Citi Trends Announces Third Quarter 2008 Results
SAVANNAH, Ga., Nov 24, 2008 (BUSINESS WIRE) --
Citi Trends, Inc. (NASDAQ: CTRN) today reported results for the third quarter ended November 1, 2008.
Financial Highlights -- Third quarter ended November 1, 2008
Total sales in the third quarter ended November 1, 2008 increased 5.4% to $104.9 million compared with $99.5 million in the third quarter ended November 3, 2007. Comparable store sales decreased 4.2% in the third quarter. The net loss in this year's third quarter was $687,000 compared with a net loss of $513,000 in last year's third quarter. Loss per diluted share was $0.05 in the third quarter of 2008 compared with a loss of $0.04 in 2007's third quarter.
The decline in comparable store sales in this year's third quarter pressured the Company's results in relation to the third quarter of 2007. However, the Company's efforts to improve its management of inventory levels led to fewer markdowns than in last year's third quarter which, together with an increased focus on controlling inventory shrinkage, led to a higher gross margin, substantially offsetting the effect of the comparable store sales decrease.
The Company opened 7 stores, relocated or expanded 3 others, and closed 1 store in the third quarter of 2008, reaching a total store count of 341 at the end of the quarter. Since quarter-end, the Company has opened an additional 14 stores.
Financial Highlights -- First three quarters ended November 1, 2008
Total sales in the first three quarters of fiscal 2008 increased 12.8% to $341.6 million compared with $302.9 million in the first three quarters of fiscal year 2007. Comparable store sales increased 0.8% in the first three quarters of this year. Net income was $7.3 million compared with $5.8 million last year. Earnings per diluted share in the first three quarters of 2008 was $0.51 compared with $0.41 during the same period of 2007, which included $0.04 of expenses related to a 2007 secondary stock offering.
Fiscal 2008 Outlook
The Company's estimate of fiscal 2008 earnings is a range of $0.95 to $1.05 per diluted share. This guidance is based upon an anticipated comparable store sales decrease of 3% to 6% in the fourth quarter. For the year, the Company expects to increase selling square footage by approximately 15%. The effective tax rate for 2008 is estimated to approximate 33%.
The Company reminds investors of the complexity of accurately assessing future results given the difficulty in predicting fashion trends, consumer preferences and general economic conditions and the impact of other business variables. See "Forward-Looking Statements" below for more information regarding these uncertainties.
Investor Conference Call and Webcast
Citi Trends will host a conference call today at 5:00 p.m. ET. The number to call for the live interactive teleconference is (303)262-2143. A replay of the conference call will be available until December 1, 2008, by dialing (303)590-3000 and entering the passcode, 11113318#. The live broadcast of Citi Trends' 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 5:00 p.m. ET. The online replay will follow shortly after the call and continue until December 1, 2008.
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. The Company currently operates 355 stores located in 22 states in the Southeast, Mid-Atlantic and Midwest regions and the state of Texas. 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.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 | |||||||
| November 1, 2008 | November 3, 2007 | |||||||
| (unaudited) | (unaudited) | |||||||
| Net sales | $ | 104,948 | $ | 99,542 | ||||
| Cost of sales | 66,208 | 65,026 | ||||||
| Gross profit | 38,740 | 34,516 | ||||||
| Selling, general and administrative expenses | 36,482 | 32,455 | ||||||
| Depreciation and amortization | 4,134 | 3,265 | ||||||
| Loss from operations | (1,876 | ) | (1,204 | ) | ||||
| Interest income | 790 | 521 | ||||||
| Interest expense | (94 | ) | (107 | ) | ||||
| Loss before income tax benefit | (1,180 | ) | (790 | ) | ||||
| Income tax benefit | (493 | ) | (277 | ) | ||||
| Net loss | $ | (687 | ) | $ | (513 | ) | ||
| Basic net loss per common share | $ | (0.05 | ) | $ | (0.04 | ) | ||
| Diluted net loss per common share | $ | (0.05 | ) | $ | (0.04 | ) | ||
| Weighted average number of shares outstanding | ||||||||
| Basic | 14,141 | 14,023 | ||||||
| Diluted | 14,141 | 14,023 | ||||||
| CITI TRENDS, INC. | ||||||||
| CONDENSED STATEMENTS OF OPERATIONS | ||||||||
| (unaudited) | ||||||||
| (in thousands, except per share data) | ||||||||
| Thirty-Nine Weeks Ended | Thirty-Nine Weeks Ended | |||||||
| November 1, 2008 | November 3, 2007 | |||||||
| (unaudited) | (unaudited) | |||||||
| Net sales | $ | 341,599 | $ | 302,944 | ||||
| Cost of sales | 211,172 | 191,638 | ||||||
| Gross profit | 130,427 | 111,306 | ||||||
| Selling, general and administrative expenses | 109,600 | 94,578 | ||||||
| Depreciation and amortization | 11,915 | 9,095 | ||||||
| Income from operations | 8,912 | 7,633 | ||||||
| Interest income | 2,215 | 1,703 | ||||||
| Interest expense | (256 | ) | (372 | ) | ||||
| Income before provision for income taxes | 10,871 | 8,964 | ||||||
| Provision for income taxes | 3,544 | 3,128 | ||||||
| Net income | $ | 7,327 | $ | 5,836 | ||||
| Basic net income per common share | $ | 0.52 | $ | 0.42 | ||||
| Diluted net income per common share | $ | 0.51 | $ | 0.41 | ||||
| Weighted average number of shares outstanding | ||||||||
| Basic | 14,095 | 13,917 | ||||||
| Diluted | 14,262 | 14,235 | ||||||
| CITI TRENDS, INC. | ||||||
| CONDENSED BALANCE SHEETS | ||||||
| (unaudited) | ||||||
| (in thousands) | ||||||
| November 1, 2008 | November 3, 2007 | |||||
| (unaudited) | (unaudited) | |||||
| Assets: | ||||||
| Cash and cash equivalents | $ | 12,415 | $ | 4,398 | ||
| Investment securities - current | --- | 43,721 | ||||
| Inventory | 89,822 | 93,886 | ||||
| Other current assets | 12,690 | 9,288 | ||||
| Property and equipment, net | 58,659 | 43,895 | ||||
| Investment securities - noncurrent | 41,785 | --- | ||||
| Other noncurrent assets | 7,154 | 5,176 | ||||
| Total assets | $ | 222,525 | $ | 200,364 | ||
| Liabilities and Stockholders' Equity: | ||||||
| Accounts payable | $ | 46,366 | $ | 44,926 | ||
| Accrued liabilities | 17,516 | 14,290 | ||||
| Other current liabilities | 4,281 | 3,921 | ||||
| Noncurrent liabilities | 7,673 | 8,239 | ||||
| Total liabilities | 75,836 | 71,376 | ||||
| Total stockholders' equity | 146,689 | 128,988 | ||||
| Total liabilities and stockholders' equity | $ | 222,525 | $ | 200,364 | ||
SOURCE: Citi Trends, Inc.
Citi Trends, Inc.
Bruce Smith, Chief Financial Officer
912-443-2075
or
Ed Anderson, Chairman and Chief Executive Officer
912-443-3705
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