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7 days ago
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Citi Trends Inc (CTRN) Q1 2025 Earnings Call Highlights: Strong Sales Growth and Strategic ...
Total Sales Growth: $15.4 million increase, or 8.3% over the prior year. Adjusted EBITDA: Increased by $6.2 million, representing a sales to profit flow through of 40%. Gross Margin: Expanded by 90 basis points to 39.6%. Operating Expense Leverage: Improved by 220 basis points. Comparable Store Sales Growth: 9.9% increase over the prior year. Q1 Sales: $201.7 million, up 8.3% compared to Q1 2024. SG&A Expense: $74.4 million or 36.9% of revenue, a 220 basis point improvement. Diluted Earnings Per Share: $0.11 or $0.17 as adjusted, compared to a loss per share of $0.42 or $0.32 as adjusted in Q1 2024. Inventory Levels: Total inventory dollars decreased by 7.6% compared to last year. Cash Position: $42 million in cash with no debt. Store Remodels: 19 stores remodeled in Q1, with 36 completed year-to-date. Full Year Comp Store Sales Growth Outlook: Mid-single digits. Full Year Gross Margin Expansion Outlook: Approximately 200 basis points. Full Year EBITDA Outlook: $6 million to $10 million, a $20 to $24 million improvement versus fiscal 2024. Warning! GuruFocus has detected 6 Warning Signs with CTRN. Release Date: June 03, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Citi Trends Inc (NASDAQ:CTRN) reported a total sales growth of $15.4 million, or 8.3% over the prior year, with a comparable store sales growth of 9.9%. The company achieved a gross margin expansion of 90 basis points and operating expense leverage of 220 basis points, demonstrating effective cost structure management. Citi Trends Inc (NASDAQ:CTRN) has successfully implemented strategic product initiatives, resulting in strong performance across all apparel and home categories, with many experiencing double-digit growth. The company has made significant progress in its strategic transformation phases, focusing on product value, supply chain speed, and operational efficiency. Citi Trends Inc (NASDAQ:CTRN) has maintained a healthy financial position with no debt, $42 million in cash, and $117 million in liquidity, enabling it to fund business initiatives effectively. The accessory business was slightly below plan for the quarter, indicating a need for refinement in the assortment to better meet customer needs. Distribution center performance was below expectations, highlighting a critical area for improvement in the company's operations. The company faces uncertainty in the macroeconomic environment, particularly concerning potential changes in tariffs, which could impact future performance. Despite strong Q1 results, the company has provided a conservative full-year outlook, suggesting potential challenges in maintaining growth momentum. The remodel program, while showing solid returns, is still in early stages, with only 25% of the fleet in an updated format, indicating a need for further investment and execution. Q: Can you explain the change in your closeout strategy and provide more context on the closeout opportunity? A: Kenneth Seipel, CEO: Our closeout strategy now includes both end-of-season closeouts and in-season extreme value products. The latter involves current or just past season products with high brand cachet, offered at significant discounts, often 50-70% off the manufacturer's suggested retail price. This strategy aims to grow the extreme value portion of our business to about 10% of the top line over time. Q: Your Q1 comp sales were up 9.9%, but your full-year guidance suggests a deceleration. Why is that? A: Kenneth Seipel, CEO: We face tougher comparisons in the back half of the year, with previous strong performances in Q3 and Q4. We're also considering macroeconomic uncertainties, so our guidance reflects a cautious approach. We're focusing on a two-year stack comp basis for a more comprehensive view. Q: Can you provide more color on specific category performance and trends in Q2? A: Kenneth Seipel, CEO: All categories performed well in Q1, with many experiencing mid to upper single-digit growth and some reaching low double digits. Plus sizes and footwear were strong, and we see opportunities in plus sizes, big men, and trend relevancy in juniors and young men's categories. The broad-based improvement across categories is encouraging. Q: What performance uplift have you seen from the recently remodeled stores? A: Heather Plutino, CFO: It's early, but we're happy with the performance of remodeled stores, which is consistent with prior classes. The first round of remodels was completed in February, so we have a couple of months of data showing positive results. Q: How are you leveraging your understanding of your African American customer base to drive growth? A: Kenneth Seipel, CEO: We've conducted extensive consumer research to better understand our African American customer base, revealing a significant group of average and higher-income customers. This insight allows us to expand our product assortment to meet their fashion needs, focusing on recognizable brands at amazing prices. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
