Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |||
Jan. 29, 2022 | Jan. 30, 2021 | Apr. 08, 2022 | Jul. 31, 2021 | |
Document and Entity Information | ||||
Document Type | 10-K | |||
Document Period End Date | Jan. 29, 2022 | |||
Document Annual Report | true | |||
Document Transition Report | false | |||
Entity File Number | 000-51315 | |||
Entity Registrant Name | CITI TRENDS, INC. | |||
Entity Incorporation, State or Country Code | DE | |||
Entity Tax Identification Number | 52-2150697 | |||
Entity Address, Address Line One | 104 Coleman Boulevard | |||
Entity Address, City or Town | Savannah | |||
Entity Address, State or Province | GA | |||
Entity Address, Postal Zip Code | 31408 | |||
City Area Code | 912 | |||
Local Phone Number | 236-1561 | |||
Title of 12(b) Security | Common Stock, $.01 Par Value | |||
Trading Symbol | CTRN | |||
Security Exchange Name | NASDAQ | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Interactive Data Current | Yes | |||
Entity Filer Category | Accelerated Filer | |||
Entity Small Business | false | |||
Entity Emerging Growth Company | false | |||
Entity Shell Company | false | |||
ICFR Auditor Attestation Flag | true | |||
Entity Public Float | $ 682,276,483 | |||
Entity Common Stock, Shares Outstanding | 8,670,237 | |||
Current Fiscal Year End Date | --01-29 | |||
Document Fiscal Year Focus | 2021 | |||
Document Fiscal Period Focus | FY | |||
Entity Central Index Key | 0001318484 | |||
Amendment Flag | false | |||
Auditor Firm ID | 34 | 185 | ||
Auditor Name | Deloitte & Touche LLP | KPMG LLP | ||
Auditor Location | Atlanta, Georgia | Jacksonville, Florida |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 49,788 | $ 123,177 |
Inventory | 123,835 | 103,845 |
Prepaid and other current assets | 14,997 | 17,420 |
Income tax receivable | 3,987 | |
Total current assets | 192,607 | 244,442 |
Property and equipment, net of accumulated depreciation | 75,282 | 63,514 |
Operating lease right of use assets | 201,827 | 179,673 |
Deferred income taxes | 2,992 | 6,195 |
Other assets | 1,317 | 769 |
Total assets | 474,025 | 494,593 |
Current liabilities: | ||
Accounts payable | 98,879 | 84,832 |
Operating lease liabilities | 47,803 | 46,983 |
Accrued expenses | 14,532 | 16,592 |
Accrued compensation | 25,896 | 29,315 |
Income tax payable | 4,623 | |
Layaway deposits | 364 | 500 |
Total current liabilities | 187,474 | 182,845 |
Noncurrent operating lease liabilities | 168,304 | 145,828 |
Other long-term liabilities | 2,104 | 2,286 |
Total liabilities | 357,882 | 330,959 |
Stockholders' equity: | ||
Common stock, $0.01 par value. Authorized 32,000,000 shares; 16,090,365 shares issued as of January 29, 2022 and 15,981,394 shares issued as of January 30, 2021; 8,617,210 shares outstanding as of January 29, 2022 and 9,876,901 shares outstanding as of January 30, 2021 | 159 | 158 |
Paid in capital | 101,037 | 95,484 |
Retained earnings | 272,158 | 209,918 |
Treasury stock, at cost; 7,473,155 shares held as of January 29, 2022 and 6,104,493 shares held as of January 30, 2021 | (257,211) | (141,926) |
Total stockholders' equity | 116,143 | 163,634 |
Commitments and contingencies (note 7) | ||
Total liabilities and stockholders' equity | $ 474,025 | $ 494,593 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Condensed Consolidated Balance Sheets | ||
Accumulated depreciation | $ 283,445 | $ 279,080 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 32,000,000 | 32,000,000 |
Common stock, shares issued | 16,090,365 | 15,981,394 |
Common stock, shares outstanding | 8,617,210 | 9,876,901 |
Treasury stock, shares | 7,473,155 | 6,104,493 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Consolidated Statements of Operations | |||
Net sales | $ 991,595 | $ 783,294 | $ 781,925 |
Revenue, Product and Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Cost of sales (exclusive of depreciation shown separately below) | $ (584,063) | $ (471,618) | $ (484,740) |
Selling, general and administrative expenses | (307,622) | (260,198) | (259,629) |
Depreciation | (20,393) | (19,259) | (18,535) |
Asset impairment | (286) | (472) | |
Income from operations | 79,517 | 31,933 | 18,549 |
Interest income | 31 | 238 | 1,577 |
Interest expense | (306) | (776) | (158) |
Income before income taxes | 79,242 | 31,395 | 19,968 |
Income tax expense | (17,002) | (7,417) | (3,465) |
Net income | $ 62,240 | $ 23,978 | $ 16,503 |
Basic net income per common share | $ 6.98 | $ 2.33 | $ 1.41 |
Diluted net income per common share | $ 6.91 | $ 2.32 | $ 1.41 |
Weighted average number of shares outstanding | |||
Basic | 8,911,810 | 10,282,718 | 11,673,887 |
Diluted | 9,012,932 | 10,325,239 | 11,699,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Operating activities: | |||
Net income | $ 62,240 | $ 23,978 | $ 16,503 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 20,393 | 19,259 | 18,535 |
Non-cash operating lease costs | 50,455 | 48,242 | 45,463 |
Asset impairment | 286 | 472 | |
Loss on disposal of property and equipment | 201 | 39 | 23 |
Deferred income taxes | 3,203 | 474 | (130) |
Insurance proceeds related to operating activities | 804 | 1,042 | 1,012 |
Non-cash stock-based compensation expense | 4,776 | 2,912 | 2,121 |
Changes in assets and liabilities: | |||
Inventory | (20,381) | 33,564 | 1,216 |
Prepaid and other current assets | 2,011 | (7,718) | (1,588) |
Other assets | (278) | (14) | (10) |
Accounts payable | 12,833 | 5,083 | 5,560 |
Accrued expenses and other long-term liabilities | (53,187) | (38,346) | (45,282) |
Accrued compensation | (5) | 16,302 | 267 |
Income tax payable/receivable | (8,610) | 5,809 | (1,581) |
Layaway deposits | (136) | (54) | 28 |
Net cash provided by operating activities | 74,319 | 110,858 | 42,609 |
Investing activities: | |||
Sales/redemptions of investment securities | 35,272 | 43,759 | 59,836 |
Purchases of investment securities | (35,272) | (522) | (43,840) |
Purchases of property and equipment | (29,707) | (16,956) | (24,175) |
Insurance proceeds related to investing activities | 192 | 416 | 573 |
Net cash (used in) provided by investing activities | (29,515) | 26,697 | (7,606) |
Financing activities: | |||
Borrowings under revolving credit facility | 43,700 | ||
Repayments of revolving credit facility | (43,700) | ||
Payments of debt issuance costs | (270) | ||
Cash used to settle withholding taxes on the vesting of nonvested restricted stock | (2,638) | (608) | (733) |
Dividends paid to stockholders | (832) | (3,765) | |
Repurchases of common stock | (115,285) | (32,861) | (28,445) |
Net cash used in financing activities | (118,193) | (34,301) | (32,943) |
Net (decrease) increase in cash and cash equivalents | (73,389) | 103,254 | 2,060 |
Cash and cash equivalents: | |||
Beginning of year | 123,177 | 19,923 | 17,863 |
End of year | 49,788 | 123,177 | 19,923 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 176 | 731 | 127 |
Cash payments of income taxes | 22,409 | 1,134 | 4,477 |
Supplemental disclosures of non-cash investing activities: | |||
Accrual for purchases of property and equipment | 2,847 | $ 1,392 | $ 4,000 |
Conversion of nonvested cash-settled units to nonvested shares under incentive plan | $ 3,415 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Paid in Capital | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Treasury Stock | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balances at Feb. 02, 2019 | $ 157 | $ 91,794 | $ (2,060) | $ 176,094 | $ (80,620) | $ (2,060) | $ 187,425 |
Balances (in shares) at Feb. 02, 2019 | 15,827,713 | 3,669,476 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Vesting of nonvested restricted stock units | $ 1 | 1 | |||||
Vesting of nonvested restricted stock units (in shares) | 18,851 | ||||||
Issuance of nonvested shares under incentive plan (in shares) | 122,816 | ||||||
Forfeiture of nonvested shares (in shares) | (24,359) | ||||||
Stock-based compensation expense | 2,121 | 2,121 | |||||
Net share settlement of nonvested shares and units | $ (1) | (735) | (736) | ||||
Net share settlement of nonvested shares and units (in shares) | (37,355) | ||||||
Repurchase of common stock | $ (28,445) | $ (28,445) | |||||
Repurchase of common stock (in shares) | 1,404,056 | 1,404,000 | |||||
Dividends paid to stockholders | (3,765) | $ (3,765) | |||||
Net income | 16,503 | 16,503 | |||||
Balances at Feb. 01, 2020 | $ 157 | 93,180 | 186,772 | $ (109,065) | 171,044 | ||
Balances (in shares) at Feb. 01, 2020 | 15,907,666 | 5,073,532 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Vesting of nonvested restricted stock units | $ 1 | 1 | |||||
Issuance of nonvested shares under incentive plan (in shares) | 127,880 | ||||||
Forfeiture of nonvested shares (in shares) | (15,218) | ||||||
Stock-based compensation expense | 2,912 | 2,912 | |||||
Net share settlement of nonvested shares and units | (608) | (608) | |||||
Net share settlement of nonvested shares and units (in shares) | (38,934) | ||||||
