SecProbe.io

CORRESP
 1
 filename1.htm

 July 2, 2025

 U.S. Securities and Exchange Commission

 Division of Corporation Finance

 Office of Trade and Services

 100 F Street, N.E.

 Washington, D.C. 20549

 Attn: Suying Li and Rufus Decker

 Re: Citi Trends, Inc.

 Form 10-K for Fiscal
Year Ended February 1, 2025

 Item 2.02
 Form 8-K dated March 18, 2025

 Item   2.02 Form 8-K dated June 3, 2025

 Dear Ms. Li and Mr. Decker:

 We hereby respond to the comments
of the staff (the "Staff") of the Securities and Exchange Commission (the "Commission"), as set forth in the Staff's
letter of comments dated June 5, 2025 (the "Comment Letter"), to the above referenced filings of Citi Trends, Inc.
(the "Company"). The Company has filed, via EDGAR, this letter (tagged Correspondence).

 The Company has the following
responses to the Staff's comments in the Comment Letter. For your convenience, we have reproduced in italics below each comment
from the Comment Letter with the response following.

 Item 2.02 Form 8-K dated March 18,
2025

 Exhibit 99.1

 Reconciliation of Non-GAAP Financial Measures

 1. Please breakout the other non-recurring
expenses line item into smaller components in your non-GAAP reconciliations. Tell us and disclose the nature of the underlying amounts
recorded in each period presented in the broken out other non-recurring expenses, one-time strategic costs, payroll and bonus accrual
adjustments, and CEO transition expenses line items. Also, tell us your consideration of Question 100.01 of the Non-GAAP Financial Measures
Compliance and Disclosure Interpretations in determining the appropriateness of these non-GAAP adjustments.

 The Company respectfully acknowledges the Staff's
comment and advises the Staff that, in the Company's future earnings releases furnished under Item 2.02 of Form 8-K, it will
break out the other non-recurring expenses line items into smaller components in its non-GAAP reconciliations.

 As further described below, the Company respectfully
advises the Staff that the other non-recurring expenses consist of costs associated with response to significant shareholder requests
and inquiries, severance and related costs associated with the departure of key executives and CEO-led organizational changes, and expenses
related to the Company's response to the cyber disruption it experienced in January 2023.

 By way of illustration, the Company provides in
the tables below a break-out of "Other non-recurring expenses" included in its earnings release furnished as Exhibit 99.1
to its Form 8-K filed March 18, 2025.

 Fourth Quarter

 February 1, 2025
 February 3, 2024

 Severance and related costs
 $ 653
 $ -

 Shareholder matters
 50
 334

 Other non-recurring expenses
 $ 703
 $ 334

 Fiscal Year

 February 1, 2025
 February 3, 2024

 Shareholder matters
 $ 1,746
 $ 334

 Severance and related costs
 653
 -

 Cyber incident expenses
 36
 -

 Other non-recurring expenses
 $ 2,435
 $ 334

 The Company considered Question 100.01 of the
Non-GAAP Financial Measures Compliance and Disclosure Interpretations and believes that these adjusted costs do not represent normal,
recurring, cash operating expenses necessary to operate the Company's business and, accordingly, excluding these amounts from the
applicable non-GAAP financial measures does not cause those measures to be misleading. The Company describes below in detail the nature
and composition of each of the other non-recurring expenses, one-time strategic costs, payroll and bonus accrual adjustments, and
CEO transition expenses.

 Background on Organizational Changes

 In June 2024, Ken Seipel was appointed as
Interim CEO, and subsequently as permanent CEO in November 2024 and Chairman of the Board of Directors in April 2025. These
events mark the first leadership change in the CEO position experienced by the Company since Q1 2020. Upon his appointment as Interim
CEO, Mr. Seipel launched a turnaround strategy designed to stabilize operations, improve profitability, and refocus on the Company's
core customer. This multi-phase initiative, described as "repair, execute, and optimize", included enhancements to merchandising
capabilities, improved supply chain efficiency, improved store-level operational discipline and restructuring of certain functions to
streamline decision-making and eliminate non-core expenditures. These activities resulted in costs, described throughout this letter,
that were outside the normal operations of the Company.

 2

 The CEO transition and subsequent company-wide
turnaround activities represent foundational strategic changes to reposition the Company for sustained profitability. Accordingly, the
Company respectfully submits that due to the infrequent nature of these events and because these costs are not reflective of the Company's
recurring operational performance, these associated costs are outside of the normal cost of operating the business and thus are appropriate
to be excluded from its non-GAAP metrics.

