Citi Trends Inc (CTRN) 2024 Q1 法說會逐字稿

Greetings, and welcome to the Citi Trends first quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加花旗趨勢 2024 年第一季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Nitza McKee, Senior Associate at ICR. Thank you. You may begin.

現在我很高興向您介紹主持人，ICR 高級研究員 Nitza McKee。謝謝。你可以開始了。

Thank you, and good morning, everyone. Thank you for joining us on Citi Trends first-quarter 2024 earnings call. On our call today is Interim Chief Executive Officer, Ken Seipel; and Chief Financial Officer, Heather Plutino.

謝謝大家，大家早安。感謝您參加花旗趨勢 2024 年第一季財報電話會議。今天與我們通話的是臨時執行長肯·塞佩爾 (Ken Seipel)；財務長希瑟‧普魯蒂諾 (Heather Plutino)。

Our earnings release was sent out this morning at 6:45 AM Eastern time. If you have not received a copy of the release, it's available on the company's website under Investor Relations section at www.cititrends.com.

我們的財報發佈於東部時間今天早上 6:45。如果您還沒有收到新聞稿的副本，可以在公司網站 www.cititrends.com 的投資者關係部分找到該版本。

You should be aware that prepared remarks today may during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance.

您應該注意，今天在本次電話會議中準備的發言可能包含 1995 年《私人證券訴訟改革法案》含義內的前瞻性陳述。管理階層可能會做出額外的前瞻性陳述來回答您的問題。這些陳述不保證未來的表現。

Therefore, you should not place undue reliance on these statements. We refer you to the company's most recent report on form 10-K and other subsequent filings with the Securities and Exchange Commission for a more detailed discussion of the factors that can cause actual results to differ materially from those described in the forward-looking statements.

因此，您不應過度依賴這些陳述。我們建議您參閱該公司最新的 10-K 表格報告以及向美國證券交易委員會提交的其他後續文件，以更詳細地討論可能導致實際結果與前瞻性聲明中描述的結果存在重大差異的因素。

I will now turn the call over to our Interim Chief Executive Officer, Ken Seipel. Ken?

我現在將把電話轉給我們的臨時執行長肯·塞佩爾 (Ken Seipel)。肯？

Well, good morning, everyone. I'm pleased to join you today to discuss the work ahead for Citi Trends. Heather will provide you a review of the Q1 business results, and then I will give you a brief overview of my prior experiences at a high-level outline of the work that we are undertaking to increase shareholder value.

嗯，大家早安。我很高興今天與大家一起討論花旗趨勢未來的工作。希瑟將為您回顧第一季的業務成果，然後我將向您簡要概述我之前在我們為增加股東價值而開展的工作的高層次概述中的經驗。

Before we discuss the business on behalf of the Board of Directors and the entire Citi Trends team. I'd like to thank our former CEO, David Makuen for his hard work and leadership these past four years. David shaped and build our purpose-driven Citi Trends, culture while leading the company through some of the most challenging consumer environments in recent history.

在我們代表董事會和整個花旗趨勢團隊討論業務之前。我要感謝我們的前執行長 David Makuen 在過去四年中的辛勤工作和領導。大衛塑造並建立了我們以目標為導向的花旗趨勢文化，同時帶領公司度過了近代歷史上一些最具挑戰性的消費者環境。

And on a personal level, I'd like to thank David for his willingness to provide business advice to ensure a smooth transition, and we want to send him very best wishes.

就我個人而言，我要感謝大衛願意提供業務建議以確保順利過渡，我們想向他致以最良好的祝愿。

I'd like to turn the call over now to Heather to review Q1 business results. Heather?

我現在想將電話轉給希瑟，以審查第一季的業務成果。希瑟？

Thank you, Ken, and good morning, everyone. We are pleased with our first quarter performance in which we registered an improved top line trends by delivering a positive comp store sales of increase of 3.1%. The quarter was further highlighted by gross margin expansion of 160 basis points compared to last year.

謝謝你，肯，大家早安。我們對第一季的業績感到滿意，我們實現了 3.1% 的正比商店銷售額成長，實現了收入趨勢的改善。與去年相比，毛利率成長了 160 個基點，進一步凸顯了本季的表現。

Both of these Q1 wins were assisted by our inventory rebuilds and targeted product categories, combined with our buying team's continued focus on making wise inventory investments, maximizing markup, while also providing incredible values for our customers.

第一季的這兩場勝利都得益於我們的庫存重建和目標產品類別，再加上我們的採購團隊持續專注於明智的庫存投資、最大化利潤，同時為我們的客戶提供令人難以置信的價值。

Early in the quarter, we felt the impact from the slower start to the tax refund season as well as unfavorable spring weather pattern. However, we posted positive comps in each month of the quarter. We also experienced an improved trend in store traffic with basket size similar to last year and continued healthy in-store conversion.

本季度初，我們感受到了退稅季開局放緩以及不利的春季天氣模式的影響。然而，我們在該季度的每個月都發布了積極的業績。我們也經歷了商店客流量的改善趨勢，購物籃規模與去年相似，店內轉換率持續健康。

These key performance indicators are proof points that our unique assortment curated specifically for our African-American and multicultural customers resonated. As mentioned on recent earnings calls, our teams remain committed to setting up key selling moments earlier and it paid off in the first quarter.

這些關鍵績效指標證明我們專門為非裔美國人和多元文化客戶打造的獨特產品引起了共鳴。正如最近的財報電話會議中所提到的，我們的團隊仍然致力於儘早設定關鍵銷售時刻，並在第一季獲得回報。

Our Q1 product offering included a healthy balance of exclusive trends, leading brands, year-round fashion, and of course, basics for spring selling the tax refund season and the Easter holiday.

我們第一季的產品包括獨家趨勢、領先品牌、全年時尚，當然還有春季銷售、退稅季和復活節假期的基本款的健康平衡。

From a category perspective, our performance was broad-based, with particular strength in home and lifestyle, Impulse also referred to as our Q line, big men's and ladies' plus, all areas positively impacted by our inventory rebuild efforts.

從品類角度來看，我們的表現基礎廣泛，尤其是家居和生活方式方面的優勢，Impulse 也稱為我們的 Q 系列、大號男裝和女裝，所有領域都受到我們庫存重建工作的積極影響。

Across our largest categories, ladies,' men's, and kids' apparel, quarterly comp sales were all positive, driven by trend-right values and incredible brands that met the needs and wants of our customers for the spring season.

在我們最大的女裝、男裝和童裝品類中，季度銷售額均呈正值，這得益於順應潮流的價值觀和令人難以置信的品牌，這些品牌滿足了客戶在春季的需求和願望。

We exited the first quarter with total inventory dollars up 4%, in line with our expectations. We feel good about the quality mix and value proposition across our inventory. As we entered the second quarter, we are positioned to capitalize on late spring and peak summer selling weeks with a robust assortment of made for Citi Trends coordinating short and tee-sets, plenty of tee's for the whole family, fresh takes on Americana and June tees and all the goodies for summer barbecues from outfits to audio.

第一季末，我們的庫存總額增加了 4%，符合我們的預期。我們對整個庫存的品質組合和價值主張感到滿意。當我們進入第二季度時，我們準備充分利用春末和夏季銷售高峰週的機會，推出一系列專為花旗趨勢設計的短褲和T 卹套裝，適合全家人的大量T 卹，以及美國和六月的新鮮款式T 卹以及夏季燒烤的所有好東西，從服裝到音頻。

With a large portion of our fleet in areas that go back to school by mid August, we will also be well positioned to capture demand in July with a heightened focus on kids' apparel, accessories and footwear.

