Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 29, 2022 | Nov. 30, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Oct. 29, 2022 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-51315 | |
Entity Registrant Name | CITI TRENDS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 52-2150697 | |
Entity Address, Address Line One | 104 Coleman Boulevard | |
Entity Address, City or Town | Savannah | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 31408 | |
City Area Code | 912 | |
Local Phone Number | 236-1561 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | CTRN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 8,356,254 | |
Current Fiscal Year End Date | --01-28 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001318484 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 29, 2022 | Jan. 29, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 77,771 | $ 49,788 |
Inventory | 128,511 | 123,835 |
Prepaid and other current assets | 12,903 | 14,997 |
Income tax receivable | 3,987 | |
Total current assets | 219,185 | 192,607 |
Property and equipment, net of accumulated depreciation of $258,622 and $283,445 as of October 29, 2022 and January 29, 2022, respectively | 60,912 | 75,282 |
Operating lease right of use assets | 264,667 | 201,827 |
Deferred income taxes | 873 | 2,992 |
Other assets | 1,218 | 1,317 |
Total assets | 546,855 | 474,025 |
Current liabilities: | ||
Accounts payable | 83,451 | 98,879 |
Operating lease liabilities | 48,294 | 47,803 |
Accrued expenses | 16,936 | 14,532 |
Accrued compensation | 10,680 | 25,896 |
Income tax payable | 2,912 | |
Layaway deposits | 1,486 | 364 |
Total current liabilities | 163,759 | 187,474 |
Noncurrent operating lease liabilities | 222,430 | 168,304 |
Other long-term liabilities | 2,204 | 2,104 |
Total liabilities | 388,393 | 357,882 |
Stockholders' equity: | ||
Common stock, $0.01 par value. Authorized 32,000,000 shares; 16,160,267 shares issued as of October 29, 2022 and 16,090,365 shares issued as of January 29, 2022; 8,356,254 shares outstanding as of October 29, 2022 and 8,617,210 shares outstanding as of January 29, 2022 | 160 | 159 |
Paid in capital | 101,100 | 101,037 |
Retained earnings | 324,413 | 272,158 |
Treasury stock, at cost; 7,804,013 shares held as of October 29, 2022 and 7,473,155 shares held as of January 29, 2022 | (267,211) | (257,211) |
Total stockholders' equity | 158,462 | 116,143 |
Commitments and contingencies (Note 6) | ||
Total liabilities and stockholders' equity | $ 546,855 | $ 474,025 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Oct. 28, 2023 | Jan. 28, 2023 | Oct. 29, 2022 | Jan. 29, 2022 |
Condensed Consolidated Balance Sheets | ||||
Accumulated depreciation | $ 258,622 | $ 283,445 | ||
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 | 16,160,267 | 16,090,365 | ||
Common stock, shares outstanding | 8,356,254 | 8,617,210 | ||
Treasury stock, shares | 7,804,013 | 7,473,155 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2023 | Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Consolidated Statements of Operations | |||||
Net sales | $ 192,323 | $ 227,959 | $ 585,550 | $ 750,621 | |
Revenue, Product and Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | |
Cost of sales (exclusive of depreciation) | $ (115,741) | (136,071) | $ (357,341) | $ (440,404) | |
Selling, general and administrative expenses | (69,092) | (74,784) | (208,599) | (228,059) | |
Depreciation | (5,076) | (5,527) | (15,793) | (15,218) | |
Gain on sale-leaseback | 29,168 | 64,088 | |||
Income from operations | 31,582 | 11,577 | 67,905 | 66,940 | |
Interest income | 202 | 18 | 204 | 24 | |
Interest expense | (76) | (76) | (230) | (200) | |
Income before income taxes | 31,708 | 11,519 | 67,879 | 66,764 | |
Income tax expense | (7,120) | (2,505) | (15,624) | (14,363) | |
Net income | $ 24,588 | $ 9,014 | $ 52,255 | $ 52,401 | |
Basic net income per common share | $ 3.02 | $ 1.04 | $ 6.34 | $ 5.77 | |
Diluted net income per common share | $ 3.02 | $ 1.03 | $ 6.34 | $ 5.71 | |
Weighted average number of shares outstanding | |||||
Basic | 8,145,318 | 8,706,219 | 8,236,836 | 9,081,240 | |
Diluted | 8,145,318 | 8,786,887 | 8,236,836 | 9,178,565 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 29, 2022 | Oct. 30, 2021 | |
Operating activities: | ||
Net income | $ 52,255 | $ 52,401 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation | 15,793 | 15,218 |
Non-cash operating lease costs | 38,474 | 37,407 |
Loss on disposal of property and equipment | 10 | 159 |
Deferred income taxes | 2,119 | 2,277 |
Insurance proceeds related to operating activities | 1,575 | 454 |
Non-cash stock-based compensation expense | 2,271 | 2,883 |
Gain on sale-leaseback | (64,088) | |
Changes in assets and liabilities: | ||
