Citi Trends (CTRN) Q2 2025 earnings summary

Executive summary

• Total sales increased 1.7% year-over-year to $176.6 million, with a calendar shift contributing $7.9 million; comparable store sales declined 1.7%.

• Net loss widened to $18.4 million, or $16.2 million as adjusted, compared to $5.0 million in the prior year.

• Strategic actions included aggressive markdowns, inventory reset, and shrink mitigation to improve future profitability.

• Focused on core African American customer, refining assortment and leveraging community presence.

• Operated 597 stores in 33 states as of August 3, 2024.

Financial highlights

• Gross margin declined to 31.1% in Q2 2024, impacted by $9.4 million in markdowns and $4.0 million in shrink, versus 38.2% in Q2 2023.

• Adjusted EBITDA loss was $17.2 million, including $13.4 million in transition expenses.

• Adjusted SG&A rose $2.7 million, mainly due to merit increases, higher advertising, and $1.4 million in CEO transition costs.

• Ended Q2 with $59.3 million in cash, no debt, and $134 million in liquidity.

• Inventory was $135.0 million, flat year-over-year; packaway inventory up 20%, now 23% of total.

Outlook and guidance

• Second half 2024 comparable store sales expected to be flat to up low single digits; total sales down mid-single digits due to 53rd week last year and store closures.

• Second half gross margin projected at approximately 39%, with positive EBITDA of $0.5–$2.5 million.

• Year-end cash forecasted at $60–$70 million; capital expenditures reduced by 35% to ~$13 million.

• Plan to close 10–15 underperforming stores in 2024, ending the year with ~590 stores and 35 remodels.

• Management expects continued pressure on low-income families due to inflation and macroeconomic conditions.