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Citi Trends Rises on Solid Q4, FY14 Sales Performance

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Shares of Citi Trends Inc. jumped 7.6% yesterday after the company reported robust fourth quarter and fiscal 2014 sales results.

The company’s sales advanced 15.2% year over year to $181.1 million compared with $157.2 million in the prior-year quarter. Sales in the quarter benefited as the third quarter momentum continued into the fourth quarter.

During the quarter, comparable-store sales (comps) surged 13.9%, driven by comps gains in all three months of the quarter. Comps improved 7.7% in November, 13.5% in December and a solid 26.6% in January.

Sales results for January stood out mainly as the company gained from the absence of the numerous winter-storm related closings that occurred in January last year as well as the early start of the tax refund season this year, which began in the last two days of the month.

Excluding the benefits of the last two days of January, comps for the month surged about 15%, while the last two days made for nearly a 75% increase summing to approximately $3 million. Simultaneously, fourth-quarter comps rose about 12%, minus the gains from tax refunds in the last two days of January.

Moreover, throughout fiscal 2014 the company’s sales benefited from the right placement of merchandise assortments at the right time, with specific gains coming from cold weather merchandise. Overall, all five of the company’s merchandise divisions recorded substantial sales growth this year. Additionally, on a geographical basis, the company reported strong sales in all weather conditions and store regions.

Consequently, fiscal 2014 sales increased 7.8% year over year to $670.8 million while comps for the year were up 7.5%.

Looking ahead, the company remains optimistic about its first-quarter fiscal 2015 sales results as it expects to gain from the prevailing strong momentum and the right inventory positions.

Other Stocks to Consider

Citi Trends currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the apparel-shoe industry include Stage Stores Inc. , Pacific Sunwear of California Inc. and L Brands Inc. (LB - Free Report) . While Stage Stores and Pacific Sunwear carry a Zacks Rank #1 (Strong Buy), L Brands holds a Zacks Rank #2 (Buy).

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