Tax refunds arrive later and that's a problem for Citi Trends

Same store sales literally fell off a cliff at Citi Trends in the waning days of the fourth quarter and the operator of 522 urban fashion stores is attributing the weakness to the federal government.

For the fourth quarter ended Jan. 30, total sales at Citi Trendsdecreased 2.8% to $176.1 million compared with $181.1 million in the prior year. Same store sales decreased 5% from the fourth quarter of fiscal 2014, a quarter in which same store sales increased 13.9%. The company attributes January’s decrease due to the later start to tax refund season, as same store sales were down 45% (approximately $3.5 million) the last two days of the month.

“Fourth quarter sales were challenging, with unusually warm winter weather affecting all apparel categories," saidJason T. Mazzola, president and CEO. "However, we continued to realize the benefits of strong inventory control and a new merchandise planning and allocation system, which led to another increase in quarterly gross margin and to a full year gross margin approximating 39%.”

For the year, total sales increased 1.9% to $683.8 million compared with $670.8 million in fiscal 2014. Same store sales decreased 0.1% for the full year.

In addition, the company announced that its Board of Directors has declared a quarterly dividend of 6 cents per common share, payable on March 16 to shareholders of record as of the close of business on March 1.

The company will report complete financial results for its fourth quarter and fiscal 2015 before the market opens on March 11.

Citi Trends, Inc. operates 522 stores located in 31 states.