What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-12-11 compared with 2024-09-11 · 109 added, 93 removed, 365 unchanged (36% of the section changed)

8 unchanged sentences

Total current assets

Property and equipment, net of accumulated depreciation of $ 291,466 and $ 276,446 as of August 3, 2024 and February 3, 2024, respectively

Property and equipment, net of accumulated depreciation of $ 294,363 and $ 276,446 as of November 2, 2024 and February 3, 2024, respectively

Operating lease right of use assets

14 unchanged sentences

Authorized 32,000,000 shares;

16,419,356 shares issued as of August 3, 2024 and 16,354,714 shares issued as of February 3, 2024;

8,615,343 shares outstanding as of August 3, 2024 and 8,550,701 shares outstanding as of February 3, 2024

16,434,037 shares issued as of November 2, 2024 and 16,354,714 shares issued as of February 3, 2024;

8,630,024 shares outstanding as of November 2, 2024 and 8,550,701 shares outstanding as of February 3, 2024

Paid in capital

1 unchanged sentence

Treasury stock, at cost;

7,804,013 shares held as of August 3, 2024 and February 3, 2024

7,804,013 shares held as of November 2, 2024 and February 3, 2024

Total stockholders ’ equity

20 unchanged sentences

(in thousands, except per share amounts)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Cost of sales (exclusive of depreciation)

13 unchanged sentences

(in thousands)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Operating activities:

4 unchanged sentences

Deferred income taxes

Insurance proceeds related to operating activities

Non-cash stock-based compensation expense

Gain on insurance related to operating activities

Changes in assets and liabilities:

8 unchanged sentences

Purchases of property and equipment

Insurance proceeds related to investing activities

Net cash used in investing activities

30 unchanged sentences

Balances — August 3, 2024

Issuance of nonvested shares under incentive plan

Forfeiture of nonvested shares

Stock-based compensation expense

Net share settlement of nonvested shares

Balances — November 2, 2024

Treasury Stock

11 unchanged sentences

Balances — July 29, 2023

Forfeiture of nonvested shares

Stock-based compensation expense

Net share settlement of nonvested shares

Balances — October 28, 2023

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

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements (unaudited)

August 3, 2024

November 2, 2024

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 August 3, 2024, the Company operated 597 stores in urban, suburban and rural markets in 33 states.

As of November 2, 2024, the Company operated 593 stores in urban, suburban and rural markets in 33 states.

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

18 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 2024 and 2023, there were 178,000 and 328,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the twenty-six weeks ended August 3, 2024 and July 29, 2023, there were 234,000 and 215,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the third quarter of 2024 and 2023, there were 258,000 and 318,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the thirty-nine weeks ended November 2, 2024 and October 28, 2023, there were 242,000 and 259,000 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

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

Weighted average number of common shares outstanding (basic)

1 unchanged sentence

Weighted average number of common shares and common stock equivalents outstanding (diluted)

Twenty-Six Weeks Ended

August 3, 2024

July 29, 2023

Thirty-Nine Weeks Ended

November 2, 2024

October 28, 2023

Weighted average number of common shares outstanding (basic)

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 August 3, 2024, the Company had no borrowings under the credit facility and $ 1.4 million of letters of credit outstanding.

As of November 2, 2024, the Company had no borrowings under the credit facility and $ 1.4 million of letters of credit outstanding.

Impairment of Assets

1 unchanged sentence

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 second quarter of 2024, non-cash impairment expense related to underperforming stores totaled $ 1.3 million, comprised of $ 0.7 million for leasehold improvements and fixtures and equipment, and $ 0.6 million for operating lease right of use assets.

There was no impairment expense in the first twenty-six weeks of 2023.

In the third quarter of 2024, non-cash impairment expense related to underperforming stores totaled $ 0.6 million, comprised of $ 0.3 million for leasehold improvements and fixtures and equipment, and $ 0.3 million for operating lease right of use assets.

In the third quarter of 2023, non-cash impairment expense related to underperforming stores totaled $ 0.2 million, primarily for leasehold improvements and fixtures and equipment.

The provision for income taxes for the interim period in 2024 is based on an estimate of the annual effective tax rate adjusted to reflect the impact of discrete items.

Management judgment is required in projecting ordinary income to estimate the Company ’ s annual effective tax rate.

