CBKC - Earnings call transcript Q1 2019 | Christopher & Banks Corporation

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Operator

Greetings and welcome to the Christopher & Banks Corporation Fiscal First Quarter 2019 Earnings 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. I would now like to turn the conference over to your host, Ms. ICR. with Fontana Jean you. Thank

begin. may You

Jean Fontana

will Thank Officer. you, us quarter you joining Richard today’s everyone. XXXX Chief President Executive Officer Good for Christopher morning, and call on today Presenting first Chief conference Thank Keri & Jones, earnings and Financial for Bundy, call. Melissa. be Banks fiscal Corporation’s

that issued this morning. This morning’s conjunction in company is with the the conference call earnings press release

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

Keri the turn will I Jones. that, over call to With

Keri Jones

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

drove not with merchandise progress new the revised our improvement UPTs and strategic combined particular, In first both guidance response enhancements, in level continued for, pleased planned initiatives. to the presentation reflect our first product of While we on and we higher have favorable made conversions quarter. our and the quarter which have are we do

favorable, we a ready and us our present Following makes that she responds. way it right for trend comp her to tough which a easy is she February in in the provide assortment improvement an and weather product we saw more our that became to tells shop, shop as when

Before the initiatives Comparable discussing results. sales further will in overview our as I weather weather. comps largely extreme a with first during February early were sales performance our were X.X%. course brief financial This merchandise result detail, in of pressured we saw arrivals. We declined a favorable to response of merchandise. our quarter more of periods spring seasonal impacted of positive when shift pleased the new provide

and the in inventory the last year. aged with marking down the inventory basis approximately We million year. same $X.X EBITDA This quarter row Adjusted as on inventory the period a cost a remain our we significantly To sales to grow give Merchandise ensure margin merchandise as penetration XX%, last due further omni-channel with increased occupancy promotions to de-leverage. with fresh. down higher capabilities. ended e-commerce and of associated to negative second points negative quarter of through were a QX despite margins greater comp comparable sales that compared was expanded merchandise high was points X increased the a at X down aggressive a weeks was levels basis X% quarter, margins. fulfillment spring this, a following benefited the in Gross healthy XX compared assortments our to from continued first million perspective XXX weeks on delivered of double-digit E-commerce increase. $X.X in our reduced merchandise to healthy the were X% rate that

initiatives and which omni-channel relevant inspiring her our more capabilities costs. strategic we made with assortment experience, strategies, marketing shopping promotional our expanding improving shopping our experience, to our Turning include goal progress a Beginning reducing and and our our curated, offer of experience. enhancing our and to continued enhancing execution effectiveness, on was

focused well as as fewer, on each deeper by basic newness but easier still month store have choices our bigger most to fashion the while our to buys end shop the categories. are Merchant’s the that quarter, we Most We made sell-throughs delivering stories assortments, into assortment exciting as we the Chief full began and experienced more of at is visually appealing. hit new higher first across narrowing

reporting are tops. pants respond flattering soft such more with believe as silhouettes attract and experience well of curated is we customers to drape assortment enhanced still program, casual by model Added higher seeing an a will customers stronger increase selling conversion. we we our more that existing brand. as as view our have Importantly, point style rollout front the We our new and trained to easy, to customer that associates of jumpsuits, with as well appeal this updated drives developed program. customers the that taking and this With are a selling a on simplified and as new our

outfitting and We assortment increase by also X% selling units by transaction helped and through conversion and initiatives have per the Combined, program. increased visual our store presentation style us in X.X% quarter. our our planning, these focused on rate

we customer focus omni-channel well strategy, shopping underway our experience to and improving the well loyalty with heightening on our grow our we made and on capabilities, the advancements marketing to promotional as work are drive expanding her have base. Turning marketing as on our

recently to our from two We hires talent brands. level marketing have retail added new with director well-respected

executive marketing have of nominated we Directors. In Board addition, seasoned to our a

