MINNEAPOLIS _ Switching to a new e-commerce system hurt Christopher & Banks' second-quarter results, but the company's CEO said the change was needed for the women's retailer to progress in the long term.
After the company reported worse-than-expected results Tuesday, shares of its stock plunged 21.4 percent, closing at $1.62.
Results for the quarter failed to meet analysts' and the company's own expectations.
"Overall, results for the second quarter were below our expectations and we acknowledge that the significant changes we have made for the long term have led to some sales volatility in the short term," LuAnn Via, the company's president and CEO, said in a statement.
The company, headquartered in suburban Minneapolis, lost $3.9 million in the quarter, or 11 cents per share, compared with a loss of $700,000, or 2 cents per share, in the same quarter last year. Two analysts covering the company expected the company to report a net loss of $2.36 million, or 6 cents per share.
Same store sales, a critical metric among retail companies, were down 5.8 percent for the quarter. In the comparable quarter last year, same store sales dropped 12.4 percent.
Overall sales for the quarter were $89.9 million, down 4.3 percent compared to last year.
Via sorted the sales shortfall into four factors: softness in the outlet channel; a shift to a new e-commerce platform in mid-May; timing of a May sales event; and merchandise that didn't meet expectations.
In a conference call with analysts, Via attributed one-third of the sales shortfall to the e-commerce platform. The company had expected some sales impact from the conversion in the quarter but suffered more than expected due to technical difficulties and slower adoption by customers.
"We had to do it," Via said of the conversion. "The capability going forward is way beyond the hiccups we had in the second quarter."
Via said in the call that adoption of the new platform has been improving and e-commerce sales in mid-July and August were up double-digits.
