Citi Trends Announces Fourth Quarter and Fiscal 2007 Results

  
    
  
  
    
      Citi Trends, Inc. (NASDAQ: CTRN) today reported results for the fourth 
      quarter and fiscal year ended February 2, 2008.
    
    
      The Company’s 2007 fiscal year contained the 
      traditional 52 weeks, whereas, fiscal 2006 contained 53 weeks, with the 
      extra week falling in the fourth quarter. Accordingly, comparisons of 
      total sales and net income for the fourth quarter and full year of 
      fiscal 2007 to the same periods in 2006 are affected by an extra week in 
      2006. However, for comparable store sales, the Company is reporting on a 
      comparable weeks basis (e.g. the 13 weeks ended February 2, 2008 
      compared to the 13 weeks ended February 3, 2007).
    
    
      Financial Highlights – 
      Fourth quarter ended February 2, 2008
    
    
      Total sales in the 13-week quarter ended February 2, 2008 increased 6.2% 
      to $134.6 million compared with $126.8 million in the 14-week quarter 
      ended February 3, 2007. Comparable store sales decreased 1.1%, comparing 
      the 13 weeks ended February 2, 2008 to the 13 weeks ended February 3, 
      2007.
    
    
      Net income was $8.4 million compared with $10.4 million in last year’s 
      fourth quarter. Earnings per diluted share was $0.59 in the fourth 
      quarter of 2007 compared to $0.73 in 2006. The decline in fourth quarter 
      earnings was a result of the negative comparable store sales and a 
      related need to increase clearance markdowns, together with the 
      inclusion of the extra week in 2006. However, these factors were 
      partially offset by a favorable effective income tax rate in 2007 due to 
      income tax credits and tax-exempt income increasing, while pretax income 
      was decreasing.
    
    
      Financial Highlights – 
      Fiscal year ended February 2, 2008
    
    
      Total sales in the 52-week fiscal year ended February 2, 2008 increased 
      14.6% to $437.5 million compared with $381.9 million in the 53-week 
      fiscal year ended February 3, 2007. The extra week last year contributed 
      approximately $10 million of sales in 2006. Comparable store sales 
      increased 1.0%, comparing the 52 weeks ended February 2, 2008 to the 52 
      weeks ended February 3, 2007.
    
    
      Net income was $14.2 million in 2007 compared with $21.4 million in 
      2006. Earnings per diluted share was $1.00 in 2007 compared with $1.51 
      in the prior year.
    
    
      Fiscal 2008 Outlook
    
    
      The Company estimates 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 2% to 3%. For the year, the Company 
      expects to increase selling square footage by at least 15%.
    
    
      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 on March 26, 2008, at 5:00 p.m. 
      ET. The number to call for the live interactive teleconference is 
      [phone]. A replay of the conference call will be available until 
      April 2, 2008, by dialing [phone] and entering the passcode, 
      11105977#. 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 
      on March 26, 2008, beginning at 5:00 p.m. ET. The online replay will 
      follow shortly after the call and continue through April 2, 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 
      330 stores located in 20 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 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.
    
    
      
        
          CITI TRENDS, INC.
        
      
      
        
          CONDENSED STATEMENTS OF INCOME
        
      
      
        
          (unaudited)
        
      
      
        
          (in thousands, except per share data)
        
      
      
        
        
        
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Thirteen Weeks Ended
        
        
        
        
          Fourteen Weeks Ended
        
      
      
        
        
        
          February 2, 2008
        
        
        
        
        
        
          February 3, 2007
        
      
      
        
        
        
          (unaudited)
        
        
        
        
        
        
          (unaudited)
        
      
      
        
          Net sales
        
        
          $
        
        
          134,571
        
        
        
        
        
        
        
        
          $
        
        
          126,788
        
        
        
      
      
        
          Cost of sales
        
        
           
        
        
          87,145
        
        
           
        
        
        
        
        
        
           
        
        
          78,104
        
        
           
        
      
      
        
          Gross profit
        
        
        
        
          47,426
        
        
        
        
        
        
        
        
        
        
          48,684
        
        
        
      
      
        
          Selling, general and administrative expenses
        
        
        
        
          32,892
        
        
        
        
        
        
        
