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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended July 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______ TO ______
Commission File Number 001-34742
EXPRESS, INC.
(Exact name of registrant as specified in its charter)
Delaware 26-2828128
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
1 Express Drive
Columbus, Ohio
 43230
(Address of principal executive offices) (Zip Code)
Telephone: (614474-4001
(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $.01 par valueEXPRThe New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes     No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No  
The number of outstanding shares of the registrant’s common stock was 66,977,963 as of August 28, 2021.
EXPRESS, INC. | Q2 2021 Form 10-Q | 1

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EXPRESS, INC.
INDEX TO FORM 10-Q



EXPRESS, INC. | Q2 2021 Form 10-Q | 2

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FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the “safe harbor” provisions of the Private Securities Reform Act of 1995 that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Quarterly Report are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “potential,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely,” "continue to," and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, and financial results, our plans and objectives for future operations, growth, initiatives, or strategies, plans to repurchase shares of our common stock, or the expected outcome or impact of pending or threatened litigation are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

External Risks
changes in consumer spending and general economic conditions;
customer traffic at malls, shopping centers, and at our stores;
the COVID-19 pandemic has previously and may again adversely affect our business operations, store traffic, employee availability, financial condition, liquidity and cash flow;
competition from other retailers;
our dependence upon independent third parties to manufacture all of our merchandise;
changes in the cost of raw materials, labor, and freight;
supply chain disruption and increased tariffs;
difficulties associated with our distribution facilities;
natural disasters, extreme weather, public health issues, including pandemics, fire, and other events that cause business interruption; and
our reliance on third parties to provide us with certain key services for our business.
Strategic Risks
our ability to identify and respond to new and changing fashion trends, customer preferences, and other related factors;
fluctuations in our sales, results of operations, and cash levels on a seasonal basis and due to a variety of other factors, including our product offerings relative to customer demand, the mix of merchandise we sell, promotions, inventory levels, and sales mix between stores and eCommerce;
our dependence on a strong brand image;
our ability to adapt to changes in consumer behavior and develop and maintain a relevant and reliable omnichannel experience for our customers;
our dependence upon key executive management; and
our ability to execute our growth strategy, including but not limited to, engaging our customers and acquiring new ones, executing with precision to accelerate sales and profitability, putting product first, and reinvigorating our brand.
Information Technology Risks
the failure or breach of information systems upon which we rely;
the increase of our employees working remotely and use of technology for work functions; and
our ability to protect our customer data from fraud and theft.
Financial Risks
our substantial lease obligations;
restrictions imposed on us under the terms of our current credit facilities, including asset based requirements related to inventory levels, ability to make additional borrowings, and restrictions on our ability to repurchase shares of our common stock;
our inability to maintain compliance with covenants in our current credit facilities; and
impairment charges on long-lived assets and our lease assets.
Legal, Regulatory and Compliance Risks
claims made against us resulting in litigation or changes in laws and regulations applicable to our business;
our inability to protect our trademarks or other intellectual property rights that may preclude the use of our trademarks or other intellectual property around the world;
changes in tax requirements, results of tax audits, and other factors including timing of tax refund receipts, that may cause fluctuations in our effective tax rate and operating results; and
our failure to maintain adequate internal controls.
Stock Ownership Risk Factors
our inability to pay dividends and repurchase shares;
our charter documents and applicable law may discourage or delay acquisition attempts;
our shares of common stock may experience extreme volatility and purchases of our common stock could incur substantial losses;
our stock price may incur rapid and substantial increases or decreases that may not coincide in timing with the disclosure of news or developments affecting us;
potential short squeezes related to our common stock have led to, and could again lead to, extreme price volatility in shares of our common stock; and
information available in public media that is published by third parties, including blogs, articles, message boards and social and other media may include statements not attributable to us and may not be reliable or accurate.

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. For a discussion of these risks and other risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to “Item 1A. Risk Factors” included elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended January 30, 2021 (“Annual Report”), filed with the Securities and Exchange Commission (“SEC”) on March 25, 2021. The forward-looking statements included in this Quarterly Report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.
EXPRESS, INC. | Q2 2021 Form 10-Q | 3

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PART I – FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS.
EXPRESS, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
 July 31, 2021January 30, 2021
ASSETS
Current Assets:
Cash and cash equivalents$33,852 $55,874 
Receivables, net10,470 14,556 
Income tax receivable53,892 111,342 
Inventories266,593 264,360 
Prepaid rent4,891 7,883 
Other14,415 20,495 
Total current assets384,113 474,510 
Right of Use Asset, Net704,909 797,785 
Property and Equipment963,089 969,402 
Less: accumulated depreciation(806,040)(789,204)
Property and equipment, net157,049 180,198 
Other Assets4,309 5,964 
TOTAL ASSETS$1,250,380 $1,458,457 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term lease liability$212,659 $203,441 
Accounts payable156,896 150,230 
Deferred revenue29,674 32,430 
Short-term debt8,966  
Accrued expenses111,854 128,952 
Total current liabilities520,049 515,053 
Long-Term Lease Liability624,582 722,949 
Long-Term Debt109,207 192,032 
Other Long-Term Liabilities20,036 18,734 
Total Liabilities1,273,874 1,448,768 
Commitments and Contingencies (Note 9)
Stockholders’ Equity:
Preferred stock – $0.01 par value; 10,000 shares authorized; no shares issued or outstanding
  
Common stock – $0.01 par value; 500,000 shares authorized; 93,632 shares and 93,632 shares issued at July 31, 2021 and January 30, 2021, respectively, and 66,972 shares and 64,971 shares outstanding at July 31, 2021 and January 30, 2021, respectively
936 936 
Additional paid-in capital216,409 222,141 
Retained earnings57,422 114,732 
Treasury stock – at average cost; 26,660 shares and 28,661 shares at July 31, 2021 and January 30, 2021, respectively
(298,261)(328,120)
Total stockholders’ (deficit)/equity(23,494)9,689 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$1,250,380 $1,458,457 
See Notes to Unaudited Consolidated Financial Statements.
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EXPRESS, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)

