NEW YORK — Robust top-line growth led to even more robust bottom-line gains for Christopher & Banks Corp. in the second quarter and first half.
For the three months ended Aug. 31, the Minneapolis-based specialty retailer reported a 30.4 percent surge in net earnings to $6.9 million, or 26 cents a diluted share. That compares with last year’s profits of $5.3 million, or 20 cents. Earnings per share matched Wall Street’s consensus estimate.
Sales for the period ascended 27.8 percent to $73.9 million from $57.8 million last year, as same-store sales gained 6 percent.
“While we are very satisfied with our year-to-date results, the retail environment remains challenging,” said chief executive officer Bill Prange in a statement. “Based on month-to-date results, which we believe have been impacted by a slowdown in customer traffic and spending, we anticipate September same-store sales will be essentially flat with last year. We continue to plan for mid-single-digit increases in same-store sales for the remainder of the fall and holiday seasons and we believe we are well positioned to achieve this stronger performance as external conditions improve.”
Earnings growth was also fueled by a 130-basis-point improvement in gross margin.
In a conference call with analysts, chief operating officer Joseph Pennington said the 6 percent same-store sales gain was driven primarily by woven tops, bottoms and sweaters, as well as strong performance in C&B’s outerwear segment. Geographically, the Northeast, Midwest and Mid-Atlantic regions reported the largest same-store gains.
Regarding September’s anticipated flat comps, Pennington attributed the stagnation to the warmer-than-usual weather in the first three weeks of the month, which hurt sales of outerwear and woven tops.
Overall, for the first half of the fiscal year, net income gained 40.7 percent to $16.7 million, or 63 cents a diluted share, from $11.9 million, or 46 cents, a year ago.
Sales for the period increased 31.4 percent to $151.6 million from $115.4 million, and same-store sales grew 8 percent.
During the quarter, the company opened 18 stores, bringing the total number launched in the first six months to 63. C&B plans to open 30 new stores in the third quarter, which would exceed the company’s original plan of opening 90 new stores by yearend. The company has 411 stores in 32 states.
This story first appeared in the September 26, 2002 issue of WWD. Subscribe Today.