Citi Trends, Inc. · NASDAQ:CTRN
Citi Trends — ICR Conference 2020
26 slides from Citi Trends's conference presentation, Jan 13, 2020
Slide 1: ICR Conference January 2020
1 ICR CONFERENCE January 2020
Slide 2: Cautionary Note about Forward-Looking Statements
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, includin
Slide 3: Presenters
3 PRESENTERS Peter Sachse , Interim CEO • 39 years in retail • 34 years with Macy’s • CGO, CMO, CSO, CEO – Macys.com , Chief of Business Development • Launched Backstage, Macy’s off price concept Lisa Powell , Chief Merchandising Officer • 30 years in retail • 20 years at TJX (positions in Merchandi
Slide 4: Company Overview: Who Is Our Customer
4 COMPANY OVERVIEW WHO IS OUR CUSTOMER
Slide 5: Passion, Purchase, Repeat
5 Passion, Purchase, Repeat Jaqueline “loves me some Citi Trends” and has for almost 10 years. It’s her favorite store and her second home. She knows everyone there and they know her. She will definitely spend more at CT this year “especially if they keep the freshness coming.” This is more than a s
Slide 6: Company Overview: Our Unique Position
6 • Stores positioned well within the community…73% of customers within 15 minute drive • Have a dominant position with the African American customers that we serve • High frequency of visits • Young demographic • More than a store, a place where everyone is welcome • We commit to and invest in our
Slide 7: Company Overview
7 COMPANY OVERVIEW • 566 stores • In 33 states • Regional strength in the Southeast STORES • $770M revenue • $25M EBIT • $1.64 EPS 2018 • African American • $50k or less annual household income • 55% between ages of 26 - 44 PRIMARY CUSTOMER • Fashionable product • Fresh receipts • Friendly associate
Slide 8: Company Overview: 4 Year Sales and Store Count
8 COMPANY OVERVIEW (1) Fiscal 2017 was a 53 - week year (2) Compares 53 weeks ended 2/3/18 to 53 weeks ended 2/4/17 (3) Compares 52 weeks ended 2/2/19 to 52 weeks ended 2/3/18 % Comp Stores Sales (0.1)% (0.4)% +4.5% 2 +1.6% 3 600 700 800 2015 2016 2017 2018 $800 M $700 M 0 Total Store Count 521 533
Slide 9: Store Locations
9 COMPANY OVERVIEW *Input map of stores* STORE LOCATIONS
Slide 10: Financial Strength
10 FINANCIAL STRENGTH • Zero debt on the balance sheet • $72 million of cash and investments as of Q3 2019; ~$6.20 per share • Since 2015, returned $120 million to shareholders through repurchases and dividends • $0.32 annual dividend for a yield ~ 1.45% • Expected annual free cash flow of $20 - 25
Slide 11: 3 Year Growth Strategy: What Success Looks Like
11 Drive top line to $1.0B by 2022 ~ 8.5% CAGR Open ~ 30 new stores/year….remodel ~ 50 stores/year Drive comp store sales at ~ 3% CAGR Expand merchandise margins by 70 - 80 BPS Increase inventory turn by 8 - 10%/year Drive EBIT growth of 15 - 20% CAGR 1 2 3 4 5 6 7 Drive EPS growth of 20 - 25% CAGR
Slide 12: Customer Centricity: Vision, Mission, and Values
12 Customer Centricity Evolve Merchandising Reinvent Planning & Allocation Enhance Marketing Invest in Systems Maximize Real Estate Improve Supply Chain Customer Centricity Vision, Mission, and Values 3 YEAR GROWTH STRATEGY
Slide 13: Our Values and Attributes
13 Our Values • Customer Obsessed • Integrity Always • Respect Everyone • Results Matter • Expect Excellence • Give Back Our Attributes • Fashionable • Fresh • Friendly • Fair • Fun 3 YEAR GROWTH STRATEGY
Slide 14: Strategic Pillars: Evolve Merchandising
14 STRATEGIC PILLARS FOR GROWTH • Improve merchandise margins by 70 - 80 BPS • Keep assortments fresh with timely and impactful markdowns • Test and react to new product trends • Improve speed to market • Deliver more brands, more value EVOLVE MERCHANDISING
Slide 15: Strategic Pillars: Reinvent Planning and Allocation
15 • Achieve a 8 - 10%/year improvement in inventory turn • Develop and invest in merchandising, planning and allocation systems • Become more data driven • Right product, right store, right quantity, right time • Implement a markdown optimization system STRATEGIC PILLARS FOR GROWTH REINVENT PLANNIN
Slide 16: Strategic Pillars: Enhance Marketing
16 STRATEGIC PILLARS FOR GROWTH ENHANCE MARKETING • Use Marketing as a strategic tool • Increase our social media and digital presence • Increase investment • Investigate a loyalty program • Maximize Black History Month that will evolve throughout the years
Slide 17: Strategic Pillars: Invest in Systems
17 STRATEGIC PILLARS FOR GROWTH • Significant technology opportunity • Enable better visibility, flexibility and usability • Identify quick hits/short term fixes • Ensure scalability • Leverage existing retail solutions INVEST IN SYSTEMS
Slide 18: Strategic Pillars: Maximize Real Estate
18 STRATEGIC PILLARS FOR GROWTH • Open ~ 30 new stores per year » Avg. first year sales ~ $1.35M » Avg. cash flow ~ $180K » Avg. investment ~ $337K » First year ROI ~ 48% MAXIMIZE REAL ESTATE • Remodel ~ 50 stores per year » Accelerate non - apparel penetrations » Upgrade fitting rooms » Upgrade ext
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Slide 23: Strategic Pillars: Improve Supply Chain
23 STRATEGIC PILLARS FOR GROWTH IMPROVE SUPPLY CHAIN • Improve distribution center productivity • Improve speed of inbound and outbound shipments • Reduce transportation costs • Long - term roadmap…capacity, geography, quantity
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Slide 25: Summary of Growth Strategy
25 SUMMARY OF GROWTH STRATEGY Drive top line to $1.0B by 2022 ~ 8.5% CAGR Open ~ 30 New Stores/year remodel ~ 50 stores/year Drive comp store sales at ~ 3% CAGR Expand merchandise margins by 70 - 80 BPS Increase annual turn by 8 - 10%/year Drive EBIT growth of 15 - 20% CAGR Drive EPS growth of 20 -
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