Christopher & Banks Corporation Reports Third Quarter Fiscal 2015 Financial Results

MINNEAPOLIS–(BUSINESS WIRE)–Christopher & Banks Corporation (NYSE:CBK), a specialty women’s apparel
retailer, today reported results for the third quarter ended October 31,
2015.

Results for the Third Quarter Ended October 31, 2015

• Net sales totaled $103.6 million, as compared to $110.6 million for
  the third quarter of fiscal 2014. During the quarter, the Company
  operated an average of 3.0% fewer stores than during the comparable
  period last year, reflecting its MPW store conversion strategy; offset
  to some extent by new store openings, primarily outlets.
• Same-store sales decreased 6.5% in the third quarter of fiscal 2015,
  as compared to the third quarter of fiscal 2014; this follows a 6.4%
  same-store sales decrease in last year’s third quarter.
• Gross margin was 35.8% compared to 39.5% in the third quarter of
  fiscal 2014.
• Operating income was $0.3 million for the third quarter of fiscal
  2015. This compares to operating income of $9.3 million in the third
  quarter of fiscal 2014.
• Net loss totaled $0.3 million, or ($0.01) per share. Net income for
  the third quarter of fiscal 2014 totaled $9.0 million, or $0.24 per
  diluted share.

LuAnn Via, President and Chief Executive Officer, commented, “Our third
quarter results were in line with our guidance, despite a continued
difficult retail environment and unseasonably warm weather. Sales and
gross margin met our expectations and we ended the quarter with
inventory down approximately 14% on a per square foot basis as a result
of highly disciplined inventory management. We also drove significant
sales growth, in addition to higher gross margins, in our e-Commerce
business. We have taken a number of steps to drive improved performance
in the business and create a stronger foundation from which to execute,
including reorganizing our merchant team and the associated improved
processes, and capitalizing on the information provided by our retail
intelligence tool. Looking ahead, while we remain focused on these
initiatives as well as driving improved productivity in our stores, we
will also continue implementing our omni-channel strategy.”

Balance Sheet Highlights and Capital Expenditures

Cash, cash-equivalents and investments totaled $29.4 million as of
October 31, 2015. Inventory per square foot, excluding in-transit and
eCommerce inventory, decreased approximately 13.8% to $20.61 per square
foot, as of October 31, 2015, as compared to November 1, 2014. For the
third quarter ended October 31, 2015, the Company had no outstanding
borrowings under its revolving credit facility and capital expenditures
totaled approximately $5.1 million.

Outlook for the 2015 Fourth Quarter and Full Fiscal Year

For the fourth quarter of fiscal 2015, the Company currently expects:

• total net sales of between $91.0 million and $95.0 million, as
  compared to net sales of $98.0 million in last year’s fourth quarter;
• gross margin to be 30.4% to 31.6% as compared to last year’s 29.1%,
  which included a correction to occupancy expense which negatively
  impacted gross margin by 369 basis points;
• SG&A to be between approximately $33.2 million and $33.7 million,
  compared to the $31.4 million of SG&A expense reported in the fourth
  quarter last year;
• inventory per square foot at the end of the quarter to be slightly
  below the level at the end of last year’s fourth quarter;
• depreciation and amortization to be approximately $3.2 million as
  compared to $3.0 million in last year’s fourth quarter;
• to close two Christopher & Banks stores, one CJ store, and nine Missy,
  Petite, Women (“MPW”) stores; and to convert 20 stores into 10 MPW
  stores; and
• average store count to be down 1.6% and average square footage to be
  up 1.6%, as compared to last year’s fourth quarter.

For the 2015 fiscal year, the Company now expects:

• capital expenditures to be approximately $26.0 million to $27.0
  million;
• a tax rate of approximately 36.3%;
• the average store count to be down approximately 4.0% and related
  average square footage for the year to be flat as compared to fiscal
  2014;
• to open nine new MPW stores and 33 Outlet stores and to end the year
  with approximately 519 stores, of which 315 are MPWs, as compared to
  518 stores at the end of fiscal 2014; and
• to end the fiscal year with a total square footage increase of
  approximately 3.3%, as compared to the end of fiscal 2014.

Conference Call Information

The Company will discuss its third quarter results in a conference call
scheduled for today, December 8, 2015, 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 January 8, 2016. In addition, an audio replay of the call will be
available shortly after its conclusion and will be archived until
December 15, 2015. This call may be accessed by dialing 1-877-870-5176
and using the passcode 4706379.

About Christopher & Banks

Christopher
& Banks Corporation is a Minneapolis-based specialty retailer of women’s
clothing. As of December 8, 2015, the Company operates 540 stores in
45 states consisting of 79 Christopher
& Banks stores, 71 stores in its women’s
plus size clothing division CJ
Banks, 314 MPW stores and 76 Outlet stores. 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” and similar expressions and include the statements
that: (i) while the Company remains focused on its initiatives as well
as driving improved productivity in its stores, it will also continue
implementing its omni-channel strategy; (ii) for the fourth quarter of
fiscal 2015, the Company currently expects: (a) total net sales of
between $91.0 million and $95.0 million, as compared to net sales of
$98.0 million in last year’s fourth quarter; (b) gross margin to be
30.4% to 31.6% as compared to last year’s 29.1%, which included a
correction to occupancy expense which negatively impacted gross margin
by 369 basis points; (c) SG&A to be between approximately $33.2 million
and $33.7 million, compared to the $31.4 million of SG&A expense
reported in the fourth quarter last year; (d) inventory per square foot
at the end of the quarter to be slightly below the level at the end of
last year’s fourth quarter; (e) depreciation and amortization to be
approximately $3.2 million as compared to $3.0 million in last year’s
fourth quarter; (f) to close two Christopher & Banks stores, one CJ
store, and nine Missy, Petite, Women (“MPW”) stores; and to convert 20
stores into 10 MPW stores; and (g) average store count to be down 1.6%
and average square footage to be up 1.6%, as compared to last year’s
fourth quarter; (iii) for the 2015 fiscal year, the Company now expects:
(a) capital expenditures to be approximately $26.0 million to $27.0
million; (b) a tax rate of approximately 36.3%; (c) the average store
count to be down approximately 4.0% and related average square footage
for the year to be flat as compared to fiscal 2014; (d) to open nine new
MPW stores and 33 Outlet stores and to end the year with approximately
519 stores, of which 315 are MPWs, as compared to 518 stores at the end
of fiscal 2014; and (e) to end the fiscal year with a total square
footage increase of approximately 3.3%, as compared to the end of fiscal
2014.

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; (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.

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Contacts

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