Christopher & Banks announced preliminary second-quarter results causing the stock to fall slightly in after hours trading to $3.24, a drop of 0.3 percent. The Minneapolis-based specialty women’s apparel company expects to report net sales of $94 million, which is lower than the previous guidance of $100 million to $103 million. FactSet consensus estimated earnings per share to be 1 cent and sales to be $102 million. The company also said it will not meet its prior full-year guidance.
Comparable-stores sales declined 12.4 percent and inventory rose approximately 3 percent as compared to last year. The company blamed lower mall traffic and a more promotional environment as a result of fewer people shopping.
LuAnn Via, president and chief executive officer, stated, “We are disappointed by our financial results for the second quarter as we saw sales weaken significantly in late June and in July across all product categories. While sales were lower in all of our channels during the latter part of the quarter, our eCommerce business achieved plan for the quarter with strong double-digit growth as compared to last year’s second quarter. Overall, we believe that our business continued to be impacted by unfavorable macro challenges and the weakness in mall traffic. In addition, reduced levels of clearance merchandise and a more aggressive promotional environment were also contributing factors to the sales shortfall.”
Via also said that the company was hiring an outside consultant to help them improve sales. The company is also conducting a comprehensive review of its business, analyzing customer buying behaviors.
The retailer has been the subject of an activist investor Macellum Advisors, which complained that it wasn’t able to add a desired director to the board. Macellum also also believes that Christopher & Banks should no longer blame the west coast port strike for its declining results.
Christopher & Banks will report its second quarter results on September 10.