Financial Data and Key Metrics Changes - Total sales for Q1 2025 increased by $15.4 million or 8.3% compared to Q1 2024, reaching $201.7 million [23] - Adjusted EBITDA for the quarter was $5.4 million, an increase of $6.2 million compared to Q1 2024, with a sales to EBITDA flow through of 40% [26] - Gross margin expanded by 90 basis points to 39.6%, driven by higher initial markup and lower freight costs [25] - Adjusted SG&A expenses totaled $74.4 million, or 36.9% of revenue, down from 39.1% in the prior period [25] Business Line Data and Key Metrics Changes - Comparable store sales grew by 9.9%, marking the third consecutive quarter of sequential improvement, with a two-year stack of 13% [24] - The plus-size business showed meaningful improvement, and the footwear category also experienced consistent top-line growth [9][10] - The accessory business was slightly below plan, prompting adjustments to better meet customer needs [9] Market Data and Key Metrics Changes - Strong performance was noted across all apparel and home categories, with many experiencing double-digit growth [8] - Increased traffic and mid-single-digit transaction count growth were observed, alongside improved conversion rates [24] Company Strategy and Development Direction - The company is in a three-phase strategic transformation: repair, execute, and optimize, aimed at building a high-performance company for sustainable profit growth [5][7] - Focus on enhancing product offerings, particularly in plus sizes and big men's apparel, while also improving trend relevancy in juniors and young men's categories [10][54] - Plans to open up to five new stores and remodel approximately 50 locations in the year, with a disciplined approach to fleet optimization [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround plan, expecting full-year comparable store sales growth in the mid-single digits and gross margin expansion of approximately 200 basis points [28][29] - The current tariff environment presents both challenges and opportunities, with the company well-positioned to capitalize on market disruptions [20] Other Important Information - The company ended the quarter with no debt, $42 million in cash, and liquidity of approximately $117 million [27] - A new AI-based allocation system is being tested, with plans for a full rollout following the back-to-school season [14][15] Q&A Session Summary Question: Can you provide context on the change in closeout strategy? - The company is focusing on in-season closeouts and extreme value products, aiming for a long-term goal of making this segment incremental to top-line growth by about 10% [41][43] Question: Why is the full-year guidance below current comp trends? - The company is facing tougher comparisons in the back half of the year and is being cautious due to uncertainties in the macro environment [46][48] Question: Can you share insights on specific category performance? - All categories performed well in Q1, with particular strength in plus sizes and footwear, while the accessory business was slightly off plan [52][54] Question: What performance uplift has been seen from remodeled units? - Early performance from remodeled stores is promising and consistent with prior remodel classes, although it is still early to quantify [61]

Financial Performance - Comparable store sales growth of 9.9% and total year-over-year sales growth of 8.3%, or $15.4 million, to $201.7 million[1][6] - Adjusted EBITDA of $5.4 million, an increase of $6.2 million compared to the prior year, with a flowthrough of 40%[1][10] - Net income of $0.9 million, compared to a net loss of $3.4 million in Q1 2024, with diluted earnings per share of $0.11[6][10] - Adjusted operating income for Q1 2025 was $1,036 million, compared to a loss of $5,589 million in Q1 2024[22] - Adjusted net income for Q1 2025 was $1,418 million, improving from a loss of $2,663 million in Q1 2024[22] - Adjusted diluted earnings per share (EPS) for Q1 2025 was $0.17, compared to a loss of $0.32 in Q1 2024[22] - Adjusted EBITDA for Q1 2025 was $5,406 million, a significant increase from a loss of $796 million in Q1 2024[23] Inventory and Expenses - Merchandise inventory decreased by 7.6% to $109.9 million, with a 45% reduction in aged product compared to Q1 2024[10] - SG&A expenses leveraged 270 basis points compared to Q1 2024, reflecting disciplined cost controls amid increased sales[6][10] - Adjusted SG&A expenses for Q1 2025 were $74,404 million, compared to $72,831 million in Q1 2024[22] - The company incurred $402 million in cyber incident expenses during Q1 2025[22] - Other non-recurring expenses amounted to $885 million in Q1 2025, down from $1,380 million in Q1 2024[22] - The company reported an asset impairment of $64 million in Q1 2025, while there was no such expense in Q1 2024[22] Future Outlook - The company expects full-year comparable store sales growth in the mid-single digits, and EBITDA to be in the range of $6 million to $10 million, a significant improvement from 2024[11] - Plans to open up to 5 new stores and remodel approximately 50 stores during fiscal 2025[11] - Total liquidity at the end of Q1 2025 was approximately $117.0 million, with no debt and $41.6 million in cash[10][11] Operational Focus - The company continues to focus on enhancing customer experience and operational improvements to drive future growth[4][5] Interest and Tax - Interest income for Q1 2025 was $458 million, down from $849 million in Q1 2024[22] - The company did not report any income tax benefit in Q1 2025, compared to a benefit of $2,773 million in Q1 2024[22] Gross Margin - Gross margin improved to 39.6%, up 90 basis points from 38.7% in Q1 2024, driven by higher initial markup and lower shrink[6][10]

