Citi Trends (CTRN) is estimating Q2 total sales to increase in the mid-teens
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Citi Trends, Inc. (NASDAQ: CTRN), the leading value retailer of apparel, accessories and home goods for way less spend primarily for African American families in the United States, today provided a second quarter-to-date business update and announced the formation of the CitiCARES™ Council.
- Safely reopened 564 of its 574 stores closed due to COVID-19, with the remaining stores expected to open by the end of July
- Brought back to work substantially all associates in stores, distribution centers and corporate offices who had previously been furloughed
- Total sales in the second quarter through June 27, 2020 increased 25% compared to the same period of the prior year, exceeding expectations
- Comparable store sales for reopened stores from their respective opening dates in the second quarter through June 27, 2020 increased 53%
David Makuen, Chief Executive Officer, said, “We are thrilled with our strong second quarter-to-date total and comparable store sales results as we continue to benefit from a combination of the strength of our brand, our value proposition and the federal government stimulus that began in early April. Our strong second quarter-to-date performance was driven by growth in both transactions and the average transaction size. Our buying team’s elevated use of data-driven insights to leverage identified patterns in customer behaviors has served us well as we capitalize on opportunistic merchandise opportunities and successfully deliver new and relevant product for our customers at healthy margins.”
Forms CitiCARESTM Council
Operating stores predominantly in Black communities, Citi Trends has a special interest in doing its part to address the indelible racism in our communities across the country and advance the cause of justice and racial equality. The Company has a long-standing commitment to provide a safe and welcoming space for customers and associates where their differences and diversities are respected and celebrated. It prides itself on being a good neighbor. Now more than ever, the Company recognizes that it is the time to speak up for our neighbors and stand together with others to support the fight against racism.
Effective June 2020, Citi Trends has formed the “CitiCARES™ Council” made up of a diverse set of individuals that will create and oversee initiatives of change. This council will define how Citi Trends will move forward, together with communities across the country, to contribute to elevating humanity to a place of peace and inclusion so that families of color experience equality wherever they may walk, work, shop and carry out their lives.
Mr. Makuen continued, “Over the decades, Citi Trends has become an integral part of the neighborhoods in which we proudly serve, neighborhoods that have disproportionately experienced the effects of racism and discrimination. As we face such inexcusable inequality, it is time to speak up and stand together to fight for racial equality and justice. It is our collective responsibility to work every day to support this vision and we will do our part. CitiCARES will be our pillar for implementing actions that really matter to the families we serve each and every day.”
Based on the Company’s quarter-to-date performance, the Company is estimating fiscal 2020 second quarter total sales to increase in the mid-teens, with meaningful margin expansion and leverage in expenses, and improvement in earnings per share compared to the second quarter of the prior year. This estimate is subject to potential consumer and marketplace volatility during the current stages of the COVID-19 pandemic and therefore may change as the quarter continues to progress.
Reiterates Long-Term Strategic Plan
As the Company navigates the current times and returns to a version of normal, its vision remains the same – Citi Trends aspires to be a leader in the value retailing space, one of few multi-category, value-priced retailers focused primarily on the African American market. The Company provides a differentiated assortment of basics, fashion, trends and sought-after brands at compelling prices.
The Company is continuing to make meaningful progress on its long-term strategic plan, including:
- Maximizing real estate opportunities, including the opening of four new stores thus far in the second quarter of fiscal 2020;
- Making improvements in supply chain, including reductions in freight cost and four-wall efficiencies;
- Reducing inventories, increasing margins and increasing turns of an appealing assortment of always-fresh merchandise; and
- Addressing select technology enhancements to improve efficiencies and productivity.
The Company anticipates that as the country normalizes and assuming no further complications from the COVID-19 pandemic, that it will return to executing on the plan that increases earnings per share at a compounded annual growth rate of 20% to 25%.
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