03-06-2025
- Business
- Yahoo
Citi Trends CEO Asserts It Will Tackle Tariffs with 'Aggressive Growth,' Responsive Adjustments
Citi Trends, Inc. (NASDAQ:CTRN) stock gained on Tuesday after the company reported first-quarter earnings. The company reported a quarterly sales growth of 8.3% year-on-year to $201.7 million, topping the analyst consensus estimate of $183.6 million. Comparable store sales increased 9.9% compared to Q1 2024 fueled by increases in traffic, basket and conversion, reflecting the continued impact of improved product style and value, addition of off-price extreme value and better product allocation methods, the company said in a press EPS of 17 cents topped the consensus loss estimate of 92 cents. The gross margin of 39.6% expanded 90 basis points Y/Y due to a higher initial markup, lower shrink, and lower freight expense, partially offset by planned in-season markdowns. Merchandise inventory decreased by 7.6% year-over-year to $109.9 million. Average in-store inventory decreased 4.9% vs. the same period last year while supporting 9.9% comparable store sales growth. The company said inventory is significantly fresher, with a 45% decrease in aged product. The company reported adjusted EBITDA of $5.4 million compared to a loss of $0.8 million a year ago. Citi Trends held $41.6 million in cash and equivalents as of May 3, 2025. In the first quarter of fiscal 2025, the company repurchased 250,555 shares of its common stock, spending a total of $6.3 million. At the end of the quarter, $40.0 million remained available under the company's share repurchase program. CEO Ken Seipel expressed his satisfaction with the strong Q1 results, highlighting that positive trends were evident across all retail metrics, encompassing both apparel and non-apparel categories, all climate zones, and all store volumes. He noted that this sales momentum has carried into the second quarter of fiscal 2025, with quarter-to-date comparable store sales trending in the mid-to-upper-single digits. While acknowledging macro-economic uncertainties, particularly concerning tariffs, Seipel said, 'Our approach is to be aggressive to drive growth and remain flexible to react and adjust as needed.' 'For the foreseeable future, our teams have successfully held net product costs flat in the aggregate, finding alternative goods when needed and taking advantage of off-price opportunities created by the disrupted environment. As a result, we have mitigated near-term margin pressure, and we remain optimistic about our ability to control our business results,' he added. Citi Trends now expects comparable store sales growth of mid-single digits (up from prior low-to-mid-single digits). The company expects adjusted EBITDA of $6 million-$10 million (up from prior $5 million-$9 million). The company reiterated plans to open up to 5 new stores, remodel approximately 50 stores, and close up to 5 locations. Price Action: CTRN shares are trading higher by 13.1% to $30.55 at last check Tuesday. Read Next:Photo by Bruce VanLoon via Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? CITI TRENDS (CTRN): Free Stock Analysis Report This article Citi Trends CEO Asserts It Will Tackle Tariffs with 'Aggressive Growth,' Responsive Adjustments originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
Yahoo
03-06-2025
- Business
- Yahoo
Citi Trends: Fiscal Q1 Earnings Snapshot
SAVANNAH, Ga. (AP) — SAVANNAH, Ga. (AP) — Citi Trends Inc. (CTRN) on Tuesday reported net income of $871,000 in its fiscal first quarter. On a per-share basis, the Savannah, Georgia-based company said it had profit of 11 cents. Earnings, adjusted for non-recurring costs and asset impairment costs, came to 17 cents per share. The clothing and accessories company posted revenue of $201.7 million in the period. _____ This story was generated by Automated Insights ( using data from Zacks Investment Research. Access a Zacks stock report on CTRN at
Yahoo
19-03-2025
- Business
- Yahoo
Citi Trends Inc (CTRN) Q4 2024 Earnings Call Highlights: Strong Sales Growth and Strategic ...
