Citi Trends Reports Negative Non-GAAP EPS, Misses Revenues Forecasts
November 29, 2023
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Citi Trends ($NASDAQ:CTRN) is a leading off-price retailer of urban fashion apparel and accessories. The company offers fashion apparel and accessories at discounted prices, appealing to value-conscience customers.
Earnings
In its earnings report of FY2024 Q2 ending July 31 2021, CITI TRENDS reported a total revenue of 237.28M USD, with a 28.3% increase from the previous year and a 12.49M USD net income, representing a 591.7% decrease from the previous year. Over the last 3 years, CITI TRENDS’s total revenue has decreased from 237.28M USD to 173.55M USD.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Citi Trends. More…
| Total Revenues | Net Income | Net Margin |
| 755.03 | 19.56 | -0.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Citi Trends. More…
| Operations | Investing | Financing |
| 11.58 | 60.18 | -12.23 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Citi Trends. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 526.51 | 370.55 | 19.24 |
Key Ratios Snapshot
Some of the financial key ratios for Citi Trends are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 1.3% | -16.1% | 3.3% |
| FCF Margin | ROE | ROA |
| -0.5% | 9.6% | 2.9% |
Stock Price
On Tuesday, CITI TRENDS, a leading value fashion retailer, reported negative non-GAAP earnings per share (EPS) and missed revenue forecasts for the quarter. The news caused the company’s stock to open at $21.6 and close at $23.2, a plunge of 12.0% from the prior closing price of $26.4. The poor performance is attributed to a combination of factors, including lower-than-expected customer traffic and a lack of new products in the market. Furthermore, CITI TRENDS’ heavy reliance on promotions and discounts appear to have backfired, leading to reduced margins and profits. The company has since responded with a series of initiatives, such as expanding their product offerings and increasing their online presence.
However, it remains to be seen whether these measures will be enough to turn CITI TRENDS’ fortunes around. In the meantime, investors can expect stock prices to remain volatile as the company continues to navigate the challenging retail climate. Live Quote…
Analysis
As a GoodWhale analyst, I have conducted an analysis of CITI TRENDS‘ wellbeing. We have classified CITI TRENDS as an ‘elephant’, meaning the company is relatively rich in assets after deducting off liabilities. This suggests that there could be a range of investors interested in this type of company. CITI TRENDS was found to have a high health score of 8/10 with regards to its cashflows and debt, which indicates that the company is capable of sustaining future operations in times of crisis. Further to this, CITI TRENDS was found to be strong in liquidity, medium in asset, profitability and weak in dividend and growth. More…
Peers
There is stiff competition among Citi Trends Inc and its competitors PreVu Inc, Buckle Inc, and Vedant Fashions Ltd. All four companies are vying for a share of the market for affordable trendy clothing. Citi Trends Inc has an advantage in that it has over 500 stores in 31 states, while its competitors have fewer stores. However, all four companies are comparable in terms of the quality of their clothing and the prices they charge.
– PreVu Inc ($OTCPK:PRVU)
PreVu Inc is a provider of marketing solutions. The company has a market cap of 159.57k as of 2022 and a return on equity of 20.12%. The company offers a variety of marketing services, including content marketing, social media marketing, and email marketing. The company also provides a variety of tools and resources to help businesses with their marketing needs.
– Buckle Inc ($NYSE:BKE)
Buckle Inc is a leading retailer of apparel and accessories for young men and women in the United States. The company has a market capitalization of 1.77 billion as of 2022 and a return on equity of 55.65%. Buckle Inc operates over 450 stores in 44 states under the Buckle, BKE, and MKL brand names. The company offers a wide variety of clothing, footwear, and accessories for both men and women. Buckle Inc has a strong online presence and offers free shipping on orders over $100. The company is headquartered in Kearney, Nebraska.
– Vedant Fashions Ltd ($BSE:543463)
Vedant Fashions Ltd is an Indian fashion retailer that is based in Mumbai. The company has a market cap of 340.01B as of 2022 and a Return on Equity of 38.43%. The company was founded in 1984 and operates a chain of stores across India. It offers a wide range of products such as clothing, accessories, and home furnishings. The company also has an online store that ships to various international locations.
Summary
Citi Trends has recently reported their Non-GAAP earnings per share (EPS) of -$0.56, which is a miss of $0.38 compared to analysts’ estimates. Similarly, their revenue of $179.5M missed estimates by $6.63M. Following the release of these financials, their stock prices moved down for the day. Investors should carefully analyze the company’s performance, liquidity position, and future expected earnings to determine if Citi Trends is a worthwhile investment for their portfolio.
However, investors should also take into account any potential macroeconomic or industry-wide risks that may affect the company’s performance in the long run.
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