Citi Trends Announces Fourth Quarter and Fiscal 2007 Results
SAVANNAH, Ga., Mar 26, 2008 (BUSINESS WIRE) -- Citi Trends, Inc. (NASDAQ: CTRN) today reported results for the fourth quarter and fiscal year ended February 2, 2008.
The Company's 2007 fiscal year contained the traditional 52 weeks, whereas, fiscal 2006 contained 53 weeks, with the extra week falling in the fourth quarter. Accordingly, comparisons of total sales and net income for the fourth quarter and full year of fiscal 2007 to the same periods in 2006 are affected by an extra week in 2006. However, for comparable store sales, the Company is reporting on a comparable weeks basis (e.g. the 13 weeks ended February 2, 2008 compared to the 13 weeks ended February 3, 2007).
Financial Highlights - Fourth quarter ended February 2, 2008
Total sales in the 13-week quarter ended February 2, 2008 increased 6.2% to $134.6 million compared with $126.8 million in the 14-week quarter ended February 3, 2007. Comparable store sales decreased 1.1%, comparing the 13 weeks ended February 2, 2008 to the 13 weeks ended February 3, 2007.
Net income was $8.4 million compared with $10.4 million in last year's fourth quarter. Earnings per diluted share was $0.59 in the fourth quarter of 2007 compared to $0.73 in 2006. The decline in fourth quarter earnings was a result of the negative comparable store sales and a related need to increase clearance markdowns, together with the inclusion of the extra week in 2006. However, these factors were partially offset by a favorable effective income tax rate in 2007 due to income tax credits and tax-exempt income increasing, while pretax income was decreasing.
Financial Highlights - Fiscal year ended February 2, 2008
Total sales in the 52-week fiscal year ended February 2, 2008 increased 14.6% to $437.5 million compared with $381.9 million in the 53-week fiscal year ended February 3, 2007. The extra week last year contributed approximately $10 million of sales in 2006. Comparable store sales increased 1.0%, comparing the 52 weeks ended February 2, 2008 to the 52 weeks ended February 3, 2007.
Net income was $14.2 million in 2007 compared with $21.4 million in 2006. Earnings per diluted share was $1.00 in 2007 compared with $1.51 in the prior year.
Fiscal 2008 Outlook
The Company estimates 2008 earnings in a range of $1.10 to $1.15 per diluted share. This guidance is based upon an anticipated 2008 comparable store sales increase of 2% to 3%. For the year, the Company expects to increase selling square footage by at least 15%.
The Company reminds investors of the complexity of accurately assessing future results given the difficulty in predicting fashion trends, consumer preferences and general economic conditions and the impact of other business variables. See "Forward-Looking Statements" below for more information regarding these uncertainties.
Investor Conference Call and Webcast
Citi Trends will host a conference call on March 26, 2008, at 5:00 p.m. ET. The number to call for the live interactive teleconference is (800) 218-0204. A replay of the conference call will be available until April 2, 2008, by dialing (303) 590-3000 and entering the passcode, 11105977#. The live broadcast of Citi Trends' quarterly conference call will be available online at the Company's website, www.cititrends.com, as well as http://ir.cititrends.com/medialist.cfm on March 26, 2008, beginning at 5:00 p.m. ET. The online replay will follow shortly after the call and continue through April 2, 2008.
During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends. 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 currently operates 330 stores located in 20 states in the Southeast, Mid-Atlantic and Midwest regions and the state of Texas. Citi Trends' website address is www.cititrends.com. CTRN-E
Forward-Looking Statements
All statements other than historical facts contained in this news release, including statements regarding our future financial results and position, business policy and plans and objectives of management for future operations, 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 Citi Trends, are intended to identify forward-looking statements. 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 year-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 Citi Trends, Inc. filings with the Securities and Exchange Commission. 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. 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, Citi Trends 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 STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share data)
Thirteen Weeks Ended Fourteen Weeks Ended
February 2, 2008 February 3, 2007
-------------------- -----------------------
(unaudited) (unaudited)
Net sales $ 134,571 $ 126,788
Cost of sales 87,145 78,104
-------------------- -----------------------
Gross profit 47,426 48,684
Selling, general and
administrative expenses 32,892 31,374
Depreciation and
amortization 3,488 2,363
-------------------- -----------------------
Income from operations 11,046 14,947
Interest income 680 585
Interest expense (97) (190)
-------------------- -----------------------
Income before provision
for income taxes 11,629 15,342
Provision for income
taxes 3,251 4,970
-------------------- -----------------------
Net income $ 8,378 $ 10,372
==================== =======================
Net income per share,
basic $ 0.60 $ 0.75
Net income per share,
diluted $ 0.59 $ 0.73
Weighted average shares
used to compute net
income per share, basic 14,034 13,739
Weighted average shares
used to compute net
income per share,
diluted 14,188 14,200
CITI TRENDS, INC.
