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What changed in Citi Trends Inc's 10-K — 2025 vs 2026

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Paragraph-level year-over-year comparison of Citi Trends Inc's 2025 and 2026 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2026 report.

+253 added−300 removedSource: 10-K (2025-04-16) vs 10-K (2024-04-18)

Top changes in Citi Trends Inc's 2026 10-K

253 paragraphs added · 300 removed · 187 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

63 edited+37 added−32 removed17 unchanged
Biggest changeAlso, sizes for newborns, infants and toddlers, as well as kids uniforms and kids accessories. ● Accessories & Beauty: fashionable handbags, luggage, hats, belts, sunglasses, jewelry and watches for men and women, underwear and socks for the entire family, as well as beauty and fragrance offerings for women and men. ● Home & Lifestyle: 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. ● Footwear: casual and dress footwear in sizes for Mens, Ladies and Kids.
Biggest changeAlso, sizes for newborns, infants and toddlers, as well as kids uniforms, accessories and sleepwear. ● Accessories & Beauty: fashionable handbags, luggage, hats, belts, sunglasses, jewelry and watches for men and women, underwear and socks for the entire family, as well as beauty and fragrance offerings for women and men. ● Home & Lifestyle: 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. ● Footwear: casual and dress footwear in sizes for men, women and kids. 6 Table of Contents The following table provides the percentage of net sales for each Division within the store: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Divisions 2024 2023 2022 Womens ​ 27 % 27 % 26 % Kids ​ 23 % 23 % 23 % Accessories & Beauty ​ 17 % 17 % 18 % Mens ​ 17 % 17 % 17 % Home & Lifestyle ​ 10 % 9 % 8 % Footwear ​ 6 % 7 % 8 % ​ Our goal is to deliver outstanding value every day.
Sourcing and Allocation We believe that our flexible, value-conscious business model and ever-changing assortment that results from our fresh flow of inventory differentiates us from traditional retailers. 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.
Sourcing and Allocation We believe that our flexible, value-conscious business model and ever-changing assortment that results from our fresh flow of inventory differentiates us from traditional retailers. We source our merchandise from thousands of domestic manufacturers and importers. Our merchandising division consists of a buying team, a planning team and an allocation team.
“ 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.
“ CITI LIFE ” - Corporate Culture. 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.
We strive to make Citi Trends a diverse, inclusive and safe workplace, with opportunities for our associates to grow and develop in 8 Table of Contents their careers, supported by competitive compensation, benefits and health and wellness programs, and by programs that build connections between our associates and their communities. Associates.
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. 9 Table of Contents Associates.
These associates work in every division and at every level of the company and reflect a diversity of genders, ethnicities and geographies. 9 Table of Contents Underscoring everything we do, the Council creates and oversees initiatives that drive positive change and growth for our customers and associates.
These associates work in every division and at every level of the company and reflect a diversity of genders, ethnicities and geographies. 10 Table of Contents Underscoring everything we do, the Council creates and oversees initiatives that drive positive change and growth for our customers and associates.
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. We believe our management team is integral to our success and positions us well for long-term growth.
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.
We do this by offering access to fashion and trends at affordable prices that are desirable for lower income 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.
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.
We have well-established store operating policies and procedures and an extensive 30-day in-store training program for new store management members. 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 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.
It is designed to increase awareness of Black-owned businesses, and we provide ten $5,000 grants to Black business owners each year. Since its launch, CITI cares , on behalf of Citi Trends, has awarded a total of $150,000 to 30 outstanding Black entrepreneurs.
It is designed to increase awareness of Black-owned businesses, and we provide ten $5,000 grants to Black business owners each year. Since its launch, CITI cares , on behalf of Citi Trends, has awarded a total of $200,000 to 40 outstanding Black entrepreneurs.
We use our social media 7 Table of Contents 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.
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 merchandise is represented by six distinct “ Citis ” within the store: ● Ladies: a wide selection of apparel for juniors, missy and women (plus size), including trend right sportswear, outerwear, sleepwear, lingerie and scrubs. ● Mens: a wide selection of apparel for men and big men, including trend right sportswear and outerwear. ● Kids: a wide assortment of basics, fashion and trends for boys up to size 20 and girls up to size 16.
Our merchandise is represented by six distinct divisions within the store: ● Womens: a wide selection of apparel for juniors, missy and plus size, including trend right sportswear, outerwear, sleepwear, lingerie and scrubs. ● Mens: a wide selection of apparel for men and big men, including trend right sportswear and outerwear. ● Kids: a wide assortment of basics, fashion and trends for boys up to size 20 and girls up to size 16.
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 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.
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. See Item 1A. Risk Factors in this Report for additional information regarding competition in our markets.
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. See Item 1A. Risk Factors in this Report for additional information regarding competition in our markets.
As of February 3, 2024, we had approximately 2,700 full-time and approximately 2,100 part-time associates. Of these associates, approximately 4,000 are employed in our stores and the remainder are employed in our distribution centers, buying offices and corporate office. We are not a party to any collective bargaining agreements, and none of our associates are represented by a labor union.
As of February 1, 2025, we had approximately 2,600 full-time and approximately 2,000 part-time associates. Of these associates, approximately 3,800 are employed in our stores and the remainder are employed in our distribution centers, buying offices and corporate office. We are not a party to any collective bargaining agreements, and none of our associates are represented by a labor union.
Our website, cititrends.com , showcases our latest in-store products and provides information about our business, our locations, and more. Distribution 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. Our stores receive multiple shipments of merchandise each week from our distribution centers.
Our website, cititrends.com , showcases our latest products and provides information about our business, our store locations, and more. 8 Table of Contents Distribution 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.
We believe these core values represent the emotional connection that our customers and associates have with Citi Trends and are integral to the successful achievement of our long-term growth plans. Diversity and Inclusion . We believe that a diverse and inclusive team is critical to our success.
We believe these core values represent the emotional connection that our customers and associates have with Citi Trends and are integral to the successful achievement of our long-term growth plans. Diversity and Inclusion .
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.
Highly Talented and Motivated Leadership Team . 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.
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 .
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 .
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.
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 merchandise through multiple channels to ensure a fresh and trendy assortment.
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.
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 1, 2025, we operated 591 stores in 33 states.
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.
Business Strategy 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.
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.
Our associates are critical to achieving our goals, and we strive to hire high-energy and motivated associates. We have well-established store operating policies and procedures and an extensive 30-day in-store training program for new store management members.
Accordingly, we are committed to the health, safety and wellness of our associates. We follow guidance released by state and federal health officials to create a safe environment for our associates to work and our customers to shop. Compensation and Benefits . We provide competitive compensation and comprehensive benefits programs to help meet the needs of our associates.
The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health, safety and wellness of our associates. We follow guidance released by state and federal health officials to create a safe environment for our associates to work and our customers to shop. Compensation and Benefits .
In addition to salaries, these programs (which vary by position) include annual bonuses, stock awards, a 401(k) match, healthcare and insurance benefits, paid time off and personal/family leave. Training and Development . Our associates are critical to achieving our goals, and we strive to hire high-energy and motivated associates.
We provide competitive compensation and comprehensive benefits programs to help meet the needs of our associates. In addition to salaries, these programs (which vary by position) include annual bonuses, stock awards, a 401(k) match, healthcare and insurance benefits, paid time off and personal/family leave. Training and Development .
The flexibility of our model allows our pricing structure to fluctuate in response to marketplace changes while maintaining our merchandise margins. Both branded and non-branded offerings validate our fashion and value to our customers.
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. Both branded and non-branded offerings validate our fashion and value to our customers.
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.
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.
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. The customer then makes additional payments every two weeks and has 60 days to complete the purchase.
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.
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.
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 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.
In addition, we utilize a vendor direct-to-store shipping program that enables us to expedite the delivery of select merchandise to our stores by shipping directly from our vendors. The Darlington distribution center has 550,000 square feet of space, and the Roland distribution center has 565,000 square feet of space.
Our stores receive multiple shipments of merchandise each week from our distribution centers. In addition, we utilize a vendor direct-to-store shipping program that enables us to expedite the delivery of select merchandise to our stores by shipping directly from our vendors.
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.
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.
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.
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.
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.
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.
Information Technology and Systems We have information systems in place to support our core business functions, using a combination of industry-standard third-party products and internally developed applications. 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.
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. In fiscal 2024, we launched multiple initiatives to advance our technology ecosystem.
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; 90% of our store associates are African American or multicultural, and more than 91% of our store management positions are filled by women.
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 in our stores that creates a high level of connectivity with our customers.
In addition, we require convenient site accessibility, as well as strong co-tenants, such as grocery stores, dollar stores, beauty stores and other value stores. We aim to be an integral part of our customers ’ community by providing a compelling shopping destination and career opportunities.
We aim to be an integral part of our customers ’ community by providing a compelling shopping destination and career opportunities.
As a result, our store associates cultivate a unique culture at 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 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, 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.
We also 6 Table of Contents 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. We allocate merchandise across our stores according to fact-based plans that are created by our planning and allocation teams.
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.
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.
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 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.
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.
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.
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. People.
We strive to foster an intentionally inclusive, diverse and productive working environment where our associates are valued and respected. We continue to focus on attracting, developing and retaining team members that reflect the diverse communities we serve. As of February 3, 2024, 85% of our team members are African American or multicultural and 82% are female.
We continue to focus on attracting, developing and retaining team members that reflect the diverse communities we serve. As of February 1, 2025, 85% of our team members are African American or multicultural and 81% are female. In addition, three of our eight board members are African American females. Health, Safety and Wellness .
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. Launched in 2021, the program supports Black entrepreneurs who are making an impact in their communities.
It collaborates with community leaders, organizations, individuals, and established programs in local underserved communities. Citi Trends empowers small business owners in our store areas through our Black History Makers Grant program. Launched in 2021, the program supports Black entrepreneurs who are making an impact in their communities.
We cater to entire families and offer a one-stop 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.
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 product offerings.
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.
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.
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.
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 strive to provide our customers with a place that is fresh and fun for the family at prices that don ’ t break the bank . We believe the following business strengths differentiate us from our competitors and are important to our success: Focus on Fashion and Trend Mix .
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 .
This upgrade enabled significant enhancements to our systems and also provides the foundation for future growth and innovation. Competition 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 compete with a broad range of retailers, including national chains, mass merchants, discount stores and specialty stores with both physical locations and online stores.
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 .
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.
Our unique focus on underserved African American and multicultural 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.
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 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.
The distribution centers ’ value-added services include, but are not limited to, receiving, price ticketing, packing and shipping specific store-allocated quantities. We continue to evaluate distribution, transportation and supply chain alternatives to accelerate the movement of merchandise from our vendor origin points to our stores as optimally as possible.
The Darlington distribution center has 550,000 square feet of space, and the Roland distribution center has 565,000 square feet of space. The distribution centers ’ value-added services include, but are not limited to, receiving, price ticketing, packing and shipping specific store-allocated quantities.
Store Operations Our stores are located in the heart of the lower-income neighborhoods we serve. We hire a diverse staff of women and men from the local area surrounding our stores. As of February 3, 2024, 90% of our store associates are African American or multicultural, and more than 91% of our store management positions are filled by women.
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 compelling shopping experience in the communities in which we operate.
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.
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.
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. Friendly and Helpful Store Associates . Our store associates are trained to provide friendly and helpful customer service to deliver a positive shopping experience.
Our store associates are trained to provide friendly and helpful customer service to deliver a positive shopping experience. Many of our store associates live in the neighborhoods where our stores are located and frequently shop our stores themselves.
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. A critical component of our success is to maintain an environment that is neat, clean and organized, where everyone is welcome.
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.
If the purchase is not completed, the customer receives a Citi Trends gift card for amounts paid less a re-stocking and layaway service fee. 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.
The customer then makes additional payments every two weeks and has 60 days to complete the purchase. If the purchase is not completed, the customer receives a Citi Trends gift card for amounts paid less a re-stocking and layaway service fee.
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. In selecting a location, we target urban, suburban and rural markets, and our strategy includes both further densification of existing markets and entering new markets over time.
