Citi Trends Inc
For the period ended May 2, 2026. Filed Jun 10, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 2, 2026 · Filed Jun 10, 2026
CTRN$45.01-14.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-11-01; filed 2025-12-10.
0001104659-25-119960
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-05-02; filed 2026-06-10.
0001104659-26-072225
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 61 previous paragraphs and 49 current paragraphs.
24 unchanged; 22 reworded; 3 added; 12 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
We are the leading off-price value retailer of apparel, accessories and home trends primarily for Black families. Our high-quality and trend-right merchandise offerings at everyday low prices are designed to appeal to the fashion and trend preferences of value-conscious customers.
Current report
*Depreciation.*Depreciation expense increased $0.7 million, or 16.9%, to $5.1 million in the first quarter of 2026 from $4.4 million in the first quarter of 2025.
Current report
No shares were repurchased in the first quarter of fiscal 2026. In the first quarter of fiscal 2025, we returned $6.3 million to shareholders through share repurchases.
Removed paragraphs (12)
Previous report
We are a highly differentiated off-price value retailer known for trendy fashions, great brands and amazing prices. We offer culturally relevant fashion– what we call“Cultural Cachet” – in apparel, accessories and home trends primarily for African American families in the United States. We curate a three-tiered mix of products featuring well-known brands, core products and opening price goods, with intermittent extreme value deals. Our core product styles are curated trend-right, high quality, value for the price. We offer an assortment of opening price products for the price conscious customer; all sold at competitive prices. Plus, for the treasure hunters, we often have“extreme value” product deals on well-known branded product at 50% to 75% off the manufacturer’s suggested retail price. Consumer insights research validates that our unique culturally relevant styling, and strong value for the price, fosters deep customer loyalty and high shopping frequency in the neighborhoods in which we operate.
Previous report
*Cost of Sales (exclusive of depreciation).*Cost of sales (exclusive of depreciation) increased $12.7 million, or 11.7%, to $120.5 million in the third quarter of 2025 from $107.8 million in the third quarter of 2024. Cost of sales as a percentage of sales was 61.1% in the third quarter of 2025 and 60.2% in the third quarter of 2024. The 90 basis-point increase was primarily driven by a 50 basis points increase in markdowns, a 20 basis points increase in shrink, and a 20 basis points increase in other cost of sales. Cost of sales as a percentage of sales in the third quarter of 2024 was positively impacted by low markdowns and shrink following the second quarter of 2024 strategic inventory reset.
Previous report
*Selling, General and Administrative Expenses.*Selling, general and administrative expenses increased $4.6 million, or 6.2%, to $79.3 million in the third quarter of 2025 from $74.7 million in the third quarter of 2024. The increase was driven by corporate expenses (primarily incremental incentive compensation) of $2.9 million and store expenses of $1.7 million. As a percentage of sales, Selling, general and administrative expenses decreased to 40.3% in the third quarter of 2025 from 41.7% in the third quarter of 2024, primarily driven by the aforementioned items.
Previous report
*Depreciation.*Depreciation expense decreased $0.2 million, or 2.7%, to $4.6 million in the third quarter of 2025 from $4.8 million in the third quarter of 2024.
Previous report
*Impairment.*We did not incur any non-cash impairment expense in the third quarter of 2025. Non-cash impairment expense related to underperforming stores totaled $0.6 million in the third quarter of 2024, comprised of $0.3 million for leasehold improvements and fixtures and equipment, and $0.3 million for operating lease right of use assets.
Previous report
Thirty-Nine Weeks Ended November 1, 2025 and November 2, 2024
Previous report
*Net Sales.*Net sales increased $47.7 million, or 8.8%, to $589.6 million in the first thirty-nine weeks of 2025 from $541.9 million in the same period of 2024. Comparable store sales increased 10.0%, resulting in an increase of $53.2 million in sales. Net store opening and closing activity resulted in a net decrease of $5.5 million in sales.
Previous report
*Depreciation.*Depreciation expense decreased $0.8 million, or 5.5%, to $13.5 million in the first thirty-nine weeks of 2025 from $14.3 million in the same period last year primarily due to the sale of the corporate office building.
Previous report
Impairment. Non-cash impairment expense related to underperforming stores totaled $0.3 million in the first thirty-nine weeks of 2025, comprised of $0.2 million for leasehold improvements and fixtures and equipment, and $0.1 million for operating lease right of use assets. Non-cash impairment expense related to underperforming stores totaled $1.8 million in the first thirty-nine weeks of 2024, comprised of $0.9 million for leasehold improvements and fixtures and equipment, and $0.9 million for operating lease right of use assets.
