0001558370-23-019509 | 10-Q | XBRL Viewer

Revenue - Returns and Disaggregation of Revenue (Details)	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Disaggregation of Revenue
Period Customers Can Return Merchandise			30 days
Ladies
Disaggregation of Revenue
Revenue from contracts with customers disaggregated by major product line (as a percent)	26.00%	26.00%	27.00%	27.00%
Kids
Disaggregation of Revenue
Revenue from contracts with customers disaggregated by major product line (as a percent)	24.00%	25.00%	22.00%	22.00%
Accessories & Beauty
Disaggregation of Revenue
Revenue from contracts with customers disaggregated by major product line (as a percent)	17.00%	17.00%	18.00%	17.00%
Mens
Disaggregation of Revenue
Revenue from contracts with customers disaggregated by major product line (as a percent)	17.00%	17.00%	17.00%	18.00%
Footwear
Disaggregation of Revenue
Revenue from contracts with customers disaggregated by major product line (as a percent)	9.00%	7.00%	8.00%	8.00%
Home & Lifestyle
Disaggregation of Revenue
Revenue from contracts with customers disaggregated by major product line (as a percent)	7.00%	8.00%	8.00%	8.00%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Impairment of Assets	9 Months Ended
Oct. 28, 2023
Impairment of Assets
Impairment of Assets	5. Impairment of Assets If facts and circumstances indicate that a long-lived asset or operating lease right-of-use asset may be impaired, the carrying value is reviewed. If this review indicates that the carrying value of the asset will not be recovered as determined based on projected undiscounted cash flows related to the asset over its remaining life, the carrying value of the asset is reduced to its estimated fair value. In the third quarter of 2023, non-cash impairment expense related to underperforming stores totaled $0.2 million.

Impairment of Assets

9 Months Ended

Oct. 28, 2023

Impairment of Assets

Impairment of Assets

5. Impairment of Assets

If facts and circumstances indicate that a long-lived asset or operating lease right-of-use asset may be impaired, the carrying value is reviewed. If this review indicates that the carrying value of the asset will not be recovered as determined based on projected undiscounted cash flows related to the asset over its remaining life, the carrying value of the asset is reduced to its estimated fair value. In the third quarter of 2023, non-cash impairment expense related to underperforming stores totaled $0.2 million.

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Oct. 28, 2023	Nov. 22, 2023
Document and Entity Information
Document Type	10-Q
Document Period End Date	Oct. 28, 2023
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-51315
Entity Registrant Name	CITI TRENDS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	52-2150697
Entity Address, Address Line One	104 Coleman Boulevard
Entity Address, City or Town	Savannah
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	31408
City Area Code	912
Local Phone Number	236-1561
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	CTRN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		8,544,345
Current Fiscal Year End Date	--02-03
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001318484
Amendment Flag	false

Commitments and Contingencies

9 Months Ended

Oct. 28, 2023

Commitments and Contingencies

Commitments and Contingencies

7. Commitments and Contingencies

The Company from time to time is involved in various legal proceedings incidental to the conduct of its business, including claims by customers, landlords, employees or former employees. Once it becomes probable that the Company will incur costs in connection with a legal proceeding and such costs can be reasonably estimated, the Company establishes appropriate reserves.

In January 2023, the Company experienced a disruption of its back office and distribution center IT systems, which was due to what is known as Hive ransomware (the “January 2023 cyber disruption”). In connection with this incident, third party consultants and forensic experts were engaged to assist with the restoration and remediation of the Company’s systems and, with the assistance of law enforcement, to investigate the incident. The Company does not retain sensitive customer data on its systems.

In connection with the January 2023 cyber disruption, four putative class action lawsuits have been filed against the Company in the United States District Court for the Southern District of Georgia. These matters, Matousek et al v. Citi Trends, Inc.; Sienna Thomas v. Citi Trends, Inc.; Yeimy Sambrano v. Citi Trends, Inc.; and Sabrina Green-Fogg v. Citi Trends, Inc., were filed on September 26, 2023, June 27, 2023, July 7, 2023 and July 14, 2023, respectively. The plaintiffs allege harm in connection with the January 2023 cyber disruption and assert a variety of claims seeking unspecified monetary damages and other related relief. The Company is vigorously defending these lawsuits. In addition, the Attorneys General of Alabama, Connecticut, Indiana and Texas have sent inquiry letters to the Company regarding the January 2023 cyber disruption, which the Company is answering. At October 28, 2023, the Company had an accrual of $0.8 million for estimated losses in connection with these matters recorded in Accrued expenses. The ultimate loss to the Company for these matters could be materially different from the amount the Company has accrued. The Company cannot predict or estimate the duration or ultimate outcome of these matters. The Company is unable to predict whether it may be subject to other lawsuits, claims or inquiries.

