What changed in this filing

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Item 1. Business

2025-04-16 compared with 2024-04-18 · 140 added, 131 removed, 137 unchanged (66% of the section changed)

Citi Trends, Inc.

( “ Citi Trends ” or 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 in the United States.

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.

Based on the strength of our brand and our experienced leadership team, we believe we have fostered deep customer loyalty and high shopping frequency in the underserved neighborhoods in which we operate.

As a purpose-led brand, we strive to consistently bring our purpose – Live BOLD, Live PROUD, Respect ALL – to life for both our customers and our associates each and every day.

Our stores are located primarily in neighborhoods with a concentration of low income households and serve as a “ one-stop shop ” for the entire family.

( “ Citi Trends ” or the “ Company ” ) is a highly differentiated off-price value retailer known for trendy fashions, great brands and amazing prices.

We offer culturally relevant fashion – what we call “ Cultural Cachet ” – in apparel, accessories and home goods, primarily for African American families in the United States.

We curate a three tiered mix of product featuring well-known brands, core product and opening price goods, with intermittent extreme value deals.

Our core product styles are curated trend-right, high quality, value for the price.

We offer an assortment of opening price product for the price conscious customer, all sold at competitive prices.

Plus, for the treasure hunters, we often have “ extreme value ” product deals on well-known branded product at 50% to 75% off MSRP.

Consumer insights research validates that our unique culturally relevant styling, and strong value for the price fosters deep customer loyalty and high shopping frequency in the neighborhoods in which we operate.

Our stores are strategically located in vibrant African American neighborhoods with product offerings for the entire family.

Our stores average approximately 11,000 square feet of selling space and are typically found in outdoor community shopping centers across a variety of urban, suburban and rural markets.

As of February 3, 2024, we operated 602 stores in 33 states, with a focus on delivering a memorable store experience anchored in value.

As of February 1, 2025, we operated 591 stores in 33 states.

We believe the combination of product curated with Cultural Cachet at amazing prices, and the large scale of our 591 neighborhood stores is extremely hard to duplicate which gives us a defensible moat against competition.

Competitive Strengths and Strategies

Our goal is to be the leading specialty value retailer of apparel, accessories and home trends for African American and multicultural families with an average annual household income of approximately $38,000.

We strive to provide our customers with a place that is fresh and fun for the family at prices that don ’ t break the bank .

Citi Trends is one of the largest national retailers focused on African American customers.

With 591 stores located in the neighborhoods we serve, our customers rely on us as a leading off-price value retailer of apparel, accessories and home trends.

Because of our long-term presence in the African American community, our customers are highly engaged and loyal to Citi Trends.

We strive to provide an engaging and exciting shopping experience supported by fresh product and a friendly, welcoming staff.

We believe the following business strengths differentiate us from our competitors and are important to our success.

Focus on Fashion and Trend Mix .

We focus our merchandise on being fashionable and trend-right to appeal to our core customers.

We do not attempt to dictate trends, but rather, we devote considerable effort to identifying emerging trends and ensuring that our wide assortment of apparel and non-apparel merchandise is curated to appeal to the preferences of African American and multicultural customers.

Our buying team tests new and emerging trends before reordering and actively manages the mix of basic, fashion, trend and branded products in our stores to keep the offering fresh and current.

We curate our merchandise assortment to be fashionable and fresh, recognizing that our customers use style as a form of personal expression.

We devote considerable effort to identifying emerging trends and ensuring that our wide assortment of apparel and non-apparel merchandise is curated to appeal to the preferences of African American customers.

Our buying team actively manages a dynamic blend of essentials, fashion-forward pieces, trending items and recognized brands, all at strong value prices to keep the assortment fresh, relevant and culturally attuned.

Superior Value Proposition .

We seek to offer high quality, fashionable merchandise for way less spend.

We believe our value proposition provides important access to trends for the lower-income customers we serve.

We seek to offer high quality, fashionable merchandise with Cultural Cachet and believe that our value proposition provides important access to trends for our customers.

We know that our customers are willing to spend more when the fashion is on trend, the brand is right, and the price-value proposition is strong.

The majority of our product is ticketed with compare at pricing to demonstrate our pricing superiority against competition.

We do not employ high-low pricing strategies;

instead, our everyday low price points offer superior value, allowing our customers to purchase multiple items per visit.

We do not rely on promotion-driven sales and instead seek to build our reputation through a steady stream of weekly in-store deliveries of the latest trends which drives word-of-mouth awareness of our value in the neighborhoods we serve.

