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Investing.com - Craig-Hallum raised its price target on Citi Trends (NASDAQ:CTRN) to $53.00 from $37.00 on Wednesday, maintaining a Buy rating following the retailer’s strong second-quarter performance. The stock, currently trading at $34.96, has shown remarkable momentum with a 122.77% return over the past year, according to InvestingPro data.
The retailer reported a 9.2% increase in same-store sales for the quarter, with positive comparable sales momentum continuing into the third quarter. Craig-Hallum attributed the growth to management’s merchandising strategy shift toward more brand-name goods and extreme-value closeout products, which has driven consistent traffic gains.
Gross margins exceeded expectations as the brand-name and closeout products carry higher-than-average product margins, creating what the research firm described as simple merchandising and profitability alignment. Store remodels have delivered positive returns on investment, prompting the company to add additional remodels for fiscal year 2025.
Citi Trends plans to accelerate unit growth to mid-single digits in fiscal year 2026, with potential to reach nearly 10% unit growth. Management is targeting over $40 million in EBITDA for fiscal year 2027, which Craig-Hallum characterized as "one of the most remarkable turnarounds within retail."
The research firm noted that consistent strong results have improved credibility for Citi Trends, and with initiatives still in early stages, Craig-Hallum sees potential for significant long-term upside.
In other recent news, Citi Trends reported its second-quarter 2025 earnings, which exceeded expectations. The company achieved a revenue of $190.8 million, surpassing the projected $183.64 million. Additionally, Citi Trends posted an earnings per share (EPS) of $0.46, a significant turnaround from the forecasted loss of $0.92. This resulted in a 150% earnings surprise. DA Davidson responded to these results by raising its price target for Citi Trends to $43 from $40, while maintaining a Buy rating on the stock. The firm highlighted the company’s broad-based strength across regions and categories, attributing it to a renewed focus on trendy products and a three-tiered assortment strategy. These developments underscore Citi Trends’ positive financial trajectory and strategic initiatives.
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