By Connor Hart

Citi Trends raised its full-year outlook after swinging to a profit in the second quarter, boosted by higher sales and traffic.

The discount clothing chain said Tuesday that it now expects comparable sales to rise by a mid-to-high-single digit percentage for the year, compared with a previous outlook of mid-single-digit percentage growth.

Citi Trends additionally guided for gross margin expansion, aided by improvements to its inventory efficiency and supply chains. The company expects adjusted Ebitda--or earnings before interest, taxes, depreciation and amortization--of $7 million to $11 million, up from a prior view of $6 million to $10 million.

The outlooks came as Citi Trends said comparable sales, or those from stores and digital channels in operation for at least 12 months, rose 9.2% during the three months ended Aug. 2. The company attributed the increase to improved traffic trends, larger baskets and higher conversion rates.

The company posted a profit of $3.8 million, or 46 cents a share, in its latest quarter, compared with a loss of $18.4 million, or $2.21 a share, in last year's comparable quarter.

Net sales increased 8% to $190.8 million.

Chief Executive Ken Seipel said the recent quarter' results underscore the company's recent success in executing its key initiatives. "I am also pleased that year-to-date sales momentum has continued into the important August back to school period," he added.

Shares rose 1.8% to $34.63 in premarket trading.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

August 26, 2025 07:16 ET (11:16 GMT)

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