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     125  0 Kommentare Citi Trends Announces Second Quarter 2023 Results

    Citi Trends, Inc. (NASDAQ: CTRN), a leading specialty value retailer of apparel, accessories and home trends for way less spend primarily for African American and multicultural families in the United States, today reported results for the second quarter ended July 29, 2023.

    Financial Highlights – Second Quarter 2023

    • Total sales of $173.6 million decreased 6.2% vs. Q2 2022; Comparable store sales decreased 5.3% compared to Q2 2022, an 880 bps improvement to Q1 2023
    • Gross margin of 38.2% vs. 38.1% in Q2 2022; 150 bps increase to Q1 2023
    • Operating loss of $7.9 million, or a loss of $7.8 million as adjusted*, compared to operating loss of $3.3 million in Q2 2022
    • Net loss per share of ($0.61), or adjusted net loss per share* of ($0.60), vs. net loss per share of ($0.31) in Q2 2022
    • Quarter-end total dollar inventory decreased 5.4% compared to Q2 2022
    • Total liquidity of approximately $141 million at the end of the quarter, made up of $65.8 million of cash, no borrowings under a $75 million credit facility, and no debt
    • During Q2 2023, the Company opened 5 new stores, closed 2 underperforming locations and remodeled 8 stores, ending the quarter with 611 stores

    Financial Highlights – 26 weeks ended July 29, 2023

    • Total sales of $353.2 million decreased 10.2% vs. 2022; Comparable store sales decreased 10.0% compared to 2022
    • Gross margin of 37.5%, or 37.6% as adjusted*, vs. 38.6% in 2022
    • Operating loss of $17.4 million, or a loss of $15.7 million as adjusted*, compared to operating income of $36.3 million in 2022, or $1.4 million as adjusted*
    • Net loss of $11.7 million, or $10.4 million as adjusted*, compared to net income of $27.7 million in 2022, or $1.0 million as adjusted*
    • Adjusted EBITDA* of ($6.3) million vs $12.1 million in 2022
    • Net loss per share of ($1.42), or adjusted net loss per share* of ($1.27), vs. diluted earnings per share of $3.34 in 2022, or $0.12 as adjusted*

    Chief Executive Officer Comments

    David Makuen, Chief Executive Officer, commented, “We are pleased with our second quarter results that reflect positive momentum for both the top line and gross margin, against a continued challenging macro backdrop. The quarter was highlighted by significant sequential comparable store sales acceleration from the first quarter, a strong gross margin of 38.2% and well managed expenses. Importantly, we experienced improved traffic levels and strong conversion throughout the quarter, signaling that our product assortment, strengthened by our strategic inventory rebuild in key areas of the business, is resonating with our loyal customers.”

    Mr. Makuen continued, “I am incredibly proud of how our team managed the business, while maintaining a laser focus on our strategic priorities and taking decisive actions that reflect our deep connection and understanding of our customers. While the discretionary landscape remains under pressure, we are reiterating our guidance for the fiscal year that incorporates our continued efforts to improve what we can control. We are excited about our back-to-school and early Fall assortments showcased in our unique in-store experience that positions Citi Trends as a one-stop solution for trends for the entire family in their local neighborhoods.”

    Capital Return Program Update

    In the second quarter of 2023, the Company did not repurchase any shares of its common stock. At the end of the second quarter of 2023, $50.0 million remained available under the Company’s share repurchase program.

    Guidance

    The Company is reiterating its outlook for fiscal 2023 as follows:

    • Full year total sales are expected to be in the range of negative mid single-digits to negative low single-digits as compared to fiscal 2022
    • Full year gross margin expected to be in the high thirties
    • Full year EBITDA* expected to be in the range of $5 million to $20 million
    • The Company plans to open 5 new stores, remodel 10 to 20 stores and close 10 to 15 underperforming stores in the year
    • Full year capital expenditures are expected to be in the range of $15 million to $20 million
    • Year end cash balance is expected to be in the range of $85 million to $105 million

    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 (415) 226-5356. A replay of the conference call will be available until August 29, 2023, by dialing (800) 633-8284 and entering the passcode, 22027692.

