Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jan. 30, 2021 | Apr. 05, 2021 | Aug. 01, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Period End Date | Jan. 30, 2021 | ||
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 | $ 169,044,315 | ||
Entity Common Stock, Shares Outstanding | 9,418,042 | ||
Current Fiscal Year End Date | --01-30 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001318484 | ||
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 123,177 | $ 19,923 |
Short-term investment securities | 27,562 | |
Inventory | 103,845 | 138,258 |
Prepaid and other current assets | 17,420 | 14,278 |
Income tax receivable | 1,186 | |
Total current assets | 244,442 | 201,207 |
Property and equipment, net of accumulated depreciation | 63,514 | 64,985 |
Operating lease right of use assets | 179,673 | 169,854 |
Long-term investment securities | 15,675 | |
Deferred income taxes | 6,195 | 6,669 |
Other assets | 769 | 755 |
Total assets | 494,593 | 459,145 |
Current liabilities: | ||
Accounts payable | 84,832 | 79,596 |
Operating lease liabilities | 46,983 | 42,944 |
Accrued expenses | 16,592 | 14,755 |
Accrued compensation | 29,315 | 13,013 |
Income tax payable | 4,623 | |
Layaway deposits | 500 | 554 |
Total current liabilities | 182,845 | 150,862 |
Noncurrent operating lease liabilities | 145,828 | 135,316 |
Other long-term liabilities | 2,286 | 1,923 |
Total liabilities | 330,959 | 288,101 |
Stockholders' equity: | ||
Common stock, $0.01 par value. Authorized 32,000,000 shares; 15,981,394 shares issued as of January 30, 2021 and 15,907,666 shares issued as of February 1, 2020; 9,876,901 shares outstanding as of January 30, 2021 and 10,834,134 shares outstanding as of February 1, 2020 | 158 | 157 |
Paid in capital | 95,484 | 93,180 |
Retained earnings | 209,918 | 186,772 |
Treasury stock, at cost; 6,104,493 shares held as of January 30, 2021 and 5,073,532 shares held as of February 1, 2020 | (141,926) | (109,065) |
Total stockholders' equity | 163,634 | 171,044 |
Commitments and contingencies (note 7) | ||
Total liabilities and stockholders' equity | $ 494,593 | $ 459,145 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jan. 30, 2021 | Feb. 01, 2020 |
Condensed Consolidated Balance Sheets | ||
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 | 15,981,394 | 15,907,666 |
Common stock, shares outstanding | 9,876,901 | 10,834,134 |
Treasury stock, shares | 6,104,493 | 5,073,532 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Consolidated Statements of Operations | |||
Net sales | $ 783,294 | $ 781,925 | $ 769,553 |
Revenue, Product and Service [Extensible List] | Net sales | Net sales | Net sales |
Cost of sales (exclusive of depreciation shown separately below) | $ (471,618) | $ (484,740) | $ (476,326) |
Selling, general and administrative expenses | (260,198) | (259,629) | (247,938) |
Depreciation | (19,259) | (18,535) | (18,886) |
Asset impairment | (286) | (472) | (1,274) |
Income (loss) from operations | 31,933 | 18,549 | 25,129 |
Interest income | 238 | 1,577 | 1,353 |
Interest expense | (776) | (158) | (154) |
Income (loss) before income taxes | 31,395 | 19,968 | 26,328 |
Income tax (expense) benefit | (7,417) | (3,465) | (4,954) |
Net income (loss) | $ 23,978 | $ 16,503 | $ 21,374 |
Basic net income per common share | $ 2.33 | $ 1.41 | $ 1.64 |
Diluted net income per common share | $ 2.32 | $ 1.41 | $ 1.64 |
Weighted average number of shares outstanding | |||
Basic | 10,282,718 | 11,673,887 | 13,030,063 |
Diluted | 10,325,239 | 11,699,000 | 13,069,694 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Operating activities: | |||
Net income | $ 23,978 | $ 16,503 | $ 21,374 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 19,259 | 18,535 | 18,886 |
Non-cash operating lease costs | 48,242 | 45,463 | |
Asset impairment | 286 | 472 | 1,274 |
Loss on disposal of property and equipment | 39 | 23 | 471 |
Deferred income taxes | 474 | (130) | (762) |
Insurance proceeds related to operating activities | 1,042 | 1,012 | 475 |
Non-cash stock-based compensation expense | 2,912 | 2,121 | 2,238 |
Changes in assets and liabilities: | |||
Inventory | 33,564 | 1,216 | (2,330) |
Prepaid and other current assets | (7,718) | (1,588) | (2,135) |
Other assets | (14) | (10) | (25) |
Accounts payable | 5,083 | 5,560 | (2,844) |
Accrued expenses and other long-term liabilities | (38,346) | (45,282) | (418) |
Accrued compensation | 16,302 | 267 | (4,267) |
Income tax payable/receivable | 5,809 | (1,581) | (1,521) |
Layaway deposits | (54) | 28 | (6) |
Net cash provided by operating activities | 110,858 | 42,609 | 30,410 |
Investing activities: | |||
Sales/redemptions of investment securities | 43,759 | 59,836 | 41,600 |
Purchases of investment securities | (522) | (43,840) | (43,882) |
Purchases of property and equipment | (16,956) | (24,175) | (13,256) |
Insurance proceeds related to investing activities | 416 | 573 | 195 |
Net cash provided by (used in) investing activities | 26,697 | (7,606) | (15,343) |
Financing activities: | |||
Borrowings under revolving credit facility | 43,700 | ||
Repayments of revolving credit facility | (43,700) | ||
Cash used to settle withholding taxes on the vesting of nonvested restricted stock | (608) | (733) | (1,048) |
Dividends paid to stockholders | (832) | (3,765) | (4,207) |
Repurchases of common stock | (32,861) | (28,445) | (40,400) |
Net cash used in financing activities | (34,301) | (32,943) | (45,655) |
Net increase (decrease) in cash and cash equivalents | 103,254 | 2,060 | (30,588) |
Cash and cash equivalents: | |||
Beginning of year | 19,923 | 17,863 | 48,451 |
End of year | 123,177 | 19,923 | 17,863 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 731 | 127 | 127 |
Cash payments of income taxes | 1,134 | 4,477 | 7,237 |
Supplemental disclosures of non-cash investing activities: | |||
Accrual for purchases of property and equipment | $ 1,392 | $ 4,000 | $ 2,017 |
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. 03, 2018 | $ 156 | $ 90,605 | $ 158,927 | $ (40,220) | $ 209,468 | ||
Balances (in shares) at Feb. 03, 2018 | 15,777,946 | 2,034,170 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Vesting of nonvested shares | $ 1 | 1 | |||||
Vesting of nonvested shares (in shares) | 10,663 | ||||||
Issuance of nonvested shares (in shares) | 80,045 | ||||||
Stock-based compensation expense | 2,238 | 2,238 | |||||
Net share settlement of nonvested shares and restricted stock units | (1,049) | (1,049) | |||||
Net share settlement of nonvested shares and restricted stock units (in shares) | (40,941) | ||||||
Repurchase of common stock | $ (40,400) | (40,400) | |||||
Repurchase of common stock (in shares) | 1,635,306 | ||||||
Dividends paid to stockholders | (4,207) | (4,207) | |||||
Net income | 21,374 | 21,374 | |||||
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 shares | $ 1 | 1 | |||||
Vesting of nonvested shares (in shares) | 18,851 | ||||||
Issuance of nonvested shares (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 restricted stock units | $ (1) | (735) | (736) | ||||
Net share settlement of nonvested shares and restricted stock units (in shares) | (37,355) | ||||||
Repurchase of common stock | $ (28,445) | (28,445) | |||||
Repurchase of common stock (in shares) | 1,404,056 | ||||||
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 | 15,907,666 | ||||
Increase (Decrease) in Stockholders' Equity | |||||||
Vesting of nonvested shares | $ 1 | $ 1 | |||||
Issuance of nonvested shares (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 restricted stock units | (608) | (608) | |||||
Net share settlement of nonvested shares and restricted stock units (in shares) | (38,934) | ||||||
Repurchase of common stock | $ (32,861) | (32,861) | |||||
Repurchase of common stock (in shares) | 1,030,961 | ||||||
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 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | Mar. 17, 2020 | Dec. 24, 2019 | Sep. 17, 2019 | Jun. 18, 2019 | Mar. 19, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 |