我們的大部分車隊都位於 8 月中旬返校的地區，因此我們也將能夠很好地抓住 7 月的需求，重點關注兒童服裝、配件和鞋類。

Lastly, our value proposition is showing up mildly on the sales floor with many new deal priced offers that are driving strong sell-through. In addition to the inventory rebuilds and targeted product categories that we've been discussing for the past several quarters. In Q1, we leveraged our new ERP system to optimize assortments in key African American neighborhoods where we've identified significant sales opportunity.

最後，我們的價值主張在銷售現場得到了溫和的體現，許多新的優惠價格推動了強勁的銷售。除了我們過去幾季一直在討論的庫存重建和目標產品類別之外。在第一季度，我們利用新的 ERP 系統來優化主要非裔美國人社區的產品分類，我們在這些社區中發現了重要的銷售機會。

This initiative using our improved planning and allocation method is impacting about 20% of the chain and had encouraging results in the quarter. We'll continue to monitor our results and refine our approach based on what we learned with the potential to expand this effort as we move through the year.

這項措施使用了我們改進的規劃和分配方法，影響了約 20% 的鏈條，並在本季度取得了令人鼓舞的結果。我們將繼續監控我們的結果，並根據我們所學到的知識來改進我們的方法，並有可能在這一年中擴大這項努力。

In the quarter, we continued testing radio, and paid social marketing, turning the dials on market size, repeat markets, frequency of messaging and combinations with other initiatives. We've seen particularly strong results with a combination of remodels and marketing.

在本季度，我們繼續測試廣播和付費社交行銷，調整市場規模、重複市場、訊息傳遞頻率以及與其他舉措的組合。我們看到改造和行銷相結合取得了特別強勁的成果。

To date, we've touched about 140 stores with our marketing efforts and will increase that number throughout the year with back-to-school and holiday campaigns. We remodeled 20 stores in the first quarter and an additional 15 locations in May, quickly closing in on our fiscal year goal of 40 remodels.

迄今為止，我們的行銷工作已覆蓋約 140 家商店，並將透過返校和假期活動全年增加這一數量。我們在第一季改造了 20 家商店，5 月又改造了 15 家門市，很快就實現了 40 家改造的財年目標。

As we've discussed in prior calls, these refreshed stores see positive results with mid to high single digit sales lift and at half the prior costs. Including the May remodels, CTS stores represents approximately 21% of our fleet.

正如我們在之前的電話會議中討論的那樣，這些煥然一新的商店取得了積極的成果，銷售額達到中高個位數，而成本卻只有之前的一半。包括 5 月的改造在內，CTS 門市約占我們門市的 21%。

Turning to the details of gross margin. Our first quarter adjusted gross margin expansion of 160 basis points was driven by the focus on markup I described earlier, significant freight expense improvement and effective markdown management. Partially offsetting the growth gross margin benefits in the quarter was an unexpected shrink headwind as a result of physical inventory counts.

轉向毛利率的細節。我們第一季調整後的毛利率成長了 160 個基點，這是由於我之前描述的對加價的關注、貨運費用的顯著改善和有效的降價管理。實際庫存盤點導致的意外收縮逆風部分抵銷了本季毛利率成長的收益。

As we've discussed on prior calls, we count a portion of our store fleet each month and continue to see issues in very specific stores and very specific categories. We did not believe that this is a chain-wide problem.

正如我們在之前的電話中討論的那樣，我們每個月都會對部分商店進行統計，並繼續在非常具體的商店和非常具體的類別中發現問題。我們不認為這是一個全鏈問題。

At Citi Trends, we are accustomed to managing shrink, and although a headwind this year, it remains a very small component of our margin structure. Internally, we have engaged cross-functional experts to reduce the impact of shrink, with particular focus on internal sales.

在花旗趨勢，我們習慣於管理虧損，儘管今年出現了逆風，但它仍然是我們利潤結構中很小的組成部分。在內部，我們聘請了跨職能專家來減少縮減的影響，特別關注內部銷售。

We are ensuring that stores have well-placed cameras and are leveraging recently improved exception reporting to quickly identify root causes and to take appropriate action. We're updating key loss prevention policies and are establishing a more robust restitution program. And key to all of this, we've been working to upgrade our store talent and our training programs.

我們確保商店配備適當的攝像頭，並利用最近改進的異常報告來快速識別根本原因並採取適當的措施。我們正在更新關鍵的防損政策，並正在製定更強有力的賠償計畫。而這一切的關鍵是，我們一直在努力提升我們的商店人才和培訓計畫。

Next, we'll turn our attention to our supply chain, tightening controls and reporting to identify and resolve any additional causes of shrink. Importantly, we will continue to place the safety and well-being of our employees and customers at the center of our operational decisions to stem this headwind.

接下來，我們將把注意力轉向我們的供應鏈，加強控制和報告，以識別和解決任何其他造成損耗的原因。重要的是，我們將繼續將員工和客戶的安全和福祉置於我們營運決策的中心，以遏制這一不利因素。

Despite pressure from shrink, we remain confident in our ability to deliver continued gross margin expansion for the balance of 2024, driven by incremental markup improvement and reduced freight rates.

儘管面臨萎縮的壓力，但在加價增量改善和運費下降的推動下，我們仍然對 2024 年剩餘時間毛利率持續增長的能力充滿信心。

Moving to SG&A, adjusted SG&A expenses increased about $3 million in the quarter compared to last year. In line with our expectations and reflecting our previously discussed reset of the SG&A base. The increase as expected was driven by merit increases in stores and corporate and a modest increase in advertising spend. During the quarter, we closed three stores as part of our ongoing fleet optimization effort, ending the period with 599 locations.

說到 SG&A，調整後的 SG&A 費用本季與去年相比增加了約 300 萬美元。符合我們的預期並反映了我們之前討論的 SG&A 基數重置。這一成長符合預期，是由商店和企業的業績成長以及廣告支出的小幅成長所推動的。本季度，我們關閉了 3 家門市，作為我們持續進行的車隊優化工作的一部分，本季末門市數量達到 599 家。

Now turning to the balance sheet, at the end of the quarter, we remained in a healthy financial position with a strong balance sheet including no debt, no drawings on our $75 million revolver and $58 million in cash. With the liquidity of approximately $133 million, we can more than sufficiently fund our business initiatives, building on our foundational strength for future profitable growth.

現在轉向資產負債表，截至本季末，我們仍保持健康的財務狀況，資產負債表強勁，沒有債務，沒有提取 7,500 萬美元的左輪手槍和 5,800 萬美元的現金。憑藉約 1.33 億美元的流動性，我們可以為我們的業務計劃提供足夠的資金，為我們未來的獲利成長奠定基礎。

Before I turn the call back to Ken, I want to reiterate that we are encouraged by our first quarter results. Our strategic initiatives are driving improved performance, and we are playing offense while controlling what we can control.

在我把電話回給肯之前，我想重申，我們對第一季的業績感到鼓舞。我們的策略舉措正在推動績效的提高，我們在進攻的同時控制我們能控制的事情。

This approach is particularly important as our customer continues to face inflationary pressures and as carefully managing their discretionary spend. We still believe in the overall approach to the annual outlook we shared in March. However, with one quarter under our belt we felt it was prudent to make a few adjustments to our 2024 outlook as follows.

由於我們的客戶繼續面臨通膨壓力並謹慎管理可自由支配的支出，因此這種方法尤其重要。我們仍然相信我們在三月分享的年度展望的整體方法。然而，在四分之一的時間裡，我們認為對 2024 年的前景進行以下一些調整是謹慎的。

Full year comp store sales are expected to grow by low to mid-single digits compared to fiscal 2023, a range slightly below our previous outlook. We expect full year gross margin to expand by approximately 75 to 100 basis points, consistent with previous outlook.

與 2023 財年相比，全年同店銷售額預計將出現低至中個位數的成長，增幅略低於我們先前的預期。我們預計全年毛利率將擴大約 75 至 100 個基點，與先前的預期一致。

We are now planning an SG&A dollar increase of 1.5% to 2.5% over 2023, slightly better than what we discussed during our last earnings call, driven by streamlining costs in a variety of areas.