In selecting a location, we target urban, suburban and rural markets, and our strategy includes both further densification of existing markets and entering new markets over time. In addition, we require convenient site accessibility, as well as strong co-tenants, such as grocery stores, dollar stores, beauty stores and other value stores.
We plan to continue to integrate social and environmental sustainability into business practices to support long-term growth. 5 Table of Contents We strongly believe that our business strategy centered around these four areas will accelerate our long-term sales and earnings growth.
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.
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.
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.
We believe our value proposition provides important access to trends for the lower-income customers we serve. 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 employ high-low pricing strategies; 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.
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.
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.
ITEM 1. BUSINESS Overview 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.
ITEM 1. BUSINESS Overview Citi Trends, Inc. ( “ Citi Trends ” or the “ Company ” ) is a highly differentiated off-price value retailer known for trendy fashions, great brands and amazing prices.
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.
Product and Value 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 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. Superior Value Proposition . We seek to offer high quality, fashionable merchandise for way less spend.
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 with Cultural Cachet and believe that our value proposition provides important access to trends for our customers.
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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.
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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.
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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.
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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.
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As of February 3, 2024, we operated 602 stores in 33 states, with a focus on delivering a memorable store experience anchored in value. 3 Table of Contents 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.
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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.
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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.
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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. 3 Table of Contents Competitive Strengths and Strategies Citi Trends is one of the largest national retailers focused on African American customers.
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We maintain strong sourcing relationships with a large group of suppliers.
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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.
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To foster vendor relationships, we do not ask for typical retail concessions, such as promotional and markdown allowances.
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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.
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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.
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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.
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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.
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Our vendor partnerships enable us to deliver fresh items weekly to our stores.
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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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur stock price has been volatile in the past and may be influenced in the future by a number of factors, including: ● actual or anticipated fluctuations in our operating results; ● changes in preferences or spending habits of our customers; ● changes in securities analysts ’ recommendations or estimates of our financial performance or our failure to meet any such estimates; ● changes in market valuations or operating performance of our competitors or companies similar to ours; ● announcements by us, our competitors or other retailers , including strategic actions by us or our competitors, such as acquisitions, restructurings, significant contracts, joint marketing relationships, joint ventures or capital commitments ; ● market and industry perception of our success, or lack thereof, in pursuing our growth strategy; ● additions and departures of key personnel; ● changes in accounting principles; ● the passage of legislation or other regulatory developments affecting us; ● the trading volume of our common stock in the public market and size of our public float ; ● changes in economic or financial market conditions, including without limitation, the systemic failure of the banking system in the United States or globally; ● global economic, legal and regulatory factors unrelated to our performance; ● our involvement in any litigation or investigations by government authorities, including litigation judgments, settlements or other litigation-related costs; ● cyber events, such as the ransomware incident we experienced in January 2023; ● natural disasters, public health emergencies, terrorist acts, acts of war or periods of civil unrest; and ● the realization of some or all of the risks described in this section entitled “ Risk Factors. ” These and other factors may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock.
Biggest changeOur stock price has been volatile in the past and may be influenced in the future by a number of factors, including: ● changes in securities analysts ’ recommendations or estimates of our financial performance or our failure to meet any such estimates; ● changes in market valuations or operating performance of our competitors or companies similar to ours; ● market and industry perception of our success, or lack thereof, in pursuing our growth strategy; ● changes in accounting principles; ● the trading volume of our common stock in the public market and size of our public float ; and ● the realization of some or all of the risks described in this section entitled “ Risk Factors. ” These and other factors may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock.
Even if we are successful, our business could be adversely affected by any proxy contest or activist stockholder action involving us because: ● responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, can disrupt operations and divert the attention of management and employees, and can lead to uncertainty; ● perceived uncertainties as to future direction may result in the loss of potential acquisitions, collaborations or business opportunities, and may make it more difficult to attract and retain qualified personnel, business partners and suppliers; and ● if individuals are elected to our board of directors with a specific agenda, it may adversely affect our ability to effectively implement our business strategy in a timely manner and create additional value for our stockholders.
Even if we are successful, our business could be adversely affected by any proxy contest or activist stockholder action involving us because: ● responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, disrupt operations, divert the attention of management and employees, and lead to uncertainty; ● perceived uncertainties as to future direction may result in the loss of potential acquisitions, collaborations or business opportunities, and may make it more difficult to attract and retain qualified personnel, business partners and suppliers; and ● if individuals are elected to our board of directors with a specific agenda, it may adversely affect our ability to effectively implement our business strategy in a timely manner and create additional value for our stockholders.
The success of opening new stores is dependent upon, among other things, the current retail environment, the identification of suitable markets and the availability of real estate that meets our criteria for traffic, square footage, co-tenancies, lease economics, demographics, and other factors, the negotiation of acceptable lease terms, construction costs, the increased hiring, training and retention of competent sales personnel, and the effective management of inventory to meet the needs of new and existing stores on a timely basis.
The success of opening new stores is dependent upon, among other things, the current retail environment, the identification of suitable markets and the availability of real estate that meets our criteria for traffic, square footage, co-tenancies, lease economics, demographics, and other factors, the negotiation of acceptable lease terms, construction costs, the hiring, training and retention of competent sales personnel, and the effective management of inventory to meet the needs of new and existing stores on a timely basis.
We also face a variety of other risks generally associated with relying on vendors that do business in foreign markets and import merchandise from abroad, such as: ● geopolitical unrest, supply disruptions or increased shipping costs in China or the Asia-Pacific region where our third-party vendors are located; ● natural disasters, public health emergencies or the threat of terrorism, in particular in countries where our vendors source merchandise; ● increases in merchandise costs due to raw material price inflation or changes in purchasing power caused by fluctuations in currency exchange rates; ● enhanced security measures at United States and foreign ports, which could delay delivery of imports; ● imposition of new or supplemental duties, trade restrictions, sanctions, tariffs, quotas, taxes, environmental regulations, emissions standards and other charges on imports; ● compliance with new or changing import/export controls; ● delayed receipt or non-delivery of goods due to the failure of foreign-source suppliers to comply with import regulations, organized labor strikes or congestion at United States ports; ● concerns about human rights and working conditions in countries where our merchandise is manufactured and produced; and ● local business practice and political issues, including issues relating to compliance with domestic or international labor and environmental standards.
We also face a variety of other risks generally associated with relying on vendors that do business in foreign markets and import merchandise from abroad, such as: ● geopolitical unrest, supply disruptions or increased shipping costs in China or the Asia-Pacific region where our third-party vendors are located; ● natural disasters, public health emergencies or the threat of terrorism, in particular in countries where our vendors source merchandise; ● increases in merchandise costs due to raw material price inflation or changes in purchasing power caused by fluctuations in currency exchange rates; ● enhanced security measures at United States and foreign ports, which could delay delivery of imports; ● imposition of new or supplemental duties, trade restrictions, sanctions, tariffs, quotas, taxes, environmental regulations, emissions standards and other charges on imports; ● compliance with new or changing import/export controls; ● delayed receipt or non-delivery of goods due to the failure of foreign-source suppliers to comply with import regulations, organized labor strikes or congestion at United States ports; ● concerns about human rights and working conditions in countries where our merchandise is manufactured and produced; and 15 Table of Contents ● local business practice and political issues, including issues relating to compliance with domestic or international labor and environmental standards.
The apparel industry in general and our core customer in particular are subject to rapidly evolving fashion trends and shifting consumer demands. Accordingly, our success is heavily dependent on our ability to anticipate, identify and capitalize on emerging fashion and home trends, including products, styles and materials that will appeal to our target consumers.
The apparel industry and our core customer in particular are subject to rapidly evolving fashion trends and shifting consumer demands. Accordingly, our success is heavily dependent on our ability to anticipate, identify and capitalize on emerging fashion and home trends, including products, styles and materials that will appeal to our target consumers.
Failure to maintain the security of employee, customer or vendor information could expose us to litigation, government enforcement actions and materially impact our reputation and business operations. Over the normal course of business operations, we obtain certain private or confidential information of our employees, job applicants, customers, and vendors.
Failure to maintain the security of employee, customer or vendor information could expose us to litigation, government enforcement actions and materially impact our reputation and business operations. Over the normal course of business operations, we may obtain certain private or confidential information of our employees, job applicants, customers, and vendors.
If our manufacturers do not ship orders to us in a timely manner or meet our quality standards, it could cause delays in responding to consumer demands or inventory shortages and negatively affect consumer confidence in the quality and value of our brand or negatively impact our competitive position.
If these manufacturers do not ship orders to us in a timely manner or meet our quality standards, it could cause delays in responding to consumer demands or inventory shortages and negatively affect consumer confidence in the quality and value of our brand or negatively impact our competitive position.
Downturns, or the expectation of a downturn, in general economic conditions, including the effects of unemployment levels, salaries and wage rates, inflation in rent, energy, food and other consumer good prices, interest rates, higher insurance costs , levels of consumer debt, changes in tax rates and policies (including delays in the distribution of tax refunds), government stimulus, consumer confidence, consumer perception of economic conditions, increased fuel costs or fuel shortages, increased shipping, transportation and distribution costs and other macroeconomic factors, could adversely affect consumer spending patterns, our sales and our results of operations.
Downturns, or the expectation of a downturn, in general economic conditions, including the effects of unemployment levels, salaries and wage rates, inflation in rent, energy, food and other consumer good prices, interest rates, higher insurance costs , levels of consumer debt, changes in tax rates and policies (including delays in the distribution of tax refunds), government stimulus, geopolitical conflicts, consumer confidence, consumer perception of economic conditions, increased fuel costs or fuel shortages, increased shipping, transportation and distribution costs and other macroeconomic factors, could adversely affect consumer spending patterns, our sales and our results of operations.
Factors negatively affecting us during the first and fourth quarters, including adverse weather, pandemics or other seasonal public health emergencies, cybersecurity events, unfavorable economic conditions, reduced governmental assistance, and tax refund patterns for our customers, will have a greater adverse effect on our financial condition than if our business was less seasonal. Seasonal fluctuations also affect our inventory levels.
Factors that negatively affect us during the first and fourth quarters, including adverse weather, pandemics or other seasonal public health emergencies, cybersecurity events, unfavorable economic conditions, reduced governmental assistance, and tax refund patterns for our customers, will have a greater adverse effect on our financial condition than if our business was less seasonal. Seasonal fluctuations also affect our inventory levels.
We also compete against local specialty retail stores, regional retail chains, traditional department stores, web-based retail stores and other direct retailers. 10 Table of Contents The level of competition we face from these retailers varies depending on the product segment, as many of our competitors do not offer apparel for the entire family.
We also compete against local specialty retail stores, regional retail chains, traditional department stores, web-based retail stores and other direct retailers. 11 Table of Contents The level of competition we face from these retailers varies depending on the product segment, as many of our competitors do not offer apparel for the entire family.
In either event, our sales may be lower and our cost of sales may be higher than historical levels, which could have a material adverse effect on our business strategy, financial condition and results of operations. 11 Table of Contents We could experience a reduction in sales if we are unable to fulfill our current and future merchandising needs.
In either event, our sales may be lower and our cost of sales may be higher than historical levels, which could have a material adverse effect on our business strategy, financial condition and results of operations. 12 Table of Contents We could experience a reduction in sales if we are unable to fulfill our current and future merchandising needs.
We presently have no intention to reinstate the dividend, and there can be no assurance that we will resume paying dividends on a regular basis . 19 Table of Contents Provisions in our certificate of incorporation and by-laws and Delaware law may delay or prevent our acquisition by a third party.
We presently have no intention to reinstate the dividend, and there can be no assurance that we will resume paying dividends on a regular basis . 18 Table of Contents Provisions in our certificate of incorporation and by-laws and Delaware law may delay or prevent our acquisition by a third party.
We currently rely upon third-party transportation providers for all of our merchandise shipments to our distribution centers and our retail stores.
We rely upon third-party transportation providers for all of our merchandise shipments to our distribution centers and our retail stores.
