Value-priced retailer of urban fashion apparel and
Citi Trends Inc.
) reported first-quarter fiscal 2013 earnings per share of 42
cents, missing the Zacks Consensus Estimate of 57 cents and down
39.1% from 69 cents earned in the year-ago quarter.
Turning to Numbers
Citi Trends reported first-quarter sales of $181.8 million,
marking a decrease of 8.0% from $197.7 million in the prior-year
quarter. The company's first-quarter sales also missed the Zacks
Consensus Estimate of $198 million.
Comparable store sales in the quarter was down 4.1% compared
to the year-ago quarter, driven mainly by weak sales at the
company's stores in February and March, followed by a recovery in
April as weather turned warmer after Easter.
On the basis of months, the company's comparable store sales
dipped 7% in February and 8% in March, while it gained 9% in
April. Comps remained weak in March primarily due to shift in
timing of Easter this year to March against April last year. This
shift caused March comps to decline 2% while April comps gained
Citi Trends' gross profit for the quarter declined 9.8% to
$67.3 million from $74.7 million in the year-ago quarter, whereas
gross margin contracted 80 basis points to 37.0%. The decline in
gross margin was equally distributed between core merchandise
margin, freight expense and shrinkage.
Selling, general and administrative expenses in the quarter
decreased 1.5% year over year to $51.9 million, while
depreciation and amortization expenses waned 8.2% to $5.6
million. The company's operating income came in at $9.8 million,
a significant decline of 38.4% from $15.9 million in the year-ago
Citi Trends had no debt on its balance sheet at the end of the
first quarter. Cash and cash equivalents were $64.1 million
compared with $64.0 million at the end of first quarter fiscal
2012. Shareholders' equity totaled $202.2 million compared with
$206.3 million in the prior-year period.
Following a conservative store growth strategy in 2013, Citi
Trends opened only 1 new store in the first quarter. In
furtherance of streamlining its stores, the company shuttered 6
troubled stores. This brought the company's total store count to
508 at the end of first-quarter fiscal 2013.
Stepping into the second quarter, the company closed 2 more
stores, with its current store count reaching 506. The company
operates across 29 states in the Southeast, Mid-Atlantic and
Midwest regions as well as in the states of Texas and Calif.
Looking into fiscal 2013, the company continues to be focused
on improving its sales via enhancing the variety of its ladies
business. Though the significance of the company's Urban Brands
continues to decline and non-branded business is not poised to
make loss from the branded business, the company expects to gain
from better focus on its ladies business in 2013.
A Look at Zacks Rank
Citi Trends currently holds a Zacks Rank #3 (Hold). Stocks
that are performing well among apparel-shoe retailers include
) , all of which carry a Zacks Rank #2 (Buy).
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