Merchandise assortments perform well at Coldwater

26 Nov '09

5 min read

• Net loss for the three-month period was $34.0 million, or $0.37 per share, compared with net loss of $1.3 million, or $0.01 per share, for the three-month period ended November 1, 2008.
• Adjusted net loss on a non-GAAP basis for the third quarter was $3.9 million, or $0.04 per share and excludes the non-cash charge to income taxes of $26.3 million, or $0.29 per share, related to a valuation allowance against net deferred tax assets, and a $3.8 million after-tax charge, or $0.04 per share, related to the separation from our former CEO.

Dennis Pence, Chairman and Chief Executive Officer of Coldwater Creek, commented, "While we are pleased with the strength of our merchandise assortments and our increased same store sales, our strong top line performance came at the expense of margin and increased promotional costs. We are taking steps to improve merchandise margins through changes in pricing and sourcing, while improving the effectiveness and efficiency of our advertising and promotional strategies. We believe that these changes will result in improvements in our long-term financial performance, while continuing our success in providing a strong and compelling assortment of product to our customers."

First Nine Months Operating Results

• Net sales were $720.2 million, compared with $741.0 million in the first nine months of fiscal 2008. Sales from the retail segment, which includes the Company's premium retail stores, outlet stores, and day spa locations, were $561.4 million versus $551.7 million in the first nine months of fiscal 2008. Direct sales (phone and internet) were $158.8 million, compared with $189.3 million in the same period last year.
• Gross profit for the first nine months of fiscal 2009 was $244.0 million, or 33.9 percent of net sales, compared with $274.6 million, or 37.1 percent of net sales, for the first nine months of fiscal 2008. The decline in gross profit was primarily due to lower merchandise margins resulting from increased promotional activity, and lower initial markups, as well as deleveraging of fixed occupancy expenses.
• Selling, general and administrative expenses for the first nine months of fiscal 2009 were $273.7 million, or 38.0 percent of net sales, compared with $285.0 million, or 38.5 percent of net sales, for the first nine months of fiscal 2008. The decrease in selling, general and administrative expenses of approximately $11.4 million was primarily related to lower employee costs and reduced marketing expenses as well as other related costs. These decreases were partially offset by former CEO separation costs, increased marketing expenses, and higher retail wages in the third quarter of 2009.
• Net loss for the nine-month period was $46.5 million, or $0.51 per share, compared with a net loss of $7.4 million, or $0.08 per share, for the first nine months of fiscal 2008.
• Adjusted net loss on a non-GAAP basis for the nine-month period was $16.3 million,or $0.18 per share, and excludes the non-cash charge to income taxes of $26.3 million, or $0.29 per share, related to a valuation allowance against net deferred tax assets, and a $3.8 million after-tax charge, or $0.04 per share, related to the separation from our former CEO.

Coldwater Creek Inc

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