Citi Trends (CTRN) risk factors, FY2025 10-K

Risks Related to our Business and Operations

1. 01Our success depends on our ability to anticipate, identify and respond rapidly to changes in consumers’ fashion tastes, and our failure to adequately evaluate fashion trends could have an adverse effect on our business strategy, financial condition and results of operations
2. 02If we are unsuccessful in competing with our retail apparel competitors, our market share could decline or our growth could be impaired and, as a result, our business strategy, financial condition and results of operations could be negatively impacted
3. 03Our ability to attract consumers to our stores depends on several factors, including the success of the outdoor neighborhood shopping centers where our stores are primarily located
4. 04We do not offer the option to purchase our products through the internet. As the retail industry experiences an increase in online sales, our sales could be adversely affected
5. 05Our sales, inventory levels and earnings fluctuate on a seasonal basis, which makes our business more susceptible to adverse events that occur during the first and fourth quarters
6. 06We could experience a reduction in sales if we are unable to fulfill our current and future merchandising needs
7. 07Failure to properly manage and allocate our inventory could have an adverse effect on our business strategy, sales, margins, financial condition, and results of operations
8. 08We rely on numerous third parties in the supply chain to produce and deliver the products that we sell, and our business may be negatively impacted by their failure to comply with applicable law
9. 09If we fail to protect our name and brand in the marketplace, there could be a negative effect on our business and limitations on our ability to penetrate new markets
10. 10Failure to attract, motivate and retain personnel and control our labor costs could have an adverse effect on our financial condition

Risks Related to General Economic and Market Conditions

1. 11Our sales could decline and our store operations could be disrupted as a result of general economic and other factors outside of our control, such as inflation, changes in consumer spending patterns and declines in employment levels
2. 12Inflation and rising commodity prices could adversely affect our business
3. 13A significant disruption to our distribution centers or retail locations could have an adverse effect on our business strategy, financial condition and results of operations
4. 14natural disaster that affects our distribution centers and/or a significant number of our stores could have an adverse effect on our business strategy, financial condition and results of operations
5. 15Adverse trade restrictions may disrupt our supply of merchandise

Risks Related to our Strategy

1. 16We may not be able to sustain our growth plans or successfully implement our long-term strategic goals
2. 17We may engage in strategic transactions that could negatively impact our liquidity, increase our expenses and present significant distractions to management
3. 18We depend upon strong cash flows from our operations, as well as cash on our balance sheet, to supply capital to fund our operations, growth, stock repurchases and any potential future interest obligations
4. 19We may be unable to negotiate future leases or renegotiate current leases on the same favorable terms as we had in the past
5. 20If we fail to successfully implement our various marketing efforts or if our competitors are more effective with their programs than we are, our revenue or results of operations may be adversely affected

Risks Related to Regulatory, Legal and Cybersecurity

1. 21Changes in government regulations could have an adverse effect on our business strategy, financial condition and results of operations
2. 22Any failure of our management information systems or the inability of third parties to continue to upgrade and maintain our systems could have an adverse effect on our business strategy, financial condition and results of operations
3. 23Failure to maintain the security of employee, customer or vendor information could expose us to litigation, government enforcement actions and materially impact our reputation and business operations

Risks Relating to Ownership of our Common Stock

1. 24Our stock price is subject to volatility
2. 25We cannot provide any guaranty of future cash dividend payments or future repurchase of our common stock pursuant to a share repurchase program
3. 26Provisions in our certificate of incorporation and by-laws and Delaware law may delay or prevent our acquisition by a third party
4. 27Our business could be negatively affected as a result of the actions of activist stockholders