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8-K - 8-K - Citi Trends Inc | a11-7755_18k.htm |
Exhibit 99.1
CITI TRENDS ANNOUNCES FOURTH QUARTER AND FISCAL 2010 RESULTS AND PROVIDES EARNINGS GUIDANCE FOR FISCAL 2011
SAVANNAH, GA (March 11, 2011) Citi Trends, Inc. (NASDAQ: CTRN) today reported results for the fourth quarter and fiscal year ended January 29, 2011.
Financial Highlights Fourth quarter ended January 29, 2011
Total sales in the fourth quarter ended January 29, 2011 increased 1.3% to $172.0 million compared with $169.8 million in the quarter ended January 30, 2010. Comparable store sales decreased 11.4% in the fourth quarter. Sales were particularly weak in December due largely to a delay in the governments distribution of extended unemployment benefits until just before Christmas, a significant shortfall in sales of long denim, and a heavy promotional environment that included going-out-of-business sale events by a major competitor. Sales in January were negatively impacted by a later income tax refund season due to a lack of refund anticipation loan availability for the Companys customers.
Net income in the fourth quarter of 2010 was $9.4 million compared with $11.3 million in last years fourth quarter. Earnings per diluted share decreased to $0.64 in the fourth quarter of 2010 compared with $0.78 in the fourth quarter of 2009. Financial results for the fourth quarter of 2010 included an immaterial correction of an error related to an accounting policy. Prior to the fourth quarter, the Companys policy was to expense the cost of inbound freight associated with the delivery of inventory to the Companys distribution centers in the period incurred, rather than capitalizing such costs as a component of inventory and expensing them as the related inventory was sold. In the fourth quarter of 2010, the Company began to capitalize freight costs as a component of the cost of inventory. The impact of this adjustment in the fourth quarter was a non-recurring reduction in cost of sales of $2.7 million and a resulting increase in net income of $1.8 million, or $0.12 per diluted share.
The Company opened 3 stores in the fourth quarter of 2010, reaching a total store count of 461 at the end of the year. In addition, the Company converted 15 of its stores to its new Citi Lights prototype format in January 2011, and now has a total of 25 stores operating under the new format.
Financial Highlights Fiscal year ended January 29, 2011
Total sales in the fiscal year ended January 29, 2011 increased 12.8% to $622.5 million compared with $551.9 million in the fiscal year ended January 30, 2010. Comparable store sales decreased 1.8% for the full year.
Net income was $20.9 million in 2010 compared with $19.7 million in the prior year. Earnings per diluted share increased to $1.44 in 2010 compared to $1.36 in 2009, with 2010 including the aforementioned benefit related to capitalized freight.
The Company opened 60 stores, relocated or expanded 13 others, and closed 2 stores in 2010.
Fiscal 2011 Outlook Fiscal year ending January 28, 2012
The Company estimates fiscal 2011 earnings of approximately $1.40 to $1.50 per diluted share, including an anticipated comparable store sales increase of approximately 2% and an increase in selling square footage of at least 15%. Through the first five-plus weeks of the new fiscal year, comparable store sales are down 2%, versus an 11% increase during the same period of time last year.
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) 231-2901. A replay of the conference call will be available until March 18, 2011, by dialing (402) 977-9140 and entering the passcode, 21510236. The live broadcast of Citi Trends conference call will be available online at the Companys 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 March 18, 2011.
During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends. The Companys 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 three stores and closing one thus far in the first quarter of 2011, the Company currently operates 463 stores located in 27 states. 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 Companys year-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 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.
Contact: |
Bruce Smith |
David Alexander |
|
Citi Trends, Inc. |
Citi Trends, Inc. |
|
Chief Financial Officer |
President and Chief Executive Officer |
|
(912) 443-2075 |
(912) 443-3924 |
CITI TRENDS, INC.
