CTRN - Earnings call transcript Q4 2021

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Operator

Greetings, and welcome to the Citi Trends 4Q 2021 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we’ll conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, March 15, 2022. I would now like to turn the conference over to Nitza McKee, Senior Associate. ahead. go Please

Nitza McKee

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

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

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

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

David Makuen

related elaborate to strategies for Edwards, I us priorities. operational and items and Thank Citi productive with as and our earnings of year business progress fiscal And our morning, results financial against XXXX in you, our and our strategic everyone. XXXX We Pam and for related African-American Nitza. value execution before transformation growth for underserved more This you transformation Master results focus CFO, few financial support store the our activity our outlook. of by our begin updating Latinx our and many evolution will results priorities. our some will fourth fourth quarter meaningful progress today reviewing on of morning, on on our underlying strong for of to strategic and expanding the discipline Then joining thanks Plan XXXX focused and our call. quarter financial to XXXX the highlight our Fiscal the achieved of Good communities. fiscal Trends on Citi Citi a continued goals other brand of Trends we highly differentiated and experience specialty remained was a the with continued

increased by year, we For our and nearly XX.X%, per earnings line XX% grew the XXX%. share stores our top plus comparable

healthy level while our and something the Trends. have connection and our encapsulates finally, these CTx diversity labor solutions. prudent our headwinds XXXX. are: Directors. in accomplishments through chain All for we And Life, value store staffing purpose returned We with in maintaining this are points strengthened for And and Board to upgrades to inventory remodeled kicked store market-tested of We and Buy off managed that data compared Highlights most new enhancements managed our successfully and year launched the launched challenging shareholders brand system Move XX of with program. and We opened revolutionized leadership investments effective new navigated team share We of emotional is stores We our customers infrastructure which supply team. for represents and high XX during that Citi a our associates includes that the and and our capacity our format. probably excited of to values freshness. about I'm backdrop we stocks new repurchase year. we and additions our and distribution Citi the and two leadership

neighborhoods, our family our to entire at live whatever clear life. journey for break as bank. bold, purpose-led life empowering are begin in business. environment. am really at up transformation across make dynamic and prices proud of Our you Dedicated still teams I early driving North level Support Sell it Buy, and you your so the show Move, Citi opportunities remains the comes our We to a operating in that the Trends like the is proud, delighted for a in welcomes best current fun face our With when fresh live that True you the and positive I'm that brand what executed bring we a innings, don't respect high to such way, is is and helps change to a purpose XXXX of friend all. you it in

and In the variant, across February our a store and a soft early health underlying a January retail the in business. of attributed addition, the After in from feel sharp traffic from experience we largely spike improving fleet. product recovered COVID-XX felt compelling Omicron content our really to fueled stemming continuously across cases by good nicely decline about March

average high Our conversion on above remains customer and par the XXXX. per visit well at continues XXXX spend with levels and

expanding we our product our strategic a team approach during some quarter, plan our following the XX-year-old and the the along way fleet and consistently As few communities executing modern optimizing start-up, serve. and becoming growing share take excellent number number to exactly what plan I three, in moments difference every within number is have operating shared we with a and like customer a with infrastructure; continuing This the XXXX a this are making four mix; updates. operators. with four, unfolds, two, reinvesting base; priorities: high-level accordance I'll you and our means agile number one, in

is stores fleet base speak CTx we new week. of format expanding happening our is remodel this First, as underway. our customer store growing eight well live The with comp our and rollout going

up of by purpose upgraded new approximately that a while you whatever Why a XX% to I way. on portion and experience. feels a show of customers. CTx driver and half an the After and remodels am.” me, purpose, welcoming attracting major who brings really our Well, stores To to destination home format all, multicultural neighborhood stores year expect important? the respects needs our we better improving it's our appreciate a your a apparel, welcome “gets quote We customer open is life depend during for you and conversion. for the first me One do approximately for experience us during of that primary like to the of XX help comes XX new diverse first half. friend represent our Customers this offering for non-apparel

families affecting we XXX X,XXX bright from the years. intend our be the we've light strip so in to grow to on combined journey with in remodels stated, many As at retail our stores XXX to three centers always positively next least

