CTRN - Earnings call 3 2024 | Citi Trends, Inc.

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Operator

Greetings, and welcome to the Citi Trends Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded on Tuesday, November 28, 2023. I would now like to turn the conference over to Ms. Nitza McKee, Senior Associate. Please go ahead.

Nitza McKee

morning, good and you, everyone. Thank joining Thank Quarter Citi Third on Earnings you Call. for XXXX Trends' us On today and Chief our David Financial Officer, call Officer, is our Heather Plutino. Executive Chief Makuen;

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

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

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

I Makuen. call our over will David? Officer, Executive now turn Chief the David to

David Makuen

our then us Good on will XXXX call Nitza. your Chief questions. you, our with Then for elaborate financial our today open begin outlook. joining and everyone, fiscal we'll Officer, and third of quarter Thank our performance. earnings on will Heather thanks quarter I third the call. morning, call our our Financial highlights results for Plutino, detailed

more controlling top macroeconomic managed expense the operating back performance to essentially a as of with like line we our always kept registered continued did quarter third strong P&L our the expected environment prior a backdrop. to and challenging strategic sales controllables, ongoing advance initiatives compared we gross meet held not challenging year. the than expectations, we by and navigating In very successfully the quarter, margin the our That said, while selling do. We middle our XX.X% flat team third of the dollars

base, per very mostly need families warm throughout much living, customer primarily higher less closer consisting the of further is by $XX,XXX being income pattern navigate they unseasonably buying impacted and of earning weather Our cost as low a selective quarter. and to purchasing year,

better Our Men's, X.X%, the assortments third embraced our decline quarter quarter's and sales last intentional rebuilds by benefit particular, enhanced similar better that rate, of significantly Big I to to from Beauty and comp did QX levels, prior In Men's were while in customers, inventory earnings inventory values Home, during than rebuilds referenced call. run the thanks year.

business forecasting Additionally, assortments our up showed excellent best ever. trend benefited our in Ladies from one of preseason that

resonate that we signaling for As our to and the trend-right strong quarter experienced with many ages consistent unfolded, continue conversion, components of assortment all customers. our in-store

Our equally stubborn warmer trends. total fleet. quarter sales throughout most basket by weather back traffic across was to meaningfully the our large portion Contributing and a held of were these trends of

annual Additionally, real who that household out at $XX,XXX or and income, year. for it's less issues in latest rent, $XX,XXX food our XX% our customers earning utilities, still about gas research, customers top of with clear per are

strong kept than Our normal, financial short goods. back-to-school volatile persistent curtailing environment, a selling coupled this pressure business and and fall students waves less heat far longer bought as sleeves of and back-to-college parents felt that with in during therefore kids historically shorts

our and drive quarterly We fell to a of continue short bigger few markets to play deeper have strategy began our role to marketing digital robust we to traffic marketing we test expectations, customer a in a testing engagement though more Even customers, offense. are from current pleased lapse radio play and we results future. and in are early new very with and planning

our refresh strong sales contributed when trends. excitement we remodels established our translates quarter to markets, our in basket traffic in Additionally, better more that and store the experience lifts, customers' evidence

Lastly, on the continues management selling appropriate to with With times newness quarter sales X week. in amount margin to ahead of the a am days of stores improved we've fourth headwinds the steady we discretionary us, to experienced face inventory top wheel, and ensuring X to I date. pleased our momentum many flow report per that focus hand important of at line

including customers supported right Campaign, party and mega the Bluetooth set Set. of accessories so could all course, Our a want, offering fragrance floor timely and clothing of a GIFT! the are holiday sets, Ready. gift our at for speakers, amazing all ages, setup trend much incredible loving person most values. of gifts, by a great wide our all cozy and toys, home

also customers holiday our are fits their style ready up gatherings to and help show confidence. to with We with must-have

We no for life. know our show customers up sure this their will big be exception. in the in holiday that for stores And moments

inventory and stores good prices position. and appropriate Our staff feel are jaw-dropping energized, and we about our really

selling Notably, season, we this between Thanksgiving positioned updating to you forward quarter resulting to extra shopping, look progress super for and day well is our of we are the -- our and I'm fourth day this customers. Christmas selling win confident extra year's hallmark call. weekend on last-minute year's perfect our during and a holiday

their the each gratitude unwavering at value. to consumer we sheet the on express American no making our the the shareholder heart particularly visit, season. focus while every balance flexibility necessary to dynamic liquidity Importantly, long-term with neighborhoods, time their and teams our serving initiatives provides to total my environment our take with African and I'd a they moment of strength feel States seek during across for holiday the end like in our multicultural maintaining of debt million create the welcome families quarter local of us dedication to strategic busy navigate to them our United $XXX as in

to we Before our to review results of the pass taking improve want third it line review for a a are I I performance. discussion our our on quickly and quarter of Heather top outlook, to steps

sheet; To significant driving first, our they are: enhancements. strategic productivity; and made expenses comp executing our technology balance we you, second, SG&A remind quarter, margin; fourth, third, stores maximizing inventory the and During and progress managing initiatives. X against leveraging controlling

