CTRN - Earnings call transcript Q4 2017

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Citi Trends’ Fourth Quarter 2017 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session [Operator Instructions].

As a reminder, this conference is being recorded Friday, March 16, 2018. to at conference ICR. like Filandro, to now Director Managing would turn over the Tom I Please ahead. go

Tom Filandro

Thank you, Beatrice.

Our earnings Eastern a.m. morning at release was sent Time. out this X:XX

of available If release, section at under a not you Relations copy have the Investor it the on is www.cititrends.com. company’s website received the

Exchange on XX-K in this additional materially detailed of meaning recent you to over the should Private more of future forward-looking to our response You subsequent during Securities aware that Commission forward-looking discussion XXXX. forward-looking statements Smith. contain turn most of to Litigation Executive will guarantee the statements. and Bruce undue prepared described call cause that those refer and may be statements. differ for Form Act Bruce? to We company’s I actual Management should reliance the results make may statements now statements Officer, made Reform factors a These you filings not report questions. the remarks other call within in place your can from these Securities with not Chief the the on do the Therefore, performance.

Bruce Smith

in Trend’s off throughout fronts. Financial first momentum the Officer, us Good are our in newly Citi capped a and as by you quarters team Tom. Short today. Lattman, Brian President, quarter, Christina we on successful to number the Chief and of Stuart two The thank Thanks, General call named Also Vice year fourth the for everybody, the Clifford. our three the year the of continued build joining on session morning, participate question-and-answer Merchandise Managers,

the quarter increases in the full store were First and and comparable sales year. foremost, strong of

the including unit growth registered comp all and of number we Importantly, items retail. per transaction transaction counts, average metrics average across

both store of Expenses results the the with value improvement. of addition all in the contributed offerings controlled non-apparel is priced fashion consistently apparel the our rates, delivering right, our our provided our customers These five company, major successfully business. were resulting of our strategy we investment expanded categories levels Inventory new opened managed, turnover were that all or an in merchandize resonating inventory combined The in confirmed with lines well to $XXX sales at and merchandized which to In million end. and merchandizing across throughout XX increase significant in existing expense sales and and increase improvement also XX performance relocated company’s in comparable leverage. stores. balances to cash led year effectively stores

strength led and program the authorize returning of Our to Board with operating their the $XX performance capital shareholders commitment of amount confidence Board the financial together Directors’ our million. in another share to appropriately and strong business has and excess to repurchase

number per where of results the It have consecutive transaction and last fourth quarter. the for now double-digit customer our of quarter, the details categories that of a on XX quarter years X.X% quarter home we comp increased trend had to fourth I top the in growth financial a unit we during and growth and unit increase in area review at registered like average of which transactions And per home number sales that full Now continues has increase this men’s in merchandize XX% XXth the X.X% items improvement the to average for note ladies in the year’s in at business. Comparable in the XXXX after year. year’s six the on improvement in transactions the fourth of in an retail were is in customer would increasing in being XX% consecutive the full quarter metrics. years The up first same transaction children the was retail. improvement is X%, X% increased X% the quarter time a store full in of year. fourth the slight looking this over in an increase both a The sales various also X% XXXX, sales our quarter X.X%, area year. in This store units important reflected quarter The year. and was previous the top quarter was X% last year the last sales and of The the year. of comp fourth fourth similar increased down business up X% number of fourth of for in after

X%, Finally were accessories in fourth quarter. year’s footwear last which increase up include following X% a

increase full was flat at compared the to sales year, a XX% and of store ladies each kids and X%. men’s’ in quarter followed Gross comparable with accessories home margin same the For XXXX led X%, at last at by fourth year. way quarter X% the the

XX higher points primarily basis cost. For to margin the about slightly gross due freight year, full decreased

year full profit dollar delivered we of in However X%. growth excess gross

charge During act XX.X% in P&L, proxy quarter half down sales with re-measure adjusted significantly per points adjusted new cuts of the leverage X.X the a XX.X% assets. the the diluted in percent share in more improvement rate basis $X.XX was to tax to expenses for for in result to in similar XXXX. last expenses, Earnings XX% from what continue XX% the and represented tax lowering in of effect net of had balance for including we act, previous the XXXX. an from XX to of charge fourth in a $X.XX jobs of the the that income from as of expenses comparison fourth expense assets contest federal first after December. recorded adjusting where write lever XXXX. on year’s quarter, quarter, impact rate tax fourth we $X.X expense billion and non-cash than in the a income this the were and full SG&A year, In we income million we a to effect enactment as increased This $X.X experienced Fourth the sheet was in tax the our the over continuing the year-over-year tax million, income the down $X.X rate. quarter XX% net share our new increased both In deferred years when the EPS XX% per to to one-time quarter million of was charge these This quarter.

$X.XX last XX.X% $XX.X to year expenses act, When per earnings new For $X.XX the the proxy in net to and tax was share, of per XXXX. or year, income or adjusted share the million for $XX.X XXXX $X.XX. contest full the effect compared the a over share increased million

right, so we plus season, sell-through spring strong yesterday the Year, a and positioned of spring the weeks Looking XXXX. flow well store combination are for quality products a comparable forward, our of to sales good Through first of New in up of off Trend fall-winner reflecting far high merchandize. five X% we were the fourth value-priced, the thus are for quarter start

enhancements meeting the We strategy our also our growing earlier expect the store expected sales. X% which allocation by indicating in previously basis. values. both earnings systems, the our and for assortments our focusing In apparel morning, comp X% business planning tailor issued needs a to fiscal mentioned we and to increase rollout We merchandize on our this non-apparel store-by-store to continued on merchandize an customer’s plan improve ability continue of guidance at our we of to will release of areas fashion provided exceptional XXXX

per a we year that lead one expected and XXXX when decline range sales to such fewer increase XX would stores. to next the benefit XXXX expect expect next considering from the X% The an share adjusted comps increase weak We in of standpoint, tax of in $X.XX earnings new of From opening rate goal in guidance to earnings X% a $X.XX a versus a to EPS year. in an $X.XX total $X.XX. includes of $X.XX range the

up for Now Beatrice, will open we questions. it

Operator

our [Operator comes Partners. the from line first of with Please question your MKM Patrick with McKeever question. proceed Instructions]

