Christopher & Banks CEO pleased with solid financial results

03 Jul '10

3 min read

Christopher & Banks Corporation reported results for its fiscal 2011 first quarter ended May 29, 2010.

For the First Quarter Ended May 29, 2010

• Total net sales were $126.2 million as compared to $120.4 million in the first quarter of fiscal 2010. First quarter fiscal 2011 same-store sales increased 5%.
• Gross profit for the quarter increased 18.9% to $53.4 million as compared to $44.9 million in the first quarter of fiscal 2010; gross profit margin increased to 42.3% for the first quarter from 37.3% in the first quarter of fiscal 2010.
• Operating income for the first quarter of fiscal 2011 totaled $10.6 million, or 8.4% of sales, as compared to $2.5 million, or 2.0% of sales for the first quarter of fiscal 2010.
• Net income was $6.3 million or $0.18 per diluted share as compared to $1.7 million or $0.05 per diluted share for the first quarter of fiscal 2010.
• Cash, cash equivalents and investments totaled $115 million at the end of the quarter.

Lorna Nagler, President and Chief Executive Officer, commented, “We were pleased to have achieved solid financial results for the first quarter of fiscal 2011. Comparable store sales rose 5%, our gross profit margin expanded significantly and expenses were well managed. Sustained improvement in our conversion rates and increased full price selling drove the strong gross profit margin gain as customers continued to respond favorably to our evolving merchandise assortment. We are confident that we are moving in the right direction as we continue to make progress on our key initiatives in merchandising, marketing and operational efficiencies, which we expect to result in stronger sales and increased profitability in fiscal 2011 and beyond.”

Balance Sheet Highlights
The Company ended the first quarter of fiscal 2011 with total cash, cash equivalents and investments of $115 million. Inventory, excluding e-Commerce inventory, increased 5.4% on a per-store basis at the end of the first quarter of fiscal 2011, as compared to the end of the first quarter of fiscal 2010. The Company's balance sheet remains strong and management believes that its cash and investments are sufficient to meet the Company's cash and liquidity needs for the current fiscal year.

Capital Expenditures
Capital expenditures totaled approximately $3.4 million in the first quarter of fiscal 2011.

Second Quarter Fiscal 2011 Outlook

• For the second quarter of fiscal 2011, the Company expects comparable store sales to approximate or be slightly higher than the 5% increase generated in the first quarter of fiscal 2011.
• For the second quarter of fiscal 2011, total gross margin is expected to improve by a couple of hundred basis points, as compared to last fiscal year's second quarter, primarily driven by leveraging of buying and occupancy costs.
• SG&A dollars in the second quarter of fiscal 2011 are expected to be flat to slightly higher than SG&A dollars in the first quarter of fiscal 2011.
• Expected capital expenditures remain at $12 to $14 million for the full fiscal year.

Christopher & Banks Corporation is a Minneapolis-based specialty retailer of women's clothing. As of June 30, 2010, the Company operates 793 stores in 46 states consisting of 531 Christopher & Banks stores, 260 stores in their plus size clothing division CJ Banks and two dual-concept stores.

Christopher & Banks Corporation

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