Total Sales: Approximately $211 million for the fourth quarter. Comparable Store Sales Growth: 6.4% increase in the fourth quarter. Gross Margin: 39.7%, a 60 basis point expansion compared to Q4 2024. Inventory: Down 6% compared to the prior year. Cash Position: $61 million in cash with no debt. Store Count: 591 stores at the end of the quarter. Adjusted EBITDA: $7.1 million for the fourth quarter. Full-Year Sales: $753.1 million for fiscal 2024. Full-Year Comparable Store Sales: 3.4% increase on a 52-week to 52-week basis. Full-Year Adjusted EBITDA: Loss of $14.2 million. Share Repurchase: $10 million spent on repurchasing 395,793 shares at an average price of $25.23. 2025 Outlook - Comp Sales Growth: Low to mid-single digits expected. 2025 Outlook - Gross Margin Expansion: Minimum of 220 basis points expected. 2025 Outlook - EBITDA: Expected to be in the range of $5 million to $9 million. 2025 Outlook - Store Openings/Closures: Plan to open up to five new stores and close up to five stores. Warning! GuruFocus has detected 4 Warning Sign with CTRN. Release Date: March 18, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Citi Trends Inc (NASDAQ:CTRN) reported a 6.4% increase in comparable store sales for the fourth quarter, showing strong customer traffic and transaction growth. The company achieved a gross margin rate of 39.7%, a 60 basis point expansion compared to the previous year. Citi Trends Inc (NASDAQ:CTRN) ended the period with inventories down 6% compared to the prior year, indicating improved inventory management. The company has a strong financial position with $61 million in cash, no debt, and no drawings on its $75 million revolver. Citi Trends Inc (NASDAQ:CTRN) is implementing an AI-based product allocation system to enhance inventory efficiency and reduce markdowns. The company experienced a significant miss in plus size apparel due to execution issues, although these have been addressed. Adjusted EBITDA for the fourth quarter was $7.1 million, down from $10 million in the same quarter of the previous year. Citi Trends Inc (NASDAQ:CTRN) recorded a noncash valuation allowance of approximately $15.5 million related to deferred tax assets. The company closed two stores during the quarter as part of its fleet optimization efforts. Weather disruptions in January had a 250 basis point negative impact on comparable store sales for the month. Q: What is Citi Trends doing differently from the industry to sustain momentum into 2025 despite other retailers reporting softening results? A: Kenneth Seipel, CEO, highlighted that Citi Trends has sharpened its price value equation and added an off-price model, which has resonated well with customers. The strategic positioning of their 591 stores in neighborhoods has also made them a first alternative for customers, contributing to market share gains. Q: How has the off-price portion of the business evolved, and what are the future expectations? A: Kenneth Seipel explained that the off-price segment, currently contributing 1-2% of the business, is expected to grow to about 10%. This segment focuses on in-season aggressive deals and extreme value items, which are additive to the business rather than replacements. Q: Can you provide more details on the brand name deals Citi Trends is pursuing? A: Kenneth Seipel mentioned that while specific brand names cannot be disclosed due to ongoing relationships, the focus is on top-selling, high-awareness brands across categories like footwear and apparel. These deals are often at extreme pricing, providing unique market opportunities. Q: What are the building blocks for the projected EBITDA increase of $19 million to $23 million? A: Kenneth Seipel and Heather Plutino, CFO, noted that the increase will be driven by sales growth, margin expansion, and leveraging SG&A. The company has set a low base for sales and expenses, with a plan to achieve a 25% flow-through from sales growth. Q: What sales level is needed to achieve the longer-term adjusted EBITDA target of $40 million to $50 million? A: Kenneth Seipel indicated that the goal is to achieve an EBITDA margin of 5% to 7%, which would align with industry standards. The focus is on restoring EBITDA to the $40 million to $50 million range through improved sales and operational efficiencies. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
