Citi Trends, Inc, a leading US-based retailer of urban fashion apparel and accessories, has reported total sales of $362.8 million For the first half of fiscal 2024 (H1 FY24), representing a 2.7 per cent increase compared to the same period in FY23. Comparable store sales, calculated on a shifted 26-week to 26-week basis, rose by 0.7 per cent compared to H1 FY23. However, the company’s gross margin fell to 35.0 per cent, down from 37.5 per cent, or 37.6 per cent as adjusted, in 2023.

Despite the sales growth, Citi Trends reported a net loss of $21.8 million for the first half, or $18.8 million as adjusted, compared to a net loss of $11.7 million, or $10.4 million as adjusted, in the same period last year. The adjusted EBITDA loss widened to $18 million, compared to an adjusted EBITDA loss of $6.3 million in H1 FY23, the company said in a press release.

In the second quarter of fiscal 2024, Citi Trends posted total sales of $176.6 million, a 1.7 per cent increase compared to Q2 FY23. However, comparable store sales, calculated on a shifted 13-week to 13-week basis, decreased by 1.7 per cent year-over-year.

The company’s gross margin for the quarter dropped significantly to 31.1 per cent, compared to 38.2 per cent in Q2 FY23. Citi Trends reported a net loss of $18.4 million for Q2 FY24, or $16.2 million as adjusted, compared to a net loss of $5 million, or $4.9 million as adjusted, in the same quarter last year. The adjusted EBITDA loss also increased, reaching $17.2 million, including $13.4 million in transition expenses, compared to an adjusted EBITDA loss of $3.1 million in Q2 FY23.

During the second quarter, Citi Trends opened one new store, closed three stores, and remodelled 15 locations, ending the quarter with a total of 597 stores. The company also reported that 23 per cent of its store fleet is now in the CTx format. Citi Trends exited Q2 FY24 with total inventory levels flat compared to Q2 FY23.

“Following an evaluation of several key areas of our business including an extensive review of our product assortment, we made the strategic decision to execute an inventory reset to quickly clear through slow-selling and aged inventory. This action enables us to consistently offer fresher, more balanced assortments of good, better, and best products,” said Ken Seipel, interim chief executive officer.

Fibre2Fashion News Desk (DP)