One-Stop Shop for the Entire Family .

instead, our everyday ticketed low price points offer superior value, enabling our customers to purchase multiple items per visit.

We focus on a balanced three-tiered assortment along with an increasing selection of off-price ‘ treasures ’ – nationally known brands at incredible values.

We do not rely on promotion-driven sales and instead seek to build our reputation through a steady stream of weekly in-store deliveries of the latest trends at great prices which drives word-of-mouth awareness and excitement in the neighborhoods we serve.

Fashions for the Entire Family .

We merchandise our stores to create a specialty store environment that serves as a destination that meets the apparel and non-apparel needs of the entire family.

Every store offers a wide variety of always-changing, curated products for men and women of all sizes and children from newborn to size 20.

Our stores include a wide assortment of sportswear, dresses, outerwear, intimate apparel and sleepwear, footwear, jewelry, handbags, beauty products, home goods, tech accessories, health and beauty aids, candy, fitness products, team sports products, toys and books.

Every store offers a comprehensive selection of always-changing, curated products for men, women and children with a range of size options in each category.

In addition, we offer home goods and consumables.

We believe that our small-footprint stores, combined with a specialty store experience, friendly customer service where we often know our customers ’ names, and breadth of merchandise, distinguishes our stores from many competitors and creates an exciting and welcoming environment that encourages repeat visits from the local community.

Strong and Flexible Sourcing Relationships .

We maintain strong sourcing relationships with a large group of suppliers.

Our buying team, located primarily in New York City, plans, develops and creates curated assortments by (i) purchasing goods developed specifically with our customers in mind, (ii) selecting products for our customers from vendor catalogs and (iii) buying opportunistically available excess inventory from reliable and trustworthy vendors, with the majority of our merchandise purchased for the current season and a lesser quantity held for sale in future seasons.

To foster vendor relationships, we do not ask for typical retail concessions, such as promotional and markdown allowances.

Our closeknit vendor partnerships enable us to deliver fresh items weekly to our stores, positioning us as an “ instant gratification store ” , allowing our customers to “ buy now, wear now ” and avoid shipping fees and the wait for their potential online orders.

Dynamic Experience in a Friendly and Fun Environment .

We seek to provide a fashion-focused shopping environment that is similar to a specialty apparel retailer, rather than a typical discount or big box retailer.

Products are prominently displayed by style, rather than by size, on four-sided fixtures featuring multiple sizes, styles and suggested outfits.

Non-apparel products are displayed on fixtures that highlight prints, patterns and themes of trend-right categories.

Our stores are easy to navigate, carpeted, well-lit and feature upbeat and current overhead music appropriate for our target customers.

Our stores are neat, orderly and clean, offering a friendly and fun environment.

In the first quarter of fiscal 2021, we launched our first “ CTx ” store, which represents the first major overhaul to our store format in over 10 years.

Our CTx format is a completely redesigned floor layout with an emphasis on visual merchandising that provides an enhanced shopping experience for our customers and drives traffic, average basket and conversion.

Going forward, all of our new and remodeled stores will be based on the CTx format.

Approximately 15% of our fleet was in the CTx format as of February 3, 2024.

We maintain strong, long-standing sourcing relationships with a large group of suppliers while continually opening new relationships with both well-known and up-and-coming brands.

We believe that our access to the African American customer drives vendor interest.

Our buying team plans, develops and creates curated assortments by (i) purchasing goods developed specifically for our customer, (ii) selecting products for our customers from vendor product lines, (iii) buying opportunistically available excess inventory from reliable vendors, with the majority of our merchandise purchased for the current season and a lesser quantity held for sale in future seasons and (iv) buying extreme value, off-price deals to offer exciting national brands at significantly reduced prices.

Our vendor partnerships enable us to deliver fresh items weekly to our stores.

This fresh assortment, coupled with exciting and surprising off-price deals, creates a shopping experience that can ’ t be easily replicated in an on-line environment, positioning us as an “ instant gratification store ” , allowing our customers to “ buy now, wear now ” , avoiding shipping fees and the wait for their potential online orders.

This approach allows us to offer exceptional value that goes beyond mere price – it ’ s the thrill of discovering fresh styles that fosters a deep, in-person connection with our customers.

Dynamic Experience in a Friendly, Neat, Clean and Organized Environment .

