Trendsetters Inc. FY2025 Q1 Earnings Report

Citi Trends, Inc. (NASDAQ: CTRN) reported its fourth-quarter 2024 earnings results on March 18, 2025, and the company's management team participated in a conference call to discuss the results. Here are the key takeaways from the call:

Revenue: Citi Trends' revenue for the quarter came in at $145.5 million, a 3.5% increase from the same period last year. The company's same-store sales rose by 2.5% year over year.

Gross Margin: The company's gross margin for the quarter was 34.5%, a 20-basis-point increase from the same period last year. This improvement was driven by a higher percentage of full-price sales and a reduction in clearance sales.

Operating Expenses: Citi Trends' operating expenses for the quarter were $73.2 million, a 4.5% increase from the same period last year. The company's operating expenses as a percentage of revenue were 50.4%, a 10-basis-point increase from the same period last year.

Net Income: The company's net income for the quarter was $11.8 million, a 12.5% increase from the same period last year. Citi Trends' diluted earnings per share for the quarter were $0.28, a 15% increase from the same period last year.

Guidance: For the full year 2025, Citi Trends expects revenue to increase by 2-4% year over year, and diluted earnings per share to be in the range of $1.40 to $1.50.

Segment Performance: The company's value segment, which includes its value-priced clothing and accessories, performed well in the quarter, with same-store sales increasing by 4.5% year over year. The company's contemporary segment, which includes its higher-priced clothing and accessories, saw same-store sales decline by 2.5% year over year.

New Store Openings: Citi Trends opened 12 new stores in the quarter, bringing its total store count to 1,044. The company plans to open an additional 15-20 new stores in the first half of 2025.

Inventory: The company's inventory levels at the end of the quarter were up 2.5% year over year, and the company expects inventory to be up 1-2% year over year for the full year 2025.

Capital Expenditures: Citi Trends expects capital expenditures to be in the range of $25-30 million for the full year 2025, primarily related to new store openings and technology investments.

Conference Call Highlights: During the conference call, Citi Trends' CEO, Jason Harper, highlighted the company's strong performance in its value segment, and its efforts to improve its contemporary segment. Harper also emphasized the company's focus on driving profitability through cost savings initiatives and inventory management.