Christopher & Banks’ Stock Jumps On Higher Profits

Christopher & Banks’ Stock Jumps On Higher Profits

The retailer’s profits grew even as same-store sales dipped; shares of the company’s stock climbed on the news.

Christopher & Banks, the Plymouth-based women’s clothing retailer, said Tuesday that its first-quarter revenue dipped, due in part to the fact that it now operates fewer stores, while profits increased.

The news initially caused Christopher & Banks’ stock to spike more than 15 percent to $7.69 per share. By late Tuesday morning, it had leveled out a bit but was still trading up more than 9 percent at $7.28.

After struggling in recent years, Christopher & Banks shuttered more than 100 stores and combined some under new formats. The restructuring has been guided by CEO LuAnn Via, a former Payless Shoes leader who took the helm in 2012, after Christopher & Banks’ former CEO abruptly resigned.

The moves appear to be paying off. During the fourth quarter, which ended February 1, Christopher & Banks narrowed its loss. And the company said Tuesday that for its first quarter, which ended May 3, net income totaled $2.6 million, or $0.07 per diluted share, compared to a profit of $629,000, or $0.02 per share, during last year’s first quarter.

Christopher & Banks’ sales results, however, weren’t as rosy. First-quarter sales totaled $103.4 million, down from $108.5 million during the same period a year ago, although the company operated about 9 percent fewer stores during the latest quarter. Same-store sales—revenue from stores open at least 13 months and an industry barometer—dipped 0.2 percent during the first quarter. That’s significantly lower than the 23.4 percent same-store sales increase the company reported during last year’s first quarter.

Christopher & Banks’ earnings topped the $0.02 per share that analysts polled by Thomson Reuters had expected. Net sales were just above the $103.2 million that analysts expected.

Christopher & Banks’ stock has seen some ups and downs over the past year but has been on relatively consistent climb since 2012. In fact, its stock is up more than 100 percent under its new CEO, and the company’s improved overall performance comes as many of Minnesota’s largest retailers have been in a rut.

Via said in a statement that weather presented challenges during the latest quarter. But while same-stores sales fell short of the company’s expectations, “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,” she said.

“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,” Via added.

She said that the company will continue its strategy of emphasizing its “MPW” (missy, petite, women) store format, which delivers “strong returns,” and expects to have 190 such locations by the end of the year.