Inventory | (5,891) | (23,446) |
Prepaid and other current assets | 1,734 | 263 |
Other assets | 99 | (362) |
Accounts payable | (15,572) | 15,939 |
Accrued expenses and other long-term liabilities | (44,643) | (36,324) |
Accrued compensation | (15,216) | (6,466) |
Income tax receivable/payable | 6,899 | (6,920) |
Layaway deposits | 1,122 | 1,370 |
Net cash (used in) provided by operating activities | (23,059) | 54,853 |
Investing activities: | ||
Purchases of investment securities | (35,462) | |
Purchases of property and equipment | (19,218) | (20,808) |
Insurance proceeds related to investing activities | 1,370 | 192 |
Proceeds from sale-leaseback | 81,098 | |
Net cash provided by (used in) investing activities | 63,250 | (56,078) |
Financing activities: | ||
Payments of debt issuance costs | (270) | |
Cash used to settle withholding taxes on the vesting of nonvested restricted stock | (2,208) | (2,453) |
Repurchases of common stock | (10,000) | (107,206) |
Net cash used in financing activities | (12,208) | (109,929) |
Net increase (decrease) in cash and cash equivalents | 27,983 | (111,154) |
Cash and cash equivalents: | ||
Beginning of period | 49,788 | 123,177 |
End of period | 77,771 | 12,023 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 119 | 109 |
Cash payments of income taxes | 6,606 | 19,006 |
Supplemental disclosures of non-cash investing activities: | ||
Accrual for purchases of property and equipment | $ 595 | $ 3,192 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Paid in Capital | Retained Earnings | Treasury Stock | Total |
Balances at Jan. 30, 2021 | $ 158 | $ 95,484 | $ 209,918 | $ (141,926) | $ 163,634 |
Balances (in shares) at Jan. 30, 2021 | 15,981,394 | ||||
Balances (in shares) at Jan. 30, 2021 | 6,104,493 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of nonvested shares under incentive plan (in shares) | 17,278 | ||||
Forfeiture of nonvested shares (in shares) | (3,005) | ||||
Stock-based compensation expense | 1,087 | 1,087 | |||
Net share settlement of nonvested shares | (2,155) | (2,155) | |||
Net share settlement of nonvested shares (in shares) | (22,666) | ||||
Repurchase of common stock | $ (45,470) | (45,470) | |||
Repurchase of common stock (in shares) | 537,496 | ||||
Net income (loss) | 30,897 | 30,897 | |||
Balances at May. 01, 2021 | $ 158 | 94,416 | 240,815 | $ (187,396) | 147,993 |
Balances (in shares) at May. 01, 2021 | 15,973,001 | ||||
Balances (in shares) at May. 01, 2021 | 6,641,989 | ||||
Balances at Jan. 30, 2021 | $ 158 | 95,484 | 209,918 | $ (141,926) | 163,634 |
Balances (in shares) at Jan. 30, 2021 | 15,981,394 | ||||
Balances (in shares) at Jan. 30, 2021 | 6,104,493 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Repurchase of common stock | $ (107,206) | ||||
Repurchase of common stock (in shares) | 1,273,000 | ||||
Net income (loss) | $ 52,401 | ||||
Balances at Oct. 30, 2021 | $ 159 | 95,914 | 262,319 | $ (249,132) | 109,260 |
Balances (in shares) at Oct. 30, 2021 | 15,967,965 | ||||
Balances (in shares) at Oct. 30, 2021 | 7,377,836 | ||||
Balances at May. 01, 2021 | $ 158 | 94,416 | 240,815 | $ (187,396) | 147,993 |
Balances (in shares) at May. 01, 2021 | 15,973,001 | ||||
Balances (in shares) at May. 01, 2021 | 6,641,989 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of nonvested shares under incentive plan (in shares) | 4,680 | ||||
Forfeiture of nonvested shares (in shares) | (6,161) | ||||
Stock-based compensation expense | 814 | 814 | |||
Net share settlement of nonvested shares | (16) | (16) | |||
Net share settlement of nonvested shares (in shares) | (171) | ||||
Repurchase of common stock | $ (18,907) | (18,907) | |||
Repurchase of common stock (in shares) | 214,761 | ||||
Net income (loss) | 12,490 | 12,490 | |||
Balances at Jul. 31, 2021 | $ 158 | 95,214 | 253,305 | $ (206,303) | 142,374 |
Balances (in shares) at Jul. 31, 2021 | 15,971,349 | ||||
Balances (in shares) at Jul. 31, 2021 | 6,856,750 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Vesting of nonvested restricted stock units | $ 1 | 1 | |||
Issuance of nonvested shares under incentive plan (in shares) | 415 | ||||
Stock-based compensation expense | 982 | 982 | |||
Net share settlement of nonvested shares | (282) | (282) | |||
Net share settlement of nonvested shares (in shares) | (3,799) | ||||
Repurchase of common stock | $ (42,829) | $ (42,829) | |||
Repurchase of common stock (in shares) | 521,086 | 521,000 | |||
Net income (loss) | 9,014 | $ 9,014 | |||
Balances at Oct. 30, 2021 | $ 159 | 95,914 | 262,319 | $ (249,132) | 109,260 |
Balances (in shares) at Oct. 30, 2021 | 15,967,965 | ||||
Balances (in shares) at Oct. 30, 2021 | 7,377,836 | ||||
Balances at Jan. 29, 2022 | $ 159 | 101,037 | 272,158 | $ (257,211) | $ 116,143 |
