Citi Trends 2026 Q1 Earnings Impressive Turnaround with 125.4% Net Income Increase

Citi Trends (CTRN) reported its fiscal 2026 Q1 earnings on June 11th, 2025. The company demonstrated a notable turnaround by achieving a net income of $871,000, reversing from a net loss of $3.43 million in the prior year. This represents a 125.4% positive change. The earnings per share swung to a profit of $0.11 from a loss of $0.42. Citi Trends has provided guidance indicating expected growth in comparable store sales and gross margin expansion for the full fiscal year, with adjusted EBITDA projected to significantly improve.

Revenue
The total revenue of Citi Trends increased by 8.3% to $201.73 million in 2026 Q1, up from $186.29 million in 2025 Q1.

Earnings/Net Income
Citi Trends returned to profitability with EPS of $0.11 in 2026 Q1, reversing from a loss of $0.42 per share in 2025 Q1 (126.2% positive change). Meanwhile, the company achieved a remarkable turnaround with net income of $871,000 in 2026 Q1, representing a 125.4% positive swing from the net loss of $-3.43 million in 2025 Q1. The positive EPS indicates a strong recovery from last year's losses.

Price Action
The stock price of Citi Trends has dropped 3.42% during the latest trading day, has edged down 1.16% during the most recent full trading week, and has surged 45.29% month-to-date.

Post-Earnings Price Action Review
The strategy of buying CTRN when there is a revenue miss and holding for 30 days resulted in a significant performance. This approach achieved an overall return of 180.54%, surpassing the benchmark return of 88.76% by 91.78%. Despite a maximum drawdown of -87.04% and a Sharpe ratio of 0.37, indicating some risk with moderate returns, the compound annual growth rate (CAGR) was 23.04%, showing substantial growth over the backtested period. This performance highlights the potential benefits of this strategy despite inherent risks, as the returns significantly exceeded the benchmark.

CEO Commentary
Kenneth Seipel, Interim Chief Executive Officer, emphasized that Citi Trends achieved significant growth, with total sales increasing by $15.4 million or 8.3% year-over-year. He highlighted the strong performance across all categories, particularly in plus-size and footwear, driven by a strategic focus on value merchandising and operational discipline. Seipel noted the ongoing supply chain transformation and the need for further improvement in distribution center performance, while expressing confidence in the company’s ability to gain market share through a structured three-phase plan: repair, execute, and optimize. He conveyed an optimistic outlook, stating, "We have a clear path to achieving a target of $40 million to $50 million of EBITDA."

Guidance
Citi Trends expects full-year comparable store sales growth to be in the mid-single digits and gross margin expansion of approximately 200 basis points versus fiscal 2024. The company guides for adjusted EBITDA in the range of $6 million to $10 million, reflecting a $20 million to $24 million improvement from fiscal 2024. Capital expenditures are projected to be between $18 million and $22 million, with plans to open up to five new stores and remodel approximately 50 locations.

Additional News
Recently, Citi Trends experienced several significant developments. Kenneth Seipel was elected as the Chairman of the Board, signifying leadership stability and strategic direction. The company also announced a refresh of its Board of Directors, reflecting a commitment to strengthening governance. Additionally, Citi Trends has been actively engaged in an equity buyback plan, initially announced on November 30, 2021, and March 15, 2022, which underscores the company's confidence in its financial health and future prospects. These actions signal a proactive approach to enhancing shareholder value and positioning the company for sustained growth.