        
        
        
          31,374
        
        
        
      
      
        
          Depreciation and amortization
        
        
           
        
        
          3,488
        
        
           
        
        
        
        
        
        
           
        
        
          2,363
        
        
           
        
      
      
        
          Income from operations
        
        
        
        
          11,046
        
        
        
        
        
        
        
        
        
        
          14,947
        
        
        
      
      
        
          Interest income
        
        
        
        
          680
        
        
        
        
        
        
        
        
        
        
          585
        
        
        
      
      
        
          Interest expense
        
        
           
        
        
          (97
        
        
          )
        
        
        
        
        
        
           
        
        
          (190
        
        
          )
        
      
      
        
          Income before provision for income taxes
        
        
        
        
          11,629
        
        
        
        
        
        
        
        
        
        
          15,342
        
        
        
      
      
        
          Provision for income taxes
        
        
           
        
        
          3,251
        
        
           
        
        
        
        
        
        
           
        
        
          4,970
        
        
           
        
      
      
        
          Net income
        
        
          $
        
        
          8,378
        
        
           
        
        
        
        
        
        
          $
        
        
          10,372
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income per share, basic
        
        
          $
        
        
          0.60
        
        
        
        
        
        
        
        
          $
        
        
          0.75
        
        
        
      
      
        
          Net income per share, diluted
        
        
          $
        
        
          0.59
        
        
        
        
        
        
        
        
          $
        
        
          0.73
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average shares used to compute net income per share, basic
        
        
        
        
          14,034
        
        
        
        
        
        
        
        
        
        
          13,739
        
        
        
      
      
        
          Weighted average shares used to compute net income per share, diluted
        
        
        
        
          14,188
        
        
        
        
        
        
        
        
        
        
          14,200
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          CITI TRENDS, INC.
        
      
      
        
          CONDENSED STATEMENTS OF INCOME
        
      
      
        
          (unaudited)
        
      
      
        
          (in thousands, except per share data)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Fifty-Two Weeks Ended
        
        
        
        
          Fifty-Three Weeks Ended
        
      
      
        
        
        
          February 2, 2008
        
        
        
        
        
        
          February 3, 2007
        
      
      
        
        
        
          (unaudited)
        
        
        
        
        
        
          (unaudited)
        
      
      
        
          Net sales
        
        
          $
        
        
          437,515
        
        
        
        
        
        
        
        
          $
        
        
          381,918
        
        
        
      
      
        
          Cost of sales
        
        
           
        
        
          278,783
        
        
           
        
        
        
        
        
        
           
        
        
          235,744
        
        
           
        
      
      
        
          Gross profit
        
        
        
        
          158,732
        
        
        
        
        
        
        
        
        
        
          146,174
        
        
        
      
      
        
          Selling, general and administrative expenses
        
        
        
        
          127,470
        
        
        
        
        
        
        
        
        
        
          107,535
        
        
        
      
      
        
          Depreciation and amortization
        
        
           
        
        
          12,583
        
        
           
        
        
        
        
        
        
           
        
        
          8,326
        
        
           
        
      
      
        
          Income from operations
        
        
        
        
          18,679
        
        
        
        
        
        
        
        
        
        
          30,313
        
        
        
      
      
        
          Interest income
        
        
        
        
          2,383
        
        
        
        
        
        
        
        
        
        
          2,014
        
        
        
      
      
        
          Interest expense
        
        
           
        
        
          (469
        
        
          )
        
        
        
        
        
        
           
        
        
          (359
        
        
          )
        
      
      
        
          Income before provision for income taxes
        
        
        
        
          20,593
        
        
        
        
        
        
        
        
        
        
          31,968
        
        
        
      
      
        
          Provision for income taxes
        
        
           
        
        
          6,379
        
        
           
        
        
        
        
        
        
           
        
        
          10,617
        
        
           
        
      
      
        
          Net income
        
        
          $
        
        
          14,214
        
        
           
        
        
        
        
        
        
          $
        
        
          21,351
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income per share, basic
        
        
          $
        
        
          1.02
        
        
        
        
        
        
        
        
          $
        
        
          1.57
        
        
        
      
      
        
          Net income per share, diluted
        
        
          $
        
        
          1.00
        
        
        
        
        
        
        
        
          $
        
        
          1.51
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average shares used to compute net income per share, basic
        
        
        
        
          13,946
        
        
        
        
        
        
        
        
        
        
          13,575
        
        
        
      
      
        
          Weighted average shares used to compute net income per share, diluted
        
        
        
        
          14,223
        
        
        
        
        
        
        
        
        
        
          14,138
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          CITI TRENDS, INC.
        
