Greetings, and welcome to the Citi Trends 1Q 2022 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we’ll conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, May 24, 2022. I would now like to turn the conference over to Nitza McKee, Senior Associate. Please go ahead.

Thanks Malika and good morning, everyone. Thank you for joining us on Citi Trends first quarter 2022 earnings call. On our call today is Chief Executive Officer, David Makuen; and Vice President of Finance, Jason Moschner. Our earnings release was sent out this morning at 6:45 a.m. Eastern Time. If you have not received a copy of the release, it's available on the company's website under the Investor Relations section at www.cititrends.com. You should be aware that prepared remarks today made 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. Therefore, you should not place undue reliance on these statements. We refer to 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. I will now turn the call over to our Chief Executive Officer, David Makuen. David?

Thank you, Nitza. Good morning, everyone. And thanks for joining us today on our first quarter fiscal 2022 earnings call. This morning, I will begin by reviewing the ongoing transformation of our business and highlight our financial and operational results for the first quarter fiscal 2022 before updating you on our focus on our highest priority, providing for our customers and associates during tough times and how we are doubling down on helping them show up for whatever comes their way. Then Jason Moschner, our VP of Finance and Principal Financial and Accounting Officer, will elaborate on our financial results and a few other items related to our outlook. Before turning to our results, I want to recognize that the macro environment has been difficult for our customers, given a number of factors, including ultra-high inflation that is driving high food prices, rents, and gas prices. These factors coupled with geopolitical instability and lapping the stimulus from last year, disproportionately impact our core customers, and also our associates who work tirelessly to operate our 600-plus store fleets. While it hasn't been easy for them, they are resilient, strong, and able to weather this storm just like they have for so many other storms during the last 20 years. Importantly, Citi Trends will always be dedicated to our neighborhoods and will always be there for our loyal and new customers. Our unique ability to listen to the African, American, and Latinx families we serve and respond with the right trends, fashion, and essentials at the right time in the right store has never been stronger. No matter the headwinds, it's our responsibility to keep it fresh and fun for the family each and every day. I want to thank our associates throughout all functions and stores that keep Citi Trends purpose…

Thanks David, and good morning, everyone. For the first quarter of fiscal 2022, the operating environment remained difficult with headwinds of extreme inflation, freight pressures, and lapping government stimulus to name a few. Despite this, we delivered total sales in line with our expectations, achieved gross margin well above the levels in 2019 and prior, and applied rigorous discipline to controlling our expenses resulting in earnings per share that exceeded the top end of our prior guidance. We ended the quarter with a strong cash balance and a clean inventory position leaving us poised as David said to chase trends within our six cities or categories, keeping our powder dry so we can appropriately respond to our customers' needs based on the time of year and occasion. Now, let's turn to the specifics of our Q1 financial results. As mentioned in our earnings release, we are comparing select operating results for Q1 of 2022 relative to Q1 of 2019 in order to provide a more normalized comparison of performance. In addition, certain results are adjusted with 2022 figures adjusted to exclude the gain from selling our distribution center in 2019 adjusted to exclude expenses related to a proxy contest. Please see our earnings release for reconciliation of these adjustments. Total sales for the first quarter were $208 million, an increase of 1.6% compared to Q1 of 2019. Comparable store sales declined 29% versus 2021 on top of a 35% increase last year versus 2019, representing a stack of 5.8%. Our conversion in basket remains strong, which tells us our content is resonating. Earnings per share was $3.59 compared to $0.65, or as adjusted $0.42 compared to $0.72. Gross margin was 39%, 150 basis points higher than the first quarter of 2019. Our continued improvement in quarterly gross margin rates versus…

