CTRN - Earnings call transcript Q3 2020

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Operator

Greetings, and welcome to the Citi Trends 3Q 2020 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 today, Tuesday, December 1, 2020.

Now, I would like to turn the conference over to Nitza McKee, Senior Associate. ahead. go Please

Nitza McKee

Makuen; good on and On Thank for Officer, you call Jason of Thank Moschner. Trends morning, third us David Executive Chief Citi is call. Vice quarter joining President today Finance, you our everyone. and XXXX our earnings

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

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

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

David Makuen

Despite points. XXXX well. program, we that $XX credit our you, with Chief our our repurchased million many XXX,XXX call. and I repaid one as effective everyone, January. good stellar us you We the November under Edwards uncertain Officer, retail share and and quarter program Pam all fully third appointed morning, XX, registered through revolving in we operating our under we facility, a executive, we Citi results, Nitza, Financial borrowings Trends safe third shares reinstated our and earnings was and today hope Thank thanks environment high for on quarter joining are for that the seasoned repurchase outstanding

and campaign. will be merchandising review marketing us deliver to will the discuss Fab capabilities third I accomplishments. provide I ahead. first discussed during todays performance topics our holiday initiatives provide onto season, will confidence a our spectacular then model our Finds operating of Now the that call. and for and our review results expanded in business critical in functions the to I Festive notable strong months including holiday quarter

to Next, more Jason in third of turn Moschner, who'll VP over detail. Finance, I it review results our will and financial quarter our position

more and stated close and efforts centers our have winning and ingenuity, and are ongoing transformation questions, to stores, for will could in confidence to with Lastly, our Savannah, reiterate before will of our a To to begin, I tireless what New distribution I not I I contributing across board, be the the to in thankful our opening XXX Trends. scalable call unique York, out continue showcasing your as the model. thoughtful in in but on high-level comments few for Citi operating everyone's of navigating Trends positioning analytics our second with model transforming organization with of Citi our to unprecedented years period through only growth. are a successfully we entire use this not impressed powerful I data history profitable we truly unique Trends, innovation, our Citi culture be quarter and call, we at many on

well-being perspective, the store communities Importantly, of prioritize and customers serve. associates, continue and we we and operations an from to our our the safety

to our families registering year's resulting followed children achieved on are increase a the comparable experienced cleaning better school. shy we, the doubling mid-single by understood month which which of the a how to like XXX store Building sales in meaningfully positive of to resulted and gain down That critical acceleration The second in which quarter, were points holiday from points well X%. back-to-school which the third their enter a We the building October basis again on was positive quarter total soft just our weeks, in of we XXX our quarter unique would was substantial during quarter September growth gross season slow business basis of regimens. levels of in as and sales compared comparable momentum margin, growth was as meaningful many strong typically the up traffic performance digit protocols, last third we the quarter. our dynamics others, social return of compared in store start As year. sales as a last awareness We to and associated peak season distancing days up garners safety shopping higher as ended third sales August. X.X%, with

driven well of this full price by selling inventories. managed All healthy and

inventories, purchased now apparel half categories. season [ph] year coupled this turns of share, season In the plan; accomplishments and buys long-term our in fact, resulting of are dovetailed opportunities with impressive very during with terms capture inventory, to [ph] we more well X.X market next an encouraged shock experiencing. on momentum less comp inventory an from These extremely entered achieved we so important for on year We quarter. that first current holiday by clean increase a the XX% last store comparable the third positive the based with we full wear learnings XX% we in had are

the Additionally, extreme versus definitely in XXXX at of of second the last the next products of [ph] year and items stockpile market as quarter end end the at of XX% buying meant for values. selling up first season QX QX, our were the had right for buys; scoured our tune

total home stores, important XXX Minneapolis a of rolled additional curated growth to needs the home we the Recognizing with diverse to also an offering expanding stores, Trends, while Citi of quarter bringing reach we expanded and expanded Southeast by into community. the the store customers out Texas, our continue and opening Trends our to assortment agenda Home well-rounded to support our eight returning meet the importance locations our loyal During in new assortment XXX sections. of

leverage Moving to expense the expanded in down with basis control combined sales. strong apparel points our the Coupled third strength growth healthy XXX margin we've with our results and our the gross delivered customer which quarter. demonstrate investments continue and operating P&L; Home; base. in outsized of These on-trend quarter of resonate all our in expense business rigorous margin, X.X% prudent assortment, record and expanding the brand, loyal of to with