In addition to actions quarter marketing remainder first sales decisive XXXX. into for top include: line are testing. taking of and initiatives, these first, of to XXXX Examples the we drive

the quarter, this our testing Citi during As third robust a promising, the time we marketing to Trends' the more and a effort Early I fleet history. are holiday began markets. advanced results mentioned, strategy XX% in select approximately we in have few for season, first of marketing

inventory. Next up, optimizing

of ongoing as and Home, categories upsides around. year and spring. not in Beauty We are rebuilt categories, Big the specific benefits still during of offer bullish at these unique were such optimal Men's that items best levels values Many for regarding inventory building last the

we to excited turn holiday corner we're and traction the continued during momentum So when into XXXX. see continued

a experience. delivering differentiated Third, store

a We looks. improving putting on creating In and essence, affordability. experience. with together emphasis newness store are our and an This in-store includes laser-focused accentuating quality everyday on head-to-toe attention vibe merchandising, heightened visual specialty towards style,

as Our or think gettable ages all at of customers providing trends totally with guide approach, prices. us today's a

Lastly, in Spring the improved list of quick, decisive 'XX actions, setup.

to last flowing highly earlier standpoint, to basis from delivering are regular We a are year. product we forward the stores selling Spring season. than on while our newness a assortments on our Spring focused And weather warmer looking

is the Spring from ERP in third launched and allows of earlier early quarter. analytics, was This previous our dynamic significant for launch our system decision a the assortment ERP Our to influenced portion part more product by assortments planning. upgrade in allocation and new system

organization the exciting across new tool. teams this Our from are benefiting and

right functions will allocation improve and lead Looking ERP precise ahead our at planning store more time. new to and to the right system next the year, gradually we allocations the of believe product the to right

not As you hear, still. can standing we are

Jackson, We spend engaged of heart and to home basics the to fashion that curated love for and lots assure customers Charleston, us way items they have most Birmingham, with less met in can't loyal to for have customers them resist. of frequently our And Jacksonville, complementary highly their Mississippi beyond. trends, for impulsive from Citi that quarter you shop and last that I just and our can made the accessories, customers to to important to Savannah, Atlanta Trends. Tuscaloosa, I neighborhoods, during

Our for African how to we their fit wants job that goods core deliver what within American is aligned customer base. do know It's trend-based at their values and to our needs to means.

that, call to will She detail our in results Heather. outlook. turn quarter With third as over I'll well discuss Heather? the as our

Heather Plutino

morning, Thank everyone. and good David, you,

to third our continue by good sheet environment. us to with margin our pressure remained of mentioned, expense warm quarter and The macro difficult than flat navigate throughout David on merchandise current a results provides the in categories. We progress customers, shape coupled control were in-stocks balance targeted to inventory gross quarter financial was improving made with expected, the quarter flexibility the we XX.X%, as As unseasonably quarter, highlighted given healthy that that continued the finished quarter the in second the continued softer weather. strong uncertain to with environment that

very are of as we against drive will strategic our we team's on initiatives Importantly, proud continue driving execution focus forward growth business to our that ahead. profitable our

again $XXX.X our QX Basket, quarter X.X% as conversion sales our once pressure versus showed decrease while Turning assortment quarter. served third that a year, specifics throughout financial of the customers. Total under last consistent proof versus quarter trends quarter the the results. resonating our million, second to for with with is the were shopper XXXX. of still Strong

remained strong year. in X.X% decreased sales comp XX.X%. the Gross third quarter Third last at compared quarter margin to

contraction most group see year, did impact. a year higher versus small expense higher decline impact minimizing driven as on network. accounting more last shrink. primarily of shrink, Through collaboration, to prior the we also we cross-functional freight The keenly cartons quarter, focused prior for of to flat the through impacted remain we by While stores by with of moved the was