在精簡各個領域的成本的推動下，我們現在計劃 2023 年的SG&A 美元增長 1.5% 至 2.5%，略好於我們在上次財報電話會議上討論的內容。

Consistent with our previous outlook, resulting full year EBITDA is expected to be in the range of $4 million to $10 million. As we shared in March, we plan to open up to five new stores, remodel approximately 40 locations and close 10 to 15 underperforming stores ending fiscal 2024 with approximately 595 stores. Finally, we continue to expect full year capital expenditures to be approximately $20 million.

與我們先前的預期一致，全年 EBITDA 預計將在 400 萬至 1,000 萬美元之間。正如我們在 3 月分享的那樣，我們計劃在 2024 財年結束時開設最多 5 家新店，改造約 40 家門市，並關閉 10 至 15 家表現不佳的門市，總數約為 595 家。最後，我們仍然預計全年資本支出約為 2000 萬美元。

With that, I will turn the call back to Ken. Ken?

這樣，我會將電話轉回肯恩。肯？

Thank you, Heather. Appreciate it. First, I'd like to share my appreciation to the Citi Trends team for their hard work that generated a 3.1 comp store sales increase and gross margin rate growth of 160 basis points compared to last year. The Board remains committed to the core strategies of the business. As I take the reins, I'm focused on ensuring that the business consistently executes those strategies to improve top line sales and EBITDA profit.

謝謝你，希瑟。欣賞它。首先，我想對花旗趨勢團隊表示感謝，感謝他們的辛勤工作，與去年相比，花旗趨勢團隊的銷售額成長了 3.1，毛利率成長了 160 個基點。董事會仍然致力於業務的核心策略。當我接掌大權時，我的重點是確保企業始終如一地執行這些策略，以提高營收和 EBITDA 利潤。

Now if I may, I'd like to briefly introduce myself and discuss the near-term road ahead for Citi Trends. I joined the Citi Trends board in late 2019 and have recently served as Chair of the Nomination and Governance Committee and also members of the Audit and Finance Committee.

現在，如果可以的話，我想簡單介紹一下自己，並討論花旗趨勢的近期發展方向。我於 2019 年底加入花旗趨勢董事會，最近擔任提名與治理委員會主席以及審計與財務委員會成員。

The majority of my 40 year professional career has been in value apparel retailing. The first half of my career was with JC Penney in the 80s. I was with target in the 90s during their brand development and rapid growth. Old Navy in the 2000s where outlet exploit the explosive store growth and eventually becoming the largest specialty store retailer in the world.

我 40 年職業生涯的大部分時間都從事價值服飾零售業。我職業生涯的前半段是在 80 年代在 JC Penney 工作的。我的目標是90年代他們的品牌發展和快速成長。2000 年代的 Old Navy 暢貨店利用商店的爆炸性成長，最終成為世界上最大的專賣店零售商。

And during my time in the Fortune 100 companies, I held a number of executive roles in most company functions, including merchandise buying and in operations. In 2010, I entered the second phase of my career focused on working in private equity backed retail companies where I assume the role of Chief Executive Officer and co-investor and all business engagements.

在《財星》100 強公司任職期間，我在公司的大多數職能部門中擔任過多個行政職務，包括商品採購和營運。2010 年，我進入了職業生涯的第二階段，專注於在私募股權支持的零售公司工作，擔任執行長和聯合投資者以及所有業務活動。

I found that owning a financial stake in each business, created strong alignment with the shareholders and really help reinforce an acute focus on increasing shareholder value. As a co-owner entrepreneur and leader, I was able to generate three successful business turnarounds, which resulted in returns of 3 times and in some cases, over 6 times the initial investment for our shareholders.

我發現，在每家企業中擁有財務股權，可以與股東建立強大的聯盟，並確實有助於加強對增加股東價值的敏銳關注。作為共同擁有的企業家和領導者，我成功實現了三次業務轉型，為股東帶來了 3 倍甚至在某些情況下超過 6 倍初始投資的回報。

I've been fortunate to have a wide variety of retail experiences. However, my time as CEO who gave an off-price apparel store serving the low-end consumer is the most relevant to Citi Trends. My experiences in both public and privately held companies have taught me they're just a few critical and foundational points for restoring company profit and setting us on the path to long-term sustainability.

我很幸運能夠擁有各種各樣的零售經驗。然而，我作為執行長開設一家為低端消費者提供服務的折扣服裝店的經驗與花旗趨勢最相關。我在上市公司和私人公司的經驗告訴我，它們只是恢復公司利潤並使我們走上長期永續發展道路的幾個關鍵和基礎點。

First, successful companies need to clearly understand the core customer and how to best serve their needs. And as this core customer evolves in response to their environment. It's critical for that organization to be nimble and adaptable as well.

首先，成功的企業需要清楚了解核心客戶以及如何最好地滿足他們的需求。隨著這個核心客戶根據他們的環境而不斷發展。組織的靈活性和適應性也至關重要。

Next is a compelling and differentiated value proposition that distinguishes the business from competition and generates increasing market share in a highly competitive environment. Also cradle to critical to success is operational excellence. This is the ability for a company to consistently execute the business model with profitable cost efficiencies.

接下來是引人注目的差異化價值主張，使業務在競爭中脫穎而出，並在高度競爭的環境中增加市場份額。卓越營運也是成功關鍵的搖籃。這是公司持續執行具有獲利成本效率的業務模式的能力。

Next is a compelling growth plan, that allows the company to continually expand and capture market share. And last but not least, our well-trained, highly engaged people who are dedicated to bringing the strategy to life.

接下來是一個引人注目的成長計劃，使公司能夠不斷擴大並佔領市場份額。最後但並非最不重要的一點是，我們訓練有素、高度敬業的員工致力於將策略付諸實踐。

I have found, in my past a balanced focus on the core customer, a compelling value proposition, strong operational excellence for growth avenues, and engaged people pretty unstoppable momentum for a company owned. By the way, all of this has to be done very fast.

我發現，在過去，對核心客戶的平衡關注、令人信服的價值主張、成長途徑的強大營運卓越性以及員工的敬業度對於一家公司來說是不可阻擋的動力。順便說一句，所有這一切都必須非常快速地完成。

I'm really looking forward to bringing my past retail experiences and learnings to lead the next chapter for Citi Trends. I'm optimistic about Citi Trends because of its unique position in the marketplace as a value retailer serving a largely underserved consumer.

我真的很期待利用我過去的零售經驗和學習來引領花旗趨勢的新篇章。我對花旗趨勢持樂觀態度，因為它作為一家服務於很大程度上服務不足的消費者的價值零售商，在市場上具有獨特的地位。

With nearly 600 retail locations, we're one of the largest national retailers focused on lower income consumers. Our company is running on the strength that we have in the African American community, which today accounts for the majority of our financial success.

我們擁有近 600 個零售點，是專注於低收入消費者的最大的全國零售商之一。我們公司的營運依靠的是非裔美國人社區的力量，今天我們的財務成功主要歸功於非裔美國人社區。

Because of our long-term neighborhood presence, our customers are highly engaged and loyal to Citi Trends. When we get it right, our customers respond another positive trade of our companies, the balance sheet, which gives us a big competitive advantage today. In today's world of a higher interest rates, also allowing us the flexibility to take advantage of growth opportunities to increase our market position.

由於我們在附近的長期存在，我們的客戶對花旗趨勢高度參與和忠誠。當我們做對時，我們的客戶會對我們公司的另一項積極交易（資產負債表）做出反應，這為我們今天帶來了巨大的競爭優勢。在當今世界利率較高的情況下，也使我們能夠靈活地利用成長機會來提高我們的市場地位。

And although an appointment of an interim CEO, could be viewed as a transitional period. I want to assure you there will be minimal disruption because I'm familiar with Citi Trends, which will aid me and quick transition into the day-to-day work.