L I of thank want she hire true a benefiting Pam for Officer I'm forward years [ph] the to continue we Pam Pam finance Victoria's and and as business Chief for of Jason at Mast operations the and who's sectors. in Edwards, in third divisions extensive Financial operational spent go-to Global, a brings XX were high Officer take our leader Finance few Moschner, Secret with President from Brands not to finance, Principal quarter right weeks. recently, of a the as X. a variety Trends. we new trusted January my of strategy experience been appointment is announced retail limited partner, proven experience CFO, brands as Accounting confident our the Pam various also Our the excellence of points of and across is Express. including Most Citi success. just track and record a look to moment company, expertise to and effective Vice and will

time as little as including new merchandising a spend me the holiday positioning our well marketing our for exciting on third performance, quarter strategies. season, Let

are our Our in and with customers In tops passion. market casual women's. customers captured performance wear how for broad-based we and active share these for that comps their express significant led her, in quarter of home line coordinating sleepwear categories tees was bottoms positive Home many third with allowed our days, bedding, and statement shopping him, décor, living by five to all men's and and

just many our experience. Since store These proudly at March in tables we with gifts range our that our to located expanded studied most flushed front assortment I've business. deserved us at Fab displayed leading extreme continued entered girls robes relationship Lastly, to season and at an Festive the these gift functions prices. facets been Finds as The have our our are runs stuff; some wide stores, the to that few. brands sets [ph], such across communities creating trended of a of provide business really current to brands assortment campaign. access giftables anchored of inviting holiday of spark mention in cosmetics ability tell toys, can with by marketing underserved a Fab tech actions joining on festive XXXX, the an the of results trends on elevated and sets, jewelry Bluetooth affordable We began of focus and building spirit you to an value a meaningful the holiday gave transformative able gifting, I

growth of we product reset referred at and we're to right during tools time, business coupled with While of at right price, the our the to trade is them I more evolution our in transformation to that innate strategy. the our call, a right right QX true the growth what strategy a of Central the understanding a store. our with experiencing is experienced the am the customers, beginnings on a the I provide sustainable the right transformation; in as convinced

passion part quality to our what in insights are of inform in our progress the our thing at leverage of seeing the our the are to across do ultimately applying customers. forefront our they While matters, due the the people, progress business driven innings for strategic our at form delighted am I is to initiatives. I'm we we demonstrable that At [ph], small and functions early data ability what of only no of

tools store an time to our For stores that focus first to dynamics culture, example, and rolling technology the fresh assortment. organization one are, sales-driven transform is for a actively and the managing from platform of fluid data and communication the a out operational-only we

look putting robust cloud-based for ramped I over team turn store capabilities on enable financial targeted quarter future advanced floor our the which gets results. the will our we planning at what's the inventory much progress improve up in you that, of to past. trends from updating on I the that new buying time-sensitive call customers. we about to excited who faster our the Moschner, clusters including the come; rationalization front For Jason? the trends greatly hands seasonal third to discuss stuff With into supply our craft are vendor forward right than chain, and solutions in customers' now to will implementing shipments In right Jason calls. so hot drop I'm that into