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

Leases

9 Months Ended

Oct. 28, 2023

Leases

Leases

10. Leases

The Company leases its retail store locations, distribution centers, and certain office space and equipment. Leases for store locations are typically for a term of five years with options to extend for one or more five-year periods. In April 2022, the Company completed a sale-leaseback of its distribution center in Darlington, South Carolina that resulted in a gain of $34.9 million and a 20-year lease term with the option to extend for six additional periods of five years each. In September 2022, the Company completed a sale-leaseback of its distribution center in Roland, Oklahoma that resulted in a gain of $29.2 million and a 15-year lease term with the option to extend for six additional periods of five years each.

The Company analyzes all leases at inception to determine if a right-of-use asset and lease liability should be recognized. Leases with an initial term of 12 months or less and leases with mutual termination clauses are not included on the condensed consolidated balance sheets. The lease liability is measured at the present value of future lease payments as of the lease commencement date.

Total lease cost is comprised of operating lease costs, short-term lease costs and variable lease costs, which include rent paid as a percentage of sales, common area maintenance, real estate taxes and insurance for the Company’s real estate leases. Lease costs consisted of the following (in thousands):


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Operating lease cost	$	15,521	$	15,443	$	46,930	$	44,326
Variable lease cost		2,628		2,510		8,406		7,423
Short term lease cost		393		343		1,171		1,062
Total lease cost	$	18,542	$	18,296	$	56,507	$	52,811

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


Fiscal Year	Lease Costs
Remainder of 2023	$	10,896
2024		61,555
2025		51,678
2026		40,248
2027		29,574
Thereafter		124,026
Total future minimum lease payments		317,977
Less: imputed interest		(74,610)	(1)
Total present value of lease liabilities	$	243,367	(2)

(1)

Calculated using the discount rate for each lease.

(2)

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

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


	Thirty-Nine Weeks Ended
	October 28, 2023		October 29, 2022
Cash paid for operating leases	$	52,734	$	44,754
Right of use assets obtained in exchange for new operating lease liabilities	$	22,322	$	95,809

Weighted average remaining lease term (years) - operating leases		7.60		8.11
Weighted average discount rate - operating leases		4.90%		4.38%

Revolving Credit Facility

9 Months Ended

Oct. 28, 2023

Revolving Credit Facility

Revolving Credit Facility

4. Revolving Credit Facility

In October 2011, the Company entered into a five-year, $50 million credit facility with Bank of America. The facility was amended in August 2015 and May 2020 to extend the maturity dates. The facility was further amended in April 2021 to modify terms and extend the maturity date to April 15, 2026. In May 2023, the facility was amended to replace the London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”). The amended facility provides a $75 million credit commitment and a $25 million uncommitted “accordion” feature that under certain circumstances could allow the Company to increase the size of the facility to $100 million. The facility is secured by the Company’s inventory, accounts receivable and related assets, but not its real estate, fixtures and equipment, and it contains one financial covenant, a fixed charge coverage ratio, which is applicable and tested only in certain circumstances. The facility has an unused commitment fee of 0.20% and permits the payment of cash dividends subject to certain limitations. 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 October 28, 2023, the Company had no borrowings under the credit facility and $0.6 million of letters of credit outstanding.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Earnings per Share (Details) - shares	3 Months Ended		9 Months Ended
Earnings per Share (Details) - shares	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Reconciliation of average number of common shares outstanding used to calculate basic and diluted earnings per share
Weighted average number of common shares outstanding	8,237,729	8,145,318	8,214,907	8,236,836
Average number of common shares and common stock equivalents outstanding	8,237,729	8,145,318	8,214,907	8,236,836
Restricted Stock
Antidilutive securities
Shares excluded from the calculation of diluted earnings per share	318,000	220,000	259,000	226,000