Repurchase of common stock | $ (32,861) | $ (32,861) | |||||
Repurchase of common stock (in shares) | 1,030,961 | 1,031,000 | |||||
Dividends paid to stockholders | (832) | $ (832) | |||||
Net income | 23,978 | 23,978 | |||||
Balances at Jan. 30, 2021 | $ 158 | 95,484 | 209,918 | $ (141,926) | $ 163,634 | ||
Balances (in shares) at Jan. 30, 2021 | 15,981,394 | 6,104,493 | 15,981,394 | ||||
Increase (Decrease) in Stockholders' Equity | |||||||
Conversion of nonvested cash-settled units to nonvested shares under incentive plan | 3,415 | $ 3,415 | |||||
Conversion of nonvested cash-settled units to nonvested shares under incentive plan (in shares) | 123,478 | ||||||
Vesting of nonvested restricted stock units | $ 1 | 1 | |||||
Issuance of nonvested shares under incentive plan (in shares) | 23,539 | ||||||
Forfeiture of nonvested shares (in shares) | (9,166) | ||||||
Stock-based compensation expense | 4,776 | 4,776 | |||||
Net share settlement of nonvested shares and units | (2,638) | (2,638) | |||||
Net share settlement of nonvested shares and units (in shares) | (28,880) | ||||||
Repurchase of common stock | $ (115,285) | $ (115,285) | |||||
Repurchase of common stock (in shares) | 1,368,662 | 1,369,000 | |||||
Net income | 62,240 | $ 62,240 | |||||
Balances at Jan. 29, 2022 | $ 159 | $ 101,037 | $ 272,158 | $ (257,211) | $ 116,143 | ||
Balances (in shares) at Jan. 29, 2022 | 16,090,365 | 7,473,155 | 16,090,365 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
Consolidated Statements of Stockholders' Equity | ||
Dividends paid to stockholders | $ 0.08 | $ 0.08 |
Organization and Business
Organization and Business | 12 Months Ended |
Jan. 29, 2022 | |
Organization and Business | |
Organization and Business | 1. Organization and Business Citi Trends, Inc. and its subsidiary (the “Company”) is a growing specialty value retailer of apparel, accessories and home trends for way less spend primarily for African American and Latinx families in the United States. As of January 29, 2022, the Company operated 609 stores in urban, suburban and rural markets in 33 states. Since early 2020, the global economy has been affected by COVID-19. The COVID-19 pandemic has caused, and may continue to cause, significant volatility and disruptions in the Company’s business , including the temporary closure of stores and limited store operating hours, reduced customer traffic and consumer spending, and delays in the manufacturing and shipping of products. Certain government actions to gradually ease restrictions, provide economic stimulus and distribute vaccines have resulted in signs of economic recovery. However, t he Company cannot reasonably predict the extent to which our future business will be impacted by the pandemic. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 29, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany transactions and balances have been eliminated in consolidation. Fiscal Year The Company’s fiscal year ends on the Saturday closest to January 31 of each year. The years ended January 29, 2022, January 30, 2021 and February 1, 2020 are referred to as fiscal 2021, fiscal 2020 and fiscal 2019, respectively, in the accompanying consolidated financial statements. Fiscal 2021, 2020 and 2019 are all comprised of 52 weeks. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and apply judgments that affect the reported amounts. Actual results could differ from those estimates. The most significant estimates include those used in the valuation of inventory, property and equipment, self-insurance liabilities, leases and income taxes. Management periodically evaluates estimates used in the preparation of the consolidated financial statements for continued reasonableness. Appropriate adjustments, if any, to the estimates used are made prospectively. Cash and Cash Equivalents/Concentration of Credit Risk For purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers all highly liquid investments with maturities at date of purchase of three months or less to be cash equivalents. Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and cash equivalents. The Company places its cash and cash equivalents in what it believes to be high credit quality banks and institutional money market funds. The Company maintains cash accounts that exceed federally insured limits. Inventory Inventory is stated at the lower of cost (first-in, first-out basis) or net realizable value as determined by the retail inventory method for store inventory and the average cost method for distribution center inventory. 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. Merchandise markdowns are reflected in the inventory valuation when the retail price of an item is lowered in the stores. Inventory is recorded net of an allowance for shrinkage based on the most recent physical inventory counts and other assumptions for shrinkage activity. The allowance for inventory shrinkage was $4.4 million as of January 29, 2022 and $5.2 million as of January 30, 2021. Property and Equipment, net Property and equipment, net are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the lesser of the estimated useful lives (primarily three to five years for computer equipment and furniture, fixtures and equipment, seven years for major purchased software systems, ten years for leasehold improvements and fifteen to twenty years for buildings and building improvements) of the related assets or the relevant lease term. Impairment of Long-Lived Assets If facts and circumstances indicate that a long-lived asset may be impaired, the carrying value is reviewed. If this review indicates that the carrying value of the asset will not be recovered as determined based on projected undiscounted cash flows related to the asset over its remaining life, the carrying value of the asset is reduced to its estimated fair value. There was no impairment expense in fiscal 2021. Non-cash impairment expense in fiscal 2020 and 2019 totaled $0.3 million and $0.5 million, respectively, related primarily to leasehold improvements and fixtures and equipment at underperforming stores. Insurance Liabilities The Company is largely self-insured for workers’ compensation costs, general liability claims and employee medical claims. The Company’s self-insured retention or deductible, as applicable, for each claim involving workers’ compensation and employee medical is limited to $250,000 and $100,000 , respectively. Self-insurance liabilities are based on the total estimated costs of claims filed and estimates of claims incurred but not reported, less amounts paid against such claims. Current and historical claims data, together with information from actuarial studies, are used in developing the estimates. The insurance liabilities that are recorded are primarily influenced by the frequency and severity of claims and the Company’s growth. If the underlying facts and circumstances related to the claims change, then the Company may be required to record more or less expense which could be material in relation to results of operations. Stock-Based Compensation The Company recognizes compensation expense associated with all nonvested restricted stock and performance-based restricted stock units based on the grant-date fair value of each award. The fair value of the awards is calculated based on the stock price on the grant date, incorporating an analysis of the performance measure where applicable. Compensation expense is recognized ratably over the requisite service period. See Note 6 for additional information on the Company’s stock-based compensation plans. Revenue Recognition The Company’s primary source of revenue is derived from the sale of clothing and accessories to its customers with the Company’s performance obligations satisfied at the point of sale when the customer pays for their purchase and receives the merchandise. Sales taxes collected by the Company from customers are excluded from revenue. Revenue from layaway sales is recognized at the point in time when the merchandise is paid for and control of the goods is transferred to the customer, thereby satisfying the Company’s performance obligation. The Company defers revenue from the sale of gift cards and recognizes the associated revenue upon the redemption of the cards by customers to purchase merchandise. Breakage on gift cards is minimal as the cards are generally subject to escheat regulations of the state in which the gift card subsidiary is located. Sales Returns The Company allows customers to return merchandise for up to thirty days after the date of sale. Expected refunds to customers are recorded based on estimated margin using historical return information. The refund liability for merchandise returns is recorded in accrued expenses on the consolidated balance sheet and totaled $0.2 million and $0.3 million as of January 29, 2022 and January 30, 2021. The corresponding asset for the recoverable cost of expected refunds is included in prepaid and other current assets