NEW YORK — Christopher & Banks Corp. endured a "disappointing" third quarter, but still managed to improve its sales and profits and expand its retail footprint.
Net income for the quarter climbed 5.8 percent to $11.3 million, or 43 cents a diluted share, from $10.7 million, or 41 cents a year ago.
The result chimed in at the low end of C&B’s projected earnings of 43 to 45 cents a share, as the firm expected.
Ahead of the after-market quarterly release, shares of the firm surrendered 6.3 percent, or $1.30, to close at $19.50 on the New York Stock Exchange Thursday.
New store growth helped sales for the three months ended Nov. 30 advance 18 percent to $91.8 million from $77.7 million a year ago. Sales at stores open at least a year dipped 2 percent.
"Third-quarter results were impacted by sluggish consumer demand and a very promotional and competitive retail environment," said Bill Prange, chairman and chief executive, in a statement. The West Coast port closures also slowed down the firm’s merchandise receipts and led to increased freight costs, he said.
"While the third quarter was disappointing, we are very pleased with our ability to generate operating income, which was nearly 20 percent of sales," Prange said. Operating profits inched up 2.8 percent during the quarter to $18.2 million, from $17.7 million a year ago.
The ceo also said inventories, which rose 38.7 percent versus a year ago to $36.7 million, were on plan and included $3 million in additional in-transit inventory, representing scheduled 2003 receipts shipped early to bypass any further West Coast port labor disputes.
During the quarter, C&B opened 31 new doors, bringing its total number of new stores this fiscal year to 94. Overall, the retailer operates 439 doors across 36 states.
For the nine months, profits shot up 24.2 percent to $28 million, or $1.05 a diluted share, from $22.6 million, or 87 cents, a year ago.
Sales for the period expanded 26 percent to $243.4 million from $193.1 million a year ago. Comparable-store sales inched up 4 percent.
For December, C&B is looking for same-store sales to be flat to down 3 percent. Next year, the firm plans to open about 100 new stores.Although the retail environment remains unfriendly to retailers, Prange said the firm he heads, by virtue of its business model, brands and balance sheet, was "well positioned to post stronger results as the economy improves."
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