Citi Trends Announces Fourth Quarter and Fiscal 2023 Results
Q4 2023 total sales of
Q4 2023 diluted EPS of
Fiscal 2023 total sales of
Company ends Fiscal 2023 with
Company provides outlook for Fiscal 2024; expects mid-single digit comp increase
Q1 2024 to date comp trend consistent with outlook
Financial Highlights – Fourth Quarter 2023
-
Total sales of
$215.2 million increased 2.7% vs. Q4 2022; the extra week contributed$11.2 million to total sales in the fourth quarter of fiscal 2023; comparable store sales, calculated on a 13-week to 13-week basis, decreased 1.5% compared to Q4 2022 - Gross margin of 39.1% vs. 39.5% in Q4 2022
-
Operating income of
$3.9 million , or$5.1 million as adjusted*, compared to$7.4 million in Q4 2022 or$7.5 million as adjusted* -
Net income of
$3.6 million ,$4.4 million as adjusted*, compared to$6.6 million in Q4 2022 or$6.8 million as adjusted* -
Adjusted EBITDA* of
$10.0 million compared to$12.3 million in Q4 2022 -
Diluted EPS of
$0.42 , or$0.53 as adjusted*, vs. diluted EPS of$0.81 in Q4 2022 or$0.83 as adjusted*
Financial Highlights – Full Year 2023
-
Total sales of
$747.9 million decreased 5.9% vs. 2022; comparable stores sales, calculated on a 52-week to 52-week basis, decreased 6.8% vs. 2022 - Gross margin of 38.1%, or 38.2% as adjusted*, vs. 39.1% in 2022
-
Operating loss of
$19.5 million , or$17.5 million as adjusted*, vs. operating income of$75.3 million in 2022, or$11.4 million as adjusted* -
Net loss of
$12.0 million , or$10.5 million as adjusted*, compared to net income of$58.9 million in 2022, or$9.4 million as adjusted* -
Adjusted EBITDA* of
$1.5 million vs.$32.0 million in 2022 -
Net loss per share of
$1.46 , or$1.28 as adjusted*, vs. diluted EPS of$7.17 in 2022, or$1.14 as adjusted* - Opened 5 new stores, remodeled 15 stores and closed 14 stores to end the year with 602 locations
-
Cash of
$79.7 million at year-end, with no debt and no borrowings under a$75 million credit facility - Year-end inventory increased 23% vs. 2022, lapping insufficient levels last year, strategic category rebuilds and earlier receipts for tax refund season and an earlier Easter; exiting Q1 2024, inventory expected to be up low-single digits to Q1 2023
Chief Executive Officer Comments
Capital Return Program Update
In the fourth quarter of fiscal 2023, the Company did not repurchase any shares of its common stock. At the end of fiscal 2023,
Fiscal 2024 Outlook
The Company’s outlook for fiscal 2024 compared to fiscal 2023 is as follows:
- Expecting full year comparable store sales growth of mid-single digits
- Full year gross margin to expand by approximately 75 to 100 basis points driven by ERP system benefits and freight expense leverage
- SG&A dollars expected to increase by approximately 2.5% to 3.0% primarily driven by incentive compensation
-
Full year EBITDA* planned to be in the range of
$4 million to$10 million - The Company plans to open up to 5 new stores, remodel approximately 40 stores and close 10 to 15 underperforming stores as part of its ongoing fleet optimization; expecting to end fiscal 2024 with approximately 595 stores
-
Full year capital expenditures are expected to be approximately
$20 million
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.
*Non-GAAP Financial Measures
The historical non-GAAP financial measures discussed herein are reconciled to their corresponding GAAP measures at the end of this press release. The Company is unable to provide a full reconciliation of the forward-looking non-GAAP financial measure used in 2024 guidance without unreasonable effort because it is not possible to predict certain of its adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of the Company’s control and its unavailability could have a significant impact on its financial results.
