What changed in this filing

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Item 1. Financial Statements

2025-09-10 compared with 2025-06-11 · 174 added, 73 removed, 336 unchanged (42% of the section changed)

7 unchanged sentences

Income tax receivable

Assets held for sale

Total current assets

Property and equipment, net of accumulated depreciation of $ 293,473 and $ 297,396 as of May 3, 2025 and February 1, 2025, respectively.

Property and equipment, net of accumulated depreciation of $ 293,603 and $ 297,396 as of August 2, 2025 and February 1, 2025, respectively.

Operating lease right of use assets

14 unchanged sentences

Authorized 32,000,000 shares;

16,472,844 shares issued as of May 3, 2025 and 16,497,092 shares issued as of February 1, 2025;

8,273,038 shares outstanding as of May 3, 2025 and 8,547,841 shares outstanding as of February 1, 2025

16,505,718 shares issued as of August 2, 2025 and 16,497,092 shares issued as of February 1, 2025;

8,305,912 shares outstanding as of August 2, 2025 and 8,547,841 shares outstanding as of February 1, 2025

Paid in capital

1 unchanged sentence

Treasury stock, at cost;

8,199,806 shares held as of May 3, 2025 and 7,949,251 shares held as of February 1,2025

8,199,806 shares held as of August 2, 2025 and 7,949,251 shares held as of February 1, 2025

Total stockholders ’ equity

9 unchanged sentences

Asset impairment

Gain on sale of building

Income (loss) from operations

4 unchanged sentences

Net income (loss)

Basic net income (loss) per common share

Diluted net income (loss) per common share

Basic net earnings (loss)per common share

Diluted net earnings (loss) per common share

Weighted average number of shares outstanding

Citi Trends, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

Twenty-Six Weeks Ended

Cost of sales (exclusive of depreciation)

Selling, general and administrative expenses

Asset impairment

Gain on sale of building

Income (loss) from operations

Interest income

Interest expense

Income (loss) before income taxes

Income tax benefit

Net income (loss)

Basic net earnings (loss)per common share

Diluted net earnings (loss) per common share

Weighted average number of shares outstanding

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

2 unchanged sentences

(in thousands)

Thirteen Weeks Ended

Twenty-Six Weeks Ended

Operating activities:

6 unchanged sentences

Non-cash stock-based compensation expense

Gain on sale of building

Changes in assets and liabilities:

8 unchanged sentences

Purchases of property and equipment

Net cash used in investing activities

Proceeds from sale of building

Net cash provided by (used in) investing activities

Financing activities:

8 unchanged sentences

Cash paid for interest

Cash (refunds) payments of income taxes

Cash refunds of income taxes

Supplemental disclosures of non-cash investing activities:

6 unchanged sentences

Balances — February 1, 2025

Issuance of nonvested shares

Forfeiture of nonvested shares

Grant of restricted shares

Forfeiture of restricted shares

Stock-based compensation expense

Net share settlement of nonvested shares

Shares withheld for settlement of employee taxes on vesting

Repurchase of common stock

Net income (loss)

Balances — May 3, 2025

Grant of restricted shares

Forfeiture of restricted shares

Stock-based compensation expense

Shares withheld for settlement of employee taxes on vesting

Net income (loss)

Balances — August 2, 2025

Treasury Stock

Balances — February 3, 2024

Vesting of nonvested shares

Issuance of nonvested shares

Forfeiture of nonvested shares

Grant of restricted shares

Forfeiture of restricted shares

Stock-based compensation expense

Net share settlement of nonvested shares

Shares withheld for settlement of employee taxes on vesting

Net income (loss)

Balances — May 4, 2024

Vesting of nonvested restricted stock units

Grant of restricted shares

Grant of vested shares

Forfeiture of restricted shares

Stock-based compensation expense

Shares withheld for settlement of employee taxes on vesting

Net income (loss)

Balances — August 3, 2024

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

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements (unaudited)

August 2, 2025

Significant Accounting Policies

2 unchanged sentences

and its subsidiary (the “ Company ” ) is a leading off-price value retailer of apparel, accessories and home trends primarily for African American families in the United States.

As of May 3, 2025, the Company operated 591 stores in urban, suburban and rural markets in 33 states.

As of August 2, 2025, the Company operated 590 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 2024 Form 10-K.

Operating results for the first quarter of 2025 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 first half of 2025 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 2025 and 2024, which represent fiscal years ending or ended on January 31, 2026 and February 1, 2025, respectively.

