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Ken.

Ken Seipel -- Interim Chief Executive Officer

Thank you, Nitza. Well, good morning, everyone, and thank you for joining our Q2 earnings call today. Since our first quarterly call, I've had the opportunity to evaluate our business and chart corrective measures to enhance the long-term sales and profitability of Citi Trends. Today, we'll discuss the strategic actions taken in Q2 to prepare Citi Trends for future growth and outline important work underway to improve our near-term and long-term results.

You know -- and I must say, while there's a lot of work ahead still, I'm more energized and optimistic than ever about our company's future. So, turning to Q2. In Q2, we achieved growth in customer traffic versus last year, which indicates our core customer remains highly engaged with the Citi Trends brand and our unique store experience. Our home and impulse categories delivered double-digit comps, and our back-to-school children's categories got off to a good start.

I'm pleased to report that we've experienced continued momentum in the important back-to-school period, with positive single-digit comparable store sales growth in Q3 to date. Importantly, Citi Trends remains in a healthy financial position, with strong liquidity and no debt, allowing us to execute the foundational work necessary for future growth and profit acceleration. Since stepping into the business on June 1st, I made an evaluation of several key areas of our business, including an extensive review of our product assortment. Relatedly, I made the strategic decision to execute markdowns in the second quarter to quickly clear through aged inventory and make room for new product.

This action will enable us to consistently offer fresher, balanced assortments of good, better, and best products. At the same time, we're swiftly capitalizing on two distinct opportunities. First is enhancing the treasure hunt experience by securing branded goods at significant discounts while also increasing the penetration of opening price point goods. And second, we've identified specific opportunities to improve our preseason assortment planning process and product allocation processes.

I am confident these actions are foundational for producing consistent comparable store sales growth and improved working capital efficiency. Inventory shrinkage has been an area of concern for Citi Trends over the past several quarters. You've heard us discuss in prior calls the actions we're taking to correct recent elevated shrink trends. In July, I made the decision to engage services of a firm to identify causal issues and assist us with fixing the problem.

Working with our team, they are identifying several specific correctable administrative and process actions that are expected to have a tangible impact on shrink results going forward. The team has also identified corrective measures to monitor and manage internal and external theft. We're in the process of implementing shrinkage improvement measures, and we expect to make a positive impact on shrinkage results going forward. As I mentioned on our prior call, we've identified opportunities to enhance the effectiveness of the Island Pacific ERP upgrade that occurred last year.

Transitioning from customized legacy software to a standardized software platform left a void in reports, processes, and monitoring capabilities that I view as fundamental for our leaders to guide the business. Our senior leadership team is highly engaged and has prioritized the business needs, and the work is now underway to make the necessary improvements. I want to emphasize that each of these actions I described are foundational improvements that position Citi Trends for profitable growth. After these past couple of months, it's clear to me that the majority of the opportunities we face as a company are well within our control and really not dependent on external factors.

You know, as a company, it's really nice to be in control of your own destiny, you know, knowing that if you -- your focus, hard work, and determination will result in significantly improved outcome for our shareholders. My optimism about Citi Trends is really rooted in my belief of our core business model, which boasts a defensible moat against competition. We're uniquely positioned in the marketplace as a value retailer serving a largely underserved customer base. With our extensive network of retail locations, we're one of the largest national retailers focused on providing family apparel to lower-income customers.

Our strength lies in our deep-rooted presence within the African American community, which continues to be the cornerstone of our financial success. Our long-term neighborhood presence has fostered highly engaged and loyal customers who respond positively when we meet their needs. Now, I'd like to say a few words about the groundwork that we're laying for the future. Our plan includes a clear focus on our core customer, a strong product value proposition, trendy fashions with more treasures in the treasure hunt, consistent execution of our business model, and disciplined expense management.

The combination of which will contribute significantly to improve profit margins. Beginning with our core customer. We have narrowed our company's focus to our core African American consumer who represents the majority of our trade area in nearly 90% of our stores. This targeted focus will allow us to deliver more precise assortments.

