Citi Trends, Inc. Q4 FY2025 earnings call

• Fourth quarter performance: 8.9% comparable store sales growth, 67% EBITDA increase, broad-based growth across store tiers, regions, and categories. Customer traffic drove growth with mid to upper single digit transaction counts and improved basket size. Q1 2026 comparable store sales trending in high single digits.
• Children's: Outstanding quarter with high single digit growth, cornerstone of the company, disciplined execution.
• Men's: Solid growth with balanced strategy of trend-forward product and core male customer styles.
• Women's footwear: Early signs of progress with off-price and extreme value strategy gaining traction.
• Family basics and sleepwear: Top growth area with better styling, trend, and improved inventory positioning.
• Marketing: Launch of 'Joy Looks Good on You' campaign with over 55 million views, reflecting brand promise.
• Full year 2025: Executed three phase strategy, 9.7% comparable store sales growth, 200 basis points gross margin improvement, 120 basis points SG&A leverage, EBITDA growth of 26 million. Driven by focus on core black customer, stronger merchandising, better value communication, and engaging in-store experience.
• Operational: Leveraged SG&A, improved inventory management, implemented AI-based allocation system, standardized KPIs, real-time dashboards, opened 3 new stores and remodeled 62 stores in 2025.

Fourth quarter comparable store sales grew 8.9%, with EBITDA of 11.9 million, a 67% increase over Q4 prior year. Children's posted high single digit growth, Men's had solid growth, Women's footwear showed early signs of progress, Family basics and sleepwear was a top growth area. Full year 2025 comparable store sales increased 9.7%, net sales reached $820 million, EBITDA grew to 11.8 million. Revenue contributions: Children's became a cornerstone, Men's has runway for growth, Women's footwear has potential, Family basics and sleepwear were top growth areas.

Fiscal 2026 planning: Total sales growth 6%-8%, comparable store sales growth 5%-7%, gross margin expansion ~100 basis points, adjusted SG&A leverage 70-100 basis points, adjusted EBITDA range $34 million-$38 million, plan to open ~25 new stores, 4 store closures, remodel 50 locations, capital expenditures $35 million-$40 million.

Q: Weather impact on January cadence, February trends, closeouts percent of sales, synergistic acquisitions detail.

A: January weather impacted comp line with nearly half stores closed, February and early March back to trends. Closeouts vary by category, high penetration in shoes. Synergistic acquisitions in early stages, early stages with banking team surveying landscape, not clear yet.

Q: Q1 comp trends, unit growth plan cadence, loyalty program rollout.

A: Q1 comps trending high single digits, 25 stores opening in 2026 with 2 opened in February, ~10 in July, balance in October. Loyalty program in testing, on pause to get messaging and marketing correct, expected back half of year rollout.