# Citi Trends Inc: Form 10-Q for the period ended Nov 1, 2014

- Company: [Citi Trends Inc](/companies/ctrn.md) (CIK 1318484)
- Form: 10-Q
- Filed: 2014-12-08
- Accepted by EDGAR: Dec 8, 2014, 08:11 ET
- Period: 2014-11-01
- Accession: 0001104659-14-085224
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1318484/000110465914085224/a14-21218_110q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1318484/000110465914085224/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2014-11-01.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2014-08-03 to 2014-11-01 | $156.7m | us-gaap:SalesRevenueGoodsNet |
| Revenue | 9 months, 2014-02-02 to 2014-11-01 | $489.7m | us-gaap:SalesRevenueGoodsNet |
| Cost of revenue | 3 months, 2014-08-03 to 2014-11-01 | $98.5m | us-gaap:CostOfGoodsSold |
| Cost of revenue | 9 months, 2014-02-02 to 2014-11-01 | $304.8m | us-gaap:CostOfGoodsSold |
| Selling, general and administrative | 3 months, 2014-08-03 to 2014-11-01 | $56.4m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2014-02-02 to 2014-11-01 | $163.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2014-08-03 to 2014-11-01 | −$3.2m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2014-02-02 to 2014-11-01 | $5.9m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2014-08-03 to 2014-11-01 | $48.0k | us-gaap:InterestExpense |
| Interest expense | 9 months, 2014-02-02 to 2014-11-01 | $152.0k | us-gaap:InterestExpense |
| Income tax | 3 months, 2014-08-03 to 2014-11-01 | −$1.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2014-02-02 to 2014-11-01 | $1.6m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2014-08-03 to 2014-11-01 | −$2.2m | us-gaap:NetIncomeLossAvailableToCommonStockholdersBasic |
| Net income | 9 months, 2014-02-02 to 2014-11-01 | $4.3m | us-gaap:NetIncomeLossAvailableToCommonStockholdersBasic |
| Diluted EPS | 3 months, 2014-08-03 to 2014-11-01 | −$0.15 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2014-02-02 to 2014-11-01 | $0.29 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2014-08-03 to 2014-11-01 | −$0.15 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2014-02-02 to 2014-11-01 | $0.29 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2014-08-03 to 2014-11-01 | 14,981,559 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2014-02-02 to 2014-11-01 | 14,984,582 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2014-02-02 to 2014-11-01 | $29.6m | us-gaap:NetCashProvidedByUsedInOperatingActivitiesContinuingOperations |
| Capital expenditure | 9 months, 2014-02-02 to 2014-11-01 | $9.1m | us-gaap:PaymentsToAcquireProductiveAssets |
| Cash and equivalents | at 2014-11-01 | $66.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2014-11-01 | $227.2m | us-gaap:AssetsCurrent |
| Total assets | at 2014-11-01 | $308.0m | us-gaap:Assets |
| Current liabilities | at 2014-11-01 | $96.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2014-11-01 | $102.9m | us-gaap:Liabilities |
| Shareholders' equity | at 2014-11-01 | $205.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 23,341 characters.

### Forward-Looking Statements

Except for specific historical information, many of the matters discussed in this Form 10-Q may express or imply projections of revenues or expenditures, statements of plans and objectives for future operations, growth or initiatives, statements of future economic performance, or statements regarding the outcome or impact of pending or threatened litigation. These, and similar statements, are forward-looking statements concerning matters that involve risks, uncertainties and other factors that may cause the actual performance of the Company to differ materially from those expressed or implied by these statements. All forward-looking information should be evaluated in the context of these risks, uncertainties and other factors. The words “believe,” “anticipate,” “project,” “plan,” “expect,” “estimate,” “objective,” “forecast,” “goal,” “intend,” “could,” “will likely result,” or “will continue” and similar words and expressions generally identify forward-looking statements, although not all forward-looking statements contain such words. The Company believes the assumptions underlying these forward-looking statements are reasonable; however, any of the assumptions could be inaccurate, and therefore, actual results may differ materially from those projected in the forward-looking statements.

