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Christopher & Banks updates Q3 fiscal 2009 guidance
18 Nov '08
3 min read
Christopher & Banks Corporation announced that, as a result of weaker than expected sales through the third fiscal quarter to date, the Company now expects to report a net loss per share from continuing operations of between $0.04 and $0.07 for the third quarter ended November 29, 2008, as compared to its previous guidance of net income per share from continuing operations in the range of $0.10 to $0.13.
The updated guidance assumes that the current comparable store sales trends, which are in the negative high teens on a percentage basis quarter-to-date as compared to the prior fiscal year, will remain at or near this level throughout the remainder of the third quarter. The Company also indicated that this guidance does not include the results of operations from its Acorn Division or the costs associated with the closure of its Acorn stores, which will be accounted for as discontinued operations beginning this fiscal quarter.
The Company expects to end the third fiscal quarter with more than $85 million in cash and investments, and no long-term debt. At the end of the third fiscal quarter, inventory per average store is expected to be up on a percentage basis in the mid-teens as compared to the end of the third quarter of fiscal year 2008.
The Company had planned for a mid-single digit increase in inventory levels for the quarter as compared to last year but the unanticipated reduction in sales levels resulted in higher inventory levels than originally planned. Given its anticipated earnings as reflected in today's earnings guidance, the Company's effective tax rate is subject to increased volatility in the third fiscal quarter. Modest differences in pre-tax earnings in the quarter may have a disproportionate affect on tax expense and earnings per share.
Lorna Nagler, President and Chief Executive Officer, commented, “Recent economic events have adversely affected our sales as compared to our initial expectations for the quarter. In addition, we anticipate additional margin pressure for the remainder of the third fiscal quarter associated with the reduced sales outlook and the anticipated level of promotional activity among retailers.”
“We are operating our business with the assumption that the current economic environment will remain extremely challenging and we will continue to be highly focused on managing inventory and controlling expenses during these difficult times. Nonetheless, we are confident that with the number of key initiatives already underway at the Company we are moving in the right strategic direction.”
Further commentary on the Company's third fiscal quarter will be provided as part of the third quarter earnings release and conference call currently scheduled for January 7, 2009.
Christopher & Banks Corporation is a Minneapolis-based specialty retailer of women's clothing.
The updated guidance assumes that the current comparable store sales trends, which are in the negative high teens on a percentage basis quarter-to-date as compared to the prior fiscal year, will remain at or near this level throughout the remainder of the third quarter. The Company also indicated that this guidance does not include the results of operations from its Acorn Division or the costs associated with the closure of its Acorn stores, which will be accounted for as discontinued operations beginning this fiscal quarter.
The Company expects to end the third fiscal quarter with more than $85 million in cash and investments, and no long-term debt. At the end of the third fiscal quarter, inventory per average store is expected to be up on a percentage basis in the mid-teens as compared to the end of the third quarter of fiscal year 2008.
The Company had planned for a mid-single digit increase in inventory levels for the quarter as compared to last year but the unanticipated reduction in sales levels resulted in higher inventory levels than originally planned. Given its anticipated earnings as reflected in today's earnings guidance, the Company's effective tax rate is subject to increased volatility in the third fiscal quarter. Modest differences in pre-tax earnings in the quarter may have a disproportionate affect on tax expense and earnings per share.
Lorna Nagler, President and Chief Executive Officer, commented, “Recent economic events have adversely affected our sales as compared to our initial expectations for the quarter. In addition, we anticipate additional margin pressure for the remainder of the third fiscal quarter associated with the reduced sales outlook and the anticipated level of promotional activity among retailers.”
“We are operating our business with the assumption that the current economic environment will remain extremely challenging and we will continue to be highly focused on managing inventory and controlling expenses during these difficult times. Nonetheless, we are confident that with the number of key initiatives already underway at the Company we are moving in the right strategic direction.”
Further commentary on the Company's third fiscal quarter will be provided as part of the third quarter earnings release and conference call currently scheduled for January 7, 2009.
Christopher & Banks Corporation is a Minneapolis-based specialty retailer of women's clothing.
Christopher & Banks Corporation
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