Balances (in shares) at Jan. 29, 2022 | 16,090,365 | 16,090,365 | |||
Balances (in shares) at Jan. 29, 2022 | 7,473,155 | 7,473,155 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Vesting of nonvested shares | $ 1 | $ 1 | |||
Issuance of nonvested shares under incentive plan (in shares) | 109,157 | ||||
Issuance of common stock under incentive plan, net of shares withheld for taxes (in shares) | 15,977 | ||||
Forfeiture of nonvested shares (in shares) | (15,761) | ||||
Stock-based compensation expense | 2,277 | 2,277 | |||
Net share settlement of nonvested shares | $ (1) | (2,127) | (2,128) | ||
Net share settlement of nonvested shares (in shares) | (40,345) | ||||
Repurchase of common stock | $ (5,317) | (5,317) | |||
Repurchase of common stock (in shares) | 170,436 | ||||
Net income (loss) | 30,203 | 30,203 | |||
Balances at Apr. 30, 2022 | $ 159 | 101,187 | 302,361 | $ (262,528) | 141,179 |
Balances (in shares) at Apr. 30, 2022 | 16,159,393 | ||||
Balances (in shares) at Apr. 30, 2022 | 7,643,591 | ||||
Balances at Jan. 29, 2022 | $ 159 | 101,037 | 272,158 | $ (257,211) | $ 116,143 |
Balances (in shares) at Jan. 29, 2022 | 16,090,365 | 16,090,365 | |||
Balances (in shares) at Jan. 29, 2022 | 7,473,155 | 7,473,155 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Repurchase of common stock | $ (10,000) | ||||
Repurchase of common stock (in shares) | 331,000 | ||||
Net income (loss) | $ 52,255 | ||||
Balances at Oct. 29, 2022 | $ 160 | 101,100 | 324,413 | $ (267,211) | $ 158,462 |
Balances (in shares) at Oct. 29, 2022 | 16,160,267 | 16,160,267 | |||
Balances (in shares) at Oct. 29, 2022 | 7,804,013 | 7,804,013 | |||
Balances at Apr. 30, 2022 | $ 159 | 101,187 | 302,361 | $ (262,528) | $ 141,179 |
Balances (in shares) at Apr. 30, 2022 | 16,159,393 | ||||
Balances (in shares) at Apr. 30, 2022 | 7,643,591 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of nonvested shares under incentive plan (in shares) | 29,938 | ||||
Forfeiture of nonvested shares (in shares) | (5,379) | ||||
Stock-based compensation expense | (338) | (338) | |||
Net share settlement of nonvested shares | (12) | (12) | |||
Net share settlement of nonvested shares (in shares) | (527) | ||||
Repurchase of common stock | $ (4,683) | (4,683) | |||
Repurchase of common stock (in shares) | 160,422 | ||||
Net income (loss) | (2,536) | (2,536) | |||
Balances at Jul. 30, 2022 | $ 159 | 100,837 | 299,825 | $ (267,211) | 133,610 |
Balances (in shares) at Jul. 30, 2022 | 16,183,425 | ||||
Balances (in shares) at Jul. 30, 2022 | 7,804,013 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Vesting of nonvested shares | $ 1 | 1 | |||
Issuance of nonvested shares under incentive plan (in shares) | 1,226 | ||||
Forfeiture of nonvested shares (in shares) | (20,448) | ||||
Stock-based compensation expense | 332 | 332 | |||
Net share settlement of nonvested shares | (69) | (69) | |||
Net share settlement of nonvested shares (in shares) | (3,936) | ||||
Net income (loss) | 24,588 | 24,588 | |||
Balances at Oct. 29, 2022 | $ 160 | $ 101,100 | $ 324,413 | $ (267,211) | $ 158,462 |
Balances (in shares) at Oct. 29, 2022 | 16,160,267 | 16,160,267 | |||
Balances (in shares) at Oct. 29, 2022 | 7,804,013 | 7,804,013 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Oct. 29, 2022 | |
Significant Accounting Policies | |
Significant Accounting Policies | 1. Significant Accounting Policies Basis of Presentation Citi Trends, Inc. and its subsidiary (the “Company”) is a leading specialty value retailer of apparel, accessories and home trends for way less spend primarily for African American and Latinx families. As of October 29, 2022, the Company operated 615 stores in urban, suburban and rural markets in 33 states. The condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim reporting and are unaudited. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The condensed consolidated balance sheet as of January 29, 2022 is derived from the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2022 (the “2021 Form 10-K”). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2021 Form 10-K. Operating results for the third quarter of 2022 are not necessarily indicative of the results that may be expected for the fiscal year as a result of the seasonality of the business, the current economic uncertainty and the extent to which future business will be impacted by the COVID-19 pandemic. Fiscal Year The following contains references to fiscal years 2022 and 2021, which represent fiscal years ending or ended on January 28, 2023 and January 29, 2022, respectively. Fiscal 2022 and 2021 both have 52 -week accounting periods. |
Cash and Cash Equivalents Conce
Cash and Cash Equivalents Concentration of Credit Risk | 9 Months Ended |
Oct. 29, 2022 | |