The factors that may result in actual results differing from such forward-looking information include, but are not limited to: transportation and distribution delays or interruptions; changes in freight rates; the Company’s ability to negotiate effectively the cost and purchase of merchandise; inventory risks due to shifts in market demand; the Company’s ability to gauge fashion trends and changing consumer preferences; changes in consumer spending on apparel; changes in product mix; interruptions in suppliers’ businesses; a deterioration in general economic conditions caused by acts of war or terrorism or other factors; temporary changes in demand due to weather patterns; seasonality of the Company’s business; delays associated with building, opening and operating new stores; delays associated with building, opening or expanding new or existing distribution centers; and other factors described in the section titled “Item 1A. Risk Factors” and elsewhere in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2014 and in Part II, “Item 1A. Risk Factors” and elsewhere in the Company’s Quarterly Reports on Form 10-Q and any amendments thereto and in the other documents the Company files with the SEC, including reports on Form 8-K.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 10-Q. Except as may be required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements contained herein to reflect events or circumstances occurring after the date of this Form 10-Q or to reflect the occurrence of unanticipated events. Readers are advised, however, to read any further disclosures the Company may make on related subjects in its public disclosures or documents filed with the SEC, including reports on Form 8-K.

### Overview

We are a value-priced retailer of urban fashion apparel and accessories for the entire family. Our merchandise offerings are designed to appeal to the preferences of fashion conscious consumers, particularly African-Americans. We operated 512 stores in both urban and rural markets in 29 states as of November 1, 2014.

We measure performance using key operating statistics. One of the main performance measures we use is comparable store sales growth. We define a comparable store as a store that has been opened for an entire fiscal year. Therefore, a store will not be considered a comparable store until its 13th month of operation at the earliest or until its 24th month at the latest. As an example, stores opened in fiscal 2013 and fiscal 2014 are not considered comparable stores in fiscal 2014. Relocated and expanded stores are included in the comparable store sales results. We also use other operating statistics, most notably average sales per store, to measure our performance. As we typically occupy existing space in established shopping centers rather than sites built specifically for our stores, store square footage (and therefore sales per square foot) varies by store. We focus on overall store sales volume as the critical driver of profitability.

In addition to sales, we measure cost of sales as a percentage of sales and store operating expenses, with a particular focus on labor, as a percentage of sales. These results translate into store level contribution, which we use to evaluate overall performance of each individual store. Finally, we monitor corporate expenses against budgeted amounts. All of the statistics discussed above are critical components of earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA (comprised of EBITDA, as adjusted for non-cash asset impairment expense and infrequent significant items, such as the gain on sale of our former distribution center in fiscal 2013), which are considered our most important operating statistics. Although non-GAAP measures such as EBITDA and Adjusted EBITDA provide useful information on an operating cash flow basis, they are limited measures in that they exclude the impact of cash requirements for capital expenditures, income taxes and interest expense. Therefore, EBITDA and Adjusted EBITDA should be used as supplements to results of operations and cash flows as reported under U.S. GAAP and should not be used as a singular measure of operating performance or as a substitute for U.S. GAAP results.

Provided below is a reconciliation of net income (loss) to EBITDA and to Adjusted EBITDA for the thirty-nine and thirteen week periods ended November 1, 2014 and November 2, 2013:

