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Cautionary Note about Forward-Looking Statements
This presentation contains “forward-looking statements” within the
meaning of the federal securities laws and is intended to qualify for the
Safe Harbor from liability established by the Private Securities Litigation
Reform Act of 1995, including statements regarding expected sales, the
outlook for Citi Trends’ markets and the demand for its products. These
projections and statements are based on management’s estimates and
assumptions with respect to future events and financial performance
and are believed to be reasonable, though are inherently uncertain and
difficult to predict. Actual results could differ materially from those
projected as a result of certain factors. A discussion of factors that
could cause results to vary is included in the section entitled “Risk
Factors” in the Company’s most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission.
3
• Retailer of off-price, urban fashion apparel
• Large customer base with favorable demographics
• Differentiated merchandise for the entire family
• Current fashions and brands at value prices
• Over 500 stores with dominant presence in the Southeast
4
2000 2012 2017
$599.8
$1,037.7
$1,306.6
Favorable demographics
2000 2012 2020
35.8
39.7
44.8
• Our concept, merchandise and locations are tailored to our
core customer
– 70% African-American
– $20,000 to $40,000 median household income
Significant buying power
Source: U.S. Census Bureau Source: Selig Center for Economic Growth
African-American Population (in millions) African-American After-tax Income (in billions)
5
4.4%
3.4%
Our customer has a greater propensity to purchase apparel…
Source: U.S. Department of Labor (2012 Consumer Expenditure Survey)
Source: Initiative for a Competitive Inner City and Pricewaterhousecoopers LLP.
…and has a greater focus on brands and fashion
2012 Apparel Expenditures as % of Annual Income
52%
67%
30%
42%
Trend Setting Fashions Unique Merchandise
African-Americans
Average U.S. Consumer
African-Americans
Average U.S. Consumer
6
Ladies’
24%
Children's
25%
Men's
17%
Accessories
30%
Home Décor
4%
• Value-priced apparel
• Growth in non-apparel
• Destination focus
• Differentiated from
competitors
Net Sales*
* Fiscal 2015
7
8
• Strong sourcing relationships with over 1,700 suppliers
• Buying team with average of 15+ years retail experience
• Partnership approach with vendors:
– Pay on-time
– Avoid typical retail concessions
• Result: Ability to purchase current fashions at compelling
prices:
– Off-price & close-out buys in-season
– Next Season Buys (NSB) – close-outs purchased for next season
– Up-front
9
Existing store base of 529 locations
Corporate Headquarters
Distribution Center
New markets entered in FY 2005 – 2015
Buying Office
48
6
34
6
11
25
50
6329
42
18
45
20
6
15 28 3
22
18
6
5
1
10
1
3
2
4
1
2
2
3
10
Focus on Urban
Apparel
Brand / Fashion
Orientation
Specialty
Store
Environment
Serve the Entire
Family
11
FY01 FY02 FY03 FY04 FY05 FY06* FY07 FY08 FY09 FY10 FY11 FY12* FY13 FY14 FY15
$97.9
$125.0
$157.2
$203.4
$289.8
$381.9*
$437.5
$488.2
$551.9
$622.5
$640.8 $654.7*
$622.2
$670.8
$683.8
($ in millions)
Net Sales
Stores: 123 137 161 200 235 277 319 357 403 461 511 513 505 511 521
* 53-week fiscal year
12
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
36.6%
37.7% 37.6%
37.4%
38.3% 38.3%
36.3%
38.2%
38.6%
38.4%
34.4%
34.8%
36.6%
37.6%
39.0%
13
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
$7.2
$11.4
$14.2
$17.4
$27.3
$38.6
$31.3
$39.3
$47.8
$52.0
$13.5
$20.3 $21.6
$31.4
$42.8
($ in millions)
Adjusted EBITDA
14
EBITDA(1) & Adjusted EBITDA reconciled to Net Income (Loss)
(1) Earnings before interest, taxes, depreciation & amortization.