CONDENSED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share data)
Fifty-Two Weeks Ended Fifty-Three Weeks Ended
February 2, 2008 February 3, 2007
-------------------- -----------------------
(unaudited) (unaudited)
Net sales $ 437,515 $ 381,918
Cost of sales 278,783 235,744
-------------------- -----------------------
Gross profit 158,732 146,174
Selling, general and
administrative expenses 127,470 107,535
Depreciation and
amortization 12,583 8,326
-------------------- -----------------------
Income from operations 18,679 30,313
Interest income 2,383 2,014
Interest expense (469) (359)
-------------------- -----------------------
Income before provision
for income taxes 20,593 31,968
Provision for income
taxes 6,379 10,617
-------------------- -----------------------
Net income $ 14,214 $ 21,351
==================== =======================
Net income per share,
basic $ 1.02 $ 1.57
Net income per share,
diluted $ 1.00 $ 1.51
Weighted average shares
used to compute net
income per share, basic 13,946 13,575
Weighted average shares
used to compute net
income per share,
diluted 14,223 14,138
CITI TRENDS, INC.
CONDENSED BALANCE SHEETS
(unaudited)
(in thousands)
February 2, 2008 February 3, 2007
-------------------- -----------------------
(unaudited) (unaudited)
Assets:
Cash and cash
equivalents $ 6,203 $ 7,707
Short-term investments
(1) 56,165 65,956
Inventory 82,420 73,360
Other current assets 8,726 7,000
Property and equipment,
net 52,207 34,754
Other noncurrent assets 4,456 3,330
-------------------- -----------------------
Total assets $ 210,177 $ 192,107
==================== =======================
Liabilities and
Stockholders' Equity:
Accounts payable $ 43,566 $ 46,894
Accrued liabilities 17,089 15,587
Other current
liabilities 3,370 3,174
Noncurrent liabilities 8,005 8,243
-------------------- -----------------------
Total liabilities 72,030 73,898
Total stockholders'
equity 138,147 118,209
-------------------- -----------------------
Total liabilities and
stockholders' equity $ 210,177 $ 192,107
==================== =======================
(1) Short-term investments consist of municipal auction rate
securities (ARS) issued by state governments to fund student loans.
These securities are high-grade (AAA rated), most of which are either
guaranteed by the U.S. Department of Education or backed by
insurance. Historically, the ARS provided liquidity via an auction
process that reset the interest rate every 35 days, allowing
investors either to roll over their investments or sell them at par.
Since these auction rate securities have typically traded at short-
term intervals, they have been classified as current assets.
Subsequent to February 2, 2008, there has been insufficient demand
for these types of investments during the auctions and, as a result,
these securities are not currently liquid. The Company may not be
able to access cash by selling these securities without a loss of
principal until either, liquidity returns to the auction process, a
secondary market emerges, they are redeemed by the issuer, or they
mature in years ranging from 2010 to 2040. At this time, there is no
evidence to conclude that the ARS are impaired. If it is later
determined that the market value of these securities is impaired, the
Company would be required to write down the investments to fair
value. Also, if liquidity is not restored to this market in the near
term, the Company may be required to reclassify these investments as
long-term assets.
SOURCE: Citi Trends, Inc.
Citi Trends, Inc. Bruce Smith, 912-443-2075 Chief Financial Officer or Ed Anderson, 912-443-3705 Chairman and Chief Executive Officer
Copyright Business Wire 2008
News Provided by COMTEX