NEW YORK (TheStreet) --Shares of Christopher & Banks Corp. (CBK) - Get Report are sliding by 48.77% to $1.66 on heavy volume in mid-morning trading on Friday, after the women's apparel and accessories retailer released its preliminary second quarter sales results.
The company is expecting net sales of approximately $94 million, compared to its previous guidance for sales in a range of $100 million and $103 million.
Christopher & Banks operated 521 stores during the quarter.
Comparable store sales fell by 12.4%, with 56% of total stores on average included in the comparable store base.
"We are disappointed by our financial results for the second quarter as we saw sales weaken significantly in late June and in July across all product categories," company CEO LuAnn Via said in a statement.
Via attributes the decline in sales to unfavorable macro challenges and weak mall traffic. Additionally, lower levels of clearance merchandise and a more aggressive promotional environment also contributed to the sales decline.
Christopher & Banks will conduct a comprehensive review and is speaking with an outside consultant in order to help boost its sales in the future.
Separately, TheStreet Ratings team rates CHRISTOPHER & BANKS CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHRISTOPHER & BANKS CORP (CBK) a HOLD. The primary factors that have impacted our rating are mixed- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CBK has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 65.11%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 157.14% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 155.1% when compared to the same quarter one year ago, falling from $2.62 million to -$1.44 million.
- You can view the full analysis from the report here: CBK Ratings Report