product include offering our so developing contributing expanded curated that the directly at a style and after an our assortment growth. and XXXX developing are choices and the for mix The dresses Our of melting sizing missy much assortments growth, customer second for of first area slow new categories long-term to mayors decade, values pot of our of don't time our expanding years base in in markets more. multicultural building plan expanding product focus, diligently is our Examples bank. cities optimizing break or

and systems, clusters buying, Lastly, planning our allocation really customers. we our store easy-to-use completing this process capabilities, in specific wait. are target-specific done upgrade in advance can't the will a we tools, of haven't something to rich products and of decade. system an and analytics With We

in area third investing Our infrastructure, our role will focus, an play of at of in operations important scaling the brands.

of monetize after to generated than our will as announce Pam, We that come pending second sale part provide this the point, many the I our owned years our capital am repurchases. proceeds decisions, by seriously are leaseback taking one diligence. begin facilities happy on More centers including for To option today, additional for to to completing announced we will distribution before. it but of ongoing with an of consideration, more share allocation a we from additional liquidity

We are of and improve facilities our speed will the of productivity. upgrades moving overall on both that to labor to way distribution goods increase the stores also completing to

example our program within which received It's is our Black Month, annual our difference. neighborhoods. of punctuated receive History a An from garnered Difficulty] [Technical cannot from year's their second wait of making opportunities reward bring during celebration to History how to we was double which commitment grants recipients we XX by life Black of the over about for Lastly, businesses. amazing. chance designated program XX,XXX amount [Technical a the Difficulty]. hear This applicants, one and last I to year, just our

quarter store XXXX. new and the quarter launch Looking turn around note surge a to positive assortments through XX stimulus to year, issuing that It's uncertainties With our as new store XXXX, QX by these year during that particularly [Technical a material they of is we QX the in customers I'll and the well it regarding QX increase that is to predict over driven sales that, the up as XXXX, our lap Difficulty] quarter, XXXX. inflationary versus customers the reflects in expanded stores and product country second of first anticipated live full our of [Technical COVID-XX that that are Pam a conversion. we quarter largest to Recognizing as fourth maro and in government the mind program, posted core of unprecedented of combined restriction will demand, in against comparable last the with Difficulty] year addition to important demand, and will acceleration outlook. that year call sales we strong recognize comp revised in. tough first to best drive remodel of are best the the with results and lifting few pressures led year's in engage create were consumer believe experiencing quarters XXXX forward, our fiscal the March an details that we and Keep a currently factors consumer discuss that of difficult we Pam? neighborhoods very full our and XX% guidance the in fourth also

Pam Edwards

we everyone. In our good all both Move, David, progress Thanks, areas and and financial Sell of and Support. with core bottom Buy, making fiscal top of exceptional line meaningful while operational results delivered XXXX, in morning, growth,

underlying we are initiatives in we also we put addition, this extraordinary benefit transformation the place. federal changing early the In certainly in initiatives innings, in a operate we from particularly these from while business. have saw strength first the And how while saw the stimulus, quarter,

in chain. Specifically, operations the our which merchandise, this of to I the we have topic, significant want and we our results, second turning first address our to which third Similar the is supply calls, our efficiency and before improvements business. expense in management, to inventory top-of-mind our run made management quarter

supply navigate fluid. know, the We environment continue to side remains as you successfully which,

and buys effectively opportunistic leveraged customer inventory strategically more last in-season to have growth from We response secured season, we in demand. have

about good feel quality and remain the into fiscal XXXX we of macro the result, a quantity will the help us of agile that As heading volatility. inventory our light in

In streamlining approximately to processes. versus continued of [Technical basis we addition, what internal through disruption while control manage diligently XXXX. increasing operations allows to the Difficulty] have to efficiency impact transportation and elevated, costs are can and of work by our us the we points This XXX

