US-based value fashion retailer Citi Trends reported a total sales figure of US $ 179.5 million for the third quarter of fiscal 2023. This marked a 6.7 per cent decline compared to the same period in 2022, accompanied by a 6.2 per cent drop in comparable store sales.
Despite maintaining a gross margin of 38.2 per cent, slightly down from 39.8 per cent in Q3 FY ’22 but consistent with Q2 FY ’23, the retailer faced an operational setback. The quarter witnessed an operating loss of US $ 6.0 million, or an adjusted loss of US $ 7.0 million, a sharp contrast to the US $ 31.6 million operating income in Q3 FY ’22.
Throughout Q3 FY ’23, the company made strategic changes, closing 5 stores and renovating 7, totaling 15 remodels for the year and leaving the quarter with 606 stores.
Looking at the larger scope of the first nine months of FY ’23, challenges persisted. Total sales amounted to US $ 532.8 million, a 9 per cent decline from the previous year. Comparable store sales fell by 8.7 per cent, accompanied by a gross margin of 37.7 per cent, a decrease from 39.0 per cent in FY ’22.
Operating loss for the initial nine months reached US $ 23.4 million, or a loss of US $ 22.7 million as adjusted, compared to a US $ 67.9 million operating income in 2022. Net loss stood at US $ 15.5 million, or US $ 15.0 million as adjusted, a downturn from the US $ 52.3 million net income in 2022.
David Makuen, the chief executive officer, acknowledged the challenges, stating, “Our third quarter topline performance did not meet our expectations, with sales held back more than we expected by the ongoing challenging macroeconomic backdrop.”