We seek to provide a fashion-focused shopping environment that is easy to navigate, encouraging shopping across divisions with a well-laid-out floor plan and exciting product displays throughout the space.

We use a combination of style groupings, outfit suggestions and by-size displays to balance ease of shopping with suggestive selling.

In each department, we showcase opening price-point offerings to enhance our strong value statement.

Our stores are neat, clean and organized, offering a friendly environment where customers are encouraged to linger, explore and visit often.

We are focused on refreshing and remodeling our store base to keep our stores current and continually refine our store format to ensure that we meet the needs of our customers and our store associates.

Friendly and Helpful Store Associates .

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Many of our store associates live in the neighborhoods where our stores are located and frequently shop our stores themselves.

We have always led with a diverse and inclusive workplace;

We have a long heritage of a diverse and inclusive workplace;

91% of our store associates are African American or multicultural, and more than 90% of our store management positions are filled by women.

As a result, our store associates cultivate a unique culture at our stores that creates a high level of connectivity with our customers.

As a result, our store associates cultivate a unique culture in our stores that creates a high level of connectivity with our customers.

We strive to make our stores a destination where everyone is welcome, and our store associates foster that vision every day through enriched customer engagement.

Compelling and Cost-Effective Store Locations .

We locate our stores in high-traffic outdoor neighborhood shopping centers that are convenient to primarily lower income families.

We generally utilize previously occupied store sites in locations where we are often the brightest and cleanest store in the shopping center, which enables us to obtain attractive rents.

When opening new

stores, we seek to partner with landlords that contribute to buildout costs, which helps maintain lower startup and fixturing investment.

Compelling, Convenient and Cost-Effective Neighborhood Store Locations .

We locate our stores in high-traffic outdoor neighborhood shopping centers that are convenient primarily to African American families.

Our location strategy allows us to be an integral part of the communities we serve while providing convenience for our customers.

We believe that these neighborhood locations are difficult to duplicate, creating a competitive moat for our brand.

We generally utilize previously occupied store sites in locations where we are often the brightest and cleanest store in the shopping center, which enables us to obtain attractive rents while establishing ourselves as neighborhood cornerstones.

When opening new stores, we seek to partner with landlords that contribute to buildout costs, which helps maintain lower startup and fixturing investment.

Highly Talented and Motivated Leadership Team .

Our senior management team, led by David Makuen, our Chief Executive Officer, has extensive retail experience across a broad range of disciplines, including merchandising, real estate, finance, store operations, supply chain management, human resources and information technology.

Our management team plans and drives our growth strategy, which is based on our constant focus on providing trend-driven merchandise anchored in value to the lower income, underserved African American and multicultural populations.

Our senior management team, led by Ken Seipel, our Chief Executive Officer, has extensive retail experience across a broad range of disciplines, including merchandising, real estate, finance, store operations, supply chain management, human resources and information technology.

Our management team plans and drives our growth strategy, which is based on our constant focus on providing trend-driven merchandise anchored in value to the mid to lower income African American populations.

We believe our management team is integral to our success and positions us well for long-term growth.

Business Strategy

We believe that Citi Trends is in a unique position to serve our loyal customer base, with a long runway for comp sales growth, store unit growth and a motivated leadership team supported by a healthy balance sheet.

We have identified the following four priorities that we believe will support long-term sales and earnings growth:

Driving Comparable Store Productivity.

We believe that our unique ability to curate assortments for our target customers differentiates our model while driving customer loyalty and repeat visits.

Sharpening our focus on trend development and actively refining our assortment strategies will enable us to continue to exceed our customers ’ expectations while broadening the appeal of the brand.

We believe that our store associates, many coming from the neighborhoods we serve, are another key component of the in-store experience.

They create an exciting and welcoming shopping experience for our customers and serve as a valuable source of insights on our core customers ’ needs and preferences.

Finally, we believe that an integral part of our sales growth is the continued roll-out of our CTx format, an exciting refresh to our store format and experience.

We are continuing to remodel existing stores in this new CTx format, and all new stores will open in the CTx format.

While we believe that maximizing the productivity of our existing fleet provides significant opportunity for sales and earnings growth, we continue to believe that Citi Trends has the potential to grow to approximately 1,000 locations over time.

This goal, supported by a third-party study conducted in 2020, represents a potential 65% increase in size of our current fleet, giving us the opportunity to increase our presence in both African American and multicultural geographies.

Managing Inventory and Maximizing Margin .

We believe that our sourcing methodology further differentiates our model.

