SAVANNAH, Ga. (AP) -- Citi Trends Inc. shares sank Wednesday after the clothing retailer reported disappointing fiscal fourth-quarter sales and said it expects a loss for the period.
The clothes and accessories retailer is trying to make its products and prices more attractive to shoppers, who have grown more selective about their purchases amid the sluggish economy. Citi Trends said it can now compete with anyone on price and is making progress on fashion issues, which it believes it can solve in 2013.
Total revenue for the period that ended Feb. 2 fell 1.5 percent to $175.7 million from the prior year's fourth quarter. The company got an $8.8 million benefit from an extra week in the recent quarter. Analysts polled by FactSet expected revenue of $191.1 million for the period.
Sales at stores open at least a year fell 11.8 percent. That is a key indicator of a retailer's financial performance since it excludes recently opened or closed stores. Citi Trends reported both quarters on a comparable 14-week basis.
The company said delays of 2012 tax refunds were the cause for weaker sales trends. Due to the drawn out debate over the fiscal cliff, the IRS moved out the date it would start accepting tax returns to Jan. 30 from Jan. 13 a year ago. That delayed refunds, which can boost sales.
Citi Trends said the delay pushed all its tax refund-driven sales into the 2013 fiscal year. In the last two weeks of January, its sales dropped by over $16 million, which the company believes was due primarily to the delay in tax refunds. That cut sales at established stores by 7.5 percent.
Citi Trends expects to report a loss of 7 cents per share for the fourth quarter. Wall Street forecast a profit of 34 cents per share.
Chairman and CEO Ed Anderson said the company ended the year with its inventory and balance sheet in good shape. It has about $55 million in cash and investments and no debt as of the end of the fiscal year.
Citi Trends is expected to report its full fourth-quarter results on March 15.
The company, based in Savannah, Ga., operates 513 stores in 29 states.
Shares fell $1.83, or 13.7 percent, to $11.55 in afternoon trading. The stock has traded in a 52-week range of $9.99 to $16.42.