What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-12-08 compared with 2022-09-08 · 72 added, 55 removed, 230 unchanged (36% of the section changed)

8 unchanged sentences

Total current assets

Property and equipment, net of accumulated depreciation of $ 273,941 and $ 283,445 as of July 30, 2022 and January 29, 2022, respectively

Property and equipment, net of accumulated depreciation of $ 258,622 and $ 283,445 as of October 29, 2022 and January 29, 2022, respectively

Operating lease right of use assets

6 unchanged sentences

Accrued compensation

Income tax payable

Layaway deposits

6 unchanged sentences

Authorized 32,000,000 shares;

16,183,425 shares issued as of July 30, 2022 and 16,090,365 shares issued as of January 29, 2022;

8,379,412 shares outstanding as of July 30, 2022 and 8,617,210 shares outstanding as of January 29, 2022

16,160,267 shares issued as of October 29, 2022 and 16,090,365 shares issued as of January 29, 2022;

8,356,254 shares outstanding as of October 29, 2022 and 8,617,210 shares outstanding as of January 29, 2022

Paid in capital

1 unchanged sentence

Treasury stock, at cost;

7,804,013 shares held as of July 30, 2022 and 7,473,155 shares held as of January 29, 2022

7,804,013 shares held as of October 29, 2022 and 7,473,155 shares held as of January 29, 2022

Total stockholders’ equity

8 unchanged sentences

Selling, general and administrative expenses

(Loss) income from operations

Gain on sale-leaseback

Income from operations

Interest income

Interest expense

(Loss) income before income taxes

Income tax benefit (provision)

Net (loss) income

Basic net (loss) income per common share

Diluted net (loss) income per common share

Income before income taxes

Income tax expense

Basic net income per common share

Diluted net income per common share

Weighted average number of shares outstanding

2 unchanged sentences

(in thousands, except per share amounts)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Cost of sales (exclusive of depreciation)

Selling, general and administrative expenses

Gain on sale-leaseback

Gain on sale-leasebacks

Income from operations

2 unchanged sentences

Income before income taxes

Income tax provision

Income tax expense

Basic net income per common share

5 unchanged sentences

(in thousands)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Operating activities:

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

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Non-cash operating lease costs

3 unchanged sentences

Non-cash stock-based compensation expense

Gain on sale-leaseback

Gain on sale-leasebacks

Changes in assets and liabilities:

10 unchanged sentences

Insurance proceeds related to investing activities

Proceeds from sale-leaseback

Proceeds from sale-leasebacks

Net cash provided by (used in) investing activities

4 unchanged sentences

Net cash used in financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents:

13 unchanged sentences

Vesting of nonvested shares

Issuance of nonvested shares

Issuance of nonvested shares under incentive plan

Issuance of common stock under incentive plan, net of shares withheld for taxes

10 unchanged sentences

Balances — July 30, 2022

Vesting of nonvested shares

Issuance of nonvested shares under incentive plan

Forfeiture of nonvested shares

Stock-based compensation expense

Net share settlement of nonvested shares

Balances — October 29, 2022

Treasury Stock

12 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

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

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements (unaudited)

July 30, 2022

October 29, 2022

Significant Accounting Policies

1 unchanged sentence

Citi Trends, Inc.

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

As of July 30, 2022, the Company operated 617 stores in urban, suburban and rural markets in 33 states.

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

As of October 29, 2022, the Company operated 615 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 2021 Form 10-K.

Operating results for the second quarter of 2022 are not necessarily indicative of the results that may be expected for the fiscal year as a result of the seasonality of the business, the current economic uncertainty and the extent to which future business will be impacted by the COVID-19 pandemic.

Operating results for the third quarter of 2022 are not necessarily indicative of the results that may be expected for the fiscal year as a result of the seasonality of the business, the current economic uncertainty and the extent to which future business will be impacted by the COVID-19 pandemic.

The following contains references to fiscal years 2022 and 2021, which represent fiscal years ending or ended on January 28, 2023 and January 29, 2022, respectively.

Fiscal 2022 and 2021 both have 52 -week accounting periods.

COVID-19 Pandemic

The COVID-19 pandemic continues to evolve and has caused significant volatility and disruptions in our business, particularly during fiscal 2021 and 2020.

Despite the recent improvement in trends, we cannot reasonably predict the extent to which our future business will be impacted by the pandemic.