for drove SG&A of controlled year XX.X% adjusted. the a sales. $XX.X SG&A Lower quarter flat expense at rate $XX.X adjusted million to sales prior of as in remained quarter million and or total dollars deleveraged well to the

as to Operating of the of million as Net as per share loss $X.X operating $XX.X or adjusted adjusted was fiscal a versus XXXX. in sale-leaseback QX income $X.XX $X in earnings or quarter per was of $X.XX adjusted the million million or of quarter loss third $X.XX the compared share $X.XX diluted XXXX. transaction million $X.X impact adjusted or for as in

count total closed During of end to bringing stores, store quarter the XX remodel count the year-to-date stores. our third remodeled at the quarter, stores and XXX we and X our to X

inventory rebuild Total increased sheet. comfortable Now balance remain QX level certain at holiday season turning we season. we versus and enter and continue inventory dollars categories. stores holiday our the for the stock the quarter as with gift-giving X.X% of the the XXXX to We as makeup end to

our Set. delight customers Ready. mentioned, David stores are GIFT! up with our campaign. As geared to

environment value-seeking customers. we our Spring for pleased as with Additionally, we procure the XXXX are buying for merchandise attractive

under our the of $XXX million of approximately Finally, we million made cash, revolving with borrowings line ended $XX debt. up no quarter of liquidity, no and $XX of credit million

our turning outlook. Now to

we've plus in by earnings economic discussed driven guidance the calls, previous customers. the our second our As prior slight in relief initiatives, for primarily half our of year, improvement assumes

While we we our in and need serve still we've year. initiatives, per believe fiscal shopping are balance are We is remain continue will their of spend through that our believe under to our customers for that expectations now more dynamic reducing average the assumed, pressure low-income basket. that closer the than learned the this what families

year XXXX: fiscal As Full a the expected margin gross in $XX compared the as follows in $XX fiscal expenditures to be be to be to $X the million. our the as year year are $X Full down balance Total is still to range mid-single-digits Full expected $XX in million are cash EBITDA result, expected outlook are year-end year sales we is expected million; for high be million of updating XXs; to is to million XXXX; to the capital $XX in be range expected and of of to million; range for to

year, While single given are total XXXX. what annual to to let digits the are implies quarterly sales guidance guidance, QX up for we help clarify we fourth where quarter. this be low versus revised expected the don't in quarter give Fourth flat me approximately

year. is for million sales of the weeks million year expected this includes are EBITDA fourth to quarter, be XX reminder, be which is down weeks a last the XX-week measured expected last to to basis, year. range mid-single in on to $X As $XX of QX. XX flat is in XX- a digits the in Comp quarter the to compared to range

a In and our under is this that customer closing, difficult doubt no pressure. selling there that is environment is

bottom longer the expenses the for the and term, continue on third line base. aren't we current us navigating David loyal our fuel alongside And our focused top of While we'll satisfied initiatives to the this with quarter, turn remain environment brand. our David? earnings Doing in that, and drive closing carefully investments. important I'll so call back customer strategic while managing results inventory allow will we to comments. full With our the to in ability potential our

David Makuen

Heather. Thanks,

brand to and our we're our and high-quality experience. true serving of neighborhoods, really a As proud employing a company, locals a connection with

operation, of our ongoing X years XXX where others aren't, more vast stores of XX in our presence our located in core differentiated our majority in During fueled has than positioning including of less miles or XX states. customer, within amazing neighborhoods the markets

Importantly, our merchandise our continued offering a and challenging environment. customers vendors loyalty expanding that our our continue strong customers' in supply partnerships drives with compelling with engagement, a and to even

proud, ability support most we bring opportunities respect at our break ahead, up comes and our As prices strategies we purpose, execute to show customers is is live key Perhaps help for to all. whatever live which don't that life in Citi our of their bank. bold, to Life look the our vital will continue way against

We excited as continue our full we the to potential drive be of on to shareholder and value. long-term brand profitability driving focus

the that confidence drives to gratitude future. appreciation and call to the our holidays to strategy forward in is my turn extend execution to want I team. our Trends our again operator, It and over their Happy my all. I Citi reinforces and excitement Before

questions. ready We take to Over your you, Frank. now are to

Operator

Capital question [Operator first Instructions] from Hamblin Our Group. comes with Jeremy Craig-Hallum

Jeremy Hamblin

an start comps that saw So the I throughout quarter. wanted the to understanding cadence you of by of getting

you in August QX. that was expectations, seeing wanted same-store in bit worse a then on own to also worse you expected I And you basis. a far than month you does -- you color? you're more the get thus call just sense, little to imply your a what or And best given You that that October July noted than a expected? sense Can get had provide the sales was on missed that QX for that September

