2. Summary of significant accounting policies

Information regarding the Company’s significant accounting policies is contained in Note 2, “Summary of significant accounting policies,” to the financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2015. Presented below and in the following notes is supplemental information that should be read in conjunction with “Notes to Financial Statements” in the Annual Report.

Fiscal quarter

The Company’s quarterly periods are the 13 weeks ending on the Saturday closest to April 30, July 31, October 31, and January 31. The Company’s second quarters in fiscal 2015 and 2014 ended on August 1, 2015 and August 2, 2014, respectively.

Share-based compensation

The Company measures share-based compensation cost on the grant date, based on the fair value of the award, and recognizes the expense on a straight-line method over the requisite service period for awards expected to vest. The Company estimated the grant date fair value of stock options using a Black-Scholes valuation model using the following weighted-average assumptions for the periods indicated:

The Company granted 89 and 320 stock options during the 26 weeks ended August 1, 2015 and August 2, 2014, respectively. The compensation cost that has been charged against operating income was $1,908 and $2,471 for the 13 weeks ended August 1, 2015 and August 2, 2014, respectively. The compensation cost that has been charged against operating income was $3,939 and $4,604 for the 26 weeks ended August 1, 2015 and August 2, 2014, respectively. The weighted-average grant date fair value of these options was $44.79 and $31.74, respectively. At August 1, 2015, there was approximately $32,441 of unrecognized compensation expense related to unvested stock options.

The Company issued 73 and 68 restricted stock awards during 26 weeks ended August 1, 2015 and August 2, 2014, respectively. The compensation cost that has been charged against operating income was $2,328 and $1,069 for the 13 weeks ended August 1, 2015 and August 2, 2014, respectively. The compensation cost that has been charged against operating income was $3,639 and $2,999 for the 26 weeks ended August 1, 2015 and August 2, 2014, respectively. At August 1, 2015, there was approximately $29,931 of unrecognized compensation expense related to restricted stock awards.

Recent accounting pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, issued as a new Topic, Accounting Standards Codification Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that the Company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 Revenue from Contracts with Customers (Topic 606), which delayed the effective date of ASU 2014-09 by one year. With the deferral, the revenue recognition standard is effective beginning in fiscal year 2018 with early adoption permitted beginning in fiscal 2017. The standard allows for either full retrospective or modified retrospective adoption. The Company is currently evaluating the application method and the impact of this new standard on its consolidated financial position, results of operations and cash flows.

In April 2015, the FASB issued Accounting Standards Update No. 2015-05, Customers’ Accounting for Fees Paid in a Cloud Computing Arrangement. This standard provides guidance to determine whether a cloud-based computing arrangement includes a software license. If a cloud-based computing arrangement includes a software license, the customer must account for the software element of the arrangement consistent with the acquisition of other software licenses. Otherwise, the customer must account for the arrangement as a service contract. The standard will take effect for public companies for annual reporting periods beginning after December 15, 2015, including interim reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of this new standard on its consolidated financial position, results of operations and cash flows.