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August 16, 2006 at 12:00 AM EDT

Citi Trends Announces Second Quarter 2006 Results

SAVANNAH, Ga., Aug 16, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- Citi Trends, Inc. (Nasdaq: CTRN) today reported results for the second quarter ended July 29, 2006.

Financial Highlights -- 13 weeks ended July 29, 2006

Total net sales increased 28.4% to $76.3 million compared with $59.5 million for the 13-week period ended July 30, 2005. Comparable store sales increased 7.3% compared with a 11.5% increase in the prior-year quarter. Relocated and expanded stores are included in the comparable store sales results. Net income increased 235% to $1.3 million compared with $381,000 for the prior-year quarter. Earnings per diluted share increased 200% to $0.09 compared with $0.03 in the prior-year quarter. Last year second quarter results included a one-time fee of $1.2 million pre-tax, or $0.06 per diluted share, paid by the Company to Hampshire Equity Partners to terminate its management consulting agreement with the Company.

For the second quarter, the Company opened 3 stores, reaching a total store count of 253 at the end of the quarter. During the third and fourth quarters, the Company plans to open an additional 22 to 25 stores bringing the end of year store count to 275 to 278.

Fiscal 2006 Outlook

The Company is revising its fiscal 2006 earnings guidance to a range of $1.37 to $1.41 per diluted share. This guidance is based upon an anticipated fiscal 2006 comparable store sales increase of between 3% and 5%, the opening of 40 to 43 new stores, with no closings planned, and 14.1 million diluted shares outstanding. This store opening schedule in fiscal 2006 is expected to increase selling square footage by approximately 20%, consistent with the Company's previously issued guidance.

The Company reminds investors of the complexity of accurately assessing future growth given the difficulty in predicting fashion trends, consumer preferences and general economic conditions and the impact of other business variables.

Investor Conference Call and Webcast

Citi Trends will host a conference call on August 16, 2006, at 5:00 p.m. EDT. The number to call for the live interactive teleconference is (913) 981- 5519. A replay of the conference call will be available until August 23, 2006, by dialing (719) 457-0820 and entering the passcode, 4168286.

The live broadcast of Citi Trends' quarterly conference call will be available online at the Company's website, www.cititrends.com, as well as http://ir.cititrends.com/medialist.cfm on August 16, 2006, beginning at 5:00 p.m. EDT. The online replay will follow shortly after the call and continue for two weeks.

About Citi Trends

Citi Trends, Inc. is a value-priced retailer of urban fashion apparel and accessories for the entire family. The Company currently operates 256 stores located in 16 states in the South, Southeast, Midwest and Mid-Atlantic regions, and our website address is www.cititrends.com. CTRN-E

Forward-Looking Statements

All statements other than historical facts contained in this news release, including statements regarding our future financial position, business policy and plans and objectives of management for future operations, are forward- looking statements that are subject to material risks and uncertainties. The words "believe," "may," "could," "estimate," "continue," "anticipate," "intend," "expect," "plan" and similar expressions, as they relate to Citi Trends, are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, and that actual results or developments may differ materially from those in the forward-looking statements as a result of various factors which are discussed in Citi Trends, Inc. filings with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to, uncertainties relating to economic conditions, growth and expansion risks, consumer spending patterns, competition within the industry, competition in our markets and the ability to anticipate and respond to fashion trends. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission, Citi Trends does not undertake to publicly update any forward-looking statements in this news release or with respect to matters described herein, whether as a result of any new information, future events or otherwise.



                                CITI TRENDS INC.
                          CONDENSED STATEMENT OF INCOME
                                   (unaudited)
                  (in $000's, except share and per share data)

                                                    Thirteen Weeks Ended
                                             Jul. 29, 2006     Jul. 30, 2005

    Net sales                                      $76,330           $59,449
      Cost of sales                                 48,112            37,682
    Gross profit                                    28,218            21,767
    Selling, general and administrative expenses    26,681            21,271
    Income from operations                           1,537               496
      Interest income                                  457               136
      Interest expense                                 (38)              (81)
    Income before provision for income taxes         1,956               551
      Provision for income taxes                       680               170
    Net income                                      $1,276              $381

    Net income per share, basic                      $0.09             $0.03
    Net income per share, diluted                    $0.09             $0.03

    Weighted average shares used to
     compute net income per share, basic        13,516,060        11,925,307
    Weighted average shares used to
     compute net income per share, diluted      14,099,565        13,587,400



                                                    Twenty-six Weeks Ended
                                             Jul. 29, 2006     Jul. 30, 2005

    Net sales                                     $168,011          $123,066
      Cost of sales                                103,484            76,166
    Gross profit                                    64,527            46,900
    Selling, general and administrative expenses    52,922            41,029
    Income from operations                          11,605             5,871
      Interest income                                  954               187
      Interest expense                                 (79)             (242)
    Income before provision for income taxes        12,480             5,816
      Provision for income taxes                     4,310             2,170
    Net income                                      $8,170            $3,646

    Net income per share, basic                      $0.61             $0.34
    Net income per share, diluted                    $0.58             $0.30

    Weighted average shares used to
     compute net income per share, basic        13,481,836        10,610,154
    Weighted average shares used to
     compute net income per share, diluted      14,068,831        12,230,180



                                CITI TRENDS, INC.
                            CONDENSED BALANCE SHEETS
                                   (in $000's)

                                             Jul. 29, 2006     Jan. 28, 2006
                                                (unaudited)
    Assets
    Cash and cash equivalents                       $8,294            $9,079
    Marketable securities                           45,375            54,458
    Inventory                                       67,076            54,021
    Other assets                                    10,834             6,306
    Property and equipment, net                     26,287            23,426
      Total assets                                $157,866          $147,290

    Liabilities and Stockholders' Equity
    Borrowings under line of credit                     $-                $-
    Accounts payable and accrued liabilities        50,872            57,667
    Other liabilities                                6,575             5,874
    Total stockholders' equity                     100,419            83,749
      Total liabilities and stockholders' equity  $157,866          $147,290



                                 Citi Trends Inc.
                           Regulation G Reconciliation

                                             Quarter ended
                                             July 30, 2005         % to Sales

    Selling, general and administrative
     expenses, as reported                     $21,270,958              35.8%

    Items to Reconcile to GAAP
    Termination fee paid to Hampshire
     Equity Partners                             1,200,000               2.0%

    Selling, general and administrative
     expenses, as adjusted                     $20,070,958              33.8%


                                             Quarter ended
                                             July 30, 2005

    Diluted earnings per share, as reported          $0.03

    Items to Reconcile to GAAP
    Diluted earnings per share impact of
     termination fee paid to Hampshire
     Equity Partners                                  0.06

    Diluted earnings per share, as adjusted          $0.09

SOURCE Citi Trends, Inc.

Tom Stoltz, Chief Financial Officer, +1-912-443-2075, or Ed Anderson, Chairman and
Chief Executive Officer, +1-912-443-3705, both of Citi Trends, Inc.
http://www.prnewswire.com

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