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022
Operating activities:
Net (loss) income	$ (15,530)	$ 52,255
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation	14,138	15,793
Asset impairment	178
Non-cash operating lease costs	38,494	38,474
Loss on disposal of property and equipment	23	10
Deferred income taxes	(4,304)	2,119
Insurance proceeds related to operating activities	3,482	1,575
Non-cash stock-based compensation expense	3,002	2,271
Gain on sale-leaseback		(64,088)
Gain on insurance related to operating activities	(3,482)
Changes in assets and liabilities:
Inventory	(23,933)	(5,891)
Prepaid and other current assets	1,711	1,734
Other assets	133	99
Accounts payable	2,322	(15,572)
Accrued expenses and other long-term liabilities	(45,515)	(44,643)
Accrued compensation	(1,821)	(15,216)
Income tax receivable/payable	(2,691)	6,899
Layaway deposits	925	1,122
Net cash used in operating activities	(32,868)	(23,059)
Investing activities:
Purchases of property and equipment	(11,568)	(19,218)
Insurance proceeds related to investing activities	1,518	1,370
Proceeds from sale-leaseback		81,098
Net cash (used in) provided by investing activities	(10,050)	63,250
Financing activities:
Cash used to settle withholding taxes on the vesting of nonvested restricted stock	(851)	(2,208)
Repurchases of common stock		(10,000)
Net cash used in financing activities	(851)	(12,208)
Net (decrease) increase in cash and cash equivalents	(43,769)	27,983
Cash and cash equivalents:
Beginning of period	103,495	49,788
End of period	59,726	77,771
Supplemental disclosures of cash flow information:
Cash paid for interest	119	119
Cash payments of income taxes	1,545	6,606
Supplemental disclosures of non-cash investing activities:
Accrual for purchases of property and equipment	$ 841	$ 595

Leases - Cash flow and other information (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022
Supplemental cash flow and other information related to operating leases
Cash paid for operating leases	$ 52,734	$ 44,754
Right of use assets obtained in exchange for new operating lease liabilities	$ 22,322	$ 95,809
Weighted average remaining lease term (years) - operating leases	7 years 7 months 6 days	8 years 1 month 9 days
Weighted average discount rate - operating leases (as a percent)	4.90%	4.38%

Cash and Cash Equivalents/Concentration of Credit Risk

9 Months Ended

Oct. 28, 2023

Cash and Cash Equivalents/Concentration of Credit Risk

Cash and Cash Equivalents/Concentration of Credit Risk

2. Cash and Cash Equivalents/Concentration of Credit Risk

For purposes of the condensed consolidated balance sheets and condensed consolidated statements of cash flows, the Company considers all highly liquid investments with maturities at date of purchase of three months or less to be cash equivalents. Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and cash equivalents. The Company places its cash and cash equivalents in what it believes to be high credit quality banks and institutional money market funds. The Company maintains cash accounts that exceed federally insured limits.

Earnings per Share (Tables)

9 Months Ended

Oct. 28, 2023

Earnings per Share

Schedule of reconciliation of the number of average common shares outstanding used to calculate basic and diluted earnings per share


	Thirteen Weeks Ended
	October 28, 2023	October 29, 2022
Weighted average number of common shares outstanding	8,237,729	8,145,318
Incremental shares from assumed vesting of nonvested restricted stock	—	—
Weighted average number of common shares and common stock equivalents outstanding	8,237,729	8,145,318


	Thirty-Nine Weeks Ended
	October 28, 2023	October 29, 2022
Weighted average number of common shares outstanding	8,214,907	8,236,836
Incremental shares from assumed vesting of nonvested restricted stock	—	—
Weighted average number of common shares and common stock equivalents outstanding	8,214,907	8,236,836

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Consolidated Statements of Operations
Net sales	$ 179,520	$ 192,323	$ 532,762	$ 585,550
Revenue, Product and Service [Extensible List]	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Cost of sales (exclusive of depreciation)	$ (110,942)	$ (115,741)	$ (331,827)	$ (357,341)
Selling, general and administrative expenses	(69,654)	(69,092)	(210,004)	(208,599)
Depreciation	(4,749)	(5,076)	(14,138)	(15,793)
Asset impairment	(178)		(178)
Gain on sale-leasebacks		29,168		64,088
(Loss) income from operations	(6,003)	31,582	(23,385)	67,905
Interest income	894	202	2,804	204
Interest expense	(76)	(76)	(228)	(230)
(Loss) Income before income taxes	(5,185)	31,708	(20,809)	67,879
Income tax benefit (expense)	1,322	(7,120)	5,279	(15,624)
Net (loss) income	$ (3,863)	$ 24,588	$ (15,530)	$ 52,255
Basic net (loss) income per common share	$ (0.47)	$ 3.02	$ (1.89)	$ 6.34
Diluted net (loss) income per common share	$ (0.47)	$ 3.02	$ (1.89)	$ 6.34
Weighted average number of shares outstanding
Basic	8,237,729	8,145,318	8,214,907	8,236,836
Diluted	8,237,729	8,145,318	8,214,907	8,236,836

Stock Repurchases

9 Months Ended

Oct. 28, 2023

Stock Repurchases

Stock Repurchases

8. Stock Repurchases

Repurchases of Common Stock

The Company periodically repurchases shares of its common stock under board-authorized repurchase programs. Such repurchases may be made in the open market, through block trades or through other negotiated transactions. Share repurchases were as follows (in thousands, except per share data):


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Total number of shares purchased		—		—		—		331
Average price paid per share (including commissions)	$	—	$	—	$	—	$	30.22
Total investment	$	—	$	—	$	—	$	10,000

At October 28, 2023, $50.0 million remained available under the Company’s stock repurchase authorization.