Jason Moschner

customer third a substantial by transactions. in increase Thank in the comp comp X.X% in increased store David. $XXX.X sales offset partially increase sales increase by ticket The the average of sales to a low quarter in Total X.X%. million, driven you, including double-digit was a decrease size,

to points strong quarterly basis of and excited from dollars increase margin over accruals result XX.X%, was especially year. follows was over We margin our due are increase XX% selling in expected operating in of increase record continues gross U.S. reported in QX a markdowns. and data stores the higher our fewer margin points with combined our third The accessory expense an census increase to achieved increases comp QX year. to sales more gross of year. a $X.X expenses of decrease million We basis the and last full third the And that increased clothing rate The of about QX sales or X.X% in by this quarter X.X% of last bonus which to price XX.X%, of SG&A relative XXX stores. SG&A quarter. compared be of QX XXX for compensation last increase an primarily equity primarily the

basis due As a percent of effect from XXX leveraging higher the decreased points to sales. sales, SG&A

the turning Now, bottom line. to

a a of to for $X.XX share Our year. Earnings the loss $X.XX third was net per compared in to $X income diluted last net QX per of million year. $X.X million in quarter the share was last loss of quarter compared

results. to Now, turning our year-to-date

our to centers. in in with the took year. primarily our or business. the first The quarters, SG&A expanded we to partially and for stores. the with and prior the store by first by to year and third comp year finally, decline our expenses when the of of period. the other began associate stores of open for selling nine basis decreased quarter combined effect points the in of reopening to related the nine comparable sales points Then, our driven quarter see decreased reduction and nine of X.X%. a quarter, full expense COVID-XX had a decreases strong temporarily result than we X.X% to in price on due primarily stores third may XXXX a the payroll the decrease only in month In of to margin first basis sales the by when of increase XX.X% offset as store $XX closures million X.X% during in X.X%. Gross X% more X March compared were increase second nine sales, COVID-XX the the to for markdowns increased $XXX.X comp upon first increase of markdowns that XXXX, expenses hours, through the our quarter, months million our we period recorded in the was was operating months Then sales first we our second months in For stores. fewer the and period year-to-date due distribution the that XX.X% comparable half The of fleet reduced the total of impact temporary on closed decreased sales furloughs the XXX sales

addition, incremental costs to million incurred equipment and $X.X In we related COVID-XX personal of cleaning supplies. for protective

a XX.X% the in expenses same SG&A year-to-date period the of As for period year. increased last compared sales, XX% to to of percent

year. days gross higher months, our paid from to is half the the compared about last year. was To from is $XXX,XXX per XX XXX For pandemic year-to-date off. XXXX. million points strong we XXX-plus during compared million the in $X.X our margin summarize in $X.XX. million $XX our for faced net with significant to to of of strength first year-to-date operating XXX,XXX overall Despite at $X share $XX time and of brand. $XX we a basis store position, our in year. strong quarter our this Citi We performance; including year-to-date of investments reinstated more months last XXXX. of the million. months of our And stellar $X.XX we program. nine first closures than is the months And headwinds of Through and has to million nine cash, compared $XX business; results, in our generated than first our operational share profit our million diluted year, to-date in light the million cash financial nine confidence Trends shares operating operating the authorization, first and higher income powerful generated appeal the ranging statement to September, last ended under million In this That repurchase And repurchased reinstated the XXXX we execution the compared cash than have the the was $XX nine of flow earnings $XX

with third inventory, the to inventory a we our to As inventory last the quarter clean compared year. in XX.X% very position time same ended down

to This our our at of XX% QX XX% year. comparable with As more our season David last compared inventory next buy noted, we as XX% in end inventory QX ended XX% buys. stored stores inventory in less and of represented total next centers inventory distribution season the

liquidity COVID-XX running through in and the confident As pandemic, our remain business. approach we current our we in disciplined to position the to continue navigate

result the as marketplace planning are pandemic. given year the of We conditions of remainder the conservatively, a

we As such, are uncertainty COVID-XX estimating store with guidance and which to customer fourth XXXX trend. this behavior to impact we not the fiscal our quarter business, Due approximately be the sales further continued is time. our are on consistent providing comp surrounding at November's flat

the David? will closing for turn I Now, call to David comments. back

David Makuen

Thank you, Jason.

wrap talk up comments, a wanted things. about a I closing with Before I few few to

