CBKC - Earnings call transcript Q4 2018 | Christopher & Banks Corporation

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Operator

Greetings and welcome to the Christopher & Banks Corporation Fourth Quarter and Full Fiscal 2018 Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. to conference like host, to now Ms. would turn over the your I ICR. Fontana Jean with you you, Thank begin. may

Jean Fontana

and press Banks Chief this Officer; conference conjunction in call Richard you, Thank Melissa. Jones, release fourth the Chief earnings & us Presenting issued on Good Bundy, you earnings fiscal today’s Company that quarter Keri conference Corporation’s be call call. Thank for morning, joining for today Executive Financial full President XXXX year will morning. is with everyone. and and Officer. morning’s the This Christopher

certain business initiatives, to and results and any forward-looking Jones. call. on and the the financial reflect turn and future Company During including address of release after release our Today’s in the the With call that filings this XXXX. of to more prospects, non-GAAP conference growth the to as and SEC forward-looking limitations, for to Act today risks results these or financial undertakes conditions, statements include non-GAAP The over measure Company’s Securities statements. to the actual Keri supplements limited earnings expectations using These meaning from call performance, are including I’ll we information well to to of Reconciliations uncertainties. revise in or statements obligation will call can that, items. could subject risks rationale cause this Litigation may but release its the Reform circumstances no found such description, events reference materially of date not within and press Private arise that earnings adjusted today’s to, including measures financial as plans uncertainties differ forward-looking measures GAAP operations, each statements tables. of refer and regarding of be Please the Company’s update

Keri L. Jones

Thank and us on call. today's joining Jean, you, for thank you

January sales we initiatives had through the we to In reflects fourth frigid were X% the increase fiscal comps flat third fourth quarter the single-digits the comparable the momentum top XX laid achieved quarter the quarter. in would the up the low X% XXXX. our reflects on in low X.X% in we for temperatures That comparable our sales that a that strategic single-digit we performance compared season progress improvement our was hampered performance Absent in increase have to significant fourth financial the press that believe expectations. the in and comp expected of year out in Our decline our January said on and last quarter. holiday a release sales for in post noted weeks we

particularly to in our favorably and As capability. in growing more, with our were saw advanced as more XX% new than visual business further we e-commerce inventory stores pleased our efforts. our arrived momentum We the respond our enhanced quarter omnichannel product third we merchandising, marketing increase our in strong the with assortment, customers sales doubling comparable

product net costs. and approximately assortment. $XX.X margin transit relevant fourth Briefly and highlighting inventory heading are more the fresher, improvement quarter ended to primarily into financial basis hand lower We XXX resulting with balanced, quarter in spring million. with well a we results our decreased positioned sales X.X% merchandise of Our down points significant from the excluding showed on with expansion also XX%

$X a shifted have the the would net year, last sales X.X%. XXrd on week from basis Excluding million decreased

in negative period merchandise with compared a to penetration comparable stated the increased offset sales negative As of increase last e-commerce basis XX same higher by million was in partially margin million X.X margin a sales. Adjusted the I Gross flat. a earlier were EBITDA year. point X.X

would last week Excluding have weeks EBITDA for like last adjusted shifting year. for contribution like to and year XXrd been the flat

on and focused and our made enhancing remain we expanding our strategic reducing shopping initiatives capabilities, promotions, developing costs. quarter the fourth our our more omnichannel the including execution impactful We experience, of During progress shopping initiative, for and further with believe have company. initiatives experience. foundation our to these improved our her drive enhancing on we Beginning simplifying solid we first established financial performance a

strides made easier and as assortment have our holiday strength categories motif relax in a well shop. We to relevant customers providing way a and across that several our assortment. curated as well including in sweaters presented saw is product for restyle We

accent carries margin great average builder which outfit addition sale as improved her rate in serves In her a accessories much we merchandised dollar and our a complete with delivered results as a potential piece. business higher help we

driving remain ahead buys, improved compelling with deeper visual flow, and inventory key growth relevant categories in Looking focused on we product and presentation.

