Christopher & Banks reports fiscal 2009 Q1 results
Christopher & Banks Corporation reported results for its fiscal 2009 first quarter ended May 31, 2008.
First Quarter Results:
Total sales for the quarter ended May 31, 2008 were $159.6 million compared to $149.4 million for the quarter ended June 2, 2007. Same-store sales for the quarter ended May 31, 2008 were flat compared to the quarter ended June 2, 2007.
Merchandise buying and occupancy expense was $90.5 million or 56.7% of sales this fiscal quarter compared to $86.9 million or 58.2% of sales in last year's first quarter. The largest contributor to improvement in merchandise buying and occupancy expenses as a percent of sales was higher merchandise margins resulting from improved full price selling.
First quarter selling, general and administrative (“SG&A”) expenses were $44.8 million, or 28.1% of sales this fiscal quarter, compared to $39.1 million or 26.2% of sales in the first quarter of last year. Among the larger expense items which contributed to the higher SG&A rate as a percent of sales were a planned increase in marketing expense, higher performance-based bonus and incentive compensation, and an increase in self-insured medical claims. In addition, with flat same-store sales there was a general deleveraging of most other SG&A expenses.
The Company's first quarter net income was $11.3 million or $0.32 per diluted share. In last year's first quarter, the Company had net income of $11.7 million or $0.32 per diluted share.
At the end of the fiscal quarter, the Company had $91.5 million in cash, cash equivalents and short-term investments. This compares to $96.6 million in cash, cash equivalents and short-term investments as of the end of the comparable quarter last year.
The Company operated 850 stores as of May 31, 2008 as compared to 801 stores at June 2, 2007.
Lorna Nagler, President and Chief Executive Officer, commented, “We delivered first quarter earnings above our previously announced guidance, despite the difficult retail environment, and were pleased with the results of our second Friends and Family event held in April. In addition, we drove higher merchandise margins as we maintained tight inventory controls, which allowed for more full-priced selling.
“For the second quarter, based on our June to-date sales and traffic trends, and the assumption that the current economic environment will not improve, we believe it is reasonable to plan for a high single digit decline in same-store sales.
As we look ahead, we plan to maintain disciplined inventory and expense controls, as well as prudently manage our promotional activities. We believe that our strong balance sheet and the strategic investments we are making in our business will position us for improved performance when economic conditions become more favorable.”
Second Quarter Guidance:
For the second quarter of fiscal 2009, the Company currently estimates that earnings per diluted share will range from $0.00 to $0.03. This compares to earnings per diluted share of $0.09 in fiscal 2008. The Company's outlook for the second quarter of fiscal 2009 reflects the expectation of same-store sales in the negative high single digit range versus the same period last year.
It also reflects our expectation that the current macroeconomic and consumer environment will remain difficult, adversely impacting store traffic and resulting in a highly promotional retail environment.
Christopher & Banks Corporation