CTRN's Prelim Sales Suggest 4Q Loss - Analyst Blog
February 14 2013 - 7:40AM
Zacks
Citi Trends Inc. (CTRN) has come up with
disappointing preliminary sales results for the fourth quarter,
which guided the company to project net loss for the upcoming
quarter. Additionally, the company took a peek into fiscal 2013,
providing an update on the expected trends in fiscal 2013. This
Zacks Rank #1 (Strong Buy) stock is expected to report detailed
results on Mar 15, 2013.
We note that the company’s fourth quarter and full year sales
results include one additional week as compared to the prior-year
periods. For the fourth quarter (14 weeks ended Feb 2, 2013), Citi
Trends reported preliminary sales of $175.7 million, down 1.5% from
$178.4 million in the prior-year quarter (13 weeks ended Jan 28,
2012). The additional week made for nearly $8.8 million of net
sales in the fourth quarter of 2012. The fourth quarter sales also
missed the Zacks Consensus Estimate of $191 million.
The decline in sales results for the quarter were mainly attributed
to the loss of tax refund driven sales in the last two weeks of
January this year, as the Internal Revenue Service pushed back the
2012 tax refund date to Jan 30 instead of the usual refunds date of
Jan 13. This delay in refunds impacted the company’s fourth quarter
comparable store sales by 7.5%. As a result, the company’s
comparable store sales for the fourth quarter (14 weeks ended Feb
2, 2013) plummeted 11.8% compared with the year-ago 14 weeks period
ended Feb 4, 2012.
By month, the company’s comparable store sales inched up 1% in
January, while it declined 10% in December and 28% in January.
Barring the sales decline in the last two weeks of January,
comparable sales in the first three weeks of January rose 10%.
However, for fiscal 2012 (53 weeks ended Feb 2, 2013), the
company’s net sales rose 2.2% to $654.7 million from $640.8 million
reported in fiscal 2011 (52 weeks ended Jan 28, 2012). The fiscal
2012 sales missed the Zacks Consensus Estimate of $670 million.
Driven by the lower sales results in the fourth quarter, the
company now expects to report a net loss per share of nearly 7
cents for the quarter, which is way below the Zacks Consensus
Estimate of a gain of 31 cents per share. The company estimates the
loss of sales in the last two weeks of January to impact net loss
per share by about 35 cents.
Though the shift in the tax refunds date impacted sales in January,
the company started witnessing tax refund driven sales improvements
since the beginning of first quarter fiscal 2013. The company
expects this improvement in sales to prove beneficial for its first
quarter results.
Looking into fiscal 2013, the company remains stringently focused
on improving its sales via enhancing the variety of its ladies
business. Though the significance of the company’s Urban Brands
continues to decline and non-branded business is not poised to make
loss from the branded business, the company expects to gain from
better focus on its ladies business in 2013.
Though the company has made significant progress on resolving
pricing issues and remains on track to resolve fashion issues in
2013, the company expects its first and fourth quarter of fiscal
2013 to be impacted by the shift of one week of fiscal 2013 in
fiscal 2012, due to the additional week that was accounted for in
fiscal 2012. Nevertheless, the company is expected to benefit from
the movement of the tax refund related sales into fiscal 2013.
Besides Citi Trends, other stocks in the retail-apparel/shoe sector
that are currently performing well include Express
Inc. (EXPR), which has a Zacks Rank #1 (Strong Buy), and
American Eagle Outfitters Inc. (AEO) and
Foot Locker Inc. (FL), both of which carry a Zacks
Ranks #2 (Buy).
AMER EAGLE OUTF (AEO): Free Stock Analysis Report
CITI TRENDS INC (CTRN): Free Stock Analysis Report
EXPRESS INC (EXPR): Free Stock Analysis Report
FOOT LOCKER INC (FL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Citi Trends (NASDAQ:CTRN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Citi Trends (NASDAQ:CTRN)
Historical Stock Chart
From Jul 2023 to Jul 2024