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Citi Trends Announces Third Quarter 2016 Results


Third quarter 2016 loss per share of $(0.06) compared with $0.04 income last year

Year-to-date 2016 income per share of $0.53 compared with $0.79 last year

SAVANNAH, Ga.--(BUSINESS WIRE)-- Citi Trends, Inc. (NASDAQ: CTRN) today reported results for the third quarter of fiscal 2016.

Financial Highlights - Third quarter ended October 29, 2016

Total sales in the third quarter ended October 29, 2016 increased 1.1% to $160.7 million compared with $158.9 million in the third quarter ended October 31, 2015. Comparable store sales decreased 1.0% in the quarter.

Net loss was $(0.8) million, or $(0.06) per diluted share, in the third quarter of 2016 compared with net income of $0.6 million, or $0.04 per diluted share, in last year's third quarter. Selling, general and administrative expenses in last year's third quarter included a $0.9 million pretax benefit from a legal recovery, which had a positive impact on income per diluted share of $0.04 in the third quarter of 2015.

During this year's third quarter, the Company opened seven new stores, relocated or expanded three other stores and closed four stores.

Financial Highlights - First three quarters ended October 29, 2016

Total sales in the first three quarters of fiscal 2016 increased 0.4% to $509.7 million compared with $507.7 million in the same period of fiscal 2015. Comparable store sales decreased 1.6% in the first three quarters of this year.

Net income was $7.8 million, or $0.53 per diluted share, in the first three quarters of this year, compared with $12.1 million, or $0.79 per diluted share, in last year's first three quarters.

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 (212) 231-2910. A replay of the conference call will be available until November 29, 2016, by dialing (402) 977-9140 and entering the passcode, 21818614.

The live broadcast of Citi Trends' conference call will be available online at the Company's website, www.cititrends.com, under 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 an off-price retailer of urban fashion apparel and accessories for the entire family. The Company operates 533 stores located in 31 states. Citi Trends' website address is www.cititrends.com. CTRN-G

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 quarterly 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. Any forward-looking statements by the Company, with respect to earnings guidance, the declaration and payment of dividends, the repurchase of the Company's shares, 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, 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 OPERATIONS (unaudited)
(in thousands, except per share data)
       
Thirteen Weeks Ended Thirteen Weeks Ended
October 29, 2016 October 31, 2015
(unaudited) (unaudited)
Net sales $ 160,716 $ 158,937
 
Cost of sales (exclusive of depreciation shown separately below) (100,386 ) (97,565 )
Selling, general and administrative expenses (57,637 ) (55,616 )
Depreciation (4,223 ) (4,589 )
Asset impairment   (61 )     -  
(Loss) income from operations (1,591 ) 1,167
Interest income 146 107
Interest expense   (39 )   (107 )
(Loss) income before income tax benefit (expense) (1,484 ) 1,167
Income tax benefit (expense)   648     (553 )
Net (loss) income $ (836 ) $ 614  
 
Basic net (loss) income per common share $ (0.06 ) $ 0.04  
Diluted net (loss) income per common share $ (0.06 ) $ 0.04  
 
Weighted average shares used to compute basic net (loss) income per share   14,677     15,056  
Weighted average shares used to compute diluted net (loss) income per share   14,677     15,115  
 
 
 
Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended
October 29, 2016 October 31, 2015
(unaudited) (unaudited)
Net sales $ 509,664 $ 507,728
 
Cost of sales (exclusive of depreciation shown separately below) (313,345 ) (308,253 )
Selling, general and administrative expenses (172,073 ) (167,131 )
Depreciation (12,961 ) (14,022 )
Asset impairment   (282 )   -  
Income from operations 11,003 18,322
Interest income 408 222
Interest expense   (120 )   (201 )
Income before income tax expense 11,291 18,343
Income tax expense   (3,510 )   (6,288 )
Net income $ 7,781   $ 12,055  
 
Basic net income per common share $ 0.53   $ 0.80  
Diluted net income per common share $ 0.53   $ 0.79  
 
Weighted average shares used to compute basic net income per share   14,649     15,112  
Weighted average shares used to compute diluted net income per share   14,652     15,167  
 
 
CITI TRENDS, INC.
CONDENSED BALANCE SHEETS (unaudited)
(in thousands)
       
October 29, 2016 October 31, 2015
(unaudited) (unaudited)
Assets:
Cash and cash equivalents $ 36,956 $ 41,585
Short-term investment securities 34,132 34,142
Inventory 130,752 129,433
Prepaid and other current assets (1) 18,570 13,705
Property and equipment, net 54,478 49,978
Long-term investment securities 29,183 30,582
Other noncurrent assets (1)   9,211   13,504
Total assets $ 313,282 $ 312,929
 
Liabilities and Stockholders' Equity:
Accounts payable $ 59,098 $ 58,210
Accrued liabilities 25,718 29,759
Other current liabilities 1,974 2,284
Noncurrent liabilities   8,130   6,225
Total liabilities 94,920 96,478
 
Total stockholders' equity   218,362   216,451
Total liabilities and stockholders' equity $ 313,282 $ 312,929
 

(1)

October 31, 2015 deferred tax asset balances reflect a reclassification between current and noncurrent assets totaling $4,544 in connection with the retrospective adoption of ASU 2015-17 in 2016.

Citi Trends, Inc.
Bruce Smith, 912-443-2075
Chief Operating Officer and Chief Financial Officer
or
Jason Mazzola, 912-443-3990
President and Chief Executive Officer

Source: Citi Trends, Inc.

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