Citi Trends (CTRN) Announces Third Quarter 2010 Results

Nov. 22, 2010 (Business Wire) — Citi Trends, Inc. (NASDAQ: CTRN) today reported results for the third quarter of fiscal 2010.

Financial Highlights – Third quarter ended October 30, 2010

Total sales in the third quarter ended October 30, 2010 increased 10.0% to $140.0 million compared with $127.4 million in the third quarter ended October 31, 2009. Comparable store sales decreased 4.2% in the third quarter. A net loss of $394,000 was recognized in this year’s third quarter compared with net income of $606,000 in the third quarter of 2009. Loss per diluted share was $(0.03) in the third quarter of 2010 compared with earnings per diluted share of $0.04 in the third quarter of 2009.

Store activity in the third quarter of 2010 included 33 new openings and 5 relocations/expansions, resulting in a total store count of 458 at the end of the quarter.

Financial Highlights – First three quarters ended October 30, 2010

Total sales in the first three quarters of fiscal 2010 increased 17.9% to $450.5 million compared with $382.1 million in the same period of fiscal 2009. Comparable store sales increased 2.2% in the first three quarters of this year. Net income increased 35.7% to $11.5 million compared with $8.5 million in last year’s first three quarters. Earnings per diluted share increased to $0.79 in the first three quarters of 2010 compared with $0.58 in the same period of 2009.

Fiscal 2010 Outlook

The Company estimates that 2010 earnings will be in a range of $1.50 to $1.60 per diluted share which includes an anticipated comparable store sales decrease of 1% to 4% in the fourth quarter of 2010. The effective tax rate for 2010 is expected to be in a range of 34% to 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) 231-2938. A replay of the conference call will be available until November 29, 2010, by dialing (402) 977-9140 and entering the passcode, 21463760. 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 November 29, 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 2 stores thus far in November 2010, the Company currently operates 460 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 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
			October 30, 2010					October 31, 2009
			(unaudited)					(unaudited)
Net sales			$	140,037				$	127,356
Cost of sales				88,356					79,720
Gross profit				51,681					47,636
Selling, general and administrative expenses				47,243					41,989
Depreciation and amortization				5,324					4,851
(Loss) income from operations				(886	)				796
Interest income				41					85
Interest expense				(8	)				(17	)
Unrealized gain on investment securities				–					57
(Loss) income before income tax (benefit) expense				(853	)				921
Income tax (benefit) expense				(459	)				315
Net (loss) income			$	(394	)			$	606
Basic net (loss) income per common share			$	(0.03	)			$	0.04
Diluted net (loss) income per common share			$	(0.03	)			$	0.04
Net (loss) income attributable to common shares (1):
Basic			$	(394	)			$	593
Diluted			$	(394	)			$	593
Weighted average shares used to compute basic net (loss) income per share				14,519					14,370
Weighted average shares used to compute diluted net (loss) income per share				14,519					14,409
			Thirty-Nine Weeks Ended					Thirty-Nine Weeks Ended
			October 30, 2010					October 31, 2009
			(unaudited)					(unaudited)
Net sales			$	450,485				$	382,058
Cost of sales				278,134					234,640
Gross profit				172,351					147,418
Selling, general and administrative expenses				140,119					121,116
Depreciation and amortization				14,843					13,679
Income from operations				17,389					12,623
Interest income				140					329
Interest expense				(17	)				(86	)
Income before income tax expense				17,512					12,866
Income tax expense				6,024					4,400
Net income			$	11,488				$	8,466
Basic net income per common share			$	0.79				$	0.58
Diluted net income per common share			$	0.79				$	0.58
Net income attributable to common shares (1):
Basic			$	11,488				$	8,289
Diluted			$	11,488				$	8,289
Weighted average shares used to compute basic net income per share				14,497					14,351
Weighted average shares used to compute diluted net income per share				14,518					14,383
(1) Net of income allocated to nonvested restricted stockholders

CITI TRENDS, INC.
CONDENSED BALANCE SHEETS (unaudited)
(in thousands)
			October 30, 2010				October 31, 2009
			(unaudited)				(unaudited)
Assets:
Cash and cash equivalents			$	69,632			$	32,487
Short-term investment securities				4,752				42,225
Inventory				115,273				105,314
Other current assets				21,995				16,420
Property and equipment, net				76,879				62,422
Other noncurrent assets				4,470				4,282
Total assets			$	293,001			$	263,150
Liabilities and Stockholders’ Equity:
Accounts payable			$	61,355			$	60,762
Accrued liabilities				22,111				20,263
Other current liabilities				3,200				3,504
Noncurrent liabilities				10,422				9,719
Total liabilities				97,088				94,248
Total stockholders’ equity				195,913				168,902
Total liabilities and stockholders’ equity			$	293,001			$	263,150