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 release.
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Adjusted 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.
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