Citi Trends Announces 2019 Holiday Sales Results and Planned Retirement of CFO
Tuesday, January 14th, 2020
Citi Trends, Inc. reported unaudited sales for the first two months of the fourth quarter of fiscal 2019, in advance of its investor presentation at the ICR Conference in Orlando, Florida on January 14, 2020.
Holiday Sales – November and December 2019
Total sales in the first two months of the fourth quarter of fiscal 2019 increased 5.4% to $170.5 million compared with $161.9 million in the same period of 2018. Comparable store sales increased 3.6% during the two-month period.
Peter Sachse, Interim Chief Executive Officer, commented, “We were pleased with a 3.6% increase in comparable store sales during the holiday season, as our continued strategic shift towards non-apparel merchandise proved to be successful. We are achieving this sales growth on much less inventory, resulting in very current merchandise levels. We enter the new year well-positioned to grow Citi Trends’ business and I look forward to discussing our strategic priorities at the ICR Conference on January 14th.”
Chief Financial Officer Retirement
The Company also announced that Stuart C. Clifford, Senior Vice President and Chief Financial Officer, plans to retire effective March 29, 2020. As part of the succession planning for Mr. Clifford’s retirement, Jason B. Moschner has been promoted to Vice President, Finance. Mr. Moschner joined Citi Trends in June 2017 and has served in several roles in the Company’s finance organization, most recently as Director of Finance. The Company has initiated a search for a new Chief Financial Officer and will consider both external and internal candidates.
Long-Term Strategic Planning
Citi Trends continues to execute on its strategic initiatives that were first outlined publicly in the second quarter of 2019. The Company has revised its investor presentation to include updates on the execution of these initiatives as well as provide other updates based on the Company’s ongoing review of its three-year strategic plan. Such presentation includes the following information, among other things:
Merchandising, marketing, planning and allocation initiatives to drive sales, gross margin and inventory turnover
New store growth plans – ~ 30 per year (~ 5% unit growth per year)
Investments in major remodels for existing stores – ~ 50 per year
Systems initiatives, particularly in support of merchandising, planning and allocation
Projects to improve supply chain performance
Improve inventory turnover 8% to 10% each year
Increase earnings per share at a compounded annual growth rate of 20% to 25%
Generate annual free cash flow* of $20 million to $25 million
Return of excess capital to shareholders
The presentation is being filed with the SEC on Form 8-K today and will also be available in the Investor Relations section of the Company’s website. This presentation will be referenced by management at the ICR Conference.
*Forward-looking non-GAAP financial measure. See investor presentation for additional information regarding this measure.
Capital Return Program
As announced on November 26, 2019, the Company’s Board of Directors authorized another $25 million share repurchase program. Since that announcement, the Company has repurchased shares at a total cost of approximately $13 million, and since the beginning of 2019, the Company has returned approximately $26 million to its shareholders in the form of share repurchases and dividends. Since Citi Trends initiated its capital return program in 2015, the Company has returned approximately $120 million to its shareholders in the form of share repurchases and dividends.