Thirteen Weeks EndedTwenty-Six Weeks Ended
 July 31, 2021August 1, 2020July 31, 2021August 1, 2020
Net Sales$457,627 $245,703 $803,386 $455,978 
Cost of Goods Sold, Buying and Occupancy Costs308,320 289,760 575,275 546,242 
GROSS PROFIT/(LOSS)149,307 (44,057)228,111 (90,264)
Operating Expenses:
Selling, general, and administrative expenses134,562 92,805 253,955 191,970 
Other operating income, net(31)(568)(64)(661)
TOTAL OPERATING EXPENSES134,531 92,237 253,891 191,309 
OPERATING INCOME/(LOSS)14,776 (136,294)(25,780)(281,573)
Interest Expense, Net4,115 1,023 9,367 1,079 
Other Expense, Net   2,733 
INCOME/(LOSS) BEFORE INCOME TAXES10,661 (137,317)(35,147)(285,385)
Income Tax Expense/(Benefit)22 (29,547)(62)(23,565)
NET INCOME/(LOSS)$10,639 $(107,770)$(35,085)$(261,820)
COMPREHENSIVE INCOME/(LOSS)$10,639 $(107,770)$(35,085)$(261,820)
EARNINGS PER SHARE:
Basic$0.16 $(1.67)$(0.53)$(4.07)
Diluted$0.15 $(1.67)$(0.53)$(4.07)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic66,527 64,645 65,863 64,338 
Diluted69,565 64,645 65,863 64,338 
See Notes to Unaudited Consolidated Financial Statements.
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EXPRESS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Amounts in Thousands) (Unaudited) 

Common StockTreasury Stock
 Shares OutstandingPar ValueAdditional
Paid-in
Capital
Retained
Earnings
Accumulated Other Comprehensive LossSharesAt Average CostTotal
BALANCE, January 30, 202164,971 $936 $222,141 $114,732 $ 28,661 $(328,120)$9,689 
Net loss— — — (45,724)— — — (45,724)
Exercise of stock options and restricted stock1,934 — (6,477)(15,659)— (1,934)22,136  
Share-based compensation— — 2,523 — — — — 2,523 
Repurchase of common stock(647)— — — — 647 (2,167)(2,167)
BALANCE, May 1, 202166,258 $936 $218,187 $53,349 $ 27,374 $(308,151)$(35,679)
Net income— — — 10,639 — — — 10,639 
Exercise of stock options and restricted stock998 — (4,659)(6,566)— (998)11,225  
Share-based compensation— — 2,881 — — — — 2,881 
Repurchase of common stock(284)— — — — 284 (1,335)(1,335)
BALANCE, July 31, 2021
66,972 $936 $216,409 $57,422 $ 26,660 $(298,261)$(23,494)



Common StockTreasury Stock
 Shares OutstandingPar ValueAdditional
Paid-in
Capital
Retained
Earnings
Accumulated Other Comprehensive LossSharesAt Average CostTotal
BALANCE, February 1, 202063,922 $936 $215,207 $533,690 $ 29,710 $(343,531)$406,302 
Net loss— — — (154,050)— — — (154,050)
Exercise of stock options and restricted stock802 — (1,609)(7,659)— (802)9,268  
Share-based compensation— — 2,502 — — — — 2,502 
Repurchase of common stock(268)— — — — 268 (540)(540)
BALANCE, May 2, 202064,456 $936 $216,100 $371,981 $ 29,176 $(334,803)$254,214 
Net loss— — — (107,770)— — — (107,770)
Exercise of stock options and restricted stock386 — (732)(3,682)— (386)4,414  
Share-based compensation— — 2,460 — — — — 2,460 
Repurchase of common stock(12)— — — — 12 (28)(28)
BALANCE, August 1, 202064,830 $936 $217,828 $260,529 $ 28,802 $(330,417)$148,876 
See Notes to Unaudited Consolidated Financial Statements.

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EXPRESS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands) (Unaudited)
Twenty-Six Weeks Ended
 July 31, 2021August 1, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(35,085)$(261,820)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization35,866 37,323 
Loss on disposal of property and equipment 1 
Impairment of property, equipment and lease assets 21,483 
Equity method investment impairment 3,233 
Share-based compensation5,404 4,962 
Deferred taxes 63,621 
Landlord allowance amortization(172)(208)
Other non-cash adjustments (500)
Changes in operating assets and liabilities:
Receivables, net4,086 (7,982)
Income tax receivable57,450 (85,724)
Inventories(2,233)(11,999)
Accounts payable, deferred revenue, and accrued expenses(12,896)75,588 
Other assets and liabilities15,171 (8,361)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
67,591 (170,383)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(10,558)(10,130)
NET CASH USED IN INVESTING ACTIVITIES
(10,558)(10,130)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under the revolving credit facility38,000 165,000 
Repayment of borrowings under the revolving credit facility(119,050) 
Proceeds from borrowings under the term loan facility50,000  
Repayment of borrowings under the term loan facility(43,263) 
Proceeds on financing arrangements 2,548 
Repayments of financing arrangements(769)(712)
Costs incurred in connection with debt arrangements(471) 
Repurchase of common stock for tax withholding obligations(3,502)(568)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
(79,055)166,268 
NET DECREASE IN CASH AND CASH EQUIVALENTS(22,022)(14,245)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD55,874 207,139 
CASH AND CASH EQUIVALENTS, END OF PERIOD$33,852 $192,894 
See Notes to Unaudited Consolidated Financial Statements.
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EXPRESS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Page

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NOTE 1 | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Business Description
Express, Inc., together with its subsidiaries (“Express” or the “Company”), is a modern, versatile, dual gender apparel and accessories brand that helps people get dressed for every day and any occasion. Launched in 1980 with the idea that style, quality and value should all be found in one place, Express has been a brand of the now, offering some of the most important and enduring fashion trends. Express aims to Create Confidence & Inspire Self-Expression through a design & merchandising view that brings forward The Best of Now for Real Life Versatility. The Company operates 566 retail and factory outlet stores in the United States and Puerto Rico, as well as an online store. As of July 31, 2021, Express operated 360 primarily mall-based retail stores in the United States and Puerto Rico as well as 206 factory outlet stores.

