Citi Trends Reports Sluggish Sales - Analyst Blog
February 06 2012 - 4:30AM
Zacks
Citi Trends Inc.
(CTRN), retailer of fashion apparel and accessories in U.S.,
continued its sluggish performance as it recently posted weak
fourth-quarter comparable store sales.
Citi Trends witnessed a decrease of
6.2% in comparable store sales in the fourth quarter of 2011. Month
wise, comparable store sales decreased 10.7% in November, 2.3% in
December and 11.2% in January.
However, amid this gloom, total
sales increased 3.7% year over year to $178.4 million during the
reported period compared with $172 million in the prior-year
period. The analysts’ considered by Zacks expected the company to
report total sales of $181 million in fourth-quarter 2011.
For the fiscal, total sales marked
an increase of 2.9% to $640.8 million compared with $622.5 million
in last fiscal. Moreover, comparable store sales also decreased
8.3% for fiscal 2011.
Battered by the sluggish
fourth-quarter sales results, the company now expects to report
adjusted net loss of approximately 20 cents per share in the fourth
quarter, in line with the current Zacks Consensus Estimate.
However, on a reported basis,
including one time items, the company expects to report a loss of
40 cents per share.
Moreover, the company expects gross
margins to be significantly down compared with the last year
quarter, reflecting higher markdowns to reduce excess quantities of
branded merchandise and competitive pressures.
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), mass merchants including
Wal-Mart Stores Inc. (WMT) as well as smaller
specialty retailers, such as Rainbow and Dots.
Moreover, Citi Trends' business is
seasonal in nature, characterized by the spring and holiday
seasons. Therefore, the company is exposed to significant risks if
the seasons fail to deliver expected operating performance.
Consequently, Citi Trends currently
has a Zacks #5 Rank, implying a short-term Strong Sell rating 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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