Thanks Jason. Before we take your questions, I want to provide some additional beliefs in our customers and business model that give us the confidence to navigate current unpredictable times and make the ongoing improvements to our model to maximize profitability in the years ahead. First about our customers. Our associates make it personal and often know their customers on a first name basis, and even what's happening on in their lives. Across our fleet, we play in a central role in the neighborhood where we quite literally help bring opportunities to life by suggesting value outfits for her and him and the kids for both work and play, suggesting value toys and accessories for the little ones, suggesting new value beauty items, tailored towards black and Latinx women and so much more. At the crux of this relationship is a high level of loyalty and dedication our customers and associates had with our brand. It's a special bond that is not easily eroded by tough times. Our customers know tough times and they're equipped to muscle through. Its characteristic is also an indelible strand of our DNA that we will leverage to help solve for the current times while laying the groundwork for future growth. Regarding our business model. When I take a step back and look at how we manage the business through an incredibly challenging period, we are definitely behaving like a 75 year old startup. The modernization of the Citi Trends brand is unfolding as planned and can be felt in our people, our culture and our operations. Our 75-year history is critical to understanding how durable our model is from where we uniquely sit in the neighborhood to the curated assortment we offer to the unique associate team that takes respect all to a new level. If you walk away with one thing today, it's the power and underlying foundational strength of a legacy value brand built by and for the neighborhoods it has served from many decades in the past and for many decades in the future. I am humbled to be a member of a team that shares my passion for growing and building something really special for the customers and associates that care deeply about the success of Citi Trends. For this year and beyond as you've heard before, we remain focused on four strategic priorities; number one, growing our fleet and expanding our customer base; number two, optimizing our product mix; number three, reinvesting in our infrastructure; and number four, making a difference within the communities we serve. In closing, I want to, again, thank the entire Citi Trends team for their dedication and all their efforts for making a difference in the communities we serve, their passion to live our purpose. Life is best when you live bold, live proud and respect all is definitely shining bright. With that, we are now ready to take your questions. Malika?

Thank you. [Operator Instructions] Our first phone question is from the line of Dana Telsey with Telsey Advisory Group. Please go ahead. Your line is open.

Good morning, everyone. Hello, David and Jason. As you think about the current environment and the state of the consumer with inflationary headwinds with your customer, how are you managing on price? What -- how much pricing are you passing on to them? What have you seen be accepted, not be accepted by category? And how are you managing the inflationary headwinds internally in terms of labor costs? And then lastly, any update on how the CTx stores are performing versus the base and the 20 new stores versus the prior guide for 35, do those push off into 2023 and is some of that because it's just hard to get the goods for the stores, whether it's HVAC equipment or other things? Thank you.

Hi, Dana. Good morning. Nice to hear from you and thanks for your good questions. I'll try to tick through some of those from the start. On price, I'll tell you that we've really not changed our stance versus what we've shared prior even dating back into 2021. We have maintained that. We can nudge price up in the case of improving value, features, and benefits, and that's been working consistently up until today, and we expect it to work throughout the rest of this year into the future. We have maintained value on sort of the essential band within our cities, call that underwear, socks, the things that you kind of need, less trend driven, more basic driven, we've maintained those prices and really not passed on any increases to the customer. And then thirdly, a lot of our newness, so not like SKU per SKUs, but newness in the area of trends. We've really managed not only the price in relationships and kind of resiliency by our customer, but also manage the ability for us to price the trend right and bring it in at lower than maybe 2019 and prior inventory levels, which you’ve heard us talk about, and celebrate the trends, selling out, and moving on at the next one. So, I think we've managed kind of price and assortment really successfully, and we're going to stay the course on all those points. On the labor headwind, I think at the end of the day, we've -- similar answer to price. We're going to stay the course. As you've heard me speak in the past, we haven't had to do drastic wage increases, but rather we've done very surgical and strategic and tactical wage increases where needed, and we've treated our people well from a cultural standpoint and from a benefit standpoint. So, the kind of the total package is working well for us, and we expect that to continue for the future without any big disruptions. And we've had great loyalty from our teams in our distribution centers as well as in our stores, and of course in our headquarters, that indicate a passionate team, ready to serve the customer no matter what function you're a part of. From a CTx perspective, we are really pleased with the results so far. We're seeing lifts higher than we did in 2019 and prior remodels. And we've shared that we expect to see high-single-digit lifts and we're right on plan for the initial class. Really exciting, we'll have basically 20 open by tomorrow, and that's something that we're pretty pumped about and we'll do another tranche here in the Q2 period to up that number to close to 30 by the end of Q2. So, we're excited about where that's going. And then the -- refresh me on your last question, if you don't mind.

On the number of store openings going to 20 from 35, is that because it pushes into 2023 or is it the headwinds of getting supplies to get a store open?

It's actually -- it's not necessarily either one right now. Let me answer the first piece of your question. We expect to grow stores and hit our thousand store target. We have no question in that number that we've shared with everybody prior. The pace of which we do that, we're just kind of slowing that a little bit this year. We expect to return to a faster pace in 2023 and 2024 and beyond, and we'll move-- so we'll move that 15 for sure. In fact, most of the deals are already in flight or done. We'll move those into 2023. In respect to lowering it, it's really just a more prudent measure on our part. We want to make sure that we're able to spread our resources throughout the company around on, not only managing the current business, but getting new stores off to a great start, managing the remodels in an effective way, and running our core business in these times of challenges. So, that's kind of really how we thought about it, but we've got tons of deals in the pipeline. We're excited about upping the number in 2023 and upping it from there in 2024 and so on.

