Loading...
•
Aug 02
Citi Trends Q2 2025 Earnings Report
Citi Trends delivered strong comp growth and its highest Q2 gross margin since FY21, but posted an adjusted net loss amid strategic investments and increased incentive compensation.
Key Takeaways
Citi Trends reported $190.8 million in revenue and $3.8 million in GAAP net income for Q2 2025, benefiting from robust comparable store sales growth and margin expansion, though adjusted results showed a net loss due to one-time items.
Comparable store sales rose 9.2%, marking four consecutive quarters of growth.
Gross margin improved significantly to 40.0%, the highest Q2 level since FY21.
Reported net income was $3.8 million, but adjusted for one-time gains, the company posted a $6.8 million loss.
Citi Trends ended the quarter with $50.4 million in cash and no debt.
Citi Trends
Citi Trends
Citi Trends Revenue by Geographic Location
Revenue by Geographic Location
United States Revenue
CapyFin.com Forward Guidance
Citi Trends raised its FY25 outlook, expecting stronger comp growth, margin expansion, and improved EBITDA based on sales momentum and operational execution.
Positive Outlook
- FY25 comp sales now expected to grow mid to high-single digits, up from mid-single digits.
- Full-year gross margin expected to expand 210–230 bps vs. FY24.
- SG&A expected to leverage 60–90 bps vs. FY24 despite higher incentives.
- EBITDA guidance raised to $7M–$11M, a $21M–$25M YoY improvement.
- Inventory discipline and faster supply chain continue to drive efficiency.
Challenges Ahead
- Adjusted net loss of $6.8 million reflects ongoing cost pressures.
- SG&A increased YoY due to incentive compensation and volume-driven costs.
- Q2 adjusted EBITDA remained negative despite improvements.
- Store remodel and expansion plan adds capital expenditure pressure.
- Still navigating prior year cost structure normalization challenges.