Markets
FL

Citi Trends (CTRN) Looks Promising: Will it be Your Pick?

Citi Trends, Inc.CTRN appears to be an attractive choice for investors, given its strong fundamentals, solid financial position, impressive earnings results and positive estimate revisions.

Citi Trends' practice of offering merchandise at about 20%-70% discount compared with other department and specialty stores' regular prices, appeals more to value-conscious customers looking for cheaper alternatives.

Further, we are impressed with the company's strategies such as better utilization of floor area, enhancement of merchandise margins and efficient inventory management that have been aiding a turnaround in its operating performance. This was further evident from Citi Trends' better-than-expected results in the second quarter of fiscal 2015.

Following the results, the earnings estimate for this Zacks Rank #2 (Buy) stock has increased 18.8% to $1.14 per share for fiscal 2015.

Citi Trends benefits from its inviting store formats that provide an edge over other off-price retailers and mass merchants. Apart from focusing on stores, the company is testing its website, with limited offerings in order to capture the eCommerce business. Going forward, it plans to add more assortments to its site based on the response from customers.

The company is also focused on taking prudent steps to reduce inventory shrinkage. These include better supervision by the operations and loss prevention departments as well as installation of sophisticated surveillance systems in high shrinkage stores.

Finally, Citi Trends' robust financial status offers a silver lining to the stock. The company's healthy balance sheet and solid cash flow generation ability provide it with ample liquidity as well as the flexibility to fund its strategic endeavors and boost shareholder value.

All the aforementioned factors underscore Citi Trends' inherent strength and strong future prospects, instilling confidence among investors.

Other Stocks to Consider

Other stocks worth considering in the Retail-Apparel/Shoe space include Express Inc. EXPR , Foot Locker, Inc. FL , each with a Zacks Rank #1 (Strong Buy), and American Eagle Outfitters, Inc. (AEO), carrying the same Zacks Rank as Citi Trends.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

FOOT LOCKER INC (FL): Free Stock Analysis Report

CITI TRENDS INC (CTRN): Free Stock Analysis Report

EXPRESS INC (EXPR): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

FL CTRN EXPR

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More