Financial Performance - Total sales for fiscal 2024 were $753.1 million, representing a 0.7% increase from $747.9 million in fiscal 2023, driven by a 3.4% increase in comparable store sales [162]. - The net loss for fiscal 2024 was $43.2 million, compared to a net loss of $12.0 million in fiscal 2023, influenced by a $16.5 million valuation allowance on deferred tax assets and strategic investments [168]. - Selling, general and administrative expenses increased by $15.7 million, or 5.5%, to $300.2 million in fiscal 2024, with SG&A as a percentage of sales rising to 39.9% [164]. - Cost of sales increased by $8.2 million, or 1.8%, to $471.0 million in fiscal 2024, with cost of sales as a percentage of net sales at 62.5% [163]. Store Operations - The company operated 591 stores at the end of fiscal 2024, having opened 1 new store, remodeled 35 stores, and closed 12 stores during the year [151]. - The company expects to accelerate square footage expansion in the range of 6% to 10% annually over time, focusing on maximizing productivity in existing stores [154]. Cash Flow and Investments - Cash used in operating activities was $3.8 million in fiscal 2024, a decrease from $9.6 million in fiscal 2023, with significant sources including a $7.8 million reduction in inventory [175]. - Cash used in investing activities was $10.1 million in fiscal 2024, down from $13.4 million in fiscal 2023, entirely for purchases of property and equipment [177]. - Cash used in financing activities was $4.7 million in fiscal 2024, including $3.8 million for share repurchases [178]. - In fiscal 2024, the company returned $3.8 million to shareholders through share repurchases [173]. Inventory Management - Inventory at the end of fiscal 2024 was $122.6 million, a decrease from $130.4 million in fiscal 2023, due to a strategic inventory reset [171]. - Inventory shrink as a percentage of sales was 1.7% in fiscal 2024, up from 1.0% in fiscal 2023 and 0.7% in fiscal 2022 [181]. - The allowance for inventory shrink was $5.2 million as of February 1, 2025, compared to $3.9 million as of February 3, 2024 [181]. Financial Position - The company ended fiscal 2024 with cash of $61.1 million and no debt, down from $79.7 million at the end of the previous year [169]. - The company has a revolving credit facility with a $75 million credit commitment and no borrowings as of the end of fiscal 2024 [174]. - As of February 1, 2025, the company's contractual commitments for operating leases totaled $289.3 million, with $60.7 million due within 12 months [179]. Accounting and Compliance - The company is evaluating the impact of new accounting standards on its consolidated financial statements, including ASU 2023-09 and ASU 2024-03 [182][183]. - The company sources all products in U.S. Dollars and is not directly subject to foreign currency exchange rate fluctuations [184].

Group 1 - The core investment strategy of Quipus Capital focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective rather than market-driven dynamics [1] - Quipus Capital emphasizes understanding the long-term earnings power of companies and the competitive dynamics within their industries [1] - The majority of recommendations from Quipus Capital will be holds, indicating a cautious approach to investment opportunities [1] Group 2 - The articles produced by Quipus Capital aim to provide valuable information for future investors while maintaining a healthy skepticism towards a generally bullish market [1] - The company believes that only a small fraction of companies should be considered a buy at any given time [1]

