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]

Financial Data and Key Metrics Changes - Total sales for Q3 2024 were $179.1 million, with comparable sales growth of 5.7% compared to the prior year [11][33] - Gross margin expanded by 160 basis points to 39.8%, with gross profit dollars increasing by 3.9% year-over-year [19][36] - Adjusted SG&A expenses totaled $74.6 million, an increase of $3.7 million versus last year, driven by strategic costs aimed at future growth [38][39] Business Line Data and Key Metrics Changes - Positive trends were observed across both apparel and non-apparel categories, with children's apparel performing particularly well due to improved product assortment and allocation tactics [12][13] - Non-apparel categories, especially home and lifestyle, also showed strength, benefiting from strategic inventory investments [13] Market Data and Key Metrics Changes - Comparable sales improved each month during Q3, culminating in high single-digit growth in October, indicating strong customer traffic and transaction growth [10][12] - The company noted a significant reduction in inventory aged 7 months or older, which made up only 3% of Q3 end-of-period inventory [35] Company Strategy and Development Direction - The company is focused on a core African American customer base, aiming to refine product assortments that resonate with this demographic [24] - A balanced product value proposition is being reinforced, with an increased selection of goods priced under $5 to attract lower-income customers [25] - The company plans to return to new store growth in 2025 and beyond, while also implementing a remodel and refresh program for existing stores [78][80] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the positive customer response to recent strategic changes, particularly in November [58][102] - The company expects second-half comparable store sales to increase low to mid-single digits year-over-year, with total sales expected to be flat to down slightly due to store closures [44][46] Other Important Information - The company has a strong balance sheet with no debt and $39 million in cash, allowing for share repurchases and funding of business initiatives [40][41] - Approximately $1.6 million in one-time strategic expenses were incurred in Q3, aimed at stabilizing operational practices for long-term growth [23] Q&A Session Summary Question: What is the guidance for Q4 sales given the strong start in November? - Management acknowledged the exceptional performance in November but noted caution due to tougher comparisons in December and January [58][60] Question: What portion of Q4 sales comes in December? - Management indicated that December accounts for about 50% of Q4 sales [63] Question: What is the current impact of shrink on margins? - Management estimated shrink is currently a drag of 50 to 70 basis points compared to historical levels, with improvement expected into 2025 [64][66] Question: What is the long-term EBITDA margin target for the business? - Management aims to return EBITDA margins to historical levels of 5% to 6% [88][90] Question: What is the expected long-term SG&A cost? - Management indicated that a quarterly SG&A of around $73 million is a reasonable target moving forward [93] Question: How does the current turnaround compare to past experiences? - Management highlighted the unique operational challenges faced and the quick positive customer response as key differences in this turnaround [100][102]

Financial Results - Citi Trends, Inc. announced preliminary financial results for Q3 fiscal 2024, with specific figures to be detailed in the attached press release[5]. Executive Appointments - Kenneth D. Seipel has been appointed as the permanent Chief Executive Officer, effective November 18, 2024, after serving as Interim CEO[7]. - The Board appointed Peter Sachse as Chairman of the Board, effective November 18, 2024, following Mr. Seipel's appointment[13]. Compensation and Incentives - Mr. Seipel's annual base salary is set at $725,000, with a potential annual cash incentive of up to 200% of a prorated target amount based on earnings performance[9]. - The company plans to grant Mr. Seipel 80,000 restricted shares of common stock, vesting over three years, and an additional performance-based grant of approximately 321,500 restricted shares[9]. - The performance-based shares will vest based on achieving specific stock price hurdles, each representing a 20% increase in stock price over a three-year period[9]. Press Release - The press release regarding the CEO appointment and preliminary financial results is incorporated into the current report[14].