and totaled $0.1 million as of both January 29, 2022 and January 30, 2021. Disaggregation of Revenue In the following table, the Company’s revenue is disaggregated by “Citi” or major product category. The following table provides the percentage of net sales for each Citi within the merchandise assortment: Fiscal Year Citis 2021 2020 2019 Ladies 26 % 26 % 26 % Kids 22 % 23 % 23 % Mens 18 % 18 % 16 % Accessories & Beauty 18 % 16 % 17 % Home & Lifestyle 9 % 9 % 7 % Footwear 7 % 8 % 11 % Cost of Sales Cost of sales includes the cost of inventory sold during the period and transportation costs, including inbound freight related to inventory sold and freight from the distribution centers to the stores, net of discounts and allowances. Distribution center costs, store occupancy expenses and advertising expenses are not considered components of cost of sales and are included as part of selling, general and administrative expenses. Depreciation is also not considered a component of cost of sales and is included as a separate line item in the consolidated statements of operations. Distribution center costs (exclusive of depreciation) for fiscal 2021, 2020 and 2019 were $24.9 million, $20.3 million and $20.8 million, respectively. Earnings per Share Basic earnings per common share amounts are calculated using the weighted average number of common shares outstanding for the period. Diluted earnings per common share amounts are calculated using the weighted average number of common shares outstanding plus the additional dilution for all potentially dilutive securities, such as nonvested restricted stock. During loss periods, diluted loss per share amounts are based on the weighted average number of common shares outstanding because the inclusion of common stock equivalents would be antidilutive. The following table provides a reconciliation of the number of average common shares outstanding used to calculate basic earnings per share to the number of common shares and common stock equivalents outstanding used in calculating diluted earnings per share: Fiscal Year 2021 2020 2019 Weighted average number of common shares outstanding 8,911,810 10,282,718 11,673,887 Incremental shares from assumed vesting of nonvested restricted stock 101,122 42,521 25,113 Average number of common shares and common stock equivalents outstanding 9,012,932 10,325,239 11,699,000 The dilutive effect of stock-based compensation arrangements is accounted for using the treasury stock method. The Company includes as assumed proceeds the amount of compensation costs attributed to future services and not yet recognized. For fiscal 2021, 2020 and 2019, respectively, there were 47,000 , 131,000 and 128,000 shares of nonvested restricted stock excluded from the calculation of diluted earnings per share because of antidilution. Advertising The Company expenses advertising as incurred. Advertising expense for fiscal 2021, 2020 and 2019 was $1.2 million, $1.6 million and $1.8 million, respectively. Operating Leases The Company leases all of its retail store locations and certain office space and equipment. All leases are classified as operating leases. The Company records right-of-use assets and lease liabilities based on the present value of future minimum lease payments using an incremental borrowing rate. The incremental borrowing rate is determined based on rates and terms from the Company’s existing borrowing facility with adjustments to bridge for differences in collateral, terms and payments. Lease costs are recognized over the estimated term of the lease, which includes any reasonably certain lease periods associated with available renewal periods. Lease expense for fixed lease payments is recognized on a straight-line basis over the lease term. In addition, certain leases provide for contingent rents that are not measurable at inception. These contingent rents are primarily based on a percentage of net sales that are in excess of a predetermined level. These amounts are excluded from minimum rent and included in the determination of total rent expense when it is probable that the expense has been incurred and the amount can be reasonably estimated. If an operating lease asset is impaired, the remaining operating lease asset will be amortized on a straight-line basis over the remaining lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company adopted ASU 2016-20, Leases (Topic 842), as amended, on February 3, 2019 using the optional transition method that allowed for prospective application of the standard. The Company elected the package of practical expedients for transition that retained the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. Further, the Company elected to account for lease and non-lease components as a single lease component. Lease impairment, net of the related deferred taxes, totaled approximately $2.1 million as of February 3, 2019 and is reflected as an adjustment to retained earnings at the transition date. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Business Operating Segment The Company is a specialty value retailer of fashion apparel, accessories and home goods for the entire family. The retail operations represent a single operating segment based on the way the Company manages its business. Operating decisions and resource allocation decisions are made at the Company level in order to maintain a consistent retail store presentation. The Company’s retail stores sell similar products, use similar processes to sell those products, and sell their products to similar classes of customers. All sales and assets are located within the United States . |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Jan. 29, 2022 | |
Property and Equipment, net | |
Property and Equipment, net | 3. Property and Equipment, net Property and equipment, net, consists of the following (in thousands): January 29, January 30, 2022 2021 Land $ 479 $ 479 Buildings 32,378 31,642 Leasehold improvements 117,604 108,818 Furniture, fixtures and equipment 156,215 148,332 Computer equipment 45,804 42,414 Construction in progress 6,247 10,909 358,727 342,594 Accumulated depreciation (283,445) (279,080) $ 75,282 $ 63,514 |
Revolving Credit Facility
Revolving Credit Facility | 12 Months Ended |
Jan. 29, 2022 | |
Revolving Credit Facility | |
Revolving Credit Facility | 4. Revolving Line of Credit On October 27, 2011, the Company entered into a five-year , $50 million credit facility with Bank of America. The facility was amended in August 2015 and May 2020 to extend the maturity dates. The facility was further amended on April 15, 2021 to modify terms and extend the maturity date to April 15, 2026. The amended facility provides a $75 million credit commitment and a $25 million uncommitted “accordion” feature that under certain circumstances could allow the Company to increase the size of the facility to $100 million. The facility is secured by the Company’s inventory, accounts receivable and related assets, but not its real estate, fixtures and equipment, and it contains one financial covenant, a fixed charge coverage ratio, which is applicable and tested only in certain circumstances. The facility has an unused commitment fee of 0.20% and permits the payment of cash dividends subject to certain limitations. Borrowings under the credit facility bear interest (a) for Eurodollar Loans, at a rate equal to the Eurodollar Rate plus either 1.25% , 1.50% or 1.75% , or (b) for Base Rate Loans, at a rate equal to the highest of (i) the prime rate, (ii) the Federal Funds Rate plus 0.5% or (iii) the Eurodollar Rate plus 1.0% , plus, in each case either 0.25% , 0.50% or 0.75% , based in any such case on the average daily availability for borrowings under the facility. On March 20, 2020, in response to the COVID-19 pandemic, the Company borrowed $43.7 million on the credit facility to enhance its liquidity position. On September 11, 2020, the Company repaid the full amount outstanding under the credit facility. Such borrowings accrued interest ranging from 1.625% to 3.5% . As of January 29, 2022, the Company had no borrowings under the credit facility and $0.6 million of letters of credit outstanding. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 29, 2022 | |
Income Taxes | |