Club Clubs to first am with at in with partnership On associates. with the announce clients stores their select clubs benefit November on you a the worked First of America. to holiday. these pleased CitiCARES update donations the the this will and off, platform December the Counsel by Boys a our CitiCARES Girls I'm communities. and I event of of excited Boys affected closures of result the communities. created event our Citi of a and support will proud directly communities in is needs, directly School to current discuss have fundraising households, have that select from CitiCARES powered significant pandemic. Citi in as some created Clubs Girls partner staff hardships XX, to through and Boys Girls particularly the Trends, even which XX those many programs centers in a our and Trends shortfalls new these accept

capabilities progressed. has only a has shout and this up I'm in wrap me to what our change Let continue the environment. our communities to with My Citi big confidence operating serve as safely adapt entire to we out serve Trends of grow fluid in year our organization. strengthened our brands, profitably very customers proud remains team's so creating ability while and to the a positive

Our model, is one operate that a third that by we embraced our performance quarter unique further indicates and customers. loyal scalable

support During we of humbling customer third and quarters, the and thankful outpouring so are the something second was for.

leverage inviting environment coordinating expense overtime. questions. we our will our We our ready continue operational create are our accessory our build recognize extreme in across the margin categories. that Black, to sit for lower the entire front coupled towns to important of head-to-toe experience your in-store turns, because we experience are in including product vital consider broad his, and our valued family take home success between to of across to easy-to-shop in Trends and moderate key in that layout continue this optimistic her "essential puts With to-date framework improvements Hispanic to stores entire showcases everything the continuous to lifestyles. for metrics, It's a the neighborhoods spectrum within an with shopping love choice melting-pot and store center, America. that be kids fashion, customer model underserved and unique Citi We our an centers are to within income outfits our trends, that on loyalty and and apparel, customers." that It's with basics We gross warm features pickups ensuring that inventory and that,

Operator

we'll [ph]. line Thank your Instructions] Malibu Growth you John with with [Operator from question. very proceed on our And from the Lawrence first ahead much. Go question

Unidentified Analyst

even a Thank and to how little everything else, transformation just how bit bit morning, with the or speak the little you. a a maybe a what's for -- that your give process things the how though and Good talk comments and buying six but I guys. background eight -- you David, is their just on And go the more just backwards; numbers. a team give the products? of a of you bit little months? of community Congratulations one about to you Citi that about -- looking could you market? Can it the when is, pandemic vendor Trends valuable XXXX is in over outlet mean, of a little changed of at now last step

David Makuen

our a add across sourced speak And they and Good serve went our vendors color base fronts; they're expand team, John. attacked with vendors. and offerings, marketplace for as really new so vendors that around label at Lisa And put our fresh my vendor long-term relationships interesting effort a and style customers desiring. with her Sure, fostering base, and on approach fashion know give the stores, of more do the opened how private right And all our at find to of Merchandising for I'll relationships here that Citi really and and things I to to to in to buying could how our that goods Officer; yeoman's team arrival; and are the you'll Powell, April, relationships our [ph], we Thanks, attract and little And brands team nationally-known pandemic we to assortment we're Trends. March hadn't the Citi new asking working and ourselves, she we we really in to that. and to exciting into forth. kudos out a do so the rallied the really on beginning question. developed fuel vendor Chief the that the shot and Really upon how onset and forth that with exciting I'll out bring these up those plan nurturing really they result, a Trends. this expand existed really

in what some future. leverage to fruits future. the develop and team in we're of And, looking our the and seeing will So, the in year-to-date. to We're those forward results continue she holds those relationships

Unidentified Analyst

Great, thanks. luck. Good

David Makuen

you. Thank

Operator

Thank on the next you our Alec very Securities. the Go line ahead. of We'll Legg line to right, get much. from from question B.Riley

Alec Legg

Hi morning. David good Hi, and Jason.

quarter. growth. the to the My First fleet just off, nice job relates store on question

left. So, like per growing closed stores you stores this eight on per strategy of base? long-term are looks open thoughts year? do many think How the have new and your store quarter a it the opened quarter two; you And in new what or you can white lot you space

David Makuen

for question; opposing something Hi our to Alec, dear near thanks that hearts. and

