Citi Trends, Inc. (NASDAQ: CTRN) today reported results for the
second quarter of fiscal 2010.
Financial Highlights – Second
quarter ended July 31, 2010
Total sales in the second quarter ended July 31, 2010 increased
15.6% to $129.0 million compared with $111.6 million in the second
quarter ended August 1, 2009. Comparable store sales decreased 0.6%
in the second quarter. A net loss of $567,000 was recognized in
this year’s second quarter compared with a net loss of $69,000 in
the second quarter of 2009. Last year’s second quarter included an
unrealized pretax gain of $671,000 related to auction rate
securities held at that time. Loss per diluted share was $(0.04) in
the second quarter of 2010 compared with loss per diluted share of
$(0.00) in the second quarter of 2009.
Store activity in the second quarter of 2010, included five new
openings and two expansions, resulting in a total store count of
425 at the end of the quarter.
Financial Highlights – First
half ended July 31, 2010
Total sales in the first half of fiscal 2010 increased 21.9% to
$310.4 million compared with $254.7 million in the first half of
fiscal 2009. Comparable store sales increased 5.1% in the first
half of this year. Net income increased 51.2% to $11.9 million
compared with $7.9 million in last year’s first half. Earnings per
diluted share were $0.82 in the first half of 2010 compared with
$0.54 in 2009’s first half.
Fiscal 2010
Outlook
The Company estimates that 2010 earnings will be in a range of
$1.60 to $1.70 per diluted share which includes an anticipated
comparable store sales increase of flat to 2% in the last half of
2010. For the full year, the Company expects to increase selling
square footage by at least 15%. The effective tax rate for 2010 is
estimated to approximate 35%.
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 9:00 a.m. ET.
The number to call for the live interactive teleconference is
(212) 231-2900. A replay of the conference call will be
available until August 25, 2010, by dialing (402) 977-9140 and
entering the passcode, 21463754. 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 9:00 a.m.
ET. The online replay will follow shortly after the call and
continue through August 25, 2010.
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. After opening 4
stores thus far in August 2010, the Company currently operates 429
stores located in 25 states in the Southeast, Mid-Atlantic and
Midwest regions and the states of Texas and California. 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
July 31, 2010 August 1, 2009 (unaudited) (unaudited)
Net sales $ 129,042 $ 111,605 Cost of sales 80,762
69,011 Gross profit 48,280 42,594 Selling, general
and administrative expenses 44,426 38,994 Depreciation and
amortization 4,769 4,455 Loss from
operations (915 ) (855 ) Interest income 44 105 Interest expense (5
) (28 ) Unrealized gain on investment securities -
671 Loss before income tax benefit (876 ) (107 )
Income tax benefit (309 ) (38 ) Net loss $ (567 ) $
(69 ) Basic net loss per common share $ (0.04 ) $ (0.00 )
Diluted net loss per common share $ (0.04 ) $ (0.00 ) Net
loss attributable to common shares (1): Basic $ (567 ) $ (69 )
Diluted $ (567 ) $ (69 ) Weighted average shares used to
compute basic net loss per share 14,515 14,365
Weighted average shares used to compute diluted net loss per
share 14,515 14,365
Twenty-Six Weeks Ended Twenty-Six
Weeks Ended July 31, 2010 August 1, 2009
(unaudited) (unaudited) Net sales $ 310,448 $ 254,702 Cost of sales
189,778 154,920 Gross profit 120,670
99,782 Selling, general and administrative expenses 92,876 79,127
Depreciation and amortization 9,519 8,828
Income from operations
18,275 11,827 Interest income 99 244 Interest expense (9 ) (69 )
Unrealized loss on investment securities - (57
) Income before income tax expense 18,365 11,945 Income tax expense
6,483 4,085 Net income $ 11,882
$ 7,860 Basic net income per common share $ 0.82
$ 0.54 Diluted net income per common share $ 0.82
$ 0.54 Net income attributable to common
shares (1): Basic $ 11,882 $ 7,700 Diluted $ 11,882
$ 7,700 Weighted average shares used to
compute basic net income per share 14,486
14,342 Weighted average shares used to compute diluted net
income per share 14,510 14,370
(1) Net of income allocated to nonvested restricted
stockholders
CITI TRENDS, INC. CONDENSED BALANCE SHEETS
(unaudited) (in thousands) July 31, 2010
August 1, 2009 (unaudited) (unaudited) Assets: Cash and cash
equivalents $ 84,636 $ 36,361 Short-term investment securities
3,148 42,468 Inventory 107,556 88,829 Other current assets 16,742
13,199 Property and equipment, net 73,434 59,741 Other noncurrent
assets 4,849 4,744 Total assets $
290,365 $ 245,342 Liabilities and
Stockholders' Equity: Accounts payable $ 58,942 $ 46,129 Accrued
liabilities 24,685 20,336 Other current liabilities 1,909 2,370
Noncurrent liabilities 9,253 8,836
Total liabilities 94,789 77,671 Total stockholders' equity
195,576 167,671 Total liabilities and
stockholders' equity $ 290,365 $ 245,342
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