Shares of Christopher & Banks Corp. fell more than 10 percent in after-hours trading Tuesday following the retailer’s disclosure of an adjusted loss in the fourth quarter in excess of analysts’ consensus estimates and guidance for first-quarter revenues that fell well below them.
In the 13 weeks ended Jan. 31, the Minneapolis-based retailer reported net income of $32.2 million, or 87 cents a diluted share, versus a net loss of $286,000, or 1 cent, in the 2013 quarter. On an adjusted basis, eliminating a $1.10-a-share benefit from the reversal of a valuation allowance and a 6-cent-a-share benefit from the correction of an errant calculation for deferred rent expense, the company lost 18 cents a share, 8 cents more than the 10-cent loss anticipated, on average, by analysts.
Net sales fell 6.6 percent to $98 million from $104.9 million, slightly above the $97.1 million analysts’ consensus estimate.
The firm operated with 7 percent fewer stores than during the 2013 quarter as it continued to convert the bulk of its fleet to its MPW (missy, petite and women’s) format. In the current first quarter, it expects to open three new MPW stores, convert 15 Christopher & Banks stores and 10 CJ Banks stores a total of 15 MPW stores and convert another 70 Christopher & Banks stores to its MPW format with the addition of CJ Banks product.
The firm expects to operate an average of 518 stores in the first quarter, down from 551 in the comparable 2014 period.
LuAnn Via, president and chief executive officer, said the company, like other specialty retailers, faced challenging traffic trends, a promotional environment and “extensive West Coast port delays.”
“Despite these challenges, we delivered revenue at the high end of our expectations and a year-over-year improvement in our gross margin rate [with the exclusion of the error correction] as we worked diligently to manage the business and executive on our strategic initiatives.”
The company in January projected fourth-quarter sales of between $96 million and $98 million.
In 2015, those initiatives will include the conversion to the MPW format, enhancements to its merchandise assortment and an intensification of omnichannel efforts, she said.
Sales in the first quarter are expected to come in between $90 million and $94 million, below the $108.2 million anticipated, on average, by analysts and the $103.4 million reported in the same period last year.
Shares fell 11.3 percent to $5.20 in the first hour after the disclosure of results as the markets ended trading late Tuesday.