Citi Trends has ambitious expansion plans for its store network. (AP Photo/Rogelio V. Solis, File)
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Off-price retailer Citi Trends has reported double-digit sales growth and outlined plans for a significantly faster store expansion strategy across the U.S. as consumers continue to seek affordability amid ongoing economic uncertainty.
The retailer focuses on apparel, accessories and home products with what the company described as a “differentiated focus in the black consumer” and it delivered its 21st consecutive month of sales growth in the first quarter.
For the quarter ended May 3, Citi Trends reported sales of $230.9 million, an increase of 14.4% year over year. Comparable store sales climbed 13.9%, driven by higher customer traffic, larger basket sizes and improved merchandising initiatives.
On a two-year basis, comparable sales were up 23.8%, highlighting the sustained nature of the retailer's momentum rather than a short-term rebound.
Profitability improved even more dramatically. Net income rose to $7.8 million, or $0.91 per share, compared with $0.9 million a year earlier, while adjusted EBITDA more than doubled to $13.9 million from $6.4 million.
"We delivered an exceptional start to 2026, building on the momentum established last year," CEO Ken Seipel said of the results.
The company has also reported that second-quarter comparable sales are currently tracking in the high-single digits, suggesting that demand remains strong despite broader concerns about consumer spending.
The performance comes as off-price retail continues to outperform many traditional apparel chains. Shoppers facing persistent inflation and higher household expenses are increasingly prioritising value, benefiting retailers able to offer branded merchandise at discounted prices.
Industry leaders such as TJX Companies, owner of Marshalls and T.J. Maxx, and Ross Stores have also reported continued customer demand as consumers trade down from department stores and specialty retailers.
Citi Trends plans to accelerate store growth this year and next. (Photo by Ben Hasty/MediaNews Group/Reading Eagle via Getty Images)
MediaNews Group via Getty Images
Citi Trends believes it has a significant runway for growth. The company currently operates 591 stores across 33 states and plans to open 25 new locations this year while remodeling 50 existing stores. More notably, management signaled a step-change in expansion plans for 2027.
"Our early results from our newest stores are exceeding expectations, giving us the confidence to accelerate to approximately 40 new stores in 2027," Seipel told investors.
For the full year, Citi Trends expects comparable sales growth of between 8% and 10%, with total sales projected to increase 9% to 11%.
Citi Trends is also investing in customer loyalty and operational improvements. Management said priorities for the remainder of the year include strengthening its product assortment, expanding off-price and extreme-value offerings, improving efficiency and launching its new Insiders Club loyalty platform.
“Our sales growth is being driven by refinements of trend, style, and value of our core merchandising assortment. Plus, we also utilize extreme value deals periodically to add excitement to the treasure hunt for our customers. The strong performance of our core merchandising strategy gives us confidence in the durability and sustainability of our top-line performance,” Seipel said on an earnings call.
He added that, having opened two new stores during the quarter, one in St. Louis and one in Baltimore, plus three new stores from last fall, are serving as test stores for us as the retailer refines its processes and prepares for accelerating store growth.
“I’m very pleased to report that our new stores are all performing above expectations. As a reminder here in stores, one of our primary points of differentiation is our neighborhood store locations, which are embedded in communities where we built trust over many, many years. The combination of these convenient proximity and strong word-of-mouth recommendations creates sustainable, powerful traffic drivers,” he added.
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