Chirstopher & Banks Upgraded to Strong Buy Following Splendid Q1 - Analyst Blog
On Jun 18, 2014, Zacks Investment Research upgraded Christopher & Banks Corporation ( CBK ) to a Zacks Rank #1 (Strong Buy). Shares of this specialty retailer of women's fashion attire and accessories exhibited an impressive year-over-year return of 32.2%.
Why the Upgrade?
Christopher & Banks has been witnessing rising earnings estimates owing to impressive first-quarter fiscal 2014 results, on the back of gross margin expansion that stemmed from superior merchandise offering and enhanced inventory management strategies.
The company declared strong bottom-line results on Jun 10, 2014, wherein earnings of 7 cents a share fared better than the Zacks Consensus Estimate of 5 cents per share. Earnings also surpassed the comparable year-ago quarter's earnings of 2 cents per share.
Christopher & Banks has outperformed the Zacks Consensus Estimate in 4 straight quarters by an average of 110.9%.
However, net sales were a little disappointing during the quarter as it reflected a decline of 4.7% year over year to $103.4 million. Sales also came below the Zacks Consensus Estimate of $105 million. The decline in top line was due to fewer stores in operation than the last year as well as an inclement weather during the first half of the quarter. Moreover, comparable store sales (comps) declined 2% in the quarter as against a 23.4% increase last year.
Nevertheless, the downside in top line and comps did not affect the gross margin, which expanded 750 basis points (bps) to 36.7%.
Further, the company projected comps to increase in the low to mid-single digit range for the second quarter, while gross margin is expected to expand about 100-150 bps during the quarter.
Driven by an impressive first quarter, the Zacks Consensus Estimate for fiscal 2014 improved 9.1% to 36 cents per share in the last 30 days.
Other Stocks to Consider
Other well performing stocks in the apparel-shoe retail space include Citi Trends Inc. ( CTRN ) sporting a Zacks Rank #1 (Strong Buy) along with Foot Locker Inc. ( FL ) and The Men's Wearhouse Inc. ( MW ), both carrying a Zacks Rank #2 (Buy).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.