- Definition

The entire disclosure for equity.

+ References

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-Paragraph 18
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-Topic 505
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-Section 50
-Paragraph 18
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-Publisher FASB
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+ Details

Significant Accounting Policies (Policies)	9 Months Ended
Significant Accounting Policies (Policies)	Oct. 28, 2023
Significant Accounting Policies
Basis of Presentation	Basis of Presentation Citi Trends, Inc. 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 October 28, 2023, the Company operated 606 stores in urban, suburban and rural markets in 33 states. The condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim reporting and are unaudited. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The condensed consolidated balance sheet as of January 28, 2023 is derived from the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023 (the “2022 Form 10-K”). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2022 Form 10-K. Operating results for the third quarter of 2023 are not necessarily indicative of the results that may be expected for the fiscal year as a result of the seasonality of the business and the current economic uncertainty.
Fiscal Year	Fiscal Year The following contains references to fiscal years 2023 and 2022, which represent fiscal years ending or ended on February 3, 2024 and January 28, 2023, respectively. Fiscal 2023 has a 53-week accounting period, and fiscal 2022 had a 52-week accounting period.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and apply judgments that affect the reported amounts. Actual results could differ from those estimates. The most significant estimates include those used in the valuation of inventory, property and equipment, self-insurance liabilities, leases and income taxes. Management periodically evaluates estimates used in the preparation of the consolidated financial statements for continued reasonableness. Appropriate adjustments, if any, to the estimates used are made prospectively.

Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Leases - Lease Cost (Details) - USD ($) $ in Thousands	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Leases
Operating lease cost	$ 15,521	$ 15,443	$ 46,930	$ 44,326
Variable lease cost	2,628	2,510	8,406	7,423
Short term lease cost	393	343	1,171	1,062
Total lease cost	$ 18,542	$ 18,296	$ 56,507	$ 52,811

Impairment of Assets (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
Impairment of Assets (Details) - USD ($) $ in Thousands	Oct. 28, 2023	Oct. 28, 2023
Impairment of Assets
Asset impairment	$ 178	$ 178

Commitments and Contingencies - Legal Proceedings (Details) $ in Millions	3 Months Ended
	Oct. 28, 2023 USD ($) lawsuit
Commitments and Contingencies
Number of putative class action lawsuits \| lawsuit	4
Accrued expenses
Commitments and Contingencies
Accrued litigation liability \| $	$ 0.8

Leases (Details) $ in Thousands	1 Months Ended		3 Months Ended	9 Months Ended
Leases (Details) $ in Thousands	Sep. 30, 2022 USD ($) period	Apr. 30, 2022 USD ($) period	Oct. 29, 2022 USD ($)	Oct. 29, 2022 USD ($)	Oct. 28, 2023
Leases
Lease term					5 years
Gain on sale-leasebacks			$ 29,168	$ 64,088
Distribution Center Darlington, South Carolina
Leases
Sale leaseback transaction, term of lease		20 years
Sale leaseback transaction, number of additional periods \| period		6
Sale leaseback transaction, renewal term		5 years
Gain on sale-leasebacks		$ 34,900
Distribution Center Roland, Oklahoma
Leases
Sale leaseback transaction, term of lease	15 years
Sale leaseback transaction, number of additional periods \| period	6
Sale leaseback transaction, renewal term	5 years
Gain on sale-leasebacks	$ 29,200
Minimum
Leases
Extension term					1 year
Maximum
Leases
Extension term					5 years

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Oct. 28, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Stock Repurchases (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Oct. 29, 2022	Oct. 28, 2023
Stock Repurchases
Total number of shares purchased	331
Average price paid per share (including commissions)	$ 30.22
Total investment	$ 10,000
Remaining value of shares available for repurchase		$ 50,000

Significant Accounting Policies (Details)	12 Months Ended
Significant Accounting Policies (Details)	Feb. 03, 2024	Jan. 28, 2023	Oct. 28, 2023 state store
Significant Accounting Policies
Number of stores operated \| store			606
Number of states in which company operates \| state			33
Length of fiscal year	371 days	364 days

