Citi Trends (NASDAQ:CTRN) Chief Executive Officer Ken Seipel and Chief Financial Officer Heather Plutino presented at the UBS 2026 Global Consumer and Retail Conference, outlining the company’s ongoing transformation strategy, recent comparable-sales performance, and a multi-year plan for growth and margin expansion.
Recent performance and “early stages” of transformation
Seipel, who said he has led multiple retail turnarounds in private equity-backed settings, described Citi Trends’ progress since he became CEO nearly two years ago. He said the company has delivered “industry-leading comp sales,” driven largely by transaction growth, broad-based product strength, and disciplined execution. Seipel added that the company is still in the early stages of its transformation and has “a lot to do,” including refining processes, optimizing categories, and building systems.
- Holiday comparable sales rose 9.3%, following a 7.1% increase in the prior year, for a two-year stack of 16.4%.
- For the year-to-date period through December, Seipel said comps were up 9.8% versus last year, representing a two-year stack of 13.3%.
- He pointed to “five, about to be six quarters” of consistent quarter-over-quarter sales performance.
Seipel said the company has “a clear line of sight” to about $45 million of EBITDA in fiscal 2027, driven primarily by consistent comp sales growth, gross margin expansion, operating expense leverage, and new store expansion.
Business overview and customer focus
Citi Trends is headquartered in Savannah, Georgia, with buying offices in New York. The company operates as an off-price retailer specializing in family apparel, accessories, and home categories. Seipel said fiscal 2025 annual sales were about $820 million and that the company operates 592 stores across 33 states, typically in 12,000-square-foot boxes, with strong penetration in the Southeast.
Seipel emphasized what he described as a differentiated positioning: Citi Trends is “the only off-price retailer specifically focused on the Black customer,” serving an “underserved demographic” with styles, brands, and trends at compelling prices. He said the company’s locations are embedded in customers’ neighborhoods, where proximity and word-of-mouth serve as powerful traffic drivers.
He also described the customer base by shopping frequency and household income, stating that more than one-third of customers shop weekly or bi-weekly. Seipel said this frequent shopper group has household incomes ranging from $75,000 to $150,000 and accounts for about 40% of revenue. He said a monthly-shopping segment typically earns $50,000 to $75,000, makes up about 50% of the customer base, and drives about 45% of revenue, alongside a less frequent, more budget-conscious segment.
Merchandising, “extreme value,” and off-price dynamics
Seipel said the company’s product strategy is built around a three-tier assortment designed to serve customers across income levels:
- Opening price point: Value-focused basics, signed in-store with “CITI SCORE.”
- Better tier (core): Quality products with fresh styles, typically priced in the $7–$12 range, across men’s, women’s, kids’, footwear, and home.
- Best tier (expanding): More trend-relevant product plus “extreme value” branded deals, often purchased at deep discounts (Seipel cited “often 75% off MSRP”).
Seipel said the company’s goal is to grow the extreme value segment to about 10% of total mix, describing these branded deals as traffic and basket drivers that can still deliver strong gross margin performance.
He also discussed off-price retail fundamentals, explaining that the model capitalizes on supply chain inefficiencies and vendor overstocks, and that fast inventory turns and frequent newness create a “treasure hunt” experience that encourages repeat visits.
Marketing, community positioning, and store refreshes
Seipel said Citi Trends historically relied heavily on word-of-mouth, but has begun increasing marketing investment. He highlighted the company’s “Joy Looks Good On You” holiday marketing campaign, which he said included refreshed branding, social media, and online efforts. Seipel said the campaign video generated more than 55 million viral views and engagements online and is the first in a series of videos available on the company’s website.
Beginning in 2026, Seipel said the company plans to add external marketing during key peak selling weeks to increase awareness and drive incremental traffic. He also described localized marketing tests, including December efforts that included bus wraps and branded moments at bus stops, which he said produced “good results.”
Seipel repeatedly framed stores as community anchors, saying the company’s store teams often have long-standing neighborhood ties that create trust and extend beyond the transaction. He said transaction growth has been the majority driver of comp increases over the past six quarters.
On store investment, Seipel said Citi Trends refreshed 62 high-volume stores in fiscal 2025, with those locations averaging about $2 million in annual sales. He put remodel costs at approximately $100,000 per store and said the upgrades included fixtures, signage, lighting, and enhanced presentation standards. Looking forward, he said the company expects to remodel about 50 stores per year as part of fleet maintenance and a market share investment strategy.
Store growth, AI-driven analytics, and 2027 financial targets
Seipel outlined a new store expansion plan and described a disciplined approach to site selection. He said Citi Trends plans to open approximately 25 new stores in 2026 and about 40 stores per year beginning in 2027, reaching roughly 650 stores by the end of 2027. The strategy includes backfilling existing markets and selectively entering new markets with demographic alignment.
As examples, Seipel said the company piloted a market backfill approach in Jacksonville, Florida, and Columbia, South Carolina, opening two new stores alongside remodels of existing stores, with both markets “off to a great start.”
Seipel said the company uses AI tools combining about three years of transaction data from every store with geolocation studies to identify drivers of success and improve site selection. He said this approach has shown approximately 90% accuracy in sales prediction. Financial hurdles include targeting mature stores averaging around $1.5 million in sales and mid-teens percentage four-wall contribution.
On capital allocation, Seipel said the company has a debt-free balance sheet and ample liquidity. He said capital spending totaled $23 million in 2025 and is expected to be $40 million to $45 million in 2026 and 2027, funding remodels, new store openings, technology infrastructure, and AI-based systems. He also said the company’s financial strength could enable selective strategic roll-ups and synergistic acquisitions over time.
Seipel concluded with fiscal 2027 targets relative to fiscal 2024, including about $150 million in total store sales growth to reach $900 million or more in fiscal 2027, gross margin expansion of 400 basis points to 42%, and SG&A leverage of about 200 basis points. He said these elements would support a planned EBITDA increase of $60 million and overall EBITDA of about $45 million, implying roughly a 5% EBITDA margin in fiscal 2027. He also said the company expects consistent store sales growth in the 6%–8% annual range.
To support margin expansion, Seipel cited AI-based planning to improve inventory efficiency and reduce markdowns, planned markdown optimization tools, and opportunities to reduce shrink and freight costs. He said shrink improvements are expected through enhanced practices, including stronger internal data accuracy and investments in facial recognition camera systems, alongside distribution center efficiency efforts.
Seipel said the company’s strategy is “actionable” and “well underway,” emphasizing that Citi Trends is “debt-free, disciplined, and positioned for growth,” with a focus on profitable expansion and stronger earnings over time.
About Citi Trends (NASDAQ:CTRN)
Citi Trends, Inc (NASDAQ: CTRN) is an off-price retail apparel chain that focuses on value-priced urban fashion apparel and accessories for men, women, and children. Headquartered in Savannah, Georgia, the company offers a broad assortment of merchandise, including denim, sportswear, activewear, and seasonal styles, complemented by footwear, jewelry, cosmetics, and home goods. Through its purchasing model, Citi Trends sources closeouts, overstocks and canceled orders from name-brand vendors, enabling it to offer trending styles at competitive price points.
The company operates more than 500 stores across the Southeastern and Mid-Atlantic regions of the United States, with typical store footprints of approximately 11,000 square feet.
