In the first quarter of fiscal 2025, the company’s comparable store sales increased 9.9 per cent compared to the first quarter of previous year. The rise was fuelled by increases in traffic, basket and conversion, reflecting the continued impact of improved product style and value, addition of off-price extreme value and better product allocation methods.
“I am pleased to report progress on our continued strategic transformation journey, as evidenced by our strong first quarter results on both top and bottom line as well as stronger-than-expected adjusted EBITDA flowthrough. The tide is rising on all fronts at Citi Trends with all retail metrics trending positively and growth in both apparel and non-apparel, in all climate zones, and in all store volumes. Our sales momentum has continued with Q2 FY25 quarter-to-date comparable store sales growth trending in the mid to upper-single digits.”
“There is no doubt that there is a great deal of macro-economic uncertainty, particularly as it relates to tariffs. Our approach is to be aggressive to drive growth and remain flexible to react and adjust as needed. For the foreseeable future, our teams have successfully held net product costs flat in aggregate, finding alternative goods when needed and taking advantage of off-price opportunities created by the disrupted environment. As a result, we have mitigated near-term margin pressure and we remain optimistic about our ability to control our business results,” Seipel continued.
The company posted a gross margin of 39.6 per cent in Q1 FY25 vs. 38.7 per cent in Q1 FY24, an increase of 90 basis points due to higher initial markup, lower shrink and lower freight expense, partially offset by planned in-season markdowns. SG&A expense dollars leveraged 270 bps in Q1 FY25, reflecting the impact of increased sales and disciplined cost controls.
“The transformation of Citi Trends begins with our people. We are making Citi Trends a great place to work through performance-based compensation programmes, improved retention and enhanced leadership training programmes. For our customers, we're making Citi Trends a great place to shop by delivering exceptional store experiences that are neat, clean and organized as we fully embrace our identity as an off-price retailer. And above all, we are improving our ability to edit style and trends, while delivering extreme value branded offerings and buzz-worthy products all aimed at enhancing our value equation for our shoppers. I want to thank the entire Citi Trends organisation for their unwavering support throughout our transformation journey. I'm confident that our refined operating model, dedicated people and strong customer focus position Citi Trends to deliver continued strong results, market share gains and shareholder value creation,” Seipel concluded.
ALCHEMPro News Desk (RR)
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