Heather Plutino

take was fairly question. comps it And Heather. QX, I'll range Jeremy, QX. least quarter, at in really line that full part of The months this in with consistent. in really is the the Cadence of was tight. between just

with July our I'll Tight that's right, right? but quarter more in results. say full you're the second about month was strongest what QX, quarter, the line So of and in QX

weather all it's a say but in for Weather that is for just we well moments, that our comps So when that -- changes, underneath and it's reasons peel look buying talked warm, basket a And And story back well, was changes are as right? you many you abnormally this we up. quarter as equals earnings cover the it talked months, calls, really about to not example. need in the closer weather back-to-school we gifting need. call, the right, release the right, the comps back, weather about is throughout customer -- are and of will we thought pressure, Continued the down. word of those traffic I not used stubborn, stubborn trends good

they're wearing were dad back weather, and Summer, the the mentioned were shorts they on the and fall for the remarks, that wearing XX-degree only impact prepared buying had if in kids needed. selling, And an that what are quarter. during sure, going right? the in throughout they mom T-shirts The So we

David Makuen

Yes. calling. for David. it's Thanks Jeremy,

driving gift within campaign. assortment, kind encouraging, in really the mean, October, timely by the has On like release, the right our our Set. in of GIFT! with of really presentation QX the yes, Ready. meaning is setup the holiday driven stores momentum. late our we were been in boxes We context of that's stated improved really a I momentum headline question, by our

seen all, of snaps not decent November. throughout some, we've weather And some

momentum, to nice of quarter. contributing the improved into rest the a so And all giving run us the that's

what So we're about seeing. excited we're

Jeremy Hamblin

you So back just saw then coming QX. to what in

maybe So a difference than you and your understand if an or expectation expecting happen that comps and didn't between macro comp were of of maybe then to trends more trying more end were the got you a the you was relatively of on weather Just because think steady, result. maybe factor? what acceleration

David Makuen

important They Jeremy. factors, were both

similarly As setup up I for call, we the entered QX. QX we just well, stated that in really to set BTS the mentioned

in in bamboozled we So the the than macro of we pressure. do confident or far we As predict impact in We best in whether anticipated, lot said, ages. And our and and in it right? across can't estimate mix our to the quarter, values worse a the really our case, view, pressurized more was gets being offering, really all were weather macro. we've presented often our better. But it this what

before And the that metrics, one our good. of incredibly is Jeremy, I think we've remains conversion shared telltale

just to in excuse in we shop, of months getting consistent her been pressure of just in and getting the is traffic presenting consistently. come the the me, the convert the stubborn conversion. the mean, for have out I who of basket pointed We're fight those we a stubborn basket see, it's what more means pressure. It's Heather -- transactions. XX dollar for But remarks, kind the every So so conversion. We're is basket. as

So -- abnormally hot macro. weather. It's right? and the it's both, It's

but give So for -- both can't you I it's percentages, they're being exact sure. felt,

Jeremy Hamblin

helpful the it sure noise I back to down That's of extra QX that in -- X expectations QX. with And kind want just added, obviously, are? a make comp, down clarity. implying because like that There's the to some X what is on week a your guidance coming to

Heather Plutino

a comp basis. Well, XX- to is on XX-week again,

mid-single in perspective. the as from I we So look in comp at to expecting quarter cleanest remarks, are And a prepared Jeremy. digits flat down the that's mentioned way the it, to

Jeremy Hamblin

Okay. All right.

want and bit little -- margin understand then impact. on, moving the about to a Just I gross

here, those anything it, contributed might I there where attribution you back, think, And were expense QX, strong, to think a year-over-year. you understand given if was wanted each shrink, certainly on remains points I of components. which than a basis XXX basis, things Conversion more noted to a in freight bit of have I of in margin. also down the higher was year-over-year So higher step XX.X% gross else year-over-year. that X But was expected.

