NEWS - Retail & Shopping Centers

By Lou Phelps, SBJ Staff

Feb 6, 2012 - Citi Trends, Inc. (NASDAQ: CTRN), headquartered in Savannah, released its 4^th quarter unaudited sales results and fiscal year end numbers last week, reporting a loss due primarily to same-store sales decreases.  The company blames late income tax refund checks for weak January numbers.

Total sales in the 13-week period ended January 28, 2012 increased 3.7% to $178.4 million compared with $172.0 million in the 13-week period ended January 29, 2011, but comparable store sales decreased 6.2% in the fourth quarter. 

By month, comparable store sales were down 10.7% in November, down 2.3% in December and down 11.2% in January.  Comparable store sales in January were up more than 3% until the last two days of the month, which were both down 40% due to a delay of one to two weeks for income tax refunds, as announced by the Internal Revenue Service.

For the year, total sales increased 2.9% to $640.8 million compared with $622.5 million in fiscal 2010.  Comparable store sales decreased 8.3% for the full year.

The Company stated that, although the year-end closing process has just begun, based on the negative fourth quarter comparable store sales results and a significantly lower gross margin, it expects to report a net loss of approximately $0.40 per diluted share for the fourth quarter.  Included in the estimated quarterly loss is the adverse impact of non-cash impairment expense totaling approximately $0.20 per diluted share.

According to Ed Anderson, Chairman and Chief Executive Officer, who has stepped back in to run the company, “While we are disappointed to report a loss for the fourth quarter, there are positives to report. Our sales trends improved significantly as we moved through the quarter, except for the impact of the shift in income tax refunds on the last two days of the quarter. We ended the year with the cleanest, best-balanced inventory in some time, preparing us well for the important first quarter. In addition, we continue to be strong financially with an excellent balance sheet, over $60 million of cash and investments, no debt and $50 million of unused capacity under our revolving line of credit.”

Many retailers nationally are awash in inventory due to weaker than projected December holiday sales.

According to Anderson, “Our company sells urban fashions, which we believe are whatever our customers tell us they are. Currently, our customers are telling us that price and fashion are important, while brands are less important. Many of the urban brands that have been important to us over the last few years do not resonate as well with our customers,” indicating a shift in buying strategies is ahead.

The Company will report complete financial results for its fourth quarter and fiscal 2011 before the market opens on March 9, 2012.