Christopher & Banks Corp. (CBK) Tops Q1 EPS by 5c, Sales In-Line; Comps Down 0.2%

Christopher & Banks Corp. (NYSE: CBK) reported Q1 EPS of $0.07, $0.05 better than the analyst estimate of $0.02. Revenue for the quarter came in at $103.4 million versus the consensus estimate of $103.23 million. Same-store sales decreased 0.2%.

LuAnn Via, President and Chief Executive Officer, commented, “Throughout the first quarter, we realized continued momentum in our strategic initiatives despite the challenges presented by the severe winter weather experienced during the first half of the quarter. While our comparable store sales were slightly below our expectations for the quarter, we saw business improve as the weather became more seasonal and we exceeded our gross margin expansion target, with a refined merchandise offering and enhanced inventory strategies. Furthermore, sales and profitability in our MPW (Missy, Petite, Women) stores continued to perform above the Company average. Looking ahead, additional opportunities to enhance our merchandise offering, further engage our customer and broaden our reach with our marketing programs are expected to result in continued improvement in store productivity. We also plan to accelerate our MPW strategy and end the year with approximately 190 locations in this format, as these stores continue to deliver strong returns. Overall, we are well-positioned to meet our financial goals for the year, and are on track to deliver on our three-year growth plan.”

For the second quarter of fiscal 2014, the Company expects:

• same-store sales to increase in the low to mid-single digit range, which compares to a 7.7% same-store sales increase last year in the second quarter;
• approximately 100 to 150 bps of gross margin improvement, as compared to the comparable prior year period, largely driven by improved merchandise margins;
• SG&A dollars to be between approximately $32.5 million and $33.0 million, compared to the $31.5 million of SG&A expense reported in the second quarter last year;
• inventory to remain higher than the levels for the comparable prior year period, at a level similar to the dollars per square foot increase at the end of the first quarter; and
• to open 6 new Outlet stores and 3 new MPW stores, convert 14 CB/CJ stores to 7 MPW stores, to close 4 CB stores and replace them with 4 new MPW stores, and to convert 53 CB stores to an equal number of MPW stores by adding CJ product to each.

For the 2014 fiscal year, the Company:

• expects capital expenditures to be approximately $23 million to $25 million;
• expects to recognize a nominal amount of tax expense, as the Company’s tax provisions will continue to be affected by the valuation allowance on its deferred tax assets in fiscal 2014, although the potential exists that the valuation allowance may be reversed later this fiscal year;
• is planning average store count to be down 8% and related average square footage for the year to be down 5% as compared to fiscal 2013; and
• expects to end the fiscal year with a total square footage increase of 1% as compared to the end of fiscal 2013.

For earnings history and earnings-related data on Christopher & Banks Corp. (CBK) click here.

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