Citi Trends, Inc., a leading specialty value retailer of apparel, accessories and home trends for way less spend primarily for African American and multicultural families in the United States, today reported results for the fourth quarter and full year ended January 28, 2023.

The Company is reporting select operating results for the fourth quarter and full year 2022 relative to the same periods of 2019 due to the unique operating environment resulting from the COVID-19 pandemic and related government stimulus in 2020 and 2021.

Financial Highlights – Fourth Quarter 2022

Total sales of $209.5 million decreased 13.1% vs. Q4 2021 and decreased 0.7% vs. Q4 2019; comparable store sales decreased 14.4% compared to Q4 2021
Gross margin of 39.5% vs. 40.4% in Q4 2021 and 39.7% in Q4 2019
SG&A expense dollars declined 11.3% vs. Q4 2021 and increased 4.3% vs. Q4 2019; SG&A expenses were 33.7% of sales compared to 33.0% in Q4 2021 and 32.1% in Q4 2019
Operating income of $7.4 million, or $7.5 million as adjusted*, compared to $12.6 million in Q4 2021 and $11.3 million in Q4 2019, or $11.8 million as adjusted*
Net income of $6.6 million compared to $9.8 million in Q4 2021 and $9.4 million in Q4 2019
Adjusted EBITDA* of $12.3 million compared to $17.8 million in Q4 2021 and $16.6 million in Q4 2019
Diluted EPS of $0.81, or $0.83 as adjusted*, vs. diluted EPS of $1.16 in Q4 2021 and diluted EPS of $0.84 in Q4 2019, or $0.88 as adjusted*
Financial Highlights – Full Year 2022

Total sales of $795.0 million decreased 19.8% vs. 2021 and increased 1.7% vs. 2019
Gross margin of 39.1% vs. 41.1% in 2021 and 38.0% in 2019
Operating income of $75.3 million, or $11.4 million as adjusted*, vs. $79.5 million in 2021 and $18.5 million in 2019, or $20.6 million as adjusted*
Net income of $58.9 million, or $9.4 million as adjusted*, compared to $62.2 million in 2021 and $16.5 million in 2019, or $18.2 million as adjusted*
Adjusted EBITDA* of $32.0 million vs. $99.9 million in 2021 and $39.2 million in 2019
Diluted EPS of $7.17, or $1.14 as adjusted*, vs. diluted EPS of $6.91 in 2021 and $1.41 in 2019, or $1.56 as adjusted*
Opened 12 new stores, remodeled 35 stores and closed 10 stores to end the year with 611 locations
Year-end total dollar inventory decreased 14.6% vs. 2021
Cash of $103.5 million at year-end, with no debt and no borrowings under a $75 million credit facility
Chief Executive Officer Comments

David Makuen, Chief Executive Officer, commented, “I am pleased to report that we delivered on every aspect of our stated guidance for the fourth quarter and the second half of 2022. During a highly challenging economic environment, especially for low income families, our annual sales were above 2019 levels at a healthy gross margin of 39.1%, and we successfully reduced operating expenses by 9% versus last year. Our teams leveraged our flexible operating model and executed our strategic priorities including optimizing our product mix, enhancing our in-store experience and investing in our infrastructure. I want to thank the entire Citi Trends family for their incredible dedication and hard work.”

Mr. Makuen concluded, “Our customers are expected to remain under pressure through the first half of 2023, impacted by ongoing inflationary factors, in addition to the reduction in SNAP benefits and lower tax refunds. As a result, our first quarter is off to a slow start. However, we remain cautiously optimistic that our customers will experience relief from economic pressures over the course of the year and we are playing offense to drive comp store productivity, our highest priority. We are sharpening our focus on trend development and refining assortments to fuel incremental sales. We are planning the second half to deliver meaningfully improved results thanks to controlling what we can control and leveraging our strong balance sheet and healthy inventory position. I remain extremely confident in the power of our brand, our operating model and our team’s ability to execute our plan.”