Cash and Cash Equivalents/Concentration of Credit Risk | |
Cash and Cash Equivalents/Concentration of Credit Risk | 2. Cash and Cash Equivalents/Concentration of Credit Risk For purposes of the condensed consolidated balance sheets and condensed consolidated statements of cash flows, the Company considers all highly liquid investments with maturities at date of purchase of three months or less to be cash equivalents. Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and cash equivalents. The Company places its cash and cash equivalents in what it believes to be high credit quality banks and institutional money market funds. The Company maintains cash accounts that exceed federally insured limits. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Oct. 29, 2022 | |
Earnings per Share | |
Earnings per Share | 3. Earnings per Share Basic earnings per common share amounts are calculated using the weighted average number of common shares outstanding for the period. Diluted earnings per common share amounts are calculated using the weighted average number of common shares outstanding plus the additional dilution for all potentially dilutive securities, such as nonvested restricted stock. During loss periods, diluted loss per share amounts are based on the weighted average number of common shares outstanding because the inclusion of common stock equivalents would be antidilutive. The dilutive effect of stock-based compensation arrangements is accounted for using the treasury stock method. The Company includes as assumed proceeds the amount of compensation cost attributed to future services and not yet recognized. For the third quarter of 2022 and 2021, there were 220,000 and 38,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution. For the thirty-nine weeks ended October 29, 2022 and October 30, 2021, there were 226,000 and 38,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution. The following table provides a reconciliation of the weighted average number of common shares outstanding used to calculate basic earnings per share to the number of common shares and common stock equivalents outstanding used in calculating diluted earnings per share: Thirteen Weeks Ended October 29, 2022 October 30, 2021 Weighted average number of common shares outstanding 8,145,318 8,706,219 Incremental shares from assumed vesting of nonvested restricted stock — 80,668 Weighted average number of common shares and common stock equivalents outstanding 8,145,318 8,786,887 Thirty-Nine Weeks Ended October 29, 2022 October 30, 2021 Weighted average number of common shares outstanding 8,236,836 9,081,240 Incremental shares from assumed vesting of nonvested restricted stock — 97,325 Weighted average number of common shares and common stock equivalents outstanding 8,236,836 9,178,565 |
Revolving Credit Facility
Revolving Credit Facility | 9 Months Ended |
Oct. 29, 2022 | |
Revolving Credit Facility | |
Revolving Credit Facility | 4. Revolving Credit Facility In October 2011, the Company entered into a five-year , $50 million credit facility with Bank of America. The facility was amended in August 2015 and May 2020 to extend the maturity dates. The facility was further amended 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. As of October 29, 2022, the Company had no borrowings under the credit facility and $0.6 million of letters of credit outstanding. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 29, 2022 | |
Income Taxes | |
Income Taxes | 5. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. If there is a change in tax rates, the Company would recognize the impact of such change in income in the period that includes the enactment date. For the thirty-nine weeks ended October 29, 2022 and October 30, 2021, the Company utilized the annual effective tax rate method to calculate income taxes. The effective income tax rate was 23.0% for the first thirty-nine weeks of 2022, compared to 21.5% for the first thirty-nine weeks of 2021. The difference in the tax rate was due to a favorable tax impact of restricted stock vestings in the prior year. On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022 ("IRA"). The IRA contains a number of revisions to the Internal Revenue Code, including a 15% corporate alternative minimum income tax and a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022. The Company is continuing to evaluate the IRA and its potential impact on future periods, and at this time the Company does not expect the IRA to have a material impact on its consolidated financial statements. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 29, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. Commitments and Contingencies The Company from time to time is involved in various legal proceedings incidental to the conduct of its business, including claims by customers, landlords, employees or former employees. Once it becomes probable that the Company will incur costs in connection with a legal proceeding and such costs can be reasonably estimated, the Company establishes appropriate reserves. 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. |