    The live broadcast of Citi Trends' conference call will be available online at the Company's website, 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 call, may contain or constitute information that has not been disclosed previously.

    About Citi Trends

    Citi Trends, Inc. is a leading specialty value retailer of apparel, accessories and home trends for way less spend primarily for African American and multicultural families in the United States. The Company operates 611 stores located in 33 states. For more information, visit cititrends.com or your local store.

    *Non-GAAP Financial Measures

    The historical non-GAAP financial measures discussed herein are reconciled to their corresponding GAAP measures at the end of this press release. The Company is unable to provide a full reconciliation of the forward-looking non-GAAP financial measure used in 2023 guidance without unreasonable effort because it is not possible to predict certain of its adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of the Company’ control and its unavailability could have a significant impact on its financial results.

    Forward-Looking Statements

    All statements other than historical facts contained in this news release, including statements regarding the Company’s future financial results and position, business policy and plans, objectives and expectations of management for future operations and capital allocation expectations, are forward-looking statements that are subject to material risks and uncertainties. The words "believe," "may," "could," "plans," "estimate," “expects,” "continue," "anticipate," "intend," "expect," “upcoming,” “trend” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements, although not all forward-looking statements contain such language. Statements with respect to earnings, sales or new store 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 our Annual Reports and Quarterly Reports on Forms 10-K and 10-Q, respectively, and any amendments thereto, filed with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to, uncertainties relating to general economic conditions, including inflation, energy and fuel costs, unemployment levels, and any deterioration whether caused by acts of war, terrorism, political or social unrest (including any resulting store closures, damage or loss of inventory) or other factors; changes in market interest rates and market levels of wages; natural disasters such as hurricanes; uncertainty and economic impact of pandemics, epidemics or other public health emergencies such as the ongoing COVID-19 pandemic; transportation and distribution delays or interruptions; changes in freight rates; the Company’s ability to attract and retain workers; the Company’s ability to negotiate effectively the cost and purchase of merchandise inventory risks due to shifts in market demand; the Company’s ability to gauge fashion trends and changing consumer preferences; consumer confidence and changes in consumer spending patterns; competition within the industry; competition in our markets; the duration and extent of any economic stimulus programs; changes in product mix; interruptions in suppliers’ businesses; the ongoing assessment and impact of the cyber disruption we identified on January 14, 2023, including legal, reputational, financial and contractual risks resulting from the disruption, and other risks related to cybersecurity, data privacy and intellectual property; temporary changes in demand due to weather patterns; seasonality of the Company’s business; the results of pending or threatened litigation; delays associated with building, remodeling, opening and operating new stores; and delays associated with building and opening or expanding new or existing distribution centers. Any forward-looking statements by the Company, with respect to guidance, 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, the Company 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 CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
    (in thousands, except per share data)
     
    Thirteen Weeks Ended
    July 29, 2023 July 30, 2022 July 31, 2021
    Net sales

    $

    173,554

     

    $

    185,012

     

    $

    237,281

     

     
    Cost of sales (exclusive of depreciation shown separately below)

     

    (107,226

    )

     

    (114,589

    )

     

    (140,542

    )

    Selling, general and administrative expenses

     

    (69,543

    )

     

    (68,481

    )

     

    (75,383

    )

    Depreciation

     

    (4,708

    )

     

    (5,272

    )

     

    (4,994

    )

    (Loss) income from operations

     

    (7,923

    )

     

    (3,330

    )

     

    16,362

     

    Interest income

     

    887

     

     

    2

     

     

    2

     

    Interest expense

     

    (77

    )

     

    (78

    )

     

    (77

    )

