CTRN - Citi Trends drops after warning about 'selective' customer spending

2023-05-23 08:12:55 ET

Citi Trends ( NASDAQ: CTRN ) fell in early trading on Tuesday after the retailer swung to a loss in Q1 after being profitable for the quarter a year ago.

Total sales decline 13.7% during Q1 and comparable store sales were down 14.1%.

Gross margin fell 200 basis pointst to 37.0% of sales.

Citi Trends ( CTRN ) reported an operating loss of $9.5M vs. operating income of $4.7M a year ago.

Quarter-end total dollar inventory decreased 11.9% and average in-store inventory increased 8.1%, reflecting work to rebuild inventory levels in targeted departments. On the balance sheet, Citi Trends ( CTRN ) ended the quarter with total liquidity of approximately $164M at the made up of $88.7M of cash, no borrowings under a $75M credit facility, and no debt.

CEO update: "Against what remained a challenging macro backdrop for the low-income families that we serve, our first quarter results were in line with our previously stated guidance. During the quarter, we made progress rebuilding inventory in key areas of the business, which we believe will position us to recoup market share. Although we are seeing good response to our spring and early summer merchandise, our customers are being selective about what they put in their basket. That said, we continue to see strong shopper conversion, a clear signal that our assortments are resonating and the Citi Trends brand position remains healthy."

Shares of Citi Trends ( CTRN ) shed 3.05% in premarket action on Tuesday.

More on Citi Trends:

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