Citi Trends Q2 Sales Rise 8% as Guidance Raised

Citi Trends, Inc. (NASDAQ: CTRN) delivered a strong second-quarter fiscal 2025 performance, exceeding expectations and prompting an upward revision of its full-year guidance. The retailer, which focuses on affordable apparel and home trends, reported total sales of $190.8 million, representing an 8% year-over-year increase and surpassing the projected revenue of $183.64 million [2]. The company also achieved a 9.2% rise in comparable store sales, marking the fourth consecutive quarter of growth in this key metric [4]. This performance is attributed to higher customer traffic and a product lineup that better aligns with current consumer preferences [2].

The company’s gross margin rate reached 40.0%, the highest for a second quarter since fiscal 2021, reflecting an 8.9 percentage point improvement from the prior year [4]. This was driven by reduced markdowns, better inventory shrink management, and increased full-price selling. Despite a rise in selling, general, and administrative (SG&A) expenses to $78.9 million—largely due to higher sales processing costs and incentive compensation—Citi Trends reported a net income of $3.8 million for the quarter. On an adjusted basis, the company recorded a net loss of $6.8 million, a significant improvement from the $18.4 million net loss in Q2 2024 [2]. Earnings per share (EPS) came in at $0.46, far above the forecasted loss of $0.92 per share [3].

Based on its strong Q2 performance, Citi Trends raised its full-year fiscal 2025 guidance. The updated outlook now anticipates mid to high-single-digit growth in comparable store sales for the full year, up from the previous mid-single-digit forecast [1]. The company also expects a gross margin expansion of approximately 210 to 230 basis points compared to 2024, supported by improved inventory management and supply chain efficiencies. SG&A expenses are forecast to leverage by 60 to 90 basis points, reflecting better-than-expected business performance and optimized incentive compensation [2].

Citi Trends also provided a revised EBITDA outlook, projecting full-year EBITDA between $7 million and $11 million, a $21 million to $25 million improvement over 2024 [2]. As part of its capital allocation strategy, the company plans to open three new stores, remodel approximately 60 locations, and close three underperforming stores. Capital expenditures are expected to range between $22 million and $25 million, underscoring the company’s commitment to long-term growth and operational efficiency [2].

The earnings report and guidance revision were well-received by investors, with shares of Citi Trends rising more than 2% following the release [3]. The stock’s positive reaction reflects growing confidence in the company’s ability to execute on its strategic initiatives, including store remodels, product assortment improvements, and digital integration [1]. Analysts have highlighted that Citi Trends’ ability to deliver both top-line and margin growth is a strong differentiator in a challenging retail environment [5].

Overall, the Q2 results and updated guidance reinforce Citi Trends’ strategic direction and its potential to create long-term value for shareholders. With continued momentum in comparable store sales and margin expansion, the company is positioned to benefit from its ongoing transformation and evolving consumer trends in the retail sector [5].

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Source: [1] Citi Trends (CTRN) Reports Strong Q2 Results, Raises Fiscal Guidance (https://tokenist.com/citi-trends-ctrn-reports-strong-q2-results-raises-fiscal-guidance/)

[2] Citi Trends Posts 9.2% Comp Gain in Q2 (https://www.mitrade.com/insights/news/live-news/article-8-1069818-20250826)

[3] Citi Trends rises over 2% as Q2 earnings beat, raises full-year outlook (https://www.investing.com/news/earnings/citi-trends-rises-over-2-as-q2-earnings-beat-raises-fullyear-outlook-93CH-4210726)

[5] Citi Trends Swings To Net Profit In Q2; Boosts FY25 Outlook (https://www.rttnews.com/3569079/citi-trends-swings-to-net-profit-in-q2-boosts-fy25-outlook.aspx)