 Other non-recurring expenses

 · Significant shareholder requests and inquiries

 o The Company incurred legal and consulting fees related to a books and records demand received from a significant
shareholder in Q4 2023. Subsequent discussions with the Company's significant shareholder led to the negotiation and execution of
a cooperation agreement in Q1 2024, which was later amended and restated in Q1 2025. The Company has not experienced shareholder engagement
of this nature since prior to fiscal year 2020. As such, the Company considers the costs associated with these activities to be distinct
from the Company's normal, historical operations and appropriate exclusions from its non-GAAP metrics.

 · Severance and related costs

 o The Company incurred severance and related costs in connection with the departure of key executives resulting
from the CEO transition and subsequent implementation of CEO-led organizational changes as described in the "Background on Organizational
Changes" section of this letter. The Company considers these costs to be distinct from the Company's normal, historical operations
and appropriate exclusions from its non-GAAP metrics.

 · Cyber incident expenses

 o The Company experienced a cyber disruption of its back office and distribution center IT systems in January 2023,
which was followed by related lawsuits against the Company in the second half of fiscal year 2023. In fiscal year 2024 the Company incurred
third-party consulting and legal counsel fees associated with its defense against this litigation. Due to the historically infrequent
nature of cyber disruptions and related legal matters, the Company considers these costs to be distinct from the Company's normal,
historical operations and appropriate exclusions from its non-GAAP metrics.

 3

 One-time strategic costs

 · 2 nd Half Contribution Awards

 o In recognition of employee contributions to the execution of the Company's turnaround efforts as
described in the "Background on Organizational Changes" section of this letter and the significant progress made in the second
half of the year, the Company awarded a performance-based bonus to employees identified as key contributors to the Company's turnaround
efforts. This bonus was a discretionary, non-recurring payment directly tied to the turnaround activities and not part of the Company's
standard annual compensation program. The Company adjusted for this cost in its normalized adjusted EBITDA measure to maintain consistency
in evaluating the underlying performance of the Company's operations before the impact of the one-time incentive compensation.

 · Consulting expenses

 o The Company incurred consulting costs in support of the "repair" phase of the Company's
turnaround efforts as described in the "Background on Organizational Changes" section of this letter, which consisted of a
customer and market insight study and consulting services to improve supply chain efficiency and store-level operational discipline. These
costs were not reflective of the Company's recurring operational performance and the Company believes these expenses are appropriate
exclusions from its non-GAAP metrics.

 Payroll and bonus accrual adjustments

 The Company recognized the profit-and-loss statement
impact of PTO accrual adjustments resulting from revisions to PTO policies, including the accrual schedule for hourly associates in fiscal
year 2024 and a change to unlimited PTO for salaried associates in fiscal year 2023. Due to the infrequent nature of fundamental changes
to the PTO policy, the Company considers the costs associated with these activities to be distinct from the Company's normal, historical
operations and appropriate exclusions from its non-GAAP metrics.

 CEO transition expenses

 The Company incurred costs associated with the
hiring of a new CEO as discussed in the "Background on Organizational Changes" section of this letter, which consisted of
executive search costs, a cash and equity sign-on bonus, and severance payments to the former CEO. The Company considers the costs associated
with the CEO transition to be distinct from the Company's normal, historical operations and appropriate exclusions from its non-GAAP
metrics.

 4

 Item 2.02 Form 8-K dated June 3,
2025

 Exhibit 99.1

 2. You present several non-GAAP financial
measures in your earnings release. Please address the following:

 · Present and discuss net income with equal
or greater prominence when you present and discuss adjusted EBITDA in the headline. Refer to Item 10(e)(1)(i)(A) of Regulation S-K
and Question 102.10(a) of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations.

 The Company respectfully acknowledges the Staff's
comment and advises the Staff that, in the Company's future earnings releases furnished under Item 2.02 of Form 8-K, it will
present and discuss net income with equal or greater prominence when presenting and discussing adjusted EBITDA.

 By way of illustration, the Company provides the
below example as if this had been included in its earnings release furnished as Exhibit 99.1 to its Form 8-K filed June 3,
2025:

 CITI TRENDS ANNOUNCES FIRST QUARTER FISCAL 2025
RESULTS

 Comparable store sales growth of 9.9%; Two-year
stack of 13.0%

 Total year-over-year sales growth of 8.3%,
or $15.4 million, to $201.7 million

 Net Income of $0.9 million, $1.4 million
as adjusted* vs. net loss of $3.4 million, ($2.7) million as adjusted* in Q1 last year

 Adjusted EBITDA* of $5.4 million, $6.2 million
higher than prior year

 Balance sheet continues to have ample
liquidity and no debt

 Company raises Fiscal 2025 Outlook

 · Present and discuss net income flowthrough
with equal or greater prominence when you present and discuss adjusted EBITDA flowthrough in the Financial Highlights – First Quarter
2025. Also, provide all of the disclosures required by Item 10(e) of Regulation S-K.

