Citi Trends shifts capital into remodels this year — and plots a 40-store-a-year expansion starting in 2027

Citi Trends will open about 20 new stores and remodel 60 to 65 locations in fiscal 2026, executives said on the value retailer's second-quarter earnings call Tuesday, before accelerating to roughly 40 openings a year in fiscal 2027 and beyond. The Savannah, Georgia-based chain ended the quarter with 594 stores after opening four and closing one, and reported a 10.5% jump in comparable store sales — its eighth consecutive quarter of comp growth — on total sales of $211.6 million, up 10.9% from a year ago, according to the company's earnings release and call commentary reported by Yahoo Finance.

The store plan is a deliberate reshuffle. Citi Trends trimmed its 2026 opening target from 25 stores to about 20, citing timing, and pushed the freed-up capital into a bigger remodel program — 60 to 65 refreshes this year versus an original plan of roughly 50. The company remodeled 26 stores in the second quarter alone and 51 through the first half.

Citi Trends sells off-price apparel, accessories and home goods to value-conscious, largely African American and multicultural shoppers, with a footprint concentrated in high-density urban neighborhoods and smaller rural markets across the country — trade areas most national retailers underserve. That positioning has been a tailwind in a stretched consumer economy: comps are up 12.2% year to date and 19.7% on a two-year stacked basis, and CEO Ken Seipel told analysts the third quarter opened on a roughly 25% two-year stack. Notably, Seipel said about half of the comp growth is coming from increased transaction counts — more customers in the door, not just bigger baskets.

The chain's first-half adjusted EBITDA of $19.4 million represents a $14.1 million improvement over the prior year, and management raised full-year guidance to $38 million to $42 million in adjusted EBITDA on comp growth of 9% to 11%. Gross margin expanded 60 basis points to 40.6% in the quarter on stronger merchandise margins and lower shrink. Capital expenditures are planned at $35 million to $40 million, funded from a debt-free balance sheet holding $55.9 million in cash with an untouched $75 million credit facility. Even so, shares fell after the report, per Investing.com, as the quarter's small net loss of $0.9 million reminded investors the turnaround is still converting sales into profit.

The nine stores opened since the fourth quarter of 2025 — including locations in Rochester, Baltimore and Jackson, Tennessee — are all exceeding expectations, Seipel said. New units are being underwritten to clear defined hurdles: "For our new stores, we're targeting roughly $1.5 million in mature sales and mid-teens four-wall contributions," he told analysts, adding that "each new location is evaluated using our AI tools and held to strict financial return and investment criteria."

Citi Trends' remodel-first sequencing is a classic tell that management wants proof of concept in the existing fleet before signing 40 leases a year — landlords courting the brand for 2027 deals should expect that AI-driven site screen to be unforgiving on rent. The chain's sweet spot — smaller-footprint boxes in urban strip centers and rural markets — puts it in competition for the same second-generation space that its off-price and dollar-store peers are chasing, but in trade areas with far less institutional competition. A $1.5 million mature-sales target on a modest box implies healthy rent-to-sales ratios for neighborhood-center owners, and a tenant funding growth entirely from cash flow, with zero debt, is the kind of covenant story leasing teams like. If the planned 2027 acceleration holds, Citi Trends becomes one of the more active value-retail tenants in the market next year — worth a call before the pipeline fills.