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Citi Trends' (CTRN) Q4 & FY16 Sales Lag; Declares Dividend

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Citi Trends Inc.CTRN reported lower-than-expected sales results for fourth-quarter and fiscal 2016. However, the top line surged year over year for both periods. Moreover, the company reported solid comparable store sales (comps) for the fiscal fourth quarter. Concurrently, Citi Trends also declared a quarterly cash dividend.

The company's total sales for the quarter ended Jan 28, 2017, rose 5.4% to $185.5 million from $176.1 million recorded in the year-ago quarter. However, sales for the quarter were short of the Zacks Consensus Estimate of $187 million. Comps for the 13-week period jumped 3.4% from the year-ago period, driven by comps gain in every month of the quarter. On a monthly basis, comps rose 5% in November, 2% in December and about 6% in January.

For fiscal 2016, Citi Trends recorded total sales of $695.2 million, up 1.7% from the prior-year period sales of $683.8 million. The top line missed the Zacks Consensus Estimate of $697 million. Further, comps for the fiscal dipped 0.4%.

Looking ahead, the company anticipates the tax refund related sales to be pushed back to March this year from February in the prior-year, owing to delayed disbursement by the Internal Revenue Service. Such delay in tax refunds usually hurts the company's first-quarter sales, as is evident from its past results.

In conjunction with the sales results, Citi Trends announced a quarterly cash dividend of 6 cents per share. This will be payable on Mar 14, 2017, to stockholders with record as on Feb 28.

What to Expect from Citi Trends' Q4 Earnings?

Citi Trends is scheduled to release fourth-quarter fiscal 2016 results on Mar 10, 2017. The current Zacks Consensus Earnings Estimate is 37 cents for the fiscal fourth quarter and 91 cents for fiscal 2016. The estimates for both periods have remained stable for over 30 days. However, a comparison of our estimates with the reported numbers in the respective prior-year periods reflects a year-over-year growth of 54.2% for fiscal fourth-quarter and a decline of 11.7% for fiscal 2016.

Citi Trends, Inc. Price, Consensus and EPS Surprise

Citi Trends, Inc. Price, Consensus and EPS Surprise | Citi Trends, Inc. Quote

Additionally, Citi Trends' stock momentum looks solid given the increase of 7.2% recorded in the last five days. This growth has outperformed the Zacks categorized Retail-Apparel/Shoe industry that dipped 1.3% in the same time frame. Further, the stock has returned about 3.2% in the last six months, compared with the broader industry slump of nearly 10%.

However, our proven model does not conclusively show that Citi Trends is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Citi Trends has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 37 cents. You may uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

The company's ESP combined with its current Zacks Rank #4 (Sell), makes surprise prediction unlikely. We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement.

Stocks to Consider

Some better-ranked stocks in the Apparel/Shoe industry include The Children's Place Inc. PLCE , sporting a Zacks Rank #1 (Strong Buy), Genesco Inc. GCO and Zumiez Inc. ZUMZ , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Children's Place, with a long-term earnings growth rate of 10.3%, has surged nearly 58.9% in the past one year.

Genesco, with a long-term earnings growth rate of 9.5%, flaunts a solid earnings history having delivered an average positive surprise of 31.4% in the trailing four quarters. Further, the stock has witnessed positive estimate revisions in the last 30 days.

Zumiez has jumped 7.3% in the past one year. The stock has a long-term earnings growth rate of 15%.

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Genesco Inc. (GCO): Free Stock Analysis Report

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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.

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