Previous report
Gain on sale of building. Gain on sale of the corporate office building was $11.0 million in the first thirty-nine weeks of 2025.
Previous report
*Net Income (Loss).*Net loss was $2.2 million in the first thirty-nine weeks of 2025 compared to net loss of $29.0 million in the same period of 2024 due to the factors discussed above.
Previous report
In the first thirty-nine weeks of fiscal 2025, we returned $6.3 million to stockholders through share repurchases. See Part II, Item 2 of this Report and Note 8 to the Financial Statements for more information.
Reworded paragraphs (22)
Previous wording
Item 2. Management**’**s Discussion and Analysis of Financial Condition and Results of Operations.
Current wording
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Previous wording
distribution delays or interruptions; changes in freight rates; the Company’s ability to attract and retain workers; 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; consumer confidence and changes in consumer spending patterns; competition within the industry; competition in our markets; the duration and extent of any economic stimulus programs; changes in product mix; interruptions in suppliers’ businesses; risks related to cybersecurity, data privacy and intellectual property; temporary changes in demand due to weather patterns; seasonality of the Company’s business; the results of pending or threatened litigation; delays associated with building, opening, remodeling 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, 2025 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.
Current wording
The factors that may result in actual results differing from such forward-looking information include, but are not limited to: uncertainties relating to general economic conditions, including inflation, energy and fuel costs, unemployment levels, and any deterioration whether caused by acts of war, terrorism, political or social unrest (including any resulting store closures, damage or loss of inventory) or other factors; changes in market interest rates and market levels of wages; the imposition of new taxes on imports, new tariffs and changes in existing tariff rates; the imposition of new trade restrictions and changes in existing trade restrictions; impact of natural disasters such as hurricanes; uncertainty and economic impact of pandemics, epidemics or other public health emergencies; transportation and distribution delays or interruptions; changes in freight rates; the Company’s ability to attract and retain workers; 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; consumer confidence and changes in consumer spending patterns; competition within the industry; competition in our markets; the duration and extent of any economic stimulus programs; changes in product mix; interruptions in suppliers’ businesses; risks related to cybersecurity, data privacy and intellectual property; temporary changes in demand due to weather patterns; seasonality of the Company’s business; the results of pending or threatened litigation; delays and costs associated with building, opening, remodeling, assuming leases, and operating new stores; delays and costs associated with building, opening or expanding new or existing distribution centers; changes in regulator’s requirements or stakeholder’s expectations on environmental, social and sustainability related topics; challenges effectively managing the use of artificial intelligence; and strategic transactions that could negatively impact our liquidity, increase our expenses, or present significant distractions to management; 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 January 31, 2026 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.
Previous wording
As of November 1, 2025, we operated 593 stores in urban, suburban and rural markets in 33 states.
Current wording
As of May 2, 2026, we operated 591 stores in urban, suburban and rural markets in 33 states.
Previous wording
We are monitoring trends in general economic conditions including inflation, tariffs, and changes in consumer sentiment. We also regularly monitor the impacts on our business of unemployment levels, wage inflation, interest rates, inflation rates, housing costs, energy costs, consumer confidence, consumer perception of economic conditions, costs to source our merchandise and supply chain disruptions.
Current wording
We are monitoring trends in general economic conditions, including on-going inflationary pressures, new and changing tariff programs and changes in consumer sentiment. We continue to monitor the impacts on our business of unemployment levels, wage inflation, interest rates, inflation rates, housing costs, energy costs, gas prices, consumer confidence, consumer perception of economic conditions, costs to source our merchandise and supply chain disruptions.
Previous wording
The nature of our 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. In addition, sales of clothing are directly impacted by the timing of the seasons to which the clothing relates. While we have expanded our product offerings to balance discretionary with non-discretionary product, traffic to our stores is still influenced by weather patterns to some extent.
Current wording
The nature of our 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. In addition, sales of clothing are directly impacted by the timing of the seasons to which the clothing relates. While we have expanded our product offerings to balance discretionary with non-discretionary products, traffic to our stores is still influenced by weather patterns to some extent.
Previous wording
Net sales consist of store sales and layaway fees, net of returns by customers. Cost of sales consists of the cost of products we sell and associated freight costs. Depreciation is not considered a component of cost of sales and is included as a separate line item in the consolidated statements of operations. Selling, general and administrative expenses are comprised of store costs, including payroll and occupancy costs, corporate and distribution center costs and advertising costs.
