On Friday, Christopher & Banks (CBK +0.00%) will release its latest quarterly results. With the company having recovered from the brink of failure a year ago, investors are wondering what the retailer still has planned to produce further growth.
A year ago, Christopher & Banks saw its stock plunge to just $1 per share as the retailer faced widening losses and had to fend off a prospective acquirer's attempts to buy out the company. Since then, though, the retailer has made an impressive comeback. Let's take an early look at what's been happening with Christopher & Banks over the past quarter and what we're likely to see in its quarterly report.
Stats on Christopher & Banks
|
Analyst EPS Estimate |
($0.07) |
|
Year-Ago EPS |
($0.38) |
|
Revenue Estimate |
$105.31 million |
|
Change From Year-Ago Revenue |
12.5% |
|
Earnings Beats in Past 4 Quarters |
3 |
Source: Yahoo! Finance.
How can Christopher & Banks stay on the mend?
In recent months, analysts have continued to believe in a long-term turnaround at Christopher & Banks. They haven't changed their views on the April quarter, but they've boosted their estimates for both this fiscal year and next substantially, with analysts now expecting a profit this year. The stock has risen about 13% since early March but has risen more than 500% from last year's lows.
So far this year, Christopher & Banks has done a good job of continuing the work it started last year. In January, the retailer gave guidance expecting a same-store sales increase in the high teens for its holiday quarter, pointing to the efforts that CEO LuAnn Via had made during the year. With store closures and job cuts designed to eliminate unprofitable locations and cut costs, the retailer was better able to concentrate on its core strengths. Those comps came in up 18.5% for the holiday quarter, and in March, the company said it expected a greater than 20% increase in same-store sales for the May quarter.
As a result of its progress, Christopher & Banks decided last month to allow the poison pill defense it had implemented last year to expire, concluding that the company's turnaround was sufficient to make the defense unnecessary. At this point, it doesn't anticipate any interest from a potential buyer.
Investors shouldn't get too comfortable with Christopher & Banks' good results lately, though, as the women's retail industry remains fraught with peril. Just last week, competitor Chico's (CHS +0.00%) saw shares plunge 7% after the company missed earnings estimates, with bad weather during the quarter hurting sales of its warmer-weather apparel offerings. Yet when you look more broadly, Gap (GPS 1.32%), which has been on a similar turnaround path as Christopher & Banks, was able to overcome the weather to beat estimates, and earlier this week, Gap announced plans to expand further into potentially lucrative new markets in Hungary and Paraguay, as well as offering Banana Republic stores in Mexico.
In Christopher & Banks' report, watch for the latest word on whether the company is sustaining its ambitious growth trajectory. The stock has already anticipated the retailer reaching profitability in the near future, so any unanticipated roadblocks to that goal could send shares lower. For now, though, it looks like Christopher & Banks has gotten a lot of the hardest part of its recovery strategy done.
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