Stock Repurchases
Stock Repurchases | 9 Months Ended |
Oct. 29, 2022 | |
Stock Repurchases | |
Stock Repurchases | 7. Stock Repurchases Repurchases of Common Stock The Company periodically repurchases shares of its common stock under board-authorized repurchase programs. Such repurchases may be made in the open market, through block trades or through other negotiated transactions. Share repurchases were as follows (in thousands, except per share data): Thirteen Weeks Ended Thirty-Nine Weeks Ended October 29, 2022 October 30, 2021 October 29, 2022 October 30, 2021 Total number of shares purchased — 521 331 1,273 Average price paid per share (including commissions) $ — $ 82.19 $ 30.22 $ 84.19 Total investment $ — $ 42,829 $ 10,000 $ 107,206 On March 15, 2022, the Company announced that its board of directors approved an additional $30 million stock repurchase program. At October 29, 2022, $50.0 million remained available under the Company’s stock repurchase authorization. |
Revenue
Revenue | 9 Months Ended |
Oct. 29, 2022 | |
Revenue | |
Revenue | 8. Revenue Revenue Recognition The Company’s primary source of revenue is derived from the sale of clothing, accessories and home trends to its customers with the Company’s performance obligations satisfied immediately when the customer pays for their purchase and receives the merchandise. Sales taxes collected by the Company from customers are excluded from revenue. Revenue from layaway sales is recognized at the point in time when the merchandise is paid for and control of the goods is transferred to the customer, thereby satisfying the Company’s performance obligation. The Company defers revenue from the sale of gift cards and recognizes the associated revenue upon the redemption of the cards by customers to purchase merchandise. Sales Returns The Company allows customers to return merchandise for up to 30 days after the date of sale. Expected refunds to customers are recorded based on estimated margin using historical return information. Disaggregation of Revenue The Company’s retail operations represent a single operating segment based on the way the Company manages its business. Operating decisions and resource allocation decisions are made at the Company level in order to maintain a consistent retail store presentation. The Company’s retail stores sell similar products, use similar processes to sell those products and sell their products to similar classes of customers. In the following table, the Company’s revenue from sales to customers is disaggregated by “CITI” or major merchandise category. The percentage of net sales for each CITI with the merchandise assortment was approximately: Thirteen Weeks Ended Thirty-Nine Weeks Ended October 29, October 30, October 29, October 30, 2022 2021 2022 2021 Ladies 26 % 25 % 27 % 27 % Kids 25 % 26 % 22 % 22 % Mens 17 % 17 % 18 % 18 % Accessories & Beauty 17 % 17 % 17 % 17 % Home & Lifestyle 8 % 8 % 8 % 8 % Footwear 7 % 7 % 8 % 8 % |
Leases
Leases | 9 Months Ended |
Oct. 29, 2022 | |
Leases | |
Leases | 9. 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 condensed consolidated balance sheets. The lease liability is measured at the present value of future lease payments as of the lease commencement date. In April 2022, the Company completed a sale-leaseback of its distribution center in Darlington, South Carolina for net proceeds of approximately $45.5 million. The total annual rent for this property starts at approximately $3.2 million with increases of 2% annually over the 20-year lease term. The net proceeds included $5.6 million of advance funding for a capital improvement project that will be amortized over the 20-year lease term. The lease contains the option to extend for six additional periods of five years each. The transaction met the requirements for sale-leaseback accounting, resulting in a gain of approximately $34.9 million on the condensed consolidated statements of operations. The related land and property were removed from property and equipment, and an operating lease right-of-use asset and lease liability of $42.6 million and $37.0 million, respectively, were recorded in the condensed consolidated balance sheets. In September 2022, the Company completed a sale-leaseback of its distribution center in Roland, Oklahoma for net proceeds of approximately $35.6 million. The total annual rent for this property starts at approximately $2.7 million with increases of 2% annually over the 15-year lease term. The net proceeds included $0.6 million of advance funding for a capital improvement project that will be amortized over the 15-year lease term. The lease contains the option to extend for six additional periods of five years each. The transaction met the requirements for sale-leaseback accounting, resulting in a gain of approximately $29.2 million on the condensed consolidated statements of operations. The related land and property were removed from property and equipment, and an operating lease right-of-use asset and lease liability of $29.5 million and $25.8 million, respectively, were recorded in the condensed consolidated balance sheets. Total lease cost is comprised of operating lease costs, short-term lease costs and variable lease costs, which include rent paid as a percentage of sales, common area maintenance, real estate taxes and insurance for the Company’s real estate leases. Lease costs consisted of the following (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended October 29, 2022 October 30, 2021 October 29, 2022 October 30, 2021 Operating lease cost $ 15,443 $ 13,320 $ 44,326 $ 39,384 Variable lease cost 2,510 2,685 7,423 8,264 Short term lease cost 343 213 1,062 775 Total lease cost $ 18,296 $ 16,218 $ 52,811 $ 48,423 Future minimum lease payments as of October 29, 2022 are as follows (in thousands): Fiscal Year Lease Costs Remainder of 2022 $ 11,285 2023 61,742 2024 55,603 2025 45,005 2026 34,443 Thereafter 141,055 Total future minimum lease payments 349,133 Less: imputed interest (78,409) (1) Total present value of lease liabilities $ 270,724 (2) (1) Calculated using the discount rate for each lease. (2) Includes short-term and long-term portions of operating lease liabilities. Supplemental cash flows and other information related to operating leases are as follows (in thousands, except for weighted average amounts): Thirty-Nine Weeks Ended October 29, 2022 October 30, 2021 Cash paid for operating leases $ 44,754 $ 42,315 Right of use assets obtained in exchange for new operating lease liabilities $ 95,809 $ 54,263 Weighted average remaining lease term (years) - operating leases 8.11 5.31 Weighted average discount rate - operating leases 4.38% 2.89% |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 29, 2022 | |
Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation Citi Trends, Inc. and its subsidiary (the “Company”) is a leading specialty value retailer of apparel, accessories and home trends for way less spend primarily for African American and Latinx families. As of October 29, 2022, the Company operated 615 stores in urban, suburban and rural markets in 33 states. The condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim reporting and are unaudited. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The condensed consolidated balance sheet as of January 29, 2022 is derived from the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2022 (the “2021 Form 10-K”). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2021 Form 10-K. Operating results for the third quarter of 2022 are not necessarily indicative of the results that may be expected for the fiscal year as a result of the seasonality of the business, the current economic uncertainty and the extent to which future business will be impacted by the COVID-19 pandemic. |
Fiscal Year | Fiscal Year The following contains references to fiscal years 2022 and 2021, which represent fiscal years ending or ended on January 28, 2023 and January 29, 2022, respectively. Fiscal 2022 and 2021 both have 52 -week accounting periods. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Earnings per Share | |
Schedule of reconciliation of the number of average common shares outstanding used to calculate basic and diluted earnings per share | Thirteen Weeks Ended October 29, 2022 October 30, 2021 Weighted average number of common shares outstanding 8,145,318 8,706,219 Incremental shares from assumed vesting of nonvested restricted stock — 80,668 Weighted average number of common shares and common stock equivalents outstanding 8,145,318 8,786,887 Thirty-Nine Weeks Ended October 29, 2022 October 30, 2021 Weighted average number of common shares outstanding 8,236,836 9,081,240 Incremental shares from assumed vesting of nonvested restricted stock — 97,325 Weighted average number of common shares and common stock equivalents outstanding 8,236,836 9,178,565 |
Stock Repurchases (Tables)
Stock Repurchases (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Stockholders' Equity | |
