Christopher & Banks Corp. reported that its first-quarter sales increased 9.2 percent and the retailer trimmed its previous losses.
Net income for the quarter was $200,000 or 0 cents a diluted share, up from last year’s net loss of $1.4 million, or 4 cents. This easily beat the FactSet estimate for a loss of 10 cents a share. The stock jumped 28 percent to $2.60 in early trading.
Net sales for the three months ended April 30 increased 9.2 percent to $100 million from $91.6 million a year earlier. This also topped the FactSet estimate for sales of $96.9 million. Comparable sales increased 6 percent versus last year’s decrease of 11.7 percent.
“We were well-positioned in our merchandise assortment as we optimized our mix of fashion basics and trend-right styles, and saw strong growth in our special sizes offering across all channels,” said chief executive officer LuAnn Via. “Our e-commerce business also posted strong gains, primarily the result of effective digital marketing efforts. In addition, our focus on cash management resulted in a more than $4 million reduction in our use of operating cash compared to last year’s first quarter, and our overall inventory levels were very fresh at the end of the quarter.”
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Gross margin increased to 37.7 percent of net sales, an improvement of 250 basis points.
The company plans to open two outlet stores and one misses’, Pet
petite, women’s store in the second quarter, but also close four MPW stores and one Christopher & Banks store. For the full year, the company plans to open six outlets and three MPE stores. Average square footage will decline 1 percent from 2015.
Looking ahead, Christopher & Banks is projecting total net sales for the second quarter to be between $92 million and $96 million versus last year’s $94 million. This is lower than the Capital IQ estimate for $97 million.
Christopher & Banks’ stock is crawling back and has risen 87 percent over the past six months to trade lately at $2.02. Last year, the stock ticked down to almost $1 and is a far cry from the days of 2014 when the stock was near $10.