Citi Trends Announces Fourth Quarter and Fiscal 2021 Results
Q4 2021 total sales of
Q4 2021 gross margin of 40.4%, an increase of 70 bps vs. Q4 2019
Q4 2021 earnings per diluted share of
Fiscal 2021 total sales of
Fiscal 2021 earnings per diluted share of
Company enters into definitive agreement for a sale-leaseback transaction
The Company is reporting the following operating results for the fourth quarter and full year 2021 relative to the same periods of 2019 due to the uniquely challenging operating environment in 2020 resulting from the COVID-19 pandemic.
Financial Highlights – Fourth Quarter 2021
- Total sales increased 14.2% vs. Q4 2019
- Comparable store sales increased 9.2% vs. Q4 2019
- Gross margin increased 70 bps to 40.4% compared to 39.7% in Q4 2019
- Operating margin was 5.2% compared to 1.4% in Q4 2019
-
Earnings per diluted share was
$1.16 compared$0.84 in Q4 2019 - Quarter-end total inventory decreased 10.4% vs. Q4 2019
| Fourth Quarter | Fourth Quarter | ||||||||||||||||||
| (in thousands, except per share data) |
|
2021 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2021 vs 2019 |
|||||
| Net sales |
$ |
240,974 |
|
$ |
251,919 |
|
$ |
211,013 |
|
+14.2% | |||||||||
| Comparable store sales |
|
-6.2 |
% |
+16.7% | +3.1% | +9.2% | |||||||||||||
| Gross margin |
|
40.4 |
% |
|
42.7 |
% |
|
39.7 |
% |
+70 bps | |||||||||
| Operating income |
$ |
12,577 |
|
$ |
23,699 |
|
$ |
11,254 |
|
||||||||||
| Operating margin |
|
5.2 |
% |
|
9.4 |
% |
|
1.4 |
% |
+380 bps | |||||||||
| Net income |
$ |
9,839 |
|
$ |
18,038 |
|
$ |
9,422 |
|
||||||||||
| Diluted earnings per share |
$ |
1.16 |
|
$ |
1.81 |
|
$ |
0.84 |
|
||||||||||
| Open stores - end of period |
|
609 |
|
|
585 |
|
|
571 |
|
+6.7% | |||||||||
Financial Highlights – Full Year 2021
- Total sales increased 26.8% vs. 2019
- Comparable store sales increased 22.2% vs. 2019
- Gross margin increased 310 bps to 41.1% compared to 38.0% in 2019
- Operating margin was 8.0% compared to 2.4% in 2019
-
Earnings per diluted share was
$6.91 compared to$1.41 in 2019 - Opened 27 new stores and remodeled 25 stores during the year
| Fiscal Year | Fiscal Year | ||||||||||||
| (in thousands, except per share data) |
2021 |
|
20201 |
|
2019 |
|
|
2021 vs 2019 |
|||||
| Net sales |
|
|
|
+26.8% | |||||||||
| Comparable store sales | +25.1% |
-2.1% |
-0.1% |
+22.2% | |||||||||
| Gross margin |
41.1% |
39.8% |
38.0% |
+310 bps | |||||||||
| Operating income |
|
|
|
||||||||||
| Operating margin |
8.0% |
4.1% |
2.4% |
+560 bps | |||||||||
| Net income |
|
|
|
||||||||||
| Diluted earnings per share |
|
|
|
||||||||||
| Open stores - end of period |
609 |
585 |
571 |
+6.7% | |||||||||
1 In Fiscal 2020, the Company’s stores were closed for approximately 16% of the total available store days
Chief Executive Officer Comments
Makuen continued, “In 2022, we are excited to continue executing our strategic growth priorities that began in 2019 with an extreme focus on optimizing our product mix, upgrading our in-store experience and investing in growth via new stores and infrastructure improvements. With tremendous newness in our 609 stores, our first fiscal quarter to date sales trend is improving as compared to January when our sales were negatively impacted by the sharp spike in COVID-19 cases from the Omicron variant. As we lap an extraordinary first quarter of fiscal 2021 when the March government stimulus contributed to a total sales increase of 39% vs. Q1 2019, we are planning first quarter 2022 total sales to be down 25-30% vs. the same period last year. Once we exit the first quarter, we expect our sales to accelerate as the year progresses. Our three-year strategic growth plan remains intact fueled by this year’s CTx remodel program, the expected addition of approximately 35 new stores and the launch of expanded and new product assortments, all of which will continue into 2023 and 2024.”