Income Taxes | 5. Income Taxes Income tax expense consists of the following (in thousands): Fiscal Year 2021 2020 2019 Current: Federal $ (11,326) $ (5,538) $ (2,650) State (2,473) (1,405) (945) Total current (13,799) (6,943) (3,595) Deferred: Federal (2,629) (588) 104 State (574) 114 26 Total deferred (3,203) (474) 130 Total income tax expense $ (17,002) $ (7,417) $ (3,465) Income tax expense computed using the federal statutory rate is reconciled to the reported income tax expense as follows (in thousands): Fiscal Year 2021 2020 2019 Statutory rate applied to income before income taxes $ (16,641) $ (6,593) $ (4,193) State income taxes, net of federal benefit (2,936) (1,777) (791) State tax credits 152 168 308 State tax credits - valuation allowance (net of federal benefit) 158 — (99) Tax exempt interest — — 34 General business credits 1,433 878 1,456 Nondeductible compensation (455) — — Excess (deficit) tax benefits from stock-based compensation 1,226 (58) (83) Other 61 (35) (97) Income tax expense $ (17,002) $ (7,417) $ (3,465) Deferred tax assets and deferred tax liabilities consist of the following (in thousands): January 29, January 30, 2022 2021 Deferred tax assets: Inventory capitalization $ 1,910 $ 1,628 Vacation liability 781 754 Operating lease liabilities 55,088 49,763 State tax credits 3,033 3,033 Stock compensation 2,233 1,598 Deferral of FICA tax — 416 Legal expense reserve — 128 Insurance liabilities 778 646 Other 620 532 Subtotal deferred tax assets 64,443 58,498 Less: State tax credits valuation allowance - net (1,556) (1,714) Total deferred tax assets 62,887 56,784 Deferred tax liabilities: Right of use asset (53,342) (47,672) Book and tax depreciation differences (5,574) (2,040) Prepaid expenses (979) (877) Total deferred tax liabilities (59,895) (50,589) Net deferred tax asset $ 2,992 $ 6,195 The Company files income tax returns in U.S. federal and state jurisdictions where it does business and is subject to examinations by the Internal Revenue Service (“IRS”) and other taxing authorities. With a few exceptions, the Company is no longer subject to U.S. federal and state income tax examinations by tax authorities for years prior to fiscal 2016. The Company reviews and assesses uncertain tax positions, if any, with recognition and measurement of tax benefit based on a “more-likely-than-not” standard with respect to the ultimate outcome, regardless of whether this assessment is favorable or unfavorable. As of January 29, 2022, there were no benefits taken on the Company’s income tax returns that do not qualify for financial statement recognition. If a tax position does not meet the minimum statutory threshold to avoid payment of penalties and interest, a company is required to recognize an expense for the amount of the interest and penalty in the period in which the company claims or expects to claim the position on its tax return. For financial statement purposes, companies are allowed to elect whether to classify such charges as either income tax expense or another expense classification. Should such expense be incurred in the future, the Company will classify such interest as a component of interest expense and penalties as a component of income tax expense. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible and income tax credits may be utilized, management believes it is more likely than not that the Company will realize the benefits of these deductible differences with the exception of certain tax credits available in one state. Beginning in 2011, the Company concluded that its ability to utilize a portion of such state’s tax credits was no longer more likely than not. Such recognition resulted in the establishment of a valuation allowance which necessitated a charge to income tax expense and a reduction in deferred tax assets. Subsequent to 2011, the Company has continued to earn such state credits and has further adjusted the related valuation allowance. At January 29, 2022, the valuation allowance, net of federal tax benefit, totaled $1.6 million. The effective income tax rate for fiscal 2021, 2020 and 2019 included the recognition of benefits arising from various federal and state tax credits. Under current IRS and state income tax regulations, these credits may be carried back for one year or carried forward for periods up to 20 years . The income tax benefit included $1.6 million, $1.7 million and $1.7 million related to such credits in each of fiscal 2021, 2020 and 2019, respectively . |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 29, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 6 . Stockholders’ Equity Repurchases of common stock The Company periodically repurchases shares of its common stock under board-authorized repurchase programs. Such repurchases may be made in the open market, through block trades or through other negotiated transactions. Share repurchases are as follows (in thousands, except per share data): Fiscal Year 2021 2020 2019 Total number of shares purchased 1,369 1,031 1,404 Average price paid per share (including commissions) $ 84.23 $ 31.87 $ 20.26 Total investment $ 115,285 $ 32,861 $ 28,445 At January 29, 2022, $30.0 million remained available under the Company’s stock repurchase authorization. In March 2022, the Company announced that its board of directors approved an additional $30.0 million stock repurchase program. Stock-Based Compensation The Company maintains the Citi Trends, Inc. Incentive Plan (the “Plan”) which permits the grant of stock-based incentive awards to employees, officers, directors and consultants. The Plan provides for the grant of incentive and nonqualified options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other forms of stock-based and cash-based compensation. At January 29, 2022, the Company had 678,356 shares reserved for future grants under the Plan. During fiscal 2021, 2020 and 2019, non-cash stock-based compensation expense recorded in selling and general and administrative expenses totaled $4.8 million, $2.9 million and $2.1 million, respectively. The income tax (benefit) expense resulting from the fair market value of restricted stock at vesting versus the cumulative compensation cost of such stock is recorded as a component of income tax expense and was ( $1.2 ) million, $0.1 million and $0.1 million, respectively. The Company issues shares of restricted stock to key team members and non-employee directors. Restricted stock granted to employees vests in equal installments over three years from the date of grant. Restricted stock granted to non-employee directors vests one year from the date of grant. The Company also issues performance-based restricted stock units (“PSUs”) to key team members that cliff vest at the end of a three-year period based upon the Company’s achievement of pre-established goals. The number of units earned and vested is subject to scaling based on a pre-established performance matrix. Prior to fiscal 2021, the Company issued cash-settled restricted stock units (“CSUs”) to certain team members. In the fourth quarter of fiscal 2021, all outstanding CSUs were converted to time-based restricted stock, with vesting criteria based on the original vesting criteria for the CSUs. This conversion resulted in the reclassification of a $3.4 million liability from accrued compensation to equity . The following table summarizes activity related to nonvested restricted stock and PSUs during fiscal 2021: Time-Based Restricted Stock Performance-Based Restricted Stock Units Weighted Average Weighted Average Nonvested Grant Date Nonvested Grant Date Shares Fair Value Units Fair Value Outstanding as of January 30, 2021 175,077 $ 21.02 130,969 $ 16.98 Granted 50,707 89.35 21,380 84.46 Conversion of cash-settled units 96,310 82.19 — — Vested (86,437) 21.72 (26,887) 20.25 Forfeited (9,166) 24.90 (10,657) 23.72 Outstanding as of January 29, 2022 226,491 $ 61.91 114,805 $ 28.15 At January 29, 2022, there was $8.4 million of unrecognized compensation expense related to restricted stock. Based on current probable performance, there was $3.9 million of unrecognized compensation expense related to PSUs . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 29, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 7. Commitments and Contingencies The Company from time to time is involved in various legal proceedings incidental to the conduct of its business, including claims by customers, employees or former employees. Once it becomes probable that the Company will incur costs in connection with a legal proceeding and such costs can be reasonably estimated, it establishes appropriate reserves. While legal proceedings are subject to uncertainties and the outcome of any such matter is not predictable, the Company is not aware of any legal proceedings pending or threatened against it that it expects to have a material adverse effect on its financial condition, results of operations or liquidity. |
Leases
Leases | 12 Months Ended |
Jan. 29, 2022 | |
Leases | |
