Financial Analysis

7. Commitments and Contingencies The Company is, from time to time, involved in legal proceedings arising in the ordinary course of business, including claims by customers, employees, or former employees and matters relating to real estate and contractual disputes. 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. In connection with the January 2023 cyber disruption previously disclosed in the Companys Form 8-K filed on February 23, 2023, four putative class action lawsuits were filed against the Company in the United States District Court for the Southern District of Georgia (the Court). These matters, Matousek et al v. Citi Trends, Inc.; Sienna Thomas v. Citi Trends, Inc.; Yeimy Sambrano v. Citi Trends, Inc.; Sabrina Green-Fogg v. Citi Trends, Inc. were filed in the second half of 2023, and consolidated into one case by the Court on November 8, 2023. The plaintiffs allege harm in connection with the January 2023 cyber disruption and assert a variety of claims seeking unspecified monetary damages and other related relief. A consolidated class action complaint was filed on February 15, 2024, adding an additional plaintiff, Shykira Scott. The Company has successfully settled these class actions without any admission of liability. In addition, the Attorneys General of Alabama, Connecticut, Indiana and Texas sent inquiry letters to the Company regarding …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

4. Revolving Credit Facility In October 2011, the Company entered into a five-year, $50 million credit facility with Bank of America. The facility was amended in August 2015, May 2020 and April 2021 to modify terms and extend the maturity dates. The facility was further amended on April 10, 2025 to extend the maturity date to April 10, 2030. The amended facility provides a $75 million credit commitment and a $25 million uncommitted accordion feature that under certain circumstances could allow the Company to increase the size of the facility to $100 million. The facility is secured by the Companys 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 credit facility bear interest (a) for SOFR Loans, at a rate equal to the SOFR Rate plus a SOFR adjustment equal to 0.10% plus either 1.50%, 1.75% or 2.00%, 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% and (iii) the Terms SOFR Rate plus 1.0%, plus, in each case either 0.50%, 0.75% or 1.00%, based in any such case on the average daily availability for borrowings under the facility. As of January 31, 2026, the Company had no borrowings unde …

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Fiscal Year Divisions 2025 2024 2023 Women's 27 % 27 % 27 % Children's 23 % 23 % 23 % Men's 17 % 17 % 17 % Accessories & Beauty 16 % 17 % 17 % Home & Lifestyle 10 % 10 % 9 % Footwear 7 % 6 % 7 % …

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6 . Stockholders Equity Repurchases of common stock The Company periodically repurchases shares of its common stock under board-authorized repurchase programs. Such repurchases may be made in the open market, through block trades or through other negotiated transactions. Share repurchases are as follows (in thousands, except per share data): Fiscal Year 2025 2024 2023 Total number of shares purchased 251 145 Average price paid per share (including commissions) $ 25.21 $ 25.99 $ Total investment $ 6,315 $ 3,777 $ At January 31, 2026, $40.0 million remained available under the Companys previously announced stock repurchase authorization. Stock-Based Compensation The Company maintains the Citi Trends, Inc. Incentive Plan (the Plan) which permits the grant of stock-based incentive awards to employees, officers, directors and consultants. The Plan provides for the grant of incentive and nonqualified options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other forms of stock-based and cash-settled equity compensation. At January 31, 2026, the Company had 694,570 shares reserved for future grants under the Plan. During fiscal 2025, 2024 and 2023, non-cash stock-based compensation expense recorded in selling and general and administrative expenses totaled $5.4 million, $3.3 million and $4.1 million, respectively. The income tax expense resulting from the fair market value of restricted stock at vesting versus the cumulative compensation c …

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5. Income Taxes Income tax (expense) benefit consists of the following (in thousands): Fiscal Year 2025 2024 2023 Current: Federal $ (160) $ (275) $ 2,025 State (34) (420) (329) Total current (194) (695) 1,696 Deferred: Federal (102) (2,266) 2,635 State (2,875) (424) Total deferred (102) (5,141) 2,211 Total income tax (expense) benefit $ (296) $ (5,836) $ 3,907 Income tax (expense) benefit computed using the federal statutory rate is reconciled to the reported income tax (expense) benefit as follows (in thousands): Fiscal year 2025 2024 2023 Rate (Expense) / Benefit Rate (Expense) / Benefit Rate (Expense) / Benefit Statutory rate applied to income before income taxes 21% $ (1,165) 21% $ 7,840 21% $ 3,337 State income taxes, net of federal benefit * 5% (292) 3% 1,109 2% 240 State tax credits, net of federal benefit 32% (1,775) (3)% (1,001) (1)% (167) General business credits, net of nondeductible expenses (20)% 1,130 3% 1,235 11% 1,840 Nondeductible compensation 6% (364) 0% (46) 0% Excess (deficit) tax benefits from stock-based compensation (4)% 220 0% (96) (3)% (519) Valuation Allowance (37)% 2,028 (39)% (14,582) (5)% (774) Changes in tax rates 3% (150) 0% 42 0% Nondeductible or nontaxable items 1% (52) 0% (47) 0% Changes in Unrecognized tax benefits 0% (2) 0% 0% Other (2)% 126 (1)% (290) 0% (50) Income tax (expense) benefit 5% $ (296) (16)% $ (5,836) 25% $ 3,907 * The only state that contributes to the majority (greater than 50%) of the tax effect in this category is Louisia …