Got it. One last thing, cadence of the quarter, what did you see in terms of cadence of the quarter, whether it's lapping stimulus or tax refunds? And how is the exit rate, and what's happening so far Q2 to date? Thank you.

Sure. Good question. The cadence to the quarter, the short answer is it got better by month. So, from Feb through April, we saw sequential improvement in our transaction counts. We saw a consistent and strong conversion level and a consistent and strong basket. So that was encouraging throughout the quarter. And then, as we've entered the early parts of Q2, we've seen a continued improvement off of the improvements we saw month-to-month in Q1, and I'll stick a quick plug-in for some of our incremental initiatives that we've talked about. The last couple of calls are taking hold. They're in sort of test learn, some are in rollout gradually over Q2 and Q3, but we're liking the traction we're seeing and that's contributing to the improved momentum.

Thank you.

You're welcome. Have a great day.

You too.

Thank you. Our next question is from the line of Jeremy Hamblin with Craig-Hallum Capital Group. Please go ahead. Your line is open.

Thanks. I want to start by just following up on that last question and great to hear that there's some improved sequential results. I wanted to clarify. So, historically, there's been this typical seasonality where Q1 on an absolute dollar basis is significantly stronger than Q2 and Q3. I wanted to understand if you -- just maybe a little bit more color on expectations around Q2 because of how tax refunds didn't play out as typical. Are you expecting Q2 sales to be up from Q1?

Jeremy, hello. Thanks for calling in and asking some questions. While today we're not disclosing any guidance related to the individual quarters of the year. What I can tell you is that the Q2 to Q4 trend run rate is very similar in our projection and guidance to what we stated earlier, meaning it gets better over the Qs and ends with the numbers that we've guided as of today. So, we're -- while we're not sharing the relationship with every single quarter, what I can tell you is the sequential improvement offers us confidence that we'll accomplish that bill from quarter-to-quarter. The order and the way I think about it is we expect to have a strong remaining summer inclusive of July 4, which is an important time period for the brand. Then, we roll into a more normalized in the past three years that is back-to-school season. We're well positioned from a current and packaway standpoint to feed back-to-school. And then as you can imagine, we're putting the right emphasis and priorities around winning the gifting season in Q4. So, that's kind of some color around how the rest of the year shapes up in our minds.

What -- let me ask it just in a slightly different context and I apologize. But you cut the full year guidance by roughly $60 million. But Q1 played out kind of right down the pipe of where you're expecting it. So, I'm just trying to understand versus your prior expectations in March, is that $60 million change kind of coming equitably over the course of the remaining three quarters? Are you just having a little bit lower expectation in Q4? Or is it more in the near-term where we thought we might get a little more bounce in Q2, Q3 previously, and now we're thinking it's seasonally going to play out a little bit more like it might typically? I know you're going after that summer season though.

Yeah. Yeah. No, no. Good question. Yeah. I think we can give you some directional insights that the inflationary pressures are certainly lingering. And as we know from all news, expected to linger a little longer than we all hope. And so, you can take it away that Q2 has got a little more of that $60 million decline than Q3 and Q4. I think that's a fair takeaway. But they all -- as you can imagine, we sliced away a bit from each quarter to appropriately respond to the pressures from inflation and such.

Great. That's helpful. And then, just wanted to get into the inventory. So, you have some packaway. Inventory levels on a year-over-year basis are up about 27%, came in maybe a little bit higher than I expected, but consistent with what we're hearing from a lot of retailers in recent weeks that inventory levels for a variety of reasons are higher than expected. In terms of thinking about your gross margins, which I think probably came in pretty close to where you might have been expecting in Q1. On a go forward basis, do you have some concerns at all about the risk of maybe markdown rates being a little bit higher, not just because -- like one, I wanted to understand if your inventory levels were -- are where you expected them to be two, three months ago? And then two, given that there's a lot of competitors also with higher inventory levels, certainly than they expected, are you starting to see any incremental pressure from slightly higher promotions? Are you thinking that maybe clearance rates are going to be up a tick, certainly from where they were a year ago?

