Citi Trends Sees $40M EBITDA Target by 2027 Amid Remodels and AI Push

Citi Trends reported Q2 2025 comparable sales growth of 9.2%, marking its fourth consecutive quarter of mid-to-high single-digit comp sales growth. CEO Kenneth Duane Seipel outlined a $40M EBITDA target by 2027, citing store remodels and AI initiatives as key drivers of transformation.

Citi Trends (NASDAQ:CTRN) reported its second quarter 2025 earnings on August 26, 2025, highlighting a 9.2% comparable sales growth, marking its fourth consecutive quarter of mid-to-high single-digit comp sales growth. The company also reported an adjusted EBITDA loss of $2.6 million, reflecting meaningful top-line improvement and ongoing turnaround initiatives [1].

CEO Kenneth Duane Seipel noted that the company's strategy is rooted in a dedicated focus on its core customer, investment in updated assortments, and disciplined operational execution across all regions and categories. Seipel also highlighted the company's AI-driven allocation systems, which are being implemented to optimize inventory flow and category management across the fleet, with full rollout expected by mid-September 2025 [2].

CFO Heather Plutino emphasized the company's financial controls, noting that adjusted SG&A expenses were $78.9 million, up mainly due to reinstated incentive compensation, but all other controllable SG&A leveraged by about 150 basis points. The company remains debt-free, with $50 million in cash and no borrowings against a $75 million revolver, reinforcing balance sheet flexibility for continued investment [1].

Looking ahead, Seipel outlined a $40 million EBITDA target by 2027, driven by sustained sales growth, new store investment, and continued SG&A leverage. The company plans to remodel approximately 60 stores this fiscal year, open three, and close three, and ramp new store openings to 25 to 40 in 2026. The long-term objective is to achieve $40 million or more of EBITDA by 2027 [2].

References:

[1] https://www.nasdaq.com/articles/citi-trends-sales-jump-9-percent-q2
[2] https://seekingalpha.com/news/4489268-citi-trends-outlines-40m-ebitda-target-by-2027-as-store-remodels-and-ai-initiatives