Patrick McKeever

that of the that tax business It XXXX I flow Is of bottom the the or bill on well. benefit like savings from will to to you benefit last some point on reinvestment correct in there the guess line. the most back on made is earnings. as sounds the

the my date is for same quarter, XXXX. of the more the And historically volatility that It to first on that X% of some become be and like dissipating or business seems in in guidance store will becoming seen quarter comp the the you’ve the first X% question. fourth that then of has consistent. just So sales strong that is

is by quarter, sales. comment of kind should might that about we behind So growth and point. of about that. I’m think stand that the XXXX case, sales X% you if the you on factors fluctuation from are think you the what comparisons, for if think in know how in should fluctuations major consistency the is same do the a greater a quarters some meaningful wondering different store And same store rate more we steady of area There but just

Bruce Smith

about the asked I’ll start question with the tax changes. you

that amount. other are should back You’re we operations, about of And Remember to been bottom not some correct, things are the the countries use line. discuss that It’s benefit country, have like in therefore discuss to no and the we’re to think the through that in money probably we I the we probably for the what thought showed as bringing guidance foreign way we companies things. other able considering. cash that first all have some helpful as that well

on a the we will year that benefit course in do is source benefit our use X, million any that in of from our past to free your that make reinvest impact balance question and see that about appropriate of ago. year. right, we’ve we to from so. as return come can pass then Our use far meaningful from and per brands as And will the company annually X works roughly cash XX% cash where and about XX% million a on course smooth X, you’re of really investments, as And it tax the where to were financial really last to decline or off a plan the grow years benefit period and year federal our the just expected have and not seen the income or the have from We rate position million impacting year in per time $XX of out half sales sheet $XXX dramatically and we of falling other million $X $X the you therefore out capital to volatility, operations shareholders. sales it where

So stabilized. have things

than that anything don’t XX major more have other asked We’ve direction, from them pressure the continue are thing metrics having all back the had think like more years there, reflected make so I guidance. also and it mentioned working key three we in that I categories consecutive actually in we we were merchandized and now quarters. unit point nothing the all do volatility and to my retail pulling five have don’t number that’s to that going sale, as our direction know really more did average would up, transaction. average those we be that any there’s a don’t is have years. you gotten we to of had we comments The us of so area between where a always to that unusual. anchor give in for have our of the per declining we around we And that I right in necks, right expect likewise transactions and we of where items and unit

by You volatility pointing and you really what we’re are. towards as so our know point. last far quarter we’re year looking unusual comparisons between business our what know at, not cost as quarters this at the goes any were, what But

Patrick McKeever

margin guidance still rate, should gave, growth a there square open little growth more couple pretty the small growth And just think grow given a why the geographic priced see ended than to chains, the Burlington, X% the see term you term X% limited you helpful. longer was and on relative Ross, consistent on city that then The rate, given fact around operating X% the a company’s’ where TJ. then company peak the not the margin, the footprint. of business the and could comment trends where to And the and off you of do potential margin also is relatively bit which faster to be more store size margin, that I you on big the maybe which opportunity just that just been relative both operating footage has longer

to I in to think the high mid-teens. those margins very single-digits even are in the

Bruce Smith

that factors we spend regarding same and goes the your way off-price and an lot in on go key we a question expenses way shop there’s real that that as the basis. growth for same far on shop that for as rate, estate factor to Yes, of money for merchandize including is that is we

great And those comes so real order we stores it are great us always estate give deals on looking investment. in for to to when returns make

from us teaches rate. that yes, at growing a So, maybe higher

perfectly the fine that we’re not sake of really is grow growing for just to are We do what looking because profitably, growing.

factor were a go in And way keep some to we’re grow that nice it the that when growth We trying And learned Another this, a cognizant to a growing of footage, to with some smaller that, to we growing. try hard when we and along you’re steady that. fast rate to in goes stores years XX in square that XX% issues year. XX company, XX% there are were respects.

a high us single-digits. much, And four get operating you consistently our You are, X% much in the period be of question or seven back where certainly bigger years to. terms would said to like year prices a we were on course get we range the for back operating strive margin. longer probably of where to to That would eight ago was There goal in term margin.

Some are is they single-digit the those of have. operating of companies that high to that margin that scale able because achieve

leverage but sales, with store for good to comp operating continue to us good it’s expense But key expense and comp We them, comes comes all certainly mind. the keep leverage goal are in smaller a a it we with as and to higher store much is because margin. than grow certainly

keep the right the so store to got direction. comp go And we’ve sales in

Operator

to Smith your with I or at Please back Mr. there this will the further are no remarks. continue questions time. presentation you. call now closing turn

Bruce Smith

great Okay, Thank thank you. you. everybody has I hope day. a

Operator

for for you the today. your gentlemen, that call participation thank and please you your Ladies that disconnect and line. conference does conclude ask We

Tom Filandro	MD, ICR
Bruce Smith	CEO
Stuart Clifford	CFO
Christina Short	VP, General Merchandise Manager
Brian Lattman	VP, General Merchandise Manager
Patrick McKeever	MKM Partners

Citi Trends (CTRN) 16 Mar 182017 Q4 Earnings call transcript