Value-priced retailer of urban fashion apparel and accessories,
Citi Trends Inc.
), saw its second quarter 2012 results slump on account of a
decline in comparable-store sales coupled with rising costs.
The company's quarterly loss per share was 54 cents per share,
compared with a loss per share of 76 cents reported in the year-ago
quarter. The company's quarterly loss also compared unfavorably to
the Zacks Consensus Estimate of 44 cents per share.
Turning to Numbers
During the quarter, Citi Trends recorded a 1.6% rise in net
sales to $132.3 million, compared to $130.2 million in the
comparable prior-year quarter. However, the total revenue slightly
missed the Zacks Consensus Estimate of $133 million. Comparable
store sales dropped 4% in the second quarter of fiscal 2012.
In the second quarter, Citi Trends' gross profit increased only
2.1% to $44.4 million from $43.5 million in the year-ago quarter,
mainly due to a rise in cost of sales. Consequently, gross margin
expanded 20 basis points to 33.6% from 33.4% in the prior-year
Selling, general and administrative expenses in the quarter
increased 0.4% year over year to $50.9 million, while depreciation
and amortization expenses declined 6.3% to $6.0 million. However,
the company's loss from operations came in at $12.6 million
compared with $15.2 million in the year-ago period.
Citi Trends had no debt on its balance sheet at the end of the
quarter. Cash and cash equivalents were $51.7 million compared with
$49.5 million at the end of second quarter of fiscal 2011. At the
end of the quarter, the company shareholders' equity totaled $199.0
million compared with $208.7 million in the prior-year period.
During the second quarter, Citi Trends slightly stepped up its
stores with the opening of one new store. This brought the
company's total store count to 512 stores at the end of the July
quarter. The company operates across 29 states in the Southeast,
Mid-Atlantic and Midwest regions as well as in the states of Texas
Citi Trends operates in a highly fragmented specialty retail
sector and faces intense competition from larger off-price rivals
The TJX Companies Inc.
Ross Stores Inc.
Citi Trends currently has a short-term Zacks #1 Rank, which
translates into a Strong Buy rating. However, we retain our
long-term Outperform recommendation on the shares.
CITI TRENDS INC (CTRN): Free Stock Analysis
ROSS STORES (ROST): Free Stock Analysis Report
TJX COS INC NEW (TJX): Free Stock Analysis
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