Fiscal 2025 and fiscal 2024 both have 52 -week accounting periods.

Assets Held for Sale

Assets and liabilities to be disposed of by sale are classified as “ held for sale ” if their carrying amounts are principally expected to be recovered through a sale transaction rather than through continuing use, and the disposal group is available for immediate sale and the sale is probable.

These criteria are generally met when an agreement to sell exists, or management has committed to a plan to sell the assets within one year.

Disposal groups are measured at the lower of carrying amount or fair value less costs to sell, and long-lived assets included within the disposal group are no longer depreciated or amortized.

The fair value of a disposal group, less any costs to sell, is assessed each reporting period it remains classified as held for sale and any remeasurement to the lower of carrying value or fair value less costs to sell is reported as an adjustment to the carrying value of the disposal group.

As of May 3, 2025, the Company had $ 0.2 million of assets classified as held for sale.

Cash and Cash Equivalents/Concentration of Credit Risk

8 unchanged sentences

The dilutive effect of stock-based compensation arrangements is accounted for using the treasury stock method.

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

For the first quarter of 2025 and 2024, there were 0 and 272,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

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

For the second quarter of 2025 and 2024, there were 0 and 178,000 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 2, 2025 and August 3, 2024, there were 0 and 234,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

The following table provides 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 2, 2025

August 3, 2024

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 2, 2025

August 3, 2024

Weighted average number of common shares outstanding (basic)

Incremental shares from assumed vesting of nonvested restricted stock

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

Revolving Credit Facility

6 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 1.50 % , 1.75 % or 2.00 % , 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 % and (iii) the Term SOFR Rate plus 1.0 % , plus, in each case either 0.50 % , 0.75 % or 1.00 % , based in any such case on the average daily availability for borrowings under the facility.

As of May 3, 2025, the Company had no borrowings under the credit facility and $ 2.2 million of letters of credit outstanding.

As of August 2, 2025, the Company had no borrowings under the credit facility and $ 2.2 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 first half of 2025, non-cash impairment expense related to underperforming stores totaled $ 0.3 million, comprised of $ 0.2 million for leasehold improvements and fixtures and equipment, and $ 0.1 million for operating lease right of use assets.

In the first half 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.

Income taxes are accounted for under the asset and liability method.

2 unchanged sentences

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some

portion or all of the deferred tax assets will not be realized.

If realization of the deferred tax asset is not considered more likely than not, then a valuation allowance is recorded to reduce the deferred tax asset to its net realizable value.

3 unchanged sentences

We intend to maintain a valuation allowance until sufficient positive evidence exists to support its reversal, resulting in no deferred tax asset balance being recognized.

On July 4, 2025, the President signed H.R.

1, the “ One Big Beautiful Bill Act, ” into law.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense.

The Company expects to utilize the more favorable tax legislation in its corresponding tax filings.

Commitments and Contingencies

7 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

August 2, 2025

August 3, 2024

August 2, 2025

August 3, 2024

Total number of shares purchased

1 unchanged sentence

Total investment

At May 3, 2025, $ 40.0 million remained available under the Company ’ s stock repurchase authorization.

On November 30, 2021, the Company announced that its board of directors approved a $ 30 million stock repurchase program.

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

The programs do not have expiration dates.

At August 2, 2025, $ 40.0 million remained available under the Company ’ s stock repurchase authorization.

Recent Accounting Pronouncements

22 unchanged sentences

In the following table, the Company ’ s revenue from contracts with customers is disaggregated by Division or product category.

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

It also provides the percentage of net sales for each Division within the merchandise assortment.

Thirteen Weeks Ended

Twenty-Six Weeks Ended

Accessories & Beauty

8 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

August 2, 2025

August 3, 2024

August 2, 2025

August 3, 2024

Operating lease cost

2 unchanged sentences

Total lease cost

Future minimum lease payments as of May 3, 2025 are as follows (in thousands):

Future minimum lease payments as of August 2, 2025 are as follows (in thousands):

Remainder of 2025

Total future minimum lease payments

5 unchanged sentences

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

Thirteen Weeks Ended

Twenty-Six Weeks Ended

August 2, 2025

August 3, 2024

Cash paid for operating leases

14 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

August 2, 2025

August 3, 2024

August 2, 2025

August 3, 2024

Cost of sales (exclusive of depreciation shown separately below)

7 unchanged sentences

Other segment expenses (1)

Gain on sale of building

Asset impairment

32 unchanged sentences

risks related to cybersecurity, data privacy and intellectual property;

temporary changes in demand due to weather patterns;

changes in demand due to weather patterns;

seasonality of the Company ’ s business;

11 unchanged sentences

We offer culturally relevant fashion – what we call “ Cultural Cachet ” – in apparel, accessories and home trends 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.

