Citi Trends, Inc. (NASDAQ:CTRN) Q4 2018 Earnings Conference Call Transcript

Mar 15, 2019 • 09:00 am ET


Citi Trends, Inc. (NASDAQ:CTRN) Q4 2018 Earnings Conference Call Transcript


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Ladies and gentlemen, thank you for standing by. Welcome to the Citi Trends Fourth Quarter and Full-Year 2018 Earnings Conference Call. During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question-and-answer session.

(Operator Instructions) As a reminder, this conference is being recorded Friday, March 15th, 2019.

I would now like to turn the conference over to Tom Filandro, Managing Director, ICR. Please go ahead.

Tom Filandro

Thank you, Alisha. Our earnings release was sent out this morning at 6:45 AM Eastern Time. If you have not received a copy of the release, it is available on the Company's website under the Investor Relations section at

You should be aware that prepared remarks made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Management may make additional forward-looking statements in response to your questions.

These statements do not guarantee future performance. Therefore, you should not place undue reliance on these statements. We refer you to the Company's most recent report on Form 10-K and other subsequent filings with the Securities and Exchange Commission for a more detailed discussion of the factors that can cause actual results to differ materially from those described in the forward-looking statements.

I will now turn the call over to our President and Chief Executive Officer, Bruce Smith. Bruce?

Bruce D. Smith

Thanks, Tom. Good morning, everybody, and thank you for joining us today. Also on the call is our Chief Financial Officer Stuart Clifford and our two merchandising Senior Vice Presidents, Christina Short and Brian Lattman.

In the fourth quarter, comparable store sales increased 0.2% on top of a 5.6% increase in last year's fourth quarter. Continued strength in home and accessories was almost completely offset by declines in the ladies business, and to a much lesser extent, children's and men's. The comparisons to 2017 were challenging for all three major apparel areas as each of them was up 6% to 7% in comparable store sales in last year's fourth quarter.

Ladies was impacted more so than the other areas as there continue to be fashion misses in the fourth quarter that we first started to see in the third quarter. We did a very good job of managing expenses during the fourth quarter, actually achieving 30 basis points of expense leverage on sales that were below our plan.

From an earnings standpoint, diluted earnings per share increased 55% in this year's fourth quarter or 18% on an adjusted basis, driven by a much lower tax rate this year and fewer outstanding shares as a result of our stock repurchase program.

Now, I'll turn the call over to Stuart to provide additional details on the results before I discuss future expectations.

Stuart C. Clifford

Thanks, Bruce. Comparable store sales increase 0.2% in the fourth quarter and 1.6% for the full year. In looking at total sales, fiscal 2017 had 53 weeks, so fourth quarter and full year comparisons of total sales are impacted by having one