Current wording
Net sales consist of store sales and layaway fees, net of returns by customers. Cost of sales consists of the cost of products we sell and associated freight costs. Depreciation is not considered a component of cost of sales and is included as a separate line item in the consolidated statements of operations. Selling, general and administrative expenses are comprised of store costs, including payroll and occupancy costs, corporate and distribution center costs and marketing costs.
Previous wording
The following discussion contains references to fiscal years 2025 and 2024, which represent fiscal years ending or ended on January 31, 2026 and February 1, 2025, respectively. Fiscal 2025 and fiscal 2024 both have 52-week accounting periods. This discussion and analysis should be read with the unaudited condensed consolidated financial statements and the notes thereto contained in Part I, Item 1 of this Report.
Current wording
The following discussion contains references to fiscal years 2026 and 2025, which represent fiscal years ending or ended on January 30, 2027 and January 31, 2026, respectively. Fiscal 2026 and fiscal 2025 have a 52-week accounting period. This discussion and analysis should be read with the unaudited condensed consolidated financial statements and the notes thereto contained in Part I, Item 1 of this Report.
Previous wording
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 the overall performance of each individual store. Finally, we monitor corporate and distribution center expenses against budgeted amounts.
Current wording
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 open for at least 14 full consecutive months without closure for more than seven days within the same fiscal month. Remodeled and relocated stores are included in the comparable store sales results if the selling square footage is not changed significantly, the store is not closed for more than five days in any fiscal month and the store remains in the same trade area. 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 the overall performance of each individual store. Finally, we monitor corporate and distribution center expenses against budgeted amounts.
Previous wording
*Net Sales.*Net sales increased $18.0 million, or 10.1%, to $197.1 million in the third quarter of 2025 from $179.1 million in the third quarter of 2024. Comparable store sales increased 10.8%, resulting in an increase of $19.1 million in sales. Net store opening and closing activity resulted in a net decrease of $1.1 million in sales.
Current wording
*Net Sales.*Net sales increased $29.2 million, or 14.4%, to $230.9 million in the first quarter of 2026 from $201.7 million in the first quarter of 2025. The increase in sales was due to a 13.9% increase in comparable store sales, as well asan increase of $1.5 million from net store opening and closing activity.
Previous wording
*Cost of Sales (exclusive of depreciation).*Cost of sales (exclusive of depreciation) increased $13.2 million, or 3.8%, to $356.9 million in the first thirty-nine weeks of 2025 from $343.7 million in the same period of 2024. Cost of sales as a percentage of sales decreased to 60.5% in the first thirty-nine weeks of 2025 from 63.4% in the same period of 2024. The 290 basis-point decrease was driven by a 150 basis points decrease in markdowns, an 80 basis points decrease in shrink, and a 60 basis points decrease in other cost of sales.
Current wording
*Cost of Sales (exclusive of depreciation).*Cost of sales (exclusive of depreciation) increased $16.7 million, or 13.7%, to $138.6 million in the first quarter of 2026 from $121.9 million in the first quarter of 2025. Cost of sales as a percentage of sales decreased to 60.0% in the first quarter of 2026 from 60.4% in the first quarter of 2025. The change was due to lower shrink expense, partially offset by fuel surcharges in freight.
Previous wording
*Selling, General and Administrative Expenses.*Selling, general and administrative expenses increased $10.4 million, or 4.7%, to $233.1 million in the first thirty-nine weeks of 2025 from $222.7 million in the same period of 2024. The increase was primarily driven by store expenses of $3.8 million, distribution center costs of $2.7 million, and corporate expenses (primarily incentive compensation) of $3.9 million. As a percentage of sales, Selling, general and administrative expenses decreased to 39.5% in the first thirty-nine weeks of 2025 from 41.1% in the first thirty-nine weeks of 2024, due to the aforementioned items.
Current wording
*Selling, General and Administrative Expenses.*Selling, general and administrative expenses increased $4.8 million, or 6.5%, to $79.7 million in the first quarter of 2026 from $74.9 million in the first quarter of 2025. The increase was primarily due to an increase in store and corporate expenses and incentive compensation accrual, partially offset by lower distribution center expenses. As a percentage of sales, selling, general and administrative expenses decreased to 34.5% in the first quarter of 2026 from 37.1% in the first quarter of 2025.
