Third Quarter of Fiscal 2013 Operating Results
Consolidated net sales were $154.5 million, compared with $188.1 million in third quarter 2012. Net sales from the retail segment were $120.7 million, compared with $147.2 million in the same period last year. Comparable premium retail sales declined 16.8 percent for the quarter. Net sales from the direct segment were $33.7 million, compared with $40.9 million in the same period last year.
Consolidated gross profit was $48.2 million, or 31.2 percent of net sales, compared with $66.1 million, or 35.1 percent of net sales, for the third quarter of 2012. The 390 basis point decline in gross profit margin was due to deleveraging of buying and occupancy expense and lower merchandise margins reflecting increased promotional activity.
Selling, general and administrative expenses (SG&A) were $70.8 million, or 45.9 percent of net sales, compared with $76.1 million, or 40.5 percent of net sales, for third quarter 2012. The decrease in SG&A was across all categories with the most significant reductions coming from marketing and employee-related expenses.
Net loss was $23.8 million, or $0.78 per share, and included
(i) other gain, net, of $8.0 million, or $0.26 per share, due to the change in the fair value of the derivative liability related to the Series A Preferred Stock issued in July 2012;
(ii) a pre-tax charge of $2.3 million, or $0.07 per share, for severance and other expenses associated with the Company's cost restructuring program;
(iii) a non-cash asset impairment charge of $2.7 million, or $0.09 per share, related primarily to 27 under-performing stores; and
(iv) a non-cash income tax charge of $2.6 million, or $0.09 per share, related to a valuation allowance against previously recorded net deferred tax assets. This compares to third quarter 2012 net loss of $20.5 million, or $0.67 per share, which included other loss, net, of $6.8 million, or $0.22 per share, due to the change in the fair value of the derivative liability.
Adjusted net loss for the third quarter of fiscal 2013, excluding the gain on the derivative liability, severance expense, non-cash impairment charge and non-cash income tax charge, was $24.2 million, or $0.79 per share. This compares to an adjusted net loss of $13.7 million, or $0.45 per share, for third quarter 2012, excluding the loss on the derivative liability.
"In response to the disappointing performance of our fall merchandise, we took swift action early in the third quarter to adjust our holiday assortment, and we experienced a meaningful improvement in full-priced selling as holiday product flowed into stores starting in mid-October. During the quarter we also implemented a cost reduction program, which is expected to generate $20-$25 million in expense savings next year," said Jill Dean, President and Chief Executive Officer of Coldwater Creek.
"While we are encouraged by the favorable customer response to recent deliveries, the holiday selling season is still underway and the environment remains highly competitive. Moving ahead, we believe the essential steps to accelerate our turnaround and to deliver stability to our top-line involve successful execution of our strategic merchandising and marketing initiatives, aggressive cost cutting measures and disciplined inventory management."
Apparel/Garments | On 26th Jun 2017
E-commerce operators and TDS (tax deducted at source) deductors can...
Textiles | On 26th Jun 2017
The Tiruppur Exporters' Association (TEA) has again urged Union...
Textiles | On 26th Jun 2017
The export promotion schemes will continue under GST regime, said...
Hindoostan Innovation Centre
‘Modern technical textile is an indispensable tool for science and...
Mukesh Agarwal & Rajesh Agarwal
Madhuram Fincap Pvt Ltd
Increasing prices and lack of demand main issues facing industry
Every market region has its own culture and trends
Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...
InvestKonsult Sweden AB
Investkonsult Sweden AB has been buying and selling second-hand textile...
Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...
"Now we can see the Russian trend in international fashion. And Russian...
Gildan Activewear SRL
Gildan Activewear, a manufacturer and marketer of branded clothing and...
Bridal couture created with rich Indian heritage, exquisite craftsmanship...