Citi Trends Announces Fourth Quarter & Full Year 2017 Results and Next Steps under Its Capital Return Program
Fourth quarter 2017 pretax income increased 23% to
Fourth quarter comparable store sales up 5.6%
Authorizes
The Company’s 2017 fiscal year included 53 weeks compared with 52 weeks
in fiscal 2016. Accordingly, year-over-year comparisons of total sales
for the fourth quarter and full year are affected by an extra week of
sales in 2017. However, for comparable store sales, the Company is
reporting on a comparable weeks basis (e.g. the 14 and 53 weeks ended
Financial Highlights – 14-week fourth
quarter ended
Total sales in the 14-week quarter ended
Pretax income increased 23.3% to
This year’s fourth quarter net income was
Financial Highlights – 53-week fiscal year
ended
Total sales in the 53-week fiscal year ended
Pretax income was
The Company had net income of
Capital Return Program
As the next step in the Company’s expanded capital return program
announced in
Also, as previously announced, the Board of Directors has declared a
quarterly dividend payment of
Mr. Smith commented, “These actions taken by our Board are a
continuation of the capital return program started in 2015 when we
authorized and completed a
Guidance
For the 52-week fiscal year ending
- Comparable store sales to increase in the range of 2% to 3%, on top of the 4.5% increase in fiscal 2017;
- Total sales to increase in the range of 3% to 4%, including the impact of opening approximately 20 new stores in 2018 and having one fewer week than in the 53-week 2017 fiscal year;
-
Earnings per diluted share in the range of
$1.55 to $1.70 , compared with adjusted earnings per diluted share of$1.26* in fiscal 2017, with the 2018 range including a benefit of$0.23 to $0.25 resulting from the lower income tax rate prescribed by the TCJA. Without this income tax benefit, the guidance implies a 5% to 15% improvement in earnings per diluted share next year. The 2018 guidance is based on a fully diluted share count of 13.7 million shares, an effective income tax rate of 20% and no impact on earnings from having one fewer week, because that week is approximately break-even from a net income standpoint. To the extent the Company repurchases shares under its new program during 2018, the Company expects that earnings per diluted share would benefit accordingly.
Looking at longer term goals, the Company expects to increase comparable store sales at a rate of approximately 3% each year and increase store square footage 2% to 3% each year through new store growth, which would be expected to result in earnings increases of approximately 12% to 15% annually. In addition, the Company expects that the Board’s commitment to appropriately return excess capital to stockholders would continue in the future.
Investor Conference Call and Webcast
The live broadcast of
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
*Non-GAAP Financial Measures
The non-GAAP financial measures discussed herein 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 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 the Company’s filings with the
CITI TRENDS, INC. | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) | |||||||||||
(in thousands, except per share data) | |||||||||||
Fourteen Weeks Ended | Thirteen Weeks Ended | ||||||||||
February 3, 2018 | January 28, 2017 | ||||||||||
(unaudited) | (unaudited) | ||||||||||
Net sales | $ | 212,143 | $ | 185,511 | |||||||
Cost of sales (exclusive of depreciation shown separately below) | (131,363 | ) | (114,822 | ) | |||||||
Selling, general and administrative expenses | (65,623 | ) | (58,593 | ) | |||||||
Depreciation | (5,020 | ) | (4,129 | ) | |||||||
Asset impairment | (430 | ) | (31 | ) | |||||||
Income from operations | 9,707 | 7,936 | |||||||||
Interest income | 266 | 163 | |||||||||
Interest expense | (38 | ) | (39 | ) | |||||||
Income before income taxes | 9,935 | 8,060 | |||||||||
Income tax expense | (4,688 | ) | (2,510 | ) | |||||||
Net income | $ | 5,247 | $ | 5,550 | |||||||
Basic net income per common share | $ | 0.39 | $ | 0.38 | |||||||
Diluted net income per common share | $ | 0.38 | $ | 0.38 | |||||||
Weighted average shares used to compute basic net income per share | 13,568 | 14,680 | |||||||||
Weighted average shares used to compute diluted net income per share | 13,652 | 14,693 | |||||||||
Fifty-Three Weeks Ended | Fifty-Two Weeks Ended | ||||||||||
February 3, 2018 | January 28, 2017 | ||||||||||
(unaudited) | (unaudited) | ||||||||||
Net sales | $ | 755,241 | $ | 695,175 | |||||||
Cost of sales (exclusive of depreciation shown separately below) | (466,022 | ) | (428,167 | ) | |||||||
Selling, general and administrative expenses | (247,062 | ) | (230,666 | ) | |||||||
Depreciation | (18,883 | ) | (17,090 | ) | |||||||
Asset impairment | (507 | ) | (313 | ) | |||||||