Consolidated Statements of Stockholders' Equity | ||||||||
Dividends paid to stockholders | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 |
Organization and Business
Organization and Business | 12 Months Ended |
Jan. 30, 2021 | |
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 primarily for African American and Latinx families. As of January 30, 2021, the Company operated 585 stores in urban, suburban and rural markets in 33 states. In March 2020, the World Health Organization declared the spread of the coronavirus (“COVID-19”) a global pandemic. As a result, the Company temporarily closed all of its retail store locations and distribution centers effective March 20, 2020. At the end of April 2020, the Company started to reopen stores in select states in accordance with government guidelines. As of July 18, 2020, the Company safely reopened all of its stores. The Company took numerous actions beginning in the first quarter of fiscal 2020 in light of the uncertainties resulting from the pandemic, including: (i) the drawdown of $43.7 million in principal amount under the revolving credit facility on March 20, 2020, which was fully repaid on September 11, 2020; (ii) an amendment to the revolving credit facility to extend the term to August 2021; (iii) temporary furloughs of substantially all store and distribution center personnel and a significant portion of the corporate staff, with employee benefits for eligible employees continued through the temporary furloughs; (iv) temporary tiered salary reductions for management level corporate employees and a reduction to the cash portion of non-employee director fees; (v) extensions of payment terms with vendors and suppliers; (vi) the suspension of share repurchases; (vii) negotiations of rent concessions with landlords, some of which are ongoing; and (viii) a substantial reduction in operating expenses, store occupancy costs, capital expenditures and other costs. The COVID-19 pandemic has resulted in a period of disruption, 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. During this period, the Company continues to prioritize the health of its associates, customers and communities it serves. The impacts of the pandemic have had, and may continue to have, an adverse impact on the Company’s financial condition, results of operations and liquidity. The Company expects continued uncertainty in its business and the global economy due to the duration and intensity of the COVID-19 pandemic, the duration and extent of economic stimulus, timing and effectiveness of vaccines, and volatility in employment trends and consumer confidence. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 30, 2021 | |
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 30, 2021, February 1, 2020 and February 2, 2019 are referred to as fiscal 2020, fiscal 2019 and fiscal 2018, respectively, in the accompanying consolidated financial statements. Fiscal 2020, 2019 and 2018 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 use assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates made by management 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 based on such periodic evaluations. 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. 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, five years for leasehold improvements, seven years for major purchased software systems, 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. Non-cash impairment expense related primarily to leasehold improvements and fixtures and equipment at underperforming stores totaled $0.3 million, $0.5 million and $1.3 million in fiscal 2020, 2019 and 2018, respectively. 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 restricted stock units based on an estimate of the grant-date fair value of each equity award. Grants of time-based and earnings target-based nonvested restricted stock are valued based on the closing stock price on the grant date, while grants of stock price performance-based restricted stock units are valued at an estimate of fair market value using a lattice model. 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 included in the line item “Accrued expenses” on the consolidated balance sheet and totaled $0.3 million as of both January 30, 2021 and February 1, 2020. 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 30, 2021 and February 1, 2020. Disaggregation of Revenue In the following table, the Company’s revenue is disaggregated by “Citi” or major category. The following table provides the percentage of net sales for each Citi within the merchandise assortment: Fiscal Year Citis 2020 2019 2018 Ladies 26 % 26 % 27 % Kids 23 % 23 % 24 % Mens 18 % 16 % 17 % Accessories & Beauty 16 % 17 % 15 % Home & Lifestyle 9 % 7 % 7 % Footwear 8 % 11 % 10 % 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 2020, 2019 and 2018 were $20.3 million, $20.8 million and $17.6 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 2020 2019 2018 Weighted average number of common shares outstanding 10,282,718 11,673,887 13,030,063 Incremental shares from assumed vesting of nonvested restricted stock 42,521 25,113 39,631 Average number of common shares and common stock equivalents outstanding 10,325,239 11,699,000 13,069,694 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 2020, 2019 and 2018, respectively, there were 131,000 , 128,000 and 124,000 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 2020, 2019 and 2018 was $1.6 million, $1.8 million and $1.7 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 over the lease term. In determining the present value of lease payments, the Company uses an incremental borrowing rate that approximates the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term. The Company’s lessors do not provide an implicit rate, nor is one readily available, therefore the incremental borrowing rate is determined based on a buildup approach which utilizes rates and terms from the Company’s existing borrowing facility with adjustments to bridge for impacts to the rate due to differences in collateral, terms and payments. The Company records operating lease cost over the estimated term of the lease, which includes options to extend lease terms that are reasonably certain of being exercised, starting when possession of the property is taken from the landlord. 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 are 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. 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. Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification (ASC). The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s consolidated financial statements. Recently Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), as amended. The new standard established a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. The Company adopted ASU 2016-02 on February 3, 2019 using the optional transition method, which allows for the prospective application of the standard. In addition, the Company elected the package of practical expedients for transition, which permitted it to not reassess prior conclusions regarding lease classification, identification or initial direct costs. Further, the Company elected a short-term lease exception policy which permitted it to not apply the recognition requirements of the new standard to short-term leases (leases with terms of 12 months or less). The Company also elected an accounting policy to account for lease and non-lease components as a single component for certain classes of assets. The Company did not elect an optional hindsight practical expedient. Operating lease ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term. The present value of lease payments was determined using the Company’s incremental borrowing rate. Our lessors do not provide an implicit rate, nor is one readily available, therefore we determined an incremental borrowing rate based on a buildup approach which utilizes rates and terms from the Company’s existing borrowing facility with adjustments to bridge for impacts to the rate due to differences in collateral, terms and payments. Adoption of the new standard resulted in the recording of operating lease right-of-use assets and operating lease liabilities of approximately $133.6 million and $141.0 million, respectively, as of February 3, 2019. The difference between the lease assets and lease liabilities was primarily due to reclassification of lease incentives, as well as impairment of operating lease right-of-use assets for stores previously impaired as of the effective date. 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. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Jan. 30, 2021 | |
