CHRISTOPHER BANKS CORP (CBK) SEC Filing 10-Q Quarterly report for the period ending Saturday, November 3, 2018

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Exhibit 99.1
cbka21.jpg
2400 Xenium Lane North, Plymouth, MN 55441 ▪ (763) 551-5000 ▪ www.christopherandbanks.com

CHRISTOPHER & BANKS CORPORATION REPORTS
THIRD QUARTER FISCAL 2018 FINANCIAL RESULTS

- Net Sales of $91.3 Million -
- $15.5 Million in Cash and No Debt at end of Q3 -
- Fourth Quarter To-Date Positive Comparable Sales at Improved Gross Margins -
- Providing Fiscal 2019 Outlook -
- Announces New Chief Stores Officer -


Minneapolis, MN, December 4, 2018 - Christopher & Banks Corporation (NYSE: CBK), a specialty women’s apparel retailer, today reported results for the third quarter ended November 3, 2018.

Keri Jones, President and Chief Executive Officer, commented, “While we are disappointed in our third quarter performance, I remain confident in our path forward. Our third quarter results were adversely impacted by the combination of shipment delays and lower planned levels of inventory which resulted in an average of 17% less inventory on hand than in last year’s third quarter. In addition, moving through excess spring/summer merchandise inventory was more challenging than the prior year and created meaningful pressure on our gross margin. Notably, as newer merchandise arrived in stores, we have been encouraged by the response as these deliveries have been resonating with our customers. Quarter-to-date we are seeing positive comparable sales coupled with gross margin expansion. Importantly, the abundance of work we have done over the last eight months, focused on strengthening our merchandising strategy, developing a more impactful marketing approach and enhancing our omni-channel capabilities, are beginning to bear fruit. At the same time, we continue to make progress in advancing process improvement initiatives and reducing costs. Looking ahead, we expect this momentum to continue as our entire team is energized and focused on the strategic initiatives that we believe will drive improved sales, operating results and cash flow in the future.”

Results for the Third Quarter Ended November 3, 2018
Net sales totaled $91.3 million, a decrease of 7.3%, while operating on average 461 stores. This compares to $98.5 million in net sales for the third quarter of fiscal 2017, while operating on average 473 stores.
Comparable sales decreased 7.5% following a 5.0% decrease in the same period last year. eCommerce sales increased 10.7% following an 8.5% increase in the same period last year.
Gross margin rate was 29.8%, as compared to 33.8% in last year’s third quarter. The decrease was due to lower merchandise margins on spring/summer merchandise, deleverage of fixed costs and