Revolving Credit Facility (Details) $ in Thousands		1 Months Ended
Revolving Credit Facility (Details) $ in Thousands	Oct. 27, 2011 USD ($)	May 31, 2023 USD ($) agreement	Oct. 28, 2023 USD ($)
Line of Credit
Revolving Line of Credit
Term of credit facility	5 years
Maximum borrowing capacity	$ 50,000	$ 75,000
Borrowing capacity, accordion feature		25,000
Maximum borrowing capacity including accordion expansion		$ 100,000
Number of covenants \| agreement		1
Unused commitment fee (as a percent)		0.20%
Debt outstanding			$ 0
Line of Credit \| Secured Overnight Financing Rate
Revolving Line of Credit
Increase pricing for loans (as a percent)		0.10%
Line of Credit \| Federal Fund Rate
Revolving Line of Credit
Margin added to variable rate (as a percent)		0.50%
Line of Credit \| Eurodollar Rate
Revolving Line of Credit
Increase pricing for loans (as a percent)		1.00%
Letter of Credit
Revolving Line of Credit
Debt outstanding			$ 600
First interest rate \| Line of Credit \| Eurodollar Rate
Revolving Line of Credit
Margin added to variable rate (as a percent)		1.25%
First interest rate \| Line of Credit \| Federal Funds or Eurodollar Rate
Revolving Line of Credit
Margin added to variable rate (as a percent)		0.25%
Second interest rate \| Line of Credit \| Eurodollar Rate
Revolving Line of Credit
Margin added to variable rate (as a percent)		1.50%
Second interest rate \| Line of Credit \| Federal Funds or Eurodollar Rate
Revolving Line of Credit
Margin added to variable rate (as a percent)		0.50%
Third interest rate \| Line of Credit \| Eurodollar Rate
Revolving Line of Credit
Margin added to variable rate (as a percent)		1.75%
Third interest rate \| Line of Credit \| Federal Funds or Eurodollar Rate
Revolving Line of Credit
Margin added to variable rate (as a percent)		0.75%