Property and Equipment, net | |
Property and Equipment, net | 3. Property and Equipment, net Property and equipment, net, consists of the following (in thousands): January 30, February 1, 2021 2020 Land $ 479 $ 479 Buildings 31,642 31,158 Leasehold improvements 108,818 103,919 Furniture, fixtures and equipment 148,332 142,953 Computer equipment 42,414 40,096 Construction in progress 10,909 8,950 342,594 327,555 Accumulated depreciation (279,080) (262,570) $ 63,514 $ 64,985 |
Revolving Credit Facility
Revolving Credit Facility | 12 Months Ended |
Jan. 30, 2021 | |
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 on August 18, 2015, extending the maturity date to August 18, 2020. The facility was amended again on May 12, 2020, extending the maturity date to August 18, 2021. The facility provides a $50 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 $75 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 0.25% and permits the payment of cash dividends subject to certain limitations. Borrowings under the facility bear interest (a) for Eurodollar Loans, at a rate equal to LIBOR plus either 2.25% or 2.5% , 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) LIBOR for a period of one month plus 1.0% , plus, in each case either 1.25% or 1.5% , 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% . |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 30, 2021 | |
Income Taxes | |
Income Taxes | 5. Income Taxes Income tax expense consists of the following (in thousands): Fiscal Year 2020 2019 2018 Current: Federal $ (5,538) $ (2,650) $ (4,326) State (1,405) (945) (1,390) Total current (6,943) (3,595) (5,716) Deferred: Federal (588) 104 619 State 114 26 143 Total deferred (474) 130 762 Total income tax expense $ (7,417) $ (3,465) $ (4,954) Income tax expense computed using the federal statutory rate is reconciled to the reported income tax expense as follows (in thousands): Fiscal Year 2020 2019 2018 Statutory rate applied to income before income taxes $ (6,593) $ (4,193) $ (5,529) State income taxes, net of federal benefit (1,777) (791) (1,250) State tax credits 168 308 276 State tax credits - valuation allowance (net of federal benefit) — (99) 10 Tax exempt interest — 34 16 General business credits 878 1,456 1,409 (Deficit) Excess tax benefits from stock-based compensation (58) (83) 140 Other (35) (97) (26) Income tax expense $ (7,417) $ (3,465) $ (4,954) Deferred tax assets and deferred tax liabilities consist of the following (in thousands): January 30, February 1, 2021 2020 Deferred tax assets: Inventory capitalization $ 1,628 $ 2,176 Vacation liability 754 705 Operating lease liabilities 49,763 46,595 State tax credits 3,033 3,038 Stock compensation 1,598 796 Deferral of FICA tax 416 — Legal expense reserve 128 128 Insurance liabilities 646 541 Other 532 659 Subtotal deferred tax assets 58,498 54,638 Less: State tax credits valuation allowance - net (1,714) (1,714) Total deferred tax assets 56,784 52,924 Deferred tax liabilities: Right of use asset (47,672) (45,095) Book and tax depreciation differences (2,040) (373) Prepaid expenses (877) (787) Total deferred tax liabilities (50,589) (46,255) Net deferred tax asset $ 6,195 $ 6,669 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 2015. 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 30, 2021, 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 30, 2021, the valuation allowance, net of federal tax benefit, totaled $1.7 million. The effective income tax rate for fiscal 2020, 2019 and 2018 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 $1.7 million related to such credits in each of fiscal 2020, 2019 and 2018. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 30, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | 6. Stockholders’ Equity Repurchases of common stock In November 2018, the Company’s board of directors approved a program that authorized the repurchase of up to $25.0 million in shares of the Company’s common stock. Under this program in fiscal 2018, the Company repurchased 768,558 shares of its common stock in the open market at an aggregate cost of $15.4 million. During the first three quarters of fiscal 2019, the Company repurchased 562,813 shares of its common stock in the open market at an aggregate cost of $9.6 million. In November 2019, the Company’s board of directors approved a new program that authorized the purchase of up to $25.0 million in shares of the Company’s common stock. Under this program in the fourth quarter of fiscal 2019, the Company repurchased 841,243 shares of its common stock in the open market at an aggregate cost of $18.8 million. During February of fiscal 2020, the Company repurchased 260,254 shares of its common stock at an aggregate cost of $6.3 million. In March 2020, the Company’s board of directors approved a $30.0 million stock repurchase program. Due to the uncertainty stemming from the COVID-19 pandemic, on March 23, 2020, the Company temporarily suspended any repurchases. On September 14, 2020, the Company announced the reinstatement of this program. On December 22, 2020, the Company announced that its board of directors approved an additional $30.0 million stock repurchase program. Under these programs in fiscal 2020, the Company repurchased 770,707 shares of its common stock at an aggregate cost of $26.6 million. Dividends On March 17, 2020, the Company paid a dividend of $0.08 per common share. On April 28, 2020, the Company announced the suspension of future cash dividends. In 2019, the Company paid a quarterly dividend of $0.08 per common share on March 19, 2019, June 18, 2019, September 17, 2019 and December 24, 2019. Any determination to declare and pay cash dividends for future quarters will be made by the Company’s board of directors. Stock-Based Compensation On April 6, 2012, the Company adopted the Citi Trends, Inc. 2012 Incentive Plan (the “2012 Plan”), which became effective upon approval by the Company’s stockholders on May 23, 2012. The 2012 Plan provides for the grant of incentive and nonqualified options, nonvested restricted stock and other forms of stock-based and cash-based compensation to key employees and directors. Shares of time-based nonvested restricted stock granted to employees vest in equal installments over three years from the date of grant. Shares issued to directors vest one year from the date of grant. The Company records compensation expense for grants of time-based nonvested restricted stock on a straight line basis over the requisite service period of the stock recipients which is equal to the vesting period of the stock. Total compensation cost for such stock is calculated based on the closing market price on the date of grant multiplied by the number of shares granted. The Company expects to recognize $2.7 million in future compensation expense from the grants of time-based restricted stock over the requisite service period of up to three years . In March 2019, the Company granted 51,490 RSUs to 19 employees. The RSUs have performance vesting criteria which were based upon the Company achieving adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $63.0 million for the Company’s fiscal year ending January 29, 2022. The number of units earned and vested will increase by 20% if the Company achieves EBITDA of $69.0 million for the same period. In the event that actual performance is below threshold, no award will be made. In addition, the award will be forfeited upon the termination of employment by the recipient prior to January 29, 2022. During 2020, the Company recorded $397,000 of expense related to these RSU grants. In March 2020, the Company granted 103,767 RSUs to 18 employees. The RSUs have performance vesting criteria based upon the Company achieving certain thresholds of adjusted earnings before interest and taxes (“EBIT”) for the fiscal year ending February 4, 2023. The number of units earned and vested may range from 50% (at threshold performance) to no more than 200% of the target award. In the event that actual performance is below threshold, no award will be made. In addition, the award will be forfeited upon the termination of employment by the recipient prior to February 4, 2023. During 2020, the Company recorded $863,000 of expense related to these RSU grants. During fiscal 2020, 2019 and 2018, compensation expense arising from nonvested restricted stock grants and RSUs totaled $2.9 million, $2.1 million and $2.2 million, respectively. The following table summarizes activity related to time-based nonvested restricted stock grants during fiscal 2020: Nonvested Weighted Average Restricted Grant Date Shares Fair Value Outstanding as of February 1, 2020 171,979 $ 21.06 Granted 127,880 20.15 Vested (109,564) 20.31 Forfeited (15,218) 19.26 Outstanding as of January 30, 2021 175,077 $ 21.02 In March 2018, the Company granted 8,400 RSUs to one employee for which vesting was based upon the Company’s stock achieving certain thresholds. On the date of grant, the Company expensed $137,000 based upon the estimated fair market value. One threshold for vesting was achieved in 2018. No thresholds were achieved in 2019 and the grant expired on January 31, 2020 when the recipient left the Company. In March 2018, the Company granted 8,401 RSUs to one employee for which vesting was based upon achieving certain thresholds of adjusted EBITDA. During 2018, the Company expensed $78,000 based upon the estimated fair market value. No thresholds were achieved in 2018 or 2019 and the grant expired January 31, 2020 when the recipient left the Company. Income tax benefits or deficiencies arising from the fair market value of restricted stock shares at vesting versus the cumulative compensation cost of such shares are recorded as a component of income tax expense in the Company’s consolidated statement of operations. Such income tax expense (benefits) totaled $58,000 , $83,000 and ($140,000) in fiscal 2020, 2019 and 2018, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 30, 2021 | |
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. 30, 2021 | |
Leases | |
Leases | 8. Leases The Company leases its retail store locations and certain office space and equipment. 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 sheet. The lease liability is measured at the present value of future lease payments as of the lease commencement date, or as of the date of adoption of ASU 2016-02 for leases existing at the adoption date. Leases for store locations are typically for a term of five years with options to extend for one or more five-year periods. 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 cost consists of the following (in thousands): Fiscal Year 2020 2019 Operating lease cost $ 50,446 $ 51,213 Variable lease cost 8,159 5,791 Short term lease cost 1,459 1,061 Total lease cost $ 60,064 $ 58,065 In response to the impact of the COVID-19 pandemic on the Company’s operations, 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 is engaging in ongoing discussions with certain landlords regarding the potential restructuring of lease payments and rent concessions. In fiscal 2020, 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 $1.0 million in fiscal 2020. Future minimum lease payments as of January 30, 2021 are as follows (in thousands): Fiscal Year Lease Costs 2021 $ 51,435 2022 45,537 2023 37,714 2024 29,308 2025 18,978 Thereafter 26,717 Total future minimum lease payments 209,689 Less: imputed interest (16,878) (1) Total present value of lease liabilities $ 192,811 (2) (1) Calculated using the discount rate for each lease. (2) Includes short-term and long-term 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 2020 2019 Cash paid for operating leases $ 47,075 $ 49,704 Right of use assets obtained in exchange for new operating lease liabilities $ 60,144 $ 82,954 Weighted average remaining lease term (years) - operating leases 5.12 5.13 Weighted average discount rate - operating leases 3.11% 3.49% |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Jan. 30, 2021 | |
Valuation and Qualifying Accounts | |
Valuation and Qualifying Accounts | 9. Valuation and Qualifying Accounts The following table summarizes the allowances for inventory shrinkage and deferred tax assets (in thousands): Allowance for Allowance for Inventory Deferred Tax Shrinkage Assets Balance as of February 3, 2018 $ 3,504 $ 1,624 Additions charged to costs and expenses 9,643 — Deductions (10,033) (9) Balance as of February 2, 2019 3,114 1,615 Additions charged to costs and expenses 9,759 99 Deductions (9,919) — Balance as of February 1, 2020 2,954 1,714 Additions charged to costs and expenses 6,393 — Deductions (4,115) — Balance as of January 30, 2021 $ 5,232 $ 1,714 For the allowance for inventory shrinkage, additions charged to costs and expenses are the result of estimated inventory shrinkage, while deductions represent actual inventory shrinkage incurred from physical inventories taken during the fiscal year. For the deferred tax asset valuation allowance, additions charged to costs and expenses represent the establishment of a valuation allowance when management determines that its ability to utilize certain tax credits included in deferred tax assets is no longer more likely than not. |
Unaudited Quarterly Results of
Unaudited Quarterly Results of Operations | 12 Months Ended |
Jan. 30, 2021 | |
Unaudited Quarterly Results of Operations | |
Unaudited Quarterly Results of Operations | 10. Unaudited Quarterly Results of Operations Fiscal 2020 Fiscal 2019 Fourth Third Second First Fourth Third Second First Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter (in thousands, except per share amounts) Statement of Operations Data: Net sales $ 251,919 $ 199,100 $ 216,151 $ 116,124 $ 211,013 $ 183,050 $ 182,830 $ 205,032 Cost of sales (exclusive of depreciation shown separately below) (144,274) (115,827) (127,147) (84,370) (127,311) (114,579) (114,612) (128,238) Selling, general and administrative expenses (79,269) (69,230) (57,623) (54,076) (67,654) (65,539) (62,989) (63,447) Depreciation (4,677) (4,703) (4,933) (4,946) (4,794) (4,520) (4,607) (4,614) Asset impairment — — — (286) — — (472) — Income (loss) from operations 23,699 9,340 26,448 (27,554) 11,254 (1,588) 150 8,733 Interest, net (40) (189) (363) 54 322 382 374 341 Income (loss) before income taxes 23,659 9,151 26,085 (27,500) 11,576 (1,206) 524 9,074 Income tax (expense) benefit (5,621) (2,186) (6,218) 6,608 (2,154) 122 (147) (1,286) Net income (loss) $ 18,038 $ 6,965 $ 19,867 $ (20,892) $ 9,422 $ (1,084) $ 377 $ 7,788 Net income (loss) per common share: (1) Basic $ 1.83 $ 0.67 $ 1.90 $ (2.00) $ 0.84 $ (0.09) $ 0.03 $ 0.65 Diluted $ 1.81 $ 0.67 $ 1.90 $ (2.00) $ 0.84 $ (0.09) $ 0.03 $ 0.65 Weighted average shares used to compute net income (loss) per common share: Basic 9,872 10,365 10,451 10,443 11,202 11,636 11,882 11,976 Diluted 9,969 10,401 10,458 10,443 11,271 11,636 11,882 12,006 (1) Net income (loss) per share is computed independently for each period presented. As a result, the total of net income (loss) per share for the four quarters may not equal the annual amount . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 30, 2021 | |
