Sterne Agee Reports Christopher & Banks Pre-Announces Greater Loss Than Projected In 4Q

According to Sterne Agee, Christopher & Banks Corporation CBK pre-announced greater loss than projected in 4Q. Sterne Agee reported that CBK released preliminary results for the 4Q (end February). “The company expects its sales to be in the area of $99.6 million (we had been projecting $98.8 million) on a -1% comp (vs. -4% LY and our projection of +1%). The gross margin rate is also expected to decline by 900 to 1,000 bp from 31.9% LY due to markdowns needed to clear holiday lines. SG&A is expected to be $35 million, below our $36.6 million projection. This brings the expected loss per share for the quarter to ($0.47) – ($0.51) including a pretax, non-cash impairment charge of $0.06 for underperforming stores. The tax rate is expected to be in the mid to high teens. Inventory (ex-e-com inventory) is expected to be up 4% per store ahead of the negative 1% comp. For the full year, sales are projected to be approximately $448.1 million, reflective of a 1% SSS decline. We are lowering our Q4 loss to ($0.51) from a loss projection of ($0.42) which brings the full-year loss to ($0.29). Our FY12 and FY13 estimates are cut to ($0.24) and ($0.09) from ($0.18) and ($0.04), respectively. The company expects to end the year with no debt, inventory levels which are below initial expectations, and cash and equivalents and investments of $106 million or $3.00 per share up from $84.1 million at the end of Q3.” Christopher & Banks Corporation closed yesterday at $6.48.