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SAVANNAH, Ga. - On Tuesday, Citi Trends Inc. (NASDAQ:CTRN) reported better-than-expected first quarter results and raised its full-year guidance, as the off-price retailer’s strategic transformation efforts showed progress.
The company’s stock was unchanged in early trading following the earnings release.
The company posted adjusted earnings per share of $0.17 for the first quarter, significantly beating analyst estimates of a $0.27 loss per share. Revenue came in at $201.7 million, surpassing expectations of $194.81 million.
Comparable store sales grew 9.9% YoY, driven by increases in traffic, basket size and conversion rates. Total (EPA:TTEF) sales increased 8.3% to $201.7 million compared to the same quarter last year.
"I am pleased to report progress on our continued strategic transformation journey, as evidenced by our strong first quarter results on both the top and bottom line as well as stronger-than-expected adjusted EBITDA flowthrough," said CEO Ken Seipel.
Gross margin expanded 90 basis points to 39.6%, benefiting from higher initial markups, lower shrink and reduced freight costs. The company generated adjusted EBITDA of $5.4 million, compared to an adjusted EBITDA loss of $0.8 million in Q1 2024.
Citi Trends raised its full-year outlook, now expecting mid-single digit comparable store sales growth and EBITDA of $6-$10 million. The company plans to open up to 5 new stores and remodel approximately 50 locations this fiscal year.
"Our refined approach to serving African American customers through curated assortments, improved in-store experiences and compelling off-price value is resonating, as evidenced by increased transaction counts," Seipel added.
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