Any determination to declare and pay cash dividends on our common stock in the future (quarterly or otherwise) will be based, among other things, on our board of directors ’ conclusion in each instance that the declaration and payment of a cash dividend is in the best interest of our stockholders and is in compliance with all laws and agreements applicable to the dividend and upon our financial condition, results of operations, business strategy and cash requirements.
Any determination to declare and pay cash dividends on our common stock in the future will be based, among other things, on our board of directors ’ conclusion in each instance that the declaration and payment of a cash dividend is in the best interest of our stockholders and is in compliance with all laws and agreements applicable to the dividend and upon our financial condition, results of operations, business strategy and cash requirements.
If any of our manufacturers fail to comply with applicable laws or these 14 Table of Contents guidelines, or engage in any socially unacceptable business practices, such as poor working conditions, child labor, disregard for environmental standards or otherwise, our brand reputation could be negatively impacted and our results of operations could in turn be materially adversely affected.
If any of our manufacturers fail to comply with applicable laws or these guidelines, or engage in any socially unacceptable business practices, such as poor working conditions, child labor, disregard for environmental standards or otherwise, our brand reputation could be negatively impacted and our results of operations could in turn be materially adversely affected.
There can be no assurance that our new product offerings will have the same level of acceptance as our product offerings in the past or that we will be able to adequately and timely respond to the preferences of our customers.
Further, there can be no assurance that our new product offerings will have the same level of acceptance as past product offerings or that we will be able to adequately and timely respond to the preferences of our customers.
Like most retailers, we experience significant employee turnover rates, particularly among store sales associates and managers. We therefore must continually attract, hire and train new personnel to meet our staffing needs.
Like most retailers, we experience significant employee turnover rates, particularly among store sales associates and managers and distribution center associates. We therefore must continually attract, hire and train new personnel to meet our staffing needs.
Accordingly, we are subject to the risks, including labor disputes or strikes, union organizing activity, inclement weather, public health emergencies, supply chain interruptions, port delays, increased freight, distribution and transportation costs, associated with such providers ’ ability to provide delivery services to meet outbound shipping needs.
Accordingly, we are subject to risks, including labor disputes or strikes, union organizing activity, inclement weather, public health emergencies, supply chain interruptions, port delays, increased freight, distribution and transportation costs, associated with such providers ’ ability to provide delivery services to meet our shipping needs.
Changes in, expanded enforcement of, or adoption of new federal, state or local laws and regulations governing areas such as minimum wage or living wage requirements, workplace-regulation and other labor or employment benefits laws, supply chain, taxes, including changes to corporate tax rates, privacy and information security, or environmental regulation such as carbon emission standards and environmental, social and governance (ESG) programs, transparency and reporting, could increase our costs of doing business or impact our sales, operations or profitability.
Changes in, expanded enforcement of, or adoption of new federal, state or local laws and regulations governing areas such as minimum wage or living wage requirements, workplace-regulation and other labor or employment benefits laws, supply chain, taxes, including changes to corporate tax rates, privacy and information security, or environmental regulation such as carbon emission standards and sustainability programs, transparency and reporting, could increase our costs of doing business or impact our sales, operations or profitability.
In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements, compliance with those requirements could also result in additional costs. 18 Table of Contents Risks Relating to Ownership of our Common Stock Our stock price is subject to volatility.
In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements, compliance with those requirements could also result in additional costs. Risks Relating to Ownership of our Common Stock Our stock price is subject to volatility.
Historically, our sales and earnings are significantly higher during the first and fourth quarters each year due to the importance of the spring selling season, which includes Easter, and the fall selling season, which includes Christmas.
Historically, our sales and earnings are significantly higher during the first and fourth quarters each year due to the importance of the spring selling season, which includes the tax refund season and Easter, and the fall selling season, which includes Christmas.
Our programs may not be or remain effective or could require increased expenditures, which could have a significant adverse effect on our revenue and results of operations. 16 Table of Contents Risks Related to Regulatory, Legal and Cybersecurity Changes in government regulations could have an adverse effect on our business strategy, financial condition and results of operations.
Our programs may not be or remain effective or could require increased expenditures, which could have a significant adverse effect on our revenue and results of operations. Risks Related to Regulatory, Legal and Cybersecurity Changes in government regulations could have an adverse effect on our business strategy, financial condition and results of operations.
Patent and Trademark Office that we believe are important to our business. 12 Table of Contents We cannot assure that these registrations will prevent imitation of our name, merchandising concept, store design or private label merchandise or the infringement of our other intellectual property rights by others.
Patent and Trademark Office that we believe are important to our business. We cannot assure that these registrations will prevent imitation of our name, merchandising concept, store design or private label merchandise or the infringement of our other intellectual property rights by others.
Although we maintain insurance on our stores, distribution centers and other facilities, the economic effects of a natural disaster that affects our distribution centers and/or a significant number of our stores could have an adverse effect on our business strategy, financial condition and results of operations.
Although we maintain insurance on our stores, distribution centers and other facilities, the economic effects of a 14 Table of Contents natural disaster that affects our distribution centers and/or a significant number of our stores could have an adverse effect on our business strategy, financial condition and results of operations.
The success of an individual store can depend on favorable placement within a given shopping center and from the volume of traffic generated by the other destination retailers and the anchor stores in the shopping centers where our stores are located.
The success of an individual store can depend on favorable placement within a given shopping center as well as the volume of traffic generated by the other destination retailers and the anchor stores in the shopping centers where our stores are located.
As of February 3, 2024, we had no borrowings outstanding under this facility. Although we currently have available a credit facility to fund our current operating needs, if necessary, we cannot be certain that we will be able to replace our existing credit facility or refinance any future debt at a reasonable cost when necessary.
As of February 1, 2025, we had no borrowings outstanding under this facility. Although we currently have available a credit facility to fund our current operating needs, if necessary, we cannot be certain that we will be able to replace our existing credit facility or refinance any future debt at a reasonable cost when necessary.
We maintain a revolving credit facility with Bank of America through April 15, 2026 which provides for a $75 million credit commitment and a $25 million uncommitted “ accordion ” feature that under certain circumstances could allow us to increase the size of the facility to $100 million.
We maintain a revolving credit facility with Bank of America through April 10, 2030 which provides for a $75 million credit commitment and a $25 million uncommitted “ accordion ” feature that under certain circumstances could allow us to increase the size of the facility to $100 million.
Our ability to meet our labor needs and control labor costs is subject to various external factors, including increased market pressures with respect to prevailing wage rates, unemployment levels and health and other insurance costs; inflation, the impact of legislation or regulations governing labor relations, immigration, minimum wage, and healthcare benefits; changing demographics; the impact of future pandemics or other public health emergencies; and our reputation within the labor market.
Our ability to meet our labor needs and to control labor costs is subject to various external factors, including increased market pressures with respect to prevailing wage rates, unemployment levels and health and other insurance costs; inflation; the impact of legislation or regulations governing labor relations, minimum wage, and healthcare benefits; changing demographics; and our reputation within the labor market.
Risks Related to our Strategy We may not be able to sustain our growth plans or successfully implement our long-term strategic goals. Our growth strategy includes successfully opening and operating new stores, optimizing product assortment and investing in infrastructure to expand our specialty value model within our current markets and into new geographic regions and customer demographics.
Risks Related to our Strategy We may not be able to sustain our growth plans or successfully implement our long-term strategic goals. Our growth strategy includes successfully opening and operating new stores, optimizing product assortment and investing in infrastructure to expand our off-price value model within our current markets and into new geographic regions.
In addition, the stock markets have experienced significant price and trading volume fluctuations from time to time, including in recent months, and the market prices and trading volumes of the equity securities of retailers have been volatile, including our common stock. These broad market fluctuations may adversely affect the market price of our common stock .
In addition, the stock markets experience significant price and trading volume fluctuations from time to time, and the market prices and trading volumes of the equity securities of retailers have been volatile, including our common stock. These broad market fluctuations may adversely affect the market price of our common stock .
Additionally, we are embarking on renovating a number of our stores. If these remodels do not attract new or existing customers to our stores or otherwise drive an increase in sales then this may have an adverse impact on our business and results of operations. We do not sell our products through the internet.
Additionally, we are in the process of renovating a number of our stores. If these remodels do not attract new or existing customers to our stores or otherwise drive an increase in sales, then this may have an adverse impact on our business and results of operations. We do not offer the option to purchase our products through the internet.
Although we use marketing to drive customer traffic through various media including digital/social media and e-mail, some of our competitors expend more for their marketing programs than we do, or use different approaches than we do, which may provide them with a competitive advantage.
Customer traffic and demand for our merchandise may be influenced by our marketing efforts. Although we use marketing to drive customer traffic through various media including digital/social media and e-mail, some of our competitors expend more for their marketing programs than we do, or use different approaches than we do, which may provide them with a competitive advantage.
Changes in the capital and credit markets, including market disruptions, limited liquidity, inflation and interest rate fluctuations may increase the cost of financing or restrict our access to these potential sources of liquidity. Our continued access to these liquidity sources on favorable terms depends on multiple factors, including our operating performance and maintaining strong credit ratings.
Changes in the capital and credit markets, including market disruptions, limited liquidity, inflation and interest rate fluctuations may increase the cost of financing or restrict our access to these potential sources of liquidity. Our continued access to these liquidity sources on favorable terms depends on multiple factors, including our operating performance and, if applicable, credit rating.
As a result of this competition, we may experience pricing pressures, increased marketing expenditures, increased costs to open new stores, as well as loss of market share, which could materially and adversely affect our business strategy, financial condition and results of operations.
As a result of this competition, we may experience pricing pressures, increased marketing expenditures, as well as loss of market share, which could materially and adversely affect our business strategy, financial condition and results of operations.
We compete against a diverse group of retailers, including national chains, mass merchants, smaller discount retail chains that sell only women ’ s products and general merchandise discount stores that offer a variety of products, including apparel, home fashions and other merchandise we sell for the value-conscious consumer.
The retail apparel and home fashion businesses are highly competitive, and we compete against a diverse group of retailers, including national chains, mass merchants, smaller discount retail chains, some of which sell only women ’ s products, and general merchandise discount stores that offer a variety of products, including apparel, home fashions and other merchandise we sell for the value-conscious consumer.
We purchase our merchandise from a large assortment of vendors, and a substantial portion of this merchandise is manufactured outside of the United States and imported by our vendors from countries such as China and other areas of the Asia-Pacific region.
Adverse trade restrictions may disrupt our supply of merchandise. We purchase our merchandise from a large assortment of vendors, and a substantial portion of this merchandise is manufactured outside of the United States and imported by our vendors from countries such as China and other areas of the Asia-Pacific region.
A significant increase in the turnover rate among our store sales associates and managers would increase our recruiting and training costs and could cause us to be unable to service our customers effectively.
A significant increase in the turnover rate would increase our recruiting and training costs and could cause us to be unable to service our customers effectively.
In addition, a number of our suppliers are smaller, less capitalized companies and are more likely to be impacted by unfavorable general economic and market conditions than larger and better capitalized companies.
In addition, a number of our suppliers are smaller, less capitalized companies and are more likely to be impacted by unfavorable general economic and market conditions than larger and better capitalized companies, negatively impacting their ability to supply their products to us.
If faced with a proxy contest or other activist stockholder action in the future, we may not be able to respond successfully to the contest or action, which could be disruptive to our business.
Our business could be negatively affected as a result of the actions of activist stockholders. If faced with a proxy contest or other activist stockholder action in the future, we may not be able to respond successfully to the contest or action, which could be disruptive to our business.
Imitation of our name, concept, store design or merchandise in a manner that projects lesser quality or carries a negative connotation of our brand image or other damage to our brand image and reputation in any aspect of its operations could have an adverse effect on our reputation, business strategy, financial condition and results of operations.
Imitation of our name, concept, store design or merchandise in a manner that projects lesser quality or carries a negative connotation of our brand image or other damage to our brand image and reputation in any aspect of its operations could have an adverse effect on our reputation, business strategy, financial condition and results of operations. 13 Table of Contents Failure to attract, motivate and retain personnel and control our labor costs could have an adverse effect on our financial condition.