Fiscal Year
The Company's fiscal year ends on the Saturday closest to January 31. Fiscal years are designated in the unaudited Consolidated Financial Statements and Notes, as well as the remainder of this Quarterly Report, by the calendar year in which the fiscal year commences. All references herein to the Company's fiscal years are as follows:
Fiscal YearYear EndedNumber of Weeks
2021January 29, 202252
2020January 30, 202152

All references herein to “the second quarter of 2021” and “the second quarter of 2020” represent the thirteen weeks ended July 31, 2021 and August 1, 2020, respectively.
Basis of Presentation
The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and the U.S. Securities and Exchange Commission’s Article 10, Regulation S-X and therefore do not include all of the information or footnotes required for complete financial statements. In the opinion of management, the accompanying unaudited Consolidated Financial Statements reflect all adjustments (which are of a normal recurring nature) necessary to state fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for 2021. Therefore, these statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended January 30, 2021, included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 25, 2021.
Principles of Consolidation
The unaudited Consolidated Financial Statements include the accounts of Express, Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Segment Reporting    
The Company defines an operating segment on the same basis that it uses to evaluate performance internally. The Company has determined that, together, its Chief Executive Officer and its President and Chief Operating Officer are the Chief Operating Decision Maker, and that there is one operating segment. Therefore, the Company reports results as a single segment, which includes the operation of its Express brick-and-mortar retail and outlet stores and eCommerce operations.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expense during the reporting period, as well as the related disclosure of contingent assets and liabilities as of the date of the unaudited Consolidated Financial
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Statements. Actual results may differ from those estimates. The Company revises its estimates and assumptions as new information becomes available.
Management's Assessment
The Company has seen significant recovery in sales and profitability in the first half of 2021 with continued improvement into the third quarter and continues to be in compliance with the financial covenants under its Revolving Credit Facility and Term Loan Facility (as defined below). Based upon the improved results in the first half of 2021, the terms of the Term Loan Facility and the Revolving Credit Facility and the cash conservation and cost reduction measures taken to date, the Company is projecting sufficient liquidity to fund future operations and to meet its obligations as they become due for at least one year following the date that these unaudited Consolidated Financial Statements are issued.

NOTE 2 | REVENUE RECOGNITION
The following is information regarding the Company’s major product categories and sales channels:
Thirteen Weeks EndedTwenty-Six Weeks Ended
 July 31, 2021August 1, 2020July 31, 2021August 1, 2020
(in thousands)
Apparel$404,961 $207,421 $709,233 $387,004 
Accessories and other40,896 25,888 73,119 47,268 
Other revenue11,770 12,394 21,034 21,706 
Total net sales$457,627 $245,703 $803,386 $455,978 
Thirteen Weeks EndedTwenty-Six Weeks Ended
 July 31, 2021August 1, 2020July 31, 2021August 1, 2020
(in thousands)
Retail$315,836 $164,745 $562,067 $324,282 
Outlet130,021 68,564 220,285 109,990 
Other revenue11,770 12,394 21,034 21,706 
Total net sales$457,627 $245,703 $803,386 $455,978 
Other revenue consists primarily of revenue earned from our private label credit card agreement, shipping and handling revenue related to eCommerce activity, sell-off revenue related to marked-out-of-stock inventory sales to third parties, revenue from gift card breakage and revenue from franchise agreements.

Merchandise Sales
The Company recognizes sales for in-store purchases at the point-of-sale. Revenue related to eCommerce transactions is recognized upon shipment based on the fact that control transfers to the customer at that time. The Company has made a policy election to treat shipping and handling as costs to fulfill the contract, and as a result, any amounts received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of goods sold, buying and occupancy costs in the unaudited Consolidated Statements of Income and Comprehensive Income for amounts paid to applicable carriers. Associate discounts on merchandise purchases are classified as a reduction of net sales. Net sales excludes sales tax collected from customers and remitted to governmental authorities.
Loyalty Program
The Company maintains a customer loyalty program in which customers earn points toward rewards for qualifying purchases and other marketing activities. Upon reaching specified point values, customers are issued a reward, which they may redeem on merchandise purchases at the Company’s stores or on its website. Generally, rewards earned must be redeemed within 60 days from the date of issuance. The Company defers a portion of merchandise sales based on the estimated standalone selling price of the points earned. This deferred revenue is recognized as
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certificates that are redeemed or expire. To calculate this deferral, the Company makes assumptions related to card holder redemption rates based on historical experience. The loyalty liability is included in deferred revenue on the unaudited Consolidated Balance Sheets.