We curate a three-tiered mix of products featuring well-known brands, core products 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.

We offer an assortment of opening price products 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 the manufacturer ’ s suggested retail price.

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.

As of May 3, 2025, we operated 591 stores in urban, suburban and rural markets in 33 states.

As of August 2, 2025, we operated 590 stores in urban, suburban and rural markets in 33 states.

Uncertainties and Challenges

13 unchanged sentences

The following discussion contains references to fiscal years 2025 and 2024, which represent fiscal years ending or ended on January 31, 2026 and February 1, 2025, respectively.

Fiscal 2025 and fiscal 2024 have a 52-week accounting period.

Fiscal 2025 and fiscal 2024 both have 52-week accounting periods.

This discussion and analysis should be read with the unaudited condensed consolidated financial statements and the notes thereto contained in Part I, Item 1 of this Report.

2 unchanged sentences

Expenses and, to a greater extent, operating income, vary by quarter.

Results of a period shorter than a full year may not be indicative of results expected for the entire year as a result of the seasonality of our business and the current economic uncertainty.

Results of a period shorter than a full

year may not be indicative of results expected for the entire year as a result of the seasonality of our business, and the current economic uncertainty.

Key Operating Statistics

9 unchanged sentences

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

Thirteen Weeks Ended May 3, 2025 and May 4, 2024

Net sales increased $15.4 million, or 8.3%, to $201.7 million in the first quarter of 2025 from $186.3 million in the first quarter of 2024.

The increase in sales was due to a 9.9% increase in comparable store sales.

Thirteen Weeks Ended August 2, 2025 and August 3, 2024

Net sales increased $14.2 million, or 8.0%, to $190.8 million in the second quarter of 2025 from $176.6 million in the second quarter of 2024.

Comparable store sales increased 9.2%, resulting in an increase of $16.0 million in sales.

Net store opening and closing activity resulted in a net decrease of $1.9 million in sales.

Cost of Sales (exclusive of depreciation).

Cost of sales (exclusive of depreciation) increased $7.6 million, or 6.6%, to $121.9 million in the first quarter of 2025 from $114.3 million in the first quarter of 2024.

Cost of sales as a percentage of sales

decreased to 60.4% in the first quarter of 2025 from 61.3% in the first quarter of 2024.

The change was due to a decrease in shrink expense, a decrease in freight expense and an increase in initial markup offset by an increase in markdowns.

Cost of sales (exclusive of depreciation) decreased $7.1 million, or 5.8%, to $114.5 million in the second quarter of 2025 from $121.6 million in the second quarter of 2024.

Cost of sales as a percentage of sales decreased to 60.0% in the second quarter of 2025 from 68.9% in the second quarter of 2024.

The 890 basis-point decrease was primarily driven by a 580 basis points decrease in markdowns, a 190 basis points decrease in shrink, and a 120 basis points decrease in other cost of sales.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased $0.7 million, or 0.9%, to $74.9 million in the first quarter of 2025 from $74.2 million in the first quarter of 2024.

The increase was primarily due to an increase in distribution center expenses and incentive compensation accrual, partially offset by lower corporate expenses.

As a percentage of sales, selling, general and administrative expenses decreased to 37.1% in the first quarter of 2025 from 39.8% in the first quarter of 2024.

Selling, general and administrative expenses increased $5.1 million, or 6.9%, to $78.9 million in the second quarter of 2025 from $73.8 million in the second quarter of 2024.

The increase was driven by corporate expense (primarily payroll and incremental incentive compensation) of $3.9 million and occupancy expense of $1.0 million.

As a percentage of sales, Selling, general and administrative expenses decreased to 41.4% in the second quarter of 2025 from 41.8% in the second quarter of 2024, primarily driven by the aforementioned items.

Depreciation.

Depreciation expense decreased $0.4 million, or 8.8%, to $4.4 million in the first quarter of 2025 from $4.8 million in the first quarter of 2024.

Income Tax Benefit/Expense.

There was no income tax expense in the first quarter of 2025 compared to a tax benefit of $2.8 million in the first quarter of 2024.

For the first quarter of 2025 and the first quarter of 2024, we used the annual effective tax rate to determine income tax expense based upon interim period results.

Depreciation expense decreased $0.2 million, or 4.9%, to $4.5 million in the second quarter of 2025 from $4.8 million in the second quarter of 2024 due to the sale of our corporate office building.

