Josh Arnold
Long/short equity

Citi Trends: Unprofitable And Unloved

Citi Trends (NASDAQ:CTRN) is a 500+ location retailer of urban apparel and accessories. The company offers apparel, footwear, handbags, hats, home décor and other categories for the entire family primarily to African-Americans, who make up about 70% of sales according to the company. The stock has had a monster run in the past two months, moving from $10 to $15 in that time span. However, this is a company that has struggled mightily to break even in the past couple of years amid declining sales and profitability metrics. I will argue in this article that the earnings estimates built into the stock price currently are unreachable and completely unrealistic. Therefore, it is my estimation that shares are a...

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