TILLY'S, INC.TLYS
TILLY'S, INC. Stock Compensation Disclosure
Share-Based Compensation
The Tilly's, Inc. 2012 Third Amended and Restated Equity and Incentive Plan (the "2012 Plan"), authorizes up to 8,613,900 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 January 31, 2026, there were 786,915 shares available for future issuance under the 2012 Plan.
Stock Options
We grant stock options to certain employees that gives 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 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.
Performance-Based Stock Options
In fiscal year 2025, in conjunction with the hiring of our President and Chief Executive Officer, we granted 900,000 time-based stock options and 900,000 performance-based stock options pursuant to the 2012 Plan. Vesting of these performance-based stock options is dependent upon the achievement of certain stock price targets based on the 30 consecutive trading day trailing average market closing price of the Company's stock.
The following table summarizes our stock option activity for fiscal year 2025:
| Stock Options | Grant Date Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in Years) | Aggregate Intrinsic Value (1) | ||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| Outstanding at February 1, 2025 | 2,100,895 | $ | 7.79 | ||||||||||||||||||||
| Granted | 2,306,000 | $ | 2.03 | ||||||||||||||||||||
| Exercised | — | $ | — | ||||||||||||||||||||
| Forfeited | (87,875) | $ | 5.02 | ||||||||||||||||||||
| Expired | (193,562) | $ | 7.51 | ||||||||||||||||||||
| Outstanding at January 31, 2026 | 4,125,458 | $ | 4.64 | 8.1 | $ | — | |||||||||||||||||
| Exercisable at January 31, 2026 | 1,255,083 | $ | 8.54 | 5.4 | $ | — | |||||||||||||||||
(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 year and the weighted average exercise price of in-the-money stock options outstanding at the end of each fiscal period. The market value per share was $1.47 at January 31, 2026.
No stock options were exercised in fiscal year 2025. The total intrinsic value of stock options exercised in fiscal years 2024 and 2023 was $0.2 million and $0.3 million, respectively.
The total fair value of stock options vested in fiscal years 2025, 2024 and 2023 was $1.6 million, $1.8 million and $2.5 million, respectively.
The total proceeds received from the exercise of stock options in fiscal years 2024 and 2023 was $0.3 million and $0.4 million, respectively. The tax benefit realized from stock options exercised in fiscal years 2024 and 2023 was $0.2 million and $0.1 million, respectively.
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 will issue shares of Class A common stock when the options are exercised.
The performance-based stock options were measured at fair value on the grant date using the Monte-Carlo valuation model. The Monte-Carlo valuation model uses multiple simulations to evaluate the probability of achieving various stock price levels in relation to the market condition. We expense compensation cost over the vesting period regardless of whether the market condition is ultimately achieved. Based on the Monte-Carlo valuation model, the total fair value as of the grant date of performance-based stock options that vest based on market conditions was $1.2 million in fiscal year 2025. We did not award any performance-based stock options in fiscal years 2024 and 2023.
The fair values of stock options granted in fiscal years 2025, 2024 and 2023 were estimated on the grant dates using the following assumptions:
| Fiscal Year Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | |||||||||||||||
| Weighted average grant-date fair value per option granted | $1.24 | $3.45 | $3.52 | ||||||||||||||
Expected option term (1) | 4.5 years | 5.6 years | 5.5 years | ||||||||||||||
Expected volatility factor (2) | 62.1 | % | 54.9 | % | 56.3 | % | |||||||||||
Risk-free interest rate (3) | 3.8 | % | 4.3 | % | 4.0 | % | |||||||||||
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 weighted average of 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 have a dividend policy and we do not anticipate paying any additional cash dividends on our common stock at this time.
Restricted Stock
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 represent shares issuable in the future upon vesting. Under the 2012 Plan, we grant RSAs to independent members of our Board of Directors and restricted stock units to certain employees. RSAs granted to Board members vest at a rate of 50% on each of the first 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 restricted stock units granted to certain employees vest at a rate of 25% on each of the first 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 restricted stock units based upon the closing price of our Class A common stock on the date of grant.
A summary of the status of non-vested restricted stock as of January 31, 2026 and changes during fiscal year 2025 are presented below:
| Shares | Weighted- Average Grant-Date Fair Value | ||||||||||
| Nonvested at February 1, 2025 | 91,719 | $ | 5.67 | ||||||||
| Granted | 327,870 | $ | 1.22 | ||||||||
| Vested | (55,020) | $ | 5.82 | ||||||||
| Forfeited | (6,107) | $ | 6.55 | ||||||||
| Nonvested at January 31, 2026 | 358,462 | $ | 1.56 | ||||||||
The weighted-average grant-date fair value of restricted stock granted during the years ended February 1, 2025 and February 3, 2024 was $5.23 and $6.55, respectively.
The total fair value of restricted stock vested in fiscal years 2025, 2024 and 2023 was $0.1 million, $0.3 million, and $0.3 million, respectively.
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 recorded in the accompanying Consolidated Statements of Operations (in thousands):
| Fiscal Year Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | |||||||||||||||
| Cost of goods sold | $ | 309 | $ | 335 | $ | 295 | |||||||||||
| Selling, general and administrative expenses | 1,617 | 1,722 | 1,923 | ||||||||||||||
| Total share-based compensation, net of tax | $ | 1,926 | $ | 2,057 | $ | 2,218 | |||||||||||
At January 31, 2026, there was $4.2 million of total unrecognized share-based compensation expense related to unvested stock options and restricted stock awards. This cost has a weighted average remaining recognition period of 2.6 years.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Apr 9, 2026 | Showing above |
| 2025 | Apr 10, 2025 | |
| 2024 | Apr 11, 2024 | |
| 2023 | Apr 13, 2023 | |
| 2022 | Apr 14, 2022 | |
| 2021 | Apr 1, 2021 | |
| 2020 | Apr 1, 2020 | |
| 2019 | Mar 29, 2019 | |
| 2018 | Mar 30, 2018 | |
| 2017 | Mar 20, 2017 | |
| 2016 | Mar 30, 2016 | |
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.