Christopher & Banks Corporation Reports First Quarter Fiscal 2016 Financial Results

– Net Sales Increase of 9.2% to $100.0 million –

– Comparable Sales Increase of 6.0% –

– Gross Margin Expanded 250 basis points –

MINNEAPOLIS–(BUSINESS WIRE)–Christopher & Banks Corporation (NYSE:CBK), a specialty women’s apparel
retailer, today reported results for the first quarter ended April 30,
2016.

Results for the First Quarter Ended April 30, 2016

• Net sales totaled $100.0 million, an increase of 9.2%, compared to
  $91.6 million in net sales for the first quarter of fiscal 2015.
• Comparable sales increased 6.0% compared to an 11.7% decrease in the
  same period last year.
• Gross margin increased to 37.7% of net sales, an improvement of 250
  basis points, compared to last year’s first quarter.
• Operating loss was approximately $1.0 million for the first quarter of
  fiscal 2016, including a non-cash impairment charge of $0.2 million.
  This compares to an operating loss of $2.5 million in the first
  quarter of fiscal 2015.
• Net loss totaled $0.2 million, or a $0.00 loss per share, compared to
  a net loss for the prior year period of $1.4 million, or a $0.04 loss
  per share.

LuAnn Via, President and Chief Executive Officer, commented, “We started
fiscal 2016 on a strong note, with better-than-expected financial
results across key measures, reflecting the progress we have made on our
key initiatives. We were well positioned in our merchandise assortment
as we optimized our mix of fashion basics and trend-right styles, and
saw strong growth in our special sizes offering across all channels. Our
e-commerce business also posted strong gains, primarily the result of
effective digital marketing efforts. In addition, our focus on cash
management resulted in a more than $4.0 million reduction in our use of
operating cash compared to last year’s first quarter, and our overall
inventory levels were very fresh at the end of the quarter. We intend to
continue to build upon our momentum while strategically managing our
inventory and controlling expenses in order to drive long-term
profitable, sustainable growth.”

Balance Sheet Highlights and Capital Expenditures

Cash, cash-equivalents and investments totaled $26.7 million as of April
30, 2016. Inventory per square foot, excluding in-transit and eCommerce
inventory, decreased approximately 9.9%, to $19.44 per square foot, as
of April 30, 2016, as compared to May 2, 2015. Capital expenditures for
the first quarter of fiscal 2016 were $3.6 million compared to $7.8
million in last year’s first quarter. Capital expenditures in the first
quarter this year primarily reflected investments in new stores and
technology associated with our Customer First initiative. For the first
quarter ended April 30, 2016, the Company had no outstanding borrowings
under its revolving credit facility.

Outlook for the 2016 Second Quarter and Full Fiscal Year

For the second quarter of fiscal 2016, the Company currently expects:

• total net sales of between $92.0 million and $96.0 million, as
  compared to net sales of $94.0 million in last year’s second quarter;
• gross margin to be 33.9% to 35.1% as compared to 32.9% in last year’s
  second quarter;
• SG&A to be between approximately $32.0 million and $33.0 million,
  compared to the $29.6 million of SG&A expense reported in the second
  quarter last year;
• inventory per square foot at the end of the quarter to be relatively
  flat as compared to the end of last year’s second quarter;
• depreciation and amortization to be approximately $3.2 million as
  compared to $2.9 million in last year’s second quarter;
• to open two Outlet stores and one MPW store;
• to close one Christopher & Banks (“C&B”) store and four Missy, Petite,
  Women (“MPW”) stores, and to convert two stores into one MPW store; and
• average square footage to be flat, as compared to last year’s second
  quarter.

For the 2016 fiscal year, the Company expects:

• capital expenditures to be approximately $12.5 million to $13.0
  million;
• nominal taxes, representing minimal taxes and fees;
• to open six new Outlets and three new MPW stores; and
• average square footage for the year to be down approximately 1% as
  compared to fiscal 2015.

Conference Call Information

The Company will discuss its first quarter results in a conference call
scheduled for today, June 9, 2016, at 8:30 a.m. Eastern Time. The
conference call will be simultaneously broadcast live over the Internet
at http://www.christopherandbanks.com.
An online archive of the broadcast will be available within
approximately one hour of the completion of the call and will be
accessible at http://www.christopherandbanks.com
until July 9, 2016. In addition, an audio replay of the call will be
available shortly after its conclusion and will be archived until June
16, 2016. This call may be accessed by dialing 1-877-870-5176 and using
the passcode 5023346.