We with continue our we Chief standing not strategy. In lead are are digital Marketing marketing a to still of the to advanced Officer marketing. in and experience meantime, hiring marketing invest stages in

our size of spend, three file. growing PLCC We the have on through efforts cards, fronts: maximizing and productivity total driving of loyalty our

our customers. alternative optimize of mailers This with marketing test most to to testing stores, to retail productivity e-commerce our identify and is offers continue our of intended channel types spend. across resonate We which promotions the direct

promotions our brand the streamlining are messaging our communicate and our this loyalty. channels. drive more we and increased value with refining our across clearly proposition interaction to will addition, We believe In enhance

our We remain a PLCC of with performance with tender basis first grow PLCC to pleased sales. share card. quarter, point In XX.X% the continued XXX increase the to of

spends per our As customer is visit PLCC XX% a and we rates a time. more higher over reminder, customer at that retain

and acquisition. the also positioned dollars we customer enhanced will continue We experience with we grow our are to shopping our marketplace base. invest into customer driving uniquely marketing believe We product can within that and

overlap developing the win a to Dress significant of Barn the the customer. regarding plan we We opportunity continue also recent to Barn, from and Dress see are announcement to the we discontinuation have with market market disruption benefit where

our sales cost. omni-channel a to XX.X% online, first Turning We our our we benefit into of quarter convenience store reducing the the customers, omni-channel stores increased while in business, goal for pickup at to buy with end driving launched providing our continue initiatives. in added of trip the quarter e-commerce as shipping the from also

as initiative, capability we XX% were enhanced channels. very stages look profitability stores. are as you in potential this capability, inventory We of While our this helps shipments from the calls. from first and optimistic we the our store that sales forward are well ship With through of about early quarter drive updating on incremental sent to improved productivity future believe to across

of potential to evaluate strategy. continue will this expansion We

reduce to to on Lastly, our ways focus structure. cost continue we

expense the annualized in last additional our in to We quarterly is are of savings to on we discussed on the fiscal track million that identified $XXX,XXX deliver savings in equating million annualized $X call. year last cost on This savings top $X.X this year. for we

with engaged As company estate in we to occupancy third-party mentioned we the press have us our the rates. reduce release, help recent high real

We savings of have we us. we have from work internally, the opportunity still but ahead already significant have achieved believe done we

project completed focused this fully initiative. are enable end QX the is able other the on is impact delivering critical that which the of to be providing we savings, to hold. runway which take expected to be estimated time of will We to quantify increased by our at strategies occupancy will This

summary, we path the In believe on that forward. we are right

communicate inspired make and value service. shopping enhancements experience, continue clearly customer We assortment, merchandise exceptional deliver to proposition our an our to provide

We she however shop orders and flexibly strong we online have now her business wherever whenever, and a to can growing chooses. and fulfill allowing

marketing We our that augmenting area our with our progress we new programs are so can here. team and in that accelerate tactics leveraging

forecast retail we approach a we additional will environment, continue we Finally, management in our our and the our remains with to to revising as cash identify reduce the as to That we are priority volatility efficiencies focus as business our a year. disciplined and inventory with expenses. strategy top execute Generating for results our continue both well to as work to the our cost. look in first said, on estate quarter costs savings consultants based on occupancy real third-party

our Importantly move strategic adequate with financing we revised guidance capacity with initiatives. have to our still forward

results With for the that, quarter to call over turn and first I will our our to outlook fiscal Richard XXXX. discuss