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Paid in Capital	Retained Earnings	Treasury Stock	Total
Balances at Jan. 29, 2022	$ 159	$ 101,037	$ 272,158	$ (257,211)	$ 116,143
Balances (in shares) at Jan. 29, 2022	16,090,365
Balances (in shares) at Jan. 29, 2022				7,473,155
Increase (Decrease) in Stockholders' Equity
Vesting of nonvested shares	$ 1				1
Issuance of nonvested shares (in shares)	109,157
Issuance of common stock under incentive plan, net of shares withheld for taxes (in shares)	15,977
Forfeiture of nonvested shares (in shares)	(15,761)
Stock-based compensation expense		2,277			2,277
Net share settlement of nonvested shares	$ (1)	(2,127)			(2,128)
Net share settlement of nonvested shares (in shares)	(40,345)
Repurchase of common stock				$ (5,317)	(5,317)
Repurchase of common stock (in shares)				170,436
Net (loss) income			30,203		30,203
Balances at Apr. 30, 2022	$ 159	101,187	302,361	$ (262,528)	141,179
Balances (in shares) at Apr. 30, 2022	16,159,393
Balances (in shares) at Apr. 30, 2022				7,643,591
Balances at Jan. 29, 2022	$ 159	101,037	272,158	$ (257,211)	116,143
Balances (in shares) at Jan. 29, 2022	16,090,365
Balances (in shares) at Jan. 29, 2022				7,473,155
Increase (Decrease) in Stockholders' Equity
Net (loss) income					52,255
Balances at Oct. 29, 2022	$ 160	101,100	324,413	$ (267,211)	158,462
Balances (in shares) at Oct. 29, 2022	16,160,267
Balances (in shares) at Oct. 29, 2022				7,804,013
Balances at Apr. 30, 2022	$ 159	101,187	302,361	$ (262,528)	141,179
Balances (in shares) at Apr. 30, 2022	16,159,393
Balances (in shares) at Apr. 30, 2022				7,643,591
Increase (Decrease) in Stockholders' Equity
Issuance of nonvested shares (in shares)	29,938
Forfeiture of nonvested shares (in shares)	(5,379)
Stock-based compensation expense		(338)			(338)
Net share settlement of nonvested shares		(12)			(12)
Net share settlement of nonvested shares (in shares)	(527)
Repurchase of common stock				$ (4,683)	(4,683)
Repurchase of common stock (in shares)				160,422
Net (loss) income			(2,536)		(2,536)
Balances at Jul. 30, 2022	$ 159	100,837	299,825	$ (267,211)	133,610
Balances (in shares) at Jul. 30, 2022	16,183,425
Balances (in shares) at Jul. 30, 2022				7,804,013
Increase (Decrease) in Stockholders' Equity
Vesting of nonvested shares	$ 1				1
Issuance of nonvested shares (in shares)	1,226
Forfeiture of nonvested shares (in shares)	(20,448)
Stock-based compensation expense		332			332
Net share settlement of nonvested shares		(69)			(69)
Net share settlement of nonvested shares (in shares)	(3,936)
Net (loss) income			24,588		24,588
Balances at Oct. 29, 2022	$ 160	101,100	324,413	$ (267,211)	158,462
Balances (in shares) at Oct. 29, 2022	16,160,267
Balances (in shares) at Oct. 29, 2022				7,804,013
Balances at Jan. 28, 2023	$ 160	102,445	331,050	$ (267,211)	$ 166,444
Balances (in shares) at Jan. 28, 2023	16,158,494				16,158,494
Balances (in shares) at Jan. 28, 2023				7,804,013
Increase (Decrease) in Stockholders' Equity
Vesting of nonvested shares	$ 1				$ 1
Issuance of nonvested shares (in shares)	1,500
Forfeiture of nonvested shares (in shares)	(9,647)
Stock-based compensation expense		935			935
Net share settlement of nonvested shares	$ (1)	(782)			(783)
Net share settlement of nonvested shares (in shares)	(33,432)
Net (loss) income			(6,635)		(6,635)
Balances at Apr. 29, 2023	$ 160	102,598	324,415	$ (267,211)	159,962
Balances (in shares) at Apr. 29, 2023	16,116,915
Balances (in shares) at Apr. 29, 2023				7,804,013
Balances at Jan. 28, 2023	$ 160	102,445	331,050	$ (267,211)	$ 166,444
Balances (in shares) at Jan. 28, 2023	16,158,494				16,158,494
Balances (in shares) at Jan. 28, 2023				7,804,013
Increase (Decrease) in Stockholders' Equity
Net (loss) income					$ (15,530)
Balances at Oct. 28, 2023	$ 160	104,597	315,520	$ (267,211)	$ 153,066
Balances (in shares) at Oct. 28, 2023	16,348,358				16,348,358
Balances (in shares) at Oct. 28, 2023				7,804,013	7,804,013
Balances at Apr. 29, 2023	$ 160	102,598	324,415	$ (267,211)	$ 159,962
Balances (in shares) at Apr. 29, 2023	16,116,915
Balances (in shares) at Apr. 29, 2023				7,804,013
Increase (Decrease) in Stockholders' Equity
Issuance of nonvested shares (in shares)	259,136
Forfeiture of nonvested shares (in shares)	(6,581)
Stock-based compensation expense		1,049			1,049
Net share settlement of nonvested shares		(26)			(26)
Net share settlement of nonvested shares (in shares)	(1,400)
Net (loss) income			(5,032)		(5,032)
Balances at Jul. 29, 2023	$ 160	103,621	319,383	$ (267,211)	155,953
Balances (in shares) at Jul. 29, 2023	16,368,070
Balances (in shares) at Jul. 29, 2023				7,804,013
Increase (Decrease) in Stockholders' Equity
Forfeiture of nonvested shares (in shares)	(17,787)
Stock-based compensation expense		1,018			1,018
Net share settlement of nonvested shares		(42)			(42)
Net share settlement of nonvested shares (in shares)	(1,925)
Net (loss) income			(3,863)		(3,863)
Balances at Oct. 28, 2023	$ 160	$ 104,597	$ 315,520	$ (267,211)	$ 153,066
Balances (in shares) at Oct. 28, 2023	16,348,358				16,348,358
Balances (in shares) at Oct. 28, 2023				7,804,013	7,804,013

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Oct. 28, 2023	Jan. 28, 2023
Condensed Consolidated Balance Sheets
Accumulated depreciation	$ 272,238	$ 262,525
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	32,000,000	32,000,000
Common stock, shares issued	16,348,358	16,158,494
Common stock, shares outstanding	8,544,345	8,354,481
Treasury stock, shares	7,804,013

Stock Repurchases (Tables)

9 Months Ended

Oct. 28, 2023

Stockholders' Equity

Schedule of activity related to stock repurchases


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Total number of shares purchased		—		—		—		331
Average price paid per share (including commissions)	$	—	$	—	$	—	$	30.22
Total investment	$	—	$	—	$	—	$	10,000

Revenue

9 Months Ended

Oct. 28, 2023

Revenue

Revenue

9. Revenue

Revenue Recognition

The Company’s primary source of revenue is derived from the sale of clothing and accessories to its customers with the Company’s performance obligations satisfied immediately when the customer pays for their purchase and receives the merchandise. Sales taxes collected by the Company from customers are excluded from revenue. Revenue from layaway sales is recognized at the point in time when the merchandise is paid for and control of the goods is transferred to the customer, thereby satisfying the Company’s performance obligation. The Company defers revenue from the sale of gift cards and recognizes the associated revenue upon the redemption of the cards by customers to purchase merchandise.

