Same-store sales flat in Q3 - Christopher & Banks
Christopher & Banks Corporation, a specialty women's apparel retailer, reported results for the third fiscal quarter and nine month period ended November 26, 2011.
Results for the Three Months Ended November 26, 2011
• Net sales for the third quarter were $123.9 million, as compared to $120.9 million for the third quarter of fiscal 2011. Same store sales were essentially flat for the quarter.
• Gross profit was $26.8 million, as compared to $43.4 million in the third quarter of fiscal 2011. Gross profit margin was 21.7% for the third quarter of fiscal 2012, as compared to 35.9% in the third quarter of fiscal 2011.
• Asset impairment charges estimated at $11.4 million for the third quarter of fiscal 2012 include non-cash asset impairment charges related to approximately 100 stores planned to close by January 2012 and non-cash asset impairment charges for stores the Company plans to continue to operate. The Company also recorded $0.8 million of severance charges related to closing stores and a reduction in force in October involving corporate office and field management personnel. No asset impairment or restructuring charges were recorded in the third quarter of fiscal 2011.
• Operating loss totaled $28.2 million which includes the asset impairment and restructuring charges referred to above. This compares to an operating loss of $0.2 million in the third quarter of fiscal 2011, which included a pre-tax severance charge of approximately $1.0 million related to the separation of the Company's former Chief Executive Officer.
• Net loss totaled $28.2 million, or $0.79 per share, for the third quarter, which includes $12.2 million, or $0.34 per share, of restructuring charges and the estimated asset impairment charges. This compares to a net loss of $9.2 million, or $0.26 per diluted share, for the third fiscal quarter of 2011, which included a non-cash charge resulting from recording a $12.9 million, or $0.36 per share, valuation allowance related to the Company's deferred tax assets and a pre-tax severance charge of approximately $1.0 million, or $0.02 per share.
Larry Barenbaum, Chief Executive Officer, commented, "We were clearly disappointed in the results for the quarter. In response to the slow sell-through, we aggressively promoted merchandise to drive customer purchasing and move through seasonal inventory, which resulted in significant erosion of our gross margins. "
"We expect that these challenges and merchandise margin pressures will continue in the fourth quarter given that we still need to work through current product. Looking ahead, we remain focused on completing our previously announced store closing plan, disciplined inventory management and expense controls, and improved product execution."
Mr. Barenbaum continued, "We announced last week that Joel Waller, a retail veteran with a strong industry background, joined us as President. While I am confident he will addvalue in all aspects of our business, his primary focus will be on product development, sourcing and merchandising. Joel and I are committed to revitalizing the business and getting the Company back on track to profitability."