Top Performer for Thursday: Citi Trends (CTRN)

Citi Trends, Inc. (CTRN - Analyst Report) shares are up almost 7% today on news that JP Morgan upgraded the apparel retailer to "overweight" from "neutral".

However, even before the upgrade, earnings estimates for CTRN had been trending higher after a solid fiscal first-quarter report, which continued an impressive streak of better-than-expected earnings.

This Zacks #1 Rank Top Performer is moving on heavy volume this afternoon of about 488,000 shares, compared to the daily average of 259,000.

Good Growth Potential

This Southeastern retailer is one of those niche players that are bucking the overall economic trend. As a result, analysts believe the company could continue adding or expanding stores and, therefore, increase its square footage; hence the recent brokerage upgrade.

CTRN expects to increase selling square footage by at least 15% during its fiscal 2009. Also, in its fiscal first quarter, the company opened 8 stores while relocating or expanding 4 others. The total store count was 365 at the end of the period.

But the number of stores isn't the only thing that's growing at CTRN, so too are its earnings. The company announced an earnings surprise of nearly 23% in its most recently-reported quarter, which contributed to an average surprise of about 32% over the past 4 quarters.

Earnings per share of 54 cents was a dime better than the consensus, and easily surpassed the year-ago performance of 36 cents. Sales jumped 18.3% to $143.1 million from $121 million a year earlier. Meanwhile, same-store sales increased 7.4%.

CTRN also raised its earnings guidance for the year to about $1.33 per share, and expects same-store sales to advance 3%.

Earnings Estimates Moving Higher

The fiscal first quarter report from late May has spawned an increase in earnings estimates over the past 30 days. Expectations for the year ending January 2010 are up almost 5% in that time as 2 out of 3 analysts boosted expectations.

Estimates for the fiscal year ending January 2011 are up 8% to $1.48, which is nearly 10% better than this fiscal year's current guidance of $1.35.

A Well-Represented Industry

CTRN is 1 of 11 companies from the Retail - Apparel/Shoe industry on the Zacks #1 Rank List, which includes some well-known names like Aeropostale Inc. (ARO - Snapshot Report), The Gap, Inc. (GPS - Analyst Report) and Gymboree Corp. (GYMB - Snapshot Report). Today's list includes 225 stocks.

In previous Top Performers articles, we've mentioned the large amount of retail companies on the list, thanks to a slightly better environment than in the recent past. In all, there are 40 retail-related companies on today's list.