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Dresses & value-priced accessories perform well at Cache
21 Jul '09
6 min read
• Adjusted net income for the first six months of fiscal 2008 was $1.9 million or $0.14 per diluted share and excludes store closure and management change costs.
Gross profit for the second quarter of fiscal 2009 was $25.2 million, or 44.4% of net sales, compared to $34.2 million, or 46.2% of net sales, in the second quarter of fiscal 2008. For the first six months of fiscal 2009, gross profit was $47.0 million, or 42.8% of net sales, compared to $62.6 million, or 44.2% of net sales, in the first six months of fiscal 2008. The decline in gross profit margin for the second quarter and first six months of fiscal 2009 was primarily driven by deleverage in occupancy costs resulting from lower sales. This was partially offset by higher initial markup due to improved sourcing and reduced freight costs, as compared to the prior year.
In total, operating expenses were $23.9 million, or 42.0% of net sales, as compared to $31.0 million, or 41.9% of net sales, in the second quarter of fiscal 2008. For the first six months of fiscal 2009, total operating expenses were $48.2 million, or 43.9% of net sales, compared to $62.9 million, or 44.4% of net sales, in the first six months of fiscal 2008.
Operating expenses for the first six months of fiscal 2008 included $2.9 million of charges, primarily related to store closures. The decrease in operating expenses for the quarter and first six months of fiscal 2009 was primarily driven by a reduction in store payroll, depreciation and advertising costs, lower general and administrative costs and the effect of the above-mentioned one-time charges incurred during the first six months of fiscal 2008.
At June 27, 2009, cash and marketable securities totaled $34.8 million and compares to $27.4 million in cash and marketable securities at June 28, 2008. Total inventory at cost decreased 36% at quarter end from the prior-year period. Working capital decreased by $2.2 million to $45.7 million from $47.9 million at June 28, 2008, primarily due to reduced profitability.
Third Quarter Fiscal 2009 Guidance:
The Company is introducing guidance for the third quarter of fiscal 2009. The Company estimates net sales in the range of $48 million to $50 million, which compares to actual net sales of $58.1 million in fiscal 2008. This guidance assumes comparable stores sales in the third quarter of fiscal 2009 will decrease in the mid-to-high teen percentage range and compares to a comparable store sales decrease of 4% in the third quarter of fiscal 2008.
Loss per share for the third quarter of fiscal 2009 is estimated in the range of ($0.22) to ($0.17), which compares to actual third quarter fiscal 2008 loss per share on a GAAP basis of ($0.12), which included charges of $0.02 per diluted share for store closures. Actual adjusted net loss for the third quarter of fiscal 2008 was ($0.10) per share and excluded store closure costs.
Store Opening Plans:
During the second quarter, the Company opened no new stores and closed three locations, ending the period with 291 stores in operation. For the remainder of fiscal 2009, the Company plans to open one or two additional new stores and close approximately two or three locations, ending the year with approximately 289 stores and approximately 585,000 square feet in operation.
Gross profit for the second quarter of fiscal 2009 was $25.2 million, or 44.4% of net sales, compared to $34.2 million, or 46.2% of net sales, in the second quarter of fiscal 2008. For the first six months of fiscal 2009, gross profit was $47.0 million, or 42.8% of net sales, compared to $62.6 million, or 44.2% of net sales, in the first six months of fiscal 2008. The decline in gross profit margin for the second quarter and first six months of fiscal 2009 was primarily driven by deleverage in occupancy costs resulting from lower sales. This was partially offset by higher initial markup due to improved sourcing and reduced freight costs, as compared to the prior year.
In total, operating expenses were $23.9 million, or 42.0% of net sales, as compared to $31.0 million, or 41.9% of net sales, in the second quarter of fiscal 2008. For the first six months of fiscal 2009, total operating expenses were $48.2 million, or 43.9% of net sales, compared to $62.9 million, or 44.4% of net sales, in the first six months of fiscal 2008.
Operating expenses for the first six months of fiscal 2008 included $2.9 million of charges, primarily related to store closures. The decrease in operating expenses for the quarter and first six months of fiscal 2009 was primarily driven by a reduction in store payroll, depreciation and advertising costs, lower general and administrative costs and the effect of the above-mentioned one-time charges incurred during the first six months of fiscal 2008.
At June 27, 2009, cash and marketable securities totaled $34.8 million and compares to $27.4 million in cash and marketable securities at June 28, 2008. Total inventory at cost decreased 36% at quarter end from the prior-year period. Working capital decreased by $2.2 million to $45.7 million from $47.9 million at June 28, 2008, primarily due to reduced profitability.
Third Quarter Fiscal 2009 Guidance:
The Company is introducing guidance for the third quarter of fiscal 2009. The Company estimates net sales in the range of $48 million to $50 million, which compares to actual net sales of $58.1 million in fiscal 2008. This guidance assumes comparable stores sales in the third quarter of fiscal 2009 will decrease in the mid-to-high teen percentage range and compares to a comparable store sales decrease of 4% in the third quarter of fiscal 2008.
Loss per share for the third quarter of fiscal 2009 is estimated in the range of ($0.22) to ($0.17), which compares to actual third quarter fiscal 2008 loss per share on a GAAP basis of ($0.12), which included charges of $0.02 per diluted share for store closures. Actual adjusted net loss for the third quarter of fiscal 2008 was ($0.10) per share and excluded store closure costs.
Store Opening Plans:
During the second quarter, the Company opened no new stores and closed three locations, ending the period with 291 stores in operation. For the remainder of fiscal 2009, the Company plans to open one or two additional new stores and close approximately two or three locations, ending the year with approximately 289 stores and approximately 585,000 square feet in operation.
Cache Inc
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