儘管任命了臨時首席執行官，但可以被視為一個過渡期。我想向您保證，幹擾不會很大，因為我熟悉花旗趨勢，這將幫助我快速過渡到日常工作。

My objective is to deliver consistent top line growth, streamline expenses, lay the groundwork for long-term store expansion. And it all begins with really getting back to the basic blocking and tackling of a good retail company. My goal is to first clearly understand what's working and find ways to accelerate that work as well as remove obstacles so our team can perform their jobs and more efficiently.

我的目標是實現持續的營收成長、精簡開支、為長期商店擴張奠定基礎。這一切都始於真正回到優秀零售公司的基本封鎖和解決方案。我的目標是首先清楚地了解什麼是有效的，並找到加速工作並消除障礙的方法，以便我們的團隊可以更有效地完成工作。

To do that in, we're going to focus on the following initiatives. Number one, driving profitable sales. Number two, sharpening our product assortment decisions and improving inventory turns. Number three, streamlining costs. Four, optimizing our supply chain and five, leveraging benefits from recent IT upgrades as I mentioned a moment ago.

為此，我們將重點放在以下舉措。第一，推動獲利銷售。第二，加強我們的產品分類決策並提高庫存週轉率。第三，精簡成本。第四，優化我們的供應鏈，第五，利用我剛才提到的最近 IT 升級帶來的好處。

I plan to lead the Company through a fresh review of our current business performance in each of these areas. Our goal is to align on the facts, focus on the opportunities to accelerate areas of success and course, correct areas of opportunity. The strategy, things are pretty familiar, and I believe many of the answers already exist.

我計劃領導公司對當前每個領域的業務績效進行重新審查。我們的目標是根據事實，專注於加速成功領域的機會，以及糾正機會領域的機會。策略、事情都非常熟悉，我相信很多答案已經存在。

The difference will be a laser focus on initiatives to significantly improve our execution and speed on all fronts. Regardless of external factors, we will control what we can control, and we're going to fight hard to significantly improve our top line sales results.

不同之處在於我們將專注於顯著提高我們各方面執行力和速度的措施。無論外部因素如何，我​​們都會控制我們能控制的事情，我們將努力奮鬥，顯著提高我們的營收績效。

As I entered the business, there are a few questions on my mind that I want to quickly answer. First, are we offering enough exciting brands and compelling prices ? Increasing frequency and enticing new customers begins with putting more treasure in the treasure hunt of product choices and the thrill of finding unexpected deals is the reason customers love to shop off-price and value retail for us.

當我進入這個行業時，我腦子裡有幾個問題我想快速回答。首先，我們是否提供足夠令人興奮的品牌和令人信服的價格？增加頻率和吸引新客戶始於在產品選擇的尋寶中投入更多的寶藏，而發現意想不到的優惠的興奮感是客戶喜歡為我們購買折扣和超值零售的原因。

It's also the key reason our business has a defensible moat around external competition and online retailers. We will review all product categories and adjust the assortments as needed to ensure that we have compelling treasure throughout the store to excite our customers.

這也是我們的業務在外部競爭和線上零售商周圍擁有防禦護城河的關鍵原因。我們將審查所有產品類別並根據需要調整品種，以確保我們在整個商店中擁有引人注目的珍品來激發顧客的興趣。

Next question is really our product assortment breadth of offering and value price value equation strong enough in all of our categories. We know that many of our product categories are doing well and they offer us opportunities to study and replicate their success.

下一個問題實際上是我們的產品種類的提供範圍和價值價格等式在我們所有類別中都足夠強大。我們知道我們的許多產品類別都表現良好，它們為我們提供了研究和複製其成功的機會。

We can capitalize in these early positive results in our Q line product, for example, and the successful apparel departments must continue expanding our reach and home categories. However, there is an opportunity in some categories to sharpen the value equation and improve customer choice counts. All in all, I see a good deal of opportunity to consistently grow our top line sales.

例如，我們可以利用 Q 系列產品的這些早期積極成果，而成功的服裝部門必須繼續擴大我們的業務範圍和家居類別。然而，某些類別有機會提高價值方程式並增加客戶選擇數量。總而言之，我看到了持續成長我們營收的大量機會。

Also in support of our sales initiatives, we have an opportunity to ramp up business analytics and product allocation. As previously reported the company installed a new enterprise resource system. And we had the opportunity to realize the efficiency savings from the new technology, which include driving sales through more accurate store-by-store product allocations and the ability to more accurately analyze market gaps.

此外，為了支援我們的銷售計劃，我們有機會加強業務分析和產品分配。正如之前報導的那樣，該公司安裝了新的企業資源系統。我們有機會實現新技術帶來的效率節省，其中包括透過更準確的逐店產品分配和更準確地分析市場差距的能力來推動銷售。

Another area to reduce our supply chain costs, which impacts our gross profit. Work is already underway in the supply chain where our distribution teams are beginning to uncover ways to reduce our transportation costs and the cost of processing product.

降低我們供應鏈成本的另一個領域，這會影響我們的毛利。供應鏈中的工作已經展開，我們的分銷團隊開始尋找降低運輸成本和產品加工成本的方法。

An example is vendor direct to store shipments that can be reduced and resulted in a significant savings. We also have line of sight to savings in transportation by renegotiating in inbound shipping rates. Both business analytics and supply chain efficiency initiatives will have a positive impact on our gross profit.

一個例子是供應商直接到商店的發貨量可以減少並帶來顯著的節省。我們也希望透過重新協商入境運費來節省運輸費用。業務分析和供應鏈效率措施都將對我們的毛利產生正面影響。

We also need a lower SG&A expense base. Overtime, our total sales have decreased while our SG&A has steadily increased. Clearly, this relationship is untenable and it must be reversed. Increasing sales will help, but we also need to find cost efficiencies to offset inflationary pressures.

我們還需要降低銷售、管理及行政費用基礎。隨著時間的推移，我們的總銷售額有所下降，而銷售、一般管理費用卻穩定成長。顯然，這種關係是站不住腳的，必須扭轉。增加銷售量會有所幫助，但我們還需要找到成本效率來抵銷通膨壓力。

We intend to deep dive review every cost center to ensure that the FCA is cost efficient and supports our go-forward strategies. I expect we're going to find a lot of smaller expenses that's going to add up to significant SG&A savings. We will find ways to lower our expenses and improve our operational execution.

我們打算深入審查每個成本中心，以確保 FCA 具有成本效益並支持我們的前進策略。我預計我們會發現許多較小的開支，這些開支加起來可以節省大量的銷售管理費用。我們將找到降低開支並提高營運執行力的方法。

I also want to dig into our new stores. Our recent new stores performance has been a divergence from our alone successful new store strategy. We're embarking on a detailed review of our performance to understand root cause issues and what's driving that underperformance.

我也想深入了解我們的新店。我們最近的新店表現與我們單獨成功的新店策略有所不同。我們正在著手對我們的績效進行詳細審查，以了解問題的根本原因以及導致績效不佳的原因。

Nonetheless, the company has a long history of successful new stores and our demographic market whitespace data tells us we have a sizable opportunity to grow our square footage. We are a growth company, and we will return to industry standard return on investment from new store growth.

儘管如此，該公司擁有成功開設新店的悠久歷史，而且我們的人口統計市場空白數據告訴我們，我們有很大的機會來擴大我們的面積。我們是一家成長型公司，我們將從新店成長中恢復到行業標準的投資回報。

And initially that we can accelerate also our successful store remodel program that Heather touched on. She outlined the remodel account and our success so far this year. But with a little over 20% of our store base remodeled, we have an opportunity to bring more stores current overtime. We're going to continue this good work and combine current store remodels with top market growth initiatives to ensure that we capture top line sales available to us in each marketplace.