While we acknowledge the presence of multicultural and Latinx customers in our trade areas, our core African American customer remains central to our business and is critical to our success. Our merchandise teams have embraced the narrow focus on our core customer, which is enabling them to create a more refined and targeted assortment. In addition, we have initiated a comprehensive consumer insights study to gain both quantitative and ethnographic insights into the drivers of purchase decisions. This study, expected to be completed by the fall, will be a critical factor in our decision-making process for 2025 and beyond.

Next, our product assortment. In past years, the company reduced the style choice count for opening price point goods under $5, which [Technical difficulty] our value perception and created a void for commodity needs at value prices. Simultaneously, we increased our offering of higher-priced products, which was a positive step. However, we did not keep pace with the consumer demands for brands, leading to disappointment among customers seeking branded products at competitive prices.

Moving forward, our objective is to always offer a balanced assortment of good, better, and best products across all categories. For our lower-income customers on a tight budget, we're going to offer increased selection of goods priced under $5, with visible in-store signage to emphasize our value proposition. And even more significant growth opportunity for our business lies in expanding our sales of branded products. Our customers are fashion-conscious and have demonstrated that they're willing to trade up when the fashion is right, the brand is recognizable, and the price value proposition is strong.

We have identified juniors, men's, and family shoes as the categories with the greatest potential for near-term top-line growth. And I want to recognize our merchant team for recently opening up relationships with well over 20 well-known national brands that were previously inaccessible to Citi Trends. Our merchants have noted our large scale of nearly 600 stores uniquely positioned in African American neighborhoods is very attractive to brands looking to expand their reach into this important demographic. We expect some of this product to begin filtering into our stores in Q4, with continued expansion in 2025.

You know, and speaking of brands, we're currently developing internal capacity to add more treasure to the treasure hunt by securing branded deals from various sources as significant discounts to regular cost. And although the current economic climate is challenging, it presents an excellent opportunity for off-price deal-making with distressed vendors and retailers. We've added a highly regarded off-price buyer to our team to open new relationships, create an off-price deal flow, evaluate assortment, fit, and execute. Our buyers are in the market now reviewing a seemingly endless amount of opportunistic deals to begin delivering in Q4 as we refine our capacity to execute this important growth initiative.

And over time, I expect this newly developed off-price treasure segment of our assortment to contribute an additional 10% or more incremental sales at a higher-than-average margin rate. I'm confident that the changes in our product strategy will drive traffic to our stores, resulting in consistent top-line and gross margin dollar performance in the future. Now, turning to operations. In our supply chain, we are working to increase the speed of product delivery from vendor to store while reducing costs.

Our objective is to shorten the number of product days in the supply chain, enabling us to respond more quickly to customer demands and reallocate inventory working capital to fuel sales growth opportunities. Our distribution teams have identified several tangible opportunities to increase speed and reduce operating costs. Our progress in supply chain was stalled this summer when our primary outbound carrier unexpectedly shut down. And although we were able to react, the disruption caused a distraction for our teams and some delay in product flow.

We are now refocusing on the supply chain efficiency project, and we'll provide updates on our progress in the near future. Now, I'll turn the call to Heather to review the financial points from Q2, as well as our outlook for the second half of the year. Heather.

Heather Plutino -- Chief Financial Officer

Thank you, Ken, and good morning, everyone. Let me start by saying that I, too, am excited about the growth opportunities that lie ahead for Citi Trends and strongly believe that the definitive actions we are taking set us up for long-term success. Before I review our second quarter results and update you on our outlook, I'd like to provide some additional color on two unique aspects of our second quarter, our successful inventory reset and our shrink results. I would characterize these two items, totaling $13.4 million of expense in the quarter, as one-time in nature and not reflective of the underlying strength of the business or the long-term potential of the Citi Trends brand.

Note, however, that they are included in our adjusted EBITDA results for the quarter. As Ken mentioned, we made the strategic decision to quickly move through aged inventory to make room for new product. The inventory reset resulted in $9.4 million of second quarter markdowns. In addition and despite progress on several meaningful initiatives, we incurred higher-than-anticipated shrink from physical inventory results in the quarter.

As a result, we appropriately increased our accrual for shrink, which had an outsized impact on Q2 due to the catch-up nature of that adjustment. In total, we incurred $4 million of unexpected shrink expense in the quarter. As you know, there are three categories of shrink in retail: internal theft, administrative/recordation issues in either stores or DCs, and external theft. We are working hard to change the recent trend in each of these categories.

