Breaking Down Citi Trends, Inc. (CTRN) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments in the retail sector? Have you considered how economic pressures might be affecting companies like Citi Trends, Inc. (CTRN)? Despite Q1 2024 net sales reaching $186.3 million, the company reported a comparable store sales decrease of 1.9% and a net loss of $7.9 million. As of early May 2024, they were operating 602 stores across 33 states, targeting African American and multicultural families with affordable goods. But how does CTRN's financial health stack up, and what are the key indicators investors should be monitoring?

Citi Trends, Inc. (CTRN) Revenue Analysis

Citi Trends, Inc. (CTRN) is a value-priced retailer that operates stores predominantly in urban areas. Understanding their revenue streams involves examining the sources, growth, and segment contributions that drive their financial performance. For detailed insights into the company's guiding principles, see: Mission Statement, Vision, & Core Values of Citi Trends, Inc. (CTRN).

Here’s a breakdown of what drives Citi Trends, Inc. (CTRN) revenue:

• Primary Revenue Sources: Citi Trends, Inc. (CTRN) generates revenue primarily through the sale of apparel, home décor, and other assorted merchandise targeted towards value-conscious customers.
• Year-over-Year Revenue Growth: Monitoring the year-over-year revenue growth rate provides insights into the company's ability to expand its market presence and increase sales.
• Segment Contribution: Detailed analysis of revenue contribution from different merchandise categories helps to understand which segments are performing well and driving overall revenue.

Here's a closer look at some available financial data:

Citi Trends, Inc. (CTRN) total sales for the fiscal year 2024 were reported at approximately $845.4 million. This represents a decrease of 4.2% compared to the $882.4 million reported in fiscal year 2023.

The decrease in sales can be attributed to several factors, including:

• A comparable sales decrease of 4.8%.
• A decrease in sales resulting from operating 8 fewer stores at the end of fiscal year 2024 as compared to the end of fiscal year 2023.

Here's a table summarizing the sales data:

Gross profit for fiscal year 2024 decreased to $298.4 million from $315.8 million in fiscal year 2023. The gross margin decreased to 35.3% in 2024 from 35.8% in the prior year, primarily due to increased markdowns.

Citi Trends, Inc. (CTRN) Profitability Metrics

Assessing the profitability of Citi Trends, Inc. (CTRN) requires a close look at its gross profit, operating profit, and net profit margins. These metrics reveal how efficiently the company converts revenue into profit at various stages of its operations. By examining these figures and comparing them to industry averages, investors can gain valuable insights into CTRN's financial health and competitive positioning.

For the fiscal year 2024, Citi Trends, Inc. reported the following:

• Gross Profit: The gross profit for fiscal year 2024 was reported at $338.7 million.
• Operating Profit: The operating profit reached $47.9 million for the same period.
• Net Profit: Citi Trends, Inc. posted a net profit of $35.8 million in fiscal year 2024.

Analyzing these figures as percentages of revenue provides margin insights:

• Gross Profit Margin: Calculated as (Gross Profit / Revenue) 100, the gross profit margin for 2024 was approximately 39.9%.
• Operating Profit Margin: Determined by (Operating Profit / Revenue) 100, the operating profit margin was about 5.6%.
• Net Profit Margin: Computed as (Net Profit / Revenue) 100, the net profit margin stood at roughly 4.2%.

A historical perspective on these margins reveals trends in CTRN's profitability. Monitoring these trends helps in understanding the company's ability to maintain or improve its profitability over time. Any significant changes in these margins warrant further investigation to identify underlying causes, such as changes in cost structure, pricing strategies, or competitive pressures.

To benchmark CTRN's profitability, it is essential to compare its ratios with industry averages. This comparison provides context and helps determine whether CTRN is performing above or below its peers. If CTRN's profitability ratios are lower than the industry average, it may indicate areas where the company needs to improve its operational efficiency or competitive strategy.

Operational efficiency plays a crucial role in CTRN's profitability. Effective cost management and favorable gross margin trends are indicators of strong operational performance. For instance, a rising gross margin suggests that the company is either increasing its selling prices or reducing its cost of goods sold, both of which positively impact profitability.

Below is a table summarizing Citi Trends, Inc.'s profitability metrics for fiscal year 2024:

Understanding these profitability metrics is crucial for investors seeking to assess the financial health and investment potential of Citi Trends, Inc. For more detailed insights, you can explore: Breaking Down Citi Trends, Inc. (CTRN) Financial Health: Key Insights for Investors.

Citi Trends, Inc. (CTRN) Debt vs. Equity Structure

Understanding how Citi Trends, Inc. (CTRN) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt versus equity to fund its activities. For further insights, you might find this resource helpful: Breaking Down Citi Trends, Inc. (CTRN) Financial Health: Key Insights for Investors

As of the end of fiscal year 2024, Citi Trends, Inc. reported having no long-term debt on its balance sheet. This indicates a conservative approach to financial leverage, relying more on equity or short-term financing to support its operations.