首先，我們還可以加快希瑟提到的成功的商店改造計劃。她概述了改造情況以及我們今年迄今所取得的成功。但隨著我們對 20% 多一點的商店基地進行了改造，我們有機會讓更多商店加班。我們將繼續這項出色的工作，並將當前的商店改造與頂級市場成長計劃相結合，以確保我們獲得每個市場的最高銷售額。

Another big question we're going to work on is getting a fresh view of the quantitative characteristics and qualitative desires of our customer base. As a new shopping alternatives have been merged, it has likely shifted our customers' perception of value and selection.

我們要解決的另一個大問題是對客戶群的定量特徵和定性需求有一個新的認識。隨著新的購物選擇的合併，它可能改變了客戶對價值和選擇的看法。

We need to clearly understand our customers' current needs and understand our recently lapsed customers so we can more able and accurately focus strategic efforts on remaining or becoming their store of choice. We will use differential analysis to determine how to implement measured and meaningful steps to sharpening our overall value proposition, investments in categories of product to fulfill consumer demand, and service ,and convenience, options that might be expected in a neighborhood store. This work will take us a few months to complete, but I expect the insights will be a key driver of our long-range growth plan.

我們需要清楚地了解客戶當前的需求，並了解最近流失的客戶，以便我們能夠更準確地把策略重點集中在保留或成為他們選擇的商店上。我們將使用差異分析來確定如何實施經過衡量和有意義的步驟，以強化我們的整體價值主張、對滿足消費者需求的產品類別進行投資，以及鄰裡商店可能期望的服務、便利性和選擇。這項工作將需要我們幾個月的時間才能完成，但我預計這些見解將成為我們長期成長計畫的關鍵驅動力。

Well, as I just outlined, we have a lot of work to do. I plan on spending the first few weeks listening and learning from the internal team. My goal is to clearly understand what's working and accelerate that work as well as remove obstacles to our team can perform their jobs more efficiently.

嗯，正如我剛才概述的那樣，我們還有很多工作要做。我計劃在最初的幾週內傾聽內部團隊的聲音並向他們學習。我的目標是清楚地了解什麼是有效的，並加速這項工作，並消除我們團隊更有效地執行工作的障礙。

And some of the things mentioned on today's call may sound familiar to those of you that have been tracking our business for the past few years. As I mentioned at the beginning of the call, operational excellence is one of the five tenants of a successful company.

對於過去幾年一直關注我們業務的人來說，今天電話會議中提到的一些事情可能聽起來很熟悉。正如我在電話會議開始時所提到的，卓越營運是成功公司的五個要素之一。

I plan to lead the team through deep thorough analysis, narrowing focus on opportunities that had the most significant impact on sales and EBITDA, relentless tracking of results and course corrections as needed. In short, we will execute we will achieve operational excellence, and we will move fast.

我計劃帶領團隊進行深入徹底的分析，縮小對銷售和 EBITDA 影響最大的機會的關注範圍，不斷追蹤結果並根據需要進行修正。簡而言之，我們將執行我們將實現的卓越運營，並且我們將快速採取行動。

The Citi Trends is really fortunate to have such a talented team of people who are highly invested in our Company's success. And I feel fortunate to work with the Citi Trends team we will analyze together, we will learn together, we will execute initiatives together to significantly improve our shareholder value and look forward to updating you in the future on our progress.

花旗趨勢非常幸運能夠擁有這樣一支才華橫溢的團隊，他們為我們公司的成功投入了大量精力。我很幸運能夠與花旗趨勢團隊合作，我們將共同分析、共同學習、共同執行舉措，以顯著提高股東價值，並期待將來向您通報我們的進展。

I'd like to now return the call to our operator to facilitate questions. Christine, back to you.

我現在想將電話回撥給我們的接線生以方便提問。克里斯汀，回到你身邊。

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions)

謝謝。我們現在將進行問答環節。（操作員說明）

Michael Baker, D.A. Davidson.

麥可貝克，D.A.戴維森。

Okay, great. Hopefully you can hear me okay. It seems to me, you guys are heading in the right direction for maybe speed was the issue trying to get there a little bit faster. I imagine that a couple of times, Ken, in your past experiences in the 3 turnarounds you referenced, how long does it take to get typically to where you want to go?

好的，太好了。希望你能聽到我的聲音。在我看來，你們正朝著正確的方向前進，因為也許速度是試圖更快到達那裡的問題。我想，肯，在你過去提到的 3 次轉變的經歷中，有幾次，通常需要多長時間才能到達你想去的地方？

And then I'll ask a follow-up, which is where do you want to go? What do you think the right margin is for this business? I think you said you got there in 2019 on the board, EBITDA margins were close to [4 and change]. What do you think they should get back to ? Thanks.

然後我會問後續，你想去哪裡？您認為這項業務的合適利潤是多少？我想你說過你在 2019 年就加入了董事會，EBITDA 利潤率接近[4.改變]。你認為他們應該回到什麼地方？謝謝。

Thanks for your question, Mike. I appreciate it. Yes, in terms of turnaround and turnaround timing. I mean the answer to that question varies greatly on each company's situation. And depending upon the depth and breadth of some of the initiatives. My thoughts are is to take a few moments, as I mentioned earlier, really kind of evaluate what's going on do a lot of listening and learning a little bit of it goes, go slow to go fast philosophy. And then by the point of getting into about 30 days of learning and listening, your themes really do emerge. And what I've found is that there's often some low-hanging fruit that can be enacted right away, and you start to see some improvement in some areas of the business.

謝謝你的提問，麥克。我很感激。是的，就週轉和周轉時間而言。我的意思是，這個問題的答案因每個公司的情況而有很大差異。並取決於某些舉措的深度和廣度。我的想法是花一些時間，正如我之前提到的，真正評估正在發生的事情，做大量的傾聽和學習其中的一點點，慢走快走的哲學。然後，經過大約 30 天的學習和傾聽，你的主題就真正浮現出來了。我發現，通常有一些容易實現的目標可以立即實施，並且您開始看到業務某些領域的一些改進。

I'll touch briefly on transportation is a good example of something that can be done and we can see some results of that sooner than later. Whereas when you get into some of the assortment decisions on some of those things, it takes a little bit longer for the train to take effect and for those that really impact the marketplace. So the answer to your question is I view it as a journey, and it's difficult to give an exact timeframe on that. But that's essentially that would be where I would go.

我將簡要介紹交通運輸，這是可以做的事情的一個很好的例子，我們遲早可以看到一些結果。然而，當你對其中一些事情做出一些分類決定時，火車需要更長的時間才能生效，而那些真正影響市場的事情則需要更長的時間。所以你問題的答案是，我將其視為旅程，很難給出確切的時間表。但這基本上就是我要去的地方。

I think in terms of your second question, which was an EBITDA margin rates as you go back and you look at the history of the business, and I think we've been kind of in that and we should be in that mid-single digit range for sure.

我認為就你的第二個問題而言，當你回顧並查看業務歷史時，這是 EBITDA 利潤率，我認為我們一直在這方面，我們應該處於中個位數範圍是肯定的。

And I do think that as you look at the industry, particularly in value and our price in the market, actually sometimes will pay for a better EBITDA margin rate. But I certainly see an opportunity for us to get back in the mid single digits. And that is certainly our goal and focus we have. Hopefully, that answered your question.

我確實認為，當你觀察這個行業時，特別是價值和我們在市場上的價格，實際上有時會付出更好的 EBITDA 利潤率。但我確實看到了我們重返中個位數的機會。這當然是我們的目標和重點。希望這回答了你的問題。

Thank you. I appreciate that. Thank you.

謝謝。我很感激。謝謝。

Thanks, Mike.

謝謝，麥克。

(Operator Instructions) Jeremy Hamblin, Craig Hallum.

