Knobias Clip Report (11-25-2008) CTRN
Submitted By Knobias ClipReport
CTRN: CEO Comments on Smaller Than Expected Q3 Loss and Outlook
By Fain Hughes, fhughes@knobias.com
Shares of Citi Trends, Inc. (CTRN) surged on Tuesday after the Company reported better than expected financial resulst on Monday for the third quarter ended November 1, 2008.
Total sales in the third quarter ended November 1, 2008 increased 5.4% to $104.9 million compared with $99.5 million in the third quarter ended November 3, 2007. Comparable store sales decreased 4.2% in the third quarter. The net loss in this year’s third quarter was $687,000 compared with a net loss of $513,000 in last year’s third quarter. Loss per diluted share was $0.05 in the third quarter of 2008 compared with a loss of $0.04 in 2007’s third quarter. Analysts had expected a Q3 loss of $0.10 per share.
R. Edward Anderson, Chairman and CEO of Citi Trends, commented in a conference call, “I believe that we are well positioned to withstand these current economic headwinds and prosper in this environment. We are strong financially with no debt and $54 million in cash at the end of Q3. We have done a good job of managing our largest asset, inventories. We have made a number of improvements in operations. We improved inventory shrinkage and delivered much improved results. We have focused on expense control all year. We delivered a smaller that expected Q3 loss in a tough sales quarter because we were able to manage expenses very well.”
He continued, “We will continue to run lean inventories, focus on strengthening our operations and further tighten our expenses. We are committed to continuing our growth rate at the 15% square foot pace. We believe in this environment that real estate prices will come down, and we are positioned to take advantage. We will push hard for cheaper rents and will not chase any expensive deals.”
The Company’s estimate of full year EPS is a range of $0.95 to $1.05 per diluted share. This guidance is based upon an anticipated comparable store sales decrease of 3% to 6% in the fourth quarter.
Mr. Anderson added, “From the first few weeks of November, our best guess for November comparable store sales is a range of -4% to +2%.”
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