For the first half 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 annual effective tax rate method would not have provided a reliable estimate for the first twenty-six weeks of 2023.

As of August 3, 2024, we had approximately $ 13.7 million in net deferred tax assets (DTA).

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 period results.

As of November 2, 2024, we had approximately $ 15.3 million in net deferred tax assets (DTA).

At this time, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize these DTAs.

If we are not able to generate sufficient taxable income to realize these DTAs, a substantial valuation allowance to reduce our U.S.

If we are not able to generate

sufficient taxable income to realize these DTAs, a substantial valuation allowance to reduce our U.S.

DTAs may be required, which would materially increase our expenses in the period the allowance is recognized and adversely affect our results of operations.

As of August 3, 2024, our net DTA includes approximately $ 9.7 million related to net operating loss (NOL) carryforwards that can be used to offset taxable income in future periods and reduce our income taxes payable in those future periods.

As of November 2, 2024, our net DTA includes approximately $ 9.3 million related to net operating loss (NOL) carryforwards that can be used to offset taxable income in future periods and reduce our income taxes payable in those future periods.

NOL carryforwards may be subject to annual limitations under Internal Revenue Code Section 382 (Section 382) (or comparable provisions of foreign or state law) in the event that certain changes in ownership were to occur.

9 unchanged sentences

Such repurchases may be made in the open market, through block trades or through other negotiated transactions.

There were no stock repurchases in the first half of 2024 or the first half of 2023.

At August 3, 2024, $ 50.0 million remained available under the Company ’ s stock repurchase authorization.

There were no stock repurchases in the first thirty-nine weeks of 2024 or the first thirty-nine weeks of 2023.

At November 2, 2024, $ 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

8 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

Thirty-Nine Weeks Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Operating lease cost

2 unchanged sentences

Total lease cost

Future minimum lease payments as of August 3, 2024 are as follows (in thousands):

Future minimum lease payments as of November 2, 2024 are as follows (in thousands):

Remainder of 2024

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

August 3, 2024

July 29, 2023

Thirty-Nine Weeks Ended

November 2, 2024

October 28, 2023

Cash paid for operating leases

25 unchanged sentences

changes in market interest rates and market levels of wages;

natural disasters such as hurricanes;

impacts of natural disasters such as hurricanes;

uncertainty and economic impact of pandemics, epidemics or other public health emergencies;

5 unchanged sentences

the Company ’ s ability to gauge fashion trends and changing consumer preferences;

changes in consumer confidence and consumer spending patterns;

consumer confidence and changes in consumer spending patterns;

competition within the industry;

3 unchanged sentences

interruptions in suppliers ’ businesses;

the impact of the cyber disruption we identified on January 14, 2023, including legal, reputational, financial and contractual risks resulting from the disruption, and other risks related to cybersecurity, data privacy and intellectual property;

the results of pending or

threatened litigation;

the impact of the cyber disruption we identified on January 14, 2023, including legal, reputational, financial and contractual

risks resulting from the disruption, and other risks related to cybersecurity, data privacy and intellectual property;

the results of pending or threatened litigation;

temporary changes in demand due to weather patterns;

seasonality of the Company ’ s business;

changes in market interest rates and market level wages;

delays associated with building, opening, remodeling and operating new stores;

9 unchanged sentences

Our high-quality and trend-right merchandise offerings at everyday low prices are designed to appeal to the fashion and trend preferences of value-conscious customers.

As of August 3, 2024, we operated 597 stores in urban, suburban and rural markets in 33 states.

As of November 2, 2024, we operated 593 stores in urban, suburban and rural markets in 33 states.

Uncertainties and Challenges

10 unchanged sentences

As previously disclosed, in January 2023, we experienced a disruption of our back office and distribution center IT systems, (the “ January 2023 cyber disruption ” ).

In the first twenty-six weeks of fiscal 2023, we recognized $1.7 million of costs related to the cyber disruption in Selling, general and administrative expenses on our Statement of Operations.

In the first thirty-nine weeks of fiscal 2023, we recognized $1.7 million of costs related to the cyber disruption in Selling, general and administrative expenses on our Statement of Operations.

Several putative class action lawsuits have been filed against the Company and several inquiries have been made to the Company with respect to the January 2023 cyber disruption.

