SAVANNAH, Ga. - Citi Trends, Inc. (NASDAQ: CTRN), a value retailer of apparel, accessories, and home trends, announced the appointment of Ken Seipel as interim Chief Executive Officer, effective June 2, 2024. David Makuen has stepped down as CEO and board member but will serve as Senior Advisor to ensure a smooth transition. The Board of Directors has begun a search for a permanent CEO and plans to consider internal and external candidates.
Ken Seipel, who joined Citi Trends' Board in 2019, is recognized for his leadership in turnarounds within the retail sector, including his previous role as CEO of West Marine. Peter Sachse, Executive Chairman of the Board, expressed gratitude to David Makuen for his leadership during the COVID-19 pandemic and for leading the company to a record financial year in 2021. The Board's decision aims to restore and enhance the company's profitability with Seipel's experience.
Seipel stated his commitment to leveraging his expertise to drive sales, optimize supply chain, and improve inventory returns, among other strategies for the company's growth. He acknowledged the transitional period and emphasized the months ahead as foundational for long-term success.
The company also released preliminary first quarter results for 2024, reporting total sales of $186.3 million, a same-store sales increase of 3.1%, and an EBITDA loss of $0.8 million. Further details will be discussed in the investor call scheduled for June 4, 2024.
Citi Trends operates 598 stores across 33 states, focusing on African American and multicultural families. The recent leadership changes and preliminary financial results are detailed in the Form 8-K filed with the U.S. Securities and Exchange Commission.
This article is based on a press release statement from Citi Trends, Inc.
In other recent news, Citi Trends Inc., a value-priced retailer, reported its fourth-quarter and full-year earnings for fiscal year 2023. The company saw a 2% growth in total sales for the fiscal year, with Q4 sales reaching $215.2 million, a slight increase from the previous year. However, comparable store sales experienced a 1.5% decrease in Q4 and a 6.8% drop for the full year. The retailer's gross margin for Q4 stood at 39.1%, with the full-year adjusted gross margin at 38.2%.
Citi Trends also announced plans for the coming fiscal year, including opening five new stores, remodeling 40, and closing 10 to 15 underperforming stores. The company ended the fiscal year with a strong balance sheet, featuring no debt and $80 million in cash. For fiscal 2024, Citi Trends forecasts mid-single digit comp growth and expects an adjusted EBITDA between $4 million and $10 million.
Despite a challenging retail environment, the company maintains optimism for the future, leveraging strategic growth areas and maintaining a robust balance sheet. These recent developments indicate Citi Trends' commitment to navigate the retail landscape effectively and position itself for potential growth in the coming year.
InvestingPro Insights
Citi Trends, Inc. (NASDAQ: CTRN) faces a pivotal moment as it navigates a leadership transition and strives to build on its past success. With the interim CEO, Ken Seipel, taking the helm, the company's future direction is under careful scrutiny, particularly in light of recent financial performance and market dynamics.
The company's market capitalization stands at a modest $205.99 million, reflecting the scale of the business in the competitive retail landscape. Despite a challenging environment, Citi Trends reported a positive same-store sales increase of 3.1% in the preliminary first quarter results for 2024. This is a notable achievement, considering the company's revenue has seen a decline of nearly 5.92% over the last twelve months as of Q1 2024. Additionally, the company's gross profit margin remains robust at 38.12%, indicating a strong ability to manage cost of goods sold relative to sales.
InvestingPro Tips highlight that Citi Trends may have difficulty making interest payments on its debt, which could be a concern for potential investors. Moreover, the company's high shareholder yield is a positive sign, reflecting its commitment to returning value to its shareholders. It's worth noting that two analysts have revised their earnings expectations downwards for the upcoming period, which may warrant caution.
For those interested in a deeper analysis, there are additional insights available on InvestingPro, including the company's valuation multiples and stock price volatility. For instance, Citi Trends is trading at a high EBITDA valuation multiple and has experienced significant price fluctuations over the last three months, with a 22.16% drop, yet it has managed a strong return over the past month of 12.55%.
Investors looking to explore these dynamics further can find a total of 12 InvestingPro Tips on https://www.investing.com/pro/CTRN. To gain access to this valuable resource and enhance their investment strategy, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering a comprehensive view of Citi Trends' financial health and market position.
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