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2 Forward-Looking Statements All statements other than historical facts contained in this presentation, including statements regarding the Company’s future financial results and position, business policy and plans, objectives and expectations of management for future operations and capital allocation expectations, are forward-looking statements that are subject to material risks and uncertainties. The words "believe," "may," "could," "plans," "estimate," “expects,” "continue," "anticipate," "intend," "expect," “upcoming,” “trend” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements, although not all forward-looking statements contain such language. Statements with respect to earnings, sales or new store guidance are forward-looking statements. Investors are cautioned that any such forward-looking statements are subject to the finalization of the Company’s quarter-end financial and accounting procedures, are not guarantees of future performance or results, and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Actual results or developments may differ materially from those included in the forward-looking statements as a result of various factors which are discussed in our Annual Reports and Quarterly Reports on Forms 10-K and 10-Q, respectively, and any amendments thereto, filed with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to, uncertainties relating to general economic conditions, including inflation, energy and fuel costs, unemployment levels, and any deterioration whether caused by acts of war, terrorism, political or social unrest (including any resulting store closures, damage or loss of inventory); or other factors; changes in market interest rates and market levels of wages; impacts of natural disasters such as hurricanes; uncertainty and economic impact of pandemics, epidemics or other public health emergencies such as the ongoing COVID-19 pandemic; transportation and distribution delays or interruptions; changes in freight rates; the Company’s ability to attract and retain workers; the Company’s ability to negotiate effectively the cost and purchase of merchandise inventory risks due to shifts in market demand; the Company’s ability to gauge fashion trends and changing consumer preferences; consumer confidence and changes in consumer spending patterns; competition within the industry; competition in our markets; the duration and extent of any economic stimulus programs; changes in product mix; interruptions in suppliers’ businesses; the impact of the cyber disruption we identified on January 14, 2023, including legal, reputational, financial and contractual risks resulting from the disruption, and other risks related to cybersecurity, data privacy and intellectual property; temporary changes in demand due to weather patterns; seasonality of the Company’s business; changes in market interest rates and market level wages; the results of pending or threatened litigation; delays associated with building, remodeling, opening and operating new stores; and delays associated with building, and opening or expanding new or existing distribution centers. Any forward-looking statements by the Company, with respect to guidance, the repurchase of shares pursuant to a share repurchase program, or otherwise, are intended to speak only as of the date such statements are made. Except as required by applicable law, including the securities laws of the United States and the rulesand regulations of the Securities and Exchange Commission, the Company does not undertake to publicly update any forward-looking statements in this presentation or with respect to matters described herein, whether as a result of any new information, future events or otherwise.
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3 Ken Seipel- CEO Citi Trends “C Suite” Fortune 100 Companies Merchandising Operations Co-Owner /CEO Private companies Business Turn-Around Shareholder Value Creation
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4 Key to Success • Focus on the Core Customer • Differentiated value proposition • Operational excellence • Compelling growth plan • Highly engaged people and go fast!
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5 Citi Trends Long History 1946 Savannah Wholesale Company 1954 Allied Stores 2000 CitiTrends Rebrand 2005 CitiTrends Public Offering Iconic African-American Brands
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6 Citi Trends Overview Trendy Fashions Great Brands Amazing Prices Sales ~$750M Product Margin ~39%* Family Apparel Home Shoes 3-Tiered Good-Better-Best Product Assortment Neighborhoods ~590 Stores ~12K sq. ft. * 39% Gross Margin excludes one time costs
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7 Citi Trends Stores ~590 stores Growth White Space
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8 The Citi Trends Core Customer Citi Trends is the Neighborhood store in primarily African-American communities • ~40 years Average Age • High penetration of male customers • ~1/3 shop weekly or bi-weekly • Income • Most frequent $75K to $125K • Large base $50K to $75K
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9 The Citi Trends Customer Ethnography Continual Progress Do a lot with a little Never Settle Fashion & Style Top Priority Be seen and understood Black culture is mainstream Move from Surviving to Thriving Our customers define themselves in many ways Trendy Fashions Great Brands Amazing Prices
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10 Citi Trends Historical Challenges Lost Focus on Core Customer and Product Value Equation • ” Average product at Average Prices” • Lack of brands • Lack of fresh, fashionable styles • Operational disconnects • Turn-over of key talent Improvement levers are in our control
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11 Citi Trends Recent Trends 1% 4% 6% 8% 9% 6% 7% 1H August September October November December QTD Q4 2024 Comp Store Sales Customers Responding to Business Improvements
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12 Citi Trends – What is Driving the Results? • Focus on African-American Consumer • Marked down ~$26 million in unproductive inventory • Created open to buy for fresh product • Improve Retail “101” Fundamental practices • Build Foundational Best practices • Develop “off-price” extreme value capabilities
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13 Citi Trends – Fundamental “ Retail 101” fixes Sales Growth Customer focused Product Compelling Value Proposition Foundational Consistent-Efficient- Execution Retail Fundamentals Basic practices Fix Technology Stabilize Talent Basic Best Practices
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14 Citi Trends – Foundation Capabilities Sales Growth Customer focused Product Compelling Value Proposition Foundational Consistent-Efficient- Execution Retail Fundamentals Basic practices Product Allocation Product Planning Execution Consistency
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15 Treasure in the Treasure Hunt! Branded values at 50% to 75% off MSRP “Exciting! I have chills!” “Customers lined up at the door” “Everyone is calling someone” “Social media is blowing up”
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16 Citi Trends Path to Value Creation Repair 2nd half 2024 Execute 1st half 2025 Optimize 2nd half 2025 Growth 2026 and beyond Improvement levers are in our control
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17 Path to Value Creation Customers African American Customers Critical to Our Success Focused Curated Product First Shopping Choice Neat-Clean-Organized Stores Loyalty/CRM Programs
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18 Path to Value Creation Product Select Opening Price Points Core On Trends Styles Great Brands Category Opportunities Snacks & Home Shoes Extended Sizes Trendy Fashions Great Brands Amazing Prices
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19 Path to Value Creation Extreme Value The “Treasure in the Treasure Hunt” Original Retail $100 Citi Trends Value $24.99 Savings 75% High Margin Rates
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20 Path to Value Creation Operational Excellence Best Practices Advanced Allocation Methods Speedy Supply Chain Profit Flow Through Consistently Execute our Business Model
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21 Path to Value Creation Growth Refresh and Remodel Priority Markets New Stores + 6%-10% Sq. Ft Grow Market Share
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22 Path to Value Creation Summary ➢ Focus on Core Customer ➢ Compelling Value Proposition ➢ Consistent Execution ➢ Efficient Profit Flow Through ➢ Square Footage Expansion
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23 Path To Value Creation Results EBITDA Margin Mid to Upper-Single Digits Sales Growth ~4% to ~6% Margin Dollar Growth ~6% to ~10% EBITDA ~$40M or more Square Footage Growth ~6% to ~10%
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24 Citi Trends Investment Summary ➢ High Performing “Off-Price” Retail Sector ➢ Compelling Growth Opportunity ➢ Unduplicatable Neighborhood Stores ➢ High Frequency Loyal Customer ➢ Controllable Value Creation Path ➢ Debt Free Balance Sheet
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