This summary is based on the fourth quarter fiscal 2008 earnings call conducted by Christopher and Banks Corp. (CBK: chart) on April 9, 2008.
Management:

- President and Chief Executive Officer: Lorna Nagler
- Executive Vice President, Chief Financial Officer: Andrew K. Moller
- Executive Vice President, Chief Operating Officer: Monica L. Dahl
- Integrated Corporate Relations: Jean Fontana

Key Investors Issues

- Total sales were $125.3 million, down 6.49%.
- Net loss was $8.3 million or 23 cents per share, down from a profit of $1.92 million or 5 cents per share in the prior year.
- The firm had $36 million in capital expenditures.

Full Year Highlights:

- Total sales were $575.8 million compared to $547.3 million in 2007, a 5.2% increase as same-store sales increased 1%.
- Net income was $17.0 million or 47 cents a share, compared to $33.7 million or 89 cents per share in the prior year.
- The Company operated 837 stores compared to 778 stores as of March 3, 2007.

Fourth Quarter Highlights

Total sales were $125.3 million, down 6.49% compared to $134 million in 2007 as comparable store sales declined 3.5%.

- Net loss was $8.3 million or 23 cents per share, down from a profit of $1.92 million or 5 cents per share in the prior year on declining sales, as well as a $6 million pretax non-cash long life asset impairment charge.
- Furthermore, Acorn operations reduced store level operating income by approximately 90 basis points.
- Same-store sales declined 3.5% due to a decline of 14% in the number of transactions per average store, which was offset by an increase of 10% in the average transaction value.

Cost of merchandise buying and occupancy expense as a percent of sales was roughly flat in the fourth quarter compared to last year.

- The firm gained 330 basis points of improvement in merchandise margins and this gain was offset by 260 basis points of deleveraging of occupancy costs and 70 basis points of negative leverage related to other buying and distribution costs.
- SG&A expense was $42.3 million or 33.8% of sales compared to $37.2 million, or 27.8% of sales last year.
- Components of negative leverage were store related costs, including salaries, corporate salaries and benefits, stock-based compensation, medical and workers’ comp claims, and other insurance, marketing related costs, and IT consulting and other professional fees.
- Depreciation was $6.1 million, or 4.9% of sales, up from $5.4 million or 4% of sales in 2007, with the increase as a percent of sales primarily resulting from a lower level of sales.

Cash was $78.5 million, and the firm also classified $24.5 million of auction rate securities as long-term investments, currently valued at par.

- The firm had $36 million in capital expenditures and plan for $22 million to $24 million of CapEx in fiscal 2009, with $14 million planned for the construction of new stores, fixture replacements, and store remodels.
- The majority of the balance relates to various IT projects, including new point of sale hardware for more than 550 stores.
- In total inventory, including in-transit, was $43.8 million this year compared to $52.4 million last year as inventory per store declined 22%.

The performance of the Acorn Division has not met expectations due to the merchandise mix and the cost of many of the real estate locations.

- The firm is in the process of repositioning Acorn from primarily offering private label merchandise to featuring recognized brands and also plans to increase the penetration of the accessory category.
- Despite the decline in traffic, the firm showed improvement in both ADF and UPT’s and merchandise margins improved more than 300 basis points.
- Christopher and Banks improved the freshness of the inventory as a result of taking more timely mark downs and it finished the quarter with 22% less inventory per store than last year.

Business Highlights:

- The company made strides in laying the groundwork to position itself for long term growth, with the solid progress made in returning to original roots as a casual lifestyle brand retailer.
- It returned to the heritage of its brand in terms of the fabrications that the core customers are accustomed to seeing from Christopher and Banks.
- In addition, for spring, the firm has updated its looks with new silhouettes, colors, prints, patterns and textures along with an increased emphasis on novelty balanced with an expanded offering of fashion basics.

Beginning with spring, the goal was to improve the freshness and color of the product assortments and has changed the practice of being quad driven, where colors are featured for two consecutive months.

- With an increase emphasis on unit planning relative to store capacity and a smoother product flow, the firm will do refresher floor sets each month in between the more traditional larger, monthly sets to ensure customer sees fresh products every time.
- In addition, the firm has planned a reduction SKU comps for the second quarter fiscal 2009.
- The petites offerings currently in 95 stores has also been performing well and the firm continues to see significant potential for this collection and will feature petites in about 300 stores by September.
- In February, the firm completed the rollout of the e-commerce site for Christopher and Banks and C.J. Banks and performance to date has exceeded expectations.

Update on Programs and Initiatives:

- The firm continues to make progress on the installation of the new planning and allocation modules and expects to see benefit from this initiative beginning in late fiscal 2009 and to a larger degree in fiscal 2010.
- The planning and allocation systems will help execute on the merchandising strategies as it tailors the assortment to geographic areas so that merchandise reflects climate as well as fashion preference differences.
- Given the benefits expected from the planning and allocation modules, the firm is adding additional staff to ensure that it fully maximizes the benefits of these systems.