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Will Citi Trends' (CTRN) Q4 Earnings Beat Help Propel Stock?
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After missing earnings estimate in the third quarter, Citi Trends Inc. (CTRN - Free Report) made a sharp comeback and posted a positive earnings surprise of 5.6% in the final quarter of fiscal 2016. Further, the company reported in-line revenues in the quarter under preview, after missing the Zacks Consensus Estimate in the preceding quarter. Moreover, both the top line and bottom line rose year over year. These factors were enough to propel the shares of this Savannah, GA-based company.
Since the past two trading sessions, the stock has improved roughly 13%. The momentum gained in the last few days helped Citi Trends to outperform the Zacks categorized Retail-Apparel/Shoe industry in the past one year, in spite of registering an average negative earnings surprise of 58% in the trailing four quarters. In the said time frame, the stock has increased 6.3%, while the industry has plunged 24.1%.
Let’s Delve Deep
Citi Trends posted quarterly earnings of 38 cents a share that beat the Zacks Consensus Estimate by a couple of cents and surged 58.3% from the year-ago period. The improvement in the bottom line was driven by higher net sales that climbed 5.4% to $185.5 million and also met analysts’ expectations.
Comparable store sales (comps) grew 3.4% in the quarter. This reflects a 6% jump in the average number of items per transaction and a 5% rise in the number of customer transactions, partly offset by fall in the average unit sale of 7%.
On the basis of merchandise category, comps at the Home division were up for the eighteenth straight quarter, as it recorded a 29% surge compared with a 10% rise in the year-ago period. Meanwhile, comps at Accessories, which includes footwear, climbed 2% compared with a 2% decline in the year-ago period. Comps at Men's and Ladies’ divisions increased 6% and 3%, respectively compared with a decline of 7% and 8% recorded in divisions in the prior-year period. Children’s division comps fell 1% compared with a drop of 8% in the year-ago period.
Store Update
During the quarter, the company opened six stores – Kansas City, MO; Panama City, FL; Richmond, VA; Memphis, TN; Philadelphia, PA; and Hot Springs, AR. As of Mar 10, 2017, the company operated 537 stores in 31 states. In fiscal 2017, it aims to open 20 new outlets, relocate or expand about 10 stores and remodel 20 current locations.
Other Financials
As of Jan 28, 2017, the company had cash and cash equivalents of nearly $49.3 million compared with $39.1 million as of Jan 30, 2016. Shareholders' equity totaled approximately $223.6 million compared with $212.2 million in the prior-year period.
Citi Trends, Inc. Price, Consensus and EPS Surprise
Management expects to deliver positive comps in fiscal 2017 on the back of balanced assortment of basics, fashion basics and fashion. Citi Trends remains impressed with the performance of Home division and expects a robust show at this division this fiscal. The company anticipates gross margin to improve in the second half of the fiscal year.
Zacks Rank
Citi Trends currently carries a Zacks Rank #4 (Sell). Some better-ranked retail stocks include The Children's Place, Inc. (PLCE - Free Report) , Big 5 Sporting Goods Corp. (BGFV - Free Report) and Kate Spade & Company . While Children's Place flaunts a Zacks Rank #1 (Strong Buy), Big 5 Sporting and Kate Spade both carry a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
Children's Place has an average positive earnings surprise of 39% in the trailing four quarters with long-term earnings per share growth rate of 10.3%.
Big 5 Sporting has an average positive earnings surprise of 1.6% in the trailing four quarters with long-term earnings per share growth rate of 12%.
Kate Spade has an average positive earnings surprise of 14.6% in the trailing four quarters with long-term earnings per share growth rate of 28.3%.
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One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>
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Will Citi Trends' (CTRN) Q4 Earnings Beat Help Propel Stock?
After missing earnings estimate in the third quarter, Citi Trends Inc. (CTRN - Free Report) made a sharp comeback and posted a positive earnings surprise of 5.6% in the final quarter of fiscal 2016. Further, the company reported in-line revenues in the quarter under preview, after missing the Zacks Consensus Estimate in the preceding quarter. Moreover, both the top line and bottom line rose year over year. These factors were enough to propel the shares of this Savannah, GA-based company.
Since the past two trading sessions, the stock has improved roughly 13%. The momentum gained in the last few days helped Citi Trends to outperform the Zacks categorized Retail-Apparel/Shoe industry in the past one year, in spite of registering an average negative earnings surprise of 58% in the trailing four quarters. In the said time frame, the stock has increased 6.3%, while the industry has plunged 24.1%.
Let’s Delve Deep
Citi Trends posted quarterly earnings of 38 cents a share that beat the Zacks Consensus Estimate by a couple of cents and surged 58.3% from the year-ago period. The improvement in the bottom line was driven by higher net sales that climbed 5.4% to $185.5 million and also met analysts’ expectations.
Comparable store sales (comps) grew 3.4% in the quarter. This reflects a 6% jump in the average number of items per transaction and a 5% rise in the number of customer transactions, partly offset by fall in the average unit sale of 7%.
On the basis of merchandise category, comps at the Home division were up for the eighteenth straight quarter, as it recorded a 29% surge compared with a 10% rise in the year-ago period. Meanwhile, comps at Accessories, which includes footwear, climbed 2% compared with a 2% decline in the year-ago period. Comps at Men's and Ladies’ divisions increased 6% and 3%, respectively compared with a decline of 7% and 8% recorded in divisions in the prior-year period. Children’s division comps fell 1% compared with a drop of 8% in the year-ago period.
Store Update
During the quarter, the company opened six stores – Kansas City, MO; Panama City, FL; Richmond, VA; Memphis, TN; Philadelphia, PA; and Hot Springs, AR. As of Mar 10, 2017, the company operated 537 stores in 31 states. In fiscal 2017, it aims to open 20 new outlets, relocate or expand about 10 stores and remodel 20 current locations.
Other Financials
As of Jan 28, 2017, the company had cash and cash equivalents of nearly $49.3 million compared with $39.1 million as of Jan 30, 2016. Shareholders' equity totaled approximately $223.6 million compared with $212.2 million in the prior-year period.
Citi Trends, Inc. Price, Consensus and EPS Surprise
Citi Trends, Inc. Price, Consensus and EPS Surprise | Citi Trends, Inc. Quote
Outlook
Management expects to deliver positive comps in fiscal 2017 on the back of balanced assortment of basics, fashion basics and fashion. Citi Trends remains impressed with the performance of Home division and expects a robust show at this division this fiscal. The company anticipates gross margin to improve in the second half of the fiscal year.
Zacks Rank
Citi Trends currently carries a Zacks Rank #4 (Sell). Some better-ranked retail stocks include The Children's Place, Inc. (PLCE - Free Report) , Big 5 Sporting Goods Corp. (BGFV - Free Report) and Kate Spade & Company . While Children's Place flaunts a Zacks Rank #1 (Strong Buy), Big 5 Sporting and Kate Spade both carry a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
Children's Place has an average positive earnings surprise of 39% in the trailing four quarters with long-term earnings per share growth rate of 10.3%.
Big 5 Sporting has an average positive earnings surprise of 1.6% in the trailing four quarters with long-term earnings per share growth rate of 12%.
Kate Spade has an average positive earnings surprise of 14.6% in the trailing four quarters with long-term earnings per share growth rate of 28.3%.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>