At August 3, 2024, we had an accrual of $0.7 million for estimated losses in connection with these matters recorded in Accrued expenses on our Balance Sheet.

At November 2, 2024, we had an accrual of $0.7 million for estimated losses in connection with these matters recorded in Accrued expenses on our Balance Sheet.

For additional information regarding these lawsuits, see Note 7 of the Annual Report on Form 10-K for the fiscal year ended February 3, 2024 .

28 unchanged sentences

Finally, we monitor corporate and distribution center expenses against budgeted amounts.

Thirteen Weeks Ended August 3, 2024 and July 29, 2023

Thirteen Weeks Ended November 2, 2024 and October 28, 2023

Sales comparisons for 2024 to the prior year are affected by the shift in the calendar caused by last year having 53 weeks.

Net sales increased $3.0 million, or 1.7%, to $176.6 million in the second quarter of 2024 from $173.6 million in the second quarter of 2023.

The shift in the retail calendar contributed $7.9 million to revenue for the thirteen weeks ended August 3, 2024.

Comparable store sales, on a comparable weeks basis, decreased 1.7%, resulting in a decrease of $3.0 million in sales.

Net sales decreased $0.4 million, or 0.3%, to $179.1 million in the third quarter of 2024 from $179.5 million in the third quarter of 2023.

The shift in the retail calendar contributed $7.0 million to revenue for the thirteen weeks ended November 2, 2024.

Comparable store sales, on a comparable weeks basis, increased 5.7%, resulting in an increase of $9.6 million in sales.

Net store opening and closing activity resulted in a net decrease of $2.8 million in sales.

Cost of Sales (exclusive of depreciation).

Cost of sales (exclusive of depreciation) increased $14.4 million, or 13.4%, to $121.6 million in the second quarter of 2024 from $107.2 million in the second quarter of 2023.

Cost of sales as a percentage of sales increased to 68.9% in the second quarter of 2024 from 61.8% in the second quarter of 2023.

The 710 basis points increase was driven by an increase of 510 basis points of markdowns (from a strategic inventory reset) and a 220 basis points increase in shrink (driven by physical inventory results and accrual rate adjustment), partially offset by a decrease of 20 basis points in other cost of sales.

Cost of sales (exclusive of depreciation) decreased $3.1 million, or 2.7%, to $107.8 million in the third quarter of 2024 from $110.9 million in the third quarter of 2023.

Cost of sales as a percentage of sales decreased to 60.2% in the third quarter of 2024 from 61.8% in the third quarter of 2023.

The 160 basis points decrease was driven by a 40 basis points decrease in shrink (driven by physical inventory results), and a decrease of 120 basis points in other cost of sales.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased $4.2 million, or 6.1%, to $73.8 million in the second quarter of 2024 from $69.5 million in the second quarter of 2023.

The increase was driven by one-time CEO transition related expenses of $1.4 million, corporate expense (primarily payroll, insurance and professional fees) of $3.8 million, and store selling and advertising expense of $1.0 million, partially offset by lower incentive compensation expense of $2.3 million.

As a percentage of sales, Selling, general and administrative expenses increased to 41.8% in the second quarter of 2024 from 40.1% in the second quarter of 2023, primarily driven by the aforementioned items.

Selling, general and administrative expenses increased $5.1 million, or 7.3%, to $74.7 million in the third quarter of 2024 from $69.7 million in the third quarter of 2023.

The increase was driven by corporate expense (primarily payroll and professional fees) of $2.2 million, including $1.6 million of one-time expenses for strategic initiatives, occupancy expense of $1.0 million, and third quarter 2023 gain on insurance of $2.0 million.

As a percentage of sales, Selling, general and administrative expenses increased to 41.7% in the third quarter of 2024 from 38.8% in the third quarter of 2023, primarily driven by the aforementioned items.

Depreciation.

Depreciation expense increased $0.1 million, or 1.6%, to $4.8 million in the second quarter of 2024 from $4.7 million in the second quarter of 2023.

Non-cash impairment expense related to underperforming stores totaled $1.3 million in the second quarter of 2024, comprised of $0.7 million for leasehold improvements and fixtures and equipment, and $0.6 million for operating lease right of use assets.

There was no impairment expense in the second quarter of 2023.

Depreciation expense increased $0.1 million, or 0.1%, to $4.8 million in the third quarter of 2024 from $4.7 million in the third quarter of 2023.

