Shares of Christopher & Banks Corp. soared 17.9 percent Thursday to $7.30 after the misses’ apparel retailer said its first-quarter profit nearly quadrupled.
Full-price selling and an updated assortment helped the Minneapolis-based retailer rake in net income of $6.3 million, or 18 cents a diluted share, for the period ended May 29. This compared with year-ago profits of $1.7 million, or 5 cents a share.
The firm, which operates its namesake concept and CJ Banks, a plus-size chain, reported a 4.9 percent increase in first-quarter sales to $126.2 million, versus $120.4 million a year earlier.
Analysts polled by Yahoo expected earnings per share of 12 cents on revenue of $128 million.
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Comparable-store sales rose 5 percent in the quarter, as gross margin improved to 42.3 percent of sales versus 37.3 percent in 2009.
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Despite “declining traffic trends,” transactions were “up slightly,” president and chief executive officer Lorna Nagler said on the company call. Average transaction value also rose, thanks to a mix of full-price selling and an increase in units per transaction.
The company said it expects second-quarter comps to “approximate or be slightly higher than” the 5 percent comp rise in the first quarter.
The retailer said following positive response to its merchandise, it would “strategically rebuild” second-quarter inventory levels at a low-teen percentage to “support expected sales growth,” a fact that gave some analysts pause.
“While we understand management’s logic, we’d be more comfortable with less of a planned increase,” said RBC Capital Markets’ Howard Tubin. “While comps in the first quarter were up 5 percent, traffic in the quarter was down 13 to 15 percent. In addition, the retail environment, overall, remains choppy. We’d rather see a ‘test and react’ or a ‘chase’ strategy employed as opposed to a ‘build in advance of season’ as, in our opinion, these strategies could mitigate markdown risk somewhat if sales don’t materialize.”