Through a combination of products made exclusively for our core customers, available market goods and highly recognized brands grounded in everyday value, we are known for delivering newness and freshness, resulting in high shopping frequency.

Our open-to-buy process allows us to be flexible and responsive to emerging trends.

With our focus on culturally-relevant fashion, exciting brands, and accessible pricing in each of our neighborhood locations, we believe that Citi Trends is in a unique position to serve our loyal customer base, with a long runway for comp sales growth, store unit growth and a motivated leadership team supported by a healthy balance sheet.

We have identified the following areas of focus to restore the Company ’ s financial performance and to maximize long-term growth:

Offer Compelling Value Proposition .

Our three-tiered product strategy of opening prices, core value product and familiar brands, all focused on the wants and needs of our African American customers, differentiates our model while driving customer loyalty and repeat visits.

We are known for delivering newness and freshness, resulting in high customer frequency.

We offer a balanced assortment of good, better and best products that resonates with our customer base across income levels.

We highlight our opening price point offerings consistently across departments, ensuring our value-conscious customers can easily identify these options.

Our core value product is the bedrock of our business, and we are focused on ensuring quality-for-price in this important tier.

Our research confirms that our customers have good disposable income and respond positively to recognizable brands with a willingness to trade up.

This insight has guided our branded merchandise strategy which will become a larger part of our product assortment.

We are expanding our offering of “ treasures, ” or extreme value product offerings, enabling us to offer well-known brands at a significant discount to the market.

Our product strategy is supported by our open-to-buy process which allows us to be flexible and responsive to emerging trends.

We practice rigorous inventory management, prioritizing choice and breadth over depth, improving our speed to market and driving faster turns.

We also leverage consumer insights and analytics to add incremental assortments to our offerings appealing to both African American and multicultural families.

Continued expansion of non-apparel categories and investments in systems and automation will further optimize our product mix.

Further, we employ disciplined pricing studies to underpin our value offering while expanding margin, and we offer balanced “ good, better, best ” pricing tiers in most areas of our assortment.

Investing in Our Infrastructure .

We believe that we have an opportunity to make strategic investments in our business that will improve our capabilities to “ buy, ” “ move ” and “ sell ” our assortments to effectively engage current and new customers.

● “ Buy ” is everything associated with buying, planning and allocating the assortments that we offer to our customers.

We recently invested in systems and data to enhance our teams ’ roles and operations.

● “ Move ” comprises our supply chain and our methods for moving goods from the time an order is placed until it arrives at the selling floor.

Investments in this area include upgrades to our distribution centers and system enhancements in order to increase speed and productivity.

● “ Sell ” relates to operations at our retail stores, remodels of our existing stores and additions of new stores to our fleet.

Our investments in this area consist primarily of expanding and enhancing the chain in our new CTx format.

In addition, we are investing in our store associates through enhanced training programs to further their development while enhancing our customers ’ in-store experience.

Making a Difference .

Our team is committed to making a difference in the African American and multicultural neighborhoods that we serve.

We are on a journey towards enhancing our company-wide sustainability, diversity and inclusion and ethics-based efforts.

See “ Neighborhood Involvement ” under “ Human Capital Management ” below for more information on our CITI cares Council and initiatives designed to make a difference.

We plan to continue to integrate social and environmental sustainability into business practices to support long-term growth.

We strongly believe that our business strategy centered around these four areas will accelerate our long-term sales and earnings growth.

Focus on the African American Customer.

We are one of the largest national retailers focused on African American customers.

Our customers are at the core of what we do, central to our business and critical to our success.

Our customers are fashion conscious and prioritize style as an expression of self.

Recent extensive customer research revealed that about one third of our customers visit our stores weekly or bi-weekly and have incomes in the $75k to $150k range.

The next largest tier visits monthly with incomes in the range of $50k to $75k.

We also serve a base of less frequent, lower income customers who are more budget conscious.

The income capacity of our two most frequent tiers of customers is the biggest realization from our recent research, qualifying the previous assumption that our entire customer base was in the low-income category.

We believe that this refined understanding of our customer will strengthen our ability to predict their wants and needs, driving increased traffic and conversion in our stores.

Consistent Operational Excellence .

Our objective is to be fast, consistent and efficient.

We believe that our ability to produce strong, consistent and sustainable financial results depends on the development of fundamental retail practices and consistent execution.

We have taken fast action to improve access to information and to develop consistent key performance indicators to drive business results.