Heather Plutino

in X right? called mentioned, are as are Yes. bulkier It's carton more per if through freight the really is got forgive the rebuilds components towards heavily more -- that the and And David those issue -- -- the And units cartons system. the freight. but So as think -- lower. mentioned, going I you weighted that, you there the shrink, heavily we've some me, Men's, items, Home, weeds Big about the Footwear, here, of out, are Jeremy, the and

in get to the increase that more we quarter, you're cartons that So X% inventory at in lot moving order end the system. a through the reported of

volume higher behind to as So of we we the freight mitigate as equals us. QX rebuild higher the the that expense bulk as in is rebuild, expect --

the I we for component, smaller which component, shrink in as you So I about and the past. mentioned think line, still is this but know -- a a this, talked

is Our it to times retailers cadence take a our as X other inventories of section do time physical to maybe to year. opposed year or stores a in every X a month,

every we're month, it results shrink particular perspective. So but a performing our how stores testing is from are subject to those

higher driving we of a a the that of QX, the balance class in if increase was will, who had of had stores, stores, strength in So you which expense. shrink chain, the majority of than group

for bummer, sure. So

controlling loss over cross-functional perspective, controlling a it's a on prevention, we're focused team, from talent from enforcement really focused a all law are HR, are from shrink, field perspective, We've As that strength. it. got local I we reporting whether a on mentioned, perspective, really, leadership field really

level freight shrink same the over forward. you giving that both we all don't I'm are headwinds feel hopefully, So and going of the expect and

Operator

from Mike with Our Baker proceed. next Please comes D.A. Davidson. question

Michael Baker

I us I the the cetera, you're that that confirm remind guess a if easier, expecting up to of does way but follow-up some throughout you closer and to the and A to sales the does I quarter -- last last questions. the another that to if harder, of pickup people -- you what bit Okay. ask are assuming that? as et you're does of by shopping that comparisons against digits imply presume of you guess new maybe get guidance fourth can than get that, fourth just little closer to are need or quarter month wanted the quarter, flat get holidays, down mid-single not? for what And from year, a pickup? a better rest year,

Heather Plutino

for you. Thanks Mike. hear the question. to Yes, Good

guidance the we So QX mid-single to flat versus produced digits that assume does for QX, in the down right, X sure. improvements, down

at throughout right? within find surprise the as speaking as at the about I -- I you, the look it mean, the won't I I month. I'm the As the look moment -- forecast quarter, slowly it's really the numbers,

actually, opposed is of And where November, we the to about in of expect, Thanksgiving. Thanksgiving to important reminder, lead December, the So around out, have later sales, in customer to important, holiday to merch David closer performance in laid actual Thanksgiving. Christmas initiatives their becomes to a And in dress but it's right? very the for that expect events, still That's as the all the that to right? stronger get after, And then our lead-in we Friday as we strong they're see because to well. Wednesday before we as customer, coming our important

But within. would say, we last I ask year a I improvement at look David, versus it's have as yes, as a bailout for the moment here. well. -- I there's about say holiday And that then throughout. year, So season would I might really last softer-than-expected

I David, anything to a that It improve, there's anything there's say think room would you'd don't add? I was tailwind. is headwind sure. -- So for

David Makuen

added fuel Yes, from we've Yes. good add give to us the the I thing -- for you quarter. think talking rebuilds I'd these hear Mike, -- been about is some that last

year nothing I'd bunch it confidence gives our I'd weaker you as have last QX abnormal to year kind Home them that weren't to business firepower we of what from would so quality value than but of there's this last standpoint. give would a call and added year lapping perspective inventory be. I strong that a in there's an out, us Example, and mix from as call the really was And wanted confidence

believe we're high-indexing embed in that in category toys things throes better So that gifts our all that because gift. and our very and positioned we and the we our people much holiday category

gives in the framed tell, and being it's can improve in good QX, what that's to us confidence as So guide. trend you our able from as

Michael Baker

a enough. A quarter, risk? selling price more Fair couple anything little sales or Okay. markdowns commentary, of margins gross how there give full Or within us is with bit to sense you One, questions. or weaker margin on that. a a like clearance or being this Can as just on the that year-over-year any impacted markdown kind gross of have may basis. nothing

David Makuen

one, a adjustments we to little liked in make the good were perspective, are basically, Heather on, fall selling slower gross little that really versus the comments, got which managing trying footwork, really as QX. LY. little pointed reasons fancy the in a has can you from deleverage hopefully the a take and we past and big out in job highlighted done shrink I'll From than moment, has bit answer, Mike. hear margin a we've and as all It like inventory team is freight, for good the a I in my a -- that her stuff. I handle slight mean or markdown did when sell goods, than of slower our especially

stuff. period time taking long not too matters that in sell, we're action good all most, and But appropriate when waiting is the the which it

item QX on So as to call there was out. pretty it, much newsworthy It expected. in no we're but we we're was --

Heather Plutino

And in prior line with year.