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 | ||||||||||||
| Net sales |
$ |
215,179 |
|
$ |
209,461 |
|
$ |
240,974 |
|
|||
| Cost of sales (exclusive of depreciation shown separately below) |
|
(130,997 |
) |
|
(126,681 |
) |
|
(143,659 |
) |
|||
| Selling, general and administrative expenses |
|
(74,527 |
) |
|
(70,578 |
) |
|
(79,563 |
) |
|||
| Depreciation |
|
(4,850 |
) |
|
(4,802 |
) |
|
(5,175 |
) |
|||
| Asset impairment |
|
(873 |
) |
|
— |
|
|
— |
|
|||
| Income from operations |
|
3,931 |
|
|
7,400 |
|
|
12,577 |
|
|||
| Interest income |
|
1,070 |
|
|
830 |
|
|
7 |
|
|||
| Interest expense |
|
(78 |
) |
|
(76 |
) |
|
(106 |
) |
|||
| Income before income taxes |
|
4,923 |
|
|
8,154 |
|
|
12,478 |
|
|||
| Income tax expense |
|
(1,372 |
) |
|
(1,517 |
) |
|
(2,639 |
) |
|||
| Net income |
$ |
3,551 |
|
$ |
6,637 |
|
$ |
9,839 |
|
|||
| Basic net income per common share |
$ |
0.43 |
|
$ |
0.81 |
|
$ |
1.17 |
|
|||
| Diluted net income per common share |
$ |
0.42 |
|
$ |
0.81 |
|
$ |
1.16 |
|
|||
| Weighted average number of shares outstanding | ||||||||||||
| Basic |
|
8,238 |
|
|
8,155 |
|
|
8,404 |
|
|||
| Diluted |
|
8,380 |
|
|
8,155 |
|
|
8,516 |
|
|||
| Fiscal Year | ||||||||||||
| Net sales |
$ |
747,941 |
|
$ |
795,011 |
|
$ |
991,595 |
|
|||
| Cost of sales (exclusive of depreciation shown separately below) |
|
(462,824 |
) |
|
(484,022 |
) |
|
(584,063 |
) |
|||
| Selling, general and administrative expenses |
|
(284,529 |
) |
|
(279,177 |
) |
|
(307,622 |
) |
|||
| Depreciation |
|
(18,990 |
) |
|
(20,595 |
) |
|
(20,393 |
) |
|||
| Asset impairment |
|
(1,051 |
) |
|
— |
|
|
— |
|
|||
| Gain on sale-leasebacks |
|
— |
|
|
64,088 |
|
|
— |
|
|||
| (Loss) income from operations |
|
(19,454 |
) |
|
75,305 |
|
|
79,517 |
|
|||
| Interest income |
|
3,874 |
|
|
1,034 |
|
|
31 |
|
|||
| Interest expense |
|
(306 |
) |
|
(306 |
) |
|
(306 |
) |
|||
| (Loss) income before income taxes |
|
(15,886 |
) |
|
76,033 |
|
|
79,242 |
|
|||
| Income tax benefit (expense) |
|
3,907 |
|
|
(17,141 |
) |
|
(17,002 |
) |
|||
| Net (loss) income |
$ |
(11,979 |
) |
$ |
58,892 |
|
$ |
62,240 |
|
|||
| Basic net (loss) income per common share |
$ |
(1.46 |
) |
$ |
7.17 |
|
$ |
6.98 |
|
|||
| Diluted net (loss) income per common share |
$ |
(1.46 |
) |
$ |
7.17 |
|
$ |
6.91 |
|
|||
| Weighted average number of shares outstanding | ||||||||||||
| Basic |
|
8,221 |
|
|
8,216 |
|
|
8,912 |
|
|||
| Diluted |
|
8,221 |
|
|
8,216 |
|
|
9,013 |
|
|||
|
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands) |
||||||
| Assets: | ||||||
| Cash and cash equivalents |
$ |
79,706 |
$ |
103,495 |
||
| Inventory |
|
130,432 |
|
105,794 |
||
| Prepaid and other current assets |
|
10,838 |
|
12,976 |
||
| Property and equipment, net |
|
56,231 |
|
60,106 |
||
| Operating lease right of use assets |
|
231,281 |
|
257,195 |
||
| Deferred tax assets |
|
5,105 |