      
      
        
          CONDENSED BALANCE SHEETS
        
      
      
        
          (unaudited)
        
      
      
        
          (in thousands)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          February 2, 2008
        
        
        
        
        
        
          February 3, 2007
        
      
      
        
        
        
          (unaudited)
        
        
        
        
        
        
          (unaudited)
        
      
      
        
          Assets:
        
        
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
          $
        
        
          6,203
        
        
        
        
        
        
        
        
          $
        
        
          7,707
        
        
        
      
      
        
          Short-term investments (1)
        
        
        
        
          56,165
        
        
        
        
        
        
        
        
        
        
          65,956
        
        
        
      
      
        
          Inventory
        
        
        
        
          82,420
        
        
        
        
        
        
        
        
        
        
          73,360
        
        
        
      
      
        
          Other current assets
        
        
        
        
          8,726
        
        
        
        
        
        
        
        
        
        
          7,000
        
        
        
      
      
        
          Property and equipment, net
        
        
        
        
          52,207
        
        
        
        
        
        
        
        
        
        
          34,754
        
        
        
      
      
        
          Other noncurrent assets
        
        
           
        
        
          4,456
        
        
           
        
        
        
        
        
        
           
        
        
          3,330
        
        
           
        
      
      
        
          Total assets
        
        
          $
        
        
          210,177
        
        
           
        
        
        
        
        
        
          $
        
        
          192,107
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Liabilities and Stockholders' Equity:
        
        
        
        
        
        
        
        
        
      
      
        
          Accounts payable
        
        
          $
        
        
          43,566
        
        
        
        
        
        
        
        
          $
        
        
          46,894
        
        
        
      
      
        
          Accrued liabilities
        
        
        
        
          17,089
        
        
        
        
        
        
        
        
        
        
          15,587
        
        
        
      
      
        
          Other current liabilities
        
        
        
        
          3,370
        
        
        
        
        
        
        
        
        
        
          3,174
        
        
        
      
      
        
          Noncurrent liabilities
        
        
           
        
        
          8,005
        
        
           
        
        
        
        
        
        
           
        
        
          8,243
        
        
           
        
      
      
        
          Total liabilities
        
        
        
        
          72,030
        
        
        
        
        
        
        
        
        
        
          73,898
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total stockholders' equity
        
        
           
        
        
          138,147
        
        
           
        
        
        
        
        
        
           
        
        
          118,209
        
        
           
        
      
      
        
          Total liabilities and stockholders' equity
        
        
          $
        
        
          210,177
        
        
           
        
        
        
        
        
        
          $
        
        
          192,107
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            (1) Short-term investments consist of municipal auction rate 
            securities (ARS) issued by state governments to fund student 
            loans. These securities are high-grade (AAA rated), most of which 
            are either guaranteed by the U.S. Department of Education or 
            backed by insurance. Historically, the ARS provided liquidity via 
            an auction process that reset the interest rate every 35 days, 
            allowing investors either to roll over their investments or sell 
            them at par. Since these auction rate securities have typically 
            traded at short-term intervals, they have been classified as 
            current assets. Subsequent to February 2, 2008, there has been 
            insufficient demand for these types of investments during the 
            auctions and, as a result, these securities are not currently 
            liquid. The Company may not be able to access cash by selling 
            these securities without a loss of principal until either, 
            liquidity returns to the auction process, a secondary market 
            emerges, they are redeemed by the issuer, or they mature in years 
            ranging from 2010 to 2040. At this time, there is no evidence to 
            conclude that the ARS are impaired. If it is later determined that 
            the market value of these securities is impaired, the Company 
            would be required to write down the investments to fair value. 
            Also, if liquidity is not restored to this market in the near 
            term, the Company may be required to reclassify these investments 
            as long-term assets.