Non-cash impairment expense related to underperforming stores totaled $0.6 million in the third quarter of 2024, comprised of $0.3 million for leasehold improvements and fixtures and equipment, and $0.3 million for operating lease right of use assets.

Non-cash impairment expense related to underperforming stores totaled $0.2 million in the third quarter of 2023 primarily due to leasehold improvements and fixtures and equipment.

Income Tax Benefit.

Income tax benefit was $6.0 million in the second quarter of 2024 compared to $2.1 million in the second quarter of 2023.

The effective tax rate for the second quarter of 2024 and 2023 was 24.4% and 29.2%, respectively.

The difference is attributable to a higher projected net loss for full year 2024.

Net loss was $18.4 million in the second quarter of 2024 compared to net loss of $5.0 million in the second quarter of 2023 due to the factors discussed above.

Twenty-Six Weeks Ended August 3, 2024 and July 29, 2023

Income tax benefit was $1.3 million in the third quarter of 2024 and in the third quarter of 2023.

The effective tax rate for the third quarter of 2024 and 2023 was 15.1% and 25.5%, respectively.

The difference is attributable to fluctuations in permanent items during the third quarter of 2024.

Net loss was $7.2 million in the third quarter of 2024 compared to net loss of $3.9 million in the third quarter of 2023 due to the factors discussed above.

Thirty-Nine Weeks Ended November 2, 2024 and October 28, 2023

Sales comparisons for 2024 to the prior year are affected by the shift in the retail calendar caused by last year having 53 weeks.

Net sales increased $9.6 million, or 2.7%, to $362.8 million in the first twenty-six weeks of 2024 from $353.2 million in the same period of 2023.

The shift in the retail calendar contributed $10.2 million to revenue for the twenty six weeks ended August 3, 2024.

Net sales increased $9.1 million, or 1.7%, to $541.9 million in the first thirty-nine weeks of 2024 from $532.8 million in the same period of 2023.

The shift in the retail calendar contributed $3.1 million to revenue for the thirty-nine weeks ended November 2, 2024.

Comparable store sales, on a comparable weeks basis, increased 2.3%, resulting in an increase of $3.2 million in sales.

1 unchanged sentence

Cost of Sales (exclusive of depreciation).

Cost of sales (exclusive of depreciation) increased $15.0 million, or 6.8%, to $235.9 million in the first twenty-six weeks of 2024 from $220.9 million in the same period of 2023.

Cost of sales as a percentage of sales increased to 65.0% in the first twenty-six weeks of 2024 from 62.5% in the same period of 2023.

The 250 basis points increase was driven by an increase of 180 basis points of markdowns (as mentioned above) and a 180 basis points increase in shrink (as mentioned above), partially offset by a decrease of 80 basis points of freight and a decrease of 20 basis points in other cost of sales.

Cost of sales (exclusive of depreciation) increased $11.9 million, or 3.6%, to $343.7 million in the first thirty-nine weeks of 2024 from $331.8 million in the same period of 2023.

Cost of sales as a percentage of sales increased to 63.4% in the first thirty-nine weeks of 2024 from 62.3% in the same period of 2023.

The 110 basis points increase was driven by an increase of 120 basis points of markdowns and a 100 basis points increase in shrink, partially offset by a decrease of 50 basis points of freight and a decrease of 60 basis points in other cost of sales.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased $7.6 million, or 5.4%, to $148.0 million in the first twenty-six weeks of 2024 from $140.4 million in the same period of 2023.

The increase was primarily driven by one-time CEO transition related expenses of $1.4 million, corporate expenses (primarily payroll, insurance and professional fees) of $5.0 million, and stores selling and advertising expense of $2.5 million, partially offset by lower incentive compensation expense of $1.9 million.

As a percentage of sales, Selling, general and administrative expenses increased to 40.8% in the first twenty-six weeks of 2024 from 39.7% in the first twenty-six weeks of 2023, due to the aforementioned items.

Selling, general and administrative expenses increased $12.7 million, or 6.1%, to $222.7 million in the first thirty-nine weeks of 2024 from $210.0 million in the same period of 2023.

The increase was primarily driven by one-time CEO transition related expenses of $3.2 million, corporate expenses (primarily payroll, insurance and professional fees) of $6.5 million, stores selling and advertising expense of $4.7 million, and distribution center costs of $0.3 million, partially offset by lower incentive compensation expense of $2.0 million.