We have refined our product allocation methodology and are investing in artificial intelligence ( “ AI ” )-based technology to drive more effective and efficient product allocation processes.

We have made improvements to our supply chain speed and we are driving additional improvements to further reduce speed to store as well as to reduce our working capital needs.

We have implemented improved product planning practices focused on pre-season strategy and open-to-buy to support growing categories.

Each of these improvements is supported by having the right talent in place.

We believe that these foundational improvements will drive near-term financial results while positioning us for future, accelerated growth.

We believe that our 591 stores located in the heart of African American neighborhoods is a key differentiator of our business that gives us a defensible moat around our business and store base.

To improve the financial performance of the company, we are focused on improving productivity in our existing stores by sharpening our focus on our African American customers and strategically investing in product categories identified for intensification through our customer insights studies, both with a goal of driving increased foot traffic and basket.

Finally, we believe that an integral part of our sales growth is the continued refinement of our store format, incorporating customer feedback and insights from operational results to improve the in-store experience and enhance profitability.

We are remodeling existing stores to the updated format, and all new stores will open in the revised format.

While we believe that maximizing the productivity of our existing fleet provides significant near-term opportunity for sales and earnings growth, we continue to believe that Citi Trends has the potential to grow, and we expect to accelerate square footage expansion in the range of 6% to 10% annually over time.

We believe that our people are a key differentiator for our business and are key to the continued transformation of our company.

Our buying team is trained to understand our customers, what motivates them to shop at Citi Trends and what creates an emotional connection to the brand.

Our buyers also cultivate strong relationships with the vendor community to ensure access to the exciting, trend-right product that our customers rely on us to provide.

We believe that our store associates, many of whom come from the neighborhoods we serve, are another key component of the in-store experience.

They create an exciting and welcoming shopping experience for our customers and serve as a valuable source of insights on our core customers ’ needs and preferences.

Our leadership team is made up of functional experts who are adept at leading through change.

Under the direction of Ken Seipel, our Chief Executive Officer, we believe that our people are key to the Company ’ s success.

We strongly believe that our business strategy centered around these five areas will restore our financial performance and accelerate our long-term sales and earnings growth.

Product and Value

Our merchandising strategy is to offer fresh and fashionable apparel, accessories and home trends for way less spend for value-conscious families.

We seek to maintain a diverse assortment of in-season merchandise that appeals to the specific tastes and preferences of our core customers.

Our assortment is comprised of privately developed and nationally recognized brands.

Our merchandise is represented by six distinct “ Citis ” within the store:

a wide selection of apparel for juniors, missy and women (plus size), including trend right sportswear, outerwear, sleepwear, lingerie and scrubs.

Our merchandising strategy focuses on delivering fresh, fashionable and trend-right apparel, accessories and home products at exceptional value for cost-conscious African American families.

As the go-to family store in the neighborhood, we are committed to maintaining a diverse, seasonally relevant assortment that reflects the bold style and preferences of our customers.

Our product offerings include a balanced mix of privately developed brands and nationally recognized labels, ensuring both quality and affordability.

Our merchandise is represented by six distinct divisions within the store:

a wide selection of apparel for juniors, missy and plus size, including trend right sportswear, outerwear, sleepwear, lingerie and scrubs.

a wide selection of apparel for men and big men, including trend right sportswear and outerwear.

a wide assortment of basics, fashion and trends for boys up to size 20 and girls up to size 16.

Also, sizes for newborns, infants and toddlers, as well as kids uniforms and kids accessories.

Also, sizes for newborns, infants and toddlers, as well as kids uniforms, accessories and sleepwear.

● Accessories & Beauty:

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home goods for the bedroom, bathroom, kitchen and decorative accessories, plus an eclectic composition of wants and needs such as books, food, tech products, team sports products, toys, health and beauty products and seasonal items.

casual and dress footwear in sizes for Mens, Ladies and Kids.

The following table provides the percentage of net sales for each Citi within the store:

casual and dress footwear in sizes for men, women and kids.

The following table provides the percentage of net sales for each Division within the store:

Accessories & Beauty

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Our goal is to deliver outstanding value every day.

We do this by offering access to fashion and trends at affordable prices that are desirable for lower income families.

We do this by offering access to fashion and trends at affordable prices that are desirable for African American families.

As a normal course, we do not engage in promotional activity such as high-low pricing, coupons or sales other than our regularly scheduled markdowns.

