Comparable store sales increased 4.8% in November/December
Company expects fourth quarter EPS to be in a range of $0.40 to
$0.45, pending analysis of an expected charge from implementation of the
Tax Cuts and Jobs Act
SAVANNAH, Ga.--(BUSINESS WIRE)--
Citi Trends, Inc. (NASDAQ:CTRN) today reported unaudited sales for the
first two months of the fourth quarter of fiscal 2017, in advance of its
investor presentation at the ICR Conference on January 9, 2018.
Holiday Sales - November and December 2017
Total sales in the first two months of the fourth quarter of 2017
increased 7.3% to $165.1 million compared with $153.9 million in the
same period of 2016. Comparable store sales increased 5.5% in November
and 4.5% in December.
Earnings Forecast for the Fourth Quarter of
For the fourth quarter of fiscal 2017, the Company expects diluted
earnings per share to be in the range of $0.40 to $0.45 compared with
$0.38 in the fourth quarter of fiscal 2016. Such guidance for the
quarter assumes sales of approximately $211 million, cost of sales
(exclusive of depreciation) of approximately $131 million and selling,
general, administrative and depreciation expenses of approximately $72
million. As disclosed previously, this year's fourth quarter includes a
14th week that is expected to be break-even from a profit
standpoint and also includes an expected increase in incentive
compensation and insurance expense from last year's fourth quarter
totaling $1.7 million, which is expected to have a negative effect of
approximately $0.09 on this year's fourth quarter diluted earnings per
share in relation to the fourth quarter of last year.
The Company is still evaluating the impact of the recent enactment of
the Tax Cuts and Jobs Act (the "Act") on its 2017 financial statements,
and the guidance does not reflect a one-time, non-cash charge that is
expected to be required in the fourth quarter as a result of the Act.
While the Company expects its financial results and cash flows to
benefit in future years from the reduction in the federal corporate tax
rate pursuant to the Act, the Company anticipates that it will record a
charge to decrease the value of its deferred tax assets from the
previous 35% federal tax rate to the new 21% rate in the fourth quarter.
Bruce Smith, Acting Chief Executive Officer, commented, "We were very
pleased with a 4.8% comparable store sales increase in the first two
months of the quarter, which was on top of a 2.9% increase during the
same period the previous year. All five of our major merchandise
categories continued to contribute to the growth in comparable store
As a result of the strong execution by the Citi Trends' team, we are
well positioned to complete our fifth consecutive quarter of comparable
store sales increases, which we believe is an indication that our
strategic efforts to drive sales in both apparel and non-apparel
categories are working. Importantly, we believe these strong sales
results have led to high-quality inventory levels as we begin to prepare
for the spring selling season.
Fiscal 2017 has been an extremely good year thus far for Citi Trends, as
we have built sales momentum, significantly improved earnings and
returned $25 million to our stockholders in the form of a share
repurchase program. As we move forward, we are very positive about Citi
Trends' future. We believe that continued comparable store sales
increases and store unit growth, leading to increased profitability and
cash flows, are reasonable expectations for our Company. Importantly,
the realization of those goals would allow us to continue to return
capital to our stockholders as part of our expanded capital return
program announced earlier in 2017. We look forward to providing more
details regarding our 2017 fourth quarter results and our 2018
expectations during our March 20, 2018 investor call."
About Citi Trends
Citi Trends, Inc. is a value-priced retailer of urban fashion apparel
and accessories for the entire family. The Company operates 547 stores
located in 31 states. Citi Trends' website address is www.cititrends.com.
All statements other than historical facts contained in this news
release, including statements regarding our future financial results and
position, business policy and plans, objectives of management for future
operations, management's expectations and beliefs, and our intentions
and ability to pay dividends and complete any share repurchase
authorizations, are forward-looking statements within the meaning of the
federal securities laws, including the Private Securities Litigation
Reform Act of 1995, 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,
although not all forward-looking statements contain such language. Statements
with respect to earnings guidance are forward-looking statements. Investors
are cautioned not to place undue reliance on any forward-looking
statements and that any such forward-looking statements are subject to
the finalization of the Company's quarter-end financial and accounting
procedures, including the assessment of the impact of the Tax Cuts and
Jobs Act, 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,
the ability to anticipate and respond to fashion trends and the impact
of tax reform and legislation, including the effects of the Tax Cuts and
Jobs Act. Any forward-looking statements by the Company, with
respect to earnings guidance, future performance or management's
expectations, 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, 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180108006491/en/
Citi Trends, Inc.
Bruce Smith, 912-443-2075
Executive Officer, Chief Operating Officer and Chief Financial Officer
Source: Citi Trends, Inc.
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