What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-09-06 compared with 2023-06-07 · 80 added, 28 removed, 207 unchanged (34% of the section changed)

8 unchanged sentences

Total current assets

Property and equipment, net of accumulated depreciation of $ 265,473 and $ 262,525 as of April 29, 2023 and January 28, 2023, respectively

Property and equipment, net of accumulated depreciation of $ 269,483 and $ 262,525 as of July 29, 2023 and January 28, 2023, respectively

Operating lease right of use assets

14 unchanged sentences

Authorized 32,000,000 shares;

16,116,915 shares issued as of April 29, 2023 and 16,158,494 shares issued as of January 28, 2023;

8,312,902 shares outstanding as of April 29, 2023 and 8,354,481 shares outstanding as of January 28, 2023

16,368,070 shares issued as of July 29, 2023 and 16,158,494 shares issued as of January 28, 2023;

8,564,057 shares outstanding as of July 29, 2023 and 8,354,481 shares outstanding as of January 28, 2023

Paid in capital

1 unchanged sentence

Treasury stock, at cost;

7,804,013 shares held as of April 29, 2023 and 7,804,013 shares held as of January 28, 2023

7,804,013 shares held as of July 29, 2023 and 7,804,013 shares held as of January 28, 2023

Total stockholders’ equity

8 unchanged sentences

Selling, general and administrative expenses

Gain on sale-leaseback

Loss from operations

Interest income

Interest expense

Loss before income taxes

Income tax benefit

Basic net loss per common share

Diluted net loss per common share

Weighted average number of shares outstanding

Citi Trends, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

Twenty-Six Weeks Ended

Cost of sales (exclusive of depreciation)

Selling, general and administrative expenses

Gain on sale-leasebacks

(Loss) Income from operations

11 unchanged sentences

(in thousands)

Thirteen Weeks Ended

Twenty-Six Weeks Ended

Operating activities:

21 unchanged sentences

Financing activities:

Payments of debt issuance costs

Cash used to settle withholding taxes on the vesting of nonvested restricted stock

7 unchanged sentences

Cash paid for interest

Cash payments (refunds)of income taxes

Cash payments of income taxes

Supplemental disclosures of non-cash investing activities:

12 unchanged sentences

Balances — April 29, 2023

Issuance of nonvested shares

Forfeiture of nonvested shares

Stock-based compensation expense

Net share settlement of nonvested shares

Balances — July 29, 2023

Treasury Stock

8 unchanged sentences

Balances — April 30, 2022

Issuance of nonvested shares under incentive plan

Forfeiture of nonvested shares

Stock-based compensation expense

Net share settlement of nonvested shares

Repurchase of common stock

Balances — July 30, 2022

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

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements (unaudited)

April 29, 2023

July 29, 2023

Significant Accounting Policies

2 unchanged sentences

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 multicultural families.

As of April 29, 2023, the Company operated 608 stores in urban, suburban and rural markets in 33 states.

As of July 29, 2023, the Company operated 611 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 2022 Form 10-K.

Operating results for the first quarter of 2023 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 the current economic uncertainty.

Operating results for the second quarter of 2023 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 the current economic uncertainty.

The following contains references to fiscal years 2023 and 2022, which represent fiscal years ending or ended on February 3, 2024 and January 28, 2023, respectively.

11 unchanged sentences

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

For the first quarter of 2023 and 2022, there were 102,000 and 222,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the second quarter of 2023 and 2022, there were 328,000 and 236,000 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 29, 2023 and July 30, 2022, there were 215,000 and 229,000 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

April 29, 2023

April 30, 2022

July 29, 2023

July 30, 2022

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 29, 2023

July 30, 2022

Weighted average number of common shares outstanding

Incremental shares from assumed vesting of nonvested restricted stock

Weighted average number of common shares and common stock equivalents outstanding

Revolving Credit Facility

7 unchanged sentences

Borrowings under the credit facility bear interest (a) for SOFR Loans, at a rate equal to the SOFR Rate plus a SOFR adjustment equal to 0.10 % 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 April 29, 2023, the Company had no borrowings under the credit facility and $ 0.6 million of letters of credit outstanding.

