Citi Trends, Inc. (NASDAQ: CTRN) today reported results for the fourth quarter and fiscal year ended January 29, 2011.
Financial Highlights – Fourth quarter ended January 29, 2011
Total sales in the fourth quarter ended January 29, 2011 increased 1.3% to $172.0 million compared with $169.8 million in the quarter ended January 30, 2010. Comparable store sales decreased 11.4% in the fourth quarter. Sales were particularly weak in December due largely to a delay in the government’s distribution of extended unemployment benefits until just before Christmas, a significant shortfall in sales of long denim, and a heavy promotional environment that included going-out-of-business sale events by a major competitor. Sales in January were negatively impacted by a later income tax refund season due to a lack of refund anticipation loan availability for the Company’s customers.
Net income in the fourth quarter of 2010 was $9.4 million compared with $11.3 million in last year’s fourth quarter. Earnings per diluted share decreased to $0.64 in the fourth quarter of 2010 compared with $0.78 in the fourth quarter of 2009. Financial results for the fourth quarter of 2010 included an immaterial correction of an error related to an accounting policy. Prior to the fourth quarter, the Company’s policy was to expense the cost of inbound freight associated with the delivery of inventory to the Company’s distribution centers in the period incurred, rather than capitalizing such costs as a component of inventory and expensing them as the related inventory was sold. In the fourth quarter of 2010, the Company began to capitalize freight costs as a component of the cost of inventory. The impact of this adjustment in the fourth quarter was a non-recurring reduction in cost of sales of $2.7 million and a resulting increase in net income of $1.8 million, or $0.12 per diluted share.