Schedule of activity related to stock repurchases | Thirteen Weeks Ended Thirty-Nine Weeks Ended October 29, 2022 October 30, 2021 October 29, 2022 October 30, 2021 Total number of shares purchased — 521 331 1,273 Average price paid per share (including commissions) $ — $ 82.19 $ 30.22 $ 84.19 Total investment $ — $ 42,829 $ 10,000 $ 107,206 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Revenue | |
Schedule of revenue from contracts with customers disaggregated by major product line | Thirteen Weeks Ended Thirty-Nine Weeks Ended October 29, October 30, October 29, October 30, 2022 2021 2022 2021 Ladies 26 % 25 % 27 % 27 % Kids 25 % 26 % 22 % 22 % Mens 17 % 17 % 18 % 18 % Accessories & Beauty 17 % 17 % 17 % 17 % Home & Lifestyle 8 % 8 % 8 % 8 % Footwear 7 % 7 % 8 % 8 % |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Leases | |
Schedule of lease expense | Lease costs consisted of the following (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended October 29, 2022 October 30, 2021 October 29, 2022 October 30, 2021 Operating lease cost $ 15,443 $ 13,320 $ 44,326 $ 39,384 Variable lease cost 2,510 2,685 7,423 8,264 Short term lease cost 343 213 1,062 775 Total lease cost $ 18,296 $ 16,218 $ 52,811 $ 48,423 |
Schedule of future minimum rent payments under operating leases | Fiscal Year Lease Costs Remainder of 2022 $ 11,285 2023 61,742 2024 55,603 2025 45,005 2026 34,443 Thereafter 141,055 Total future minimum lease payments 349,133 Less: imputed interest (78,409) (1) Total present value of lease liabilities $ 270,724 (2) (1) Calculated using the discount rate for each lease. (2) Includes short-term and long-term portions of operating lease liabilities. |
Schedule of supplemental cash flow and other information | Supplemental cash flows and other information related to operating leases are as follows (in thousands, except for weighted average amounts): Thirty-Nine Weeks Ended October 29, 2022 October 30, 2021 Cash paid for operating leases $ 44,754 $ 42,315 Right of use assets obtained in exchange for new operating lease liabilities $ 95,809 $ 54,263 Weighted average remaining lease term (years) - operating leases 8.11 5.31 Weighted average discount rate - operating leases 4.38% 2.89% |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 12 Months Ended | ||
Jan. 28, 2023 | Jan. 29, 2022 | Oct. 29, 2022 state store | |
Significant Accounting Policies | |||
Number of stores operated | store | 615 | ||
Number of states in which company operates | state | 33 | ||
Length of fiscal year | 364 days | 364 days |
Earnings per Share (Details)
Earnings per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Reconciliation of average number of common shares outstanding used to calculate basic and diluted earnings per share | ||||
Weighted average number of common shares outstanding | 8,145,318 | 8,706,219 | 8,236,836 | 9,081,240 |
Incremental shares from assumed vesting of nonvested restricted stock | 80,668 | 97,325 | ||
Average number of common shares and common stock equivalents outstanding | 8,145,318 | 8,786,887 | 8,236,836 | 9,178,565 |
Restricted Stock | ||||
Antidilutive securities | ||||
Shares excluded from the calculation of diluted earnings per share | 220,000 | 38,000 | 226,000 | 38,000 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) $ in Thousands | Apr. 15, 2021 USD ($) bbl / agreement | Oct. 27, 2011 USD ($) | Oct. 29, 2022 USD ($) | May 12, 2020 USD ($) |
Revolving Line of Credit | ||||
Debt outstanding | $ 0 | |||
Line of Credit | ||||
Revolving Line of Credit | ||||
Term of credit facility | 5 years | |||
Maximum borrowing capacity | $ 75,000 | $ 50,000 | ||
Borrowing capacity, accordion feature | $ 25,000 | |||
Maximum borrowing capacity including accordion expansion | $ 100,000 | |||
Number of covenants | bbl / agreement | 1 | |||
Unused commitment fee (as a percent) | 0.20% | |||
Line of Credit | Eurodollar Rate | ||||
Revolving Line of Credit | ||||
Increase pricing for loans (as a percent) | 1% | |||
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 | Federal Funds or Eurodollar Rate | ||||
Revolving Line of Credit | ||||
Margin added to variable rate (as a percent) | 0.25% | |||
Second interest rate | Line of Credit | Eurodollar Rate | ||||
Revolving Line of Credit | ||||
Margin added to variable rate (as a percent) | 1.50% | |||
Second interest rate | Line of Credit | Federal Funds or Eurodollar Rate | ||||
Revolving Line of Credit | ||||
Margin added to variable rate (as a percent) | 0.50% | |||
Third interest rate | Line of Credit | Eurodollar Rate | ||||
Revolving Line of Credit | ||||
Margin added to variable rate (as a percent) | 1.75% | |||
Third interest rate | Line of Credit | Federal Funds or Eurodollar Rate | ||||
Revolving Line of Credit | ||||
Margin added to variable rate (as a percent) | 0.75% |
Income Taxes (Details)
Income Taxes (Details) | 9 Months Ended | |
Oct. 29, 2022 | Oct. 30, 2021 | |