Cash and Cash Equivalents/Concentration of Credit Risk

9 unchanged sentences

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

For the second quarter of 2022 and 2021, there were 236,000 and 39,000 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 30, 2022 and July 31, 2021, there were 229,000 and 38,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the third quarter of 2022 and 2021, there were 220,000 and 38,000 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 29, 2022 and October 30, 2021, there were 226,000 and 38,000 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 30, 2022

July 31, 2021

October 29, 2022

October 30, 2021

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 30, 2022

July 31, 2021

Thirty-Nine Weeks Ended

October 29, 2022

October 30, 2021

Weighted average number of common shares outstanding

9 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.

As of July 30, 2022, the Company had no borrowings under the credit facility and $ 0.6 million of letters of credit outstanding.

As of October 29, 2022, the Company had no borrowings under the credit facility and $ 0.6 million of letters of credit outstanding.

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 twenty-six weeks ended July 30, 2022 and July 31, 2021, the Company utilized the annual effective tax rate method to calculate income taxes.

The effective income tax rate was 23.5 % for the first half of 2022, compared to 21.5 % for the first half of 2021.

For the thirty-nine weeks ended October 29, 2022 and October 30, 2021, the Company utilized the annual effective tax rate method to calculate income taxes.

The effective income tax rate was 23.0 % for the first thirty-nine weeks of 2022, compared to 21.5 % for the first thirty-nine weeks of 2021.

The difference in the tax rate was due to a favorable tax impact of restricted stock vestings in the prior year.

On August 16, 2022, the U.S.

enacted the Inflation Reduction Act of 2022 ("IRA").

The IRA contains a number of revisions to the Internal Revenue Code, including a 15% corporate alternative minimum income tax and a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022.

The Company is continuing to evaluate the IRA and its potential impact on future periods, and at this time the Company does not expect the IRA to have a material impact on its consolidated financial statements.

Commitments and Contingencies

8 unchanged sentences

Thirteen Weeks Ended

Twenty-six Weeks Ended

July 30, 2022

July 31, 2021

July 30, 2022

July 31, 2021

Thirty-Nine Weeks Ended

October 29, 2022

October 30, 2021

October 29, 2022

October 30, 2021

Total number of shares purchased

2 unchanged sentences

On March 15, 2022, the Company announced that its board of directors approved an additional $ 30 million stock repurchase program.

At July 30, 2022, $ 50.0 million remained available under the Company’s stock repurchase authorization.

At October 29, 2022, $ 50.0 million remained available under the Company’s stock repurchase authorization.

Revenue Recognition

13 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Accessories & Beauty

11 unchanged sentences

The related land and property were removed from property and equipment, and an operating lease right-of-use asset and lease liability of $ 42.6 million and $ 37.0 million, respectively, were recorded in the condensed consolidated balance sheets.

In September 2022, the Company completed a sale-leaseback of its distribution center in Roland, Oklahoma for net proceeds of approximately $ 35.6 million.

The total annual rent for this property starts at approximately $ 2.7 million with increases of 2 % annually over the 15-year lease term.

The net proceeds included $ 0.6 million of advance funding for a capital improvement project that will be amortized over the 15-year lease term.

The lease contains the option to extend for six additional periods of five years each.

The transaction met the requirements for sale-leaseback accounting, resulting in a gain of approximately $ 29.2 million on the condensed consolidated statements of operations.

The related land and property were removed from property and equipment, and an operating lease right-of-use asset and lease liability of $ 29.5 million and $ 25.8 million, respectively, were recorded in the condensed consolidated balance sheets.

Total lease cost is comprised of operating lease costs, short-term lease costs and variable lease costs, which include rent paid as a percentage of sales, common area maintenance, real estate taxes and insurance for the Company’s real estate leases.

1 unchanged sentence

Thirteen Weeks Ended

Twenty-Six Weeks Ended

July 30, 2022

July 31, 2021

July 30, 2022

July 31, 2021

Thirty-Nine Weeks Ended

October 29, 2022

October 30, 2021

October 29, 2022

October 30, 2021

Operating lease cost

2 unchanged sentences

Total lease cost

Future minimum lease payments as of July 30, 2022 are as follows (in thousands):

Future minimum lease payments as of October 29, 2022 are as follows (in thousands):

Remainder of 2022

5 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 30, 2022

July 31, 2021

Thirty-Nine Weeks Ended

October 29, 2022

October 30, 2021

Cash paid for operating leases

2 unchanged sentences

Weighted average discount rate - operating leases

Subsequent Events

As previously announced, the Company elected to sell its distribution center in Roland, Oklahoma.

On September 6, 2022, the Company completed the sale-leaseback of this property for pretax proceeds of $ 35.6 million.

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