Citi Trends, Inc. reported a strong earnings uptick in the first quarter ended May 3, as same-store sales climbed 13.9 percent. The off-pricer slightly raised its year-end guidance.

First-Quarter Highlights

  • Q1 2026 total sales increased 14.4 percent to $230.9 million.
  • Comparable store sales growth of 13.9 percent; Two-year stack of 23.8 percent.
  • Q1 2026 Net Income of $7.8 million; Q1 2026 adjusted EBITDA of $13.9 million, more than double Q1 2025 results.
  • Company reaffirms increased 2026 adjusted EBITDA outlook, more than doubling Fiscal 2025 results.

Ken Seipel, chief executive officer, said, “We delivered an exceptional start to 2026, building on the momentum established last year. Comparable store sales increased 13.9 percent, an increase of 23.8 percent on a two-year basis. We delivered $7.8 million of net income and adjusted EBITDA more than doubled to $13.9 million, with performance accelerated across all merchandise categories and geographies. Most importantly, our growth was driven by increased customer traffic and larger basket size, reinforcing that our customers are responding to our improved assortment, trend-right product and compelling value. We are also encouraged by the momentum we are seeing early in the second quarter, with quarter-to-date comparable store sales growth trending in the high-single digits, upper teens on a two-year basis, which further validates that our strategy is working to drive sustainable trends in our financial performance.”

Seipel continued, “As we move through 2026, we remain focused on three priorities: consistent execution, strong sales flow-through to profit and accelerated growth. We are strengthening our product offering, expanding our off-price and extreme value opportunities, improving operational efficiency, and deepening customer engagement through initiatives like our upcoming Insiders Club loyalty platform. We are leveraging our refined, data-driven site selection process to open 25 new stores this year, with a mix of existing and new markets. With a debt-free balance sheet, improving profitability, and strong customer momentum, we believe Citi Trends is well-positioned for sustained profitable growth and long-term shareholder value creation, giving us confidence in our increased adjusted EBITDA projection of $35 million to $40 million this year.”

Financial Highlights | First Quarter 2026

  • Total sales of $230.9 million increased $29.1 million, or 14.4 percent, compared to Q1 2025; comparable store sales increased 13.9 percent compared to Q1 2025, driven by increases in both traffic and basket.
  • Gross margin of 40.0 percent increased 40 basis points compared to Q1 2025 due to increased merchandise margin offset by higher freight expense from increased fuel surcharges.
  • SG&A expense of $79.7 million, $78.3 million as adjusted; on a rate basis, adjusted SG&A was 33.9 percent of sales, leveraging 250 basis points vs. last year, driven by fixed-cost leverage with higher sales.
  • Net income of $7.8 million, $9.2 million as adjusted, vs. net income of $0.9 million, or adjusted net income of $2.4 million in Q1 2025.
  • Adjusted EBITDA of $13.9 million compared to adjusted EBITDA of $6.4 million in Q1 2025.
  • Real Estate: Opened two stores, closed one and remodeled 25 in the quarter.
  • Cash of $81.1 million at quarter-end, with no debt and no borrowings under a $75 million credit facility.
  • Merchandise inventory was $115.2 million at the end of the quarter, an increase of 4.8 percent vs. Q1 2025.

Fiscal 2026 Outlook
The company’s outlook for fiscal 2026 compared to fiscal 2025 is as follows:

  • Expecting comparable store sales growth in the range of 8 percent to 10 percent, implying balance-of-year comps in the high single-digits. Total sales growth is expected to be 9 percent to 11 percent for the year. Previously, guidance called for sales to expand 6 percent to 8 percent, with comparable-store sales growth in the range of 5 percent to 7 percent.
  • Gross margin is expected to expand approximately 50 to 70 basis points, lower than the previous outlook due to expected continued headwinds from fuel surcharges. Previously, guidance called for an approximately 100-basis-point expansion.
  • Adjusted SG&A is expected to be leveraged by approximately 130 to 160 basis points, up from the previous outlook of 70 to 100 basis points, driven by higher sales under the fixed-cost structure and ongoing disciplined expense control.
  • Adjusted EBITDA is expected to be in the range of $35 million to $40 million. Adjusted EBITDA margin expansion is expected to be approximately 200 basis points. Previously, guidance called for adjusted EBITDA to be in the range of $34 million to $38 million, with approximately 200 basis points of adjusted EBITDA margin expansion.
  • For the year, the company’s real estate plans remain unchanged, with plans to open approximately 25 new stores, remodel approximately 50 stores, and close 4 stores.
  • Capital expenditures are expected to be in the range of $35 million to $40 million, consistent with the previous outlook, with the majority of the spend on new stores and remodels.

Based in Savannah, GA, Citi Trends operates 591 stores located in 33 states.

Image courtesy Citi Trends