ICR at Citi all, the firmly brand, communities the [ph] support to what to relatively tell them that U.S. aren't level, an way. of or in our of high the space mid-January to a further number right communities share store lot plan it in African-American so question and and we liberty network. upon of in Citi about First is adopt can share we we is is, more growth Conference a the you there is small today; it; Trends U.S. At while serve through and lot Hispanic Trends to of in specifics. XXX today percentage I a exact no a there to serving fleet opportunity intend hit a growth; we There's are believe you upcoming

we and elaborate at there So around we lot us our good of forward key more geographies kind big can that join agenda; a look plan. more. is front you But more growth because sharing a no, that we I a I'll when tell on the little color in long-range share store of and have bit you upside to to our add U.S., ICR is some on believe of part

Alec Legg

entering regarding -- And the rent long-term reduction landlords, quarter just you follow-up. abatement just or first restructuring negotiations; then, meaningful on Have mentioned received with and any a update you I any rent conversation that? agreements? of guess, in Perfect. into Back

David Makuen

Citi on I an of to planned, relative them I Good would landlords, think to gracious in our that summarize and would stating you very kind renegotiation, we to a bucket up which work said, that healthy to like -- combined good of with they third of in mix a abatements, turned gravity like current made situation, tell understood gave I us renegotiate they them months; they was landlords; date again, out much out and last question. And and opportunity very or shout them we come nice and what the I and of achieved and an the deferrals front the landlord, couple Trends, things were abatements deal a of they put open have either expiration and to Yes, a was our altogether. to were renegotiations. sit Those with the down what to resulted a with, deal, pretty our deferrals. deal new then negotiations might

Alec Legg

thank you. Perfect,

David Makuen

you. Have Thank a good day.

Alec Legg

too. You

Operator

And next with our the we'll Go go on right Haskett. your ahead question. line the of line question Grom Gordon Chuck from to with

Chuck Grom

Hey you on hopped a talked guys, of a about just congrats great maybe and minutes a I it; question, I had couple late. on quarter.

pretty October sounded September to flat. and during change the then the were in with November Just it and like out you're calling regards quarter, strong, trend

past it Black guys? also, then if you how share you're to wondering on that? if could just fared for this comments Friday; to any factors So that willing you weekend the And discuss contribute

David Makuen

Hi, add Chuck. color Yes. Thanks a I of on that. to little bit joining. for No, look

On of the make month a that that chapters is bunch November, of up there book.

the caused a One those weather was impacted which moderation little in nice there the of XX really of month, trends them that trends warm unseasonably days was first weather bounce. some

that a The generally what well seeing Black then more minute last the destination; second lastly, are we're avoid based creating reasons, what on to light And around, shopping know that. us -- a mix crowds, I people; of the because interacting we by, reaction of be, warnings, with it those slowdown. think a to We be CDC reasons of both November. like for in weekend the well chapter little we -- online, which fared bodes for chapter factors a shop huge and is it's -- traffic but know Christmas, would of all in retail -- of we in decline delayed was as of as from kind avoid we was typified Friday -- bit flattish you appropriate so pretty a safety another believe macro things

All together netted that of flat. equaled about

Chuck Grom

Okay, bigger environment, of buying could you XXXX? move great. And you're how just the as that's picture; just thinking the on comment product about wondering availability then, we if into

David Makuen

Sure.

don't scoured As We of we momentum you think speak QX accomplishments our globe, really our team. QX might abating, availability XXXX, that. stellar the part you on tell when to the progress the a our back know, business. looking selling so at plenty Well buyers there it's this, QX I'd vital did at see job our and find of that in in is for to stuff to and they right of

year, for start in year. those buys the hunt So can away next that [ph] attractive we down later socking

So off Chuck. let front. that, we and won't about pedal the And optimistic our foot pretty that bullish on

Chuck Grom

the just the And if and given Thanks. business -- to even that you in Home just us couple of in the category if into leaning category, next you're about of And strength over of then, remind that great years? I today? strength could more the complex today, thinking the That's is comment, hear. what housing just mix you're guess