（操作員說明）Jeremy Hamblin、Craig Hallum。

Thanks and congrats, Ken. Looking forward to working with you. I wanted to first start with some sense of what you're seeing in terms of current trends in the business, you're lapping compares that are not as easy in Q2 as you saw in Q1.

謝謝並祝賀，肯。期待和你一起工作。我想先了解您在當前業務趨勢方面所看到的情況，您在第二季度進行的比較並不像第一季那麼容易。

And just in terms of, you with the performance in Q1 $186 million and change on total sales in others, kind of a typical or historical seasonality to the business in which Q1, Q4 are your strongest quarters. You noted that tax season was a little bit slower than normal this year because the filing started a week late.

就而言，第一季的業績為1.86 億美元，其他方面的總銷售額發生變化，這對業務來說是典型的或歷史的季節性，其中第一季、第四季是您最強勁的季度。您指出，今年的報稅季比正常情況慢一些，因為申報工作晚了一周。

I wanted to get a sense, Ken and Heather, in terms of what you're expecting, in terms of how that seasonality plays out this year and to get to your low single digit comp guide, you know how you might see that kind of flowing throughout the year?

肯和希瑟，我想了解你們的期望，今年季節性的表現，以及你們的低個位數比較指南，你們知道你們可能會如何看待這種情況全年流動？

Sorry, Ken and I are doing airplane signals to each other. Jeremy, you can see us and we are -- thanks for the question always good to hear from you. As far as the lap in Q2 and May is a tough one to say that is a read for the full quarter. It is the least important month of the quarter.

抱歉，肯和我正在互相發送飛機訊號。傑里米，你可以看到我們，我們——謝謝你提出這個問題，很高興收到你的來信。就第二季和五月的一圈而言，很難說這是整個季度的讀數。這是本季最不重要的月份。

June and July are by far more impactful as we get into summer and we get into it and early back-to-school, very important seasons as you know. So yeah, maybe a little bit more difficult lap. But as I mentioned in my prepared remarks, we're set up, we're ready.

六月和七月的影響力要大得多，因為我們進入了夏季，我們進入了夏季，並且提早返校，這是非常重要的季節。所以是的，也許一圈有點困難。但正如我在準備好的發言中提到的，我們已經準備好了。

We know that our earlier set works our customer needs from time to play and out there. They're their spend for important timeframes like the ones that are that are coming up. So we feel good about that. As far as how the balance of the year looks, I hear you that Q1 is usually looking like Q4. Our intent is that Q4 this year will be stronger than Q1 from a dollar sales perspective. The builds are based on history, but with some breaking in there because it's our challenge is break the build rates build more sales quarter to quarter.

我們知道，我們早期的系列可以滿足客戶在比賽和比賽中的不同需求。它們是他們在重要時間範圍內的支出，例如即將到來的時間範圍。所以我們對此感覺良好。至於今年的餘額情況，我聽說第一季通常看起來像第四季。我們的目的是，從銷售額角度來看，今年第四季將強於第一季。這些構建是基於歷史的，但也有一些突破，因為我們的挑戰是打破構建率，逐季度建立更多的銷售。

And then let's remember, there are some -- we've talked about this before with the calendar shift, and there's some sales that move into Q2 out of Q3. So it's going to be a little bit different throughout the year. And but we're planning or watching. And the most important thing is that our inventory is right and that it's set up it correctly in the store and we've got product that's compelling and, our customer will respond.

然後讓我們記住，有一些 - 我們之前已經討論過日曆轉換，並且有一些銷售從第三季度轉移到第二季度。所以全年都會有些不同。但我們正在計劃或觀察。最重要的是，我們的庫存是正確的，並且在商店中的設定正確，我們擁有引人注目的產品，我們的客戶會做出回應。

All of the initiatives that we have in place will support that as well you've heard us talk about it, remodels, marketing and the testing and learning that we've been doing and has been enhanced with our ERP system in our ability to better analyze data and to react and act much more quickly. So we feel good about hitting our target top line for the year. Ken, do you want to add anything?

我們採取的所有舉措都將支持這一點，您也聽到我們談論它、改造、營銷以及我們一直在做的測試和學習，並且通過我們的 ERP 系統得到了增強，我們有能力更好地分析數據並更快地做出反應和行動。因此，我們對實現今年的目標收入感到很高興。肯，你想補充什麼嗎？

Jeremy, it's a good question and certainly everything that Heather. So there, your central question is what are we seeing in the current trends and it kind of goes back to what I said earlier in the script, I mean, there are certainly some things going in the business right now that looks good, and we have a lot to build on and that we can accelerate those results.

傑瑞米，這是一個很好的問題，當然也是希瑟的一切。所以，你的核心問題是我們在當前趨勢中看到了什麼，這可以追溯到我之前在劇本中所說的，我的意思是，現在業務中肯定有一些看起來不錯的事情，我們有很多值得借鏡的地方，我們可以加速取得這些成果。

And I mentioned earlier the resource, the remodels, you're just getting those completed. You'll see some momentum in those moving forward, which is exciting. We have a handful of categories that have had a reasonably good start for the year and appears to be continuing and we can accelerate those things. So from my desk, I have a good deal of confidence that we can continue to accelerate our business going forward.

我之前提到過資源、改造，你剛完成這些工作。你會看到那些前進的動力，這是令人興奮的。我們有一些類別今年有一個相當好的開局，並且似乎會繼續下去，我們可以加速這些事情。因此，在我的辦公桌上，我對我們能夠繼續加速我們的業務發展充滿信心。

Got it. That's helpful. And then wanted to come back to the point that you made on your SG&A and expense management. So it looks like I think by my math, on your SG&A dollars guide for the year, you have about $2 million lower than what you were previously expecting.

知道了。這很有幫助。然後想回到您在 SG&A 和費用管理方面提出的觀點。因此，根據我的數學計算，在您今年的 SG&A 美元指南中，您的預算比您之前的預期低了約 200 萬美元。

It sounds like you feel like there is more opportunity than that, you know, over time here over the next year or two. Can you give us a sense of what you think kind of obviously you're not new to the business, but can you give us a sense for what you think the magnitude of range might be on that opportunity. I mean, are we talking about it's something that's on the order of $10 million in annualized savings or something bigger than that, anyway to square it up?

聽起來你覺得隨著時間的推移，未來一兩年這裡會有更多的機會。您能否讓我們了解您的想法，顯然您對這個業務並不陌生，但您能否讓我們了解您認為該機會的範圍大小。我的意思是，我們談論的是年化儲蓄 1000 萬美元左右的東西還是比這個更大的東西，無論如何要平方？

Yes, Jeremy, I'll start with that and we'll certainly give it to Heather for follow up on that. I think in a couple of things, I'd say about that. Obviously, we, as you mentioned, have lowered our guidance for the back half.

是的，傑里米，我將從這個開始，我們當然會將其交給希瑟進行跟進。我認為有幾件事我想說一下。顯然，正如您所提到的，我們已經降低了對後半段的指導。

In terms of expenses, which is a good start, as I mentioned in my script, the answer to your question is TBD. We're going to be going through each of our expense centers, taking a really deep look at where we are at and looking for opportunities for efficiencies.

就費用而言，這是一個好的開始，正如我在腳本中提到的，你的問題的答案是待定。我們將仔細檢查每個費用中心，深入了解我們所處的位置並尋找提高效率的機會。

And I think there's going to be some things that will unfold over time that we'd be more equipped to better share in a solid answer to your question in the future here. We had some immediate line of sight of some areas, as I mentioned, in transportation that we're encouraged about in DC processing, but there's a whole lot more there.

我認為隨著時間的推移，有些事情將會逐漸展開，我們將來會更有能力更好地分享對你的問題的可靠答案。正如我所提到的，我們對一些領域有一些直接的視野，在運輸方面，我們鼓勵在 DC 處理中進行這些領域，但那裡還有更多。

So we definitely know that as we step back and think about our SG&A rate, it needs to be lowered. It's certainly untenable, as I mentioned in the script earlier, and we're going to continue to work on it that I believe the answer, your question will be just over time or we're going to find bits and pieces here that will make us a much more efficient organization.