As a percentage of sales, Selling, general and administrative expenses increased to 41.1% in the first thirty-nine weeks of 2024 from 39.4% in the first thirty-nine weeks of 2023, due to the aforementioned items.

Depreciation.

Depreciation expense increased $0.2 million, or 2.0%, to $9.6 million in the first twenty-six weeks of 2024 from $9.4 million in the same period last year.

Non-cash impairment expense related to underperforming stores totaled $1.3 million in the first twenty-six weeks of 2024, comprised of $0.7 million for leasehold improvements and fixtures and equipment, and $0.6 million for operating lease right of use assets.

There was no impairment expense in the first twenty-six weeks of 2023.

Depreciation expense increased $0.2 million, or 1.4%, to $14.3 million in the first thirty-nine weeks of 2024 from $14.1 million in the same period last year.

Non-cash impairment expense related to underperforming stores totaled $1.8 million in the first thirty-nine weeks of 2024, comprised of $0.9 million for leasehold improvements and fixtures and equipment, and $0.9 million for operating lease right of use assets.

Non-cash impairment expense related to underperforming stores totaled $0.2 million in the first thirty-nine weeks of 2023, comprised primarily of leasehold improvements and fixtures and equipment.

Income Tax Benefit.

Income tax benefit was $8.7 million in the first twenty-six weeks of 2024 compared to $4.0 million in the first twenty-six weeks of 2023.

The effective tax rate for the twenty-six weeks of 2024 and 2023 was 28.5% and 25.3%, respectively.

The difference is attributable to a higher projected net loss for full year 2024.

Income tax benefit was $10.0 million in the first thirty-nine weeks of 2024 compared to $5.3 million in the first thirty-nine weeks of 2023.

The effective tax rate for the thirty-nine weeks of 2024 and 2023 was 25.6% and 25.4%, respectively.

Net (Loss) Income.

Net loss was $21.8 million in the first twenty-six weeks of 2024 compared to net loss of $11.7 million in the same period of 2023 due to the factors discussed above.

Net loss was $29.0 million in the first thirty-nine weeks of 2024 compared to net loss of $15.5 million in the same period of 2023 due to the factors discussed above.

Liquidity and Capital Resources

1 unchanged sentence

Our capital allocation strategy is to maintain adequate liquidity to prioritize investments in opportunities to profitably grow our business and maintain current operations, then to return excess cash to shareholders through our repurchase programs.

Our quarter-end cash and cash equivalents balance was $59.3 million compared to cash and cash equivalents of $65.8 million at the end of the second quarter last year.

Our quarter-end cash and cash equivalents balance was $38.9 million compared to cash and cash equivalents of $59.7 million at the end of the third quarter last year.

Until required for other purposes, we maintain cash and cash equivalents in deposit or money market accounts.

4 unchanged sentences

and (iv) a revolving credit facility with a $75 million credit commitment.

Our quarter-end inventory balance was $135.0 million, roughly flat compared to $134.5 million at the end of the second quarter last year.

Our quarter-end inventory balance was $127.5 million, down 1.7% compared to $129.7 million at the end of the third quarter last year.

Capital Expenditures

Capital expenditures in the first twenty-six weeks of 2024 were $5.6 million, a decrease of $1.3 million over the first twenty-six weeks of 2023, as we pared back our investments in new stores and remodels.

We anticipate capital expenditures in fiscal 2024 to be approximately $13 million, primarily for opening new stores and remodeling existing stores, combined with ongoing investments in our systems.

Capital expenditures in the first thirty-nine weeks of 2024 were $7.6 million, a decrease of $4.0 million over the first thirty-nine weeks of 2023, as we pared back our investments in new stores and remodels.

We anticipate capital expenditures in fiscal 2024 to be in the range of $14 million to $18 million, primarily for the opening of one new store and remodeling existing stores, combined with ongoing investments in our systems.

Stock Repurchases

We did not repurchase any shares of our common stock in the first twenty-six weeks of fiscal 2024 or fiscal 2023.

We did not repurchase any shares of our common stock in the first thirty-nine weeks of fiscal 2024 or fiscal 2023.

See Part II of this Report and Note 8 to the Financial Statements for more information.

