By Viraj Nair

BANGALORE, Jan 6 (Reuters) - Christopher & Banks Corp (CBK.N) reported a quarterly profit at the low end of its outlook range issued last month, missing market estimates, hurt by a higher-than-expected tax rate, sending its shares down 12 percent in after-market trade.

Christopher & Banks

The women's apparel retailer expects the overall gross margin rate for fiscal 2010 to be slightly higher than in fiscal 2009.

"The outlook is conservative, particularly on the gross margin line, because I think they have limited clearance for inventory compared to last year. So, that should help their gross margin," Sterne, Agee & Leach analyst Margaret Whitfield said.

Gross margin expansion of 510 basis points exceeded the company's expectations in the third quarter.

The company, which has reported fourth-quarter losses for the past several years, given that it includes two post-holiday months, said comparable store sales are expected to decline in the high single digits for the fourth quarter.

For the third quarter ended Nov. 28, 2009, the company earned $6.9 million, or 19 cents a share, compared with $3.9 million, or 20 cents a share, a year ago.

According to Thomson Reuters I/B/E/S, analysts on average had expected earnings of 21 cents a share -- at the high end of the company's outlook.

As it had forecast last month, revenue came in at $132 million. Same-store sales fell 8.4 percent.

Last month, the company released preliminary results for the third quarter that had exceeded market expectations, helped by cost cuts and higher gross margins.

The effective tax rate for the quarter was 29.6 percent, up from the previous outlook of 22 percent.

"There was a 3-cent penalty from the tax rate, everything else was pretty good," analyst Whitfield said.

Shares of the retailer fell 12 percent to $6.71 in extended trade. They closed at $7.66 Wednesday 6 January on the New York Stock Exchange. (Reporting by Viraj Nair in Bangalore; Editing by Maju Samuel)