On June 4, 2024, Citi Trends Inc (CTRN, Financial) released its 8-K filing announcing the financial results for the first quarter of fiscal 2024. Citi Trends Inc is a retailer of urban fashion apparel and accessories in the United States, offering a wide range of products including apparel, accessories, home products, beauty products, books, and toys.
Financial Highlights
For the first quarter ended May 4, 2024, Citi Trends Inc reported a total year-over-year sales growth of 3.7% to $186.3 million, slightly below the analyst estimate of $187.38 million. The company also achieved a comparable sales growth of 3.1% and a gross margin of 38.7%, an improvement of 160 basis points from the previous year.
Performance and Challenges
Despite the positive sales growth, Citi Trends Inc faced challenges, including a net loss of $3.43 million, or $0.42 per share, which was better than the analyst estimate of a loss of $0.43 per share. The company's performance is crucial as it reflects the ability to navigate a challenging economic environment, particularly for lower-income consumers.
Financial Achievements
The company's balance sheet remains strong with ample liquidity and no debt, providing flexibility to fund business opportunities. This financial discipline is vital for a retail company like Citi Trends Inc, which operates in a cyclical industry where maintaining liquidity is essential for weathering economic fluctuations.
Key Financial Metrics
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Net Sales | $186.3 million | $179.7 million |
| Gross Margin | 38.7% | 36.7% |
| Net Loss | $(3.43) million | $(6.64) million |
| Cash and Cash Equivalents | $58.2 million | $88.7 million |
| Inventory | $119.0 million | $114.3 million |
Commentary from Interim CEO
"The board is encouraged with our first quarter performance in which we registered an improvement in topline trend, delivering a comparable sales increase of 3.1%. The quarter was further highlighted by gross margin expansion of 160 basis points compared to last year. The improvements in topline and gross margin were helped by our rebuild of inventories in targeted product categories. We also benefitted from our store teams’ delivering in-store experiences and bringing to life our Citi Trends’ value proposition for the entire family."
Capital Return Program
During the first quarter of fiscal 2024, Citi Trends Inc did not repurchase any shares of its common stock. As of the end of Q1 2024, $50.0 million remained available under the company’s share repurchase program.
Fiscal 2024 Outlook
The company reiterated its fiscal 2024 EBITDA outlook, emphasizing its focus on driving profitable sales, optimizing supply chain, and leveraging recent technology investments. The company remains cautious of the challenging economic environment but is committed to executing business initiatives to achieve its EBITDA target for the year.
For more detailed information, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from Citi Trends Inc for further details.