In order to better serve our customers and maximize sales, we must properly execute our inventory management strategies by appropriately allocating merchandise among our stores, timely and efficiently distributing inventory to such locations, maintaining an appropriate mix and level of inventory in such locations, appropriately changing the allocation of floor space of stores among product categories to respond to customer demand, and effectively managing pricing and markdowns, and there is no assurance we will be able to do so.
In order to better serve our customers and maximize sales, it is important that we properly execute our inventory management strategies by appropriately allocating merchandise among our stores, timely and efficiently distributing inventory to such locations, maintaining an appropriate mix and level of inventory in such locations, responding to customer demand, and effectively managing pricing and markdowns, and there is no assurance we will be able to do so.
Further, we may not effectively implement strategies with respect to rapidly evolving Internet-based and other digital or mobile communication channels, including social media.
Further, we may not effectively implement strategies with respect to rapidly evolving Internet-based and other digital or mobile communication channels, including social media. Partnerships with social media content creators may expose us to reputational or other risks.
Our greatest competition is generally in women ’ s apparel. Many of our competitors are larger than we are and have substantially greater resources than we do and, as a result, may be able to adapt better to changing market conditions, exploit new opportunities and exert greater pricing pressures on suppliers than we can.
Our greatest competition is generally in women ’ s apparel. We compete with many retailers that are larger than we are with substantially greater resources that can, as a result, adapt better to changing market conditions, better exploit new opportunities and exert greater pricing pressures on suppliers than we can.
If we are unsuccessful in competing with our retail apparel competitors, our market share could decline or our growth could be impaired and, as a result, our business strategy, financial condition and results of operations could be negatively impacted. The retail apparel and home fashion businesses are highly competitive with few barriers to entry.
If we are unsuccessful in competing with our retail apparel competitors, our market share could decline or our growth could be impaired and, as a result, our business strategy, financial condition and results of operations could be negatively impacted.
The low-income consumer, which is our core customer, is especially sensitive to these factors. Consumer confidence may also be affected by domestic and international political or social unrest (including related protests or disturbances), acts of war or terrorism, natural disasters, pandemics or other public health emergencies, or other significant events outside of our control.
Consumer confidence may also be affected by domestic and international political or social unrest (including related protests or disturbances), acts of war or terrorism, natural disasters, pandemics or other public health emergencies, or other significant events outside of our control.
Our ability to attract consumers to our stores depends on several factors, including the success of the outdoor neighborhood shopping centers where our stores are primarily located. We locate our stores primarily in outdoor shopping centers where we believe our current and potential consumers shop.
Our ability to attract consumers to our stores depends on several factors, including the success of the outdoor neighborhood shopping centers where our stores are primarily located.
Additionally, as we rely on third parties throughout the course of our business operations, a failure of a third-party service provider to monitor and secure their environment could lead to unauthorized access of our private or confidential information.
The rapid evolution and increased adoption of artificial intelligence technologies by attackers may intensify our cybersecurity risks. Additionally, as we rely on third parties throughout the course of our business operations, a failure of a third-party service provider to monitor and secure their environment could lead to unauthorized access of our private or confidential information.
Any interruption in these systems could impair our ability to manage our inventory effectively, which could have an adverse effect on our business strategy, financial condition or results of operations.
We do not currently have redundant systems for all functions performed by our management information systems. Any interruption in these systems could impair our ability to manage our inventory effectively, which could have an adverse effect on our business strategy, financial condition or results of operations.
Any future cyberattack or a breach of our data could expose us to costly fines, private litigation and response measures, credit card brand assessments, government enforcement actions, disruption of business operations, negative publicity, erode customer confidence in the effectiveness of our data security measures, and decrease our current or potential customers ’ willingness to shop in our stores which could adversely affect our business strategy, financial conditions and results of operations.
Any cyber-attack or compromise of our data could expose us to loss of revenue, loss of business, increased expenses, fines or sanctions, private litigation and response measures, credit card brand assessments including termination of our ability to receive credit or debit card payments, government enforcement actions, disruption of business operations, negative publicity, eroded customer confidence in the effectiveness of our data security measures, and decrease in customers ’ willingness to shop in our stores which could adversely affect our business strategy, financial conditions and results of operations.
In order to prepare for the spring and fall selling seasons, we must order and keep in stock significantly more merchandise than during other parts of the year. While we believe we have a flexible supply chain, we often enter into agreements to purchase merchandise well in advance of the applicable selling season and before trends are confirmed by sales.
While we believe we have a flexible supply chain, we often enter into agreements to purchase merchandise well in advance of the applicable selling season and before trends are confirmed by sales.
Failure to comply with all of the currently proposed regulatory requirements in a timely manner may adversely affect our reputation, business and financial performance. Any failure of our management information systems or the inability of third parties to continue to upgrade and maintain our systems could have an adverse effect on our business strategy, financial condition and results of operations.
Any failure of our management information systems or the inability of third parties to continue to upgrade and maintain our systems could have an adverse effect on our business strategy, financial condition and results of operations.
These laws and regulations, and related interpretations and enforcement activity, may change as a result of a variety of factors, including political, economic or social events.
We are subject to numerous federal, state and local laws and regulations that govern numerous aspects of our business. These laws and regulations, and related interpretations and enforcement activity, may change as a result of a variety of factors, including political, economic or social events.
A failure on our part to anticipate, identify or react appropriately and timely to changes in styles, trends, brand preferences and images is likely to lead to lower demand for our merchandise. This could cause, among other things, sales declines, excess inventories and higher markdowns, which could materially adversely affect our business and our brand image.
A failure on our part to anticipate, identify or react appropriately and timely to changes in styles, trends, brand preferences and images is likely to lead to lower demand for our merchandise.
Additionally, if our existing competitors or other retailers decide to focus more on our core customers, we may have greater difficulty in competing effectively.
If the consumer base we serve is satisfied with the selection, quality and price of our competitors ’ products, consumers may decide not to shop in our stores. Additionally, if our existing competitors or other retailers decide to focus more on our core customers, we may have greater difficulty in competing effectively.
Therefore, we are vulnerable to changes in consumer preference and demand between the time we design and order our merchandise and the season in which this merchandise will be sold. If we are not able to accurately predict customers ’ preferences for our fashion items, we may have too much inventory which may result in increased markdowns and lower margins.
If we are not able to accurately predict customers ’ preferences for our fashion items, we may have either too much inventory which may result in increased markdowns and lower margins or inventory shortages, which may result in lost sales.
Our co mputer systems and the third-party systems we rely on are also subject to damage or interruption from a number of causes, including power outages; computer and telecommunications failures; computer viruses, malware, ransomware, phishing or distributed denial-of-service attacks; security breaches; cyber-attacks; catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes; acts of war or terrorism and design or usage errors by our employees or contractors.
Our co mputer systems and the third-party systems we rely on are also subject to damage or interruption from a number of causes, including power outages; computer and telecommunications failures; computer viruses, malware, ransomware, phishing or distributed denial-of-service attacks; brute force attacks; exploiting software vulnerabilities (including “ zero-day attacks ” ), supply chain attacks and other security incidents and cyber-attacks.
When the current lease terms for our stores or distribution centers expire, we may be unable to negotiate renewals which could lead to the closing or relocating stores or centers on less favorable terms or in a less favorable location.
When the current lease terms for our stores or distribution centers expire, we may be unable to negotiate renewals which could lead to the closing or relocating stores or distribution centers on less favorable terms or in a less favorable location. 16 Table of Contents If we fail to successfully implement our various marketing efforts or if our competitors are more effective with their programs than we are, our revenue or results of operations may be adversely affected.
We currently lease all of our store locations and distribution centers and are subject to the risks associated with leasing real estate.
Our strategic growth plan depends in part on our ability to renew current leases and enter into new leases for future stores. We currently lease all of our store locations and distribution centers and are subject to the risks associated with leasing real estate.
If inflation continues or increases this will likely have a materially adverse impact on our business and results of operations. A significant disruption to our distribution centers or retail locations could have an adverse effect on our business strategy, financial condition and results of operations.
This in turn may cause our core customer base to not purchase our products or otherwise visit our stores. A significant disruption to our distribution centers or retail locations could have an adverse effect on our business strategy, financial condition and results of operations.
If retained, this information may be stored within our internal information technology environments or hosted by third-party service providers. We have implemented security procedures and technology that are intended to safeguard this information from cybersecurity attacks and data breaches.
If retained, this information may be stored within our internal information technology environments or hosted by third-party service providers.
Our ability to expand successfully into other geographic markets will also depend on acceptance of our retail store experience by customers in those markets, including our ability to design our stores in a manner that resonates locally and 15 Table of Contents to offer the correct product assortment to appeal to consumers in such markets.
Our ability to expand successfully into other geographic markets will also depend on acceptance of our retail store experience by customers in those markets.
Our local and regional competitors have extensive knowledge of the consumer base and may be able to garner more loyalty from customers than we can. If the consumer base we serve is satisfied with the selection, quality and price of our competitors ’ products, consumers may decide not to shop in our stores.
Many of these retailers also have better name recognition among consumers than we do. Our local and regional competitors may have more extensive knowledge of the consumer base and may be able to garner more loyalty from customers than we can.
We also face certain risks from our use of third-party order fulfillment and direct shipping for products we do not hold in inventory such as freight cost increases, timely delivery and customer service and delays due to work stoppages. We base our purchases of inventory, in part, on our sales forecasts.
In addition, as we continue to implement new inventory allocation initiatives, there could be disruptions in inventory flow and placement. We also face certain risks from our use of third-party order fulfillment and direct shipping including freight cost increases, timely delivery and delays due to work stoppages. Our financial performance could also be impacted by increases in shrink.
If our access to capital is restricted or our borrowing costs increase, our business strategy, results of operations and financial condition could be adversely impacted. We maintain deposit balances with certain financial institutions that are above the federal insurance limit. A failure of these institutions could result in loss of these deposits.
We maintain deposit balances with certain financial institutions that are above the federal insurance limit. A failure of these institutions could result in loss of these deposits. We may be unable to negotiate future leases or renegotiate current leases on the same favorable terms as we had in the past.
Cyberattacks continue to evolve and there can be no assurance that a future attacker would be unable to gain access to the information we collect. These attacks can come in many forms, including computer hacking, acts of vandalism or theft, malware, ransomware, computer viruses or other malicious codes, phishing, employee error or malfeasance, catastrophes, unforeseen events or other cyber-attacks.
Cyber-attacks can come in many forms, including cyber-attacks from criminal threat actors, as we experienced in fiscal 2023, acts of vandalism or theft, malware, ransomware, computer viruses or other malicious codes, phishing, brute force attacks, exploiting software vulnerabilities and zero-day attacks, supply chain attacks, employee error or malfeasance, catastrophes, and unforeseen events.
Although we continue to develop, and further enhance, our systems and processes that are designed to protect personal information and prevent data loss and other security breaches and disruptions such as the one we experienced in the past, such measures cannot provide absolute security.
While we have implemented security procedures and technology that are intended to safeguard this information from cybersecurity attacks and security incidents, there can be no assurance that these measures will be adequate to safeguard against all data security incidents, system compromises or misuses of data. 17 Table of Contents Although we continue to develop, and further enhance, our systems and processes that are designed to protect personal information and prevent data loss and other security incidents and technology disruptions, such measures cannot provide absolute security.
The countries in which our merchandise currently is manufactured or may be manufactured in the future could become subject to new trade restrictions imposed by the United States or other foreign governments. There is continuing uncertainty with respect to trade relations between the United States and such countries, especially China.
The product we source could become subject to new trade restrictions imposed by the United States or other foreign governments.
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Because our success depends significantly on our brand image among our core customer, damage to our brand image as a result of our failure to identify and respond to changing trends and tastes could have a material negative impact on our business.
Added
These could cause, among other things, sales declines, excess inventories and higher markdowns, which could materially adversely affect our business and our brand image.
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The failure of our product offerings to appeal to our customers could have a material adverse effect on our business strategy, results of operations and financial condition.
