Citi Trends Inc. reported total sales for the nine-week period ended January 2, 2021 increased 12.9 percent to $192.5 million compared with $170.5 million in the same period of 2019 and comparable store sales increased 10.3 percent versus 3.6 percent in the same period last year.
David Makuen, chief executive officer, said, “We are thrilled with our holiday sales results that significantly exceeded our expectations. The 10.3 percent comparable store sales increase is reflective of our curated merchandising strategies and on-trend gift assortment with amazing values, which resonated with our customers during the holiday season. Notably, we continue to drive meaningful gross margin and operating margin expansion fueled by full-price selling and accelerated inventory turns. I would like to thank our incredible teams for their hard work and dedication as they continue to meet our customers’ needs, especially during the dynamic holiday season.”
Makuen continued, “Given our strong quarter-to-date results, we now expect positive comparable store sales in the low double-digit range for the fourth quarter. We enter 2021 in a strong position and are excited about the underlying momentum of our business. We are committed to the same merchandising and marketing strategies that have driven our recent success, and we believe we are well-positioned to continue capitalizing on the demand for our brand and serving our loyal customer base.”
Based on the quarter-to-date trends, the company expects fourth-quarter 2020 positive comparable store sales in the low double-digit range. For the full year 2020, the company expects total sales to be only slightly below 2019 total sales, despite the fact that the company’s stores were closed for approximately 16 percent of the total available store days in 2020 due primarily to the impact of COVID-19. The company expects fourth-quarter 2020 diluted earnings per share of $1.22 to $1.32 on an adjusted basis* compared to $0.88 in the fourth quarter of 2019. The company expects full-year 2020 diluted earnings per share of $1.85 to $1.95 on an adjusted basis* compared to $1.56 in 2019.
Capital Return Program Update
In the fourth quarter-to-date, the company has repurchased approximately 316,000 shares of its common stock at an aggregate cost of $11.9 million. As of January 12, 2021, $38.2 million remains available under the company’s existing share repurchase authorization.
Long-Term Strategic Plan Update
The company has revised its investor presentation to include updates on the execution of its strategic initiatives as well as other updates based on the company’s ongoing review of its three-year strategic plan. The presentation includes the following among other notables:
- Increasing top-line sales to more than $1 billion in fiscal 2023;
- Comparable store sales growth of ~3 percent per year;
- Growing the fleet with at least 100 new stores by the end of fiscal 2023;
- Remodeling at least 150 stores by the end of fiscal 2023;
- Investing in infrastructure improvements for merchandising, supply chain and stores;
- Operating income growth at a compound annual growth rate of 20 percent+ per year; and
- Diluted earnings per share growth at a compound annual growth rate of 25 percent+ per year.
Photo courtesy City Trends