June 27, 2009
Shares of women’s clothing chain Christopher & Banks Corp. surged as high as 14 percent Thursday after first-quarter results exceeded Wall Street expectations, although profits plunged from lower sales.
The Plymouth, Minn., company said profit fell to $1.7 million, or 5 cents a share, from $11.3 million, or 32 cents a share, last year.
Net sales for the quarter ended May 30 fell 23 percent to $120.4 million from $155.4 million a year earlier, while same-store sales tumbled 24 percent as tough economic conditions continued to pressure sales.
The retailer said it expects the second quarter will remain challenging, with sales at stores open at least a year to be similar to the first quarter. The nation’s high unemployment rate and the prolonged housing market downturn have made many consumers reluctant to spend on all but the basic necessities.
Analysts surveyed by Thomson Reuters expected the company to report a loss of 5 cents a share on sales of $121 million.
Although CEO Lorna Nagler expressed disappointment with the company’s revenue growth, she said it was able to deliver positive cash flow and earnings, which represented “a meaningful improvement” from the fourth quarter.
She said the company also has made progress by reducing inventory levels and cutting sales, general and administrative expenses, which were trimmed by $7.5 million.
The company said it expects to be cash flow positive for fiscal 2010, but offered little additional guidance.
Christopher & Banks has 814 retail stores in 46 states. Its shares settled back in midday trading, to $6.03, up 9.6 percent.
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