Piper Jaffray Lowers Price Target on Christopher & Banks

Piper Jaffray is lowering their price target and EPS estimates on Christopher & Banks CBK following updated 3Q outlook. CBK management is expecting a decline between 8-10% in 3Q same-store sales, Piper Jaffray's prior expectation was a 3% increase. Gross margin was also down 500-650 bps vs. last year because of higher promotional activity and a deleverage of buying and occupancy costs. Piper Jaffray writes, "We are changing our EPS estimates as follows: from $0.11 to ($0.06) in FQ3; from ($0.13) to ($0.19) in FQ4; from $0.09 to ($0.14) in FY11; and from $0.16 to $0.01 in FY12. We are lowering our price target from $9 to $5, which is based on 5x FY12 EV/EBITDA. We are lowering our target EV/EBITDA multiple from 6x to 5x to reflect greater downside risk to our model given the company's current inventory position." CBK closed yesterday at $5.17.