MINNEAPOLIS--Christopher & Banks Corporation (NYSE: CBK) today reported results for its third quarter and nine months ended December 1, 2007.
Third Quarter Results
Total sales for the third quarter ended December 1, 2007 were $160.0 million compared to $139.3 million for the quarter ended November 25, 2006. Same-store sales for the thirteen-week period ended December 1, 2007 increased 9% compared to the thirteen-week period ended December 2, 2006. Net income for the third quarter was $10.2 million or $0.29 per diluted share compared to $9.2 million or $0.24 per diluted share for the third quarter last year.
Lorna Nagler, President and Chief Executive Officer of Christopher & Banks Corporation, commented, "We are pleased to have delivered a 9% same-store sales increase and strong third quarter earnings despite a challenging macro-environment. We were also encouraged by our solid improvement in merchandise margins and the success of our first ever Friends and Family event."
For the nine month period ended December 1, 2007, net sales were $450.5 million compared to $413.3 million for the nine month period ended November 25, 2006. Same-store sales for the thirty-nine week period ended December 1, 2007 increased 3% compared to the thirty-nine week period ended December 2, 2006. Net income was $25.3 million or $0.70 per diluted share, compared to $31.8 million or $0.84 per diluted share last year. As of December 1, 2007, the Company operated 841 stores compared to 778 as of November 25, 2006.
As of December 1, 2007, total inventory was $46.9 million as compared to $55.4 million on November 25, 2006. Total inventory per store, including in-transit inventory, decreased 22% and was approximately $55,818 this year compared to $71,235 last year.
Financial Outlook
The Company currently anticipates fourth quarter earnings per diluted share to be in the range of $0.02 to $0.05. The Company's updated guidance reflects the expectation for flat to a low single digit decline in same-store sales in the fourth quarter. This compares to fourth quarter of fiscal 2007 earnings per diluted share of $0.05. For the year, the Company estimates earnings per diluted share to be in the range of $0.72 to $0.75, compared to $0.89 per share last year.
In addition, the Company announced that, based on sales to date and its projections for the balance of the month, fiscal December same-store sales are anticipated to decline 1 to 2%.
Ms. Nagler continued, "Thus far, December sales have been adversely impacted by a promotional retail environment, challenging macroeconomic conditions, as well as snow and ice storms in several geographic regions. We are encouraged that we have seen improvement in same-store sales as we progressed through the month. Nonetheless, our December same-store sales are expected to fall short of our initial expectations. While the women's specialty apparel retail sector remains very promotional, we are pleased that our December merchandise margins to date show strong improvement as compared to last year. We plan to maintain lean inventory levels and believe we are positioned to generate continued improvement in merchandise margins as we proceed through the fourth quarter."
Change In Same-Store Sales Reporting Schedule
The Company announced that, at the beginning of fiscal 2009, it will begin reporting consolidated sales and same-store sales on a quarterly basis. The Company's last monthly sales release will be on March 6, 2008, for the fiscal month of February 2008. Sales for future quarters will be reported on dates on which the Company reports quarterly earnings.
Future Earnings Guidance
Commencing with the first quarter of fiscal 2009, the Company will initiate a practice of issuing earnings per share guidance for the then current quarter as part of its regularly scheduled quarterly earnings release for the prior quarter.
Conference Call Information
The Company will discuss its third quarter results in a conference call scheduled for today, December 27, 2007 at 5:00 p.m. Eastern time. The conference call will be simultaneously broadcast live over the internet at http://www.christopherandbanks.com. An online archive of the broadcast will be available within one hour of the completion of the call and will be accessible at http://www.christopherandbanks.com until January 10, 2008. In addition, an audio replay of the call will be available shortly after its conclusion and archived until January 3, 2008. This call may be accessed by dialing (888) 203-1112 pass code 2284909.
