Citi Trends, Inc. (NASDAQ:CTRN) shares climbed in premarket trading on Tuesday after the value-focused retailer delivered double-digit sales growth.

The company continued to tighten costs and improve its balance sheet even as earnings remained in the red.

The company reported third-quarter adjusted earnings per share of 88 cents loss, missing the Street view of 79 cents.

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Metrics

Quarterly sales of $197.091 million (+10.1%  year over year) outpaced the analyst consensus estimate of $192.734 million.

Comparable store sales grew 10.8% in the period. On a two-year basis, comps increased 16.5%. CEO Ken Seipel added:

• Third-quarter comparable store sales growth of 10.8%
• 16.5% on a two-year stack basis, represents the fifth consecutive quarter of positive comp performance
• Year-to-date comp to 10.0%, and 12.3% on a two-year stack basis

Gross margin was 38.9%, in line with the company's internal plan but down 90 basis points from the third quarter of 2024. Results reflected product margins similar to the first half of 2025.

The quarter also included freight costs pulled forward from the fourth quarter to help balance holiday workloads in distribution centers.

Adjusted EBITDA loss narrowed to $2.9 million, compared with a loss of $3.3 million in the third quarter of 2024.

The company ended the quarter with $51.1 million in cash, no debt and no borrowings on its $75 million credit facility.

Merchandise inventory totaled $123.5 million, down 3.1% from the third quarter of 2024.

Average store inventory rose 4.5% from a year ago, reflecting revised timing of pre-holiday product deliveries.

Outlook

The company now expects full-year comparable store sales to rise in the high-single digits, with gross margin expanding about 230 basis points and SG&A leveraging about 90 basis points versus 2024, all at the high end of prior guidance.

Full-year EBITDA is now projected at $10 million to $12 million, above the previous outlook and representing a $24 million to $26 million improvement from 2024, while the effective tax rate is still expected to be about 0%.

The company plans to open three new stores, remodel 62 and close four locations in 2025, with capital expenditures projected at about $23 million, toward the low end of its prior range.

The company expects fourth-quarter comparable store sales to rise in the high-single digits, with gross margin projected between 40% and 41%.

CTRN Price Action: Citi Trends shares are up 9.83% to $48.40 at the time of publication on Tuesday, according to Benzinga Pro data.

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