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- **Revenue Momentum**: Q3 sales up 10.1% YoY, 15th consecutive month of comp growth driven by traffic and basket size.
- **Profit Target**: 2027 EBITDA target of $45 million (+$60 million vs. 2024), supported by 230bp gross margin expansion and 90bp SG&A leverage.
- **Extreme Value Growth**: Extreme value deals currently 2-3% of sales, targeting 10% of total sales.
- **Store Expansion**: 25 new stores in 2026, 40+ in 2027, with AI-driven location analytics achieving 90% sales accuracy.
- **CRM Launch**: "Insider's Club" loyalty program set to launch Q1 2026 with digital tools for enhanced customer engagement.

**【CEO Summary Section】**
- **Revenue Growth**: Q3 total sales of $197.1 million, up 10.1% YoY, with comparable store sales increasing 10.8% (16.5% 2-year stack). 15th consecutive month of comp growth driven by traffic and basket size.
- **EBITDA Target**: 2027 EBITDA expected to reach $45 million, a $60 million improvement from 2024, driven by gross margin expansion and SG&A leverage.
- **Product Strategy**: 3-tiered product approach (core basics, on-trend styles, extreme value deals) with extreme value sales targeting 10% of total sales.
- **Operations**: 10.8% comp growth achieved with 3% less inventory YoY, AI-based allocation system implemented across all categories.
- **Growth Strategy**: 25 new stores in 2026, 40+ in 2027, remodeling 50 stores/year. 90% accuracy in new store location analytics.
- **Customer Engagement**: Launching "Joy Looks Good on You" holiday campaign and CRM/loyalty program in Q1 2026.

**【CFO Financial Commentary】**
- **Q3 Financials**: Gross margin 38.9%, SG&A rate 40.4% (130bp improvement YoY). Adjusted EBITDA loss of $2.9 million, better than prior year's $3.3 million loss.
- **Balance Sheet**: $51 million cash, no debt, healthy inventory levels for holiday. 2025 capex $23 million.
- **Updated Guidance**: Full year EBITDA $10-12 million (vs. prior $7-11 million). 2025 sales growth high single digits, gross margin +230bp YoY, SG&A leverage 90bp.
- **Q4 Outlook**: Comps high single digits, gross margin 40-41%, EBITDA $10-12 million.

**【Q&A Highlights】**
- **Merchandising Opportunities**: Strong performance in Men's, Women's footwear, and Kids. Extreme value deals (2-3% of sales) expected to grow to 10% of sales.
- **Store Expansion**: 2026 store openings split between spring, back-to-school, and holiday periods. 2027 cadence to accelerate with 40+ openings.
- **Shrink Mitigation**: AI-enabled camera systems rolled out to 1/3 of stores, aiming for 2026 shrink reduction. Current shrink rate <1.5% of sales.
- **CRM/Loyalty**: "Insider's Club" launching Q1 2026 with electronic receipts, early access to deals, and digital layaway features.

Citi Trends, Inc. (CTRN) Q3 2026 Earnings Call Transcript

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CTRN

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