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Therefore, we are vulnerable to changes in consumer preference and demand between the time we design and order our merchandise and the season in which this merchandise will be sold.
Removed
Many of these retailers have better name recognition among consumers than we do and purchase significantly more merchandise from vendors. These retailers may be able to purchase merchandise that we cannot purchase because of their name recognition and relationships with suppliers, or they may be able to purchase merchandise with better pricing concessions than we can.
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We base our purchases of inventory, in part, on our sales forecasts.
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Our business could suffer if our store locations fail to attract sufficient consumer traffic due to consumer preferences to shop on the internet or at large warehouse stores, increased competition in our shopping areas, the amount we spend on advertising, an economic slowdown or a decline in the popularity of outdoor shopping centers, or if we are unable to locate replacement locations on terms acceptable to us.
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In addition, the technologies and artificial intelligence tools that we incorporate into certain aspects of our operations may not generate the intended efficiencies and may impact our business results.
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Conversely, if we are unable to accurately predict demand for our merchandise, we could also end up with inventory shortages, which may negatively impact customer relationships, diminish brand loyalty and result in lost sales.
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Specifically artificial intelligence tools could have the potential to be deficient, inaccurate, or biased and if we fail to adopt and oversee the use of artificial intelligence in a thoughtful and strategic manner, it could harm our financial performance and/or our business reputation.
Removed
We purchase a portion of our products from suppliers that directly ship these products to our stores. These direct shipment relationships enable us to make available to our customers a wide selection of products without having to maintain large amounts of inventory. The termination or interruption of our relationships with any of these suppliers could materially adversely affect our business.
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These smaller suppliers may not have sufficient liquidity during economic downturns to properly fund their businesses, and their ability to supply their products to us could be negatively impacted. They may also be more vulnerable to cybersecurity threats.
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In addition, as we continue to implement new inventory allocation initiatives, there could be disruptions in inventory flow and placement. Failure to effectively execute our opportunistic inventory buying and inventory management strategies could adversely affect our business strategy, financial condition and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe monitor our cybersecurity programs and processes through assessments focused on evaluating effectiveness, including regular network and endpoint monitoring, vulnerability scanning and penetration testing. In addition, we have engaged third parties to perform reviews of our information security control environment, and to provide expertise on various cybersecurity programs and issues.
Biggest changeOur cybersecurity programs include physical, administrative and technical safeguards designed to help us detect and prevent cybersecurity threats and incidents. We monitor our cybersecurity programs and processes through assessments focused on evaluating effectiveness, including regular network and endpoint monitoring, vulnerability scanning and penetration testing.
We have not experienced any material cybersecurity incidents in Fiscal 2023, and as of the date of this Report, we have not identified any material risks from active cybersecurity threats, including as a result of any prior cybersecurity incidents.
We have not experienced any material cybersecurity incidents in fiscal 2024, and as of the date of this Report, we have not identified any material risks from active cybersecurity threats, including as a result of any prior cybersecurity incidents.
In addition, the audit committee receives briefings from management bi-annually, or more frequently as needed, on material aspects of our cybersecurity program . ​ 21 Table of Contents
In addition, the audit committee receives briefings from management bi-annually, or more frequently as needed, on material aspects of our cybersecurity program . ​ 20 Table of Contents
Our cybersecurity team has established a written incident response plan in the event of an incident. We do not retain any sensitive customer data on our systems. We provide routine awareness training for associates regarding cybersecurity best practices and their role in protecting the Company from cybersecurity attacks and testing to measure the effectiveness of our information security program.
We provide routine awareness training for associates regarding cybersecurity best practices and their role in protecting the Company from cybersecurity attacks and testing to measure the effectiveness of our information security program.
Removed
During fiscal 2023, we made significant investments in people and technology to detect, respond, and recover from security incidents. We have developed and are executing our cybersecurity roadmap which provides the framework to continually strengthen our capabilities. Our cybersecurity programs include physical, administrative and technical safeguards designed to help us detect and prevent cybersecurity threats and incidents.
Added
In addition, we have engaged third parties to perform reviews of our information security control environment, and to provide expertise on various cybersecurity programs and issues. Our cybersecurity team has established a written incident response plan in the event of an incident. We do not retain any sensitive customer data on our systems.
Removed
During fiscal 2023, we partnered with an external cyber security firm to leverage their expertise and guidance in fortifying our systems from evolving threats. We also have third-party risk management processes in place used to address the risks involved with engaging third parties in our cybersecurity programs.
Removed
As previously disclosed, we experienced a cybersecurity disruption at the end of Fiscal 2022, which did not result in a material impact to our business strategy, results of operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we currently lease a flexible office space in New York City. We also lease and operate two distribution centers, one in Darlington, South Carolina totaling approximately 550,000 square feet and another in Roland, Oklahoma totaling approximately 565,000 square feet.
Biggest changeIn addition, we currently lease office space in New York City. We lease and operate two distribution centers, one in Darlington, South Carolina totaling approximately 550,000 square feet, and another in Roland, Oklahoma totaling approximately 565,000 square feet. We believe our facilities are suitable and adequate to meet our current business and operational needs . 21 Table of Contents
The table below sets forth the number of stores in each of the 33 states in which we operated as of February 3, 2024: ​ ​ Alabama 35 Arkansas 15 California 7 Connecticut 5 Delaware 3 Florida 52 Georgia 63 Illinois 25 Indiana 18 Iowa 3 Kansas 2 Kentucky 7 Louisiana 34 Maryland 10 Massachusetts 5 Michigan 23 Minnesota 2 Mississippi 30 Missouri 8 Nebraska 1 Nevada 3 New Jersey 2 New York 12 North Carolina 47 Ohio 30 Oklahoma 6 Pennsylvania 9 Rhode Island 1 South Carolina 41 Tennessee 18 Texas 59 Virginia 20 Wisconsin 6 Corporate Offices and Distribution Center Facilities We own a facility in Savannah, Georgia totaling approximately 70,000 square feet, which serves as our headquarters and, to a lesser extent, as a storage facility.
The table below sets forth the number of stores in each of the 33 states in which we operated as of February 1, 2025: ​ ​ Alabama 35 Arkansas 15 California 7 Connecticut 5 Delaware 3 Florida 50 Georgia 60 Illinois 25 Indiana 18 Iowa 3 Kansas 2 Kentucky 7 Louisiana 34 Maryland 9 Massachusetts 5 Michigan 23 Minnesota 2 Mississippi 30 Missouri 8 Nebraska 1 Nevada 3 New Jersey 2 New York 12 North Carolina 47 Ohio 30 Oklahoma 6 Pennsylvania 9 Rhode Island 1 South Carolina 41 Tennessee 17 Texas 56 Virginia 19 Wisconsin 6 Corporate Offices and Distribution Center Facilities We own a facility in Savannah, Georgia which serves as our headquarters and, to a lesser extent, as a storage facility.
All existing 602 stores, totaling 8.0 million total square feet and 6.6 million selling square feet, are leased under operating leases. The typical store lease is for five years with options to extend the lease term for three additional five-year periods.
All existing 591 stores, totaling 7.9 million total square feet and 6.5 million selling square feet, are leased under operating leases. The typical store lease is for five years with options to extend the lease term for three additional five-year periods.
ITEM 2. PROPERTIES Store Locations As of February 3, 2024, we operated 602 stores located in 33 states. Our stores average approximately 11,000 square feet of selling space and are typically located in outdoor community shopping centers that are convenient to low and moderate income customers. We have no franchising relationships, and all of the stores are company operated.
ITEM 2. PROPERTIES Store Locations As of February 1, 2025, we operated 591 stores located in 33 states. Our stores average approximately 11,000 square feet of selling space and are typically located in outdoor community shopping centers that are convenient to mid- to low-income African American customers. We have no franchising relationships, and all of the stores are company operated.
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We believe our facilities are suitable and adequate to meet our current business and operational needs . 22 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile legal proceedings are subject to uncertainties and the outcome of any such matter is not predictable, we are not aware of any legal proceedings pending or threatened against us that we expect to have a material adverse effect on our business strategy, financial condition, results of operations or liquidity. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II ​
Biggest changeWhile legal proceedings are subject to uncertainties and the outcome of any such matter is not predictable, we are not aware of any legal proceedings pending or threatened against us that we expect to have a material adverse effect on our business strategy, financial condition, results of operations or liquidity.
Added
See Note 7 to the Financial Statements for a summary of certain ongoing legal proceedings. Such information is incorporated into this Part I, Item 3 – “ Legal Proceedings ” by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II ​

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 23 ​ ​ ​ PART II ​ ​ Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 23 Item 6. [Reserved] 24 Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations 25 Item 7A.
Biggest changeItem 4. Mine Safety Disclosures 22 ​ ​ ​ PART II ​ ​ Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22 Item 6. [Reserved] 23 Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations 24 Item 7A.
Removed
Quantitative and Qualitative Disclosure About Market Risk 31 Item 8. Financial Statements and Supplementary Data 32 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 48 Item 9A. Controls and Procedures 49 Item 9B. Other Information 51
Added
Quantitative and Qualitative Disclosures About Market Risk 29 Item 8. Financial Statements and Supplementary Data 30

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOur common stock price performance shown on the graph is not indicative of future price performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Return Analysis 1/19 ​ 1/20 ​ 1/21 ​ 1/22 ​ 1/23 ​ 1/24 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Citi Trends, Inc. 100.00 ​ 115.73 ​ 294.39 ​ 243.09 ​ 157.07 ​ 134.37 ​ Russell 2000 100.00 ​ 109.21 ​ 142.16 ​ 140.45 ​ 135.70 ​ 138.96 ​ Dow Jones US Specialty Retailers 100.00 ​ 109.87 ​ 154.82 ​ 156.21 ​ 148.97 ​ 174.71 ​ ​
Biggest changeOur common stock price performance shown on the graph is not indicative of future price performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Return Analysis 1/20 ​ 1/21 ​ 1/22 ​ 1/23 ​ 1/24 ​ 1/25 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Citi Trends, Inc. 100.00 ​ 254.38 ​ 210.06 ​ 135.73 ​ 116.11 ​ 111.67 Russell 2000 100.00 ​ 130.17 ​ 128.60 ​ 124.26 ​ 127.24 ​ 151.53 Dow Jones US Specialty Retailers 100.00 ​ 140.92 ​ 142.18 ​ 135.59 ​ 159.02 ​ 235.34 ​ ​ ​
See Item 12 of this Report. 23 Table of Contents Stock Performance Graph Set forth below is a line graph comparing the last five years ’ percentage change in the cumulative total stockholder return on shares of our common stock against the cumulative total returns of the Russell 2000 Index and the Dow Jones US Specialty Retailers Index.
See Item 12 of this Report. 22 Table of Contents Stock Performance Graph Set forth below is a line graph comparing the last five years ’ percentage change in the cumulative total stockholder return on shares of our common stock against the cumulative total returns of the Russell 2000 Index and the Dow Jones US Specialty Retailers Index.
This graph assumes that $100 was invested on January 31, 2019 in our common stock and in each of the market index and the industry indexes, and that all cash distributions were reinvested.
This graph assumes that $100 was invested on January 31, 2020 in our common stock and in each of the market index and the industry indexes, and that all cash distributions were reinvested.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on The NASDAQ Stock Market under the symbol “ CTRN. ” On March 25, 2024, there were 9 holders of record and approximately 3,500 beneficial holders of our common stock.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on The NASDAQ Stock Market under the symbol “ CTRN. ” On March 31, 2025, there were 9 holders of record and approximately 3,400 beneficial holders of our common stock.
Dividends In 2020, the Company announced it would suspend quarterly cash dividends. Any determination to declare and pay cash dividends in the future will be made by the Company ’ s board of directors. Purchases of Equity Securities by the Issuer and Affiliated Purchasers. We did not repurchase any shares of our common stock during fiscal 2023.
Dividends In 2020, the Company announced it would suspend quarterly cash dividends. Any determination to declare and pay cash dividends in the future will be made by the Company ’ s board of directors. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
Removed
During fiscal 2022, we repurchased approximately 331,000 shares of our common stock at an aggregate purchase price of $10.0 million. As of February 3, 2024, approximately $50.0 million remained available under our previously announced share repurchase programs. Equity Compensation Plan Information.
