Citi Trends (CTRN) Q1 2025 earnings summary

Executive summary

• Achieved total sales of $186.3 million, up 3.7% year-over-year, with a 3.1% increase in comparable store sales and 160 basis points gross margin expansion, driven by inventory rebuilds and targeted product categories.

• Net loss narrowed to $3.4 million from $6.6 million in the prior year quarter, with adjusted EBITDA loss improving to $0.8 million from $3.2 million loss in Q1 2023.

• Positive comps posted in each month of the quarter, with improved store traffic and healthy in-store conversion.

• Leadership transition to Interim CEO Ken Seipel, who brings extensive value retail experience and a focus on operational excellence and shareholder value.

• Operating environment remains challenged by inflation and economic pressures on low-income families.

Financial highlights

• Ended Q1 with $58.2 million in cash, no debt, and no borrowings under a $75 million credit facility.

• Inventory increased to $119.0 million from $114.3 million year-over-year, reflecting a strategic increase in in-store inventory.

• Adjusted SG&A expenses increased by about $3 million year-over-year, mainly due to higher payroll and marketing costs.

• Closed 3 stores and remodeled 20, ending the quarter with 599 locations.

• No share repurchases in Q1; $50 million remains authorized under the repurchase program.

Outlook and guidance

• Expects full-year comparable store sales growth in the low to mid-single digits, slightly below prior outlook.

• Full-year gross margin projected to expand by 75–100 basis points.

• SG&A expected to rise 1.5%–2.5%, an improvement from previous guidance.

• Full-year EBITDA guidance unchanged at $4–$10 million.

• Plans to open up to 5 new stores, remodel ~40, and close 10–15 underperforming stores, ending 2024 with ~595 stores; capital expenditures expected to be ~$20 million.