|
2,893 |
||
| Other noncurrent assets |
|
5,128 |
|
1,797 |
||
| Total assets |
$ |
518,721 |
$ |
544,257 |
||
| Liabilities and Stockholders' Equity: | ||||||
| Accounts payable |
$ |
100,366 |
$ |
80,670 |
||
| Accrued liabilities |
|
23,312 |
|
26,876 |
||
| Current operating lease liabilities |
|
45,842 |
|
52,661 |
||
| Other current liabilities |
|
384 |
|
344 |
||
| Noncurrent operating lease liabilities |
|
188,810 |
|
214,939 |
||
| Other noncurrent liabilities |
|
2,301 |
|
2,322 |
||
| Total liabilities |
|
361,015 |
|
377,812 |
||
| Total stockholders' equity |
|
157,706 |
|
166,445 |
||
| Total liabilities and stockholders' equity |
$ |
518,721 |
$ |
544,257 |
||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) | ||||||||
| (in thousands, except per share data) | ||||||||
| The Company makes reference in this release to adjusted gross margin, adjusted operating income, adjusted net income, adjusted earnings per share and adjusted EBITDA. The Company believes these supplemental measures reflect 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). | ||||||||
| Fourth Quarter | ||||||||
|
|
|
|||||||
| Reconciliation of Adjusted Operating (Loss) Income | ||||||||
| Operating (loss) income |
$ |
3,931 |
|
$ |
7,400 |
|
||
| Gain on insurance |
|
— |
|
|
— |
|
||
| Asset impairment |
|
873 |
|
|
— |
|
||
| Cyber incident expenses |
|
— |
|
|
142 |
|
||
| Other non-recurring expenses |
|
334 |
|
|
- |
|
||
| Adjusted operating (loss) income |
$ |
5,139 |
|
$ |
7,542 |
|
||
| Fourth Quarter | ||||||||
|
|
|
|||||||
| Reconciliation of Adjusted Net Income | ||||||||
| Net (loss) income |
$ |
3,551 |
|
$ |
6,637 |
|
||
| Gain on insurance |
|
— |
|
|
— |
|
||
| Asset impairment |
|
873 |
|
|
— |
|
||
| Cyber incident expenses |
|
— |
|
|
142 |
|
||
| Other non-recurring expenses |
|
334 |
|
|
— |
|
||
| Tax effect |
|
(336 |
) |
|
(26 |
) |
||
| Adjusted net (loss) income |
$ |
4,422 |
|
$ |
6,753 |
|
||
| Fourth Quarter | ||||||||
|
|
|
|||||||
| Reconciliation of Adjusted Diluted EPS | ||||||||
| Diluted (loss) earnings per share |
$ |
0.42 |
|
$ |
0.81 |
|
||
| Gain on insurance |
|
— |
|
|
— |
|
||
| Asset impairment |
|
0.10 |
|
|
— |
|
||
| Cyber incident expenses |
|
— |
|
|
0.02 |
|
||
| Other non-recurring expenses |
|
0.04 |
|
|
— |
|
||
| Tax effect |
|
(0.04 |
) |
|
— |
|
||
| Adjusted diluted (loss) earnings per share |
$ |
0.53 |
|
$ |
0.83 |
|
||
| Fourth Quarter | ||||||||
|
|
|
|||||||
| Reconciliation of Adjusted EBITDA | ||||||||
| Net (loss) income |
$ |
3,551 |
|
$ |
6,637 |
|
||
| Interest income |
|
(1,070 |
) |
|
(830 |
) |
||
| Interest expense |
|
78 |
|
|
76 |
|
||
| Income tax (benefit) expense |
|
1,372 |
|
|
1,517 |
|
||
| Depreciation |
|
4,850 |
|
|
4,802 |
|
||
| Gain on insurance |
|
- |
|
|
- |
|
||
| Asset impairment |
|
873 |
|
|
— |
|
||
| Cyber incident expenses |
|
— |
|
|
142 |
|
||
| Other non-recurring expenses |
|
334 |
|
|
— |
|
||
| Adjusted EBITDA |
$ |
9,989 |
|
$ |
12,344 |
|
||
| Fiscal Year | ||||||||
|
|
|
|||||||
| Reconciliation of Adjusted Operating (Loss) Income | ||||||||
| Operating (loss) income |
$ |
(19,454 |
) |
$ |
75,305 |
|
||
| Gain on insurance |
|
(1,188 |
) |
|
— |
|
||
| Asset impairment |
|
1,051 |
|
|
— |
|
||
| Cyber incident expenses |
|
1,723 |
|
|
142 |
|
||
| Other non-recurring expenses |
|
334 |
|
|
— |
|
||
| Gain on sale-leaseback |
|
— |
|
|
(64,088 |
) |
||
| Adjusted operating (loss) income |
$ |
(17,533 |
) |
$ |
11,359 |
|
||
| Fiscal Year | ||||||||
|
|
|
|||||||
| Reconciliation of Adjusted Gross Margin | ||||||||
| Net sales |
$ |
747,941 |
|
$ |
795,011 |
|
||
| Cost of sales |
|
(462,824 |
) |
|
(484,022 |
) |
||
| Gross profit |
$ |
285,117 |
|
$ |
310,989 |
|
||
| Gross margin |
|
38.1 |
% |
|
39.1 |
% |
||
| Cyber incident expenses |
$ |
513 |
|
$ |
- |
|
||
| Adjusted gross profit |
$ |
285,630 |
|
$ |
310,989 |
|
||
| Adjusted gross margin |
|
38.2 |
% |
|
39.1 |
% |
||
| Fiscal Year | ||||||||
|
|
|
|||||||
| Reconciliation of Adjusted Net (Loss) Income | ||||||||
| Net (loss) income |
$ |
(11,979 |
) |
$ |
58,892 |
|
||
| Gain on insurance |
|
(1,188 |
) |
|
— |
|
||
| Asset impairment |
|
1,051 |
|
|
— |
|
||
| Cyber incident expenses |
|
1,723 |
|
|
142 |
|
||
| Other non-recurring expenses |
|
334 |
|
|
— |
|
||
| Gain on sale-leaseback |
|
— |
|
|
(64,088 |
) |
||
| Tax effect |
|
(472 |
) |
|
14,416 |
|
||
| Adjusted net (loss) income |
$ |
(10,530 |
) |
$ |
9,362 |
|
||
| Fiscal Year | ||||||||
|
|
|
|||||||
| Reconciliation of Adjusted Diluted EPS | ||||||||
| Diluted (loss) earnings per share |
$ |
(1.46 |
) |
$ |
7.17 |
|
||
| Gain on insurance |
|
(0.14 |
) |
|
— |
|
||
| Asset impairment |
|
0.13 |
|
|
— |
|
||
| Gain on insurance |
|
0.21 |
|
|
0.02 |
|
||
| Other non-recurring expenses |
|
0.04 |
|
|
— |
|
||
| Other non-recurring expenses |
|
— |
|
|
(7.80 |
) |
||
| Tax effect |
|
(0.06 |
) |
|
1.75 |
|
||
| Adjusted diluted (loss) earnings per share |
$ |
(1.28 |
) |
$ |
1.14 |
|
||
| Fiscal Year | ||||||||
|
|
|
|||||||
| Reconciliation of Adjusted EBITDA | ||||||||
| Net (loss) income |
$ |
(11,979 |
) |
$ |
58,892 |
|
||
| Interest income |
|
(3,874 |
) |
|
(1,034 |
) |
||
| Interest expense |
|
306 |
|
|
306 |
|
||
| Income tax (benefit) expense |
|
(3,907 |
) |
|
17,141 |
|
||
| Depreciation |
|
18,990 |
|
|
20,595 |
|
||
| Gain on insurance |
|
(1,188 |
) |
|
— |
|
||
| Asset impairment |
|
1,051 |
|
|
— |
|
||
| Cyber incident expenses |
|
1,723 |
|
|
142 |
|
||
| Other non-recurring expenses |
|
334 |
|
|
— |
|
||
| Other non-recurring expenses |
|
— |
|
|
(64,088 |
) |
||
| Adjusted EBITDA |
$ |
1,457 |
|
$ |
31,954 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240319968273/en/
CitiTrendsIR@icrinc.com
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