What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-12-06 compared with 2023-09-06 · 78 added, 46 removed, 241 unchanged (34% of the section changed)

8 unchanged sentences

Total current assets

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

Property and equipment, net of accumulated depreciation of $ 272,238 and $ 262,525 as of October 28, 2023 and January 28, 2023, respectively

Operating lease right of use assets

14 unchanged sentences

Authorized 32,000,000 shares;

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

16,348,358 shares issued as of October 28, 2023 and 16,158,494 shares issued as of January 28, 2023;

8,544,345 shares outstanding as of October 28, 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 July 29, 2023 and 7,804,013 shares held as of January 28, 2023

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

Total stockholders’ equity

8 unchanged sentences

Selling, general and administrative expenses

Loss from operations

Asset impairment

Gain on sale-leaseback

(Loss) income 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

(Loss) income before income taxes

Income tax benefit (expense)

Net (loss) income

Basic net (loss) income per common share

Diluted net (loss) 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

Asset impairment

Gain on sale-leasebacks

12 unchanged sentences

(in thousands)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Operating activities:

1 unchanged sentence

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

Asset impairment

Non-cash operating lease costs

4 unchanged sentences

Gain on sale-leaseback

Gain on insurance related to operating activities

Changes in assets and liabilities:

41 unchanged sentences

Balances — July 29, 2023

Forfeiture of nonvested shares

Stock-based compensation expense

Net share settlement of nonvested shares

Balances — October 28, 2023

Treasury Stock

Balances — January 29, 2022

Vesting of nonvested restricted stock units

Vesting of nonvested shares

Issuance of nonvested shares

5 unchanged sentences

Balances — April 30, 2022

Issuance of nonvested shares under incentive plan

Issuance of nonvested shares

Forfeiture of nonvested shares

3 unchanged sentences

Balances — July 30, 2022

Vesting of nonvested shares

Issuance of nonvested shares

Forfeiture of nonvested shares

Stock-based compensation expense

Net share settlement of nonvested shares

Balances — October 29, 2022

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

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements (unaudited)

July 29, 2023

October 28, 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 July 29, 2023, the Company operated 611 stores in urban, suburban and rural markets in 33 states.

As of October 28, 2023, the Company operated 606 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 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.

Operating results for the third 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.

Fiscal 2023 has a 53 -week accounting period, and fiscal 2022 had a 52 -week accounting period.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) requires management to make estimates and apply judgments that affect the reported amounts.

Actual results could differ from those estimates.

The most significant estimates include those used in the valuation of inventory, property and equipment, self-insurance liabilities, leases and income taxes.

Management periodically evaluates estimates used in the preparation of the consolidated financial statements for continued reasonableness.

Appropriate adjustments, if any, to the estimates used are made prospectively.

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 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.

For the third quarter of 2023 and 2022, there were 318,000 and 220,000 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 28, 2023 and October 29, 2022, there were 259,000 and 226,000 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 29, 2023

July 30, 2022

October 28, 2023

October 29, 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

Thirty-Nine Weeks Ended

October 28, 2023

October 29, 2022

Weighted average number of common shares outstanding

10 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 July 29, 2023, the Company had no borrowings under the credit facility and $ 0.6 million of letters of credit outstanding.

As of October 28, 2023, the Company had no borrowings under the credit facility and $ 0.6 million of letters of credit outstanding.

Impairment of Assets

If facts and circumstances indicate that a long-lived asset or operating lease right-of-use asset may be impaired, the carrying value is reviewed.

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.

In the third quarter of 2023, non-cash impairment expense related to underperforming stores totaled $ 0.2 million.

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

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

Commitments and Contingencies

4 unchanged sentences

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.

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

These matters, Matousek et al v.

Citi Trends, Inc.;

Sienna Thomas v.

Citi Trends, Inc.;

Yeimy Sambrano v.

1 unchanged sentence

and Sabrina Green-Fogg v.

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

Citi Trends, Inc., were filed on September 26, 2023, 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.

1 unchanged sentence

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.

At October 28, 2023, the Company had an accrual of $ 0.8 million for estimated losses in connection with these matters recorded in Accrued expenses.

The ultimate loss to the Company for these matters could be materially different from the amount the Company has accrued.

The Company cannot predict or estimate the duration or ultimate outcome of these matters.

The Company is unable to predict 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.

5 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

July 29, 2023

July 30, 2022

July 29, 2023

July 30, 2022

Thirty-Nine Weeks Ended

October 28, 2023

October 29, 2022

October 28, 2023

October 29, 2022

Total number of shares purchased

1 unchanged sentence

Total investment

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

At October 28, 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

Thirty-Nine Weeks Ended

Accessories & Beauty

10 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

July 29, 2023

July 30, 2022

July 29, 2023

July 30, 2022

Thirty-Nine Weeks Ended

October 28, 2023

October 29, 2022

October 28, 2023

October 29, 2022

Operating lease cost

2 unchanged sentences

Total lease cost

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

Future minimum lease payments as of October 28, 2023 are as follows (in thousands):

Remainder of 2023

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 29, 2023

July 30, 2022

Thirty-Nine Weeks Ended

October 28, 2023

October 29, 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