|  | Thirty-Nine Weeks Ended November 1, 2014 | November 2, 2013 | Thirteen Weeks Ended November 1, 2014 | November 2, 2013 |
| --- | ---: | ---: | ---: | ---: |
| Net income (loss) | $4,293 | $(1,001) | $(2,207) | $(1,672) |
| Plus: |  |  |  |  |
| Interest expense | 152 | 145 | 48 | 49 |
| Income tax expense | 1,623 | — | — | — |
| Depreciation | 15,306 | 16,716 | 5,038 | 5,454 |
| Less: |  |  |  |  |
| Interest income | (135) | (213) | (43) | (78) |
| Income tax benefit | — | (1,201) | (1,038) | (1,643) |
| EBITDA | 21,239 | 14,446 | 1,798 | 2,110 |
| Asset impairment | 83 | 1,237 | — | 556 |
| Gain on sale of former distribution center | — | (1,526) | — | (1,526) |
| Adjusted EBITDA | $21,322 | $14,157 | $1,798 | $1,140 |

### Accounting Periods

The following discussion contains references to fiscal years 2014 and 2013, which represent fiscal years ending or ended on January 31, 2015 and February 1, 2014, respectively. Fiscal 2014 and fiscal 2013 both have 52-week accounting periods. This discussion and analysis should be read with the unaudited condensed consolidated financial statements and the notes thereto that are contained herein.

### Results of Operations

The following discussion of the Company’s financial performance is based on the unaudited condensed consolidated financial statements set forth herein. The nature of the Company’s business is seasonal. Historically, sales in the first and fourth quarters have been higher than sales achieved in the second and third quarters of the fiscal year. Expenses and, to a greater extent, operating income, vary by quarter. Results of a period shorter than a full year may not be indicative of results expected for the entire year. Furthermore, the seasonal nature of the Company’s business may affect comparisons between periods.

### Thirty-Nine Weeks Ended November 1, 2014 and November 2, 2013

*Net Sales.* Net sales increased $24.7 million, or 5.3%, to $489.7 million in the thirty-nine weeks ended November 1, 2014 from $465.0 million in the thirty-nine weeks ended November 2, 2013, consisting of a 5.3% increase in comparable store sales and the opening of eight new stores since last year’s third quarter, partially offset by the closing of nine stores in 2013 and one store in 2014. The increase in comparable store sales was reflected in an increase in the number of customer transactions by more than 7% and a 1% increase in the average number of items per transaction, partially offset by a 3% decrease in the average unit sale. Comparable store sales changes by major merchandise class were as follows in the first thirty-nine weeks of 2014: Accessories +21%; Home +20%; Men’s 0%; Children’s 0%; and Ladies’ -3%.

The 5.3% comparable store sales increase in the 503 comparable stores totaled $24.4 million, while store closing and opening activity resulted in a net increase of $0.3 million in sales.

*Cost of Sales (exclusive of depreciation).* Cost of sales (exclusive of depreciation) increased $9.9 million, or 3.4%, to $304.8 million in the thirty-nine weeks ended November 1, 2014 from $294.9 million in the thirty-nine weeks ended November 2, 2013 due to the effect of the increase in sales discussed above, partially offset by an improvement in cost of sales as a percentage of sales to 62.3% in the thirty-nine weeks ended November 1, 2014 from 63.4% in the thirty-nine weeks ended November 2, 2013. The decrease in cost of sales as a percentage of sales was due to an increase in the core merchandise margin (initial mark-up, net of markdowns) as the result of improved sales and the resulting need for fewer merchandise markdowns in this year’s first thirty-nine weeks. A more conservative inventory position as we entered 2014 also contributed to the reduction in merchandise markdowns.

*Selling, General and Administrative Expenses.* Selling, general and administrative expenses increased $7.5 million, or 4.8%, to $163.5 million in the first thirty-nine weeks of 2014 from $156.0 million in the first thirty-nine weeks of 2013 due primarily to (1) normal inflationary pressure on expenses such as rent, payroll, utilities and employee medical claims, (2) higher costs to handle the increasing sales, (3) a $1.8 million increase in incentive compensation expense resulting from the improvement in operating results, and (4) a $1.7 million charge related to a legal settlement. As a percentage of sales, selling, general and administrative expenses decreased to 33.4% in the first thirty-nine weeks of fiscal 2014 from 33.5% in the first thirty-nine weeks of fiscal 2013, due primarily to the leveraging effect associated with the 5.3% increase in comparable store sales discussed above.