We persist to as through continue environment the at least the to closely this expected monitor will XXXX. is current of remainder

the results. our turn specifics to let's Now financial QX of

to grew of mentioned uniquely of our million in normalized by XXXX to in XXXX. a quarter results are sales of QX of compared the reporting QX the fourth press environment As QX operating challenging release, in XXXX performance to XX.X% $XXX to comparison relative XXXX. earnings we provide for Total QX operating more due

the cadence sales Conference, increase of saw sales In the terms holiday January a a that nine-week quarter, XX.X% XXXX. included at as ICR of when the comparable announced in strong we for to store compared results

we per up, the held our experience. strong spike of a traffic period, and following thanks the holiday unit cases basket experienced Omicron decline attributed variant. our the COVID-XX conversion, sales strength and to the However, from our to assortment Though selling store sharp in in our softened, transaction

strong million to gross unit margin an was basis our selling XX.X% of of higher growth full by offset in fourth performance-based the increased quarter transaction. subscriptions. expense. our $X.X price XXXX of to freight deleveraged in price gross Earnings increased the quarterly million of our support in points average XXX an compensation income XXXX. per XX.X% $X.X points of retail markdowns basket by result and XXXX. in QX increase to growth diluted XXXX rate and Specifically, grew versus compared compared SG&A insurance increased share cloud solid versus million $X.XX in income partially of XXXX, XXXX. increase increased the for was fewer margin to XX% of freight $X.X of in to A both basis We the result $X.XX premiums professional by an primarily XX.X% and compared the of primarily increased of in XX quarter fees in outsized quarter to related in $XX.X driven QX the units selling versus technology QX Operating and million performance, per investments size, achieved increase of in

grew XXXX. in Turning the in review sales $X.XX per income to fiscal and strong Operating year million $X.XX full the delivered was points margin same margin our an XX.X%, XXXX. basis also XXX% XX.X% Gross of XXXX. for million, Total compared to X.X% Earnings was which X% the year very in to an of fiscal period XXXX. over being increase the of XXXX. results, share XX% to versus comparable to strong fiscal Operating compared diluted of $XX.X XXX XXXX expanded XXXX. were of compared to fiscal $XX.X are sales million compared for We year compared increase to XXXX. of $XXX.X

Turning Total of to sheet. during depleted experienced XX% our end year. inventory the with year-end last year made reserve by quarter. from QX balance increased Combined end versus XXXX effect the XXXX. opportunistic levels year-end of largely the versus XX%, Inventory decreased at fourth the inventory inventory

close repurchased experience management record agility giving and million year-on-year, repurchased common as of at shares authorization. X.X The shares for million $XXX remaining In inventory our million cost with $X.X stock, has XX,XXX million. of year total, we the markedly fourth quarter. existing cost We continue year, ended approximately an We its aggregate improved us resulting to approximately a level to approximately aggregate freshness. in the product an of company record of $XX the the in from buyback turns

announced an of earnings Lastly, extensive that we release review company our has owned the real estate. today, in its undergone

approximately agreement execute to a a subject and price our other sale-leaseback we diligence due conditions. purchase a South result, $XX As an into have of Darlington, of Carolina for to center entered distribution closing customary million

total a the our the also net In for a setting. company’s retained into enter network Roland, similar addition, of we agreement authorization transactions, an to liquidity, repurchase Board from Board. share these action announced Company’s outstanding determined In million, $XX It million. as price approximately to use repurchases $XX $XX for share sale additional purchase by intent transactions to pending provide additional proceeds center, our including result the the leaseback is with optimization of million an authorization option Oklahoma for of distribution for to

the outlook, our our of confident underlying as remain to seeing relates we take As in the initiatives are health transformation we business hold.

However, we inflation. unprecedented extraordinary well up the particularly year’s against in of as in our XXXX press last quarter first stimulus, as are mentioned current release, as government

factors and inflation gasoline significant customer. the food it’s high been core Specifically, The with XX historically is store prices, in prices highest years and macro impact increases. our disproportionately

repurchases. guidance, updated providing determined are and share excludes events we the leaseback result, be a sale to which aforementioned impact the As from

planning year for operational $X.XX EPS increase a fourth in Combined XXXX. be decrease $X.XX represents with QX versus our quarter we XX% we performance. significant of of to our versus brings XXXX. the $X.XX. XXXX sales in $X.XX expected and are $X.XX In XXXX This XX% to through sales At the an increase XX% is versus expected our total the XXXX. to for fiscal to summary, First, expectations financial to translates top to this increase of a of compared to combined quarter XXXX XX% to first the to expected through That same midpoint, on quarter total in compared second last EPS period digits the second fourth are low-to-mid-single are $X.XX pleased increase to XX% of EPS first approximately XXXX. $X.XX. quarter

remain initiatives are we With amidst team in we While so nimble closing of agile turn that, call backdrop. we confident comments. David under Trends Citi proud are by have unknowns, entire we’re currently in operating I’ll execution David? many the the the and and uncertainties and place. the put the a strategies to for And dynamic back we excellent