Income from operations | 22,767 | 18,939 | |||||||||
Interest income | 883 | 571 | |||||||||
Interest expense | (150 | ) | (159 | ) | |||||||
Income before income taxes | 23,500 | 19,351 | |||||||||
Income tax expense | (8,926 | ) | (6,020 | ) | |||||||
Net income | $ | 14,574 | $ | 13,331 | |||||||
Basic net income per common share | $ | 1.04 | $ | 0.91 | |||||||
Diluted net income per common share | $ | 1.03 | $ | 0.91 | |||||||
Weighted average shares used to compute basic net income per share | 14,058 | 14,657 | |||||||||
Weighted average shares used to compute diluted net income per share | 14,116 | 14,662 | |||||||||
CITI TRENDS, INC. | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | |||||||||||
(in thousands) | |||||||||||
February 3, 2018 | January 28, 2017 | ||||||||||
(unaudited) | (unaudited) | ||||||||||
Assets: | |||||||||||
Cash and cash equivalents | $ | 48,451 | $ | 49,253 | |||||||
Short-term investment securities | 31,500 | 38,026 | |||||||||
Inventory | 137,701 | 134,649 | |||||||||
Prepaid and other current assets | 15,694 | 15,384 | |||||||||
Property and equipment, net | 61,777 | 59,280 | |||||||||
Long-term investment securities | 25,451 | 26,691 | |||||||||
Other noncurrent assets | 6,497 | 9,231 | |||||||||
Total assets | $ | 327,071 | $ | 332,514 | |||||||
Liabilities and Stockholders' Equity: | |||||||||||
Accounts payable | $ | 75,947 | $ | 75,433 | |||||||
Accrued liabilities | 30,775 | 24,505 | |||||||||
Other current liabilities | 2,448 | 471 | |||||||||
Noncurrent liabilities | 8,433 | 8,514 | |||||||||
Total liabilities | 117,603 | 108,923 | |||||||||
Total stockholders' equity | 209,468 | 223,591 | |||||||||
Total liabilities and stockholders' equity | $ | 327,071 | $ | 332,514 | |||||||
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 pretax income
adjusted for proxy contest expenses and net income and earnings
per diluted share adjusted |
||||||||||||||||||||
Fourteen Weeks Ended February 3, 2018 | ||||||||||||||||||||
As Reported | Adjustment (1) | Adjustment (2) | As Adjusted | |||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
Net sales | $ | 212,143 | $ | - | $ | - | $ | 212,143 | ||||||||||||
Cost of sales (exclusive of depreciation shown separately below) | (131,363 | ) | - | - | (131,363 | ) | ||||||||||||||
Selling, general and administrative expenses | (65,623 | ) | - | - | (65,623 | ) | ||||||||||||||
Depreciation and impairment | (5,020 | ) | - | - | (5,020 | ) | ||||||||||||||
Asset impairment | (430 | ) | - | - | (430 | ) | ||||||||||||||
Income from operations | 9,707 | - | - | 9,707 | ||||||||||||||||
Interest income | 266 | - | - | 266 | ||||||||||||||||
Interest expense | (38 | ) | - | - | (38 | ) | ||||||||||||||
Income before income taxes | 9,935 | - | - | 9,935 | ||||||||||||||||
Income tax expense | (4,688 | ) | 1,609 | (3,079 | ) | |||||||||||||||
Net income | $ | 5,247 | $ | - | $ | 1,609 | $ | 6,856 | ||||||||||||
Basic net income per common share | $ | 0.39 | $ | 0.51 | ||||||||||||||||
Diluted net income per common share | $ | 0.38 | $ | 0.50 | ||||||||||||||||
Weighted average number of shares outstanding | ||||||||||||||||||||
Basic | 13,568 | 13,568 | ||||||||||||||||||
Diluted | 13,652 | 13,652 | ||||||||||||||||||
Fifty-Three Weeks Ended February 3, 2018 | ||||||||||||||||||||
As Reported | Adjustment (1) | Adjustment (2) | As Adjusted | |||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
Net sales | $ | 755,241 | $ | - | $ | - | $ | 755,241 | ||||||||||||
Cost of sales (exclusive of depreciation shown separately below) | (466,022 | ) | - | - | (466,022 | ) | ||||||||||||||
Selling, general and administrative expenses | (247,062 | ) | 2,516 | - | (244,546 | ) | ||||||||||||||
Depreciation and impairment | (18,883 | ) | - | - | (18,883 | ) | ||||||||||||||
Asset impairment | (507 | ) | - | - | (507 | ) | ||||||||||||||
Income from operations | 22,767 | 2,516 | - | 25,283 | ||||||||||||||||
Interest income | 883 | - | - | 883 | ||||||||||||||||
Interest expense | (150 | ) | - | - | (150 | ) | ||||||||||||||
Income before income taxes | 23,500 | 2,516 | - | 26,016 | ||||||||||||||||
Income tax expense | (8,926 | ) | (956 | ) | 1,609 | (8,273 | ) | |||||||||||||
Net income | $ | 14,574 | $ | 1,560 | $ | 1,609 | $ | 17,743 | ||||||||||||
Basic net income per common share | $ | 1.04 | $ | 1.26 | ||||||||||||||||
Diluted net income per common share | $ | 1.03 | $ | 1.26 | ||||||||||||||||
Weighted average number of shares outstanding | ||||||||||||||||||||
Basic | 14,058 | 14,058 | ||||||||||||||||||
Diluted | 14,116 | 14,116 | ||||||||||||||||||
(1) Proxy contest expenses and related tax effects | ||||||||||||||||||||
(2) Tax Cuts and Jobs Act effect |
View source version on businesswire.com: http://www.businesswire.com/news/home/20180316005073/en/
Source:
Citi Trends, Inc.
Bruce Smith, 912-443-2075
Chief Executive
Officer