Non-cash impairment expense related to underperforming stores totaled $0.2 million in the second quarter of 2025, comprised of leasehold improvements and fixtures and equipment.

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.

Gain on sale of building.

Gain on the sale of the corporate office building was $11.0 million in the second quarter of 2025.

Income Tax Benefit.

There was no income tax benefit in the second quarter of 2025 compared to a benefit of $6.0 million in the second quarter of 2024.

For the second quarter of 2025 and the second quarter of 2024, we used the annual effective tax rate to determine income tax benefit based upon interim period results.

Net Income (Loss).

Net income was $0.9 million in the first quarter of 2025 compared to net loss of $3.4 million in the first quarter of 2024 due to the factors discussed above.

Net income was $3.8 million in the second quarter of 2025 compared to net loss of $18.4 million in the second quarter of 2024 due to the factors discussed above.

Twenty-Six Weeks Ended August 2, 2025 and August 3, 2024

Net sales increased $29.6 million, or 8.2%, to $392.5 million in the first twenty-six weeks of 2025 from $362.8 million in the same period of 2024.

Comparable store sales increased 9.6%, resulting in an increase of $34.1 million in sales.

Net store opening and closing activity resulted in a net decrease of $4.6 million in sales.

Cost of Sales (exclusive of depreciation).

Cost of sales (exclusive of depreciation) increased $0.5 million, or 0.2%, to $236.4 million in the first twenty-six weeks of 2025 from $235.9 million in the same period of 2024.

Cost of sales as a percentage of sales decreased to 60.2% in the first twenty-six weeks of 2025 from 65.0% in the same period of 2024.

The 480 basis-point decrease was driven by a 250 basis points decrease in markdowns, a 130 basis points decrease in shrink, and a 100 basis points decrease in other cost of sales.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased $5.8 million, or 3.9%, to $153.8 million in the first twenty-six weeks of 2025 from $148.0 million in the same period of 2024.

The increase was primarily driven by stores selling and advertising expenses of $2.2 million, distribution center costs of $2.2 million, and corporate expenses (primarily incentive compensation) of $1.4 million .

As a percentage of sales, Selling, general and administrative expenses decreased to 39.2% in the first twenty-six weeks of 2025 from 40.8% in the first twenty-six weeks of 2024, due to the aforementioned items.

Depreciation.

Depreciation expense decreased $0.7 million, or 6.9%, to $8.9 million in the first twenty-six weeks of 2025 from $9.6 million in the same period last year due to the sale of the corporate office building.

Non-cash impairment expense related to underperforming stores totaled $0.3 million in the first twenty-six weeks of 2025, comprised of $0.2 million for leasehold improvements and fixtures and equipment, and $0.1 million for operating lease right of use assets.

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.

Gain on sale of building.

Gain on sale of the corporate office building was $11.0 million in the first twenty-six weeks of 2025.

Income Tax Benefit.

There was no income tax benefit in the first twenty-six weeks of 2025 compared to $8.7 million in the first twenty-six weeks of 2024.

For the second half of 2025 and the second half of 2024, we used the annual effective tax rate to determine income tax benefit based upon interim period results.

Net Income (Loss).

Net income was $4.7 million in the first twenty-six weeks of 2025 compared to net loss of $21.8 million in the same period of 2024 due to the factors discussed above.

Liquidity and Capital Resources

Capital Allocation

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 share repurchase programs.

Our quarter-end cash and cash equivalents balance was $41.6 million compared to $58.2 million at the end of the first quarter of 2024.

Our quarter-end cash and cash equivalents balance was $50.4 million compared to cash and cash equivalents of $59.3 million at the end of the second 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 $109.9 million, compared with $119.0 million at the end of the first quarter of 2024.

The decrease was primarily due to a strategic decrease in our average in-store inventory and lower pack-and-hold inventory.

Our quarter-end inventory balance was $117.6 million, down 12.9% compared to $135.0 million at the end of the second quarter last year.

Capital Expenditures

Capital expenditures in the first quarter of 2025 were $2.1 million, an increase of $0.5 million from the first quarter of 2024, as we invest in more existing store remodels.

We anticipate capital expenditures in fiscal 2025 of approximately $20 million, primarily for opening up to five new stores and remodeling approximately 50 stores, combined with ongoing investments in various technology platforms.

Capital expenditures in the first twenty-six weeks of 2025 were $7.7 million, an increase of $2.1 million over the first twenty-six weeks of 2024, as we increased our investments in new stores and remodels.

