Citi Trends, Inc. reported results for the third quarter of fiscal 2018.

Financial Highlights – Third quarter ended November 3, 2018

Total sales in the third quarter ended November 3, 2018 decreased 0.9% to $175.4 million, compared with $176.9 million in the third quarter ended October 28, 2017. As discussed previously, the year-over-year comparison of total quarterly sales was adversely impacted by approximately $5.0 million due to a shift in the weeks that were included in the third quarter this year, as a result of fiscal 2017 being a 53-week year. Comparable store sales increased 0.6%, comparing the 13 weeks ended November 3, 2018 with the 13 weeks ended November 4, 2017.

The Company had a net loss of $(0.5) million, or $(0.04) per diluted share, in the third quarter of 2018, compared with net income in last year’s third quarter of $0.6 million, or $0.05 per diluted share. The decline in third quarter earnings from last year was heavily impacted by the loss of sales resulting from the calendar shift.

During the third quarter, the Company opened four new stores, expanded one store and closed one store.

Financial Highlights – First three quarters ended November 3, 2018

Total sales in the first three quarters of fiscal 2018 increased 4.7% to $568.4 million, compared with $543.1 million in the first three quarters of fiscal 2017. Comparable store sales increased 2.0% in the first three quarters of this year, comparing the 39 weeks ended November 3, 2018 with the 39 weeks ended November 4, 2017.

Net income was $14.0 million in the first three quarters of 2018, compared with net income in the same period of last year of $9.3 million on a GAAP basis, or $11.1 million when adjusted for proxy contest-related expenses*. Earnings per diluted share in the first three quarters of 2018 were $1.06, compared with earnings per diluted share in the first three quarters of 2017 of $0.65 on a GAAP basis, or $0.77 when adjusted for proxy contest-related expenses*.

Bruce Smith, President and Chief Executive Officer, commented, “Comparable store sales increased 0.6% in this year’s third quarter on top of a strong 7.4% increase in the third quarter of 2017. While sales in the non-apparel lines of business continued to increase, we experienced a fashion miss in our Ladies’ apparel category. We have taken corrective action in the Ladies’ area and remain focused on our continuing efforts to maximize sales across all of our merchandise categories anchored on delivering fashion-right, value-priced products that resonate with our customers.”

Smith further noted, “With the impact on earnings from the calendar shift now largely behind us, we are pleased with our year-to-date results for the first nine months of 2018, which reflect a 63% increase in earnings per diluted share, or 38% when adjusted for proxy contest-related expenses*.”

Guidance

The Company provided the following guidance for the fourth quarter of fiscal 2018:

• The Company is maintaining its fourth quarter earnings per diluted share guidance in a range of $0.60 to $0.65, which would result in full year fiscal 2018 guidance in a range of $1.66 to $1.71. This compares with last year’s earnings per diluted share of $1.03 for the full year.

• Comparable store sales are expected to increase in a range of 1% to 2% in the fourth quarter, consistent with the November month-to-date trend.

• Total sales are expected to decrease in a range of 3% to 4% in the fourth quarter due to having one fewer week this year than in last year’s 14-week fourth quarter of a 53-week year.

The Company is also reiterating its longer term goals, under which the Company expects to increase comparable store sales at a rate of approximately 3% each year and increase store square footage 2% to 3% each year through new store growth, with the expectation that earnings would increase approximately 12% to 15% annually.

Capital Return Program

During the third quarter, the Company completed the $25 million stock repurchase program that had been authorized by the Company’s Board of Directors on March 16, 2018. As the next step in the Company’s expanded capital return program announced in April 2017, the Company’s Board of Directors today announced the authorization of another $25 million share repurchase program, which the Company expects to fund from cash on hand.

Also, the Company announced that its Board of Directors has declared a quarterly cash dividend of $0.08 per common share, payable on December 26, 2018, to stockholders of record as of the close of business on December 11, 2018.

Mr. Smith commented, “Once again, our Board has demonstrated its confidence in the business and its commitment to returning excess capital to stockholders while maintaining the financial flexibility required to invest in and grow our business. These actions taken by our Board are a continuation of the capital return program started in 2015. Since that time, we have returned approximately $78 million to our stockholders through a combination of dividends and share repurchases.”