Financial Performance - Net sales for the twenty-six weeks ended August 3, 2024, were $362,841,000, compared to $353,242,000 for the same period in 2023, representing an increase of about 2.3%[8] - The net loss for the thirteen weeks ended August 3, 2024, was $21,839,000, compared to a net loss of $11,667,000 for the same period in 2023, indicating a worsening of approximately 87.1%[9] - Basic net loss per common share for the thirteen weeks ended August 3, 2024, was $(2.63), compared to $(1.42) for the same period in 2023, reflecting a significant increase in losses per share[8] - The company reported a loss from operations of $31,865,000 for the twenty-six weeks ended August 3, 2024, compared to a loss of $17,382,000 for the same period in 2023, indicating a deterioration of approximately 83.5%[8] - The net loss for the second quarter of 2024 was $18.4 million, compared to a net loss of $6.6 million in the same period of 2023[21] - The company reported an asset impairment of $1,261,000 for the twenty-six weeks ended August 3, 2024, compared to no impairment in the same period of 2023[8] Assets and Liabilities - Total assets decreased from $518,721,000 as of February 3, 2024, to $506,731,000 as of August 3, 2024, a decline of approximately 2.3%[5] - Total current liabilities increased from $169,904,000 as of February 3, 2024, to $185,483,000 as of August 3, 2024, an increase of approximately 9.1%[5] - Total current assets decreased from $225,099 thousand as of February 3, 2024, to $215,116 thousand as of August 3, 2024[5] - Total liabilities increased from $361,015 thousand as of February 3, 2024, to $370,141 thousand as of August 3, 2024[5] - Total stockholders' equity decreased from $157,706,000 as of February 3, 2024, to $136,590,000 as of August 3, 2024, a decline of approximately 13.4%[6] Cash Flow and Liquidity - Cash and cash equivalents decreased from $79,706,000 at the beginning of the period to $59,302,000 at the end, a decline of about 25.6%[9] - Total cash and cash equivalents at the end of the period were $59,302,000, down from $65,820,000 at the end of July 29, 2023, indicating a decrease in liquidity[9] - Cash used in operating activities for the twenty-six weeks ended August 3, 2024, was $(13,996,000), a decrease from $(29,961,000) in the same period of 2023, showing improved cash flow management[9] Inventory and Operating Costs - Inventory increased from $130,432,000 as of February 3, 2024, to $134,996,000 as of August 3, 2024, an increase of approximately 3.6%[5] - Operating lease liabilities increased from $45,842,000 to $49,071,000, reflecting a rise of about 4.9%[5] - Operating lease costs for the weeks ended July 29, 2023, totaled $18,921 thousand, while for the weeks ended August 3, 2024, they were $18,322 thousand, indicating a decrease[31] - Total lease costs for the first half of 2024 amounted to $37.047 million, compared to $37.965 million for the first half of 2023[31] Shareholder Information - The weighted average number of common shares outstanding (basic) for the second quarter of 2024 was 8,336,629, compared to 8,224,762 for the same period in 2023[17] - The weighted average number of basic shares outstanding increased to 8,295,000 for the twenty-six weeks ended August 3, 2024, from 8,203,000 in the same period of 2023[8] - The weighted average number of common shares outstanding (diluted) increased to 8,294,593 as of August 3, 2024, from 8,203,497 in the previous year[18] - There were no stock repurchases in the first half of 2024 or 2023, with $50 million remaining available under the stock repurchase authorization[27] Store Operations - As of August 3, 2024, the company operated 597 stores across 33 states[13] - The company’s retail operations represent a single operating segment, with similar products and processes across its stores[28] Tax and Deferred Assets - The company had approximately $13.7 million in net deferred tax assets as of August 3, 2024[23] - As of August 3, 2024, the company had approximately $13.7 million in net deferred tax assets (DTA), with $9.7 million related to net operating loss (NOL) carryforwards[23][24] Accounting and Reporting - The company is currently evaluating the impact of new accounting standards issued by the FASB regarding segment reporting and income tax disclosures[36][37]