Internal theft has been our primary area of focus, and we've identified and are implementing several mitigating tactics to improve impressions of control, many of which we discussed last quarter, including updated in-store theft prevention equipment, increased use of exception reporting to identify and resolve problem areas, and a new third-party restitution program. We are also upgrading store talent as needed and are revising important policies to further tighten controls. We're taking action on the administrative front to ensure accurate flow of inventory data, identifying and fixing any leaks in that flow. Finally, the external theft category will benefit from the initiatives I've mentioned, but there may be more to do here.

And as mentioned earlier, we've engaged a well-regarded consulting firm to help further improve our shrink management across all three categories. We remain focused and are confident that the steps we're taking will move us toward shrink results that are more in line with our historic performance. Shifting back to our inventory reset. With Ken's leadership and vision, we are moving fast to refine our assortment strategy, anchored on a more balanced mix of good, better, and best products, as well as a higher penetration of opening price points and exciting branded goods at incredible value.

We entered the second half of fiscal 2024 comfortable with our inventory level and composition, pleased with the early progress on the refinement of our assortment strategy, and optimistic about our ability to drive top-line improvement. And Q3 is off to a solid start, with single-digit comp store sales increases through the first three weeks of August. Turning now to the details of our second quarter results. Total sales in the quarter increased 1.7% to last year, with comp store sales down 1.7%.

In the second quarter, we saw sales momentum around the moments in our customers' lives with a particularly strong Father's Day and July Fourth. The start of the back-to-school season was supported by strength in branded children's apparel, and uniforms got off to a good start. Our layaway program, which helps our budget-conscious customers manage their spend while securing great gear for the kids, remains an important offering and was up to last year. It is important to note that only about 14% of our store markets returned to school by the end of the second quarter.

As of today, approximately 80% of our store markets have returned to school. We continued our marketing efforts in the quarter with summer and early back-to-school radio and paid social in select markets. Our back-to-school marketing will continue into Q3, with a focus on learning and planning to maximize holiday advertising efforts. We look forward to updating you with our back-to-school marketing test results when we meet next quarter.

To date, we've touched about 188 stores with our marketing efforts, and we'll increase that number throughout the year to drive traffic in key markets. We remodeled 15 stores in the second quarter, bringing the year-to-date total to 35. We also opened one new store and closed three stores as part of our ongoing fleet optimization effort, bringing our quarter-end store count to 597, with CTx stores representing approximately 23% of our fleet. Turning to the details of gross margin.

Our second quarter adjusted gross margin of 31.1% was considerably lower than recent history and well below expectations due to the inventory and reset and shrink expense I described earlier. On a positive note, I am pleased to report that despite the unexpected shutdown of one of our largest outbound carriers, we delivered freight expense improvement over last year, a direct result of our supply chain team's ongoing efforts to improve overall supply chain efficiency while reducing costs. Moving to SG&A. Adjusted SG&A expenses increased $2.7 million in the quarter compared to last year, in line with our expectations.

The increase, as discussed in previous calls, was driven primarily by merit increases in stores and corporate and a modest increase in advertising spend. Now, turning to the balance sheet. We remained in a healthy financial position at the end of the quarter with a strong balance sheet, including no debt, no drawings on our $75 million revolver, and $59 million in cash. With liquidity of approximately $134 million, we can more than sufficiently fund our business initiatives designed to position the company for future profitable growth.

We exited the second quarter with total inventory dollars approximately flat to last year. Strategic packaway buys made up approximately 23% of the end-of-quarter inventory, up about 20% to last year, reflecting our buyers' success in securing opportunistic buys of exciting branded goods to drive future sales. Excluding the packaway goods, inventory was down 4% to last year. Now, turning to our outlook for the balance of the year.

Because of the unique aspects of our second quarter results, we believe it is most helpful to provide outlook for the second half of the -- of fiscal 2024, which is as follows. We expect second half comparable store sales to be flat to up low single digits. Total sales for the second half are expected to be down mid-single digits due to the 53rd week last year and store closures. Second half gross margin is expected to be approximately 39%.