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New Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Improvement to Income Tax Disclosures (Topic 740), which requires additional disclosures for income tax rate reconciliations, income taxes paid, and certain other tax disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. Adoption is required for annual periods beginning after December 15, 2024. In fiscal 2025, the Company adopted the new accounting pronouncement ASU 2023-09 in the current period and retrospectively. The adoption of ASU 2023-09 did not have a material impact on the Companys consolidated financial statements as the requirements impact only annual income tax reporting disclosures in the Notes to the Companys consolidated financial statements. Refer to Note 5. Income Taxes for additional information. In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses (ASU 2024-03), which requires public entities to disclose additional information that disaggregates certain expense captions into specified categories in the Notes to the consolidated financial statements. The new standard is effective for fiscal years beginning after December 15, 2026, and interim periods after Decem …

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9. Segment Reporting The Company is the leading off-price value retailer of fashion apparel, accessories and home trends primarily for Black families. The retail operations represent a single operating segment based on the way the Company manages its business. The Companys Chief Executive Officer, as our chief operating decision maker (CODM), manages and allocates resources to the operations of the Company on a consolidated basis. This enables the Chief Executive Officer to assess the Companys overall level of available resources and determine how best to deploy these resources across retail stores that are in line with the Companys long-term company-wide strategic goals. The Companys 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. The CODM assesses performance based on consolidated net (loss) income that is reported on the statement of operations as part of the annual budgeting and forecasting process. The CODM considers budget-to-actual variances on a monthly basis when making decisions about allocating capital and personnel. The CODM does not review assets in evaluating results, therefore such information is not provided. The following table summarizes the Companys one reportable segment profit or loss, including significant segment expenses, and includes the reconciliation to consolidated net income (loss) (in thousands): F …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

6. Commitments and Contingencies The Company from time to time is involved in various legal proceedings incidental to the conduct of its business, including claims by customers, landlords, employees or former employees. Once it becomes probable that the Company will incur costs in connection with a legal proceeding and such costs can be reasonably estimated, the Company establishes appropriate reserves. While legal proceedings are subject to uncertainties and the outcome of any such matter is not predictable, the Company is not aware of any legal proceedings pending or threatened against it that it expects to have a material adverse effect on its financial condition, results of operations or liquidity.

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4. Revolving Credit Facility In October 2011, the Company entered into a five-year , $50 million credit facility with Bank of America. The facility was amended in August 2015, May 2020, and April 2021 to modify terms and extend the maturity dates. The facility was further amended on April 10, 2025 to extend the maturity date to April 10, 2030. The amended facility provides a $75 million credit commitment and a $25 million uncommitted accordion feature that under certain circumstances could allow the Company to increase the size of the facility to $100 million. The facility is secured by the Companys 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 credit facility bear interest (a) for SOFR Loans, at a rate equal to the SOFR Rate plus a SOFR adjustment equal to 0.10% plus either 1.50% , 1.75% or 2.00% , 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% and (iii) the Term SOFR Rate plus 1.0% , plus, in each case either 0.50% , 0.75% or 1.00% , based in any such case on the average daily availability for borrowings under the facility. As of May 2, 2026, the Company had no borrowings und …

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Thirteen Weeks Ended May 2, May 3, Division 2026 2025 Women's 27 % 28 % Children's 23 % 22 % Accessories & Beauty 17 % 17 % Men's 16 % 15 % Home & Lifestyle 10 % 11 % Footwear 7 % 7 % …

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5. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. If realization of the deferred tax asset is not considered more likely than not, then a valuation allowance is recorded to reduce the deferred tax asset to its net realizable value. 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 …

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9. Revenue Revenue Recognition The Companys primary source of revenue is derived from the sale of clothing and accessories to its customers with the Companys performance obligations satisfied immediately when the customer pays for their purchase and receives the merchandise. Sales taxes collected by the Company from customers are excluded from revenue. Revenue from layaway sales is recognized at the point in time when the merchandise is paid for and control of the goods is transferred to the customer, thereby satisfying the Companys performance obligation. The Company defers revenue from the sale of gift cards and recognizes the associated revenue upon the redemption of the cards by customers to purchase merchandise. Sales Returns The Company allows customers to return merchandise for up to 30 days after the date of sale. Expected refunds to customers are recorded based on estimated margin using historical return information. Disaggregation of Revenue The Companys 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 Companys retail stores sell similar products, use similar processes to sell those products, and sell their products to similar classes of customers. In the following table, the Companys revenue from contracts with customers is disaggregated by Division or product ca …

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11. Segment Reporting The Company is an off-price value retailer of fashion apparel, accessories and home trends primarily for Black families. The retail operations represent a single operating segment based on the way the Company manages its business. The Companys Chief Executive Officer, as our chief operating decision maker (CODM), manages and allocates resources to the operations of the Company on a consolidated basis. This enables the Chief Executive Officer to assess the Companys overall level of available resources and determine how best to deploy these resources across retail stores that are in line with the Companys long-term company-wide strategic goals. The Companys 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. The CODM assesses performance based on consolidated net (loss) income that is reported on the statement of operations as part of the annual budgeting and forecasting process. The CODM considers budget-to-actual variances on a monthly basis when making decisions about allocating capital and personnel. The CODM does not review assets in evaluating results, therefore such information is not provided. The following table summarizes the Companys one reportable segment profit or loss, including significant segment expenses, and includes the reconciliation to consolidated net (loss) income (in thousands): Thirteen …

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7. Stock Repurchases The Company periodically repurchases shares of its common stock under board-authorized repurchase programs. Such repurchases may be made in the open market, through block trades or through other negotiated transactions. Share repurchases were as follows: Thirteen Weeks Ended May 2, 2026 May 3, 2025 Total number of shares purchased 251 Average price paid per share (including commissions) $ $ 25 Total investment $ $ 6,315 At May 2, 2026, $40.0 million remained available under the Companys stock repurchase authorization. …

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