David Makuen

Thanks, Pam.

the evolve Master but organization is our getting be excellent to only today’s from As you Citi not Plan hear changemaker our we diverse excite really operators. in traction. With can customers, will flight, importantly, initiatives call, also

to XXXX intact. very low and very longer-term you growth single-digit will Turning we confident our again, annual are assure in growth growth. team’s attention fully for can our proud assumptions In plan Once the execution XXXX I opportunities, year. our and XXXX, comp income double-digit with three-year operating pleased the results EPS business and our are we are that the and generate and that of

our position capitalizing continue in brand against We’re see entering our we transformation to forward beyond. look and opportunity year in this the progress strong in our a our execute XXXX we for strategy. to on to We confident and are ability on building

questions. us our and live to bring With to appreciate proud entire announcement She XX Pam’s continuing driving search transformation. we Citi closing, drive that, commitment all. of communities exciting Join Before Pam to and that ready team to deep replacements. their to the Malika, difference I in We Citi capable Edwards our want in Trends like our while Trends to We I In serve. a purpose wish dedication we’re I and life: leave reiterate to our would and thank make over we’re dedication months. work April her a for profitable take X. close, the in your mission finance respect knee to I want past helped X purpose and gratitude Pam live interest endeavors. future company made And has Pam in bold, all her to built the brand growth hard on the to organization long-term the retire the for story. for a my acknowledge decided on to February retail growth has strong, best and

Operator

Jeremy Instructions] go first Please ahead. is question [Operator Our with the line of Craig-Hallum. from Hamblin

open. line is Your

Jeremy Hamblin

you. Thank

So, details to by I around start wanted a bit more getting little QX the in guidance.

know had as at up significantly same-store you within get versus terms don’t wanted that’s the in a But could gross in guide outlook I range? XX% clarify as to and also that wanted in note was understanding came that you points kind see a gross a that’s Street XX basis whole? if about as we figure. of embedded implied EPS for guided share in you’re XXXX of guidance from that, what looking was XXXX. count figure than of of in I I So the QX QX, sales QX was your your then if down the that where to margins kind what Thanks. well And and of and an better your perspective to margin implied type

David Makuen

guided Hey top-line, equates total for turn basis. From XX% thanks in crack comp take Great kind for standpoint of over Jeremy, things, high-level I’ll on XX% top the and sales it range joining. a on questions. you’re guidance of negative sales. right to and then XX% that I’ll Pam. a the And to store a for XX% to XX% zone. We roughly to QX a

around for of there. Pam? it over turn I’ll margin you’re count And QX. little a background better the bit to share Pam highlight So, knowledge our and then and right to

Pam Edwards

Yes.

the purchased For And the mentioned, quarter. the at we shares – as repurchased ended X.X million roughly year beginning of share we count, we shares at the we outstanding.

we able before XXX that better, the For range QX through mean our we’ve that the points stand to to result. high-XXs, gross the expenses And low basis perspective being of our guidance end profit – I to given freight perspective for margin. really, – what that got manage -XXs the QX out around low on came overall that I’m and sorry,

That helped also expected we profit quarter. drive well. We markdowns also fewer what than in had the gross better as had the

year, January quarter lap against last the point starting started managing and So come five the inventory beginning the really, up started little manage could out stimulus what as we business. from management, in first we we started with evolved of a accordingly We to we our we week lighter just and at to for did. business nimble to than that through expected And seeing see in account were the were and the bit expenses just the time, manage the market. whatever December

entire that So maintaining across the of in light in slowdown we business last just really saw that agility month the the again of quarter.

