Christopher & Banks (NYSE:CBK) managed to post 2Q earnings that was $0.09 a share - topping $0.03 consensus - and revenues of $106.6 million just marginally beat consensus. Shares have popped 10% earlier this week. Sales were up just 2.3% and same-store sales up 2.6%. However, gross margin was up to 35.3%, versus 33.5% in 2Q 2013.
Shares are up 70% since we first covered it back in March, where we debunked that it would be the next, now bankrupt, Coldwater Creek. One of the standouts was Christopher's revamp of its outlet operations, noting,
And unlike what some of the other apparel retailers do, Christopher is creating merchandise that's exclusive to its outlet stores. This is helping it create a sub-brand of sorts. By the end of fiscal 2015, about a quarter of its outlet merchandise should be "exclusive."
But it's now trading at 24x forward earnings, which is above our justified 20x multiple. With the run up in shares and the valuation more in line with peers, it would be advisable to hold off on going long here.
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