Wednesday, women's apparel chain owner Christopher & Banks Corp. (CBK) reported a sharp rise in third-quarter profit, compared to the year-ago on lower expenses; despite a fall in revenue.
Third-quarter profit from continuing operations increased to $6.97 million from $3.96 million in the year-ago period. Earnings per share rose to $0.19 from $0.11. Analysts polled by Thomson Reuters expected earnings of $0.21 for the quarter. Analysts' estimates typically exclude one-time items.
Christopher & Banks' net sales fell to $132.00 million from $143.00 million in the year-ago period; yet matching analysts revenue expectations of $132.00 million for the quarter. Comparable store sales for the third quarter decreased 8.4%.
Merchandise, buying and occupancy expenses were reduced to $78.2 million or 59.2% of sales from $91.9 million or 64.3% of sales in the prior-year period. Selling, General and Administrative or SG&A expenses were cut to $37.5 million or 28.4% of net sales from $45.2 million or 31.6% of net sales in the prior-year quarter. The company's realized SG&A cost reduction was $7.7 million for the third quarter.
The 510 basis point gross margin increase combined with the SG&A reduction resulted in an operating income of $9.79 million for the quarter versus an operating loss of $662,000 in the year-earlier quarter.
For the nine-month period, net income fell sharply to $6.52 million or $0.18 per share from $16.06 million or $0.59 per share in the prior-year period. Net sales for the same period declined to $353.54 million from $426.85 million.
Looking ahead, Christopher & Banks' comparable store sales is expected to decline in the high single digits for the fourth quarter of fiscal 2010, while overall gross margin rate for fiscal 2010 is anticipated to be slightly higher than in fiscal 2009. It also expects to save $2 million in SG&A cost-cutting measures. Capital expenditure for the full year is expected to be $7 million.
CBK closed Wednesday's regular trading session at $7.66, up $0.19 or 2.54%, on a volume of 535,702 shares on the NYSE. In after-market trading, CBK shares fell $0.94 or 12.34% to $6.72.
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