Citi Trends Stock Jumps Despite Q4 Miss, Bets Big On 'Off-Price' Model

Citi Trends Inc CTRN shares traded higher on Tuesday after the fourth-quarter earnings results.

The company reported a fourth-quarter sales decline of 1.9% year-on-year to $211.17 million, missing the analyst consensus estimate of $211.54 million.

Comparable store sales increased 6.4%. Adjusted EPS loss of $1.54 missed the consensus estimate for EPS of $0.18.

Gross margin of 39.7% expanded 60 basis points Y/Y due to lower freight expense, partially offset by planned in-season markdowns.

Quarter-end total inventory decreased 6% versus last year. Adjusted EBITDA of $7.1 million decreased 29% Y/Y.

Citi Trends held $61.1 million in cash and equivalents as of February 1, 2025.

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In the fourth quarter, the company repurchased 145,238 shares of its common stock for a total spend of $3.8 million

At the end of the fiscal 2024, $46.2 million remained available under the company’s share repurchase program.

“This top-line growth was driven by strong customer traffic and consistent increase in basket size. Our renewed focus on delivering trendy fashions, great brands, and amazing prices combined with compelling off-price deals strongly resonated with our customers,” said CEO Ken Seipel.

“As we enter a period of economic uncertainty, we believe we are in a good position to gain market share due to the addition of “off-price” to our business model, which enables us to offer high margin, great brands at exceptional prices with minimal impact of tariff-based cost pressures.”

Outlook: Citi Trends sees FY25 comparable store sales growth of low to mid-single digits. The company expects FY25 adjusted EBITDA of $5 million – $9 million.

The company plans to open up to 5 new stores, remodel approximately 50 stores, and close up to 5 locations.

Price Action: CTRN shares traded higher by 11.2% at $23.95 at last check Tuesday.

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