Christopher & Banks Corporation (NYSE:CBK): Reality Check For Investors

Christopher & Banks Corporation (NYSE:CBK) is a retailer that specializes in women-focused apparel. It operates hundreds of stores some of which it plans to eliminate, according to an article on StarTribune. The company recently offered a reality check to investors as sales declined and profit rose below expectation.

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Tepid sales

Christopher & Banks Corporation (NYSE:CBK) closed the latest quarter with revenue of $110.6 million, which was down 6.3%. Revenue in the latest quarter also fell below the company’s own guidance of $114-$118. In the latest quarter, the retailer operated stores that were 8% smaller in number compared with the same quarter a year earlier. Same-store sales declined 7.6%. The company reported a profit of $8.9 million, which was up 4%.

Christopher & Banks Corporation (NYSE:CBK) blamed the tepid 3Q financial results on the soft store traffic. The company’s CEO, LuAnn Via, cited that retail traffic has generally been weaken in the recent times.

Store base adjustment

On December 4, during the release of the 3Q earnings results, Christopher & Banks Corporation (NYSE:CBK) highlighted plans to convert certain stores and closing others. The company will shut six stores in the current quarter, 4Q, and convert 25 others into a new format that is favorable in boosting sales. The retailer runs about 553 stores that are spread across 43 states.

Additionally, Christopher & Banks Corporation (NYSE:CBK) updated on the revenue expectations for the current quarter. The company predicted revenue in the range of $94-$98 million. It anticipates achieving the revenue on a store base of 544 outlets, compared with 584 outlets last year.

Shares of Christopher & Banks Corporation (NYSE:CBK) have declined more than 42% this year. No promotional activities have been cited in the stock.

On Wall Street, analysts hold different views of the stock. Analysts at Piper Jaffary downgraded the stock to “Neutral” from “Overweight” on the day that the 3Q results came out. However, analysts at Brean Capital earlier initiated Christopher & Banks Corporation (NYSE:CBK) with a “But” rating and $10 target price.



There was a big down move for Christopher & Banks Corporation (NYSE:CBK) in yesterday’s trading session as the stock fell by 27.95%. From the above chart it can be clearly seen that the smart money has been steadily flowing out of the stock ever since it made a top near $7.30. The stock has seen quite a lot of selling and moving ahead the stock has support near $4.40 and $4 in short-term which if holds then the stock can bounce back.

About the Author

Erica is a graduate of New York University’s school of Journalism. She joined US Markets Daily as a general assignment reporter in January of 2008.

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