Sales Returns

The Company allows customers to return merchandise for up to 30 days after the date of sale. Expected refunds to customers are recorded based on estimated margin using historical return information.

Disaggregation of Revenue

The Company’s retail operations represent a single operating segment based on the way the Company manages its business. Operating decisions and resource allocation decisions are made at the Company level in order to maintain a consistent retail store presentation. The Company’s retail stores sell similar products, use similar processes to sell those products and sell their products to similar classes of customers.

In the following table, the Company’s revenue from contracts with customers is disaggregated by “CITI” or major merchandise category. The percentage of net sales for each CITI with the merchandise assortment was approximately:


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 28,		October 29,		October 28,		October 29,
	2023		2022		2023		2022
Ladies	26	%	26	%	27	%	27	%
Kids	24	%	25	%	22	%	22	%
Accessories & Beauty	17	%	17	%	18	%	17	%
Mens	17	%	17	%	17	%	18	%
Footwear	9	%	7	%	8	%	8	%
Home & Lifestyle	7	%	8	%	8	%	8	%

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Oct. 28, 2023	Jan. 28, 2023
Current assets:
Cash and cash equivalents	$ 59,726	$ 103,495
Inventory	129,727	105,794
Prepaid and other current assets	11,266	12,977
Income tax receivable	3,306	615
Total current assets	204,025	222,881
Property and equipment, net of accumulated depreciation of $272,238 and $262,525 as of October 28, 2023 and January 28, 2023, respectively	56,658	60,106
Operating lease right of use assets	239,282	257,195
Deferred income taxes	7,197	2,893
Other assets	1,050	1,183
Total assets	508,212	544,258
Current liabilities:
Accounts payable	83,393	80,670
Operating lease liabilities	46,511	52,661
Accrued expenses	15,983	16,055
Accrued compensation	9,002	10,823
Layaway deposits	1,269	344
Total current liabilities	156,158	160,553
Noncurrent operating lease liabilities	196,856	214,939
Other long-term liabilities	2,132	2,322
Total liabilities	355,146	377,814
Stockholders' equity:
Common stock, $0.01 par value. Authorized 32,000,000 shares; 16,348,358 shares issued as of October 28, 2023 and 16,158,494 shares issued as of January 28, 2023; 8,544,345 shares outstanding as of October 28, 2023 and 8,354,481 shares outstanding as of January 28, 2023	160	160
Paid in capital	104,597	102,445
Retained earnings	315,520	331,050
Treasury stock, at cost; 7,804,013 shares held as of October 28, 2023 and January 28, 2023	(267,211)	(267,211)
Total stockholders' equity	153,066	166,444
Commitments and contingencies (Note 7)
Total liabilities and stockholders' equity	$ 508,212	$ 544,258

Income Taxes

9 Months Ended

Oct. 28, 2023

Income Taxes

Income Taxes

6. Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. 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. If there is a change in tax rates, the Company would recognize the impact of such change in income in the period that includes the enactment date.

The Company has historically used the annual effective tax rate method to calculate income taxes. For the first thirty-nine weeks of 2023, the Company used the discrete effective tax rate method to determine its tax expense based upon interim results. The Company determined that since small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the first thirty-nine weeks of 2023.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details

Earnings per Share

9 Months Ended

Oct. 28, 2023

Earnings per Share

Earnings per Share

3. Earnings per Share

Basic earnings per common share amounts are calculated using the weighted average number of common shares outstanding for the period. Diluted earnings per common share amounts are calculated using the weighted average number of common shares outstanding plus the additional dilution for all potentially dilutive securities, such as nonvested restricted stock. During loss periods, diluted loss per share amounts are based on the weighted average number of common shares outstanding because the inclusion of common stock equivalents would be antidilutive.

