EX-99.1 2 a08-22023_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

CITI TRENDS ANNOUNCES SECOND QUARTER 2008 RESULTS

Second quarter net income increased to $2.8 million from $0.6 million last year

Second quarter sales increased 19.5%; comparable store sales increased 6.5%

 

SAVANNAH, GA (August 20, 2008) — Citi Trends, Inc. (NASDAQ: CTRN) today reported results for the second quarter ended August 2, 2008.

 

Financial Highlights – Second quarter ended August 2, 2008

 

Total sales in the second quarter ended August 2, 2008 increased 19.5% to $115.7 million compared with $96.8 million in the second quarter ended August 4, 2007.  Comparable store sales increased 6.5% in the second quarter.  Net income was $2.8 million compared with $0.6 million in last year’s second quarter.  Earnings per diluted share was $0.20 in the second quarter of 2008 compared with $0.04 in 2007 which included $0.03 of expense related to a 2007 secondary stock offering.

 

Earnings were higher in this year’s second quarter due primarily to the increase in comparable store sales, which benefited from the government stimulus checks, together with an improvement in gross margin due to lower merchandise markdowns and inventory shrinkage. The Company’s efforts to improve its management of inventory levels led to fewer markdowns than in last year’s second quarter, while the increased focus on controlling inventory shrinkage over the past year has contributed to a decline in that cost.

 

The Company opened 4 stores and relocated or expanded 2 others in the second quarter of 2008, reaching a total store count of 335 at the end of the quarter.

 

Financial Highlights – First half ended August 2, 2008

 

Total sales in the first half of fiscal year 2008 increased 16.4% to $236.7 million compared with $203.4 million in the first half of fiscal year 2007.  Comparable store sales increased 3.2% in the first half of this year.  Net income was $8.0 million compared with $6.3 million in last year’s first half.  Earnings per diluted share was $0.56 in the first half of 2008 compared with $0.45 in 2007 which included $0.04 of expense related to a 2007 secondary stock offering.

 

Fiscal 2008 Outlook

 

The Company is maintaining its estimate of 2008 earnings in a range of $1.10 to $1.15 per diluted share.  This guidance is based upon an anticipated 2008 comparable store sales increase of 1% to 2%.  For the year, the Company expects to increase selling square footage by approximately 15%.  The effective tax rate for 2008 is estimated to approximate 33%.

 

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.

 

104 Coleman Blvd., Savannah, Ga 31408 · (912) 236-1561 · Fax (912) 443-3674

 


 

Investor Conference Call and Webcast

 

Citi Trends will host a conference call today at 5:00 p.m. ET.  The number to call for the live interactive teleconference is (303) 262-2143.  A replay of the conference call will be available until August 27, 2008, by dialing (303) 590-3000 and entering the passcode, 11113317#.  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/medialist.cfm, beginning today at 5:00 p.m. ET.  The online replay will follow shortly after the call and continue until August 27, 2008.

 

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.  The Company currently operates 336 stores located in 21 states in the Southeast, Mid-Atlantic and Midwest regions and the state of Texas.  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.

 

Contact:

 

Bruce Smith

 

Ed Anderson

 

 

Chief Financial Officer

 

Chairman and Chief Executive Officer

 

 

(912) 443-2075

 

(912) 443-3705

 

-END-

 

2


 

CITI TRENDS, INC.

CONDENSED STATEMENTS OF INCOME

(unaudited)

(in thousands, except per share data)

 

 

 

Thirteen Weeks Ended

 

Thirteen Weeks Ended

 

 

 

August 2, 2008

 

August 4, 2007

 

 

 

(unaudited)

 

(unaudited)

 

Net sales

 

$

115,655

 

$

96,826

 

Cost of sales

 

70,731

 

61,734

 

Gross profit

 

44,924

 

35,092

 

Selling, general and administrative expenses

 

36,877

 

31,548

 

Depreciation and amortization

 

4,078

 

3,009

 

Income from operations

 

3,969

 

535

 

Interest income

 

557

 

536

 

Interest expense

 

(75

)

(121

)

Income before income tax expense

 

4,451

 

950

 

Income tax expense

 

1,605

 

323

 

Net income

 

$

2,846

 

$

627

 

 

 

 

 

 

 

Net income per share, basic

 

$

0.20

 

$

0.05

 

Net income per share, diluted

 

$

0.20

 

$

0.04

 

 

 

 

 

 

 

Weighted average shares used to compute net income per share, basic

 

14,095

 

13,922

 

Weighted average shares used to compute net income per share, diluted

 

14,279

 

14,249

 

 

CITI TRENDS, INC.

CONDENSED STATEMENTS OF INCOME

(unaudited)

(in thousands, except per share data)

 

 

 

Twenty-Six Weeks Ended

 

Twenty-Six Weeks Ended

 

 

 

August 2, 2008

 

August 4, 2007

 

 

 

(unaudited)

 

(unaudited)

 

Net sales

 

$

236,651

 

$

203,402

 

Cost of sales

 

144,964

 

126,612

 

Gross profit

 

91,687

 

76,790

 

Selling, general and administrative expenses

 

73,118

 

62,123

 

Depreciation and amortization

 

7,781

 

5,830

 

Income from operations

 

10,788

 

8,837

 

Interest income

 

1,425

 

1,181

 

Interest expense

 

(162

)

(265

)

Income before income tax expense

 

12,051

 

9,753

 

Income tax expense

 

4,037

 

3,404

 

Net income

 

$

8,014

 

$

6,349

 

 

 

 

 

 

 

Net income per share, basic

 

$

0.57

 

$

0.46

 

Net income per share, diluted

 

$

0.56

 

$

0.45

 

 

 

 

 

 

 

Weighted average shares used to compute net income per share, basic

 

14,071

 

13,865

 

Weighted average shares used to compute net income per share, diluted

 

14,248

 

14,234

 

 

3


 

CITI TRENDS, INC.

CONDENSED BALANCE SHEETS

(unaudited)

(in thousands)

 

 

 

August 2, 2008

 

August 4, 2007

 

 

 

(unaudited)

 

(unaudited)

 

Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

7,191

 

$

5,625

 

Investment securities - current

 

—

 

46,436

 

Inventory

 

85,330

 

93,909

 

Other current assets

 

11,374

 

10,114

 

Property and equipment, net

 

57,165

 

40,154

 

Investment securities - noncurrent

 

50,936

 

—

 

Other noncurrent assets

 

6,679

 

4,236

 

Total assets

 

$

218,675

 

$

200,474

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity:

 

 

 

 

 

Accounts payable

 

$

43,521

 

$

45,419

 

Accrued liabilities

 

17,461

 

14,416

 

Other current liabilities

 

4,043

 

2,978

 

Noncurrent liabilities

 

7,483

 

8,686

 

Total liabilities

 

72,508

 

71,499

 

 

 

 

 

 

 

Total stockholders’ equity

 

146,167

 

128,975

 

Total liabilities and stockholders’ equity

 

$

218,675

 

$

200,474

 

 

4