Citi Trends Announces 2017 Holiday Sales Results
January 08 2018 - 4:05PM
Business Wire
Comparable store sales increased 4.8% in
November/December
Company expects fourth quarter EPS to be in
a range of $0.40 to $0.45, pending analysis of an expected charge
from implementation of the Tax Cuts and Jobs Act
Citi Trends, Inc. (NASDAQ:CTRN) today reported unaudited sales
for the first two months of the fourth quarter of fiscal 2017, in
advance of its investor presentation at the ICR Conference on
January 9, 2018.
Holiday Sales – November and December
2017
Total sales in the first two months of the fourth quarter of
2017 increased 7.3% to $165.1 million compared with $153.9 million
in the same period of 2016. Comparable store sales increased 5.5%
in November and 4.5% in December.
Earnings Forecast for the Fourth
Quarter of 2017
For the fourth quarter of fiscal 2017, the Company expects
diluted earnings per share to be in the range of $0.40 to $0.45
compared with $0.38 in the fourth quarter of fiscal 2016. Such
guidance for the quarter assumes sales of approximately $211
million, cost of sales (exclusive of depreciation) of approximately
$131 million and selling, general, administrative and depreciation
expenses of approximately $72 million. As disclosed previously,
this year’s fourth quarter includes a 14th week that is expected to
be break-even from a profit standpoint and also includes an
expected increase in incentive compensation and insurance expense
from last year’s fourth quarter totaling $1.7 million, which is
expected to have a negative effect of approximately $0.09 on this
year’s fourth quarter diluted earnings per share in relation to the
fourth quarter of last year.
The Company is still evaluating the impact of the recent
enactment of the Tax Cuts and Jobs Act (the “Act”) on its 2017
financial statements, and the guidance does not reflect a one-time,
non-cash charge that is expected to be required in the fourth
quarter as a result of the Act. While the Company expects its
financial results and cash flows to benefit in future years from
the reduction in the federal corporate tax rate pursuant to the
Act, the Company anticipates that it will record a charge to
decrease the value of its deferred tax assets from the previous 35%
federal tax rate to the new 21% rate in the fourth quarter.
Bruce Smith, Acting Chief Executive Officer, commented, “We were
very pleased with a 4.8% comparable store sales increase in the
first two months of the quarter, which was on top of a 2.9%
increase during the same period the previous year. All five of our
major merchandise categories continued to contribute to the growth
in comparable store sales.
As a result of the strong execution by the Citi Trends’ team, we
are well positioned to complete our fifth consecutive quarter of
comparable store sales increases, which we believe is an indication
that our strategic efforts to drive sales in both apparel and
non-apparel categories are working. Importantly, we believe these
strong sales results have led to high-quality inventory levels as
we begin to prepare for the spring selling season.
Fiscal 2017 has been an extremely good year thus far for Citi
Trends, as we have built sales momentum, significantly improved
earnings and returned $25 million to our stockholders in the form
of a share repurchase program. As we move forward, we are very
positive about Citi Trends’ future. We believe that continued
comparable store sales increases and store unit growth, leading to
increased profitability and cash flows, are reasonable expectations
for our Company. Importantly, the realization of those goals would
allow us to continue to return capital to our stockholders as part
of our expanded capital return program announced earlier in 2017.
We look forward to providing more details regarding our 2017 fourth
quarter results and our 2018 expectations during our March 20, 2018
investor call.”
About Citi Trends
Citi Trends, Inc. is a value-priced retailer of urban fashion
apparel and accessories for the entire family. The Company operates
547 stores located in 31 states. Citi Trends’ website address is
www.cititrends.com. CTRN-G
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, objectives of
management for future operations, management’s expectations and
beliefs, and our intentions and ability to pay dividends and
complete any share repurchase authorizations, are forward-looking
statements within the meaning of the federal securities laws,
including the Private Securities Litigation Reform Act of 1995,
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, although not all forward-looking statements contain
such language. Statements with respect to earnings guidance are
forward-looking statements. Investors are cautioned not to place
undue reliance on any forward-looking statements and that any such
forward-looking statements are subject to the finalization of the
Company’s quarter-end financial and accounting procedures,
including the assessment of the impact of the Tax Cuts and Jobs
Act, 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, the ability to anticipate and respond
to fashion trends and the impact of tax reform and legislation,
including the effects of the Tax Cuts and Jobs Act. Any
forward-looking statements by the Company, with respect to earnings
guidance, future performance or management’s expectations, the
Company’s intention to declare and pay dividends, the repurchase of
shares pursuant to a share repurchase program, or otherwise, are
intended to speak only as of the date such statements are made.
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20180108006491/en/
Citi Trends, Inc.Bruce Smith, 912-443-2075Acting Chief Executive
Officer, Chief Operating Officer and Chief Financial Officer
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