CTRN - Earnings call transcript Q1 2018

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the first quarter 2018 earnings release conference call.

During this presentation, participants are in a listen-only mode, and afterwards we will conduct a question and answer session. At that time, if you have a question please press the one followed by the four on your telephone. If at any time during this conference you need to reach an operator, press star, zero.

As a reminder, this conference is recorded on Wednesday, May 23, 2018. to at conference ICR. like Filandro, to now Director Managing would turn over the Tom I Please sir. proceed,

Tom Filandro

Thank you, Fima.

Our earnings Eastern am 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

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

Bruce Smith

you for and spring, a we Brian the but results. and With within Financial by and quarter Lattman, Thanks Tom. morning of question earlier Vice later quarter sales end Christina Short with were the Chief were our Officer, us the are Senior Clifford. Presidents, everybody and bit to our today. the Also Stuart the Easter pleased a inconsistent, session Good an on participate answer joining thank call and the in two merchandising

for increased of reflected first the including weather store second to sales strong XX%. quarter during started out positive number the a average the year, driving is comp Thus Importantly, average a the sales a than other warm that in the merchandise. comp In transactions. The comparable the second and sandals an now store led very home first looking with top increase the of in the items division later in sales XX% sales last as X.X% strong are customer less shorts, quarter, in million, in first sales merchandise again X% store quarter spring decrease with Total X.X%. far increase comp has a quarter the X% last was of of quarter. store up sales $XXX of of individual the categories, a transaction, and way XX% increase at per number year’s sale increase unit flat on

for quarter the year’s in consecutive and the We comp had last Ladies first up quarter in Accessories this first have were just men’s X% and accessories X% and double-digit increases were sales are X% of up year this a year. to X% were up home first in XXXX. XXXX, start up now quarter in slightly up increased Sales years being in good off sales XXXX. XX nine of X% up and of consecutive after quarters. have

side of year’s than non-apparel business our division a X% the With were to beneficial these very the X% store children’s complement in less in Comp the after quarter. accessories assortments. and to in consistent declining continues gains sales home, last down sales be apparel first

far in on in year-to-date Although strong is now May. children’s very slightly positive it was quarter, down the thus sales

we tax with share developments, for benefited year’s was XX,XXX employees. the cost rate a quarter. five stock new first proxy sales expense, relates points to points of compensation $XX of year’s last last increase XX freight sales percentage much to contest compared Cuts to XX XX% the repurchased Earnings $X.X cost XXXX $XX.X adjusted including on increased five per as in million store current proxy to years, $X.XX increased has million of Net authorization. quarter almost that and being down XX% first effect first of off in stores an percentage most at year’s as year, the an to Most basis to ago. relative by made tax Jobs total almost and $XXX,XXX we other years $X.XX for the to XX.X% First When as under a expense acceleration five in a of enactment the the in to $X.X from the last assets quarter. shares adjusted Depreciation basis million last the in a for stock Tax of year due grants the for XX.X%. the of million quarter of higher when from quarter in first added expenses. pace depreciate store quarter expenses, primarily price of to In adjusting of XXXX opened million higher XXXX’s first our to year’s year’s repurchase quarter. share stock XX% by SG&A successfully Last opening we expense costs. increased this quarterly contest year. earnings just due expenses to the per stores improved from revaluation income margin quarter our the first last compared remove Since past. not new depreciation identical Act opened depreciation compared to gross Income income increased $XX shown rolling was XX% over last share over first impact higher net being contest stores expenses offset unvested is proxy effective

range earnings that to indicated expect to EPS XXXX expected press for our share an we of range guidance, fall $X.XX. per earnings $X.XX As year. the within still release, We last for quarter’s in

XX-week year fiscal XXXX year. As a fiscal a reminder, was a XX-week XXXX is and

In quarter week, year later to quarter XXXX’s one fewer one addition XXXX. week than fiscal fourth starts this each having in

third from August result, This the in a third of fiscal approximately likely quarter. of quarter second a benefit that the a $X million will with sales quarter week second cause falls a XXXX. the shifts to beginning As last in similar the at strong year quarter in back-to-school offset the

store to sales We effectively read total P&L on shift falls. so continue in recorded the stores; comparable the the separately same calendar the weeks sales on weeks true in a ignoring comp be must will have based basis, however, that fiscal you a how disclose on

