Coldwater Creek same-store sales decline in Q4 2008

17 Feb '09

3 min read

Coldwater Creek (NASDAQ: CWTR) today provided an update on its business.

Fourth Quarter and Full Year 2008 Preliminary Results:
For the fourth quarter of fiscal 2008, the company expects sales of approximately $280 million, reflecting a same-store sales decline of approximately 22%. The company expects to realize a loss per share for the quarter in the range of $0.23 to $0.25. This compares to a loss of $0.19 in the fourth quarter of fiscal 2007.

During the fourth quarter, the company continued to tightly control costs, resulting in over a $20 million decline in SG&A expenses, ahead of expectations. The company ended the quarter with cash of approximately $80 million. Premium retail store inventory per square foot, including retail inventory in the distribution center, decreased approximately 12% in the fourth quarter of fiscal 2008 compared with the fourth quarter of 2007.

For fiscal 2008, the company currently expects sales of approximately $1.0 billion and a loss per share in the range of $0.31 to $0.33, as compared with a loss of $0.03 per share in fiscal 2007. The company began an expense reduction initiative in fiscal 2008, which resulted in over a $60 million reduction in SG&A expenses for the year.

The company remains committed to further reducing expenses and has identified at least $30 million of additional SG&A savings for 2009. The company currently expects to reduce capital expenditures to $30 million in 2009, down from approximately $75 million in 2008, which is based on opening no more than 10 stores in 2009, down from 43 openings in 2008.

Daniel Griesemer, president and chief executive officer of Coldwater Creek said, "We expect a continued challenging macroeconomic environment and therefore remain focused on the variables we can control, such as elevating the product assortment, enhancing the customer experience, reducing expenses, and strengthening the balance sheet. We are pleased with our brand direction and are confident that we are taking the right steps to position our company to be an even stronger organization when consumer spending improves."

The company is planning to report fourth quarter and full year fiscal 2008 results on March 4, 2009.

New Credit Facility Agreement:
The company has strengthened its capital position by entering into a new credit facility with Wells Fargo. The secured, three-year revolving credit facility has increased the aggregate commitment amount by $10 million to $70 million, subject to borrowing base limitations.

The new facility has financial covenants related to capital expenditures, minimum inventory book value, and other customary terms and conditions, but does not contain the financial covenants related to the company's minimum net worth and fixed charge coverage, that were imposed under the company's prior credit facility with Wells Fargo.

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