Citi Trends Announces 2023 Holiday Sales Results for Quarter-to-date Through January 6, 2024
- None.
- None.
Insights
The reported quarter-to-date sales of $179.5 million for Citi Trends, Inc. align with the upper range of market expectations, indicating a robust consumer demand during the holiday season. The marginal decrease in comparable store sales (-0.3%) suggests a relatively stable retail environment, especially when considering the broader economic context. It is essential to note that the holiday season is a critical period for retailers, often accounting for a significant portion of annual sales. The ability to maintain nearly flat comp sales despite broader economic challenges is a testament to the company's strategic inventory management and targeted marketing campaigns.
Looking at the reaffirmed guidance, with an anticipated year-end cash balance of $80 million to $90 million, investors can infer a degree of financial stability and liquidity. This is crucial for maintaining operations, investing in growth opportunities and weathering potential market downturns. The mention of a 600 basis points improvement in comp sales performance compared to the previous quarter provides an optimistic signal, potentially reflecting effective operational adjustments and a successful holiday strategy.
The financial figures presented by Citi Trends are indicative of a company that is managing to navigate the retail landscape effectively. The reaffirmation of the 2023 guidance suggests confidence in the company's financial projections and operational strategy. It is important for stakeholders to consider the implications of these figures on the company's valuation and future earnings potential. The slight downturn in comp sales, while not ideal, is not necessarily a red flag given the current economic climate and the fact that it represents an improvement from previous quarters.
Investors should also consider the company's target demographic and the specific niche it occupies within the retail sector. Citi Trends' focus on value apparel for multicultural families could imply a resilient customer base that may be less sensitive to economic fluctuations compared to other retail segments. This demographic targeting could be a contributing factor to the company's ability to maintain sales momentum in a challenging economic environment.
The data released by Citi Trends provides an interesting snapshot into consumer behavior and economic trends. The holiday season typically sees an uptick in consumer spending and Citi Trends' performance suggests that consumer confidence within its target demographic remains relatively steady. However, the -0.3% dip in comparable store sales, while minor, could be reflective of broader economic pressures such as inflation or reduced disposable income among consumers. The company's performance in such an environment could be indicative of broader retail sector resilience or specific strategic advantages held by Citi Trends.
On a macroeconomic level, the reaffirmation of guidance and stable sales figures could be seen as positive indicators for the retail sector, particularly specialty retailers. The ability of Citi Trends to maintain a strong cash balance projection suggests effective cash management and could be a buffer against potential economic headwinds. This financial prudence is especially relevant for investors looking at the long-term prospects of the company in an uncertain economic climate.
Total Holiday Sales for the quarter-to-date period ending January 6, 2024 of
Comp sales decreased -
Reaffirms 2023 guidance including expected year end cash balance of
Total sales for the quarter-to-date period ending January 6, 2024 of
David Makuen, Chief Executive Officer, said, "I am pleased to report that our holiday sales were at the high end of our expectations as our Ready. Set. GIFT! Campaign resonated well with the families we serve. Our nearly flat comp was driven by strategic inventory investments while continuing to generate strong gross margin. Importantly, our holiday sales results represent a significant trend change to the prior quarter with an improvement in comp sales performance of approximately 600 basis points."
Mr. Makuen continued, "I would like to thank the entire Citi Crew for their continued hard work and dedication, especially our store teams who once again amazed our loyal customers throughout the holiday season. As we look forward, we are excited about setting up our spring selling season with a potent mix of basics, fashion and trend to drive comp store productivity. Additionally, we are moving full steam ahead with leveraging our new ERP system, incorporating marketing into the mix and beginning some exciting remodels across the fleet. We look to the new fiscal year with optimism as we continue to advance our strategic initiatives while prudently managing what is in our control."
Guidance
The Company is reaffirming its outlook for fiscal 2023 as follows:
- Full year total sales are expected to be down mid-single digits as compared to fiscal 2022
- Full year gross margin is expected to be in the high thirties
-
Full year EBITDA* is expected to be in the range of
$1 million $7 million -
Full year capex is expected to be in the range of
$17 million $20 million -
Year end cash balance is expected to be in the range of
$80 million $90 million
The Company’s implied fourth quarter total sales are expected to be approximately flat to up low-single digits vs. Q4 2022 with comp store sales now expected to be in the range of down low-single digits to flat to last year and Q4 EBITDA in the range of
About Citi Trends
Citi Trends, Inc. is a leading specialty value retailer of apparel, accessories and home trends for way less spend primarily for African American and multicultural families in
*Non-GAAP Financial Measures
The Company is unable to provide a full reconciliation of the forward-looking non-GAAP financial measure used in 2023 guidance without unreasonable effort because it is not possible to predict certain of its adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of the Company’s control and its unavailability could have a significant impact on its financial results.
Forward-Looking Statements
All statements other than historical facts contained in this news release, including statements regarding the Company’s future financial results and position, business policy and plans, objectives and expectations of management for future operations and capital allocation expectations, are forward-looking statements that are subject to material risks and uncertainties. The words "believe," "may," "could," "plans," "estimate," “expects,” "continue," "anticipate," "intend," "expect," “upcoming,” “trend” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements, although not all forward-looking statements contain such language. Statements with respect to earnings, sales or new store guidance are forward-looking statements. Investors are cautioned that any such forward-looking statements are subject to the finalization of the Company’s quarter-end financial and accounting procedures, are not guarantees of future performance or results, and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Actual results or developments may differ materially from those included in the forward-looking statements as a result of various factors which are discussed in our Annual Reports and Quarterly Reports on Forms 10-K and 10-Q, respectively, and any amendments thereto, filed with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to, uncertainties relating to general economic conditions, including inflation, energy and fuel costs, unemployment levels, and any deterioration whether caused by acts of war, terrorism, political or social unrest (including any resulting store closures, damage or loss of inventory) or other factors; changes in market interest rates and market levels of wages; natural disasters such as hurricanes; uncertainty and economic impact of pandemics, epidemics or other public health emergencies such as the ongoing COVID-19 pandemic; transportation and distribution delays or interruptions; changes in freight rates; the Company’s ability to attract and retain workers; the Company’s ability to negotiate effectively the cost and purchase of merchandise inventory risks due to shifts in market demand; the Company’s ability to gauge fashion trends and changing consumer preferences; changes in consumer confidence and consumer spending patterns; competition within the industry; competition in our markets; the duration and extent of any economic stimulus programs; changes in product mix; interruptions in suppliers’ businesses; the ongoing assessment and impact of the cyber disruption we identified on January 14, 2023, including legal, reputational, financial and contractual risks resulting from the disruption, and other risks related to cybersecurity, data privacy and intellectual property; temporary changes in demand due to weather patterns; seasonality of the Company’s business; changes in market interest rates and market levels of wages; the results of pending or threatened litigation; delays associated with building, remodeling, opening and operating new stores; and delays associated with building and opening or expanding new or existing distribution centers. Any forward-looking statements by the Company, with respect to guidance, the repurchase of shares pursuant to a share repurchase program, or otherwise, are intended to speak only as of the date such statements are made. Except as required by applicable law, including the securities laws of
View source version on businesswire.com: https://www.businesswire.com/news/home/20240108244059/en/
Tom Filandro/Rachel Schacter
ICR, Inc.
CitiTrendsIR@icrinc.com
Source: Citi Trends, Inc.
FAQ
What were Citi Trends, Inc.'s total holiday sales for the quarter-to-date period ending January 6, 2024?
How did Citi Trends, Inc.'s comparable store sales perform compared to Fiscal 2022?
What is Citi Trends, Inc.'s expected year-end cash balance for 2023?