Thirteen Weeks EndedTwenty-Six Weeks Ended
 July 31, 2021August 1, 2020July 31, 2021August 1, 2020
(in thousands)
Beginning balance loyalty deferred revenue$8,273 $9,585 $8,951 $14,063 
Reduction in revenue/(revenue recognized)541 284 (137)(4,194)
Ending balance loyalty deferred revenue$8,814 $9,869 $8,814 $9,869 
Sales Returns Reserve
The Company reduces net sales and provides a reserve for projected merchandise returns based on prior experience. Merchandise returns are often resalable merchandise and are refunded by issuing the same payment tender as the original purchase. The sales returns reserve was $9.9 million and $6.4 million as of July 31, 2021 and January 30, 2021, respectively, and is included in accrued expenses on the unaudited Consolidated Balance Sheets. The asset related to projected returned merchandise is included in other assets on the unaudited Consolidated Balance Sheets.
Gift Cards
The Company sells gift cards in its stores, on its eCommerce website, and through third parties. These gift cards do not expire or lose value over periods of inactivity. The Company accounts for gift cards by recognizing a liability at the time a gift card is sold. The gift card liability balance was $20.7 million and $23.5 million, as of July 31, 2021 and January 30, 2021, respectively, and is included in deferred revenue on the unaudited Consolidated Balance Sheets. The Company recognizes revenue from gift cards when they are redeemed by the customer. The Company also recognizes income on unredeemed gift cards, referred to as “gift card breakage.” Gift card breakage is recognized proportionately using a time-based attribution method from issuance of the gift card to the time when it can be determined that the likelihood of the gift card being redeemed is remote and that there is no legal obligation to remit unredeemed gift cards to relevant jurisdictions. The gift card breakage rate is based on historical redemption patterns. Gift card breakage is included within the other revenue component of net sales.
Thirteen Weeks EndedTwenty-Six Weeks Ended
 July 31, 2021August 1, 2020July 31, 2021August 1, 2020
(in thousands)
Beginning gift card liability$21,587 $21,728 $23,478 $24,142 
Issuances5,761 4,353 9,839 8,393 
Redemptions(6,074)(4,728)(11,299)(10,146)
Gift card breakage(540)(488)(1,284)(1,524)
Ending gift card liability$20,734 $20,865 $20,734 $20,865 
Private Label Credit Card
The Company has an agreement with Comenity Bank (the “Bank”) to provide customers with private label credit cards (the “Card Agreement”) which was amended on August 28, 2017 to extend the term of the arrangement through December 31, 2024. Each private label credit card bears the logo of the Express brand and can only be used at the Company’s store locations and eCommerce channel. The Bank is the sole owner of the accounts issued under the private label credit card program and absorbs the losses associated with non-payment by the private label card holders and a portion of any fraudulent usage of the accounts.
Pursuant to the Card Agreement, the Company receives amounts from the Bank during the term based on a percentage of private label credit card sales and is also eligible to receive incentive payments for the achievement of certain performance targets. These funds are recorded within the other revenue component of net sales. The Company also receives reimbursement funds from the Bank for certain expenses the Company incurs. These
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reimbursement funds are used by the Company to fund marketing and other programs associated with the private label credit card. The reimbursement funds received related to private label credit cards are recorded within the other revenue component of net sales in the Consolidated Statements of Income and Comprehensive Income.

In connection with the Card Agreement, the Bank agreed to pay the Company a $20.0 million refundable payment which the Company recognized upon receipt as deferred revenue within other long-term liabilities in the Consolidated Balance Sheets and began to recognize into income on a straight-line basis commencing January of 2018. As of July 31, 2021, the deferred revenue balance of $9.8 million will be recognized over the remaining term of the amended Card Agreement within the other revenue component of net sales.
Thirteen Weeks EndedTwenty-Six Weeks Ended
 July 31, 2021August 1, 2020July 31, 2021August 1, 2020
(in thousands)
Beginning balance refundable payment liability$10,553 $13,431 $11,272 $14,150 
Recognized in revenue(720)(720)(1,439)(1,439)
Ending balance refundable payment liability $9,833 $12,711 $9,833 $12,711 

NOTE 3 | EARNINGS PER SHARE
The following table provides a reconciliation between basic and diluted weighted-average shares used to calculate basic and diluted earnings per share:
Thirteen Weeks EndedTwenty-Six Weeks Ended
July 31, 2021August 1, 2020July 31, 2021August 1, 2020
(in thousands)
Weighted-average shares - basic66,527 64,645 65,863 64,338 
Dilutive effect of stock options and restricted stock units3,038    
Weighted-average shares - diluted69,565 64,645 65,863 64,338 
Equity awards representing 1.1 million and 8.8 million shares of common stock were excluded from the computation of diluted earnings per share for the thirteen and twenty-six weeks ended July 31, 2021, respectively, as the inclusion of these awards would have been anti-dilutive. Equity awards representing 11.3 million and 10.4 million shares of common stock were excluded from the computation of diluted earnings per share for the thirteen and twenty-six weeks ended August 1, 2020, respectively, as the inclusion of these awards would have been anti-dilutive.
Additionally, for the thirteen weeks ended July 31, 2021, approximately 1.5 million shares were excluded from the computation of diluted weighted average shares because the number of shares that will ultimately be issued is contingent on the Company’s performance compared to pre-established performance goals which have not been achieved as of July 31, 2021.

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NOTE 4 | FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date.
Level 1 - Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 - Valuation is based upon quoted prices for similar assets and liabilities in active markets or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 - Valuation is based upon other unobservable inputs that are significant to the fair value measurement.
Financial Assets
The following table presents the Company’s financial assets, recorded in cash and cash equivalents on the unaudited Consolidated Balance Sheets, measured at fair value on a recurring basis as of July 31, 2021 and January 30, 2021, aggregated by the level in the fair value hierarchy within which those measurements fall.
July 31, 2021
Level 1Level 2Level 3
(in thousands)
Money market funds$4,742 $ $ 
January 30, 2021
Level 1Level 2Level 3
(in thousands)
Money market funds$35,964 $ $ 
The money market funds are valued using quoted market prices in active markets.
The carrying amounts reflected on the unaudited Consolidated Balance Sheets for the remaining cash and cash equivalents, receivables, prepaid expenses, and payables as of July 31, 2021 and January 30, 2021 approximated their fair values.
Non-Financial Assets
Store Asset Impairment
Property and equipment, including the right of use assets, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur indicating the carrying value of these assets may not be recoverable, an impairment test is required. These events include, but are not limited to, material adverse changes in projected revenues and cost of goods sold (exclusive of buying and occupancy costs), present cash flow losses combined with a history of cash flow losses and a forecast that demonstrates significant continuing losses, significant negative economic conditions, a significant decrease in the market value of an asset and store closure or relocation decisions. The reviews are conducted at the store level, the lowest identifiable level of cash flow.