We anticipate capital expenditures in fiscal 2025 to be in the range of $22 million to $25 million, primarily for the opening of three new stores and remodeling existing stores, combined with ongoing investments in our systems.

Share Repurchases

In the first quarter of fiscal 2025, we returned $6.3 million to shareholders through share repurchases.

In the first half of fiscal 2025, we returned $6.3 million to stockholders through share repurchases.

See Part II, Item 2 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 first quarter of 2025, we had no borrowings under the credit facility and $2.2 million in letters of credit outstanding.

At the end of the second quarter of 2025, we had no borrowings under the credit facility and $2.2 million in letters of credit outstanding.

Cash Flows From Operating Activities .

Net cash used in operating activities was $11.0 million in the first quarter of 2025 compared to cash used of $19.6 million in the first quarter of 2024.

Sources of cash in the first quarter of 2025 resulted from

net income adjusted for non-cash expenses totaling $18.5 million (compared to a net loss adjusted for non-cash items of $11.5 million in the first quarter of 2024), and a decrease of $12.7 million in inventory (compared to a decrease of $11.4 million in 2024).

Significant uses of cash during the first quarter of 2025 included (1) a $21.9 million decrease in accounts payable (compared to a decrease of $28.1 million in the first quarter of 2024) due primarily to timing of vendor payments;

and (2) a decrease of $19.4 million in accrued expenses and other long-term liabilities (compared to a decrease of $14.5 million in the first quarter of 2024) due primarily to payments of operating lease liabilities.

Net cash used in operating activities was $7.1 million in the first twenty-six weeks of 2025 compared to $14.0 million in the same period of 2024.

Significant sources of cash for the first twenty-six weeks of 2025 included net income adjusted for non-cash items totaling $29.9 million (compared to net loss adjusted for non-cash items of $6.6 million in the first twenty-six weeks of 2024) and a decrease in inventory of $5.1 million in the first twenty-six weeks of 2025 (compared to an increase of $4.6 million in the first twenty-six weeks of 2024).

Significant uses of cash from operating activities in the first twenty-six weeks of 2025 included (1) a $29.6 million decrease in accrued expenses and other long-term liabilities (compared to a $21.9 million decrease in the first twenty-six weeks of 2024) due primarily to payments of operating lease liabilities;

(2) a $9.4 million increase in prepaid and other current assets (compared to a $6.1 million dollar increase in the first twenty-six weeks of 2024);

and (3) a $7.1 million decrease in accounts payable (compared to a $10.0 million increase in the same period last year).

Cash Flows From Investing Activities.

Cash used in investing activities was $2.1 million in the first quarter of 2025 compared to $1.6 million in the first quarter of 2024.

Cash used in the first quarter of 2025 and 2024 consisted of purchases of property and equipment.

Cash provided by investing activities was $3.5 million in the first twenty-six weeks of 2025 compared to cash used of $5.6 million in the same period last year.

Sources of cash of $11.2 million in the first 26 weeks of 2025 was from the sale of a building.

Cash used of $7.7 million in the first twenty-six weeks of fiscal 2025 and $5.6 million in the first twenty-six weeks of fiscal 2024 consisted of purchases of property and equipment.

Cash Flows From Financing Activities.

Cash used in financing activities was $6.4 million in the first quarter of 2025 compared to $0.3 million in the first quarter of 2024.

Cash used in the first quarter of 2025 was $0.1 million to settle withholding taxes on the vesting of restricted stock and $6.3 million for share repurchases, compared to $0.3 million used in the first quarter of 2024 to settle withholding taxes on the vesting of restricted stock.

Cash used in financing activities was $7.1 million in the first twenty-six weeks of 2025 compared to $0.9 million in the same period last year.

Cash used in the first twenty-six weeks of fiscal 2025 was $0.8 million to settle withholding taxes on the vesting of restricted stock and $6.3 million for share repurchases, compared to $0.9 million used in the first twenty-six weeks of fiscal 2024 to settle withholding taxes on the vesting of restricted stock.

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 May 3, 2025, our contractual commitments for operating leases totaled $220.4 million (with $50.4 million due within 12 months).

As of August 2, 2025, our contractual commitments for operating leases totaled $217.5 million (with $36.2 million due within 12 months).

See Note 11 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 thirteen weeks ended May 3, 2025 compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended February 1, 2025.

There have been no material changes in our market risk during the twenty-six weeks ended August 2, 2025 compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended February 1, 2025 .

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