Previous wording
*Income Tax Benefit.*There was no income tax benefit in the first thirty-nine weeks of 2025 compared to $10.0 million in the first thirty-nine weeks of 2024. We used the annual effective tax rate to determine income tax benefit based upon interim period results.
Current wording
*Income Tax Benefit/Expense.*There was $0.2 million income tax expense in the first quarter of 2026 and there was no income tax expense in the first quarter of 2025. We used the annual effective tax rate to determine income tax expense based upon interim period results.
Previous wording
*Net Income (Loss).*Net loss was $6.9 million in the third quarter of 2025 compared to net loss of $7.2 million in the third quarter of 2024 due to the factors discussed above.
Current wording
*Net Income.*Net income was $7.8 million in the first quarter of 2026 compared to net income of $0.9 million in the first quarter of 2025 due to the factors discussed above.
Previous wording
Our capital allocation strategy is to maintain adequate liquidity to prioritize investments in opportunities to profitably grow our business and maintain current operations, then to return excess cash to stockholders through our repurchase programs. Our quarter-end cash and cash equivalents balance was$51.1 million compared to cash and cash equivalents of $38.9 million at the end of the third quarter last year. Until required for other purposes, we maintain cash and cash equivalents in deposit or money market accounts.
Current wording
Our capital allocation strategy is to maintain adequate liquidity to prioritize investments in opportunities to profitably grow our business and maintain current operations, then to return excess cash to shareholders through our share repurchase programs. Our quarter-end cash and cash equivalents balance was $81.1 million compared to $41.6 million at the end of the first quarter of 2025. Until required for other purposes, we maintain cash and cash equivalents in deposit or money market accounts.
Previous wording
Our quarter-end inventory balance was $123.5 million, down 3.1% compared to $127.5 million at the end of the third quarter last year.
Current wording
Our quarter-end inventory balance was $115.2 million, compared with $109.9 million at the end of the first quarter of 2025. The increase was primarily related to increased sales volume.
Previous wording
Capital expenditures in the first thirty-nine weeks of 2025 were $15.5 million, an increase of $7.9 million over the first thirty-nine weeks of 2024, as we increased our investments in new stores and remodels. We anticipate capital expenditures in fiscal 2025 to be approximately 23 million, primarily for the opening of three new stores and remodeling existing stores, combined with ongoing investments in our systems.
Current wording
Capital expenditures in the first quarter of 2026 were $5.8 million, an increase of $3.7 million from the first quarter of 2025, as we invested in more existing store remodels. We anticipate capital expenditures in fiscal 2026 in the range of $35 million to $40 million, primarily for opening approximately 25 new stores and remodeling approximately 50 stores.
Previous wording
We have a revolving credit facility that matures in April 2030 and provides a $75 million credit commitment and a $25 million uncommitted“accordion” feature. Additional details of the credit facility are in Note 4 to the Financial Statements. At the end of the third quarter of 2025, we had no borrowings under the credit facility and $2.2 million in letters of credit outstanding.
Current wording
We have a revolving credit facility that matures in April 2030 and provides a $75 million credit commitment and a $25 million uncommitted “accordion” feature. Additional details of the credit facility are in Note 4 to the Financial Statements. At the end of the first quarter of 2026, we had no borrowings under the credit facility and $2.2 million in letters of credit outstanding.
Previous wording
Cash Flows From Operating Activities. Net cash provided by operating activities was $1.5 million in the first thirty-nine weeks of 2025 compared to net cash used in operating activities of $32.3 million in the same period of 2024. Significant sources of cash for the first thirty-nine weeks of 2025 included net loss adjusted for non-cash items totaling $40.4 million (compared to net loss adjusted for non-cash items of $16.1 million in the first thirty-nine weeks of 2024) and an increase in accrued compensation of $7.5 million in the first thirty-nine weeks of 2025 (compared to an increase of $2.9 million in the first thirty-nine weeks of 2024).
Current wording
Cash Flows From Operating Activities. Net cash provided by operating activities was $20.9 million in the first quarter of 2026 compared to cash used of $11.0 million in the first quarter of 2025. Sources of cash in the first quarter of 2026 resulted from net income adjusted for non-cash expenses totaling $26.3 million (compared to a net income adjusted for non-cash items of $18.5 million in the first quarter of 2025), and an increase of $12.6 million in accounts payable (compared to a decrease of $21.9 million in the first quarter of 2025).