Stores that display an indicator of impairment are subjected to an impairment assessment. Such stores are tested for recoverability by comparing the sum of the estimated future undiscounted cash flows to the carrying amount of the asset. This recoverability test requires management to make assumptions and judgments related, but not limited, to management’s expectations for future cash flows from operating the store.

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The key assumptions used in the undiscounted future store cash flow models include sales growth rate and gross margin, exclusive of buying and occupancy costs.

An impairment loss may be recognized when these undiscounted future cash flows are less than the carrying amount of the asset group. In the circumstance of impairment, any loss would be measured as the excess of the carrying amount of the asset group over its fair value. Fair value of the store-related assets is determined at the individual store level based on the highest and best use of the asset group.

The key assumptions used in the fair value analysis may include discounted estimates of future store cash flows from operating the store and/or comparable market rents.

During the thirteen and twenty-six weeks ended July 31, 2021 and August 1, 2020, the Company recognized impairment charges as follows:
Thirteen Weeks EndedTwenty-Six Weeks Ended
July 31, 2021August 1, 2020July 31, 2021August 1, 2020
(in thousands)
Right of use asset impairment$ $5,874 $ $15,562 
Property and equipment asset impairment 931  5,921 
Total asset impairment$ $6,805 $ $21,483 
Impairment charges are recorded in cost of goods sold, buying and occupancy costs in the unaudited Consolidated Statements of Income and Comprehensive Income.

NOTE 5 | INCOME TAXES
The provision for income taxes is based on a current estimate of the annual effective tax rate, adjusted to reflect the effect of discrete items. The Company’s effective income tax rate may fluctuate from quarter to quarter as a result of a variety of factors, including the estimate of annual pre-tax income, the related changes in the estimate, and the effect of discrete items. The impact of these items on the effective tax rate will be greater at lower levels of pre-tax earnings.

The Company evaluates whether deferred tax assets are realizable on a quarterly basis. The Company considers all available positive and negative evidence, including past operating results and expectations of future operating income. Accordingly, the Company continues to maintain a full valuation allowance on deferred tax assets as of July 31, 2021.

On March 27, 2020, the Coronavirus Aid Relief and Economic Security (“CARES”) Act was enacted into law. The CARES Act includes several provisions that impact the Company such as the establishment of a five-year carryback of net operating losses originating in the tax years 2018, 2019, and 2020, temporarily suspending the 80% limitation on the use of net operating losses, relaxing limitation rules on business interest deductions, and retroactively clarifying that businesses may immediately write-off certain qualified leasehold improvement property dating back to January 1, 2018.

The Company’s effective tax rate was 0.2% and 21.5% for the thirteen weeks ended July 31, 2021 and August 1, 2020, respectively. The effective tax rate for the thirteen weeks ended July 31, 2021 is driven by changes to the Company's full year forecasted effective tax rate due to improved operational forecast offset by a reduction to the forecasted valuation allowance needed for the current year results. The effective tax rate for the thirteen weeks ended August 1, 2020 reflects the impact of recording an additional valuation allowance of $16.2 million valuation allowance against 2020 U.S. federal and state taxes and other tax credits of which a portion relates to 2020 U.S. federal net operating losses that could not be carried back to offset taxable income in the five-year carryback period as part of the CARES Act. This was partially offset by $9.1 million of tax benefit related to the portion of the 2020 U.S. federal net operating losses that are able to be carried back to years with a higher federal statutory tax rate than is currently enacted.

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The Company’s effective tax rate was 0.2% and 8.3% for the twenty-six weeks ended July 31, 2021 and August 1, 2020, respectively. The effective tax rate for the twenty-six weeks ended July 31, 2021 reflects the impact of non-deductible executive compensation and the recording of an additional valuation allowance of $1.0 million against current year losses. The effective tax rate for the twenty-six weeks ended August 1, 2020 reflects the impact of establishing a valuation allowance against the Company's net deferred tax assets, which includes $55.0 million of discrete tax expense from a valuation allowance on previously recognized deferred tax assets and $22.3 million valuation allowance on 2020 U.S. federal and state taxes and other tax credits of which a portion relates to 2020 U.S. federal net operating losses that could not be carried back to offset taxable income in the five-year carryback period as part of the CARES Act. This was partially offset by a $28.6 million tax benefit related to the portion of the 2019 and 2020 U.S. federal net operating losses that are able to be carried back to years with a higher federal statutory tax rate than is currently enacted.

NOTE 6 | LEASES
The Company leases all of its store locations and its corporate headquarters, which also includes its distribution center, under operating leases. The store leases typically have initial terms of 5 to 10 years; however, most of the leases that are coming to the end of their lease lives are being renegotiated with shorter terms. The current lease term for the corporate headquarters expires in 2026, with one optional five-year extension period. The Company also leases certain equipment and other assets under operating leases, typically with initial terms of 3 to 5 years. The lease term includes the initial contractual term as well as any options to extend the lease when it is reasonably certain that the Company will exercise that option. Leases with an initial term of 12 months or less (short-term leases) are not recorded on the balance sheet. The Company does not currently have any material short-term leases. The Company is generally obligated for the cost of property taxes, insurance and other landlord costs, including common area maintenance charges, relating to its leases. If these charges are fixed, they are combined with lease payments in determining the lease liability; however, if such charges are not fixed, they are considered variable lease costs and are expensed as incurred. The variable payments are not included in the measurement of the lease liability or asset. The Company’s finance leases are immaterial. The Company did not make any amendments to its lease modification policies as a result of the COVID-19 pandemic.
Certain lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company’s lease agreements do not provide an implicit rate, so the Company uses an estimated incremental borrowing rate, which is derived from third-party information available at the lease commencement date, in determining the present value of lease payments. The rate used is for a secured borrowing of a similar term as the lease.

