Citi Trends, Inc. (NASDAQ:CTRN) reported second-quarter sales of $190.75 million (+8% year over year) on Tuesday, beating the analyst consensus estimate of $188.397 million.
Comparable store sales in the quarter under review increased by 9.2% compared to the same quarter in the year-ago period, driven by traffic, basket, and conversion increases.
“Our second quarter results underscore our recent success executing our key initiatives, which drove comparable store sales up 9.2%, our fourth consecutive quarter and 12 straight months of consistent comparable sales gains,” said Ken Seipel, Chief Executive Officer. “I am also pleased year-to-date sales momentum has continued into the important August back to school period.”
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Quarterly gross margin increased by 890 basis points year over year to 40%, the highest second quarter rate since fiscal 2021, driven by reduced markdowns, improved shrink results, increased full price selling, and lower cost of freight.
The company reported a quarterly adjusted EBITDA loss of $2.6 million, an increase of $14.6 million compared to the year-ago period’s adjusted EBITDA loss of $17.2 million.
View more earnings on CTRN
Citi Trends remodeled 19 stores and closed one store in the quarter, ending the period with 590 locations.
Merchandise inventory totaled $117.6 million at quarter-end, down 12.9% from the year-ago period.
The average store inventory declined by 5.7% year over year, reflecting stronger buying discipline and a quicker supply chain.
Citi Trends exited the quarter with cash and equivalents worth $50.397 million, lower than $59.302 million a year ago.
Outlook
The company raised its fiscal 2025 outlook, projecting comparable store sales growth in the mid to high single digits, gross margin expansion of 210–230 basis points, and EBITDA between $7 million and $11 million, a $21 million–$25 million improvement from 2024.
It plans to open three new stores, remodel about 60, close three locations, and increase capital spending to $22 million–$25 million.
Price Action: CTRN shares are trading higher by 2.50% to $34.88 at last check Tuesday.
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This article Citi Trends Lifts Outlook As CEO Highlights Robust Back-To-School Sales Momentum originally appeared on Benzinga.com
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