Second half EBITDA is expected to be positive in a range of 0.5 million to 2.5 million, a significant improvement to first half results. We've completed our plans for store openings and remodels for the year with one new store and 35 remodels. As part of our ongoing fleet optimization, we are planning to close 10 to 15 underperforming stores in 2024, including the six closures already completed through Q2. We expect to end fiscal 2024 with approximately 590 stores.

Finally, we expect to end the year with $60 million to $70 million of cash, reflecting full year capital expenditures of approximately $13 million, which is down about 35% to our previous outlook. Before I turn the call back to Ken, I want to reiterate that our second quarter results, while disappointing, represent a reset for Citi Trends. The actions we took in the quarter will set us up for improved financial performance in the second half of 2024, with stronger sales fueled by our refined merchandise strategy, a return to high 30s margin rates on cleaned-up inventory and efforts to control shrink, positive EBITDA, and importantly, a strong financial position with a healthy cash balance. With that, I'll turn the call back to Ken.

Ken.

Ken Seipel -- Interim Chief Executive Officer

Thank you, Heather. You know, in summary, our plan is a clear focus on our core customer, strong product value proposition, trendy fashions with more treasures in the treasure hunt, consistent execution of our business model, and disciplined expense management. The combination of which contributes significantly improved profit margins. Executing this amount of change in a short period of time can be challenging, so I'd like to take this opportunity to thank our entire Citi Trends team for their high level of engagement in driving the success of our business.

I spoke earlier of the work of our merchandise and distribution teams, but I also like -- would like to extend my sincere appreciation to all of our store and corporate teams for their extra effort and hard work these past couple of months. I am confident that our entire internal team is excited about our direction and eager to execute a winning strategy for our shareholders. I also want to express my appreciation to our long-term shareholders. You know, in a turnaround situation, the initial road can be a little bumpy as we repair, replace, or implement new processes that enable consistent execution and profit flow-through.

So, shareholders, rest assured, your patience will be rewarded. As CEO, my interests are fully aligned with our individual and institutional investors, and I really look forward to enjoying success with all of you. I will now return the call to our operator, Darryl, to facilitate questions. Darryl.

Questions & Answers:

Operator

Thank you. We will now be conducting a question-and-answer session. [Operator instructions] Our first questions come from the line of Michael Baker with D.A. Davidson.

Please proceed with your questions.

Mike Baker -- D.A. Davidson -- Analyst

OK. Thanks. First, I just wanted to focus on the comp, the top line, just a little bit more color on what was below plan. So, obviously -- so size of the transaction was down.

Was that fewer items per basket, just -- or is that due to the lower price points due to the markdowns? Just a little bit more color on what drove that. And then what categories missed? What were -- what was -- I guess you said in the press release what was good, but what missed, I guess, in terms of categories?

Heather Plutino -- Chief Financial Officer

Hey, Mike. Good morning. Good to hear you. So, from a retail metrics perspective, transactions were up in the quarter, which Ken mentioned.

Basket has been under pressure, and we've seen UPT declines pretty consistently, but AUR remains up. So, it's really -- it's -- the number of units that our customer is choosing to put in the basket is really causing the pressure. From a category perspective, we mentioned children's is off to a good start, uniform is off to a good start, back to school to a good start. I mentioned that Father's Day and July Fourth, in particular, were strong.

They really responded to the Americana that we had on the floor and getting ready for summer barbecues. So, that was off to a good start. This will sound repetitive from what we've talked about in prior quarters because it is -- it has been a trend. Footwear continues to be a drag on the business.

Home continues to perform well because of the inventory rebuilds that we've done. So, still continuation of theme there. Impulse, also, which we formerly called Q line, also performing well with our customers. So, it's really a continuation of theme from prior quarters on what worked, what didn't work, but with a particular focus in the latter part of the quarter on the success of the children's business.

Mike Baker -- D.A. Davidson -- Analyst

OK. Understood. Thank you. If I could ask a follow-up on -- just on the shrink and more just the way the accounting works on that.