Financial Data and Key Metrics Changes - Total sales in Q2 2024 increased by 1.7% compared to the previous year, while comparable store sales decreased by 1.7% [20] - Adjusted gross margin for Q2 was 31.1%, significantly lower than recent history due to inventory markdowns and shrink expenses [22] - The company ended Q2 with a strong balance sheet, including no debt and $59 million in cash, resulting in total liquidity of approximately $134 million [23] Business Line Data and Key Metrics Changes - The home and impulse categories delivered double-digit comparable sales growth, while back-to-school children's categories started strong [4] - Footwear continued to be a drag on the business, while home and impulse categories performed well [28] Market Data and Key Metrics Changes - The company reported strong customer traffic growth, indicating high engagement with the Citi Trends brand [4] - Approximately 80% of store markets returned to school by the end of Q2, compared to only 14% at the end of the previous quarter [20] Company Strategy and Development Direction - The company is focusing on refining its product assortment strategy to include a balanced mix of good, better, and best products, with an emphasis on opening price points and branded goods [19][12] - A targeted approach towards the core African-American consumer is being implemented to enhance product offerings and customer engagement [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's future, citing control over internal opportunities and a strong financial position as key factors for growth [8] - The company expects second-half comparable store sales to be flat to up low single-digits, with total sales anticipated to decline mid-single-digits due to store closures [24] Other Important Information - The company incurred $13.4 million in one-time expenses related to inventory reset and shrink, which are not reflective of the underlying business strength [15] - Inventory was approximately flat compared to last year, with strategic packaway buys making up about 23% of the end-of-quarter inventory [23] Q&A Session Summary Question: What drove the decline in comparable store sales? - Management noted that while transactions were up, basket sizes were under pressure due to fewer items per transaction, with footwear continuing to be a drag on sales [28] Question: How will the increased shrink accrual impact future quarters? - The increased accrual will continue to be a drag on gross margin but is incorporated into the guidance for the second half of the year [29] Question: Can you elaborate on the aged inventory write-downs? - The company overpurchased inventory in Q1, leading to a backlog that required aggressive markdowns to clear [32] Question: How is the new ERP system performing? - The new ERP system has complexities that require simplification for better execution, with plans to enhance allocation processes [33] Question: What are the expectations for same-store sales trends in Q3 and Q4? - Management indicated that while comparisons may get tougher, they are focused on driving top-line growth through improved product offerings and customer engagement [39]

Financial Performance - Total sales increased by 1.7% to $176.6 million in Q2 2024 compared to Q2 2023, while comparable store sales decreased by 1.7%[2] - Gross margin decreased to 31.1% in Q2 2024 from 38.2% in Q2 2023, impacted by $9.4 million in markdowns and $4.0 million in shrink[2] - Net loss for Q2 2024 was $18.4 million, compared to a net loss of $5.0 million in Q2 2023[2] - Adjusted EBITDA loss was $17.2 million in Q2 2024, including $13.4 million of transition expenses, compared to a loss of $3.1 million in Q2 2023[2] - Net sales for the quarter ended August 3, 2024, were $362,841 thousand, an increase from $353,242 thousand for the same period last year, representing a growth of approximately 4.5%[14] - Gross profit margin decreased to 35.0% in Q2 2024 from 37.5% in Q2 2023, indicating a decline in profitability[21] - The net loss for the quarter was $21,840 thousand, compared to a net loss of $11,667 thousand in the same quarter last year, reflecting a worsening of approximately 87.5%[14] - Adjusted net loss for the quarter was $16,202 thousand, compared to $4,916 thousand in the prior year, indicating a significant increase in losses[17] - Basic and diluted net loss per share for the quarter was $(2.63), compared to $(1.42) in the same quarter last year, showing a decline of approximately 85.4%[14] Store Operations - The company opened 1 new store, closed 3 stores, and remodeled 15 stores, ending the quarter with 597 locations[2] - The company plans to close 10 to 15 underperforming stores in fiscal 2024, expecting to end the year with approximately 590 stores[8] Future Outlook - The outlook for the second half of fiscal 2024 includes expectations for comparable store sales to be flat to up low-single digits, with total sales expected to decline mid-single digits[8] - Second half gross margin is expected to be approximately 39%, with EBITDA projected to be positive in the range of $0.5 million to $2.5 million[8] - Cash balance at year-end is expected to be between $60 million and $70 million, with capital expenditures reduced by 35% to approximately $13 million[8] Asset and Liability Management - Total assets decreased to $506,731 thousand as of August 3, 2024, down from $526,507 thousand as of July 29, 2023, a reduction of about 3.7%[15] - Total liabilities remained relatively stable at $370,141 thousand compared to $370,554 thousand in the previous quarter[15] - Cash and cash equivalents decreased to $59,302 thousand from $65,820 thousand in the previous quarter, a decline of approximately 8.5%[15] Operational Challenges - The company has engaged a consulting firm to address shrinkage issues and improve operational efficiency[3] - The company incurred asset impairment expenses of $1,261 thousand related to a cyber incident during the quarter[17] - Cyber incident expenses amounted to $36 million, down from $1,723 million in the previous quarter[23] - Other non-recurring expenses totaled $3,009 million, with no expenses reported in the prior quarter[23] Interest and Tax Expenses - Interest income decreased to $(1,460) million from $(1,910) million[23] - Interest expense slightly increased to $158 million from $152 million[23] - Income tax benefit expense was $(8,724) million, compared to $(3,957) million in the previous quarter[23] Depreciation and Impairment - Depreciation increased to $9,576 million, compared to $9,389 million in the prior quarter[23] - Asset impairment charges were $1,261 million, with no charges reported in the previous quarter[23]