Given the absence of long-term debt, calculating a traditional debt-to-equity ratio isn't applicable. However, it's important to consider any short-term liabilities the company might have. For example, total liabilities were reported at $156.75 million. These short-term obligations could include accounts payable, accrued expenses, and other current liabilities.

Here's a breakdown of some key balance sheet figures as of February 3, 2024:

The fact that Citi Trends carries no long-term debt can be viewed positively, suggesting less financial risk associated with interest payments and debt repayment. However, it's also important to assess whether the company is optimizing its capital structure to take advantage of potential leverage benefits. The decision to avoid debt financing could be influenced by various factors, including the company's strategic priorities, market conditions, and management's risk tolerance.

Instead of debt, Citi Trends primarily relies on equity to finance its operations. The total equity as of February 3, 2024, stood at $304.92 million. This indicates a strong equity base, which can provide a buffer during challenging times and support future growth initiatives.

In summary, Citi Trends, Inc. demonstrates a preference for equity funding over debt, reflected in its zero long-term debt and substantial equity base. While this strategy reduces financial risk, investors should consider whether the company could enhance shareholder value by strategically incorporating debt into its capital structure.

Citi Trends, Inc. (CTRN) Liquidity and Solvency

Here's an overview of Citi Trends, Inc.'s (CTRN) liquidity position, analyzing key financial metrics and cash flow trends. You can also find more information at Breaking Down Citi Trends, Inc. (CTRN) Financial Health: Key Insights for Investors.

Assessing Citi Trends, Inc.'s Liquidity:

Understanding a company's liquidity is crucial for assessing its ability to meet short-term obligations. Here's an analysis of Citi Trends' (CTRN) liquidity position based on key ratios and cash flow trends.

• Current and Quick Ratios:
• As of March 2024, CTRN's current ratio is 1.32, compared to 1.39 in March 2023.
• The quick ratio for the same period is 0.56, down from 0.73 in the previous year. These ratios provide insights into the company's ability to cover its short-term liabilities with its most liquid assets.

The following table summarizes Citi Trends' (CTRN) liquidity ratios over the recent years:

• Analysis of Working Capital Trends:
• CTRN's net working capital growth has seen significant changes.
• There was a decrease in net working capital growth in 2024 (85.6%, down -67.7%) and a further decrease in 2025 (-71.0%, down -182.9%).
• In fiscal year 2024, the working capital was $22.67 million, a decrease from $55.195 million in fiscal year 2023.

• Cash Flow Statements Overview:
• For fiscal year 2024, CTRN's free cash flow was $0.40 million for Q4.
• The operating cash flow was $0.02 million for fiscal year 2024.

• Cash Flow Trends:
• Operating Activities: Reviewing the cash generated or used from the company's core business operations.
• Investing Activities: Analyzing cash flow related to the purchase or sale of long-term assets.
• Financing Activities: Examining cash flow from debt, equity, and dividends.

• Liquidity Strengths:
• At the end of fiscal year 2024, Citi Trends had approximately $136 million in liquidity, including $61 million in cash and no debt.
• The company also has an untapped $75 million credit facility, providing additional financial flexibility.

Citi Trends, Inc. (CTRN) Valuation Analysis

When evaluating whether Citi Trends, Inc. (CTRN) is overvalued or undervalued, several key financial ratios and indicators come into play. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, as well as stock price trends, dividend yield, payout ratios, and analyst consensus.

Here's a breakdown of these metrics for CTRN:

• Price-to-Earnings (P/E) Ratio: As of April 2025, Citi Trends' P/E ratio is negative (-3.76, -3.8, -6.46, -7.2, -13.32) because the company has negative earnings per share (EPS). A negative P/E ratio indicates that the company is currently not profitable, making it difficult to assess valuation using this metric alone.
• Price-to-Book (P/B) Ratio: The P/B ratio for Citi Trends is around 1.40 to 1.59. A P/B ratio indicates how much investors are paying for each dollar of the company's net assets. A lower P/B ratio may suggest that the stock is undervalued, while a higher ratio could indicate overvaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The EV/EBITDA ratio for Citi Trends is negative (-17.53, -18.13, -23.2x, -8.62), which is due to negative earnings before interest, taxes, depreciation, and amortization (EBITDA). Like the P/E ratio, a negative EV/EBITDA makes it difficult to rely on this metric for valuation purposes.

Here's a table summarizing CTRN's valuation ratios:

Stock price trends and additional valuation metrics offer further insights:

• Stock Price Trends: Over the past 52 weeks, the stock price has ranged from $13.66 to $29.41. The stock price has decreased by approximately -11.31% to -13.78% in the last 52 weeks.
• Dividend Yield and Payout Ratios: Citi Trends' dividend yield is 0%, and the payout ratio is not applicable (n/a) since the company is not currently paying dividends. The company previously paid dividends, but the last ex-dividend date was March 2, 2020.
• Analyst Consensus: The consensus rating for Citi Trends is 'Buy' or 'Strong Buy'. The average price target is around $28.00 to $33.33, suggesting potential upside from the current price.
• Market Capitalization: Citi Trends has a market capitalization of approximately $157.60 million to $183.30 million.
• Other Ratios:
  • Price-to-Sales (P/S) Ratio: 0.22 to 0.23
  • EV-to-Sales Ratio: 0.42 to 0.44
  • Debt/Equity Ratio: 1.73 to 1.95

Considering these factors, the valuation of Citi Trends, Inc. is complex. The negative P/E and EV/EBITDA ratios suggest caution, while the positive P/B ratio and analyst consensus indicate some potential for future growth. Investors should also consider the company's Mission Statement, Vision, & Core Values of Citi Trends, Inc. (CTRN).

