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Citi Trends Inc. (CTRN - Analyst Report) is set to report fourth-quarter and fiscal 2013 results on Mar 14, 2014. Last quarter, it posted an earnings surprise of 5.56%. Let us see how things are shaping up for this announcement.

Growth Factors in the Past Quarter

Citi Trends narrowed losses for the third quarter compared to the prior year benefiting from its strategic initiatives such as better utilization of floor area, improvising merchandise margins and efficient inventory management. While the company’s top line declined, comps for the quarter increased marginally driven by a rise in the number of customer transactions and the average number of items per transaction offset by a decline in average unit sale.  

Earnings Whispers?

Our proven model does not conclusively project Zumiez to likely beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, that is not the case here due to the following factors:
 
Zacks ESP: ESP for Citi Trends is 0.00% since the Most Accurate estimate stands at 10 cents per share, which is in line with the Zacks Consensus Estimate.

Zacks Rank: Citi Trends’ Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we need to have a positive ESP to be confident of an earnings surprise call. We caution against stocks with Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is undergoing negative estimate revisions.

Other Stocks to Consider

Citi Trends is not the only firm we are looking up to this earnings season. Our model shows that the following stocks have the right combination to post an earnings beat:

Emerge Energy Services LP (EMES - Snapshot Report) with Earnings ESP of +8.96% and a Zacks Rank #1 (Strong Buy).

Matador Resources Company (MTDR - Snapshot Report) with Earnings ESP of +7.14% and a Zacks Rank #3 (Hold).

Tiffany & Co. (TIF - Analyst Report) with Earnings ESP of +0.66% and a Zacks Rank #3 (Hold).

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