STOCKHOLDERS' EQUITY

12 Months Ended

Jan. 31, 2024

STOCKHOLDERS' EQUITY, [Abstract]

STOCKHOLDERS' EQUITY

NOTE 11 — STOCKHOLDERS’ EQUITY

Share Repurchase Program

In August 2023, our Board of Directors authorized an increase in the number of shares covered by the Company’s share repurchase program to an aggregate amount of 10,000,000 shares. Prior to this increase, the Company had 6,813,851 authorized shares under this program. The timing and actual number of shares repurchased, if any, will depend on a number of factors, including market conditions and prevailing stock prices, and are subject to compliance with certain covenants contained in the loan agreement. Share repurchases may take place on the open market, in privately negotiated transactions or by other means, and would be made in accordance with applicable securities laws.

During fiscal 2024, pursuant to this program, the Company acquired 1,598,568 shares of its common stock for an aggregate purchase price of $26.1 million. During fiscal 2023, pursuant to this program, the Company acquired 1,587,581 shares of its common stock for an aggregate purchase price of $26.9 million. During fiscal 2022, pursuant to this program, the Company acquired 656,213 shares of its common stock for an aggregate purchase price of $17.3 million. As of January 31, 2024, we had 10,000,000 authorized shares remaining under this program.

Long-Term Incentive Plan

On October 10, 2023, the Company’s shareholders approved the 2023 Long-Term Incentive Plan (the “2023 Plan”), which replaced the Company’s Amended and Restated 2015 Long-Term Incentive Plan (the “2015 Plan”). The 2023 Plan authorizes the issuance of 2.8 million shares. Shares available under the 2015 Plan, which would otherwise have expired on June 9, 2025, were not carried over into the 2023 Plan and no further grants will be made under the 2015 Plan. Outstanding awards issued prior to August 18, 2023 will continue to remain subject to the terms of the 2015 Plan. As of January 31, 2024, the Company had 2,404,510 shares available for grant under the 2023 Plan. The plan provides for the grant of equity and cash awards, including restricted stock awards, stock options and other stock unit awards to directors, officers and employees.

Restricted stock units (“RSUs”) generally (i) cliff vest after three years or (ii) vest over a three year period. Performance based restricted stock units (“PRSUs”) granted to executives prior to fiscal 2020 include (i) market price performance conditions that provide for the award to vest only after the average closing price of the Company’s stock trades above a predetermined market level and (ii) another performance condition that requires the achievement of an operating performance target. Performance stock units (“PSUs”) that were granted to executives generally vest after a three year performance period during which certain earnings before interest and taxes and return on invested capital performance standards must be satisfied for vesting to occur. Special performance stock units (“SPSUs”) were granted to Morris Goldfarb, the Company’s Chairman and Chief Executive Officer, in fiscal 2024 under the terms of his new employment agreement. These SPSUs may be earned if certain stock price, relative Total Shareholder Return target and service conditions are achieved.  These awards may vest from time to time beginning on the third anniversary of the effective date of the award through the fifth anniversary of the effective date of the award.

Restricted Stock Units and Performance Based Restricted Stock Units

	Restricted Stock Units			Performance Based Restricted Stock Units
		Weighted Average			Weighted Average
	Awards	Grant Date		Awards	Grant Date
	Outstanding	Fair Value		Outstanding	Fair Value
Unvested as of January 31, 2021	1,393,268	$	12.47	466,830	$	34.17
Granted	326,791	$	31.52	176,212	$	31.43
Vested	(201,260)	$	20.43	(125,934)	$	30.23
Cancelled	(2,650)	$	33.46	—	$	—
Unvested as of January 31, 2022	1,516,149	$	15.48	517,108	$	34.20
Granted	1,076,509	$	26.88	308,317	$	31.42
Vested	(656,814)	$	29.11	(78,998)	$	35.77
Cancelled	(17,599)	$	31.21	(261,898)	$	35.60
Unvested as of January 31, 2023	1,918,245	$	17.07	484,529	$	31.41
Granted	572,147	$	16.47	1,030,381	$	21.15
Vested	(1,153,872)	$	10.61	—	$	—
Cancelled	(43,445)	$	23.39	—	$	—
Unvested as of January 31, 2024	1,293,075	$	22.35	1,514,910	$	24.44

