Citi Trends, Inc. (NASDAQ:CTRN) saw its stock rise 2.79% in pre-market trading Tuesday after reporting second-quarter results that far exceeded Wall Street forecasts and announcing an upward revision to its full-year guidance.
The off-price retailer posted earnings per share of $0.46 for Q2, significantly ahead of the analyst estimate of -$0.92. Revenue reached $190.8 million, surpassing the consensus of $183.64 million and marking an 8% increase from the same period last year. Comparable store sales grew 9.2%, extending the company’s streak to four consecutive quarters and 12 straight months of gains. Citi Trends also reported a gross margin of 40.0%, its highest second-quarter level since fiscal 2021, improving 890 basis points from a year ago.
“I’m pleased to report another quarter of strong, consistent performance as our strategic transformation continues to build momentum,” said Ken Seipel, Chief Executive Officer. “The majority of our sales growth over the past four quarters has been driven by increased customer traffic and transactions. By staying laser-focused on our core African American customer base, improving execution of our three-tiered product assortments, offering more compelling extreme-value deals, and introducing more trend-leading merchandise, we have encouraged our customers to shop more often and purchase more items.”
Following the strong Q2 results, Citi Trends raised its full-year guidance. The company now expects comparable store sales growth in the mid- to high-single digits, up from the previous mid-single-digit forecast. Full-year EBITDA is projected between $7 million and $11 million, an improvement of $21 million to $25 million compared to 2024.
Citi Trends ended the quarter with $50.4 million in cash, no debt, and no borrowings under its $75 million credit facility. Merchandise inventory declined 12.9% from the second quarter of 2024, reflecting more disciplined purchasing and a faster supply chain.
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