($ in thousands)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Net income (loss) 2,457$ 5,028$ 5,918$ 7,257$ 14,200$ 21,351$ 14,214$ 17,383$ 19,717$ 20,852$ (10,014)$ (2,225)$ 464$ 8,966$ 15,527$
Plus:
Interest expense 455 256 577 774 345 359 469 307 92 24 79 212 194 200 242
Income tax expense 1,566 3,101 3,727 4,551 7,551 10,617 6,379 7,870 9,969 10,742 - - - 2,144 8,787
Depreciation and
amortization 2,738 3,015 4,033 4,872 6,087 8,326 12,583 16,261 18,319 20,324 24,958 23,950 21,974 20,177 18,577
Less:
Interest Income - - (14) (42) (891) (2,014) (2,383) (2,495) (404) (174) (243) (260) (281) (187) (339)
Income tax benefit - - - - - - - - - - (7,816) (2,516) (754) - -
EBITDA 7,216 11,400 14,241 17,412 27,292 38,639 31,262 39,326 47,693 51,768 6,964 19,161 21,597 31,300 42,794
Asset impairment - - - - - - - - 112 211 6,514 1,177 1,542 83 -
Gain on sale of former
distribution center (1,526)
Adjusted EBITDA 7,216$ 11,400$ 14,241$ 17,412$ 27,292$ 38,639$ 31,262$ 39,326$ 47,805$ 51,979$ 13,478$ 20,338$ 21,613$ 31,383$ 42,794$
15
2012
($ in millions, except per share data) 2015 2014 2013
Sales $683.8 $670.8 $622.2
Gross Profit $267.0 $252.4 $227.8
Gross Margin 39.0% 37.6% 36.6%
SG&A $224.2 $221.0 $206.1
SG&A as % of Sales 32.8% 32.9% 33.1%
Adjusted EBITDA $ 42.8 $ 31.4 $ 21.6
Income Per Share $ 1.03 $ 0.60 $ 0.03
• Gross margin improvement due to stronger inventory management and increase in
opportunistic next-season-buys
• Continued expense leverage
• 72% increase in income per share in 2015
16
2012
($ in millions, except per share data) 1st Half 2016 1st Half 2015
Sales $348.9 $348.8
Gross Profit $136.0 $138.1
Gross Margin 39.0% 39.6%
SG&A $114.4 $111.5
SG&A as % of Sales 32.8% 32.0%
Adjusted EBITDA $ 21.6 $ 26.6
Income Per Share $ 0.59 $ 0.75
• 2.0% comparable store sales decline
• Gross margin – 60 b.p. decline due equally to higher markdowns, shrink & freight
• Expenses – 2.6% increase from new stores and normal inflation, partially offset by lower
incentive compensation expense
17
As of
July 30, 2016
Cash & Investment Securities $ 101.6
Total Debt* $ 0.0
Total Stockholders' Equity 219.5
Total Capitalization $219.5
* $50 million credit facility available; unused
($ in millions)
Citi_Trends

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Citi_Trends

  • 1.
  • 2. 2 Cautionary Note about Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the federal securities laws and is intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements regarding expected sales, the outlook for Citi Trends’ markets and the demand for its products. These projections and statements are based on management’s estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results could differ materially from those projected as a result of certain factors. A discussion of factors that could cause results to vary is included in the section entitled “Risk Factors” in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.
  • 3. 3 • Retailer of off-price, urban fashion apparel • Large customer base with favorable demographics • Differentiated merchandise for the entire family • Current fashions and brands at value prices • Over 500 stores with dominant presence in the Southeast
  • 4. 4 2000 2012 2017 $599.8 $1,037.7 $1,306.6 Favorable demographics 2000 2012 2020 35.8 39.7 44.8 • Our concept, merchandise and locations are tailored to our core customer – 70% African-American – $20,000 to $40,000 median household income Significant buying power Source: U.S. Census Bureau Source: Selig Center for Economic Growth African-American Population (in millions) African-American After-tax Income (in billions)
  • 5. 5 4.4% 3.4% Our customer has a greater propensity to purchase apparel… Source: U.S. Department of Labor (2012 Consumer Expenditure Survey) Source: Initiative for a Competitive Inner City and Pricewaterhousecoopers LLP. …and has a greater focus on brands and fashion 2012 Apparel Expenditures as % of Annual Income 52% 67% 30% 42% Trend Setting Fashions Unique Merchandise African-Americans Average U.S. Consumer African-Americans Average U.S. Consumer
