Comparable store sales increased 13.9 per cent YoY, while the two-year comparable sales stack rose 23.8 per cent. The company posted net income of $7.8 million during the quarter, compared to $0.9 million in Q1 FY25. Adjusted EBITDA more than doubled to $13.9 million from $6.4 million a year earlier.
American off-price retailer Citi Trends has reported strong Q1 FY26 results, with sales rising 14.4 per cent YoY to $230.9 million and comparable store sales up 13.9 per cent.
Net income increased to $7.8 million, while adjusted EBITDA more than doubled to $13.9 million.
The company maintained a debt-free balance sheet and reaffirmed its FY26 outlook, supported by store expansion.
“We delivered an exceptional start to 2026, building on the momentum established last year,” said Ken Seipel, chief executive officer of Citi Trends. “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.”
Gross margin improves despite freight headwinds
The gross margin expanded 40 basis points (bps) to 40 per cent during the quarter, supported by higher merchandise margins despite elevated freight expenses linked to fuel surcharges. Adjusted selling, general and administrative (SG&A) expenses stood at $78.3 million, representing 33.9 per cent of sales and leveraging 250 basis points compared to last year due to stronger sales flow-through and fixed-cost leverage.
The company ended the quarter with cash of $81.1 million and no debt, while merchandise inventory increased 4.8 per cent YoY to $115.2 million.
During the quarter, Citi Trends opened two stores, closed one store, and remodelled 25 locations. The retailer reiterated plans to open around 25 new stores, remodel approximately 50 stores, and close four stores during fiscal 2026.
FY26 outlook signals continued growth momentum
For fiscal 2026 (FY26), Citi Trends expects comparable store sales growth in the range of 8 per cent to 10 per cent and total sales growth of 9 per cent to 11 per cent. The company reaffirmed its adjusted EBITDA outlook of $35 million to $40 million, which would more than double fiscal 2025 results.
Seipel added that the company remains focused on consistent execution, accelerating growth, expanding off-price opportunities, and strengthening customer engagement through initiatives including the upcoming Insiders Club loyalty platform.
Fibre2Fashion News Desk (SG)