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 30, 2021, February 1, 2020 and February 2, 2019 are referred to as fiscal 2020, fiscal 2019 and fiscal 2018, respectively, in the accompanying consolidated financial statements. Fiscal 2020, 2019 and 2018 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 use assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates made by management 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 based on such periodic evaluations. |
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. |
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, five years for leasehold improvements, seven years for major purchased software systems, 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. Non-cash impairment expense related primarily to leasehold improvements and fixtures and equipment at underperforming stores totaled $0.3 million, $0.5 million and $1.3 million in fiscal 2020, 2019 and 2018, respectively. |
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 restricted stock units based on an estimate of the grant-date fair value of each equity award. Grants of time-based and earnings target-based nonvested restricted stock are valued based on the closing stock price on the grant date, while grants of stock price performance-based restricted stock units are valued at an estimate of fair market value using a lattice model. 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 included in the line item “Accrued expenses” on the consolidated balance sheet and totaled $0.3 million as of both January 30, 2021 and February 1, 2020. 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 30, 2021 and February 1, 2020. |
Disaggregation of Revenue | Disaggregation of Revenue In the following table, the Company’s revenue is disaggregated by “Citi” or major category. The following table provides the percentage of net sales for each Citi within the merchandise assortment: Fiscal Year Citis 2020 2019 2018 Ladies 26 % 26 % 27 % Kids 23 % 23 % 24 % Mens 18 % 16 % 17 % Accessories & Beauty 16 % 17 % 15 % Home & Lifestyle 9 % 7 % 7 % Footwear 8 % 11 % 10 % |
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 2020, 2019 and 2018 were $20.3 million, $20.8 million and $17.6 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 2020 2019 2018 Weighted average number of common shares outstanding 10,282,718 11,673,887 13,030,063 Incremental shares from assumed vesting of nonvested restricted stock 42,521 25,113 39,631 Average number of common shares and common stock equivalents outstanding 10,325,239 11,699,000 13,069,694 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 2020, 2019 and 2018, respectively, there were 131,000 , 128,000 and 124,000 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 2020, 2019 and 2018 was $1.6 million, $1.8 million and $1.7 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 over the lease term. In determining the present value of lease payments, the Company uses an incremental borrowing rate that approximates the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term. The Company’s lessors do not provide an implicit rate, nor is one readily available, therefore the incremental borrowing rate is determined based on a buildup approach which utilizes rates and terms from the Company’s existing borrowing facility with adjustments to bridge for impacts to the rate due to differences in collateral, terms and payments. The Company records operating lease cost over the estimated term of the lease, which includes options to extend lease terms that are reasonably certain of being exercised, starting when possession of the property is taken from the landlord. 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 are 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. |
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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification (ASC). The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s consolidated financial statements. Recently Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), as amended. The new standard established a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. The Company adopted ASU 2016-02 on February 3, 2019 using the optional transition method, which allows for the prospective application of the standard. In addition, the Company elected the package of practical expedients for transition, which permitted it to not reassess prior conclusions regarding lease classification, identification or initial direct costs. Further, the Company elected a short-term lease exception policy which permitted it to not apply the recognition requirements of the new standard to short-term leases (leases with terms of 12 months or less). The Company also elected an accounting policy to account for lease and non-lease components as a single component for certain classes of assets. The Company did not elect an optional hindsight practical expedient. Operating lease ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term. The present value of lease payments was determined using the Company’s incremental borrowing rate. Our lessors do not provide an implicit rate, nor is one readily available, therefore we determined an incremental borrowing rate based on a buildup approach which utilizes rates and terms from the Company’s existing borrowing facility with adjustments to bridge for impacts to the rate due to differences in collateral, terms and payments. Adoption of the new standard resulted in the recording of operating lease right-of-use assets and operating lease liabilities of approximately $133.6 million and $141.0 million, respectively, as of February 3, 2019. The difference between the lease assets and lease liabilities was primarily due to reclassification of lease incentives, as well as impairment of operating lease right-of-use assets for stores previously impaired as of the effective date. 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of revenue from contracts with customers disaggregated by major product line | Fiscal Year Citis 2020 2019 2018 Ladies 26 % 26 % 27 % Kids 23 % 23 % 24 % Mens 18 % 16 % 17 % Accessories & Beauty 16 % 17 % 15 % Home & Lifestyle 9 % 7 % 7 % Footwear 8 % 11 % 10 % |
Schedule of reconciliation of the number of average common shares outstanding used to calculate basic and diluted earnings per share | Fiscal Year 2020 2019 2018 Weighted average number of common shares outstanding 10,282,718 11,673,887 13,030,063 Incremental shares from assumed vesting of nonvested restricted stock 42,521 25,113 39,631 Average number of common shares and common stock equivalents outstanding 10,325,239 11,699,000 13,069,694 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Property and Equipment, net | |
Schedule of the components of property and equipment | Property and equipment, net, consists of the following (in thousands): January 30, February 1, 2021 2020 Land $ 479 $ 479 Buildings 31,642 31,158 Leasehold improvements 108,818 103,919 Furniture, fixtures and equipment 148,332 142,953 Computer equipment 42,414 40,096 Construction in progress 10,909 8,950 342,594 327,555 Accumulated depreciation (279,080) (262,570) $ 63,514 $ 64,985 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Income Taxes | |
Schedule of income tax (benefit) expense | Income tax expense consists of the following (in thousands): Fiscal Year 2020 2019 2018 Current: Federal $ (5,538) $ (2,650) $ (4,326) State (1,405) (945) (1,390) Total current (6,943) (3,595) (5,716) Deferred: Federal (588) 104 619 State 114 26 143 Total deferred (474) 130 762 Total income tax expense $ (7,417) $ (3,465) $ (4,954) |
