Value priced fashion retailer Citi Trends has outlined plans to open 100 new stores and remodel 150 others, as it revealed holiday sales that significantly exceeded company expectations.

In a trading update, the retail group said it had updated its strategic three-year initiative to include additional targets. The company is aiming to increase topline sales to more than US$1bn by fiscal 2023, and achieve comparable store sales growth of 3% per year.

Citi Trends is also looking to grow its store fleet, with at least 100 additional stores by the end of fiscal 2023, and the remodelling of at least 150 more.

The company said it is investing in infrastructure improvements for merchandising, supply chain, and stores.

The aim is to achieve operating income growth at a compound annual growth rate of 20%-plus per year, and diluted earnings per share growth at a compound annual growth rate of 25%-plus per year.

For the nine weeks ended 2 January, total sales increased 12.9% to $192.5m from $170.5m a year earlier. Comparable store sales were up 10.3% versus 3.6% in the year-ago period.

"We are thrilled with our holiday sales results that significantly exceeded our expectations," said CEO David Makuen. "We continue to drive meaningful gross margin and operating margin expansion fuelled by full-price selling and accelerated inventory turns."

Citi Trends is now forecasting positive comparable store sales in the low double-digit range for the fourth quarter, and diluted earnings per share of $1.22 to $1.32 on an adjusted basis. For the full year, total sales are forecast to be only slightly below 2019 total sales, despite the store closures due to Covid-19.