因此，我們肯定知道，當我們退一步思考我們的 SG&A 率時，它需要降低。這當然是站不住腳的，正如我之前在劇本中提到的，我們將繼續努力，我相信答案，你的問題將隨著時間的推移而出現，或者我們將在這裡找到一些零碎的東西，這將使我們是一個更有效率的組織。

And Heather, if you'd add anything to that?

希瑟，你能補充點什麼嗎？

Yeah, and not surprising, Jeremy, your math is spot on, right? It's about 1.4 to 2.8 on my math, in the range of the amount that we've reduced SG&A in our guide. So we are able to do that because we're selling our Citi Trends shops, where we're a nimble, agile team.

是的，這並不奇怪，傑里米，你的數學很正確，對吧？根據我的計算，大約是 1.4 到 2.8，在我們指南中減少 SG&A 的金額範圍內。所以我們能夠做到這一點是因為我們正在銷售我們的花旗趨勢商店，我們是一個靈活的團隊。

We're able to find savings across the board on discretionary spend, nothing that will and harm our ability to achieve our initiatives. Nothing that will harm our ability to achieve our financial goals for the year.

我們能夠在可自由支配的支出上全面節省開支，而不會損害我們實現計劃的能力。沒有任何事情會損害我們實現今年財務目標的能力。

So, Ken's point longer-term, this is a moment of he talked about, let's let's get the data study and analyze so that that's what we will be doing with Ken's leadership and more to come as we learn and uncover. But I think we've proven that we are able to control our SG&A and can make the adjustments that need to be made in order to bring that line down is something that so we'll partner with Ken on overtime is going to be great.

因此，從長遠來看，肯的觀點是他談到的，讓我們進行數據研究和分析，以便這就是我們將在肯的領導下所做的事情，以及隨著我們學習和發現的更多內容。但我認為我們已經證明我們能夠控制我們的SG&A，並且能夠做出必要的調整來降低這條線，所以我們在加時賽上與肯合作將會很棒。

Great. Last one for me. In terms of getting back to, let's say, that to get to a mid-single digit operating margin or even just to get to that 4%, where do you think your gross margin needs to be to get there? You know, I think as you look at it, there's been some nice improvements that have been made versus where the business was, let's say, in 2018 or 2019.

偉大的。最後一張給我。就回到過去而言，要達到中個位數的營業利潤率，甚至只是達到 4%，您認為您的毛利率需要達到多少？你知道，我認為當你看到它時，與 2018 年或 2019 年的業務狀況相比，已經有了一些不錯的改進。

And obviously, you just made the implementation on the systems upgrades that is creating some opportunity. But really to get to that, that plan I mean, are you targeting 40% something higher than that? And any color that you might be able to share would be helpful.

顯然，您剛剛實施了系統升級，這創造了一些機會。但真正要實現這個目標，我的意思是，你的目標是 40%，比這個更高嗎？您可以分享的任何顏色都會有所幫助。

Yes, for sure, Jeremy, as you know, we've been in the high-30s, right? We're very proud of our gross margin rate, but we think we've got room to grow and we're shooting to have that start with the floor over time on the backs of freight rates and improvements.

是的，當然，傑里米，正如你所知，我們已經30多歲了，對吧？我們對我們的毛利率感到非常自豪，但我們認為我們還有成長的空間，隨著時間的推移，我們將在運費和改進的支持下從底線開始。

Our supply chain team shout out to them are tireless and being able to find opportunities to improve that line. Markup and expansion, we've been talking about that throughout the call and plus mark down managements, right, and that's where the ERP system comes in. And then and finally, of course, getting shrinked back to and nice low levels. It's all in the mix. So certainly starting with the 4 and we're going to keep pushing have to make that happen.

我們的供應鏈團隊向他們喊話，他們不知疲倦，並且能夠找到改善該生產線的機會。加價和擴張，我們在整個電話會議中一直在談論這個問題，再加上減價管理，對吧，這就是 ERP 系統的用武之地。當然，最後也是最後，縮小到相當低的水平。一切都在混合之中。所以當然從 4 開始，我們將繼續努力實現這一目標。

A follow up on that shrink comment, I think previously because you had noted on the last call in March that there was some elevated shrink and it sounds like maybe that's that not only remained elevated, but maybe a little bit worse than you had expected.

我想是對收縮評論的後續行動，因為您在三月份的最後一次電話會議上註意到，收縮率有所上升，聽起來也許這不僅仍然保持在較高水平，而且可能比您預期的還要糟糕一些。

So I think previously, Heather, you had quantified it as maybe a 25 to 30 basis point impact for FY24, is what you had expected. Can you give us an update on where that expectation is on shrink? And I gather that that's probably not something that can be cured incredibly quickly, but how long do you think how many quarters or possibly longer than that do you think before we can see significant improvement and get it to a level where you're our content.

所以我認為，Heather，您之前已經將其量化為對 2024 財年可能產生 25 到 30 個基點的影響，這正是您所期望的。能為我們介紹一下收縮預期的最新情況嗎？我認為這可能不是可以很快治癒的事情，但是您認為需要多少個季度或可能比這個時間更長的時間才能看到顯著的改進並將其達到您滿意的水平。

Yes. Thanks, Jeremy. And I'm going to have to make this the last question. So we can move on to our next analyst. But thanks for the call or the question. Really appreciate it as always, that shrink is continuing to be concern, right? I will say and remind you that this is not new for Citi Trends.

是的。謝謝，傑里米。我必須把這個當作最後一個問題。這樣我們就可以轉向下一位分析師了。但感謝您的來電或提問。一如既往，真的很感激，那個心理醫生繼續受到關注，對嗎？我要提醒您的是，這對花旗趨勢來說並不新鮮。

We have managed strength well over our history, but it is a bit of a sign of the time. It's a bit of some that we can't control external we do what we can. It's all about safety when it comes to external tests, we've been very much focusing on internal fast, as I mentioned in my prepared remarks. So was it at another surprise in the quarter? Disappointing surprise? Yeah, it was. We expect it to come down over time.

我們在歷史上一直很好地管理著實力，但這只是一個時代的象徵。有些事情是我們無法控制的外在因素，我們只能盡力而為。當談到外部測試時，一切都與安全有關，正如我在準備好的發言中提到的那樣，我們一直非常關注內部快速測試。那麼這是本季的另一個驚喜嗎？令人失望的驚喜？是的，確實如此。我們預計它會隨著時間的推移而下降。

But this takes time, right, because shrink is a function of physical inventory counts. We do, as you know, counts a portion of our fleet each month. So I expect this to still be a headwind, but we'll start to see it mitigating in the second half of the year as we are lapping of the beginning of what I would call a surprise period, right, and then into the following year, we'll start to see it improve even more based on all of the levers that we're pulling to put controls in place and into to get ahead of it. So wish us well, please.

但這需要時間，對吧，因為縮減是實際庫存數量的函數。如您所知，我們每個月都會對我們機隊的一部分進行統計。因此，我預計這仍然是一個逆風，但我們將開始看到它在今年下半年有所緩解，因為我們正在經歷我所說的驚喜時期的開始，對吧，然後進入下一年，我們將開始看到它的進一步改進，基於我們為將控製到位並領先於它而拉動的所有槓桿。所以請祝我們一切順利。

(multiple speakers) like I think you can just add to that a little bit. I just going to say on the backside of that, and I know you guys are have been really, really focused on shrink, which is good and certainly would appear that you've taken the right steps to get the shrink rate and accommodated in the accrual rate going forward, and that's contained inside of our guidance. So it's an opportunity for us to continue to improve that. You should feel confident that it has been accounted for appropriately about the business.