Michael Baker

SG&A a that? do how initiatives. comps consistent quarter. go associated invest sales that Does pretty more, marketing it One color million driving? good. that's see we out Any that? Okay, think I Your work you could. $XX the that lift The initiative? with is And more should Or about new kind Just what's because the on if been before of dynamic? of cost have in around marketing that? to up you has the What

David Makuen

SG&A. test on Well, for I question. error It's a It's that great base It's Mike, off, on. QX a the in too Yes. rounding comment small. first

both customers that. ability So you test back the lapsed drive about into don't to need the But our is about to us the inform worry and did what new fold.

And see, little audience so traffic kind our lifts in of we which very and per bit to even conversion, in established the showed a that nice to customer see was and in can ability basket markets. reignite

clear, tests are new were to these ] where in markets to very legacy [ want These not and wanted Trends is new markets you water. African we easy. in customers, test capturing fat argue, could American be the long-time Citi where I markets,

QX, basically advertising that. reawakening to and bullish do of often more come on So But more more what's couch on even drive us the embedded that And to shop not for going encouraging and customers some, window. QX. exposure lifts. convincing our during and to really, would even it lifts, we're figure as about that healthy drove number SG&A. We're seeing I and to And lapsed It's ones to what is sneak of we're how exciting existing -- this give into is Again, little in XX% in a peek. the chain out some -- huge. we're I'll post a little

but it pretty can do seeing come, top more for about pumped So and to we're what we're line what improvement.

Michael Baker

What just to SG&A be marketing? specific, higher of -- the Understood. kind be any But been? so -- is up investment do has it just dollar on that in that -- embedded than we SG&A, in will reason bump marketing,

David Makuen

big it of our not unsettle -- don't call what it, our release that to I and that QX. expected self-funding we're a out number But I'll enough overall expected we're have Mike. you level It's you, detail, at SG&A tell can in SG&A. We budget for

Heather Plutino

Yes. still XX fine. range is

Michael Baker

it. Got

Heather Plutino

range XX out, is If point yes. Mike, fine. I still Yes,

Operator

Haskett. question next from comes Chuck with Gordon Our Grom

Charles Grom

to on I Mike's the up wanted follow question, quarter-to-date. just on just

if at lot down comp lot out alone, are was curious just talked range, digits not you're point. that of in XX.X%. you of about that And guys your last improvement. You I down that a holiday this retailers year called believe And flat. a mid-single I'm to

just for wonder just could if I So us. confirm that you

David Makuen

I Chuck, that number, X. the Thanksgiving. hope divulge you is with, we within Chuck, leave X what thanks a Yes, for calling did in. can I exact it you good won't to negative is Yes, but an too. negative

and inventory our of I we're So on certainly standpoint, for year this where that moments. even these provided, to quality better seen customers firepower phenomenon QX shown both about run And December last it's and values the family And QX. tied availability based we've strong rate improvement versus year. being month, answers more our all cautiously a the are so than largely optimistic some from long,

come. for So to we're excited what's

you is I the that to our which economic to really weather. used QX know lot, to We've status. be weather, a heard more need comments, X definitely think to their ascertain can They're in tethered are off customers just until part they you've and seen, holding something. study they our sensitive wildcard, than as I Chuck, the

a or they'll particularly it's way, whether come that I QX X droves, little with impact. But weather know out XX bit of customers in have for So wrong would XX out, asterisk the we're them. in token, we at an and last our December, the if same goes weeks ready the

rest half that's describe kind of I how for So of back the the quarter. the

Charles Grom

to referenced year. of and inventory And that terms then the helpful. next the to from for be see of guys system I the drivers going talk -- the ERP out Okay. you the just as if opportunity to could and Spring, product newness X That's rolling wondered X about very you new looking Great. you're in in the sales product ahead

little you more. into if dive bit a that maybe just So

David Makuen

sure. Yes, for

we're end think, adapting system, as everybody change it, been normal, of new which using our pretty it ERP day, learning is to discovering management. call you A, And we the to of I deliver it's all went of of August, of starting last back would. end we've we on quarter going live the made many the what is system at the to commitments this And in told and year. first

to Spring highlight I'll it because relates couple, And a question. Chuck, directly your

new our And better got and since powerful announced far enable system. to I've deeper insightful we've action. a touting and this First off, ever analytics plans analytics. are we been much ERP the do

been hot. is we've and chain. I've the an call got allocation across really cold peanut We've lot they able we're cool, And And love chain bit this accustomed based our got the define within mentioned in stores. climate. We've XXX-plus buttering more to dynamic. Second, differently. a pretty of We've to all our warm. allocations our standpoint our and that of dissect a prior of we got need kind on uber got from then little chain

finer And into of so much detail that back demand us those we get that allocate allow the a us this level climates, system at and see all different an to as to better in around of example. allows

being accurate three, where go and number our allocation would So about what time. things more precise at be