Leases | 8. Leases The Company leases its retail store locations and certain office space and equipment. Leases for store locations are typically for a term of five years with options to extend for one or more five-year periods. The Company analyzes all leases at inception to determine if a right-of-use asset and lease liability should be recognized. Leases with an initial term of 12 months or less and leases with mutual termination clauses are not included on the consolidated balance sheets. The lease liability is measured at the present value of future lease payments as of the lease commencement date. Total lease cost is comprised of operating lease costs, short-term lease costs and variable lease costs, which include rent paid as a percentage of sales, common area maintenance, real estate taxes and insurance for the Company’s real estate leases. Lease costs consisted of the following (in thousands): Fiscal Year 2021 2020 Operating lease cost $ 52,737 $ 50,446 Variable lease cost 10,938 8,159 Short term lease cost 1,091 1,459 Total lease cost $ 64,766 $ 60,064 In response to the impact of the COVID-19 pandemic on the Company’s operations in fiscal 2020, the Company suspended certain lease payments under its existing lease agreements. During the suspension of payments, the Company continued to recognize expenses and liabilities for lease obligations and corresponding right-of-use assets on the balance sheet in accordance with the applicable accounting guidance. The Company negotiated contractual rent concessions on certain leases in the form of early renewals, rent deferrals and rent abatements. The Company elected to account for qualifying COVID-19 related rent concessions as if they were part of the enforceable rights and obligations under the existing lease agreements, as permitted by the updated guidance provided by the FASB in April 2020. As a result of this election, the Company recognized rent abatement credits of approximately $0.7 million and $1.0 million in fiscal 2021 and 2020, respectively. The balance of accrued lease liabilities related to these suspended payments was $0.4 million at January 29, 2022. Future minimum lease payments as of January 29, 2022 are as follows (in thousands): Fiscal Year Lease Costs 2022 $ 53,317 2023 50,918 2024 42,114 2025 31,622 2026 21,246 Thereafter 34,818 Total future minimum lease payments 234,035 Less: imputed interest (17,928) (1) Total present value of lease liabilities $ 216,107 (2) (1) Calculated using the discount rate for each lease. (2) Includes short-term and long-term portions of operating leases. Certain operating leases provide for fixed monthly rents, while others provide for contingent rents computed as a percentage of net sales and others provide for a combination of both fixed monthly rents and contingent rents computed as a percentage of net sales. Supplemental cash flow and other information related to operating leases are as follows (in thousands, except for weighted average amounts): Fiscal Year 2021 2020 Cash paid for operating leases $ 56,932 $ 47,075 Right of use assets obtained in exchange for new operating lease liabilities $ 75,359 $ 60,144 Weighted average remaining lease term (years) - operating leases 5.32 5.12 Weighted average discount rate - operating leases 2.86% 3.11% |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jan. 29, 2022 | |
Subsequent Events | |
Subsequent Events | 9. Subsequent Events On March 14, 2022, we entered into an agreement to consummate a sale and leaseback transaction of our distribution center in Darlington, South Carolina, and at our discretion, our distribution center in Roland, Oklahoma. The sale of the Darlington property is expected to provide net proceeds (after tax and transaction-related costs) of approximately $37 million. The sale of the Roland property, if elected by the Company, is expected to provide net proceeds of approximately $32 million. The sale of the Roland property is subject to due diligence and other customary closing conditions. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 29, 2022 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany transactions and balances have been eliminated in consolidation. |
Fiscal Year | Fiscal Year The Company’s fiscal year ends on the Saturday closest to January 31 of each year. The years ended January 29, 2022, January 30, 2021 and February 1, 2020 are referred to as fiscal 2021, fiscal 2020 and fiscal 2019, respectively, in the accompanying consolidated financial statements. Fiscal 2021, 2020 and 2019 are all comprised of 52 weeks. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and apply judgments that affect the reported amounts. Actual results could differ from those estimates. The most significant estimates include those used in the valuation of inventory, property and equipment, self-insurance liabilities, leases and income taxes. Management periodically evaluates estimates used in the preparation of the consolidated financial statements for continued reasonableness. Appropriate adjustments, if any, to the estimates used are made prospectively. |
Cash and Cash Equivalents/Concentration of Credit Risk | Cash and Cash Equivalents/Concentration of Credit Risk For purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers all highly liquid investments with maturities at date of purchase of three months or less to be cash equivalents. Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and cash equivalents. The Company places its cash and cash equivalents in what it believes to be high credit quality banks and institutional money market funds. The Company maintains cash accounts that exceed federally insured limits. |
Inventory | Inventory Inventory is stated at the lower of cost (first-in, first-out basis) or net realizable value as determined by the retail inventory method for store inventory and the average cost method for distribution center inventory. 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. Merchandise markdowns are reflected in the inventory valuation when the retail price of an item is lowered in the stores. Inventory is recorded net of an allowance for shrinkage based on the most recent physical inventory counts and other assumptions for shrinkage activity. The allowance for inventory shrinkage was $4.4 million as of January 29, 2022 and $5.2 million as of January 30, 2021. |
Property and Equipment, net | Property and Equipment, net Property and equipment, net are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the lesser of the estimated useful lives (primarily three to five years for computer equipment and furniture, fixtures and equipment, seven years for major purchased software systems, ten years for leasehold improvements and fifteen to twenty years for buildings and building improvements) of the related assets or the relevant lease term. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets If facts and circumstances indicate that a long-lived asset may be impaired, the carrying value is reviewed. If this review indicates that the carrying value of the asset will not be recovered as determined based on projected undiscounted cash flows related to the asset over its remaining life, the carrying value of the asset is reduced to its estimated fair value. There was no impairment expense in fiscal 2021. Non-cash impairment expense in fiscal 2020 and 2019 totaled $0.3 million and $0.5 million, respectively, related primarily to leasehold improvements and fixtures and equipment at underperforming stores. |
Insurance Liabilities | Insurance Liabilities The Company is largely self-insured for workers’ compensation costs, general liability claims and employee medical claims. The Company’s self-insured retention or deductible, as applicable, for each claim involving workers’ compensation and employee medical is limited to $250,000 and $100,000 , respectively. Self-insurance liabilities are based on the total estimated costs of claims filed and estimates of claims incurred but not reported, less amounts paid against such claims. Current and historical claims data, together with information from actuarial studies, are used in developing the estimates. The insurance liabilities that are recorded are primarily influenced by the frequency and severity of claims and the Company’s growth. If the underlying facts and circumstances related to the claims change, then the Company may be required to record more or less expense which could be material in relation to results of operations. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation expense associated with all nonvested restricted stock and performance-based restricted stock units based on the grant-date fair value of each award. The fair value of the awards is calculated based on the stock price on the grant date, incorporating an analysis of the performance measure where applicable. Compensation expense is recognized ratably over the requisite service period. See Note 6 for additional information on the Company’s stock-based compensation plans. |
Revenue Recognition | Revenue Recognition The Company’s primary source of revenue is derived from the sale of clothing and accessories to its customers with the Company’s performance obligations satisfied at the point of sale when the customer pays for their purchase and receives the merchandise. Sales taxes collected by the Company from customers are excluded from revenue. Revenue from layaway sales is recognized at the point in time when the merchandise is paid for and control of the goods is transferred to the customer, thereby satisfying the Company’s performance obligation. The Company defers revenue from the sale of gift cards and recognizes the associated revenue upon the redemption of the cards by customers to purchase merchandise. Breakage on gift cards is minimal as the cards are generally subject to escheat regulations of the state in which the gift card subsidiary is located. |
