Citi Trends(CTRN) - 2026 Q4 - Annual Report

Financial Performance - Total sales increased by $66.9 million, or 8.9%, to $820.0 million in fiscal 2025 compared to $753.1 million in fiscal 2024, driven by a 9.7% increase in comparable store sales [159]. - Comparable store sales increased by 9.7% in fiscal 2025, with the majority of growth attributed to increased transactions [159]. - Net income for fiscal 2025 was $5.2 million, a significant improvement from a net loss of $43.2 million in fiscal 2024 [166]. Cost and Expenses - Cost of sales increased by $24.3 million, or 5.2%, to $495.3 million in fiscal 2025, with cost of sales as a percentage of net sales decreasing to 60.4% from 62.5% [160]. - Selling, general and administrative (SG&A) expenses rose by $13.0 million, or 4.3%, to $313.2 million in fiscal 2025, with SG&A expenses leveraging to 38.2% of sales from 39.9% [161]. Store Operations - The company ended fiscal 2025 with 590 stores, having opened 3 new stores, remodeled 62, and closed 4 [147]. - Capital expenditures in fiscal 2025 were $22.7 million, an increase of $10.6 million from the prior year, with expectations of $35 million to $40 million in fiscal 2026 for opening approximately 25 new stores and remodeling about 50 stores [170]. Cash Flow and Liquidity - Year-end cash and cash equivalents were $66.1 million, with no debt and no drawings on the $75 million line of credit [167]. - Cash provided by operating activities was $21.0 million in fiscal 2025, compared to cash used of $3.8 million in fiscal 2024, driven by an increase in net income and an $8.8 million reduction in inventory [173]. - Cash used in investing activities was $8.5 million in fiscal 2025, down from $10.1 million in fiscal 2024, with sources including $11.2 million from the sale of a building [175]. - Cash used in financing activities was $7.5 million in fiscal 2025, compared to $4.7 million in fiscal 2024, including $6.3 million for share repurchases [176]. - The company returned $6.3 million to shareholders through share repurchases in fiscal 2025 [171]. - Significant uses of cash in fiscal 2025 included a $55.2 million decrease in accrued expenses and other long-term liabilities due to payments of operating lease liabilities [173]. - The company had no borrowings under its $75 million revolving credit facility at the end of fiscal 2025 [172]. Inventory Management - Year-end inventory decreased to $113.5 million from $122.6 million at the end of fiscal 2024, reflecting ongoing inventory efficiency initiatives [169]. Technology and Marketing - The company completed the implementation of an AI-based allocation system and began developing an AI-based merchandise planning system [147]. - The company launched a holiday marketing campaign that garnered over 55 million views and engagements [147]. Commitments and Accounting - As of January 31, 2026, the company's contractual commitments for operating leases totaled $309.9 million, with $63.5 million due within 12 months [177]. - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements and disclosures [182][183][184]. Currency Exposure - The company sources all products in U.S. Dollars and is not directly subject to foreign currency exchange rate fluctuations [185].