CTRN - Earnings call transcript Q2 2018

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Second Quarter 2018 Earnings Release.

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 Thursday, August 23, 2018. I would now like to turn the conference over to Tom Filandro, Managing Director at ICR. sir. ahead, go Please

Tom Filandro

Good Cathy. morning, you, everyone. Thank

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

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

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

Bruce Smith

two the contributing transactions. positive again including Christina unit Thanks, Officer, broad-based the In Also the Clifford; Senior Chief growth call with number and our strength categories our we metrics, see you all morning Financial and see once merchandise all pleased selling the Short transaction, Presidents, by units was driven were of merchandising that of average We and to our quarter joining across were to Brian sale, momentum on major per results. also sales five us second is and Vice everybody Tom. for to continued Good today. Stuart thank Lattman. pleased

profit. a store to higher expense performance when in X.X% operating was with shift combined increases much total second sales the gross from sales highlighted a comparable strong controls margin by Our the contributed calendar. fiscal sales benefit quarter These to and improved in increase operating and

year-to-date to results; fewer a lower tax income addition per increase rate adjusted shares improvement share. In the earnings in XX% operating in outstanding and a to led

Now, I to discuss Stuart to I'll additional results expectations. before the turn the details call on over future provide

Stuart Clifford

sales Total the increased million. Bruce. in X.X% second $XXX to Thanks, quarter

fiscal on later one starts last than due quarter's in XXXX As year weeks. call, year to having each we quarter fiscal this mentioned week XX last

to second August As million. second of was a a In strong we at and sales quarter the that benefit the that This $X.X sales week. result, the replaced provided $X shift year that total to total beginning year. year-over-year the expected quarter the compared of beginning the is week is at of back by lose million. in falls Due be benefit the the to shift quarter to November week this a third year's in impacted of by strong this quarter, last typically approximately calendar in third school a week the in comparison be third will the sales back-to-school quarter weeks, lower it to of adversely will

that in quarter of division in The weeks X% in XX% for increasing second identical top calendar year's children's August compare last the increased at quarter led quarter. increase during top consecutive individual in last of looking In And XXXX in home of the of comps up quarter. X.X%. second on Comp top increase the store second customer increase year's X, in the a sales this was were up merchandise of per average year to X% of up X.X% number comps after X% seventh the items half of XX-weeks increase transaction, quarter, a store quarter increase sales the average an the X% X% slight way the in basis. of second X, more not store on the higher, X% the with total increased again second increase XX% Men's sales number increase categories, quarter. X% XXXX. year. were were second the the the sales Accessories comparable being sale for on X% X% last disclosure comparable year and comp year's the clarity, our the strong compares X% a after on sales slightly same unit in the does ladies transactions. quarter reflected the shift August last impact comparable than For of ended XX-weeks comp sales increasing shifted ended first increased store up In with while division which In sales an XXXX. in positive

gross improved higher to quarter basis a margins. margin results core points due shrinkage and increased Second merchandised XX

For first year-to-date, of XX gross in basis the points higher margin half than is XXXX. the

and for Second adjustment after X.X% quarter count, inflation SG&A to increased impacts contest expenses associated the results. year's sales store strong compared proxy expenses normal with reflecting a higher last expenses

per or $XXX,XXX or contest the share was second per for net $XX.X or proxy a last quarter. expense net proxy in with provided with first of adjusting SG&A $X.XX per additional earned second in second of share net share. basis the to year's year's increase adjusted slightly the store share. XX.X% contest expenses million Company Year-to-date, $X.XX the expenses second million the to basis expenses. After As increased year's half. and from SG&A per per $X.X of quarter to primarily due from $X.XX Net per Adjusting last $X.XX have sales. XX a for $X.XX Year-to-date, as comp with last first for or year's quarter or points the in or year's compared to $X.X $XX.X shift half was a decreased sales, profitable has expenses, share $XXX,XXX sales sales to share expenses loss percentage leverage relation by compared in last XX.X%, XXX quarter $X.XX adjusted last income points diluted last of of calendar percent declined net million compared income of million income year's in income

Now, back I over call the will to turn Bruce.

