Citi Trends (CTRN) 3 Dec 24 2025 Q3 Earnings call transcript
1min read Citi Trends recently held its third quarter 2024 earnings call, showcasing a company that is undergoing a strategic transformation and demonstrating a strong commitment to driving growth and enhancing shareholder value. The call, led by Chief Executive Officer Ken Seipel and Chief Financial Officer Heather Plutino, provided insights into the company's financial performance, strategic initiatives, and future growth prospects.
Strong Financial Performance
Citi Trends reported a solid financial performance for the third quarter of 2024, with total sales of $179.1 million and a comparable sales increase of 5.7%. The company's sales growth was broad-based, with improved customer traffic, transaction growth, and a larger basket size contributing to the positive results. The company's focus on its core African-American customer, a defensible market position, and a renewed product value proposition are key drivers of this growth.
Strategic Initiatives and Future Growth Plans
Citi Trends' strategic initiatives are centered around improving product allocation, operational processes, and customer insights. The company's allocation strategy has seen significant improvement, with a reduction in complexity and an increase in accuracy. This has led to a meaningful impact on operating results, with improvements expected to continue into 2025 and beyond. Additionally, Citi Trends is investing in customer insights and operational process enhancements to drive future top-line expansion and enhanced profitability.
Financial Highlights
The third quarter saw gross margin expansion of 160 basis points, driven by higher initial markups and improved shrinkage rates. This expansion was a significant achievement, demonstrating the company's ability to effectively manage its costs and increase profitability. Citi Trends also announced a return to profitable growth, with a focus on improving shrink rates, optimizing store fleet, and enhancing the shopping experience for customers.
Future Outlook
Looking ahead, Citi Trends is optimistic about its future growth prospects. The company expects to end the year with approximately 590 stores, consistent with its earlier outlook. It also anticipates second half comparable store sales to be up low to mid-single digits, driven by a refreshed inventory assortment and strategic investments in growth initiatives. The company's focus on operational improvements, product value proposition, and customer insights positions it well for long-term success.
Conclusion
Citi Trends' third quarter 2024 earnings call underscored the company's strategic transformation and commitment to driving growth. The company's financial performance, strategic initiatives, and future growth prospects are promising, with a focus on its core African-American customer, operational improvements, and strategic investments in growth initiatives. Citi Trends is well-positioned to capitalize on the opportunities in its market and continue to enhance shareholder value.