Capital Return Program Update
In the fourth quarter of 2021, the Company repurchased approximately 95,000 shares of its common stock at an aggregate cost of
The Company underwent a comprehensive evaluation of its owned real estate. As a result, the Company has entered into an agreement to execute a sale-leaseback of its distribution center located in
Guidance
Fiscal 2022 is difficult to predict as the Company is up against last year’s largest government stimulus and the lifting of COVID-19 restrictions that led to a surge in consumer demand, particularly in the first quarter of fiscal 2021. In addition, the country is currently experiencing unprecedented inflationary pressures which are especially impactful to the Company’s core customers. Furthermore, rising wage rates and increases in supply chain expenses continue from last year. As a result of these macro factors, the Company is updating its guidance. This guidance excludes any impact from the Company’s sale-leaseback transactions or any potential share repurchases.
- First quarter fiscal 2022 total sales decrease of 25-30% as compared to an increase of 39% in the first quarter of fiscal 2021 vs. first quarter of fiscal 2019
-
First quarter fiscal 2022 diluted earnings per share of
$0.15 to$0.40 - Combined second through fourth quarter fiscal 2022 total sales to increase low-to-mid single digits as compared to an increase of 22% for the same period in 2021 vs. 2019; at the midpoint of guidance, this represents an increase in total sales of 25% to 2019
-
Combined second through fourth quarter fiscal 2022 diluted earnings per share of
$3.90 to$4.20 ; at the midpoint of guidance, this represents an increase of 14% vs. the same period in 2021 -
Fiscal 2022 diluted earnings per share of
$4.05 to$4.60 , compared to$6.91 in fiscal 2021 and$1.41 in fiscal 2019 - Expects to open approximately 35 new stores and remodel approximately 50 stores during fiscal 2022
- As of fiscal 2023 and beyond, the Company expects to generate at least 20% year on year earnings per share and operating income growth
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 call, may contain or constitute information that has not been disclosed previously.
About
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 and expectations of management for future operations and capital allocation expectations, are forward-looking statements that are subject to material risks and uncertainties. The words "believe," "may," "could," "plans," "estimate," “expects,” "continue," "anticipate," "intend," "expect," “upcoming,” “trend” 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 our Annual Reports and Quarterly Reports on Forms 10-K and 10-Q, respectively, and any amendments thereto, filed with the
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | |||||||||||
| (in thousands, except per share data) | |||||||||||
| Fourth Quarter | Fourth Quarter | Fourth Quarter | |||||||||
|
2021 |
|
2020 |
|
2019 |
|
||||||
| (unaudited) | (unaudited) | (unaudited) | |||||||||
| Net sales |
$ |
240,974 |
|
$ |
251,919 |
|
$ |
211,013 |
|
||
| Cost of sales (exclusive of depreciation shown separately below) |
|
(143,659 |
) |
|
(144,274 |
) |
|
(127,311 |
) |
||
| Selling, general and administrative expenses |
|
(79,563 |
) |
|
(79,269 |
) |
|
(67,654 |
) |
||
