Citi Trends Reports Mixed Q2 Results with Revenue Growth and Increased Losses

Citi Trends, Inc. reported its financial results for the second quarter and the first half of fiscal 2024, revealing a mixed performance in terms of revenue and profitability. For the thirteen weeks ended August 3, 2024, net sales reached $176.6 million, a slight increase of $3.0 million (1.7%) compared to $173.6 million in the same period of the previous year. However, comparable store sales decreased by 1.7%, which contributed to a $3.0 million decline in sales. The company attributed part of the revenue increase to a shift in the retail calendar, which added $7.9 million to sales.

Despite the revenue growth, Citi Trends experienced a significant increase in losses. The loss from operations for the second quarter was $(24.9 million), compared to $(7.9 million) in the same quarter of 2023. The net loss for the quarter was $(18.4 million), a stark contrast to the $(5.0 million) loss reported in the prior year. Basic net loss per share also widened to $(2.21) from $(0.61).

For the first twenty-six weeks of fiscal 2024, net sales totaled $362.8 million, up $9.6 million (2.7%) from $353.2 million in the same period of 2023. However, the net loss for this period increased to $(21.8 million) from $(11.7 million) year-over-year. The company’s cost of sales rose significantly, with costs increasing by $15.0 million (6.8%) to $235.9 million, leading to a higher cost of sales percentage of 65.0%, up from 62.5%.

Citi Trends' total assets decreased to $506.7 million as of August 3, 2024, down from $518.7 million on February 3, 2024. Total current assets also fell to $215.1 million, while total current liabilities increased to $185.5 million. This resulted in a decline in total stockholders’ equity to $136.6 million from $157.7 million.

The company recorded a non-cash impairment expense of $1.3 million related to underperforming stores during the quarter, a new expense not present in the same period of the previous year. Additionally, the company has approximately $50.0 million remaining under its stock repurchase authorization, with no repurchases made in the first half of 2024 or 2023.

Citi Trends continues to operate 597 stores across 33 states, focusing on apparel and accessories primarily for African American and multicultural families. The company anticipates ongoing inflationary pressures affecting consumer spending, which may impact future performance.