American retailer Citi Trends' sales at $747.9 mn in FY23

20 Mar '24

2 min read

Pic: Citi Trends

Insights

Citi Trends reported a 5.9 per cent drop in FY23 sales to $747.9 million and a 6.8 per cent decline in comparable store sales.
Operating loss hit $19.5 million, a stark turn from FY22's $75.3 million income.
Net loss was $12 million, with adjusted EBITDA falling to $1.5 million.
Net EPS fell to minus $1.46.
Q4 saw a slight sales recovery, up 2.7 per cent.

US-based leading specialty value retailer Citi Trends has reported a total sales decline of 5.9 per cent to $747.9 million in fiscal 2023 (FY23), compared to the previous fiscal, with comparable store sales experiencing a 6.8 per cent decline on a 52-week basis.

The gross margin for FY23 stood at 38.1 per cent, slightly down from 39.1 per cent in FY22. A significant shift was seen in operating results, with the company reporting an operating loss of $19.5 million, a stark contrast to the operating income of $75.3 million recorded in FY22. Similarly, net losses were reported at $12.0 million, or $10.5 million as adjusted, compared to a net income of $58.9 million in the previous year. Adjusted EBITDA plummeted to $1.5 million from $32 million in FY22, the company said in a press release.

Earnings per share also took a hit, with the company registering a net loss per share of $1.46, or $1.28 as adjusted, compared to a diluted EPS of $7.17 in FY22. During the fiscal, Citi Trends focused on expanding its footprint by opening 5 new stores and remodelling 15, although 14 stores were closed, ending the year with a total of 602 locations.

The retailer highlighted a significant year-end inventory increase of 23 per cent. Inventory levels are expected to show a modest increase in the low-single digits by the end of Q1 FY24 compared to the same period last year.

Despite the annual downturn, Q4 FY23 showed some signs of recovery with total sales increasing by 2.7 per cent to $215.2 million, aided by an extra week that contributed $11.2 million to the quarter's sales. However, comparable store sales dipped by 1.5 per cent in the same period. The gross margin and operating income for the quarter also saw declines, with net income settling at $3.6 million, or $4.4 million as adjusted.

“Our strong execution of the business across our strategic priorities fuelled our performance throughout the quarter. In particular, our focus on rebuilding inventories drove improved comps in targeted product categories. I am incredibly grateful to our entire organisation for their continued execution of our priorities, while keeping our customers and neighbourhoods at the core of everything we do,” said David Makuen, chief executive officer.

Fibre2Fashion News Desk (DP)

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