  • 6. 6 Ladies’ 24% Children's 25% Men's 17% Accessories 30% Home Décor 4% • Value-priced apparel • Growth in non-apparel • Destination focus • Differentiated from competitors Net Sales* * Fiscal 2015
  • 7. 7
  • 8. 8 • Strong sourcing relationships with over 1,700 suppliers • Buying team with average of 15+ years retail experience • Partnership approach with vendors: – Pay on-time – Avoid typical retail concessions • Result: Ability to purchase current fashions at compelling prices: – Off-price & close-out buys in-season – Next Season Buys (NSB) – close-outs purchased for next season – Up-front
  • 9. 9 Existing store base of 529 locations Corporate Headquarters Distribution Center New markets entered in FY 2005 – 2015 Buying Office 48 6 34 6 11 25 50 6329 42 18 45 20 6 15 28 3 22 18 6 5 1 10 1 3 2 4 1 2 2 3
  • 10. 10 Focus on Urban Apparel Brand / Fashion Orientation Specialty Store Environment Serve the Entire Family
  • 11. 11 FY01 FY02 FY03 FY04 FY05 FY06* FY07 FY08 FY09 FY10 FY11 FY12* FY13 FY14 FY15 $97.9 $125.0 $157.2 $203.4 $289.8 $381.9* $437.5 $488.2 $551.9 $622.5 $640.8 $654.7* $622.2 $670.8 $683.8 ($ in millions) Net Sales Stores: 123 137 161 200 235 277 319 357 403 461 511 513 505 511 521 * 53-week fiscal year
  • 12. 12 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 36.6% 37.7% 37.6% 37.4% 38.3% 38.3% 36.3% 38.2% 38.6% 38.4% 34.4% 34.8% 36.6% 37.6% 39.0%
  • 13. 13 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 $7.2 $11.4 $14.2 $17.4 $27.3 $38.6 $31.3 $39.3 $47.8 $52.0 $13.5 $20.3 $21.6 $31.4 $42.8 ($ in millions) Adjusted EBITDA
  • 14. 14 EBITDA(1) & Adjusted EBITDA reconciled to Net Income (Loss) (1) Earnings before interest, taxes, depreciation & amortization. ($ in thousands) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Net income (loss) 2,457$ 5,028$ 5,918$ 7,257$ 14,200$ 21,351$ 14,214$ 17,383$ 19,717$ 20,852$ (10,014)$ (2,225)$ 464$ 8,966$ 15,527$ Plus: Interest expense 455 256 577 774 345 359 469 307 92 24 79 212 194 200 242 Income tax expense 1,566 3,101 3,727 4,551 7,551 10,617 6,379 7,870 9,969 10,742 - - - 2,144 8,787 Depreciation and amortization 2,738 3,015 4,033 4,872 6,087 8,326 12,583 16,261 18,319 20,324 24,958 23,950 21,974 20,177 18,577 Less: Interest Income - - (14) (42) (891) (2,014) (2,383) (2,495) (404) (174) (243) (260) (281) (187) (339) Income tax benefit - - - - - - - - - - (7,816) (2,516) (754) - - EBITDA 7,216 11,400 14,241 17,412 27,292 38,639 31,262 39,326 47,693 51,768 6,964 19,161 21,597 31,300 42,794 Asset impairment - - - - - - - - 112 211 6,514 1,177 1,542 83 - Gain on sale of former distribution center (1,526) Adjusted EBITDA 7,216$ 11,400$ 14,241$ 17,412$ 27,292$ 38,639$ 31,262$ 39,326$ 47,805$ 51,979$ 13,478$ 20,338$ 21,613$ 31,383$ 42,794$
  • 15. 15 2012 ($ in millions, except per share data) 2015 2014 2013 Sales $683.8 $670.8 $622.2 Gross Profit $267.0 $252.4 $227.8 Gross Margin 39.0% 37.6% 36.6% SG&A $224.2 $221.0 $206.1 SG&A as % of Sales 32.8% 32.9% 33.1% Adjusted EBITDA $ 42.8 $ 31.4 $ 21.6 Income Per Share $ 1.03 $ 0.60 $ 0.03 • Gross margin improvement due to stronger inventory management and increase in opportunistic next-season-buys • Continued expense leverage • 72% increase in income per share in 2015
  • 16. 16 2012 ($ in millions, except per share data) 1st Half 2016 1st Half 2015 Sales $348.9 $348.8 Gross Profit $136.0 $138.1 Gross Margin 39.0% 39.6% SG&A $114.4 $111.5 SG&A as % of Sales 32.8% 32.0% Adjusted EBITDA $ 21.6 $ 26.6 Income Per Share $ 0.59 $ 0.75 • 2.0% comparable store sales decline • Gross margin – 60 b.p. decline due equally to higher markdowns, shrink & freight • Expenses – 2.6% increase from new stores and normal inflation, partially offset by lower incentive compensation expense
  • 17. 17 As of July 30, 2016 Cash & Investment Securities $ 101.6 Total Debt* $ 0.0 Total Stockholders' Equity 219.5 Total Capitalization $219.5 * $50 million credit facility available; unused ($ in millions)