In a recent series of transactions, insiders at Citi Trends Inc (NASDAQ:CTRN), a retail-apparel company, have significantly increased their holdings. The company has reported multiple purchases of its common stock by key investment entities, totaling over $1.2 million.
The transactions, which took place on June 5th and 7th, saw the acquisition of Citi Trends shares at prices ranging from $22.5797 to $24.0521. On June 5th, a total of 7,835 shares were bought, with 3,835 shares acquired at $23.9917 each and 4,000 shares at $24.0521 per share. Two days later, on June 7th, an additional 46,500 shares were purchased, 35,500 of which were bought at $22.5797 each and 11,000 at $22.6030 per share.
These purchases were made by entities including Pleasant Lake Onshore Feeder Fund LP, Fund 1 Investments, LLC, and Pleasant Lake Partners LLC. It is important to note that the shares reported are held for the benefit of private investment vehicles, for which Pleasant Lake Partners LLC serves as the investment adviser. Fund 1 Investments, LLC is the managing member of Pleasant Lake Partners LLC, and Jonathan Lennon is the managing member of Fund 1 Investments, LLC.
The filings indicated that Benjamin C. Cable, Chief Operating Officer of Fund 1 Investments, LLC, executed these transactions on behalf of the reporting entities. Each of the Reporting Persons has disclaimed beneficial ownership of the shares reported herein except to the extent of its or his pecuniary interest therein.
Investors often monitor insider buying as it can signal confidence in the company by those with detailed knowledge of its operations. The substantial investment by these insiders in Citi Trends indicates a potential positive outlook for the company's future performance.
In other recent news, Citi Trends has been in the spotlight due to various developments. The company's Q1 results revealed a 3.1% rise in comparable store sales and a significant 160 basis point expansion in gross margin from the previous year. However, Craig-Hallum, an analyst firm, reduced the retailer's price target from $27.00 to $25.00 while retaining a Hold rating on the stock due to minor shortfalls in sales and adjusted EBITDA.
Citi Trends has also updated its fiscal year 2024 guidance, lowering same-store sales projections while reaffirming its adjusted EBITDA outlook. The company is planning to open up to five new stores, remodel approximately 40, and close 10-15 underperforming locations. Despite ongoing challenges from shrink, primarily due to theft, the company maintains a strong financial position with no debt, $58 million in cash, and $133 million in liquidity.
The company's interim CEO, Ken Seipel, emphasized the importance of understanding their core customer and delivering value. Citi Trends anticipates low to mid-single digit growth in comparable store sales and a 75-100 basis points expansion in gross margin. These are some of the recent developments that investors should be aware of.
InvestingPro Insights
As insiders at Citi Trends Inc (NASDAQ:CTRN) demonstrate confidence through substantial stock purchases, a closer look at the company's financial health and market performance provides additional context. According to InvestingPro data, Citi Trends currently has a market capitalization of approximately $192.25 million. The company's P/E ratio stands at -20.91, reflecting investor sentiment about its earnings potential. Despite a challenging financial performance with a negative revenue growth of -1.56% over the last twelve months as of Q1 2025, the company has managed to maintain a gross profit margin of 38.58%.
However, the company's stock price has experienced significant volatility, as indicated by a -27.74% price total return over the past three months. This aligns with one of the InvestingPro Tips, which notes that Citi Trends' stock price movements are quite volatile. Additionally, the company is trading at a high EBITDA valuation multiple, which could be a point of concern for value-focused investors. Furthermore, another InvestingPro Tip suggests that the company operates with a significant debt burden and may have trouble making interest payments, which is crucial information for investors considering the recent insider transactions.
For those seeking more in-depth analysis, there are 9 additional InvestingPro Tips available for Citi Trends, which can be accessed at Investing.com/pro/CTRN. To enrich your investment strategy, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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