Financial Data and Key Metrics Changes - The company reported a fourth quarter comparable store sales growth of 6.4%, showing sequential improvement from the third quarter and strong acceleration on a two-year basis [3][4] - Gross margin expanded compared to the previous year, indicating positive momentum in sales and profitability [4] Business Line Data and Key Metrics Changes - The strategic focus on off-price value retailing has been a key driver of the company's performance, particularly in appealing to the African American customer base [3][5] - The company is enhancing its product value proposition and expanding brand assortment, which has contributed to the positive sales momentum [5] Market Data and Key Metrics Changes - The company has seen approximately 2,000 basis points of improvement in two-year stack trends, distinguishing itself from other retailers facing softening results [7][8] Company Strategy and Development Direction - The company is focused on a refined strategy that emphasizes trendy fashions, great brands, and competitive pricing, creating a defensible market position [3][4] - Long-term EBITDA targets are set between $40 million to $50 million, with plans to improve EBITDA margins to the 5% to 7% range [5][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic initiatives and healthy balance sheet, positioning it for continued improvement into fiscal year 2025 [4] - The management highlighted the importance of operational excellence and improved allocation practices in driving the company's turnaround [5] Other Important Information - The company is developing relationships with larger brands to enhance its product offerings, particularly in footwear and apparel [10] - The operating budget is set at a low base to ensure foundational operations, with a sales plan aimed at generating approximately 25% flow-through once sales targets are met [15][16] Q&A Session Summary Question: Sales trends and industry differentiation - The analyst inquired about the company's sales trends and what differentiates it from the industry, noting a significant improvement in two-year stack trends [7] Response: Off-price strategy - Management attributed the success to the addition of off-price strategies and a sharpened price-value equation across core products [8] Question: Off-price inventory expectations - The analyst asked about the current and future state of off-price inventory [9] Response: In-season aggressive deals - Management clarified that off-price now includes more in-season aggressive deals, not just end-of-season closeouts [9] Question: Long-term EBITDA targets - The analyst sought clarity on the sales levels needed to achieve the EBITDA target of $40 million [11] Response: EBITDA margin improvement - Management indicated that improving EBITDA margins to above 5% would be essential to reach the target [11] Question: Building blocks of EBITDA increase - An analyst requested details on the components contributing to the projected EBITDA increase [15] Response: Sales growth and margin expansion - Management discussed the importance of sales growth and margin expansion, with a focus on maintaining a low base of expenses [16] Question: Clarification on comp guidance - The analyst asked if the low base of sales and SG&A was the baseline for comp guidance [17] Response: Guidance encompasses low sales base - Management confirmed that the guidance includes a low sales base to ensure expenses remain controlled [17]

Financial Data and Key Metrics Changes - The company reported total sales of approximately $211 million for Q4 2024, with comparable store sales growth of 6.4%, reflecting a sequential improvement from Q3 [6][13] - Gross margin rate expanded by 60 basis points to 39.7% compared to Q4 2023, driven by strong customer traffic and improved product offerings [14][41] - Inventory levels decreased by 6% year-over-year, indicating a fresher inventory position [15][53] Business Line Data and Key Metrics Changes - The footwear business registered high-single-digit growth, driven by strong customer acceptance of extreme off-value price branded buys [18] - Non-apparel categories such as giftables and family basics performed well, while children's apparel continued to grow [17] - The plus-size apparel segment experienced challenges due to execution issues, which are expected to improve by Q2 2025 [17] Market Data and Key Metrics Changes - The company has identified significant opportunities to expand its product assortment to cater to average- and higher-income customers within its African-American customer base [8][20] - The strategic focus on trendy fashions and recognizable brands has resonated well with customers, leading to increased loyalty and transaction sizes [7][21] Company Strategy and Development Direction - The company is transitioning from the repair phase to the execute phase of its strategic journey, focusing on consistent execution capabilities and best practices [11][55] - A three-tiered product strategy is being implemented to enhance product assortment and meet diverse customer needs [19] - The company plans to remodel at least 50 stores in 2025 and is conducting market studies for future expansion [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties, including potential changes in tariffs and taxes [32][34] - The company anticipates positive free cash flow generation in fiscal 2025, marking a critical milestone in its financial transformation [30][51] - Full-year comparable sales growth is expected to be in the low- to mid-single digits, with gross margin expected to expand by at least 220 basis points [56] Other Important Information - The company maintains a healthy balance sheet with $61 million in cash and no debt, providing flexibility for strategic initiatives [29][51] - The Board approved a $50 million share repurchase program, with $10 million already invested [30][52] Q&A Session Summary Question: Sales trends and market share - Management highlighted the addition of off-price to the business model and improved price value equation as key drivers for sustaining momentum into 2025 [65][66] Question: Off-price business growth - Currently, off-price accounts for 1% to 2% of the business, with expectations to grow to around 10% in the long term [70][71] Question: Brand name deals - The company is focusing on securing deals with well-known brands across various categories, emphasizing extreme pricing [76][78] Question: EBITDA increase components - Management outlined that the anticipated EBITDA increase of $19 million to $23 million will come from sales growth, margin expansion, and leveraging SG&A [89][95] Question: Sales guidance and flow-through - The low base of sales and SG&A is expected to support the guidance of low- to mid-single-digit comp sales, with potential for additional sales above that range [96][98]

