We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Should You Avoid Citi Trends (CTRN) Stock Right Now
Read MoreHide Full Article
You must get rid of Citi Trends, Inc. (CTRN - Free Report) right now as the stock has been losing its sheen, of late. Evidently, its share price fell 7.2% in the past three months, against the Zacks categorized Retail-Apparel/Shoe industry’s rise of 0.2%. Also, the stock carries a Zacks Rank #5 (Strong Sell), with a Momentum Score of “F”, further contributing to its darker side. Let’s explore why.
What’s Hurting the Stock?
Citi Trends’ estimates have been slumping down for the past 60 days. The Zacks Consensus Estimate declined 9% to 91 cents for fiscal 2016 and 6.9% to $1.21, for fiscal 2017, over the same time frame.
Further, the company’s quarterly performance looks bleak as it reverted to its negative earnings surprise trend in third-quarter fiscal 2016, after posting a beat in the prior quarter. The company delivered a negative earnings surprise of 300% in the reported quarter. Moreover, it has an average negative surprise of 63% for the trailing four quarters.
In addition, this off-price retailer’s top line has underperformed the Zacks Consensus Estimate in four out of seven straight quarters. In the last quarter, the company’s sales lagged estimates and its comparable-store sales (comps) dipped year over year. This stems from the soft average units sold as well as external factors like the Hurricane Matthew and the unseasonably warm weather, which weighed upon demand for fall products. (Read more: Citi Trends Incurs Loss in Q3; Stock Plunges 8.3%)
We note that Citi Trends’ business is seasonal in nature and typically generates stronger sales during the first and fourth quarters. As a result, the company is exposed to significant risks if these seasons fail to deliver the expected operating performance.
Also, risks of changing fashion trends, along with macroeconomic headwinds and intense competition, are likely to hurt the company’s financial performance.
However, management remains impressed with the performance of its Home division and expects a robust show at this division in the fiscal fourth quarter. Additionally, Citi Trends remains optimistic about its comps momentum, moving ahead.
The Children's Place, with a long-term earnings growth rate of 10.3%, has surged a whopping 83.9% year to date.
Tilly's, with a long-term earnings growth rate of 15.5%, has skyrocketed 121.9% in the past six months.
Zumiez, with a long-term earnings growth rate of 15%, has gained 41.3% in the past six months.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Should You Avoid Citi Trends (CTRN) Stock Right Now
You must get rid of Citi Trends, Inc. (CTRN - Free Report) right now as the stock has been losing its sheen, of late. Evidently, its share price fell 7.2% in the past three months, against the Zacks categorized Retail-Apparel/Shoe industry’s rise of 0.2%. Also, the stock carries a Zacks Rank #5 (Strong Sell), with a Momentum Score of “F”, further contributing to its darker side. Let’s explore why.
What’s Hurting the Stock?
Citi Trends’ estimates have been slumping down for the past 60 days. The Zacks Consensus Estimate declined 9% to 91 cents for fiscal 2016 and 6.9% to $1.21, for fiscal 2017, over the same time frame.
Further, the company’s quarterly performance looks bleak as it reverted to its negative earnings surprise trend in third-quarter fiscal 2016, after posting a beat in the prior quarter. The company delivered a negative earnings surprise of 300% in the reported quarter. Moreover, it has an average negative surprise of 63% for the trailing four quarters.
In addition, this off-price retailer’s top line has underperformed the Zacks Consensus Estimate in four out of seven straight quarters. In the last quarter, the company’s sales lagged estimates and its comparable-store sales (comps) dipped year over year. This stems from the soft average units sold as well as external factors like the Hurricane Matthew and the unseasonably warm weather, which weighed upon demand for fall products. (Read more: Citi Trends Incurs Loss in Q3; Stock Plunges 8.3%)
CITI TRENDS INC Price and Consensus
CITI TRENDS INC Price and Consensus | CITI TRENDS INC Quote
We note that Citi Trends’ business is seasonal in nature and typically generates stronger sales during the first and fourth quarters. As a result, the company is exposed to significant risks if these seasons fail to deliver the expected operating performance.
Also, risks of changing fashion trends, along with macroeconomic headwinds and intense competition, are likely to hurt the company’s financial performance.
However, management remains impressed with the performance of its Home division and expects a robust show at this division in the fiscal fourth quarter. Additionally, Citi Trends remains optimistic about its comps momentum, moving ahead.
Key Picks
Some better-ranked stocks in the same industry include The Children's Place, Inc. (PLCE - Free Report) , Tilly's, Inc. (TLYS - Free Report) and Zumiez Inc. (ZUMZ - Free Report) , all boasting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Children's Place, with a long-term earnings growth rate of 10.3%, has surged a whopping 83.9% year to date.
Tilly's, with a long-term earnings growth rate of 15.5%, has skyrocketed 121.9% in the past six months.
Zumiez, with a long-term earnings growth rate of 15%, has gained 41.3% in the past six months.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>