Citi Trends, Inc. (CTRN) Risk Factors

Citi Trends, Inc. (CTRN) faces a variety of internal and external risks that could significantly impact its financial health. These risks span from industry-specific challenges to broader market conditions.

Key risks impacting Citi Trends, Inc. (CTRN) include:

• Industry Competition: The retail industry is highly competitive. This competition could impact Citi Trends, Inc. (CTRN)'s market share and profitability.
• Regulatory Changes: Changes in regulations, such as trade policies, labor laws, or environmental regulations, could increase operating costs and reduce profitability.
• Market Conditions: Economic downturns, shifts in consumer spending, or other adverse market conditions could reduce demand for Citi Trends, Inc. (CTRN)'s products, impacting revenue and earnings.

Operational, financial, and strategic risks are continuously highlighted in Citi Trends, Inc. (CTRN)'s earnings reports and filings. These include:

• Inventory Management: Effective inventory management is crucial. Overstocking can lead to markdowns, while understocking can result in lost sales.
• Supply Chain Disruptions: Disruptions in the supply chain, whether due to geopolitical events, natural disasters, or other factors, can impact the availability of merchandise and increase costs.
• E-commerce Competition: The increasing shift to online shopping poses a risk. Maintaining a competitive edge in the e-commerce space requires ongoing investment in technology and infrastructure.

Mitigation strategies and plans are essential for managing these risks. While specific strategies may vary, common approaches include:

• Diversification of Supply Sources: Sourcing products from multiple suppliers can reduce the impact of disruptions from any single source.
• Investment in Technology: Investing in technology can improve inventory management, enhance the customer experience, and drive operational efficiencies.
• Proactive Monitoring of Regulatory Changes: Staying informed about potential regulatory changes and proactively adapting business practices can minimize compliance costs.

For additional insights into Citi Trends, Inc. (CTRN), consider reading: Exploring Citi Trends, Inc. (CTRN) Investor Profile: Who’s Buying and Why?

Citi Trends, Inc. (CTRN) Growth Opportunities

Citi Trends, Inc. (CTRN) faces a challenging but potentially rewarding path to future growth, balancing strategic initiatives with prevailing market conditions. The company's ability to navigate these challenges will be crucial in determining its long-term success. For additional insights, see: Breaking Down Citi Trends, Inc. (CTRN) Financial Health: Key Insights for Investors.

Here's an analysis of key growth drivers, future projections, and strategic advantages for Citi Trends, Inc. (CTRN):

• Product Innovations: Citi Trends focuses on delivering a constantly changing assortment of fashionable, name-brand, and private-label products at compelling values. Their strategy includes offering on-trend apparel, accessories, and home décor.
• Market Expansion: As of fiscal year 2024, Citi Trends operated 667 stores in 33 states. The company sees potential in expanding its store base and increasing its presence in existing markets.
• Strategic Initiatives: Key initiatives include enhancing the customer experience through improved store layouts and visual merchandising, as well as strengthening its omni-channel capabilities to meet evolving consumer preferences.

Future revenue growth for Citi Trends is projected to be influenced by several factors, including:

• Comparable Sales Growth: The company aims to drive sales through effective merchandising and marketing strategies. However, in fiscal year 2024, comparable sales decreased by approximately 7%.
• New Store Openings: Expanding the store base remains a priority, although the pace of new openings may be affected by market conditions and capital availability.
• Gross Margin Improvement: Efforts to improve gross margin, which was approximately 38.4% in fiscal year 2024, are crucial for boosting profitability.

The estimates show the potential for recovery and growth, contingent on the successful execution of strategic initiatives and improvements in the macroeconomic environment.

Strategic partnerships and competitive advantages that may drive future growth include:

• Vendor Relationships: Strong relationships with key vendors enable Citi Trends to secure favorable pricing and access to in-demand merchandise.
• Targeted Marketing: The company focuses on reaching its core customer base through targeted marketing campaigns and loyalty programs.
• Real Estate Strategy: Citi Trends strategically selects store locations with favorable lease terms and high visibility, contributing to store performance.

Despite these advantages, Citi Trends faces significant competition from other retailers, including department stores, discount chains, and online marketplaces. The company's ability to differentiate itself through unique merchandise and compelling value propositions will be critical for sustaining growth.

Here’s an overview of Citi Trends' recent financial performance and future growth prospects:

Citi Trends is working on improving its financial performance through various strategic initiatives. Still, achieving sustained growth will depend on the company's ability to adapt to changing consumer preferences and navigate a competitive retail landscape.