shopping taken We experience. customer to steps also additional our elevate have

drive we opportunity to connection more fully Christopher in advantage Banks. store the more a our associates As competitive generate even and customers an strong that our loyalty has key sales. & believe to been said past this there importantly We for is greater to leverage

style the new selling training just skills program a with our and style and simplified our completed have outfit This of customers. We better equips launch the associates model. to

performance higher our to pilot deepen will instituted customer that these stores can associates productivity. productivity. progress drive to programs outperform sales the confidence loyalty that and team new we allow more which sales fully their metrics us chain improved The have we Additionally gives the evaluate that leverage and average drive

delivering compelling is promotion. initiative second Our

the offering Our customers to was that in appropriate for the margins to delivering right while strike balance compelling company. promotions are merchandise our goal

we us line with competitive We in from believe in year. Our were earlier promotions quarter largely fourth additional the the and starting helped season holiday gain promotions consistent environment benefited with sales. last during the which

In Monday rate of drove Friday met and season semiannual end addition traffic as and the Black goals. our delivered sale our promotions Cyber margin as effectively over well we the

wherever, drive shop whenever, company. to margin Number her optimizing she We allow giving will more committed continue to We promotions remain however our higher generate omnichannel and to wants. our designed growing customer to that offer targeted rates for three, our traffic business. options experience her and

demand to in capabilities. omnichannel our expand our this reflecting we store in XX% represented Ship fourth quarter quarter online potential grew and accounted and build sales million the in from X slightly e-commerce over initiative. Our of XX% the for continued as fourth the of revenue

these drove generated sales incremental they in the rate profit dollars. margin lower quarter, a While importantly

plan as optimize ahead of Looking to pressure us our from mitigate the we we through. model ship allowing store margin flow gross some the improve margin to

As future offer quarter locations continue ship XXX to this we we initiative. we opportunity evaluate store discussed last will in a from the and of

and online store seen business at buy on stores. in track customer have for purchase quarter. the ship launch provides first to In costs store item. nearly are traffic into we one an to additional us We to This our shipping least of the in drive XX% our reduce opportunity pickup

initiative help We Number our higher. to building us new selling loyalty continue are program retail e-commerce customer drive in to and four, will excited meaningful file. drive our to growth to even productivity well growing footprint. believe leverage our this as as store We metrics higher these

a As increase part efforts to of are drive our goal higher to we productivity transactions. on store

achieve an customers, increasing our the attracting this have reengaging to existing opportunity lapsed by We of value brand. lifetime to and new customers, customers

our credit our share. discussed been customer tender initiatives program label card the have loyalty As and focused private around in past

at new PLCC Our reflect XXX point a this front over share basis XX% the last same year. up accounts which our results tender fourth improvement quarter on was with period and XX% progress

acquire see experience customers & our are we our our of we nearly the growing points have loves and discuss chain inviting customer offering, we bankruptcies drawing enhanced file lapsed our generate buyer to of to sales capitalizing what way shopping presentation, comparable about One Bon-Ton disruption grow We're by stores basis continued ones. ramping overlapped market in efforts with visual new average. XX and is file that above more winning customers. that results back up on product to Banks. closures her Now new The the XXX from she competitor Christopher to our back by

list the quarter, direct mail discussed last expectations. acquired around the line see the in of In efforts with mailing to our pleased were redemption rate we terms we

future mailings insights use from acquisition these strategies. to the help inform customer will We

new will of marketing be we towards more Additionally, dollars acquisitions. shifting customer our

our are that quarter and stated initiatives annualized renegotiated take non-merchandise million cost we that the our in across of savings cost recognize believe to had on time reducing expanding will are base. five, Last we expenses. to longer-term we right X.X customer path results. yield While some we We structure. these Number

identified an have We opportunities for $XXX,XXX additional XXXX. fiscal in expense savings

drive to additional reductions foundation improved we underway us still realize have renegotiate conclusion as we the rent position plan we addition In that to we confident performance. financial we strategic and initiatives leases. have In the remain established

and initiatives seen have we drive that believe fiscal we quarter-to-date improved in performance maintaining our our position therefore us to guidance. weather, sales we are While related financial largely to XXXX pressure

dedication & discuss potential fourth results brand. us in I'll call outlook fiscal to want the thank Our XXXX. turn their team remains realize energized to hard that our and everyone Banks our of Christopher for and to Richard for and work to over full at With our the quarter I helping