Restricted Stock Units

RSUs are time based awards that do not have market or performance conditions and (i) cliff vest after three years or (ii) vest over a three year period.  The grant date fair value for RSUs are based on the quoted market price on the date of grant.  Compensation expense for RSUs is recognized in the consolidated financial statements on a straight-line basis over the service period based on their grant date fair value.

Performance Based Restricted Stock Units

Performance based restricted stock units consist of PRSUs, PSUs and SPSUs.

PRSUs were granted to executives prior to fiscal 2020 and included (i) market price performance conditions that provide for the award to vest only after the average closing price of the Company’s stock trades above a predetermined market level and (ii) another performance condition that requires the achievement of an operating performance target. PRSUs generally vest over a two to five year period. For restricted stock units with market conditions, the Company estimates the grant date fair value using a Monte Carlo simulation model. This valuation methodology utilizes the closing price of the Company’s common stock on grant date and several key assumptions, including expected volatility of the Company’s stock price, and risk-free rates of return. This valuation is performed with the assistance of a third party valuation specialist. PRSUs are expensed over the service period under the accelerated attribution method.

Performance stock units (“PSUs”) were granted to executives beginning in fiscal 2020 and vest after a three year performance period during which certain earnings before interest and taxes and return on invested capital performance conditions must be satisfied for vesting to occur. PSUs are expensed over the service period under the accelerated attribution method and based on an estimated percentage of achievement of certain pre-established goals.

Special performance stock units (“SPSUs”) were granted to Morris Goldfarb, the Company’s Chairman and Chief Executive Officer, in fiscal 2024 under the terms of his employment agreement entered into in August 2023. These SPSUs may be earned if certain stock price, relative Total Shareholder Return target and service conditions are achieved. These awards may vest from time to time beginning on the third anniversary of the effective date of the award through the fifth anniversary of the effective date of the award. For restricted stock units with market conditions, the Company estimates the grant date fair value using a Monte Carlo simulation model. This valuation methodology utilizes the closing price of the Company’s common stock on grant date and several key assumptions, including expected volatility of the Company’s stock price, and risk-free rates of return. This valuation is performed with the assistance of a third party valuation specialist. SPSUs are expensed over the service period under the accelerated attribution method.

The Company accounts for forfeited awards as they occur as permitted by ASC 718. Ultimately, the actual expense recognized over the vesting period will be for those shares that vest.

The Company recognized $17.2 million, $32.5 million and $17.4 million in share-based compensation expense for the years ended January 31, 2024, 2023 and 2022 respectively, related to restricted stock unit grants. At January 31, 2024, 2023 and 2022, unrecognized costs related to the restricted stock units totaled $32.8 million, $20.8 million and $21.2 million, respectively. The total fair value of awards for which restrictions lapsed was $23.0 million, $20.4 million and $10.8 million as of January 31, 2024, 2023 and 2022, respectively.

Stock Options

	2024			2023			2022
		Weighted			Weighted			Weighted
		Average			Average			Average
	Shares	Exercise		Shares	Exercise		Shares	Exercise
Stock options outstanding at beginning of year	—	$	—	10,000	$	18.11	18,245	$	23.63
Exercised	—	$	—	—	$	—	—	$	—
Granted	—	$	—	—	$	—	—	$	—
Cancelled or forfeited	—	$	—	(10,000)	$	18.11	(8,245)	$	30.32
Stock options outstanding at end of year	—	$	—	—	$	—	10,000	$	18.11
Exercisable	—	$	—	—	$	—	10,000	$	18.11