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The following information was filed by CHRISTOPHER BANKS CORP on Tuesday, December 4, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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  • 18487875_82
    Other - Other
    In addition, we wish to advise readers that the factors listed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended February 3, 2018, as well as other factors, could affect our performance and could cause our actual results for future periods to differ materially from any opinions or statements expressed in the quarterly report on Form 10-Q.
  • 18487875_35
    Financial - Earnings
    Gross Profit Gross margin rate declined 400 basis points compared to the prior year due to lower sales, changes in product mix and the shift in sales to the eCommerce channel.
  • 18487875_78
    Other - Other
    These forward-looking statements, which may be included in reports filed under the Exchange Act, in press releases and in other documents and materials as well as in written or oral statements made by or on behalf of the Company, are subject to certain risks and uncertainties, including those discussed in Item 1A - Risk Factors of our Annual Report on Form 10-K for the fiscal year ended February 3, 2018, which could cause actual results to differ materially from historical results or those anticipated.
  • 18487875_4
    Financial - Earnings
    Deliver compelling promotions that support our financial goals We intend to better leverage our data and tools to execute a marketing and promotional strategy that will drive traffic and conversion while expanding gross margins.
  • 18487875_41
    Financial - Earnings
    Gross Profit Gross margin rate decreased 230 basis points primarily driven by lower sales, changes in product mix and the shift in sales to the eCommerce channel.
  • 18487875_36
    Financial - Expense
    Selling, General, and Administrative ("SG&A;") Expenses Depreciation and Amortization Impairment of Store Assets Operating Loss Interest expense, net Income Tax Provision Net earnings Net sales decreased 3.3% compared to the same period last year primarily due to a decline in the number of sales transactions, including a decrease in average store count, partly offset by an increase in average unit retail; Comparable sales decreased 0.9% as compared to a 5.1% decrease in the same period last year; eCommerce sales increased 10.7% following a 15.1% increase in the same period last year; Gross margin rate decreased 230 basis points compared to the same period last year largely driven by lower sales, changes in product mix and the shift in sales to the eCommerce channel; Net loss aggregated to $21.6 million, or a $0.58 loss per share, compared to a net loss of $13.2 million, or a loss of $0.36 per share for the same period last year.
  • 18487875_56
    Other - Other
    The increase in cash used in operating activities in the first thirty-nine weeks of fiscal 2018 compared to the first thirty-nine weeks of fiscal 2017 was primarily due to the increase in the net loss for the current period partially offset by a delay in the receipt of certain inventories resulting in a favorable impact on accounts payable.
  • 18487875_48
    Other - Other
    Average square footage for the year is expected to be down approximately 2.4% as compared to fiscal 2017 and down 2.0% in the fourth quarter as compared to the same period last year.
  • 18487875_14
    Revenue - Product
    We believe these enhancements will further improve her online experience and drive higher sales on our site.
  • 18487875_63
    Other - Other
    We believe that our sources of liquidity will be sufficient to sustain operations and to finance anticipated capital investments and strategic initiatives over the next twelve months.
  • 18487875_58
    Revenue - Product
    The $15.0 million favorable impact is primarily attributable to the proceeds of $13.7 million from the sale of the corporate facility as part of a sale-leaseback transaction.
  • 18487875_22
    Revenue - Product
    Management evaluates our financial results based on the following key measures of performance: Comparable sales Comparable sales is a measure that highlights the sales performance of our store channel and eCommerce channel by measuring the changes in sales over the comparable, prior-year period of equivalent length.
  • 18487875_20
    MA - Other
    We believe that leveraging digital marketing is one of the best ways to acquire new customers and we have shifted a greater mix of our marketing spend to digital.
  • 18487875_71
    Other - Other
    There were no outstanding borrowings under the Credit Facility as of November 3, 2018 and October 28, 2017.
  • 18487875_0
    Revenue - Product
    Our overall business strategy is to build sustainable, long-term revenue growth and consistent profitability through the following strategic initiatives: Enhance the shopping experience; Deliver compelling promotions that support our financial goals; Leverage our omni-channel capabilities; Attract new customers and grow our customer file; and Optimize our cost structure.
  • 18487875_25
    Revenue - Product
    We believe our eCommerce operations are interdependent with our brick-and-mortar store sales and, as such, we believe that reporting combined store and eCommerce comparable sales is a more appropriate presentation.
  • 18487875_74
    Other - Other
    Accordingly, after reducing the Borrowing Base for the open letters of credit and the required minimum availability of the greater of $3.0 million, or 10.0% of the Borrowing Base, the net availability of revolving credit loans under the Credit Facility was approximately $33.4 million at November 3, 2018.
  • 18487875_65
    Financial - Cash Flow
    There can be no assurance that we will generate cash flows at or above current levels or that we will be able to maintain our ability to borrow under our existing facilities or obtain additional financing, if necessary, on favorable terms.
  • 18487875_6
    Other - Other
    With the assistance of data analytics, we believe there is an opportunity to better leverage our data to drive fewer, more meaningful promotions.
  • 18487875_29
    Revenue - Product
    As a result, our comparable sales calculation is not necessarily comparable to similarly titled measures reported by other companies.
  • 18487875_44
    Financial - Expense
    Depreciation and Amortization Impairment of Store Assets Operating Loss Interest expense, net Income Tax Provision Net earnings We have been implementing a number of strategic priorities, including actions to enhance her shopping experience with a well-curated merchandise offering; deliver compelling promotions that support our financial goals; leverage our omni-channel capabilities, and attract new customers and grow our customer file.

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  • Form Type: Quarterly
  • Number of times amended: 0
  • Accession Number: 0000883943-18-000177
  • Submitted to the SEC: Thursday, December 6, 2018 4:07:53 PM EST
  • Accepted by the SEC: Thursday, December 6, 2018
  • Period ending: November 2018
  • Industry: Retail Womens Clothing Stores