Citi Trends Inc. (NASDAQ: CTRN) reported a narrower-than-anticipated second-quarter loss and revenue that exceeded estimates, but shares slipped in pre-market trading after the company trimmed its new store expansion plans.
The Savannah, Georgia-based discount retailer posted a loss of $0.11 per share, beating the consensus estimate of a $0.35 loss. Revenue rose 10.9% year-over-year to $211.6 million, topping analyst expectations of $205.5 million. Comparable store sales increased 10.5% from the prior year, marking the eighth consecutive quarter of growth and accelerating to 19.7% on a two-year basis.
Gross margin expanded by 60 basis points to 40.6% in the quarter. For the first half of fiscal 2026, net income reached $6.8 million, while adjusted EBITDA totaled $19.4 million, up $14.1 million from the same period last year. The company ended the quarter with 594 stores, $55.9 million in cash, and no debt.
Management raised its full-year comparable store sales growth guidance to a range of 9% to 11%, up from the prior 8% to 10%, and increased total sales growth expectations to 10% to 12% from 9% to 11%. Adjusted EBITDA is now projected between $38 million and $42 million, with a midpoint of $40 million, compared with the prior guidance midpoint of $37.5 million.
However, Citi Trends reduced its new store count target to 20 for the year, down from the prior estimate of 25. Chairman and CEO Ken Seipel noted that the company’s disciplined execution is translating sales momentum into improved profitability, with first-half adjusted EBITDA already exceeding the full-year total for fiscal 2025.
Shares of Citi Trends fell 1.82% in pre-market trading following the release.
