Citing a tough economic environment, Christopher & Banks Corp. on Thursday reported a 75.3 percent decline in second-quarter profits, matching Wall Street estimates.
Net income for the quarter ended Aug. 30 shrank to $836,000, or 2 cents a diluted share, from $3.4 million, or 9 cents, for the comparable period last year. Net sales slid 6.7 percent to $131.6 million, versus $141.1 million a year ago. Same-store sales for the Minneapolis-based company fell 13 percent. Analysts surveyed by Yahoo Finance expected income of 2 cents a share on revenues of $138.9 million.
Lorna Nagler, president and chief executive officer, said the company expects an “extremely challenging economic and retail environment to adversely impact” near-term sales and earnings.
“However, we believe that the progress we continue to make with our merchandise assortment and on our strategic initiatives in e-commerce, planning and allocation, marketing and sourcing will position us for stronger performance when the economy improves,” she said.
Sterne, Agee & Leach analyst Margaret Whitfield on Wednesday downgraded the retailer’s stock to “hold” from “buy,” due partially to slow mall traffic and a weak retail environment. Coupled with increased investments in new initiatives, the soft state of retail would further exacerbate the company’s “situation,” she commented.
“The Boomer space has been among the most difficult in specialty retail, and while Christopher & Banks has outperformed other peer companies to date, we believe an even tougher environment is ahead,” Whitfield said.
For the first half, the company saw a 19.6 percent decline in profits, dipping to $12.1 million, or 34 cents a diluted share, from $15.1 million, or 42 cents a share, last year. Net sales grew 0.3 percent to $291.3 million from $290.5 million. Same-store sales declined 6 percent.
The company estimated third-quarter earnings, before the operating results and closing costs associated with its Acorn division, in the 10 cent to 13 cent range. Same-store sales are expected to decline at about the same rate they did in the second quarter.