NOTE 4. EARNINGS PER SHARE

The computation of basic earnings per share (EPS) is based on the number of weighted average common shares outstanding during the period. The computation of diluted EPS is based on the weighted average number of shares outstanding plus the incremental shares that would be outstanding assuming exercise of dilutive stock options and issuance of restricted stock. The number of incremental shares is calculated by applying the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share in thousands:

	Fiscal Year Ended
	February 3, 2018		January 28, 2017		January 30, 2016
	(53 weeks)		(52 weeks)		(52 weeks)
Net income	$	35,030	$	61,075	$	70,528

Weighted average number of common shares outstanding		20,347		22,240		23,947
Dilutive stock options		5		40		35
Dilutive restricted stock units		98		147		147
Weighted average number of common shares outstanding and dilutive shares		20,450		22,427		24,129

Basic earnings per share	$	1.72	$	2.75	$	2.95
Diluted earnings per share	$	1.71	$	2.72	$	2.92

In calculating diluted earnings per share for Fiscal 2018, 235,232 options to purchase shares of common stock outstanding as of the end of the period were excluded in the computations of diluted earnings per share due to their anti-dilutive effect. In calculating diluted earnings per share for Fiscal 2017, 104,091 options to purchase shares of common stock outstanding as of the end of the period were excluded in the computations of diluted earnings per share due to their anti-dilutive effect. In calculating diluted earnings per share for Fiscal 2016, 120,206 options to purchase shares of common stock outstanding as of the end of the period were excluded in the computations of diluted earnings per share due to their anti-dilutive effect.

We excluded 50,100 nonvested stock awards granted to certain employees from the computation of diluted weighted average common shares and common share equivalents outstanding, because they are subject to performance-based annual vesting conditions which had not been achieved by the end of Fiscal 2018. Assuming the performance criteria had been achieved at target as of February 3, 2018, the incremental dilutive impact would have been 50,100 shares.