We up And so fleet. be setting a It's during December as perfect our late early right that's of. as in late as XX% over they'll and more Feb. as well which that our goods in warm lead the them have can into adopt early likely January hot of we more December and lot a sending and stores, accurate or in certainly

the the for experience of doing serve. it mid is to of to list for it's have late to have sets items, things It's more optimization. appropriate It's season have tax climates refund bullish It's product we all that better Chuck. marketing. we're that on going going to excited and X to to have across the pretty leads all to got that And we're up different inventory going Feb. this we're comment because us on what So in

that a in QX lot Does that additive, 'XX we we future. So believe, make strong into look will of contributing to as be of sense? a the

Charles Grom

It it just get down, in margins, I'm is EBIT My opportunity the at it just to the the to looking flat question call scenario the seems No, just that for does. not And like stay, comps totally speak back big final Heather. new EBITDA, last which Can as 'XX. opportunity. Yes. of 'XX, in then positive store are territory. CTX follow-up, to just a That's you that maybe in EBIT margins how number thinking about opportunity? my the we clearly question. be should good? remodels, And a a growth

Heather Plutino

So that's 'XX about it but we I asked that spirit we of thanks. right same, the is all performance Chuck, that know really right? comp you Yes, not in stays revealing plan. not line, now, being our really helpful, the but about top We're -- say anything

in past, And we've top that's is many real line the times plan about improves. as talked Our juice the here. that

to that flow-through margin You top get EBIT get EBITDA going, and line the there. the margin is

relative believe we a We retailers. healthy have limited have expenses We to margin. other very variable

the So really strong. flow-through is

going it's all tell And driving that's line. why our always it's -- -- is really I'm So top to initiatives. productivity about talk you that the about comp store driving when #X strategic we

with to new thin do XXXX. too And to we're stores new stores, it's going in what then say

to Citi our us, single-digit that know top top get have store our say and is So remodel. important right? the to and important cadence. store what remodels. that remodels, you refresh important it's a our real we line. They We our I see lever, -- like after nice to excited we shows most it associates, line, that what We mid- lift, we will customers, Trends in buzz about high- and to their done but lift It's get like remodel it's important up again, from to

right So what thinking but on more come that's now. 'XX, to we're

Operator

John Lawrence next from comes with Our question Benchmark.

John Lawrence

beat to not weather, the about to at with you I weather, stores dead you only the the in if am that David, X that are weather a et weather-correct quarter? South, the looked weather here the correct the I had But XX in planogram the cetera. weeks days match the on merchandise of mean, horse situation,

David Makuen

to quarter fall the John, suitable days, you're referring you're to estimate was weeks asking? kind Is more of sell the what number an of that that on goods? in

John Lawrence

correct. that's Yes,

David Makuen

in were we prepared off. the in remarks. Louisiana, the far this XX, cetera, And the You're chain periods quarter. weather we XX, People The had shorts short impact were rain. made stores I was not degrees or heart our of inside, staying for felt time that long. in XX comment with day entire prolonged sleeves mean, all of cetera, just hotter et Texas et and wearing X across

was bounce believe me a too. to immediate in more weather you the to is the and by back a got almost really last what prompted that weather generally trend. macro, in that's certainly the so brought an in comment a appropriate, But John, the snapped, right, be than heightened. -- from of math that is And saw on But sensitivity the And of that's snapped, lot your that I we couple Chuck which weeks max quarterly it when trend much better not our question to helping favor. share even

John Lawrence

stores once obviously, spread And once picking of that first November, the instance, hoodie? So off et need, the first of was or November. store. really that, and me, that the hoodies a in that again, the fly that store didn't checks Can week hoodie, just because my about, flew around customer they here -- in until weather-correct, of as get come to the am the at the NBA it til hottest the you to to And purchases saw, NFL for hoodies cetera, shelf when was that briefly you making other explain has to I talk for then need looking right? the for up item home, does

David Makuen

have you're thanks yes. don't your mean, findings. in on, I to right row, And add to then stores. in a a being for our John, second I question lot