David Makuen

to some XXX of -- a further been become momentum in into years Home a Home recent there penetration greater you expansion seeing forefront, some assortment. big We've business. mentioned question. business Home XXXX, great I'd is from mix a being good XXXX and business; off in our stores in develop the of to there? is something in No, deeper want mid-XXXX our the And of growing it it sense. yes. and interest to add Sure, at you lot our our and Home therefore that and broader certainly we've on a that including upside tell the relatively small the in pretty mix, really kicked for see XXXX still we total Jason, more

Jason Moschner

consistently out good I is QX the few something quickly, growing like from looking we just of up could break most to break consistently that QX; posts the can categories. and Yes. last revenue in XXXX But yet And was the portion it's said, at morning. consistently the it the business just of our not double-digit makeup XX% footnote David Chuck, distribution significant growing of in what so add, Hey QX, of out and it in comping. I recently X% really tell business. you the is business X% our back just in but this high quarters; that and will comps, our

Chuck Grom

luck. Thank you. Good helpful. Very

David Makuen

Chuck. Thanks,

Operator

Thank much. question Go get right, Instructions] next line Alex AWM from we'll ahead. you from the our on [Operator Silverman very And Investments.

Alex Silverman

Hey, good morning.

David Makuen

Good morning.

Alex Silverman

Can you hear me?

David Makuen

Yes.

Alex Silverman

Great.

asked Though So, been basket most assortment? of questions. given What happened the last answered. of have to and couple of my improved size the questions your

David Makuen

Good since question. The it's May. short pretty increased answer is, considerably

make when a desire trip do the to little need understand here. maybe trip, some important that impact to based there trip happening even We dynamics pandemic, and more spend worthwhile. on we macro is some make folks' they it's bit loading there a that's believe less per to trips; of and a Now, they that do is make up the that

in when great which of in by very So a retail. in transaction, per softness a our to to we're units higher as centers unit amount, gains visit our do seeing healthy is seeing are basket they commented, driven average and course, slightly improved traffic but by, Jason is some see, we which

desires trips some sense? it's macro trends of more impact to per of that important those and spend makes seeing, that you less that Does by we So but trip. love Alex, driven is recognize that

Alex Silverman

It does, absolutely.

this quarters? XX% the this dynamics level are on should second of is gross using greater than consider or the unusual last good to over go-forward question, quarter we new of Second some couple margin; is be a basis there a

David Makuen

was context within it Good business which model the the ways have ever of And it I'll answer internally think months like our been transformation accelerated. experienced. metrics, way those many question. is; in we And in so to six and we've about nothing speak, last

what forever, kind thrilled not see to ready we it's QX give so to is, say [ph] hand to seen while focus but one those take numbers yet like on can a away I in and teams And them QX. of you sustain would to see you've of numbers, we're we're maniacal I our think

I see once of some things a perhaps normalize or reach think determine and change some to reason and we I more dynamics shopping we'll of more think so one forth focus, normal healthy we're those XXXX, resulting our calls in of of to making optimistic that's way that can the gross some -- high deliver our But what end at gross rate. levels the day to and number -- in really margin. continue we we're it margin of and

Alex Silverman

Very Last me. from question helpful.

season; inventory were put that of opportunities a basis for of about strategy inventory lot next this away a lot a there to bought to should guys think buy go-forward a You both? is is a dynamic unusual this on that or or we

David Makuen

focus strategic we to a most the season Good deliver point question. point. always have lens, From sure and getting making hands at make probably next important our on say latter the them future you finding right I'd buys them the great need and seasons. we to is

pillar ongoing predict, takeaway, I plus, as we deliver it's than how you it Will big strategy. have next of that's is the our part buys. past more hard to in season relationships seriously say ROI always determine versus tell right of And the key So of a I would internally plus, about plus stream to with be the but constant the [ph], to tell can our and a Alex, folks and speak strategy. that's and

Alex Silverman

you great Great, quarter. Congratulations, guys. thank

David Makuen

a day. Have great Alex. Thanks,

Operator

Dana Go ahead. Thank Group. from much. line right, the you We'll on from to Telsey Advisory next our Telsey go very question

Dana Telsey

congratulations morning, progress the And the nice Good in results. David, on everyone.

