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Citi Trends Announces Third Quarter 2011 Results


Third quarter sales increased 2.2%; comparable store sales decreased 9.3%

Third quarter 2011 loss per share of $0.46 compared with $0.03 loss last year

SAVANNAH, Ga.--(BUSINESS WIRE)-- Citi Trends, Inc. (NASDAQ: CTRN) today reported results for the third quarter of fiscal 2011.

Financial Highlights — Third quarter ended October 29, 2011

Total sales in the third quarter ended October 29, 2011 increased 2.2% to $143.1 million compared with $140.0 million in the third quarter ended October 30, 2010. Comparable store sales decreased 9.3%.

Net loss was $6.8 million, or $0.46 per diluted share, in the third quarter of 2011, compared with a net loss of $0.4 million, or $0.03 per diluted share, in last year's third quarter. The increase in this year's quarterly loss was primarily a result of the negative comparable store sales and a related need to take clearance markdowns. In addition, this year's third quarter was affected by severance costs of $1.2 million, incurred primarily in connection with the elimination of 40 positions in the Company's corporate offices, distribution centers and store organization, and $0.7 million of non-cash impairment expense related to the property and equipment at nine underperforming stores. The severance and impairment expenses had an adverse impact on loss per diluted share of $0.08 in the third quarter of 2011.

The Company opened 26 stores, relocated or expanded 4 others and closed 1 store in the third quarter of 2011, reaching a total store count of 507 at the end of the quarter.

Financial Highlights — First three quarters ended October 29, 2011

Total sales in the first three quarters of fiscal 2011 increased 2.7% to $462.5 million compared with $450.5 million in the same period of fiscal 2010. Comparable store sales decreased 9.1%. Net loss was $4.7 million, or $0.32 per diluted share, in the first three quarters of 2011, compared with net income of $11.5 million, or $0.79 per diluted share, in last year's first three quarters. Year-to-date results include the aforementioned severance costs and impairment expense in the third quarter and $1.6 million of impairment expense and $0.6 million of costs incurred in connection with the closing of the Company's Savannah, Georgia distribution center in the second quarter of 2011. Such expenses in the second and third quarters had an adverse impact on loss per diluted share of $0.17 in the first three quarters of 2011.

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) 231-2902. A replay of the conference call will be available until November 29, 2011, by dialing (402) 977-9140 and entering the passcode, 21543976. The live broadcast of the quarterly conference call will be available online at the Company's website, www.cititrends.com, as well as http://ir.cititrends.com/events.cfm, beginning today at 9:00 a.m. ET. The online replay will follow shortly after the call and continue through November 29, 2011.

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. After opening 4 stores thus far in November 2011, the Company currently operates 511 stores located in 29 states. 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 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 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, 2011 October 30, 2010
(unaudited) (unaudited)
Net sales $ 143,067 $ 140,037
Cost of sales   94,909     88,356  
Gross profit 48,158 51,681
Selling, general and administrative expenses 53,059 47,243
Depreciation and amortization 6,454 5,134
Asset impairment   696     190  
Loss from operations (12,051 ) (886 )
Interest income 61 41
Interest expense   (17 )   (8 )
Loss before income tax benefit (12,007 ) (853 )
Income tax benefit   (5,246 )   (459 )
Net loss $ (6,761 ) $ (394 )
 
Basic net loss per common share $ (0.46 ) $ (0.03 )
Diluted net loss per common share $ (0.46 ) $ (0.03 )
 
 
Weighted average shares used to compute basic net loss per share   14,602     14,519  
Weighted average shares used to compute diluted net loss per share   14,602     14,519  
 
 
 
Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended
October 29, 2011 October 30, 2010
(unaudited) (unaudited)
Net sales $ 462,468 $ 450,485
Cost of sales   295,789     278,134  
Gross profit 166,679 172,351
Selling, general and administrative expenses 154,819 140,119
Depreciation and amortization 18,389 14,653
Asset impairment   2,305     190  
(Loss) income from operations (8,834 ) 17,389
Interest income 180 140
Interest expense   (27 )   (17 )
(Loss) income before income tax (benefit) expense (8,681 ) 17,512
Income tax (benefit) expense   (3,982 )   6,024  
Net (loss) income $ (4,699 ) $ 11,488  
 
Basic net (loss) income per common share $ (0.32 ) $ 0.79  
Diluted net (loss) income per common share $ (0.32 ) $ 0.79  
 
 
Weighted average shares used to compute basic net (loss) income per share   14,584     14,497  
Weighted average shares used to compute diluted net (loss) income per share   14,584     14,518  
 
 
 
CITI TRENDS, INC.
CONDENSED BALANCE SHEETS (unaudited)
(in thousands)
 
October 29, 2011 October 30, 2010
(unaudited) (unaudited)
Assets:
Cash and cash equivalents $ 33,225 $ 69,632
Short-term investment securities - 4,752
Inventory 127,156 115,273
Prepaid and other current assets 27,836 21,995
Assets held for sale 1,415 -
Property and equipment, net 95,369 76,879
Long-term investment securities 19,760 -
Other noncurrent assets   3,308     4,470  
Total assets $ 308,069   $ 293,001  
 
Liabilities and Stockholders' Equity:
Accounts payable $ 64,120 $ 61,355
Accrued liabilities 25,126 22,111
Other current liabilities 3,363 3,200
Noncurrent liabilities   12,974     10,422  
Total liabilities 105,583 97,088
 
Total stockholders' equity   202,486     195,913  
Total liabilities and stockholders' equity $ 308,069   $ 293,001  

Citi Trends, Inc.
Bruce Smith, 912-443-2075
Chief Financial Officer
or
David Alexander, 912-443-3924
President and Chief Executive Officer

Source: Citi Trends, Inc.

News Provided by Acquire Media

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