Women's apparel retailer Cache Q2 FY'13 sales fall 2.5%

- Net sales decreased 3.4% to $113.6 million from $117.6 million in the first six months of fiscal 2012. Comparable store sales decreased 0.4%, as compared to a increase of 6.9% in the first six months of fiscal 2012;

- Gross profit decreased to $37.3 million, or 32.8% of net sales from $48.6 million, or 41.3% of net sales, in the first six months of fiscal 2012;

- Operating loss totaled $11.4 million, which included costs of $2.5 million associated with employee separation charges incurred, in connection with the separation agreement with the former CEO, as well as severance for other corporate employees. This compares to operating loss of $346,000 in the first six months of fiscal 2012, which included $277,000 of employee separation costs;

- Net loss was $21.7 million or ($1.37) per diluted share, as compared to a net loss of $177,000, or ($0.01) per diluted share in the first six months of fiscal 2012; and

- Adjusted net loss was $9.0 million, or ($0.57) per share, as compared to adjusted net loss of $16,000 or ($0.00) per diluted share in the first six months of fiscal 2012.

Gross profit for the second quarter of fiscal 2013 was $20.9 million, or 34.7% of net sales, compared to $26.4 million, or 42.8% of net sales, in the second quarter of fiscal 2012. For the first six months of fiscal 2013, gross profit was $37.3 million, or 32.8% of net sales, compared to $48.6 million, or 41.3% of net sales in the first six months of fiscal 2012. The decrease in gross margin for the second quarter and first six months of fiscal 2013 was primarily driven by an increase in markdowns on prior season assortments, as compared to the prior year.

In total, operating expenses for the second quarter of fiscal 2013 were $24.0 million, or 40.0% of net sales, as compared to $24.7 million, or 40.1% of net sales, in the second quarter of fiscal 2012. For the first six months of fiscal 2013, operating expenses were $48.7 million, or 42.9% of net sales, compared to $48.9 million, or 41.6% of net sales, in the first six months of fiscal 2012.

The decrease in operating expenses for the second quarter of fiscal 2013 was driven by decreases in marketing, as well as payroll and payroll-related expenses. The decrease in operating expense for the first six months of fiscal 2013 was driven by decreases in marketing, payroll and payroll-related expenses, and depreciation expense.

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