Our assortment balances tiers of good, better, best products, ensuring a broad appeal across diverse income levels.

The flexibility of our model allows our pricing structure to fluctuate in response to marketplace changes while maintaining our merchandise margins.

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We source our merchandise from thousands of domestic manufacturers and importers.

Our merchandising division consists of a buying team and a planning and allocation team.

Our merchandising division consists of a buying team, a planning team and an allocation team.

Our buyers have extensive experience and have developed long-standing relationships with many of our vendors.

Our buying office is located in New York City, and the team travels regularly to the major United States markets, visiting manufacturers and attending national and regional trade shows.

Our buying team sources goods in a couple of ways.

First, we source a curated compilation of the latest trends and fashion from a constantly growing base of vendors that manufacture products exclusively for Citi Trends ’ core customers.

Our buyers collaborate with these vendors to design products that are of high aesthetic value and appealing to our customers.

Second, we maintain strong relationships with nationally recognized brands and labels that we partner with to buy and customize products that are curated in size, color and style for our core customers.

Third, we leverage our vendor relationships to opportunistically buy close-out product at incredible value.

The majority of our merchandise is first-quality and delivered in season.

purchase high-quality excess inventory at advantageous pricing with the intent to sell later in the same season or the following season.

This allows us to deliver exciting value on select highly desirable goods.

Our buying team sources merchandise through multiple channels to ensure a fresh and trendy assortment.

First, we work with a continuously evolving network of vendors that manufacture products exclusively for Citi Trends ’ core customers.

Our buyers collaborate with these vendors who specialize in trend identification and product development to design and manufacture exclusive products for Citi Trends, providing our fashion-savvy customers with unique standout styles they won ’ t find anywhere else.

Second, we maintain partnerships with nationally recognized brands and labels, collaborating to customize products in size, color and style to align with the specific needs and preferences of our customers.

Third, we leverage all of our vendor relationships to opportunistically buy close-out product at incredible value.

Fourth, we buy extreme value, off-price deals from a wide variety of sources, allowing us to offer our customers exciting national brands at significantly reduced prices.

While almost all of our merchandise is first-quality and delivered in-season, we also purchase high-quality excess inventory at advantageous pricing with the intent of selling later in the same season or the following season.

This allows us to deliver extreme value on select highly desirable goods.

We allocate merchandise across our stores according to fact-based plans that are created by our planning and allocation teams.

Our staff utilizes a centralized management system to monitor merchandise purchasing, planning and allocation in order to maximize inventory turnover, identify and respond to changing customer demands and determine the timing of markdowns to our merchandise.

A store-level planning system assists our planning and allocation teams in their efforts to allocate merchandise to individual stores based on sales performance and planned inventory levels.

We launched a significant technological upgrade to our Planning and Allocations systems in 2023.

Leveraging the new environment, we are able to more effectively allocate products, strategically distributing them across weather zones, volume bands, and demographic segments.

Our staff utilizes a centralized management system to monitor merchandise purchasing, planning and allocation to manage inventory turnover, identify and respond to changing customer demands and determine the timing of markdowns.

We simplified our allocation methodology in fiscal 2024, enabling us to more effectively allocate products, strategically distributing them across three store volume definitions:

high, average and low.

In fiscal 2024, we also launched a test of an AI-based allocation system that will use predictive analytics to forecast sales trends, further enhancing our product allocation capabilities.

We expect that system to be fully implemented by the second half of fiscal 2025.

These upgrades should optimize our inventory distribution to better meet the needs of our customers.

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Store Operations

Our stores are located in the heart of the lower-income neighborhoods we serve.

Our stores are located in the heart of the mid to lower income neighborhoods we serve.

We hire a diverse staff of women and men from the local area surrounding our stores.

As of February 1, 2025, 91% of our store associates are African American or multicultural, and more than 90% of our store management positions are filled by women.

We cater to entire families and offer a one-stop shopping experience in the communities in which we operate.

We cater to entire families and offer a compelling shopping experience in the communities in which we operate.

We welcome everyone with “ Hi, welcome to Citi Trends, ” and we develop a longstanding rapport with many of our customers, many of whom we know by name.

Every Citi Trends store presents a specialty store environment with a wide array of offerings.

The average selling space of our 602 stores is approximately 11,000 square feet, which allows us the space and flexibility to organize our six “ Citis ” of business in exciting and appealing ways.

Every Citi Trends store presents a specialty store environment with a wide array of product offerings.

