This summary is based on the fourth quarter fiscal 2007 earnings call conducted by Christopher and Banks Corp. (CBK: chart) on April 11, 2007.
Key Investors Issues
- EPS were 5 cents compared to 18 cents last year.
- Net income was $1.9 million compared to $6.9 million a year ago.
- Net sales increased to $134 million versus $126.6 million the prior year.
Fourth Quarter Highlights
Same-store sales were down 7%.
The comparable stores opened in fiscal 2004, 2005 and 2006 had a low single digit decline, while the mature base of fiscal 2003 and older stores had a high single digit decline.
Merchandise buying and occupancy costs have 670 basis points of negative leverage.
- SG&A expense was $37.2 million, or 27.8% of sales, resulting in 80 basis points of positive leverage.
- Approximately 90 basis points of improvement related to a lower level of medical and workers’ claims. In addition, last year contained a $1.2 million charge to former CEO resulting in approximately 100 basis points of improvement.
- Depreciation increased as an asset impairment charge for eight under-performing stores, led to an acceleration of $1.1 million of depreciation expense.
With regard to the balance sheet, the company continues to have a strong cash position.
The company finished the quarter with more than $102 million in cash and short-term investments.
- In March, the company completed $40 million stock repurchase program and now has 36.2 million shares outstanding.
- Increase in inventory was primarily due to the timing of deliveries, and a larger in transit balance related to an earlier Easter.
- In store, inventory on a per store basis was up 4% when inventory at March 3rd is compared to inventory at March 4th of 2006 on a per store basis.
- Same-store sales from March were flat, and improved from February.
- March same-store sales did not receive any benefit from the shift in Easter.
- The company launched new test called CVK Sport in early March.
Reduced traffic, erratic weather patterns and merchandising missteps resulted in a weaker performance.
In the sunbelt experience, the company experienced a mid single digit comparable store sales increase. The company managed through this fourth quarter softness with a row bust and successful merchandise liquidation process. This has allowed entering the current spring season with clean and current inventory levels of which less than 1% was over 120 days old, which is similar to last year’s percentage.
The company has begun a store field program that will enhance selling and management skills to a customized program that will be completed this fall.
From a systems standpoint the company continues to be on target for the phase implementation of real estate workplace management system.
As the company moved in the new year, it is under way with the implementation of a store POS upgrade, which will allow for improvements in operational activities and future will improved customer service components.
This upgrade supports go forward needs from a communication standpoint.
- The company has embarked on the formal evaluation of the new planning and allocation systems along with the configuration project, an effort to ensure the company has the processes in place to maximize full supply chain efforts effectively.
CRM program, launched last October, has continued to see growth.