*Depreciation.* Depreciation expense decreased $1.4 million, or 8.4%, to $15.3 million in the thirty-nine weeks ended November 1, 2014 from $16.7 million in the thirty-nine weeks ended November 2, 2013 due to the slowing of our store opening pace in relation to previous years.

*Asset Impairment.* Impairment charges for property and equipment at certain underperforming stores decreased $1.1 million to $0.1 million in the first thirty-nine weeks of 2014 from $1.2 million in the first thirty-nine weeks of 2013 due to the improvement in the Company’s operating results.

*Gain on Sale of Former Distribution Center.* During last year’s third quarter, we sold a previously closed distribution center in Savannah, Georgia for $2.9 million, which resulted in a gain of $1.5 million.

*Income Tax (Expense) Benefit.* Income tax expense increased $2.8 million to $1.6 million in this year’s first thirty-nine weeks from an income tax benefit of $1.2 million in the first thirty-nine weeks of 2013 due to the improvement from a pretax loss last year to pretax income this year, partially offset by a decrease in the effective income tax rate to 27.4% from 54.5%. The comparison of the effective tax rate between the two years is affected by Work Opportunity Tax Credits (WOTC) being available in 2013, but not 2014. Federal income tax regulations providing for WOTC expired on December 31, 2013 and have not been renewed. As a result, the higher effective tax rate in the thirty-nine weeks ended November 2, 2013 included such tax credits as part of that period’s income tax benefit.

*Net Income.* Net income increased to $4.3 million in the first thirty-nine weeks of 2014 from a net loss of $1.0 million in the first thirty-nine weeks of 2013 due to the factors discussed above.

### Thirteen Weeks Ended November 1, 2014 and November 2, 2013

*Net Sales.* Net sales increased $11.3 million, or 7.8%, to $156.7 million in the third quarter of 2014 from $145.4 million in the third quarter of 2013, consisting of a 6.7% increase in comparable store sales and the opening of eight new stores since last year’s third quarter, partially offset by the closing of two stores during or after the third quarter of 2013. The increase in comparable store sales was reflected in an increase of more than 9% in the number of customer transactions and a 1% increase in the average number of items per transaction, partially offset by an average unit sale that was almost 4% lower. Comparable store sales changes by major merchandise class were as follows in the third quarter of 2014: Accessories +18%; Home +11%; Ladies’ +4%; Men’s +2%; and Children’s 0%.

The 6.7% comparable store sales increase in the 503 comparable stores totaled $9.7 million, while store closing and opening activity resulted in a net increase of $1.6 million in sales.

*Cost of sales (exclusive of depreciation).* Cost of sales (exclusive of depreciation) increased $6.4 million, or 7.0%, to $98.5 million in the third quarter of 2014 from $92.1 million in last year’s third quarter due to the effect of the increase in sales discussed above, partially offset by an improvement in cost of sales as a percentage of sales to 62.9% in the third quarter of 2014 from 63.3% in the third quarter of 2013. The decrease in cost of sales as a percentage of sales was due to an improvement of 80 basis points in the core merchandise margin (initial mark-up, net of markdowns) as the result of improved sales and the resulting need for fewer merchandise markdowns in this year’s third quarter. A 40 basis points increase in freight expense partially offset the improvement in the core merchandise margin.