Sales Performance - Q4 2024 total sales reached $211.2 million, with comparable store sales growth of 6.4% and average store inventory down 6.7%[1] - Fiscal 2024 total sales amounted to $753.1 million, reflecting a 0.7% increase compared to the previous year[5] - Net sales for the fourth quarter of fiscal year 2025 were $211,172, a decrease of 1.5% compared to $215,179 in the same quarter of the previous year[18] - For the fiscal year 2025, net sales were $753,079, an increase of 0.2% from $747,941 in fiscal year 2024[18] Profitability and Loss - The company reported a net loss of $(43.2) million for fiscal 2024, compared to a net loss of $(12.0) million in 2023[5] - The company reported a net loss of $14,177 for the fourth quarter, compared to a net income of $3,551 in the fourth quarter of fiscal year 2024[18] - The company reported a basic net loss per common share of $5.19 for fiscal year 2025, compared to a basic net income per common share of $7.17 in fiscal year 2024[18] Gross Margin - Q4 2024 gross margin was 39.7%, an increase of 60 basis points from Q4 2023[5] - Full year gross margin for fiscal 2025 is expected to expand by a minimum of 220 basis points compared to 2024[11] - The adjusted gross margin for fiscal year 2025 was 37.5%, down from 38.1% in fiscal year 2024[24] EBITDA - Adjusted EBITDA for Q4 2024 was $7.1 million, down from $10.0 million in Q4 2023[5] - Adjusted EBITDA for the fourth quarter of fiscal year 2025 was $7,098, down from $9,989 in the fourth quarter of fiscal year 2024[23] Liquidity and Debt - The company ended fiscal 2024 with liquidity of approximately $136 million, including $61 million in cash and no debt[1] - Cash and cash equivalents decreased to $61,085 as of February 1, 2025, from $79,706 as of February 3, 2024[20] Future Outlook - For fiscal 2025, the company expects low to mid-single digit comparable store sales growth and EBITDA improvement of $19 million to $23 million compared to fiscal 2024[11] - The company plans to remodel approximately 50 stores and open up to 5 new locations in fiscal 2025[11] Assets and Liabilities - Total assets decreased to $462,769 as of February 1, 2025, from $518,721 as of February 3, 2024[20] - Total liabilities decreased to $349,594 as of February 1, 2025, compared to $361,015 as of February 3, 2024[20] Share Repurchase - In Q4 2024, the company repurchased 145,238 shares for a total of $3.8 million, with $46.2 million remaining under the share repurchase program[8] Asset Impairment - The company incurred asset impairment charges of $701 in the fourth quarter of fiscal year 2025, compared to $873 in the same quarter of the previous year[18]

Core Viewpoint - Purcell & Lefkowitz LLP is investigating Citi Trends, Inc. to determine if the company's directors breached their fiduciary duties related to recent corporate actions [1] Group 1 - The investigation is being conducted on behalf of Citi Trends's shareholders [1] - The law firm specializes in representing shareholders who are victims of securities fraud and corporate misconduct [3] - Shareholders interested in their rights and options can obtain additional information free of charge [2]