So, I understand you took a big step-up this quarter to catch up on the accrual, but does this still remain a drag over the coming quarters until you cycle that step-up because, now, you're accruing at a higher rate than you were presumably a year ago? So, is it a drag in the gross margin, and presumably, though, that's incorporated in the 39% back half outlook? Is that fair to say?

Heather Plutino -- Chief Financial Officer

You are correct. The drag versus last year lessens in the fall season, but it's still there. And then absolutely, it is -- the increased accrual is incorporated into that 39% guide.

Mike Baker -- D.A. Davidson -- Analyst

OK. Thank you.

Heather Plutino -- Chief Financial Officer

Thanks, Mike.

Operator

Thank you. Our next questions comes from the line of John Lawrence with The Benchmark Company. Please proceed with your questions.

John Lawrence -- The Benchmark Company -- Analyst

Yeah. Good morning, guys.

Heather Plutino -- Chief Financial Officer

Good morning, John.

John Lawrence -- The Benchmark Company -- Analyst

Could you --

Ken Seipel -- Interim Chief Executive Officer

Hey, John.

John Lawrence -- The Benchmark Company -- Analyst

Yeah. Ken, could you spend a little time and just tell me, just that rationalization, when you look at that, when you talk about aged inventory, and just digging down another level on the write-down, sort of what factors go into that? How old is some of this inventory? Was it something that you had tried to clear and it just didn't get through? If you can sort of walk through the nuts and bolts of that, if you will, please.

Ken Seipel -- Interim Chief Executive Officer

Yeah, happy to. Yeah, a couple of things on that, John. So, when I first looked at the inventory for the business, the company, as you probably remember from Q1, had a reasonably aggressive sales plan in place and missed that plan, although we had a comp increase for Q1. So, the inventory was actually over-purchased for that quarter.

And you begin to see from there and then a little bit of a softness in the Q2 a lot of the inventory geared to sell in that important Q1 time frame just was backing up and certainly not turning at the rate that it needed to, thus blocking room for new receipts, which is the lifeblood of our business. So, in looking at it, it was pretty clear that we needed to take more aggressive action to take the markdowns, get them moving. And I am happy to report, actually, we've sold through better part of 40%, 50% of that inventory already, and it looks like it's going to be clear and out of our stores here very soon. In terms of the nuts and bolts of it, you know, I think an opportunity that we identified and actually is being implemented literally next week after Labor Day is to improve our overall markdown process.

And what we're doing now is taking a much more thorough look at aged inventory. And aged is defined by not so much a time, I should say, slow-selling inventory and making sure that we've reduced the price of that on a regular basis to take advantage of that in-season selling of a markdown and move that slow-seller out quickly. And then behind that, we also have a follow-up process for second markdowns. The teams are also in the process of updating our in-store presentation and making it much more easy for the consumer to shop and access that product.

I think the combination of both the cleanup and then actually our new actions that are in place now to prevent this from happening in the future should make this a nonissue as we go forward. And most importantly, it will keep our inventories clean and ready to receive new product, which will, in fact, help us fuel our top-line sales.

John Lawrence -- The Benchmark Company -- Analyst

Thank you for that. And secondly, just to follow up, can you talk about the results of the new system and how is it working on the allocation side as far as new products and categories, etc. from an ordering standpoint?

Ken Seipel -- Interim Chief Executive Officer

Yeah, the new system, Island Pacific ERP system, we installed does have, as you point out, an allocation module in it. As we've looked into the module a little bit more closely, what we've discovered is there's a lot of complexity with executing this particular system. It actually has about every bell and whistle one could ever imagine when it comes to allocation. But unfortunately, what we need to do is to make it a little bit simpler and easier for our teams to execute and implement.

So, we're underway right now doing a couple of things. One, we're trying to think about ways that we can fine-tune the use of the system. One of the things I've asked our teams to do is to reduce the number of overall store clusters that we're trying to allocate to. That will help them be a little bit more focused on dividing up the inventory appropriately between our low-volume, mid-volume, and high-volume stores.

That will help us in the interim to get better with allocation. And then longer term, we do believe that there's a bolt-on opportunity, and we're highly investigating currently a couple of AI solutions that we believe can help us with future forecasting. And if I were to be critical of our current system, it's probably the one big deficit that we have is it doesn't have a real robust future forecasting module with it and certainly an opportunity for us as we go forward and start to kind of anticipate consumer needs. And more importantly, as this business continues to grow, we need to be really crisp and clear about the trends going forward.