Financial Performance - Net sales for the thirteen weeks ended May 4, 2024, were $186.3 million, an increase of 3.6% compared to $179.7 million for the same period in 2023[34]. - The company reported a net loss of $3.4 million for the first quarter of 2024, improving from a net loss of $6.6 million in the first quarter of 2023[34]. - Basic and diluted net loss per common share for the first quarter of 2024 was $0.42, compared to $0.81 for the same period in 2023[34]. - The company experienced a loss from operations of $7.0 million for the first quarter of 2024, an improvement from a loss of $9.5 million in the first quarter of 2023[34]. Equity and Liabilities - Total stockholders' equity decreased to $154.8 million as of May 4, 2024, from $157.7 million as of February 3, 2024[32]. - Total liabilities and stockholders' equity amounted to $484.1 million as of May 4, 2024, down from $518.7 million as of February 3, 2024[32]. - The company had no borrowings under its credit facility as of May 4, 2024, with $1.4 million in letters of credit outstanding[43]. - The company reported a decrease of $14.5 million in accrued expenses and other long-term liabilities in Q1 2024, compared to a $20.0 million decrease in Q1 2023[46]. Expenses - Selling, general and administrative expenses increased to $74.2 million in the first quarter of 2024, compared to $70.8 million in the first quarter of 2023[34]. - Interest income for the first quarter of 2024 was $849,000, down from $1.0 million in the first quarter of 2023[34]. - Significant uses of cash included a $28.1 million decrease in accounts payable compared to an increase of $9.1 million in the first quarter of 2023[46]. - Significant cash uses in Q1 2024 included a $28.1 million decrease in accounts payable, contrasting with a $9.1 million increase in Q1 2023[46]. Shareholder Information - As of April 29, 2023, the company reported net income of $(6,635) million, with retained earnings at $324,415 million[38]. - The company had 16,116,915 common shares outstanding as of April 29, 2023, reflecting a decrease from 16,158,494 shares at the beginning of the year[38]. - The company excluded 272,000 shares of nonvested restricted stock from the diluted earnings per share calculation for Q1 2024[40]. Cash Requirements and Commitments - The company’s cash requirements primarily consist of inventory purchases, capital expenditures, and operational needs[47]. - Contractual commitments for operating leases totaled $229.9 million, with $41.1 million due within the next 12 months[47]. Accounting and Reporting - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and reflect all necessary adjustments for fair presentation[39]. - The operating results for Q1 2024 may not be indicative of the full fiscal year due to seasonality and economic uncertainty[39].

Citi Trends, Inc. (NASDAQ:CTRN) Q1 2024 Earnings Conference Call June 4, 2024 9:00 AM ET Company Participants Nitza McKee - Senior Associate, ICR Ken Seipel - Interim CEO Heather Plutino - CFO Conference Call Participants Michael Baker - D.A. Davidson Jeremy Hamblin - Craig-Hallum Capital Group John Lawrence - Benchmark Operator Greetings, and welcome to the Citi Trends First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session ...

Exhibit 99.1 CITI TRENDS ANNOUNCES FIRST QUARTER FISCAL 2024 RESULTS Total year-over-year sales growth of 3.7% to $186.3 million Comparable sales growth of 3.1%; Gross margin at 38.7% Balance sheet continues to have ample liquidity and no debt Company reiterates Fiscal 2024 EBITDA Outlook SAVANNAH, GA (June 4, 2024) — Citi Trends, Inc. (NASDAQ: CTRN), a leading specialty value retailer of apparel, accessories and home trends for way less spend primarily for African American and multicultural families in the ...