As of July 29, 2023, 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.

5 unchanged sentences

The Company has historically used the annual effective tax rate method to calculate income taxes.

For the first quarter of 2023, the Company used the discrete effective tax rate method to determine its tax expense based upon interim period results.

The Company determined that since small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the first quarter of 2023.

For the first half of 2023, the Company used the discrete effective tax rate method to determine its tax expense based upon interim results.

Commitments and Contingencies

1 unchanged sentence

Once it becomes probable that the Company will incur costs in connection with a legal proceeding and such costs can be reasonably estimated, the Company establishes appropriate reserves.

While legal proceedings are subject to uncertainties and the outcome of any such matter is not predictable, the Company is not aware of any legal proceedings pending or threatened against it that it expects to have a material adverse effect on its financial condition, results of operations or liquidity.

In January 2023, the Company experienced a disruption of its back office and distribution center IT systems, which was due to what is known as Hive ransomware (the “January 2023 cyber disruption”).

In connection with this incident, third party consultants and forensic experts were engaged to assist with the restoration and remediation of the Company’s systems and, with the assistance of law enforcement, to investigate the incident.

The Company does not retain sensitive customer data on its systems.

In connection with the January 2023 cyber disruption, three putative class action lawsuits have been filed against the Company in the United States District Court for the Southern District of Georgia.

These matters, Sienna Thomas v.

Citi Trends, Inc.;

Yeimy Sambrano v.

Citi Trends, Inc.;

and Sabrina Green-Fogg v.

Citi Trends, Inc., were filed on June 27, 2023, July 7, 2023, and July 14, 2023, respectively.

The plaintiffs allege harm in connection with the January 2023 cyber disruption and assert a variety of claims seeking unspecified monetary damages and other related relief.

The Company is vigorously defending these lawsuits.

In addition, the Attorneys General of Alabama, Connecticut, Indiana and Texas have sent inquiry letters to the Company regarding the January 2023 cyber disruption, which the Company is answering.

At this early date, the Company is unable to estimate the range of potential losses that may be associated with these actions or whether it may be subject to other lawsuits, claims or inquiries.

While legal proceedings are subject to uncertainties and the outcome of any such matter is not predictable and it is possible that we could incur losses associated with these proceedings, the Company does not believe, based on the information available to it at the time of this filing, that any legal proceedings pending or threatened against it will have a material adverse effect on its financial condition, results of operations or liquidity.

Stock Repurchases

Repurchases of Common Stock

The Company periodically repurchases shares of its common stock under board-authorized repurchase programs.

2 unchanged sentences

Thirteen Weeks Ended

April 29, 2023

April 30, 2022

Twenty-Six Weeks Ended

July 29, 2023

July 30, 2022

July 29, 2023

July 30, 2022

Total number of shares purchased

1 unchanged sentence

Total investment

At April 29, 2023, $ 50.0 million remained available under the Company’s stock repurchase authorization.

At July 29, 2023, $ 50.0 million remained available under the Company’s stock repurchase authorization.

Revenue Recognition

13 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

Accessories & Beauty

10 unchanged sentences

Thirteen Weeks Ended

April 29, 2023

April 30, 2022

Twenty-Six Weeks Ended

July 29, 2023

July 30, 2022

July 29, 2023

July 30, 2022

Operating lease cost

2 unchanged sentences

Total lease cost

Future minimum lease payments as of April 29, 2023 are as follows (in thousands):

Future minimum lease payments as of July 29, 2023 are as follows (in thousands):

Remainder of 2023

4 unchanged sentences

(2) Includes short-term and long-term portions of operating lease liabilities.

Certain operating leases provide for fixed monthly rents, while others provide for contingent rents computed as a percentage of net sales and others provide for a combination of both fixed monthly rents and contingent rents computed as a percentage of net sales.

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

Thirteen Weeks Ended

April 29, 2023

April 30, 2022

Twenty-Six Weeks Ended

July 29, 2023

July 30, 2022

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