Citi Trends Narrows Loss - Analyst Blog
November 21 2012 - 3:10AM
Zacks
Value-priced retailer of urban
fashion apparel and accessories, Citi Trends Inc.
(CTRN), marked an improvement in its third quarter 2012 results as
the company reported loss per share of 25 cents, compared with a
loss per share of 41 cents reported in the year-ago quarter
(excluding the impact of severance expenses).
Moreover, the company’s quarterly
loss compared favorably with the Zacks Consensus Estimate of a loss
of 41 cents per share.
Turning to
Numbers
During the quarter, Citi Trends
recorded a 4.1% rise in net sales to $149 million, compared to
$143.1 million in the comparable prior-year quarter. Moreover,
total revenue came ahead of the Zacks Consensus Estimate of $142
million. Comparable store sales inched up 0.5% during the
quarter.
Citi Trends' gross profit augmented
6.3% to $51.2 million from $48.2 million in the year-ago quarter,
whereas gross margin expanded 70 basis points to 34.4%.
Selling, general and administrative
expenses in the quarter decreased 3.6% year over year to $51.1
million, while depreciation and amortization expenses waned 7.5% to
$6 million. The company's loss from operations came in at $6.6
million compared with $12.1 million in the year-ago period.
Financials
Citi Trends had no debt on its
balance sheet at the end of the quarter. Cash and cash equivalents
were $36.2 million compared with $33.2 million at the end of the
third quarter of fiscal 2011. Shareholders' equity totaled $196
million compared with $202.5 million in the prior-year period.
Stores Count
During the third quarter, Citi
Trends slightly paced up its stores with the opening of one new
store and relocation of two. This brought the company’s total store
count to 513 at the end of the quarter. The company operates across
29 states in the Southeast, Mid-Atlantic and Midwest regions as
well as in the states of Texas and California.
Our
Recommendation
Citi Trends 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).
Citi Trends currently has a
short-term Zacks #3 Rank, which translates into a ‘Hold’ rating.
Moreover, we retain our long-term ‘Neutral’ recommendation on the
shares.
CITI TRENDS INC (CTRN): Free Stock Analysis Report
ROSS STORES (ROST): Free Stock Analysis Report
TJX COS INC NEW (TJX): Free Stock Analysis Report
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