CHRISTOPHER & BANKS SALES RISE
Byline: David Lipke
NEW YORK — Defying economic trends, Christopher & Banks delivered stellar second-quarter results on the strength of healthy sweater and denim sales.
For the three months ended September 1, the Minneapolis-based retailer posted net income of $5.3 million, or 31 cents a diluted share, up 27.1 percent from $4.2 million, or 25 cents, in the year-ago quarter. Sales climbed 39.1 percent, to $57.8 million from $41.5 million in the same period last year, as comparable-store sales increased 8 percent.
Bill Prange, chairman and chief executive officer, said on a conference call that sales and earnings in the quarter were driven by “strong consumer acceptance of our novelty sweaters, particularly in late July and throughout August.” Sweaters constitute approximately 40 percent of the retailer’s merchandise mix, according to Mercedes Sanchez, vice president of research at Raymond James.
The company noted business was negatively impacted from Sept. 11 through 14, due to the terrorist attacks on New York and Washington, but comp sales rebounded into positive territory on the weekend of September 15.
Prange said the company was boosting its traditionally strong Americana-inspired offerings in the wake of the attacks. “We have had American-themed merchandise for 4 1/2 years…and it is selling at twice the rate as before,” he told analysts. The retailer executed reorders for these red-white-and-blue offerings, which will grow to comprise 10 to 12 percent of all merchandise, up from 4 to 5 percent previously.
Inventories grew 29.4 percent, to $19.9 million, but declined on a per-store basis by 2 percent.
“Management has done a great job controlling inventory and limiting markdowns,” observed Sanchez. “This was a stellar quarter, particularly in this environment. We have a ‘strong buy’ rating on the company, and I’d upgrade it to a ‘stronger buy’ if there was such a thing.”
The company opened 19 new stores in the quarter and closed one, bringing the total store base to 333 as of Sept. 1, up from 252 a year ago. The company plans to convert its 60 remaining Braun’s locations into Christopher & Banks stores by December 2002. In the third quarter, the company anticipates opening an additional 20 new stores.
For the six months, income was $11.9 million, or 69 cents, up 30.7 percent from $9.1 million, or 54 cents, in the year-ago period. Sales jumped 37.5 percent, to $115.4 million from $83.9 million a year ago.