As a result of the impact of the COVID-19 pandemic, the Company did not initially make its store rent payments for certain stores in the first and second quarter of 2020. The Company established an accrual for rent payments that were not made and has continued to recognize accrued rent expense. As a result of negotiations with certain landlords, the Company has since made rent payments for certain stores and some landlords have agreed to abate certain rent payments. The appropriate adjustments were made to accrued rent. Accrued rent is within accrued expenses on the unaudited Consolidated Balance Sheets. Accrued minimum rent as of July 31, 2021 and January 30, 2021, was $17.3 million and $56.3 million, respectively.

Supplemental cash flow information related to leases is as follows:
Twenty-Six Weeks Ended
July 31, 2021August 1, 2020
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases
$146,563 $70,707 
Right-of-use assets obtained in exchange for operating lease liabilities$41,951 $17,893 

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NOTE 7 | DEBT
The following table summarizes the Company's outstanding debt as of the dates indicated:
July 31, 2021January 30, 2021
(in thousands)
Term Loan Facility$96,737 $90,000 
Revolving Facility25,000 106,050 
Total outstanding borrowings121,737 196,050 
Less: unamortized debt issuance costs(3,564)(4,018)
Total debt, net118,173 192,032 
Less: current portion of long-term debt8,966  
Long-term debt, net$109,207 $192,032 
Outstanding letters of credit$34,486 $36,099 
Term Loan Facility
On January 13, 2021, Express Holding, LLC, a wholly-owned subsidiary of the Company (“Express Holding”), and its subsidiaries entered into the $140.0 million Asset-Based Term Loan Agreement (the “Term Loan Facility”), among the Loan Parties (as defined therein), Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent and collateral agent, and the other lenders named therein (the “Term Loan Lenders”).

The Term Loan Facility provides for a “first in, last out” term loan in an amount equal to $90.0 million (the “FILO Term Loan”) and a delayed draw term loan facility in an amount equal to $50.0 million (the “DDTL”). The Term Loan Facility is a senior secured obligation that ranks equally with the Loan Parties’ other senior secured obligations.

During the first quarter of 2021, the Company drew down the additional $50.0 million under the DDTL and repaid $12.4 million with proceeds from 2020 CARES Act tax refunds, as required under the Term Loan Facility.

During the second quarter of 2021, the Company paid an additional $30.9 million payment on the DDTL with proceeds from CARES Act refunds. As of July 31, 2021, the Company had $6.7 million in borrowings outstanding under the DDTL and $90.0 million in borrowings outstanding under the Term Loan Facility. The fair value of the $96.7 million total borrowings outstanding under the Term Loan Facility at July 31, 2021 was $95.6 million.

Amounts borrowed under the FILO Term Loan will be repaid in quarterly installments at a rate of 1.25% per quarter based on the original principal amount of the FILO Term Loan, commencing with the fiscal quarter beginning on or about January 30, 2022. All remaining amounts of the Term Loan Facility outstanding on the maturity date will be paid in full on the maturity date, May 24, 2024. The Loan Parties must repay amounts incurred under the Term Loan Facility with net proceeds from the incurrence of certain additional debt, after payment in full and termination of the $250.0 million asset-based loan credit facility, when outstanding loans under the Term Loan Facility and asset-based loan credit facility exceed the aggregate borrowing base under the Term Loan Facility and asset-based loan credit facility, and, in the case of the DDTL only, with tax refund proceeds payable to the Company pursuant to the CARES Act. Voluntary prepayments under the Term Loan Facility are permitted at any time upon proper notice and subject to minimum dollar amounts and, in certain instances, a prepayment fee.

Amounts borrowed under the Term Loan Facility will bear interest at a variable rate indexed to LIBOR plus a pricing margin ranging from 8.00% to 8.25% per annum, as determined in accordance with the provisions of the Term Loan Facility based on EBITDA (as defined below), as of any date of determination, for the most recently ended twelve month period. Interest payments under the Term Loan Facility are due on the first day of each calendar month. As of July 31, 2021 the interest rate on the outstanding FILO Term Loan was 9.0%.

The Term Loan Facility is subject to a borrowing base which is calculated based on specified percentages of eligible inventory, credit card receivables, intellectual property and, after the advance of the DDTL, the lesser of the amount of the tax refund claim under the CARES Act and the outstanding amount of the DDTL.
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The Term Loan Facility financial covenant requires the Borrower to maintain minimum excess availability of at least the greater of (i) $25.0 million or (ii) 10% of the sum of (x) the Amended Revolving Credit Facility (defined below) loan cap (calculated without giving effect to any term pushdown reserve) plus (y) the lesser of (A) the outstanding principal balance under the Term Loan Facility and (B) the term loan borrowing base. In addition, the Term Loan Facility contains customary covenants and restrictions on the Company’s and its subsidiaries’ activities, including, but not limited to, limitations on the amount of cash that can be held, the incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions, prepayment of other debt, distributions, dividends, the repurchase of capital stock, transactions with affiliates, the ability to change the nature of its business or its fiscal year, and permitted activities of the Company.

The Term Loan Facility includes customary events of default that include, among other things, non-payment defaults, inaccuracy of representations and warranties, covenant defaults, cross-default to material indebtedness, bankruptcy and insolvency defaults, material judgment defaults, ERISA defaults, structural defaults under the loan documents and a change of control default. The occurrence of an event of default could result in the acceleration of the obligations under the Term Loan Facility. Under certain circumstances, a default interest rate will apply on any amount payable under the Term Loan Facility during the existence of an event of default at a per annum rate equal to 2.00% above the applicable interest rate for any principal and 2.00% above the rate applicable for base rate loans for any other interest.

All obligations under the Term Loan Facility are guaranteed by the Loan Parties (other than the Borrower (as defined therein)) and secured by (a) a second priority lien on, substantially all of the Loan Parties’ working capital assets, including cash, accounts receivable, and inventory, and (b) a first priority lien on, substantially all of the Loan Parties’ non-working capital assets, including intellectual property, and the tax refund payable to the Company pursuant to the CARES Act, in each case, subject to certain permitted liens.