Jeremy Hamblin

point, being just year. so and you levels that to looks certainly XXXX can to inventories are like, in the prices. prices Do by rapid follow-up or really of like the your it a impacted pressures assumption? XX% about lower in that versus spikes whether it’s quarters inflationary ago you’ve couple point Do down to a gas your seen fair of feel a years managed as we’ve where XXXX. base like customer inventories And the obviously, you end feel the you that you markdown utilities that food here or maintain for Is your that next were couple is versus

David Makuen

That’s Jeremy. assumption, context. a And a me good give let little

and the of quotes, group management you one of as might know of you I remember, to think XXXX. in the back. a lot really look of good out And the summer going my knows, started in we’re As coming we opening never inventory getting

pressed manage mentioned tough so that and agility. Pam word hard team really And has good on times. inventory in how And to the best times

at things better our dry and around and and that and we making open comes we for we’re when powder so buy that it sure to to have work to and best move and vendors on. better the getting the still are things can We’re and look that can [indiscernible] occasionally TVs enough cancel with yet reading we opportunities

it give the in it that, and how a you that all looking markdowns of our in our terms we trend. job bring but but what manage we how it’s customer it’s they sure of and knock And multivariable pleased out it’s we’re and really and box next manage down, that through So sell make good if skis the over want, game, it’s with to going. will, the

about of is I talked trend when today. make it and I is I getting cycle management in better. and better life last about this this about the of talked company. idea better. just the tell and the better it I’ll XXXX, point joined you So I’d Getting

truly of too inventory. much are and helps in any falling it rabbit trend Our becoming mayors when management comes mitigate holes to masters that perhaps

are of as excited is gross we’re which telling we low-XXs margin forward us. And our high-XXs, what look here. we’ll about So, MO, the maintain numbers normal

Pam Edwards

The only thing our expect I from the be add thing – comparison QX from most would only perspective. just just quarterly that, a standpoint, do Jeremy, difficult a to margin would that cadence we will I

And so of of that, rate again, that’s And we’re year. planning high- XXs sequential a for a the to in improvement first QX. largely QX – quarter last with the a from result

versus had We year. then QX favorability also year. prior also not in year this we’re markdown that strength seeing just our additional And number last

Jeremy Hamblin

your thinking Great. QX, for of guidance, Last know openings whether store about the you or the the just cadence but then not follow-on a so seems in that, are stores, changed. openings those Thanks And how have – half and many for to the stores store are I like rest given year, performing me XX versus how a has XX how as development in half? expected a is first only in prudent I you is of versus to versus unit CTx handful, the wanted chain? change the way change for are back year the prior much. understand the your the one environment the

David Makuen

to appreciate And to order XX. an to right through XX XXXX out quick format importing XX, XX and XXXX. off of But of a this I issue. in call which that our is up we good rolling and little to importantly, to And China. can our amazing a few, we’ll is breather store think a of catch year point, January out estate on last for It’s lot get to real XXXX time, November guys. That’s heavy CTx the those it the from everything in and so we kudos we’ll the cadence, if terms of teams, it remodels Thanks just in not an fixtures required thought XX lifting came in in construction Yes, we I went saying from news prudent. is just your now most Jeremy. in go back your questions, year,

So, live sure the It’s year remodel the that actually I we can a live little a you which lose about factoid program, too as end make that margin. didn’t into last put the your tell we ones speak. question you early healthy emphasis, with to we doing. I wanted to how continue But more report going I’ll outperform on with to the are age went at that they’re chain

your we’re hope country and It experience. some for quick our revolution in excited here. to it. start get they’re a is really popping representing can So, about because I you going these And the others today, Thanks into questions of pretty around Jeremy.

Jeremy Hamblin

Best much. so Thanks wishes.

Operator

Thank you.

Please go Our of next question is Group. ahead. Advisory from the line Dana Telsey Telsey with

is open. Your line

Dana Telsey

– on And luck your best Pam, retirement. of in everyone. morning Good

inflation of events. is topics the In terms obviously stimulus to and current of macro

offset forward you we for of Anything differ and the of, in last average increase? how you’re it quarters, does the thinking just next, think seeing is through gains called QX to occurring? that how looking And what upcoming us to your you’re wage should of category remind low-to is mindful be mid-single-digit in What David, then QX? by And on helping year Anything go or price increases? are given pricing sales How you as of? inflation. and you and impact it and the each the out stimulus, of was. year this that As had of stimulus impact, about framework quarter we

