Citi Trends Appears Strong, Hits 52-Week High - Analyst Blog

Shares of Citi Trends, Inc. CTRN hit a 52-week high of $21.94 yesterday, before eventually closing at $21.81 that translates into a year-to-date return of 27.8%. Additionally, this Zacks Rank #1 (Strong Buy) stock has garnered a return of 52.7% over the past one year.  

The company's shares have been on a roll since the announcement of its spectacular first-quarter fiscal 2014 earnings on May 21, 2014. The stock price has moved north by 10.4% since the earnings release.

The reported earnings of 61 cents a share surged 45.2% year over year, cruising ahead of the Zacks Consensus Estimate of 52 cents. Citi Trends has consistently performed impressively in the last few quarters with an average positive earnings surprise of about 21.7% over the last 7 trailing quarters.

Moreover, the top line climbed 3.4% to $188.0 million, marginally ahead of the Zacks Consensus Estimate of $187.0 million. Comparable-store sales (comps) for the quarter improved 4.2% on the back of a healthy uptick in transactions.

Further, Citi Trends enjoys a debt-free status and has a strong balance sheet, which might enable it to capitalize on potential acquisition opportunities. The company also has long-term earnings growth expectation of 15% to boost investors' optimism.

We believe that the company's strategic initiatives such as better utilization of floor area, improving merchandise margins and efficient inventory management have helped it make a significant turnaround. Going forward, the company intends to maintain its focus on these initiatives and continue with its conservative store growth strategy in fiscal 2014.

Apart from Citi Trends, Advance Auto Parts Inc. AAP, Constellation Brands Inc. STZ and Signet Jewelers Limited SIG also achieved 52-week highs of $130.51, $85.99 and $109.80, respectively on Jun 18, 2014.