A rebound that excited Christopher & Banks Corp. investors three months ago fell apart a short time later, the company's latest results showed Thursday, and executives said they're not sure precisely how it happened.
But it could have been the new iPhone.
"The traffic has just been down unless you're Apple or Home Depot," said LuAnn Via, chief executive of the Plymouth-based women's apparel retailer. "Overall, it's been a very strange last nine weeks."
Just after reporting its May through July results in early September, Via went on roadshow to meet institutional investors with high expectations. "We thought at Labor Day we were going to have the best quarter in the entire world," she said.
Referring to an analyst involved in the trip, Via added, "I think you said it when the iPhone 6 came out, all of a sudden it looked like everything dropped off."
Other apparel retailers over the past month reported lower-than-expected sales and declines in store traffic. Many retail firms, including those like Target Corp. that fared better than expected during fall, have sounded cautious about the holiday season, chiefly citing deep discounting that's being used to attract customers.
But few retailers have seen such a big change in momentum as Christopher & Banks. Its stock had reached a postrecession high in September of $11.22 per share. It plunged 26 percent in one day in October when executives first sounded a warning about the August-October period.
And following the announcement of the quarter's results Thursday, Christopher & Banks shares plunged 28 percent to close at $4.95, the lowest price since December 2012.
On Friday, the company's shares were down another 6.5 percent in afternoon trading.
In her comments, Via said she considered weather and other influences for its lower-than-expected sales. With 60 percent of its business tied to fashion, the wrong style choice can be detrimental, she said, but not enough to make such a dent in sales.
"Overall, I haven't seen this type of an impact so widespread across the retail sector outside of electronics in a very long time," Via said. "And there is nothing that's one single factor you can attribute to, which is a little concerning."
The company said its profit rose 4 percent to $8.9 million, or 24 cents a share, during the three months ended Nov. 1, its fiscal third quarter. That was above analysts' expectation of 21 cents a share.
But its same-store sales fell 7.6 percent, following a 4.9 percent same-store sales increase in last year's third quarter.
Overall revenue was $110.6 million, down 6.3 percent on a store base that was nearly 8 percent smaller. That was below even the revised outlook Via laid out in October for sales in the $114 million to $118 million range.
In the fourth quarter, the company expects total sales of between $94 million and $98 million from a base of 544 stores compared with 584 stores during the fourth quarter last year.
Via will continue plans to add more outlet stores, which offer higher sales productivity and operating margin, she said, and convert 25 existing Christopher & Banks and CJ Banks stores to a format that combines plus sizes and missy, petite women sizes. About six stores will close in the fourth quarter. The company operates 553 stores in 43 states.
John Ewoldt • 612-673-7633
Evan Ramstad • 612-673-4241