David Makuen

for start me of pretty impact March almost like bit From that describe impact a stimulus in a it really the Pam credit into drops even look December. that dropping started or of child starts on thanks in quick it that more the an take July questions. Dana, hill. the let it high first Hi pretty I tax impact curve then across year, overall But – of and a It through and slope ski can we April, your that one, March, second look meaning one. the I’ll elaborate little the we CTC drop. as on kind at of at

And point, our what hear to won't couple share in XXXX And – QX. they sure gets And really, guidance. reflected forward. and in importantly, to of QX make the in go pump start hearing to I our We've I then but QX. lot a it begin that live in cooking to initiatives want of is so gets easier, it really QX lower but you're a say QX impact lion's then this got you in QX, many through

take when a better assortment start kicking the That's And not almost Missy to do going half, to and then pop a assortment is starts assortment, to show dress Latinx to remodel which for we start most when stores. example, that's in. starts end into capture, For more, our more by work share with of We're if remodels our up to XX volume That's the example, our hold. importantly, when market opportunity. of significant multicultural QX.

end stores we So they to line, build the of well. kick comp benefit of new think building obviously, the provide And as start on top rest some our really half the we'll then in, will – QX of those of nice by and year. the total for just

Pam, coming business. parts do Trends to So lots of want good for on moving pricing? comment our Citi you the

Pam Edwards

Sure.

has trend, our inventory AUR quality, shared, the and we've markdowns lower due management. of in to previously our also tighter As due increasing to steadily been assortment improvements curation

it it continue perspective we're as closely value as that very from providing surgically to well we customers. just right and make our equation our for sure at so And by elasticity measuring look that to business category monitor

also But match door is are price, the we've quality up seen so can assortment due that inched And we lower higher where to it's a the than to and our historically. price level have seeing value we manage. what higher AUR due and that the markdowns while out of the some a to customer

Dana Telsey

similar Got then year? XXX point that quarters differences that the And basis it. there the hold quarter. upcoming supply the is Or looking the the in impact you're chain on throughout at? side, of the rest in Does fourth

Pam Edwards

fuel so right uncertainty pretty with much the and there's get Dana, cash, We're transportation the rising holding now much costs. costs

at start the level to see some versus our points take as relates of will least at the to and do supply XXX hopefully. hold of XXXX have this increase, we at to the back it pretty much mentioned, until in as point, of stability, David get But chain. uncertainty, that initiatives XXXX basis that we half As this some given we're holding can XXX out year

Dana Telsey

Got it. David, you mentioned lastly, just And dresses. then had

core like I Big about customer? think sizing, move categories you excitement tops Boy XXXX What collaborations. through the or we the branded are also for Missy thinking product-wise looking other the Junior you at had your to drive as been sizing,

David Makuen

memory. and cited those question, on also things great Great the that list. you Dana, are All

windows. open mask the we Citi a In customer free to of being in look our how up some returning we and I social and and for out think have of this new without at the But terms the business. some how all an more more out, how they're and are of so landscape office and tailwinds think frankly, to how they're really coming Trends going improving opportunity changing they're those on, great we also cases,

dabble waters incredible into three live We casual have still on loyal kind full years, But this the day-to-evening and proud life. I'll will as yourself with of you we and from and what is and even a Lisa, casual Citi strongly live and call deep I last much bold will do have belief side and the support it's opportunities present the and certainly represent customer our haven't five to in trend, still be but And still way dress them but of the done the this it connections Trends we'll our and initiatives She two and of and as hangers. a sort it, this right are number last of, it many way. flying now in more enter those It of the to looks. and testing shelves a Allocating and Planning. with Product the off of and off we're of sees happening, Head the strength

And lot needs. the of categories expansion than was then by business our remember, side. So non-apparel of front, their we're on landscape ever. changing in consumer addition the the as non-apparel apparel of on you our may And stronger a remains of encouraged or categories terms

out. under or generate existing on basket. things last trends you stores that least, bigger many and not things the hip your like conversion I from will, you keep so if strong store excited mean jewelry really stuff bounds. with that [ph]. expanding of the more and higher footprint, with and higher we're a initiative That's blowing neck plus-size And So customer. just to on we're growing covers there's is we tell our her believe, the line about. but working the then engage And I point, performance for into can keeps And women few the will

