Key Highlights

● Total sales rose 10.9% to US$211.6 million.

● Comparable-store sales grew 10.5%.

● Net loss was US$0.9 million.

● Fiscal 2026 comparable sales guidance rose to 9% to 11%.

Citi Trends, Inc. (NASDAQ:CTRN) raised its fiscal 2026 outlook on 25 August 2026 after a second quarter in which sales and comparable-store sales grew strongly, yet the company still recorded a small net loss. The retailer, which trades as CITITRENDS, reported total sales of US$211.6 million for the 13 weeks ended 1 August 2026.

Second-quarter results

Total sales growth was 10.9% and comparable-store sales growth was 10.5%, or 19.7% on a two-year basis. Gross Margin was 40.6%, up 60 basis points on the prior-year quarter. Adjusted EBITDA was US$5.5 million.

The net result was a loss of US$0.9 million, compared with Net Income of US$3.8 million a year earlier. The company's headline release was dated 25 August 2026.

Chairman and chief executive Ken Seipel was quoted as saying: "CITITRENDS delivered another strong quarter, with comparable store sales increasing 10.5%." Cash stood at US$55.9 million and the company reported no debt.

Higher full-year guidance

Management lifted its fiscal 2026 comparable-store sales growth range to 9% to 11%, from 8% to 10%. Total sales growth is now expected at 10% to 12%, up from 9% to 11%. Adjusted EBITDA guidance moved to US$38 million to US$42 million from US$35 million to US$40 million, and adjusted selling, general and administrative expense Leverage to 160 to 180 basis points from 130 to 160 basis points.

These ranges are the company's own targets. They follow a strong first quarter. In its release dated 2 June 2026 and filed with the US Securities and Exchange Commission, the company reported net sales of US$230.9 million for the quarter ended 2 May 2026, up 14.4%, with comparable-store sales up 13.9% and net income of US$7.8 million, or US$0.91 per diluted share.

Business model and store base

Citi Trends is a discount retailer of apparel, accessories and home goods aimed at value-focused US households. At the end of the first quarter it operated 591 stores, having opened two, closed one and remodelled 25 during the period. The first-quarter release said growth was driven by higher customer traffic and larger baskets, and the company planned 25 new stores in fiscal 2026 along with Capital Expenditure of US$35 million to US$40 million.

First-quarter inventory was US$115.2 million, 4.8% higher than a year earlier, and cash was US$81.1 million with no debt. Compared with that, the reported second-quarter cash balance of US$55.9 million is lower.

Risks and caveats

The company noted risks including shifts in consumer spending, Tariff and trade policy changes, freight costs, inventory shrink and wider economic conditions. For a retailer serving price-sensitive customers, those pressures can quickly affect margins. The second-quarter loss, despite higher sales and a wider gross margin, also suggests that costs still weigh on profit.

A Raised Range Heads Into the Holiday Test

Attention now turns to the third quarter of fiscal 2026 and the key holiday period, which will test whether comparable-store sales can stay within the raised range. Investors will also look for the full second-quarter filing, any commentary on the lower cash balance, and progress on the planned 25 new stores.