What changed in this filing

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Item 1. Financial Statements

2021-12-08 compared with 2021-09-08 · 64 added, 55 removed, 251 unchanged (32% of the section changed)

7 unchanged sentences

Prepaid and other current assets

Income tax receivable

Total current assets

Property and equipment, net of accumulated depreciation of $ 281,874 and $ 279,080 as of July 31, 2021 and January 30, 2021, respectively

Property and equipment, net of accumulated depreciation of $ 281,004 and $ 279,080 as of October 30, 2021 and January 30, 2021, respectively

Operating lease right of use assets

15 unchanged sentences

Authorized 32,000,000 shares;

15,971,349 shares issued as of July 31, 2021 and 15,981,394 shares issued as of January 30, 2021;

9,114,599 shares outstanding as of July 31, 2021 and 9,876,901 shares outstanding as of January 30, 2021

15,967,965 shares issued as of October 30, 2021 and 15,981,394 shares issued as of January 30, 2021;

8,590,129 shares outstanding as of October 30, 2021 and 9,876,901 shares outstanding as of January 30, 2021

Paid in capital

1 unchanged sentence

Treasury stock, at cost;

6,856,750 shares held as of July 31, 2021 and 6,104,493 shares held as of January 30, 2021

7,377,836 shares held as of October 30, 2021 and 6,104,493 shares held as of January 30, 2021

Total stockholders’ equity

19 unchanged sentences

(in thousands, except per share amounts)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Cost of sales (exclusive of depreciation)

1 unchanged sentence

Asset impairment

Income (loss) from operations

Income from operations

Interest income

Interest expense

Income (loss) before income taxes

Income tax (provision) benefit

Net income (loss)

Basic net income (loss) per common share

Diluted net income (loss) per common share

Income before income taxes

Income tax provision

Basic net income per common share

Diluted net income per common share

Weighted average number of shares outstanding

3 unchanged sentences

(in thousands)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Operating activities:

Net income (loss)

Adjustments to reconcile net income to net cash provided by operating activities:

10 unchanged sentences

Accrued compensation

Income tax (receivable) payable

Income tax receivable

Layaway deposits

13 unchanged sentences

Repurchases of common stock

Net cash (used in) provided by financing activities

Net cash used in financing activities

Net (decrease) increase in cash and cash equivalents

25 unchanged sentences

Balances — July 31, 2021

Vesting of nonvested restricted stock units

Issuance of nonvested shares under incentive plan

Stock-based compensation expense

Net share settlement of nonvested shares and restricted stock units

Repurchase of common stock

Balances — October 30, 2021

Treasury Stock

12 unchanged sentences

Balances — August 1, 2020

Issuance of nonvested shares under incentive plan

Forfeiture of nonvested shares by employees and directors

Stock-based compensation expense

Net share settlement of nonvested shares and restricted stock units

Repurchase of common stock

Balances — October 31, 2020

See accompanying notes to the condensed consolidated financial statements (unaudited).

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements (unaudited)

July 31, 2021

October 30, 2021

Significant Accounting Policies

2 unchanged sentences

and its subsidiary (the “Company”) is a growing specialty value retailer of apparel, accessories and home trends primarily for African American and Latinx families.

As of July 31, 2021, the Company operated 589 stores in urban, suburban and rural markets in 33 states.

As of October 30, 2021, the Company operated 600 stores in urban, suburban and rural markets in 33 states.

The condensed consolidated financial statements are prepared in accordance with U.S.

4 unchanged sentences

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2020 Form 10-K.

Operating results for the second quarter of 2021 are not necessarily indicative of the results that may be expected for the fiscal year as a result of the seasonality of the business and current uncertainty surrounding the economic impact of the novel coronavirus (“COVID-19”) pandemic and the duration and extent of any economic stimulus programs.

Operating results for the third quarter of 2021 are not necessarily indicative of the results that may be expected for the fiscal year as a result of the seasonality of the business and continued uncertainty surrounding the economic impact of the novel coronavirus, including variants of the coronavirus (“COVID-19”) and the duration and extent of any economic stimulus programs.

The following contains references to fiscal years 2021 and 2020, which represent fiscal years ending or ended on January 29, 2022 and January 30, 2021, respectively.

1 unchanged sentence

COVID-19 Pandemic

In March 2020, the World Health Organization declared the spread of the coronavirus (“COVID-19”) a global pandemic.