Dana Telsey

you. Thank

David Makuen

great Thank day. you. a Have

Operator

Thank you.

is from question Grom Chuck Gordon ahead. go line of Please with Haskett. next Our the

open. is line Your

Chuck Grom

thanks. Hey, Good morning.

same. You called and the have conversion that guys stayed relatively basket out have

guess you're past, from perspective the a XXX since say, really traffic over seeing the of I December. curious middle I'm or days So what footfall

David Makuen

our comes encouraged per our question. by Hey in as selling healthy answer well We Chuck, it's levels our transaction. as If AUR Yes, definitely good of levels you're QX I basket back pull question increases your now, our from seesawed. price right. both units and about were driven holiday kind to conversion and could

typically think because tends to December more with our are strong we our minute. last I customer really shop

year And stocked traffic. saw XXXX, variant. pretty being better we ended in we nicely and so got kind positive as against deceleration holding throughout December but by Omicron COVID people seen And week the our we really not big of the in And XXXX, know, had against still than the stocked prior. three a then January we four, from in

see as was or didn't decay in any basket. was reported then, just to back amazing However, I we It see. what conversion

of in seeing not had business, to customers pleased levels the and some QX better we we're we based really as high. stayed progression we're would tax meaning as better strong and to our started a that conversion our as pretty the true XXXX. Feb, we're our to is QX us strong. on suggested recovery, planned lap saw and weeks overall, and presenting soon early the we traffic that between above and basket we as We're also recover seesawing happen, tells with and And refunds the is We've that what our nice stories then such. enter are and But get content get So QX. cadence to still that we and have

Chuck Grom

be like think, January quarter to I you're was about the because down, XX%, Okay, down it looks around guiding and first XX%.

I'm down any trending degree you for trying conservatism understand this that the – in Is of so can just shake the you are So out XX% of there to far date. kind quarter guide way us? you're or to if if in

David Makuen

a you high level. I think give I can little

you're improvements April you seen we've is a of Feb March what your and in will, the think increases hearing into kind some will mainly I little date. downturn. That if bit March to quelch of, of the or

As last last a last weekend, hits hitting week. week really stimulus hit meaning this following reminder, the and started the year, it year, and

said recovery March. in back the We'll So what give of some stimulus. lap when I instead is We've early true. that some seen we

color hope So can that that's I provide today. the I helps.

Chuck Grom

Yes.

And one Pam. for Okay. then

earlier in January. EBITDA year, which ratio low looks X% provided, guide It last Just with is long-term consistent call range. think, the in around, your year is, was EBITDA XXXX, your over guide guys this like the for it, in I you XX%, that

you the to to that the long it think XXXX? years, to Just to level produce back for were guys it's wondering how in several next think over do get you able take going about when you you

Pam Edwards

by now Chuck. believe back business that a Great the inflation, on we're long-range get and and stimulus, the that start our we some past see goals, to of we're Yes. we projected this the can where going in to lapping underlying track of EBITDA do this question, to conditions get double-digit doing I XXXX. and business, we see once

still our this I we that that think we're seeing what feel stimulus-related all of that's a is transformation. again, from So and temporary believe in good measurement

Chuck Grom

million question if is and the – the If your that here share about I now, any done just be buyback and in maybe then you proceeds. guidance of in the buybacks? time think really, to wondering guess, $XX consideration, has you consideration last with your $X do from but cheap is, earnings I'm holds the my on the if the potential execute on XXXX, proceeds guess more and those to get monetization stock board I And DCs, per aggressive Okay. what north you're really could would

Pam Edwards

it's active for actively at leaseback. certainly, the mean ongoing Board and capital And the repurchase allocation as considerations that pillar proceeds our of is part part an share or strategy. I and the Yes. this owns of important an remains looking The important of sale conversation.

Chuck Grom

Okay. Congrats again, Pam.

Pam Edwards

Thanks. Thank you.

Operator

you. Thank

the line Benchmark. go John with Lawrence from Our of next Please ahead. question is

line Your is open.

John Lawrence

Great.

for congrats, the First of help. all Thanks Pam. all,

Pam Edwards

Thank you.

