Christopher & Banks Lowers Q3 Sales Outlook

(RTTNews) - Specialty women's apparel retailer Christopher & Banks Corp. (CBK) on Tuesday lowered its net sales outlook for the third quarter, citing continued softness in mall traffic and lower than expected sales from its September fashion show. Shares of the company are down almost 12 percent in pre-market activity.

LuAnn Via, President and Chief Executive Officer of Christopher & Banks, said, "We believe that the continued softness in traffic trends, coupled with the difficult overall retail environment, have adversely affected our sales as compared to our initial expectations for the quarter. We are operating our business with the assumption that the current environment will remain challenging and promotional activity will continue to be aggressive, creating continued pressure on sales and margins."

Accordingly, the company now forecasts net sales for the third quarter in a range of $114 million to $118 million, down from its prior guidance range of $122 million to $124 million. The company had reported net sales of $118.1 million in the prior-year quarter.

On average, analysts polled by Thomson Reuters expect the company to report revenues of $123.98 million for the quarter. Analysts' estimates typically exclude special items.

Christopher & Banks now projects gross margin improvement for the quarter in a range of 75 to 100 basis points, compared to its prior guidance for gross margin improvement of 75 to 125 basis points.

However, the company noted that it has seen recent improvements in the sell-through of fashion merchandise and continued strong margins in its core offerings.

As of October 6, 2014, Christopher & Banks operates 553 stores in 43 states, consisting of 210 Christopher & Banks stores, 115 stores in its women's plus size clothing division CJ Banks, 186 MPW stores and 42 outlet stores.

CBK closed Monday's trading at $9.10. In Tuesday's pre-market activity, the stock is down $1.07 or 11.76 percent to $8.03.