Citi Trends Announces Second Quarter 2019 Results and Declares Quarterly Cash Dividend
Financial Highlights – Second quarter ended
Total sales in the second quarter ended
The Company had net income of
During the second quarter, the Company opened four new stores, relocated or expanded one store and closed three stores.
Financial Highlights – First half ended
Total sales in the first half of fiscal 2019 decreased 1.3% to
In the first half of 2019, the Company had net income of
Smith further noted, “We are pleased with the quality and age of our inventory entering the back half of the year, as we ended the quarter with 5% less inventory than at the end of last year’s second quarter, including a 14% decline in inventory in comparable stores.”
Smith continued, “Peter Sachse, our new director and Special Advisor to the CEO, has been working with management on a number of initiatives, including the appropriate mix of apparel and non-apparel for the important holiday season, organizational structure and resources, system opportunities, customer research, real estate optimization, and other strategic projects. We are executing on these initiatives and believe the benefits will better position
Guidance
The Company is maintaining its full year fiscal 2019 earnings guidance in a range of
Capital Return Program
The Company announced that its Board of Directors has declared a quarterly cash dividend of
During the first half of 2019, the Company repurchased 273,000 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 Measure
The non-GAAP financial measures discussed herein 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 OPERATIONS (unaudited) | |||||||
| (in thousands, except per share data) | |||||||
| Thirteen Weeks Ended | Thirteen Weeks Ended | ||||||
| August 3, 2019 | August 4, 2018 | ||||||
| (unaudited) | (unaudited) | ||||||
| Net sales |
$ |
182,830 |
|
$ |
181,999 |
|
|
| Cost of sales (exclusive of depreciation shown separately below) |
|
(114,612 |
) |
|
(110,398 |
) |
|
| Selling, general and administrative expenses |
|
(62,989 |
) |
|
(62,285 |
) |
|
| Depreciation |
|
(4,607 |
) |
|
(4,676 |
) |
|
| Asset impairment |
|
(472 |
) |
|
(942 |
) |
|
| Income from operations |
|
150 |
|
|
3,698 |
|
|
| Interest income |
|
414 |
|
|
363 |
|
|
| Interest expense |
|
(40 |
) |
|
(38 |
) |
|
| Income before income taxes |
|
524 |
|
|
4,023 |
|
|
| Income tax expense |
|
(147 |
) |
|
(788 |
) |
|
| Net income |
$ |
377 |
|
$ |
3,235 |
|
|
| Basic net income per common share |
$ |
0.03 |
|
$ |
0.24 |
|
|
| Diluted net income per common share |
$ |
0.03 |
|
$ |
0.24 |
|
|
| Weighted average number of shares outstanding | |||||||
| Basic |
|
11,882 |
|
|
13,314 |
|
|
| Diluted |
|
11,882 |
|
|
13,351 |
|
|
| Twenty-Six Weeks Ended | Twenty-Six Weeks Ended | ||||||
| August 3, 2019 | August 4, 2018 | ||||||
| (unaudited) | (unaudited) | ||||||
| Net sales |
$ |
387,862 |
|
$ |
393,031 |
|
|
| Cost of sales (exclusive of depreciation shown separately below) |
|
(242,850 |
) |
|
(239,811 |
) |
|
| Selling, general and administrative expenses |
|
(126,436 |
) |
|
(125,290 |
) |
|
| Depreciation |
|
(9,221 |
) |
|
(9,650 |
) |
|
| Asset impairment |
|
(472 |
) |
|
(942 |
) |
|
| Income from operations |
|
8,883 |
|
|
17,338 |
|
|
| Interest income |
|
793 |
|
|
658 |
|
|
| Interest expense |
|
(78 |
) |
|
(75 |
) |
|
| Income before income taxes |
|
9,598 |
|
|
17,921 |
|
|
| Income tax expense |
|
(1,433 |
) |
|
(3,389 |
) |
|
| Net income |
$ |
8,165 |
|
$ |
14,532 |
|
|
| Basic net income per common share |
$ |
0.68 |
|
$ |
1.08 |
|
|
| Diluted net income per common share |
$ |
0.68 |
|
$ |
1.08 |
|
|
| Weighted average number of shares outstanding | |||||||
| Basic |
|
11,929 |
|
|
13,446 |
|
|
| Diluted |
|
11,944 |
|
|
13,491 |
|
|
| CITI TRENDS, INC. | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | |||||
| (in thousands) | |||||
| August 3, 2019 | August 4, 2018 | ||||