Added
The number of shares of common stock repurchased by the Company during the fourth quarter of 2024 and the average price paid per share are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total number of ​ Maximum number (or ​ ​ ​ ​ ​ ​ ​ shares purchased as ​ approximate dollar value) ​ ​ Total number ​ Average ​ part of publicly ​ of shares that may yet be ​ ​ of shares ​ price paid ​ announced plans or ​ purchased under the Period ​ purchased ​ per share (1) ​ programs (2) ​ plans or programs (2) November (11/3/24 - 12/2/24) — ​ $ — — ​ $ 50,011,482 ​ December (12/3/24 - 1/1/25) 77,965 ​ $ 25.48 77,965 ​ $ 48,026,585 ​ January (1/2/25 - 2/1/25) 67,273 ​ $ 26.62 67,273 ​ $ 46,237,233 ​ Total 145,238 ​ ​ ​ 145,238 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Includes commissions for the shares repurchased under the stock repurchase program. ​ (2) On November 30, 2021, the Company announced that its board of directors approved a $30 million stock repurchase ​ program.
Added
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. ​ ​ Equity Compensation Plan Information.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFiscal 2023 Business Highlights ● Elevated our in-store experience with our strong value offering, improved inventory levels and assortment optimization focused on African American and multicultural families ● Demonstrated expense control throughout the year while investing in sales-driving initiatives such as marketing tests and inventory rebuilds ● Opened 5 new stores, remodeled 15 stores and closed 14 stores; ended the year with 15% of the fleet upgraded to our CTx store format ● Leveraged distribution center upgrades made in fiscal 2022 to expand shipping partnerships, resulting in freight rate improvements and greater supply chain flexibility ● Completed the implementation of our upgraded ERP system Fiscal 2023 Financial Highlights ● Total sales of $747.9 million ● Net loss of $1.46 per share ● Cash of $79.7 million at the end of the fiscal year, with no debt Our Strategy We believe that Citi Trends is in a unique position to serve our loyal customer base, with a long runway for store growth and a motivated leadership team supported by a healthy balance sheet.
Biggest changeComparable stores sales in the first half of 0.7% compared to second half comparable store sales of 6.1%. ● Leveraged extensive, recent customer insights study to sharpen our focus on and understanding of our African American customer base ● Elevated our in-store experience with our updated, three-tiered product assortment strategy, with balanced good-better-best offerings, trend-right fashion and the addition of extreme value branded treasures, all focused on African American families ● Implemented improved allocation methodology and updated in-season markdown approach to ensure improved inventory management and fresh product for our customers ● Opened 1 new store, remodeled 35 stores and closed 12 stores; ended the year with 23% of the fleet in our updated store format Fiscal 2024 Financial Highlights ● Total sales of $753.1 million; comparable store sales increase of 3.4% vs fiscal 2023 ● Net loss of ($43.2) million, including the impact of $16.5 million of valuation allowance on deferred tax asset and impact of $16.5 million of strategic investments to fuel the transformation ● Cash of $61.1 million at the end of the fiscal year, with no debt Our Strategy We believe that Citi Trends is in a unique position to serve our loyal customer base, with a long runway for store growth and a motivated leadership team supported by a healthy balance sheet.
See Note 8 to the Financial Statements for more information regarding lease commitments. 29 Table of Contents Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and apply judgments that affect the reported amounts. Actual results could differ from those estimates.
See Note 8 to the Financial Statements for more information regarding lease commitments. 28 Table of Contents Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and apply judgments that affect the reported amounts. Actual results could differ from those estimates.
Under the retail inventory method, the cost of inventory is determined by calculating a cost-to-retail ratio and applying it to the retail value of inventory. Inherent in the retail inventory calculation are certain management judgments and estimates, including, among others, merchandise markups, markdowns and shrinkage, which impact the ending inventory valuation at cost as well as resulting cost of sales.
Under the retail inventory method, the cost of inventory is determined by calculating a cost-to-retail ratio and applying it to the retail value of inventory. Inherent in the retail inventory calculation are certain management judgments and estimates, including, among others, merchandise markups, markdowns and shrink, which impact the ending inventory valuation at cost as well as resulting cost of sales.
In addition, we continue to monitor the impacts on our business of unemployment levels, wage inflation, interest rates, inflation rates, housing costs, energy costs, consumer confidence, consumer perception of economic conditions, costs to source our merchandise and supply chain disruptions . Seasonality and Weather Conditions The nature of our business is seasonal.
We continue to monitor the impacts on our business of unemployment levels, wage inflation, interest rates, inflation rates, housing costs, energy costs, consumer confidence, consumer perception of economic conditions, costs to source our merchandise and supply chain disruptions . Seasonality and Weather Conditions The nature of our business is seasonal.
Cash Requirements and Commitments Our principal cash requirements consist of (1) inventory purchases; (2) capital expenditures to invest in our infrastructure; and (3) operational needs, including salaries, occupancy costs, taxes and other operating costs. We have also historically used cash to repurchase stock under our stock repurchase programs.
Cash Requirements and Commitments Our principal cash requirements consist of (1) inventory purchases; (2) capital expenditures to invest in our growth initiatives; and (3) operational needs, including salaries, occupancy costs, taxes and other operating costs. We have also historically used cash to repurchase stock under our stock repurchase programs.
Significant uses of cash included (1) a $58.3 million decrease in accrued expenses and other-long-term liabilities due primarily to payments of operating lease liabilities; (2) a $24.6 million increase in inventory due primarily to depleted inventory levels at the end of the prior year; and (3) a $3.5 million increase in income tax receivable.
Significant uses of cash included (1) a $58.3 million decrease in accrued expenses and other-long-term liabilities due primarily to payments of operating lease liabilities; (2) a $24.6 million increase in inventory due primarily to depleted inventory levels at the end of the prior year; and (3) a $3.5 million increase in income tax receivable. Cash Flows From Investing Activities.
Relocated stores and expanded stores are included in the comparable store sales results, while stores that are closed permanently or for an extended period are excluded from the comparable store sales results. 27 Table of Contents Key Operating Statistics We measure performance using key operating statistics. One of the main performance measures we use is comparable store sales growth.
Remodeled and relocated stores are included in the comparable store sales results, while stores that are closed permanently or for an extended period are excluded from the comparable store sales results. 26 Table of Contents Key Operating Statistics We measure performance using key operating statistics. One of the main performance measures we use is comparable store sales growth.
Liquidity and Capital Resources Capital Allocation Our capital allocation strategy is to maintain adequate liquidity to maintain current operations while investing in opportunities to profitably grow our business, then to return excess cash to shareholders through our share repurchase programs. Our year-end cash and cash equivalents balance was $79.7 million compared to $103.5 million at the end of last year.
Liquidity and Capital Resources Capital Allocation Our capital allocation strategy is to maintain adequate liquidity to support current operations while investing in opportunities to profitably grow our business, then to return excess cash to shareholders through our share repurchase programs. Our year-end cash and cash equivalents balance was $61.1 million compared to $79.7 million at the end of last year.
Additional details of the credit facility are in Note 4 to the Financial Statements. At the end of fiscal 2023, we had no borrowings under the credit facility and $1.4 million in letters of credit outstanding. Cash Flows Cash Flows From Operating Activities.
Additional details of the credit facility are in Note 4 to the Financial Statements. At the end of fiscal 2024, we had no borrowings under the credit facility and $2.2 million in letters of credit outstanding. Cash Flows Cash Flows From Operating Activities.
Discussions of our results of operations for the year ended January 28, 2023 compared to the year ended January 29, 2022 that have been omitted under this item can be found in "Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended January 28, 2023, which was filed with the United States Securities and Exchange Commission on April 13, 2023.
Discussions of our results of operations for the year ended February 3, 2024 compared to the year ended January 28, 2023 that have been omitted under this item can be found in "Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended February 3, 2024, which was filed with the United States Securities and Exchange Commission on April 18, 2024.
As a measure of sensitivity, a ten percent change in our estimated shrinkage rates as of February 3, 2024, would not have materially impacted our cost of goods sold in fiscal 2023. Many retailers have arrangements with vendors that provide for rebates and allowances under certain conditions, which ultimately affect the value of the inventory.
As a measure of sensitivity, a ten percent change in our estimated shrink as of February 1, 2025, would not have materially impacted our cost of goods sold in fiscal 2024. Many retailers have arrangements with vendors that provide for rebates and allowances under certain conditions, which ultimately affect the value of the inventory.
Executive Overview We are a leading specialty value retailer of apparel, accessories and home trends for way less spend primarily for African American and multicultural families. 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.
Executive Overview We are a leading off-price value retailer of apparel, accessories and home trends primarily for African American families. 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.
Historically, we have met these cash requirements using cash flow from operations and short-term trade credit. As of February 3, 2024, our contractual commitments for operating leases totaled $307.3 million (with $57.0 million due within 12 months) and our purchase obligations for open merchandise orders totaled $132.8 million due within 12 months.
Historically, we have met these cash requirements using cash flow from operations and short-term trade credit. As of February 1, 2025, our contractual commitments for operating leases totaled $289.3 million (with $60.7 million due within 12 months) and our purchase obligations for open merchandise orders totaled $138.0 million due within 12 months.
In fiscal 2022, we returned $10.0 million to shareholders through share repurchases. See Part II, Item 5 of this Report and Note 6 to the Financial Statements for more information. Revolving Credit Facility We have a revolving credit facility that matures in April 2026 and provides a $75 million credit commitment and a $25 million uncommitted “ accordion ” feature.
See Part II, Item 5 of this Report and Note 6 to the Financial Statements for more information. Revolving Credit Facility We have a revolving credit facility that matures in April 2030 and provides a $75 million credit commitment and a $25 million uncommitted “ accordion ” feature.
As described in more detail in “ Item 1 – Business, ” we have identified four strategic areas of focus that we believe will accelerate our sales and earnings growth over the next few years: Driving Comparable Store Productivity .
As described in more detail in “ Item 1 – Business, ” we have identified five strategic areas of focus that we believe will accelerate our sales and earnings growth over the next few years: Offer Compelling Value Proposition .
Cash Flows From Investing Activities. Cash used in investing activities was $13.4 million in fiscal 2023 compared to cash provided of $60.2 million in fiscal 2022. Cash used in fiscal 2023 consisted of $14.9 million for purchases of property and equipment, partially offset by $1.5 million from insurance proceeds related to investing activities.
Cash used in fiscal 2023 consisted of $14.9 million of purchases of property and equipment, partially offset by $1.5 million from insurance proceeds related to investing activities. Cash Flows From Financing Activities. Cash used in financing activities was $4.7 million in fiscal 2024 compared with $0.9 million in fiscal 2023.
Furthermore, the seasonal nature of our business may affect comparisons between periods. 26 Table of Contents Net Sales and Additional Operating Data The following table provides selected consolidated statement of operations data expressed both in dollars and as a percentage of net sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ (dollars in thousands) Statement of Operations Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 747,941 ​ 100.0 % $ 795,011 ​ 100.0 % $ 991,595 ​ 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales (exclusive of depreciation) ​ (462,824) ​ (61.9) % (484,022) ​ (60.9) % (584,063) ​ (58.9) % Selling, general and administrative expenses ​ (284,530) ​ (38.0) % (279,177) ​ (35.1) % (307,622) ​ (31.0) % Depreciation ​ (18,990) ​ (2.5) % (20,595) ​ (2.6) % (20,393) ​ (2.0) % Asset impairment ​ (1,051) ​ (0.1) % — ​ 8.1 % — ​ 0.0 % Gain on sale-leasebacks ​ ​ — ​ 0.0 % ​ 64,088 ​ 0.0 % ​ — ​ 0.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Loss) income from operations ​ (19,454) ​ (2.6) % 75,305 ​ 9.5 % 79,517 ​ 8.0 % Interest income ​ 3,874 ​ 0.5 % 1,034 ​ 0.1 % 31 ​ 0.0 % Interest expense ​ (306) ​ (0.0) % (306) ​ (0.0) % (306) ​ (0.0) % (Loss) income before income taxes ​ (15,886) ​ (2.1) % 76,033 ​ 9.6 % 79,242 ​ 8.0 % Income tax benefit (expense) ​ 3,907 ​ 0.5 % (17,141) ​ (2.2) % (17,002) ​ (1.7) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income ​ $ (11,979) ​ (1.6) % $ 58,892 ​ 7.4 % $ 62,240 ​ 6.3 % ​ The following table provides information about store activity and the change in comparable store sales for each fiscal year: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ ​ ​ ​ ​ ​ Total stores open, beginning of year 611 609 585 ​ New stores 5 12 27 ​ Closed stores (14) (10) (3) ​ Total stores open, end of year 602 611 609 ​ ​ ​ ​ ​ ​ ​ ​ ​ Comparable store sales (decrease) increase (1) (6.8) % (22.1) % 25.1 % (1) Stores included in the comparable store sales calculation for any year are those stores that were opened prior to the beginning of the preceding fiscal year and were still open at the end of such year.
