Total Sales increased 5.5%; Comparable Store
Sales up 2.1%
Citi Trends, Inc. (NASDAQ: CTRN) today reported unaudited
results for the first quarter of fiscal 2018.
Financial Highlights – First quarter
ended May 5, 2018
Total sales in the first quarter ended May 5, 2018 increased
5.5% to $211.0 million compared with $200.0 million in the first
quarter ended April 29, 2017. Comparable store sales increased
2.1%, comparing the 13 weeks ended May 5, 2018 with the 13 weeks
ended May 6, 2017.
Net income in the first quarter of 2018 was $11.3 million,
compared with net income in last year’s first quarter of $8.9
million on a GAAP basis, or $10.0 million when adjusted for proxy
contest-related expenses*. Earnings per diluted share in this
year’s first quarter were $0.83, compared with earnings per diluted
share in the first quarter of 2017 of $0.60 on a GAAP basis, or
$0.68 when adjusted for proxy contest-related expenses*.
Bruce Smith, President and Chief Executive Officer, commented,
“We are very pleased with the 22% increase in adjusted earnings per
share in the first quarter which reflected solid top-line growth,
as well as benefits from a lower income tax rate due to the
enactment of the Tax Cuts and Jobs Act, and a lower share count
resulting from share repurchases since last year’s first quarter
under the Company’s expanded capital return program.”
Smith further noted, “Within the quarter, comparable store sales
fluctuated somewhat due to an earlier Easter and a later start to
spring. However, by the end of the quarter, we were pleased with
the results, and we are now excited with our early second quarter
sales, as the later spring is driving sales of warm-weather
merchandise. As we enter the second quarter, our sales momentum
continues, with comparable store sales increasing 10% thus far in
the fiscal month of May.”
During the first quarter, the Company opened five new stores,
expanded one store and closed one store.
Guidance
The Company reaffirmed its previous guidance of earnings per
diluted share in the range of $1.55 to $1.70 for fiscal 2018.
Capital Return Program
The Company announced that its Board of Directors has declared a
quarterly dividend of $0.08 per common share, payable on June 19,
2018, to shareholders of record as of the close of business on June
5, 2018.
During the first quarter of 2018, the Company repurchased 86,000
shares of its common stock at an aggregate cost of $2.7 million. At
May 5, 2018, $22.3 million remained available under the existing
stock repurchase authorization.
Investor Conference Call and
Webcast
Citi Trends will host a conference call today at 9:00 a.m. ET.
The number to call for the live interactive teleconference is
(303) 223-4360. A replay of the conference call will be
available until May 30, 2018, by dialing (402) 977-9140 and
entering the passcode, 21888546.
The live broadcast of Citi Trends' conference call will be
available online at the Company's website, www.cititrends.com, in
the Investor Relations section, beginning today at 9:00 a.m. ET.
The online replay will follow shortly after the call and will be
available for replay for one year.
During the conference call, the Company may discuss and answer
questions concerning business and financial developments and trends
that have occurred after quarter-end. The Company’s responses to
questions, as well as other matters discussed during the conference
call, may contain or constitute information that has not been
disclosed previously.
About Citi Trends
Citi Trends, Inc. is a value-priced retailer of urban fashion
apparel and accessories for the entire family. The Company operates
553 stores located in 31 states. Citi Trends’ website address is
www.cititrends.com. CTRN-G
*Non-GAAP Financial
Measures
The non-GAAP financial measures are reconciled to their
corresponding GAAP measures at the end of this press release.
Forward-Looking
Statements
All statements other than historical facts contained in this
news release, including statements regarding the Company’s future
financial results and position, business policy and plans,
objectives of management for future operations and our intentions
and ability to pay dividends and complete any share repurchase
authorizations, are forward-looking statements that are subject to
material risks and uncertainties. The words "believe," "may,"
"could," "plans," "estimate," "continue," "anticipate," "intend,"
"expect" and similar expressions, as they relate to the Company,
are intended to identify forward-looking statements, although not
all forward-looking statements contain such language. Statements
with respect to earnings guidance are forward-looking statements.
Investors are cautioned that any such forward-looking statements
are subject to the finalization of the Company’s quarter-end
financial and accounting procedures, are not guarantees of future
performance or results and are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified.
