Stockholders' Equity

12 Months Ended

Feb. 03, 2024

Stockholders' Equity

Stockholders' Equity

6. Stockholders’ Equity

Repurchases of common stock

The Company periodically repurchases shares of its common stock under board-authorized repurchase programs. Such repurchases may be made in the open market, through block trades or through other negotiated transactions. Share repurchases are as follows (in thousands, except per share data):

	Fiscal Year
	2023		2022		2021
Total number of shares purchased		—		331		1,369
Average price paid per share (including commissions)	$	—	$	30.22	$	84.23
Total investment	$	—	$	10,000	$	115,285

At February 3, 2024, $50.0 million remained available under the Company’s 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-based compensation. At February 3, 2024, the Company had 361,841 shares reserved for future grants under the Plan. During fiscal 2023, 2022 and 2021, non-cash stock-based compensation expense recorded in selling and general and administrative expenses totaled $4.1 million, $3.6 million and $4.8 million, respectively. The income tax expense (benefit) resulting from the fair market value of restricted stock at vesting versus the cumulative compensation cost of such stock is recorded as a component of income tax expense and was $0.5 million, $0.5 million and ($1.2) million, respectively.

The Company issues shares of restricted stock to key team members and non-employee directors. Restricted stock granted to employees vests in equal installments over three years from the date of grant. Restricted stock granted to non-employee directors vests one year from the date of grant.

The Company also issues performance-based restricted stock units (“PSUs”) to key team members that cliff vest at the end of a three-year period based upon the Company’s achievement of pre-established goals. The number of units earned and vested is subject to scaling based on a pre-established performance matrix.

Prior to fiscal 2021, the Company issued cash-settled restricted stock units (“CSUs”) to certain team members. In the fourth quarter of fiscal 2021, all outstanding CSUs were converted to time-based restricted stock, with vesting criteria based on the original vesting criteria for the CSUs. This conversion resulted in the reclassification of a $3.4 million liability from accrued compensation to equity.

The following table summarizes activity related to nonvested restricted stock and PSUs during fiscal 2023:

	Time-Based Restricted Stock			Performance-Based Restricted Stock Units
		Weighted Average			Weighted Average
	Nonvested	Grant Date		Nonvested	Grant Date
	Shares	Fair Value		Units	Fair Value
Outstanding as of January 28, 2023	195,509	$	43.41	72,590	$	44.60
Granted	272,479		16.97	107,826		16.08
Vested	(117,785)		44.89	—		—
Forfeited	(39,321)		26.39	(80,949)		41.65
Outstanding as of February 3, 2024	310,882	$	21.83	99,467	$	16.08

At February 3, 2024, there was $4.1 million of unrecognized compensation expense related to restricted stock. Based on current probable performance, we have determined no compensation expense is required on our PSUs.

Stockholder Right Agreement

On December 6, 2023, the board of directors adopted a limited duration stockholder protection rights plan, pursuant to which the board declared a dividend of one preferred share purchase right (a “Right”) for each of the Company’s issued and outstanding shares of common stock, par value $0.01 per share. The dividend was paid to the stockholders of record at the close of business on December 18, 2023. Each Right entitles the registered holder, subject to the terms of the Rights Agreement (as defined below), to purchase from the Company one ten-thousandth of a share of the Company’s Series A Junior Participating Preferred Stock, par value $0.01 per share, at a price of $120.00, subject to certain adjustments. The Rights are governed by the Stockholder Protection Rights Agreement, dated as of December 6, 2023 (the “Rights Agreement”), by and between the Company and Equiniti Trust Company, LLC, and are exercisable only after the occurrence of certain conditions set forth in the Rights Agreement. The Rights Agreement expires upon the close of business on December 4, 2024, but may expire earlier upon the occurrence of certain events set forth in the Rights Agreement.