Sales Returns | Sales Returns The Company allows customers to return merchandise for up to thirty days after the date of sale. Expected refunds to customers are recorded based on estimated margin using historical return information. The refund liability for merchandise returns is recorded in accrued expenses on the consolidated balance sheet and totaled $0.2 million and $0.3 million as of January 29, 2022 and January 30, 2021. The corresponding asset for the recoverable cost of expected refunds is included in prepaid and other current assets and totaled $0.1 million as of both January 29, 2022 and January 30, 2021. |
Disaggregation of Revenue | Disaggregation of Revenue In the following table, the Company’s revenue is disaggregated by “Citi” or major product category. The following table provides the percentage of net sales for each Citi within the merchandise assortment: Fiscal Year Citis 2021 2020 2019 Ladies 26 % 26 % 26 % Kids 22 % 23 % 23 % Mens 18 % 18 % 16 % Accessories & Beauty 18 % 16 % 17 % Home & Lifestyle 9 % 9 % 7 % Footwear 7 % 8 % 11 % |
Cost of Sales | Cost of Sales Cost of sales includes the cost of inventory sold during the period and transportation costs, including inbound freight related to inventory sold and freight from the distribution centers to the stores, net of discounts and allowances. Distribution center costs, store occupancy expenses and advertising expenses are not considered components of cost of sales and are included as part of selling, general and administrative expenses. Depreciation is also not considered a component of cost of sales and is included as a separate line item in the consolidated statements of operations. Distribution center costs (exclusive of depreciation) for fiscal 2021, 2020 and 2019 were $24.9 million, $20.3 million and $20.8 million, respectively. |
Earnings per Share | Earnings per Share Basic earnings per common share amounts are calculated using the weighted average number of common shares outstanding for the period. Diluted earnings per common share amounts are calculated using the weighted average number of common shares outstanding plus the additional dilution for all potentially dilutive securities, such as nonvested restricted stock. During loss periods, diluted loss per share amounts are based on the weighted average number of common shares outstanding because the inclusion of common stock equivalents would be antidilutive. The following table provides a reconciliation of the number of average common shares outstanding used to calculate basic earnings per share to the number of common shares and common stock equivalents outstanding used in calculating diluted earnings per share: Fiscal Year 2021 2020 2019 Weighted average number of common shares outstanding 8,911,810 10,282,718 11,673,887 Incremental shares from assumed vesting of nonvested restricted stock 101,122 42,521 25,113 Average number of common shares and common stock equivalents outstanding 9,012,932 10,325,239 11,699,000 The dilutive effect of stock-based compensation arrangements is accounted for using the treasury stock method. The Company includes as assumed proceeds the amount of compensation costs attributed to future services and not yet recognized. For fiscal 2021, 2020 and 2019, respectively, there were 47,000 , 131,000 and 128,000 shares of nonvested restricted stock excluded from the calculation of diluted earnings per share because of antidilution. |
Advertising | Advertising The Company expenses advertising as incurred. Advertising expense for fiscal 2021, 2020 and 2019 was $1.2 million, $1.6 million and $1.8 million, respectively. |
Operating Leases | Operating Leases The Company leases all of its retail store locations and certain office space and equipment. All leases are classified as operating leases. The Company records right-of-use assets and lease liabilities based on the present value of future minimum lease payments using an incremental borrowing rate. The incremental borrowing rate is determined based on rates and terms from the Company’s existing borrowing facility with adjustments to bridge for differences in collateral, terms and payments. Lease costs are recognized over the estimated term of the lease, which includes any reasonably certain lease periods associated with available renewal periods. Lease expense for fixed lease payments is recognized on a straight-line basis over the lease term. In addition, certain leases provide for contingent rents that are not measurable at inception. These contingent rents are primarily based on a percentage of net sales that are in excess of a predetermined level. These amounts are excluded from minimum rent and included in the determination of total rent expense when it is probable that the expense has been incurred and the amount can be reasonably estimated. If an operating lease asset is impaired, the remaining operating lease asset will be amortized on a straight-line basis over the remaining lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company adopted ASU 2016-20, Leases (Topic 842), as amended, on February 3, 2019 using the optional transition method that allowed for prospective application of the standard. The Company elected the package of practical expedients for transition that retained the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. Further, the Company elected to account for lease and non-lease components as a single lease component. Lease impairment, net of the related deferred taxes, totaled approximately $2.1 million as of February 3, 2019 and is reflected as an adjustment to retained earnings at the transition date. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. |
Business Operating Segment | Business Operating Segment The Company is a specialty value retailer of fashion apparel, accessories and home goods for the entire family. The retail operations represent a single operating segment based on the way the Company manages its business. Operating decisions and resource allocation decisions are made at the Company level in order to maintain a consistent retail store presentation. The Company’s retail stores sell similar products, use similar processes to sell those products, and sell their products to similar classes of customers. All sales and assets are located within the United States . |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of revenue from contracts with customers disaggregated by major product line | Fiscal Year Citis 2021 2020 2019 Ladies 26 % 26 % 26 % Kids 22 % 23 % 23 % Mens 18 % 18 % 16 % Accessories & Beauty 18 % 16 % 17 % Home & Lifestyle 9 % 9 % 7 % Footwear 7 % 8 % 11 % |
Schedule of reconciliation of the number of average common shares outstanding used to calculate basic and diluted earnings per share | Fiscal Year 2021 2020 2019 Weighted average number of common shares outstanding 8,911,810 10,282,718 11,673,887 Incremental shares from assumed vesting of nonvested restricted stock 101,122 42,521 25,113 Average number of common shares and common stock equivalents outstanding 9,012,932 10,325,239 11,699,000 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Property and Equipment, net | |
Schedule of the components of property and equipment | Property and equipment, net, consists of the following (in thousands): January 29, January 30, 2022 2021 Land $ 479 $ 479 Buildings 32,378 31,642 Leasehold improvements 117,604 108,818 Furniture, fixtures and equipment 156,215 148,332 Computer equipment 45,804 42,414 Construction in progress 6,247 10,909 358,727 342,594 Accumulated depreciation (283,445) (279,080) $ 75,282 $ 63,514 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Income Taxes | |
Schedule of income tax (benefit) expense | Income tax expense consists of the following (in thousands): Fiscal Year 2021 2020 2019 Current: Federal $ (11,326) $ (5,538) $ (2,650) State (2,473) (1,405) (945) Total current (13,799) (6,943) (3,595) Deferred: Federal (2,629) (588) 104 State (574) 114 26 Total deferred (3,203) (474) 130 Total income tax expense $ (17,002) $ (7,417) $ (3,465) |
Schedule of the reconciliation of income tax (benefit) expense computed using the federal statutory rate to the reported income tax (benefit) expense | Income tax expense computed using the federal statutory rate is reconciled to the reported income tax expense as follows (in thousands): Fiscal Year 2021 2020 2019 Statutory rate applied to income before income taxes $ (16,641) $ (6,593) $ (4,193) State income taxes, net of federal benefit (2,936) (1,777) (791) State tax credits 152 168 308 State tax credits - valuation allowance (net of federal benefit) 158 — (99) Tax exempt interest — — 34 General business credits 1,433 878 1,456 Nondeductible compensation (455) — — Excess (deficit) tax benefits from stock-based compensation 1,226 (58) (83) Other 61 (35) (97) Income tax expense $ (17,002) $ (7,417) $ (3,465) |