Actual results or developments may differ materially from those
included in the forward-looking statements as a result of various
factors which are discussed in the Company’s filings with the
Securities and Exchange Commission, including those set forth under
the heading “Item 1A. Risk Factors” in the Company’s Form 10-K for
the fiscal year ended February 3, 2018. These risks and
uncertainties include, but are not limited to, uncertainties
relating to economic conditions, growth risks, consumer spending
patterns, competition within the industry, competition in our
markets and the ability to anticipate and respond to fashion
trends. Any forward-looking statements by the Company, with respect
to earnings guidance, the Company’s intention to declare and pay
dividends, the repurchase of shares pursuant to a share repurchase
program, or otherwise, are intended to speak only as of the date
such statements are made. Except as required by applicable law,
including the securities laws of the United States and the rules
and regulations of the Securities and Exchange Commission, the
Company does not undertake to publicly update any forward-looking
statements in this news release or with respect to matters
described herein, whether as a result of any new information,
future events or otherwise.
CITI TRENDS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (unaudited) (in thousands,
except per share data)
Thirteen Weeks Ended
Thirteen Weeks Ended May 5, 2018
April 29, 2017 (unaudited) (unaudited) Net sales $ 211,032 $
199,955 Cost of sales (exclusive of depreciation shown
separately below) (129,413 ) (122,390 ) Selling, general and
administrative expenses (63,005 ) (60,487 ) Depreciation
(4,974 ) (4,298 ) Income from operations 13,640 12,780
Interest income 295 186 Interest expense (37 ) (37 )
Income before income taxes 13,898 12,929 Income tax expense
(2,601 ) (4,039 ) Net income $ 11,297 $ 8,890
Basic net income per common share $ 0.83 $
0.60 Diluted net income per common share $ 0.83 $
0.60 Weighted average shares used to compute
basic net income per share 13,578 14,719
Weighted average shares used to compute diluted net income
per share 13,631 14,780
CITI TRENDS, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited) (in thousands) May
5, 2018 April 29, 2017 (unaudited) (unaudited) Assets:
Cash and cash equivalents $ 53,978 $ 73,037 Short-term investment
securities 33,504 34,189 Inventory 125,331 124,533 Prepaid and
other current assets 16,372 13,853 Property and equipment, net
59,156 61,152 Long-term investment securities 21,707 25,914 Other
noncurrent assets 6,203 7,753 Total
assets $ 316,251 $ 340,431 Liabilities and
Stockholders' Equity: Accounts payable $ 63,814 $ 71,465 Accrued
liabilities 21,971 27,530 Other current liabilities 5,530 2,147
Noncurrent liabilities 8,325 8,260
Total liabilities 99,640 109,402 Total stockholders' equity
216,611 231,029 Total liabilities and
stockholders' equity $ 316,251 $ 340,431
CITI TRENDS, INC. RECONCILIATION OF GAAP
BASIS OPERATING RESULTS TO ADJUSTED NON-GAAP OPERATING
RESULTS (unaudited) (in thousands, except per share
data)
The Company makes reference in this
release to net income adjusted for proxy contest expenses and
earnings per diluted share adjustedfor proxy contest expenses for
the thirteen weeks ended April 29, 2017. The Company believes that
excluding proxy contest expensesand their related tax effects from
its financial results reflects operating results that are more
indicative of the Company's ongoingoperating performance while
improving comparability to prior and future periods, and as such,
may provide investors with an enhancedunderstanding of the
Company's past financial performance and prospects for the future.
This information is not intended to beconsidered in isolation or as
a substitute for net income or earnings per diluted share prepared
in accordance with generally acceptedaccounting principles
(GAAP).
Thirteen Weeks Ended April 29,
2017 As Reported Adjustment (1)
As Adjusted (unaudited)
(unaudited) (unaudited) Net sales $ 199,955 $
- $ 199,955 Cost of sales (exclusive of depreciation shown
separately below) (122,390 ) - (122,390 ) Selling, general and
administrative expenses (60,487 ) 1,590 (58,897 ) Depreciation
(4,298 ) - (4,298 ) Income from
operations 12,780 1,590 14,370 Interest income 186 - 186 Interest
expense (37 ) - (37 ) Income before
income taxes 12,929 1,590 14,519 Income tax expense (4,039 )
(497 ) (4,536 ) Net income $ 8,890 $ 1,093
$ 9,983 Basic net income per common
share $ 0.60 $ 0.68 Diluted net income per common
share $ 0.60 $ 0.68 Weighted
average shares used to compute basic net income per share
14,719 14,719 Weighted average shares used to
compute diluted net income per share 14,780
14,780 (1) Proxy contest expenses and related
tax effects
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version on businesswire.com: https://www.businesswire.com/news/home/20180523005218/en/
Citi Trends, Inc.Bruce Smith, 912-443-2075President and Chief
Executive Officer
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