Furthermore, the seasonal nature of our business may affect comparisons between periods. 25 Table of Contents Net Sales and Additional Operating Data The following table provides selected consolidated statement of operations data expressed both in dollars and as a percentage of net sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ (dollars in thousands) Statement of Operations Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 753,079 ​ 100.0 % $ 747,941 ​ 100.0 % $ 795,011 ​ 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales (exclusive of depreciation) ​ (471,036) ​ (62.5) % (462,824) ​ (61.9) % (484,022) ​ (60.9) % Selling, general and administrative expenses ​ (300,173) ​ (39.9) % (284,530) ​ (38.0) % (279,177) ​ (35.1) % Depreciation ​ (18,822) ​ (2.5) % (18,990) ​ (2.5) % (20,595) ​ (2.6) % Asset impairment ​ (2,536) ​ (0.3) % (1,051) ​ 0.1 % — ​ 0.0 % Gain on sale-leasebacks ​ ​ — ​ 0.0 % ​ — ​ 0.0 % ​ 64,088 ​ 8.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Loss) income from operations ​ (39,488) ​ (5.2) % (19,454) ​ (2.6) % 75,305 ​ 9.5 % Interest income ​ 2,473 ​ 0.3 % 3,874 ​ 0.5 % 1,034 ​ 0.1 % Interest expense ​ (319) ​ (0.0) % (306) ​ (0.0) % (306) ​ (0.0) % (Loss) income before income taxes ​ (37,334) ​ (5.0) % (15,886) ​ (2.1) % 76,033 ​ 9.6 % Income tax benefit (expense) ​ (5,836) ​ (0.8) % 3,907 ​ 0.5 % (17,141) ​ (2.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income ​ $ (43,170) ​ (5.7) % $ (11,979) ​ (1.6) % $ 58,892 ​ 7.4 % ​ The following table provides information about store activity and the change in comparable store sales for each fiscal year: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ Total stores open, beginning of year 602 611 609 ​ New stores 1 5 12 ​ Closed stores (12) (14) (10) ​ Total stores open, end of year 591 602 611 ​ ​ ​ ​ ​ ​ ​ ​ ​ Comparable store sales increase (decrease) (1) 3.4 % (6.8) % (22.1) % (1) Stores included in the comparable store sales calculation for any year are those stores that were open for at least 14 full consecutive months without closure for more than seven days within the same fiscal month.
ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. Adoption is required for annual periods beginning after December 15, 2024.
The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. Adoption is required for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.
Capital Expenditures Capital expenditures in fiscal 2023 were $14.9 million, a decrease of $7.4 million from the prior year, primarily due to opening fewer stores in fiscal 2023.
Capital Expenditures Capital expenditures in fiscal 2024 were $12.1 million, a decrease of $2.8 million from the prior year, primarily due to opening fewer stores in fiscal 2024.
Asset Impairment . Impairment charges for fiscal 2023 related to underperforming stores totaled $1.0 million, comprised of $0.9 million for leasehold improvements and fixtures and equipment, and $0.1 million for an operating lease right-of-use asset. There was no impairment expense in fiscal 2022. ​ Gain on Sale-leasebacks .
Impairment charges for fiscal 2023 related to underperforming stores totaled $1.0 million, comprised of $0.9 million for leasehold improvements and fixtures and equipment, and $0.1 million for an operating right of use asset. ​ Income Tax (Expense) Benefit. Income tax expense was $5.8 million in fiscal 2024 compared to income tax benefit of $3.9 million in fiscal 2023.
Cash used in operating activities was $9.6 million in fiscal 2023 compared with cash provided of $5.8 million in fiscal 2022. For fiscal 2023, significant sources of cash included $3.5 million from insurance proceeds related to operating activities and a $17.9 million increase in accounts payable.
Cash used in operating activities was $3.8 million in fiscal 2024 compared with cash used of $9.6 million in fiscal 2023. For fiscal 2024, significant sources of cash included $7.8 million reduction in inventory and a $0.1 million increase in accounts payable.
Cash used in fiscal 2023 was to settle withholding taxes on the vesting of restricted stock. Cash used in fiscal 2022 was primarily for repurchases of our common stock.
Cash used in fiscal 2024 was $3.8 million for share repurchases and $0.9 million to settle withholding taxes on the vesting of restricted stock. Cash used in fiscal 2023 was to settle withholding taxes on the vesting of restricted stock.
We do not generally enter into such arrangements with our vendors. There were no material changes in the estimates or assumptions related to the valuation of inventory during fiscal 2023. Operating Leases We lease all of our retail store locations, our distribution centers and certain office space and equipment. All leases are classified as operating leases.
We do not generally enter into such arrangements with our vendors. There were no material changes in the estimates or assumptions related to the valuation of inventory during fiscal 2024.
The estimate of shrinkage can be affected by changes in actual shrinkage trends. Inventory shrinkage as a percentage of sales in fiscal 2023, fiscal 2022 and fiscal 2021 was 1.0%, 0.7% and 0.4%, respectively. The allowance for inventory shrinkage was $3.9 million as of February 3, 2024 and $5.8 million as of January 28, 2023.
Inventory shrink as a percentage of sales in fiscal 2024, fiscal 2023 and fiscal 2022 was 1.7%, 1.0% and 0.7%, respectively. The allowance for inventory shrink was $5.2 million as of February 1, 2025 and $3.9 million as of February 3, 2024.
We anticipate capital expenditures in fiscal 2024 of approximately $20 million, primarily for opening up to 5 new stores and remodeling approximately 40 stores, combined with continued investments in our systems and distribution centers. Share Repurchases We did not repurchase any shares of our common stock during fiscal 2023.
We anticipate capital expenditures in fiscal 2025 in the range of $18 million to $22 million, primarily for opening up to 5 new stores and remodeling approximately 50 stores, combined with continued investments in our systems and distribution centers. Share Repurchases In fiscal 2024 we returned $3.8 million to shareholders through share repurchases.
Merchandise markdowns are reflected in the inventory valuation when the price of an item is lowered in the stores. As a result, we believe the retail inventory method results in a more conservative inventory valuation than other accounting methods. We estimate and record an allowance for shrinkage for the period between the last physical count and the balance sheet date.
Merchandise markdowns are reflected in the inventory valuation when the price of an item is lowered in the stores. We estimate and record an allowance for shrink for the period between the last physical count and the balance sheet date. The estimate of shrink can be affected by changes in actual shrink trends.
We also use other operating statistics, most notably average sales per store, to measure our performance. As we typically occupy existing space in established outdoor community shopping centers rather than sites built specifically for our stores, store square footage (and therefore sales per square foot) varies by store.
As we typically occupy existing space in established shopping centers rather than sites built specifically for our stores, store square footage (and therefore sales per square foot) varies by store. We focus on overall store sales volume as the critical driver of profitability.
There are also areas in which management ’ s judgment in selecting any available alternative would not produce a materially different result. Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, “ Improvement to Income Tax Disclosures (Topic 740) ” , which requires additional disclosures for income tax rate reconciliations, income taxes paid, and certain other tax disclosures.
Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, “ Improvement to Income Tax Disclosures (Topic 740) ” , which requires additional disclosures for income tax rate reconciliations, income taxes paid, and certain other tax disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures.
Our principal sources of liquidity consist of (i) cash and cash equivalents on hand; (ii) short-term trade credit arising from customary payment terms and trade practices with our vendors; (iii) cash generated from operations on an ongoing basis; and (iv) a revolving credit facility with a $75 million credit commitment. 28 Table of Contents In fiscal 2022, we completed sale-leaseback transactions of our distribution centers in Darlington, South Carolina and Roland, Oklahoma that resulted in combined pretax proceeds of $81.1 million.
Our principal sources of liquidity consist of (i) cash and cash equivalents on hand; (ii) short-term trade credit arising from customary payment terms and trade practices with our vendors; (iii) cash generated from operations on an ongoing basis; and (iv) a revolving credit facility with a $75 million credit commitment. 27 Table of Contents Inventory Our year-end inventory balance was $122.6 million, compared with $130.4 million at the end of fiscal 2023.
Uncertainties and Challenges General Economic Conditions We expect that our operations in the short-term will continue to be influenced by general economic conditions, including on-going inflationary pressures, which are particularly impactful to the communities we serve.
We strongly believe that our business strategy centered around these five areas will accelerate our long-term sales and earnings growth. Uncertainties and Challenges General Economic Conditions We expect that our operations in the short-term will continue to be influenced by general economic conditions, including on-going inflationary pressures, new tariff programs and changes in consumer sentiment.
SG&A expenses increased $5.3 million, or 1.9%, to $284.5 million in fiscal 2023 from $279.2 million in fiscal 2022.
Selling, General and Administrative ( “ SG&A ” ) Expenses. SG&A expenses increased $15.7 million, or 5.5%, to $300.2 million in fiscal 2024 from $284.5 million in fiscal 2023.
These increases were partially offset by $2.7 million lower insurance costs. As a percentage of sales, SG&A expenses deleveraged 290 basis points to 38.0% in fiscal 2023 from 35.1% in fiscal 2022, primarily due to the deleveraging effect of lower sales. Depreciation. Depreciation expense decreased $1.6 million to $19.0 million in fiscal 2023 from $20.6 million in fiscal 2022.
As a percentage of sales, SG&A expenses deleveraged 190 basis points to 39.9% in fiscal 2024 from 38.0% in fiscal 2023, due to the aforementioned expense increases. Depreciation. Depreciation expense decreased $0.2 million to $18.8 million in fiscal 2024 from $19.0 million in fiscal 2023. Asset Impairment .
Fiscal 2023 is comprised of 53 weeks, while fiscal years 2022 and 2021 are each comprised of 52 weeks. Results of Operations The following discussion of our financial performance is based on the consolidated financial statements set forth in the financial pages of this Report. The nature of our business is seasonal.
Results of Operations The following discussion of our financial performance is based on the consolidated financial statements set forth in Item 8 of this Report. The nature of our business is seasonal. Results may fluctuate due to changes in our business, consumer spending patterns, and the macroeconomic environment.
Selling, general and administrative expenses are comprised of store costs, including payroll and occupancy costs, corporate and distribution center costs and advertising costs. The years ended February 3, 2024, January 28, 2023 and January 29, 2022 are referred to herein as fiscal 2023, fiscal 2022 and fiscal 2021, respectively.
The years ended February 1, 2025, February 3, 2024 and January 28, 2023 are referred to herein as fiscal 2024, fiscal 2023 and fiscal 2022, respectively. Fiscal years 2024 and 2022 are each comprised of 52 weeks, while fiscal 2023 is comprised of 53 weeks.
Significant uses of cash included (1) a $54.8 million decrease in accrued expenses and other long-term liabilities due primarily to payments of operating lease liabilities; (2) an $18.3 million decrease in accounts payable due primarily to the decrease in inventory; and (3) an $15.1 million decrease in accrued compensation due to payment in the first quarter of incentive compensation accrued in the preceding fiscal year.