Schedule of the components of deferred tax assets and deferred tax liabilities | Deferred tax assets and deferred tax liabilities consist of the following (in thousands): January 29, January 30, 2022 2021 Deferred tax assets: Inventory capitalization $ 1,910 $ 1,628 Vacation liability 781 754 Operating lease liabilities 55,088 49,763 State tax credits 3,033 3,033 Stock compensation 2,233 1,598 Deferral of FICA tax — 416 Legal expense reserve — 128 Insurance liabilities 778 646 Other 620 532 Subtotal deferred tax assets 64,443 58,498 Less: State tax credits valuation allowance - net (1,556) (1,714) Total deferred tax assets 62,887 56,784 Deferred tax liabilities: Right of use asset (53,342) (47,672) Book and tax depreciation differences (5,574) (2,040) Prepaid expenses (979) (877) Total deferred tax liabilities (59,895) (50,589) Net deferred tax asset $ 2,992 $ 6,195 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Stockholders' Equity | |
Schedule of activity related to stock repurchases | Fiscal Year 2021 2020 2019 Total number of shares purchased 1,369 1,031 1,404 Average price paid per share (including commissions) $ 84.23 $ 31.87 $ 20.26 Total investment $ 115,285 $ 32,861 $ 28,445 |
Schedule of activity related to nonvested restricted stock grants | Time-Based Restricted Stock Performance-Based Restricted Stock Units Weighted Average Weighted Average Nonvested Grant Date Nonvested Grant Date Shares Fair Value Units Fair Value Outstanding as of January 30, 2021 175,077 $ 21.02 130,969 $ 16.98 Granted 50,707 89.35 21,380 84.46 Conversion of cash-settled units 96,310 82.19 — — Vested (86,437) 21.72 (26,887) 20.25 Forfeited (9,166) 24.90 (10,657) 23.72 Outstanding as of January 29, 2022 226,491 $ 61.91 114,805 $ 28.15 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Leases | |
Schedule of lease expense | Fiscal Year 2021 2020 Operating lease cost $ 52,737 $ 50,446 Variable lease cost 10,938 8,159 Short term lease cost 1,091 1,459 Total lease cost $ 64,766 $ 60,064 |
Schedule of future minimum rent payments under operating leases | Fiscal Year Lease Costs 2022 $ 53,317 2023 50,918 2024 42,114 2025 31,622 2026 21,246 Thereafter 34,818 Total future minimum lease payments 234,035 Less: imputed interest (17,928) (1) Total present value of lease liabilities $ 216,107 (2) (1) Calculated using the discount rate for each lease. (2) Includes short-term and long-term portions of operating leases. |
Schedule of supplemental cash flow and other information | Supplemental cash flow and other information related to operating leases are as follows (in thousands, except for weighted average amounts): Fiscal Year 2021 2020 Cash paid for operating leases $ 56,932 $ 47,075 Right of use assets obtained in exchange for new operating lease liabilities $ 75,359 $ 60,144 Weighted average remaining lease term (years) - operating leases 5.32 5.12 Weighted average discount rate - operating leases 2.86% 3.11% |
Organization and Business (Deta
Organization and Business (Details) | Jan. 29, 2022statestore |
Organization and Business | |
Number of stores operated | store | 609 |
Number of states in which company operates | state | 33 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - PPE and Insurance Liabilities (Details) - USD ($) | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Fiscal Year | |||
Length of fiscal year | 364 days | 364 days | 364 days |
Inventory | |||
Allowance for inventory shrinkage | $ 4,400,000 | $ 5,200,000 | |
Impairment of long lived assets | |||
Non-cash impairment expense related to leasehold improvements and fixtures and equipment | 0 | $ 300,000 | $ 500,000 |
Insurance Liabilities | |||
Self-insured retention or deductible amount per claim for workers' compensation | 250,000 | ||
Self-insured retention or deductible amount per claim for employee medical | $ 100,000 | ||
Furniture and Fixtures | Minimum | |||
Property and Equipment, net | |||
Estimated useful lives | 3 years | ||
Furniture and Fixtures | Maximum | |||
Property and Equipment, net | |||
Estimated useful lives | 5 years | ||
Leasehold Improvements | |||
Property and Equipment, net | |||
Estimated useful lives | 10 years | ||
Software | |||
Property and Equipment, net | |||
Estimated useful lives | 7 years | ||
Building and Building Improvements | Minimum | |||
Property and Equipment, net | |||
Estimated useful lives | 15 years | ||
Building and Building Improvements | Maximum | |||
Property and Equipment, net | |||
Estimated useful lives | 20 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Returns and Disaggregation of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Revenue, initial application period, cumulative effect transition | |||
Period of time company allows customers to return merchandise | 30 days | ||
Estimated refund liability | $ 0.2 | $ 0.3 | |
Carrying value of return asset | 0.1 | ||
Distribution center costs | $ 24.9 | $ 20.3 | $ 20.8 |
Ladies | |||
Revenue, initial application period, cumulative effect transition | |||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 26.00% | 26.00% | 26.00% |
Kids | |||
Revenue, initial application period, cumulative effect transition | |||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 22.00% | 23.00% | 23.00% |
Mens | |||
Revenue, initial application period, cumulative effect transition | |||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 18.00% | 18.00% | 16.00% |
Accessories & Beauty | |||
Revenue, initial application period, cumulative effect transition | |||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 18.00% | 16.00% | 17.00% |
Home & Lifestyle | |||
Revenue, initial application period, cumulative effect transition | |||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 9.00% | 9.00% | 7.00% |
Footwear | |||
Revenue, initial application period, cumulative effect transition | |||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 7.00% | 8.00% | 11.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - EPS, Advertising and Leases (Details) - USD ($) $ in Millions | Feb. 02, 2019 | Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 |
Reconciliation of average number of common shares outstanding used to calculate basic and diluted earnings per share | ||||
Weighted average number of common shares outstanding | 8,911,810 | 10,282,718 | 11,673,887 | |
Incremental shares from assumed vesting of nonvested restricted stock | 101,122 | 42,521 | 25,113 | |
Average number of common shares and common stock equivalents outstanding | 9,012,932 | 10,325,239 | 11,699,000 | |
Advertising | ||||
Advertising expense | $ 1.2 | $ 1.6 | $ 1.8 | |
Impairment of Assets | ||||
Lease impairment | $ 2.1 | |||
Restricted Stock | ||||
Reconciliation of average number of common shares outstanding used to calculate basic and diluted earnings per share | ||||
Securities excluded from calculation of diluted earnings per share (in shares) | 47,000 | 131,000 | 128,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Segments and Concentration Risk (Details) | 12 Months Ended |
Jan. 29, 2022segment | |
Summary of Significant Accounting Policies | |
Number of operating segments | 1 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Property and Equipment, net | ||
Property and equipment, gross | $ 358,727 | $ 342,594 |
Accumulated depreciation | (283,445) | (279,080) |
Property and Equipment, net | 75,282 | 63,514 |
Land | ||
Property and Equipment, net | ||
Property and equipment, gross | 479 | 479 |
Building | ||
Property and Equipment, net | ||
Property and equipment, gross | 32,378 | 31,642 |
Leasehold Improvements | ||
Property and Equipment, net | ||
Property and equipment, gross | 117,604 | 108,818 |
Furniture and Fixtures | ||
Property and Equipment, net | ||
Property and equipment, gross | 156,215 | 148,332 |
Computer Equipment | ||
Property and Equipment, net | ||
Property and equipment, gross | 45,804 | 42,414 |
Construction in Progress | ||
Property and Equipment, net | ||
Property and equipment, gross | $ 6,247 | $ 10,909 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) - USD ($) $ in Thousands | Apr. 15, 2021 | Mar. 20, 2020 | Oct. 27, 2011 | Jan. 30, 2021 | Jan. 29, 2022 |
Revolving Line of Credit | |||||
Borrowings under revolving credit facility | $ 43,700 | ||||
Line of Credit | |||||
Revolving Line of Credit | |||||
Term of credit facility | 5 years | ||||
Maximum borrowing capacity | $ 75,000 | $ 50,000 | |||
Borrowings under revolving credit facility | $ 43,700 | ||||
Borrowing capacity, accordion feature | 25,000 | ||||
Maximum borrowing capacity including accordion expansion | $ 100,000 | ||||
Unused commitment fee (as a percent) | 0.20% | ||||
Debt outstanding | $ 0 | ||||
Line of Credit | Minimum | |||||
Revolving Line of Credit | |||||