Richard Bundy

Thank today. and us net fourth in fourth million decreased sales X.X% for compared results Good with to you joining $XX.X morning last thank to quarter Beginning everyone quarter. $XX.X you Keri. for the our year's million

for Excluding sales net have on sales attributed fewer quarter. aligning and of average in sales like and the decreased We comparable year would were to the a flat X.X%. X.X% essentially week in XXrd shifted stores operated basis week like last

X.X% a from in reflecting lower of retail continued increased the business of was points due product up a transaction quarter in sales comps XXX For with and offset X.X% increase to a XX% Gross with with partially per for conversion the due strong to to product lower unit our year. X.X% last due to period e-commerce capabilities. e-commerce compared our costs was decline and in margin The quarter higher basis increased the fulfillment merchandised invest momentum cost primarily stores. associated traffic margin sales. units to net point The as basis XX.X% average to down the mix same omnichannel dollar by Total penetration higher transaction. as ship in volume sale in X% offset average decrease partially by remained XX increase we

professional Going lower fulfillment which to the quarter. last fees percentage of from in decrease was primarily offset fourth with split by forward due general, to expenses and XX.X to the and quarter. store we medical partially result lower compared in The due ship expect fourth to year a higher last SG&A million cost to were shipments week XXrd process expenses. the further XX.X year's optimize administrative as should million Selling, associated compared

SG&A deleverage as million of last Depreciation amortization to As sales and increased net the million of X.X compared depreciation points to was $X.X completed facility approximately XX.X% a $X.X to corporate to We million due in stores. basis our volume to week quarter a XXX fourth store on XXrd year. sales of back impairment result lower due percentage lease charge as as year's of recorded that and lower store QX. sale related well last we the in underperforming non-cash a

Our prior fourth or loss $X.XX $XX.X or net to the was $X.X of share quarter $X.XX period year net per million million share. loss per compared a for

Excluding net $X.X loss per negative a the in XXth long non-GAAP the fourth EBITDA live to of $X.XX week. for included adjusted measure XXXX $X.X Adjusted was impairment of negative year. approximately was $XXX,XXX a $X.XX per in share period share related last $X.XX a per a a the quarter million quarter the fiscal same year. share compared or million fourth non-GAAP this measure costs loss, to The of assets,

to ended to contribution shifting approximately turning we would the have flat to and payment million like for flow primarily week XXrd end receipt due the Excluding adjusted to a and decrease EBITDA the year. like quarter and equivalents cash balance XX.X The with approximately $XX.X of of sheet, million the related quarter obligation. cash fourth last weeks, the in the of been timing to inventory year now compared ago. last fourth was the at cash year

at shipments payments we that had million and at the under some Total quarter for revolving million the the as recall the of end We quarter. and into no inventory to same XXXX sufficient our credit availability ABL was you XXXX. the expect $XX inventory quarter As fourth fourth in we the compared end year. of our fourth borrowings period outstanding said no last facility delayed for of debt $XX.X QX push to the under

associated inventory inventory. of and down expenditures excluding As are Keri stated in hand level our XX% we with transit our compared $X.X of with the was year's last leaseback and quarter ended the were $XXX,XXX to corporate $XXX,XXX on XXXX improvements comfortable approximately for Capital fourth of million fourth freshness both sale quarter. facility. in the we and quarter this of our to related with agreement

in weather, performance to progress large outlook, are as the our soft quarter-to-date the expect believe to were improved moving Turning we part right direction while strategically due year. we through we results we in and