Good questions, Jeremy. First off, we are very pleased about where we sit inventory-wise. And if I can, I'll give you a little bit of color versus [indiscernible]. In our script and release, we talked about versus 2019, but obviously 2021 data is out there. So, an important thing to remember about our business model is that we spend a considerable effort and devotion towards capturing forward season buys from roughly November of 2021 through even as late as March of 2022, and we packaway those goods for eventual selling in really back-to-school and later. And so, when you look at our end of quarter inventory levels against last year, up like you said, kind of mid-20s, we really believe you need to pull forward season buys out of there. So, we're really up when you do that up 5% because that forward season buy amount is sitting in the rafters in our distribution centers. And we pulled it out starting in back-to-school and then continuing through holiday, and we really basically drain it and deplete it in a good way. And that's a good margin and the unbelievable deals in that bucket, so to speak. So that's important color to understand. The other thing is our average store inventory against last year is only up a couple of points. And that's important to know, because we were extremely depleted last year during the stimulus fuel Q1 period. And so, to be only up 6% on an average store, that's literally what's in our four walls. It's just a testament to the team is focus on not getting over our skis, keeping the powder dry and manage inventory levels across all of our cities in a really effective manner. So, long story short, we're not terribly concerned yet we're extra maniacal about keeping it this way. And then on your point around risk around markdowns and margins, that -- you can assume that's all built into what we shared today. We spent a lot of time modeling that and we feel comfortable with what we shared today.

Great. Next one for me.

Thank you.

Yeah. Absolutely. Thanks. That's great color. Last one for me is just around the SG&A understanding also, the $2.3 million non-cash stock charge. So, presumably that's going to be spread over the next few quarters. I wasn't sure if it was all hitting in Q2 or not. But then in terms of your absolute spend in Q1, that’s just $71 million, down from where you were in Q2 and Q3 of last year, so managing that really well. And my guess is it sounds like that's kind of like a sustainable level. But I wanted to just kind of get a little more detail around that SG&A spend. And then also specific to that $2.3 million award, if that was hitting all in one quarter or if that was spread over multiple quarters here throughout 2022? Thanks.

Sure. Yeah. You bet. I'll take the part one and then Jason can chime in on part two. But on part one relative to the $2.3 million, kind of one-time event that will impact and deem our EPS about $0.22 for this year, it is spread across the year. It's probably more like 30% in Q1, and then the rest of it is spread by quarter. And as Jason pointed out, it runs out as of the end of Q1 of 2023 and no longer becomes "non-cash charge" to the EPS number. So that's a good thing. I'll give you a high level on SG&A. I think we do feel confident about it in terms of how we've forecasted and how we're managing it. But I'll turn it over to Jason for one minute or two on that one.

Yeah. And quickly to clarify on those awards, that was our conversion. We disclosed that in the footnotes to our 10-K as well that it was in the fourth quarter of 2021 and we converted certain cash settled awards that were for our mid level managers into restricted stock. And the nature of the accounting rules around that is that they take on the fair market value at the conversion price, which was an elevated value relative to their initial grant date price. So, that price gets locked in and then the expense is straight line until they vest. So they'll be fully vested in March of 2023. And then going forward, we have no cash settled awards, so no mark-to-market fluctuations in our equity awards and all future equity awards will just be straight line expense based on grant fair value. As to SG&A expense for the balance of the year, we do feel confident in our ability to control expenses. And generally speaking, we think we can keep it around the levels that we kept it in Q1 of 2022, with the caveat that -- we generally do have some fluctuations through the quarters. We're generally -- as part of the higher SG&A spend through Q2 through Q4, just as it relates to the variable expenses with our sales particularly in Q4. So, I think it will -- we expect still follow directionally along the same path, but 2021 followed and even as 2019 followed and staying around the levels, starting point being where we were in Q1 of 2022.

Great. Thanks for that context and color. Best wishes.

Thanks Jeremy. Have a great day.

Thank you. Our next question is from the line of Chuck Grom with Gordon Haskett. Please go ahead. Your line is open.

Hi. Thanks a lot. Good morning. Just wondered if you guys could speak to how you arrived at the comp guidance down 14% to 16%. You guys were fortunate enough to come in line with the 1Q view that you provided. And if I run the three-year stacks out over the next few quarters, it does imply a pretty big uptick sequentially throughout the year. So, I just was wondering if you could just unpack how you got to that number for us. And if you'd be willing to give us a little bit of help on the second quarter.