2 unchanged sentences

Additional details of the credit facility are in Note 4 to the Financial Statements .

At the end of the second quarter of 2024, we had no borrowings under the credit facility and $1.4 million in letters of credit outstanding.

At the end of the third quarter of 2024, we had no borrowings under the credit facility and $1.4 million in letters of credit outstanding.

Cash Flows From Operating Activities .

Net cash used in operating activities was $14.0 million in the first twenty-six weeks of 2024 compared to $30.0 million in the same period of 2023.

Sources of cash for the first twenty-six weeks of 2024 included net loss adjusted for non-cash expenses totaling $6.6 million (compared to net loss adjusted for non-cash items of $22.2 million in the first twenty-six weeks of 2023).

Significant uses of cash from operating activities in the first twenty-six weeks of 2024 included (1) a $21.9 million decrease in accrued expenses and other long-term liabilities (compared to a $31.2 million decrease in the first twenty-six weeks of 2023) due primarily to payments of operating lease liabilities;

(2) a $6.1 million increase in prepaid and other current assets (compared to a $3.8 million dollar increase in the same period last year);

and (3) a $4.6 million increase in inventory (compared to a $28.7 million increase in the same period last year).

Net cash used in operating activities was $32.3 million in the first thirty-nine weeks of 2024 compared to $32.9 million in the same period of 2023.

Sources of cash for the first thirty-nine weeks of 2024 included (1) net loss adjusted for non-cash items totaling $16.1 million (compared to net loss adjusted for non-cash items of $36.0 million in the first thirty-nine weeks of 2023);

(2) a decrease in inventory of $2.9 million in the first thirty-nine weeks of 2024 (compared to an increase of $23.9 million in the first thirty-nine weeks of 2023);

(3) a decrease in accrued compensation of $2.9 million (compared to an increase of $1.8 million in the first thirty-nine weeks of 2023);

and (4) an increase in layaway deposits of $1.2 million in the first thirty-nine weeks of 2024 (compared to an increase of $0.9 million in the same period last year).

Significant uses of cash from operating activities in the first thirty-nine weeks of 2024 included (1) a $35.9 million decrease in accrued expenses and other long-term liabilities (compared to a $45.5 million decrease in the first thirty-nine weeks of 2023) due primarily to payments of operating lease liabilities;

(2) a $17.9 million decrease in accounts payable (compared to a $2.3 million decrease in the first thirty-nine weeks of 2023);

and (3) a $2.3 million increase in prepaid and other current assets (compared to a $1.7 million dollar decrease in the same period last year).

Cash Flows From Investing Activities.

Cash used in investing activities was $5.6 million in the first twenty-six weeks of 2024 compared to cash used of $6.9 million in the same period last year.

Cash used in the first twenty-six weeks of fiscal 2024 and fiscal 2023 consisted of purchases of property and equipment.

Cash used in investing activities was $7.6 million in the first thirty-nine weeks of 2024 compared to cash used of $10.1 million in the same period last year.

Cash used in the first thirty-nine weeks of fiscal 2024 and fiscal 2023 consisted of purchases of property and equipment.

Cash Flows From Financing Activities.

Cash used in financing activities was $0.9 million in the first twenty-six weeks of 2024 compared to $0.8 million in the same period last year.

Cash used in the first twenty-six weeks of fiscal 2024 and fiscal 2023 consisted of payments to settle withholding taxes on restricted stock that vested.

Cash used in financing activities was $0.9 million in the first thirty-nine weeks of 2024 compared to $0.9 million in the same period last year.

Cash used in the first thirty-nine weeks of fiscal 2024 and fiscal 2023 consisted of payments to settle withholding taxes on restricted stock that vested.

Cash Requirements and Commitments

4 unchanged sentences

Historically, we have met these cash requirements using cash flow from operations and short-term trade credit.

As of August 3, 2024, our contractual commitments for operating leases totaled $231.9 million (with $49.1 million due within 12 months).

As of November 2, 2024, our contractual commitments for operating leases totaled $225.2 million (with $49.4 million due within 12 months).

See Note 10 to the Financial Statements for more information regarding lease commitments.

4 unchanged sentences

Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our market risk during the twenty-six weeks ended August 3, 2024 compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 .

There have been no material changes in our market risk during the thirty-nine weeks ended November 2, 2024 compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 .

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