About Christopher & Banks

Christopher
& Banks Corporation is a Minneapolis-based national specialty
retailer featuring exclusively designed privately branded women’s
apparel and accessories. As of June 9, 2016, the Company operates 508
stores in 45 states consisting of 315 MPW stores, 82 Outlet stores, 57 Christopher
& Banks stores, and 54 stores in its women’s plus size clothing
division CJ
Banks. The Company also operates the www.ChristopherandBanks.com
eCommerce website.

Keywords: Christopher & Banks, CJ Banks, Women’s Clothing, Plus
Size Clothing, Petites, Extended Sizes, Outfits.

Forward-Looking Statements

Certain statements in this press release are forward-looking
statements, made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements may use the words “expect”, “anticipate”, “plan”, “intend”,
“project”, “believe”, “drive” “in order to” and similar expressions and
include the statements that: (i) that the Company expects
to continue to build upon its momentum while strategically
managing its inventory and controlling expenses in order to drive
long-term profitable, sustainable growth; (ii) for the second quarter of
fiscal 2016, the Company currently expects: (a) total net sales of
between $92.0 million and $96.0 million, as compared to net sales of
$94.0 million in last year’s second quarter; (b) gross margin to be
33.9% to 35.1% as compared to 32.9% in last year’s second quarter; (c)
SG&A to be between approximately $32.0 million and $33.0 million,
compared to the $29.6 million of SG&A expense reported in the second
quarter last year; (d) inventory per square foot at the end of the
quarter to be relatively flat as compared to the end of last year’s
second quarter; (e) depreciation and amortization to be approximately
$3.2 million as compared to $2.9 million in last year’s second quarter;
(f) to open two Outlet stores and one MPW store; (g) to close one
Christopher & Banks stores, and four MPW stores; and to convert two
stores into one MPW store; and (h) average square footage to be flat, as
compared to last year’s second quarter; and (iii) for the 2016 fiscal
year, the Company now expects: (a) capital expenditures to be
approximately $12.5 million to $13.0 million; (b) nominal taxes,
representing minimal taxes and fees; (c) to open six new Outlet stores
and three new MPW stores; and (d) average square footage for the year to
be down approximately 1% as compared to the end of fiscal 2015.

These statements are based on management’s current expectations and
are subject to a number of uncertainties and risks, as well as
assumptions that, if they do not fully materialize or prove incorrect,
could cause the Company’s actual results to differ materially from those
expressed or implied by the forward-looking statements. Important
factors that could cause actual results to differ materially from
estimates or projections contained in the forward-looking statements
include, but are not limited to: (i) the inherent difficulty in
forecasting consumer buying and retail traffic patterns which may be
affected by factors beyond the Company’s control, such as a weakness in
overall consumer demand; adverse weather, economic or political
conditions; and shifts in consumer tastes or spending habits that result
in reduced sales or gross margins; (ii) lack of acceptance of the
Company’s fashions, including its seasonal fashions; (iii) the ability
of the Company’s infrastructure and systems to adequately support its
operations; (iv) the effectiveness of the Company’s brand awareness,
marketing programs and efforts to enhance the in-store experience; (v)
the possibility that, because of poor customer response to the Company’s
merchandise, management may determine it is necessary to sell
merchandise at lower than expected margins or at a loss; (vi) the
failure to successfully implement the Company’s strategic and tactical
plans and initiatives; (vii) general economic conditions could lead to a
reduction in store traffic and in consumer spending on women’s apparel;
(viii) fluctuations in the levels of the Company’s sales, expenses or
earnings; and (ix) risks associated with the performance and operations
of the Company’s Internet operations.

Readers are cautioned not to place undue reliance on these
forward-looking statements which are based on current expectations and
speak only as of the date of this release. The Company does not
assume any obligation to update or revise any forward-looking statement
at any time for any reason.

Certain other factors that may cause actual results to differ from
such forward-looking statements are included in the Company’s periodic
reports filed with the Securities and Exchange Commission and available
on the Company’s website under “For Investors” and you are urged to
carefully consider all such factors.