In March 2020, the World Health Organization declared the spread of the COVID-19 a global pandemic.

The pandemic has resulted in periods of disruption for the Company, including the temporary closure of stores and limited store operating hours, reduced customer traffic and consumer spending, and delays in the manufacturing and shipping of products.

The Company saw improvement in its financial results and positive trends during the latter half of 2020 and into the first half of 2021 as certain governments began to ease restrictions and provide economic stimulus and vaccine distribution accelerated, leading to an increase in spending and increased customer demand.

The Company saw improvement in its financial results and positive trends during the latter half of 2020 and through the first three quarters of 2021 as governments eased restrictions and provided economic stimulus, along with the acceleration of vaccine distribution, leading to an increase in spending and increased customer demand.

The Company expects continued uncertainty in its business and the global economy due to the COVID-19 pandemic, including potential volatility in employment trends and consumer confidence, current or future restrictive actions that may be imposed by governments or public health authorities, the duration and extent of any economic stimulus programs, supply chain interruptions, increased distribution and transportation costs, increased payroll expenses, and increased costs to maintain safe work and shopping environments.

12 unchanged sentences

The Company includes as assumed proceeds the amount of compensation cost attributed to future services and not yet recognized.

For the thirteen weeks ended July 31, 2021 and August 1, 2020, there were 39,000 and 165,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the twenty-six weeks ended July 31, 2021 and August 1, 2020, there were 38,000 and 173,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the thirteen weeks ended October 30, 2021 and October 31, 2020, there were 38,000 and 134,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the thirty-nine weeks ended October 30, 2021 and October 31, 2020, there were 38,000 and 150,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

The following table provides a reconciliation of the weighted average number of common shares outstanding used to calculate basic earnings per share to the number of common shares and common stock equivalents outstanding used in calculating diluted earnings per share:

Thirteen Weeks Ended

July 31, 2021

August 1, 2020

October 30, 2021

October 31, 2020

Weighted average number of common shares outstanding

1 unchanged sentence

Weighted average number of common shares and common stock equivalents outstanding

Twenty-Six Weeks Ended

July 31, 2021

August 1, 2020

Thirty-Nine Weeks Ended

October 30, 2021

October 31, 2020

Weighted average number of common shares outstanding

9 unchanged sentences

Level 3 inputs are given the lowest priority in the fair value hierarchy.

As of July 31, 2021, the Company’s investment securities are classified as held-to-maturity since the Company has the intent and ability to hold the investments to maturity.

As of October 30, 2021, the Company’s investment securities are classified as held-to-maturity since the Company has the intent and ability to hold the investments to maturity.

Such securities are carried at amortized cost plus accrued interest and consist of the following (in thousands):

1 unchanged sentence

Obligations of states and municipalities (Level 2)

The amortized cost and fair market value of investment securities as of July 31, 2021 by contractual maturity are as follows (in thousands):

The amortized cost and fair market value of investment securities as of October 30, 2021 by contractual maturity are as follows (in thousands):

Mature in one year or less

2 unchanged sentences

If this review indicates that the carrying value of the asset will not be recovered as determined based on projected undiscounted cash flows related to the asset over its remaining life, the carrying value of the asset is reduced to its estimated fair value.

There was no impairment expense recorded in the first half of 2021.

In the first half of 2020, non-cash impairment charges related to an underperforming store totaled $ 0.3 million, comprised of $ 0.2 million for an operating lease right-of-use asset and $ 0.1 million for leasehold improvements and fixtures and equipment.

There was no impairment expense recorded in the first thirty-nine weeks of 2021.

In the first thirty-nine weeks of 2020, non-cash impairment charges related to an underperforming store totaled $ 0.3 million, comprised of $ 0.2 million for an operating lease right-of-use asset and $ 0.1 million for leasehold improvements and fixtures and equipment.

Revolving Credit Facility

6 unchanged sentences

Borrowings under the credit facility bear interest (a) for Eurodollar Loans, at a rate equal to the Eurodollar Rate plus either 1.25 % , 1.50 % or 1.75 % , or (b) for Base Rate Loans, at a rate equal to the highest of (i) the prime rate, (ii) the Federal Funds Rate plus 0.5 % or (iii) the Eurodollar Rate plus 1.0 % , plus, in each case either 0.25 % , 0.50 % or 0.75 % , based in any such case on the average daily availability for borrowings under the facility.

The Company had no borrowings under the credit facility as of July 31, 2021.

