Citi Trends, Inc. reported unaudited sales for the first two months of the fourth quarter of fiscal 2017, in advance of its investor presentation at the ICR Conference on January 9, 2018.

Holiday Sales - November and December 2017

Total sales in the first two months of the fourth quarter of 2017 increased 7.3% to $165.1 million compared with $153.9 million in the same period of 2016. Comparable store sales increased 5.5% in November and 4.5% in December.

Earnings Forecast for the Fourth Quarter of 2017

For the fourth quarter of fiscal 2017, the Company expects diluted earnings per share to be in the range of $0.40 to $0.45 compared with $0.38 in the fourth quarter of fiscal 2016. Such guidance for the quarter assumes sales of approximately $211 million, cost of sales (exclusive of depreciation) of approximately $131 million and selling, general, administrative and depreciation expenses of approximately $72 million. As disclosed previously, this year's fourth quarter includes a 14th week that is expected to be break-even from a profit standpoint and also includes an expected increase in incentive compensation and insurance expense from last year's fourth quarter totaling $1.7 million, which is expected to have a negative effect of approximately $0.09 on this year's fourth quarter diluted earnings per share in relation to the fourth quarter of last year.

The Company is still evaluating the impact of the recent enactment of the Tax Cuts and Jobs Act (the "Act") on its 2017 financial statements, and the guidance does not reflect a one-time, non-cash charge that is expected to be required in the fourth quarter as a result of the Act. While the Company expects its financial results and cash flows to benefit in future years from the reduction in the federal corporate tax rate pursuant to the Act, the Company anticipates that it will record a charge to decrease the value of its deferred tax assets from the previous 35% federal tax rate to the new 21% rate in the fourth quarter.

Bruce Smith, Acting Chief Executive Officer, commented, "We were very pleased with a 4.8% comparable store sales increase in the first two months of the quarter, which was on top of a 2.9% increase during the same period the previous year. All five of our major merchandise categories continued to contribute to the growth in comparable store sales.

As a result of the strong execution by the Citi Trends' team, we are well positioned to complete our fifth consecutive quarter of comparable store sales increases, which we believe is an indication that our strategic efforts to drive sales in both apparel and non-apparel categories are working. Importantly, we believe these strong sales results have led to high-quality inventory levels as we begin to prepare for the spring selling season.

Fiscal 2017 has been an extremely good year thus far for Citi Trends, as we have built sales momentum, significantly improved earnings and returned $25 million to our stockholders in the form of a share repurchase program. As we move forward, we are very positive about Citi Trends' future. We believe that continued comparable store sales increases and store unit growth, leading to increased profitability and cash flows, are reasonable expectations for our Company. Importantly, the realization of those goals would allow us to continue to return capital to our stockholders as part of our expanded capital return program announced earlier in 2017. We look forward to providing more details regarding our 2017 fourth quarter results and our 2018 expectations during our March 20, 2018 investor call."