Citi Trends Updates Guidance As Q1 Earnings Miss Estimates Due To Low Customer Spend

Citi Trends Inc CTRN reported first-quarter FY23 sales decline of 13.7% year-on-year to $179.7 million, missing the analyst consensus estimate of $180.25 million.

• Comparable store-sales declined 14.1% compared to Q1 2022.
• • Adjusted EPS of $(0.66) missed the analyst consensus of $(0.30). Comparable store sales decreased 14.4% versus last year.
  • Gross margin of 36.7% fell 230 basis points Y/Y.
  • The company reported an operating loss of $(9.5) million versus an income of $39.7 million last year.
  • Quarter-end total inventory decreased 11.9% versus last year. 
  • Citi Trends held $88.7 million in cash and equivalents as of April 29.
  • At the end of the first quarter of 2023, $50 million remained available under the company's share repurchase program.
  • "Although we are seeing good response to our spring and early summer merchandise, our customers are being selective about what they put in their basket," said CEO David Makuen.
  • Outlook: The company updated its FY23 sales guidance from low double digits — mid-teens decline to mid-single-digits — low single-digits decline.
  • It cut FY23 EBITDA outlook from $20 million—$30 million to $5 million—$20 million.
  • It also lowered FY23 capital expenditure outlook from $20 million—$25 million to $5 million—$20 million.

  Price Action: CTRN shares are trading lower by 1.66% at $17.74 in premarket on the last check Tuesday.