Specialty store retailer Christopher & Banks logged increases in earnings and sales in its third quarter, but its same-store sales declined and its forecast for the current month suggested a further erosion in consumer purchasing.

During the three months ended 25 November, net income at the Minneapolis, Minnesota-based firm rose 5.7% to US$9.2m from $8.7m in last year's quarter. Earnings per diluted share were flat at 24 cents in both periods.

Quarterly net sales were up 6.8%, to $139.3m from $130.5m, but declined 1% on a comparable-store basis.

Joe Pennington, chief executive officer, commented: "The customer response to our product assortment was not as favourable as expected during the third quarter.

"Merchandise margins were very strong early in the quarter but came under pressure as sales softened in October and November. We are taking all of the necessary measures to ensure that our holiday merchandise miscue are contained and do not impact our spring season business."

However, the fixes may come too late to benefit the current month, the first of Christopher & Banks' fourth quarter. Pennington said that December same-store sales are expected to decline between 6% and 7%, despite improvement as the month has progressed.

The current month is Pennington's last as CEO. After accelerating its succession timetable, as reported by just-style.com last week, C&B will transfer the CEO post to Matthew Dillon on 1 January 2007, two months ahead of the original plan. Dillon is currently president and chief merchandising officer of the company.

For the nine months, net income rose a brisk 33.8% to $31.8m, or 86 cents a diluted share, from $23.7m, or 66 cents. Sales were up 13.6% to $413.3m while same-store sales escalated 4%.

The company, which operates 779 stores in 45 states, expects diluted earnings per share in the fourth quarter to decline to between 13 and 14 cents from 18 cents in the final quarter of 2005.
By Arnold J Karr.