Hey, Chuck. Nice to hear from you. Yeah. Let me give a little bit of color on kind of how the year unfolds. And it is pretty consistent methodology -- methodologically with prior talk on this in the March release, meaning we expect sequential improvement from Q2 to Q3 to Q4, largely driven by, as I mentioned a few minutes ago, the seasonal patterns in the business winning back-to-school, winning holiday, but importantly also tied to the gradual rollout and incremental volume initiatives, so to speak, within many of our cities. As I've spoken about in the March call, the addition of a missy size range, for example, the expansion and rollout of a more intense Q line last UPT stop before you check out portion of our store, the further traction of our CTx remodels, which go into comp. So, all of those inputs and assumptions remain in our model. Really, as I'm sure you thought about it, we just kind of tamped down the lifts that we thought we would potentially achieve based on a persistent level of the inflationary impact impacting our lower income customer. So, it definitely improved sequentially, and it's bolstered by -- these are incremental relationships. And then I'd share a little bit of color on current product trends which is relevant. In that we're seeing some really good trend shifts within some of our cities regarding the change in habits of our end customer, mainly driven by greater wear to work trending activities that is benefiting us. So, we're kind of, if you will, way more in business than last year and the prior year on wear to work clothing from black and white simple pieces that you could put together with the trend flare and so forth. And then, we're also seeing…

Okay. That's very helpful. And then, just to build off that. I was hoping you could talk about the evolution of your basket since 2019 in terms of the overall dollar size, UPT? And I guess, like what's actually changed within the basket? How much more discretionary that basket has become, or has it stayed mainly in the apparel area?

Yeah. Great questions. Let me give you some high level thoughts on that. First off, what it's being driven by? It's being driven by both the basket that is -- both by UPT gains, and I'm talking now versus 2019 and AUR improvement. So, similar to how we reported the -- frankly, the resiliency and the acceptance of better quality value, slightly better and higher price points for the brand, the customer has not really bolted those and that combined with higher UPTs, call it, 50-50, Chuck, to the basket is contributing that trend being up significantly against 2019, in the neighborhood of almost $8 to $10 higher than 2019. And relative to 2021, it's almost flat to 2021, which is encouraging, as you know, given what was in the market in terms of stimuli and such during 2021. So, as we look at the complexion of that basket, it really hasn't changed much because of the fact we're a trend driven brand. The balance between sort of what I'd call needs and wants has stayed relatively consistent. The only sort of aberration in a good way to that is the Q line impact, we're seeing a contribution in UPTs to the basket, incremental for sure from the Q. But everything else, apparel to non-apparel, it's kind of holding its own kind of in the same way it did in 2019. I think bodes well. I think it shows us that the merchants are keeping up at the times on both the needs and wants and kind of all those arise the incremental addition of the incremental Q line activities.

That helped. That’s actually really -- yeah. No. That's great color. Thank you. My last question is, just I'm just trying to understand. You talked about business getting better each month of the quarter, to Dana's question earlier, and the continued improvement into May. You're more guarded on the consumer. And I was just curious if you could just maybe just speak to what work you guys have done internally to understand the concerns that your consumer has in terms of the food, rent and gas inflation. Just like what's changed? Has it gotten incrementally -- has it become incrementally more concerned? And I guess, if that's the case then, why do you think your business has gotten a little bit better? I'm just trying to understand, I guess, as much details you have on your consumer right now?

Yeah. No. Great question. I think what we've done primarily to date, Chuck, is hold a series of internal focus groups, primarily led by the field and getting direct input from our associate base who often mirrors our customer base. We trade back and forth in fact on a regular basis in the neighborhood. And I'll give you some direct color a little more than in the call, so to speak. We're hearing a disproportionate amount of pressure on gas and hearing things like, Hey, I fill up my tank with a portion of my paycheck and then I buy my driving time, so that I don't have to fill it up again a week later. And that's a real from the heart and it makes it hurt, because that's curtailing some of their, certainly, distance driving and probably pleasure driving choices. And it's keeping them local. Now that, in many respects, is most likely benefiting our traffic a bit, because they are staying closer to home, and we are near home for them. So, there's probably a put and take there. Again, this is qualitative data, not quant. The second thing we're hearing is rent. Our customer often rents in -- way over indexes versus the average population and even a slight higher cohort of income, these guys are renters. And they're feeling the pressure of landlord -- rents going up, utilities for my rents going up, and those utility costs obviously being passed on to the renter. And some are facing things like evictions, and this is certainly more on the lower income tranche, think [indiscernible] and below. They're facing some really, really tough times. And so, those are the two that are showing up the most. Food is coming in number three, but not -- certainly not…

Got it. Thanks a lot.

Thanks Chuck. Have a good day.

Thank you. Our last question is from the line of John Lawrence with Benchmark. Please go ahead. Your line is open.