（多個發言者）就像我認為你可以補充一點。我只想說，我知道你們真的非常非常關注收縮，這很好，而且肯定會顯得你們已經採取了正確的步驟來獲得收縮率並適應未來的應計利率，這包含在我們的指導中。因此，這是我們繼續改進這一點的機會。您應該確信它已被適當地考慮到業務中。

Good point, Ken, thank you so much. Christine, do we have any other questions?

好點，肯，非常感謝你。克里斯汀，我們還有其他問題嗎？

John Lawrence, The Benchmark Company.

約翰·勞倫斯，基準公司。

Thank you. Good morning. Ken, can you talk a little bit about when you were at Gabe's and looked at that transition? I know it's a smaller store base, et cetera, compare and contrast a little bit when you got there, you know the business on what's happened and I'm sure I assume that that's how some of these business cases are coming about, but can you talk about that and what you were able to adjust to and to get that business back to the level you wanted it and what were some of the major steps to make that happen?

謝謝。早安.Ken，你能談談你在 Gabe 的時候看到的轉變嗎？我知道這是一個較小的商店基地，等等，當你到達那裡時進行一點比較和對比，你知道所發生的事情，我確信我認為這就是其中一些業務案例的發生方式，但可以您談到了這一點以及您能夠進行哪些調整並使該業務恢復到您想要的水平以及實現這一目標的一些主要步驟是什麼？

Yeah, for sure, John. Happy to talk about that. Yeah, when I came into the business, some of you might remember that private equity firm in capital and purchased it and they had bought it from the family themselves.

是的，當然，約翰。很高興談論這個。是的，當我進入這個行業時，你們中的一些人可能還記得那家私募股權公司的資本併購買了它，他們自己從家族那裡購買了它。

And so, as with a family business at times, you run into a situation where some things are good, but not everything. And so I mentioned earlier, the five balanced approach that I've taken the business and actually applying all of those principles there and found it as with every business. There's some things that are going quite well.

因此，就像家族企業有時會遇到這樣的情況：有些事情是好的，但並非一切都是好的。因此，我之前提到過，我在業務中採用了五種平衡方法，並實際應用了所有這些原則，並發現它與每個業務一樣。有些事情進展順利。

Engaged, they have to be quite good deal-making, and they were amazing and putting treasure in the treasure hunt. However, the replication in accuracy that was was was not there. So what we've embarked upon was really, first and foremost there, beginning operational excellence.

訂婚後，他們必須非常擅長做生意，而且他們非常出色，並且在尋寶活動中投入了寶藏。然而，當時的準確性並不存在。因此，我們首先要做的就是開始卓越營運。

And I really highlight and find that to be the foundation of a great company, which as you heard the old saying retail is detail, right ? You have to get in there just to make sure that everything you do is replicable and consistent and shows up for the consumer in that way.

我真的強調並發現這是一家偉大公司的基礎，正如你聽到的那句老話，零售就是細節，對吧？你必須進入那裡只是為了確保你所做的一切都是可複製的和一致的，並以這種方式向消費者展示。

So that's really kind of step one, and then step two actually is helping get the teams really fully engaged and what that means basically is really getting people excited about winning and sometimes and you are working in turnarounds, people have been kind of used to seeing negative numbers and it kind of can wear on individuals over time. So there's a key ingredient here about creating some little wins and getting folks excited and the more that tends to kind of reach higher engagement. So that was kind of the next piece of the puzzle.

所以這確實是第一步，然後第二步實際上是幫助團隊真正充分參與，這基本上意味著真正讓人們對獲勝感到興奮，有時，當你在扭轉局面時，人們已經習慣了看到負數隨著時間的推移會對個人產生影響。因此，這裡有一個關鍵因素，那就是創造一些小勝利，讓人們興奮起來，而越多的勝利往往會達到更高的參與度。這就是下一個難題。

And then, as I mentioned earlier on dialing in and getting the branding and the value proposition, right, marketing is a key piece of this known, much necessarily marketing spend and essentially a voice of the company and making sure that it's crystal clear to the consumer can see and understand at the edge. I can kind of go on a little bit that you kind of get the idea here that really working through those five tenants that I mentioned earlier are really in a sequential order.

然後，正如我之前提到的，關於撥入並獲得品牌和價值主張，對吧，行銷是這一已知的、非常必要的行銷支出的關鍵部分，本質上是公司的聲音，並確保它對消費者來說是非常清楚的。我可以繼續說一點，您可以在這裡了解到，真正處理我之前提到的這五個租戶實際上是按順序排列的。

So I still yet evaluating Citi Trends to decide which and what we need to be focused on it. I would not supposed from one minute to walk in the long answers. But I do have a lot of questions and then couple that with my past experience, I think we're going to find any internal team's knowledge. We're going to find the right formula for Citi Trends that I'm incredibly confident that we can replicate some of these past experiences that I've had and perhaps even beyond.

因此，我仍在評估花旗趨勢，以決定我們需要關注哪些內容。我不應該從一分鐘就走完長長的答案。但我確實有很多問題，然後結合我過去的經驗，我認為我們會找到任何內部團隊的知識。我們將為花旗趨勢找到正確的公式，我非常有信心我們可以複製我過去的一些經驗，甚至可能超越我的經驗。

Great. Thanks for that. And just a quick follow-up. Can you give Heather, can you give any kind of a little deeper dive into those stores that have been remodeled that might have had that marketing spend as well in the right categories and how significant are some of those better stores' performance, the average it was a [3], but how well that some of those successful stores really perform in the quarter?

偉大的。感謝那。只是快速跟進。您能否給希瑟提供一些更深入的信息，了解那些經過改造的商店，這些商店可能在正確的類別中投入了營銷支出，以及其中一些更好的商店的績效有多大，平均績效如何？ [3]，但是這些成功的商店中的一些在本季度的實際表現如何？

Yeah. Thanks, John, for the question, and I appreciate I know you're a big supporter of our CTx format. Well, I won't disclose exact details. But what I will tell you is that, as you know, with these for calling them are incremental initiatives, right, marketing remodels, inventory rebuilds, et cetera, et cetera. I mean, we're tweaking the dials as we learn.

是的。謝謝約翰提出這個問題，我很感激我知道您是我們 CTx 格式的大力支持者。好吧，我不會透露具體細節。但我要告訴你的是，如你所知，這些所謂的增量舉措，對吧，行銷改造、庫存重建等等。我的意思是，我們一邊學習一邊調整刻度盤。

And that combination of remodel and marketing have had a particularly exciting results that we're looking at and saying, yes, we always do how do we replicate that. Where do we replicate that? So it's small yet. It's a learning, but it's an exciting one. And as well, we'll apply it going forward, in a measured manner. But yeah, I mean, it's helping for sure.

改造和行銷的結合產生了特別令人興奮的結果，我們正在研究並說，是的，我們總是在做我們如何複製它。我們在哪裡複製它？所以它還很小。這是一種學習，但也是一種令人興奮的學習。同樣，我們將以謹慎的方式繼續應用它。但是，是的，我的意思是，這肯定有幫助。

Great. Thanks. Good luck.

偉大的。謝謝。祝你好運。

Thank you. We have reached the end of the question-and-answer session. Mr. Seipel I will now turn the floor back over to you for closing comments.

謝謝。我們的問答環節已經結束。Seipel 先生，我現在將發言權交還給您，請您發表總結意見。

Thank you. I certainly appreciate everyone joining us today on our call. Thank you for the good questions and your time and attendance here, and we look forward to updating you in the future on our progress. And thank you very much.

謝謝。我當然感謝今天參加我們電話會議的每個人。感謝您提出的好問題以及您的時間和出席，我們期待將來向您通報我們的最新進展。非常感謝你。

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

女士們、先生們，今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與，祝您有美好的一天。