John Lawrence

more in for what talk little of that planning you you those go there? Could several and the you a achieve about about side merchandising deeper on really would bit about you and to David, talked investments expect about these efficiency Secondly, little systems you talk with and quarters. to – some realize investments these a you you systems maybe the need – talked

David Makuen

and later Happy sure. got you're the of on – come across I've it's team, the vast, Buy, the POs, solution summer. what Sell, they Buy is store, in backbone what's on how exciting Move developing truly. kind the ultimate way and many right are all testing so African-American the John, really new to will benefits now from the through and teams right. based and previewing store store of do system and it's the be our that, climate the whether this store allocate the we've working been individuals on Latinx hard and the primary an of stores, places This to of represents forth. both types the of how an plan location and African-American or And our store,

maximize chase say, is level this going sell-throughs back to car to gosh, this system, importantly, the probably new pull a opportunities, And and that be the manual the make able in without that's pretty this spend tool it time itself. customer XX the most and want a brand go I'll this time right race So And set to testament happy. a operating system, know lens less has in you, which a been right really stores dashboards to guys will system, to do. give right if the go in that's on says of to bit, high with the at thing I provide markdowns." these we're a particular kind to you to because I and these how a product allocate "Hey, system right to and And more KPIs,

in and shorts what and should old, I Florida, shorts And mean. in conversations, we'll to this because in Florida, is very little should to need which the I the fingers, largely peak and this we So smarts more those almost a go today Florida. shorts away know This when away Florida. the when is should say, year, manually bit have do analytics go shorts tend if every age when will in all you arrive is happens across

a change-maker So system glad for asked, it a these this enhancement – is is you Citi are I'm Trends.

John Lawrence

expect And that have David, when would you and implemented to fully operating?

David Makuen

really early we We are it and rest play late the that really XXXX immediate impact get But in expecting as to it. of it good XXXX at and some think the fall, is teams for summer, when have for XXXX. kicks has using in

John Lawrence

at those that merchandise Can they presented you way stores; you deeper is stronger was of a – those new presented new way? presentations, of are on format leading sort non-apparel the – you in into new digging they stores. of a all stores give than different a new really Can charge me tell dive, comps the commented you can go the know And in a into into solid just we've little bit sense Great. are you of the seen. those I that

David Makuen

really Good is change newbie’s tell what surprised this store all we'll CTX XX would all I remodels. pleasantly our to really on you're put of that us year layout think John, our question. into boats I And referring format large that rose. our you, to XX and that the new

a or up. The it's the material the charts. the move of the box is not we store of is find mean business off most that to to – me, the truth be I excuse that's expected center hard up. to We products,

it really that whole just me of our last wasn't specialty this just – vision for and long trends into older those it got XXXX after and weren't or in presented weren't led, well launching Nobody's It until the fault. so for store experience fall new feel XXXX. team fall legacy And We dynamic, spring respecting that on so we easy-to-shop, stores. good, upholding. city agenda in me, something the in excuse

what of past. the So bit think the And day, excited And in as end we're to these follow our will UPTs stores, What us seeing. conversion, operating the tells might operators for these in And gains basket, about which right them seeing to of job with conversion, better not we the new filling but stuff, most and a proxy we're up in using meaning is in of get nice performance transactions that lift call what when and in some little is is become out even up. have seeing system I at I loving just think, as rise, stores. and or we're the in highlighted been in little live coupled from stores the increase comes with we're you now goal I've coming a good these it the engaged have experience the come you really are. the

John Lawrence

luck. Thanks. Good

David Makuen

Take John. Thanks, care.

Operator

further no over And Please you. back Makuen. it I'll David go ahead. Thank to questions, turn

David Makuen

everybody. Thanks, Malika. Thanks,

for joining next a for Bye-bye. Have you and look We call conclude today. can the to seeing day us. we spring. forward and great week think I Thanks time. great a

Pam Edwards

everyone. Thanks, Bye.

Operator

please you Have That gentlemen. and disconnect and ladies your good today's that participation lines. call. you, conclude does Thank day. We for you thank a ask your

Citi Trends (CTRN) 15 Mar 222021 Q4 Earnings call transcript