Cache Inc: triples Q2 profit; a strong performance

19 Aug '11

5 min read

Gross profit for the second quarter of fiscal 2011 was $27.5 million, or 45.7% of net sales, compared to $24.9 million, or 44.1% of net sales, in the second quarter of fiscal 2010. For the six months of fiscal 2011, gross profit was $49.4 million or 44.0% of net sales, compared to $41.6 million or 39.6% of net sales in the first six months of fiscal 2010. The increase in gross margin for the first six months of fiscal 2011 was primarily driven by an increase in full-price sales, an increase in initial mark-up and a decrease in markdowns as a percent of sales, as well as the leverage of fixed occupancy and operational costs, as compared to the prior year.

In total, operating expenses for the second quarter of fiscal 2011 were $23.4 million, or 38.8% of net sales, as compared to $23.5 million, or 41.5% of net sales, in the second quarter of fiscal 2010. For the first six months of fiscal 2011 operating expenses were $46.5 million, or 41.4% of net sales, compared to $46.8 million, or 44.6% of net sales, in the first six months of fiscal 2010.

At July 2, 2011, cash and marketable securities totaled $27.3 million, as compared to $30.9 million in cash and marketable securities at July 3, 2010. Total inventory at cost decreased 10.1% at quarter end from the prior year period.

Store Opening Plans
During the second quarter, the Company did not open or close any locations, ending the quarter with 280 stores in operation. For fiscal 2011, the Company expects to open no new additional stores and close two additional existing locations, ending the year with 278 locations and approximately 565,000 square feet in operation.

Second Half Fiscal 2011 Outlook
For the second half of fiscal 2011, the Company currently expects comparable store sales to increase in the mid-to-high single digit range following a decline of 3.7% in the second half of fiscal 2010. The Company currently expects to report second half net income per diluted share in the range of $0.18 to $0.22, which compares to a net loss per diluted share of $1.50 last year, inclusive of $1.04 in charges, relating to non-cash impairment of fixed assets and intangible assets, a non-cash valuation allowance against deferred tax assets, as well as one-time legal costs.

For the third quarter of fiscal 2011, the Company currently expects comparable store sales to increase in the mid single digit range, following flat comparable store sales performance in the third quarter of fiscal 2010. The Company currently expects third quarter fiscal 2011 net loss per diluted share in the range of $0.06 to $0.08. This compares to a net loss of $0.39 per diluted share in the third quarter of fiscal 2010, inclusive of $0.08 per diluted share in legal costs.

Cache Inc

More Cache Inc News... More Apparel/Garments News - United States Of America...