And so, I think the combination of kind of some interim steps to make our current system better and the idea that we may need to bolt on an AI solution will make allocation one of our competitive strengths, actually.

John Lawrence -- The Benchmark Company -- Analyst

All right. Thanks. Good luck.

Ken Seipel -- Interim Chief Executive Officer

Yeah. Thank you, John.

Operator

Thank you. Our next questions come from the line of Jeremy Hamblin with Craig-Hallum. Please proceed with your questions.

Jeremy Hamblin -- Analyst

Thanks for taking the question. So, I wanted to come back to what you're seeing on same-store sales trends, and, you know, first question would be in terms of, you know, the remainder of Q3 and into Q4, can you help us to understand, one, you know, if the compares get easier from here, if they get a little bit tougher? And then secondly is just in terms of taking a high-level look. You note that you've got traffic growth, and that sounds like that's sustained here to start Q3. But, you know, your same-store sales is down on top of a, you know, pretty easy compare from last year when you have a lot of larger players in extreme value apparel category that are reporting, you know, fairly strong same-store sales on top of, you know, strong same-store sales from last year.

You know, given that you kind of juxtaposition with traffic, do you sense that the bigger problem here is the merchandise assortment itself or the price value equation that is, you know, kind of causing some customers maybe to not buy as much from you and potentially to go from -- over to some competitors?

Ken Seipel -- Interim Chief Executive Officer

Yeah, Jeremy. Thanks for the question. You know, I'll kind of take the last part of your question first, and then I'll let Heather talk to you a little bit about the go-forward compares. You know, I think, essentially, what you said is really the problems that we've identified coming into the business.

Ultimately, we believe the assortment itself, and I'm speaking in terms of Q2, have become a little bit stale and a little bit out of sync of our consumer demands. As I mentioned, we were missing some opening price point portions of the business, and then we actually didn't have enough brands in the mix so that we're appealing to our consumers. So, part of the action that we took to take the markdowns was to clear out some of that product that we knew was not working. And then we're in the process of implementing the new things that I mentioned earlier.

But most notably, I've been really, really pleased with the work our merchants have done so far near term to react. For example, if you look at what's happening right now in August, our children's department is having a very robust period, right? In the middle of a peak, they've really done a nice job of growing the business. And that's actually coming as a result of going into market and getting some additional branded product in place that the consumer is reacting to. Our uniform business has been excellent as well, and that's a recovery of a missed opportunity from the past year.

As well as our home business has been strong, and that's actually an inventory step-up that's helped that business kind of grow substantially. And those are reversals of trends that we saw coming out of Q2. Now, home had been OK in Q2 but certainly has accelerated. So, I think if I could step back and just say that the challenges -- the reason we're lagging in consumer sales, as you point out, against the other competitors is our assortment plan has just not been dialed in correctly, and part of it is the price value equation; but more often, it's the offering, which we're adjusting and starting to see some results with.

And I expect we'll get significantly better as we go forward. In terms of the compares, I'll let Heather talk a little bit about the road ahead on our compares.

Heather Plutino -- Chief Financial Officer

Yeah. Hey, Jeremy. Good to hear you. You know, as I look at it, spring last year, we had a negative 10% comp in the spring.

And in the fall, we delivered a negative 3.7% comp. So, that tells me that the compares are actually getting a little bit harder in the fall. But we're not worried about the compare. We're worried about what are we doing to drive the top line, right? And so, all of the things that we've talked about this morning: inventory reset; a new focused approach on our customer; a new focused approach on our product; good, better, best assortment; opening price point; real strong value statement.

And I've got to tell you, for me, personally, the most exciting piece is the branded good approach that Ken is bringing to the table, right? That will bring the excitement back into our stores, will cause our customers to pick up the phone and call their friends. That is the strongest marketing arm in the history of Citi Trends, is when that word-of-mouth marketing kicks in. So, because of that, I would say, I hear you on the compares. It actually gets a little harder in the fall if you just stare at the numbers.