XXXX guidance. our we are reaffirming such As fiscal

For fiscal the X% E-commerce expanding as launch driven result contributor our implementing file promotions the to the stores, in from drive to are range to be in X% Ship store sales low continued our capabilities, quarter plan a to product to initiative. meaningful, to the we launched of double-digit expected a pickup and in growth of and be a fourth marketing buy XXXX. expect increase omnichannel impactful assortment customer XXXX enhancing by growth total overall comp our scheduled sales omnichannel quarter in more for first meaningful store growth. online the single-digit plan in to

the initiatives, omnichannel as and disciplines of result XXX gross reduction of expect a management cost. occupancy improved our XXX margin expansion around We supply fiscal in promotions, continued points and XXXX inventory including of to greater chain basis

expecting are reductions. to to to the range next leases remaining the third over XX cost end improvement starting at and stores store expire. of margin XX plan from to years the come two of come with occupancy as closings one XXXX thirds the merchandise We from close improved We two

open to new to stores plan XX X year. also per We

making on been our have expense progress reduction initiatives. We considerable

more from fiscal with leverage of cost expect $X Coupled basis points from achieve benefit in annualized to sold SG&A. SG&A in cost to savings and we in XXX leverage both growth expect sales million than We to XXXX. XXX planned across goods

Now we turn the call the Q&A begin operator the over to session. will to

Operator

Instructions]. [Operator

with & your line question first Hamblin proceed question. Company. Dougherty of Our Please the from Jeremy with comes

Jeremy Hamblin

the seeing because of you're me wanted see could from over some you I to number? quarter? terms more on could QX very of an or plan, average to provide give if even quarter-to-date what three strong you you you seeing just saw little a XX% see clarify in if I secondly last provide deceleration saw weather. obviously significant could overall wanted some be clearly would an think e-commerce you're you're bit from you color a But running then than if quarter-to-date And one, on I color perspective in morning. seeing trends weeks Good you're what impact magnitude below that of e-commerce it colder the in though the helpful

Keri L. Jones

with Yes, that gives us maintain largely of small take mid what believe that characterize the timeframe. so the as of February saw season I towards the I in percentage trend one that we late certainly the spring would a the to Jeremy. related. to -- and will small date outlook represents January year for What smaller quarter to line a is percent really weather we the year, sales confidence

buying our comes so are into when she As she's store conversion and rates store. up she's our in

we a up while quarter, at year. the fourth the XX% last growth, e-com slightly just it's strong Our not of is number quarter under double-digit that e-com obviously through rate QX ran

sales the have we that once that and the to the inventory return weather up, will believe we're rates we believe so conversion we right closer seeing plan breaks. the in And store, to

Jeremy Hamblin

for you I up like were that, you're QX saying think Okay, so in and under by the running e-commerce, XX.X% you're just single-digit high so just quarter-to-date?

Keri L. Jones

double, very that to to so margin, single in strong. High close right

Jeremy Hamblin

a and -- sense the despite margins Okay, terms product they translating you you XXX comp, translate this up quarter-to-date can product the what of bps does give into us over I margin, quarter of that's in had on what about flat said how in fourth here were side? think

Keri L. Jones

driven cost. think profit call quarter the Well, by lower upside we're fourth product increased to side we too in improved it's seeing from cost mentioned so I merchandise the but margin soon that was

gravitating feeling we're both so our and when in we I watching business And our the is like and she's goal she's fresh to promo closely with then I challenging the line the our So see last up. the largely and our stay situation. weather rates conversion best can online are that obviously to We're inventories are say rates product with and to very year. said our in we would ensure continue that store

Jeremy Hamblin

your and the this then XXst kind April you Okay, on you let's March for in important does of Easter other year. it that QX? I the What promotional do versus here in some more what and the think for friends year rest have is of know last that's move to thinking into the QX of mean family of to end about and calendar promotions going and QX, quarter