The Company recorded deferred financing costs associated with the issuance of the Term Loan Facility. The unamortized balance is $3.6 million as of July 31, 2021. These costs will be amortized over the respective contractual terms of the Term Loan Facility or written off ratably as the Term Loan Facility is extinguished. The Company’s Term Loan debt is presented on the Consolidated Balance Sheets, net of the unamortized fees.
Revolving Credit Facility
On May 24, 2019, Express Holding and its subsidiaries entered into a First Amendment to the Second Amended and Restated $250.0 million Asset-Based Loan Credit Agreement (as amended, the “Revolving Credit Facility”).

On March 17, 2020, the Company provided notice to the lenders under the Revolving Credit Facility of a request to borrow $165.0 million.

On January 13, 2021, Express Holding and its subsidiaries entered into the Second Amendment to the Second Amended and Restated $250.0 million Asset-Based Loan Credit Agreement and the Second Amendment to the Amended and Restated Security Agreement, among the Loan Parties (as defined therein), the lenders party thereto, and Wells Fargo, as administrative agent, as collateral agent, as issuing bank and as swing line lender (the “Revolving Credit Facility Amendment”). The Revolving Credit Facility Amendment amends the Loan Parties’ existing asset-based Revolving Credit Facility (as amended by the Revolving Credit Facility Amendment, the “Amended Revolving Credit Facility”), which is scheduled to expire on May 24, 2024.

The Revolving Credit Facility Amendment added the Company and Express Topco LLC as Loan Parties, fully obligated and bound by all of the respective covenants, representations, warranties and events of default.

Under the Amended Revolving Credit Facility, revolving loans may be borrowed, repaid and reborrowed until May 24, 2024, at which time all amounts borrowed must be repaid. Borrowings under the Amended Revolving Credit Facility bear interest at variable rates that are indexed, at the Borrower’s option, to LIBOR or the base rate as defined in the credit agreement governing the asset-based loan credit facility, in each case plus a pricing margin. The pricing margin for LIBOR loans ranges from 2.00% to 2.25% per annum, and the pricing margin for base rate loans ranges from 1.00% to 1.25% per annum, in each case as determined in accordance with the provisions of the Amended Revolving Credit Facility based on average daily excess availability. The Amended Revolving Credit Facility has a maximum borrowing amount of $250.0 million, subject to a borrowing base which is calculated based on specified percentages of eligible inventory, credit card receivables and cash, less certain reserves. Commitment reductions and termination of the Amended Revolving Credit Facility prior to the maturity date is permitted, subject
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in certain instances to a prepayment fee. As of July 31, 2021, the interest rate on the outstanding borrowings of $25.0 million at LIBOR was approximately 2.8%.

The unused line fee payable under the Amended Revolving Credit Facility is 0.375% per annum when average daily excess availability during an applicable fiscal quarter is greater than or equal to 50% of the borrowing base and 0.20% per annum when average daily excess availability is less than 50% of the borrowing base, payable quarterly in arrears on the first day of each calendar month. The Borrower is also obligated to pay other customary closing fees, arrangement fees, administration fees and letter of credit fees for a credit facility of this size and type.

Interest payments under the Amended Revolving Credit Facility are due on the first day of each calendar month for base rate loans. Interest payments under the Amended Revolving Credit Facility are due on the last day of the interest period for LIBOR loans for interest periods of one and three months, and additionally every three months after the first day of the interest period for LIBOR loans for interest periods of greater than three months.

The Amended Revolving Credit Facility financial covenant requires the Borrower to maintain minimum excess availability of at least the greater of (i) $25 million or (ii) 10% of the sum of (x) Amended Revolving Credit Facility loan cap (calculated without giving effect to any term pushdown reserve) plus (y) the lesser of (A) the outstanding principal balance under the Term Loan Facility and (B) the term loan borrowing base. Subject to certain conditions, the Amended Revolving Credit Facility restricts prepayment of the Term Loan Facility, except in connection with a prepayment made solely from the tax refund payable to the Company pursuant to the CARES Act. In addition, the Amended Revolving Credit Facility contains customary covenants and restrictions on the Company’s and its subsidiaries’ activities, including, but not limited to, limitations on the amount of cash that can be held, incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions, prepayment of other debt, distributions, dividends, the repurchase of capital stock, transactions with affiliates, the ability to change the nature of its business or its fiscal year, and permitted activities of the Company.

The Amended Revolving Credit Facility includes customary events of default that, include among other things, non-payment defaults, inaccuracy of representations and warranties, covenant defaults, cross-default to material indebtedness, bankruptcy and insolvency defaults, material judgment defaults, ERISA defaults, structural defaults under the loan documents and a change of control default. The occurrence of an event of default could result in the acceleration of the obligations under the Amended Revolving Credit Facility. Under certain circumstances, a default interest rate will apply on any amount payable under the Amended Revolving Credit Facility during the existence of an event of default at a per annum rate equal to 2.00% above the applicable interest rate for any principal and 2.00% above the rate applicable for base rate loans for any other interest.

All obligations under the Amended Revolving Credit Facility are guaranteed by the Loan Parties (other than the Borrower) and secured by (a) a first priority lien on substantially all of the Loan Parties’ working capital assets, including cash, accounts receivable, and inventory, and (b) a second priority lien on substantially all of the Loan Parties’ non-working capital assets, including intellectual property, and the refund payable to the Company pursuant to the CARES Act, in each case, subject to certain permitted liens.

During the second quarter of 2021, the Company repaid $80.0 million on the Revolving Credit Facility. As of July 31, 2021, the Company had $25.0 million in borrowings outstanding under the Revolving Credit Facility and approximately $137.2 million remained available for borrowing under the Revolving Credit Facility after giving effect to outstanding letters of credit in the amount of $34.5 million and subject to certain borrowing base limitations as further discussed above. The fair value of the Revolving Credit Facility at July 31, 2021 was $25.1 million.