The Company had no borrowings under the credit facility as of October 30, 2021.

Income taxes are accounted for under the asset and liability method.

4 unchanged sentences

If there is a change in tax rates, the Company would recognize the impact of such change in income in the period that includes the enactment date.

For the first half of 2021, the Company utilized the annual effective tax rate method to calculate income taxes.

For the first half of 2020, the Company utilized the discrete effective tax rate method based on the determination that the full-year tax rate was not reliably predictable.

The tax rate was 21.5 % for the first half of 2021, compared to 27.6 % (benefit) for the first half of 2020.

The difference in the tax rate was primarily due to pretax income in the current year compared to a pretax loss in the same period of 2020.

For the thirty-nine weeks ended October 30, 2021 and October 31, 2020, the Company utilized the annual effective tax rate method to calculate income taxes.

The effective income tax rate was 21.5 % for the first thirty-nine weeks of 2021, compared to 23.2 % for the first thirty-nine weeks of 2020.

The difference in the effective income tax rate was primarily due to a favorable tax impact of restricted stock vestings in the current year, partially offset by an increase in pretax income compared to the same period of 2020.

Commitments and Contingencies

8 unchanged sentences

Shortly thereafter, due to the economic uncertainty stemming from the COVID-19 pandemic, the Company suspended its stock repurchase program until September 2020 when the program was reinstated.

In December 2020, the Company announced that its board of directors approved an additional $ 30 million stock repurchase program.

In June 2021, the Company announced that its board of directors authorized another $ 30 million stock repurchase program.

In the first half of 2021, the Company repurchased 502,257 shares of its common stock under its repurchase programs at an aggregate cost of $ 42.5 million.

Further, the Company announced that its board of directors approved new $ 30 million stock repurchase programs in each of December 2020, June 2021 and August 2021.

In the first thirty-nine weeks of 2021, the Company repurchased 1,023,343 shares of its common stock under its repurchase programs at an aggregate cost of $ 85.3 million.

In addition, the Company completed a block repurchase of 250,000 shares of its common stock at an aggregate cost of $ 21.9 million.

As of July 31, 2021, the Company had approximately $ 20.9 million available under its previously announced stock repurchase program.

On August 24, 2021, the Company announced that its board of directors authorized another $ 30 million stock repurchase program.

As of October 30, 2021, the Company had approximately $ 8.1 million available under its previously announced stock repurchase program.

On November 30, 2021, the Company announced that its board of directors authorized another $ 30 million stock repurchase program.

Revenue Recognition

4 unchanged sentences

Sales Returns

The Company allows customers to return merchandise for up to thirty days after the date of sale.

The Company allows customers to return merchandise for up to 30 days after the date of sale.

Expected refunds to customers are recorded based on estimated margin using historical return information.

6 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Beauty & Accessories

8 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

July 31, 2021

August 1, 2020

July 31, 2021

August 1, 2020

Thirty-Nine Weeks Ended

October 30, 2021

October 31, 2020

October 30, 2021

October 31, 2020

Operating lease cost

5 unchanged sentences

The Company continues to engage in discussions with landlords regarding the potential restructuring of lease payments and rent concessions.

As of July 31, 2021 , the Company negotiated contractual rent concessions on many leases in the form of early renewals, rent deferrals and rent abatements.

The Company elected to account for qualifying COVID-19 related rent concessions as if they were part of the enforceable rights and obligations under the existing lease agreements, as permitted by the updated guidance provided by the FASB in April 2020.

As a result of this election, the Company recognized rent abatement credits of approximately $ 0.1 million and $ 0.6 million during the second quarter of 2021 and 2020, respectively.

Future minimum lease payments as of July 31, 2021 are as follows (in thousands):

As of October 30, 2021, the Company negotiated contractual rent concessions on many leases in the form of early renewals, rent deferrals and rent abatements.

As a result of this election, the Company recognized rent abatement credits of approximately $ 0.1 million and $ 0.8 million during the thirteen weeks ended October 30, 2021 and October 31, 2020, respectively.

Future minimum lease payments as of October 30, 2021 are as follows (in thousands):

Remainder of 2021

6 unchanged sentences

Supplemental cash flows and other information related to operating leases are as follows (in thousands, except for weighted average amounts):

Twenty-Six Weeks Ended

July 31, 2021

August 1, 2020

Thirty-Nine Weeks Ended

October 30, 2021

October 31, 2020

Cash paid for operating leases

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements