Citi Trends, Inc. (NASDAQ:CTRN) today reported results for the
first quarter of fiscal 2017.
Financial Highlights – First quarter
ended April 29, 2017
Total sales in the first quarter ended April 29, 2017 increased
3.2% to $200.0 million compared with $193.7 million in the first
quarter ended April 30, 2016. Comparable store sales increased 1.0%
in the quarter.
On a GAAP basis, the Company had net income of $8.9 million, or
$10.0 million when adjusted for proxy contest-related expenses*, in
the first quarter of 2017, compared with $8.7 million, in last
year’s first quarter. On a GAAP basis, earnings per diluted share
in this year’s first quarter were $0.60, or $0.68 when adjusted for
proxy contest-related expenses*, compared with $0.60 per diluted
share in the first quarter of 2016.
Bruce Smith, Acting Chief Executive Officer, commented, “Despite
a challenging start to the quarter which was negatively impacted by
later tax refund disbursements, we are pleased to have delivered
positive comparable store sales and a 14% increase in net income
adjusted for proxy contest expenses. The success in the quarter
confirms that our strategic direction remains on track as we
continue to diversify our offerings into complementary product
lines, while maintaining a keen focus on delivering fashion-right
and value-priced merchandise that resonates with our customer base.
In particular, our non-apparel business, accessories and home,
which now comprises 37% of our merchandise mix, continues to
perform well. The accessories division has had comparable store
sales increases in 28 of the last 31 quarters, while the home
division increased for the 19th consecutive quarter. While adding
significantly to the Company’s sales, the non-apparel business
consistently delivers gross margin above the Company-average,
making our merchandise offering even more profitable.”
During the first quarter, the Company opened six new stores,
relocated or expanded two other stores and closed one store.
In addition, the Company announced that its Board of Directors
has declared a quarterly dividend of $0.08 per common share,
reflecting a 33% increase in the dividend rate as announced
previously in connection with the Company’s expanded capital return
program. The dividend is payable on June 13, 2017, to shareholders
of record as of the close of business on May 30, 2017.
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) 231-2931. A replay of the conference call will be
available until May 24, 2017, by dialing (402) 977-9140 and
entering the passcode, 21851529.
The live broadcast of Citi Trends' conference call will be
available online at the Company's website, www.cititrends.com,
under the Investor Relations section, beginning today at 9:00 a.m.
ET. The online replay will follow shortly after the call and will
be available for replay for one year.
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 Citi Trends
Citi Trends, Inc. is an off-price retailer of urban fashion
apparel and accessories for the entire family. The Company operates
538 stores located in 31 states. Citi Trends’ website address is
www.cititrends.com. CTRN-G
*Non-GAAP Financial
Measure
The non-GAAP financial measures 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 our 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 repurchases, 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 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 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 outcome of our current proxy
fight and any other actions of activist stockholders. Any
forward-looking statements by the Company, with respect to earnings
guidance, the Company’s intention to declare and pay dividends, the
repurchase of shares pursuant to the 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.
Important Additional
Information
Citi Trends, its directors and certain of its executive officers
may be deemed to be participants in the solicitation of proxies
from Citi Trends stockholders in connection with the matters to be
considered at Citi Trends' 2017 Annual Meeting to be held on May
24, 2017. On April 3, 2017, Citi Trends filed a definitive proxy
statement (the “Proxy Statement”) with the U.S. Securities and
Exchange Commission (the "SEC") in connection with any such
solicitation of proxies from Citi Trends stockholders. INVESTORS
AND STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE PROXY
STATEMENT AND ACCOMPANYING BLUE PROXY CARD WITH RESPECT TO THE 2017
ANNUAL MEETING, AND OTHER DOCUMENTS FILED WITH THE SEC, CAREFULLY
AND IN THEIR ENTIRETY AS THEY CONTAIN IMPORTANT INFORMATION.
Detailed information regarding the identity of potential
participants, and their direct or indirect interests, by security
holdings or otherwise, is set forth in the Proxy Statement and
other materials to be filed with the SEC in connection with Citi
Trends' 2017 Annual Meeting. Stockholders may obtain the Proxy
Statement, any amendments or supplements to the Proxy Statement and
other documents filed by Citi Trends with the SEC for no charge at
the SEC's website at www.sec.gov. Copies will also be available at
no charge at the Investor Relations section of our corporate
website at www.cititrends.com.
CITI TRENDS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (unaudited) (in thousands,
except per share data)
Thirteen Weeks Ended Thirteen Weeks Ended
April 29, 2017 April 30, 2016 (unaudited) (unaudited)
Net sales $ 199,955 $ 193,672 Cost of sales (exclusive of
depreciation shown separately below) (122,390 ) (117,809 ) Selling,
general and administrative expenses (60,487 ) (58,331 )
Depreciation (4,298 ) (4,444 ) Asset impairment -
(221 ) Income from operations 12,780 12,867 Interest income
186 127 Interest expense (37 ) (40 ) Income before
income taxes 12,929 12,954 Income tax expense (4,039 )
(4,217 ) Net income $ 8,890 $ 8,737
Basic net income per common share $ 0.60 $ 0.60
Diluted net income per common share $ 0.60 $ 0.60
Weighted average shares used to compute basic
net income per share 14,719 14,594
Weighted average shares used to compute diluted net income per
share 14,780 14,603
CITI TRENDS, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited) (in thousands)
April 29, 2017 April 30, 2016
(unaudited) (unaudited) Assets: Cash and cash equivalents $ 73,037
$ 53,032 Short-term investment securities 34,189 40,215 Inventory
124,533 123,330 Prepaid and other current assets 13,853 13,536
Property and equipment, net 61,152 49,816 Long-term investment
securities 25,914 24,327 Other noncurrent assets 7,753
9,223 Total assets $ 340,431 $ 313,479 Liabilities
and Stockholders' Equity: Accounts payable $ 71,465 $ 60,128
Accrued liabilities 27,530 24,316 Other current liabilities 2,147
2,528 Noncurrent liabilities 8,260 6,661 Total
liabilities 109,402 93,633 Total stockholders' equity
231,029 219,846 Total liabilities and stockholders' equity $
340,431 $ 313,479
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 expenses and earnings per diluted share
adjusted for proxy contest expenses. 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 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, net income per common share or expense
information prepared in accordance with generally accepted
accounting principles (GAAP).
Thirteen Weeks Ended April 29, 2017
As Reported Adjustment (1)
As Adjusted (unaudited) (unaudited)
(unaudited) Net sales $ 199,955 $ - $ 199,955
Cost of sales (exclusive of depreciation shown separately
below) (122,390 ) - (122,390 ) Selling, general and administrative
expenses (60,487 ) 1,590 (58,897 ) Depreciation (4,298 )
- (4,298 ) Income
from operations 12,780 1,590 14,370 Interest income 186 - 186
Interest expense (37 ) -
(37 ) Income before income taxes 12,929 1,590 14,519
Income tax expense (4,039 ) (497 )
(4,536 ) Net income $ 8,890
$ 1,093 $ 9,983
Basic net income per common share $ 0.60 $ 0.68
Diluted net income per common share $ 0.60 $ 0.68
Weighted average shares used to compute basic
net income per share 14,719 14,719
Weighted average shares used to compute diluted net income per
share 14,780 14,780 (1)
Proxy contest expenses and related tax effects
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version on businesswire.com: http://www.businesswire.com/news/home/20170517005188/en/
For Citi Trends, Inc.Bruce Smith, 912-443-2075Acting Chief
Executive Officer,Chief Operating Officer andChief Financial
Officer
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