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 2020 2019 2018 Statutory rate applied to income before income taxes $ (6,593) $ (4,193) $ (5,529) State income taxes, net of federal benefit (1,777) (791) (1,250) State tax credits 168 308 276 State tax credits - valuation allowance (net of federal benefit) — (99) 10 Tax exempt interest — 34 16 General business credits 878 1,456 1,409 (Deficit) Excess tax benefits from stock-based compensation (58) (83) 140 Other (35) (97) (26) Income tax expense $ (7,417) $ (3,465) $ (4,954) |
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 30, February 1, 2021 2020 Deferred tax assets: Inventory capitalization $ 1,628 $ 2,176 Vacation liability 754 705 Operating lease liabilities 49,763 46,595 State tax credits 3,033 3,038 Stock compensation 1,598 796 Deferral of FICA tax 416 — Legal expense reserve 128 128 Insurance liabilities 646 541 Other 532 659 Subtotal deferred tax assets 58,498 54,638 Less: State tax credits valuation allowance - net (1,714) (1,714) Total deferred tax assets 56,784 52,924 Deferred tax liabilities: Right of use asset (47,672) (45,095) Book and tax depreciation differences (2,040) (373) Prepaid expenses (877) (787) Total deferred tax liabilities (50,589) (46,255) Net deferred tax asset $ 6,195 $ 6,669 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Stockholders' Equity | |
Schedule of activity related to nonvested restricted stock grants | Nonvested Weighted Average Restricted Grant Date Shares Fair Value Outstanding as of February 1, 2020 171,979 $ 21.06 Granted 127,880 20.15 Vested (109,564) 20.31 Forfeited (15,218) 19.26 Outstanding as of January 30, 2021 175,077 $ 21.02 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Leases | |
Schedule of lease expense | Fiscal Year 2020 2019 Operating lease cost $ 50,446 $ 51,213 Variable lease cost 8,159 5,791 Short term lease cost 1,459 1,061 Total lease cost $ 60,064 $ 58,065 |
Schedule of future minimum rent payments under operating leases | Future minimum lease payments as of January 30, 2021 are as follows (in thousands): Fiscal Year Lease Costs 2021 $ 51,435 2022 45,537 2023 37,714 2024 29,308 2025 18,978 Thereafter 26,717 Total future minimum lease payments 209,689 Less: imputed interest (16,878) (1) Total present value of lease liabilities $ 192,811 (2) (1) Calculated using the discount rate for each lease. (2) Includes short-term and long-term 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 2020 2019 Cash paid for operating leases $ 47,075 $ 49,704 Right of use assets obtained in exchange for new operating lease liabilities $ 60,144 $ 82,954 Weighted average remaining lease term (years) - operating leases 5.12 5.13 Weighted average discount rate - operating leases 3.11% 3.49% |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Valuation and Qualifying Accounts | |
Summary of the allowance for inventory shrinkage | The following table summarizes the allowances for inventory shrinkage and deferred tax assets (in thousands): Allowance for Allowance for Inventory Deferred Tax Shrinkage Assets Balance as of February 3, 2018 $ 3,504 $ 1,624 Additions charged to costs and expenses 9,643 — Deductions (10,033) (9) Balance as of February 2, 2019 3,114 1,615 Additions charged to costs and expenses 9,759 99 Deductions (9,919) — Balance as of February 1, 2020 2,954 1,714 Additions charged to costs and expenses 6,393 — Deductions (4,115) — Balance as of January 30, 2021 $ 5,232 $ 1,714 |
Unaudited Quarterly Results o_2
Unaudited Quarterly Results of Operations (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Unaudited Quarterly Results of Operations | |
Schedule of unaudited quarterly results of operations | Fiscal 2020 Fiscal 2019 Fourth Third Second First Fourth Third Second First Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter (in thousands, except per share amounts) Statement of Operations Data: Net sales $ 251,919 $ 199,100 $ 216,151 $ 116,124 $ 211,013 $ 183,050 $ 182,830 $ 205,032 Cost of sales (exclusive of depreciation shown separately below) (144,274) (115,827) (127,147) (84,370) (127,311) (114,579) (114,612) (128,238) Selling, general and administrative expenses (79,269) (69,230) (57,623) (54,076) (67,654) (65,539) (62,989) (63,447) Depreciation (4,677) (4,703) (4,933) (4,946) (4,794) (4,520) (4,607) (4,614) Asset impairment — — — (286) — — (472) — Income (loss) from operations 23,699 9,340 26,448 (27,554) 11,254 (1,588) 150 8,733 Interest, net (40) (189) (363) 54 322 382 374 341 Income (loss) before income taxes 23,659 9,151 26,085 (27,500) 11,576 (1,206) 524 9,074 Income tax (expense) benefit (5,621) (2,186) (6,218) 6,608 (2,154) 122 (147) (1,286) Net income (loss) $ 18,038 $ 6,965 $ 19,867 $ (20,892) $ 9,422 $ (1,084) $ 377 $ 7,788 Net income (loss) per common share: (1) Basic $ 1.83 $ 0.67 $ 1.90 $ (2.00) $ 0.84 $ (0.09) $ 0.03 $ 0.65 Diluted $ 1.81 $ 0.67 $ 1.90 $ (2.00) $ 0.84 $ (0.09) $ 0.03 $ 0.65 Weighted average shares used to compute net income (loss) per common share: Basic 9,872 10,365 10,451 10,443 11,202 11,636 11,882 11,976 Diluted 9,969 10,401 10,458 10,443 11,271 11,636 11,882 12,006 (1) Net income (loss) per share is computed independently for each period presented. As a result, the total of net income (loss) per share for the four quarters may not equal the annual amount . |
Organization and Business (Deta
Organization and Business (Details) $ in Millions | Sep. 11, 2020USD ($) | Jan. 30, 2021statestore |
Number of stores operated | store | 585 | |
Number of states in which company operates | state | 33 | |
Line of Credit | ||
Debt repaid | $ | $ 43.7 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - PPE and Insurance Liabilities (Details) - USD ($) | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Fiscal Year | |||
Length of fiscal year | 364 days | 364 days | 364 days |
Impairment of long lived assets | |||
Non-cash impairment expense related to leasehold improvements and fixtures and equipment | $ 300,000 | $ 500,000 | $ 1,300,000 |
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, fixtures and equipment | Minimum | |||
Property and Equipment, net | |||
Estimated useful lives | 3 years | ||
Furniture, fixtures and equipment | Maximum | |||
Property and Equipment, net | |||
Estimated useful lives | 5 years | ||
Leasehold improvements | |||
Property and Equipment, net | |||
Estimated useful lives | 5 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. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Revenue, initial application period, cumulative effect transition | |||
Period of time company allows customers to return merchandise | 30 days | ||
Estimated refund liability | $ 0.3 | $ 0.3 | |
Carrying value of return asset | 0.1 | 0.1 | |
Distribution center costs | $ 20.3 | $ 20.8 | $ 17.6 |
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% | 27.00% |
Kids | |||
Revenue, initial application period, cumulative effect transition | |||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 23.00% | 23.00% | 24.00% |
Mens | |||
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% |
Accessories & Beauty | |||
Revenue, initial application period, cumulative effect transition | |||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 16.00% | 17.00% | 15.00% |
Home & Lifestyle | |||
Revenue, initial application period, cumulative effect transition | |||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 9.00% | 7.00% | 7.00% |
Footwear | |||
Revenue, initial application period, cumulative effect transition | |||
Revenue from contracts with customers disaggregated by major product line (as a percent) | 8.00% | 11.00% | 10.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - EPS, Advertising and Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Reconciliation of average number of common shares outstanding used to calculate basic and diluted earnings per share | |||||||||||
Weighted average number of common shares outstanding | 9,872 | 10,365 | 10,451 | 10,443 | 11,202 | 11,636 | 11,882 | 11,976 | 10,282,718 | 11,673,887 | 13,030,063 |