I've that I Men's businesses. We of mentioned anything another on I my being are in ever for can our ditto trend probably here. in than other some is the better seen ladies assortment assortment. tenure example. confident really our

nailing We a branded customer. we're of the African-American assortment apparel, team -- we do are made for it and just with then terrific ladies, apparel like -- in

other Generally, the right our stores, those you're So and from they flow that They're a rise. stuff, and inventory. for boats snaps, out. weeks, and our the basket, building walking a et level. like come cetera. boy, up into we're boy same young come a high, they out Z weather high in And oh goes stores, guys' only the millennials, mom, our the up already right. not I on conversion for for into And come there stuff walk same in absolutely singles I'm right. Gen It's with all if guy around in you're young getting When

it So true. you what clockwork. like is we said watch And

movements. And Friday And Wednesday. we're in tell so Black enough maybe, of tree. -- I'll where we We massive got QX going we bunch on -- now and and make Black important just into November got the we've [ got comments, through mode a are gifts really sure stock Black under up you call don't in you ]

our taken John, we've prices And in cases. some down,

some $XX got versus we've and like-for-like items, in So they're cases. down QY $X $X and LY

assortments they're pressure values. and stoppable important to like an are -- team done responding the customer that -- just that So an has they're unbeatable is amazing the under our frankly, job, within just offering vignettes

feel of that conversion rest we the think the continues also we engagement in garner So should fuel to the and hope helps quarter. basket and our

John Lawrence

All right.

as consider parts tough but leave know, all have significant over and shrink the enough I'll it, any any that you situation. gotten but I or difficult or you're the you're stores is subject, might Just it indicating closing? alone, that there

Heather Plutino

retailers store, into made I it. close Yes, based is a decision it's We're perspective. environment. question. appreciate -- we're if other on yet, not there the yet going the from factors I know the not -- difficult the -- That are we John. not it's have there bigger shrink there

you -- come wood Knock It and I that, broad-based. that, subject feel very -- seen well, but headlines happens. we're see us, staff the managing you I'm right of to -- others. some -- closely. it's you've the happens of seen you particularly It's that external something because more not very we're and grab that right, us, not but and this say market out know not but the Shrink, smash universe, the doesn't aware Memphis, going know, like keenly as to in for us, in shouldn't is I loud you've for that occasion, know it's to We're like that for it's are on that tempt you on small.

cetera. control cetera, We that helps us really make control? environment we've citizens the et sure So what team are looking got got we control, to Citi what We've is, lot, we local addressed. a with solid can reporting understand. right, aware we've who law partner make we controllable. what that we True family. the have out got on can on et to people the focusing That the And shrink, Trends be we're concerns the for We that say right? right enforcement that sure we're of to need that and

way that stores. some close of need no, causing long So saying to us is that's determine not a shrink we to

John Lawrence

the continues to is mentioned freshness, of Great. about David, case? -- mean, I think and And the last for cetera, those assume across assume be one opportunities talking new ago, several I me. platform, that months toys I that there rebuilds. back question you've were you I et areas were the brands, for about

David Makuen

remote good to. the right, Yes. talking our December." and going example, QX. even earlier, up come and control I'm toys the it couple comments, or layaway Great. they Barbie earlier October, play my is go, I'm We memory. weeks a we they other gravitate first But for sales what like come stuff you're November. a John. in absolutely is during back African-American about "That's a And And get it a in, layaway, an to of consider a And that I business on and cool little gifts. to "Oh, put to set," customer as have and thing of of really customer the does Last opportunity question, in in pretty set part mentioned racecar. into an bunch get cool meaningful that's saw called a and layaway

I'm up tree it, pre-consideration, we going it, going in put down I'm And off, put it and December. the a call rely pretty little I'm it so layaway. under to to pay going pick to payment importantly in in put that, I'll on it to on time it

getting it's So earlier the on is you're that germane, rebuilds and right, really intentional we've been it, layaway-friendly rebuilding out part absolutely I'll businesses call the those, a floor doing. of

as So we're a selling forward toy result. a to season looking good

John Lawrence

Good Great. help. Thanks luck. for your

David Makuen

Thanks, holidays. Happy John.

Operator

the back at further there call this Makuen, you. turn I are questions Mr. to now time. will no

David Makuen

today. Thanks, a us Frank. great See at next the for one. you joining Have Thanks, Bye-bye. everybody, holiday.

Operator

for day, disconnect today. call conference ask and participation you your that thank does That Have great for the you We a conclude everyone. your line. please

Citi Trends (CTRN) 28 Nov 232024 Q3 Earnings call transcript