*Selling, General and Administrative Expenses.* Selling, general and administrative expenses increased $4.3 million, or 8.1%, to $56.4 million in the third quarter of 2014 from $52.1 million in last year’s third quarter due primarily to (1) a $1.7 million charge related to a legal settlement, (2) normal inflationary pressure on expenses such as rent, payroll, utilities and employee medical claims, (3) higher costs to handle the increasing sales, and (4) a $0.8 million increase in incentive compensation expense resulting from the improvement in operating results. In looking forward to the fourth quarter, while incentive compensation expense is not expected to be significantly different than it was in the earlier quarters of 2014, it could be approximately $2.5 million higher than in last year’s fourth quarter because of (1) the improvement in 2014 operating results and (2) because such expense was negative in last year’s fourth quarter when we had an unexpected sales decline and had to reverse a portion of the expense accrued earlier in 2013. Ultimately, we expect that selling, general and administrative expenses in this year’s fourth quarter will fall in a range of approximately $55.0 million to $56.0 million, up from $50.2 million in last year’s fourth quarter. In addition to the expected increase in incentive compensation expense, other factors likely to contribute to the overall expense increase include normal inflation, an increase in store count and the incremental impact on expenses from an expected fourth quarter comparable store sales increase this year, against a decrease in the same quarter last year. As a percentage of sales, selling, general and administrative expenses increased to 36.0% in the third quarter of 2014 from 35.9% in the third quarter of 2013 due primarily to the effect of the legal settlement, mostly offset by the leveraging effect associated with the 6.7% increase in comparable store sales.

*Depreciation.* Depreciation expense decreased $0.5 million, or 7.6%, to $5.0 million in the third quarter of 2014 from $5.5 million in the third quarter of 2013, due to the slowing of our store opening pace in relation to previous years.

*Asset Impairment.* Impairment charges for property and equipment at certain underperforming stores decreased $0.6 million to $0.0 million in the third quarter of 2014 from $0.6 million in the third quarter of 2013 due to the improvement in the Company’s operating results.

*Gain on Sale of Former Distribution Center.* During last year’s third quarter, we sold a previously closed distribution center in Savannah, Georgia for $2.9 million, which resulted in a gain of $1.5 million.

*Income Tax Benefit.* Income tax benefit decreased $0.6 million, or 36.8%, to $1.0 million in this year’s third quarter from $1.6 million in the third quarter of 2013 due primarily to a decrease in the effective income tax rate to 32.0% from 49.6%. The income tax benefit rate for the third quarter of 2014 was lower than the rate for last year’s third quarter due to the availability of WOTC in 2013, but not 2014. Federal income tax regulations providing for WOTC expired on December 31, 2013 and have not been renewed.

*Net Loss.* Net loss increased to $2.2 million in the third quarter of 2014 from $1.7 million in the third quarter of 2013 due to the factors discussed above.

### Liquidity and Capital Resources

Our cash requirements are primarily for working capital, opening of new stores, remodeling of our existing stores and the improvement of our information systems. In recent years, we have met these cash requirements using cash flow from operations and short-term trade credit. We expect to be able to meet future cash requirements with cash flow from operations, short-term trade credit, existing balances of cash and investment securities and, if necessary, borrowings under our revolving credit facility.

*Current Financial Condition.* As of November 1, 2014, we had total cash and cash equivalents of $66.0 million compared to $58.9 million as of February 1, 2014. Additionally, we had $14.0 million and $24.0 million of short-term and long-term investment securities, respectively, as of November 1, 2014, compared to $6.0 million and $19.8 million, respectively, as of February 1, 2014. These securities are comprised of bank certificates of deposit and obligations of the U.S. Treasury, states and municipalities. Inventory represented 41.7% of our total assets as of November 1, 2014. Management’s ability to manage our inventory can have a significant impact on our cash flows from operations during a given interim period or fiscal year. In addition, inventory purchases can be seasonal in nature, such as the purchase of warm-weather or Christmas-related merchandise.