Accrued interest (as a percent) | 1.625% | ||||
Line of Credit | Maximum | |||||
Revolving Line of Credit | |||||
Accrued interest (as a percent) | 3.50% | ||||
Line of Credit | Eurodollar Rate plus 1% | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 1.00% | ||||
Line of Credit | Federal Fund Rate | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 0.50% | ||||
Letter of Credit | |||||
Revolving Line of Credit | |||||
Debt outstanding | $ 600 | ||||
First interest rate | Line of Credit | Eurodollar Rate | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 1.25% | ||||
First interest rate | Line of Credit | Eurodollar Rate plus 1% | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 0.25% | ||||
Second interest rate | Line of Credit | Eurodollar Rate | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 1.50% | ||||
Second interest rate | Line of Credit | Eurodollar Rate plus 1% | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 0.50% | ||||
Third interest rate | Line of Credit | Eurodollar Rate | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 1.75% | ||||
Third interest rate | Line of Credit | Eurodollar Rate plus 1% | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 0.75% |
Income Taxes - Income Tax (Bene
Income Taxes - Income Tax (Benefit) Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Current: | |||
Federal | $ 11,326 | $ 5,538 | $ 2,650 |
State | 2,473 | 1,405 | 945 |
Total current | 13,799 | 6,943 | 3,595 |
Deferred: | |||
Federal | (2,629) | (588) | 104 |
State | (574) | 114 | 26 |
Total deferred | (3,203) | (474) | 130 |
Income tax expense | $ (17,002) | $ (7,417) | $ (3,465) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Federal Statutory Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Reconciliation of income tax (benefit) expense computed using the federal statutory rate to the reported income tax (benefit) expense | |||
Statutory rate applied to income before income taxes | $ (16,641) | $ (6,593) | $ (4,193) |
State income taxes, net of federal benefit | (2,936) | (1,777) | (791) |
State tax credits | 152 | 168 | 308 |
State tax credits - valuation allowance (net of federal benefit) | 158 | (99) | |
Tax exempt interest | 34 | ||
General business credits | 1,433 | 878 | 1,456 |
Nondeductible compensation | (455) | ||
Excess (deficit) tax benefits from stock-based compensation | 1,226 | (58) | (83) |
Other | 61 | (35) | (97) |
Income tax expense | $ (17,002) | $ (7,417) | $ (3,465) |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Deferred tax assets: | ||
Inventory capitalization | $ 1,910 | $ 1,628 |
Vacation liability | 781 | 754 |
Operating lease liabilities | 55,088 | 49,763 |
State tax credits | 3,033 | 3,033 |
Stock compensation | 2,233 | 1,598 |
Deferral of FICA tax | 416 | |
Legal expense reserve | 128 | |
Insurance liabilities | 778 | 646 |
Other | 620 | 532 |
Subtotal deferred tax assets | 64,443 | 58,498 |
Less: State tax credits valuation allowance - net | (1,556) | (1,714) |
Total deferred tax assets | 62,887 | 56,784 |
Deferred tax liabilities: | ||
Right of use asset | (53,342) | (47,672) |
Book and tax depreciation differences | (5,574) | (2,040) |
Prepaid expenses | (979) | (877) |
Total deferred tax liabilities | (59,895) | (50,589) |
Net deferred tax asset | $ 2,992 | $ 6,195 |
Income Taxes - Income Tax (Be_2
Income Taxes - Income Tax (Benefit) Expense Components (Details) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022USD ($)item | Jan. 30, 2021USD ($) | Feb. 01, 2020USD ($) | |
Income Taxes | |||
Benefits not recognized due to uncertainty | $ 0 | ||
Number of states in which ability to utilize tax credits is no longer more likely than not | item | 1 | ||
Valuation allowance, net | $ 1,556 | $ 1,714 | |
Credits carry back period | 1 year | ||
Credits carry forward period | 20 years | ||
Income tax benefit related to federal and state tax credits | $ 1,600 | $ 1,700 | $ 1,700 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchases (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | Mar. 31, 2022 | |
Stock Repurchases | ||||
Total number of shares purchased | 1,369 | 1,031 | 1,404 | |
Average price paid per share (including commissions) | $ 84.23 | $ 31.87 | $ 20.26 | |
Total investment | $ 115,285 | $ 32,861 | $ 28,445 | |
Remaining value of shares available for repurchase | $ 30,000 | |||
Stock purchase plan authorized amount | $ 30,000 |
Stockholders' Equity - Time-Bas
Stockholders' Equity - Time-Based Nonvested Restricted Stock Granted to Employees (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Stockholders' Equity | |||
Shares reserved for future grants | 678,356 | ||
Income tax expense (benefits) | $ 17,002 | $ 7,417 | $ 3,465 |
Conversion of nonvested cash-settled units to nonvested shares under incentive plan | 3,415 | ||
Selling and general and administrative expenses | |||
Stockholders' Equity | |||
Stock-based compensation expense | 4,800 | 2,900 | 2,100 |
Income tax (benefit) expense | |||
Stockholders' Equity | |||
Income tax expense (benefits) | (1,200) | $ 100 | $ 100 |
Restricted Stock | |||
Stockholders' Equity | |||
Unrecognized compensation expense | $ 8,400 | ||
Restricted Stock | Employee | |||
Stockholders' Equity | |||
Vesting period | 3 years | ||
Restricted Stock | Director | |||
Stockholders' Equity | |||
Vesting period | 1 year | ||
Performance-Based RSU | |||
Stockholders' Equity | |||
Vesting period | 3 years | ||
Unrecognized compensation expense | $ 3,900 |
Stockholders Equity - Activity
Stockholders Equity - Activity for Time-Based Nonvested Restricted Stock and Performance-Based RSU Grants (Details) | 12 Months Ended |
Jan. 29, 2022$ / sharesshares | |
Restricted Stock | |
Nonvested Restricted Shares | |
Outstanding at the beginning of the period (in shares) | shares | 175,077 |
Granted (in shares) | shares | 50,707 |
Conversion of cash-settled units (in shares) | shares | 96,310 |
Vested (in shares) | shares | (86,437) |
Forfeited (in shares) | shares | (9,166) |
Outstanding at the end of the period (in shares) | shares | 226,491 |
Weighted Average Grant Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 21.02 |
Granted (in dollars per share) | $ / shares | 89.35 |
Conversion of cash-settled units (in dollars per share) | $ / shares | 82.19 |
Vested (in dollars per share) | $ / shares | 21.72 |
Forfeited (in dollars per share) | $ / shares | 24.90 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 61.91 |
Performance-Based RSU | |
Nonvested Restricted Shares | |
Outstanding at the beginning of the period (in shares) | shares | 130,969 |
Granted (in shares) | shares | 21,380 |
Vested (in shares) | shares | (26,887) |
Forfeited (in shares) | shares | (10,657) |
Outstanding at the end of the period (in shares) | shares | 114,805 |
Weighted Average Grant Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 16.98 |
Granted (in dollars per share) | $ / shares | 84.46 |
Vested (in dollars per share) | $ / shares | 20.25 |
Forfeited (in dollars per share) | $ / shares | 23.72 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 28.15 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 29, 2022 | Jan. 30, 2021 | |
Leases | ||
Lease term | 5 years | |
Operating lease cost | $ 52,737 | $ 50,446 |
Variable lease cost | 10,938 | 8,159 |
Short term lease cost | 1,091 | 1,459 |
Total lease cost | $ 64,766 | $ 60,064 |
Minimum | ||
Leases | ||
Extension term | 1 year | |
Maximum | ||
Leases | ||
Extension term | 5 years |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Jan. 29, 2022USD ($) |
Future minimum lease payments under operating leases | |
2022 | $ 53,317 |
2023 | 50,918 |
2024 | 42,114 |
2025 | 31,622 |
2026 | 21,246 |
Thereafter | 34,818 |
Total future minimum lease payments | 234,035 |
Less: imputed interest | (17,928) |
Total present value of lease liabilities | $ 216,107 |
Leases - Cash flow and other in
Leases - Cash flow and other information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 29, 2022 | Jan. 30, 2021 | |
Supplemental cash flow and other information related to operating leases | ||
Rent abatements due to the number of leases renegotiated in response to the negative financial impacts of COVID-19 | $ 700 | $ 1,000 |
Accrued lease liabilities for rent abatements due to the number of leases renegotiated in response to the negative financial impacts of COVID-19 | 400 | |
Cash paid for operating leases | 56,932 | 47,075 |
Right of use assets obtained in exchange for new operating lease liabilities | $ 75,359 | $ 60,144 |
Weighted average remaining lease term - operating leases | 5 years 3 months 25 days | 5 years 1 month 13 days |
Weighted average discount rate - operating leases (as a percent) | 2.86% | 3.11% |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | Mar. 14, 2022USD ($) |
Distribution Center Darlington, South Carolina | |
Subsequent Events | |
Proceeds from properties sold | $ 37 |
Distribution Center Roland, Oklahoma | |
Subsequent Events | |
Proceeds from properties sold | $ 32 |