Incremental shares from assumed vesting of nonvested restricted stock | 42,521 | 25,113 | 39,631 | ||||||||
Weighted average number of common shares and common stock equivalents outstanding | 9,969 | 10,401 | 10,458 | 10,443 | 11,271 | 11,636 | 11,882 | 12,006 | 10,325,239 | 11,699,000 | 13,069,694 |
Advertising | |||||||||||
Advertising expense | $ 1.6 | $ 1.8 | $ 1.7 | ||||||||
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) | 131,000 | 128,000 | 124,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Segments and Concentration Risk (Details) | 12 Months Ended |
Jan. 30, 2021segment | |
Summary of Significant Accounting Policies | |
Number of operating segments | 1 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Feb. 03, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 |
Transition package of practical expedients | true | ||||
Hind sight practical expedient | false | ||||
Lease liability | $ 192,811 | ||||
Right-of-use ("ROU") asset | 179,673 | $ 169,854 | |||
Adoption of lease accounting standard | $ 163,634 | $ 171,044 | $ 187,425 | $ 209,468 | |
Accounting Standards Update 2016-02 | |||||
Lease liability | $ 133,600 | ||||
Right-of-use ("ROU") asset | 141,000 | ||||
Cumulative Effect, Period of Adoption, Adjustment | |||||
Adoption of lease accounting standard | $ 2,100 | $ (2,060) |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Property and Equipment, net | ||
Property and equipment, gross | $ 342,594 | $ 327,555 |
Accumulated depreciation | (279,080) | (262,570) |
Property and Equipment, net | 63,514 | 64,985 |
Land | ||
Property and Equipment, net | ||
Property and equipment, gross | 479 | 479 |
Buildings | ||
Property and Equipment, net | ||
Property and equipment, gross | 31,642 | 31,158 |
Leasehold improvements | ||
Property and Equipment, net | ||
Property and equipment, gross | 108,818 | 103,919 |
Furniture, fixtures and equipment | ||
Property and Equipment, net | ||
Property and equipment, gross | 148,332 | 142,953 |
Computer equipment | ||
Property and Equipment, net | ||
Property and equipment, gross | 42,414 | 40,096 |
Construction in progress | ||
Property and Equipment, net | ||
Property and equipment, gross | $ 10,909 | $ 8,950 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) $ in Thousands | May 12, 2020USD ($)item | Mar. 20, 2020USD ($) | Oct. 27, 2011USD ($) | Jan. 30, 2021USD ($) | Sep. 11, 2020 |
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 | $ 50,000 | $ 50,000 | |||
Borrowings under revolving credit facility | $ 43,700 | ||||
Borrowing capacity, accordion feature | 25,000 | ||||
Maximum borrowing capacity including accordion expansion | $ 75,000 | ||||
Number of covenants | item | 1 | ||||
Unused commitment fee (as a percent) | 0.25% | ||||
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 | LIBOR | Minimum | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 2.25% | ||||
Line of Credit | LIBOR | Maximum | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 2.50% | ||||
Line of Credit | Base Rate | Minimum | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 1.25% | ||||
Line of Credit | Base Rate | Maximum | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 1.50% | ||||
Line of Credit | Federal Fund Rate | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 0.50% | ||||
Line of Credit | LIBOR, One Month | |||||
Revolving Line of Credit | |||||
Margin added to variable rate (as a percent) | 1.00% |
Income Taxes - Income Tax (Bene
Income Taxes - Income Tax (Benefit) Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Current: | |||||||||||
Federal | $ 5,538 | $ 2,650 | $ 4,326 | ||||||||
State | 1,405 | 945 | 1,390 | ||||||||
Total current | 6,943 | 3,595 | 5,716 | ||||||||
Deferred: | |||||||||||
Federal | (588) | 104 | 619 | ||||||||
State | 114 | 26 | 143 | ||||||||
Total deferred | (474) | 130 | 762 | ||||||||
Income tax expense | $ (5,621) | $ (2,186) | $ (6,218) | $ 6,608 | $ (2,154) | $ 122 | $ (147) | $ (1,286) | $ (7,417) | $ (3,465) | $ (4,954) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Federal Statutory Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
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 | $ (6,593) | $ (4,193) | $ (5,529) | ||||||||
State income taxes, net of federal benefit | (1,777) | (791) | (1,250) | ||||||||
State tax credits | 168 | 308 | 276 | ||||||||
State tax credits - valuation allowance (net of federal benefit) | (99) | 10 | |||||||||
Tax exempt interest | 34 | 16 | |||||||||
General business credits | 878 | 1,456 | 1,409 | ||||||||
(Deficit) Excess tax benefits from stock based compensation | (58) | (83) | 140 | ||||||||
Other | (35) | (97) | (26) | ||||||||
Income tax expense | $ (5,621) | $ (2,186) | $ (6,218) | $ 6,608 | $ (2,154) | $ 122 | $ (147) | $ (1,286) | $ (7,417) | $ (3,465) | $ (4,954) |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Deferred tax assets: | ||
Inventory capitalization | $ 1,628 | $ 2,176 |
Vacation liability | 754 | 705 |
Operating lease liabilities | 49,763 | 46,595 |
State tax credits | 3,033 | 3,038 |
Stock compensation | 1,598 | 796 |
Deferral of FICA tax | 416 | |
Legal expense reserve | 128 | 128 |
Insurance liabilities | 646 | 541 |
Other | 532 | 659 |
Subtotal deferred tax assets | 58,498 | 54,638 |
Less: State tax credits valuation allowance - net | (1,714) | (1,714) |
Total deferred tax assets | 56,784 | 52,924 |
Deferred tax liabilities: | ||
Right of use asset | (47,672) | (45,095) |
Book and tax depreciation differences | (2,040) | (373) |
Prepaid expenses | (877) | (787) |
Total deferred tax liabilities | (50,589) | (46,255) |
Net deferred tax asset | $ 6,195 | $ 6,669 |
Income Taxes - Income Tax (Be_2
Income Taxes - Income Tax (Benefit) Expense Components (Details) $ in Thousands | 12 Months Ended | 36 Months Ended | ||
Jan. 30, 2021USD ($)item | Feb. 01, 2020USD ($) | Feb. 02, 2019USD ($) | Jan. 30, 2021USD ($) | |
Income Taxes | ||||
Benefits not recognized due to uncertainty | $ 0 | $ 0 | ||
Number of states in which ability to utilize tax credits is no longer more likely than not | item | 1 | |||
Valuation allowance, net | $ 1,714 | $ 1,714 | $ 1,714 | |
Credits carry back period | 1 year | 1 year | 1 year | |
Credits carry forward period | 20 years | |||
Income tax benefit related to federal and state tax credits | $ 1,700 | $ 1,700 | $ 1,700 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Program and Cash Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 17, 2020 | Dec. 24, 2019 | Sep. 17, 2019 | Jun. 18, 2019 | Mar. 19, 2019 | Feb. 29, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | Dec. 22, 2020 | Mar. 31, 2020 | Nov. 30, 2019 | Nov. 30, 2018 |
Stockholders' Equity | |||||||||||||||
Stock Repurchased During Period, Value | $ 32,861 | $ 28,445 | $ 40,400 | ||||||||||||
Dividends paid to stockholders | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | |||||||
Stock Repurchase Program | |||||||||||||||
Stockholders' Equity | |||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 30,000 | $ 30,000 | $ 25,000 | $ 25,000 | |||||||||||
Stock Repurchased During Period, Shares | 260,254 | 841,243 | 562,813 | 770,707 | 768,558 | ||||||||||
Stock Repurchased During Period, Value | $ 6,300 | $ 18,800 | $ 9,600 | $ 26,600 | $ 15,400 |
Stockholders' Equity - Time-Bas
Stockholders' Equity - Time-Based Nonvested Restricted Stock Granted to Employees (Details) | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2020USD ($)shares | Mar. 31, 2019USD ($)employeeshares | Jan. 30, 2021USD ($)shares | Feb. 01, 2020USD ($) | Feb. 02, 2019USD ($) | |
Restricted Stock | |||||
Stockholders' Equity | |||||
Future compensation expense to be recognized | $ 2,700,000 | ||||
Period for recognition of future compensation expense over the requisite service period | 3 years | ||||
Granted (in shares) | shares | 127,880 | ||||
Compensation expense | $ 2,900,000 | $ 2,100,000 | $ 2,200,000 | ||
Restricted Stock | Employee | |||||
Stockholders' Equity | |||||