Richard Bundy

Good you, the everyone to compared Thank Beginning million joining sales last results you quarter, Keri. and year’s first for for us $XX.X first million average fewer extended early thank our X.X% today. was which quarter. by decreased $XX.X sales due we with to X.X%, morning, net decrease negatively was decline The believe of impacted through and of to March. snowy operating weather extremely the cold X.X% and an stores comparable a in

our with X.X% down X.X% and offset ship decline retail. points quarter increase sales weeks than we to period of of of in the net margin following The in continued first X.X%, volume to e-commerce XX% and up strong our from in decreased XX.X% the per X% basis saw XX.X% a last weeks of X a reflecting we sales offset mid-teens decline benefit more Average decreased from coinciding to compared remains cost higher for fulfillment higher e-commerce in with the omni-channel year. sales average capabilities. to was by and than X.X% sale decrease same de-leverage weather XXX Gross a improved related trends. store Total dollar as business as transaction momentum occupancy units Keri in in penetration stated, conversion traffic transaction unit pressure the comparable X As associated costs. investments comps the in by quarter more the with in stores due increase a with the a

compared a expect which points. lower of the process increased switch and shipments we result ship fulfillment by we the further margin as from optimize store algorithms. operating to Merchandise forward, to are quarter by XX percentage should Going costs our finding first driven lower basis in

year’s administrative partially to last $XX.X was insurance expenses million lower to were expenses medical decrease compared million and by and marketing offset general Selling, higher severance in first quarter. expenses. and The $XX.X due primarily

decrease to and amortization Depreciation XX volumes. million was lower million the of primarily a XX.X% decrease net due to to sales of due to in sales, increased The XXXX, store in assets April to was taken As first percentage $X.X impairment approximately basis SG&A count last de-leverage year’s average $X.X on fixed the quarter. on XXXX. points and of the leaseback and a sale due X% facility corporate third in fourth fiscal store-related quarters charges depreciation in compared lower

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

same was million, Excluding of a $X.X loss million share, measure, with May million as million under was X, EBITDA, million $X equivalents $X.XX. Adjusted measure, executive million non-GAAP of expense per and of in $X.X XXXX. net a Cash and negative the adjusted negative $X.X compared to $X.X severance a facility a non-GAAP year. borrowings availability of period totaled credit last the $XX.X cash outstanding

program. than Total reflect the at $XX,XXX with and period primarily to $X.X inventory support million expenditures quarter approximately composition million our Capital the shares aged for down the stores. and $XX.X of million during compared of down under first first in of stock to to with inventory our quarter $X.X associated first significantly. for Capital merchandising our last in $X million expenditures is of of investments in inventory expenditures capabilities end compared XXXX, We year. end approximately X.X% last $XX.X the at same quarter XXXX last and new quarter. million remaining e-commerce were healthier repurchase technology The the initiatives first year’s the year much first have was XXX,XXX quarter repurchased the

the contemplate Before tariffs turning does List on of X. to please guidance, potential not note that this impact

to the and options. mitigation monitoring our with adjustments shipments are other of negotiations and timing We vendors situation steps, including among the initiating

revising outlook, our our performance and retail guidance. right quarter based Strategically, are our year. improved moving we are environment, the through to first in direction in volatility year the Turning and we believe performance we the as on progress the full we expect we

our expanding to be to sales expect growth. driven capabilities, product omni-channel assortment and X% now promotions implementing up meaningful, our we marketing flat more and XXXX, drive customer fiscal to impactful in enhancing For by file overall the stores

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

to We the and XX are the of reductions. expecting closings from expire. occupancy next come to one XXXX of end the XX come to remaining the approximately X store over from stores leases half close improved at improvement starting margin one rates half planned merchandise years We with cost as to

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

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

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

based guidance, to our we on continue cash the necessary As operate Keri have this to of business. mentioned, availability

to with expect no outstanding year the under end facility. cash and credit positive our We borrowings

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

Thank at I you [Operator final this for Thank time. Jones, back there questions no turn floor any you. will the to you. are Instructions] comments. Ms.

Keri Jones

today. for you our joining Thank call

updating you. strategic continued when results. and look progress report we advancements Thank XXXX quarter to fiscal and second continued our to-date initiatives on to on We our we our forward make you

Operator

This you. conference Thank our for today. concludes

disconnect Thank your may for You lines. your you participation.

Christopher & Banks (CBKCQ) 11 Jun 192019 Q1 Earnings call transcript