Significant uses of cash include a $49.5 million decrease in accrued expenses and other-long-term liabilities due primarily to payments of operating lease liabilities. For fiscal 2023, significant sources of cash included $3.5 million from insurance proceeds related to operating activities and a $17.9 million increase in accounts payable.
The difference is attributable to a pretax loss this year compared to pretax income last year that included the gain on sale-leasebacks. Net (Loss) Income. Net loss was $12.0 million in fiscal 2023 compared to net income of $59.0 million in fiscal 2022, due to the factors discussed above.
Net loss was $43.2 million in fiscal 2024 compared to net loss of $12.0 million in fiscal 2023, due to the factors discussed above.
The decrease in sales was due to a 6.8% decrease in comparable store sales, as well as a decrease of $6.1 million from net store opening and closing activity. The decrease in comparable store sales was the result of continued inflationary pressures in fiscal 2023 that were particularly impactful to our core customers. Cost of Sales (exclusive of depreciation).
Fiscal 2024 Compared to Fiscal 2023 Net Sales. Net sales increased $5.1 million, or 0.7%, to $753.1 million in fiscal 2024 from $747.9 million in fiscal 2023. The increase in sales was due to a 3.4% increase in comparable store sales, as well as a decrease of $9.1 million from net store opening and closing activity.
Basis of Presentation Net sales consist of store sales and layaway fees, net of returns by customers. Cost of sales consists of the cost of products we sell and associated freight costs. Depreciation is not considered a component of cost of sales and is included as a separate line item in the consolidated statements of operations.
Depreciation is not considered a component of cost of sales and is included as a separate line item in the consolidated statements of operations. Selling, general and administrative expenses are comprised of store costs, including payroll and occupancy costs, corporate and distribution center costs and advertising costs.
As a percentage of net sales, cost of sales deleveraged 100 basis points to 61.9% in fiscal 2023 from 60.9% in fiscal 2022 driven by higher freight costs due to rebuilding inventory in certain categories, as well as an increase in shrinkage costs. Selling, General and Administrative ( “ SG&A ” ) Expenses.
As a percentage of net sales, cost of sales deleveraged 60 basis points to 62.5% in fiscal 2024 from 61.9% in fiscal 2023 driven by higher markdowns from our large, strategic inventory reset in the second quarter and higher shrink expense, partially offset by lower freight costs as a result of reduced rates from a new carrier relationship.
As of February 3, 2024, we operated 602 stores in urban, suburban and rural markets in 33 states.
As of February 1, 2025, we operated 591 stores in urban, suburban and rural markets in 33 states. Fiscal 2024 Business Highlights ● After a mid-year fiscal 2024 CEO transition, began transformation efforts with significant improvement in financial results in the second half of the year.
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We believe that we can drive sales productivity improvements by sharpening our focus on trend development and actively refining our assortment strategies, broadening the appeal of the brand and continuing to roll out the CTx store format.
Added
We believe that we can drive increases in traffic and basket by focusing on our three-tiered product strategy of opening prices, core value product and familiar brands at incredible values, all focused on the wants and needs of our African American customers. We believe that delivering newness and freshness results in high customer frequency.
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We believe that we have the potential to grow our fleet to approximately 1,000 locations over time, giving us the opportunity to increase our presence in African-American and multicultural geographies through both densification and new market entries. Managing Inventory and Maximizing Margin .
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Our expanded offering of “ treasures ” , or extreme value product offerings, further strengthens this strategy and deepens our relationship with our customers. 24 Table of Contents Focus on the African American Customer.
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We believe that our sourcing methodology further differentiates our model through a combination of products made exclusively for our core customers and highly recognized brands grounded in everyday value. We are known for delivering newness and freshness, resulting in a high-repeat shopping rate, and our ample monthly liquidity will enable us to chase trends to excite our customer base.
Added
We believe that a sharpened focus on our African American customers will drive improved sales through a more focused product assortment designed to address their fashion needs and wants, supporting their ability to express themselves through the creation of their own style. We believe that our refined understanding of our customer will drive increased traffic and conversion in our stores.
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In addition, we leverage consumer insights and analytics to add incremental assortments, and we employ pricing studies to expand margin while ensuring a balanced “ good, better, best ” assortment. 25 Table of Contents Investing in Our Infrastructure .
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Consistent Operational Excellence . We believe that the work we are doing to develop fundamental retail practices and to ensure consistent execution will produce strong, sustainable financial results while positioning us for future, accelerated growth. Growth .
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We believe that we have an opportunity to make strategic investments in our business that will improve our efficiencies and our capabilities to “ buy, ” “ move ” and “ sell ” our assortments to effectively engage current and new customers. Making a Difference .
Added
We believe that we can maximize the productivity of our existing 591 stores located in the heart of African American neighborhoods by executing on the three areas of focus stated above and by continued refinement of our store format.
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Our team is dedicated to our neighborhoods and committed to positively impacting the African American and multicultural neighborhoods that we serve. We ’ ll leverage our “ CITI cares ” Council to continue making an impact. We strongly believe that our business strategy centered around these four areas will accelerate our long-term sales and earnings growth.
Added
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, and we expect to accelerate square footage expansion in the range of 6% to 10% annually over time. People.
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Given the macro-economic environment, we expect low-income families to remain under pressure and to tightly manage their discretionary spend through the majority of fiscal 2024.
Added
We believe that our teams across the organization, led by Ken Seipel, our Chief Executive Officer, and their ability to consistently execute while staying focused on our African American customer, providing great product and a welcoming in-store environment, are a key differentiator for our business and are key to the continued transformation of our company.
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While we have expanded our product offerings to become a one-stop shop, traffic to our stores is still influenced by weather patterns to some extent. Cyber Disruption As previously disclosed, in January 2023, we experienced a disruption of our back office and distribution center IT systems, (the “ January 2023 cyber disruption ” ) .
Added
While we have expanded our product offerings to balance discretionary with non-discretionary products, traffic to our stores is still influenced by weather patterns to some extent. Basis of Presentation Net sales consist of store sales and layaway fees, net of returns by customers. Cost of sales consists of the cost of products we sell and associated freight costs.
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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. We do not retain sensitive customer data on our systems.
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We define a comparable store as a store that has been open for at least 14 full consecutive months without closure for more than seven days within the same fiscal month.
Removed
The impact of the January 2023 cyber disruption was not material to our fiscal 2023 financial results. In the third quarter of fiscal 2023, we received insurance proceeds (reflected on our Statement of Cash Flows) related to the January 2023 cyber disruption.
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Remodeled and relocated stores are included in the comparable store sales results if the selling square footage is not changed significantly, the store is not closed for more than five days in any fiscal month and the store remains in the same trade area. We also use other operating statistics, most notably average sales per store, to measure our performance.
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This resulted in a gain of $1.2 million that is recorded in Selling, general and administrative expenses on our Statement of Operations . In fiscal 2023, we recognized $1.7 million of costs related to the cyber disruption in Selling, general and administrative expenses on our Statement of Operations.
Added
In addition to sales, we measure cost of sales as a percentage of sales and store operating expenses, with a particular focus on labor, as a percentage of sales. These results translate into store level contribution, which we use to evaluate overall performance of each individual store. Finally, we monitor corporate and distribution center expenses against budgeted amounts.
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We expect to incur ongoing costs to enhance data security and take further steps to prevent unauthorized access to, or manipulation of, our systems and data. Several putative class action lawsuits have been filed against the Company and several inquiries have been made to the Company with respect to the January 2023 cyber disruption.
Added
The increase in comparable store sales was the result of increased traffic, basket and conversion, particularly in the second half of the year with the implementation of our refined strategies. Cost of Sales (exclusive of depreciation). Cost of sales increased $8.2 million, or 1.8%, to $471.0 million in fiscal 2024 from $462.8 million in fiscal 2023.
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At February 3, 2024, we had an accrual of $0.8 million for estimated losses in connection with these matters recorded in Accrued expenses on our Balance Sheet. See Note 7 to the Financial Statements for more information . For additional information on cybersecurity and cybersecurity threats, see Item 1C. Cybersecurity.
Added
The increase was primarily due to (1) $4.1 million of merit increases for store, DC and corporate roles; (2) $3.9 million of expenses related to CEO transition and shareholder defense; (3) $3.1 million of one-time investments, such as consulting fees and store and DC labor to process off-price deals to fuel our strategic initiatives and (4) $1.8 million of store repair and maintenance costs.
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Results may fluctuate due to changes in our business, consumer spending patterns, and the macroeconomic environment.
Added
Impairment charges for fiscal 2024 related to underperforming stores totaled $2.5 million, comprised of $1.2 million for leasehold improvements and fixtures and equipment, and $1.3 million for an operating lease right-of-use asset.
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We define a comparable store as a store that has been open for an entire fiscal year. Therefore, a store will not be considered a comparable store until its 13th month of operation at the earliest or until its 24th month at the latest.
Added
The difference is attributable to the $16.5 million valuation allowance related to deferred tax assets, primarily associated with net operating loss carryforward generated in fiscal years 2023 and 2024. The cumulative losses during recent years represents sufficient negative evidence to require a valuation allowance, which will be maintained until sufficient positive evidence exists to support its reversal. Net Loss.
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As an example, stores opened in fiscal 2022 and fiscal 2023 were not considered comparable stores in fiscal 2023. Relocated and expanded stores are included in the comparable store sales results. Stores that are closed permanently or for an extended period are excluded from the comparable store sales results.
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The decrease was the result of our large, strategic inventory reset which led to the markdown of aged product in the second quarter plus the impact of a faster supply chain and a focus on improved inventory productivity.
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We focus on overall store sales volume as the critical driver of profitability. Fiscal 2023 Compared to Fiscal 2022 Net Sales. Net sales decreased $47.1 million, or 5.9%, to $747.9 million in fiscal 2023 from $795.0 million in fiscal 2022.
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Cash used in investing activities was $10.1 million in fiscal 2024 compared to cash used of $13.4 million in fiscal 2023. Cash used in fiscal 2024 consisted entirely of purchases of property and equipment.
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Cost of sales decreased $21.2 million, or 4.4%, to $462.8 million in fiscal 2023 from $484.0 million in fiscal 2022.
Added
In November 2024, the FASB issued ASU 2024-03, “ Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses ” ( “ ASU 2024-03 ” ), which requires public entities to disclose additional information that disaggregates certain expense captions into specified categories in the Notes to the consolidated financial statements.
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The increase was primarily due to (1) $2.7 million of rent related to our two distribution center sale-leaseback transactions completed in fiscal 2022; (2) $1.9 million of store rent and occupancy costs; (3) $1.9 million of distribution center payroll; (4) $0.9 million for traffic driving marketing tests; and (5) $0.6 million for cloud based technology subscriptions.
Added
The new standard is effective for fiscal years beginning after December 15, 2026, and interim periods after December 15, 2027, with early adoption permitted. The disclosure updates are required to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact the amended guidance will have on its disclosures.
Removed
In fiscal 2022, we completed sale-leaseback transactions for our distribution centers in Darlington, South Carolina and Roland, Oklahoma that resulted in a combined gain of $64.1 million. Income Tax Benefit (Expense). Income tax benefit was $3.9 million in fiscal 2023 compared to income tax expense of $17.0 million in fiscal 2022.
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Inventory Our year-end inventory balance was $130.4 million, compared with $105.8 million at the end of fiscal 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK We source all of our products from markets in the United States in U.S. Dollars and, therefore, are not directly subject to fluctuations in foreign currency exchange rates. However, fluctuations in currency exchange rates could affect our purchasing power with vendors that import merchandise to sell to us.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We source all of our products from markets in the United States in U.S. Dollars and, therefore, are not directly subject to fluctuations in foreign currency exchange rates. However, fluctuations in currency exchange rates could affect our purchasing power with vendors that import merchandise to sell to us.
We have not entered into forward contracts to hedge against fluctuations in foreign currency prices. ​ 31 Table of Contents
We have not entered into forward contracts to hedge against fluctuations in foreign currency prices. ​ 29 Table of Contents

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