CONDENSED STATEMENTS OF INCOME (unaudited)
(in thousands, except per share data)
|
|
Thirteen Weeks Ended |
|
Thirteen Weeks Ended |
| ||
|
|
January 29, 2011 |
|
January 30, 2010 |
| ||
|
|
(unaudited) |
|
(unaudited) |
| ||
Net sales |
|
$ |
172,043 |
|
$ |
169,811 |
|
Cost of sales |
|
105,184 |
|
104,258 |
| ||
Gross profit |
|
66,859 |
|
65,553 |
| ||
Selling, general and administrative expenses |
|
47,112 |
|
44,050 |
| ||
Depreciation and amortization |
|
5,692 |
|
4,752 |
| ||
Income from operations |
|
14,055 |
|
16,751 |
| ||
Interest income |
|
34 |
|
75 |
| ||
Interest expense |
|
(7 |
) |
(6 |
) | ||
Income before income tax expense |
|
14,082 |
|
16,820 |
| ||
Income tax expense |
|
4,718 |
|
5,569 |
| ||
Net income |
|
$ |
9,364 |
|
$ |
11,251 |
|
|
|
|
|
|
| ||
Basic net income per common share |
|
$ |
0.64 |
|
$ |
0.78 |
|
Diluted net income per common share |
|
$ |
0.64 |
|
$ |
0.78 |
|
|
|
|
|
|
| ||
Net income attributable to common shares (1): |
|
|
|
|
| ||
Basic |
|
$ |
9,364 |
|
$ |
11,251 |
|
Diluted |
|
$ |
9,364 |
|
$ |
11,251 |
|
|
|
|
|
|
| ||
Weighted average shares used to compute basic net income per share |
|
14,523 |
|
14,402 |
| ||
Weighted average shares used to compute diluted net income per share |
|
14,537 |
|
14,447 |
|
|
|
Fifty-Two Weeks Ended |
|
Fifty-Two Weeks Ended |
| ||
|
|
January 29, 2011 |
|
January 30, 2010 |
| ||
|
|
(unaudited) |
|
(unaudited) |
| ||
Net sales |
|
$ |
622,528 |
|
$ |
551,869 |
|
Cost of sales |
|
383,318 |
|
338,898 |
| ||
Gross profit |
|
239,210 |
|
212,971 |
| ||
Selling, general and administrative expenses |
|
187,231 |
|
165,166 |
| ||
Depreciation and amortization |
|
20,535 |
|
18,431 |
| ||
Income from operations |
|
31,444 |
|
29,374 |
| ||
Interest income |
|
174 |
|
404 |
| ||
Interest expense |
|
(24 |
) |
(92 |
) | ||
Income before income tax expense |
|
31,594 |
|
29,686 |
| ||
Income tax expense |
|
10,742 |
|
9,969 |
| ||
Net income |
|
$ |
20,852 |
|
$ |
19,717 |
|
|
|
|
|
|
| ||
Basic net income per common share |
|
$ |
1.44 |
|
$ |
1.36 |
|
Diluted net income per common share |
|
$ |
1.44 |
|
$ |
1.36 |
|
|
|
|
|
|
| ||
Net income attributable to common shares (1): |
|
|
|
|
| ||
Basic |
|
$ |
20,852 |
|
$ |
19,540 |
|
Diluted |
|
$ |
20,852 |
|
$ |
19,541 |
|
|
|
|
|
|
| ||
Weighted average shares used to compute basic net income per share |
|
14,503 |
|
14,364 |
| ||
Weighted average shares used to compute diluted net income per share |
|
14,523 |
|
14,396 |
|
(1) Net of income allocated to nonvested restricted stockholders
CITI TRENDS, INC.
CONDENSED BALANCE SHEETS (unaudited)
(in thousands)
|
|
January 29, 2011 |
|
January 30, 2010 |
| ||
|
|
(unaudited) |
|
(unaudited) |
| ||
Assets: |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
69,231 |
|
$ |
62,993 |
|
Short-term investment securities |
|
586 |
|
33,025 |
| ||
Inventory |
|
121,432 |
|
100,874 |
| ||
Other current assets |
|
16,669 |
|
14,927 |
| ||
Property and equipment, net |
|
85,299 |
|
63,791 |
| ||
Long-term investment securities |
|
9,205 |
|
|
| ||
Other noncurrent assets |
|
3,980 |
|
4,376 |
| ||
Total assets |
|
$ |
306,402 |
|
$ |
279,986 |
|
|
|
|
|
|
| ||
Liabilities and Stockholders Equity: |
|
|
|
|
| ||
Accounts payable |
|
$ |
67,934 |
|
$ |
62,706 |
|
Accrued liabilities |
|
23,184 |
|
22,273 |
| ||
Other current liabilities |
|
444 |
|
3,669 |
| ||
Noncurrent liabilities |
|
10,036 |
|
9,995 |
| ||
Total liabilities |
|
101,598 |
|
98,643 |
| ||
|
|
|
|
|
| ||
Total stockholders equity |
|
204,804 |
|
181,343 |
| ||
Total liabilities and stockholders equity |
|
$ |
306,402 |
|
$ |
279,986 |
|