Citi Trends Reports $7.2 Million Net Loss in Third Quarter of Fiscal 2024

Citi Trends, Inc. reported its financial results for the third quarter and the first thirty-nine weeks of fiscal 2024, revealing a net loss of $7.2 million for the quarter ending November 2, 2024, compared to a net loss of $3.9 million for the same period in the previous year. For the first thirty-nine weeks, the company experienced a net loss of $29.0 million, up from a loss of $15.5 million in the prior year. Net sales for the third quarter were $179.1 million, a slight decrease of 0.3% from $179.5 million in the third quarter of 2023. However, year-to-date sales increased by 1.7% to $541.9 million, driven by a 2.3% increase in comparable store sales.

The company's financial performance was impacted by several factors, including a rise in selling, general, and administrative expenses, which increased by 7.3% to $74.7 million in the third quarter. This rise was attributed to higher corporate expenses, including one-time costs related to strategic initiatives. Additionally, the cost of sales decreased by 2.7% to $107.8 million, resulting in a reduction in the cost of sales as a percentage of total sales from 61.8% to 60.2%. The company also recorded non-cash impairment expenses of $0.6 million related to underperforming stores during the quarter.

Citi Trends continues to focus on its strategic initiatives, including the expansion of its store footprint. As of November 2, 2024, the company operated 593 stores across 33 states. The company has not engaged in any stock repurchases during the first thirty-nine weeks of fiscal 2024, maintaining $50 million available under its stock repurchase authorization. The company’s capital expenditures for the first thirty-nine weeks were $7.6 million, a decrease from $11.6 million in the same period last year, reflecting a more cautious approach to investments in new stores and remodels.

Looking ahead, Citi Trends anticipates that ongoing economic conditions, including inflation and consumer spending patterns, will continue to influence its operations. The company expects low-income families to remain under financial pressure, which may affect discretionary spending. Management remains focused on maintaining adequate liquidity and prioritizing investments that will support profitable growth while navigating the challenges posed by the current economic environment. The company plans to continue monitoring its performance metrics, including comparable store sales growth, to adapt its strategies accordingly.