About Christopher & Banks
Christopher & Banks is a Minneapolis-based specialty retailer of women's clothing. The Company currently operates 841 stores under the names Christopher & Banks, CJ Banks and Acorn. The Company currently has 546 Christopher & Banks stores, 256 CJ Banks stores and 39 Acorn stores.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release are forward-looking statements, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements may use the words "expect," "anticipate," "plan," "intend," "project," "believe" and similar expressions and include a statement regarding the Company's (i) anticipated fourth quarter and full year earnings per diluted share, (ii) expectations for December and fourth quarter same-store sales and (iii) plans to maintain lean inventories and generate improved merchandise margins for the fourth quarter. These statements are based on management's current expectations and are subject to a number of uncertainties and risks, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our actual results to differ materially from those expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, but are not limited to: (i) the inherent difficulty in forecasting consumer buying and retail traffic patterns which may be affected by factors beyond our control such as; a weakness in overall consumer demand; adverse economic or political conditions; unseasonable or adverse weather; and shifts in consumer tastes or spending habits that result in reduced sales; (ii) lack of acceptance of the Company's fashions, including its seasonal fashions; (iii) escalation in energy costs; (iv) an increase in the rate of import duties or export quotas with respect to the Company's merchandise; (v) effectiveness of the Company's brand awareness and marketing programs; (vi) the possibility that, because of poor customer response to our merchandise, management may determine it is necessary to sell merchandise at lower than expected margins or at a loss; (vii) increased promotional activity in the women's specialty apparel retail sector; (viii) interruption of merchandise flow from our centralized distribution center; and (ix) our ability to successfully implement our tactical and strategic plans.
Readers are cautioned not to place undue reliance on these forward-looking statements which are based on current expectations and speak only as of the date of this release. The Company does not assume any obligation to update or revise any forward-looking statement at any time for any reason.
Certain other factors that may cause actual results to differ from such forward-looking statements are included in the Company's periodic reports filed with the Securities and Exchange Commission and available on the Company's website under "Investor Relations" and you are urged to carefully consider all such factors.
CHRISTOPHER & BANKS CORPORATION
UNAUDITED COMPARATIVE INCOME STATEMENT
FOR THE QUARTERS AND NINE MONTHS ENDED
DECEMBER 1, 2007 AND NOVEMBER 25, 2006
(in thousands, except per share data)
Quarter Ended Nine Months Ended
------------------- -------------------
December November December November
1, 25, 1, 25,
2007 2006 2007 2006
--------- --------- --------- ---------
Net sales $ 159,976 $ 139,265 $ 450,475 $ 413,349
Costs and expenses:
Merchandise, buying and
occupancy 94,102 84,611 271,613 241,976
Selling, general and
administrative 44,336 35,793 124,042 107,986
Depreciation and
amortization 6,586 5,138 17,391 15,136
--------- --------- --------- ---------
Total costs and expenses 145,024 125,542 413,046 365,098
--------- --------- --------- ---------
Operating income 14,952 13,723 37,429 48,251
Interest income 1,163 1,353 3,382 3,640
--------- --------- --------- ---------
Income before income taxes 16,115 15,076 40,811 51,891
Income tax provision 5,877 5,849 15,508 20,134
--------- --------- --------- ---------
Net income $ 10,238 $ 9,227 $ 25,303 $ 31,757
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Basic earnings per share:
Net income $ 0.29 $ 0.24 $ 0.71 $ 0.86
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Basic shares outstanding 35,448 37,743 35,835 37,051
========= ========= ========= =========
Diluted earnings per share:
Net income $ 0.29 $ 0.24 $ 0.70 $ 0.84
========= ========= ========= =========
Diluted shares outstanding 35,528 38,233 35,926 37,617
========= ========= ========= =========
Dividends per share $ 0.06 $ 0.06 $ 0.18 $ 0.14
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CHRISTOPHER & BANKS CORPORATION
UNAUDITED COMPARATIVE BALANCE SHEET
(in thousands)
December 1, November 25,
2007 2006
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 46,701 $ 59,380
Short-term investments 48,300 53,800
Merchandise inventories 46,943 55,421
Other current assets 22,892 13,783
----------- ------------
Total current assets 164,836 182,384
----------- ------------
Property, equipment and improvements, net 136,374 128,176
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Other assets:
Goodwill 3,587 3,587
Other 4,338 1,249
----------- ------------
Total other assets 7,925 4,836
----------- ------------
Total assets $ 309,135 $ 315,396
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,483 $ 7,058
Accrued liabilities 30,433 25,274
----------- ------------
Total current liabilities 38,916 32,332
----------- ------------
Other liabilities:
Deferred lease incentives 22,337 21,896
Other 15,036 10,582
----------- ------------
Total other liabilities 37,373 32,478
----------- ------------
Stockholders' equity:
Common stock 450 450
Additional paid-in capital 109,767 105,561
Retained earnings 232,341 213,551
Common stock held in treasury (109,712) (68,976)
----------- ------------
Total stockholders' equity 232,846 250,586
----------- ------------
Total liabilities and stockholders'
equity $ 309,135 $ 315,396
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