The average selling space of our 591 stores is approximately 11,000 square feet, which allows us the space and flexibility to organize our six product divisions in exciting and appealing ways.

The unobstructed floor plan allows the customer to see almost all of the different product areas from the store entrance and provides us the flexibility to easily expand and contract departments in response to customer demand, seasonality and merchandise availability.

Nearly all of our inventory is displayed on the selling floor.

Our mission is to curate highly appealing products at value prices for our core customers.

We provide a place to shop that is fresh and fun for the entire family at prices that don ’ t break the bank.

Our mission is to curate culturally relevant fashion, great brands and compelling price points for our core customers in an exciting shopping environment.

A critical component of our success is to maintain an environment that is neat, clean and organized, where everyone is welcome.

The typical store is staffed with a Customer Experience Manager ( “ CEM ” ), Citi Merchandise Manager ( “ CMM ” ) and Citi Operations Manager ( “ COM ” ), along with five to eight part-time Sales associates, all of whom rotate work days on a shift basis.

Our associates are critical to achieving our goals, and we strive to hire associates from the local community with high energy levels and motivation.

We have well-established store operating policies and procedures and an extensive 30-day in-store training program for new store CEMs, CMMs and COMs.

The typical store is staffed with a Store Manager and multiple Assistant Managers, along with five to eight part-time Sales associates, all of whom rotate work days on a shift basis.

Our associates are critical to achieving our goals, and we strive to hire motivated associates from the local community with high energy levels.

We have well-established store operating policies and procedures and an extensive 30-day in-store training program for new Store Managers and Assistant Managers.

Sales associates also participate in a 14-day customer service and store procedures training program, which is designed to enable them to assist customers in a friendly and helpful manner.

We offer a layaway program that allows customers to purchase merchandise by initially paying a 20% deposit and a $2 service charge, although at various times, we reduce the deposit requirement to 10% and waive the service charge in connection with promotional events.

We offer a layaway program, allowing customers to purchase merchandise by initially paying a 20% deposit and a $2 service charge.

At various times throughout the year, we reduce the deposit requirement to 10% and waive the service charge in connection with promotional events.

The customer then makes additional payments every two weeks and has 60 days to complete the purchase.

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In addition, we offer a buy-now-pay-later program through an external vendor that allows customers to split purchases into four installments over six weeks.

Our unique focus on underserved African American and multicultural families offers us the opportunity to pinpoint highly targeted and highly visible store locations.

Our unique focus on African American families offers us the opportunity to pinpoint highly targeted and highly visible store locations.

Cost-effective store locations are an important part of our store profitability model.

Accordingly, we look for locations in outdoor neighborhood shopping centers that offer attractive rents and meet our demographic and economic criteria.

Accordingly, we look for locations in high-traffic outdoor neighborhood shopping centers that offer attractive rents and meet our demographic and economic criteria.

We have a dedicated real estate management team responsible for new store site selection, and we employ rigorous analysis to approve final store selection decisions.

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We aim to be an integral part of our customers ’ community by providing a compelling shopping destination and career opportunities.

After completing a study in 2020 with a third-party provider, we believe we have the potential to grow our fleet to approximately 1,000 stores over time.

Advertising and Marketing

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We generally focus our organic advertising efforts on emails, social media and text messaging.

We use our social media

channels to highlight our brand and engage our customers with compelling digital content on a regular basis.

We use our social media channels to highlight our brand and engage our customers with compelling digital content on a regular basis.

We generally focus our paid marketing efforts on radio, digital ads, paid social media influencers, and website retargeting.

Our website, cititrends.com , showcases our latest in-store products and provides information about our business, our locations, and more.

Our website, cititrends.com , showcases our latest products and provides information about our business, our store locations, and more.

The majority of merchandise sold in our stores is shipped directly from our company-operated distribution centers in Darlington, South Carolina and Roland, Oklahoma, utilizing third-party delivery partners.

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These systems support purchase order management, price and markdown management, merchandise planning and allocation, general ledger, accounts payable, sales audit, loss prevention, store operations and supply chain functions.

We have developed and are continuing to execute our strategic technology roadmap.

In fiscal 2023, we made significant improvements to our systems as we successfully upgraded our enterprise resource planning system ( “ ERP ” ) which marked a pivotal milestone for the Company.

The upgraded environment included the implementation of new Planning & Allocation systems as well as a new Enterprise Data Warehouse.