 The Company respectfully acknowledges the Staff's
comment and advises the Staff that, in the Company's future earnings releases furnished under Item 2.02 of Form 8-K, it will
present and discuss net income flowthrough with equal or greater prominence when discussing and presenting adjusted EBITDA flowthrough.

 By way of illustration, the Company provides the
below example as if this had been included in its earnings release furnished as Exhibit 99.1 to its Form 8-K filed June 3,
2025:

 5

 Financial Highlights –
First Quarter 2025

 · Net Income flowthrough of 28%, 26% as adjusted*

 · Adjusted EBITDA Flowthrough* of 40%, above
Company expectations, from total sales increase of $15.4 million versus last year and adjusted EBITDA* increase of $6.2 million

 Additionally, the Company will provide the additional
disclosures required by Item 10(e) of Regulation S-K for this measure to the extent it is used in future earnings releases, including
a reconciliation to the most directly comparable GAAP measure, as well as disclosing the reasons why the Company's management believes
that presentation of this non-GAAP financial measure provides useful information to investors regarding the Company's financial
condition and results of operations.

 In this instance, the Company reconciled adjusted
EBITDA flowthrough to total sales, the most directly comparable financial measure presented in accordance with GAAP, within the text of
the earnings release.

 The Company believes the adjusted EBITDA flowthrough
financial measure reflects operating results that are more indicative of the Company's ongoing operating performance while improving
comparability to prior and future periods, and as such, may provide investors with an enhanced understanding of the Company's past
financial performance and prospects for the future. The Company will include such reasons for the use of this non-financial measure, to
the extent used, in the schedules to future earnings release.

 · Breakout the other non-recurring expenses
line item into smaller components in your non-GAAP reconciliations. Tell us and disclose the nature of the underlying amounts recorded
in each period presented in the broken out other non-recurring expenses and cyber incident expenses line items. Also, tell us your consideration
of Question 100.01 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations in determining the appropriateness of
these non-GAAP adjustments.

 The Company respectfully acknowledges the Staff's
comment and advises the Staff that in the Company's future earnings releases furnished under Item 2.02 of Form 8-K, it will
break out the other non-recurring expenses line items into smaller components in its non-GAAP reconciliations.

 The Company respectfully advises the Staff that
the other non-recurring expenses consist of costs associated with response to significant shareholder requests and inquiries, severance
and related costs associated with the departure of key executives and CEO-led organizational changes and a lease termination fee.

 6

 By way of illustration, the Company provides in
the table below a break-out of "Other non-recurring expenses" included in its earnings release furnished as Exhibit 99.1
to its Form 8-K filed June 3, 2025.

 First Quarter

 May 3, 2025
 May 4, 2024

 Shareholder matters
 $ 175
 $ 1,380

 Severance and related costs
 320
 -

 Lease termination fee
 390
 -

 Other non-recurring expenses
 $ 885
 $ 1,380

 The Company considered Question 100.01 of the
Non-GAAP Financial Measures Compliance and Disclosure Interpretations and believes that these adjusted costs do not represent normal,
recurring, cash operating expenses necessary to operate the Company's business and, accordingly, excluding these amounts from the
applicable non-GAAP financial measures does not cause those measures to be misleading. The Company describes below in detail the nature
and composition of each of the other non-recurring expenses and cyber incident expenses.

 Other non-recurring expenses

 · Significant shareholder requests and inquiries

 o As discussed earlier in this letter, the Company received a books and records demand from a significant
shareholder in Q4 2023. Subsequent discussions with the Company's significant shareholder led to the negotiation and execution of
a cooperation agreement in Q1 2024, which was later amended and restated in Q1 2025. The Company has not experienced shareholder engagement
of this nature since prior to fiscal year 2020. As such the Company considers the costs associated with these activities to be distinct
from the Company's normal, historical operations and appropriate exclusions from its non-GAAP metrics.

 · Severance and related costs

 o The Company incurred severance and related costs in connection with the departure of key executives resulting
from the CEO transition and subsequent implementation of CEO-led organizational changes as described in the "Background on Organizational
Changes" section of this letter. The Company considers these costs to be distinc