Critical Survey: Citi Trends (NASDAQ:CTRN) & Tapestry (NYSE:TPR)

Tapestry (NYSE:TPR) and Citi Trends (NASDAQ:CTRN) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, valuation, earnings, profitability and risk.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Tapestry and Citi Trends, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tapestry	0	4	15	2	2.90
Citi Trends	0	1	2	0	2.67

Tapestry currently has a consensus price target of $165.12, indicating a potential upside of 13.15%. Citi Trends has a consensus price target of $68.00, indicating a potential upside of 19.63%. Given Citi Trends’ higher possible upside, analysts plainly believe Citi Trends is more favorable than Tapestry.

Valuation and Earnings

This table compares Tapestry and Citi Trends”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tapestry	$7.01 billion	4.21	$183.20 million	$3.12	46.77
Citi Trends	$819.96 million	0.58	$5.21 million	$1.39	40.89

Tapestry has higher revenue and earnings than Citi Trends. Citi Trends is trading at a lower price-to-earnings ratio than Tapestry, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Tapestry has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500. Comparatively, Citi Trends has a beta of 1.88, indicating that its share price is 88% more volatile than the S&P 500.

Insider and Institutional Ownership

90.8% of Tapestry shares are owned by institutional investors. 1.3% of Tapestry shares are owned by insiders. Comparatively, 9.6% of Citi Trends shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Tapestry and Citi Trends’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tapestry	8.44%	229.70%	22.06%
Citi Trends	1.42%	2.09%	0.51%

Summary

Tapestry beats Citi Trends on 12 of the 15 factors compared between the two stocks.

About Tapestry

Tapestry, Inc. provides luxury accessories and branded lifestyle products in the United States, Japan, Greater China, and internationally. The company operates in three segments: Coach, Kate Spade, and Stuart Weitzman. It offers women’s handbags; and women’s accessories, such as small leather goods which includes mini and micro handbags, money pieces, wristlets, pouches, and cosmetic cases, as well as novelty accessories including address books, time management and travel accessories, sketchbooks, and portfolios; and belts, key rings, and charms. The company also provides men products, which includes bag collections, such as business cases, computer bags, messenger-style bags, backpacks, and totes; small leather goods including wallets, card cases, travel organizers, and belts; and footwear, watches, fragrances, sunglasses, novelty accessories, and ready-to-wear items. In addition, it offers other products including women’s footwear and fragrances; eyewear and sunglasses; and jewelry, such as bracelets, necklaces, rings, and earrings, watches, and other women’s seasonal lifestyle apparel collections, including outerwear, ready-to-wear and cold weather accessories, such as gloves, scarves, and hats. Further, the company provides kids items, housewares, and home accessories, such as fashion bedding and tableware, stationery, and gifts. It offers its products through e-commerce sites and concession shop-in-shops, wholesale, and third-party distributors under the Coach, Kate Spade, and Stuart Weitzman brand names. The company was formerly known as Coach, Inc. and changed its name to Tapestry, Inc. in October 2017. Tapestry, Inc. was founded in 1941 and is headquartered in New York, New York.

About Citi Trends

Citi Trends, Inc. operates as a value retailer of fashion apparel, accessories, and home goods. The company offers apparel, such as fashion sportswear and footwear for men and ladies, as well as apparel for kids, including newborns, infants, toddlers, boys, and girls; sleepwear, lingerie, and scrubs for ladies; and kids uniforms and accessories. It also provides accessories and beauty products that include handbags, luggage, hats, belts, sunglasses, jewelry, and watches, as well as offers outerwear for men and women. In addition, the company offers home and lifestyle products comprising home products for the bedroom, bathroom, kitchen, and decorative accessories; and food, tech, team sports, health and products, as well as seasonal items, books, and toys. Citi Trends, Inc. provides its products primarily to African American and multicultural families in the United States. The company was formerly known as Allied Fashion, Inc. and changed its name to Citi Trends, Inc. in 2001. Citi Trends, Inc. was founded in 1946 and is headquartered in Savannah, Georgia.