Citi Trends (CTRN) Reports Strong Q2 Results, Raises Fiscal Guidance

Citi Trends, Inc. (NASDAQ: CTRN), the prominent retailer specializing in affordable apparel and home trends, has released its financial results for the second quarter of fiscal 2025. The company reported impressive sales growth and improved margins, leading to an updated fiscal outlook.

Citi Trends, Inc. Reports 8% Sales Growth y/y, Total $190.8 Million for Second Quarter

Citi Trends, Inc. (NASDAQ: CTRN) has reported a robust performance for the second quarter of fiscal 2025, showcasing a total sales figure of $190.8 million. This represents an 8% increase compared to the same period in 2024, surpassing the anticipated revenue of $183.64 million. The company’s comparable store sales surged by 9.2%, marking the fourth consecutive quarter of growth in this metric. This upward trend is attributed to increased customer traffic and enhanced product offerings, including more trendy and value-driven merchandise.

The company’s gross margin rate reached 40.0%, the highest for a second quarter since fiscal 2021, reflecting a significant improvement of 890 basis points from the previous year. This was achieved through reduced markdowns, improved shrink results, and increased full-price selling. Despite higher SG&A expenses of $78.9 million, driven by costs associated with processing higher sales and incentive compensation, Citi Trends reported a net income of $3.8 million. Adjusted for a gain on the sale of a building, the company had an adjusted net loss of $6.8 million, which is a marked improvement from the $18.4 million net loss in Q2 2024.

When comparing the results against expectations, Citi Trends has outperformed the anticipated earnings per share (EPS) of $-0.92, achieving a basic net income per share of $0.48. The company’s strategic initiatives have clearly propelled its performance above market expectations, with its focus on core customer engagement and product assortment playing a pivotal role in its success.

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Citi Trends Ups Fiscal 2025 Guidance Based on Strong Q2 Performance

In light of its strong second-quarter performance, Citi Trends has revised its fiscal 2025 guidance upwards. The company now projects full-year comparable store sales growth in the mid to high-single digits, an increase from the previous outlook of mid-single-digit growth. This adjustment reflects the company’s confidence in maintaining its sales momentum, particularly as it continues to capitalize on its strategic initiatives and improved merchandise offerings.

The company anticipates a full-year gross margin expansion of approximately 210 to 230 basis points compared to 2024, slightly surpassing previous expectations. This margin improvement is attributed to enhanced inventory efficiency and progress in supply chain optimization. Additionally, SG&A expenses are expected to leverage between 60 to 90 basis points, reflecting better-than-anticipated business performance and increased incentive compensation accruals.

Looking ahead, Citi Trends expects its full-year EBITDA to range between $7 million and $11 million, marking a significant improvement of $21 million to $25 million over 2024. The company plans to open three new stores, remodel approximately 60 locations, and close three stores, with capital expenditures projected to be between $22 million and $25 million. This strategic investment in store development aligns with the company’s commitment to driving sustainable growth and enhancing shareholder value.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.