In an economy where few retail chains outside of Wal-Mart and Costco have been spared, analysts said Wednesday that they considered it "better than expected" news when Christopher & Banks reported a third-quarter loss and falling sales.
The Plymouth-based women's specialty retailer said its sales dropped 7.9 percent to $143 million in the quarter ended Nov. 29. It posted a net loss of $1.4 million, or 4 cents a share, which included a pre-tax charge for closing the majority of its Acorn upscale boutiques. A year ago, the company reported profit of $11 million, or 31 cents a share.
Same-store sales, considered a key retail barometer, dropped 14 percent.
Christopher & Banks is somewhat unusual among retail companies in that it includes Black Friday and Thanksgiving weekend sales in third-quarter results, but won't report the key December holiday results for another three months.
But the company gave a hint that it didn't fare well during the holidays, noting that fourth-quarter sales among established stores will likely be in the negative mid- to high-teens and it will need to continue to rely on profit-eating markdowns to help draw customers into its stores.
Major retail chains will report December results today, and RetailMetrics Inc. analyst Ken Perkins forecasts that 80 percent will report negative sales among stores open at least a year.
Like most of its counterparts, Christopher & Banks said it will significantly scale back its expansion plans and will continue to try to keep inventory in check to try to ride out the recession. It plans to open just five stores in the coming year, cutting its capital budget nearly in half to $10 million from the current $19 million. It also announced plans to launch a new concept, which it called a "dual store." in the Scranton, Pa., area in late spring. The store will pair Christopher & Banks lines with its sister plus-size brand, C.J. Banks, under the same roof.
Christopher & Banks has a healthy balance sheet, with $90 million in cash and investments, and no long-term debt. Its marketing operation, slim by most major retailers' standards at 1.5 percent of sales, continues to be driven by what CEO Lorna Nagler calls "grassroots efforts."