Previous wording
Significant uses of cash from operating activities in the first thirty-nine weeks of 2025 included (1) a $37.0 million decrease in accrued expenses and other long-term liabilities (compared to a $35.9 million decrease in the first thirty-nine weeks of 2024) due primarily to payments of operating lease liabilities; (2) a $5.9 million increase in prepaid and other current assets (compared to a $2.3 million dollar increase in the first thirty-nine weeks of 2024); and (3) a $5.1 million decrease in accounts payable (compared to a $17.9 million increase in the same period last year).
Current wording
Significant uses of cash during the first quarter of 2026 included (1) a decrease of $11.3 million in accrued expenses and other long-term liabilities (compared to a decrease of $19.4 million in the first quarter of 2025) and (2) an increase of $3.8 million in prepaid and other current assets (compared to an increase of $3.5 million in the first quarter of 2025).
Previous wording
Cash Flows From Investing Activities. Cash used in investing activities was $4.3 million in the first thirty-nine weeks of 2025 compared to $7.6 million in the same period last year. Source of cash of $11.2 million in the first thirty-nine weeks of 2025 was from the sale of a building. Cash used of $15.5 million in the first thirty-nine weeks of fiscal 2025 and $7.6 million in the first thirty-nine weeks of fiscal 2024 consisted of purchases of property and equipment.
Current wording
Cash Flows From Investing Activities. Cash used in investing activities was $5.8 million in the first quarter of 2026 compared to $2.1 million in the first quarter of 2025. Cash used in the first quarter of 2026 and 2025 consisted of purchases of property and equipment.
Previous wording
Cash Flows From Financing Activities. Cash used in financing activities was $7.1 million in the first thirty-nine weeks of 2025 compared to $0.9 million in the same period last year. Cash used in the first thirty-nine weeks of fiscal 2025 was $0.8 million to settle withholding taxes on the vesting of restricted stock and $6.3 million for share repurchases, compared to $0.9 million used in the first thirty-nine weeks of fiscal 2024 to settle withholding taxes on the vesting of restricted stock.
Current wording
Cash Flows From Financing Activities. Cash used in financing activities was $0.0 million in the first quarter of 2026 compared to $6.4 million in the first quarter of 2025. Cash used in first quarter of 2025 included $6.3 million for share repurchases and $0.1 million to settle withholding taxes on the vesting of restricted stock.
Previous wording
Our principal cash requirements consist of (1) inventory purchases; (2) capital expenditures to invest in our infrastructure; and (3) operational needs, including salaries, occupancy costs, taxes and other operating costs. We may also use cash to fund any share repurchases, make any required debt payments and satisfy other contractual obligations. Historically, we have met these cash requirements using cash flow from operations and short-term trade credit. As of November 1, 2025, our contractual commitments for operating leases totaled $218.0 million (with $64.1 million due within 12 months). See Note 11 to the Financial Statements for more information regarding lease commitments.
Current wording
Our principal cash requirements consist of (1) inventory purchases; (2) capital expenditures to invest in our infrastructure; and (3) operational needs, including salaries, occupancy costs, taxes and other operating costs. We may also use cash to fund any share repurchases, make any required debt payments and satisfy other contractual obligations. Historically, we have met these cash requirements using cash flow from operations and short-term trade credit. As of May 2, 2026, our contractual commitments for operating leases totaled $226.5 million (with $64.3 million due within 12 months). See Note 10 to the Financial Statements for more information regarding lease commitments.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
The factors that may result in actual results differing from such forward-looking information include, but are not limited to: uncertainties relating to general economic conditions, including inflation, energy and fuel costs, unemployment levels, and any deterioration whether caused by acts of war, terrorism, political or social unrest (including any resulting store closures, damage or loss of inventory) or other factors; changes in market interest rates and market levels of wages; the imposition of new taxes on imports, new tariffs and changes in existing tariff rates; the imposition of new trade restrictions and changes in existing trade restrictions; impact of natural disasters such as hurricanes; uncertainty and economic impact of pandemics, epidemics or other public health emergencies; transportation and
Previous report — wording carried elsewhere
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 open for at least 14 full consecutive months without closure for more than seven days within the same fiscal month. Remodeled and relocated stores are included in the comparable store sales results if the selling square footage is not changed significantly, the store is not closed for more than five days in any fiscal month and the store remains in the same trade area.
Previous report — wording carried elsewhere
*Income Tax Benefit.*There was no income tax benefit in the third quarter of 2025 compared to a benefit of $1.3 million in the third quarter of 2024. For the third quarter of 2025 and the third quarter of 2024, we used the annual effective tax rate to determine income tax benefit based upon interim period results.