Christopher & Banks Corp. swung to a second-quarter loss but topped analysts’ forecasts by slashing inventories and expenses and limiting markdowns.
The Minneapolis-based company said Thursday it registered a net loss of $2.1 million, or 6 cents a diluted share, for the three months ended Aug. 29, compared with a profit of $836,000, or 2 cents a share, in the year-ago quarter. Sales slumped 21.2 percent, to $101.2 million from $128.5 million, and fell 22 percent on a comparable-store basis. Analysts surveyed by Yahoo Finance expected a loss of 14 cents a share on revenue of $103.6 million.
President and chief executive officer Lorna Nagler said on the earnings call that although sales trends in the quarter were “softer than we would have liked,” the company saw “indications” that merchandising assortment initiatives and cost-cutting were working.
“We anticipate that the reduced amount of inventory on hand may constrain our sales potential through the holidays as we were very promotional a year ago, while clearing excess inventory,” she told analysts and investors. “We expect progressively improved performance once we anniversary the high levels of promotions in last year’s fall and holiday season.”
Selling, general and administrative expenses for the quarter shrank 19.9 percent to $32.2 million from $40.2 million, and inventories fell 24 percent on a per-store basis versus last year.
Nagler said the retailer is focusing on “achieving the right balance of novelty and uniqueness against basic programs to complete the assortment.”
For the six months, the missy specialty retailer recorded a net loss of $446,000, or 6 cents a diluted share, versus net income of $12.1 million, or 34 cents a share, a year earlier. Revenues contracted 21.9 percent to $221.5 million from $282.8 million.
Christopher & Banks said it continues to “plan conservatively” for fiscal 2010, and expects comps to decrease in the low- to mid-teens for the third quarter. Selling, general and administrative expenses are expected to be reduced $17 million to $18 million.
The company said it would grow its new concept, a store that will house apparel from Christopher & Banks and its plus-size concept, C.J. Banks, under the same roof.
The firm operates 811 stores, including 542 Christopher & Banks units, 268 C.J. Banks shops and one dual concept store located in Scranton, Pa.
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