These new systems enable us to manage our business operations with greater precision and agility, while leveraging data-driven insights to inform decision making across our organization.

This upgrade enabled significant enhancements to our systems and also provides the foundation for future growth and innovation.

In fiscal 2024, we launched multiple initiatives to advance our technology ecosystem.

These projects include leveraging AI capabilities in key areas such as allocation, loss prevention, and store operations which we anticipate completing in fiscal 2025.

Moving forward, we will continue to explore AI-capabilities in our systems as we expect them to improve our operational and execution capabilities.

The markets we serve are highly competitive.

We compete with a broad range of retailers, including national chains, mass merchants, discount stores and specialty stores with both physical locations and online stores.

We believe we have a competitive advantage in our offering of fashion and trends at everyday low prices, and our strategy of focusing on African American and multicultural customers puts us in a unique competitive position.

We also believe we offer a more inviting store format than the traditional retailers, including our assortment and layout of merchandise, use of carpeted floors and colorful signage, and use of fixtures that are easy to shop.

Our competitors generally focus less on trend-driven apparel and, within their apparel offering, lack the specialized focus on fashionable mix that appeals to our core customers.

As a result, we believe there is significant demand for a specialty value retailer that addresses the market of low-income customers who seek extreme value for fashion apparel, accessories and home goods, particularly, African American and multicultural customers.

We believe we have a competitive advantage in our offering of culturally relevant fashion and trends at everyday low prices, and that our strategy of focusing on African American customers puts us in a unique competitive position.

We also believe we offer a more inviting store format than the traditional retailers, including our assortment and layout of merchandise, use of colorful signage, and use of fixtures that are easy to shop.

Our competitors generally focus less on trend-driven apparel and, within their apparel offering, lack the Cultural Cachet that appeals to our core customers.

As a result, we believe there is significant demand for an off-price value retailer that addresses the market of African American customers who seek extreme value for fashion apparel, accessories and home goods.

Risk Factors in this Report for additional information regarding competition in our markets.

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We recognize the importance of attracting and retaining top talent in our workforce that reflects the neighborhoods we serve.

We strive to make Citi Trends a diverse, inclusive and safe workplace, with opportunities for our associates to grow and develop in

their careers, supported by competitive compensation, benefits and health and wellness programs, and by programs that build connections between our associates and their communities.

We strive to make Citi Trends a diverse, inclusive and safe workplace, with opportunities for our associates to grow and develop in their careers, supported by competitive compensation, benefits and health and wellness programs, and by programs that build connections between our associates and their communities.

As of February 1, 2025, we had approximately 2,600 full-time and approximately 2,000 part-time associates.

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“ CITI LIFE ” - Corporate Culture.

Our purpose and values culture platform is a primary driver of how our teams collaborate on projects and initiatives that contribute to our results and ability to attract new talent who desire to work for a purpose-led brand.

Our purpose and values culture is a primary driver of how our teams collaborate on projects and initiatives that contribute to our results and ability to attract new talent who desire to work for a purpose-led brand.

The foundation of “ Citi Life ” is that Life is best when you Live BOLD, Live PROUD and Respect ALL.

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Diversity and Inclusion .

Our objective is to ensure that our workforce reflects the ethnicity and cultural sensibilities of our customer base, with a particular focus on the African American community.

We believe that a diverse and inclusive team is critical to our success.

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As of February 1, 2025, 85% of our team members are African American or multicultural and 81% are female.

In addition, three of our nine board members are African American females.

Citi Trends embraces diversity and is committed to continued improvements throughout the Company.

The Corporate Social Responsibility ( “ CSR ” ) Committee of the board monitors the Company ’ s progress towards its diversity and inclusion objectives and metrics and compliance with the Company ’ s responsibilities as an equal opportunity employer.

The CSR Committee works closely with the Compensation Committee and the Nominating and Corporate Governance Committee of the board to develop processes to achieve the Company ’ s diversity objectives and metrics.

In addition, three of our eight board members are African American females.

Health, Safety and Wellness .

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It collaborates with community leaders, organizations, individuals, and established programs in local underserved communities.

Since 2022, the CITIcares Council has partnered with established Goodwill community programs.

Citi Trends' donations of new, quality clothing and home goods generate funds to advance select Goodwill programs which align with our values.

Our partnership is currently active in fifteen markets, and we plan to expand this partnership over time to serve more of our collective communities.

Citi Trends empowers small business owners in our store areas through our Black History Makers Grant program.

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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-K

Item 1. Business