CHRISTOPHER & BANKS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
		Thirteen Weeks Ended
		April 30,				May 2,
		2016				2015
Net sales		$	100,033			$	91,621
Merchandise, buying and occupancy costs			62,321				59,412
Gross profit			37,712				32,209
Other Operating Expenses:
Selling, general and administrative			35,477				31,989
Depreciation and amortization			3,022				2,716
Impairment of store assets			168				—
Total other operating expenses			38,667				34,705
Operating loss			(955	)			(2,496	)
Interest expense, net			(39	)			(7	)
Other income			911				—
Loss before income taxes			(83	)			(2,503	)
Income tax provision (benefit)			84				(1,061	)
Net loss		$	(167	)		$	(1,442	)
Basic loss per share:
Net loss		$	(0.00	)		$	(0.04	)
Basic shares outstanding			36,922				36,845
Diluted loss per share:
Net loss		$	(0.00	)		$	(0.04	)
Diluted shares outstanding			36,922				36,845

CHRISTOPHER & BANKS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
		April 30,				May 2,
		2016				2015
ASSETS
Current assets:
Cash and cash equivalents		$	25,703			$	23,898
Short-term investments			1,001				12,382
Accounts receivable			5,780				5,659
Merchandise inventories			50,531				50,844
Prepaid expenses and other current assets			10,099				9,214
Deferred income taxes			—				3,170
Income taxes receivable			598				629
Total current assets			93,712				105,796
Property, equipment and improvements, net			60,344				51,270
Other non-current assets:
Long-term investments			—				1,906
Deferred income taxes			400				35,652
Other assets			557				812
Total other non-current assets			957				38,370
Total assets		$	155,013			$	195,436
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	18,494			$	15,499
Accrued salaries, wages and related expenses			6,744				5,988
Accrued liabilities and other current liabilities			22,516				22,818
Total current liabilities			47,754				44,305
Non-current liabilities:
Deferred lease incentives			9,974				7,891
Deferred rent obligations			7,468				6,972
Other non-current liabilities			1,346				1,202
Total non-current liabilities			18,788				16,065
Stockholders’ equity:
Common stock			468				469
Additional paid-in capital			126,081				124,855
Retained earnings			74,633				122,453
Common stock held in treasury			(112,711	)			(112,712	)
Accumulated other comprehensive income			—				1
Total stockholders’ equity			88,471				135,066
Total liabilities and stockholders’ equity		$	155,013			$	195,436

CHRISTOPHER & BANKS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
		Thirteen Weeks Ended
		April 30,				May 2,
		2016				2015
Cash flows from operating activities:
Net loss		$	(167	)		$	(1,442	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			3,022				2,716
Impairment of store assets			168				—
Deferred income taxes, net			(7	)			(883	)
Gain on investments, net			(911	)			(2	)
Amortization of premium on investments			9				16
Amortization of financing costs			15				15
Deferred lease-related liabilities			58				820
Stock-based compensation expense			253				639
Changes in operating assets and liabilities:
Accounts receivable			(1,713	)			(1,659	)
Merchandise inventories			(8,050	)			(5,525	)
Prepaid expenses and other assets			(980	)			(2,504	)
Income taxes receivable			(84	)			216
Accounts payable			1,971				(3,166	)
Accrued liabilities			1,294				1,626
Other liabilities			71				(112	)
Net cash used in operating activities			(5,051	)			(9,245	)
Cash flows from investing activities:
Purchases of property, equipment and improvements			(3,645	)			(7,825	)
Proceeds from company-owned life insurance			911				—
Maturities of available-for-sale investments			2,005				3,747
Net cash used in investing activities			(729	)			(4,078	)
Cash flows from financing activities:
Shares redeemed for payroll taxes			(23	)			(24	)
Net cash used in financing activities			(23	)			(24	)
Net decrease in cash and cash equivalents			(5,803	)			(13,347	)
Cash and cash equivalents at beginning of period			31,506				37,245
Cash and cash equivalents at end of period		$	25,703			$	23,898
Supplemental cash flow information:
Interest paid		$	47			$	26
Income taxes paid (refunded)		$	86			$	(299	)
Accrued purchases of equipment and improvements		$	1,769			$	1,795

Contacts

COMPANY:
Christopher & Banks Corporation
Peter G.
Michielutti, (763) 551-5000
Executive Vice President, Chief
Operating Officer and Chief Financial Officer
or
INVESTOR
RELATIONS:
ICR, Inc.
Jean Fontana, (203) 682-8200