    (Loss) income before income taxes

     

    (7,113

    )

     

    (3,406

    )

     

    16,287

     

    Income tax benefit (expense)

     

    2,081

     

     

    870

     

     

    (3,797

    )

    Net (loss) income

    $

    (5,032

    )

    $

    (2,536

    )

    $

    12,490

     

     
    Basic net (loss) income per common share

    $

    (0.61

    )

    $

    (0.31

    )

    $

    1.37

     

    Diluted net (loss) income per common share

    $

    (0.61

    )

    $

    (0.31

    )

    $

    1.36

     

     
    Weighted average number of shares outstanding
    Basic

     

    8,225

     

     

    8,165

     

     

    9,088

     

    Diluted

     

    8,225

     

     

    8,165

     

     

    9,178

     

     
     
    Twenty-Six Weeks Ended
    July 29, 2023 July 30, 2022 July 31, 2021
    Net sales

    $

    353,242

     

    $

    393,227

     

    $

    522,662

     

     
    Cost of sales (exclusive of depreciation shown separately below)

     

    (220,885

    )

     

    (241,600

    )

     

    (304,333

    )

    Selling, general and administrative expenses

     

    (140,350

    )

     

    (139,507

    )

     

    (153,275

    )

    Depreciation

     

    (9,389

    )

     

    (10,717

    )

     

    (9,691

    )

    Gain on sale-leasebacks

     

     

     

    34,920

     

     

     

    (Loss) income from operations

     

    (17,382

    )

     

    36,323

     

     

    55,363

     

    Interest income

     

    1,910

     

     

    2

     

     

    6

     

    Interest expense

     

    (152

    )

     

    (154

    )

     

    (124

    )

    (Loss) income before income taxes

     

    (15,624

    )

     

    36,171

     

     

    55,245

     

    Income tax benefit (expense)

     

    3,957

     

     

    (8,504

    )

     

    (11,858

    )

    Net (loss) income

    $

    (11,667

    )

    $

    27,667

     

    $

    43,387

     

     
    Basic net (loss) income per common share

    $

    (1.42

    )

    $

    3.34

     

    $

    4.68

     

    Diluted net (loss) income per common share

    $

    (1.42

    )

    $

    3.34

     

    $

    4.63

     

     
    Weighted average number of shares outstanding
    Basic

     

    8,203

     

     

    8,284

     

     

    9,269

     

    Diluted

     

    8,203

     

     

    8,284

     

     

    9,374

     

     
    CITI TRENDS, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
    (in thousands)
    July 29, 2023 July 30, 2022
    Assets:
    Cash and cash equivalents

    $

    65,820

    $

    27,914

    Inventory

     

    134,473

     

    142,101

    Prepaid and other current assets

     

    19,795

     

    17,728

    Property and equipment, net

     

    59,084

     

    72,450

    Operating lease right of use assets

     

    240,151

     

    237,556

    Deferred tax assets

     

    6,101

     

    2,538

    Other noncurrent assets

     

    1,083

     

    1,252

    Total assets

    $

    526,507

    $

    501,539

      
    Liabilities and Stockholders' Equity:
    Accounts payable

    $

    93,680

    $

    82,956

    Accrued liabilities

     

    28,383

     

    33,797

    Current operating lease liabilities

     

    46,540

     

    47,547

    Other current liabilities

     

    1,259

     

    1,205

    Noncurrent operating lease liabilities

     

    198,525

     

    200,220

    Other noncurrent liabilities

     

    2,167

     

    2,204

    Total liabilities

     

    370,554

     

    367,929

       
    Total stockholders' equity

     

    155,953

     

    133,610

    Total liabilities and stockholders' equity

    $

    526,507

    $

    501,539

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
    (in thousands, except per share data)
       
