Citi Trends Reports 10.9% Increase in Q2 Net Sales, Posts Net Loss

Citi Trends, Inc. reported its financial results for the second quarter and first half of fiscal 2026, revealing a notable increase in net sales and a shift in profitability compared to the previous year. For the thirteen weeks ended August 1, 2026, net sales reached $211.6 million, a 10.9% increase from $190.8 million in the same period last year. However, the company experienced a net loss of $0.9 million, contrasting with a net income of $3.8 million in the prior year. For the first twenty-six weeks of fiscal 2026, net sales totaled $442.5 million, up 12.7% from $392.5 million, with net income rising to $6.8 million from $4.7 million in the same period of 2025.

The increase in sales was primarily driven by a 10.5% rise in comparable store sales, contributing approximately $19.8 million to the overall sales growth. The company also noted a net increase of $1.0 million from store openings and closings. Despite the rise in sales, the cost of sales (exclusive of depreciation) increased by 9.8% to $125.7 million, leading to a slight decrease in the cost of sales as a percentage of total sales, from 60.0% to 59.4%. Selling, general, and administrative expenses also rose by 4.3% to $82.3 million, but as a percentage of sales, these expenses decreased from 41.4% to 38.9%.

Citi Trends continues to expand its operational footprint, operating 594 stores across 33 states as of August 1, 2026. The company has focused on enhancing its inventory levels, which increased by 7.5% to $126.4 million, reflecting investments to meet strong customer demand. The company’s capital expenditures for the first half of the fiscal year were $15.6 million, significantly higher than the $7.7 million spent in the same period last year, indicating a commitment to growth through new store openings and remodels.

Looking ahead, Citi Trends has expressed a cautious optimism regarding its financial outlook, emphasizing the importance of monitoring economic conditions, including inflation and consumer sentiment. The company has a revolving credit facility with a $75 million commitment, which remains untapped, providing additional liquidity for future investments. The management anticipates capital expenditures for the fiscal year to be in the range of $35 million to $40 million, primarily for new store openings and renovations, as it aims to capitalize on the growing demand for its off-price retail offerings.