Income Taxes | ||
Effective income tax rate | 23% | 21.50% |
Stock Repurchases - Stock Repur
Stock Repurchases - Stock Repurchases (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jul. 30, 2022 | Apr. 30, 2022 | Oct. 30, 2021 | Jul. 31, 2021 | May 01, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | Mar. 15, 2022 | |
Stock Repurchases | ||||||||
Total number of shares purchased | 521 | 331 | 1,273 | |||||
Average price paid per share (including commissions) | $ 82.19 | $ 30.22 | $ 84.19 | |||||
Total investment | $ 4,683 | $ 5,317 | $ 42,829 | $ 18,907 | $ 45,470 | $ 10,000 | $ 107,206 | |
Remaining value of shares available for repurchase | $ 50,000 | $ 30,000 |
Revenue - Returns and Disaggreg
Revenue - Returns and Disaggregation of Revenue (Details) | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Disaggregation of Revenue | ||||
Period Customers Can Return Merchandise | 30 days | |||
Ladies | ||||
Disaggregation of Revenue | ||||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 26% | 25% | 27% | 27% |
Kids | ||||
Disaggregation of Revenue | ||||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 25% | 26% | 22% | 22% |
Accessories & Beauty | ||||
Disaggregation of Revenue | ||||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 17% | 17% | 17% | 17% |
Mens | ||||
Disaggregation of Revenue | ||||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 17% | 17% | 18% | 18% |
Home & Lifestyle | ||||
Disaggregation of Revenue | ||||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 8% | 8% | 8% | 8% |
Footwear | ||||
Disaggregation of Revenue | ||||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 7% | 7% | 8% | 8% |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Leases | ||||
Operating lease cost | $ 15,443 | $ 13,320 | $ 44,326 | $ 39,384 |
Variable lease cost | 2,510 | 2,685 | 7,423 | 8,264 |
Short term lease cost | 343 | 213 | 1,062 | 775 |
Total lease cost | $ 18,296 | $ 16,218 | $ 52,811 | $ 48,423 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Oct. 29, 2022 USD ($) |
Future minimum lease payments under operating leases | |
Remainder of 2022 | $ 11,285 |
2023 | 61,742 |
2024 | 55,603 |
2025 | 45,005 |
2026 | 34,443 |
Thereafter | 141,055 |
Total future minimum lease payments | 349,133 |
Less: imputed interest | (78,409) |
Total present value of lease liabilities | $ 270,724 |
Leases - Cash flow and other in
Leases - Cash flow and other information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 29, 2022 | Oct. 30, 2021 | |
Supplemental cash flow and other information related to operating leases | ||
Cash paid for operating leases | $ 44,754 | $ 42,315 |
Right of use assets obtained in exchange for new operating lease liabilities | $ 95,809 | $ 54,263 |
Weighted average remaining lease term (years) - operating leases | 8 years 1 month 9 days | 5 years 3 months 21 days |
Weighted average discount rate - operating leases (as a percent) | 4.38% | 2.89% |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) period | Apr. 30, 2022 USD ($) period | Oct. 29, 2022 USD ($) | Oct. 29, 2022 USD ($) | Jan. 29, 2022 USD ($) | |
Leases | |||||
Lease term | 5 years | 5 years | |||
Gain on sale-leaseback | $ 29,168 | $ 64,088 | |||
Operating lease right of use assets | 264,667 | 264,667 | $ 201,827 | ||
Lease liability | $ 270,724 | $ 270,724 | |||
Distribution Center Darlington South Carolina [Member] | |||||
Leases | |||||
Net proceeds from sale | $ 45,500 | ||||
Sale leaseback transaction, annual lease rent | $ 3,200 | ||||
Sale leaseback transaction, percent of annual increase in lease rent | 2% | ||||
Sale leaseback transaction, term of lease | 20 years | ||||
Proceeds from advance funding for capital improvement project | $ 5,600 | ||||
Sale leaseback transaction, number of additional periods | period | 6 | ||||
Sale leaseback transaction, renewal term | 5 years | ||||
Gain on sale-leaseback | $ 34,900 | ||||
Operating lease right of use assets | 42,600 | ||||
Lease liability | $ 37,000 | ||||
Distribution Center Roland, Oklahoma | |||||
Leases | |||||
Net proceeds from sale | $ 35,600 | ||||
Sale leaseback transaction, annual lease rent | $ 2,700 | ||||
Sale leaseback transaction, percent of annual increase in lease rent | 2% | ||||
Sale leaseback transaction, term of lease | 15 years | ||||
Proceeds from advance funding for capital improvement project | $ 600 | ||||
Sale leaseback transaction, number of additional periods | period | 6 | ||||
Sale leaseback transaction, renewal term | 5 years | ||||
Gain on sale-leaseback | $ 29,200 | ||||
Operating lease right of use assets | 29,500 | ||||
Lease liability | $ 25,800 | ||||
Minimum | |||||
Leases | |||||
Extension term | 1 year | 1 year | |||
Maximum | |||||
Leases | |||||
Extension term | 5 years | 5 years |