    The Company makes reference in this release to adjusted gross margin, adjusted operating income, adjusted net income, adjusted earnings per share and adjusted EBITDA. The Company believes these supplemental measures reflect operating results that are more indicative of the Company's ongoing operating performance while improving comparability to prior and future 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 or earnings per diluted share prepared in accordance with generally accepted accounting principles (GAAP).
    Thirteen Weeks
    Ended
    July 29, 2023
    Reconciliation of Adjusted Operating Loss
    Operating loss

    $

    (7,923

    )

    Cyber incident expenses

     

    163

     

    Adjusted operating loss

    $

    (7,760

    )

     
    Thirteen Weeks
    Ended
    July 29, 2023
    Reconciliation of Adjusted Diluted EPS
    Diluted loss per share

    $

    (0.61

    )

    Cyber incident expenses

     

    0.02

     

    Tax effect

     

    (0.01

    )

    Adjusted diluted loss per share

    $

    (0.60

    )

     
    Twenty-Six
    Weeks Ended
    July 29, 2023
    Reconciliation of Adjusted Gross Margin
    Net sales

    $

    353,242

     

    Cost of sales

     

    (220,885

    )

    Gross profit

    $

    132,357

     

    Gross margin

     

    37.5

    %

    Cyber incident expenses

    $

    513

     

    Adjusted gross profit

    $

    132,870

     

    Adjusted gross margin

     

    37.6

    %

     
    Twenty-Six Weeks Ended
    July 29, 2023 July 30, 2022
    Reconciliation of Adjusted Operating (Loss) Income
    Operating (loss) income

    $

    (17,382

    )

    $

    36,323

     

    Cyber incident expenses

     

    1,723

     

     

     

    Gain on sale-leaseback

     

     

     

    (34,920

    )

    Adjusted operating (loss) income

    $

    (15,659

    )

    $

    1,403

     

     
    Twenty-Six Weeks Ended
    July 29, 2023 July 30, 2022
    Reconciliation of Adjusted Net (Loss) Income
    Net (loss) income

    $

    (11,667

    )

    $

    27,667

     

    Cyber incident expenses

     

    1,723

     

     

     

    Gain on sale-leaseback

     

     

     

    (34,920

    )

    Tax effect

     

    (436

    )

     

    8,210

     

    Adjusted net (loss) income

    $

    (10,380

    )

    $

    957

     

     
    Twenty-Six Weeks Ended
    July 29, 2023 July 30, 2022
    Reconciliation of Adjusted Diluted EPS
    Diluted (loss) earnings per share

    $

    (1.42

    )

    $

    3.34

     

    Cyber incident expenses

     

    0.21

     

     

     

    Gain on sale-leaseback

     

     

     

    (4.22

    )

    Tax effect

     

    (0.05

    )

     

    0.99

     

    Adjusted diluted (loss) earnings per share

    $

    (1.27

    )

    $

    0.12

     

     
    Twenty-Six Weeks Ended
    July 29, 2023 July 30, 2022
    Reconciliation of Adjusted EBITDA
    Net (loss) income

     

    (11,667

    )

     

    27,667

     

    Interest income

     

    (1,910

    )

     

    (2

    )

    Interest expense

     

    152

     

     

    154

     

    Income tax (benefit) expense

     

    (3,957

    )

     

    8,504

     

    Depreciation

     

    9,389

     

     

    10,717

     

    Cyber incident expenses

     

    1,723

     

     

     

    Gain on sale-leaseback

     

     

     

    (34,920

    )

    Adjusted EBITDA

    $

    (6,270

    )

    $

    12,120

     

     


    The Citi Trends Stock at the time of publication of the news with a fall of -0,98 % to 20,20EUR on Tradegate stock exchange (21. August 2023, 22:26 Uhr).


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    Citi Trends Announces Second Quarter 2023 Results Citi Trends, Inc. (NASDAQ: CTRN), a leading specialty value retailer of apparel, accessories and home trends for way less spend primarily for African American and multicultural families in the United States, today reported results for the second …