Keri L. Jones

family, us. going I’ll say be with last for to inventory big mailer like our we're advantage friends and the we our so show We've And our promotional to that have about calendar and products. the all excited aligned are augmented which we are going think is products expanded I a year that. we that's support will means for friends and we've great cleaner, fresher new have coming pre-Easter to family levels be said

talked to we've promotions in So desirable. a to the stacking the promotions that minimizing we that of in can highly past addition about product our that so is really promote use

So a this and and putting like muscle you year. and big we're lineup this spring more family the is event friends it said excited about for we're behind

Jeremy Hamblin

wanted much? deployed I of end think speak, Generation if driven was has on wanted had a conversations December the couple a at that interesting buyback in with developments, of how the I to you of that this time post One, the any so share company. to share acquiring Okay, CSC at buyback point I plan -- you been and plan announced

Richard Bundy

XX-K of Yes, purchases have active that we this We'll we're the then through quarter. end the purchased have making still in been end December the Jeremy amount and of on but been the repurchase. share in our we report we of as

Jeremy Hamblin

far? Okay, can have you much share you how with so repurchased us

Richard Bundy

$XXX,XXX. over just been It's

Jeremy Hamblin

dropped is there's you been conversations? has any have pursuit, their this CSC something follow-up additional had then And conversations,

Keri L. Jones

additional no conversations. had We

Jeremy Hamblin

around and point know, I you structure do or are this back think front scour it's X.X another cost on this the cost sales point had hard you and What sales there lot you at additional is cut then to identified some million, a do more, opportunities to you out as to -- to looks you the key I to can of structure? identified had that wanted come continue driving really that are at to think really be that you've like and commentary you your opportunities savings. you XXX,XXX Okay, because going go cut more think there of

Richard Bundy

some Yes Jeremy. still there after. We we're are believe that going that cost additional reductions

up them right things able some Some we the but still we're after increases away contracts there and SG&A we're to leverage. the opportunity of the when coupled where go additional sales to not is see come really going believe is with that

Keri L. Jones

emphasize money that was the was just we the non-merchandise to saving much on facing not a too much so consumer procurement. I of want cost of way in save

addition spend our marketing In as place we've a put things look of we to in more understand and at that spend to how effectively. to tools lot

to opportunity I business. so our And it's just for savings. impact reemphasize it additional facing, ability wanted not But to do doesn't consumer we see that the drive

Jeremy Hamblin

[Keri use terms how of view and you needed thinking and you that how your credit or of that, to Richard tend need year, of thinking be year capital and the I about you seasonality to that recover where the to Okay, what's a know I first, usage you should general you as in capital finished drawdown have path the QX, up we and would your cash timing of was terms access where some daily sources of how structure cash then have of and capital, you might the your about and] you ask changes are in some for but close year-over-year structure in the would take, during that there would line thinking that if [ph] typical the the see and need in and out XXXX? cash the of cash about flow you about cash

Richard Bundy

every basis and that's accessing is to we're get that we managing our I will typical would of of build see the we ended draw on would and Sure Jeremy, that that And making that back sufficient can. we're cash kind return and towards sure and watching up should that follow improvement to the this about, ABL a talked driving daily the need when capital planning where what end our above it quarterly we'll is we we at year utilize. our which build year the us you feel that say downs and same or that with throughout be at. year we're line our levels we as

Jeremy Hamblin

luck guys. good Great, thanks,

Keri L. Jones

Jeremy. Thanks

Operator

Thank you. comments. back turn now for the Keri to Ladies and Jones closing any I'll floor gentlemen

Keri L. Jones

Thank and initiatives. strategic We've making you developing for of in way our come today. progress long a call joining on terms our

We expect a create execution growth. the of profitable sustained initiatives for our will platform

Banks realize I in forward hard potential brand. want us the next Our look you to Christopher updating at for our full very & thank team dedication work and to call. everyone We remains energized their much. on Thank of to this and you helping

Operator

This Thank today's teleconference. concludes you.

You may your participation. disconnect your lines at this time. Thank you for

Christopher & Banks (CBKCQ) 13 Mar 192018 Q4 Earnings call transcript