Shares of Citi Trends Inc. hit a 52-week low Friday, a day after its top executive said inventory losses from crime and paperwork errors will likely persist for the remainder of fiscal 2007.
At the 2007 Wachovia Consumer Growth Conference on Thursday, chief executive Edward R. Anderson said the company's shrinkage problem largely stems from internal theft rather than shoplifting.
Citi Trends is working on installing more stable management and increasing supervision at stores, but that process will take some time to pay off, Anderson said.
At the end of the second quarter when the company first disclosed the problem, shrinkage accounted for about 2.3% of sales.
Anderson said the company expects shrinkage to be about 2% of sales in both the third and fourth quarters, before any improvement is seen. The company is working toward a shrinkage rate of less than 1.5% of sales.
"We don't think the shrinkage issue will really be fixed for us until probably next year's first or second quarter," Anderson said.
