Citi Trends Inc.
), a value-priced retailer of urban fashion apparel and
accessories, is slated to report its second-quarter fiscal 2014
results on Aug 20, 2014. In the last quarter, it posted a negative
surprise of 17.3%. Let's see how things are shaping up for this
Growth Factors This Quarter
We believe that Citi Trends' earnings for the trailing 2 quarters
(fourth quarter fiscal 2013 and first quarter fiscal 2014) has been
riding on turnaround strategies such as better utilization of floor
area, improvisation of merchandise margins and efficient inventory
management. Moreover, the company expects these strategic
initiatives to drive sales improvement throughout fiscal 2014.
Though the company typically posts negative earnings for the second
and third quarters, we remain optimistic about the upcoming results
given the above mentioned turnaround initiatives.
Our proven model does not conclusively project Citi Trends as
likely to beat earnings this quarter. This is because a stock needs
to have both a positive
and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to
happen. This is not the case here as you will see below.
ESP for Citi Trends is 0.00%. This is because both the Most
Accurate Estimate and the Zacks Consensus Estimate projects a loss
of 29 cents.
Citi Trends carries a Zacks Rank #1 (Strong Buy) which increases
the predictive power of ESP. However, we need to have a positive
ESP to be confident of an earnings surprise call.
We caution against stocks with a Zacks Rank #4 and #5
(Sell-rated stocks) going into an earnings announcement, especially
when the company is witnessing negative estimate revisions.
Other Stocks to Consider
Here are some other companies you may want to consider as our model
shows these to have the right combination of elements to post an
Abercrombie & Fitch Co. (
) has an Earnings ESP of +20.00% and a Zacks Rank #2 (Buy).
GameStop Corp. (
) has an Earnings ESP of +10.53% and a Zacks Rank #3 (Hold).
Dollar Tree Inc. (
) has an Earnings ESP of +7.69% and a Zacks Rank #3.
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