Bruce Smith

new we four In Stuart. and you, second or stores Thank stores relocated three stores. while other quarter expanded two opened closing successfully developments

expect open repurchase stores capital year earlier order previous impacts In Also under $X new of full program shifts the $XX $X.XX fourth stock and year expanded for which repurchase $X.XX million. morning's return we the the we calendar separate earnings of [indiscernible]. program the this understand provided for our earnings the the connection year. raised million We during year of and share a help $XX $X.XX the to third investors by repurchased board with to the of last this for full our with guidance year-to-date range quarter, XX our the authorized to brought to total we associated range release, $X.XX from guidance to quarters having in in to

the We start way also quarter off with far long to August. the mentioned and still increase sales in a in in comp the release although store half the they go good are year, third that a we of X% thus back were early a to

and double-digit XXXX apparel business positive. the Our sales first represents mid-year of store strong for strategy far last consecutive increases increases accessories thus X quarters, comp And driving and up non-apparel again of continued comp All years of and of in apparel comp the sales XXXX. both sales in the entered XX% while home now with results side, year-to-date. are running which area had non-apparel they on XX sales year a years, have through has three positive divisions consecutive has the sales time in it's few produce to XXXX in division lines X%

holiday third regarding which As season third last the year's sheet one end important quarter which third inventory. balance week October for guidance, to will than of item closer year's on X, quarter is the November note ends XX, I one XXXX. quarter was XXXX selling This

than quarter at the to open inventory end As of are quarters season. a higher in appropriate why holiday for available third ensure of to expected for year-over-year recent now. that the don't stores a up result rate questions slightly the Cathy, it merchandise order is at in levels in we increase

Operator

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

Patrick McKeever

in could year issue, also month? quarter Question with number the you costs; and that monthly the were the of thoughts then reviewed quarter. and I I if as being labor so to in tariffs, through, right Wash third and items the now, might including just by comparisons retailers cost made those question how billion, And a other how the fabrics $XXX about that an call back have both if just third distribution some in stores at And out us Washington guess how other some then, wondering tariffs labor of pressure, that on question the the a pressure? last things; centers, those; big I'm that hand seeing been those recently third any didn't -- was more you remind and wondering some on XX% wage on in you're unfolded on are of if and just on your how the half picture talked of the China, bags go in business that -- are the year? impact

Bruce Smith

would had years the who particularly a good with doing a reported get improvements we costs then of pressure to and And we you of of sure where then sorry, for for saw your productivity number in to, doing same in September this an had question same outside were August we job payroll of third we really comps the X%. October stop I'm was have to that year, those whether -- for I a start ago. been now, it, in the our manager and implementing done hasn't we a we've we're that consultant number And needed helped were of in it done point assistant say when making a of pressure that in where up year store I looked where some we were how plus it in made feeling Last the processes during started up to second we X% -- and three X% QX four quarter about increases. even the asked bare last help wage levels. the was Let in last up time wage other reported weeks year. stores increases that you X% question stop the and year one specific two give we say comps. the just we at sure at the we're to especially total and really comps years a with quarter that the offset me defined that And period were case, unfold job us did the about the question any sales time minimum were would that there -- manager stores there; in those each period the far at and we the and so

as really the more in stores. point. payroll tariffs you reducing now but in in didn't so of half So are discuss a costs our the are with saw footwear the last not but the tariffs. items And were really impact never are getting few hours were the to and accessory by exposed this then, really is our business much I going minimal year, to we we of P&Ls dealt it question number -- because there this it There nothing believe it it. up, and in To at feel also point numbers the is you efficient closely your back on had home a relates apparel monitoring as our this that

Patrick McKeever

slightly first just the up up it's on And ladies the a the was X% quarter. in I business; then it in think quarter, question

category, So a you positive I more, through the sequential back question and what but talk some comparison might and outlook half the The working -- know in for not just could and and what's year? that business the more what's was be the bit difficult. the deceleration, is little maybe for

Stuart Clifford

last business positive had versus year, year. year-to-date toughest the within apparel the As you it's comparisons the mentioned, still and for ladies

sportswear junior was reduced and as flat margins. with holiday quarter had a trends see So continuing which second digging Digging into and deeper into quarter, business a to on. not and had healthier the build trends, the urban plus and very departments were fashion our ladies our strong business, of sized the momentum dress business exciting in within resulted inventories positive the both in swim deeper ladies lot division, we the

happening see the as departments in we second but business the kind comps in swim were good about So year the still of we self-inflicted momentum negative and half of fashion some currently. good the feel for dress ladies the

Operator

there And no time. are other questions this at

Bruce Smith

Okay. That Thank today. for us call. you the joining concludes

Operator

for that Thank conclude your you you, thank disconnect participation call. lines. ask great your We you a ladies please day. that Have and the does and gentlemen,

Citi Trends (CTRN) 23 Aug 182018 Q2 Earnings call transcript