensuring our success and accomplishing our corporate goals. The ESPP allows eligible employees to contribute up to 15% of their base earnings towards purchases of common stock, subject to an annual maximum. The purchase price is 85% of the lower of (i) the fair market value of the stock on the first day of the related offering period and (ii) the fair market value of the stock on the last day of the related offering period. The ESPP provides that the aggregate number of shares reserved and available for issuance is 3,650,000. As of the end of fiscal year 2025, 2,966,061 authorized shares remain available for issuance under the ESPP.
RSUs
RSUs are awarded to certain employees, non-employee directors and consultants and entitle the grantee to receive shares of common stock at the end of a vesting period, subject to the employee’s continued employment or service as a director or consultant. In general, RSUs vest in equal installments each year over four years.
PSUs are awarded to certain employees, non-employee directors and consultants and entitle the grantee to receive shares of common stock based on the achievement of various Company performance targets and market conditions. In general, PSUs vest in equal installments over a three-year period subject to the achievement of the performance targets or market conditions.
RSU activity, including PSUs, under the 2021 LTIP during fiscal year 2025 consisted of the following (in thousands, except per share amounts):
| Shares | Weighted average grant date fair value per share | ||||||||||
| Nonvested at the beginning of the fiscal year | 1,483 | $ | 4.32 | ||||||||
| Granted | 467 | $ | 5.52 | ||||||||
| Vested | (436) | $ | 5.16 | ||||||||
| Forfeited | (423) | $ | 3.60 | ||||||||
| Nonvested at the end of the fiscal year | 1,091 | $ | 4.77 | ||||||||
As of the end of fiscal year 2025, unrecognized compensation expense related to unvested RSUs, including PSUs, was $3.6 million, which is expected to be recognized over a weighted average period of approximately 2.0 years. The weighted average grant date fair value of RSUs granted during fiscal years 2025, 2024 and 2023 was $5.52, $4.67 and $3.13, respectively. The total fair value of RSUs which vested during fiscal years 2025, 2024 and 2023 was $1.8 million, $3.1 million and $0.8 million, respectively.
There were no PSUs granted in fiscal years 2025 and 2024. The grant date fair value of PSUs granted during fiscal year 2023 was estimated using a Monte Carlo simulation following a Geometric Brownian Motion with the following weighted average assumptions:
| Dividend yield | 0.0 | % | |||
Expected volatility(1) | 68.4 | % | |||
Risk-free interest rate(2) | 3.8 | % | |||
Expected term(3) | 3.0 years | ||||
| Weighted average grant date fair value per share | $ | 1.66 | |||
(1)The expected volatility was estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term that is consistent with the expected term of the PSUs.
(2)The risk-free interest rate was based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected term of the PSUs.
(3)The expected term of the PSUs represents the time period from the grant date and the full vesting date.
RSAs
RSAs are awarded to certain employees, non-employee directors and consultants, subject to the employee’s continued employment or service as a director or consultant. RSAs vest over periods ranging from to four years, subject to the employee’s continued employment or service as an employee, non-employee director or consultant, as applicable, on each vesting date.
There were no unvested RSAs at the beginning of fiscal year 2025 and no RSAs granted, vested or forfeited during fiscal year 2025 nor RSAs granted during fiscal years 2024 and 2023. The total fair value of RSAs which vested during fiscal year 2024 was not material. The total fair value of RSAs which vested during fiscal year 2023 was $0.3 million.
Stock Options
Stock options generally vest in equal installments each year over four years and generally expire 10 years from the grant date. Our policy for issuing shares upon stock option exercise is to issue new shares of common stock.
Stock option activity under the 2021 LTIP during fiscal year 2025 consisted of the following (in thousands, except per share and contractual life amounts):
| Shares | Weighted average exercise price per share | Weighted average contractual life | Aggregate intrinsic value | ||||||||||||||||||||
| Outstanding at the beginning of the fiscal year | 2,708 | $ | 4.95 | ||||||||||||||||||||
| Granted | 812 | $ | 5.60 | ||||||||||||||||||||
| Exercised | (7) | $ | 2.78 | ||||||||||||||||||||
| Expired / forfeited | (252) | $ | 5.42 | ||||||||||||||||||||
| Outstanding at the end of the fiscal year | 3,260 | $ | 5.08 | 7.6 years | $ | — | |||||||||||||||||
| Vested and expected to vest at the end of the fiscal year | 3,260 | $ | 5.08 | 7.6 years | $ | — | |||||||||||||||||
| Exercisable at the end of the fiscal year | 1,318 | $ | 5.46 | 6.7 years | $ | — | |||||||||||||||||
The total intrinsic value of stock options exercised during fiscal year 2025 was not material and during fiscal year 2024, the total intrinsic value was $0.4 million. There was no intrinsic value on stock options exercised during fiscal year 2023. The weighted average grant date fair value of stock options granted during fiscal years 2025, 2024 and 2023 was $3.08, $2.77 and $1.91 per option, respectively, and was estimated with the following weighted average assumptions:
| Fiscal Year Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | |||||||||||||||
| Dividend yield | 0.0 | % | 0.0 | % | 0.0 | % | |||||||||||
| Expected volatility | 52.0 | % | 59.1 | % | 60.4 | % | |||||||||||
| Risk-free interest rate | 4.2 | % | 4.4 | % | 3.7 | % | |||||||||||
| Expected term | 6.3 years | 6.3 years | 6.3 years | ||||||||||||||
As of the end of fiscal year 2025, unrecognized compensation expense related to unvested stock options was $3.9 million, which is expected to be recognized over a weighted average period of approximately 2.2 years.
RCUs
RCUs are awarded to certain employees, non-employee directors and consultants and represent the right to receive a cash payment at the end of a vesting period, subject to the employee’s continued employment or service as a director or consultant. In general, RCUs vest in equal installments each year over four years. During fiscal years 2025, 2024 and 2023, we made cash payments totaling $2.5 million, $1.3 million and $1.2 million, respectively, associated with vested RCUs. As of the end of fiscal year 2025, the liability for unvested RCUs was $0.6 million, which is included in accrued and other current liabilities in the consolidated balance sheet.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 31, 2026 | Showing above |
| 2025 | Apr 1, 2025 | |
| 2024 | Apr 2, 2024 | |
| 2023 | Mar 28, 2023 | |
| 2022 | Mar 30, 2022 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.