*Cash Flows From Operating Activities*. Net cash provided by operating activities was $29.6 million in the thirty-nine weeks ended November 1, 2014 compared to $35.9 million in the same period of 2013. Sources of cash provided during the first thirty-nine weeks of 2014 included net income adjusted for noncash expenses such as depreciation, asset impairment, loss on disposal of property and equipment, deferred income taxes and stock-based compensation expense, totaling $23.2 million (compared to $17.0 million in the thirty-nine weeks ended November 2, 2013). Other significant sources of cash in the thirty-nine weeks ended November 1, 2014 included (1) a $3.9 million increase in accrued compensation (compared to a $4.0 million increase in the thirty-nine weeks ended November 2, 2013) due to (a) our balance sheet as of the end of the third quarter of 2014 including accrued payroll for two weeks, while our 2013 year-end balance sheet included accrued payroll for only one week due to the timing of our bi-weekly payroll, and (b) accrued incentive compensation increasing due to improved operating results in 2014; and (2) a $3.4 million increase in accounts payable (compared to a $3.8 million decrease in the thirty-nine weeks ended November 2, 2013) due to the increase in inventory and an improvement in inventory turnover associated with the increase in comparable store sales.

Significant uses of cash during the thirty-nine weeks ended November 1, 2014 consisted of a $2.0 million increase in inventory (compared to an $18.3 million decrease in the thirty-nine weeks ended November 2, 2013) due to having seven more stores at the end of this year’s third quarter in relation to the end of 2013 and in order to support the increase in sales.

*Cash Flows From Investing Activities.* Cash used in investing activities was $21.3 million in the thirty-nine weeks ended November 1, 2014 compared to $24.6 million in the thirty-nine weeks ended November 2, 2013. Cash used for purchases of property and equipment totaled $9.1 million and $7.8 million in the first thirty-nine weeks of 2014 and 2013, respectively. Purchases of investment securities, net of sales/redemptions, used cash of $12.2 million and $19.7 million in the first thirty-nine weeks of 2014 and 2013, respectively, while proceeds from the sale of our former distribution center provided cash of $2.9 million in the thirty-nine weeks ended November 2, 2013.

*Cash Flows From Financing Activities.* Cash flows from financing activities were $1.2 million and $0.9 million in the first thirty-nine weeks of 2014 and 2013, respectively.

### Cash Requirements

Our principal sources of liquidity consist of: (i) cash and cash equivalents (which equaled $66.0 million as of November 1, 2014); (ii) short-term and long-term investment securities (which equaled $14.0 million and $24.0 million, respectively, as of November 1, 2014); (iii) short-term trade credit; (iv) cash generated from operations on an ongoing basis as we sell our merchandise inventory; and (v) a $50 million revolving credit facility (under which the Company has no borrowings outstanding). Trade credit represents a significant source of financing for inventory purchases and arises from customary payment terms and trade practices with our vendors. Historically, our principal liquidity requirements have been for working capital and capital expenditure needs.

We believe that our existing sources of liquidity will be sufficient to fund our operations and anticipated capital expenditures for at least the next 12 months.

### Critical Accounting Policies

The preparation of our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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. There have been no material changes to the Critical Accounting Policies outlined in the Company’s Annual Report on Form 10-K for the year ended February 1, 2014.

## Market risk

As filed, 225 characters.

There have been no material changes in our market risk during the thirty-nine weeks ended November 1, 2014 compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the year ended February 1, 2014.

## Controls and procedures

As filed, 1,553 characters.

We have carried out an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of November 1, 2014 pursuant to Rules 13a-15 and 15d-15 of the Exchange Act. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer each concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information has been accumulated and communicated to our management, including the officers who certify our financial reports, as appropriate, to allow timely decisions regarding the required disclosures.

Our disclosure controls and procedures are designed to provide reasonable assurance that the controls and procedures will meet their objectives. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended November 1, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 189 characters.

There are no material changes to the Risk Factors described under the section “ITEM 1A. RISK FACTORS” in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2014.

Filed Dec 8, 2014.
Source: SEC EDGAR, the filing index for accession 0001104659-14-085224. Last ingested by Listed: Oct 27, 2026, 17:26 ET. No prices; not investment advice.