| Depreciation |
|
(5,175 |
) |
|
(4,677 |
) |
|
(4,794 |
) |
||
| Income from operations |
|
12,577 |
|
|
23,699 |
|
|
11,254 |
|
||
| Interest income |
|
7 |
|
|
3 |
|
|
363 |
|
||
| Interest expense |
|
(106 |
) |
|
(43 |
) |
|
(41 |
) |
||
| Income before income taxes |
|
12,478 |
|
|
23,659 |
|
|
11,576 |
|
||
| Income tax expense |
|
(2,639 |
) |
|
(5,621 |
) |
|
(2,154 |
) |
||
| Net income |
$ |
9,839 |
|
$ |
18,038 |
|
$ |
9,422 |
|
||
| Basic net income per common share |
$ |
1.17 |
|
$ |
1.83 |
|
$ |
0.84 |
|
||
| Diluted net income per common share |
$ |
1.16 |
|
$ |
1.81 |
|
$ |
0.84 |
|
||
| Weighted average number of shares outstanding | |||||||||||
| Basic |
|
8,404 |
|
|
9,872 |
|
|
11,202 |
|
||
| Diluted |
|
8,516 |
|
|
9,969 |
|
|
11,271 |
|
||
| Fiscal 2021 | Fiscal 20201 | Fiscal 2019 | |||||||||
| (unaudited) | (unaudited) | (unaudited) | |||||||||
| Net sales |
$ |
991,595 |
|
$ |
783,294 |
|
$ |
781,925 |
|
||
| Cost of sales (exclusive of depreciation shown separately below) |
|
(584,063 |
) |
|
(471,618 |
) |
|
(484,740 |
) |
||
| Selling, general and administrative expenses |
|
(307,622 |
) |
|
(260,198 |
) |
|
(259,629 |
) |
||
| Depreciation |
|
(20,393 |
) |
|
(19,259 |
) |
|
(18,535 |
) |
||
| Asset impairment |
|
- |
|
|
(286 |
) |
|
(472 |
) |
||
| Income from operations |
|
79,517 |
|
|
31,933 |
|
|
18,549 |
|
||
| Interest income |
|
31 |
|
|
238 |
|
|
1,577 |
|
||
| Interest expense |
|
(306 |
) |
|
(776 |
) |
|
(158 |
) |
||
| Income before income taxes |
|
79,242 |
|
|
31,395 |
|
|
19,968 |
|
||
| Income tax expense |
|
(17,002 |
) |
|
(7,417 |
) |
|
(3,465 |
) |
||
| Net income |
$ |
62,240 |
|
$ |
23,978 |
|
$ |
16,503 |
|
||
| Basic net income per common share |
$ |
6.98 |
|
$ |
2.33 |
|
$ |
1.41 |
|
||
| Diluted net income per common share |
$ |
6.91 |
|
$ |
2.32 |
|
$ |
1.41 |
|
||
| Weighted average number of shares outstanding | |||||||||||
| Basic |
|
8,912 |
|
|
10,283 |
|
|
11,674 |
|
||
| Diluted |
|
9,013 |
|
|
10,325 |
|
|
11,699 |
|
||
1 In Fiscal 2020, the Company’s stores were closed for approximately 16% of the total available store days during the year due to the impact of COVID-19
| CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | |||||
| (in thousands) | |||||
|
2021 |
2020 |
||||
| (unaudited) | (unaudited) | ||||
| Assets: | |||||
| Cash and cash equivalents |
$ |
49,788 |
$ |
123,177 |
|
| Inventory |
|
123,835 |
|
103,845 |
|
| Prepaid and other current assets |
|
18,984 |
|
17,420 |
|
| Property and equipment, net |
|
75,282 |
|
63,514 |
|
| Operating lease right of use assets |
|
201,827 |
|
179,673 |
|
| Other noncurrent assets |
|
4,309 |
|
6,964 |
|
| Total assets |
$ |
474,025 |
$ |
494,593 |
|
| Liabilities and Stockholders' Equity: | |||||
| Accounts payable |
$ |
98,879 |
$ |
84,832 |
|
| Accrued liabilities |
|
40,428 |
|
45,907 |
|
| Current operating lease liabilities |
|
47,803 |
|
46,983 |
|
| Other current liabilities |
|
364 |
|
5,123 |
|
| Noncurrent operating lease liabilities |
|
168,304 |
|
145,828 |
|
| Other noncurrent liabilities |
|
2,104 |
|
2,286 |
|
| Total liabilities |
|
357,882 |
|
330,959 |
|
| Total stockholders' equity |
|
116,143 |
|
163,634 |
|
| Total liabilities and stockholders' equity |
$ |
474,025 |
$ |
494,593 |
|
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