But we're not letting that slow us down, and we're going after all the levers that we've described this morning to make sure that we are creating the excitement around product that our customer expects from Citi Trends to drive foot traffic, drive comps.

Jeremy Hamblin -- Analyst

Got it and helpful color. And then just coming back to the shrink for a second. So, you know, I think, it seems like the -- at least in Q2, the $4 million impact is, you know, over 50 basis points. You know, on an annualized basis, it's over 230 basis points relative to Q2 impact.

But I think, in total, it's maybe about double what you had previously expected. And just wanted to understand if shrink is being -- you know, if you're identifying more of a problem with internal, you know, shrink issues or if this is more of a customer shrink issue?

Heather Plutino -- Chief Financial Officer

Yeah. Thanks, Jeremy. I appreciate that. And I promise you that this is a very frustrating topic for a lot of us at Citi Trends.

It gets a lot of focus. We are pulling a lot of levers. It always takes time. And frankly, I think we can't move fast enough or work hard enough on this shrink line because it's a -- it is a -- it feels like it's just -- it's a left hook, right hook when we talk about shrink.

Last quarter, when we discussed it, we felt like we had our arms around it. We were pulling the -- all the levers. We had not made an adjustment to the accrual because the data didn't support it, right? We -- the counts that we took up until that time supported the accrual that we had in place. Unfortunately, with -- with the -- with Q2, we did another big chunk of stores.

You know, we count our stores every month. We counted over 200 stores in the second quarter. And at that point, looking at the data, it did support an increase in the accrual. So, we're working hard at it.

I will say, though, that -- and I've recently learned that this is consistent with the broader industry, Jeremy, that internal theft is our primary area of focus, right, and that is our primary -- first place that we're looking to to increase impressions of control. All the things that you've heard me talk about for two quarters now are absolutely happening, starting to turn the tide. The other piece that is in our control -- I talked about the three buckets in my prepared remarks. The other piece that is in our control is the administrative or the recordation, right, where our -- how is the flow of inventory-related data, how is that working throughout the supply chain or the data supply chain if you will? And making sure that we don't have any leaks and that we are correctly reporting at the store level and at the DC level what the on-hand inventory is.

So, that's another place that we're attacking. External theft, always a concern. It's just a part of Citi Trends history, part of Citi Trends makeup. Probably more to come there.

A lot of the things that we're doing on the internal theft side will also provide some help on the external theft. But this third-party consultant that we've talked about throughout the morning is really looking to help us accelerate across all three categories. So, we're excited to continue to learn from them and see what we can do to move it forward.

Jeremy Hamblin -- Analyst

Got it. Just really quick last one to sneak in here. In terms of, you know, the comment around the shifted 13-week-to-13-week basis, just wanted to understand for -- you know, as it relates to Q2 and then into Q3 or Q4, you know, was there a positive benefit in Q2 and then how does that relate to Q3?

Heather Plutino -- Chief Financial Officer

Yeah. You'll -- we talked about this a few quarters ago that from a calendarization perspective, lots of moving pieces, parts, but the bottom line is that, in Q2, we moved an important back-to-school week into the second quarter. So, it had a little bit of a positive impact, Q3. It's minimal.

That week moves out, but then a pay week moves in, so kind of neutral in Q3.

Jeremy Hamblin -- Analyst

Got it. Helpful color. Thanks and good luck for the rest of the year.

Heather Plutino -- Chief Financial Officer

Thanks, Jeremy.

Operator

Thank you. We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Ken Seipel for any closing remarks.

Ken Seipel -- Interim Chief Executive Officer

All right. Thank you, Darryl. Well, again, thank you, everybody, for joining us today, and we really look forward to updating you on some exciting results as we continue to go through and execute our strategies. Thank you.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Nitza McKee -- Investor Relations

Ken Seipel -- Interim Chief Executive Officer

Heather Plutino -- Chief Financial Officer

Mike Baker -- D.A. Davidson -- Analyst

John Lawrence -- The Benchmark Company -- Analyst

Jeremy Hamblin -- Analyst

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Citi Trends (CTRN) Q2 2024 Earnings Call Transcript was originally published by The Motley Fool