Christopher & Banks Sees Profit Growth Under New CEO
Christopher & Banks’ stock shot up more than 10 percent Wednesday morning after the company reported that its profits more than doubled during its third quarter.
The Plymouth-based women’s clothing retailer has struggled in recent years—closing more than 100 stores, cutting jobs, and combining some stores under new formats—but it’s showing positive signs in the wake of a CEO transition last year.
Its former chief executive abruptly resigned in early 2012, and after operating under an interim CEO, Christopher & Banks tapped former Payless ShoeSource, Inc., CEO LuAnn Via a few months later as its leader.
It appears Via is helping to right the ship. Christopher & Banks announced that net earnings for the third quarter, which ended November 2, totaled $8.6 million, or $0.23 per share, up 140 percent from $3.6 million, or $0.10 per share, during the same period in 2012. Earnings per share were $0.12 higher than what analysts polled by Thomson Reuters had expected.
Revenue, meanwhile, totaled $118.1 million, up 0.7 percent from $117.3 million in the third quarter of 2012. Third-quarter revenue was just above analysts’ projections of $117.3 million.
Shares of Christopher & Banks’ stock were trading up about 7 percent at $6.91 during Wednesday afternoon trading. Since Via assumed her new role last November, the stock has climbed nearly 120 percent, following a steady fall between mid-2011 and mid-2012.
“Our momentum continued in the third quarter as reflected in our sixth consecutive quarter of comparable-store sales growth and strong bottom-line results,” Via said in a statement. “We attribute our positive performance to the continued refinement of our merchandise strategy, greater focus on targeted marketing programs, optimization of our multi-channel opportunities, and our enhanced store experience.”
Revenue at stores open at least a year rose 4.9 percent during the third quarter.
The company said it operated an average of 7.3 percent fewer stores in its third quarter than last year as a result of its “store rationalization program.” In recent years, the company has been combining some locations into dual-format Christopher & Banks and CJ Banks stores, which bring together all its clothing size lines under one roof. Christopher & Banks locations carry regular sizes, while CJ Banks offers plus-size clothing.
For its upcoming fourth quarter, Christopher & Banks expects its same-store sales to increase in the low single-digit range. Additionally, the company expects its average store count to be down 6.8 percent.
“We expect the promotional environment to remain aggressive, and we will remain diligent in managing inventory levels and operating costs, accordingly,” Via said. “We look forward to a solid ending to a challenging 2013 retail environment and we remain confident in our three-year growth plan.”
Christopher & Banks operates 593 stores in 44 states. Due to its store consolidation efforts, it expects that by the end of the year it will operate between 560 and 565 stores.