Plymouth, MN—Amid a turnaround after posting 10 consecutive quarters of losses, Christopher & Banks surprised Thursday by posting a third quarter profit.
For the quarter ended Oct. 27, the company posted net income of $3.58 million, or 10 cents a share, compared with a net loss of $28.24 million, or 79 cents a share, in the same quarter last year.
Net revenue rose 2% to $117.26 million, down from $123.90 million last year. Comparable store sales jumped 13.7%.
The profit surprised analysts whose average estimate expected a loss of 15 cents a share on sales of about $114.05. The positive new sent Christopher & Banks’ share prices up more than 5%.
“The third quarter validates the past year’s strategy,” said Joel Waller, interim chief executive. “The results exceeded our expectations at a pace that was faster than we anticipated.”
‘Happened Much Faster Than Planned’
That strategy included closing underperforming stores and combining some Christopher & Banks and its CJ Banks into a shared location. The company has about 129 fewer stores than a year ago, and 12 were closed during the quarter.
Assortments were also revamped and the average price cut about 20%, a new sale promotion strategy was adopted and management of inventory improved.
After the closings, the firm operates 640 stores in 44 states, including 388 Christopher & Banks stores, 172 stores that sell women’s plus-size clothing under the name CJ Banks, 55 stores operating under both names and 25 outlet stores.
The results made for a strong welcome to LuAnn Via, who started as chief executive on Nov. 26. “Much has been accomplished over the last year, and the quarterly results are evidence that the company is on the right track,” said Via, who was formerly chief executive at Payless ShoeSource. Waller will remain as a consultant through next June.
Retail analysts praised the results. “A fantastic job well done,” said Neely Tamminga, an analyst at Piper Jaffray & Co.
“It happened much faster than planned,” said Raghav Nayar, an analyst at Capstone Investments.
Christopher & Banks operates 637 stores in 44 states, including 386 Christopher & Banks stores and 171 CJ Banks stores, which sell plus size women’s clothing. There are also 55 dual Christopher & Banks/CJ Banks doors and 25 outlet stores.