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Bull of the Day

We are upgrading our long-term recommendation on Citi Trends, Inc. (CTRN) to Outperform on the back of the company's better-than-expected first-quarter 2012 results. After reporting a loss in three consecutive quarters, Citi Trends posted positive earnings of $0.69 per share.

Despite a 5% decline in comparable store sales, Citi Trends net sales increased 4.5% from the prior-year quarter, beating the Zacks Consensus Estimate. We believe Citi Trends effective cost-control initiatives and inventory management has helped it to drive growth.

Moreover, Citi Trends' extensive focus on store expansion strategy will drive top-line growth in the future. Looking ahead, the company has taken prudent steps to reduce inventory shrinkages, which we believe will facilitate its operational performance.

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