| (unaudited) | (unaudited) | ||||
| Assets: | |||||
| Cash and cash equivalents |
$ |
27,425 |
$ |
40,992 |
|
| Short-term investment securities |
|
37,776 |
|
36,009 |
|
| Inventory |
|
132,050 |
|
138,801 |
|
| Prepaid and other current assets |
|
17,719 |
|
17,701 |
|
| Property and equipment, net |
|
54,843 |
|
57,154 |
|
| Operating lease right of use assets (1) |
|
152,932 |
|
- |
|
| Long-term investment securities |
|
16,976 |
|
13,020 |
|
| Other noncurrent assets |
|
7,927 |
|
7,105 |
|
| Total assets |
$ |
447,648 |
$ |
310,782 |
|
| Liabilities and Stockholders' Equity: | |||||
| Accounts payable |
$ |
71,303 |
$ |
72,096 |
|
| Accrued liabilities |
|
25,327 |
|
27,358 |
|
| Current operating lease liabilities (1) |
|
41,976 |
|
- |
|
| Other current liabilities |
|
1,671 |
|
2,005 |
|
| Noncurrent operating lease liabilities (1) |
|
118,102 |
|
- |
|
| Noncurrent liabilities |
|
1,869 |
|
8,338 |
|
| Total liabilities |
|
260,248 |
|
109,797 |
|
| Total stockholders' equity |
|
187,400 |
|
200,985 |
|
| Total liabilities and stockholders' equity |
$ |
447,648 |
$ |
310,782 |
|
| (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 and earnings per diluted share adjusted for proxy contest-related expenses for the twenty-six weeks ended August 3, 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 or earnings per diluted share prepared in accordance with generally accepted accounting principles (GAAP). | |||
| Thirteen Weeks Ended August 3, 2019 | |||||||||
| As Reported | Adjustment (1) | As Adjusted | |||||||
| (unaudited) | (unaudited) | (unaudited) | |||||||
| Net sales |
$ |
182,830 |
|
$ |
- |
|
$ |
182,830 |
|
| Cost of sales (exclusive of depreciation shown separately below) |
|
(114,612 |
) |
|
- |
|
|
(114,612 |
) |
| Selling, general and administrative expenses |
|
(62,989 |
) |
|
- |
|
|
(62,989 |
) |
| Depreciation |
|
(4,607 |
) |
|
- |
|
|
(4,607 |
) |
| Asset impairment |
|
(472 |
) |
|
- |
|
|
(472 |
) |
| Income from operations |
|
150 |
|
|
- |
|
|
150 |
|
| Interest income |
|
414 |
|
|
- |
|
|
414 |
|
| Interest expense |
|
(40 |
) |
|
- |
|
|
(40 |
) |
| Income before income taxes |
|
524 |
|
|
- |
|
|
524 |
|
| Income tax expense |
|
(147 |
) |
|
- |
|
|
(147 |
) |
| Net income |
$ |
377 |
|
$ |
- |
|
$ |
377 |
|
| Basic net income per common share |
$ |
0.03 |
|
$ |
0.03 |
|
|||
| Diluted net income per common share |
$ |
0.03 |
|
$ |
0.03 |
|
|||
| Weighted average number of shares outstanding | |||||||||
| Basic |
|
11,882 |
|
|
11,882 |
|
|||
| Diluted |
|
11,882 |
|
|
11,882 |
|
|||
| Twenty-Six Weeks Ended August 3, 2019 | |||||||||
| As Reported | Adjustment (1) | As Adjusted | |||||||
| (unaudited) | (unaudited) | (unaudited) | |||||||
| Net sales |
$ |
387,862 |
|
$ |
- |
|
$ |
387,862 |
|
| Cost of sales (exclusive of depreciation shown separately below) |
|
(242,850 |
) |
|
- |
|
|
(242,850 |
) |
| Selling, general and administrative expenses |
|
(126,436 |
) |
|
1,042 |
|
|
(125,394 |
) |
| Depreciation |
|
(9,221 |
) |
|
- |
|
|
(9,221 |
) |
| Asset impairment |
|
(472 |
) |
|
- |
|
|
(472 |
) |
| Income from operations |
|
8,883 |
|
|
1,042 |
|
|
9,925 |
|
| Interest income |
|
793 |
|
|
- |
|
|
793 |
|
| Interest expense |
|
(78 |
) |
|
- |
|
|
(78 |
) |
| Income before income taxes |
|
9,598 |
|
|
1,042 |
|
|
10,640 |
|
| Income tax expense |
|
(1,433 |
) |
|
(156 |
) |
|
(1,589 |
) |
| Net income |
$ |
8,165 |
|
$ |
886 |
|
$ |
9,051 |
|
| Basic net income per common share |
$ |
0.68 |
|
$ |
0.76 |
|
|||
| Diluted net income per common share |
$ |
0.68 |
|
$ |
0.76 |
|
|||
| Weighted average number of shares outstanding | |||||||||
| Basic |
|
11,929 |
|
|
11,929 |
|
|||
| Diluted |
|
11,944 |
|
|
11,944 |
|
|||
| (1) Proxy contest expenses and related tax effects | |||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190822005115/en/
Source:
Bruce Smith
President and Chief Executive Officer
(912) 443-2075