Letters of Credit
The Company may enter into various trade letters of credit ("trade LCs") in favor of certain vendors to secure merchandise. These trade LCs are issued for a defined period of time, for specific shipments, and generally expire three weeks after the merchandise shipment date. As of July 31, 2021 and January 30, 2021, there were no outstanding trade LCs. Additionally, the Company enters into stand-by letters of credit ("stand-by LCs") on an as-needed basis to secure payment obligations for third party logistic services, merchandise purchases, and other general and administrative expenses. As of July 31, 2021 and January 30, 2021, outstanding stand-by LCs totaled $34.5 million and $36.1 million, respectively.

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NOTE 8 | SHARE-BASED COMPENSATION
The Company records the fair value of share-based payments to employees in the unaudited Consolidated Statements of Income and Comprehensive Income within selling, general, and administrative expenses as compensation expense, net of forfeitures, over the requisite service period. The Company issues shares of common stock from treasury stock, at average cost, upon exercise of stock options and vesting of restricted stock units, including those with performance conditions.
Long-Term Compensation Plans
In 2010, the Board approved, and the Company implemented, the Express, Inc. 2010 Incentive Compensation Plan (as amended, the "2010 Plan"). The 2010 Plan authorized the Compensation Committee (the "Committee") of the Board and its designees to offer eligible employees and directors cash and stock-based incentives as deemed appropriate in order to attract, retain, and reward such individuals.

On April 30, 2018, upon the recommendation of the Committee, the Board unanimously approved and adopted, subject to stockholder approval, the Express, Inc. 2018 Incentive Compensation Plan (the “2018 Plan”) to replace the 2010 Plan. On June 13, 2018, stockholders of the Company approved the 2018 Plan and all grants made subsequent to that approval will be made under the 2018 Plan. The primary change made by the 2018 Plan was to increase the number of shares of common stock available for equity-based awards by 2.4 million shares. In addition to increasing the number of shares, the Company also made several enhancements to the 2010 Plan to reflect best practices in corporate governance. The 2018 Plan incorporates these concepts and also includes several other enhancements which were practices the Company already followed but were not explicitly stated in the 2010 Plan. None of these changes will have a significant impact on the accounting for awards made under the 2018 Plan.

In the third quarter of 2019, in connection with updates made by the Company to its policy regarding the clawback of incentive compensation awarded to associates, the Board approved an amendment to the 2018 Plan, solely for the purpose of updating the language regarding the recoupment of awards granted under the 2018 Plan.

On March 17, 2020, upon the recommendation of the Committee, the Board unanimously approved and adopted, subject to stockholder approval, a second amendment to the 2018 Plan, which increased the number of shares of common stock available under the 2018 Plan by 2.5 million shares. On June 10, 2020, stockholders of the Company approved this plan amendment.

The following summarizes long-term incentive compensation expense:
Thirteen Weeks EndedTwenty-Six Weeks Ended
July 31, 2021August 1, 2020July 31, 2021August 1, 2020
(in thousands)
Restricted stock units$1,642 $2,143 $3,657 $4,327 
Stock options250 317 550 635 
Performance-based restricted stock units989  1,197  
Total share-based compensation$2,881 $2,460 $5,404 $4,962 
Cash-settled awards3,097 364 4,639 (7)
Total long-term incentive compensation$5,978 $2,824 $10,043 $4,955 
The stock compensation related income tax benefit, excluding consideration of valuation allowances, recognized by the Company during the thirteen and twenty-six weeks ended July 31, 2021 was $1.6 million and $3.6 million, respectively. The stock compensation related income tax benefit, excluding consideration of valuation allowances, recognized by the Company during the thirteen and twenty-six weeks ended August 1, 2020 was $0.2 million and $0.7 million, respectively.
The valuation allowances associated with these tax benefits were $1.6 million and $3.6 million for the thirteen and twenty-six weeks ended July 31, 2021, respectively. There were no valuation allowances associated with the tax benefits for the thirteen and twenty-six weeks ended August 1, 2020, respectively.
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Equity Awards
Restricted Stock Units
During the twenty-six weeks ended July 31, 2021, the Company granted restricted stock units (“RSUs”) under the 2018 Plan. The fair value of RSUs is determined based on the Company’s closing stock price on the day prior to the grant date in accordance with the 2018 Plan. The RSUs granted in 2021 vest ratably over one to three years and the expense related to these RSUs will be recognized using the straight-line attribution method over this vesting period.

The Company’s activity with respect to RSUs, including awards with performance conditions granted prior to 2018, for the twenty-six weeks ended July 31, 2021 was as follows:

Number of
Shares
Grant Date
Weighted Average
Fair Value Per Share
(in thousands, except per share amounts)
Unvested - January 30, 2021
7,090 $2.63 
Granted169 $5.56 
Vested(2,931)$2.81 
Forfeited(271)$2.82 
Unvested - July 31, 2021
4,057 $2.61 
The total fair value of RSUs that vested during the twenty-six weeks ended July 31, 2021 and August 1, 2020 was $8.2 million and $6.6 million, respectively. As of July 31, 2021, there was approximately $8.4 million of total unrecognized compensation expense related to unvested RSUs, which is expected to be recognized over a remaining weighted-average period of approximately 1.2 years.

Stock Options
The Company’s activity with respect to stock options during the twenty-six weeks ended July 31, 2021 was as follows:
Number of
Shares
Grant Date
Weighted Average
Exercise Price Per Share
Weighted-Average Remaining Contractual Life (in years)Aggregate Intrinsic Value
(in thousands, except per share amounts and years)
Outstanding - January 30, 2021
3,324 $6.65 
Granted $ 
Exercised $ 
Forfeited or expired(294)$17.24 
Outstanding - July 31, 2021
3,030 $5.62 7.0$4,849 
Expected to vest at July 31, 2021
551 $2.64 7.9$1,141 
Exercisable at July 31, 2021
2,465 $6.30