Financial Performance - Total net sales for the thirteen weeks ended November 2, 2024, were $179,066,000, a slight decrease of 0.3% compared to $179,520,000 for the same period last year[11]. - The company reported a net loss of $7,152,000 for the thirteen weeks ended November 2, 2024, compared to a net loss of $3,863,000 for the same period last year, representing an increase in loss of 85.5%[11]. - Basic net loss per common share was $(0.86) for the current quarter, compared to $(0.47) for the same quarter last year[11]. - The company experienced a loss from operations of $8,826,000 for the thirteen weeks ended November 2, 2024, compared to a loss of $6,003,000 for the same period last year, indicating a worsening operational performance[11]. - Net loss was $7.2 million in Q3 2024 compared to a net loss of $3.9 million in Q3 2023[75]. - Net loss was $29.0 million in the first thirty-nine weeks of 2024 compared to a net loss of $15.5 million in the same period in 2023[81]. Assets and Liabilities - Total current assets decreased to $183,112,000 as of November 2, 2024, down from $225,099,000 as of February 3, 2024, a decline of 18.7%[8]. - Total liabilities decreased to $336,806,000 as of November 2, 2024, from $361,015,000 as of February 3, 2024, a reduction of 6.7%[8]. - Total stockholders' equity decreased to $130,270,000 as of November 2, 2024, down from $157,706,000 as of February 3, 2024, a decline of 17.3%[8]. - Cash and cash equivalents decreased significantly to $38,872,000 as of November 2, 2024, from $79,706,000 as of February 3, 2024, a decline of 51.2%[8]. - The quarter-end cash and cash equivalents balance was $38.9 million, down from $59.7 million at the end of the third quarter last year[82]. Operational Metrics - Inventory levels were reported at $127,514,000 as of November 2, 2024, a decrease from $130,432,000 as of February 3, 2024, reflecting a reduction of 2.2%[8]. - The company operated 593 stores across 33 states as of November 2, 2024[19]. - The company's revenue from contracts with customers is disaggregated by major merchandise categories, with Ladies accounting for 27% and Home & Lifestyle for 10% of net sales in Q3 2024[44]. - For the first thirty-nine weeks of 2024, net sales increased by $9.1 million, or 1.7%, to $541.9 million compared to the same period in 2023[76]. Expenses - Cost of sales (exclusive of depreciation) decreased by $3.1 million, or 2.7%, to $107.8 million in Q3 2024, with cost of sales as a percentage of sales decreasing to 60.2%[70]. - Selling, general and administrative expenses increased by $5.1 million, or 7.3%, to $74.7 million in Q3 2024, resulting in an increase in expenses as a percentage of sales to 41.7%[71]. - Cost of sales (exclusive of depreciation) increased by $11.9 million, or 3.6%, to $343.7 million in the first thirty-nine weeks of 2024, with cost of sales as a percentage of sales increasing to 63.4%[77]. - Selling, general and administrative expenses increased by $12.7 million, or 6.1%, to $222.7 million in the first thirty-nine weeks of 2024, with expenses as a percentage of sales rising to 41.1%[78]. Cash Flow and Financing - The company reported a net cash used in operating activities of $32,348,000 for the thirty-nine weeks ended November 2, 2024, compared to $32,868,000 for the same period last year, indicating a slight improvement[16]. - The company had no borrowings under its $75 million credit facility as of November 2, 2024[28]. - Cash paid for operating leases in the first thirty-nine weeks of 2024 was $46.7 million, compared to $52.7 million in the same period of 2023[50]. - The company continues to meet its cash requirements through cash flow from operations and short-term trade credit[93]. Legal and Regulatory - The company is involved in various legal proceedings but does not expect any to have a material adverse effect on its financial condition[103]. - The company has established appropriate reserves for legal proceedings when costs become probable and can be reasonably estimated[103]. - The evaluation of disclosure controls and procedures concluded that they are effective as of November 2, 2024, providing reasonable assurance for timely reporting[98]. - There were no changes in internal control over financial reporting that materially affected the company during the fiscal quarter ended November 2, 2024[100]. Accounting and Standards - The company’s financial statements are prepared in accordance with U.S. GAAP and are unaudited[20]. - The company is currently evaluating the impact of new accounting standards issued by the FASB regarding segment reporting and income tax disclosures[51][52]. - There have been no material changes to the critical accounting policies since the last annual report[96]. - There have been no material changes to the risk factors described in the annual report for the fiscal year ended February 3, 2024[104].

Group 1 - Citi Trends, Inc. (NASDAQ: CTRN) reported Q3 2024 results with a topline comparable expansion exceeding 5.5%, attributed to increased traffic and basket size [1] - The company's margins did not expand, and it experienced higher losses compared to previous periods [1] Group 2 - The analysis emphasizes a long-only investment approach, focusing on operational aspects and long-term earnings potential rather than market-driven dynamics [1] - The investment strategy suggests that only a small fraction of companies should be considered for buying at any given time, with most recommendations being holds [1]