Citi Trends Announces First Quarter 2019 Results and Declares Quarterly Dividend
Financial Highlights – First quarter ended
Total sales in the first quarter ended
On a GAAP basis, the Company had net income of
Smith further noted, “In addition to these efforts to improve the mix
and apparel fashion, we engaged a consulting firm in
Smith continued, “Importantly, as reflected in our first quarter gross
margin, we took the necessary markdowns to end the period clean from an
inventory perspective. We entered the second quarter with our
inventories in good shape, down 1.1% in comparable stores. Our total
inventory increase of 4.7% is attributable to merchandise in new stores
that opened since last year’s first quarter and higher levels of
distribution center inventory, including increases in next-season-buys.
In addition to our merchandising efforts, we continue to look for ways
to reduce costs, as reflected in first quarter S, G & A expenses that
increased only
During the first quarter, the Company opened one new store and closed two stores.
Guidance
As the Company enters the second quarter, comparable store sales have been down 6%, against a difficult comparison last year when they were up 10% during the same period. As discussed in last year’s earnings release, the two plus-week timeframe at the beginning of the second quarter in 2018 benefited from timely warm weather. The Company believes that the quarter-to-date comparable store sales decrease of 6% will narrow during the remainder of the quarter, resulting in a full second quarter range of negative 1% to negative 3%. In the second half of the year, the Company expects comparable store sales to be up 1% to 3% as efforts to further accelerate the non-apparel sales mix and improve the apparel fashion take hold.
Based on the actual results in the first quarter, together with
expectations for a comparable store sales decrease of 1% to 3% in the
second quarter and comparable store sales that are up 1% to 3% in the
second half of the year, the Company is lowering its earnings guidance
to a range of
Capital Return Program
The Company announced that its Board of Directors has declared a
quarterly dividend of
During the first quarter of 2019, the Company repurchased 82,000 shares
of its common stock at an aggregate cost of
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 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, sales
or new store guidance are forward-looking statements.Investors
are cautioned that any such forward-looking statements are subject to
the finalization of the Company’s quarter-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) | |||||||||||
| Thirteen Weeks Ended | Thirteen Weeks Ended | ||||||||||
| May 4, 2019 | May 5, 2018 | ||||||||||
| (unaudited) | (unaudited) | ||||||||||
| Net sales | $ | 205,032 | $ | 211,032 | |||||||
| Cost of sales (exclusive of depreciation shown separately below) | (128,238 | ) | (129,413 | ) | |||||||
| Selling, general and administrative expenses | (63,447 | ) | (63,005 | ) | |||||||
| Depreciation | (4,614 | ) | (4,974 | ) | |||||||
| Income from operations | 8,733 | 13,640 | |||||||||
| Interest income | 379 | 295 | |||||||||
| Interest expense | (38 | ) | (37 | ) | |||||||
| Income before income taxes | 9,074 | 13,898 | |||||||||
| Income tax expense | (1,286 | ) | (2,601 | ) | |||||||
| Net income | $ | 7,788 | $ | 11,297 | |||||||
| Basic net income per common share | $ | 0.65 | $ | 0.83 | |||||||
| Diluted net income per common share | $ | 0.65 | $ | 0.83 | |||||||
| Weighted average shares used to compute basic net income per share | 11,976 | 13,578 | |||||||||
| Weighted average shares used to compute diluted net income per share | 12,006 | 13,631 | |||||||||
| CITI TRENDS, INC. | |||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| (unaudited) | |||||||||||
| (in thousands) | |||||||||||
| May 4, 2019 | May 5, 2018 | ||||||||||
| (unaudited) | (unaudited) | ||||||||||
| Assets: | |||||||||||
| Cash and cash equivalents | $ | 29,484 | $ | 53,978 | |||||||
| Short-term investment securities | 43,135 | 33,504 | |||||||||
| Inventory | 131,254 | 125,331 | |||||||||
| Prepaid and other current assets | 14,018 | 16,372 | |||||||||
| Property and equipment, net | 54,921 | 59,156 | |||||||||
| Operating lease right of use assets (1) | 149,125 | - | |||||||||
| Long-term investment securities | 7,777 | 21,707 | |||||||||
| Other noncurrent assets | 7,834 | 6,203 | |||||||||
| Total assets | $ | 437,548 | $ | 316,251 | |||||||
| Liabilities and Stockholders' Equity: | |||||||||||
| Accounts payable | $ | 64,201 | $ | 63,814 | |||||||
| Accrued liabilities | 22,004 | 21,971 | |||||||||
| Current operating lease liabilities (1) | 41,027 | - | |||||||||
| Other current liabilities | 2,808 | 5,530 | |||||||||
| Noncurrent operating lease liabilities (1) | 115,121 | - | |||||||||
| Other noncurrent liabilities | 1,838 | 8,325 | |||||||||
| Total liabilities | 246,999 | 99,640 | |||||||||
| Total stockholders' equity | 190,549 | 216,611 | |||||||||
| Total liabilities and stockholders' equity | $ | 437,548 | $ | 316,251 | |||||||
|
(1) Lease assets and liabilities recorded in connection with the adoption of ASU No. 2016-02, Leases (Topic 842) |
|
|
| 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 net income adjusted for proxy contest-related expenses, earnings per diluted share adjusted for proxy contest-related expenses and selling, general and administrative expenses adjusted for proxy contest-related expenses for the thirteen weeks ended May 4, 2019. The Company believes that excluding proxy contest expenses and their related tax effects from its financial results reflects operating results that are more indicative of the Company's ongoing operating performance while improving comparability to prior and future periods, and as such, may provide investors with an enhanced understanding of the Company's past financial performance and prospects for the future. This information is not intended to be considered in isolation or as a substitute for net income, earnings per diluted share or selling, general and administrative expenses prepared in accordance with generally accepted accounting principles (GAAP). | |
| Thirteen Weeks Ended May 4, 2019 | ||||||||||||||||
| As Reported | Adjustment (1) | As Adjusted | ||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
| Net sales | $ | 205,032 | $ | - | $ | 205,032 | ||||||||||
| Cost of sales (exclusive of depreciation shown separately below) | (128,238 | ) | - | (128,238 | ) | |||||||||||
| Selling, general and administrative expenses | (63,447 | ) | 1,042 | (62,405 | ) | |||||||||||
| Depreciation | (4,614 | ) | - | (4,614 | ) | |||||||||||
| Income from operations | 8,733 | 1,042 | 9,775 | |||||||||||||
| Interest income | 379 | - | 379 | |||||||||||||
| Interest expense | (38 | ) | - | (38 | ) | |||||||||||
| Income before income taxes | 9,074 | 1,042 | 10,116 | |||||||||||||
| Income tax expense | (1,286 | ) | (148 | ) | (1,434 | ) | ||||||||||
| Net income | $ | 7,788 | $ | 894 | $ | 8,682 | ||||||||||
| Basic net income per common share | $ | 0.65 | $ | 0.72 | ||||||||||||
| Diluted net income per common share | $ | 0.65 | $ | 0.72 | ||||||||||||
| Weighted average shares used to compute basic net income per share | 11,976 | 11,976 | ||||||||||||||
| Weighted average shares used to compute diluted net income per share | 12,006 | 12,006 | ||||||||||||||
| (1) Proxy contest expenses and related tax effects | ||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190523005151/en/
Source:
Bruce Smith
President and Chief Executive Officer
(912)
443-2075