Yeah. Good morning, guys.

Good morning, John.

Hi, David, would you sort of take Chuck's last question, just one step further. When you look at those pressures on your customer base, historically, when you are in these inflation periods, and I guess, you somewhat answered that, but just the one step further about, what is that trade effect or the trade down effect for some of your customers as they see this pressure around them and then maybe some customers find you then that in that neighborhood for back-to-school or for July 4 that were maybe shopping a little upstream or whatever? What have you seen in years past there?

Yeah. It's a great question, John. I think if you go back to historical trends, we have definitely shown resilience and strength in coming out of the kind of the post period of a recessionary time. You could see that in 2008, 2009 for the brand, as an example. I think, these times are -- as we've all read -- are a little different and have some different characteristics associated with what we're going through today. But for us, I'll key off of what I suggested to Chuck, which is this idea of shopping local. And what we know about our customer is back in 2021, they were reaching a bit outside of the immediate local trading area, aka, driving there, going on a trip and spending some of their wallet out, I'll call it, in the regional shopping pad or zone trading area. And they were shopping up, so they were doing both. I think in these times, what we're seeing is a little less QS trips out to that sort of regional/30-minute away hub and they're staying in the local hub, us and a local grocer and probably a dollar player and maybe a beauty store. They are staying in that area, and they're patronizing us. And that's what's, I think, continuing to support the brand and our current reported trends and what we believe will be our year for the rest of the year. So that's a belief we have in the business, and it's something that for a local shopping base is affordable. And so, back to your word of trade down, maybe it's some of that or maybe it's still shopping value, but instead of going out to the regional ring, they are going to shop value in their local ring and save on gas and stay closer to home. So, again, a lot of that's qualitative, but I think it holds together in terms of how our metrics are posting up. And we're going to continue to key in on this notion and offer incredible values in what I call drop-ins of great stuff at prices that don't break the bank. For example, this week, we're dropping in three different programs that are just blowout great values that we happen to have in our forward season buy bucket, and we're pretty sure the customer is going to go, Thank you. We appreciate you, like we always do because you're thinking about us and you're dropping in great new value. So, I think, we've always done that. We'll continue to do it. It's a hallmark of who we are, and the customer responds from us doing that. Does that make sense?

Great.

Great.

Thanks for that. And you mentioned the new stores. I might have missed it, but did you comment on how many more remodels you are going to do?

I did not specifically, because there was no change. We still have, on the books, a total of 50 remodels. And I did mention that we're going to zero in on completing approximately 30 by the end of Q2. So, we're on pace to what we've disclosed prior, meaning well over half within the first half of the year.

And no real difference between the performance of a remodel and a new store as far as the lift?

Well, we measure that a little differently. The new stores coming out of the gate -- new, obviously, the remodel, we're measuring it against a control group of comp stores. But we're pleased with what we're seeing, and we're feeding each of those store groups, new and remodels, the appropriate fresh goods to feed back on the sales and it's -- yeah, it’s going as planned.

Great. Last question for me is, we've heard some other companies talk about the availability of merchandise is pretty robust out there. Can you comment on that? And what do you see as far as maybe deals in the pipeline?

Sure. I can do that. As I mentioned in the call, the chase for our business model is definitely on. There is, needless to say, unfortunately, for the industry, but for us, it's a good thing. And now we're seeing goods come across our desk on a daily that represent terrific values across branded goods and private label goods that represents cancellations from other brands that unfortunately don't need it anymore, but becomes something that we can pick up on an attractive basis. And so, it is a very flush environment, which Citi Trends intends to take advantage of in the right strategic manner. And like I mentioned in the call, we look to do that for bolstering -- BTS is somewhat, although we're pretty good on BTS, and now it's more about bolstering fall and holiday with looking at those opportunistic buying opportunities. So, yeah, we're out there. We've never -- not been out there. We love it, and we do it in a very strategic smart way. And most importantly, that's right for our customer. We don't go out and just do any willy-nilly great deal. We make sure that, that product that we're picking up is right for our African, American and Latinx families.

Great. Thanks for the color. Good luck.

Thanks John. Have a great day.

Thank you. And there are no further questions at this moment on the phone lines.

Thank you, Malika. Thanks everybody for joining the Citi Trends first quarter 2022 earnings call. Have a great week and upcoming Memorial Day. Bye-bye.

Thank you. Ladies and gentlemen, that does conclude today's call. We thank you for your participation and ask that you please disconnect your lines. Have a good day.