gross the and which And And continuing side, about think SG&A delta? thinking how in you about you see coming about you this you Thank playing think when And As you're margins? on how there is where margin any going there? selling sequential did was -- forward? strength out? impressive that How you. is those categories were price the in particular from? are the biggest the see COVID How expenses markdowns, wrapped so much do improvement; where fewer full the merchandise there then

David Makuen

kind Thanks Dana. for the Thanks, for joining. Thanks words.

one of we similar apparel, categories; our front, to business in our margin our categories accessories, gross the every important and home gross saw general meaning top key across of line On so performance in basically footwear improvements forth. margin,

market so really the garner business, that's outsized to are across just really margin that we in And more wasn't and Hero, is and area. really faster apparel on in during particular any one we about, men's had last of improvements and where business I road, it all heard there But better speak. six you particular, margin, nice less merchandise, it the that. it's can share more we talk thing, the down saw a in improvement a traction was markdowns, in business that we we overall, good what broad-based; definitely on board which reflective months. me reliance the So saw fresher our even a was But some that the so think to in the would contributed explode comment turns even is,

On the within [ph] functions. it model with in, we get operational two labor key the really, we we're we my the it operate on it's about stores. a DCs remain a couple to as primary important those line; preface our you pretty know, I the margin out SG&A to those very, that's line. at one. the bring a it to front, metric our this nice focus call comment keep nothing expenses; then it below gross and areas process simple of I'll us stores; so two metrics. very Since because that takes look but is, number And cost store and And focus what's is -- one trying it And

[ph] how the really won't COVID we that's SG&A teams store know, you the Our they right to huge think people, good expenses; are we're and labor, continue where right DCs a contributor rates, PPE to or [ph]. to focused from Head the knock-on-wood, the data a come demand. how get for a do of to understand reliably at maniacally down rationalizing time, our and trying at And the for out able about technology customers is of and it vendor which prices this floor from we and customer's on be hands. in more stores on focused speed using cost amount right level. we're right more in -- Stores stores at them have serves way right takes they And people, the [ph] our the people broad then which state in the perspective, to improve productivity per basis our having unit

So, managing in it's in probably won't of the productivity any future cause it's huge SG&A; regular regular -- labor for part now swings DCs. sense? it's managing life and more That makes about really foreseeable the probably but our a the our our

Dana Telsey

as than Yes. And past about stores; getting holiday think is about you NDCs, different goods to just as all you this it? the flow seasons season been it's think holiday what in at

David Makuen

just-in-time. Yes, we're somewhat little bit more shipments it doing is. better into are some at getting a but We're not getting better, that yet although there we're stores

to prior sense as as goods. early fill we this did the -- make So that our gills with up as year big early didn't in much load in to holiday years, because we October, it stores the shift stores didn't we

it's to taking So gifts for example, we and a now; in bit have late which shipping more on a terms that in that December shifted the this a we're agile and we've be pivoted it how goods of typically XX such, as some all definitely smarter bit would folks bit stocking/stuffers in days, season we manner, October. and means, of year old deliver in the don't in a we're just more buy, just-in-time

it it's our some have and out. we're And to distribution as to sees some better, centers I later and there the and plan we a how stuff that to So get logical means all is stores then fresh our better we merchandise to the stores data smooth customer faster, of mentioned at made lastly, wise flow spikes day that by a allows in with paying definitely distribution it some the to time. our getting improvements centers earlier, -- we faster, it and off, it the because can little just when ship good get little the technology, which new will

that front. making So, headway on

Dana Telsey

luck holiday you. of for Thank Best the Great. season.

David Makuen

Thanks, Dana.

Bye-bye. too. You

Operator

Thank further you have back closing remarks. very And line. you turn the Makuen, much. I'll questions it any for to on no Mr. we

David Makuen

you who joined the Tommy. Stay call. Thanks next See to holidays. Happy quarter. safe good, Very everybody Bye-bye. and healthy.

Operator

We thank everyone. participations. the good your day, that you a Have Thank for And disconnect very your you much. does for Please conclude today. conference call lines.

Citi Trends (CTRN) 1 Dec 202020 Q3 Earnings call transcript