Vesting period | 3 years | ||||
Restricted Stock | Director | |||||
Stockholders' Equity | |||||
Vesting period | 1 year | ||||
March 2019 EBITDA RSU | Employee | |||||
Stockholders' Equity | |||||
Granted (in shares) | shares | 51,490 | ||||
Number of employees | employee | 19 | ||||
Performance vesting criteria of adjusted EBITDA | $ 63,000,000 | ||||
Percentage of additional units vested upon achieving additional threshold earnings | 20.00% | ||||
Additional performance vesting criteria of adjusted EBITDA | $ 69,000,000 | ||||
Compensation expense | $ 397,000 | ||||
March 2020 EBIT RSU | Employee | |||||
Stockholders' Equity | |||||
Granted (in shares) | shares | 103,767 | ||||
Compensation expense | $ 863,000 | ||||
March 2020 EBIT RSU | Employee | Minimum | |||||
Stockholders' Equity | |||||
Percentage of additional units vested upon achieving additional threshold earnings | 5000.00% | ||||
March 2020 EBIT RSU | Employee | Maximum | |||||
Stockholders' Equity | |||||
Percentage of additional units vested upon achieving additional threshold earnings | 20000.00% |
Stockholders Equity - Activity
Stockholders Equity - Activity for Time-Based Nonvested Restricted Stock Grants (Details) - Restricted Stock | 12 Months Ended |
Jan. 30, 2021$ / sharesshares | |
Nonvested Restricted Shares | |
Outstanding at the beginning of the period (in shares) | shares | 171,979 |
Granted (in shares) | shares | 127,880 |
Vested (in shares) | shares | (109,564) |
Forfeited (in shares) | shares | (15,218) |
Outstanding at the end of the period (in shares) | shares | 175,077 |
Weighted Average Grant Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 21.06 |
Granted (in dollars per share) | $ / shares | 20.15 |
Vested (in dollars per share) | $ / shares | 20.31 |
Forfeited (in dollars per share) | $ / shares | 19.26 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 21.02 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Units (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||
Mar. 31, 2020USD ($)employeeshares | Mar. 31, 2019shares | Mar. 31, 2018USD ($)itemshares | Jan. 30, 2021USD ($) | Oct. 31, 2020USD ($) | Aug. 01, 2020USD ($) | May 02, 2020USD ($) | Feb. 01, 2020USD ($) | Nov. 02, 2019USD ($) | Aug. 03, 2019USD ($) | May 04, 2019USD ($) | Jan. 30, 2021USD ($)itemshares | Feb. 01, 2020USD ($)item | Feb. 02, 2019USD ($)item | |
Stockholders' Equity | ||||||||||||||
Income tax expense (benefits) | $ 5,621,000 | $ 2,186,000 | $ 6,218,000 | $ (6,608,000) | $ 2,154,000 | $ (122,000) | $ 147,000 | $ 1,286,000 | $ 7,417,000 | $ 3,465,000 | $ 4,954,000 | |||
Restricted Stock | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Granted (in shares) | shares | 127,880 | |||||||||||||
Compensation expense | $ 2,900,000 | 2,100,000 | 2,200,000 | |||||||||||
Income tax expense (benefits) | $ 58,000 | $ 83,000 | $ (140,000) | |||||||||||
March 2018 RSU | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Granted (in shares) | shares | 8,400 | |||||||||||||
Compensation expense | $ 137,000 | |||||||||||||
Number of thresholds achieved | item | 1 | |||||||||||||
Number of employees to whom awards are granted who subsequently resigned | item | 1 | |||||||||||||
March 2018 EBITDA RSU | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Granted (in shares) | shares | 8,401 | |||||||||||||
Number of employees to whom awards are granted | item | 1 | |||||||||||||
Compensation expense | $ 78,000 | |||||||||||||
Number of thresholds achieved | item | 0 | 0 | ||||||||||||
Employee | March 2019 EBITDA RSU | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Granted (in shares) | shares | 51,490 | |||||||||||||
Compensation expense | $ 397,000 | |||||||||||||
Employee | March 2020 EBIT RSU | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Granted (in shares) | shares | 103,767 | |||||||||||||
Number of employees to whom awards are granted | employee | 18 | |||||||||||||
Compensation expense | $ 863,000 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
Leases | ||
Lease term | 5 years | |
Operating lease cost | $ 50,446 | $ 51,213 |
Variable lease cost | 8,159 | 5,791 |
Short term lease cost | 1,459 | 1,061 |
Total lease cost | $ 60,064 | $ 58,065 |
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. 30, 2021USD ($) |
Future minimum lease payments under operating leases | |
2021 | $ 51,435 |
2022 | 45,537 |
2023 | 37,714 |
2024 | 29,308 |
2024 | 18,978 |
Thereafter | 26,717 |
Total future minimum lease payments | 209,689 |
Less: imputed interest | (16,878) |
Total present value of lease liabilities | $ 192,811 |
Leases - Cash flow and other in
Leases - Cash flow and other information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
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 | $ 1,000 | |
Cash paid for operating leases | 47,075 | $ 49,704 |
Right of use assets obtained in exchange for new operating lease liabilities | $ 60,144 | $ 82,954 |
Weighted average remaining lease term - operating leases | 5 years 1 month 13 days | 5 years 1 month 17 days |
Weighted average discount rate - operating leases (as a percent) | 3.11% | 3.49% |
Valuation and Qualifying Acco_3
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Allowance for Inventory Shrinkage | |||
Changes in the allowance for inventory shrinkage | |||
Balance at the beginning of the period | $ 2,954 | $ 9,759 | $ 3,504 |
Additions charged to costs and expenses | 6,393 | 9,643 | |
Impact of tax reform | (10,033) | ||
Deductions | (4,115) | (9,919) | 3,114 |
Balance at the end of the period | 5,232 | 2,954 | 9,759 |
Allowance for Deferred Tax Assets | |||
Changes in the allowance for inventory shrinkage | |||
Balance at the beginning of the period | 1,714 | 99 | 1,624 |
Impact of tax reform | (9) | ||
Deductions | 1,615 | ||
Balance at the end of the period | $ 1,714 | $ 1,714 | $ 99 |
Unaudited Quarterly Results o_3
Unaudited Quarterly Results of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Statement of Income Data: | |||||||||||
Net sales | $ 251,919 | $ 199,100 | $ 216,151 | $ 116,124 | $ 211,013 | $ 183,050 | $ 182,830 | $ 205,032 | $ 783,294 | $ 781,925 | $ 769,553 |
Cost of sales (exclusive of depreciation shown separately below) | (144,274) | (115,827) | (127,147) | (84,370) | (127,311) | (114,579) | (114,612) | (128,238) | (471,618) | (484,740) | (476,326) |
Selling, general and administrative expenses | (79,269) | (69,230) | (57,623) | (54,076) | (67,654) | (65,539) | (62,989) | (63,447) | (260,198) | (259,629) | (247,938) |
Depreciation | (4,677) | (4,703) | (4,933) | (4,946) | (4,794) | (4,520) | (4,607) | (4,614) | (19,259) | (18,535) | (18,886) |
Asset impairment | (286) | (472) | (286) | (472) | (1,274) | ||||||
Income (loss) from operations | 23,699 | 9,340 | 26,448 | (27,554) | 11,254 | (1,588) | 150 | 8,733 | 31,933 | 18,549 | 25,129 |
Interest, net | (40) | (189) | (363) | 54 | 322 | 382 | 374 | 341 | |||
Income (loss) before income taxes | 23,659 | 9,151 | 26,085 | (27,500) | 11,576 | (1,206) | 524 | 9,074 | 31,395 | 19,968 | 26,328 |
Income tax (expense) benefit | (5,621) | (2,186) | (6,218) | 6,608 | (2,154) | 122 | (147) | (1,286) | (7,417) | (3,465) | (4,954) |
Net income (loss) | $ 18,038 | $ 6,965 | $ 19,867 | $ (20,892) | $ 9,422 | $ (1,084) | $ 377 | $ 7,788 | $ 23,978 | $ 16,503 | $ 21,374 |
Net income (loss) per common share: (1) | |||||||||||
Basic (in dollars per share) | $ 1.83 | $ 0.67 | $ 1.90 | $ (2) | $ 0.84 | $ (0.09) | $ 0.03 | $ 0.65 | $ 2.33 | $ 1.41 | $ 1.64 |
Diluted (in dollars per share) | $ 1.81 | $ 0.67 | $ 1.90 | $ (2) | $ 0.84 | $ (0.09) | $ 0.03 | $ 0.65 | $ 2.32 | $ 1.41 | $ 1.64 |
Weighted average shares used to compute net income (loss) per common share: | |||||||||||
Basic | 9,872 | 10,365 | 10,451 | 10,443 | 11,202 | 11,636 | 11,882 | 11,976 | 10,282,718 | 11,673,887 | 13,030,063 |
Diluted | 9,969 | 10,401 | 10,458 | 10,443 | 11,271 | 11,636 | 11,882 | 12,006 | 10,325,239 | 11,699,000 | 13,069,694 |