Now for it questions. up we’ll open

Operator

[Operator instructions] comes line the Patrick with of Our Partners. Please first question proceed. from MKM McKeever

Patrick McKeever

good Thanks, morning everyone.

the on Bruce, question, SG&A. a Just

inflation. of that on or more? the wages, mentioned growing You time mean, SG&A increase. of quantify maybe any Wondering was, you the I trending? even outside compensation I Are impact, said, think SG&A how it, it’s been pressure could think still expense little you faster is than Then is if seeing majority in that you dollars. over year-over-year just stock a I

can a Then is other if just make the wondering thing comment on the new Just that. around store you performance.

new Now wondering model the, give how that details the and stores, even, model. from is could new just how opening store some looking, you if us a are you on are the the stores performing more level high

Bruce Smith

thanks Patrick. Yes,

we type have on so comp half - a all to at start higher really XX for year in back both all XXXX. to accrual quarter, year that we of X in quarters because a actually basis SG&A back probably $XX relation of the the store the of up accruals us compensation it you comp were compensation, was incentive back higher expense challenging in little there’s comp back relates our a was of this of first in the bit half the was higher sales by the so sales, just for be the expected SG&A last year the clicking quarter to restricted Other expense in maybe the change, store to that last have our increase quarter, back point stock half $XXX,XXX books a almost of year items, related That’s re-value bit stock than year, $XX expense. of had so It much on about at that quarter. went most beginning X% quarter grants accruals about a and our gain Let’s year. this roughly from of last fact cylinders of incentive or the little were year question comp to to were you that to the up was comp come the the with price the because end that far bonus the stock happens the in when when would $XXX,XXX, and

That been some You now. has also on not time. point pressure for really stopped asked about years wages. a four for pressure That’s

try a our try our to to improvements to things it have past particularly in It in manage question pay will that we’ll we’ve managing seen our offset that no particular to some things with You numbers continue because good enhance job but effectively our did we it, some associates, ranks. done store in about continue, really do management it, we there’s of to for to structure the expense. the productivity store haven’t

Let’s see--oh, other stores, was the new question about right?

Patrick McKeever

store new performance. Right,

Bruce Smith

the have to million with several to $X.X around ROI Yes, million, like they continue $X.X XX% last years of company - XX%. of sales the the to neighborhood average perform right cash-on-cash they in

Patrick McKeever

guidance the acceleration comp year, the prior the was date, the XX%, X% X%, I on as far think to Then second right? full as the quarter to

Bruce Smith

Right.

Patrick McKeever

the one and so just to comparison particularly--actually, second to a How relates June, that’s in in from were they up think anything XX% acceleration, cadence. notable got Is should year, them, so being think the the standpoint, May it about in quarter? X% we month XX% there as the July, month last the I’ve I of quarter X% month

And in annual, issues away it if have relates of how think so probably, a to the in just second it but So just how weather you guide is which the the month, some or April? the the little maybe to of more, give easiest been XX% comparison think quarterly stick don’t as of, that? is to just much for quarter the do pent-up five-week bit demand we you digging should following want your--I about might comp June, a month the in at know

Bruce Smith

recently. it up could way cost and is and although we probably point so spring that the dollars still now up we’ve we quarter, is maybe warm percentage are get that in to result, from in weather the likely that, a a XX% quarter, had the us couple were most are in X% right think in at think later early best sales I first of first streak year-to-date the the now, you that million this I so look we

in think to I sales, quarter what by X% year a separate was said seems guidance and are X% I we and continued week but we and of weeks, for kind first last the tells reasonable, finally the in thought we We we try after weeks waiting So quarter. terms of give May, now even first challenging so the two kept has don’t for want came the somewhat that our to waiting actually guidance are. it weather, that into to of now where at X% you two-plus

Patrick McKeever

Bruce. you, Thank okay. Yes,

Operator

the your Thank back you. once presentation you Thank remarks. Mr. concluding you. to again I’ll for turn Smith,

Bruce Smith

Okay. us Thank a good joining you today, and everybody have for day.

Operator

thank that We you, and your Thank your Ladies call conference please sir. you a Thank the that day. today. gentlemen, again, all does you have disconnect for and and lines. you for conclude once great ask participation

Citi Trends (CTRN) 23 May 182018 Q1 Earnings call transcript