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Citi Trends (CTRN) Posts Holiday Results, Sales Dip 16.1% Y/Y
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Citi Trends, Inc. (CTRN - Free Report) reported soft results for the holiday period. Management is pleased with the holiday performance as the company witnessed persistent inflationary pressures. Sales came in line with the management’s expectations on the back of on-trend gift assortment and exciting values. CTRN generated a solid gross margin on prudently managed inventory levels.
Total sales for the nine-week period ending Dec 31, 2022 tumbled 16.1% to $171.9 million from the same period in 2021. However, the metric inched up 0.8% versus the same period in 2019. Comparable store sales also fell 17.5% year over year during the nine weeks ending Dec 31, 2022.
Outlook
Citi Trends currently anticipates a year-end cash balance of about $95-$105 million for the current fiscal year. Further, management reaffirmed the other components it earlier issued for the second half of fiscal 2022. The outlook consisted of the impacts of the sale-leaseback of the Roland distribution center.
CTRN now envisions fourth-quarter fiscal 2022 earnings per share (EPS) in the bracket of 78-86 cents. EPS for the second half of the current fiscal year is likely to come in the band of $3.80-$3.88, or $1.02 to $1.10 on an adjusted basis. The company delivered EPS of 73 cents or adjusted EPS of 77 cents during the second half of fiscal 2019. At the midpoint, this view reflects an EPS surge of roughly 425% versus the second half of fiscal 2019, or 38% on an adjusted basis.
Citi Trends further predicts a low single-digit rise in second-half total sales versus the first-half level. It estimates the gross margin to come in the range of high 30s-low 40s for the second half of the current fiscal year.
Management expects meaningfully less deleveraged SG&A expenses for the second half compared to the same prior-year period. This is due to the swift cost-containment efforts net of incremental lease expense from the sale-leaseback transactions. Consequently, CTRN forecasts second-half operating income to remain almost in line with the second half of fiscal 2019.
What’s More?
A glimpse of this Zacks Rank #1 (Strong Buy) stock’s price performance shows that its shares appreciated 53.4% over the past three months, outperforming the industry’s 20.9% growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
Image Source: Zacks Investment Research
Management remains encouraged about the resiliency of its operating model and strength in the loyalty of customers. Citi Trends is focused on managing costs and maintaining a sturdy cash position by maximizing the impact of its Buy, Move, Sell and Support teams.
Additionally, analysts look optimistic about the company. The Zacks Consensus Estimate for fiscal 2023 sales and EPS is currently pegged at $847.1 million and $2.27, respectively. These estimates reflect year-over-year growth of 6.2% and 97.4%, respectively.
Other Solid Picks in Retail
We highlighted three top-ranked stocks, namely Tecnoglass (TGLS - Free Report) , Chico's FAS and Wingstop (WING - Free Report) .
Tecnoglass manufactures and sells architectural glass,windows, and aluminum products for residential and commercial construction industries. TGLS currently sports a Zacks Rank of 1.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and earnings per share suggests growth of 43.4% and 82.2%, respectively, from the year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.
Chico's FAS, an omnichannel specialty retailer, currently sports a Zacks Rank of 1. CHS has a trailing four-quarter earnings surprise of 87.5%, on average.
The Zacks Consensus Estimate for Chico's FAS’s current financial-year sales and EPS suggests 19.6% and 127.5% growth, respectively, from the year-ago reported figures.
Wingstop, which franchises and operates restaurants, currently holds a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 5.8%, on average.
The Zacks Consensus Estimate for Wingstop’s current financial-year sales and earnings per share suggests 25.5% and 23% growth, respectively, from the year-ago reported numbers. WING has an expected EPS growth rate of 5.8% for three-five years.
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Citi Trends (CTRN) Posts Holiday Results, Sales Dip 16.1% Y/Y
Citi Trends, Inc. (CTRN - Free Report) reported soft results for the holiday period. Management is pleased with the holiday performance as the company witnessed persistent inflationary pressures. Sales came in line with the management’s expectations on the back of on-trend gift assortment and exciting values. CTRN generated a solid gross margin on prudently managed inventory levels.
Total sales for the nine-week period ending Dec 31, 2022 tumbled 16.1% to $171.9 million from the same period in 2021. However, the metric inched up 0.8% versus the same period in 2019. Comparable store sales also fell 17.5% year over year during the nine weeks ending Dec 31, 2022.
Outlook
Citi Trends currently anticipates a year-end cash balance of about $95-$105 million for the current fiscal year. Further, management reaffirmed the other components it earlier issued for the second half of fiscal 2022. The outlook consisted of the impacts of the sale-leaseback of the Roland distribution center.
CTRN now envisions fourth-quarter fiscal 2022 earnings per share (EPS) in the bracket of 78-86 cents. EPS for the second half of the current fiscal year is likely to come in the band of $3.80-$3.88, or $1.02 to $1.10 on an adjusted basis. The company delivered EPS of 73 cents or adjusted EPS of 77 cents during the second half of fiscal 2019. At the midpoint, this view reflects an EPS surge of roughly 425% versus the second half of fiscal 2019, or 38% on an adjusted basis.
Citi Trends further predicts a low single-digit rise in second-half total sales versus the first-half level. It estimates the gross margin to come in the range of high 30s-low 40s for the second half of the current fiscal year.
Management expects meaningfully less deleveraged SG&A expenses for the second half compared to the same prior-year period. This is due to the swift cost-containment efforts net of incremental lease expense from the sale-leaseback transactions. Consequently, CTRN forecasts second-half operating income to remain almost in line with the second half of fiscal 2019.
What’s More?
A glimpse of this Zacks Rank #1 (Strong Buy) stock’s price performance shows that its shares appreciated 53.4% over the past three months, outperforming the industry’s 20.9% growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
Image Source: Zacks Investment Research
Management remains encouraged about the resiliency of its operating model and strength in the loyalty of customers. Citi Trends is focused on managing costs and maintaining a sturdy cash position by maximizing the impact of its Buy, Move, Sell and Support teams.
Additionally, analysts look optimistic about the company. The Zacks Consensus Estimate for fiscal 2023 sales and EPS is currently pegged at $847.1 million and $2.27, respectively. These estimates reflect year-over-year growth of 6.2% and 97.4%, respectively.
Other Solid Picks in Retail
We highlighted three top-ranked stocks, namely Tecnoglass (TGLS - Free Report) , Chico's FAS and Wingstop (WING - Free Report) .
Tecnoglass manufactures and sells architectural glass,windows, and aluminum products for residential and commercial construction industries. TGLS currently sports a Zacks Rank of 1.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and earnings per share suggests growth of 43.4% and 82.2%, respectively, from the year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.
Chico's FAS, an omnichannel specialty retailer, currently sports a Zacks Rank of 1. CHS has a trailing four-quarter earnings surprise of 87.5%, on average.
The Zacks Consensus Estimate for Chico's FAS’s current financial-year sales and EPS suggests 19.6% and 127.5% growth, respectively, from the year-ago reported figures.
Wingstop, which franchises and operates restaurants, currently holds a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 5.8%, on average.
The Zacks Consensus Estimate for Wingstop’s current financial-year sales and earnings per share suggests 25.5% and 23% growth, respectively, from the year-ago reported numbers. WING has an expected EPS growth rate of 5.8% for three-five years.