Women's apparel retailer Coldwater Creek Inc. (CWTR), Wednesday reported a swing to loss in the second quarter, however, in line with the Street expectations. Revenues for the quarter dropped with comparable premium store sales declining 10.2% from last year. The company said its quarterly results were benefited by better traffic and improved conversion rates.
The Sandpoint, Idaho-based company posted a net loss of $4.9 million or $0.05 per share for the second quarter, compared to net income of $3.1 million or $0.03 per share in the prior year quarter. On average, 10 analysts polled by Thomson Reuters expected the company to report a loss of $0.05 per share for the second quarter. Analysts' estimates typically exclude special items.
Second quarter net sales declined to $225.2 million from $241.4 million in the same quarter last year. Eight analysts had a consensus revenue estimate of $222.05 million for the second quarter.
Daniel Griesemer, president and chief executive officer of Coldwater Creek, said, "Our second quarter results, which were in line with our expectations, reflected a meaningful improvement in our sales trends driven by a combination of better traffic and improved conversion rates as compared to the first quarter, as well as our continued disciplined approach to inventory and expense management."
Sales from the retail segment, which includes premium retail stores, outlet stores, and day spa locations, dropped to $183.4 million from $189.4 million in the year-ago quarter. Comparable premium store sales declined 10.2% over last year. Direct sales, phone and internet, dropped to $41.8 million from $52.1 million from a year earlier.
Gross profit for the second quarter was $75.7 million or 33.6% of net sales, compared to $95.6 million or 39.6% of net sales in the previous year quarter. The decline was due to lower merchandise margins resulting from increased promotional activity as well as deleveraging of occupancy expenses.
During the quarter, Coldwater Creek opened four new premium retail stores, bringing its premium retail store count at the end of the second quarter to 355 stores. The company has opened nine of its 10 new stores planned in fiscal 2009.
Total inventory for the quarter increased to $141.3 million from $127.1 million at the end of the second quarter of 2008.
For the first-half of 2009, Coldwater Creek reported a net loss of $12.5 million or $0.14 per share, compared to a loss of $6.1 million or $0.07 per share in the previous year quarter.
Net sales for the year-to-date period declined to $453.6 million from $512.5 million in the previous year period.
For the third quarter, Coldwater Creek anticipates improvement over second quarter results, and continues to expect SG&A savings of $30 million for fiscal 2009, expecting to end the year with at least $100 million in cash.
Looking ahead, the company said it plans to make additional investments in marketing and inventory to drive traffic and sales.
Among others in the industry, New York-based women's specialty retailer Ann Taylor Stores Corp. (ANN) reported a loss for the second quarter compared with a profit last year, daunted by restructuring costs and lower sales. Looking forward, the company projects a sequential improvement in both total sales and gross margin rate in the third quarter.
Hingham, Massachusetts-based women's apparel retailer Talbots Inc (TLB) posted a first-quarter loss compared to a profit last year, and said it would reduce corporate headcount across all locations by about 20%.
Coldwater Creek shares closed Wednesday's regular trading session at $7.18, up 3 cents on a volume of 1.02 million shares. However, in after-hours, the share lost or 23 cents or 3.20%, trading at $6.95.
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