Cit Trends' Net Loss Widens - Analyst Blog
August 18 2011 - 8:24AM
Zacks
Citi Trends Inc. (CTRN) recently reported
disappointing second-quarter 2011 results. The company's net loss
widens 16 folds to $10.0 million compared with $0.6 million in the
year-ago quarter.
Net loss per share came in at 69 cents versus 4 cents in the
year-ago quarter, primarily due to negative comparable store sales.
Moreover, net loss was higher than the Zacks Consensus Estimate of
64 cents per share.
During the quarter, Citi Trends recorded a 0.9% year-over-year
growth in net sales to $130.2 million, missing the Zacks Consensus
Estimate of $131.0 million. Comparable store sales dropped 11.9% in
the second quarter of fiscal 2011.
Citi Trends' gross profit plunged 10.0% from the prior-year
period to $43.5 million, mainly due to higher cost of sales. Gross
margin came in at 33.4% compared with 37.4% in prior-year
quarter.
Selling, general and administrative expenses increased 14.1%
year over year to $50.7 million. Accordingly, the company's
operating loss increased almost 16 folds to $15.2 million compared
with $0.9 million in the year-ago period.
Citi Trends ended the quarter with a debt-free balance sheet and
cash and cash equivalents of $49.5 million compared with $84.6
million in the prior-year period. Shareholders' equity at the end
of the quarter was $208.7 million compared with $195.6 million in
the year-ago period.
Citi Trends is a value-priced retailer of urban fashion apparel
and accessories including nationally recognized brands,
private-label products and has a limited assortment of home décor
items. The company currently operates 482 stores across 27 states
in the Southeast, Mid-Atlantic and Midwest regions as well as in
the states of Texas and California.
The company operates in a highly fragmented specialty retail
sector and faces intense competition from larger off-price rivals,
such as The TJX Companies Inc. (TJX) and
Ross Stores Inc. (ROST), and mass merchants
including Wal-Mart Stores Inc. (WMT) and
Kmart.
Currently, Citi Trends retains a short-term Zacks #4 Rank (Sell
rating). However, we hold a long-term Neutral recommendation on the
stock.
CITI TRENDS INC (CTRN): Free Stock Analysis Report
ROSS STORES (ROST): Free Stock Analysis Report
TJX COS INC NEW (TJX): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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