The dilutive effect of stock-based compensation arrangements is accounted for using the treasury stock method. The Company includes as assumed proceeds the amount of compensation cost attributed to future services and not yet recognized. For the third quarter of 2023 and 2022, there were 318,000 and 220,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution. For the thirty-nine weeks ended October 28, 2023 and October 29, 2022, there were 259,000 and 226,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

The following table provides a reconciliation of the weighted average number of common shares outstanding used to calculate basic earnings per share to the number of common shares and common stock equivalents outstanding used in calculating diluted earnings per share:


	Thirteen Weeks Ended
	October 28, 2023	October 29, 2022
Weighted average number of common shares outstanding	8,237,729	8,145,318
Incremental shares from assumed vesting of nonvested restricted stock	—	—
Weighted average number of common shares and common stock equivalents outstanding	8,237,729	8,145,318


	Thirty-Nine Weeks Ended
	October 28, 2023	October 29, 2022
Weighted average number of common shares outstanding	8,214,907	8,236,836
Incremental shares from assumed vesting of nonvested restricted stock	—	—
Weighted average number of common shares and common stock equivalents outstanding	8,214,907	8,236,836

Leases (Tables)

9 Months Ended

Oct. 28, 2023

Leases

Schedule of lease expense

Lease costs consisted of the following (in thousands):


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Operating lease cost	$	15,521	$	15,443	$	46,930	$	44,326
Variable lease cost		2,628		2,510		8,406		7,423
Short term lease cost		393		343		1,171		1,062
Total lease cost	$	18,542	$	18,296	$	56,507	$	52,811

Schedule of future minimum rent payments under operating leases


Fiscal Year	Lease Costs
Remainder of 2023	$	10,896
2024		61,555
2025		51,678
2026		40,248
2027		29,574
Thereafter		124,026
Total future minimum lease payments		317,977
Less: imputed interest		(74,610)	(1)
Total present value of lease liabilities	$	243,367	(2)

(1)

Calculated using the discount rate for each lease.

(2)

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

Schedule of supplemental cash flow and other information

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


	Thirty-Nine Weeks Ended
	October 28, 2023		October 29, 2022
Cash paid for operating leases	$	52,734	$	44,754
Right of use assets obtained in exchange for new operating lease liabilities	$	22,322	$	95,809

Weighted average remaining lease term (years) - operating leases		7.60		8.11
Weighted average discount rate - operating leases		4.90%		4.38%

Significant Accounting Policies

9 Months Ended

Oct. 28, 2023

Significant Accounting Policies

Significant Accounting Policies

1. Significant Accounting Policies

Basis of Presentation

Citi Trends, Inc. 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 October 28, 2023, the Company operated 606 stores in urban, suburban and rural markets in 33 states.

The condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim reporting and are unaudited. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The condensed consolidated balance sheet as of January 28, 2023 is derived from the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023 (the “2022 Form 10-K”). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2022 Form 10-K. Operating results for the third quarter of 2023 are not necessarily indicative of the results that may be expected for the fiscal year as a result of the seasonality of the business and the current economic uncertainty.

Fiscal Year

The following contains references to fiscal years 2023 and 2022, which represent fiscal years ending or ended on February 3, 2024 and January 28, 2023, respectively. Fiscal 2023 has a 53-week accounting period, and fiscal 2022 had a 52-week accounting period.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and apply judgments that affect the reported amounts. Actual results could differ from those estimates.

The most significant estimates include those used in the valuation of inventory, property and equipment, self-insurance liabilities, leases and income taxes. Management periodically evaluates estimates used in the preparation of the consolidated financial statements for continued reasonableness. Appropriate adjustments, if any, to the estimates used are made prospectively.

Leases - Future Minimum Lease Payments (Details) $ in Thousands	Oct. 28, 2023 USD ($)
Future minimum lease payments under operating leases
Remainder of 2023	$ 10,896
2024	61,555
2025	51,678
2026	40,248
2027	29,574
Thereafter	124,026
Total future minimum lease payments	317,977
Less: imputed interest	(74,610)
Total present value of lease liabilities	$ 243,367
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Operating Lease, Liability, Current, Operating Lease, Liability, Noncurrent

Revenue (Tables)

9 Months Ended

Oct. 28, 2023

Revenue

Schedule of revenue from contracts with customers disaggregated by major product line


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 28,		October 29,		October 28,		October 29,
	2023		2022		2023		2022
Ladies	26	%	26	%	27	%	27	%
Kids	24	%	25	%	22	%	22	%
Accessories & Beauty	17	%	17	%	18	%	17	%
Mens	17	%	17	%	17	%	18	%
Footwear	9	%	7	%	8	%	8	%
Home & Lifestyle	7	%	8	%	8	%	8	%