9.Stock-based compensation

Stock-based compensation expense is measured on the grant date based on the fair value of the award. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period for awards expected to vest. The estimated grant date fair value of stock options was determined using a Black-Scholes valuation model using the following weighted-average assumptions:

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The expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate is based on the United States Treasury yield curve in effect on the date of grant for the respective expected life of the option. The expected life represents the time the options granted are expected to be outstanding. The expected life of options granted is derived from historical data on Ulta Beauty stock option exercises. Forfeitures of stock options are estimated at the grant date based on historical rates of stock option activity and reduce the stock-based compensation expense recognized. The Company does not currently pay a regular dividend.

The Company granted 48 and 61 stock options during the 39 weeks ended October 29, 2022 and October 30, 2021, respectively. Stock-based compensation expense for stock options was $1,646 and $2,712 for the 13 weeks ended October 29, 2022 and October 30, 2021, respectively. Stock-based compensation expense for stock options was $6,152 and $8,710 for the 39 weeks ended October 29, 2022 and October 30, 2021, respectively. The weighted-average grant date fair value of these stock options was $149.14 and $109.72 for the 39 weeks ended October 29, 2022 and October 30, 2021, respectively. At October 29, 2022, there was approximately $12,073 of unrecognized stock-based compensation expense related to unvested stock options.

There were 58 and 60 restricted stock units issued during the 39 weeks ended October 29, 2022 and October 30, 2021, respectively. Stock-based compensation expense for restricted stock units was $4,544 and $4,622 for the 13 weeks ended October 29, 2022 and October 30, 2021, respectively. Stock-based compensation expense for restricted stock units was $13,983 and $14,606 for the 39 weeks ended October 29, 2022 and October 30, 2021, respectively. At October 29, 2022, there was approximately $28,260 of unrecognized stock-based compensation expense related to restricted stock units.

There were 37 and 46 performance-based restricted stock units issued during the 39 weeks ended October 29, 2022 and October 30, 2021, respectively. Stock-based compensation expense for performance-based restricted stock units was $3,489 and $1,786 for the 13 weeks ended October 29, 2022 and October 30, 2021, respectively. Stock-based compensation expense for performance-based restricted stock units was $12,419 and $4,901 for the 39 weeks ended October 29, 2022 and October 30, 2021, respectively. At October 29, 2022, there was approximately $27,039 of unrecognized stock-based compensation expense related to performance-based restricted stock units.